Thursday, October 25, 2007

The CDO Market and Associated Losses For Some Large Financial Institutions

The charts and tables below are from an article in the WSJ discussing the $8.4B loss that Merrill Lynch is going to take in Q3. The first chart gives the CDO volume since 2000 for both Merrill Lynch and the entire industry. The table gives the trading losses and asset write downs that each financial institution is going to take in Q3. It should be noted that additional losses may have to be taken in future quarters. The financial institutions are just beginning to get a handle on the losses they have before them. In addition as the housing market deteriorates additional losses will surface. (Double click to enlarge.)

Assuming some addition is correct the entire CDO market since 2000 has totalled $1.3523T (that is T as in trillion).

The data for this table comes from the print version of the WSJ.

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