Vince/Stinson:

The following is an update on LJM deal:

1) I participated on a conference call with AA (Jitendra and others) and our 
Accounting/Credit Group (Wes, Bill Bradford and others) yesturday, in which 
we discussed the best approach for definining credit reserves at year-end for 
the puts we own. 
2) A big chunck of the meeting was dedicated to explain AA the details of the 
deal. Little progress was made on achieving the meeting's goal.
3) Apparently, Accounting did want to expose the calculation we made for puts 
value that considers credit risk - the two factor model we developed. That 
line of action was implied on a pre-meeting we had early that morning. From 
my understanding, Accounting argues that we should not make any credit 
reserve because we could not liquidate our position by year-end.     
4) At a certain point Jintendra suggested me to use a two factor 
MC-simulation for calculating the position with credit risk. The approach is 
actually a more simplified version of the model we have. I and nobody 
mentioned the results we got from our 2-factor model.
5) At that same afternoon I knew from Accounting that we are in a process of 
unwinding our position. 

These are the main points. Please let me know if need more details.

Paulo Issler