Merrill Lynch acts on losses
Merrill Lynch plans to get rid of its toxic assets. by selling $30 billion worth at just 22 cents on the dollar and taking a $5.7 billion write-down in the third quarter. Janet Babin reports where we may be in the mortgage crisis.
Merrill Lynch logo (Graeme Robertson/Getty Images)
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Scott Jagow: The bank losses aren't going away either. More from Merrill Lynch this morning. But the bank does have a plan to get rid of its toxic assets. Sell $30 billion worth at just 22 cents on the dollar. Marketplace's Janet Babin reports from North Carolina public radio.
Janet Babin: In addition to its fire sale of debt, Merrill will also take a $5.7 billion write-down in the third quarter. The company said it's tied to additional losses on the sale of -- what else -- mortgage securities.
According to mortgage banking consulting firm Wholesale Access, banks have already written off about $450 billion in bad mortgage debts. That sounds like a lot.
But the firm's managing director, Tom LaMalfa, says we're only halfway through a $1 trillion subprime mortgage crisis.
Tom LaMalfa: Because that's the amount of non-prime mortgages that have been written since 2005. And since we think there's a reversal going on in property values, there has been the disappearance of all that equity.
LaMalfa's not sure government regulators can do much to stem the ongoing losses.
I'm Janet Babin for Marketplace.
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