the trashing of the cash flows with our diverse asset pool in place. We can now look back to the right side of the balance sheet and examine how the Securities each representing different levels of risk are created. The loans are cash flow generating in that they pay regular interest and principal. When do those cash flows are passed on to the security holders. This is done using a payment waterfall in accordance with the seniority of the Securities the Triple-A security sit at the top and are guaranteed payment first followed by the trash is below The equity tranche has the residual claim on all cash flows the sectioning of risk makes it possible to market the Securities to different investors the potential losses in case of default flow from the bottom up the opposite of the waterfall.