Steven J. Bensinger: No. It has not been all allocated. There is a large sum of it left. The allocation that''s been made so far some of it to the domestic life and retirement clearances companies for capital purposes. And the most of it has been used to for AIGFP purposes in terms of collateral.
Alain Karaoglan (Banc of America Securities): In terms of the de-risking of the company, I assume if you are going to de-risk that means you are going to lower the risk on the investment portfolio. Should you be selling so much and fix annuities outside the U.S. which is a spread business, or is that going to force you to maintain a riskier portfolio than you would like because you''ve sold these annuities on the crediting at minimum rates? And related to that, on the partnership income really the issue is not one of volatility and whether you should have any at all. But isn''t that more the size of the partnership investments compared to other companies that is more significant, so while you might still have some, it should going to de-risk, you should have less of it?
Robert B. Willumstad: In terms of partnership income, given the size of our balance sheet, the 3% - 4% that we have is, seems to me is not unreasonable given again the size of this balance sheet. When I think about de-risking, I think about businesses that I''ll say are not necessarily core to our overall franchise. And I think there are lot components both to the property and casualty as well as the life business that we need to look at carefully. But again, there is a certain amount of risk one has to take to be in these businesses to be a leading player in the industry. So, again all of those things are certainly going to be the part of the review process. But we''ll look at the investment portfolio as well.
Alain Karaoglan (Banc of America Securities): Could you update us on this CFO search and what your expectations are?
Robert B. Willumstad: Well, the process is ongoing. I''ve met with the number of the potential candidates, very attractive. And I expect over the course of the next six to eight weeks to have that resolved, if not sooner.
Jay Cohen (Merrill Lynch): On the domestic retirement and the fixed annuities individual, it look like on a consecutive quarter bases, not only did the base yield go down, but it look like the cost of funds went up. So I guess the crediting rate went up. Why would that occur when base yields are coming down?
I do not know if you are connecting partnerships with fixed annuity crediting rates. But for our pricing purposes the returns on partnership investments are not factored into the pricing we use on our credited interest rates as in the side. The reason - cost of funds went up, is pretty straightforward. In the quarter the treasury curve is shifting up at the longer duration, by way of example. Two-year tier was up a 103 basis points, five-year tier was up 89 basis points, 10-year tier was up 56. So, it''s logical that some of that increases would be reflected as we adjust our crediting interest rate on new business, not all of it, of course, because new business is just a component of the overall block.
Jay Cohen (Merrill Lynch): In the other income, the other unallocated expenses were up quite a bit and there were something as charge for settlement of dispute. I''m wondering if you can quantify that that was a material reason why those expenses went up?
Steven J. Bensinger: That was a $100 million.
Jay Cohen (Merrill Lynch): Pretty material. Can you talk about the dispute that was settled?
Steven J. Bensinger: It was relating to our buyout of the remaining interest in Ascot in London and is fully resolved.
Jay Cohen (Merrill Lynch): Last question on UGC, the losses have just been so astronomical. When did these losses peak? Can give us any sense of when these losses will at least peak and level off?
William V. Nutt: Obviously, the deepening disruption in the housing market is placing pressure on our first and second lean losses as well as those of the rest of our industry. We anticipate that the housing market is not going to stabilize until the second half of next year. Combined that with weakening in the ongoing weakening in the economic environment that it''s going to continue to challenge our domestic businesses. And therefore, we expect losses to continue at their current levels for the next several quarters. And we think that 2009 is going to be a challenging year as well.
Jay Cohen (Merrill Lynch): Is it fair to say that the loss in 2009 might be smaller than 2008?
William V. Nutt, Jr.: It''s hard to tell at this point in time. It should not be any worse than 2008. But again that depends upon how much further this housing market deteriorates and whether we go into a rather strong economic recession.
Jay Cohen (Merrill Lynch): Have you made any management changes at the company?
William V. Nutt, Jr.: Yes. We''ve done some restructuring within our domestic group and we have made some management changes. In order to consolidate some businesses, we have significantly contracted our second lean business. We reengineered that business and we''ve made some management changes and some in-forced reductions as a result of those changes.
Larry Greenberg (Langen McAlenney): Back to CDOs, some underlying trends in the collateral backing these instruments have actually improved specifically that the inflow of new problems, sub-prime loans Tess load and there is lower roll rate into lead delinquency buckets. What’s your comment?
Kevin B. McGinn: The CDO collateral that the sub-prime and Alt A collateral that backs our CDOs is heavily from the 2005 vintage in fact about 71% of it is from the first half of ''05 and before. And yes, there is definitely been a slowdown especially in the last three months. We''ve seen early indications that the pipeline is definitely slowing down. And that is as we expected because as the adjustable rate mortgages flowed through the pipeline we did expect to see as those things reset the data is slightly improving.
The rate of growth is definitely slowed dramatically. The ''06 and ''07 though continues to not show any appreciable decline. We don''t have a lot of that in the CDO pulls as you know it. So it''s only a small component of it, but we are encouraged obviously by the ''05 development.
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