The business stories that matter, by Fortune's Colin Barr
Type Size  -  +
December 3, 2007, 6:50 am

Writedown watch at Citi, Merrill

Brace yourself: Wall Street is looking at more writedowns. Adding to the growing chorus of analysts predicting more doom and gloom for Citi (C) and Merrill (MER) are Credit Suisse number crunchers. They took a back-of-the envelope approach in the wake of the E*Trade (ETFC)-Citadel transaction, which valued the struggling firm’s mortgage holdings at between 11 and 27 cents on the dollar. The Credit Suisse report says Merrill could be due for $9 billion worth of charges were it to mark its collateralized debt obligation holdings to market at levels dictated by the E*Trade deal, The Wall Street Journal reports. That pales, though, in comparison to Citi, which Credit Suisse says could face $26 billion in new markdowns.

To make matters worse, Moody’s is considering downgrading some structured investment vehicles, which will only add to pressure on bank sponsors such as Citi. Citi-backed SIVs holding $65 billion in debt were among those downgraded or put on review Friday by Moody’s, Bloomberg reports. The fourth quarter is certainly shaping up as another bruising one for the big banks.

I like how ETRADE paid CITI back.

Posted By ramsey : December 3, 2007 10:42 am
CNNMoney.com Comment Policy: CNNMoney.com encourages you to add a comment to this discussion. You may not post any unlawful, threatening, libelous, defamatory, obscene, pornographic or other material that would violate the law. Please note that CNNMoney.com may edit comments for clarity or to keep out questionable or off-topic material. All comments should be relevant to the post and remain respectful of other authors and commenters. By submitting your comment, you hereby give CNNMoney.com the right, but not the obligation, to post, air, edit, exhibit, telecast, cablecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comment(s) and accompanying personal identifying information via all forms of media now known or hereafter devised, worldwide, in perpetuity. CNNMoney.com Privacy Statement.
Colin Barr covers business and finance for Fortune.com. Previously he was an editor at TheStreet.com and author of the weekly Five Dumbest Things on Wall Street column, and an editor at Dow Jones Newswires.
Subscribe to Daily Briefing: RSS feed | email newsletter
* : Time reflects local markets trading time.† - Intraday data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges.• Disclaimer
Powered by WordPress.com.