We would create incentives for securitization.

It can do it through debt or equity.

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

Helps bring it down.

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

My next presentation, I'm going to take it to a further

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

I have a whole video on mortgage backed securities.

So a security in the equity world is a stock.

So it's going to be 6,000 times 1,000 bond certificates.

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.

Of course, if enough people start defaulting, even these people start to get hurt.

What is your strategy in your household?

T bill if it's a shorter duration,

Now you could also have a yield curve for other types of debt.

But if the Fed wants to inject more cash, it can now buy different types of securities.

This is an example here

So the 300 million from equity, they're going to get 55 million assuming that there are no defaults or pre payments or anything shady happens with the securities.

Treasury bond if it's a longer duration.

Savings bonds.

That's why it's called open market operations.

The 400 million senior tranche we raised from 1000 senior securities, collateralized debt obligations.

And we said there's different kinds of debt.

And in the meantime, it's going to pay me interest.

They're savings bonds.

So what you do is you have, let's say, the 6 million.

So how do you like the private sector?

And I'm doing this just to show you a point

And maybe it also does some longer term treasury securities, or whatever else.

So this right here is a Treasury bond or bill.

But essentially what happened is the investors in the mortgage backed securities provided the money to the special purpose entity to essentially loan to the borrowers.

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.

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

And in the future, we're gonna look at a lot of different companies, financial companies, insurance companies, natural gas pipeline companies, that will have very different looking income statements, but this gives you the general template for how things work.

And if buying debt seems like a weird thing to say, buying debt is the same thing as lending money (lending money).

And we learned that debt securities are often called bonds.

So let me draw them over here.

We just paid interest.

Annual rate of security

And let's visualize what a bond certificate could look like.

They are going to issue Treasury bills, when they essentially just need to borrow money.

And it could be divided into you could divide this into 6,000 bond certificates.

They'd start with your bonds preferred stock, and then move on to real estate.

You can't get it on Yahoo!

But kind of the one that people always talk about, I guess in the same phrase, is bonds.