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To: EternalHope

L-E-V-E-R-A-G-E

When LTCM started crashing, practically nobody outside the quant hedge fund industry and related traders had ever heard of it, and their actual capital base was less than $5 billion -- large, but hardly a behemoth. The blow-up was triggered by a default in Russian debt, none of which was even held by LTCM.

I'm not saying anything like that is going on here. Just that the ripple effect of leverage can be pretty powerful, in some cases (like LTCM) turning into a domino effect.


63 posted on 09/11/2006 9:59:06 AM PDT by GovernmentShrinker
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To: GovernmentShrinker
leverage

you're right on the money

speculation works both ways right now the "big mo"mentum is on the downside

102 posted on 09/11/2006 11:37:44 AM PDT by nascarnation
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