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

I know I've overdrawn this picture a little bit too much.

They serviced the loans.

You're not a homeowner until you don't have debt.

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

What is your strategy in your household?

Now let's say it gets even worse.

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

liquidate it.

So, each of these is an investor.

There might be different debt holders who have different

You're still solvent.

That man borrows money from many lenders.

That man is a heavy debtor.

That man has many debts.

The bank was profitable.

And that makes sense, right?

We would just know that there is a 20 chance.

These are the people who first lose money.

I said, who gets the money?

So what happens when you go into bankruptcy?

And to stop it crashing over the last two to three decades, we've expanded the money supply, expanded credit and debt, so that people can keep buying stuff.

They would actually owe this extra 1 million.

Perhaps you will be so good as to do the same for his creditors in Meryton,

Helps bring it down.

The yield on the bond is 6 .

And of those 20 that default, we have a 50 recovery.

They go to 0.

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

So that's bankruptcy.

You go get bankruptcy protection.

Because the government now owns 90 something percent of the company.

This is the debt, or the liabilities.

That's not always the case.

That's where the 1 billion comes from.

And they get paid first.

We would create incentives for securitization.

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.

Payable to the City of San Francisco.

So what happens is that the debtor stays in possession of the assets.

Our economy grew from 2000 to 2007 on the back of consumers massively overborrowing.

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

Bonds together with some money was stolen.