--- title: "Meaning & Key Takeaway of: Almost every financial blow up is because…" description: "\"Almost every financial blow up is because of leverage,\" — Seth Klarman" image: "https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png" --- # Almost every financial blow up is because of leverage, ![“Almost every financial blow up is because of leverage,” quote by Seth Klarman](https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png) [Download](https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png) [Open image](https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png) > “Almost every financial blow up is because of leverage,” [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Leverage amplifies risk, making financial collapses more likely when over‑used. **In simple terms:** Leverage increases financial danger. Key Takeaway Limit borrowing to manage risk. Themes finance risk leverage collapse Mood cautious analytical Type financial educational When to use this quote - investment decisions - corporate financing - regulatory policy Key Concepts debt cycles market volatility risk management Questions to Reflect On - When is leverage justified? - How can risk be measured accurately? A Different Perspective May restrict growth opportunities. ★ ★ ★ ★ ★ No ratings yet [Blow](https://sms4smile.com/quotes/about/blow/) [Blow Leverage](https://sms4smile.com/quotes/about/blow-leverage-1967415/) [Financial](https://sms4smile.com/quotes/about/financial/) [Financial Blow](https://sms4smile.com/quotes/about/financial-blow-1967416/) [Inspirational](https://sms4smile.com/quotes/about/inspirational/) [Leverage](https://sms4smile.com/quotes/about/leverage/) [Love](https://sms4smile.com/quotes/about/love/) [Money](https://sms4smile.com/quotes/about/money/) ## Related quotes > [Pressure to produce over the short term - a gun to the head of everyone - encourages excessive risk taking which manifests itself in…](https://sms4smile.com/quotes/seth-klarman/pressure-to-produce-over-the-short-term-a-gun-to-the-head-of-everyone/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Beware leverage in all its forms. Borrowers - individual, corporate, or government - should always match fund their liabilities against the duration of their…](https://sms4smile.com/quotes/seth-klarman/beware-leverage-in-all-its-forms-borrowers-individual-corporate-or/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Occasionally we are asked whether it would make sense to modify our investment strategy to perform better in today's financial climate. Our answer, as…](https://sms4smile.com/quotes/seth-klarman/occasionally-we-are-asked-whether-it-would-make-sense-to-modify-our/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Debt, we've learned, is the match that lights the fire of every crisis. Every crisis has its own set of villains - pick your…](https://sms4smile.com/quotes/andrew-ross-sorkin/debt-we-ve-learned-is-the-match-that-lights-the-fire-of-every-crisis/) [Andrew Ross Sorkin](https://sms4smile.com/quotes/author/andrew-ross-sorkin/) > [When you can't lend or trade - and you can't invest with the leverage that juiced returns to support seven- and eight-figure bonuses -…](https://sms4smile.com/quotes/andrew-ross-sorkin/when-you-can-t-lend-or-trade-and-you-can-t-invest-with-the-leverage/) [Andrew Ross Sorkin](https://sms4smile.com/quotes/author/andrew-ross-sorkin/) > [“If you can dream it up, you can team it up.”](https://sms4smile.com/quotes/richie-norton/if-you-can-dream-it-up-you-can-team-it-up/) [Richie Norton](https://sms4smile.com/quotes/author/richie-norton/) > [As a philanthropist, I give away a lot of money every year. Yet I thought there was a higher leverage to come in and…](https://sms4smile.com/quotes/jeffrey-skoll/as-a-philanthropist-i-give-away-a-lot-of-money-every-year-yet-i/) [Jeffrey Skoll](https://sms4smile.com/quotes/author/jeffrey-skoll/) > [Having a large amount of leverage is like driving a car with a dagger on the steering wheel pointed at your heart. If you…](https://sms4smile.com/quotes/warren-buffett/having-a-large-amount-of-leverage-is-like-driving-a-car-with-a-dagger/) [Warren Buffett](https://sms4smile.com/quotes/author/warren-buffett/) > [A risk-insensitive leverage ratio can be a