Or they might even start to buy things that aren't Treasuries.

That's how loans worked before the mortgage backed security industry really got developed.

So just in kind of our everyday personal finance world, your mortgage is actually secured debt.

And the bank thinks it got a great deal.

And then when we go and get the property because the

And I'll be willing to give this as collateral.

Mortgage backed security.

Two weeks in the future, and then I'm going to sign the check and I'll write it's for a payday loan and I'll write 625 etc. etc., then I have my little information here.

We don't need to invent solutions because we have them cash flow loans based in income rather than assets,

Leverage.

Home equity line, 30,000. That's 1 37,000.

Those are essentially derivative securities that are derived from mortgage backed securities.

Central Europe, unsecured.

I'd like to be reassigned.

Then I also have these CDOs.

And you end up with a mortgage backed security.

And that's essentially what the Fed was doing.

We would create incentives for securitization.

Was it a correct decision?

I only have two minutes left in this presentation, so in the next presentation I'm going to focus on what this guy can now do with the loan to turn it into a mortgage backed security.

This is highly rated mortgage backed securities, maybe they have a slightly higher interest rate.

I have a whole video on mortgage backed securities.

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

loan, because this isn't a traditional loan, an interest only loan but for the sake of this presentation, how it's different than a mortgage backed security, the important thing to realize is that the bank would have kept the loan.

Save using another format

And that company has the right to payments that are secured by mortgages.

So these shares each of these one million shares this is a mortgage backed security.

They feed me info.

Is sent over by the Coast Guard In charge of the food here

But you should watch the videos on mortgage backed securities and collateralized debt obligations, if you want to get a better understanding of exactly how the money flows go.

We'll borrow some money on the house.

We'll use the house as collateral so we can borrow some money.

I think it's a distraction.

I'm not so sure you want the maintenance and safety department. The fire department might be a better bet.

What we are going to do is go buy things like highly rated mortgage backed securities, or things like commercial paper, AAA corporate debt, so that those things, the interest on those things goes down.

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

Director Galloway, our national security advisor

We hold the bond on Jessup Dolly, and now he's a runner, it looks like.

These were conforming loans, there wasn't this whole CDO and mortgage backed security market.

This is me.

For the right interest rate and for the right assumptions in my model, I'm willing to give anybody a loan, as long as I'm compensated for it enough.

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The welcome you gave me was surly,

You can actually do this type of a structure with any type of debt obligation that's backed by assets.

That's why I'm doing term life policy.