Peripheral Visionary writes:
Interesting. I've wondered if the European banks may have less exposure to continued deterioration in the U.S., and consequently would be seeing the light at the end of the tunnel earlier than U.S. banks.

The problem, of course, is that the Europeans also have exposure to the European markets; and the collapse of the U.K. and Spanish markets is just now kicking into high gear.
Peripheral Visionary | 07.04.08 - 9:52 am | #

UrbanDigs writes:
hey am I first?
UrbanDigs | Homepage | 07.04.08 - 9:52 am | #

Peripheral Visionary writes:
P.S. Happy Fourth of July, CR!
Peripheral Visionary | 07.04.08 - 9:54 am | #

Misean writes:
"and UBS also said it has no need to raise additional capital."

Yeah, so did Bear and Lehman.

"Note the exposure to monoline insurers. Counterparty risk will be a theme at the big banks this quarter."

Ah yes...one of my favorites to go on about.

Nice post CR. You are the best.

;)

Cheers,
Misean | 07.04.08 - 10:01 am | #

Anonymouse writes:
I heard on a Bloomberg interview that European banks may be in worse shape with regard to toxic loan exposure because so many loans were made to East European countries with their own absurd speculative manias. We may see these former Soviet states default on their debt and their economies crash. This "crisis" is a structural change, not a cyclical one.
Anonymouse | Homepage | 07.04.08 - 10:07 am | #

Misean writes:
Anonymouse,

"I heard on a Bloomberg interview that European banks may be in worse shape with regard to toxic loan exposure because so many loans were made to East European countries with their own absurd speculative manias."

Read or saw that as well. The avalanche is just starting to move.

Cheers,
Misean | 07.04.08 - 10:10 am | #

REBear writes:
happy days are back?
REBear | 07.04.08 - 10:11 am | #

Anonymouse writes:
Also, somewhat related to my comment above, I've been considering how completely unexpectedly the parabolic rise in crude oil may be keeping large parts of the world from crashing, as opposed to sending the world into an immediate recession. For example, the giant petrostate Russia can use its enormous oil revenue to demand cheaper labor/production from those East European countries which adds more speculative fever to their housing markets - until the anvil of reality smashes everyone to the ground.
Anonymouse | Homepage | 07.04.08 - 10:12 am | #

Misean writes:
Haloscan, oh Haloscan, I still hear your reload twirlin'
I see the status bar slowin'
21 minutes since I clicked Haloscan

Haloscan, oh Haloscan, I still hear your servers crashing
Hope of reading comments dashing
I click refresh and dream of Haloscan

I still see her strugg’ling to reload
Waiting there for comments I can’t see
Is there something waiting there for me?
On the blog where we had such fun

Haloscan, oh Haloscan, waiting here and sighing
Before I quit and just stop trying
Before I see your reload icon say that it’s done
At Haloscan, At Haloscan

Cheers,
Misean | 07.04.08 - 10:14 am | #

REBear writes:
UBS downgraded at Moody's

http://www.marketwatch.com/news/...D& dist=hplatest

financial strength to B- from B and also cut its senior debt and deposit ratings on the bank to Aa2 from Aa1
REBear | 07.04.08 - 10:19 am | #

Misean writes:
Ah good, it's working again.

HaloScan is just another part of the CR experience. Way to go (not you CR). Where can I buy their stock?

No wait. Where can I go to short their stock?

Cheers,
Misean | 07.04.08 - 10:29 am | #

Tripleplay writes:
OT

I am truley disappointed. I thought "ac" would be up early to wish all us Americans a happy Fourth of July!
.
Tripleplay | 07.04.08 - 10:30 am | #

sbarrkum writes:
Saw this at FTAlphaville

The DOW in Euro
sbarrkum | Homepage | 07.04.08 - 10:32 am | #

Misean writes:
Tripleplay,

ac must be exhausted from channeling Jas Jain. I have it, on good authority, that is, from being a Star Trek geek since I was 6, that Vulcan mind melds are extremely taxing on mere humans.

Cheers,
Misean | 07.04.08 - 10:37 am | #

sbarrkum writes:
Apparently for StarBucks

Lax Real Estate Decisions Hurt Starbucks

......
The company has long been known in the world of commercial real estate for its expertise at selecting prime locations and its fearlessness in establishing almost comic ubiquity in some neighborhoods.


