So, if I were to draw a balance sheet for someone's house, it would look something like this.

I'm only going to get 50 gold pieces back.

All of these banks, each of these kind of represents the balance sheet of a bank.

Obviously, this is simplified.

Sal Whatever's left over is your equity.

I care about the assets.

And that loan wouldn't be a bad idea because if this person isn't lying about their balance sheet, or I'm not

But the underlyingconcepts really aren't that fancy.

This is kind of my whole personal balance sheet.

So we had 1 million and then we raised 10 million more.

Let me explain it.

Or assets minus liabilities is equal to equity.

Frankly, it doesn't have to be a bank.

So I'm going to describe what illiquidity means to you.

But we can see I've drawn a bunch of balance sheets before and I think this is a good time to draw a balance sheet.

That's not too hard to value.

And this isn't the balance sheet just for my house.

Let me draw another series, another balance sheet.

So in this situation, what are my assets?

And the difference between is kind of like your wealth.

So going into day 10, this is his balance sheet

And just so you don't get confused, there's always a

There ain't a woman born that can resist the motion of the ocean.

But anyway, I won't make social commentary.

So let's see where we left off.

But anyway, back to where we were in the example.

So in this situation, what happens?

Day 10, he decides to cover.

And all companies don't have the same amount of shares.

And let's say these are its assets right there.

There's the income statement and the other two are the balance sheet, which I have drawn a lot in a lot of the other explanations I've done on the financial crisis and whatever else.

But just for the sake of simplicity, I've just made all the banks in the situation where the book value of the

But we'll just assume we start a corporation.

I only have 650,000.

Before I go to try to get the house.

So what happens?

But let's just assume, for simplicity, that a ton of banks in the system have this identical balance sheet.

Let me scroll down a little bit.

But that's getting too philosophical.

But it doesn't hurt to review it here.

Above this line right over here is the income statement, down here is the balance sheet.

MetaBall Movement

And income statements tell you how do you get from one balance sheet to the next balance sheet?

And it really just kind of gets rid of a little nuisance.

liabilities, that's hard to get a grasp on.