Both Trader Daily and The New York Post have reports that rumours coming out of Merrill Lynch suggest that there are likely to be 'substantial' additional losses announced by the firm Wednesday, when it unveils its third-quarter numbers. Merrill came out a couple of weeks back and acknowledged that, because of the recent market turmoil, it will write-down around $5.5bn in the period and will post its first quarterly trading loss for some six years.

Trader Daily, however, quotes unnamed 'sources familiar with the situation', who claim that Merrill executives held an emergency board meeting Sunday night to discuss 'incremental substantial losses' ON TOP of the $5.5bn write-downs already announced. There are now rumours that the firm may announce further write-downs Wednesday, thought to be related to CDO assets which have suffered further declines in value. And speculation is mounting that Merrill CFO Jeffrey Edwards and co-President Ahmass Fakahany may be next for the chop. The spotlight will also turn on CEO Stan O'Neal if further losses have been uncovered at this late stage.

The Post quotes an unnamed mortgage-trading executive at a Merrill rival, who said that 'it's going to be impossible for (firms) to avoid another round of write-downs if this even remotely keeps up. And a second write-down is going to lead to a lot of job losses'.

Finally, Bank of America boss Ken Lewis has come under fire after making the comment that 'I've had all the fun I can stand in investment banking at the moment' during a conference call with analysts last week. One senior banker told Here Is The City that 'here's another guy who gained hugely from the outrageous leverage that Wall Street crammed down investors' unsuspecting throats for five halcyon years. Doesn't Lewis realise that 'not having fun' in these markets is an admission that he doesn't give a stuff for all those employees and clients who he has directly affected by his tacit management of this mess ?'.

Anyway, heads have started to roll over at Bank of America following the announcement of the firm's third-quarter profits last week. (BofA's third-quarter net income fell 32% to $3.7bn, after trading losses, defaults and write-downs of some $4bn. The firm sustained a $717m net loss in its credit products and equity business (took a $1.4bn hit in trading losses overall), wrote down $2bn for credit losses and $247m on its portfolio of leveraged loans. Profit over at the investment bank fell 93% from $1.4bn to just $100m). Chris Hentemann, who ran the bank's global structured products group, is said to have left Friday. Others are expected to swiftly follow him out the door.

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