Huge Mortgage Securities Losses; UBS Forced To Collapse Hedge Fund

May 3, 2007 (EIRNS)--Some $125 million in mortgage-backed securities losses by its hedge fund in the first quarter of 2007, forced UBS bank to close the $1.8 billion hedge fund down, according to The Guardian May 3. Closing the Dillon Read Capital Management (DRCM) hedge fund, formed two years ago, "is a major embarrassment to UBS," the paper noted.

The losses came from investments in securities in the subprime mortgage bubble in the United States, the first--but not the last--of the huge international real estate bubbles of the 21st Century to collapse.