What NYU economist Nouriel Roubini says
 

http://www.alternet.org/workplace/10...allout/?page=3
http://www.rgemonitor.com/blog/roubini/210688
http://en.wikipedia.org/wiki/Nouriel_Roubini

"Today any wealthy individual can take $1 million and go to a prime broker and leverage this amount three times; then the resulting $4 million ($1 equity and $3 debt) can be invested in a fund or funds that will in turn leverage these $4 million three or four times and invest them in a hedge fund; then the hedge fund will take these funds and leverage them three or four times and buy some very junior tranche of a CDO that is itself leveraged nine or ten times. At the end of this credit chain, the initial $1 million of equity becomes a $100 million investment out of which $99 million is debt (leverage) and only $1 million is equity. So we got an overall leverage ratio of 100 to 1. Then, even a small 1% fall in the price of the final investment (CDO) wipes out the initial capital and creates a chain of margin calls that unravel this debt house of cards."

http://images.businessweek.com/ss/06...id-of-debt.jpg

Those numbers seems a bit exaggerated.
But still it has some truth and its scary.