Wait a minute, weren’t the subprime writedowns supposed to be over? Just two weeks ago Businessweek was reporting:
Standard & Poor’s Ratings Services believes that the bulk of the writedowns of subprime securities may be behind the banks and brokers that have already announced their results for full-year 2007. There may be some additional marks to market as market indicators have shown deterioration in the first quarter. However, when we dissect the percentage of writedowns taken against various types of exposures, in our opinion the magnitude of some writedowns is greater than any reasonable estimate of ultimate losses.
UBS doubled its writedowns from the subprime crisis on Tuesday, dumped its chairman and sought more emergency capital in a second attempt to reverse its fortunes.
Its shares climbed 7.5 percent as investors hoped the move marked a turning point for the firm that now leads the global list of banks hit hardest by the credit crisis.
UBS wrote down an additional $19 billion in ailing assets, bringing to $37 billion the damage wrought by the subprime crisis and causing a net loss of 12 billion Swiss francs ($12.03 billion) in the first quarter.
It pushes UBS, Switzerland’s flagship bank and financial fortress for rich investors, past Merrill Lynch to the top of the league of writedown shame.
