Dear Colleagues,
As we approach the close of 2007, I would like to take this opportunity to bring your attention to the continued effort around cost control, balance sheet management and overall efficiency. History has shown that the fourth quarter is where we have lost ground and focus on these key initiatives. Therefore, I encourage you to take all necessary measures to make sure that you don’t take your eyes off the ball and allow end of year cost creep to occur.
Thank you for your attention to this “timely” measure. I appreciate your leadership and partnership in finishing the year on a strong note.
Best,
Michael Weisberg
Global Head Products & Services
UBS
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UBS
UBS’s Triumphant Return To Profitability Will Be Paved By Encouraging Employees To Please, For The Love Of Christ, Do Us A Favor And Print On Both Sides Of The Paper
By Bess LevinUBS announced its first quarterly loss in nearly five years today, rendering frowns on those Nazi-sympathizers’ faces that even a few anti-Semitic jokes couldn’t turn upside down, which means it must be really bad. The “unquestionably disappointing” $720 million net loss, which overshadowed record earnings in the wealth management operation, was blamed on that $4.4 billion writedown due to subprime issues and the fact that no one knew what was going on at the investment bank.
Unfortunately, UBS just recently fired a CEOi—Peter Wuffli—, and can’t very well make the only 4-month old Marcel Rohner the scapegoat in this situation (unless of course they’ve been dared to do so…in which case– watch out, Rohner). Managing expectations of what the bank is capabale of (probably so that it can later be said that they “beat analysts’ expectations” and be rewarded for what, to the naked-eye, looks like just plain failure), UBS commented that “[Although] the fourth quarter has started with good results from all businesses, including the investment bank…UBS is not assuming that the quarter will continue as positively as it has begun or that the current difficulties will be resolved in the short term.”
UBS’ Swiss Miss [NYP]
UBS to launch reporting season with losses and a warning [Times Online]
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Layoffs
UBS Goes The Terribly Unimaginative Route, Fires People Who Were In Charge Of $3.42 billion Write-Down
By Bess Levin
UBS has fired David Martin, head of interest-rate trading, following the firm’s first quarterly loss since 1998 due to its major exposure to a few collapsed areas of the bond market. James Stehli, head of the collateralized debt obligation unit, was also told he would no longer be receiving health care. Having lots of practice at letting people go—last week investment bank chief exec Huw Jenkins and CFO Clive Standish were shoved out the door, just as president Peter Wuffli was earlier in the year—the layoffs are rumored to have gone quite smoothly. Security was not needed to be called, though Martin, allegedly, did yell, “You motherfuckers aren’t going to get away with this,” as he exited the building.
Subprime Snuffs UBS Execs [New York Post]
It has been traditional for quite some time for those leaving investment banks to send an email to their colleagues on the day of their departure. The messages typically follow-up a standard format: announce the departure, wish well to others, praise mentors at the firm, perhaps indicate the next job and provide contact information. They are, in a word, boring. And usually get read—or, well, glanced at—briefly before being deleted.
But every now and then an investment banker decides to aim a little higher. Or, perhaps, lower. Over the past few years we’ve seen the development of a counter-genre to the Boring Leaving Email. Call it the Fed-Up genre. Or, less politely, the Fuck-Off email. Some of these, such as our own Keith Hahn’s email to colleagues at JP Morgan, become internationally circulated. (The counter-genre is so well known that frequently fake FO emails get circulated.)
Yesterday we reported on the latest FO email making the rounds, from a banking analyst at UBS in New York. Over-worked and under-appreciated, Jonathan Napier Maudlin decided he had had enough and wasn’t going to take it anymore. At 7:03 in the morning, after spending the night toiling away in his cubicle, he launched an email to seventeen or so of his colleagues at UBS announcing “I’m leaving the bank now.”
The letter went on to describe his job at the bank as “mindless text editing, copy and pasting, and getting yelled at for stuff other people can’t/won’t/don’t do.” The job simply was “not worth doing,” he wrote. “There is no happiness here.”
Last night, Maudlin told DealBreaker that the relentless workload had pushed him over the edge.
“After my 120th hour this week on the job, I decided to peace out. I hadn’t had a day off in three weeks (day off meaning a Saturday or Sunday either), and I got yelled at at 6 in the morning,” he said.
