And you end up with a mortgage backed security.

I have a whole video on mortgage backed securities.

But it is just like a stock.

The policy number of my insurance is PC two three five seven.

We would create incentives for securitization.

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

And the loans are just the right on these 10 payments.

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

Word is that davis' fund has taken some big hits on mortgagebacked securities.

I think it's a distraction.

But on average this Special Purpose Entity will then be able to pay a dividend.

It's a security.

There is a price.

So a security in the equity world is a stock.

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.

And so I'm fine.

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.

You would get 100 million.

When you go long a security, you're buying the security.

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

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.

Annual rate of security

But we have to start with the basics.

Some of them are going to pay ahead of time.

So all of the sudden, these bonds, because they're being insured by this entity that is AA, which Moody's has determined is AA, these bonds are now good enough for my pension fund to hold.

It seems the government's looking for Harry.

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

But anyway, this isn't the crux of it either.

I make are to the bank.

And also, just so you know, as opposed to being short the company, they're long.

Well, they're BB, but you're being insured by someone who is AA.

learning only too late that something was wrong.

And it makes sense.

And that's why they are called derivative instruments.

Preserve owner

And the cash flow will come back to it.

You group them all together.

Mortgage backed security.

You'd have to sell that loan to someone else.

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

These young boys are in Nepal.

Luckily, the doctors tell us that Jimmy will play next season.

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