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At Last, A Number
May. 6th, 2008 07:56 amUS asset manager BlackRock is to pay Swiss Bank UBS -- one of the biggest 'victims' of the subprime fiasco -- $15bn for a portfolio of subprime mortgage debt. The interesting number, however, is the amount that it is paying on the dollar for the debt - 75 cents. BlackRock isn't taking this debt on its own book -- don't be silly. It's going to put it into a new fund and will then sell it on to investors. I idly wondered how long it will be before derivatives spring up around funds created out of knocked-off debt caused by derivatives...
Anyhoo, BlackRock is clearly getting the better end of the deal on this, because UBS is fairly desperate for a clean start and $15bn for $20bn probably looks like the best result it can get of a bad lot. If I were BlackRock, I guess I'd be estimating an 85% to 90% 'real' value for this debt. So it can sell it on at something like 80%, splitting the EV with the investors.
Of course, if BlackRock and the investors have got this wrong, and the debt is only worth 60 cents on the dollar, then we will be entering a whole new world of pain. But, in the Alice In Wonderland world of derivatives, the more people that you get deciding that the debt is in to 90 cents to the dollar default value range, the more likely it is that it will turn out to be in that range.
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I bought a wireless FM transmitter for my Zen in Tesco yesterday, for the grand sum of £16.50. And it works! No instructions that I could find, so the whole thing was done by instinct. Oh, and it tells you the time and the temperature as well -- neither of which my ancient car does.
So, that solves the music problem when driving up to Pershore. No longer do I have to suffer all communication with the outside world disappearing the second I get beyond Swindon. At least I can play Radio Pete....
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Updates on Wardour Street:
Biagio Chez Victor now re-opened.
RC Grant, an odd old bloke who ran "The Hobbit" Newsagents and did his own deliveries wearing a shoe on his left foot and a slipper on his right, has finally retired. Some Indians took it over, redesigned the inside of the shop, restocked it, and probably increased turnover by 200% overnight.
The old Luigi's had recruitment ads and planning permissions outside the boarded up windows this morning, but I've forgotten the name of the company. Sounded Japanese, though...
"Cote" has opened up near St Anne's Court. Very cheap French brasserie style (if six quid for eggs benedict in the morning could be described as 'cheap') and likely to be a roaring success.
There's a bit of a renaissance at that upper end of Wardour Street, after years of having an air of neglect. Good.
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Anyhoo, BlackRock is clearly getting the better end of the deal on this, because UBS is fairly desperate for a clean start and $15bn for $20bn probably looks like the best result it can get of a bad lot. If I were BlackRock, I guess I'd be estimating an 85% to 90% 'real' value for this debt. So it can sell it on at something like 80%, splitting the EV with the investors.
Of course, if BlackRock and the investors have got this wrong, and the debt is only worth 60 cents on the dollar, then we will be entering a whole new world of pain. But, in the Alice In Wonderland world of derivatives, the more people that you get deciding that the debt is in to 90 cents to the dollar default value range, the more likely it is that it will turn out to be in that range.
+++++++++++++++
I bought a wireless FM transmitter for my Zen in Tesco yesterday, for the grand sum of £16.50. And it works! No instructions that I could find, so the whole thing was done by instinct. Oh, and it tells you the time and the temperature as well -- neither of which my ancient car does.
So, that solves the music problem when driving up to Pershore. No longer do I have to suffer all communication with the outside world disappearing the second I get beyond Swindon. At least I can play Radio Pete....
++++++++++++++
Updates on Wardour Street:
Biagio Chez Victor now re-opened.
RC Grant, an odd old bloke who ran "The Hobbit" Newsagents and did his own deliveries wearing a shoe on his left foot and a slipper on his right, has finally retired. Some Indians took it over, redesigned the inside of the shop, restocked it, and probably increased turnover by 200% overnight.
The old Luigi's had recruitment ads and planning permissions outside the boarded up windows this morning, but I've forgotten the name of the company. Sounded Japanese, though...
"Cote" has opened up near St Anne's Court. Very cheap French brasserie style (if six quid for eggs benedict in the morning could be described as 'cheap') and likely to be a roaring success.
There's a bit of a renaissance at that upper end of Wardour Street, after years of having an air of neglect. Good.
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