But it is not definitely the case for all the banks now. I am not a financial expert (still working hard) but something is definitely not right when UBS has to sell off $10 bil worth of shares. This is slightly more than the net income of UBS in 2006 (source from wikipedia).
What is this trend called “subprime write-off” all about? Why are banks taking turns to do this? I even wanted to list down the links to all the news announcement made over the year on this. Luckily, I found this diligent work from this guy (http://riskfriends.wordpress.com/2007/12/04/update-subprime-bankparade-vi/). Not sure if the link will be there for long… But what is for sure, this subprime write-off thing is not for fun (http://www.bloomberg.com/apps/news?pid=20601087&sid=a3fCFxLIgT2s&refer=worldwide).
$400 billion of dollars are about to go down the drain… This explains why the low interest rates (0.25%) the banks offered for my savings account. All the money must have just vanished into the air. How many countries in the world now have GDP of $400 billion? Imagine if this fund has been spent on research for newer energy sources and methods to improve on the global warming effect. We could have advanced time by a decade or two.
Sometimes, it just makes you laugh when you think of stuff that we humans do. One day, when the world is coming to an end, we will look back and reflect, “Are we really the most intelligent beings on this Earth?”
(dated: 11/12/2007)
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