Posted on 11/26/2013 6:36:37 PM PST by Nachum
The correlation between stock prices and margin debt continues to rise (to new records of exuberant "Fed's got our backs" hope) as NYSE member margin balances surge to new record highs. Relative to the NYSE Composite, this is the most "leveraged' investors have been since the absolute peak in Feb 2000. What is more worrisome, or perhaps not, is the ongoing collapse in investor net worth - defined as total free credit in margin accounts less total margin debt - which has hit what appears to be all-time lows (i.e. there's less left than ever before) which as we noted previously raised a "red flag" with Deutsche Bank. Relative to the 'economy' margin debt has only been higher at the very peak in 2000 and 2007 and was never sustained at this level for more than 2 months. Sounds like a perfect time to BTFATH
(Excerpt) Read more at zerohedge.com ...
When it tanks it’s just going to be one hellacious vicious circle...
Is that bad? /s
Margin calls were one of the things got the great depression rolling.
This seems to be very different story, and more realistic, than this crazy thing:
http://freerepublic.com/focus/f-bloggers/3095819/posts
I’ll get in when we hit 18,000.
Two words-Great Depression!
And when it happens, it will be Captitalism that will be blamed, but in fact it would have been the Fed that is the blame, which is pumping in billions to the banks causing a ‘boom’ which must ‘bust’.
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