So, I Tried to Securitize My Wedding

You Know You're Taking School Too Seriously When...

by Charlie Cooper,

Issue date: 11/15/07 Section: Humor

Immediately following my summer internship and shortly before the 2007-2008 academic year I married and honeymooned with my wife Nicole. Everything was wonderful and we could not be happier with the entire wedding experience. I would be remiss if I did not share a quick story of how I perhaps let the business school/Wall Street internship experience color the way I looked at a highly traditional event.

As in many cultures and many religions my traditional, very Italian, very Catholic wedding came with great financial costs. We were very lucky that my in-laws were generous in helping us. This was fortunate because I, like many of you, currently enjoy a highly levered personal balance sheet.

While planning the wedding I observed two things:

1) In today's world, even a standard, no frills wedding is very costly. There is the reception site, food and catering charges, band, flowers, the photographer, videographers, dresses, The Dress, groomsmen's gifts, hair- dos, make-up ladies, tuxedos and so on and so on ad nauseum.

2) In addition to paying to get themselves to and from Syracuse, NY and spending the night in a hotel room, guests feel obliged to buy us wedding gifts. Each guest is under the traditional impression that they must buy us Cuisinarts, toasters, china, and new bedding.

I view these two observations as a high cost for both the host of the wedding (Bride, Groom and families), as well as the guests (friends and families). Tremendous cost being incurred by these 2 parties simultaneously…hmmmmm. Like a good GSBer, I just had to ask… "Why have a market in which all parties lose or forfeit some capital? Would it be possible to use one party's costs to offset the other? Was my wedding some bizarre economic transaction in which everyone is a buyer? There could be no market this way." From my point of view, this is what was happening.

So, I tried to securitize my wedding. My thought was this… we could add all our liabilities to together, split them up into shares and sell them to the guests. The end result being that all caterers, photographers, servers, florists etc. get paid and all guests feel as though they contributed to the wedding, as though they bought us a gift. The wedding could become self financing. It even would have returns to scale, the more people we invited, the bigger the wedding we could have. This is instead of traditional wedding financing which follows that the more people invited invariably incurs more cost. The guests are buyers and the service providers are sellers. All parties are left having purchased something that they find worth their money. The market is again clearing. And not at the NYSE, a technologically enhanced trading floor, but all this trading takes place over bourbon-on-the-rocks with poor Aretha Franklin cover music playing in the background. What could be better?

If we tranched it the right way, for her $150 wedding gift Aunt Betty would get a share of our nuptials worth 1/66th of the florist and 3/73rd of the photographer. For $75.00, Cousin Andy, who under traditional wedding market rules would have given to us our gravy boat, now gets to purchase 4% of the band, 2 steak dinners and 1/10th of the shrimp display. The tranching allows everyone to feel as though s/he gave us a gift and the gift givers get the added benefit of enjoying what they purchased. Ordinarily, cousin Andy would not get to eat out of the gravy boat he purchased whereas now, he gets utility from eating and listening to his own gift.

I present Collateralized Wedding Obligations: a type of asset-backed security and structured gift bearing product. CWOs gain exposure to a portfolio of wedding liabilities used to fund a glorious celebration of love and divide the burden among different tranches: senior tranches (immediate family and lifelong friends), mezzanine tranches (college friends), and equity tranches (the neighbor your mom said you had to invite).

The guests all get to buy gifts. The service providers all make a living. The bride and groom get married without debt. Families are not burdened. I don't end up with stuff I won't ever use. The payments of one party pay the liabilities of the other party. If I could only find a way to collect fees…

I thought the system was perfect… until I tried to explain it to my wife. But then again, she goes to Kellogg.

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