UBS came out Wednesday and confirmed that it had taken an additional $4bn of asset write-downs in the fourth-quarter (taking the write-downs to $14bn in the period). The bank now expects a loss for the fourth period of around $11.4bn, taking the 2007 full-year loss to around $4bn.
Hot on the heels of that Experian report issued a few days back, which predicted as many as 20,000 job losses in London in 2008 (the majority coming from the financial sector), job cuts are back in the headlines again this Friday.
Bloomberg reports that last month was the worst January ever for European stocks, with the Stoxx 600 falling back 12%. The news agency quotes Brewin Dolphin Securities chief strategist, Mike Lenhoff, who said that 'the market is in a hysterical frame of mind. You are looking at the prospect of the credit crunch becoming much more exaggerated, a background for an economy which is going to have much more difficulty'.
Reuters reports that BNP Paribas has said that its fourth-quarter profit will come in around 42% lower at $1.48bn, after $871m of write-downs and costs linked to the credit markets.
It's very clear that our friends across the Channel could never permit a venerable French institution like Societe Generale to fall into the hands of dreadful foreigners. So, French banks like BNP Paribas and Credit Agricole will be 'encouraged' by the French authorities to jump in should it ultimately look as if SG can no longer stand alone. The upshot ? French labour laws being what they are, there will be very few job losses back home. But over at the international investment banking operations of any merged firm, there will be carnage. A BNP Paribas / Societe Generale merger, in particular, would result in blood on foreign streets. As the French say, though, 'C'est La Vie'.
The Times reports that SocGen's so-called 'lone-nut rogue trader', Jerome Kerviel, has an elder sibling, Olivier, 36. And the elder Kerviel, it seems, left his job as a portfolio manager at B Capital, a subsidiary of BNP Paribas, last year after an alleged breach of controls and internal procedures. You could make this stuff up!
This saga is as clear as mud at the moment.
Some of SocGen's risk team have been told to get on their bikes following the discovery of that $7.1bn rogue trading loss last week. Here's an exclusive picture of the team leaving the office for the last time (in the box to the right). (Apologises to SG, but we couldn't resist).
We have obtained a copy of the official 'explanatory note' compiled by Societe Generale on that $7.1bn trading scandal.
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