New Quarter, New Writedowns

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.

Then this morning:

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.

S&P could be wrong.

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4 Comments for this entry

  1. tc says:
    April 1, 2008 at 11:33 AM

    So when does Merrill take the quarterly walk of shame?

  2. twist says:
    April 1, 2008 at 1:04 PM

    TC-

    I think they report 4/17- I wonder if the market will be as happy then?

  3. tc says:
    April 1, 2008 at 6:28 PM

    The harder they try to put a good face on it, the more I worry.

  4. Yossarian says:
    April 1, 2008 at 10:22 PM

    Isn’t anyone going to talk about the huge drop in State of Arizona revenue? Soon, they’ll be laying teachers off, just like California (announced 20,000 teacher layoffs March 14).
    No one is immune, really.

    Take a look at the data … Revenue down 17.5 percent, and Individual Income Tax Collections down 53.3 percent … January and February of 2008 had largest declines since 2002.

    http://www.azleg.gov/jlbc/econdoc2.htm

    Read it and weep.

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