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

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

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.

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

Andrew,you'll analyze the SEC filings.

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

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

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.

The amount of money you get.

Annual rate of security

It seems the government's looking for Harry.

And so, it was really those lessons that made me decide to build Acumen Fund about six years ago.

learning only too late that something was wrong.

And it makes sense.

And you end up with a mortgage backed security.

Mortgage backed security.

Investment

But it is just like a stock.

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.

I have a whole video on mortgage backed securities.

He valued what we already had at 5 million dollars.

They're valuing these assets at 1 million.

Investing in professional development is not a cost.

As investors flee

Investing.

But based on the model that we just constructed, I think the real return we're going to get on this mortgage backed security is 9 .

Sekiguchi is in a movie distribution company, and Saki is in a international brokerage firm.

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

A 6 yield is guaranteed on the investment.

Malibu Equity and Investments. Roger Van Zant.

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

We would create incentives for securitization.

It can do it through debt or equity.

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

T bill if it's a shorter duration,

Treasury bond if it's a longer duration.

If some wants to invest in a fund the fund will sell them the share so they're always dealing with the fund itself in a closed end fund once the fund is created it's share pool is fixed and if someone wants to buy or sell a share it happens in the secondary market so they're buying and selling from each other they're not dealing with the actual fund manager

And it really started because this whole process of being able to take a bunch of people's mortgages together, package them up, and then turn them into securities and then sell them to a bunch of investors this was a quote unquote innovation in the mid '90s, or early '90s.

And then we said, OK, well where does that money for this special purpose entity, or for this corporation, come from?

And I'll show you why that matters in a second.

Big investors.

Investment in what?

Those can only take funds from certain types of sophisticated investors. and what happens in Pete's fund, and this is going to be an open ended mutual fund that we're showing here, and most mutual funds are like that.

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