The FoH Stock Market Game

[Gwen Rockpounder]

Originally Posted by Yutnopash

I gave up once my Exxon stock took me below 95k, after that happened I wanted to see just how much I could lose so went back to Valero and dumped everything in there now Im sitting at 101...hoping it tanks a little more but doubt Ill make it to last place. =(

That was why I went into WWE, then the 10% increase I mentioned but this week they went and lost it all if not actually crashed lower than what I bought at. No idea why punters chose this week t dump them, it's their biggest weekend of the year with the extra Mayweather hype as well. Surely no-one believed the $20m bullshit and tanked them for that?

Ah well, 105th out of 122 is err honourable *coughs* >.<

[squong]

note to self, dont invest in verizon or java.....money sinks ftl.... but considering i was down to like 90k value a few weeks ago, 116k aint so bad
start another one for like april to september...and hopefully people will actually participate instead of just signing up and not doing anything with it...30 people did nothing out of 123...
this does prove 1 thing though....overall, the stock market is a losing proposition

[Hatorade]

WOOT! top 10 and was there from the start, not bad.

[Guild Lackey]

Hi guys. I missed this game, but I started one starting 4/1 to go for a full year (or until we all get bored and forget about it). Any of you are welcome to join. Virtual Stock Exchange - Home

[Tyen]

I'm dominating sirs~

[Soriak]

I signed up and going to run with a specialty portfolio: only made up of Swiss stocks traded on the US market. (doesn't have foreign markets it seems) Awful diversification, but hey Banks ought to improve again eventually... wish I had signed up earlier, UBS jumped 50% in a few days.

[Tyen]

1 Tyen $143,780.10 +43.78%


o0o0o0o0o

[Jysin-DW]

Signed up. Sounds like fun.

[Jysin-DW]

One day in and I am already 3rd place. Woohoo!

*EDIT* 2nd place!

[prescient63]

UBS Set to Cut 5,500 Jobs After First-Quarter Loss (Update7)

By Elena Logutenkova
More Photos/Details

May 6 (Bloomberg) -- UBS AG, battered by $17.3 billion of first-quarter losses at its investment-banking unit, plans to cut 5,500 jobs and said clients withdrew a net $12.2 billion from its asset- and wealth-management divisions.

The headcount reductions, which amount to about 7 percent of the workforce, will include as many as 2,600 positions at the securities division, the company said in a statement today. The bank also said it plans to exit the municipal bond business and sell $15 billion in distressed assets to a newly created fund managed by BlackRock Inc. UBS had a net loss of 11.5 billion francs ($10.9 billion) in the first quarter.

UBS fell 4.5 percent in Swiss trading, the most in four weeks, after clients withdrew more assets than they added for the first time in almost eight years. Chief Executive Officer Marcel Rohner told analysts he expects ``tough business conditions,'' which already caused $38 billion of markdowns at Switzerland's biggest bank, to continue.

``The bank's reputation is tarnished,'' said Dieter Winet, a senior portfolio manager who helps oversee 63 billion francs at Swisscanto Asset Management in Zurich. ``They pointed out some problems in private banking, which is their last jewel. The other two divisions have even bigger problems, as one nearly drove UBS to bankruptcy.''

Earnings Breakdown

Pretax profit at the wealth-management and business-banking unit fell 1.7 percent to 2.15 billion francs, while profit from asset management slumped 17 percent to 330 million francs. The 18.2 billion-franc loss at the securities unit compares with a profit of 1.54 billion francs a year ago.

The job cuts are part of the 65,000 reductions announced by the world's biggest banks and securities firms in the past year, as writedowns and losses from the U.S. subprime crisis swelled to $319 billion.

The measures will save about 3 billion francs a year, UBS said. The bank's first-quarter loss after writedowns of $19 billion was in line with its estimate on April 1. It had a 3.03 billion-franc profit a year earlier.

UBS fell 1.66 francs to 35.22 francs in Zurich, valuing it at about 76.7 billion francs. The company lost more than half its value in the past 12 months, making it the fifth-worst performer in the Bloomberg Europe Banks and Financial Services Index of 59 stocks. Deutsche Bank AG cut UBS to ``hold'' today, with a note entitled ``good news already in the price.''

Slimmer Securities Unit

Rohner, 43, and Kurer, 58, told shareholders last month they plan to slim down the securities unit while focusing on the ``core'' wealth-management franchise. The private bank had net new money inflows of 5.6 billion francs in the first quarter, while Swiss business banking and global asset management had 18.4 billion francs outflows.

Outflows accelerated towards the end of the first quarter and UBS remains ``cautious'' with regards to outlook for net new money, Chief Financial Officer Marco Suter said in an interview. He declined to say if clients added or pulled money in April.

UBS's asset-management unit has had four consecutive quarters of outflows as its funds underperformed comparable indexes. On a composite basis, the bank's global equity and global bond funds lagged behind their benchmarks over the past one, three and five years, UBS said in its quarterly report.

``We expect this difficult environment to remain and be characterized by a continuing unfavorable global economic climate, deleveraging by institutional and private investors, slower wealth creation and lower trading and capital market activity,'' Rohner and Kurer wrote today. ``The impact will affect all of our businesses and we are required to manage costs, resources and capacity very actively.''

Fixed-Income Cuts

The bank already eliminated 1,500 jobs in the investment bank at the end of last year. It brought in Jerker Johansson, 51, from Morgan Stanley as new head of the unit in mid-March and said last month it will put assets related to U.S. residential real estate into a separate unit that may be spun off later.

