UBS post a statement (
http://www.ubs.com/1/e/about/news.html?newsId=139197) revealing its huge writedowns for the first quarter of 2008. Marcel Ospel has announced (
http://www.ubs.com/1/e/investors/rel...?newsId=139204) that he will not seek a new term as chairman of UBS; Paul Kurer will replace him.
This is the major major driver of super power countries and economies around the world! Everything will go DOWN!!
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What you could buy with the $37 billion UBS lost
By Marc Jones and Paul Hoskins
http://www.reuters.com/article/idUSL...BrandChannel=0
LONDON (Reuters) - The $37 billion written off by UBS is not only more than the GDP of most African countries, it would buy over 4000 tonnes of the world's finest caviar and pay for two Olympic games.
The staggering writedowns make UBS the hardest-hit bank by the recent credit crisis and governments, aid agencies and Hollywood glitterati must all be wincing at the thought of what the money could have been spent on.
The $37 billion figure is more than the entire GDP of 85 percent of African countries and roughly equals those of Slovenia and Sudan according to World Bank figures.
It would only fund the U.S. military's campaign in Iraq for 74 days based on Nobel prize-winning economist Joseph Stiglitz's estimate of the $500 million daily cost of the war to the U.S..
It dwarfs the $10 billion committed by Geneva-based Global Fund to fight AIDS, Tuberculosis and Malaria and would fund charity group Oxfam for 87 years based on its latest accounts.
In UBS's Swiss homeland it would buy you almost 95 million Loetscher cuckoo clocks, over 6 million Rolex watches, more than 2 million tonnes of Toblerone chocolate bars and almost 2 billion standard Victorinox Swiss Army penknives.
It would pay the bill to put on the Olympic games in London in 2012 twice.
The bank's well-heeled private clients must also be baulking at the eye-watering losses.
It would buy 4,162.7 tonnes of the world's best Caspian Beluga Caviar from Queen Elizabeth II's exclusive British grocer Fortnum & Mason or 74,000 tonnes of the finest kobe beef sold in Tokyo's swanky Mitsukoshi department store.
Theoretically it could buy you 21,766 Bugatti Veyrons although the maker of the Italian supercar currently only intends to build 300 of the handmade, 1,001 horsepower machines so you might have to settle for 74,000 Ferrari 599's.
Fashionistas could splash out on 12.2 million of the latest Dior Babe handbags as sported by Carla Sarkozy, the new wife of the French president.
The money would also put big spending Chelsea owner Roman Abramovich in the shade. $37 billion could have filled 38 soccer teams with 11 Zinedine Zidane's at his prime.
For its next Christmas party UBS could have hired Madonna to belt out 1,233 personal renditions of her hit "Like a Virgin", after the popstar was quoted recently as saying she won't sing it ever again for less than $30 million a time.
As for the root of UBS's woes, the bank could have bought 139,622 houses in the U.S. based on an average house price of $265,000.
(Editing by Elaine Hardcastle)
Marcel waves goodbye
Apr 1st 2008 | BERNE AND LONDON
From Economist.com
http://www.economist.com/finance/dis...ry_id=10947193
The boss departs after more big subprime-related writedowns at UBS
NOT long ago, when an illustrious bank was in trouble, it could announce, with some fanfare, the support of sovereign-wealth investors from the Gulf states or the Far East. In December, when UBS secured SFr13 billion ($11.5 billion) in such funds from Singapore and the Middle East, some of its long-standing investors grumbled that they, too, should have been given the opportunity to help recapitalise the bank on the same generous terms.
Be careful what you wish for. On Tuesday April 1st UBS announced – and it was no prank – that it was writing down a further $19 billion on its investments in American subprime and other mortgages, as part of an unexpected SFr12 billion projected loss in the first quarter. The Swiss bank also said it would call on its shareholders to supply SFr15 billion in additional funds to shore up its depleted reserves of capital. That means its sovereign-wealth backers face severe dilution, in addition to the potential losses that they have already suffered on their holdings since December. In penance, Marcel Ospel, architect of the merger that created UBS in 1998, said he would step down as chairman, to be replaced by Peter Kurer, the bank’s general counsel.
Even for long-term investors such as sovereign-wealth funds, experiences such as that suffered at UBS are painful. But they are not unique; by one estimate, sovereign-wealth funds as a group have lost about a third so far from their investments in Western banks and private-equity firms during the current credit crisis. Do not expect them to have cheque books at the ready the next time an ailing Western bank has a whip round.
That is why banks are now tapping ordinary shareholders instead. On Tuesday Lehman Brothers raised $4 billion from selling additional shares to strengthen its capital and convince the financial markets it was not headed in the same sorry direction as Bear Stearns. By some estimates banks are preparing to issue $100 billion in new debt and equity this year.
So far, shareholders have been surprisingly receptive to the cash calls. Lehman’s shares went up by 11% in New York after the announcement and UBS’s shares also climbed sharply higher. Both are benefiting from a period of relative calm in the financial markets—which is probably why they decided to act at this time.
But if they set a precedent, a rush to raise capital may well be painful for both banks and shareholders. Meredith Whitney, an analyst at Oppenheimer, expects a “barn rush” of firms trying to raise capital, and believes it will get more expensive as the year progresses. Nor is there much hope that UBS’s poor first-quarter performance was a one-off. On Tuesday Deutsche Bank, which had sailed through the crisis fairly smoothly last year, announced a €2.5 billion ($3.9 billion) writedown on leveraged loans, commercial property and mortgage-backed securities. March, the month in which Bear Stearns almost collapsed, was considered particularly tough for the industry as a whole.
But is the worst over now? That was one implication from the fact that UBS was able to sell some—though it won't say how much—of its poor quality mortgage positions between January and March. On the other hand, it still has $31 billion of those problem securities on its books, so it is by no means free yet.
It was also considered positive that four leading investment banks, JPMorgan, Morgan Stanley, BNP Paribas and Goldman Sachs, are fully underwriting its share issue. They demanded an “aggressive” valuation as part of their due diligence of UBS, according to Daniel Zuberbuehler, director of the Swiss Federal Banking Commission. That suggests they are comfortable with UBS’s numbers, which should be somewhat reassuring to investors. Unless the markets continue to slide again, that is.
Major NEWS: UBS lost $37 billion
Originally Posted by eax
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