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Finance allah shmoop What is a trust deed here This

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is okay So that's more of a trust fall A

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trust deed is a kind of how to build it

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kitt which instead of describing the construction of ah balsa

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wood airplane describes how assets should be owned cared for

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managed and eventually disposed of two the beneficiary or whoever

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bought him in the first place or who were involved

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in the model airplane build from the beginning What does

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that mean Well a trustee lays out the rights and

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obligations of the bank underwriting the purchase of whatever inventory

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is involved here In this trust deed it lays out

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the rights of the people transacting and it spells out

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who gets called defend or when there is a conflict

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And this is particularly useful in a world where there

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is indeed not a lot of trust Essentially a business

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owner is just holding merchandise that was bought by the

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bank like eighteen miles of denim fabric with intentional rips

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and tears in it You know those things as the

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business owner stitches together hundreds than thousands of sets of

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genes which they then sell into the fashion market places

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In new york and milan the bank via their trust

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deed owns that merchandise until the business owner essentially buys

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them out of it or pays back the loan amount

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committed when the merge was initially bought The trusty it'sjust

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the legal documentation that outlines the various obligations of both

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parties i'ii think of it as a contract light Why

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would you want one of these arrangements If you're a

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business owner Like why bother with all this trust deed

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stuff and inventory and banks Well if you didn't have

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tohave one well you wouldn't But if you're a fledgling

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company hoping to make it big in the big city

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and you need lots of inventory to make lots of

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genes or nobody takes you seriously well then you do

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what you have to dio and you can imagine that

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banks charge very high interest for setting up the's trust

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deeds because the credit risk they take here is usually

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reasonably very high like the levi stitching company just vanishes

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one night or was in fact a meth lab using

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the denim as a mano a filtration process and the

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mexican mafia comes in one night ending and this little

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companies Entrepreneurial activities Well another reason banks charge high interest

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is because the last thing they want tohave to dio

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is repossess eighteen miles of denim and then try to

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get their money back by selling that eighteen miles of

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denim on ebay So as a result not only do

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trusted borrowers pay high interest but they also have to

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carry relatively expensive insurance on that inventory So that at

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the end of the day the on the bank isn't

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left high and dry Or at least you know just 00:02:44.81 --> [endTime] dry

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