John Mack: The $1.8 billion exposure is a function of assuming a 100% default with zero recovery and all your short expiring worthless. Within that, you can have some mark-to-market volatility.

Prashant Bhatia (Citigroup): Did you cut your exposure in half on the CMBS side?

John Mack: We took our net exposure from August down from $37.2 billion to $17.5 billion.

Prashant Bhatia (Citigroup): Did you kind of hit the wall and begin to reduce that cost?

John Mack: I gave a commitment early in November to reduce my balance sheet to get the leverage ratios; our all balance sheet took the leverage ratios back in line with the third quarter. We have done a significant reduction on that balance sheet to maintain those ratios. There were some frictional costs involved with that. On the whole, we managed to get that done.

Colm Kelleher: The majority of this is overseas. As a result, we continue to distribute these positions out in anywhere from our $100 million, to sometimes $4 million or $5 million a week.

Prashant Bhatia (Citigroup): In terms of balance sheet size going forward, the 1.1, do you expect that to continue to ease down?

Colm Kelleher: You should expert us to be judicious in our sizing of balance sheet and look to the close eye to our leveraged ratios.

Prashant Bhatia (Citigroup): The new head of Wealth Management from Fidelity, does that signal more of a focused on either at the mass outflow and/or the RIA channel at all?

Colm Kelleher: No, that is the continuation of what James had started and she plugs into that and continues to build that.

Roger Freeman (Lehman Brothers): The vintages are all 2005, early 2006 in the CDO holding. Is that right?

John Mack: 50% of the vintages are 2005.

Roger Freeman (Lehman Brothers): If it is only 50%, the remainder is later vintages where those ABS indices ended November flat with the October?

John Mack: We are confident that the valuation we gave as of 31 October was a right using consistent valuation methodology. Two things happened in November, which changed the valuation which we have to look to is identifiable inputs. One was the sell off in the 2005 collateral. Two is in risking this position, we did execute observable trades, which we have to calibrate to, and it was that calibration to external marks that has driven the valuations. There is a lot of stuff going on in the market without the counterparties, where circumstantially you are getting some evidence on pricing.

Roger Freeman (Lehman Brothers): Is it possible that some of these actual transactions occurred closer to mid month, as some of those other tranches were hitting their lows before they rebounded at the end of November?

John Mack: Yes.

Roger Freeman (Lehman Brothers): You have made changes in risk management. What has changed specifically to how things were running and what liability issues?

John Mack: In the past the way that risk monitoring was run, risk management reported into the President of ISG. The right reporting law is not to the business unit head or the divisions head that someone totally independent, who reports directly to me and that, is why we have made the change.

Roger Freeman (Lehman Brothers): What is the component that is going to report into Mitch Patrick?

John Mack: It is going to be Tom Daula, who is in our risk monitoring area, who will work closely with Walid Chammah and that his whole risk monitoring team but it will be that team reporting to our CFO. Then Mitch Patrick, who has over side for all trading sales, will not have a direct report to Colm, but we work closely with him. The key is that risk management now reports to someone outside of the division, and reports to our CFO.