loans to this bank.

Bank D had loans to Bank A.

It's kind of a standard commercial bank.

If this were a commercial bank, kind of your Bank of

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

So Bank A can't get rid of these loans.

In this case, Bank A had some loans from

When this bank sold the loans grouped all of the

That's in the context of a commercial bank, but anyway,

I don't want to say total liabilities because the bank could take out loans that aren't demand loans.

And of course, everybody who had loans to Bank A, maybe

But the investment bank, they're not in the business of servicing loans or keeping loans on their balance sheets.

Because maybe one bank does fail, some of its loans come due.

Everyone with loans to Bank A all of a sudden gets afraid.

It's fun. Carl, this bank traditionally has never given out small loans.

So what the bank does is it takes all these loans together, that 1 billion in loans, and it says, hey, investment bank so that's another bank why don't you give me 1 billion?

(Laughter) So, a normal commercial bank has nine to 10 times leverage.

And now what is this investment bank going to do with these loans?

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

There's things called stated income loans, where you just tell the bank what you earn.

Commercial Area

Commercial 10

Commercial mortgages.

So I would go to an investment bank, although they've all turned into commercial banks now.

They didn't make loans and then sell the loans.

So, corporate loans, or loans to corporations or banks.

Today's commercial markets worldwide, global commercial launch market?

It's highly commercial.

Oh! A commercial!

Corporate loans tend to be for simplicity purposes, interest only loans.

They serviced the loans.

loans, they're not liquid.

Those loans aren't available.

So this bank paid 1 billion for the right to get the interest and principal payment on those loans.

And all the bank has to do is kind of set this whole legal structure up and service the loans.

It doesn't think about things like interest income from your bank account, or interest expense on any loans you have.

Two of those other loans, they came due, no one was willing to renew the loans, or give them new loans.

I love that commercial.

US Commercial 10 Envelope

Well, commercial hunting happened.

It's pure commercial business.

It's a commercial example.

It's a commercial example.

You're assuming interest only loans.

They bought all these loans.