Archimedes was a Greek mathematician, physicist and inventor born sometime around 287 B.C. in the Greek colony of Syracuse in Sicily. He is known to this day for his statement: “Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.” The concept of leverage can, of course, be measured with some precision in the physical world, and it is a powerful concept.
But Archimedes never worked on Wall Street, and he wouldn’t recognize what today’s inventors of financial products are doing in the name of leverage. Leverage in the financial world can lead to astonishing success … or a crushing collapse.
