Merrill Lynch: We Just Lost $9.8 Billion

Merrill Lynch just lost $9.8 billion.

After taking write-downs totaling $16.7 billion, the firm posted a $9.7 billion fourth quarter loss and a yearly loss of $7.78 billion.

For comparison’s sake, Merrill Lynch made $7.5 billion in 2006. So that’s, like, really bad.

So what do you say when you’re the new CEO of a company that just lost almost $10 billion in one quarter?

John Thain, who took over as Merrill’s chief executive officer in December, called the firm’s results “unacceptable”…

Pardon our language, but no fuckin’ shit, John.

Merrill Lynch Posts a $9.8 Billion Loss [NYT]

Comments

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  1. B says:

    How much did they give out in end of year bonuses, again?

  2. cmdr.sass says:

    They should look in their couch cushions, that’s where I usually lose mine. Last week, I found 3.4 billion in nickels alone.

  3. HRHKingFriday says:

    Sounds like he needs to call a Waaahmbulance.

  4. clevershark says:

    I do hope this won’t prevent the new CEO from spending most of his time on the golf course, because that worked out so well for his predecessor (who walked away with a $161M golden parachute).

  5. kris in seattle says:

    Well, fuck.

  6. Wormfather says:

    I do have to say that the good thing about switching to a CEO like John Thain is that he wasnt afraid to get all the dirt out right off the bad.

    Also he’s a CEO, what was he supposed to say?

    “I going to f*cking tell you something, this sh*t is bull sh*t. I mean WTF, who the hell thought it was a good idea to bet heavily that people who dont pay their bills would pay their bills? I’ll tell you one thing, f*ck bonuses, f*ck reviews, we’re going to go to a more in your face approach, corperal punishment for under achiving employees and that goes from the mail boys right upto and including my secretary (winks at secretary)…”

    On second thought, that wouldnt have been a bad statment. But I’ve got issues.

  7. ChrisC1234 says:

    Subprime mortgages?

  8. AndrewDB says:

    That’s a mighty big oops.

  9. clevershark says:

    I’m not quite sure how to do the math on this one:

    “After taking write-downs totaling $16.7 billion, the firm posted a $9.7 billion fourth quarter loss and a yearly loss of $7.78 billion.”

    So for 2007 ML has lost or written off 34.2 billion dollars?!? That’s more than a lot of countries’ GDP…

  10. EncephelanetRepairHelperGuy says:

    @wannabejew: I concur.

    @B: Hey, B

  11. EncephelanetRepairHelperGuy says:

    @Wormfather: Well if gets shit-canned, he can always come and work with me as CFO

  12. kelptocratic says:

    @Wormfather: Dude… If I needed a CEO, you would SO be hired.

  13. Celticlady says:

    But is he “taking it seriously” ??

  14. CumaeanSibyl says:

    @clevershark: Nope. Adding those numbers is an incorrect approach. Remember, they’ve been earning money in other areas, as well. The write-downs of $16.7B are partially balanced out by those earnings.

    Similarly, the loss of $9.8B in the fourth quarter is partially compensated for by earnings in the other three quarters, so the net loss for the full year is only (only!) $7.78B.

  15. sled_dog says:

    @clevershark: 9.7 was for the fourth quarter, 7.78 for the entire year — the entire year includes the fourth quarter. In other words, they made a 1.92 m profit in the first 3 quarters, and a loss of 9.7 in the last quarter, making the annual loss 7.78.

  16. m4ximusprim3 says:

    @sled_dog: Which doesn’t look so bad, until you write it like this: $7,780,000,000.00 in one year.

    “unacceptable”… yeah, that about sums it up.

  17. exkon says:

    Man, how the hell do companies still stay aloft when they lost almost 10 BILLION in one quarter?

  18. If I help them find it, can I have 10% as a finder’s fee?

    Another repercussion from the unacceptable fiscal policy that the Fed has been running (and tolerating from the banks who invested in subprime mortgages) for the past ten years or so.

  19. techguy1138 says:

    Everyone Don’t for get to see the GE report tomorrow!
    Lets see how GE capital finance did in all of this mess.

  20. TechnoDestructo says:

    What is wrong with that guy’s face?

  21. shrtcrt says:

    Amazing, companies lose millions or billions and the CEO leaves with millions. How is that right. Shouldn’t CEOs be paid based on how the well the company does? How can a company lose millions, yet still pay out bonuses worth millions?

  22. AndrewDB says:

    @TechnoDestructo: He just saw the 9.8 billion dollar loss. He’s trying to contain himself from crying?

