Stock Market Leverage in La-La Land, Rises to Historic WTF High, by Wolf Richter | STRAIGHT LINE LOGIC

Leverage is called leverage because borrowed money levers markets up . . . and down. From Wolf Richter at

Archegos shows how leverage is the great accelerator of stock prices on the way up, and on the way down. One of its bets, ViacomCBS, after skyrocketing, collapsed by 60%.

Vast, unreported, and at the time unknown amounts of leverage blew up Archegos Capital Management, dishing out enormous losses to its investors, the banks that brokered the swaps, and holders of the targeted stocks. The amount of leverage became known only after it blew up as banks started picking through the debris…