useful backstop to risk-based capital requirements. But such a ratio can have perverse incentives if it is…](https://sms4smile.com/quotes/jerome-powell/a-risk-insensitive-leverage-ratio-can-be-a-useful-backstop-to-risk/) [Jerome Powell](https://sms4smile.com/quotes/author/jerome-powell/) > [“At $4 trillion, and roughly only $55 billion in equity, the Fed is leveraged about 77-to-1. They define the word "leverage”](https://sms4smile.com/quotes/ziad-k-abdelnour/at-4-trillion-and-roughly-only-55-billion-in-equity-the-fed-is/) [Ziad K. Abdelnour](https://sms4smile.com/quotes/author/ziad-k-abdelnour/) > [I do not support a single-payer system; I do support having something there, whether it's an option or not. And we can work with…](https://sms4smile.com/quotes/david-scott/i-do-not-support-a-single-payer-system-i-do-support-having-something/) [David Scott](https://sms4smile.com/quotes/author/david-scott/) > [“Leverage on your self-worth and convert it into net worth.”](https://sms4smile.com/quotes/sunday-adelaja/leverage-on-your-self-worth-and-convert-it-into-net-worth/) [Sunday Adelaja](https://sms4smile.com/quotes/author/sunday-adelaja/) > [“She's one you \*really\* care about, isn't she?" Eliot shook his head. "How can you read other people so well, and completely misread me?"…](https://sms4smile.com/quotes/keith-r-a-decandido/she-s-one-you-really-care-about-isn-t-she-eliot-shook-his-head-how/) [Keith R.A. DeCandido](https://sms4smile.com/quotes/author/keith-r-a-decandido/) > [Find the leverage in the world so you can be truly lazy.](https://sms4smile.com/quotes/larry-page/find-the-leverage-in-the-world-so-you-can-be-truly-lazy/) [Larry Page](https://sms4smile.com/quotes/author/larry-page/) > [The millennials were raised in a cocoon, their anxious parents afraid to let them go out in the park to play. So should we…](https://sms4smile.com/quotes/nancy-gibbs/the-millennials-were-raised-in-a-cocoon-their-anxious-parents-afraid/) [Nancy Gibbs](https://sms4smile.com/quotes/author/nancy-gibbs/) ## More by Seth Klarman > [Unlike return, however, risk is no more quantifiable at the end of an investment that it was at its beginning. Risk simply cannot be…](https://sms4smile.com/quotes/seth-klarman/unlike-return-however-risk-is-no-more-quantifiable-at-the-end-of-an/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Because investors are not usually penalized for adhering to conventional practices, doing so is the less professionally risky strategy, even though it virtually guarantees…](https://sms4smile.com/quotes/seth-klarman/because-investors-are-not-usually-penalized-for-adhering-to/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Value investing is risk aversion.](https://sms4smile.com/quotes/seth-klarman/value-investing-is-risk-aversion/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Be focused on process and not outcome](https://sms4smile.com/quotes/seth-klarman/be-focused-on-process-and-not-outcome/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [There is an old saying, "How did you go bankrupt?" And the answer is, "Gradually, and then suddenly." The impending fiscal crisis in the…](https://sms4smile.com/quotes/seth-klarman/there-is-an-old-saying-how-did-you-go-bankrupt-and-the-answer-is/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [In a rising market, everyone makes money and a value philosophy is unnecessary. But because there is no certain way to predict what the…](https://sms4smile.com/quotes/seth-klarman/in-a-rising-market-everyone-makes-money-and-a-value-philosophy-is/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.](https://sms4smile.com/quotes/seth-klarman/ultimately-nothing-should-be-more-important-to-investors-than-the/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [The best protection against risk is knowing what you are doing.](https://sms4smile.com/quotes/seth-klarman/the-best-protection-against-risk-is-knowing-what-you-are-doing/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Warren Buffett once wrote that value investing is like an inoculation--it either takes or it doesn't--and when you explain to somebody what it is…](https://sms4smile.com/quotes/seth-klarman/warren-buffett-once-wrote-that-value-investing-is-like-an-inoculation/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [It