I've taken to referring to some of these 30-fold-leveraged companies as "subprime" just to drive the point home.
From what I've been reading, 30:1 is actually a rational leveraging ratio. The companies that have folded supposedly had a 60:1 ratio.
More on psychology:
If you notice in a previous post, I mentioned that the foreclosure rate in 1999 was worse that today's -- yet does anyone remember this kind of near-panic? Much less hearing about it?
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Date: 2008-09-26 04:14 pm (UTC)From what I've been reading, 30:1 is actually a rational leveraging ratio. The companies that have folded supposedly had a 60:1 ratio.
More on psychology:
If you notice in a previous post, I mentioned that the foreclosure rate in 1999 was worse that today's -- yet does anyone remember this kind of near-panic? Much less hearing about it?