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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Elroy Jetson who wrote (33526)	4/21/2008 8:19:35 AM
From: elmatador	Read Replies (1) \| Respond to of 217651

Citigroup loses $5B, will cut 9000 jobs. Show 'celebrations' please.

To: Elroy Jetson who wrote (33526)	4/21/2008 8:21:51 AM
From: elmatador	Read Replies (1) \| Respond to of 217651

UBS announces fresh $19 billion loss; Deutsche Bank loses additional $3.9 billion news 01 April 2008 The sub-prime mortgage crisis continues to hammer financial institutions around the world as the two largest banks in Europe announced further losses to their balance sheets. Switzerland's UBS AG and Germany's Deutsche Bank AG today declared additional write-downs over and above those already announced, leading to speculation that the pain in financial markets is far from over. The hardest hit of European banks The worst affected by far in Europe is UBS, already reeling under the effects of a $18.4 billion loss announced last year. Now, to compound its problems, comes the news that it would be forced to write down an additional $19 billion of assets in the worst crisis in the bank's history. The announcement in 2007 had been its first declaration of an annual loss since UBS was created from the merger of Union Bank of Switzerland and Swiss Bank Corporation in 1998. UBS chairman and former CEO Marcel Ospel, who had been a prime architect in the creation of UBS in 1998, became the latest high-profile casualty in this ongoing turmoil as the bank announced that he would not be seeking re-appointment. He was scheduled to be re-elected at the bank's AGM on 23 April, but has now removed himself from consideration. Although Ospel took, in his words, ''responsibility for the bank's situation'', he believed he ''made all necessary contributions'' to help in the matter. He also said that he ''remains very confident in the future prospects of UBS''. He will be succeeded by general counsel Peter Kurer, who joined UBS in 2001 and has been a member of the group executive board since 2002. Earlier losses have already led to the resignations of former CEO Peter Wuffli, finance chief Clive Standish and investment banking head Huw Jenkins, and Ospel becomes the latest to join the list. The current CEO, Marcel Rohner, predicted tough times ahead in 2008, although they didn't intend to conduct emergency sales of securities at ''distressed or inappropriate prices''. UBS said that Kurer will work closely with the board to ensure that the institution not only implements the appropriate remediation following the current crisis, but also establishes optimal, permanent governance and leadership solutions for the bank's future. The bank also unveiled plans to create a new business that would handle US property assets which had severely declined in values in recent times. In order to tide over the crisis, UBS announced its intentions to raise as much as $15.1 billion through a rights issue in an effort to replenish capital. This is in addition to the $13 billion already raised from investors in Singapore and the Middle East. UBS said its Tier 1 capital ratio, a key measure of solvency, will be at about 10.7 percent after the rights offering is completed. In this exercise, it joins peers like Citigroup and Merrill Lynch who have already taken the rights issue route. New York-based Citigroup and Merrill Lynch said in January they will receive $14.5 billion and $6.6 billion from investors respectively, after getting $7.5 billion and $5.6 billion cash infusions in November and December to tide over liquidity concerns which have led to the collapse of Bear Stearns. UBS's holdings of sub-prime assets fell to about $15 billion by the end of last month from $27.6 billion on Dec. 31, and Alt- A assets, which fall between prime and sub-prime, were cut to about $16 billion from $26.6 billion. Auction-rate securities positions, which are also subject to valuation uncertainties, rose to about $11 billion from $5.9 billion. Bad times catching up with Deutsche Bank Deutsche Bank's losses have been lower, but no less significant at about $3.9 billion. Germany's biggest bank in terms of market value today announced that it expects to write off about €2.5 billion ($3.9bn; £1.9bn) in the first quarter of 2008 on leveraged loans, commercial real estate and residential mortgage-backed securities because of the current global credit turmoil. This is in addition to the $3.6 billion (€2.3 billion) of markdowns the bank reported for 2007. The firm, due to issue its quarterly results at the end of April, will cut the value of leveraged-buyout and commercial real-estate loans and residential mortgage-backed securities, the German bank said. Last month it had reported ''exceptionally difficult'' trading conditions, warning it may miss its 2008 profit target. In February, Deutsche Bank reported a 48 per cent fall in profit for the last quarter of 2007, which was preceded by a a €2.2 billion exposure to US sub-prime debt in October last year. It had been relatively untouched by the ongoing crisis as compared to the American giants, and boosted profit last year after skirting the worst of the U.S. sub-prime mortgage market meltdown that left Zurich-based UBS and Citigroup Inc. of New York with record losses. But now, the bad times seem to be catching up. Due to the sub-prime crisis, the world's largest banks and securities firms have posted write downs and credit losses of more than $208 billion since the beginning of 2007. The largest among them include Citigroup, Merrill Lynch and JPMorgan Chase in the US, BNP Paribas in France, HSBC in the UK, Royal Bank of Scotland in Scotland, UBS in Switzerland and Deutsche Bank in Germany. According to German financial regulator, BaFin, such losses could reach as much as $600 billion.