.....
Though the flagging economy and soaring gas prices are responsible for at least some of Starbucks’s woes, interviews with commercial real estate brokers nationwide who work with the chain suggest another aspect of the story. These people say that the company was so determined to meet its growth promises to Wall Street that it relaxed its standards for selecting new store locations.
sbarrkum | Homepage | 07.04.08 - 10:47 am | #

Ross writes:
Anyone notice the Euro bourses today? No rest for the wicked.
Ross | 07.04.08 - 10:58 am | #

number2son writes:
Ah, misean, whocoodanode such an old sourpuss was so funny? ;)
number2son | 07.04.08 - 10:59 am | #

Misean writes:
sbarrkum,

I always see Starbucks through the veil of a Simpsons episode, where the family was walking through a mall, and after passing a Starbucks, the camera panned back and there were about 20 signs saying "opening soon...Starbucks".

Kinda sucks to be on the downside.
Misean | 07.04.08 - 10:59 am | #

linear algebra writes:
misean a poet--
who cudda knode it?
linear algebra | 07.04.08 - 11:08 am | #

Jack Staub writes:
"I've wondered if the European banks may have less exposure to continued deterioration in the U.S."

UBS, like the large US based banks, has exposure world-wide, as is the case for the other large European banks.
Jack Staub | 07.04.08 - 11:08 am | #

Max writes:
Bart, while walking through the Springfield Mall, passing several Starbucks, goes into a store called "In and Out Piercing:

Guy: Can I help you?
Bart: I'd like to get my ears pierced!
Guy: Better make it quick, kiddo, in five minutes this place is becoming a Starbucks!
Max | Homepage | 07.04.08 - 11:08 am | #

Misean writes:
number2son,

Don't be calling ac an old sourpuss. Them's fightin' words from my corner. Put up your dukes. Marquis of queen fighting rules. Whippersnappers, all of ya!

;) @ ac as well.

Cheers,
Misean | 07.04.08 - 11:09 am | #

John M writes:
CR: "Counterparty risk will be a theme at the big banks this quarter"

Wouldn't similar counterparty risk weigh on the GSEs? E.g. Fannie Mae's $700+ billion of off-balance-sheet QSPEs.
John M | Homepage | 07.04.08 - 11:10 am | #

Broward Horne writes:
I lived near Lincoln square in Bellevue, WA. There were at least seven Starbucks within a one-mile radius of me.

Madness.
Broward Horne | Homepage | 07.04.08 - 11:11 am | #

revro writes:
Anonymouse, believe me, the poor morons who took out mortgages in eastern europe will rather die then not pay their mortgages.

the problem is that most of them used the life savings of their parents to buy "their own" flat, so these poor morons have 50% equity finaced by their parents. also if you count in the pension income of their parents they have enough money.

the retired people are in eastern europe the most important voting block just like anywhere, and they have it best. they own real estate, have savings, get monthly their pensioon from state. they are in a much much better position than young families so dont wonder over 1,1-1,5 fertility rate in eastern europe.

the losses in eastern europe will be nothing compared with the uk, spain and ireland. dont forget the ossies :) never experienced in their lifetime a RE slowdown so they are stil in the RE will always go up mode, people will bring money from uk, ireland and buy here, and new companies will come and build factories because its so cheap here, so people will earn a lot :)

denial denial denial. globalization can bite you even if you in lowcost, just when the company gets eaten by another and your project is sent to china because its the policy of the aquiring company.

so the morons took out their mortgages at best in euro, when their currency is no longer apreciating, bankrupted their parents will soon learn that things are not only going up. they will have a hard life but no they will not cause big losses, the ones causing big lossess will be the speculators in uk, spain and england
revro | 07.04.08 - 11:11 am | #

revro writes:
lol i sound just like jas, maybe i should change my nick into "revro from the school of jas" :)
revro | 07.04.08 - 11:14 am | #

Misean writes:
linear algebra,

Did a stint, in the 80's as lyricist for the metal band I belonged to. Played bass, wrote lyrics. If you can call writing metal song words lyrical.

