Merrill rocked by $11.5bn subprime writedown


	Merrill rocked by $11.5bn subprime writedown

JICWyllie

1-17-2008 2:08 PM

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tags:

economy, financial markets, i-losses, i-increase, i-reported

JICWyllie says:

$10 billion here, $10 billion there starts to add up to serious money.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/ad62986a-9a01-49b0-9093-c833cfdf648c/1FC76F06-C27D-40FD-AFDA-BB409D6ACAC9/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.ft.com/cms/s/0/f93941c2-c4f8-11dc-811a-0000779fd2ac.html" href="http://www.ft.com/cms/s/0/f93941c2-c4f8-11dc-811a-0000779fd2ac.html" style="font-size: 11px;">www.ft.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/f93941c2-c4f8-11dc-811a-0000779fd2ac.html"><B><A href="http://markets.ft.com/tearsheets/performance.asp?s=us:MER" symbol="us:MER">Merrill Lynch</A></B> on Thursday reported the worst quarter since it was founded nearly 100 years ago, saying it lost $9.8bn in the last three months of 2007 following $14.6bn in investment writedowns.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/f93941c2-c4f8-11dc-811a-0000779fd2ac.html">The writedowns included $3.1bn related to contracts Merrill entered into with bond insurance groups to hedge against losses. Such groups, especially ACA Capital, are now under heavy pressure, raising doubts about the extent of the insurance they provide.</blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/f93941c2-c4f8-11dc-811a-0000779fd2ac.html">Merrill also reduced the value of asset-backed collateralised debt obligations on its books by $11.5bn. </blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.ft.com/cms/s/0/f93941c2-c4f8-11dc-811a-0000779fd2ac.html">The losses disclosed by Merrill are similar to those disclosed on Tuesday by <B><A href="http://markets.ft.com/tearsheets/performance.asp?s=us:C" symbol="us:C">Citigroup</A></B>, which lost nearly $10bn in the fourth quarter following an $18.1bn writedown. </blockquote></div><div style="margin: 0px 6px 6px 4px;"><table style="font-size: 11px;border-spacing: 0px;padding: 0px;" cellpadding="0" cellspacing="0" width="100%"><tr><td style="background:transparent;border-width:0px;padding:0px;">&nbsp;</td><td align="right" style="background:transparent;border-width:0px;padding:0px;width:107px" width="107"><a href="http://clipmarks.com/share/1FC76F06-C27D-40FD-AFDA-BB409D6ACAC9/blog/" title="blog or email this clip"><img src="http://content6.clipmarks.com/images/c2b-foot.png" border="0" alt="blog it" width="107" height="17" style="border-width:0px;padding:0px;margin:0px;" /></a></td></tr></table></div></div>

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