Another example of a chunk of the losses being contained on Wall Street, and not leaking to Main Street this will now have zero effect on aggregate demand and there seems to be no business interruption.
So as long as the losses stay spread out enough to not impair business operations and subdue aggregate demand in general the real economy is untouched.
On an anecdotal level, my Citibank account executive emailed me last week out of the blue asking if I still had financing with Calyon, as they were interested in competing for the business.
UBS to Sell Stakes After $10 Billion in Subprime Writedowns
2007-12-10 01:08 (New York)
By Elena Logutenkova
Dec. 10 (Bloomberg) — UBS AG, Europe’s largest bank by assets, said it will write down U.S. subprime investments by $10 billion and raise 13 billion francs ($11.5 billion) by selling stakes to investors in Singapore and the Middle East.
UBS expects a loss in the fourth quarter, and may have a loss for 2007, the Zurich-based company said in an e-mailed statement today.
Securities firms and banks had announced about $66 billion of losses and markdowns linked to the collapse of the U.S. subprime mortgage market this year. UBS reported its first loss in almost five years in the third quarter after the subprime contagion led to about $4.66 billion in markdowns on fixed-income securities and leveraged loans.
Editor: Frank Connelly