I thought I was rather clever though. A favorite:

Terror in the eyes with a cloven shield
'Cause with the next blow fate is sealed
Slicing axe
the blow hacks

Anywho, Euro banks are in as deep poop as US banks. This credit collapse is global.

Cheers,
Misean | 07.04.08 - 11:16 am | #

sk writes:

revro writes:
...dont wonder over 1,1-1,5 fertility rate...


Translating for the US crowd, that's 1.1-1.5

Ahhh, the long forgotten joys of the I18N and L10N computing.

-K
sk | 07.04.08 - 11:21 am | #

Lawyerliz writes:
I have my trust account at BKUNA. Got worried when it turned into a penny stock; moving to Mellon, which is 1} across the street, and 2} has stock which is only down 30%.

They were so picky and demanding I felt they were getting married to me, not just taking my money (or my client's money).

Anybody know anything bad about Mellon? Supposedly they don't make much money in traditional banking.
Lawyerliz | 07.04.08 - 11:24 am | #

Misean writes:
revro,

"the retired people are in eastern europe the most important voting block just like anywhere, and they have it best. they own real estate, have savings, get monthly their pensioon from state. they are in a much much better position than young families so dont wonder over 1,1-1,5 fertility rate in eastern europe."

Do they own it, or pay still on mortgages? Because state pension payments may be under pressure. Particularly if their holding...you know...like AAA CDO's.

Just asking.

Cheers,
Misean | 07.04.08 - 11:27 am | #

rent_to_own writes:
I really shouldn't have to do this, but a timely reminder -
1. UBS is not a eurozone bank, and the ECB has nothing to do with it.
2. No bank based in the UK is a eurozone bank, and the ECB has nothing to do with i
3. No bank based in Eastern Europe is technically a eurozone bank, and the ECB has less rather than more to do with them

This is a fairly major flaw in most English based reporting I have read - anything in Europe is 'European,' even when that is simply not a correct assumption when dealing with a number of different countries having different currencies and central banks.

Not that Europe isn't going to get hammered, regardless, merely that anyone that thinks what happens to UBS directly effects ECB decision making is using a flawed foundation for analysis.
rent_to_own | 07.04.08 - 11:30 am | #

Sue writes:
OT, but fascinating - the world's biggest shopping mall (China, natch) is a complete bust for now. The developers took, guess what, Las Vegas for a model.

The article goes into some detail describing the thinking and planning that made it DOA.

http://www.thenational.ae/articl...6990272/0/ SPORT

"About 500 new malls have been built in China over the last five years, estimates Kevin Jiang, a researcher at the Mall China Information Center. All of them are waiting for the arrival of this coming mega-middle class, as are the rest of China’s countless “visionary” development projects. These include a from-scratch “eco-city” for 500,000 residents north of Shanghai, a compound of a hundred luxury villas in the Ordos desert of Inner Mongolia and a thousand-acre theme-park replica of the old imperial Summer Palace, which was destroyed by British and French troops in the nineteenth century"
Sue | 07.04.08 - 11:35 am | #

revro writes:
states pension comes from money from the current generation so they are safe as long people are working

the new pension fonds in Slovakia are holding mainly local MBS and since our stock exchange is nonexistet cause few guys stole/privatized everything for 1SKK, all pension money is in Slovakian MBS or corporate paper.

fortunatly RE rise in Slovakia went up 100% only last year and is already falling down so not much of pension funds have bought at the top.

to ECB, well slovakia will soon adopt euro so it wil be a matter for ECB, slowenia already has euro and has quite strong inflation, also i think latvia also has already adopted euro and has re decline.
revro | 07.04.08 - 11:35 am | #

Clyde writes:
Anyone know of the auto industry equivalent of Calculated Risk or the Oil Drum? The liabilities of the automakers are giving me the willies. Will the government really let all those bondholders go to zero?
Clyde | 07.04.08 - 11:35 am | #

Misean writes:
rent_to_own,

"UBS directly effects ECB decision making is using a flawed foundation for analysis."

Well of course the United Bank of Scottland lends pounds. But those were traded for Euros and spent there. Or am I incorrect? The Euro finance zone has confused me a bit, since they started letting in former Soviet block contries in.

