Comments on: Ruh-Roh – UBS Writes Down $3.42 Billion Due to Credit Crunch

By: UBS takes additional $19 billion in write-downs, ousts CEO

UBS takes additional $19 billion in write-downs, ousts CEO — Wed, 02 Apr 2008 00:15:53 +0000

[...] you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting!Exactly six months ago today I wrote a post on how UBS’s write-down of $3.4 billion was going to be ch… compared to what was to be ahead of us. I wrote how even though the experts were applauding UBS [...]

By: UBS No Different than the Rest of the Big Banks

UBS No Different than the Rest of the Big Banks — Mon, 04 Feb 2008 13:48:30 +0000

[...] to my RSS feed. Thanks for visiting!Back in August as this credit crunch was picking up speed UBS reported earnings that included mortgage write downs on its mortgage backed securities holdings …. The general bull’s line was that $3.4 billion was a lot of money but the bank should be [...]

By: All Real Estate Is Global

All Real Estate Is Global — Fri, 05 Oct 2007 23:08:11 +0000

[...] news of Americans failing to pay their mortgages running in a run on an English bank. And a Swiss bank reporting billions in losses from American sub-prime [...]

By: Merrill Lynch writes down $5.5 billion as they mark to market cdos made up of subprime mortgage debt obligations

Fri, 05 Oct 2007 16:27:02 +0000

[...] becomes just the latest to the write down party, trumping the $3.4 billion write down announcement made by UBS just a week [...]

By: Morgan Brown

Morgan Brown — Mon, 01 Oct 2007 21:33:45 +0000

JB – that is a great point. I will try to do some research on that overall size of UBS fixed-income portfolio; but I imagine it’s massive. It does change the analogy if you don’t know what other cards are in the pack (which can be superstars or hall of famers of greater value than the Bonds card) which would make the Bonds write down more or less important to the overall value of the pack.

Thanks for weighing in.

SH – I agree it will be interesting to see where this all settles out when the banks finally decide to sell some of these things for real…

By: S Hallman

S Hallman — Mon, 01 Oct 2007 18:33:29 +0000

great analogy – Citi is right behind them! When they stop marking to disney world and actually have to sell some of this stuff, we are really going to see how this has become worse than the most pessimistic forcasters forcasted (don’t know if that was with or without their crystal balls)

By: JB

JB — Mon, 01 Oct 2007 13:46:02 +0000

One critical piece of information missing, IMO, is the size of the portfolio being written down in its ‘original’ form. The Barry Bonds baseball card analogy is good, but you start with the assumption of an $800 value. We only know that $3.42 is a really big number. If their total ‘original’ portfolio is $3.5 billion, then your commentary might be different than if it was, say, $20 billion.

And yes, the write downs are done in a semi-vacuum, but I suspect that there has to be a little math and a little art in this process. The market is behaving irrationally and the bets being made are based on rational behavior returning to the markets. Since you can’t crystal ball when that will happen, there is some degree of chance being taken and some may completely write down and others may only write down a portion, expecting that rationality will eventually be the moderator.