So the asset would be your house, whatever it's worth, and then your liability, and I'll call that A for asset, and then your liability would be your mortgage.

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So there's that fundamental mismatch.

The mismatcher wants to mismatch.

This is a liability.

Well, assets minus liability.

So that's a liability.

Why is it a liability?

Accounts Payable is a liability

That'd be my liability, right?

That could be a liability.

So I have zero liability.

Your liability would be the loan.

So now I have this liability.

I have 1,000 gold pieces liability.

And why is it a liability?

So it's a liability to me.

And pays off the liability holders.

So just this is liability, 750,000.

Subtract the liability from both sides.

So why are people willing to adjust with that mismatch?

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

These rapid collapses are especially likely where there's a mismatch between available resources and resource consumption, or a mismatch between economic outlays and economic potential.

In the context of a house, it's just the asset of the house minus the liability, but I'm talking about in the context of my personal balance sheet.

It's the same asset.

So that's the asset.

So it's an asset.

That's an asset, right?

We thought of people as a liability.

What is my assets minus my liability?

And then the offsetting liability for me,

Lynn Verinsky Because of liability insurance. (Laughter)

That we'll just put generally as liability.

So the only liability is this 5,000.

This is a liability for me, right?

So over here you had another liability.

So in this example right now, if we assumed that all of these asset values are correct and all of these liability values are correct, what is this bank's equity?

That's its asset it has.

So it's an illiquid asset.

This is a real asset.