CEO Stanley O’Neal in the hot seat after firm reveals huge loss on bad mortgage bets and swings to first quarterly loss since 2001.

Grace Wong, CNNMoney.com

Merrill Lynch & Co. Inc. took a $7.9 billion writedown in the third quarter due to bad mortgage bets, well exceeding its initial estimates and raising questions about whether the worst is over for the Wall Street firm.

Writedowns on home loans given to borrowers with poor credit and collateralized debt obligations - pools of bonds sold off in slices of varying credit risk - hurt performance and resulted in the company reporting on Wednesday its first quarterly net loss since 2001.
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