So, if I were to draw a balance sheet for someone's house, it would look something like this.

And that loan wouldn't be a bad idea because if this person isn't lying about their balance sheet, or I'm not

Sal Whatever's left over is your equity.

All of these banks, each of these kind of represents the balance sheet of a bank.

I'm only going to get 50 gold pieces back.

I care about the assets.

But it doesn't hurt to review it here.

That's not too hard to value.

So going into day 10, this is his balance sheet

But the underlyingconcepts really aren't that fancy.

This is kind of my whole personal balance sheet.

And just so you don't get confused, there's always a

So we had 1 million and then we raised 10 million more.

So in this situation, what happens?

And all companies don't have the same amount of shares.

Or assets minus liabilities is equal to equity.

Let me explain it.

Frankly, it doesn't have to be a bank.

And let's say these are its assets right there.

There's the income statement and the other two are the balance sheet, which I have drawn a lot in a lot of the other explanations I've done on the financial crisis and whatever else.

let me do demand in a different color.

So let's see where we left off.

I want to have money back in my vaults.

But we'll just assume we start a corporation.

I have no liabilities.

But we can see I've drawn a bunch of balance sheets before and I think this is a good time to draw a balance sheet.

So I'm going to describe what illiquidity means to you.

Let me scroll down a little bit.

But that's getting too philosophical.

And income statements tell you how do you get from one balance sheet to the next balance sheet?

And the difference between is kind of like your wealth.

Above this line right over here is the income statement, down here is the balance sheet.

And this isn't the balance sheet just for my house.

And that's why they call it book equity.

So what happens?

But let's just assume, for simplicity, that a ton of banks in the system have this identical balance sheet.

Sure, and here I'm going to attempt to give everyone a 5 minute MBA, but essentially, what I've drawn here is our balance sheets for some banks, and it might sound like a complicated term, but a balance sheet is, I think, something that most people are fairly familiar with when they talk about home equity.

But anyway, back to where we were in the example.

Let me draw another series, another balance sheet.

So in this situation, what are my assets?

Day 10, he decides to cover.

Obviously, they don't have an identical balance sheet.

We actually think this is only worth 1.5 billion.

But anyway, I won't make social commentary.

And maybe I'll do a little bit more on that in the future.