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Margin Debt Continues To Climb

CalibratedConfidence's picture


The NYSE released October margin debt data and to nobody's surprise total margin debt rests at $317 billion, the highest since April 2011 ($320 billion), leaving inquiring minds to ask just how much purchasing is being done on margin (Free Credit less Total Margin Debt)?  The answer is $43.9 billion, the highest since June of 2011 ($45.9 billion).  The level of investor net worth has only been postive 4 times since September 2009, the same month Bernanke claimed the recession was "technically" over, lagging 3 months behind ZH's number 1 fan Dennis Kneale.  When the Fiscal Cliff goes unresolved and headline reading algo's rip orders off a neverending stream of rehashed articles, margin calls will accelerate heavily and usually stable assets like Gold and Silver are likely to experience volatility as investors computer programs liquidate in a mad-faced fashion.  Rogue traders with unauthorized postions, off book loses, and fat fingers beware.


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Thu, 12/13/2012 - 13:12 | 3059896 Clowns on Acid
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Just asking...but why do you call it "debt"? It is free money for the banks......

Your article should say "Free money climbs".

Thu, 12/13/2012 - 15:47 | 3060518 CalibratedConfidence
CalibratedConfidence's picture

Because that's how it is identified

Thu, 12/13/2012 - 12:39 | 3059757 HD
HD's picture

For the record - I couldn't stand Dennis Kneale long before it was cool - or there was even a Zero Hedge.  The day Jeff Macke lost it on air I actually clapped my hands to applaud the man...

Tue, 12/25/2012 - 00:56 | 3094219 MeelionDollerBogus
MeelionDollerBogus's picture

Ya. I actually made sure to tell him on twitter that despite his apparent melt-down he was the only one on air NOT lying. And that is something to be proud of.

Thu, 12/13/2012 - 10:23 | 3059041 gmak
gmak's picture

How about overlaying the margin debt with the SPX?  that would certainly be relevant, no?

Thu, 12/13/2012 - 10:55 | 3059155 CalibratedConfidence
CalibratedConfidence's picture

Thu, 12/13/2012 - 10:08 | 3058973 GoldbugVariation
GoldbugVariation's picture

Quinvarius is wrong. If you are a hedge fund or professional trader, you can take either a long or a short position on margin. Whether you are long or short has nothing - or almost nothing - to do with the amount of margin required.

Thu, 12/13/2012 - 09:53 | 3058921 swabeyjw
swabeyjw's picture

Would not a margin call have occurred prior to a negative net worth within a margin account. The way I read the NYSE data, in a MF global pooling, it would take a 1/3 drop in the price of products(stocks) that are in the margin accounts to end up at a negative networth.... MF global to all.

Thu, 12/13/2012 - 09:50 | 3058908 Quinvarius
Quinvarius's picture

You sell short on margin.

Thu, 12/13/2012 - 08:04 | 3058719 swissaustrian
swissaustrian's picture

On time for the fiscal cliff dump.

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