So essentially, these banks have a bunch of assets.

So how does that work?

They borrowed it from their local mortgage broker, who then sold it to a bank, or to an investment bank, who created the special purpose entity, and then they IPO the special purpose entity and raise the money from people who bought the mortgage backed securities.

So let me delete this.

So now the Special Purpose Entity is the owner of the mortgages .

They'll sell the loans to like, let's say, Bear Stearns. So that's an investment bank.

What's it like being an investment banker?

Whether people will continue to loan them money.

We're now going to make all of our mortgage payments, the 10 payment, to this bank, this investment bank.

And now instead of you getting the payments, I get the payments.

And maybe I should do a whole video on what sell side means, but since I said the word I'll tell you right now.

And the second is very counterintuitive you can get the best people in the world.

That means for every dollar you deposit, it loans out about nine or 10.

And in fact, in a way, it almost took down your empire at one point.

Léila became an architect.

Owns banks in the Caymans runs investment portfolios for offshore drug money.

But we're talking in a pre 2008 world.

It's an investment opportunity. Think about that.

But he said you know Nempo...

Right?

Banking.

So they just collect the big cash.

I'm going to bundle them all together and sell them to this investment bank.

I was wondering, a) what's it like being an investment banker, and b) would you write me a recommendation?

Your finances,your investments,your bank accounts anything you have hidden,she'll find it.

It could be a whole set of people.

They are just going alone! (Applause)

Consider it a capital investment.

Investment bankers are tearing their hair out over the crash.

And of course the pre money valuation is just you just take the pre money valuation plus the amount of cash they're giving us.

And then they give the mortgage to the investment banker, which packages them up and then sells them to investors.

It's worth 5 million.

EBlT in this case would be the operating profit plus this investment income.

And when the 1 billion came from that local bank, all the payments, the interest payments, went to the bank.

The amount of money you get.

The investment bank at least starting off with all of the shares of the Special Purpose Entity.

So I want to funnel more and more money in here.

But sell side analysts are the analysts that work for the major brokerages and investment banks, who publish those reports that you see in those ratings, a buy rating on

So I'm going to sell these loans.

We've had a lot of experience.

But this investment goes to everyone.

We had gone back to the till.

Yes, it's an enterprise.

If what we had before is worth 5 million and there were a million shares initially, then the pre money valuation

Corporate profits are quite high in fact, if you include bank profits, they're higher than they've ever been.