Another block in the Wall of Ponzi rollover finance is crashing down under the weight of it’s Minsky moment. Today by a deed which bellows louder than any words can deny UBS admitted it could no longer hold up the value of the auction-rate securities in its customers accounts so the bank will write them down roughly 5 percent.
UBS will inform clients of the reduced value of their holdings via their online statements, Briefing.com said, citing a Dow Jones report. UBS customers had maintained full value without any discount that could reflect bondholders’ inability to sell their holdings.
Before the credit crunch banks which ran the auctions would buy up the unsold securities, but since last summer such maintenance is to be never more. Thus the illiquid assets remain stuck in clients accounts with no way out of the write down. We cannot find any hard numbers on the impending take down, but UBS
has been among the hardest hit of the banks, already writing down $17 billion worth of credit holdings and facing another $11 billion in write-downs in the first quarter, according to analysts at Oppenheimer.
Until now, customers who were unable to sell securities in regularly scheduled auctions were told that the securities retained full value and would receive higher interest rates. UBS, however, using an internal model to value the securities, will mark them down
And yet according to a UBS spokeswoman
“This is the right thing to do,” “This is in the best interest in our clients regarding our accounts.
A very singular version of right and wrong.
No comments:
Post a Comment