Cheers,
Misean | 07.04.08 - 11:36 am | #

Misean writes:
revro,

Thanks,

Cheers,
Misean | 07.04.08 - 11:39 am | #

kb777 writes:
Cldye,

http://www.generalwatch.com/
kb777 | 07.04.08 - 11:39 am | #

revro writes:
eastern block is eldorado for western companies, its close has low wages on par with india(many easterneuropeans speak german, indians dont, and those that do, dont :) and china (manufacturing, textile is dead in eastern europe)
revro | 07.04.08 - 11:39 am | #

OldSkool writes:
Sub-prime Chill reaches the Artic

"This Arctic municipality of 18,000 inhabitants is the surprise victim of the US sub-prime mortgage crisis, an example of how far-reaching its impact has been. Narvik, together with seven other small communities across Norway, have lost tens of millions of pounds in complex investments that went south as a direct result of the global financial squeeze."
OldSkool | 07.04.08 - 11:43 am | #

AlphaBeta writes:
Mattel (maker of toy cars..) is now more valuable than General Motors!

Yesterday: 6,23 billion for Mattel and GM 5,73 billion dollars. We have a WINNNNEEERRRRR! :-)
AlphaBeta | 07.04.08 - 11:52 am | #

Misean writes:
some thread music.

Run to the hills:

http://www.youtube.com/watch?v=3...h? v=3ZlDZPYzfm4

Cheers,
Misean | 07.04.08 - 11:56 am | #

BB writes:
The only bank that has written off more than UBS is Citibank.
BB | 07.04.08 - 11:58 am | #

rent_to_own writes:
Misean-
actually, we are talking about a Swiss bank, but that is not really important to the question, which is, what is the eurozone?

Anyone that can answer than question is truly gifted with wizardly talents, because in the end, no one really knows. The textbook answers are pretty simple - 15 countries share the euro (Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovenia, Spain), while the EU has 27 countries. Not counting Slovenia, no country formerly behind the Iron Curtain uses the euro, though among the list of countries with currencies tied or pegged to the euro, you will notice that Eastern Europe is well represented - Bulgaria, Denmark, Estonia, Latvia, Lithuania, Slovakia. However, a major economic block of the former Soviet sphere - Poland, Czech Republic, Hungary - is not yet part of the eurozone, and current schedules and planning are not working well. For example, the Czechs have decided to build their infrastructure by using debt beyond binding euro limits, the Poles don't seem very interested in general, and Hungary is running a very high level budget deficit. Realistically, none of these states is likely to join the eurozone before 2013, if they ever do.

However, both the euro and Swiss franc are used in Eastern Europe for mortgages, which thus leads to all sorts of interesting effects.

And the UK is its own theme - and considering just how much English language press comes out of a country with a vested interest in seeing its own financial industry remain profitable in the face of a growing economic structure on its doorstep, just about all British reporting on the euro should be treated with a healthy amount of skepticism. Till now, most British economic reporting on the euro has simply been wrong - the eurozone continues to do well with the advantages of a single currency being used for trade in an economic structure with arguably both a higher population and a larger economy than the U.S.

The broad picture isn't so hard - the details are close to impossible.
rent_to_own | 07.04.08 - 12:03 pm | #

uuu writes:
Sue quotes, "...All of them are waiting for the arrival of this coming mega-middle class."
Having lived in East Asia for ten years include me in that waiting list.
uuu | 07.04.08 - 12:05 pm | #

Misean writes:
Monty Python's take on Scottland.

http://www.youtube.com/watch?v=K...h? v=Kc_iWPnjtCI

Cheers,
Misean | 07.04.08 - 12:07 pm | #

gimee a break writes:
Denmark in eastern europe?

Maybe you should reduce your blog time and go back to studies, or momma will be very angry.
gimee a break | 07.04.08 - 12:17 pm | #

Terry writes:
TPG walks away from UK bank rescue

http://www.ft.com/cms/s/0/ 126523...0077b07658.html
Terry | 07.04.08 - 12:19 pm | #

RE writes:
Also, just to reinforce rent_to_own's point, the article referenced above (Sub-prime Chill reaches the Artic) refers to Norway which is also not part of the Eurozone and uses the Krone.
RE | 07.04.08 - 12:23 pm | #

Anonymous writes:
'Denmark in eastern europe?'

