Good presentation. What's not mentioned is that we can trade and sell those securities. The top portion of the CC statement is the security, the lower is really the dividend check you'll receive if you convert the top section to a bond and send to the trustee of that bank with instructions to offset the account through your treasury direct account. Once the security gets through the market, it goes to the secondary market which pays out every 4 weeks as dividends. Notice how all your "bills" come every 4 weeks? There quite a bit more to this process but, that's the jist of it. 😊
@_Israelite_127 ай бұрын
How would we read this in a Prospectus Report??
@fruitarianking68836 ай бұрын
@@_Israelite_12Great Question
@purifiedlife46153 ай бұрын
@ktajax I know a little bit about what you speak of. Do you know how much a week old security collateral sells for on the market? When I litigate I want to how much I should be be fighting for!
@ZenSlider15 жыл бұрын
Top marks, Paddy. There is a lot of information out there, but none of them employed such useful and easy to understand metaphors as you did in this video. It's exemplary, I find, that the senior editor of Marketplace has managed to explain this phenomenon in a way that anyone might be able to understand regardless of their background. Far too many media outlets have lost sight of smaller investors and ordinary citizens.
@voncarr65218 ай бұрын
Truly a great teacher. Thanks
@rohanmalik907 жыл бұрын
That marker drop at the end of every video...
@Monikblessed14 жыл бұрын
I really enjoy your teachings! I am somewhat new (embarrassed to say) to the investing world but I understand you perfectly. Please continue to provide the wonderful service that you do.
@InstTaxSolutionsLLC11 жыл бұрын
Securitization is an interesting term to describe how debts are turned into assets.
@ClearOutSamskaras5 жыл бұрын
Absolutely exquisite. I could have listened to an even longer and more detailed explanation. Thank you so very much!
@nikkininedoor14804 жыл бұрын
I love this guy! Paddy explains things so well. And at least he has a solution to all these scenarios - Everybody is needing a drink!
@tommydejosiafilms7 жыл бұрын
Your videos are changing my life. Thank you.
@officialpowerofbanana2 жыл бұрын
I love how this guy always seems to make interesting analogies and illustrations
@johnobayo29993 жыл бұрын
Watching in 2021 and loving his presentations as i thank God for him..
@namunabaatar69184 жыл бұрын
hmmm... this reminds me of something that happened in 2008....
@ashakelahi98793 жыл бұрын
I love the way you present and I wish if camera quality is the much better resolution then it will fantastic!
@jamesbeatty-wilson5290 Жыл бұрын
I ran my credit cards up just to build credit but it only stays good as long as you pay on time, you could be in maxed out values but as long as you pay everything your supposed to it basically ok to have a debt threshold
@ahmetince38504 жыл бұрын
I think this is excellent, very simple to follow and yet perfect reflection of the reality. Thank you/
@togoni3 жыл бұрын
The capital structure is not explained correctly. the Rating is related to debt owner, not holders.
@eddieatum6172 жыл бұрын
Brilliant brilliant brilliant.... Just one question, Because I signed an application to acquire a credit card, and they securitize it the way you've amazingly described, would this mean I would be also an investor in these bonds? Or a share holder ?. If so can you explain how so?. Sincerely grateful.
@InJusticeAustralia2 жыл бұрын
Great question! Anyone have a decent answer??
@intherabbithole58502 жыл бұрын
@Eddie Atum @In-Justice listen to Reclaim Your Securities
@eddieatum6172 жыл бұрын
@@intherabbithole5850 thank you and yes Adam of RYS is exactly on par.. really appreciate your guys feed back. Peace and blessings to yous.
@victorarregnelle89763 жыл бұрын
The system is disgusting. This needs to end.
@Euroxan Жыл бұрын
Absolutely agree. It's all gonna come down like a house of (credit) cards. No longer sustainable. It will cascade ok, just wait. A DEBT BASED SYSTEM that stinks. No intrinsic value. Corrupted Risk agencies and banks.
@evilo74566 жыл бұрын
Is it possible for you to make another video about how to price an ABS? Thank you so much.
@SAPHYTYRA8 ай бұрын
Are birth certiifcates securities that are traded on the stock exchange?
@pikiwiki2 жыл бұрын
Ryan Gosling explains this structure exactly as Jared Vennet in The Big Short with jenga blocks
@Orderofmerchants11 жыл бұрын
Thanks for posting this video. What does Dave do with the 1 Billion Dollars? Is it used to further securitize the investment model?
@Capefearwoodwrights14 жыл бұрын
where do you buy these bonds from? Are they traded on an exchange?
@Tweetogreggieb592 жыл бұрын
2 thumbs up good and reliable content From this host consistently videos recommended.
