Comments on: UBS 1Q Losses to Equal 1/3 of Equity http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity.html Sun, 22 Nov 2009 03:53:33 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity.html#comment-6198 Anonymous Tue, 01 Apr 2008 19:03:00 +0000 http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity/#comment-6198 These comments raise an interesting question:<br/><br/>Who exactly is ponying up for these capital infusions on UBS, Lehman and Thornburg?<br/><br/>Funny how nobody ever seems to fail to raise capital, no matter how bad things get. These comments raise an interesting question:

Who exactly is ponying up for these capital infusions on UBS, Lehman and Thornburg?

Funny how nobody ever seems to fail to raise capital, no matter how bad things get.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity.html#comment-6191 Anonymous Tue, 01 Apr 2008 16:01:00 +0000 http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity/#comment-6191 Glancing at the NYT article, there is still something like $30B of exposure to subprime and alt-a securities on their books. If things continue to trend down in the housing market I'd look for another write down -- perhaps substantial -- next quarter.<br/><br/>The interesting thing to me is that the CDS market is being saved over and over again. No BKs, price discovery, or payouts. Even TMA managed to scrape by. Glancing at the NYT article, there is still something like $30B of exposure to subprime and alt-a securities on their books. If things continue to trend down in the housing market I’d look for another write down — perhaps substantial — next quarter.

The interesting thing to me is that the CDS market is being saved over and over again. No BKs, price discovery, or payouts. Even TMA managed to scrape by.

]]> By: Richard Kline http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity.html#comment-6183 Richard Kline Tue, 01 Apr 2008 14:00:00 +0000 http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity/#comment-6183 Reading the NYT on this, that $15B in new capital is stated as underwritten _by a consortium of major ibanks_, the direct competitors of USB, and moreover TO HAVE BEEN FULLY SUBSCRIBED _ALREADY_! Wow. This can't be private capital flooding in: who in their right mind would sink that kind of dough into a firm with their kind of exposure? Why would USBs competitors help them soak up that kind of capital which they esperately need themselves; the fees must be sweet, sure, but the meat of it would be even better. To me, this has the fuzzy logic interface of a crypto-public bailout. I don't know who's putting in (or guaranteeing under the table) that kind of capital infusion, but for sure 'the powers that be' can desire no event less than they do the collapse of a bank the size of USB. . . . They're being bailed, is my view. <br/><br/>If that inference is accurate, we have now reached the point where NO major bank will be allowed to fail, in any country, to thereby set off either asset price discovery, a systemic crisis, or both. From one sense, such an arrangement would be reassuring. From another, it strikes me as madness: assets _will_ come down. It would be better to manage the Great Unwind in as orderly a fashion as we can, and move forward rather than to attempt to prevent phony valuations from re-setting. But it looks like the latter course is the one that will be tried, unsurprisingly. <br/><br/>Oh, this is _great_ theater if I just didn't have to sit in the burning building to watch the show! Reading the NYT on this, that $15B in new capital is stated as underwritten _by a consortium of major ibanks_, the direct competitors of USB, and moreover TO HAVE BEEN FULLY SUBSCRIBED _ALREADY_! Wow. This can’t be private capital flooding in: who in their right mind would sink that kind of dough into a firm with their kind of exposure? Why would USBs competitors help them soak up that kind of capital which they esperately need themselves; the fees must be sweet, sure, but the meat of it would be even better. To me, this has the fuzzy logic interface of a crypto-public bailout. I don’t know who’s putting in (or guaranteeing under the table) that kind of capital infusion, but for sure ‘the powers that be’ can desire no event less than they do the collapse of a bank the size of USB. . . . They’re being bailed, is my view.

If that inference is accurate, we have now reached the point where NO major bank will be allowed to fail, in any country, to thereby set off either asset price discovery, a systemic crisis, or both. From one sense, such an arrangement would be reassuring. From another, it strikes me as madness: assets _will_ come down. It would be better to manage the Great Unwind in as orderly a fashion as we can, and move forward rather than to attempt to prevent phony valuations from re-setting. But it looks like the latter course is the one that will be tried, unsurprisingly.

Oh, this is _great_ theater if I just didn’t have to sit in the burning building to watch the show!

]]> By: Anonymous http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity.html#comment-6169 Anonymous Tue, 01 Apr 2008 07:28:00 +0000 http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity/#comment-6169 Oh, have those 19 bn closed already? There was some shareholder resistance as far as I remember.<br/>At Bear Stearns the 1bn from the Chinese never did close. Oh, have those 19 bn closed already? There was some shareholder resistance as far as I remember.
At Bear Stearns the 1bn from the Chinese never did close.

]]> By: Anonymous http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity.html#comment-6168 Anonymous Tue, 01 Apr 2008 06:31:00 +0000 http://www.nakedcapitalism.com/2008/04/ubs-1q-losses-to-equal-13-of-equity/#comment-6168 Yves,<br/><br/>Here's another way to look at the 19B loss: it's about 5% of Switzerland's GDP.<br/><br/>Steve Yves,

Here’s another way to look at the 19B loss: it’s about 5% of Switzerland’s GDP.

Steve

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