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Our Great Stock Market

ejh238
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2/27/2012 11:34:03 AM
Posted: 4 years ago
Does anyone else think it's possible the stock market is the cause of all our problems? I personally think greed is the root, but that'll never change. I was just mulling it over, mind you I have very little education in economics, and I think the fact that money is made off over and over off potential is a real problem.

Correct me if I'm wrong, but the initial reason of buying a stock is because you believe the company will make money. Making it actually worth more. But when people then resell it to others, those others are thinking it'll be worth more. But what happens when the price of a stock triples over and over, while the companies actual profits are only doubling? Is this considered inflation?

Here's what I think, I think people should not be allowed to resell stocks. The only resale should be back to the company. Any thoughts?

PS - The reason I didn't debate this is because of my lack of knowledge and the fact I do not want this to become a debate on what I didn't say quite right. I would like a real discussion on this. No trolls please.
darkkermit
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2/27/2012 11:55:09 AM
Posted: 4 years ago
Saying you shouldn't be allowed to resell a stock is like saying you shouldn't be able to resell a book or house.

If you aren't allowed to resell a stock then the company has very little incentive to make the company viable in the long run, since who cares if you can't sell the thing? Why would a company want to reinvest in itself, since it won't add value to the company?

Economic bubbles do cause recessions, but that does not mean that stocks are bad. That's like saying that lack of food supply causes famine, therefore farming is bad.

The importance of transactions of stocks is it allows the price of the stock to be reflected based on its real value, and those that want to liquidate their assets can. It also allows those who want to save and invest trade with people who want to consume and spend.
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ejh238
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2/27/2012 12:40:45 PM
Posted: 4 years ago
At 2/27/2012 11:55:09 AM, darkkermit wrote:
Saying you shouldn't be allowed to resell a stock is like saying you shouldn't be able to resell a book or house.

I actually think it's quite a different situation. You don't buy a book based on how much you think the author will earn.

If you aren't allowed to resell a stock then the company has very little incentive to make the company viable in the long run, since who cares if you can't sell the thing? Why would a company want to reinvest in itself, since it won't add value to the company?

I think your reasoning may be wrong. Stocks are sold to give a company cash to expand (to make more money) or conduct research (to sell products that make more money). They will possibly want to do it again at some point, so that is the reason for them to stay profitable. Companies in the stock game are not out for a short existence, they are out to make money.

Economic bubbles do cause recessions, but that does not mean that stocks are bad. That's like saying that lack of food supply causes famine, therefore farming is bad.

I'm not saying stocks are bad. I'm saying the resale of stocks to other individuals seems bad to me.

The importance of transactions of stocks is it allows the price of the stock to be reflected based on its real value, and those that want to liquidate their assets can. It also allows those who want to save and invest trade with people who want to consume and spend.

I don't get your first statement here. Can you please clarify? As far as liquidating assets, this is why people can resell the stock back to the company.

Your final sentence makes a good point. But I believe the resale needs to be based on something. Perhaps a formula. Such as the amount of profit for the quarter times the % of stock you own? (1000 stocks out there, you own 100, company made a million dollars, you can sell your 100 for $100,000, not a penny more) I don't really know, but allowing the price to fluctuate based on 'maybe' seems to be a flawed concept.
Mimshot
Posts: 275
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2/27/2012 1:21:43 PM
Posted: 4 years ago
No offense, but your questions suggest you don't really understand how the stock market works. That's ok, and it's good that you're looking for answers so that you can learn more. Given that, though, do you think it's right for you to be deciding that something you don't understand is to blame for economic problems? How can you make such a claim?
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MyVoiceInYourHead
Posts: 260
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2/27/2012 1:48:50 PM
Posted: 4 years ago
At 2/27/2012 11:34:03 AM, ejh238 wrote:
Does anyone else think it's possible the stock market is the cause of all our problems? I personally think greed is the root, but that'll never change. I was just mulling it over, mind you I have very little education in economics, and I think the fact that money is made off over and over off potential is a real problem.

Correct me if I'm wrong, but the initial reason of buying a stock is because you believe the company will make money. Making it actually worth more. But when people then resell it to others, those others are thinking it'll be worth more. But what happens when the price of a stock triples over and over, while the companies actual profits are only doubling? Is this considered inflation?

Here's what I think, I think people should not be allowed to resell stocks. The only resale should be back to the company. Any thoughts?

