More Writedowns From The Financials: Merrill and WaMu Announce 3rd Quarter Writedowns
This morning Merrill Lynch (MER) announced an estimated $5.5 billion in writedowns ($4.5 million related to mortgage backed securities and $1 billion to leveraged loan commitments) and forecast a loss for the quarter of up to 50 cents per share (Press Release).
Of course this is welcome news because companies are in business to lose a boat load of money. Merrill’s shares are up more than 2% on the day.
Washington Mutual (WM), meanwhile, announced $1.4 billion in writedowns, including $975 million in loan loss provisions and $550 million (not included in write downs) in ner charge offs for the quarter (Press Release) – that compares to $166 million in loan loss provisions and $154 million in net charge offs for the year ago quarter (3Q06 Earnings Release).
All this is going to mean approximately a 75% decline in net income from the year ago quarter.
WaMu’s shares are up about 1.5%.