So you know these these are loans to really solvent or very creditworthy companies.

This is the equity...

And in the meantime, it's going to pay me interest.

Interest expense.

And that IOU, you could call that a Sal bond.

You could do it with corporate debt.

Their balance sheets are identical, except for Jason's Shoes has 100,000 in debt, and Ben's Shoes has no debt.

Morningstar type.

They go to 0.

This company now is completely delevered.

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

My responsibility is to keep the company solvent.

So first, a little bit of definitions.

So liabilities. Liabilities.

Let's say assets and I'll talk about margin requirements

But you can kind of see a lattice structure.

Junk bond dealers left the market riding on a pillow of air.

Let's say that it has, I don't know, 1 billion 1 billion in government bonds,

And I kind of jumped the gun a little bit.

Now let's say that Company x has also borrowed some money.

They'd start with your bonds preferred stock, and then move on to real estate.

Bonds, you become part lender to the company.

The correct share price of the stock, if we didn't have

And then we have the debt, the debt of the company, or the

Let's think about its liabilities.

Savings bonds.

I owe the bank 750,000.

So these treasury securities, whether they're T Bills, treasury bills, treasury notes, or treasury bonds.

So for example, if you by a well I'll just say a face value bond of, let's say it's a thousand dollars, and there's a thousand people who do that.

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

This is 120,000 in equity, market value of equity, he has another 105,000 in liabilites.

What is even a treasury?

This was equity.

They're savings bonds.

The Spanish Victory Bond.

Grab the bonds!

If these are really worth 4 billion.

That company is on the rocks because of bad debts.

So just to understand what he's talking about, the central bank, it has liabilities and assets,

You're still solvent.

They serviced the loans.

liabilities as well.

It had 5 million of debt.

What are my liabilities?

That assets, A for assets, is equal to