UBS Writes Down Positions, Predicts an Overall Loss in Third Quarter, and Reorganizes Management

sports arbitrage

All other businesses in the Investment Bank, and our

Global Wealth Management & Business Banking and Global Asset Management

businesses, continue to record good results. Mr. Wolf graduated from the Wharton School at the University of

Pennsylvania with a B.S. He is a Swiss citizen. He also chairs

the Swiss Institute for International Studies (SIAF).

Mr. He is married with two children.

There are other, smaller, losses in equities proprietary trading within

an overall satisfactory result.

“On August 14, I said that if turbulent

conditions prevail throughout the quarter, we will probably see a very

weak trading result in the Investment Bank, offset by predictable

earnings from wealth and asset management. Global Asset Management continues to perform well. I have therefore taken

decisive action to be as transparent as possible. Scoby began his career with O’Connor and

Associates in 1987 and became a Managing Director in 1993. Gall office and later broadened his experience

with assignments in Nyon, New York, Basel, Zurich and London.

Despite the unsatisfactory results for the third quarter, we still

expect to end the year with a good level of profits and in a strong

capital position. During 2008 we will continue

to focus on improving cost and balance sheet efficiency.”

Where possible, holdings are marked at the quoted market price. Prior to his appointment to his current position in 2004, Robert

Wolf was Global Head of Fixed Income for over three years.

. Mr. Prior to that, he held various

management positions in SBC’s investment banking operations, first as

the Continental European Head of Merchant Banking and later as the Chief

Credit Officer for EMEA. UBS’s financial businesses employ more than 80,000 people

around the world. Joseph Scoby’s record both as

head of A&Q and previously as Joint Head of US Equities within the

Investment Bank makes him an ideal successor to Walter Stuerzinger. Wolf also participated as a panel member at

the inaugural Wall Street forum for HIV and AIDS alongside former UN

Secretary Kofi Annan.

When most mortgage backed securities positions were set up there were

offsetting positions in place, designed to mitigate risk in normal

market conditions. This led to substantial valuation losses, including in

securities with high credit ratings. Mr. Marcel

Rohner, Group CEO, will reorganize senior management, take over as

Chairman and CEO of the Investment Bank, and accelerate structural

improvements to the firm.

These write downs are mainly of (a) legacy positions of the now closed

Dillon Read Capital Management subsidiary and (b) positions entered into

as part of the Investment Bank’s mortgage

backed securities business.

Commenting on these changes Marcel Rohner said:

ZURICH & BASEL, Switzerland–(BUSINESS WIRE)–Regulatory News:

While the third quarter loss means that pre tax results for the full

year 2007 will most probably be below those for 2006, total earnings

should still be at a high level and UBS will finish the year in a strong

capital position.

Our first quarterly loss in nine years is an unsatisfactory result,

especially after such a strong first half. We have thousands of

talented people throughout the organisation who, by working together,

will deliver further value to our clients and additional growth to our

shareholders.”

Management changes

Short bio Robert Wolf

Mr. in Economics. From

1995-1999 he was the Joint Head of US Equities at the Investment Bank,

with responsibility for approximately 650 employees. Mr. These have also been written down appropriately,

leading to a limited loss on these positions in third quarter.

Marco Suter, Executive Vice Chairman, UBS, will leave the Board of

Directors to become Group Chief Financial Officer, and join the Group

Executive Board. A&Q currently has over USD

60 billion in assets under management. Its shares are listed on the SWX Swiss Stock Exchange,

the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).

UBS is one of the world’s leading financial

firms, serving a discerning international client base. Management action has been taken to

make certain these positions are appropriately valued and risk managed.

UBS

With effect from today:

In the third quarter, UBS will recognize substantial losses in FIRC

within the Investment Bank, mainly on its holdings of securities related

to the US sub prime residential mortgage (RMBS) market. UBS remains a formidable

competitor in financial services and is well positioned to deliver

long-term profitable growth.”

UBS is the leading global wealth manager, a top tier investment banking

and securities firm, and one of the largest global asset managers. These positions consist overwhelmingly of

AAA-rated tranches, 80% with a weighted average life of less than three

years. Mr. Clive Standish, Group Chief Financial Officer, will retire.

UBS has no material exposure to conduits.

Short bio Marco Suter

Working closely with other members of the management team and the key

investment professionals within A&Q, Mr. The one firm approach requires a

successful and profitable Investment Bank. Huw Jenkins, Chairman and CEO of the Investment Bank,

will step down from his position and become a senior advisor to Marcel

Rohner.

Short bio William Ferri

Continued strong performance in other business areas

Mr. William Ferri, currently

Head of Business Development and Logistics for A&Q, will be appointed as

the new Global Head of Alternative and Quantitative Investments.

