Earlier this week it was forecasted banks would announce severe losses when their quarterly reports were made public. Merrill Lynch shocked the public when it declared a larger-than-expected $4.9 billion loss last quarter, according to CNN Money. This is the fourth consecutive quarterly loss for the bank.

The housing and credit problems are destroying bank profits. One California bank was taken over by the government earlier this week, angering and scaring its clients.

Source CNN Money:

Merrill Lynch reported a nearly $5 billion quarterly loss Thursday that surpassed even the worst estimates, hit hard yet again by writedowns across its books. … Thursday's results represent the fourth consecutive quarterly loss for Merrill Lynch. In April, it booked a nearly $2 billion first-quarter loss as the mortgage market deteriorated further.