đš US margin debt just hit $1.45 TRILLION in August â up $37B in ONE month, the 2nd largest monthly spike EVER.
YTD? Up $228B (+19%). And here's the kicker: as % of GDP, we're at 4.5% â a record. 2021 peak was 3.6%. Dotcom bubble? 2.8%.
Since late 2022, margin debt surged $847B (+140%) while $SPY only climbed 98%. Debt is outpacing the market that backs it.
Worse: net margin credit is at a record NEGATIVE $1.06T. For every $1 in free cash, there's $3.40 in debt â 4x the 2008 level.
We've seen this movie before: 1998-2000, 2006-2007, 2020-2021. All ended the same way.
This doesn't mean crash tomorrow. Margin can keep pumping for months and take the market higher â that's literally what's happening now.
But when the tide turns? Forced liquidations cascade. Brokers margin call, you sell, price drops, more margin calls, rinse repeat. The feedback loop is brutal.
If you're leveraged, know your risk. If you're not, watch the exits.
YTD? Up $228B (+19%). And here's the kicker: as % of GDP, we're at 4.5% â a record. 2021 peak was 3.6%. Dotcom bubble? 2.8%.
Since late 2022, margin debt surged $847B (+140%) while $SPY only climbed 98%. Debt is outpacing the market that backs it.
Worse: net margin credit is at a record NEGATIVE $1.06T. For every $1 in free cash, there's $3.40 in debt â 4x the 2008 level.
We've seen this movie before: 1998-2000, 2006-2007, 2020-2021. All ended the same way.
This doesn't mean crash tomorrow. Margin can keep pumping for months and take the market higher â that's literally what's happening now.
But when the tide turns? Forced liquidations cascade. Brokers margin call, you sell, price drops, more margin calls, rinse repeat. The feedback loop is brutal.
If you're leveraged, know your risk. If you're not, watch the exits.
