The greedy pigs are in deep...

I have been harping for a few years now (since the latest merger mania on Wall Street) that the Wall Street banks are in to deep in their deals. All you have to do is read their quarterly earnings over the past 2-3 years and have some common sense to see that when they are Advising on deals, Brokering the deals, Financing the deals, Participating in taking Equity in the deals and Creating Derivatives based on the debt associated with the deals, they have found a way to profit in every aspect of the deals. They have also found a way to LOOSE in every aspect of the deals if they go bad.

Hence this blurb from Bloomberg today. Note the bold paragraph. These guys deserve to be hammered and the idiots on Capital Hill should enforce some of the laws on the books with respect to conflicts of interest and if they must, write more. The home owner is getting punished but any idiot can see Wall Street got damn greedy and F----- up what was just a few years ago a sound industry.

Merrill Says Fair Value Adjustments Made for Subprime (Update1)

By Erik Schatzker

Sept. 14 (Bloomberg) -- Merrill Lynch & Co., the biggest underwriter of collateralized debt obligations, said it made ``requisite fair value adjustments'' for the impact of rising defaults on subprime mortgages and they'll be reflected in the firm's third-quarter earnings.

The New York-based firm said in a regulatory filing today that credit-market conditions ``have continued to remain challenging in the third quarter.''

Merrill is at risk of losses from subprime defaults because it participates as an investor, lender, counterparty and guarantor in markets tied to mortgages. They include CDO underwriting, other structured credit products and leveraged finance, the firm said in the filing.

While Merrill reiterated previous disclosure that ``significant risk remains that could adversely impact these exposures and results of operations,'' the filing included no estimates for how the fair value adjustments may affect earnings.

Merrill fell $1.34, or 1.8 percent, to $73.80 in 9:59 a.m. composite trading on the New York Stock Exchange. The shares are down 21 percent for the year.

Analysts predict that Merrill will report a decline in third-quarter profit next month in part because the firm needs to mark down the value of certain investments and financing commitments.

``Investors will be looking for transparency with respect to the manner in which brokers approach the mark-down process and specific disclosures around the current exposures and write-downs related to key areas of concern such as LBO loan commitments, CDO holdings and other mortgage-related assets,'' Lehman Brothers Holdings Inc. analyst Roger Freeman wrote in an Aug. 30 report.

Last Updated: September 14, 2007 10:07 EDT