UBS, a relatively conservative investment bank, took a $10 billion sub-prime hit earlier this week. This is on top of a $4.4 billion third quarter hit. The total write-down of CDOs by investment banks now totals about $50 billion and people expect Merrill Lynch and Morgan Stanley to add to their already high write-offs.
UBS was able to convince Singapore that it is still a good investment; Singapore paid almost $10 billion for a stake in UBS that could reach 10.5% This is not the first time that Singapore has bought a piece of an investment bank; it bought almost 2% of Barclay's this summer and 11% of Standard Chartered in 2006.
Investment banks are becoming more globally owned. 5% of Citibank is owned by Abu Dhabi. Another 1% of UBS was bought by an unnamed MidEast investor. China bought a piece of Blackstone last spring.
When will Congress start screaming about these foreign incursions?
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