Merrill Lynch loses another $5 billion

[harry123]

Source: Credit Writedowns

Didn't Merrill just write down over $9 billion?

I swear Merrill just wrote down $9.4 billion and sold its stake in Bloomberg two weeks ago. So why are they in the news AGAIN writing down another $5.7 billion? It's frightening to think this company is still a going concern. The company has written down more than the $42 billion it had in total shareholder's equity at this time last year - (read their 10-Q from Q2 2007). If Merrill Lynch hadn't raised tens of billions in capital, they would have gone bankrupt long ago. At one time, this is the firm everyone on Wall Street wanted to be -- 'Magnificent Merrill' as the Economist called them 13 years ago. Now, look at them. Breathtaking.





Read more: http://www.creditwritedowns.com/2008/07/didnt-merrill-just-write-down-over-9.html

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Here is another perspective from the NY Times:
http://dealbook.blogs.nytimes.com/2008/07/28/merrill-to-raise-85-billion-in-more-capital/

And the BBC:
http://news.bbc.co.uk/2/hi/business/7530124.stm

If financials don't sell off further, I'll be amazed. This is just unbelievable. Has the US financial system imploded? Thanks to Bush -- the worst President in history -- and his buddies for setting the environment for this to happen!

[MichiganVote]

1. Going, going............

[Demeter]

2. Thanks for Posting This, Harry

We may never know exactly what's been going on, but we do know it isn't good.

This should be posted in the Stock Market Watch tomorrow....

[ozymandius]

5. It will be.

Do you want to do the honors?

[Demeter]

9. I'm not much use on a weeekday for the present

be my guest.

[Xipe Totec]

3. Ask George to look for it

probably hiding under Hussein's WMDs.

[boomerbust]

4. Didn't they just buy

Bear Stearns with taxpayer backing?

[ozymandius]

6. You're thinking of J.P. Morgan.

Morgan acquired Bear.

Merrill looked positioned to acquire Lehman Brothers. That now seems a remote possibility.

[Doctor Cynic]

7. Mini-Violin Corp is posting record profits.

[MidwestTransplant]

8. Shit happens. I lost a few Billion the other day myself.

[jannyk]

10. Uh Oh, Someone's questioning CEO Thain'sTruthiness

Surely He'd never 'fib' to shareholders....or would he....:eyes:
from the BBC:

>The third biggest US investment bank had already written off nearly $40bn in four consecutive quarters of losses.

The announcement came only a few weeks after the announcement of $9.4bn of write-downs and sales of assets and has cast some doubt on Mr Thain's credibility.

"They did at least $7bn of asset sales, now they need another $8.5bn. Why do they need that much more? Are things that much worse than we were led to believe?" asked James Ellman from Seacliff Capital in San Francisco.

"If people were going to believe Thain when he said Merrill raised more capital than it needed to and had taken conservative marks on its securities book, I'm not sure they're going to believe him tomorrow morning."

http://news.bbc.co.uk/2/hi/business/7530124.stm

[MadMaddie]

11. So do the Rethuglicans want to save this company too?

Bail them out with our tax money? Reward another failed company in their "Free Market" bullshit economy?

Why do I get the feeling that Enron will have nothing on some of the companies that will fail? Enron cooked their books in a big way....what are these other companies hiding?

No more bailouts....let them fail! Live by the Free Market Die by the Free Market!

[sentelle]

12. 5 billion here, 9 billion there...

Uh, Mr. BoOosh, are we talking about real money yet?

[Pale Blue Dot]

13. Questions from "The Big Picture" blog:

The Merrill announcement raises a lot of questions. Investors should be asking questions. If the SEC wasn't so busy chasing rumors, squeezing shorts, and otherwise wasting taxpayer money -- but not protecting shareholders -- they might consider some of the following questions also:

1. Why did Merrill fail to disclose this write-down to shareholders when they reported on July 17th? The stock was $30.73 then; everyone who bought since then just got totally sandbagged.

2. The Financials traded today as if many people knew this was coming. How much non-public information leaked in advance of this announcement?

3. Who really thinks the worst of the write-downs, share issuance, and dilution is behind us? Anyone? Bueller?

4. Anyone think Financials are cheap? Think they might get cheaper?

5. Who really thinks the Financials have put in a bottom?


http://bigpicture.typepad.com/comments/2008/07/merrills-57b-wr.html

[harry123]

14. Apparently everyone knew from Friday

http://ftalphaville.ft.com/blog/2008/07/29/14786/we-knew-about-the-merrill-writedown-on-friday-didnt-you/

Notwithstanding most Wall Street traders, it turns out that followers of National Australia Bank’s results last Friday might also have seen the writedowns at Merrill coming.

Notable back then was NABs big $830m writedown on CDOs. NAB, it turns out, was a co-investor with Merrill in a number of deals.


The Big Picture is right about this smelling very fishy less than two weeks after earnings.