Margin debt in the United States — money borrowed against securities in brokerage accounts — has risen to its highest level ever, at $384 billion, surpassing the previous peak of $381 billion set in July 2007 according to New York Times Business Day’s Off The Charts: Sign of Excess?. Margin debt as a proportion of GDP is not quite yet at the peak set in 2007, but it has exceeded 2.25% only twice previously in the last 50 years–2000 and 2007. The bottom panel shows that each of those instances was followed by a large drawdown:
Read Off The Charts: Sign of Excess?
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h/t SD.
Since we are talking about money when talking about margin, why don’t we compare margin debt with base money?
As we know M1 / GDP is at all-time records today (90 cent per dollar of GDP), so margin debt can potentially rise a lot more in absolute terms to create an uber-bubble!
But thanks for the statistics, I get your point
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[…] What are we to make of higher margin debt numbers? (Greenbackd) […]
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This reminds me a blogpost I read months ago:
http://blog.kimblechartingsolutions.com/2013/03/cash-levels-in-brokerage-accounts-nears-lowest-levels-in-history/
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