Writedowns Hit $120 Billion

Wall Street Journal :

The admissions of greater-than-expected writedowns from Swiss bank UBS, along with reports out of major Japanese institutions, means the total amount of subprime- and CDO-related writedowns has surpassed $120 billion, according to WSJ.com estimates.

Following up on earlier estimates that put total writedowns at around $108 billion, the newest news -- which also adds in the recent earnings release from Bank of America -- puts writedowns related to this type of financial engineering (not including the more typical charge-offs related to loan delinquencies, and also leaving out monoline-insurer-related exposures) at around $120.9 billion.

UBS has written down about $18.4 billion in 2007 so far, an increase of $4 billion from earlier estimates after the bank updated investors in a release yesterday. The new figures, include $2 billion which UBS says relates to "other positions related to the US residential mortgage market."

Read the whole story: Wall Street Journal

Comments

[watchingthings]

Who needs government controls and guidelines? These guys can police themselves...especially if each and everyone of them had someone standing behind them with a baseball bat over their heads to keep them honest.

[realitytrumpsbull]

Riiiight...but how many of em are actually going to go out of business over their fraudulent business practices, which were the core cause of all this 'fun' to begin with?
My prediction? Zero. These guys are corporate mercenaries, kind of like Blackwater, but with no guns. Well, that could be changed...but, point is, they are in a position of leverage and authority when it comes to private lands. They 'own' the property, your mortgage usury payment lets you 'rent' it from them for another month. Maybe the answer here is that if they're going to play these shitty little games with the public, that there should be a lot more rentals and a lot less 'home ownership' because, also, at the end of the day, if you read about D.C. property tax lady, you never really 'own' the thing anyway, you're still renting from the city, county, or state where you live. Like I say, it's a shitty little racke that they have, there. I will never sign mortgage papers. Can you get like a tent permit from the county or something? I can set up a tent, no problem, and I'd cough up 100 bucks a month to do it. A tent can be struck and packed up in an hour, and you can move it down the road if you want. This stuff is american consumer-turned-veal-calf. 'Economy'? Ok...

[Justinpassing]

OOps, credit where credit is due, the above post,Thain says bond insurers bail-out unlikely, is part of the article and is posted at FT.com.

[Justinpassing]

Correct me if I'm wrong, but I don't recall seeing anything posted here about the state of the Monolines. They are, and have been the hot spot in business news:
Thain says bond insurers bail-out unlikely
By Ben White and Aline van Duyn in New York

Published: January 30 2008 23:36 | Last updated: January 31 2008 02:08

John Thain, Merrill Lynch’s new chief executive, said he expected individual credit insurers would receive capital infusions from investors, but that it would be difficult to craft an “industry-wide” bail-out for the beleaguered guarantors.

Mr Thain said an effort by New York state regulators to help leading bond insurers maintain their credit ratings was raising interest in the sector on the part of investors including private equity groups and specialists in distressed companies.

However, he said in an interview with the Financial Times on Wednesday that getting banks to agree on a single approach was unlikely because they have different exposures to the credit insurers and varying opinions on what should be done.

“I think that’s very hard to get a transaction put together across the whole industry. I think it’s more likely you’ll have a company by company solution,” Mr Thain said.

Uncertainty about whether leading bond insurers will be able to retain their triple-A credit ratings hit the stock market on Wednesday, with shares of Ambac and MBIA, the two largest insurers, falling 16 per cent and 13 per cent, respectively.

Highlighting the pressure on bond insurers, Fitch, a credit rating agency that has already cut Ambac’s triple-A rating, on Wednesday slashed the triple-A rating of FGIC, another bond insurer.


Eric Dinallo, New York state insurance superintendent, last week held a meeting with leading banks to urge them to provide up to $15bn for credit insurers.

[loki]

Never fear!! The US tax payer, 401k and mutual fund investors will help you out guys. Im sure our gov will bend over backwards to give you the power to survive, so you can do this again in a few years, just like they have always done in the past. And lets not forget the Fed doing their part. Lowering the interest rates and infusing more money into a broken system. Sure , stocks are rising the last 2 days, and these really wealthy capitalist whores are making more money now, but it hasnt, and wont do crap for the $4 gallon of milk, $3 gas,state and local taxes going through the roof ( thanks to Bush cuts for the rich )

Im sure wall street is giddy over the fed cuts and government bail outs. But it really doesnt do jack for the American citizen.

[curiousasheck]

Wanted. Your Toys

You are deeply in debt and still continue to borrow every day to feed your habit. You walk into Wawa and, for a measly $2.99 coffee and breakfast sandwich, you rip out the credit card because you have no cash (that’s me behind you in line). The concept of buying only those things you can actually afford is foreign to you. You feel that a $500k home with a big screen TV and BMW in the driveway are entitlements you deserve … even though you never finished college and earn about $45k/year. Going back to school … improving your skills … these are also distasteful to you. Math was not your favorite subject and, when the mortgage brokers told you that you could borrow your way to riches, you bit hook, line and sinker. Your mortgage rate has reset …you’re on the verge of foreclosure, making minimum payments on your credit cards and the Yellow Pages book on your kitchen table is opened up to “Bankruptcy Attorneys”. Gas prices and utility bills are killing you. Your job is not as secure as you thought. You are panicked. You are desperate. And the liquidation of assets (toys) such as your Beemer, your Big Screen, your fancy electronic toys, your Sea Doo, that nice new diamond ring bought with home equity cash … is going to be necessary to buy food and heat.

Down on your luck, need cash? I need a good used Porsche.

[jackpinesavage]

Close to $2T pumped into those banks over the last nine months to keep them going.

As pointed out below, we haven't seen the end of this yet.

[mrcontinental]

$120 billion down, $180 billion (approx.) to go.