Get ready, today may well be the day many of the doom and gloomers have been warning us about. CNN just reported Merrill Lynch is writing down an additional $15 billion of investment losses attributable to mortgage investment losses, twice the estimated projection. This report coming so early in 2008 following the recent disclosure by Countrywide, i.e., that its December 2007 mortgage defaults were much greater than anticipated, points to only one conclusion, 2008 is going to be a very very rocky year.
More importantly, or should we say more ominously, Merrill lynch, like many of America's financial companies is being compelled to look to Far East and Middle East governments for bail out money. This appears to becoming more of a solvency issue/struggle than a liquidity crisis, all of which points to the conclusion that a recession may already be here.
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