I definitely had to force myself to watch it through. It had some higher level terms that I wasn’t familiar with.
I too had some similar questions. From what I can tell since we live in a debt based economy, most, if not all large companies would fall prey to this as soon as the dollar is devalued enough. I try to think about it like what happened Lehman Bros but on a mass scale. Still trying to wrap my head around it.
As far as I understand this, securities (like stocks) that are owned by X (could be a person, a company, a pension fund) are also part of the collateral pool of Y (the bank that holds the security) and Z (the larger bank(s) above Y in the banking hierarchy).
That means, if Y or Z find themselves in a crisis situation for whatever reason, they can use X's securities to bail themselves out of trouble. Of course that also means that X got robbed blind.
That makes the most sense. Thank you for the simple formula
