Halloween is gonna suck this year

Sure, no problem. Umm, there’s one other Sure, no problem. Umm, there’s one other thing… my employer might not verify my thing… my employer might not verify my employment. Would that be a problem?employment. Would that be a problem?

I’d better get rid of these I’d better get rid of these mortgage loans. They are mortgage loans. They are starting to stink up my office. starting to stink up my office. Thankfully, the really smart Thankfully, the really smart guys in New York will buy them guys in New York will buy them and perform their financial and perform their financial magic! I’ll call them right magic! I’ll call them right away!away!

But who would buy these, But who would buy these, Boss?Boss?

I’ve got it! First we’ll create a new I’ve got it! First we’ll create a new security and use these bad mortgages security and use these bad mortgages as collateral. We’ll call it a CDO (or as collateral. We’ll call it a CDO (or maybe CMO). We can sell that CDO to maybe CMO). We can sell that CDO to investors and promise to pay them investors and promise to pay them back as the mortgages are paid off.back as the mortgages are paid off.

I don’t get it.I don’t get it.

See, individually these are all bad loans, but if See, individually these are all bad loans, but if we pool them together only some of them will we pool them together only some of them will go bad – certainly not all of them. And since go bad – certainly not all of them. And since housing prices always go up, we really have housing prices always go up, we really have very little to worry about.very little to worry about.

The SEC won’t let us sell this stuff to The SEC won’t let us sell this stuff to widows and orphans, so we’ll sell it to widows and orphans, so we’ll sell it to our sophisticated institutional clients.our sophisticated institutional clients.

No, of course not. The guys who write No, of course not. The guys who write the accounting rules allow us to set up the accounting rules allow us to set up a shell company in the Cayman Islands a shell company in the Cayman Islands to take ownership of the mortgages. to take ownership of the mortgages. These mortgages go on their balance These mortgages go on their balance sheet, not ours. The fancy name for it sheet, not ours. The fancy name for it is “Special Purpose Vehicle” or SPV.is “Special Purpose Vehicle” or SPV.

That’s great, but why would they let us That’s great, but why would they let us do that, aren’t we just moving our own do that, aren’t we just moving our own bad debt around?bad debt around?

Get Get lost.lost.

Yeah, I meant to call you but it’s been really Yeah, I meant to call you but it’s been really crazy around here. It seems that the jerks crazy around here. It seems that the jerks who took out the mortgages backing your who took out the mortgages backing your CDO aren’t able to pay them off.CDO aren’t able to pay them off.

Well unfortunately the loans were quite a bit Well unfortunately the loans were quite a bit worse than we originally thought and there worse than we originally thought and there is very little cash coming in. Frankly, I is very little cash coming in. Frankly, I assure you that we are as disappointed as assure you that we are as disappointed as you are.you are.

Yeah, that was a bad assumption. Yeah, that was a bad assumption. We messed up. Sorry.We messed up. Sorry.

Bad assumption? What Bad assumption? What about the AAA rating about the AAA rating from the agencies?from the agencies?

They messed up too.They messed up too.

Are you kidding? There’s no way they have Are you kidding? There’s no way they have enough money set aside to cover this mess. enough money set aside to cover this mess. They messed up.They messed up.

Tell them you messed up.Tell them you messed up.

That’s all you can offer me?That’s all you can offer me?

Sorry, you messed up!Sorry, you messed up!