I feel secure when I invest in stocks but not bonds.

Savings bonds.

And we came up with this idea of issuing bonds, press freedom bonds.

So a security in the equity world is a stock.

There might be a whole other class of investors here, say this guy.

They're savings bonds.

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.

You can, once you have all of those different points, you can make it easy for investors.

You can't get it on Yahoo!

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

That assets, A for assets, is equal to

And tons of people will buy it, especially hedge funds, and pension funds, and mutual funds, and bond investors.

Even the worst boy in your school is the super A plus when it comes to marriage material.

They write these research reports because they want to go to institutional investors or people who have their brokerage accounts with these banks, and essentially sell them stock.

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

We would create incentives for securitization.

It can do it through debt or equity.

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

It could be a whole set of people.

So this is just another visual representation that

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

The amount of money you get.

The proceeds from the bond issue will be used to finance the budget deficit.

It should start to make a little bit of intuitive sense

There's very little chance of them defaulting on their loans.

My recommendation is that you invest in government bonds.

But then there's a very fundamental difference in what the holder of the bond is doing.

And this guy's an investment bank instead of a commercial bank.

So let's make some very simple assumptions for ourselves.

Or the other way to view it is, assets minus liabilities is equal to equity, right?

These are my assets.

But as I said multiple times, I can't do it, because they are BB rated.

liabilities plus equity is equal to assets.

And then the equity is, essentially we would look at this formula.

Investment in what?

liabilities.

And we said there's different kinds of debt.

Investment

Now, who are they accountable to?

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.

So the only liability is this 5,000.

I have a whole video on mortgage backed securities.

Malibu Equity and Investments.

Well their intention was to take these home equity loans and put that money to work, invest it in some way.