Reply #8: Merrill Lynch to Take $15 Billion Writedown, NYT Says (Update2)

[ozymandius]

with a hat-tip to Roland

Jan. 11 (Bloomberg) -- Merrill Lynch & Co., the third- largest U.S. securities firm, may write down $15 billion related to U.S. mortgage losses, almost twice its original forecast, the New York Times reported, citing people briefed on the plan.

Analysts had estimated that the New York-based firm would announce a markdown of about $12 billion when it reports fourth- quarter earnings next week, adding to an $8.4 billion charge in the previous quarter. Losses on bets related to U.S. mortgages prompted the ouster of Chief Executive Officer Stan O'Neal in October and his replacement by John Thain a month later.

Merrill is trying to raise $4 billion from investors in the U.S., Asia and the Middle East to shore up its finances, the newspaper said, citing the same people. U.S. and European banks and securities firms including Merrill have already turned to Asian and Middle Eastern governments for about $34 billion.

....

Merrill and Citigroup Inc. lost almost half their market value in the past year after financial-market ``turmoil'' that U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday has hurt the economy. Merrill fell 3.2 percent to $50.34 in German trading as of 10:55 a.m. New York-based spokeswoman Jessica Oppenheim declined to comment when contacted by Bloomberg News.

Citigroup, the biggest U.S. bank, may post about $14 billion of writedowns when it reports fourth-quarter earnings next week, JPMorgan Chase & Co. analysts estimated today. Bank of America Corp. may announce writedowns linked to collateralized debt obligations of about $5 billion, they said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiiE0jWmlcOw&refer=home