If you didn’t get the message from JP Morgan’s $1.5 billion write-down that the carnage on Wall Street is not over, UBS trumpeted it from the Swiss Alps this morning with the announcement that it had written down another $5.1 billion in mortgage loans and other debt instruments. For those keeping track at home, the global write downs from the credit crisis now amount to around $500 billion.
UBS also said it is backing off plans to integrate its three main business units, wealth management, asset management and investment banking. This move is widely understood as a reaction to pressure from US regulators and lawmakers who have charged the Swiss bank with aiding clients in tax dodges. Giving the units more autonomy may be the first step in spinning them off entirely, a move that might allow UBS to continue its investment banking business in the US if lawmakers continue their chase after its wealth management unit.

UBS Losses Greater Than Expected [New York Times]

We always thought that helping wealthy people avoid taxes was what Swiss banks were supposed to do. But it turns out that the government doesn’t agree. And now they’ve turned one of the Swiss gnomes into an informant.
Bradley Birkenfeld, who worked for UBS’s private banking division, is expected to plead guilty at a hearing on June 9th. Specifically, he’ll admit to helping a real-estate mogul evade taxes. Earlier Birkenfeld had pleaded not guilty after he was indicted as part of the US government’s probe into whether UBS helped clients evade taxes.
Birkenfeld guilty plea is probably a signal that he is helping prosecutors identify other UBS customers who hid assets to escape paying taxes. In other news, if you are a UBS client with lots of secret money stashed away in the Alps, you might want to reschedule your New York City shopping trip.
Former UBS Banker to Plead Guilty in U.S. Tax Case [Bloomberg]

Despite being told by shareholders in general to hit the bricks and by one in particular (Salvatore Cordello, real name) that he’d turned the bank into a “casino,” Marcel Ospel (proverbially) chained himself to the front door of UBS this morning, where he vowed to remain until this so-called “financial crisis” is over. Ospel also made it clear that he’s not in this to make friends (telling the crowd of 6,500, “Popularity isn’t the benchmark by which I or the board of directors measure our actions”), nor is he in this to make money (“As you probably already know, results aren’t the benchmark by which I or the board of directors measure our actions, either”) a motto the sources in our head tell us he ripped off from Stan O’Neal. Though he chose not to offer any specs on how exactly he plans to put this Swiss bank back together again (we’re hoping for more write-offs, that shit’s adorable), Ospel promised to make sure “UBS gets back on the road to success, right after this rousing game of Trader Face or O-Face.”
UBS Chairman Focuses on Turnaround [WSJ]
Trader Face or O-Face? [Details]

Something’s amiss at UBS. Though the bank was set to pass out bonuses made entirely out of craptastic stock (down 35 percent for the year) and marshmallows today, employees are acting surprisingly calm, almost…too calm. One in wealth management tells us “we’re doing alright…it’s not a bloodbath” and the word from banking and trading is “it’s not the end of the world.” Is it possible that despite blowing a ton of money on worthless (but pretty!) ice sculptures for the holiday party at the Natural History Museum and losing a few billion dollars the other day, the friends o’ the SS aren’t stiffing all on b’s? We’re skeptical. And we remain unconvinced that no one’s angry enough to pull a Merrill. Are you planning something? Let us know.

UBS’s investment bank, which is said (by its chief rival) to be worth negative twenty billion dollars and will be awarding neither cash bonuses nor bonuses paid in cases of Mike’s this year, is nearly doubling its staff in India. Though the firm claims that the addition of 80 bankers (bringing the total to 180) has to do with its “desire to remain among the top three investment banks in India,” and to continue “leapfrogging” over rivals, we’re told the additional staff is an attempt to make a dent in the negative $1 million price tag Credit Suisse assigned the firm’s 22,000 employees, if negligibly. Any current UBS workers given the pink slip in the next several weeks, provided UBS makes good on its promise to announce a $7.999 billion writedown, are encouraged to apply, but will in no way be given preference over outsiders. And if you want to go there, UBS India has actually said internally that it hopes to fill the new positions with former Citigroup employees. Anyway, good luck to all the candidates.
Earlier: UBS Still Taking It Up The Tailpipe
UBS Too Poor To Award Real Bonuses This Year
UBS to raise India investment bank staff [Reuters]

You really have to love bonuses paid in nearly worthless currency like, say, the Brazilian Real (not to be confused with other Brazilians, which we are all in favor of), or maybe UBS stock. So are UBS’s investment bankers worthy of the 100 percent stock bonuses they have coming their way next month? Credit Suisse says “Yes.” That is, Credit Suisse uses a cute report littered with ‘Shroom burger stains to point out that UBS’s investment banking unit might have a net worth of negative $20 billion dollars. Since this pegs each of the firm’s 22,000 employees as worth negative $1 million, (before adjustments for ego good will–the Nazi sympathizers love themselves more than any other professionals on the Street, Goldman Sachs included, which is also your answer to why the stalls in the 3rd floor men’s room are always occupied from 1-4 pm) a worthless stock grant seems like a well-priced treat. Some simple math shows that even if every employee pledges to switch from 2 to 1 ply and search for their own flights on Priceline, the bank will not be out of the red ’til 2015. Goldman Sachs, investment bank Schadenfreude of the highest order, has even more pessimistic ideas about “You and Us.” But then, you knew that before we told you. Check out the bad news here.
Are UBS Bankers in a Sea of Red? [WSJ]