Mmhm. It's a real estate investment.

Malibu Equity and Investments.

Malibu Equity and Investments. Roger Van Zant.

Jim has a lot of our nest egg invested in this real estate venture.

So its assets.

That assets, A for assets, is equal to

(Laughter)

I don't want to draw this box.

And rich, eh?

I'll do that in yellow.

So let's make some very simple assumptions for ourselves.

It should start to make a little bit of intuitive sense

And, but it really it got the electricity. It took a long time.

And this guy's an investment bank instead of a commercial bank.

Obviously , a machine you can't do all of those things to it, but you can at least touch it and possibly smell and taste it.

liabilities plus equity.

And what I wrote here is, it has 4 billion of liabilities.

He is a man of wealth.

He's a wealthy man.

Or across the street from each other.

So the total assets were 5 billion in assets.

You'd have to give up 93 of your net worth.

In a world without leverage so if I didn't have all this

So this is just another visual representation that

It doesn't sound like we borrowed money or anything.

Remember liabilities plus equities are equal to assets.

Each share in this case once again, if you believe that the assets are worth 1 million are going to be 1 million.

In my opinion, we need to diversify our assets.

But let's say its assets are worth 1 million.

All of the assets needed to start the firm, the pizzeria.

Or they just have a super flush bank account.

Remember, every time it'd issue a loan, like for right here, it issued a 100 gold piece equivalent loan to D and instead of giving D 100 gold pieces from, say, right here, it just created a checking account for D, which later D paid to A and that's why it's labeled A right here. Let me relabel another thing because the gold is a different color just so you see the gold.

But let's just kind of think about a generic balance sheet for a bank.

So 225,000

I guess you could say non cash assets, right?

Are you a man of means?

But essentially what happened is the investors in the mortgage backed securities provided the money to the special purpose entity to essentially loan to the borrowers.

These are my assets, and these are my liabilities.

And if you look at the species level, you saw about fish.

The firm went under due to lack of capital.

So I'm going to give you a little equation, actually, just to take a little bit of a tangent.

I spent our entire life savings on these things.

So that's the situation we're dealing with.

I won't use the square tool.

We had a 10 return on assets.