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Gross predicts $1 trillion of writedowns Mark Cobley 25 Jul 2008 One of the world's most successful bond fund managers, Bill Gross of Pimco, expects the fall-out from the US sub-prime mortgage crisis to hit $1 trillion (??35bn), in terms of the amount that will have to be written off the global financial services industry's combined balance sheet. The total suggests Gross believes the crisis has much further to run. According to the most recent total on Financial News' writedown-ometer, which is compiled from banks' results, $205bn had been written down as of June. Since then, fresh book-losses have been...

Merrill may write down $5.4 billion in Q2: Lehman By Elinor Comlay and Tenzin Pema Fri Jun 27, 9:45 AM ET Merrill Lynch & Co (MER.N) will likely incur $5.4 billion of write-downs in the second quarter, mainly from its exposure to bond insurers, said an analyst at Lehman Brothers. The report, coupled with a discussion of the write-downs on CNBC, prompted Merrill stock to fall 2.5 percent to $32.23 and highlighted concerns the broker may need to raise capital. Lehman analyst Roger Freeman raised his write-down view by $3 billion for Merrill, making his estimate the highest among Wall...

UBS details subprime losses By Haig Simonian Published: April 21 2008 07:21 | Last updated: April 21 2008 13:56 UBS on Monday revealed that its massive losses in securities related to US residential mortgages stemmed largely from the fact that three separate parts of the group had amassed large positions, without sounding the Swiss bank’s once-vaunted alarm bells for risk. In a report to shareholders two days ahead of its annual meeting, the biggest European casualty of the subprime crisis explains how its elaborate risk detection procedures failed to detect that UBS had built up more than $70bn in potentially...

April 13, 2008 US banks Citigroup and Merrill Lynch reveal fresh $15bn loss Iain Dey CITIGROUP and Merrill Lynch will heap further pain on Wall Street this week as they reveal additional sub-prime write-downs totalling $15 billion (£7.6 billion) or more. In another sign of the intense pressure on leading banks, Deutsche Bank is attempting to offload some of its €35 billion (£28 billion) of toxic debt to a consortium of private-equity firms. Huge exposure to American mortgages is expected to result in Citi taking a $10 billion hit to its accounts, dragging the bank to a first-quarter loss of...

Bankers watch for falling knives as sponsors feel pain James Mawson 25 Mar 2008 Investment banks that have found private equity a lucrative business over the past few years are about to receive a double blow: falling fees from financial sponsors this year as well as writedowns of private equity assets held on their books. The problem is most visible at the largest banks that targeted the biggest private equity firms as clients. Banks specialising in the mid-market are more confident of their ability to withstand the growing capital markets storm. A Financial News survey of 20 of the largest...

Stocks slide as investors scramble for safety By Michael Mackenzie and Saskia Scholtes in New York Published: February 29 2008 19:08 | Last updated: February 29 2008 21:10 Stock prices and bond yields tumbled on Friday as fears about the stability of the financial system sent investors scrambling for the safety of government debt. The yield on the two-year Treasury note dropped to its lowest level in nearly four years, while the S&P 500 stock index fell 2.7 per cent and the Dow Jones Industrial Average lost 2.5 per cent. Traders said sharp falls in the prices of mortgage bonds...

February 24, 2008 Sun shines on some as storm clouds gather over US economy American Account Irwin Stelzer JUST when it seemed things couldn’t get any worse, they did. The Federal Reserve Board’s economists revised their growth estimate down, and their inflation forecast up. The dreaded word “stagflation” has begun to make its appearance, reminding those Wall Street analysts old enough to remember that in the 1970s the economy experienced 15% inflation, 9% unemployment and three recessions. Those who want to update their financial vocabularies further should also take note of the new buzz word, “contagion”, used to describe the...

AIG's derivative woes hit confidence By Michael Mackenzie, Aline van Duyn and Stacy-Marie Ishmael in New York Mon Feb 11, 4:40 PM ET Confidence in the credit markets suffered a fresh blow on Monday after AIG, the insurance group, disclosed problems with valuing its derivatives portfolio. Measures of credit risk in both the US and Europe reached record levels, indicating widespread risk aversion. The news from AIG followed last week's pressure on the credit markets amid fears about a rise in corporate and commercial property debt defaults. In the US, the cost of buying protection against the default of investment...

Credit woes to spread, says PwC chief By Francesco Guerrera in New York and Jennifer Hughes in London Published: February 6 2008 22:01 | Last updated: February 7 2008 00:06 The global credit crisis is set to spread beyond the financial industry as companies in other sectors are forced to write down the value of their investments, according to the head of the largest global audit firm. Samuel DiPiazza, chief executive of PwC, said several US companies had invested in the asset-backed and mortgage-backed securities that caused billions of dollars in losses at Wall Street banks. “It’s not just in...

Banking Bust: More To Come Liz Moyer, 01.16.08, 4:30 PM ET Banks have written down more than $100 billion since the summer. Yikes. Now the bad news: There are still billions worth of potentially toxic securities sitting on the books. The additional $1.3 billion write-down disclosed by JPMorgan on Wednesday was just the latest loss big banks have reported in the fourth quarter. Merrill Lynch is expected to report a sizeable write-down when it reveals fourth-quarter numbers on Thursday, by some estimates in the neighborhood of $15 billion. Bank of America, Wachovia and other big lenders report next week and...