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Politics : Ask Michael Burke

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To: Box-By-The-Riviera™ who wrote (110659)	1/20/2008 7:39:14 PM
From: Eggolas Moria	Read Replies (1) of 132070

Structured Finance includes three main areas: mortgages and home equity loans, auto loans and credit card debt. There are others. Think of it this way. There are three columns. In column one are all the individual loans and mortgages. They total around $20 trillion. In the second column are the pools which have combined these individual loans. The third column are securities which have a right to the cash flows that flow from the first column through the second column. They are the result of financial engineering. The third column are the tradeable securities. Think of them as being encased in a block of ice. That's the situation right now.

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