  23. LilKoko says:

    Whoopsie! . . . Oh, and where do I apply for that job? Great salary and perks, not much responsibility — I think I can do it!

  24. 92BuickLeSabre says:

    Did he check his suit coat pocket? I find lost money there all the time.

  25. kcrusher says:

    that’s what subprime lending will do to ya!

    no sympathy here – make stupid loans, get screwed!

  26. 8abhive says:

    In China or Russia, the previous CEO would suicide or be executed. The board would lose their jobs and genitals. Justice or not, it’d be a much closer fit for the crime than a $100+mil parachute.

    Some bad things yonder are only bad for the bad guys.

    Rome, here we come.

  27. friedfish says:

    @TechnoDestructo:
    How would YOU look if you lost $7.8 or $9.7 or $16.7 billion dollars in the first few days of your new job?

  28. vastrightwing says:

    Couldn’t have happened to a more deserving firm: Enron, bilking retail clients… why did it have to take so long?

  29. TechnoDestructo says:

    @Xehirut:

    Well, I don’t know. But I don’t think my brainpan would shrink while the lower half of my face grew by the same amount.

  30. jimda says:

    if they lost it someone found it!!!!

  31. Szin says:

    At least he didn’t try to spin it into something positive.

  32. zibby says:

    Really, you should have a picture of O’Neal next to the $9.8b loss headline.

  33. starrion says:

    @clevershark:

    the company wrote off 16.7 Billion. Subtracted against fourth quarter profits of 6.9 Billion, they ended up losing 9.7 Billion for the quarter.
    Further subracting against profits for the year, the company lost 7.78 Billion for the year.

    Net result: ML lost 7.78 Billion in 2007. And some executives.

    /Not a good year

  34. CumaeanSibyl says:

    @zibby: Yeah. He’s the one at fault, not the poor schmuck who just now walked in on this mess.

    I feel really sorry for him, and not because he’s kind of asymmetrical in the face. He’s been brought into a situation so wrecked that avoiding bankruptcy counts as an achievement. What a thankless job.

  35. savvy999 says:

    @TechnoDestructo: his glasses are too small for his head. Which was about to explode, until he got that little $9.8B ‘secret’ off his chest.

  36. edebaby says:

    Don’t feel sorry for them. They fucking made 5 billion in 2006. And who knows how much in the years prior. But that seems to get lost in the story. These fuckers aren’t hurting, they’re just setting it up to look bad so the government (you and me) will bail them out. Don’t fall for this bullshit.

  37. Notsewfast says:

    @edebaby:
    Actually, the government has been fairly clear that they have no intention of bailing out companies who made these subprime loans.

    Who we will be bailing out are the homeowners who took the loans.

    There is not a lot of deception going on here, there is bad news, and most of these firms are (ever so slowly) getting it off the books. In case you aren’t aware, the markets have pretty much been in the toilet since these write-downs began, and while some of it is over-selling, there is genuine bad news that is causing the markets to decline.

    This is an issue because it affects normal people who are foreclosing and/or losing their nesteggs that were invested in SIVs.

    You can’t just say “they made 5 billion” and assume that holds up as an argument as to why they are lying, its a lot of money, but its also a large company. What Thane is doing is a GOOD THING. He is being honest and doing what is best for investors and non-investors alike.

    In the future, please remember that some of us are professionals in the industries that are reported on and that if you act like you know what you are talking about, someone will likely call your bluff.

  38. meneye says:

    we could use a good recession anyway

  39. swalve says:

    Let’s remember too that some (all?) of these losses are paper losses. Huge generalization: If I pay $100 for something and it doubles to $200, I put in my books that I’m worth $200. Now it drops back to $100. I just lost half my shit! AArgh! Except I still have my $100.

    Let’s also remember that this is just the housing price bubble popping that we’ve all been predicting, manifesting in an unexpected way.

  40. lucelu says:

    I actually had stock in ML (only about 50 shares) but they were worth $10,000 and now are down to about $3,000. The problem was that ML wandered away from their standard operating procedure of creating financial products and charging a fee for that service to actually investing and keeping these CDO’s they created. What will save them is large amounts of foreign investment. Face it, by 2010 there won’t be anything owned by a US entity, it will be Chinese, Indian, Saudi, etc. I wonder how much of this has been planned by the Fed. Nevertheless, the immeasureable harm done by deregulation to Americans is coupled only by the unreasonable compensation executives receive. The CEO should have been fired and disgraced.