The Big One
Another big meltdown in the U.K. comes when the value of the bonds they're holding appears to be nil. Just don't forget that we're supposed to be the bailout source here.
If you still believe that we're going to bail out the little guys who bought under false pretenses, instead of the bigtime crooks who convinced them it was going to be safe, the home market would always go up, history no longer applies - look at this nice bridge I'm selling at a big loss.
You gotta love those financial news creators who think it's boom times for pawn brokers.
While I have seen a friend have to take her daughters out of college for a year until the local S&L was bailed out in MD, these glib financial propagandists think we'll all be better off now. After all, they've socked their ill-gotten gains away in something solid. Probably Euros.
If you still believe that we're going to bail out the little guys who bought under false pretenses, instead of the bigtime crooks who convinced them it was going to be safe, the home market would always go up, history no longer applies - look at this nice bridge I'm selling at a big loss.
A number of big investment banks have admitted major losses caused by bad investments centred on the crisis-hit US sub-prime mortgage market.
Worst hit was Swiss bank UBS which was write down losses of 4bn Swiss francs ($3.4bn; £1.67bn) as a result.
The group said it would now planned to cut 1,500 jobs and make extensive management changes.
Later, US giant Citigroup revealed its sub-prime losses would total $1.3bn, as well as $2.6bn in extra credit costs.
(snip)
US bank Citigroup will also make a profit in its third quarter, but this will be a third of what it was last year - largely as a result of a $1.3bn write down sparked by US mortgage woes.
But it also confirmed a pre-tax loss of $1.4bn on loans to private equity firms, which have until now been snapping up businesses with ever more expensive price tags at a phenomenal rate.
"This is cringe-making for Citi's chief executive, Chuck Prince," said Mr Peston.
"In July, he told the FT that his bank was 'still dancing' in the private equity market, long after it was obvious that the private-equity bubble had been pricked and was deflating at an alarming rate."
(snip)
.....few had forecast the magnitude of the write downs.
"Today's UBS news is certainly bad news," said Claudia Meier, an analyst at Vontobel.
But she argued: "On the other side, it finally gives some more visibility to the sub-prime fears and we expect the market to like this."
You gotta love those financial news creators who think it's boom times for pawn brokers.
While I have seen a friend have to take her daughters out of college for a year until the local S&L was bailed out in MD, these glib financial propagandists think we'll all be better off now. After all, they've socked their ill-gotten gains away in something solid. Probably Euros.
Labels: Budget; Economy, Bush Legacy, Free Markets
posted by Ruth at 8:42 AM
2 Comments:
That $1.3 billion write-down basically means that those dollars just disappear, don't they? As if it was imaginary wealth to begin with?
This is like an investment that loses money, programmed into the financial institution's plans to a degree. Any loss in value, like a stock's going down, is usually proportional to the amount of interest offered. A high risk investment offers a larger percentage of interest. In the case of the sub-prime mortgages, though, they were assessed incorrectly when they were sold as part of a package of mortgages.
The losses are to the institutions the cost of investing. To the individual who holds stock/bonds in the institutions, though, it has a different effect. I could get really longwinded and technical here, but I think you get the picture.
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