Merrill Estimates 3Q Writedowns at $4.5B

Merrill Lynch has estimated that it will take $4.5 billion in credit crunch-related writedowns (net of hedges) to subprime mortgages, collateralized debt obligations, and leveraged finance commitments in the fiscal third quarter.The company pegged its expected net loss for the quarter at up to 50 cents per share. "While market conditions were extremely difficult and the degree of sustained dislocation unprecedented, we are disappointed in our performance in structured finance and mortgages," said Merrill Lynch chairman and chief executive officer Stan O'Neal. "We can do a better job in managing this risk." The company also has confirmed multiple reports that at least two of its fixed-income executives, Osman Samerci and Dale Lattanzio, have left and that it has promoted David Sobotka -- head of commodities in the fixed-income, currencies, and commodities unit -- to global head of that unit.