To: Elroy Jetson who wrote (33526)	4/21/2008 8:27:08 AM
From: elmatador	Respond to of 217651

UK Banks will have to announce billions of pounds of write-offs in the next two weeks as the price of an emergency bail-out by the Government. Brazilians just watching this in desbelief on how so much irresponsibility was possible! Banks must 'kitchen sink' crunch losses Simon Watkins, Mail on Sunday 20 April 2008, 10:07am Reader comments (5) \| Vote Banks will have to announce billions of pounds of write-offs in the next two weeks as the price of an emergency bail-out by the Government. Gordon Brown demanded they gave a complete account of their losses - known as 'kitchen sinking' in City jargon - from the global credit crunch as part of the price of a Treasury plan to help free the seized mortgage market. The Prime Minister lambasted US banks last week for disguising the full extent of their losses, but some dismissed his attack by pointing out that UK banks had failed to come clean. It appears that Brown pushed hard for British lenders to set an example to other markets. One source close to last week's talks said full and rapid disclosure was a key condition of the Government for its help. The write-offs will be matched by multi-billion pound cashraisings to be announced at the banks' annual meetings. Royal Bank of Scotland will this week confirm a share issue to raise up to £10bn to help improve its balance sheet. At the same time it is expected to write off £5bn for its credit crunch losses. The total for UK banks over the next few weeks could exceed £10bn. It is thought Brown insisted that the banks disclose fully well before half-year results in the summer. They have already written off £15bn in bad loans and underperforming assets since the debt crisis gripped world markets last summer. Other banks are expected to announce rights issues. It is rumoured that Barclays will seek £5bn. And HBoS is also tipped to tap shareholders for more cash.

To: Elroy Jetson who wrote (33526)	4/21/2008 12:19:26 PM
From: elmatador	Read Replies (1) \| Respond to of 217651

Survey: 30% believe economy will shrink By JEANNINE AVERSA, AP Economics Writer Mon Apr 21, 8:56 AM ET WASHINGTON - The odds the country will fall into its first recession since 2001 are rising sharply. Thirty percent of economists now believe the economy will shrink in the first half of this year, up from 10 percent who thought this in January, according to a survey being released Monday by the National Association for Business Economics, known by its acronym NABE. "That's a striking difference," said Ken Simonson, chief economist for the Associated General Contractors of America and the NABE's point person on the survey. The tone of the overall survey, he said, was "extremely gloomy." Under one rough rule, if the economy contracts for six straight months it would be considered in a recession. Many economist and the public believe we are in one. Even Federal Reserve Chairman Ben Bernanke recently acknowledged, for the first time, that a recession is possible. Forecasters "were notably downbeat about their own companies and the overall economy," Simonson said. The majority of forecasters polled — 51 percent — thought the economic growth during the first half of this year would clock in between zero and 1 percent, which would still mark a feeble showing. Sixteen percent pegged growth in the first half at between 1 and 2 percent, while only three percent put it at between 2 and 3 percent. No forecaster believed growth during this period would exceed 3 percent. The economy nearly stalled in the last three months of 2007, growing at a pace of just 0.6 percent. Many analysts say the economy's normal growth rate should be just over 3 percent. The government will report on the economy first-quarter performance at the end of this month, while the second-quarter's results won't be known until late July. A trio of crises — housing, credit and financial — have hit the country, crimping spending by people and businesses alike. And, that's weakening national economy activity. Against that backdrop, 70 percent of the economists said they are more pessimistic about the economy's outlook than just three months ago. And, 45 percent said they expect a substantial slowdown in housing in the next six months. The housing slump — which has dragged down home values and led to record-high home foreclosures — is the biggest weight on the economy. Thirty-nine percent said harder-to-get credit has negatively affected their businesses, up from 26 percent in January. The one-two punch of weakening economic conditions and soaring prices for energy and other commodities is squeezing companies' profits margins, the survey says. Fighting to limit damage to the economy, the Federal Reserve has slashed interest rates and taken a number of extraordinary steps to help financial institutions overcome credit problems, which had threatened to paralyze the entire financial system. Interestingly, 69 percent said the Fed's action had no impact on their businesses. Elmat's theory of patient not responsing to stimuli being validated by the day. The survey, based on the responses of 109 NABE members, was conducted between March 24 and April 8. 69% said the Fed's action had no impact on their businesses.