could get more ugly, page-13

Nove - yes, maybe one day. Just a matter of how much downside you can ride between now and then, and how long you have to hang on to it (case of chewing up valuable $ in the mean time, if you know what I mean). BTW: Don't think Countrywide is out of the woods yet.

As an aside, I was reading an article by Lehmans yesterday regarding CDO issuance: they expect it to be down by 50% in 2008 (from early 2007 levels). This effectively means that the ability of banks to "remove" credit risk from their books is being diminished, and this will continue to flow through into lending spreads. In other words, the outlook for credit spreads is that they will remain reasonably high during 2008, and the line of thought that the current lending margins are "just a blip" may have to be re-thought. Will be interesting to see what the analysts think of this when they reforecast EBITs as we get into the year (and thus PE expecations will change etc.).

Regards
Kit