And Now Come The Margin Calls: NYSE Margin Debt At 16 Month High

Tyler Durden's picture

A stock sell off is usually a healthy, cathartic thing: one sells, pockets the proceeds, books a loss, and comes back to fight another day. The big problem, however, is when speculators and traders are already massively overleveraged, and not only don't have a positive Net Worth (defined as Free Credit Cash Account and Credit Balances in Margin Accounts less Margin Debt) but their Margin Debt is so high it commences a toxic loop of selling merely to fund margin calls which usually start popping up in the last hour of trading (and when trading desks put their phones straight to VM), leading to more forced selling, more margin calls, and so on. And therein lies the rub: according to the most recent NYSE margin debt data, the market complacency recently hit such high levels, that speculators virtually went all in, but solely in their margin accounts without holding any cash buffer to pay for potential margin calls. As can be seen on the table below, Margin Debt as of 9/30 hit $315 billion: a jump of $30 billion from the prior month, and the highest since March 2011, just before the market tanked. And confirming that there is simply no cash on hand to pay for margin calls when they start pouring in after today's massive sell off, is the total Net Worth, which in September was the lowest since April. Because with record complacency, and the Fed guaranteeing no further shocks are possible, who needs to hold cash? Today, we will find out: just as soon as the margin calls start coming around around 3PM Eastern...

Source: NYSE

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Jacque Itch's picture

Rochdale bitchez

slaughterer's picture

Do not underestimate the power of a QE4 rumor going into December FOMC.    

fonzannoon's picture

This selloff is totally spineless. The "most important election" in the history of earth just took place. I have been inundated with people screaming that Obama is going to wreck the place. Today is their chance to vote with their wallets and GTFO. Instead I agree with Slaughterer. They are going to line up like puppies when Bernanke gets up there to talk and they will follow his directions and buy stawks. Lame.

Caviar Emptor's picture

Yup. The something for nothing economy is intact

NewThor's picture

Release Quantitative Easing Infinity Squared!

Fleecer's picture

2pm EST... Kevin should be logging in about now.  

Ham-bone's picture

Time for an "urgent buyer who cares not at what price he buys, just that he suddenly must push through large trades" to show up.  Interesting guy, that.

Richard Chesler's picture

There's never only one Roachdale.


Caviar Emptor's picture

Come live The Dream! QE....weeeeeeeeeeeee!!! 

Shop till you flop! 

Michaelwiseguy's picture

I think we should drive over the Fiscal Cliff at ramming speed, and let the Bernank pick up the slack to make peoples debt payments on time.

Awakened Sheeple's picture

This is a shot across the bow to Obummer and congress. It's a catch 22 though.

vast-dom's picture

Today is looking like BlacK Wednesday. Gold to indices ratio: priceless. Shit splattering fan.


You have to love that algo battle of the bulge 1400 SP. At 13,850 we have FLash CraSh.

Rathmullan's picture

Meanwhile, at 133 Liberty:

Lori Logan: "Kev, I need you to make sure you drag the Dow back above 13,000 at the close".

Kevin Henry: "But the President cruised by my station this morning and said, and I quote: "Fuck-em, let the pds stew in their own shit today". Then he kicked over my waste basket and stommped off!"

Lori Logan: "That's okay Kev, he'll get over it tomorrow. Above 13,000 at close....don't forget".


Gringo Viejo's picture

I've been listening to Mozart's "Lacrimosa" all morning.
I AM depressed.

Bicycle Repairman's picture

Try some Mahler instead.  That'll cheer you right up.

Manthong's picture

Carl Orff Carmina Burana does it for me when I need a little lift.

Metalredneck's picture

I prefer Norwegian black metal.  Mayhem.

Just to relax me.

augustusgloop's picture

try guy maddin's  "the saddest music in the world" with isabella rossellini & a screenplay by ishiguro. 


cannot cry for your loss, as i think obama is the lesser of two weevils. cannot cry for the market: just wait until you see algos gone wild on the indices. i've been living through their enhanced price discovery mechanism through gold shares.


fuu's picture

Does Kevin use a margin account?

kalasend's picture

No, he uses a printer

fuu's picture

Pretty sweet gig he has going on there.

buzzsaw99's picture

the bernank will not allow them to lose.

