Comments by Gary Rosenthal:

It has come to our attention that a piece of legislation traveling through Congress contains a little known section that would retroactively render naked Credit Default Swaps(CDS) unenforceable. In other words, with the stroke of a pen Congress would make contracts previously entered into by two willing parties unenforceable. On what legal grounds can Congress do such a thing you ask? Why, on the grounds that all such contracts are “contrary to public policy”.

Ours is not to judge but to recognize meaningful change ahead of the crowd and to properly position our clients. At Rosenthal Capital Management we work 24/7 to uncover little gems like this in a tireless effort to beat the crowd to what may turn out to be a profound money making opportunity. Clients will remember our January 08 letter in which we outlined the destruction that CDS would likely rain on our banking system in the latter half of 2008. And rain it did. In this light we believe this little piece of legislation may well be the most important piece of legislation that Congress will pass concerning the recovery of the global financial system. The financial landscape is littered with the tattered ruins of once great corporations. Since we were fortunate to anticipate and avoid this destruction we feel confident in our ability to identify where to most advantageously place capital for its recovery. We will be happy to share our favorite ideas with you once we have taken positions with our clients.