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Attention paid to UBS is always repaid - today, for example, with its $19 billion writedown.
I remember being shocked by news of a $10 billion writedown not so long ago. (That was UBS too, as a matter of fact; and it turned out to be $14 billion.) Looks like Citi was spot on when it suggested back in November that UBS might be underplaying its subprime exposure.
Very good and highly readable speech, posted at the FT.
In a short space, Persaud brings out three incisive points:
Continue reading "Why models don't work by Avinash Persaud" »
On page 80 of the Great Big US Regulatory Reform Plan, an interesting idea - the creation of a federal agency whose job would be to grade the strength of individual states' oversight of mortgage regulation.
The main reason for this appears to be to ensure the quality of the mortgages being provided to the securitisation process.
But here's an interesting take on earlier events:
The private equity boom was a huge scam - charging massive fees for well-camouflaged leveraged beta - says Michael Gordon, head of institutional investment at Fidelity. Where now for the buyout barons?
Still making my way through the Great Big US Regulatory Reform Plan, and a rather odd theme seems to be emerging.
Continue reading "Muddled priorities in the Great Big Plan" »
Continuing through the Great Big US Regulatory Reform Plan, one glaring omission comes to light:
Following the news of UBS' latest plan to deal with its subprime horrors, Yves Smith at Naked Capitalism reads the FT's report on ring-fencing bad assets:
The losses are massive - see here. US banks alone lost $9.97 billion on cash and derivatives trading in Q4 2007, the first quarterly loss ever - and writedowns now total a colossal $232 billion. The investments, points out Calculated Risk, are also massive: a total of $136 billion raised by selling stakes to governments, sovereign wealth funds or private investors.
The Fed has made, I think, rather a misstep in releasing this letter.
Continue reading "Mark to market, unless you'd rather not" »
The latest issue of Risk went live today and it's heavy on crime, malpractice, misselling, and other forms of wrongdoing.
"Split up UBS," says former CEO Luqman Arnold. He's calling on current management (from his position as the head of a company that owns 0.7% of UBS) to break it up into four chunks:
An unfortunate time to get into the commercial property market for one buyer, who we'll call X...
JP Morgan receives a twelve figure Fed concession that it says it doesn't need?
The bad news keeps coming for UBS - this is via Lars Toomre.
Continue reading "Remember, you can't spell "subprime" without "UBS"" »
From Alea, a data-heavy article that gives a stark picture of how much the securitisation market has collapsed in the last few months:
Continue reading "Putting numbers on the securitisation shock" »
Ha! Just kidding.
Actually the Fund's latest Global Financial Stability Report is a bit negative.
Continue reading "Good news from the IMF on the mortage market" »
...include the risk of high inflation - but there's worse than that...
Continue reading "The real effects of the commodity bull market" »
Answer: not all of them. Low demand for the TSLF auction ($50 billion offered and $33.95 billion submitted, at a 0.25% stopout) could mean that the liquidity crisis is growing less severe. (The two previous Term Securities Lending Facility auctions had more bids than offers.)
Continue reading "Rarely is the question asked: is our interventions working?" »
The G7 governments are getting ready to take a hand in various markets -
Felix Salmon reads the official version of the leadup to the Bear Stearns merger, published by the SEC.
A startling datapoint from James Hamilton at Econbrowser: 31% of the US corn crop this year is destined to be turned into biofuels.
Remember the TED spread?
The Times this morning suggests that the Bank of England could be about to follow the Fed's lead and step up its support for UK banks.
Well, as predicted, the Bank of England stepped in yesterday and agreed to take RMBS in exchange for treasury bills.
UBS has revealed the results of its internal investigation into its ludicrously high subprime writedowns.
The monoline insurer brought out its Q1 results yesterday, revealing a $1.7 billion writedown on its CDO portfolio. But there's worse news than that.
Alea points to an account of the problems at UBS by a Swiss financial journalist, Dirk Schutz.
Some, all, or none of these will be confirmed later on this week:
7,000 jobs to go at RBS If you're Tom McKillop, you'd probably prefer to put it like this: "By 2010, when we have completed the integration process, we expect to achieve synergies totalling almost 2.3 billion euros a year."
From the New York Fed comes this paper looking at the reasons for delays in the money markets...
The Bear Stearns bailout was the Fed's worst mistake in a generation, Vincent Reinhardt, former Fed director of monetary affairs, said this week.
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