Thank you, Wayne. Good morning, everyone, and welcome to the fourth quarter earnings call. I'm joined here today by Wellington Denahan, our Chief Investment Officer and the Chief Operating Officer; Kathryn Fagan, our Chief Financial Officer; Nick Singh, our General Counsel; and Jay Diamond, the Managing Director. As usual, we will open up with some opening comments and then we will open it up to Q&A to go through the numbers and your questions. Some brief comments first. The title of this missive is Just Save, Baby, Just Save. As we sit on the precipice of the greatest fiscal stimulus package in our nation's history, the question we are asked most often during our discussion with market participants is, when will it end? Well, we can't tell you the exact date, but I can believe that a precursor to the stabilization of mortgage flows will be the clue. I can say that with certainty because from where we sit with the current instability in the economy began showing its teeth in the mortgage market in 2002 and it will ultimately end once those cash flows stabilize again. When this occurs at some uncertain future date, property valuations will have found a bottom and new run rates and GDP will have been established. The sooner this happens, the better. But in the interim, we, as a nation, are faced with policies designed to maintain the consumption during the course of our domestic economy. My view that this is what got us into the problem in the first place and it runs counter to what Americans are now doing as rational economic human beings, we are reducing consumption and increasing savings. The following is a construct of Newton's principles. For every action there is an equal and opposite reaction. We are witnessing…

Jason Arnold – RBC Capital Markets:

Jason Arnold – RBC Capital Markets:

Jason Arnold – RBC Capital Markets:

I will give you some – we have some very, very specific things that we would prefer not to discuss on an earnings call. Let me just give you some background behind that statement, if I may. We began a project here at the end of 2007 called the involuntary prepay project. And essentially what we did is we began to grind down and create analysis across the country and across different issuers and geographic concerns to try to figure out who was going to be affected most by changes in defaults, delinquencies, and the foreclosures or, as we like to think of it, involuntary prepays. We knew a lot of it was going to feed back up into the mortgage insurance business as well as into Fannie and Freddie and into the lenders who created some of these affordability products, like WaMu and Countrywide and everything. But we wanted to try to begin to quantify it on a theoretical basis and then perhaps to see how it played out. In general, and this is a very general statement, with a lot of work – and obviously we have been working on it for two years and so we have got some view in this that I think is one of the reasons why people pay us to take a look at the valuations across the curve and why I'm very protective of it is that even though you have had a huge spike in applications that in general roughly 50% to 60% of those applications are being thrown away and not serviced at the originator level for a couple of reasons. One is that some of them don't reach up to documentation standards. The second is that most people don't realize that they are upside down in their house…

Jason Arnold – RBC Capital Markets:

Mike Widner – Stifel Nicolaus:

Mike Widner – Stifel Nicolaus:

I think, Mike, it's safe for us to make a broad statement here that against the backdrop of what's going on globally that there are too many uncertainties out there in too many different economies that may wind up affecting banking counterparts or asset selection across the board. I'll give you just a brief synopsis even from this morning's reports that were released by European Central Bank, Trichet, in basically four comments this morning. He said that he is very worried about inflation, that he is not worried about inflation. He thinks that inflation is this minute diminishing, and that he thinks that they are going to hold rates steady to fight inflation. He basically said that in about four different minutes this morning. So I don't have a great degree of confidence that the central banks of the world, especially the European banks, fully understand the nature of what is going on and how far behind perhaps they are in the curve. I think Great Britain – you know, Reykjavik-on-Thames is the article in The Economist. There are real risks across the board in these different countries. You have – Russia has to roll over $700 billion worth of debt in an economy that is clearly struggling with recession/depression kinds of influences within it. So this is going to be a broader problem across the global economy. We spoke about it a little bit in the third quarter's earnings call when we talked about decoupling and how false that is. Everybody is interlinked here. Mike Widner – Stifel Nicolaus:

Mike Widner – Stifel Nicolaus:

Mike Widner – Stifel Nicolaus: Well, I appreciate the comments. I think most people would agree with you on the value of the swaps. It's just the bizarre accounting treatment of non-hedge just, you know, heavily distorts the GAAP results, which unfortunately a lot of folks focus on when they look at the headlines. Anyway, I do want to say congratulations on a solid year. 17% ROE in 2008 is certainly a track record that a lot of other companies would envy. Anyway, thanks, guys. I appreciate the comments.

Thank you, Mike.

Andrew Wessel – JP Morgan: Hi, everybody, Good morning. Thanks for taking my question.

Good morning. Andrew Wessel – JP Morgan:

Andrew Wessel – JP Morgan: Okay, great. Thank you very much.

Thank you.

Steve Delaney – JMP Securities: Thank you. Good morning.

