David Sidwell: The company would expect to do better than that. It wants to make sure it is making the right investment in the business. It believes that it should be possible at this point to have a margin higher than 15.

Michael Hecht (Banc of America): Can you talk about the recruiting trends for brokers, and how aggressive you are being today?

David Sidwell: A part of the reason that Morgan Stanley’s headcount has increased in wealth management has been that it has continued to match the pace of recruiting that it had been seeing in the first quarter and also that it has continued to see a decrease in the level of attrition. It would expect to continue to recruit going forward, and makes sure that it feels comfortable with the compensation arrangements that it makes with the people that it brings on board.

Michael Hecht (Banc of America): Does the $30 million of incremental expense on Discover include allocation of Morgan Stanley overhead in funding costs?

David Sidwell: The $30 million does not include that funding costs, and is the incremental cost like consulting and other costs to do all the things it needs to do to continue to operate as a standalone company.

Meredith Whitney (CIBC World Markets): Could you expand on the velocity of the loan balances?

David Sidwell: There has not been a significant change in that. The strategy here is to distribute this product.

Meredith Whitney (CIBC World Markets): Could you make commentary on the bridge equity?

David Sidwell: There is a market dynamic, and the company is careful about the credits that it participates in and those that it does not.

Roger Freeman (Lehman Brothers): Fee-based asset in the global Wealth Management business declined in a quarter, sequentially first time in a while, at the same time commission revenues as a percent of non-fee-based assets increased. Was there any mix shift that you can point to in the quarter in terms of retail clients becoming more active on the trading front?

David Sidwell: There is not anything unusual versus the trend. It is just a quarterly mix.

Roger Freeman (Lehman Brothers): FAs in the quarter, sequentially was up more than the sequential increase in the first quarter and the total for the year would remain relatively flattish. Is this a second quarter jump and outsize one, relative to incoming classes?

David Sidwell: The company had targeted 8000 as being the number when it lost time in this but because of the fact that attrition has slowed down and it continues to recruit, it would expect to see numbers higher than H-137 that it had at the end of the quarter.

Roger Freeman (Lehman Brothers): You have been active in making some acquisitions in alternatives area over the last few quarters. Could you comment on some of the other large brokerage having been bulking up in that area from a demand side, and does that push evaluations for these alternative asset managers up?

David Sidwell: The company is positive about the acquisitions. There is a huge demand for these assets in the marketplace but Morgan Stanley considers an asset by asset look at the management team, look at the potential, and price is one of the factors that it would consider.

Roger Freeman (Lehman Brothers): You commented how fixed income benefited last quarter from sort of favorable positioning from hedging standpoint in the mortgage area. How would you characterize your positioning in the mortgage space in the second quarter?

David Sidwell: The first quarter the company did benefit from the market conditions in Subprime as spreads did not move a whole lot during the second quarter, so there were lower opportunities. The company certainly did not loose money in this business.

Steve Warden (J.P. Morgan Chase): Your common equity capital allocated to Discover went from $5.5 billion to $5.3 billion. Is that the capital that will go away with Discover spin?

David Sidwell: The number is going to be around 5-4.

Steve Warden (J.P. Morgan Chase): Are you going to pay any of the ongoing legal costs associated with the pursuit?