After Merrill's Sale of Bad Debt, Few Have Followed

Washington Post (08/26/08) P. D1; Landy, Heather
In July, Merrill Lynch sold off a massive portfolio of securities badly damaged by the subprime mortgage meltdown--a move that was applauded at the time by shareholders and regulators, many of whom had been pressing banks and investment firms to rid themselves of such problem assets. However, widespread dumping of the securities never came to fruition because purging the collateralized debt obligations would have required pricing them at a fraction of their face value. The dilemma is one that Wall Street firms face as they look to repair balance sheets devastated by the credit crunch. Treasury Secretary Henry Paulson Jr. continues to push Wall Street executives to clean up the mess quickly and raise more capital.