> Leverage: Leverage results from using borrowed capital as a funding source when investing to expand the firm's asset base and generate returns on risk capital

> Leverage: Leverage results from using borrowed capital as a funding source when investing to expand the firm's asset base and generate returns on risk capital. From https://www.investopedia.com/terms/l/leverage.asp https://www.investopedia.com/terms/l/leverage.asp I don't think that leverage is necessarily an issue, and it isn't black hat either. It's a normal part of any economy. The problem is scale. After the last two economic issues that we had to deal with, I have a sense that far too much of our economy runs on leveraging, in order to keep growth going. This isn't just happening with these C.L.O.'s, but with credit card debt, mortgage debt, medical & student loan debt, etc. on the personal level, and a whole slew of debt options for businesses. This is all necessary for the capital owning class to maintain their wealth, which is fed by a sea of debt: without economic activity to pay for goods, many things will lose value rapidly. I've seen these leveraging games blow up twice in my life. I get to listen to people who claim to know economics tell me that it isn't going to happen this time, that it's different, but you are right. We didn't alter our economy in some fundamental way. We didn't create reward structures for building an economic system that would prevent this issue from happening so often, nor did we create a punitive structure for those who benefit and thus try to make it happen. Instead, we allowed those who benefit from these processes keep far too much of their ill-gotten wealth. It's going to happen again, and my guess is that once again the middle class and poor will be punished for it. If a billionaire loses 90% of their wealth, it wasn't real anyways. When a middle class person loses 90% of their paycheck, or your more common millionaire loses 50% of their wealth, they can be completely devastated. I know, because I already saw it happen twice in my life. The actual black-hat hack is and was regulatory capture. Sure, with good regulation perhaps the economy runs a bit slower, but all of our growth is based on an engine that burns through billions of barrels of oil a year (yet another debt/leverage to pay off) so perhaps that's for the best. EDIT: Corrected tons of oil to barrels of oil.