Guy Moszkowski (Merrill Lynch): You mentioned de-leveraging several times during the call. Not all of your competitors did, at least not on a gross leverage basis. It sounds like listening to some of the other conference calls the last couple of days essentially the FED’s creation of their new facility has taken some of the pressure to de-leverage off. Would you agree with that or do you not feel that makes a difference?

Colm Kelleher: It has taken some of the pressure off. We are looking specifically at Morgan Stanley how we want to manage our balance sheet and how liquid we want to keep it. What the FED has done has been incredibly proactive and helpful for the market but it does not get away from the way we are looking at our business and how we want to sail close to shore and manage for opportunities.

Guy Moszkowski (Merrill Lynch): You talk about de-leveraging and then you also talked about de-risking which seemed to be a more tenacious problem. Is the de-risking something that would be closer to resolution if there were more fiscal policy type adjustments as opposed to principally being on the monetary front?

Colm Kelleher: It would take a number of proposals to do that. What you need is the confidence of people to extend risk capital again and that is going to take some time. However we get there is going to be a subject of a lot of these proposals we are looking at. The first part of that is balance sheet disclosure which is largely done. The second part of that is raising capital through various methods and then through other proposals.

Guy Moszkowski (Merrill Lynch): Book value did not go up anywhere near your earnings and you did not buyback shares. Could you comment on that?

Colm Kelleher: I think that is it. We got the dividend. We did not buy back shares and that is the main thing.

Meredith Whitney (CIBC World Markets): Do the events that have happened in the last couple of weeks change your near term outlook for any type of asset dispositions particularly with the Fannie Freddie announcement this morning?

Colm Kelleher: The way I look at it is we have been consistent and our view is that in these markets the proposals are starting to unfold. The acceleration of events last week was much quicker than we ever thought they would but we have been looking at situations of maintaining capital, having a liquid balance sheet, maintaining liquidity and so on. We may get opportunities to do things quicker, but our strategy itself has been more thought out and formulated.

Meredith Whitney (CIBC World Markets): Is there any good will associated with Saxon?

Colm Kelleher: We have good will at the operating level which is consolidated at firm level where it is not deemed to be material.

Roger Freeman (Lehman Brothers): How much of the $1.2 billion dollars of mortgage related write downs in there is sub-prime?

Colm Kelleher: It is specifically related to sub-prime at 7 and the 1.2. If you look at the numbers we have 500 was a write down mez, the CVO mez, 400 was a write down on the residuals. We wrote down 600 and then we had some hedges offsetting those. That is how you get to the 1.2. When we gave that we had to show all our direct sub-prime exposures including what was on trading desk. The bulk of that was what was happening in the mortgage proprietary area. That is why you gain the skew on the numbers. If you think about it, strip off the AltA which is not on the schedule itself but it is part of the $1.2 billion, so what you are saying is the net of that is what relates to the sub-prime.

Roger Freeman (Lehman Brothers): The 600 then relates to counter-party write down. Is that separate?

Colm Kelleher: We also need to support select declined positions on the schedule and secondly what you have is dispositions in there as well. Within the dispositions, by the way, anecdotally on some of the positions we unwound we had some write offs which is why you have some noise on the movement.

Roger Freeman (Lehman Brothers): Is it fair to assume that you are looking in this environment right now continuing to de-lever the balance sheet?

Colm Kelleher: I think it is fair to say that we want to maintain a liquid balance sheet and be prudent which is what we are being.

Roger Freeman (Lehman Brothers): Inside of prime brokerage can you talk to any tightening of margin requirements that you have been putting through to clients?

Colm Kelleher: What we have been doing is optimizing pricing within our prime brokerage business. Our balance is relatively unchanged from last quarter but our revenues have been up. I think that is what has been happening. I think we have managed that business well. We keep a clear eye on our free capital within the area.

Roger Freeman (Lehman Brothers): You talked on the call about both favorable positioning and strong client flows. How would you characterize that sequential delta?

Colm Kelleher: We take positions based on edge we have, which is our client franchise. You should look at this is clearly a monetization of our client franchise. Someday’s position may be more. There is no doubt that the offer has been increased but I think to try and do some percentage of splitting the two does not make any sense. We are trading with information and with open information based on our client flows.

Roger Freeman (Lehman Brothers): Was the pulling in commodities from the negative last quarter to the strong positive this quarter meaningful to that?

Colm Kelleher: No, what I said last quarter was we had poor trading. We eliminated the poor trading. We had strong client flows coming through at structured positions and better trading this quarter. In fact, the investment coming through from new businesses we invested in such as agriculture.