By 2006-2008 the subprime risk could be sized by recognizing it was a 'disassociated risk paradigm,' then mapping it onto leverage structures: Lehman was ~36x levered with $50-60B of this product warehoused and Bear Stearns ~29x, so when assets lose ~40% of value, 30x leverage is simply a math problem that wipes out the firm.
causalpending
Speaker
Kyle BassEvidence Quote
“you lever yourself 30x and you... end up owning assets that lose, you know, 40% of their value and you can do it's just a math problem.”
Source
Global Macro Investing And Geoeconomics With Hedge Fund Investor Kyle Bass | Hoover Institution— Hoover InstitutionCreated: 6/18/2026, 2:17:47 PM
My Notes
Loading notes...