Leveraging and deleveraging

Leveraging -- or borrowing -- has been cited as one of the contributors to the financial crisis. Senior Editor Paddy Hirsch explains how the move to deleverage -- or reduce debt -- is prompting wild market swings and concerns about deflation

About the author

Paddy Hirsch is a Senior Editor at Marketplace and the creator and host of the Marketplace Whiteboard. Follow Paddy on Twitter @paddyhirsch and on facebook at www.facebook.com/paddyhirsch101
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One of the definitions Mr. Hirsch gives for leverage is "debt to capital". Technically this is incorrect because debt is a form of capital. The corrcet definition should have been "debt to equity". It would be good to have your reporters take business courses so that they obtain knowledge in business fundamentals.

Will someone PLEASE clip a lavaliere microphone on Mr. Hirsch's shirt collar? The audio in these videos is appalling. (And you call yourselves media professionals?)


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