UBS: You Hang In There

It's been a rough subprime loan crisis for UBS (NYSE: UBS  ) . Sure, the Swiss bank played a huge role in almost destroying the world financial system by gorging themselves on sub-prime profits for years. But it would be a crying shame to see the sinning and incompetence of just a few years ruin what so many decades of politically neutral profiteering have built.

Hey, forget it
In what has been by far the most active manner to date, the Swiss bank yesterday sought to cut its losses and put the crisis behind it. The company got rid of the chairman, wrote off another $19 billion, and announced a plan to raise money with a shareholder offering. Investors welcomed the notion of addressing the problems, and the stock soared almost 15%.

What have you done now?
Let's take a look at these each of these moves. Longtime Chairman Marcel Ospel was replaced by UBS lawyer Peter Kurer. It's always questionable to blame one person for a crisis of this magnitude. But, if that's what the company's going to do, it might as well blame a person who managed to preside over the near bankrupting of a company with pockets as deep as the continent of Asia. Sending him off to live the rest of his life in lavish splendor will no doubt teach him a good lesson.

UBS announced write-downs of $19 billion on Tuesday. This nicely compliments the $18 billion it already wrote down. The Swiss bank has written off a total of $37 billion so far, securing it the top spot in the catastrophic write-down sweepstakes. This number even beats Merrill Lynch's (NYSE: MER  ) $24 billion and Citigroup's (NYSE: C  ) $18 billion. The $37 billion represents more than 3 times the yearly wages of UBS' 80,000 worldwide employees. Oops.

In order to firm up its balance sheet in lieu of recent losses, UBS announced an emergency capital-raising rights offering of $15 billion. Four months ago, UBS received a similar amount of emergency capital from the Government Investment Corp. of Singapore and a Middle East investor. Hopefully, this will be one of the last times the Swiss bank needs to replace multiple billions of dollars lost by management.

Nobody said you wouldn't get your hair mussed
Hey, UBS senior executives, you hang in there. So you lost $37 billion. It could happen to anybody. Don't get all glum-faced. You'll justify those salaries in no time. If firing thousands of families' breadwinners and diluting the retirement nest eggs of those who believed in you is the only way to get better, then by golly, that's just what you'll have to do. I know you can do it. Remember the little engine that could.

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