Merrill Lynch US$8.4b Write-down

Investment banking giant, Merrill Lynch, reported a US$8.4b write-down during the bank's qtrly results statement. This was the biggest qtrly loss in its 93yr history. Stanley O'Neal (ML's CEO) said the severity of the debts mkts were misjudged since July. US$7.9b was lost to CDOs and securities/loans linked to subprime mortgages.

Slumping credit mkts have led to some industry executives' heads to roll and have wiped out >20% of stock mkt value in some firms.

With this, S&P is considering lower the ratings for some CDOs managed in S'pore: Raffles Place Funding by UOB Asset Management, and Singa Funding by OCBC's Lion Capital Management.

* ML-3Q Report , Bloomberg-ML , AsiaOne-ML *

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So, is the shore clear? I doubt so ... ... the impact of subprime mortgages is not easy to assess because the ripples hv not settled down yet.

How abt tis ... ... CDOs & SIVs are held as off-balance-sheet items by financial institutions and this has led to NO transparency on their holdings! Read abt it: AsiaOne-Mkt Risks.