Commercial mortgages.

They didn't make loans and then sell the loans.

Let's start with mortgages.

low defaults on mortgages.

And I don't make loans.

You take a bunch of mortgages, so you know, these are house mortgages.

And then they'll sell the loans.

So, corporate loans, or loans to corporations or banks.

And what they say is, well, they'll look at this big package of mortgages, these million mortgages that Bear

And they'll say, wow, these mortgages really haven't been defaulting.

Corporate loans tend to be for simplicity purposes, interest only loans.

They serviced the loans.

loans, they're not liquid.

Those loans aren't available.

loans to this bank.

Well, you take a bunch of mortgages.

Since I now have bought these mortgages,

So these mortgages really haven't been defaulting.

And they go for another guy for loans.

And this is what home equity loans are.

Two of those other loans, they came due, no one was willing to renew the loans, or give them new loans.

The money is actually backed by people's mortgages.

You're assuming interest only loans.

They bought all these loans.

I majored in Student Loans.

So 9 million in loans.

Kiva facilitated 500,000 in loans.

loans to his customers, whatever.

And I stick all of the mortgages inside that Special Purpose Entity.

Everyone wants to collect their loans from everyone else and no one wants to give loans to anybody else.

likely to pay back. 10 billion of commercial mortgages, those would be loans for someone to buy an office building, or build an office building, or something like that.

And then these are loans that I lent at least, this and this these are loans that I lent out to somebody.

And for the sake of simplicity, I'm going to assume that the loans in this presentation are interest only loans.

But my understanding is that most mortgages compound monthly.

Well, more money wanted to invest in people's mortgages.

And that company has the right to payments that are secured by mortgages.

Can I go out there and I buy a whole bunch of mortgages.

And Bear Stearns is doing this for millions of mortgages at a time.

We have 3 billion in loans.

Let me start making loans out.

We know that pre K and student loans aren't charity.

Whatever loans these were, they just weren't good loans and I realize I'm not going to get 300 gold pieces back.

What do sub prime mortgages have to do with Atlantic Salmon, SUVs and globalization?

So right here are a whole bunch of people's mortgages.

And they were all going to pay 10 on their loans.