by Calculated Risk on 10/06/2007 12:34:00 AM

From the WSJ: Merrill's $5 Billion Bath Bares Deeper Divide. This article is mostly about internal issues at Merrill Lynch. A few excerpts:

Merrill Lynch & Co.'s announcement Friday that it would take a $5.5 billion hit to third-quarter earnings is exposing the weak oversight exercised by top Merrill executives as it became a big force in the mortgage-securities business.
...
In July, before the market worsened, Merrill's chief financial officer, Jeff Edwards, said in a conference call with investors that the firm's exposure to subprime mortgages was "limited, contained and appropriate."
...
Credit-rating agencies maintained Merrill Lynch's current credit ratings but revised the outlook to negative. Standard & Poor's said Friday's announcement "raises concerns over Merrill Lynch's risk-management practices in allowing such a large exposure to build."
...
The write-down means Merrill will report a loss of about $450 million, or 50 cents a share, for the third quarter, after showing quarterly operating profits averaging over $2.1 billion for the past four quarters.

Are the problems now behind Merrill and the other banks?