The exact quote '...among the list of countries with currencies tied or pegged to the euro, you will notice that Eastern Europe is well represented - Bulgaria, Denmark, Estonia, Latvia, Lithuania, Slovakia.' could be open to misinterpretation - but the idea of 'well represented' was intended to mean 'not exclusively Eastern European, but mainly Eastern European.'
Anonymous | 07.04.08 - 12:24 pm | #

fried writes:
revro,
how is the second home market doing ? lots of press in the nytimes and elsewhere of germans and brits buying condos and second homes in eastern europe...prague, cracow, the dalmation coast. I'm guessing most used mortgages from their home countries. any selling pressure yet?
fried | 07.04.08 - 12:25 pm | #

Jes writes:
OT
KPBS radio here in San Diego right now is doing a political spoof--very funny song right now about subprime mortgages.
Jes | 07.04.08 - 12:26 pm | #

Brother,Can You Spare A Dime? writes:
Has anyone mentioned that Berkshire Hathaway is down about 20% since December?
Brother,Can You Spare A Dime? | 07.04.08 - 12:27 pm | #

rent_to_own writes:
No, I am not Anonymous, I just act that way when tired, and begging for mommy to tuck me in.

And thanks RE for pointing out a nation which should not have been ignored, as the Norwegians are sitting on one of the world's largest amounts of liquidity. And who are part of the Icelandic rescue team, yet another 'European' banking disaster in the making (or being headed off - Iceland is pretty small, after all), which has essentially nothing to do with the eurozone.
rent_to_own | 07.04.08 - 12:31 pm | #

Anonymous writes:
rent_to_own,

Nice post on the EU listing all 15 EU contries alphabetically no less.

Unlike the US, EU countries did not permit their banks to create SPEs with CDOs amd other toxic securities. In addition, Germany, the kingpin of the EU, did not permit toxic mortgages such as option ARMs, 100%, liar loans etc. and is not experiencing a housing collapse. Some large EU banks were sucked into the US problems via poorly considered investments (eg UBS), but overall the EU is much better positioned than the US to weather the coming credit contraction. Many believe Trichet's decision to raise rates to 4.25 (.25 over inflation) will further strengthen the financial system, although economic growth may suffer.
Anonymous | 07.04.08 - 12:33 pm | #

Uncle Billy Goes to Washington writes:
The Monty Python video was funny, but when you view it, the following "related" video shows up on the side:

http://www.youtube.com/watch?v=6...I420_fPM2E& NR=1

Blood on the Streets. It's not hard to imagine what things would be like now if she was a financial reporter.
Uncle Billy Goes to Washington | Homepage | 07.04.08 - 12:38 pm | #

joeblo writes:
Misean-

Thanks for the ode to Haloscan.
Starbucks silliness is not limited to the Simpsons. Last time I was at Luxor (in Vegas) for a wedding, I couldn't find my wife who had gone to Starbuck's.

Looking around, I realized I was at the wrong one, I could see two other Starbuck's from where I was standing, and after walking to both of them discovered she was at a 4th SB on the casino floor. I hope they were subsidized to keep the prols gambling.

sbarrkum- thanks for introducing me to the alea blog.
joeblo | 07.04.08 - 12:38 pm | #

gimee a break writes:
Then you write the sentence in this manner:

"Among the list of countries with currencies tied or pegged to the euro - Bulgaria, Denmark, Estonia, Latvia, Lithuania, Slovakia, you will notice that Eastern Europe is well represented."

When Tanta comes back after her plastic surgery, she will be very angry to see how much the quality of English writing in this blog declined.
gimee a break | 07.04.08 - 12:38 pm | #

Uncle Billy Goes to Washington writes:
Anonymous: interesting bit about Germany. From what I remember they invented securitization of mortgages. But when they did it back in the 1800's, they had a very conservative loan to value requirement (40%?)

