Monday, October 1, 2007

Watch For The Signs

Can an economy based on extensive borrowing and indebtness survive for long?  When your nation's leader tells you to go shopping this holiday season because it will stimulate the economy -- think twice. Watch for the signs!


UBS writes down $3.4 billion in losses - International Herald Tribune

ZURICH: UBS AG, the world's largest wealth manager, unveiled $3.4 billion in losses, swept out senior managers and slashed jobs in one of the biggest casualties yet worldwide from the credit crunch.

UBS said on Monday it would write down a net 4 billion Swiss francs ($3.42 billion) in losses in its fixed income portfolio and elsewhere, resulting in a third-quarter loss of 600-800 million Swiss francs, its first quarterly loss in nine years.

UBS said it would shed 1,500 jobs in its investment bank -- a sharp reversal of its recent build-up.

The news sent UBS shares lower, dragging other banking shares with it, as investors took cover from a credit crisis that has forced numerous rescue manoeuvres by central banks and obliterated profits at those exposed to risky investments, sub-prime mortgages and complicated products.

The loss underscores the depth of the crisis -- which has already seen central banks inject record amounts of liquidity into the markets to keep the financial system functioning -- and underscores uncertainties at rival banks, who may also be forced to unveil losses ahead of their scheduled results announcements.

*  *  *  *  *

Related posts:

Are you preparing for a recession?

Money Myths & The Debt Deception

The Economy Is Based on Borrowing

The State of The Economy 2006

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.