Lehman’s disastrous quarter has fuelled concerns that bank write-downs aren’t over. UBS investors are preparing for the worst (WSJ):
Investors are bracing for more write-downs on mortgage securities from Switzerland’s UBS AG after prices for such holdings have worsened dramatically in recent weeks, and as rival Lehman Brothers Holdings Inc. disclosed a profit warning.
Write-downs announced Monday by Lehman Brothers are “clearly indicative of further write-downs for UBS, as is the deterioration in AAA-rated securities and the U.K. mortgage market,” said Peter Thorne of independent brokerage Helvea in London.
UBS, which originally held over $15 billion in subprime mortgages, is already down about 50% year-to-date.