PS - The reason I didn't debate this is because of my lack of knowledge and the fact I do not want this to become a debate on what I didn't say quite right. I would like a real discussion on this. No trolls please.

No. It's just one of many symptoms of our debt-money system. The root cause of the problem in my opinion is that in the western economies, the money supply has almost totally been created by commercial banks as loans (interest-bearing debt). Nothing wrong with a bit of debt. We have too much as the result of commercially-issued debt-based money.

I think we should return the money creation power to the people (the State).

This is called monetary reform and it would lead to a more stable economy. Traders would not be able to skim off so much profit or make such huge losses if the economy is stable. They would start investing in businesses as the next best option instead of pushing electronic money around the world's computers.
ejh238
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2/27/2012 3:56:12 PM
Posted: 4 years ago
At 2/27/2012 1:21:43 PM, Mimshot wrote:
No offense, but your questions suggest you don't really understand how the stock market works. That's ok, and it's good that you're looking for answers so that you can learn more. Given that, though, do you think it's right for you to be deciding that something you don't understand is to blame for economic problems? How can you make such a claim?

You're right. I don't know much about the stock market. Which is why I'm telling people what I think. That way they can correct me. Your post was pointless. Please don't post on my threads if you're not going to be constructive. Thank you.
ejh238
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2/27/2012 4:01:02 PM
Posted: 4 years ago
No. It's just one of many symptoms of our debt-money system. The root cause of the problem in my opinion is that in the western economies, the money supply has almost totally been created by commercial banks as loans (interest-bearing debt). Nothing wrong with a bit of debt. We have too much as the result of commercially-issued debt-based money.

I don't understand what you mean by 'commercially-issued debt-based money'. I agree there's too much debt. But do you mean the debt for business start-ups? Please explain.

I think we should return the money creation power to the people (the State).

This is called monetary reform and it would lead to a more stable economy. Traders would not be able to skim off so much profit or make such huge losses if the economy is stable. They would start investing in businesses as the next best option instead of pushing electronic money around the world's computers.
MyVoiceInYourHead
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2/27/2012 4:08:35 PM
Posted: 4 years ago
Here is some research carried out by UK Monetary Reform pressure group, Positive Money, which gives us an inkling as to where money comes from. www.positivemoney.org.uk

Banks create new money (the numbers in your bank account) when they make loans. As the Bank of England says, "When banks make loans they create additional [bank] deposits for those that have borrowed the money."1 This means that nearly every pound in the economy today was created when somebody went into debt. All the money that we need to trade, to buy food, and to run businesses, must be borrowed from the profit-seeking banking sector, at a huge cost to us, and a massive benefit to them.

How Did This Happen?

Laws that make it illegal for you to print your own £5 or £10 notes have been in place since 1844. But those laws haven't been updated to account for the fact that almost all money now is electronic. Because of this loophole, banks worldwide now have the power to create money, effectively out of nothing.

How can We Fix this?

A few simple changes to the banking system could remove this power to create money from the banks. We just need to move away from the current banking system - known as 'fractional reserve banking' - to what we call full-reserve banking.

Originally this number money was simply written into huge ledger books in the bank, but is now stored in huge computer databases maintained by the banks.
97% of All Money is Digital Money...

With the rise in debit and credit cards, internet bank, direct debit and so on, this digital number money makes up 97% of all the money in the economy - around £2,151 billion compared to £50 billion of cash [1].
...So the ‘Money' in Your Bank Account was Created By Private Companies

The numbers in your own bank account were all created, essentially out of nothing, not by the Bank of England or the Royal Mint, but by commercial banks.

The banks are able to create this ‘number money' through the accounting process that they use to make loans, using a business model known as 'fractional reserve banking'. Rather than taking money from a saver and lending it to a borrower (as per the common understanding of banking), they simply write new numbers into the bank account of a borrower - effectively creating new money.

