I don't have formal education in economics/finance; it took me a while to understand their language. Here's an attempt to explain it. Assets in this context me

I don't have formal education in economics/finance; it took me a while to understand their language. Here's an attempt to explain it. Assets in this context means loan contracts between Celsius and its borrowers. When a finance company GLC (Great Lending Company) makes a loan of $100K to a borrower Joe it deposits $100K in Joe's account in exchange for Joe signing a contract (lets call it LC) that stipulates interest rate, repayment terms etc., On GLC's book the deposit of $100K becomes its liability and LC becomes asset. Now, GLC could also offer deposit services with attractive interest rates. The deposits needn't (and often do not) equal loans made. If inflows into GLC's reserves match outflows it typically works OK. In an economic up-cycle (low interest rate, positive consumer sentiment etc.,) everyone is happy. But when those assumptions change (usually high interest rate) some of GLC's borrower's begin to default. And it take just a fraction of borrowers to default for GLC to become insolvent. At the first sign of trouble GLC's depositors take their money out, popularly called a bank run. It thus depletes GLC's reserves making them take measures such as pausing withdrawals. At this point GLC has 3 options. 1. Borrow; they could use their assets (i.e., LCs) as collateral. 2. Sell their assets at a discount. 3. Go bust. As you can guess #1 and #2 are short term measures to tide over short-term down-cycle. But the current macro situation is in no way short-term. High interest rates are going to be here for a long time. If anything fed is pondering to raise interest rates as high and 5%. So for GLC #3 is the only option. This is where companies like Goldman come in. In a bankruptcy firesale they scoop up GLC's assets at steep discount. GLC could have assets worth $10B (i.e., it has made loan contracts worth $10B). A big chunk of those loans could be bad. But even if say 70% of them are bad Goldman could make a hefty profit of $1B by buying $3B of assets by paying $2B. The risk is at this point no one knows what those loan contracts are really worth. It takes quite a bit of time and effort to untangle these loan contracts that were made during boom time. GLC won't have neither of those resources in times of distress. So GLC and Goldman make rough calculations and agree on $2B price. It may turn out to be worth 0 (highly unlikely) or $5B or somewhere between. But either way it's highly likely that Goldman stands to make good profit out of this firesale. Because they have a robust balance sheet and resources they could wait out for years to recover from borrowers.