What price certainty? Merrill Lynch's latest round of capital raising and writedowns put a cost of 78 cents on the dollar for (partial) surety and a value of just 22 cents on super-senior positions in collateralised debt obligations, backed by noxious mortgage-related assets.

As a guide to banks' balance sheets, bad news abounds. The structure of Merrill's sale - with Lone Star paying $6.7bn for CDOs with a gross notional value of $30.6bn - means the implied value is even lower. In putting up three-quarters of Lone Star's funding, secured only on the assets it is shedding, Merrill gets about $1.7bn in equity, and takes on a $5bn credit exposure to the buyer. A fall of 25 per cent could see this risk return to Merrill, hardly a comfort when the assets have apparently dropped 40 per cent since the end of June.