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Financial Firms Face $600 Billion Of Losses, Ubs Says

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2008 has got off to a flying start for the bears and it just keeps getting better. This is going to turn into major job losses in the city in the coming months. London is going to be Ground zero for this unfolding disaster. Just take a look at the Banks shares today - they are getting hammered.

Here is the story from bloomberg:

Feb. 29 (Bloomberg) -- Financial firms are likely to face at least $600 billion of losses as the crisis triggered by the collapse of subprime mortgages batters banks, brokers and insurers, UBS AG analysts said in a report today.

Financial institutions have disclosed more than $160 billion of writedowns and credit losses. Banks and brokers stand to lose $350 billion, according to estimates from UBS's global banking team.

``We have to recognize the risk that the economy will suffer more damage than what consensus suggests,'' wrote Geraud Charpin, head of European credit strategy at UBS in London. ``All the investment schemes that have been built on the basis of a strong and resilient economic backdrop have to be unwound/ scaled down.''

American International Group Inc., the world's largest insurer, reported the biggest quarterly loss in its 89-year history yesterday after an $11.1 billion writedown on derivatives linked in part to subprime mortgages. London-based Peloton Partners LLP said yesterday it is being forced to liquidate a $1.8 billion hedge fund managing asset-backed debt because of tighter lending restrictions on Wall Street.

``The collapse of Peloton's flagship fund yesterday is a reminder to all investors that yesterday's rising star can be tomorrow's fallen angel,'' Charpin wrote. ``Leveraged risk positions are a cancer in this market and the sooner it is treated the better.''

To contact the reporter on this story: Abigail Moses in London

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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