Unfounded Rumor Of The Morning: "In The Vein Of Bad Decisions By UBS"

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Someone would like to know where this alleged one ranks. From the mailbag:

"On March 31 when the stock market was in the middle of its 3-month upswing, UBS's real estate group thought it would be a good idea to clandestinely sell almost $775 million of subordinate paper at their outdated marks -- less than 40 cents on the dollar. Made no effort to market; one of the deal guys just called an old friend at mid-size hedge fund garrison group, a Fortress spin-off. Garrison turned around, put some "quality asset management led turn-around" window dressing on it, and starting flipping the paper. The 5 guys on the desk have so far burned down half their basis or $200+ million through flips and they are hiring Eastdil or one of the other large brokerage firms to start marketing the rest after the Jewish Holidays. Garrison thinks it's worth 80 cents on the dollar and so far appears to be right. At the very least, UBS should know that non-competitive bidding and 2+20 hedge-fund buyers do not a fair price make -- good-bye $300 million of shareholder equity."

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