johnhaskell

Why Merrill's CDO Sale Doesn't Mean Big Writeoffs Elsewhere

recall that these CDO's were supposed to be "super senior." sure there are many kinds of CDO's, just as there are many kinds of portfolios of anything. But if the "super seniors" are being marked down to 22% of par, wouldn't it stand to reason that less senior tranches would be perhaps marked even lower?

Second, Thain was a new broom in mid January when he supposedly "kitchen sinked" the balance sheet. After multiple assurances that MER was well capitalized, and six months at the helm, it's a little late to say "oh what a surprise! how did this junk get here?!"