So in our example right now, what is our equity?

The shareholder's meeting was held.

liabilities plus equity.

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

And this is my equity that I start off with.

I use 100 gold pieces.

because they're both on the right hand side.

Let me do it in a different color just so the equity stands out from the liabilities.

The bank is going to be able to fulfill its promise.

So, remember, assets are equal to liabilites plus shareholder's equity, so if all of a sudden the market value of the equity, the market capitalization, for Ben's shoe company is 215,000... (That is the equity part right over here)

So 5 million of liabilities.

He invested a lot of money in stocks.

This is the building.

Another way to think about it is, if the market is paying 12 million per share, what's the market cap of the company?

less capital intensive that there's less money that's required

He invested his money in stocks.

But it's really a measure of the same thing.

He lost a lot of money in the stock investment.

I owe these people that money is 700 and my equity is 300.

My new balance you will look like this 150 and 150.

They have investors, they have shareholders. Shit like that.

I put it in, I don't know, maybe I'm a good investor.

Now what's our mantra of this day and age I wonder?

Let's think a little bit about leverage.

But I have let's see 700 of liabilities.

So the asset value is all in equity.

These are my assets, and these are my liabilities.

And the equity holders get wiped out, the old equity holders.

So the total assets were 5 billion in assets.

So notice, I now have negative equity, right?

And then what's left over, which is essentially so this is 2 million of equity, and then you'd have 2 million of equity here this 2 million of new equity, right?

It's the split of just the equity part right over here

So right now in this world, my assets are what?

I'll do that in yellow.

Let's say it sells a million shares.

Because if someone tells you debt to equity, you can figure out the assets to equity, but in this case, the debt to equity ratio before I took any losses it was what?

So I start off with 300 equity 300 gold pieces of equity.

He invested his money in stocks.

So what did we find after computing all this network control?

Ownership has its privileges.

In the next step, we built the network around these companies, so we took all the TNCs' shareholders, and the shareholders' shareholders, etc., all the way upstream, and we did the same downstream, and ended up with a network containing 600,000 nodes and one million links.

Our liabilities are still 3 billion.

So one way to think of it is Loan C gets first dibs on the assets.

Our equity is equal to 300 gold pieces.

I met him on the train.