is important to remember that value investing is not a perfect science. It is an, with an ongoing need for judgment, refinement, patience,…](https://sms4smile.com/quotes/seth-klarman/it-is-important-to-remember-that-value-investing-is-not-a-perfect/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Value investing is at its core the marriage of a contrarian streak and a calculator.](https://sms4smile.com/quotes/seth-klarman/value-investing-is-at-its-core-the-marriage-of-a-contrarian-streak/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [The avoidance of loss is the surest way to ensure a profitable outcome.](https://sms4smile.com/quotes/seth-klarman/the-avoidance-of-loss-is-the-surest-way-to-ensure-a-profitable-outcome/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Do not suffer interim losses, relish and appreciate them](https://sms4smile.com/quotes/seth-klarman/do-not-suffer-interim-losses-relish-and-appreciate-them/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [Ratings agencies are highly conflicted, unimaginative dupes. They are blissfully unaware of adverse selection and moral hazard. Investors should never trust them.](https://sms4smile.com/quotes/seth-klarman/ratings-agencies-are-highly-conflicted-unimaginative-dupes-they-are/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) > [It is crucial to have a strategy in place before problems hit, precisely because no one can accurately predict the future direction of the…](https://sms4smile.com/quotes/seth-klarman/it-is-crucial-to-have-a-strategy-in-place-before-problems-hit/) [Seth Klarman](https://sms4smile.com/quotes/author/seth-klarman/) [Explore all 193 Seth Klarman quotes ](https://sms4smile.com/quotes/author/seth-klarman/) ## More Blow quotes > [The wind always seems to blow against catchers when they are running.](https://sms4smile.com/quotes/joe-garagiola/the-wind-always-seems-to-blow-against-catchers-when-they-are-running/) [Joe Garagiola](https://sms4smile.com/quotes/author/joe-garagiola/) > [Blow, winds, and crack your cheeks! Rage! Blow! You cataracts and hurricanoes, spout Till you have drenched our teeples, drowned the cocks! You sulphurour…](https://sms4smile.com/quotes/william-shakespeare/blow-winds-and-crack-your-cheeks-rage-blow-you-cataracts-and/) [William Shakespeare](https://sms4smile.com/quotes/author/william-shakespeare/) > [If he wants to blow his head off, let him. I don't give a damn about Jim Bakker.](https://sms4smile.com/quotes/jessica-hahn/if-he-wants-to-blow-his-head-off-let-him-i-don-t-give-a-damn-about/) [Jessica Hahn](https://sms4smile.com/quotes/author/jessica-hahn/) > [If we blow ourselves up we will do it by misapplication of science; if we manage to keep from blowing ourselves up, it will…](https://sms4smile.com/quotes/robert-a-heinlein/if-we-blow-ourselves-up-we-will-do-it-by-misapplication-of-science-if/) [Robert A. Heinlein](https://sms4smile.com/quotes/author/robert-a-heinlein/) > [Not I, not I, but the wind that blows through me! A fine wind is blowing the new direction of Time.](https://sms4smile.com/quotes/d-h-lawrence/not-i-not-i-but-the-wind-that-blows-through-me-a-fine-wind-is-blowing/) [D. H. Lawrence](https://sms4smile.com/quotes/author/d-h-lawrence/) > [The only two good words that can be said for a hurricane are that it gives sufficient warning of its approach, and that it…](https://sms4smile.com/quotes/gertrude-atherton/the-only-two-good-words-that-can-be-said-for-a-hurricane-are-that-it/) [Gertrude Atherton](https://sms4smile.com/quotes/author/gertrude-atherton/) > [Music is a wind that blows away the years, memories, and fear, that crouching animal I carry inside me.](https://sms4smile.com/quotes/isabel-allende/music-is-a-wind-that-blows-away-the-years-memories-and-fear-that/) [Isabel Allende](https://sms4smile.com/quotes/author/isabel-allende/) > [The supposedly immaterial soul, we now know, can be bisected with a knife, altered by chemicals, started or stopped by electricity, and extinguished by…](https://sms4smile.com/quotes/steven-pinker/the-supposedly-immaterial-soul-we-now-know-can-be-bisected-with-a/) [Steven Pinker](https://sms4smile.com/quotes/author/steven-pinker/) > [One of the wonderful things about Portlandia - and I'm