Biographies

The remaining relevant positions in direct sub prime RMBS have a current

net value of USD 19 billion. He also has extensive

experience in solving institutional and corporate client problems using

derivatives. He is on the Executive

Leadership Council for the Multiple Myeloma Research Foundation, on the

Board of Trustees for the Children’s Aid Society, the Board of Directors

for the partnership for NYC and on the Board of Directors for the

National Sports Museum. In fact, conditions remained

turbulent, so we will make an overall pre-tax loss at Group level for

the quarter.

 

In third quarter 2007, expected pre-tax loss for the Group between

CHF 600 million and CHF 800 million, due mainly to write downs and

losses in the FIRC business within the Investment Bank

For the first nine months of 2007 pre-tax profits for the Group in

the order of CHF 10 billion, and expect to end the year with good

level of profits and a strong capital position

All other businesses in the Investment Bank, as well as the Global

Wealth Management & Business Banking and Global Asset Management

business groups, performing very well

Management changes:

— Investment Bank Chairman and CEO Huw Jenkins to step down. Scoby has a BS from Wharton School and an MA from the

University of Pennsylvania, both earned with honors in a total of four

years of study and awarded in 1987.

As a result of the planned changes within the Investment Bank, overall

staff numbers will fall by about 1,500 by the end of this year.

Results for third quarter 2007 will be announced on October 30, 2007 as

planned.

“I am confident that, with these changes and

by properly absorbing the lessons of this quarter, we will become a

stronger bank. Suter was born on 7 May 1958. We have a strong balance sheet, a strong franchise, and

leading positions in all businesses in all regions. However, the deterioration in the US sub prime

residential mortgage backed securities market, especially in August, was

more sudden and more severe than in recent history, and markets became

illiquid. Ferri began his legal career practicing corporate law at Seward &

Kissel, from 1991 to 1995. His long experience and knowledge of UBS, including as

Group Chief Credit Officer, make him extremely well qualified for this

position. Pre-tax profits for the

first nine months of 2007 will be in the order of CHF 10 billion. Following these actions, UBS is in

a strong position to continue to grow its client businesses.

Short bio Joseph Scoby

UBS is present in all major financial centers worldwide. He originally worked for PaineWebber

Inc. For most

sub prime holdings, this is not possible. Overall, FIRC

will record negative revenues in the order of CHF 4 billion.

Within the Investment Bank, Money Markets, Currencies and Commodities

(MCC) will be integrated into Fixed Income under the leadership of Andre

Esteves.

A video containing an interview with Group CEO Marcel Rohner is

available at www.ubs.com/media as

well as at www.cantos.com. In

Switzerland, UBS is the market leader in retail and commercial banking.

All other UBS businesses remain strong. Suter first joined the bank in 1974 as an

apprentice at SBC’s St. Suter has been with UBS and its predecessor, Swiss Bank Corporation,

since 1974. Mr. Valuations therefore mostly

use models with observable inputs, where possible, and level 3 valuation

models otherwise.

Mr. He is a member of the

Global Asset Management Executive Committee and a member of the UBS

Group Managing Board.

The marks take a cautious view of future developments in the US mortgage

market and UBS is content to hold these securities at this level of

valuation.

Mr. These securities are either AAA-rated or High Grade, and have a

short weighted average life.

Marcel Rohner, Group CEO, said: “UBS operates on the principle that

management is accountable to shareholders. Its business,

global in scale, is focused on growth. Wolf is a member of the UBS Group Managing Board and the Investment

Bank Management Committee. Between 1999 and 2005 he was Group Chief Credit Officer and

a member of the Group Managing Board. He also

serves as Global Chief Operating Officer for the Investment Bank.

Previously, he was General Counsel for the O’Connor

hedge fund and fund of fund businesses, and was on the O’Connor team at

its relaunch in 2000. Ferri is also responsible for managing the product

pipeline, business development, sales and client services.

Following a write down of positions in fixed income, rates and

currencies (FIRC), mainly related to deteriorating conditions in the US

sub prime residential mortgage market, UBS is likely to record an

overall Group pre-tax loss of between CHF 600 million and CHF 800

million for third quarter, ended September 30. Ferri has overall

responsibility for managing the logistics platform and business

development effort of the group, ensuring the investment team’s

requirements are met while maintaining the appropriate control

infrastructure. There is also a smaller position of below USD 4 billion net

exposure to sub prime securities through warehouse lines and retained

CDOs. He has also been the head of O’Connor,

a specialist hedge fund provider within A&Q, with assets under

management of approximately USD 7.5 billion. Wolf is on the Undergraduate

Executive Board of the Wharton School and sits on the Athletics Board of

Overseers at the University of Pennsylvania. Within the

Investment Bank, IBD has gained market share, the capital markets

business remains strong, and equities revenues –

though a bit weaker this quarter than a year ago, and in the context of

extremely difficult conditions – remain

healthy.

