Since our last update, a number of interesting trends and factors have caught our attention:M&A transaction activity:• The number and value of billion-dollar deals making headlines they peaked in late June 2007. In the twelve months ended 06/30/2007, dealmakers closed 290 deals with a combined value of $1.148 trillion. Since then, megadeal activity has declined. • The number of M&A deals stabilized in early 2007, showing 0% growth for the 12 months ended 01/30/2007, compared to the 12 months ended 01/30/2006. • Transaction volume for the 12 months ended 9/30/2007 compared to 9/30/2006 decreased by 6.1%. • Middle market news suggests that the credit crunch has not had an impact on mergers and acquisitions of private companies. However, overall transaction volume decreased by 6.1%. Private and middle market deals account for more than 70% of volume. Something is causing friction within the middle market and private segment. • The September Duke University/CFO Business Outlook Survey indicates that three-quarters of CFOs surveyed expect a slowdown in M&A activity. Of particular interest is the suddenness of this change in expectations. In the previous quarter's survey, most CFOs surveyed expected M&A "to remain strong through the remainder of 2007." Capital Markets: • Stock markets have become much more volatile. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) is a “key measure of market expectations of short-term volatility conveyed by the prices of options on the S&P 500 stock index. Since its introduction in 1993, the VIX has been considered by many to be the world's leading barometer of investor sentiment and market volatility." When the last M&A Outlook was written, the VIX was at 11.57. By early November 2007 the VIX had risen to 23.21.• Despite increased volatility, the NASDAQ Composite Index is up 15.4% for 2007 and 28% since the release of the latest MoneySoft M&A Outlook . In the same period, the Dow Jones Industrial Average went from 10,705 to 13,930, an increase of 30%, but the market is “shaky”. • A credit crunch has made it more difficult to finance leveraged transactions, resulting in downward pressure on purchase price multiples and tighter financing terms and loan covenants. The dollar and the economy: • The value of the dollar has lost value against the following currencies: Currency 29 July 2005 1 November 2007 % change (2) Canadian dollar 1.2257 0.9497 -22.5 % Chinese Yuan 8.1056 7.4582 - 7.9 %Euro (1) 1.2129 1.4435 - 15.97 % (2)British pound (1) 1.