Re: Iceland Anyone know if the rumors that Bear was manipulating their economy was true?
Uncle Billy Goes to Washington | Homepage | 07.04.08 - 12:45 pm | #

revro writes:
fried, well brits have bought between 2003-2006 and soon 5 years after which they dont have to pay taxes are over.

but problem is they all bought new appartments priced at 200% what even rich people could afford, i mean there are 20-30 thousand expensive appartments for top executives in the capitol city Bratislava with population of 600 thousand people. ofcourse RE fonds are blabbering to their investors in UK that these appartments will sell.

no they wont, with the apreciation there apparments cost over 100k Pounds and there are no 20-30 thousand top managers to buy them :)

in slovakia there were not many euro mortgages, but poland was from what i heared up to their ears in euro mortgages, so now erste bank has some significant problems there and offer nice 4% CD for a year :) while everyone else offers 3,2%.
revro | 07.04.08 - 12:54 pm | #

Exit writes:
"Among the list of countries with currencies tied or pegged to the euro - Bulgaria, Denmark, Estonia, Latvia, Lithuania, Slovakia, you will notice that Eastern Europe is well represented."

When Tanta comes back after her plastic surgery, she will be very angry to see how much the quality of English writing in this blog declined.
gimee a break | 07.04.08 - 12:38 pm | #

I hate to parse hares, but there is nothing wrong with that sentence. 4 of the 5 listed countries are in fact in Eastern Europe. Hence, Eastern Europe IS well represented. The sentence does not say, or imply, that the catalog is exclusively EE. Reading comprehension is in the eye of the beholder, in this instance.
Exit | 07.04.08 - 12:57 pm | #

BB writes:
Exit writes:

I hate to parse hares

--------------------------

Lay off my bunny :)
BB | 07.04.08 - 1:09 pm | #

Leftys Liquors writes:
I am no English major, but on a slow day I will read a copy Juggs, from behind my counter. The sentence structure is poor, however, its not incorrect. Now don't make me put this magazine down again. And, Happy Fourth of July to us on this side of the pond.
Leftys Liquors | 07.04.08 - 1:10 pm | #

Uncle Billy Goes to Washington writes:
Go take some business englyshe you heathens. "Among the list of countries" is just wrong.

Also, using an n-dash and then following it with a comma instead of another n-dash... well that's just lazy.

On second thought, a few here seem drunk half the time, so it's not laziness it's just haziness.
Uncle Billy Goes to Washington | Homepage | 07.04.08 - 1:25 pm | #

Uncle Billy Goes to Washington writes:
btw.. that bit about the n-dash was a joke, since they should have been m-dashes anyway. yah, that's it... a joke.
Uncle Billy Goes to Washington | Homepage | 07.04.08 - 1:28 pm | #

Leftys Liquors writes:
Well if any of you need more alcohol, remember, we are always open, and, we have free parking.
Leftys Liquors | 07.04.08 - 1:33 pm | #

Aheadofthecurve writes:
"Misean writes:
linear algebra,

Did a stint, in the 80's as lyricist for the metal band I belonged to."

Why does this statement not surprise me?
Aheadofthecurve | 07.04.08 - 2:34 pm | #

I'm no Tanta writes:
Exit writes:
"Among the list of countries with currencies tied or pegged to the euro - Bulgaria, Denmark, Estonia, Latvia, Lithuania, Slovakia, you will notice that Eastern Europe is well represented."

"I hate to parse hares, but there is nothing wrong with that sentence."

It may be geographically fine, however, grammatically if fall flat. Among doesn't agree with list.
I'm no Tanta | 07.04.08 - 3:12 pm | #

I'm no Tanta writes:
Rather, it falls flat.
I'm no Tanta | 07.04.08 - 3:14 pm | #

fried writes:
Lefty,
Do you accept online orders? And can you deliver to Cracow?
fried | 07.04.08 - 3:25 pm | #

Alec writes:
austrian banks have the biggest exposure to central europe RE.
Alec | 07.04.08 - 3:25 pm | #

yourkillingmelarry writes:
Kind of OT:

Has anybody seen this BW article

"The rate of option ARM delinquencies is already spiking"

"According to a recent analysis by Lehman Brothers, option ARMs that originated in 2006 performed about as well as fixed-rate Alt-A debt for the first 12 months. But by the time they were 2 years old, about 2.1% of performing loans were going 60-days delinquent each month. Compare that to a 1.2% of current loans going delinquent with other Alt-A loans. The rate of increase in delinquencies is even beginning to approach that of subprime, which is about 2.5%.

