09 / 14 · The mechanics
The Leverage Multiplier
Why a quarter down is all the way down. The lender’s claim never moves, so everything that falls comes out of your half.
From the article Situational Awareness: The $45 Billion Blowup →
Tap to enlarge SourceWSJ reported leverage of 3–4× across the portfolio. Figures shown are an illustration of the mechanic at 4×, not the fund’s actual book.