But this I just want to show you some data here.

You can sell shares.

Well everyone knows that it's not going to be exactly 10 .

So that's bankruptcy.

You go get bankruptcy protection.

So all ended up inside the Special Purpose Entities .

It allows let's say this group of borrowers let's say this pool of borrowers right here actually didn't

It can do it through debt or equity.

You're still solvent.

They serviced the loans.

You have 189,000 as the value of this equity.

Now let's say it gets even worse.

We would create incentives for securitization.

Payable to the City of San Francisco.

This guy, he does have interest.

What is your strategy in your household?

They might have issued maybe they issued a million bonds where each of those essentially represent a debt of 80.

They would actually owe this extra 1 million.

That discovery was quite accidental.

The explosion came about by accident.

Helps bring it down.

And of those 20 that default, we have a 50 recovery.

That man borrows money from many lenders.

That man is a heavy debtor.

That man has many debts.

Maybe debt that you have to pay in the next year.

So we still have the same amount of debt.

So, each of these is an investor.

So that's what we're going to show you in the presentation on collateralized debt obligations.

External debt something that I can tell you a long story about because I personally worked on one of the biggest debts on the continent has come down dramatically.

So it buys, it buys debt.

The government announced that they would pay their debts.

That's not always the case.

I have 4 billion in residential CDOs, collateralized debt obligations.

Over the next few years big decisions will be made in Washington on jobs, the economy, taxes and deficits, energy, education, war and peace.

And so when the Federal Reserve or any Central Bank prints money, and it buys debt, it goes out into debt markets and it buys it, it usually buys the safest kind of debt, but that affects all of the debt markets, it goes out and buys in the debt market, they're essentially shifting the supply curve of money to the right, they shift the supply curve to the right.

And because it's a junkier rating, no one is going to want to buy it.

We would just know that there is a 20 chance.

And let's say that's all of their liabilities.

that assets are equal to liability plus equity.

Have a surplus? Take two tax cuts, roll back some regulations and call us in the morning.

It's exciting, but we went over our finances and...

And this is what this mortgage backed security market allows.

In this example, Javier was our starting node and it had degree 3.

The invention was brought about by chance.