Wall Street's titans made a terrible mess with their bets on the sub-prime mortgage market, and now they're paying for it dearly. Most of the major U.S. banks and brokerage firms recorded massive write-downs of sub-prime and CDO (collateralized debt obligation) assets in the third quarter after late payments on U.S. home loans hit a five-year high. More big write-downs are expected in the fourth quarter of this year, as well as next year. One analyst, Matt King of Citigroup, estimates that mortgage-related write-downs could total as much as $64 billion for the second half of this year when the all dust has cleared. The numbers are a little slippery, as some firms revised their reports and estimates for future write-downs several times; some analyst reports on the figures conflict. See the table below to get a sense of the damage.

CDO/SUBPRIME Exposure And Write-Downs
Firm Net CDO and sub-prime exposure at end of Q3* Q3 pre-tax credit write-downs Est. Q4 pre-tax credit write-downs**
Citigroup $54.9 bn $6.4 bn $11.0 bn
UBS 38.8 bn 3.8 bn 7.1 bn
Merrill Lynch 20.9 bn 8.4 bn 10.0 bn
Morgan Stanley 10.4 bn 1.4 bn 3.7 bn
Wachovia 3.9 bn 1.3 bn 1.1 bn
Bear Stearns 3.2 bn 700.0 mn 1.2 bn
Goldman Sachs N/A 1.5 bn 0
*Firm filings and Keefe Bruyette & Woods analyst report
**UBS source: Lehman Brothers report; Merrill Lynch source: Deutsche Bank report; Citigroup source: Citigroup;
Bear Stearns source: Bear Stearns; Morgan Stanley, Goldman Sachs and Wachovia source: CIBC World Markets report.