Payable to the City of San Francisco.

So we still have the same amount of debt.

But this I just want to show you some data here.

All we did was, we paid the interest on the debt in this example.

You're still solvent.

They serviced the loans.

The orange slice is what's discretionary.

But unlike mortgages, a lot of corporate debt, they just pay the interest.

What happens if let's go to that scenario where we talked before 20 of the borrowers just say, you know what?

We would create incentives for securitization.

Helps bring it down.

So the 300 million from equity, they're going to get 55 million assuming that there are no defaults or pre payments or anything shady happens with the securities.

God dammit, dude. Not again. Use the toilet!

To pay off his debt,

You have 189,000 as the value of this equity.

Now let's say it gets even worse.

What is your strategy in your household?

Well everyone knows that it's not going to be exactly 10 .

So that's bankruptcy.

You go get bankruptcy protection.

You owe the boatyard 500,000 lire.

It was 1.6 million in bearer bonds.

This guy, he does have interest.

It allows let's say this group of borrowers let's say this pool of borrowers right here actually didn't

Even if it were able to offload these loans, it still does not have enough money to satisfy all of the demand deposits or all of the liabilities.

It can do it through debt or equity.

I have 4 billion in residential CDOs, collateralized debt obligations.

Over the next few years big decisions will be made in Washington on jobs, the economy, taxes and deficits, energy, education, war and peace.

Some percentage of these borrowers are going to default on their mortgage.

(Frankie) I've got to deliver this notice for a nonpayment of gas.

External debt something that I can tell you a long story about because I personally worked on one of the biggest debts on the continent has come down dramatically.

Other, Not Assigned

Other ,Not Assigned

So, each of these is an investor.

Have a surplus? Take two tax cuts, roll back some regulations and call us in the morning.

It's exciting, but we went over our finances and...

That man borrows money from many lenders.

That man is a heavy debtor.

That man has many debts.

So all ended up inside the Special Purpose Entities .

So it buys, it buys debt.

You can sell shares.

If someone doesn't pay the debt, then the insurance company will pay it for you.

And so when the Federal Reserve or any Central Bank prints money, and it buys debt, it goes out into debt markets and it buys it, it usually buys the safest kind of debt, but that affects all of the debt markets, it goes out and buys in the debt market, they're essentially shifting the supply curve of money to the right, they shift the supply curve to the right.

And because it's a junkier rating, no one is going to want to buy it.