What The Hell Is Leveraging?

Leverage leverage leverage. Everyone’s talking about it, but what does it mean?

Basically it’s a fancy word for debt, and companies can use that money to go buy more stuff. But if the stuff you bought is a bunch of risky messed-up investments like crap mortgaged-backed securities then you’ve got a problem. Or, as Paddy Hirsch learns us in his latest whiteboard explainer, a big balloon straining to burst. Video inside…

Leveraging and deleveraging [Marketplace]