Yesterday, I wrote about a 5.7 billion write-down that Merril was taking on CDOs.

It turns out that the numbers, which showed them getting 22¢ on the dollar are completely bogus. They took an even bigger haircut than reported.

Nouriel Roubin has the details, but the cliff notes version is:

• Merrill financed the purchase.
• The finance rate is at sub market rates.
• The security for the deal is the same CDO crap that they are selling
• Merrill has, “would absorb any losses on the CDOs beyond $1.68 billion”

Their face value is $30.6 billion, so this figures to a 5.5¢ on the dollar worst case.