UBS (UBS) had an awful quarter. The Swiss financial firm reported a fourth-quarter loss of 12.45 billion Swiss francs ($11.3 billion), compared with profit of 3.41 billion francs in the year-earlier period. Worse, according to MarketWatch "even after these charges, the bank said it still has significant exposure to U.S. mortgage assets."
At the end of the year, UBS still had mortgage-instrument exposure of almost $28 billion and $3.6 billion in exposure to bond insurer issues. While it is unlikely that the company would have to write off all of these assets future damage in the mortgage markets and a lock-down in credit trading could certainly put the bank in a position where its 2008 losses could be well into the billions of dollars.
In terms of the structure of its balance sheet, UBS is not terribly unlike US banks.It is a near-perfect canary in the coal mine. Citigroup (C) took a write-down on mortgage-backed securities of over $18 billion in its fourth quarter. With its current exposure to those markets, it could easily face more losses of similar magnitude.
The UBS warning, which pulled no punches, is red flag for Wall St. The US banking crisis is not over, not by a long shot.
Douglas A. McIntyre
The Average American Has No Idea How Much Money You Can Make Today (Sponsor)
The last few years made people forget how much banks and CD’s can pay. Meanwhile, interest rates have spiked and many can afford to pay you much more, but most are keeping yields low and hoping you won’t notice.
But there is good news. To win qualified customers, some accounts are paying almost 10x the national average! That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 3.80% with a Checking & Savings Account today Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Our top pick for high yield savings accounts includes other benefits as well. You can earn up to 4.00% with a Checking & Savings Account from Sofi. Sign up and get up to $300 with direct deposit. No account fees. FDIC Insured.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.