Merrill Moves $33.8 Billion Into Level 3

Merrill's Level 3 assets jumped by 70% to $82.4 billion. Level 3 assets now comprise 8% of Merrill's total assets. For those unfamiliar with Level 3, it is the bucket where dealers throw assets whose prices cannot be determined by market values. Maybe there used to be a market for them, but that was before the credit kerfuffle. For example, let's say I want to claim a $5,000 tax deduction on my 25 year-old TV. I paid $5,000 for it 25 years ago. I'm pretty sure if I tried to sell it on Craigslist, I'd have to pay someone $50 to come pick it up because it weighs about 87 pounds. So instead of selling it, I put it in my Level 3 basket, where I continue to value it at $5,000 thus increasing the value of my total assets so I can get a $1 million stated income and asset home equity loan. Once I get the loan, I donate the TV to the Salvation Army and claim my $5,000 tax deduction. I'm not really worried about the audit which will come after I have paid myself a $500,000 bonus out of the loan I took against my assets. If this analogy seems absurd to you, you've never worked on Wall Street.