by Calculated Risk on 10/28/2007 11:00:00 AM

From Gretchen Morgenson at the NY Times: Guesstimates Won’t Cut It Anymore

THE props holding up the values of risky mortgage securities finally started to give way last week. And that means the $30 billion in losses and write-downs taken by big brokerage firms in the third quarter are not likely to be the last.
...
First to face the music was Merrill Lynch, which stunned investors Wednesday with an $8.4 billion write-down, $7.9 billion of which was for mortgage-related assets. The write-down was $3.4 billion more than it had warned investors about just three weeks before.

Until that moment, investors had been willing to trust companies claiming to have limited exposure to the credit mess.
...
The executives on Merrill’s dismal conference call conceded that even after they decided to value their C.D.O. holdings more conservatively — resulting in losses — much of their methodology was based on “quantitative evaluation.” ...

ANALYSTS quickly responded by forecasting an additional $4 billion in write-downs on Merrill’s portfolio. ...

We’ll definitely see a lot more write-downs,” said Josh Rosner, an expert on asset-backed securities at Graham-Fisher, ... “I think that the exposures that we are seeing and the announcement out of Merrill are the leading edge, not the end.”
emphasis added

No worries. It's all contained discounted.