The real question is what''s the level of future losses and that''s going to be dependent on the capital markets and I just don''t think that we are prepared to make that forecast right now.
Andrew Kligerman (UBS): Shifting over to the Super Senior CDS losses, you talked about the role forward and some of the conservative assumptions going on in that new 5 to 8.5 number. But now you''ve got an aggregate loss of $25 billion. Could you give us a sense of the one or two big data points that drove the $25 billion loss, out of $80 billion in initial securities or insurance? What are the assessments there that are driving that and what do you think the likelihood is that we are going to see another $5 or $10 billion hit next quarter?
Steven J. Bensinger: The principle driver of the fair value marks that we''re taking on our GAAP financials, is based upon market pricing. Market prices were both underlying collateral with any mortgage type exposure or structured securities continues to be very adverse in today''s marketplace. You have a market that''s, first of all, adverse to these types of risks. Secondly, illiquid, there is a very little trading going on. And then you also have sales of securities that are done on a for sale or on fire sale type of basis that also dive the entire market now.
There is also the very little distinguishing characteristic in the market today in pricing between different vintages. Our portfolio is principally 2005 and prior as we''ve highlighted before. But the pricing and the market of CDOs and underlying collateral is really not distinguishing properly in our view between different performances characteristics of those vintages.
Elias Habayeb: From an accounting perspective the fair value we reflect what''s the exit price or liquidation price of the transaction today in the current market and the way we value this portfolio that came to us holding the actual CDO security. So there is a hefty liquidity premium that''s going in the evaluation.
On the stress analysis, what that stress analysis is looking at if we hold the position until maturity, how much cash do we expect to loose from today through the maturity of that position. And so that''s the highlight the difference between our credit analysis, estimates and the evaluations that we are using from the financial reporting perspective.
Andrew Kligerman (UBS): With regards to your conversations with Hank Greenberg, has there been any progress on that front?
Robert B. Willumstad: I''ve just spoken to him as recently as a few days ago. I''m not going to disclose kind of the progress or the nature of the conversations.
Could you give us some more color on the securities lending losses?
Richard W. Scott: The securities involved are primarily direct securitizations of mortgage home of various types. But primarily sub-prime and Alt A they were initially AAA in the mark-to-market which is what''s going through the OTTD calculation is just that. It''s taking the market price of those securities as they are currently trading and marking it through our income statement.
Thomas Cholnoky (Goldman Sachs): What are the rating agencies saying to you currently I haven''t seen any of them come out to make any pronouncements but given your most recent results, do you foresee any changes in the way that they are viewing the company?
Robert B. Willumstad: No, we''ve spent time with the rating agencies that we just haven''t heard back from them. They haven''t made any public statements. So we''re waiting to hear.
Thomas Cholnoky (Goldman Sachs): There''s been a lot of speculation in the market if oil tends to trade back up to 140 that the global airline industry will start to have some significant problems in terms of being able to keep airplanes in the air and is there any risk that you could envision where perhaps the residual values of your fleets could be impaired?
Robert B. Willumstad: Our most recent review of that business is that all of those claims have been put out on lease and well I think every body understands that there is a potential for some risk going forward in the airline business. I think ILFC really is a premier company with a market leadership position and has proven very adept at dealing with a lot of these problems insuring that these aircrafts are leased.
We have by far the most fuel efficient fleet that''s out there in general and so where there are airlines now that will be trying to get less fuel efficient airplanes out of their fleet and they, and in the current financing environment where they are having problems taking on an incremental airplanes that they would be looking for leasing and we have got the right product for what they need to deal with the higher cost of fuel.
Jay Gelb (Lehman Brothers): Give us a sense of what your minimum target ratings would be for as with the corporate level for financial strength as well as senior long-term debt?
Steven J. Bensinger: Our target is to maintain our current rating levels. I don''t think we have a minimum target level that we are shooting for her. So, that''s a tough question to answer beyond that.
Jay Gelb (Lehman Brothers): As we get closer to the results of the strategic review, should investors be prepared for earnings or balance sheet charges related to that?
Steven J. Bensinger: That would be premature to say. I don''t think that''s necessarily part of any expectation. Obviously, if we were to decide to the best of assets, I suppose could be some charges for that. But that''s not the thought process right now.
Alain Karaoglan (Banc of America Securities): The first one relates to the $20 billion in capital that was raised already. To which segments of the business that is found a home and do you have any left or has it been all allocated or you expect to allocate it in the third quarter?
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