John A. Thain: On the CDOs specifically, it is not likely that these things are going to recover because of the fundamental assumptions as to home price declines and cumulative losses.

Prashant Bhatia (Citigroup): What drives that view that BlackRock is a core, strategic asset and what can both firms can do together going forward?
John A. Thain: It is the whole strategy of separating the manufacturing from the distribution, we fundamentally agree with and so there are quite good linkages. The working relationship between the companies is great and we do not intend to do anything that would change that.

William Tanona (Goldman Sachs): What type of home price depreciation are you factoring into your loss assumption?

John A. Thain: You have to model out the individual positions and there is no good way to look at average prices and it also does depend on the collateral and the vintage and so on.

The value of the mezz divided by its principal amount, gives you an idea of the change in value, at the end of September, it was in the low 60s. And at the end of December it was in the mid 20s. So it’s still a pretty significant write-down.

Michael Hecht (Banc of America Securities ): Where do you plan to make investments in the franchise and where are you optimistic for growth for 2008 and beyond.

John A. Thain: On the investment banking side, we believe that we have a great position expect that our banking franchise will be stronger outside the U.S. versus inside the U.S. But if you take out the high net worth business, over 60% of our revenues are from outside the U.S., so we are well-positioned to see further growth outside the U.S.

We will grow in terms of third-party fund structures, in the principal investing area. In the wealth management business outside the United States, wealth is being created in the Middle East, the Pacific Rim, and to some extent in Latin America, particularly in Brazil.

Michael Hecht (Banc of America Securities): What areas have you made head cuts in GMI?

John A. Thain: The overall headcount is flat but there are pluses and minuses in that. The FICC headcount was down about 1,000 people and we bought First Republic, which added 1,000 people. There will be selective reductions in places like structured credit and in our various mortgage origination platforms.

Michael Hecht (Banc of America Securities ): What do you really do for an encore in that business and how can you draw out the value of that franchise? And then, are you seeing any signs that the retail investor is going to fall out of bed here?

Michael Hecht (Banc of America Securities): How much were private equity losses?

Nelson Chai: These amounted to $14 million.

Meredith Whitney (Oppenheimer): If you are so comfortable with your carrying values on your CDO exposures and sub-prime exposures in aggregate, why not just dump the assets?

John A. Thain: There was very little liquidity. There was very little trading by anyone in the CDO market, so we sold small pieces of them. We intend to sell them going forward and reduce the absolute position.

We are optimistic that as the market starts to open up and trades really occur, we can sell them at levels that are either at or near where they are marked.

Meredith Whitney (Oppenheimer): Could you provide some color in terms of your exposure on a revenue basis to the MUNI market

John A. Thain: MUNIs are still a good business and we are still committed to doing it. In terms of percentage of the total, it is not that big. It is a business that is also not going to change that much going forward.

Meredith Whitney (Oppenheimer): Any comments on your commodities business?

John A. Thain: There is a lot more upside to the commodity business and that is an area where we do in fact have a lot more upside.