A very basic question about a code..

A very basic question about a code..

Hello everyone,
I'm new in jQuery and to this forum... Hope you can help me around :)
I understand the following code, I just don't understand why it is actually executed if it is set to a variable...
Isn't it supposed to work only if I omit the "var co = "?

Thanks,
Kobi.

<script>

(function() {

 var co = $('span.co').each(function () {
    var $this = $(this);

    $('<blackquote></blackquote>', {
        class: 'co',
        text: $this.text()
    }).prependTo($this.closest('p'));
});


})();

</script>