@vbg19808 жыл бұрын
initially the bank fund manager leverages or lends from the group of investors to buy the credit cards. So it goes as debt or liabilities into the balance sheet of bank, first and an equivalent credit card receivables as current assets along with its interest payments. how does the spread in the interest received and paid to its customers/investors managed by the bank's fund manager or by special entity as depicted. ? Certainly there will be difference in the interest on time of lending from investors to buy credit cards and to its credit card receivables as asset backed bonds or securities . There's more problem if there's is default risk with the receivables
@InJusticeAustralia2 жыл бұрын
Very interesting indeed. Thank you for sharing. So how does a fund manager find the investors? How does s/he decide which cards to buy? Do the investors actually know exactly what they are investing in? Or perhaps they just blindly agree to “ABS securities” ? Any additional details you can offer about the more intricate details would be appreciated.
@sarahsonia12312 жыл бұрын
Thank you very much paddy , u are awesome
@Lululemon20234 жыл бұрын
Could you explain who are the typical investors on each trench?
@InJusticeAustralia2 жыл бұрын
Tranche
@dwspain5 жыл бұрын
I assume the original credit card written agreement (fine print) allows such securitization. But where do the legal enforcement rights reside, where a debtor defaults? Presumably they are assigned from the original issuer to the securitizer, with some consent clause in the fine print? Or does the original issuer remain entitled (and obliged, so far as the securitizer is concerned) to enforce the contractual debts? Is it usual, in practice, for the issuer to advance any guarantees as to repayment percentages?
@InJusticeAustralia2 жыл бұрын
Excellent points!! I too am curious about all you noted. Particularly, if it is not divulged, and hence, not consented to, by the signor. It also brings into question: If one has on-sold a debt, then, clearly the originator no longer owns the debt- so- should have no “right” to claim it/ recoup it/ or enforce action for it. This is where the “criminals” take advantage of the securitisation process.
@AbeOrtiz885 жыл бұрын
Subscribed you sir are a beast at simplicfication.
@blossoms2u3 жыл бұрын
Watching this in 2021
@shreenidhinayak26274 жыл бұрын
I wanted to know if there is still a bond market in credit card companies and how big is it.
@lettysef15 жыл бұрын
Yes, I would think so.
@dltyler40234 жыл бұрын
Just when I think I know something, I find out I don't. Thanks.
@m.fazlurrahman58548 жыл бұрын
Unpaid total assets are turned into securities bonds or shares depending on who is the issuer? And sell at discount, for bonds you have interest income for shares you got interest income. The main profitability depends on the recovery of the asset ( bad debt or loan or whatever). You save your company and transfer the risk to another company who can ensure asset recovery, more simple is selling your AP or AR. ( guns & roses). Cayman island.
@InJusticeAustralia2 жыл бұрын
I really wish I could comprehend this.
@roymarkotop154212 жыл бұрын
thank you sir, without your explanation, i might need a drink.
@jcng515 жыл бұрын
how do the ABS handle the differing maturity(repayment)of the loan?
@davidalen92795 жыл бұрын
excellent. thank you sir.
@rajchakraborty16029 жыл бұрын
excellent presentation
@vaibhav987656575676 жыл бұрын
Do the people falling in the senior tranches have to invest the most ?
@MegaNidhi10 жыл бұрын
theres a flaw here.the credit card receivables will reflect as assets in the balance sheet of citi bank, and not as debts.thats why assets backed securities are created.
@vbg19808 жыл бұрын
+sunil beniwal there is no flaw, initially the bank fund manager leverages or borrows from the group of investors to buy the credit cards. So it goes as debt or liabilities into the balance sheet of bank, first and an equivalent credit card receivables as current assets along with its interest payments.
@InJusticeAustralia2 жыл бұрын
@@vbg1980 I am very interested in what you write, but am a novice, really wanting to comprehend this securitisation process. So can you please explain: How is it possible a debt can be considered an asset? Then how is it “traded”?
@andreagaali71729 ай бұрын
I have sent an email request to Marketplace APM, I translated and put a Hungarian subtitle on this, waiting for approval to share it:)
@abhinavitsmebellamy5 жыл бұрын
Thank you, Sensei!!
@Gamersnewscom15 жыл бұрын
Nice... I hate credit cards and now I know why.
@sambking11 жыл бұрын
...of the credit card company. Second of all there was no asset that was lent to the holder of the credit card. The so-called "credit" was created out of thin air with the permission of the FRB (Fed. Res. Bank) rules. As a result, the holder of the credit card has no obligation to pay back something that was a fraud to being with. For example, if your neighbor printed $10k "worth" of FRNs (Fed. Res. Notes) in his basement and then "lent" them to you at an apr (interest rate) of 5% would...
@saikumarganji5 жыл бұрын
"credit" was created out of thin air. What do you mean?
@RetepOdaged5 жыл бұрын
Brilliant!!
@diegoreds4 жыл бұрын
The Kicker is $18.7 Trillion is Personal Debt Americans (Student Loan, Auto Loan, Credit Cards, & Home equity Loans. 2.6% Credit Card default 90+ days last Month? 7 milllion Auto Loans are 90+ days overdue. 51% Americans Make $33k below per year. Cost living Always going Up. Last 2 years 9000 Amercians stores have closed with Workers taking 2-3 Temp Jobs but what happens when X -Mas season is over???