not just blowing smoke, although I can blow smoke, but I'm not - is…](https://sms4smile.com/quotes/scott-raab/one-of-the-wonderful-things-about-portlandia-and-i-m-not-just-blowing/) [Scott Raab](https://sms4smile.com/quotes/author/scott-raab/) > [I would always find a way to blow the deal and I'm not sure why. I think there was part of me that wasn't…](https://sms4smile.com/quotes/oscar-isaac/i-would-always-find-a-way-to-blow-the-deal-and-i-m-not-sure-why-i/) [Oscar Isaac](https://sms4smile.com/quotes/author/oscar-isaac/) > [Letters crossing in the post, unfamiliar tunes heard three times in one day, the way that blows of fate descend upon the same bowed…](https://sms4smile.com/quotes/fay-weldon/letters-crossing-in-the-post-unfamiliar-tunes-heard-three-times-in/) [Fay Weldon](https://sms4smile.com/quotes/author/fay-weldon/) > [Truth is, right now two bombs could drop out of the sky and blow up this house and whatever building you're in and just…](https://sms4smile.com/quotes/ian-mackaye/truth-is-right-now-two-bombs-could-drop-out-of-the-sky-and-blow-up/) [Ian MacKaye](https://sms4smile.com/quotes/author/ian-mackaye/) > [The old saying is true: If you have only the Word, you dry up. If you have only the Spirit, you blow up. But…](https://sms4smile.com/quotes/jim-cymbala/the-old-saying-is-true-if-you-have-only-the-word-you-dry-up-if-you/) [Jim Cymbala](https://sms4smile.com/quotes/author/jim-cymbala/) > [I can turn an idea into a business before you know it's going to be important. My first step will blow by you.](https://sms4smile.com/quotes/mark-cuban/i-can-turn-an-idea-into-a-business-before-you-know-it-s-going-to-be/) [Mark Cuban](https://sms4smile.com/quotes/author/mark-cuban/) > [The Brick House was one of the toughest joints I ever played in ... Guys would drink and fight one another like circle saws.…](https://sms4smile.com/quotes/louis-armstrong/the-brick-house-was-one-of-the-toughest-joints-i-ever-played-in-guys/) [Louis Armstrong](https://sms4smile.com/quotes/author/louis-armstrong/) [Browse all 2,324 Blow quotes ](https://sms4smile.com/quotes/about/blow/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "Almost every financial blow up is because of leverage,", "creator": { "@type": "Person", "name": "Seth Klarman" }, "isPartOf": { "@id": "https://sms4smile.com/quotes/#website" }, "url": "https://sms4smile.com/quotes/seth-klarman/almost-every-financial-blow-up-is-because-of-leverage/", "about": { "@type": "Thing", "name": "Blow" }, "@id": "https://sms4smile.com/quotes/seth-klarman/almost-every-financial-blow-up-is-because-of-leverage/#quotation", "image": { "@type": "ImageObject", "@id": "https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png", "contentUrl": "https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png", "url": "https://sms4smile.com/quotes/i/16d/seth-klarman-1979_blow_almost-every-financial-blow-up-is-becaus_2603722.png", "width": 1080, "height": 1080, "caption": "“Almost every financial blow up is because of leverage,” — Seth Klarman", "creditText": "SMS4Smile Quotes", "creator": { "@id": "https://sms4smile.com/quotes/#organization" } } }, { "@type": "BreadcrumbList", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://sms4smile.com/" }, { "@type": "ListItem", "position": 2, "name": "Quotes", "item": "https://sms4smile.com/quotes/" }, { "@type": "ListItem", "position": 3, "name": "Seth Klarman", "item": "https://sms4smile.com/quotes/author/seth-klarman/" }, { "@type": "ListItem", "position": 4, "name": "Almost every financial blow up is...", "item": "https://sms4smile.com/quotes/seth-klarman/almost-every-financial-blow-up-is-because-of-leverage/" } ], "@id": "https://sms4smile.com/quotes/seth-klarman/almost-every-financial-blow-up-is-because-of-leverage/#breadcrumb" }, { "@type": "WebSite", "@id": "https://sms4smile.com/quotes/#website", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "publisher": { "@id": "https://sms4smile.com/quotes/#organization" } }, { "@type": "Organization", "@id": "https://sms4smile.com/quotes/#organization", "name": "SMS4Smile Quotes", "url": "https://sms4smile.com/quotes/", "logo": { "@type": "ImageObject", "url": "https://sms4smile.com/quotes/wp-content/themes/sq/assets/icons/icon-512.png", "width": 512, "height": 512 } } ] } ```