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

Now, that was the purchase price of the house.

So immediately, they have 20,000 equity and an 80,000 loan.

How much equity do they have?

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

So how does that work?

Rules?

Remember, it's free none of us are making any money on this thing.

His own bank?

Yes, it's an enterprise.

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

No, this is one of your rules.

So essentially, these banks have a bunch of assets.

Regularity

Similarity

Size Policy

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So let me delete this.

I'll show you in a second.

Ah, you think about. Hear what i said? The exception to the rule.

Everything was done in accordance with the rules.

We will do the reduction and do this sort of pretend shifting, for this first rule, and also for the second rule.

It has no liabilities.

So this is all equity.

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

Continue at Own Risk

Continue at my own risk

Whether people will continue to loan them money.

Whispers Where's the selfhelp section?

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?

Regulations.

Rules is rules.

Section 8 of the interior rules

But it's roughly the right number.

And we'll introduce debt later, because that's another variable that a lot of people don't think about when they

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

If we let him learn the rules on his own.

It's an irregular object oscillating about its own axis

And so that cash ended up here.

The bank accommodated the company with a loan.

Papa went to the bank to ask for another loan.

So the asset value is all in equity.

The market is saying, this company's worth 10 million.