The roll call of fallen household names in US banking continues to grow. Bear Stearns, Fannie Mae and Freddie Mac have wiped out their shareholders; Lehman Brothers is close to joining the club with its shares down from a peak of $86.18 to under $4. The bears will be looking for their next target and Merrill Lynch is going to be high on the list. Like Lehman, Merrill Lynch has a pile of cash, $41.3bn as at 31 December 2007.
Unfortunately that may not mean much. In a climate of fragile confidence and plunging asset values the balance sheet looks scary with shareholders’ funds of $31.9bn supporting total liabilities and equity of just over a trillion dollars.
...
