Mortgage backed security.

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.

And I'll be willing to give this as collateral.

And then when we go and get the property because the

And you end up with a mortgage backed security.

Rnd, industry cofinancing, Prizes.

Do Low Interest Rates Ensure High Asset Prices?

I guess you could say non cash assets, right?

Local finance are bankrolling the industrial promotion program.

And so that cash ended up here.

Foreclose means that Sal isn't paying on his debt, so we're going to take the collateral back that he gave for the loan.

I've gone over all of it with your money managers.

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

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

What the Fed was doing was, they were saying, OK, we'll take some of these assets that Bank C has.

I have a whole video on mortgage backed securities.

I think it's a distraction.

So once again, it's just a loan to someone else.

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

So takes a Goldman Sachs, which is considered the top dog in the economy and the political system.

But what's been happening now is when banks use this money to borrow from the Fed or to borrow any money, they used these assets as collateral, they just sit tight on that cash.

Remember, it's free none of us are making any money on this thing.

We'll borrow some money on the house.

We'll use the house as collateral so we can borrow some money.

And then if we go to, let's say, 2003.

She covers Wall Street.

So this is lending some cash.

Interest is nothing but rent.

We don't need to invent solutions because we have them cash flow loans based in income rather than assets,

Each share in this case once again, if you believe that the assets are worth 1 million are going to be 1 million.

The money which people can take has lower interest rate, people can repay it without fear.

To get some future benefit.

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

And secured means there's actually some collateral on the asset side that they get if the company can't pay.

liabilities.

At the time, there was a microlending group in the village that gave her a 65 dollar loan.

Leverage.

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

These are demand accounts.

So for example, cash is an asset.

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

That's how loans worked before the mortgage backed security industry really got developed.

Whether people will continue to loan them money.

So this is the treasury yield curve.

It's not like this person can't pay, they just file bankruptcy and there's nothing that the bank can get ahold of.