OK, so now we're in an interesting situation.

Maybe a billion of these are a loan from bank B.

So what just happened?

Then we saw that could create a whole chain of events.

Tom got a loan from the bank.

I want to get more money.

And if this is a loan from Bank B, Bank B would have an asset called loan to Bank A.

loans to this bank.

How could we kid ourselves into thinking anyone would give us a loan?

Or I want to have money back on my balance sheet.

So what the bank does is it takes all these loans together, that 1 billion in loans, and it says, hey, investment bank so that's another bank why don't you give me 1 billion?

The bank came through with the loan we had requested.

For example, let's say this is Bank A, this is Bank B.

I'm going to bundle them all together and sell them to this investment bank.

However, in a pure quantitative easing regime, the focus of quality is the quantity of bank reserves, which are liabilities of the central bank the composition of loans and securities on the asset side of the central bank's balance sheet is incidential.

In fact, probably from other banks.

This bank that thought that they had made a prudent loan, this is house number three, I think.

Freddie Mac.

I've got to get some money somehow to repay the bank loan.

loans together and it folded it into a big, kind of did it on a wholesale basis it's sold a thousand

Banks charge higher interest on loans to risky customers.

They borrowed it from their local mortgage broker, who then sold it to a bank, or to an investment bank, who created the special purpose entity, and then they IPO the special purpose entity and raise the money from people who bought the mortgage backed securities.

So I want to funnel more and more money in here.

So I'm going to sell these loans.

Bank D had loans to Bank A.

These CDOs were already an issue.

Or it has to be collateralized by some asset.

This is me.

Because maybe one bank does fail, some of its loans come due.

They're not due yet.

I can do is... So he needs 100 gold pieces.

So in this situation, this is why the bank wants you to put some down payment.

What bank?

Bank?

Can a bank just continue issuing loans and checking accounts indefinitely and essentially collecting the difference in the interest between the interest it gets on the loan and the interest it gives on the checking account?

Harry went back to New York, asked his brother, an investment banker, to loan him the 3,000, and his brother's immortal words were,

So at some point, they give up.

I'm in banking. In banking? How'd you get into that?

I've essentially become the lender to the home owner, and so the home owner's morgage payment will now come to me the Investment Bank .

So in part of this negotiation process

Let's call this Bank A.

And let's say that Bank A

BANK OF VENICE...

Yes. Banking section.

Which bank?