The result can be overleverage during the bad times.

Put simply, the cause is overleverage, and that applies to consumers, banks and increasingly, the federal government.

"I am not opposed to leverage, but I will not engage in overleverage.

For the company we acquire, it means release from a straightjacket of overleverage,” Mr Osmond said.

Heine said the spinoff would overleverage Dial's consumer products group and prompt it to issue $100 million of new equity to strengthen its balance sheet.

2002 overleverage

To the extent net asset values decline by more than expected or the transaction breaches its Overleverage Test, the ratings could be further downgraded.

Overleverage does not require excessive optimism, merely excessive certitude; not fast growth, merely steady growth.

Banks face temptations to overextend and overleverage themselves during booms and to develop inherently opaque securities like derivatives that offer them enormous profits.

In addition, we have an extreme overvaluation of housing, overleverage of the consumer and rapid decline in asset prices,' the brokerage wrote in a note to clients.

The scheme lowered borrowing costs, but some investors believe that it opens the door to overleverage and suggests there is an implicit guarantee since the debt is federally subsidised.

That comes in part because of a shortage of supply, rather than too much, and partly because there is no 'subprime' market to unwind, except perhaps overleverage in the buy-to-let sector.

If there were, there might be an argument that the Federal Reserve's pulling Treasury duration risk out of the marketplace increases the risk of bubbleicious overleverage by feckless risk-lovers.

This view has been strengthened by the experience of the last two years, when most of the financial problems surrounding subprime, toxic assets, stricken banks and overleverage were features of developed markets, rather than emerging ones.

Predatory Equity is a phenomenon whereby private equity investors acquire and substantially overleverage rent restricted housing for the explicit purpose of removing regulation, raising rents, and displacing low and moderate income families.

This is a reflection of all the overleverage and the lending binge we have gone through,' said Jeffrey Gundlach, chief investment officer of TCW Group in Los Angeles, which invests $160 billion. '

Policymakers have been left unimpressed by the near-death experience of the western banking system, which Liu Mingkang, the country’s top banking regulator, this week in the Financial Times attributed to overleverage, financial engineering and a short-term focus on compensation.

Bernard Baumohl, chief global economist at The Economic Outlook Group in Princeton, N.J., doesn't want to go back to the days of overleverage, but he thinks something to watch for this holiday season is whether there is a resurgence of purchases on credit cards.

Obama also dismissed worries spurred by the "day to day gyrations of the stock market," arguing that they were the byproduct of a perfect storm of losses generated by "lax regulation," "massive overleverage" and "huge systemic risks taken by [regulated and] unregulated institutions."

One of the most notable features of financialization has been the development of overleverage (more borrowed capital and less own capital) and, as a related tool, financial derivatives: financial instruments, the price or value of which is derived from the price or value of another, underlying financial instrument.