Without seeing the process in action, it can be a little hard to believe, so below are a few quotes ‘straight from the horse's mouth' which confirm this amazing fact:

"...by far the largest role in creating broad money is played by the banking sector... when banks make loans they create additional deposits for those that have borrowed the money." - Bank of England Quarterly Bulletin, 2007 Q3

"Subject only but crucially to confidence in their soundness, banks extend credit by simply increasing the borrowing customer's current account, which can be paid away to wherever the borrower wants by the bank ‘writing a cheque on itself'. That is, banks extend credit by creating money." - Paul Tucker, Deputy Governer of the Bank of England & member of the Monetary Policy Committee

"... changes in the money stock primarily reflect developments in bank lending as new deposits are created." - Bank of England Quarterly Bulletin 2007 Q3, p378

"...the banking sector plays such an important role in the creation of money. Changes in the terms for deposits will affect the demand for money, while changes in the terms for loans will affect the amount of bank lending and hence money supply." - Bank of England Quarterly Bulletin 2007 Q3, p383

"The money-creating sector in the United Kingdom consists of resident banks (including the Bank of England) and building societies" - Quarterly Bulletin 2007 Q3, p405

Bank deposits (the numbers in your bank account) now make up 97.4% of the total quantity of money in the economy2. By volume of payments, bank deposits are used for 99.91% of transactions and transfers, with cash being used for just 0.09% of transfers3. Consequently, the physical currency issued by the state has been almost entirely replaced by a digital currency issued by private companies. The UK's money has been privatised.

The 'Rules of Money'

Under a fractional reserve banking system, there are two 'rules of money':

1. When a bank makes a loan, it increases the amount of money in the hands of the public (by increasing the total quantity of digital bank deposits)
2. When a member of the public repays a loan, it reduces the amount of money in the hands of the public (by decreasing the total quantity of digital bank deposits)

Consequently, through excessive lending between 2000 and 2008, banks were able to double the money supply in just 7 years - an increase in the total money supply from £884 billion to £1,674 billion4.

All the ‘Money' in Your Bank Account Represents Someone Else's Debt

Since all the number money in your account was created by banks making loans, this means that for every pound in your bank account, someone else is in debt by an equal amount.

In fact, due to compound interest, the public's debts are now greater than all the money that exists in the economy. According to Bank of England figures, if the UK public collectively took all the money in our bank accounts and used it to pay down our debts, we would end up with no money at all and still owe £306billion (plus interest) to the banks!5

In other words, we now have a debt-based money supply issued entirely by private, profit-seeking companies. Our money supply has been effectively privatised.

1 Bank of England Quarterly Bulletin 2007 Q3, p377 [↩]
2 See data series LPQAUYM and LPMAVAA from the Bank of England's Interactive Statistical Database at http://www.bankofengland.co.uk......... [↩]
3 Bank of England Payment Systems Oversight Report 2008, available at: http://www.bankofengland.co.uk......... [↩]
4 See data series LPQAUYM and LPMAVAA from the Bank of England's Interactive Statistical Database at http://www.bankofengland.co.uk......... [↩]
5 Bank of England Statistics. M4 (monetary financial institutions sterling liabilites to the private sector - what the banks owe to companies and households) as at 30th September 2010 was £2,186 billion. As of the same date, M4 Lending (monetary financial institutions' sterling net lending excluding securitisations to private sector - what individuals and companies owe to the banks) was £2,492 billion.
ejh238
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2/27/2012 4:18:36 PM
Posted: 4 years ago
In reply to 'MyVoiceInYourHead' that's insane. I always thought they were somehow actually worth all the money they lent out.

I get how there is more than one problem with our economy. But how am I wrong about the stock market?
darkkermit
Posts: 11,204
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2/27/2012 4:35:58 PM
Posted: 4 years ago
At 2/27/2012 12:40:45 PM, ejh238 wrote:
At 2/27/2012 11:55:09 AM, darkkermit wrote:
Saying you shouldn't be allowed to resell a stock is like saying you shouldn't be able to resell a book or house.

I actually think it's quite a different situation. You don't buy a book based on how much you think the author will earn.

But it is an asset, one that can be liquidated If you need it. One that others might have a demand for If the supply is limited (well bad example since it has a very elastic supply but let's say that the printing press broke). One that one can theoretically make a profit off of, if there is a change in supply and demand.


If you aren't allowed to resell a stock then the company has very little incentive to make the company viable in the long run, since who cares if you can't sell the thing? Why would a company want to reinvest in itself, since it won't add value to the company?

I think your reasoning may be wrong. Stocks are sold to give a company cash to expand (to make more money) or conduct research (to sell products that make more money). They will possibly want to do it again at some point, so that is the reason for them to stay profitable. Companies in the stock game are not out for a short existence, they are out to make money.

