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In December 2007, journalists Carrick Mollenkamp and Serena Ng wrote of a CDO called Norma created by Merrill Lynch at the behest of Illinois hedge fund, Magnetar. It was a tailor-made bet on subprime mortgages that went "too far." Janet Tavakoli, a Chicago consultant who specializes in CDOs, said Norma "is a tangled hairball of risk."
October 5: Merrill Lynch announces a US$5.5 billion loss, revised to $8.4 billion on October 24, a sum that credit rating firm Standard & Poor's called "startling". [181] October 10: Hope Now Alliance is created by the US Government and private industry to help some sub-prime borrowers. [182]
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[186] [187] Merrill Lynch's large losses in 2008 were attributed in part to the drop in value of its unhedged portfolio of collateralized debt obligations (CDOs) after AIG ceased offering CDS on Merrill's CDOs. The loss of confidence of trading partners in Merrill Lynch's solvency and its ability to refinance its short-term debt led to its ...
Rating agencies lowered the credit ratings on $1.9 trillion in mortgage backed securities from the third fiscal quarter (1 July—30 September) of 2007 to the second quarter (1 April–30 June) of 2008. One institution, Merrill Lynch, sold more than $30 billion of collateralized debt obligations for 22 cents on the dollar in late July 2008.
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Stop-loss may refer to: Stop-loss insurance, an insurance policy that goes into effect after a set amount is paid in claims; Stop-loss order, stock or commodity market order to close a position if/when losses reach a threshold; Stop-loss policy, US military requirement for soldiers to remain in service beyond their normal discharge date