We would create incentives for securitization.

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

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.

It can do it through debt or equity.

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.

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

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

So what we're going to do is we're going to insure this bond.

That's not always the case.

You're still solvent.

They serviced the loans.

Because the government now owns 90 something percent of the company.

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

There's no law that says, you know what, if you insure a billion dollars of debt, you have to put a billion dollars aside.

Payable to the City of San Francisco.

Helps bring it down.

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

Now let's say it gets even worse.

You might just want to watch the video on mortgage backed securities and collateralized debt obligations if you need a refresher there.

What is your strategy in your household?

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

So that's bankruptcy.

You go get bankruptcy protection.

This guy, he does have interest.

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

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

Certification

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.

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

So a security in the equity world is a stock.

And then this is the thing that I really wanted to highlight, that it also had 4 billion of residential 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.

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.

So we still have the same amount of debt.

So, each of these is an investor.

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...

That man borrows money from many lenders.

That man is a heavy debtor.

That man has many debts.

Because that's essentially what a credit default swap is, it's insurance on debt.