@adamlycett15 жыл бұрын
Paddy for chancellor of the exchequer
@williamliuz15 жыл бұрын
great explanation. but he did not explain how "dave" earn profit for himself? is it based on commission? percentage of A/R? or what? I want to know.
@jaysteph31674 ай бұрын
Interest
@mikeh.99545 жыл бұрын
AKA ... Pyramid Scheme ...
@2SHARP4UIQ1503 жыл бұрын
This guy knows how to teach. Where is this guy right now?
@InJusticeAustralia2 жыл бұрын
Yes I agree! I would like to know to watch more feom him. Anyone know??
@ethanrubin23807 жыл бұрын
Credit card ABS probably wasn't the best because Credit Card ABS are massive revolving trusts.
@kevinubc10 жыл бұрын
nice video
@paraggupta19935 жыл бұрын
Can anyone tell which major in academics teaches all these concepts ?
@minhanhang37802 жыл бұрын
finance I think
@sweetdreamslullabiesofficial Жыл бұрын
Freedom
@twhuning63524 жыл бұрын
Sounds like a pyramid scheme to me.
@InJusticeAustralia2 жыл бұрын
Bingo
@Mountshilol12 жыл бұрын
Thats what I am saying
@bokhodirturaev2 жыл бұрын
Explained in plain language.
@PunPryde13 жыл бұрын
I buy credit card-backed bonds :)
@InJusticeAustralia2 жыл бұрын
Oh! How??? Is it possible to privately communicate with you?? I really wish to comprehend this process.
@MA-rc2eo4 жыл бұрын
why this guy is not teaching a college course?
@mns87325 жыл бұрын
Kahn website is better on financials
@voncarr65218 ай бұрын
Hay you guys don't forget to give him a thumbs-up for his effort to break this down and share his knowledge with us.
@belibem14 жыл бұрын
The metaphor with the bottle - and the pyramid of glasses of is very insightful and intuitive.
@seamusweber8298 Жыл бұрын
Paddy Hirschs presentation on this channel are all 1st rate content. And he finishes each presentation with a statement about needing a drink😂
@roberthuster15033 жыл бұрын
Good video. But there is nothing secure about credit card debt.
@christiancalderon38214 жыл бұрын
What a beautiful video!!! Bravo I love how you uses analogies on your presentation
@sambking11 жыл бұрын
...you be required to pay him back once you found out he printed the notes himself? Of course not. You would threaten to expose him and obviously not pay the interest back. He has no recourse unless he wants to be picked up by the Feds. If you spent into circulation all the counterfeit notes that he "lent" you your obligation to pay back the interest evaporates as soon as you realize the fraud. If the notes never become exposed in the market place then you have no explaining to do because...
@bergweg15 жыл бұрын
a bit off topic. Do accounts receivables, in case of contracts between consumers and utility companies, show up on the asset side of the balance sheet (on annual statements)?
@sambking11 жыл бұрын
...no one is asking or making a claim against you. The same thing is possible in our current situation. If credit card holders demand a signed copy of the non-existent contract from the credit card companies they will not be able to produce one and therefore will have no claim in court against you for the interest that you think you owe them. Again, you must understand how a contract works to be able to defend yourself against the scams. Don't be distracted by guys like Paddy...
@InJusticeAustralia2 жыл бұрын
He’s only explaining the process, not making any claims best I can see.
@wolffvera14 жыл бұрын
Love the vídeos- especialy the endings
@noisyclass15 жыл бұрын
thank you for posting your videos. there are a lot of information that is clear and easy to understand.
@captcaveman420116 жыл бұрын
there is a deep and serious flaw in that way of thinking. and im going to tell you what it is.. in order for people to HAVE to use the credit cards to begin with. you have to make sure that they don't have enough money to begin with. and when they cant pay the bill because there is now an intrest added to it. what it boils down to is the people that create the money and get thier hands on it first use it to keep themselves in positions of power. and to charge people without money more for goods.
@kenrickg12 жыл бұрын
For Whos Benefit is all this Fraud, in aid of?
@xfinancialservices40216 ай бұрын
✅
@martytrain8 жыл бұрын
I would estimate that soon from now the investors will not be drinking champaign anymore!
@cr113815 жыл бұрын
So where is the collateral? Isn't that the asset in ABS? Also, I'd like to see how a glass of champagne turns into a bottle of champagne to create a CDO. That would be fun...
@bb.w74505 жыл бұрын
Credit cards are causing depth....pay them off cut them up...
@aaronwildeofficial11 жыл бұрын
A student loan is an asset??? So credit cards are backed up by... debts? Funny I thought an asset was the opposite of a debt. Turns out they're both debts. zero times zero equals one...
@InJusticeAustralia2 жыл бұрын
@CrabApples Bodaciously Bitter Fruit's interesting read thanks for sharing