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UBS drops on writedowns warning

(LONDON) UBS AG, Europe’s biggest bank by assets, declined to the lowest level in almost five years in Swiss trading after Credit Suisse Group said the company faces further writedowns from ‘troubled’ assets. ‘Further writedowns appear likely and could be large,’ analyst Daniel Davies said yesterday in a research note. ‘Taking more pessimistic assumptions in […]

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Day of reckoning for banks hit by US mortgage crisis

WASHINGTON – IT IS D-Day for the world’s big banks as they finalise last year’s results and try to account for the full scale of the credit upheaval spawned by the United States sub-prime crisis that threatens to stall the global economy. Over the next two weeks, most major US banks will file annual reports […]

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Citigroup funds may be in trouble: paper

(NEW YORK) Citigroup Inc has barred investors in one of its hedge funds from withdrawing their money, and a new leveraged fund lost 52 per cent in its first three months, the Wall Street Journal reported yesterday. The largest US bank suspended redemptions in CSO Partners, a fund specialising in corporate debt, after investors tried […]

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NEWS ANALYSIS: Financial fears form correlation between oil and equities

Liquidation, profit taking in energy markets offset losses in equities (LONDON) Oil and other commodities typically lag more mainstream assets, making them attractive as investment portfolio diversifiers, but since January, they have been swept up in the volatility gripping nervous equity markets. The correlation between US crude and US equities has been 82 per cent, […]

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Sub-prime probes focus on disclosure, valuation

(WASHINGTON) The Securities and Exchange Commission (SEC) is investigating how banks, creditrating firms and lenders valued and disclosed complex mortgage-backed securities that ultimately led to the sub-prime crisis, a top agency enforcer said on Saturday. ‘The big question is, who knew what when, and what did they disclose to the marketplace?’ said Cheryl Scarboro, an […]

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A year of denial in US sub-prime crisis

It took months for a consensus that crisis would spread to the broader economy (NEW YORK) One year after the first alarm bells of the sub-prime mortgage crisis rang in Wall Street, many of its victims are trading at half their value or less, while others have long been buried. On Feb 8, 2007, HSBC said […]

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UBS facing probe over sub-prime mortgage investments

Swiss bank may have inflated prices of securities despite drop in valuations CHICAGO – UNITED States government prosecutors are investigating whether Swiss banking giant UBS misled investors by reporting inflated prices of mortgage-backed securities it held despite knowing those valuations had eroded, The Wall Street Journal reported last Saturday. The Journal, quoting unnamed sources familiar […]

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‘Stormy 2008’ expected for financial services

LONDON – THE financial services industry should expect ‘turbulent conditions for 2008 and beyond’ and may report an additional US$300 billion (S$429.8 billion) in losses related to the United States sub-prime crisis, according to a study by consulting firm Oliver Wyman. ‘We expect a stormy 2008,’ Oliver Wyman said in its State Of The Financial […]

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Merrill takes US$11.5b sub-prime writedown

Largest US broker posts first full-year loss since 1989 (NEW YORK) Merrill Lynch reported a second straight quarterly loss after writing down US$11.5 billion of subprime mortgages and bonds, ousting its chief executive officer and losing almost half of its market value in 2007. New York-based Merrill said yesterday that it suffered a fourth-quarter net […]

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Buddy, can you spare a few billion dollars?

US banks seek foreign govt, other funds, but for how long will they be obliged? (NEW YORK) First hard-pressed Wall Street banks turned to rich foreign governments for help. Now, they are seeking aid from the likes of New Jersey and big mutual funds to bolster their weakened finances. Citigroup and Merrill Lynch said on […]

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Borrowing costs swell as banks clamp down

NEW YORK – STUNG by billions of dollars in bad debts, banks in the United States are clamping down on loans, making borrowing costlier for the consumers and companies that are the best hope for keeping the US economy out of recession. Economists are increasingly worried that reluctant banks plus skittish borrowers will create a […]

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Merrill’s losses in fourth quarter balloon to $14b

Write-downs of $21b force world’s largest brokerage to declare worst-ever quarterly hit NEW YORK – MERRILL Lynch, the world’s largest brokerage, lost nearly S$10 billion (S$14.3 billion) in the fourth quarter, its biggest quarterly loss since it was founded 94 years ago, after reporting US$14.6 billion (S$20.9 billion) in write-downs. Of the five biggest Wall Street […]

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GIC places $430m with US property hedge fund Rosen

It steps up buying of foreign real estate assets as values plunge, growth slows SAN FRANCISCO – THE Government of Singapore Investment Corporation (GIC) is investing in the United States property market, where values have fallen heavily in the past year. GIC committed US$300 million (S$429.2 million) to hedge fund Rosen Real Estate Securities to […]

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UPFRONT: As the dollar loses its charm, the world frets

WASHINGTON – IN CHARLIE Wilson’s War, a new movie based on a true story and starring Tom Hanks, a Texan congressman convinces the United States administration to back a plan to oust the Soviets from Afghanistan. It involves ‘greening’ Afghanistan – pumping a billion dollars a year to arm the Afghan mujahideen. The plan works, […]

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UBS shocks with $14b in sub-prime write-downs

ZURICH – SWISS bank UBS, Europe’s largest lender by assets, unveiled US$10 billion (S$14.4 billion) in astounding sub-prime write-downs yesterday. The bank’s losses has already cost the jobs of chief executive officer (CEO) Peter Wuffli, his finance chief Clive Standish, investment-banking head Huw Jenkins and 1,500 people at the securities unit. The US$10 billion charge […]

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wallstreet – Stocks tumble as banks warn of debt write-offs

NEW YORK – WALL Street finished a turbulent week with another huge drop on Friday after major banks warned of further losses on their debt portfolios. That raised investor concerns that the credit market slump showed no sign of abating. Record-high crude oil prices and a sagging dollar further undermined sentiment. The Dow Jones Industrial […]

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Financial crises: True picture still to emerge

GLOBAL stock prices tumbled this week in North America and Europe as losses mounted at US banks. Meanwhile, oil and gold prices rose, indicating the jittery mood of international investors. Of course, dips are not unusual: stock markets have suffered bigger single falls in the past. And yet, there is something highly unusual and potentially […]

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US stocks fall on fresh credit worries

NEW YORK – UNITED States stocks dropped to the lowest in two months early yesterday, as financial institutions such as Wachovia, Fannie Mae and State Street reignited concern about the plummeting value of mortgage bonds. Wachovia, the fourth-largest US bank, tumbled to the lowest since 2003 after some of its debt securities lost US$1.1 billion […]

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US$ slips to record low against euro

Greenback also hit by fears of more loss disclosures by financial sector firms LONDON – THE greenback hit a record low against the euro yesterday as fears grew that more United States financial firms will be hit by credit market turmoil, reinforcing expectations of further Federal Reserve interest rate cuts. Such worries came to the […]

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Why the US dollar party may yet end…

… And why the Singapore dollar is the investment holding currency of choice FOR all the foolish chatter about an ‘unprecedented’ meltdown, the ongoing CDO (collateralised debt obligations) crisis is but a re-run of a regular occurrence in the banking industry: that of a cycle of extremely poor credit decisions by professional lenders, in this […]

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