So the total assets were 5 billion in assets.

I'll do that in yellow.

But it's roughly the right number.

And so that cash ended up here.

And if this is a loan from Bank B, Bank B would have an asset called loan to Bank A.

So what I'm squaring off in magenta, that's the assets of that bank.

Bank B has borrowed money from Bank C.

One of the viewers pointed out not incorrectly that one definition of return on asset so this whole video's going to be on return on asset that one definition of return on asset, and if you look it up on some of the finance sites or even some finance textbooks, they'll tell you it's net income over total assets.

For whatever reason, that person wants their gold back.

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

And then the offsetting liability for me,

And we have these 4 billion of CDOs.

Let's say they want to make it 20 .

In fact, probably from other banks.

They'll often say just like a big bucket of, they'll call them level three assets.

However, in a pure quantitative easing regime, the focus of quality is the quantity of bank reserves, which are liabilities of the central bank the composition of loans and securities on the asset side of the central bank's balance sheet is incidential.

So how does that work?

And if this is worth 2.5 billion, then your total assets are what?

Smelly.

So essentially I'm broke.

And let's say Loan C comes due.

And once again, this is a non liquid loan.

Bank D had loans to Bank A.

And then you can imagine now Bank C is worried because now

We're now going to make all of our mortgage payments, the 10 payment, to this bank, this investment bank.

So essentially, these banks have a bunch of assets.

So let me delete this.

So I'm also solvent.

I had 250,000 and I got another 750,000 from the bank.

Whether people will continue to loan them money.

I can do is... So he needs 100 gold pieces.

So how much wealth is gone from each person's perspective?

So now the Special Purpose Entity is the owner of the mortgages .

They'll sell the loans to like, let's say, Bear Stearns. So that's an investment bank.

What's it like being an investment banker?

Because remember, this piece right here only adds up to 140,000!

But I have an accounts receivable of 400, so my total assets now are 300 of assets, remember, accounts receivables aren't assets, because someone owes me something, someone owes me cash in the future.

Some are poor, some are wealthy. There are billions.

This is coming from the heart of finance.

This is just all gold.

People start shorting the stock, the stock go starts going down.

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

So the 1 million asset would really become an 800,000 asset.

The bank accommodated the company with a loan.

Papa went to the bank to ask for another loan.