Swiss Re hit by sub-prime losses 1.07bn

[discostu]

news.bbc.co.uk/2/hi/business/7101225.stm

This lot are a reinsurance company who now say they are working to improve their financial risk taking they just got caughtfor $1.07bn

[verbatim]

They marked the value of their subprime book to 62% of face value, and marked the value of their asset-backed CDOs to zero!

I wonder how many other places have marked their ABS CDOs to zero.

[Who_ll_take_the_rap]

@verbatim

They marked the value of their subprime book to 62% of face value, and marked the value of their asset-backed CDOs to zero!

I wonder how many other places have marked their ABS CDOs to zero.

Crikey! CDOs lower than subprime. This must be some of the DOT.COM rubbish!

[ragingbear]

@Who'll take the rap?

@verbatim

They marked the value of their subprime book to 62% of face value, and marked the value of their asset-backed CDOs to zero!

I wonder how many other places have marked their ABS CDOs to zero.

Crikey! CDOs lower than subprime. This must be some of the DOT.COM rubbish!

Not that i know what’s in these CDOs specifically, but it would make sense that even the top tranches of a subprime ABS pool are rated a lot higher than any CDOs made from the lower trances of the same ABS pool. If they expect to lose 38% on the top tranch ASB, the lower trances are long dead.

Still, it’s impressive to see a 100% capital write-down on what were likely AAA rated securities, and worth full or nearly value just 6 months ago.

[tulip]

Tell me are CDO’s level 3 assets? could this 100% right down be used by auditors using the FASB 157 to value other level 3 assets if it is?

[Green_Bear]

There are reports that UBS may have hit financial difficulty and investors are awaiting news from the bank on the size of its exposure to sub-prime mortgages.
Yesterday, Swiss-based UBS, which has a major presence in the US, saw its shares briefly suspended after a sudden crash. By noon, they were down 3% at Swfr49 in Zurich. Analysts forecast that UBS could be forced to write off $9 billion, a figure which UBS has denied.
A spokesperson for the bank insists that it will be profitable in the last quarter, however, this result that ‘isn’t compatible’ with the alleged losses. The spokesperson added that the temporary share suspension was ‘automatic’. If you have a very strong fall between two bids, it’s stopped automatically so that other market makers can come in again.
Back in October, UBS announced that it was cut 1500 jobs by Christmas after huge losses sparked by the sub-prime mortgage crisis in the US pushed it into its first loss for 9 years.

UBS in financial trouble
financemarkets.co.uk/2007/11 … l-trouble/

[ragingbear]

@tulip

Tell me are CDO’s level 3 assets? could this 100% right down be used by auditors using the FASB 157 to value other level 3 assets if it is?

I would think so.