Financial Crisis for Beginners « The Baseline Scenario

Financial Crisis for Beginners « The Baseline Scenario: "Where did all the money go?

This is a fairly common question. If banks are taking losses by writing down hundreds of billions of dollars, is someone else gaining hundreds of billions of dollars? Or is money just vanishing? Planet Money took a stab at this with Satyajit Das, but I thought I could help clarify it with a simple example."