CDOs, collateralized debt obligations, are derived from mortgage backed securities.

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

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

Something about phony securities.

They're fairly liquid securities.

Those are essentially derivative securities that are derived from mortgage backed securities.

It can buy Treasury securities, so instead of short term Treasury securities, maybe it could be longer term Treasury securities.

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.

This is actually a mortgage backed collateralized debt obligation.

Or it has to be collateralized by some asset.

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

So this is a form of a collateralized debt obligation.

So in exchange it gets treasury securities.

And equity securities you're probably familiar with.

We're from the Securities and Exchange Commission.

Welcome to my presentation on mortgage backed securities.

level of confusion and show you what a collateralized debt obligation is.

I have a whole video on mortgage backed securities.

And they rate these assets, these mortgage backed securities.

And I think I touched on it in the video on collateralized debt obligations.

Social securities are not something that should be trifled with.

And we learned that debt securities are often called bonds.

So AAA would be like the highest rated securities, right?

And so money came from when the owners of each of these mortgage backed securities each, let's say, paid 1,000 for the mortgage backed securities.

So that's what we're going to show you in the presentation on collateralized debt obligations.

You call them stock, or stock options, derivatives, mortgage backed securities.

And we're also joined by Brent Lawson from Lawson Frisk Securities.

Welcome back to my series of presentations on mortgage backed securities.

They will give this money to the market, and in exchange they will usually buy treasury securities, sometimes something slightly different, but usually very safe securities.

There are some companies that just specialize in writing collateralized sorry, in writing credit default swaps.

I have to only invest in the safest of safest of securities.

And these shares would be called Mortgage Backed Securities. or sometimes MBSes.

Well it comes from the investors in the actual mortgage backed securities.

And maybe it also does some longer term treasury securities, or whatever else.

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

But what you read about the most right now in the newspapers is mortgage backed collateralized debt obligations.

And they way they get this into circulation is that they'll take these four dollars and they'll go buy securities in the open market, normally very safe and very liquid securities

Liquid means it's very easy to buy and sell those securities in large quantities.

For several months, he has been under investigation by the Securities and Exchange Commission.

No.The company he founded, gaia matrix, was under investigation by the s.e.c.for securities violations.

So the person who constructed this whole collateralized debt obligations and who sold these tranches to the public markets, and this process by the way is called securitization, because you're creating securities out of these assets that you sell to everyone, maybe the Chinese, or whoever, sovereign wealth funds.

This is highly rated mortgage backed securities, maybe they have a slightly higher interest rate.

You know what equity securities are, and just so you know, what is a security?

So these treasury securities, whether they're T Bills, treasury bills, treasury notes, or treasury bonds.

We would look the other way when Bear Stearns is creating collateralized debt obligations, or AlG is writing credit default swaps.