Here's how I explain it to my sister.
1. You have a dollar.
2. I loan you 29 dollars.
3. You go to the casino and bet all 30 dollars.
4a. You come out ahead. You are Goldman Sachs.
4b. You do not win. You lose $2. Your equity is completely wiped out. You are Bear Stearns or Lehman Brothers.
I am starting a support group for people who have been personally affected by the collapse of Lehman Brothers. We're going to meet in the common room in my apartment. Bring booze.
