Released on: August 14, 2008, 11:40 am

Press Release Author: Ed Mcmahon

Industry: Financial

Press Release Summary: Latest write-downs at Merrill Lynch means no imminent end to
turmoil say World Capital Solutions.

Press Release Body: A source familiar with strategy at World Capital Solutions say
they see no short-term respite for the banking fraternity following the revelation
that Merrill Lynch, the third- biggest US securities firm, sold $8.55 billion of
stock and will liquidate $30.6 billion of bonds at 22¢ on the dollar in order to
shore up credit ratings jeopardized by mortgage losses.
The unofficial line at World Capital Solutions suggests that the size of the
write-down may be signal greater transparency from the large banks about the extent
of their losses which, to date, amount to close on $500bn.
Temasek Holdings, the Singapore-owned fund that became Merrill\'s biggest investor by
buying shares in December at a much higher $48 a share, agreed to buy $3.4 billion
of newly-issued stock, Merrill said yesterday in a statement. World Capital
Solutions say that Merrill's $2.5 billion payment to Temasek is tantamount to
compensation for the effective loss of 50% of their December investment. Merrill
will also book $5.7 billion of write-down in the third quarter.
The World Capital Solutions source said that consensus at the firm is that vehement
statements from bank CEOs including Merrill's John Thain can no longer be considered
to be reliable information upon which to base investment decisions because,
irrespective of the denials, the banks seem to eventually return to the market for
more capital to cover their regulatory obligations. They also say that existing
shareholders will see share value diluted.


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Contact Details: Ed Mcmahon
media@24-7-news.net