Mortgage-backed securities II

Part II of the introduction to mortgage-backed securities

June 17th, 2009. Mutual Funds and Why They are Still the Best Investment – Adam Bold in the Polsky Theatre at JCCC. This is part of the Polsky Personal Enrichment Series. Close Captioned
Video Rating: 2 / 5

  • dksieunhan1

    Hi there, can somebody answer me. Why doesn’t the investment bank use it original $1B to buy the shares and sell it out for $1.1? I don’t see why it has to give the commercial bank $1. Many thanks in advance

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  • SqueezemeOJ

    YOU ARE AMAZZIINNNGGG

    

  • dimawinner

    What a great explanation!!!! Thank you so much

  • NationalHomebuyers

    This video gives a really interesting perspective, an interesting watch. Thanks, National Homebuyers

  • UmTheMuse

    Sounds like an ingenious pyramid scheme, in a way, in that there’s no value creation and each level is made to push the risk to the next level down. However, doesn’t the IB face a new risk?
    It seems to me that they now are at risk because they have to guess how much money they can get from investors.
    Even discounting agent-principal problems, it seems like the total risk should be higher, right?

  • PhilipTheDuke

    3 people lost money in MBS’s

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  • devbodaghe

    When the bank Sells their mortgages to investment banks dont they charge a lil interest that way there not just making their not just making their money back

  • helloworld0714

    I just want to clarify, the investment bank creates new corporation/ entity? what are example of this newly created corporations?

  • 01agni1

    The 2 billion dollars are cashflows over 10 years.Hence they are not comparable to 100 M made now.To understand this further go to the concept of time value of money.

  • kweezyyy

    it’s just a matter of the investment banks pushing the risk off their own plates. once IB’s sell all the “corporation” shares, it doesn’t matter as much to the IB if people default on their mortgage payments and the corporation’s cash flow dries up

  • rond02kg

    who are some of these “special purpose entities” you speak of?

  • chocoboblue99

    The math and the model looks fun to play around with until someone defaults.

    Then, a few more defaults and then there’s a domino effect and everyone has a sad face now. 🙁

  • tcg4111

    just got one question and hopefully you can answer it soon enough for it to help…
    why does the INVESTMENT BANK (green bank) make up a corporation which sells shares letting investors bank off the interest and principle payment as well? and therefore making only 100 M (in this case), when, if they kept the rights to the mortage payments to themselves, theyd eventually be making 2 billion dollars (in this case)? provided the investmEnt bank had enough money to buy the rights from the LOCAL BANK

  • tcg4111

    just got one question and hopefully you can answer it soon enough for it to help…
    why does the INVESTMENT BANK (green bank) make up a corporation which sells shares letting investors bank off the interest and principle payment as well? and therefore making only 100 M (in this case), when, if they kept the rights to the mortage payments to themselves, theyd eventually be making 2 billion dollars (in this case)? provided the investmEnt bank had enough money to buy the rights from the LOCAL BANK

  • tcg4111

    just got one question and hopefully you can answer it soon enough for it to help…

    why does the INVESTMENT BANK (green bank) make up a corporation which sells shares letting investors bank off the interest and principle payment as well? and therefore making only 100 M (in this case), when, if they kept the rights to the mortage payments to themselves, theyd eventually be making 2 billion dollars (in this case)? provided the investmEnt bank had enough money to buy the rights from the LOCAL BANK

  • kannu12341

    Hats off to Creater of that movies…..awesome Explanation with simple examples…….:) Thanks a lot

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  • RebelHQ

    very clear,
    great stuff :]

  • doublek321

    Weren’t securitized mortgages traded on the open market? If so, it seems strange to me that they would be since isn’t there an upper limit to how much they should be able to go up? In this example, even if all the people actually pay their mortgages, they only have to pay 7% interest. Therefore, there’s an upper limit on the income stream. I’m wondering if these things ever traded above their potential worth (and if so – why)

  • prakashenator

    where does the FNMA, GNMA, FHLMC comes into play?

  • jaggernat

    nice and clear.thanks.

  • spectrum0590

    It is important to own a home rather than renting. It is a long term investment compare if you prefer to rent. It’s a waste of money.

  • muhammadzahmad

    this is worth watching

  • kaaeyl

    i found nyancat at 100hrs more enlightening

  • katheryncruz24

    boring.

  • TruMystik

    What’s good, thanks for the great video.

    Much love
    Mystik

  • MrLuckystarz

    I think my dad was here and he slept thru it.

  • mleverich1991

    what is it? link?

  • caitylovescolors

    I believe the longest youtube vid is 24 hours.

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  • cool30723

    Omg that is long

  • thepingvin123

    this is soooooooooooooooooooooooo long

  • mleverich1991

    Is this the longest video on YouTube?

  • tarcal87

    first 2mins 30 shows nothing?
    most videos on youtube are as long BUT entertaining

  • BeantownJim

    In a fiat system?

  • dly311

    There is no prospectus (sp) in a fixed annuity.

  • thaandiesel

    register as a director to get unlimited time i believe

  • ThemLostBoyyz

    I thought youtube only took 10 minutes. smh.

  • 13thChip

    @mammutpenthouse : Sure, 🙂 that would mean I travel across the globe and find a place in one of the NY’s Elevator to setup a office to enjoy the music !

    Duh, Is there a simpler way to find similiar tracks? I love it !

  • mammutpenthouse

    if you set up an office in an elevator in NY somewhere, you can listen to this pos music as long as you want. And you probably would find the ride exiting as well 🙂

  • 13thChip

    I am talking about the background music which is played for almost 2 mins at the start of the video

  • 13thChip

    Whats the name of this Music? Can anyone point me to a direction where I can find similiar music? Because this is exactly my taste and its very hard to find something similiar to this. PLease help me find the name of this music…appreciate any helpful response. Thanks a ton.

  • hotties3v3n

    lol,thanks for the heads up!

  • studentofsmith

    Mutual funds are a joke.

    The only worthwhile investments are those where you retain total control of your money at all times.

    Start by paying a mortgage rather than renting.

  • TheDizz713

    BORING

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