The holders are in it for the short run. If they have no chance to resell it, the only way for a holder to make money is to receive dividends. If a company hands out dividends, then that means that the company can't reinvest their profits back into the company. If a company reinvests their money in the stock, then the value and price of the stock increases. However, since the shareholder can't resell the stock, the holder doesn't care about the price of the stock (well there wouldn't even be a price since price requires there to be buyers). Therefore, the "best" thing the company can do is to give out dividends rather than reinvest in the company.

Economic bubbles do cause recessions, but that does not mean that stocks are bad. That's like saying that lack of food supply causes famine, therefore farming is bad.

I'm not saying stocks are bad. I'm saying the resale of stocks to other individuals seems bad to me.


The importance of transactions of stocks is it allows the price of the stock to be reflected based on its real value, and those that want to liquidate their assets can. It also allows those who want to save and invest trade with people who want to consume and spend.

I don't get your first statement here. Can you please clarify? As far as liquidating assets, this is why people can resell the stock back to the company.

The company can't just buy back the stock. At what price do they buy it back? Why are they forced to buy? The company unlikely has the liquid assets to buy the stock.

Your final sentence makes a good point. But I believe the resale needs to be based on something. Perhaps a formula. Such as the amount of profit for the quarter times the % of stock you own? (1000 stocks out there, you own 100, company made a million dollars, you can sell your 100 for $100,000, not a penny more) I don't really know, but allowing the price to fluctuate based on 'maybe' seems to be a flawed concept.

Investment bankers and stock traders constantly use formulas to base on the price of the stocks and when to buy and sell. They are usually complex formulas. In fact, more phD physicists go into finance then physics since the mathematics learned in physics can be applied to the financial sector.
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darkkermit
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2/27/2012 4:45:43 PM
Posted: 4 years ago
Just read your formula. Your joking right? You do realize that the average P/E is somewhere around 20. That means for every $20 spent, it earns about $1 per year.

Selling the stock at a fraction of its profit of a quarter is ridiculously cheap.

The above has a payback time of 20 years, not taking into account the time value of money.
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Mimshot
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2/27/2012 5:49:32 PM
Posted: 4 years ago
At 2/27/2012 4:45:43 PM, darkkermit wrote:
Just read your formula. Your joking right? You do realize that the average P/E is somewhere around 20. That means for every $20 spent, it earns about $1 per year.

Selling the stock at a fraction of its profit of a quarter is ridiculously cheap.

The above has a payback time of 20 years, not taking into account the time value of money.

This implies a risk adjusted interest rate of 5%. Not terribly high really.
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MyVoiceInYourHead
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2/27/2012 6:22:03 PM
Posted: 4 years ago
At 2/27/2012 4:18:36 PM, ejh238 wrote:
In reply to 'MyVoiceInYourHead' that's insane. I always thought they were somehow actually worth all the money they lent out.

I get how there is more than one problem with our economy. But how am I wrong about the stock market?

I agree. Totally insane. I didn't believe it at first until I looked into it properly.

Some banks are ethically better than others (eg Mutuals in the UK) but they are all not profitable in real terms.

The amount of tax received from UK banks last year was 26 bn pounds. The implicit subsidy from the taxpayer (which has now been claimed due to the crisis) is a colossal 130 bn pounds (for deposit insurance and a licence to print money). Without this taxpayer subsidy they would not be viable.

Also according to the National Audit Office, UK contribution to the banks caused by the recession is expected to be 512 bn pounds which the next few generations will have to pay off!

There's nothing necessarily wrong with the stock market, it's just that some people confuse price for value. What value to society is it really to push electronic money around? Monetary Reform would calm this activity down so it was less attractive to treat money as a commodity.
Mimshot
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2/27/2012 7:28:37 PM
Posted: 4 years ago
At 2/27/2012 6:22:03 PM, MyVoiceInYourHead wrote:
At 2/27/2012 4:18:36 PM, ejh238 wrote:
In reply to 'MyVoiceInYourHead' that's insane. I always thought they were somehow actually worth all the money they lent out.

I get how there is more than one problem with our economy. But how am I wrong about the stock market?

I agree. Totally insane. I didn't believe it at first until I looked into it properly.

Some banks are ethically better than others (eg Mutuals in the UK) but they are all not profitable in real terms.

