April 01, 2008

UBS subprime losses now at $40 billion, fires its CEO, announces it will dilute its shareholders by $15 billion, stock goes up 10%

Yup, we're in la-la land

Their stock is still down 51% and the chart is ugly, but it always amazes me when a company pretty much announces they're the antichrist and the stock pops (for a few hours) on the news.

Meanwhile, $40 billion in 9 months. $40 billion. Man, that's a lot of coin. You'd have to be REALLY REALLY stupid to lose that kind of money.

And just wait until they get around to marking down their Alt-A, HELOC and Option Arm crap. Good luck issuing more shares after that debacle. And, uh, you might want to get your money out of UBS - QUICK!

What, did these banks all think that Casey Serin was good for it?

ZURICH, Switzerland (AP) — UBS AG's chairman abruptly resigned Tuesday as the Swiss bank reported a first-quarter loss of $12.1 billion and said it would seek $15.1 billion in new capital.

UBS revealed more serious damage from exposure to the U.S. subprime crisis and said it expects write-downs of approximately $19 billion.

It was the latest indication of how far the severe plunge in U.S. housing prices and a credit crisis triggered by rising mortgage defaults has reached.

UBS write-downs have reached a staggering $40 billion in the past nine months, the largest reported by any bank to date.


Keyser Soze said...

As of 11:20 am, the American banks are up ~ 7% due to this good news. I am convinced that there are 100s of billions of dollars sitting on the sidelines, as we speak, ready to buy bank equities, due to the high dividends, sometimes 2 to 3 times higher than CDs. The question is how safe are these bank dividends?

Anonymous said...

raising 15B @ 6.25 to 7.25- are there buyers at these rates?

the SWFs won't jump in for less than 9.

Anonymous said...

The bonuses will be HUGE!

guy n. cognito said...

lots of talk of MBSs, what about souring corporate loans? is that not as big a piece of the financial sector pie?

BubbleGirl said...

I think that Meredith Whitney recently stated that banks (I think all of them) would have to cut their dividends and raise capital, didn't she? So I don't think the bank dividends are safe.

Anonymous said...


Whats the matter qweefie, did your bank puts drop 90% in value today?


Take your pick

Anonymous said...

Hello fellow HPers. I have been in agreement with most of what Keith has been saying for 2 years. Not so much with his politics, but oh well can't agree on everything.

Having said that I think you are all refusing to see reality. There is a huge bailout of homes coming. That is a done deal. Foreclosures will pretty much be a thing of the past by summer. Prices will be kept artificially high forever as the govt will essentially put a floor on prices. I am not saying I agree with this plan, but it is happening whether I like it or not.

Stock market bear is over too. The bottom was in Jan. Like it or not, the fed will bail out the financial system and stocks will benefit greatly. Again I don't agree, again nobody in DC or NY gives a shit what I think.

Keith and HP was a wakeup call for many of us. He was a lone island in a sea of real estate orgy ocean. Now however he is turning to the opposite. People made money in real estate by knowing when to get out. People who are buying now, stocks and real estate will be laughing in 5 years while you all will be convinced the next crash is just around the corner.

Flame away if you want, I don't care.