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Tarot Card Reading Says Citi Will Lose $3 Billion, UBS Will Also Have Run of Bad Luck

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Analyst 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
UBS blames poor outlook on market volatility [FT]