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-{{g}}Of potential claims against a given pool of assets, the first one up against the wall when the revolution comes. This is to do with priority, preference and capital structure.
+{{a|g|[[File:Vegas housing.jpg|450px|thumb|center|Des res Nevada style, yesterday.]]
-The first one for the [[down-trou]] will be one whose claim is most [[subordinated]]. That will be the common shareholder, if there is one, and if not (in, say, a CDO or a structured note of some sort) it will be the one bringing up the rear in the [[security waterfall]]. That will usually be the Noteholder or, if there are several [[tranche]]s of Notes, the most [[junior]], most deeply subordinated, ones.
+}}''Not to be confused with a [[first-order derivative]].''
-It is only once the first-loss piece has been wiped out that the fellow holding the second-loss piece has anything to be worried about. This was a great source of comfort, in the lead-up to the [[global financial crisis]], for those holding the most senior [[tranche]] of notes.  The estimated loss on a portfolio of mortgages is about 5%, these people would think, and I have four tranches of notes below me, absorbing up to 40% of the losses of this portfolio. So I’m, literally, safe as houses!
+Of potential claims against a given pool of assets, the “[[first-loss]]” is first one up against the wall when the revolution comes. This is to do with priority, preference and [[capital structure]].
-And so he was: safe as the hundreds of crappy, leaking, triple-mortgaged prefabs situated on recently reclaimed Nevada desert that comprised his portfolio.
+The first one for the early shower will be he whose claim is most ''[[subordinated]]''. That will be the [[Shareholder|common shareholder]], if there is one, and if not (in, say, a [[CDO]] or a [[structured note]] of some sort) it will be the one bringing up the rear in the [[security waterfall]]. That will usually be the noteholder or, if there are several [[tranche]]s of Notes, the most [[junior]], most deeply [[subordinated]], noteholder.
+It is only once the “[[first-loss]] piece” has been wiped out that the fellow holding the “[[second-loss]] piece” has anything to be worried about, much less the “[[super-senior]]” guy sitting at the top of the pile, usually clutching his a bogus [[Ratings notches|triple-A rating]] like a chewed cuddly rabbit with one ear that smells like sick.
+This was a great source of comfort, in the lead-up to the [[global financial crisis]], for those holding the most senior [[tranche]] of the [[CDO squared]] products that, well, precipitated it. It became an even greater source of comfort, later, for everyone else with a taste for ''schadenfreude''.
+“The estimated loss on your average mortgage portfolio is about 5%,” these [[super-senior]] people would think, “and I have ''four'' [[tranche]]s below me, absorbing up to 40% of the losses of this one. So I’m, like, ''literally'' as safe as houses!”
+And so they were: as safe as the thousands of crappy, leaking, triple-mortgaged prefabs located on remote strips of recently-reclaimed Nevada desert that made up all most all of their portfolios.
+Don’t shed a tear: it was all for the best.
+{{sa}}
+*[[CDO squared]]
+*[[Capital structure]]