Friday, July 18, 2008

Chronicles Of Depression 2.0: #161

Merrill Drops After $4.65 Billion Second-Quarter Loss (Update3)
July 18 (Bloomberg) -- Merrill Lynch & Co. declined in New York trading after the third-biggest U.S. securities firm reported a wider-than-estimated second-quarter loss on $9.7 billion of credit-market writedowns.

Merrill's charges from the credit crisis now exceed $46 billion.

Money-losing collateralized debt obligations -- securities packaged from other bonds, many linked to subprime mortgages -- continue to cause Merrill's biggest writedowns. The firm was one of the largest underwriters of CDOs before the credit crisis hit last year, and Merrill was stuck with more than $46 billion of them on its books when buyers fled the market.

The firm's remaining CDO holdings fell to $19.9 billion at the end of June from $26.3 billion at the end of March, according to the firm's statement yesterday. The majority of the reduction resulted from $3.5 billion in writedowns.

Emphasis added by me.

So there's another $19.9 billion they'll have to write-down in the coming quarter or two?
Banks and brokers have taken more than $435 billion of writedowns and credit losses since the beginning of last year as mortgage-backed securities, CDOs, leveraged loans and other fixed-income assets lost value. Merrill's charges are now second only to those at Citigroup Inc., the largest U.S. bank.

Emphasis added by me.

Close to half a trillion dollars.

But some people say it's not done yet.

And those people are correct!

Where is your money today?

Educate yourself!

Previously here:

Chronicles Of Depression 2.0: #141
Chronicles Of Depression 2.0: #130
Chronicles Of Depression 2.0: #099
$2-$6 Trillion … POOF! Gone!
The Two Trillion Dollar Spree
The Trillion-Dollar Spree, The Sequel

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