"Merrill was underwriting deals it knew or should have known were bad"

Mr Mortgage points to this article on Reuters:
 Tavakoli said in a report to clients that of the 30 collateralized debt obligations
(CDOs) Merrill sold in 2007, every one has either had its best-rated portion cut to junk,
is in technical default, is being liquidated, or is in danger of being liquidated.
 The poor performance suggests that Merrill was underwriting deals it knew or should
have known were bad, Tavakoli said. That underwriting, combined with similar moves from
other banks -- has shaken investor faith in CDOs, Tavakoli wrote in the report. Her
company is Tavakoli Structured Finance Inc.
 Merrill Lynch spokesman Mark Herr declined comment.
They also list on the article the status about these CDOs:

 ABS CDOs underwritten by Merrill Lynch in 2007
 (All data is as of June 10)
Estd Deal Name Manager Appx. Size Status
Closing (in millions)
1/11 Lexington Cap Fundg III Harding Advisory 1,212.00 Toast**
1/24 Port Jackson CDO 2007-1 Basis Capital 350.00 Toast**
1/25 Highridge ABS CDO I ZS Structured Credit 1,500.00 Acceleration**
                                  Capital Mgt
2/21 Maxim High Grade CDO I Maxim Capital Mgt 2,000.00 EOD**
2/27 Broderick CDO 3 SCM Advisors 1,500.00 Acceleration**
2/27 Kleros Real Estate CDO IV Strategos Capital 1,000.00 Undeclared EOD
3/1 Norma CDO I NIR Capital Mgt 1,500.00 Acceleration**
3/8 Maxim High Grade CDO II Maxim Capital Mgmt 2,000.00 EOD**
3/8 Newbury Street CDO Ltd. Mass. Fincl Svcs. 2,000.41 EOD
3/9 South Coast Funding IX TCW Asset Mgmt 540.00 Toast**
3/27 Euler ABS CDO I Babcock and Brown 675.00 Toast**
3/27 GLACIER-V Terwin Money Mgmt 498.50 Toast**
3/29 Lexington Capital Funding V Harding Advisory 615.00 Toast**
3/29 Libertas Preferred Strategos Capital 500.00 Toast**
     Funding IV                   Mgt
3/29 Silver Marlin Sailfish Structured 1,250.50 EOD
4/3 Kleros Preferred Funding VII Strategos Capital 1,498.00 EOD**
4/5 NEO CDO 2007-1 Harding 300.00 Liquidation**
4/11 Forge ABS High Grade CDO I Forge ABS LLC 1,503.50 EOD**
4/12 IMAC CDO 2007-2 Ivy Asset Mgmt 500.00 Liquidation**
4/18 Mars CDO I Chotin Group 618.50 Acceleration**
4/26 Brookville CDO I Petra Capital 499.00 EOD**
4/26 Fourth Street Funding Ltd N.I.R. Capital Mgmt 500.50 Acceleration**
4/26 Western Springs CDO Deerfield Capital Mgt. 495.60 Acceleration**
5/3 Jupiter High Grade CDO VI Harding Advisory 1,501.10 Toast**
5/10 Tazlina Funding - II Winter Group 1,500.00 EOD**
5/25 West Trade Funding CDO III N.I.R. Capital Mgmt 2,500.00 Toast**
6/1 Robeco HG CDO-I Robeco Investment 1,100.55 Toast**
6/7 Durant CDO 2007-1 SCM Advisors 400.00 Liquidation**
7/26 Biltmore CDO 2007-1 ING Clarion Capital 1,000.00 EOD**
8/28 Bernoulli High Grade CDO-II Babcock and Brown 1,500.00 Acceleration**
 **means the topmost "triple A" tranche of the CDO has been downgraded to junk.

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