James Mitchell (Buckingham Research Group): Would you expect that level of gains going forward?

Sam Molinaro: You may not see a reversal of it.

James Mitchell (Buckingham Research Group): What was the impact of the commodities acquisitions at Williams?

Sam Molinaro: The Williams asset gives us a much bigger profile in the energy markets which will be additive to our results going forward. We think it is a groundbreaking event in the evolution of our energy business.

James Mitchell (Buckingham Research Group): Is there any timing discussion on the buyback that we should look at that $1 billion in corporate buybacks?

Sam Molinaro: That will begin soon but will be dictated by market conditions.

Glen Schorr (UBS): In asset management, is there a breakdown on what is reversal versus what is charged?

Sam Molinaro: We had $125 million worth of reversals of performance fees and losses. Most of our alternative investment strategies we have seed investments in them, so losses across the board in a variety of different strategies from our own investment.

Glen Schorr (UBS): Looking at these charges, is it far to say that you could be back in the mid-teens ROE in the not too distant future?

Sam Molinaro: The markets are showing some signs of improvement, we think the worst is behind us and the Fed rate cut is definitely a positive step in that direction. When we see some normalized level of liquidity in the market again is probably going to be influenced by what is happening in the asset-backed commercial paper markets.

Some time in 2008, business activity will get back to normal levels where customers can utilize leverage again to buy securities and in that environment, we can earn those kinds of returns. We don''t see any permanent damage in our fixed income franchise at all. We think that fundamentally the business is sound.

William Tanona (Goldman Sachs): In the prime brokerage business, why were people leaving and what are you doing to bolster that business once again?

Sam Molinaro: At the height of the crisis, we had a combination of many hedge funds being in money-losing positions, particularly in the quant strategies which suffered significantly. So with the stress at many of the funds themselves, together with the market dislocation that was going on, the noise around us was more than some could handle from the standpoint of dealing with their own investors. We did see some balance migration going to other prime brokers, though this was relatively limited and we saw few situations where clients moved their entire business. What we saw were clients trying to be more defensive and moving balances in many cases into the hands of the banks where they felt there was a stronger hand..

As the crisis passed in mid-August, things have returned to normal. We are in dialogue with many, if not all, of those clients about bringing business back. Most are receptive to do that. The good news is that the merger of our equities and prime brokerage franchise and the benefits of that were never more pronounced than what we saw during the month of August, because we were able to rally around these clients with the full capabilities of the firm, which made a difference in our ability to retain business.

On the asset management, the situation with the high grade funds has been a major distraction in the management of the BSAM franchise and inflicted some damage on the franchise and reputation of that business which we are dealing with. However, the move to hire Jeff Lane was a big step in that direction.

William Tanona (Goldman Sachs): Will the focus now be on long only business as opposed to the prior strategy where you had a greater push on the alternatives business?

Sam Molinaro: There will be greater emphasis on the long-only strategies. We will look to possibly retooling the alternatives business. We have a number of good managers in there who have done a good job for their clients and we are going to continue to be committed to that.

Roger Freeman (Lehman Brothers): How effective was hedging in the fixed income business during the quarter?

Sam Molinaro: Hedges were generally effective, but August definitely put a tremendous amount of stress on hedging strategies. We saw many instances where cash and derivative markets gapped out cash assets underperforming the indices.

Roger Freeman (Lehman Brothers): What was the total performance of alternatives as a category?