“It’s a better quality borrower but the rate of increase in delinquency is looking closer to subprime than Alt-A,” said Akhil Mago, the head mortgage credit strategist for Lehman Brothers, said."

http://tinyurl.com/6dtbgn
yourkillingmelarry | 07.04.08 - 3:59 pm | #

Man-moth writes:
Sorry if this was discussed and I missed it: "It is interesting to note that the largest institutional holder in the ProShares Ultra-Short Financials (SKF) is the European bank UBS which at the end of the first quarter of 2008 owned over 318,000 shares." from
http://tiny.cc/ntLSa
Man-moth | Homepage | 07.04.08 - 6:35 pm | #

Aheadofthecurve writes:
Does SKF include UBS or only US banks? If it does then how can you justify to your shareholders shorting your own shares? If it doesn't, I suppose you can justify shorting the competition-still wierd though and legally suspect, I would think.
Aheadofthecurve | 07.04.08 - 7:39 pm | #

Mike in Long Island writes:
SKF is double short the Dow Jones US Financial Index comprised of:

Bank of America Corp. 7.41%
JP Morgan Chase & Co. 6.32%
Citigroup Inc. 4.85%
American International Group Inc. 4.19%
Wells Fargo & Co. 4.04%
Goldman Sachs Group Inc. 2.59%
U.S. Bancorp 2.43%
Wachovia Corp. 2.33%
Bank of New York Mellon Corp. 2.07%
Morgan Stanley 2.00%
among other things but no UBS...

Sounds like is may be a broad hedge against some of their counter parties - who knows.
Mike in Long Island | 07.04.08 - 7:55 pm | #

Anonymous writes:
Lawyerliz:

Unlike most commercial banks, BKNY Mellon (ticker: BK) makes most of its money from fees, not interest from loans. Basically, it acts as the back office for the financial services industry.

This is the Yahoo summary:

http://finance.yahoo.com/q/pr?s=BK

Its chief competitors are State Street (SST), Northern Trust (NTRS), and the securities processing/custody operations of the international banks (e.g., Citibank, JP Morgan Chase, etc.)

Years ago when I used them as trustee for an ERISA plan, they did a good job. Other than the usual complaints that we all have with our custodians, I not heard bad things about them from an operational and service standpoint.

There are news stories about a Russian lawsuit. I do not know the full implications of it.







State Street
Anonymous | 07.04.08 - 8:10 pm | #

Norka West writes:
Lawyerliz:

Anonymous was me posting too fast.
Norka West | 07.04.08 - 8:13 pm | #

Aheadofthecurve writes:
Mike in Long island: OK, so UBS is not shorting their own stock. Still, I bet their share price movements are highly correlated to those of other banks. So if they drive down BAC, JPM, C etc, most likely their own shares will fall too. Seems dubious to me. I bet you won't find Exxon shorting the USO or Merck shorting the PPH.
Aheadofthecurve | 07.04.08 - 9:14 pm | #

dr strangemoney writes:
You and us.
We are both subprime now.
dr strangemoney | 07.05.08 - 4:07 am | #

Tangy writes:
Here we go again - UBS is not a European bank.

It is Swiss (fusion of two main Swiss banks, SBS + USB). Switzerland is geographically situated in Europe, but not part of the EU, and thus not eurozone.

.. or Swiss-American (US). If one considers the places where it is most active.

They themselves consider, rightly, that they are global: “UBS is the leading global wealth manager, a top tier investment banking and securities firm, and one of the largest global asset managers.” -from their site

UBS is, amongst other things, politically anti-EU. (Though I have heard some dissident opinions on that.) They do have branch offices in EU countries.
Tangy | 07.05.08 - 7:25 am | #

boethius writes:
Back to UBS...their statement of yesterday also included quarterly loss mitigation via tax savings/credits/loopholes/gimmicks. Wonder when our banking brethren in the US will start to wave the tax stuff as a benefit?
boethius | 07.05.08 - 8:35 am | #