People are still buzzing about Merrill Lynch's massive $15 billion loss in December. John Thain has gone public saying Bank of America had knowledge of Merrill Lynch's situation, while Bank of America execs say the loss estimates at the time were a fraction of $15 billion.

Lots of people are now talking about the possibility that it was a few blown CDS-related trades that resulted in the surprise loss--trading losses of "greater than Kerviel proportions," notes Portfolio. Merrill Lynch and Bank of America will likely be prodded for more information soon. If true, this will be more than a PR debacle. The idea that banks are still making what will be perceived as crazy bets will not go over well.

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