Filed under: Deals, Bad news, Citigroup Inc. (C), Bank of America (BAC), Merrill Lynch (MER)
Merrill Lynch (NYSE: MER) may be worse off than expected. A report in The Wall Street Journal states that the sovereign fund of Singapore, Temasek Holdings, may put $5 billion into the investment bank. The news would be an indication that Merrill is facing large losses in the last quarter of the year.
The price action in companies like Citigroup (NYSE: C) and Bank of America (NYSE: BAC) has been bad the last two days. Credit agencies have indicated that there may be more financial company downgrades and bond insurance firms might lose the ratings levels that have made them such useful backstops.
The question now isn’t whether Merrill and its peers will need more investment capital. It is whether the process will repeat itself once or twice more next year if the mortgage market gets substantially worse.
Douglas A. McIntyre is an editor at 247wallst.com.
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