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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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Wed, 11/07/2012 - 14:50 | 2957295 Jacque Itch
Jacque Itch's picture

Rochdale bitchez

Wed, 11/07/2012 - 14:54 | 2957320 slaughterer
slaughterer's picture

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

Wed, 11/07/2012 - 14:57 | 2957340 fonzannoon
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.

Wed, 11/07/2012 - 14:59 | 2957348 Caviar Emptor
Caviar Emptor's picture

Yup. The something for nothing economy is intact

Wed, 11/07/2012 - 15:00 | 2957360 NewThor
NewThor's picture

Release Quantitative Easing Infinity Squared!

Wed, 11/07/2012 - 15:07 | 2957390 Fleecer
Fleecer's picture

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

Wed, 11/07/2012 - 16:02 | 2957669 Ham-bone
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.

Wed, 11/07/2012 - 17:13 | 2958001 Richard Chesler
Richard Chesler's picture

There's never only one Roachdale.

 

Wed, 11/07/2012 - 15:07 | 2957391 Caviar Emptor
Caviar Emptor's picture

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

Shop till you flop! 

Wed, 11/07/2012 - 15:07 | 2957392 Michaelwiseguy
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.

Wed, 11/07/2012 - 15:12 | 2957416 Awakened Sheeple
Awakened Sheeple's picture

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

Wed, 11/07/2012 - 15:05 | 2957359 vast-dom
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.

Wed, 11/07/2012 - 15:16 | 2957438 Rathmullan
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".

 

Wed, 11/07/2012 - 14:50 | 2957298 Gringo Viejo
Gringo Viejo's picture

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

Wed, 11/07/2012 - 15:18 | 2957457 Bicycle Repairman
Bicycle Repairman's picture

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

Wed, 11/07/2012 - 15:24 | 2957491 Manthong
Manthong's picture

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

Wed, 11/07/2012 - 15:34 | 2957550 Metalredneck
Metalredneck's picture

I prefer Norwegian black metal.  Mayhem.

Just to relax me.

Wed, 11/07/2012 - 16:44 | 2957830 Manthong
Manthong's picture

How I felt this morning..

http://www.youtube.com/watch?v=NZkmkcezTvo

 

Wed, 11/07/2012 - 19:27 | 2958620 fuu
fuu's picture

Good stuff right there.

Wed, 11/07/2012 - 16:22 | 2957709 augustusgloop
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.

 

Wed, 11/07/2012 - 14:50 | 2957299 fuu
fuu's picture

Does Kevin use a margin account?

Wed, 11/07/2012 - 15:05 | 2957382 kalasend
kalasend's picture

No, he uses a printer

Wed, 11/07/2012 - 15:09 | 2957405 fuu
fuu's picture

Pretty sweet gig he has going on there.

Wed, 11/07/2012 - 14:50 | 2957301 buzzsaw99
buzzsaw99's picture

the bernank will not allow them to lose.

Wed, 11/07/2012 - 15:02 | 2957362 NewThor
NewThor's picture

The election is over.

I imagine some losing is about to happen.

 

Wed, 11/07/2012 - 14:50 | 2957302 Slope of Hope
Slope of Hope's picture

Get The Bernank on the phone stat!

Wed, 11/07/2012 - 14:51 | 2957307 GraveyardSpiral
GraveyardSpiral's picture

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

Wed, 11/07/2012 - 14:52 | 2957311 AC_Doctor
AC_Doctor's picture

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

Wed, 11/07/2012 - 15:02 | 2957365 disabledvet
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'?

Wed, 11/07/2012 - 15:00 | 2957316 Translational Lift
Translational Lift's picture

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

Wed, 11/07/2012 - 15:15 | 2957436 vix is for kids
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.

Wed, 11/07/2012 - 15:18 | 2957450 Translational Lift
Translational Lift's picture

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

Wed, 11/07/2012 - 14:53 | 2957318 muppet_master
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.

 

Wed, 11/07/2012 - 14:57 | 2957338 muppet_master
muppet_master's picture

correction:

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 !!!!!

Wed, 11/07/2012 - 15:09 | 2957400 NewThor
NewThor's picture

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

was pretty impressive. I must admit.

 

Wed, 11/07/2012 - 15:06 | 2957385 Overflow-admin
Overflow-admin's picture

"raining dead cat bounces"

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

Wed, 11/07/2012 - 14:54 | 2957321 Seasmoke
Seasmoke's picture

Half a Black Wednesday

Wed, 11/07/2012 - 14:54 | 2957324 Dr. Engali
Dr. Engali's picture

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

Wed, 11/07/2012 - 14:59 | 2957350 fonzannoon
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?

Wed, 11/07/2012 - 15:13 | 2957423 Dr. Engali
Dr. Engali's picture

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

Wed, 11/07/2012 - 15:17 | 2957446 fonzannoon
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.

Wed, 11/07/2012 - 15:33 | 2957543 Dr. Engali
Dr. Engali's picture

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

Wed, 11/07/2012 - 15:05 | 2957380 disabledvet
disabledvet's picture

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

Wed, 11/07/2012 - 15:05 | 2957328 slaughterer
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?

