While we still see compelling value in the franchise and little liquidity risk, the reality is that until there is more clarity around the cost of reducing its hard-to-sell asset exposure ($75b), Lehman will continue to trade at distressed levels. The good news is that there should be more clarity within the next few weeks, which in our view will result in more stability around the stock. In Figures 2 & 3 we show our loss estimates for both the residential and commercial real estate portfolio ($2.4b in aggregate net losses). We anticipate that Lehman will take actions to: 1) reduce its mortgage exposure outright; 2) move some exposure to other counterparties in a structure that limits mark-to-market volatility and leaves Lehman on the hook for some loss content and retains some element of upside; and 3) disclose a plan to further reduce exposures in a way that avoids asset fire sales.