The email concludes with a note of finality. “I took all my personal stuff. No one needs to contact me for anything (except for a drink for those of you with my personal number). I will only be at my New York address a few days longer,” Maudlin wrote.
The email quickly circulated among investment bankers, as they forwarded it to colleagues with their own comments. Many sympathized with the sentiments of Maudlin says.
“Well said,” one person who forwarded the email wrote. “Note day of week and time email was sent.”
Banks discourage employees from sending out these FO emails. Often, they violate the email policies that banks try to make workers adhere too. Unfortunately, given the sentiments of those who are inspired to write such emails, such policies have little effect. In his post-script, Maudlin notes that his email probably violates UBS’s policies.
I’ll be waiting for some smart-ass associate to send a ‘best-practice e-mail for how to quit properly,’” he writes. “I will be sure to keep your tips in mind.”
The full email is reprinted after the jump.
“Hairy Day” Illustration via BiffSniff.
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Citigroup
Tarot Card Reading Says Citi Will Lose $3 Billion, UBS Will Also Have Run of Bad Luck
By Bess LevinAnalyst at Sanford C. Bernstein & Co. predicted today that Citigroup may lose between $1.2 billion and $1.5 billion on loans to buyout firms and somewhere in the range of $500 million and $1 billion on subprime mortgages in the third quarter. Could things turn out better—2 billion? Worse—20? Analysts Howard Mason and Michael Howard said in a note to clients, “The key question is how the market absorbs deals coming in September, when spreads may widen out to July levels or worse, or may renormalize, with spreads coming in to June levels.” We hear Howard Mason also added, “In the event of a civil union, please do not call me ‘Howard Howard’.”
Shares of Citi are down 16 percent this year, making the company a $231.5 billion value, yours free with the purchase of one disassembled umbrella that Sandy Weill’s wife vetoed as instillation art for the living room and that even a bunch of New School punks, fully versed in the reputation of Shitay Citay, turned down. (Weill’s pitch that “it’s an ironic shitay” did not pan out well).
A 79% rise in second quarter profits at UBS were overshadowed by predictions of a drop for the second half of 2007 (and a history of managing the private wealth of Adolf and his groupies). The company warned that if choppy market conditions continue, its investment bank will “see a very weak trading result.” Shares of UBS are currently at their lowest level in 2007, and the Swiss also reported additional losses at Dillon Read, its boarded-up hedge fund. Some face was saved when Marcel Rohner noted, “I’d like to point out that compared to Bear Stearns, you’re pretty much looking at Hedge Fund of the Year, right here.”
Citi May Lose $3 Billion in Debt Rout, Bernstein Says [Bloomberg]
UBS blames poor outlook on market volatility [FT]
Ken Costa, vice-chairman of investment banking at UBS had an epiphany (that he wrote down in his recently published book, God at Work: Living every day with purpose):
But then, in a flash, I saw the truth…No bank – Swiss Bank or the Bank of England – would survive the promised return of Christ.
Always searching for stability, UBS is currently exploring new anti-Christ vault technology to protect the gold stores from panicked citizens when society melts down.
Additionally: Not to play devil’s advocate re: no bank surviving but COME ON.
“No bank…would survive the promised return of Christ” [FT Alphaville]
UBS said yesterday afternoon that it feels up to task of finishing the hack job it started two years ago on Dillon Read Capital Management, its failed hedge fund, within a few months. Huw Jenkins, head of investment banking told investors, “We said the integration could take up to 12 months…from a practical point of view, I think it will be over and done within a couple of months.”
The Zurich-based bank made the “decision” to shut down Dillon Read almost two weeks ago, after the fund racked up $150 million in losses primarily from the subprime market. The fact that the fund’s losses contributed to lower fixed income revenue also helped bolster the decision to pull the trigger.
Dissolving Dillon Read was noted as a “major embarrassment” for the risk-averse UBS; not being able to reach this “couple of months” goal would likely only rub salt in Swiss bank’s third-straight-decline-in-quarterly-profit wounds. Jenkins also said that this year, there would be a focus on “keeping a lid on costs.” Related? An additional $300 million in shut down costs.
UBS: Hedge Fund to Unwind in Months [AP via Forbes]
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