Walter Stuerzinger, Group Chief Risk Officer (GCRO), will become Chief

Operating Officer, Corporate Center, and hand over the GCRO position to

Joseph Scoby, currently Global Head of Alternative and Quantitative

Investments (A&Q), Global Asset Management. A

glossary, containing definitions of some of the less-well known terms

used in today’s release, is also available at www.ubs.com/media.

In addition, UBS has taken significant write downs on positions in Super

Senior AAA-rated tranches of CDOs, based on level 3 valuation models.

Third quarter results

Joseph Scoby is Global Head of Alternative and Quantitative Investments

(A&Q), an alternatives platform within Global Asset Management with

approximately USD 60 billion in assets under management and 360

employees around the globe. From 1996 until the merger of SBC

and Union Bank of Switzerland in 1998 he served as regional manager of

the Zurich-Eastern Switzerland-Ticino area for the corporate and

commercial banking activities of SBC. Mr. I have also made

appropriate senior management changes, and will accelerate

already-planned changes to the firm. As an integrated firm, UBS

creates added value for clients by drawing on the combined resources and

expertise of all its businesses.

In addition to his roles at UBS, Mr. Group

CFO Clive Standish to retire

— Marco Suter, Executive Vice Chairman, UBS, to become Group CFO

— Walter Stuerzinger, Group Chief Risk Officer (GCRO), to become

Chief Operating Officer (COO), Corporate Center

— Joseph Scoby, Global Head of Alternative & Quantitative

Investments, UBS Global Asset Management, to become GCRO, UBS

Investment Bank changes:

— Robert Wolf, COO, Investment Bank, additionally appointed

President, Investment Bank

— Money Markets, Currencies and Commodities (MCC) to be integrated

into Fixed Income

— Initiation of cost reductions in Investment Bank

Marco Suter was elected to the Board of Directors at the Annual General

Meeting of UBS in April 2005 and thereafter appointed as Executive Vice

Chairman.

UBS has only limited exposure to leveraged lending with commitments of

about USD 13 billion. (since 1995) where positions held included Corporate Vice President

and Associate General Counsel to the Global Equities Division, and

Deputy Director of Compliance.

Marcel Rohner, in addition to his duties as Group CEO, will for the

foreseeable future take over the role of Chairman and CEO of the

Investment Bank. It has offices

in 50 countries, with about 39% of its employees working in the

Americas, 34% in Switzerland, 16% in the rest of Europe and 11% in Asia

Pacific. These events have led to the

management changes announced today. In Global Wealth Management &

Business Banking, all geographical regions continue to attract net new

money. He received a BS form Cornell University in

1988 and a JD from the University of North Carolina in 1991.

William Ferri is the Head of Business Development and Logistics for

Alternative and Quantitative Investments (A&Q), an alternatives platform

within Global Asset Management.

Commenting on these decisions, Marcel Rohner, Group CEO said:

Robert Wolf, Chairman and CEO, UBS Group Americas and Chief Operating

Officer Investment Bank, will additionally become President, Investment

Bank. Scoby’s

experience includes portfolio management in commodity options,

convertible arbitrage, equities, equity derivatives, corporate bonds,

merger arbitrage, quantitative equity, real estate finance, and

fundamental based equity long short funds. He served as Global Head of Fixed Income from

2002 – 2004, having joined the firm in 1994

after spending approximately 10 years at Salomon Brothers.

Robert Wolf is the Chairman & CEO of UBS for the Americas. Ferri joined the UBS Investment Bank in 1998

as Director of Equity Compliance.

Joseph Scoby’s first task as a member of the Group Executive Board will

be to review and refine our risk processes

The Ups and Downs of Arbitrage Betting and Trading

sports arbitrage

What a relief! My bets were both accepted and I just had to wait for the game’s result before I got paid. I could let the specific bets as is and make a profit, unless the games ends a draw. Lessons can come cheap. Much like arbitrage bettors are looking at sports events, arbitrage traders do the same when trading stocks, forex, bonds, commodities, derivatives and other financial instruments, looking at the markets worldwide.

Don’t dig into arbitrage betting before reading of the disadvantages

Two golfers were competing at a golf course, when I noticed the divergence of the betting odds between Betfair and another online bookmaker. I also write about my success or failure and run a small business.

betting-odds-arbitrage-betting

Oh, wait. They are considering a career in arbitrage trading in particular.