Wed, 11/07/2012 - 15:11 | 2957408 gamera9
gamera9's picture

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

Wed, 11/07/2012 - 15:14 | 2957431 Caviar Emptor
Caviar Emptor's picture

I noted a V-shaped recovery in the Dow today

Wed, 11/07/2012 - 14:55 | 2957332 PLira
PLira's picture

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

 

Wed, 11/07/2012 - 15:00 | 2957354 Mad Mohel
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!

Wed, 11/07/2012 - 15:01 | 2957361 NaiLib
NaiLib's picture

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

Wed, 11/07/2012 - 15:08 | 2957396 disabledvet
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...

Wed, 11/07/2012 - 15:09 | 2957402 Hedgetard55
Hedgetard55's picture

Ben jumped in at 11:30 AM.

Wed, 11/07/2012 - 15:11 | 2957410 fonzannoon
fonzannoon's picture

Look at Kevin go. I'm in awe. Kevin's ipad must be broke because he threw apple in the garbage today

Wed, 11/07/2012 - 15:14 | 2957428 fuu
fuu's picture

Oops there goes another $20B market cap.

Wed, 11/07/2012 - 15:13 | 2957420 vix is for kids
vix is for kids's picture

Margin calls are for the little people.

Wed, 11/07/2012 - 15:13 | 2957422 Cursive
Cursive's picture

Cue Jet's linebacker Bart Scott:  "Can't Wait!"

Wed, 11/07/2012 - 15:18 | 2957442 Monedas
Monedas's picture

Manipulate the markets, MSM lies, Keynesian Ponzi, manipulate the vote count .... is there a "sesame seed" of moral difference .... once you go down the road to perdition ?     Cliff Notes answer:  No !

Wed, 11/07/2012 - 15:52 | 2957486 Monedas
Monedas's picture

Abortion :   Capital punishment for innocent people without due process .... and no recourse .... fait accompli .... no emergency "stays of execution" .... no pardons .... no endless court appeals .... no "last meal" of mother's milk !   Habeas corpus on demand !  Let them be born "on appeal" .... if they are found guilty by a higher court .... use them for drone target practice .... they are US citizens without rights !  We treat murderers much nicer ? They get fried chicken and ribs for their last meal !  Every mutilated African kid is brought to America by do gooder journalists .... just seems like a bizarre double standard ?

Wed, 11/07/2012 - 15:23 | 2957487 Quinvarius
Quinvarius's picture

Must be Goldman's short position.  The public left already.

Wed, 11/07/2012 - 15:37 | 2957565 madcows
madcows's picture

So, the Bernanke put has become the margin call sell?  BTFD has become, "Crap, my creditors on the line" CMCOTL.

She went down, down, down in a burning ring of paper.  And it burns burns burns.  My portfolio.  My portfolio

Wed, 11/07/2012 - 15:42 | 2957593 FROZENOJFUTURES
FROZENOJFUTURES's picture

STOPS, BITCHEZ! USE EM! THAT WAY YOU DONT GET MARGIN CALL'D! Or how about you just don't shove with any two cards.

Wed, 11/07/2012 - 17:56 | 2958239 Nobody For President
Nobody For President's picture

Have you actually used stops lately? With all the hft algos sniffing about, you can get creamed with a low stop before you can even reach the mouse...you have to set the fuckers really low, not like the carbon-based trader days, in my experience.

Anybody wanna add to this? Maybe it's just me and the leveraged shit I play with that does 20-30 million shares a day that experience this.

Wed, 11/07/2012 - 15:52 | 2957597 SillySalesmanQu...
SillySalesmanQuestion's picture

Calling The Plunge Protection Team... oh, you're still stuck out on Staten Island with no power...roger that, calling Ben Shalom right now....Helicopter Ben, where are you?

Wed, 11/07/2012 - 16:23 | 2957715 larz
larz's picture

do robots borrow on margin too? who would lend to a robot?...... help me mr wizzard.......

Wed, 11/07/2012 - 16:36 | 2957775 leftcoastfool
leftcoastfool's picture

It's already 15:35 and the market has ramped well off the lows.  Where the HELL are the margin calls?????

Wed, 11/07/2012 - 16:45 | 2957832 Muppet
Muppet's picture

Market closing off lows, the prediction of late-day margins calls didn't pan.   

Wed, 11/07/2012 - 18:00 | 2958252 Nobody For President
Nobody For President's picture

Yeah, they closed off lows, but the PPT push to get SPX above 1400 failed at the very end as it sagged in the last 3 minutes or so below the magic do-not-cross line. Interesting to watch. Same with the RUT, and the Dow really, really crashed 13K, and after market index futures are looking downer even more.

I suspect a lot of flop sweat out there.

Good!

Thu, 11/08/2012 - 02:01 | 2959556 nastaking
nastaking's picture

The Start screen, which uses the 'live tiles' style first seen on E420 GPS DVB-T Tablet, lets apps, people and files to be 'pinned' to it.

Do NOT follow this link or you will be banned from the site!