The amount of tax received from UK banks last year was 26 bn pounds. The implicit subsidy from the taxpayer (which has now been claimed due to the crisis) is a colossal 130 bn pounds (for deposit insurance and a licence to print money). Without this taxpayer subsidy they would not be viable.

Also according to the National Audit Office, UK contribution to the banks caused by the recession is expected to be 512 bn pounds which the next few generations will have to pay off!

There's nothing necessarily wrong with the stock market, it's just that some people confuse price for value. What value to society is it really to push electronic money around? Monetary Reform would calm this activity down so it was less attractive to treat money as a commodity.

FRB as described by the gentleman before (who I haven't quoted but whose post these are referring to) has not existed in the United States since at least 1933. This is true for at least three reasons:

1) Banks are not reserve constrained. They issue loans when they find creditworthy borrowers. They are under no obligation to lend if they have excess reserves and if they have insufficient reserves they can always obtain more from the discount window.

2) Banks ARE capital constrained. Regulators require that banks maintain a maximum leverage (currently 6% capital IIRC).

3) Bank loans do not create net financial assets. From the perspective of the borrower, they create an asset (the account balance) and a liability (the obligation to repay the loan). From the bank's perspective, which is the liability and which is the asset are flipped, but from neither's perspective are new net financial assets created. The only way you get an increased "money supply" is by using a silly money supply metric like M1.
Mimshot: I support the 1956 Republican platform
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MyVoiceInYourHead
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2/28/2012 2:12:12 PM
Posted: 4 years ago
At 2/27/2012 7:28:37 PM, Mimshot wrote:
At 2/27/2012 6:22:03 PM, MyVoiceInYourHead wrote:
At 2/27/2012 4:18:36 PM, ejh238 wrote:
In reply to 'MyVoiceInYourHead' that's insane. I always thought they were somehow actually worth all the money they lent out.

I get how there is more than one problem with our economy. But how am I wrong about the stock market?

I agree. Totally insane. I didn't believe it at first until I looked into it properly.

Some banks are ethically better than others (eg Mutuals in the UK) but they are all not profitable in real terms.

The amount of tax received from UK banks last year was 26 bn pounds. The implicit subsidy from the taxpayer (which has now been claimed due to the crisis) is a colossal 130 bn pounds (for deposit insurance and a licence to print money). Without this taxpayer subsidy they would not be viable.

Also according to the National Audit Office, UK contribution to the banks caused by the recession is expected to be 512 bn pounds which the next few generations will have to pay off!

There's nothing necessarily wrong with the stock market, it's just that some people confuse price for value. What value to society is it really to push electronic money around? Monetary Reform would calm this activity down so it was less attractive to treat money as a commodity.

FRB as described by the gentleman before (who I haven't quoted but whose post these are referring to) has not existed in the United States since at least 1933. This is true for at least three reasons:

1) Banks are not reserve constrained. They issue loans when they find creditworthy borrowers. They are under no obligation to lend if they have excess reserves and if they have insufficient reserves they can always obtain more from the discount window.

2) Banks ARE capital constrained. Regulators require that banks maintain a maximum leverage (currently 6% capital IIRC).

3) Bank loans do not create net financial assets. From the perspective of the borrower, they create an asset (the account balance) and a liability (the obligation to repay the loan). From the bank's perspective, which is the liability and which is the asset are flipped, but from neither's perspective are new net financial assets created. The only way you get an increased "money supply" is by using a silly money supply metric like M1.

Mimshot - can you explain point number 3 in a bit more detail. I have never really understood how if a loan is made from a bank (a let's say the borrower puts the loan back in the same bank to make things simple) & the assets and liabilities of the bank both go up in tandem - how do banks increase their capital and/or profits from a balance sheet perspective? Capital = assets - liabilities.

Also why choose M1 measure (cash + deposit accounts)? I've seen exponentially increasing money supply graphs for all measures, including M4 broad money.
Mimshot
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2/28/2012 6:06:46 PM
Posted: 4 years ago
FRB as described by the gentleman before (who I haven't quoted but whose post these are referring to) has not existed in the United States since at least 1933. This is true for at least three reasons:

1) Banks are not reserve constrained. They issue loans when they find creditworthy borrowers. They are under no obligation to lend if they have excess reserves and if they have insufficient reserves they can always obtain more from the discount window.

2) Banks ARE capital constrained. Regulators require that banks maintain a maximum leverage (currently 6% capital IIRC).