People have made a lot of money in arbitrage. Noticed the word “almost”? That is because you still stand to lose some money. Because that is when I was going to lose a hefty amount of my total bankroll! As I am not used to gamble with my money (I know, it sounds peculiar, but by the time gambling becomes an investing, you stop gambling with your money), I reluctantly gave away some of my future profits to cover the losses of a likely draw.

Of course, my bets now resulted to a loss, no matter the final outcome of the golf game. And I have heard that by the time you get to hear of that, it’s already too late.

Many bookmakers do not welcome bettors, who follow an arbitrage betting pattern. That was almost 10 years ago! So, yes, I am far from the arbitrage expert you were expecting to be talking here. No need to wait for the final whistle.

There is zero chance that arbitrageurs will lose money from the particular game. What’s that at Betfair? A third possible outcome you say?. Yes, that’s happened before.

An arbitrageur has to open accounts with several betting or trading companies. These accounts also need sufficient funding. Arbitrage trading is likewise an almost risk-free way of trading any kind of financial instrument. That was my first (and last) bet on a golf game.

I spent the following 5 minutes deciding how to react. Because I was going to get paid for sure, I had just bet on both golfers.

As I was getting really tired the past few weeks, surfing around looking for sure bets as they are commonly known, I had found a really generous one at a golf event. Worst case scenario? To confiscate your money. And two months later I began sports trading, leaving my arbitrage betting days behind.

But let’s just start from the advantages of arbitrage betting.

I respect your privacy

Let me tell you my short story about when I finally decided to quit arbitrage betting.

And that is when the emotion of relief converts into panic in a matter of nanoseconds!

100-winner-728-90-arbitrage-betting

These advantages apply as well to arbitrage trading. At one point, an account of yours will be full of money, while the rest will be depleted. Yes, so quick that I had to write it twice for emphasis!

While there are services, which let you know when there is an arbitrage opportunity, they come at a cost. Thus, I think new arbitrageurs can be profitable even today.

By the time arbitrageurs have placed their bets, their profit is guaranteed. As a result, they may limit the stakes they are accepting from you or even forbid you to continue betting with them. You can’t expect the results to even out among the bookmakers. Yet, my little experience has taught be enough to recommend anyone against arbitrage betting or trading. Keep your capital safe for when you are more experienced.

The reason I am talking today about arbitrage, is an email I received from a visitor of my gambling blog. And that is not the worst thing it can happen in arbitrage.

As quickly as possible, I had my Excel spreadsheet calculate the stakes and I submitted my bets concurrently at the two betting operators. That is because they have bet on every possible outcome of the game.

Given the infinite number of sports events around the globe, new opportunities for arbitrage betting will constantly arise, especially as more and more people are introduced to betting or gambling in general.

Arbitrage betting is an almost risk-free way of betting on sports. Usually the ROI of a sure bet is about 1 to 2%, although you may stand lucky occasionally and find a 4 or 5% gold mine!

I myself haven’t spent more than a month taking advantage of fluctuating odds and prices when trying out arbitrage. Moving money around does not only mean extra commissions with banks, but may also arise suspicions.

And last but not least, you can still lose big chunks of money if you don’t pay close attention when placing your arbitrage bets.

A DRAW?

WRITTEN BY

Jim Makos

By advantage gambling and investing with real money online, I put my money where my mouth is. And no, the game did not end a draw but it still was a great lesson for me. Their sole worry is just how much money they can make but they neglect the fact that they can also lose money, even in this advertised as risk-free investment.

In my case the guaranteed profit was even better than that!

If you are going to give arbitrage a shot after all, be very careful and begin betting or trading small. A lesson that made me withdraw all of my funds from all the bookmakers, except Betfair. This funding will probably max out your credit card(s).

Constant money moving.

Get my Posts in Your Email For Free!

I will deliver my posts straight to your inbox as soon as they’re published.

People usually focus on the bright side of any investment, like in arbitrage betting or trading. Some still make a lot of money. Here is why:

You must be quick to find arbitrage bets.

You must be super quick to find arbitrage bets

Arbitrage Spreads | Reuters.co.uk

sports arbitrage

The following table shows the arbitrage spreads for proposed mergers and acquisitions of global companies. If the offer terms include a stock component, the offer price per share will fluctuate based on the share price of the acquirer.

Arbitrage spreads measure the difference between the offered takeover price and the target company’s current trading price.

All Deal Value, Target Price, and OPPS figures are converted to U.S. dollars.

. Historically, the wider the spread, the more investors doubt a deal will close.

The Target Price is the latest trading price (delayed by at least 15 minutes) for the Target company’s shares.

The Offer Price per Share (OPPS) is the amount the acquirer offered for each share of the target company