Market Casualties

The housing downturn hits Wall Street, teaching a familiar lesson

Every great financial boom ends in tears. With markets, what goes up unreasonably must come crashing down, and when that happens, we look for people to blame.

And so we have our first big-game catch of the 2007 housing slump and credit crunch. On Oct. 30, Stan O'Neal resigned his post as CEO of Merrill Lynch after reporting that his firm would suffer a $7.9 billion hit to the value of its assets because of bad bets on mortgage-related securities. O'Neal personally took blame for Merrill's forceful push into complex instruments designed to distribute the risk of a surging subprime-mortgage market--the ones now...

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