would be (and is) just as broke as they are, save government intervention.

I did inhale.

Please go to: http://bigpicture.typepad.com/ and read the detailed analysis of Merrill's balance sheet magic. Yesterday, Merrill agreed to sell $30.6 BILLION of CDOs to an entity whose only holding is...you guessed it, [to be] those very CDOs. Should the entity (called Lone Star Funds] cease to make timely pmts. to MER, the latter of which is ALSO financing most of the transaction, MER can call the loan (and portfolio)! There's more. What, one may muse, did the entity agree to pay for this exquisite dish of $30+ Billion? Pick a price; go ahead, try.... You say, 70 cents on the dollar? No, certainly not 50 cents...! How about 5.5% of the total [presumed] value of $30+B. This is off-balance sheet nastiness of the first order and while it may theoretically "remove" the CDO garbage from Merrill's Annual, 10Q's, et.al., it smells of out-of-sight, out-of investor's minds chicanery.
Kinda like a little Texas energy company...what was its name? I can't remember, but the symbol was ENE. It is anyone's guess how well this will work but John Thain gets a 'B+' for ingenuity. The liability is there still, but it depends on factors such as whether Lone Star can move these CDOs and make some money in the process. But, the process itself is a stretch and I would think that investors, at least the institutional ones, WILL remember this footnote, even though their retail customers might be induced or seduced into buying MER common and other paper from their soon-to-be-mute brokerages. Hide and seek anyone?