3) Bank loans do not create net financial assets. From the perspective of the borrower, they create an asset (the account balance) and a liability (the obligation to repay the loan). From the bank's perspective, which is the liability and which is the asset are flipped, but from neither's perspective are new net financial assets created. The only way you get an increased "money supply" is by using a silly money supply metric like M1.

Mimshot - can you explain point number 3 in a bit more detail. I have never really understood how if a loan is made from a bank (a let's say the borrower puts the loan back in the same bank to make things simple) & the assets and liabilities of the bank both go up in tandem - how do banks increase their capital and/or profits from a balance sheet perspective? Capital = assets - liabilities.

Also why choose M1 measure (cash + deposit accounts)? I've seen exponentially increasing money supply graphs for all measures, including M4 broad money.

We don't use M4 in the U.S., so it's just my bias of familiarity for me to not use that. But, yes, they should all grow exponentially as long as the economy is growing exponentially.

I'll try to explain the balance sheet expansion, but it's going to be hard without the ability to draw tables. All of what I say below applies to the UK as well, you just need to replace some names. I'm also going to ignore risk weighting in capital ratio calculations as a simplification.

While capital = assets - liabilities is a reasonable way to think about it, another (algebraically equivalent one) is to call capital and retained earnings special classes of liabilities. If you do this, then assets = liabilities always (unless someone made a big mistake as happened in 2008, but that's another story). Now let's imagine a simple bank. Banker decides to open a bank and capitalizes it with $1000 of his own money. This money is deposited in the bank's bank account (reserve account) at the Fed. The balance sheet looks like this:

Assets: 1000 reserve balance (1000 total)
Liabilities: 1000 stockholder equity (1000 total)

Next, Customer transfers his account from another bank depositing $200. The Fed transfers the reserves from the other bank to Banker's bank.

Assets: 1200 reserve balance (1200 total)
Liabilities: 200 checking accounts, 1000 stockholder equity (1200 total)

Note that the balance sheet just grew. The capital ratio is now 83% down from 100%. Next Builder decides to take out a loan for $100. Banker gives it to him and deposits it in Builder's bank account.

Assets: 1200 reserve balance, 100 loan (1300 total)
Liabilities: 300 checking accounts (200 C, 100B), 1000 stockholder equity (1300 total)

Capital ratio is 77%. No net wealth has been created. You only see an increase in money supply if you are only paying attention to the checking accounts. Now Builder builds a house and Customer buys it for 100. The only change in the balance sheet is moving money from one checking account to another.

Assets: 1200 reserve balance, 100 loan (1300 total)
Liabilities: 300 checking accounts (100 C, 200 B), 1000 stockholder equity (1300 total)

Ok, now the builder repays the loan $100 principle and $5 interest for a total of $105. The extra $5 shows up as "retained earnings."

Assets: 1200 reserve balance (1200 total)
Liabilities: 195 checking accounts (100 C, 95 B), 1000 stockholder equity, 5 retained earnings (1200 total)

So, now the bank has a choice to make. It can pay those retained earnings out to the shareholder (Banker), which would also remove $5 from its reserve account (keeping the balance sheet balanced) or it can move that over to capital to continue to grow the business. What happened was the loan assets/liabilities offset, but the interest was a transfer payment. Builder paid for the right to leverage the bank's capital.

Ok, so last point, why capital ratios matter. Let's say some time later the bank is in this position:

Assets: 1000 Reserve Balance, 4000 Loans (5000 total)
Liabilities: 1500 Deposits, 2000 Senior Debt, 1500 stockholder equity (5000 total)

Capital ratio is 30%. Now if 25% of those loans go bad, the bank's equity must take a hit. The change in equity is reported as a loss (as in opposite of a profit)

Assets: 1000 Reserve Balance, 3000 Loans (4000 total)
Liabilities: 1500 Deposits, 2000 Senior Debt, 500 stockholder equity (4000 total)

The bank is still above water, but much less so than before. If the bank was expecting to use the payments of those loans to service its own debt, then the bank might need an emergency liquidity loan to stay afloat (whether this loan should be provided by the government is left as a home exercise). If the loans had been for ten times as much, the bank would have been insolvent.

I hope that makes sense.
Mimshot: I support the 1956 Republican platform
DDMx: So, you're a socialist?
Mimshot: Yes