NewThor's picture

The election is over.

I imagine some losing is about to happen.


Slope of Hope's picture

Get The Bernank on the phone stat!

GraveyardSpiral's picture

Does this mean I can expect a return call from my old Margin Stanley rep?

AC_Doctor's picture

Pay to play the paper game wankers!  Personally,  I love the sound of silver money, nothing like it...

disabledvet's picture

Absolutely. "Ante up BITCHEZ." what kind a game you think this is? "I blew a trillion and didn't even break a sweat"? Open the books phuckers...what kind of shit paper you buyin'?

Translational Lift's picture

Did VIX just freeze up??  Dec 12  17 strike is showing .50/3.40 all bid/asks grayed out.....WTF

vix is for kids's picture

Vix can't break out of the teens.  There's no real concern yet about a significant correction, much less a bear market.

Translational Lift's picture

vix is back up now ...was grayed out for at least 15 minutes....

muppet_master's picture

so sooon??

margin calls??

spx down -5% from its high of 1475 to 1400 = -5%.

YOU MEAN TO TELL ME that those stupid CRANK-A-HOLICS are armed to the teeth wtih margin?? and now margin calls are coming in??? wow !!!!! they can't handle a -5% loss = THEY DESERVE TO JUMP OUT OF HIGH RISE BUILDINGS...ROFLMAO !!!!

just wait for spx sub 1000...THIS YEAR !!!! it will be raining dead cat bounces and porky porkuloses that leveraged their homes, wife and soul to the max.


muppet_master's picture


well flopple (AAPL) down -20% and flopbook (FB) down -20% from RECENT dead cat bounce from $25 to $20...

on the FB POP @ $25 i said i would wait for $26 to short....$26 never came...that's ok,

i'm heavily short aapl @ 700, IBM @ $205, spx @ 1450, eur @ 1.315.....= that's how you make $$$$.. = listen to the shoe shine boys on cnbc and bloomberg, BUT don't take their advice !!!

LOL !!!!!!

i "Listen" to the shoe shine boys and gilrs about 10 minutes/day max...all that i can TOLERATE...ROFLMAO !!!!!

NewThor's picture

Hey, that Illuminated building trick you guys at Goldman Sachs pulled after the hurricane

was pretty impressive. I must admit.


Overflow-admin's picture

"raining dead cat bounces"

LOL do you mean we won't need an app for that?

Seasmoke's picture

Half a Black Wednesday

Dr. Engali's picture

JPM calling Rochdale...we only take margin calls answered in gold.

fonzannoon's picture

I'm so angry I may actually get in there and buy some shit right now. Only because the power of me not making money is the only thing that can overwhelm the power of Kevin? What should I buy? What is the cream of the crap?

Dr. Engali's picture

Hey's it going? Doesn't sound good. I do know one thing's never a good time to buy when you are emotional. Especially when you are talking about buying crap.

fonzannoon's picture

Hey Doc. I am just playing. I am not touching this market. I am just pissed and impatient today. I just want to get on with this, whatever it's going to be.

Dr. Engali's picture

I hear you...I am too. The Obama groupies make me want to puke today.

disabledvet's picture

A margin call on a money center bank sounds risky. What's your collateral?

slaughterer's picture

1388 was the bottom for today.  Will not see it again before close.   Tyler, why are you trying to scare the rookies out of the Kevin Henry rampomatic market close?

gamera9's picture

And cue Maria off the days lows Bartorimo. The fat lady will sing

Caviar Emptor's picture

I noted a V-shaped recovery in the Dow today

PLira's picture

And getting weather hammered and snowed on in NYC is going to be fucking with everyones minds, big time.


Mad Mohel's picture

" ...solely in their margin accounts "

If a person doesn't like getting sodomized, then they shouldn't run around with their ass hanging out. Greedy motherfuckers, eat it!

NaiLib's picture

Don't worry. Big Ben has a special account that will buy everything post 3 P.M.

disabledvet's picture

I hear the newly elected Republican Governor of North Dakota has a plan to issue "the Teddy Roosevelt Dollar." they call 'em "Bison Bucks" and are backed by...