Good morning, Steve. Steve Delaney – JMP Securities:

Steve Delaney – JMP Securities:

Steve Delaney – JMP Securities:

Steve Delaney – JMP Securities:

Steve Delaney – JMP Securities: That's great, Mike, and very helpful. Thank you.

Thank you, Steve.

Ken Bruce – Bank of America Merrill Lynch: Good morning, Mike, Welly.

Good morning, Ken.

Good morning. Ken Bruce – Bank of America Merrill Lynch:

Ken Bruce – Bank of America Merrill Lynch:

Ken Bruce – Bank of America Merrill Lynch:

Ken Bruce – Bank of America Merrill Lynch:

Ken Bruce – Bank of America Merrill Lynch:

Tying some strings together there, Ken, one of the cautions that I would put out there and just tying our strings together is that sometimes because the rules allow you to take more favorable treatment of accounting purposes, it doesn't necessarily mean that you should allow that to influence your economic decisions in judging valuations. And in most of the bank portfolios that we have been involved in in the past or credit portfolios we have been involved in in the past where people have screwed up, it's because they let accounting rules drive their business decisions because they didn't have to face up to the test of amortization or prepayments at a certain time. They were allowed to smooth it out. I think those games are over, but there are still people playing by that rule and most of them are in the banking sector. So, that provides opportunity when people are trading with two different sets of rules and that's what makes markets work. But ultimately, one of the things that frustrates everybody about Annaly is that its dividend moves up and down. But our view has always been that we want you to understand the nature of what's going on in these cash flows because they are tied to the consumer. And that is 70% of the US GDP. Ken Bruce – Bank of America Merrill Lynch: As always, thank you very much. Appreciate those comments.

Thank you, Ken.

Stephen Mead – Anchor Capital Advisors:

Well, the volatility – what I would say is there have been two major influences as it relates to Annaly. The first is that the move to 0% interest rate policy. Obviously, our cost of funds was higher because we made decisions about balance sheet access and quarterly, end of quarter financing much earlier in the quarter than other people did. We started in the end of September and the beginning of October to trade what they call in that market the turn, which is the 12/31 close. And Welly very aptly described it as you just had to go forward with the assumption that every quarter in the fourth quarter, as an example of this, was going to be worse. There were going to be some black swan event out there in the fourth quarter; it wound up being Citibank. So, that volatility and that cost of funds has definitely dropped and is dropping off of our balance sheet now. And we are getting the benefit of the move by the Federal Reserve to lower interest rates and by the market recognizing that. There are still some gaps from day to day and it's still different between LIBOR, etc., but we feel pretty good about the quarter that we are in right now from that perspective without having to take on additional leverage or do anything creative in the asset selection or purchases of sales. As regards Fannie Mae and Freddie Mac, our feeling is that just on a broad basis, and this is our speculative view and I will confine it to my head if it's okay, is that Fannie Mae and Freddie Mac could have been saved in 2007 with a proper injection of capital and with some very cautionary steps in terms of stopping them –…

Bruce Silver – Silver Capital:

Bruce Silver – Silver Capital:

It's obvious that if you are looking at a 4% mortgage at par and you are financing it at, let's say, even 1%, not 0% or 25 basis points, you've got a positive carry of 200 or 300 basis points for every dollar that you are running. The question is what are you going to do with that 4% mortgage when interest rates go back up to 8% and what is that destruction going to look like? I would bring the caution to the point there first that I don't think that a 4.5% mortgage rate in the United States really moves the needle of people who are able to go out and take advantage of it. And this is also, by the way, the opinion and the very strongly held opinion of some of the major originators and participants in the market after looking at this for Congress because it's not accessible. In order for you to take advantage of today's mortgage rates, you have to have a FICO score of 720 or 740 or higher, you have to have 80% loan-to-value ratio for conforming loans, and you are not buying it as a second property. So what you need to take into consideration as an investor, and I think all investors have to do this, is that the housing stock in the United States probably peaked at around $12 trillion or $13 trillion worth of value at the peak of 2005 when the savings rate was below – minus. That was a minus number, when it was below zero. So these assets in that market are now shrinking. It's still substantial. The government is going to reach in there and fill the gap with treasuries and agency borrowings, etc., across the board. But from our perspective, a dominant player in the market and well-capitalized player, this is a great market with a lot of size and assets in it that are going to be valuable cash flow instruments going forward. Bruce Silver – Silver Capital: Thank you.

Thank you, Bruce.

Thank you, Wayne. I want to thank you all for being with us here today. We look forward to being able to exploit all the values that we've talked about here today in the market. I want to congratulate the management team here, especially our financing desk, for an outstanding job done in 2008. Jim Fortescue and the team deserve a double pat on the back and I'll buy you a beer tonight. But if you have any questions on the follow-up, you know how to get us through Investor Relations. And we look forward to speaking to you at the end of the first quarter with our first quarter's earnings call. Thank you.