UBS plans to sell subprime and Alt-A mortgage assets to BlackRock by the end of June. Outside investors are committing $3.75 billion to the fund and will carry first losses, Suter, 49, said. ``These are highly professional investors,'' he said. ``It just shows you that they see profit potential.''

Most job cuts at the investment bank will be in the U.S. and London, and at all levels, according to UBS. About 26 percent of headcount will be reduced in fixed-income and 9 percent in investment banking and equities, Johansson said on a conference call, adding that real estate and securitization businesses will also see some of the largest headcount reductions. UBS is in talks to sell the municipal-bond business, he said, declining to name potential buyers.

`Lower Transactions, Commissions'

The securities unit, which at the end of the quarter employed 21,230 people, is targeting pretax profit of about 4 billion francs, down 28 percent from the level of 2006.

``In the coming quarters and potentially even years, the securities industry will have to live with lower transactions and lower commissions,'' said Paul Vrouwes, a fund manager at ING Investment Management who helps oversee about $23 billion, including UBS shares.

New York-based Citigroup Inc., which has suffered almost $41 billion in writedowns and losses from the subprime crisis, cut about 15,200 jobs and Merrill Lynch & Co. reduced 5,220 positions. Investment banks may have to eliminate as much as 35 percent of employees as leveraged lending dwindles and the pace of mergers and acquisitions slows, Kenneth Moelis, the former president of UBS's investment bank, forecast last month.

Ospel, Arnold

Chairman Marcel Ospel, who replaced half of the executive board since losses began in 2007, stepped down last month. The bank got shareholder approval to raise 15 billion francs through a rights offer after receiving 13 billion francs to replenish capital from investors in Singapore and the Middle East in March.

Some investors, including Luqman Arnold, a former UBS president whose London-based investment group holds more than 1.1 percent of the bank's shares, are demanding a split of the investment bank from other units. Rohner said today that UBS is committed to its integrated-bank model, although he wants each unit to be successful on its own.

To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net;
Last Updated: May 6, 2008 12:29 EDT

[Soriak]

UBS sent out a letter to its customers today, thanking them for their continued faith. I have CHF 4.- at stake, they can keep it Now the depot is different, but that isn't affected if the bank happens to fold. Which is why I find the faith issue curious... why would you withdraw your investment depot because of the bank's market situation? (besides, even now it's one of the best capitalized banks in the world)

They're also getting beaten by Swisscanto on funds now. Swisscanto is a joint company by the cantonal (state) banks and is well known for its lower fees and great performance. (I guess they can afford lower fees, they don't have to pay taxes - though I think they do it voluntarily, maybe at a lower rate) Downside is that the banks are only in Switzerland whereas UBS is everywhere.

Personally, I just have my Swiss Index with UBS. They have a good alternative to the Swiss Market Index that tracks it nearly to the dot but has significantly lower fees. I don't see anything else where they're leading...

They need to drop their investment bank division like Arnold suggested and focus again on wealth management. They get billions every quarter just from fees and they can't afford to put this at risk.

[rinthea]

You take your money out of the bank because yoru scared you wont get it back. Northern rock, bear, refco. 'best capatilized' means nothing when derivative positions cant even be valued. Or if other banks decide they dont want ot trade with them any more and they cant keep things ticking.

This is good for oz banks (and guys like blackrock). They've been straight banks and are getting a chance to buy some cheap ibank stuff here from these fire sales. Selling of stuff like UBS is now is bad. They're forced to do it, therefore they're automatically on the losing side.

edit: makes a little more sense now

[Soriak]

I don't think they're forced to... they raised about as much new capital as they had to write down. Imo they should sell the investment bank division because of the risk - it just hasn't made enough money to justify it. They would have made a profit of over $20bn last year, just in wealth management fees and with their funds. This is essentially zero risk, lots of money and everyone's happy. The only downside is that management earns about 1/10th of the management in investment banks - but investors' interest > management's interest.

Plus most of the high salaries/bonuses tend to go towards the investment division, a lot of money can be saved there.

You take your money out of the bank because yoru scared you wont get it back.

This makes sense for savings and such... but if you have only a depot with shares, the bank should only be holding it for you - it should never enter into their possession. If they fold, you could transfer this to another bank - unlike with cash assets. Or am I totally off here?

[Tyen]

Sprint and Clearwire are skyrocketing my cash~

[rinthea]

I think i may have been confused by your term 'depot'. I'm assuming its the same as retail broker now.

If you physically hold the stocks in your name. Your pretty safe. You may have to sit for a while as you change brokers with your exchange, but thats not too bad.

However, for a lot of things, like prime brokerage, loans, swaps, anything using margin, CFD's and all sorts of contracts, your relying on the bank to have the integrity & cash to pony up their side of the bargain. Even segregated accounts with refco got taken. People fightiing over pennies in the dollar at the end. Best case scenario, your money is held for 6months or so as they work out who gets what.

When things go bad, lots of dodgey shit happens. People ring up and tell a manager they'll throw a bone this or that way if they prioritize them. Legality isnt so much an issue when the ship is sinking. He who has the money makes the rules.
So yeah you should be safe if the bank is just your broker (for physical shares) and you have no cash with them. I've heard some horror stories how funds have been destroyed because they stayed with bear as their prime broker until the end. Often with 'big' brokerage, the bank will just take the other side of the trade and balance it on their entire book. So, for small retail share accounts (assuming you have no idle cash) where the shares are in your name, your ok, but bigger stuff, credibility is everything.