NYSE Margin Debt Rises To Fresh Five Year High As Short Interest Slide Continues

Tyler Durden's picture

With the Fed no longer even pretending it is not all about the stock market, where some mysterious trickle down force is supposed to boost the economy the second the S&P hits new all time highs, and injecting billions into stocks via Primary Dealers courtesy of the daily now-unseterilized POMO (today's edition saw another $3.4 billion enter risk assets), there is apparently no reason to worry about anything. Sure enough, institutions don't need a second invitation to BTFD especially if they can do so on margin. According to the latest NYSE margin debt data, the December of margin debt used for various leveraging activities rose for the fifth consecutive month, reaching $331 billion - the highest since February 2008, when the market was declining, and back to the levels from May 2007 when the market was ramping ever higher to its all time highs which would be hit 3 short months later, and just as the subprime bubble popped.

Margin debt, or gross institutional leverage ex-shadow banking leverage via various repos, vs the stock market:

And just in case there is any confusion whether the shorts have thrown in the towel, here is a chart showing total NYSE short interest, which has declined in virtually a straight line since June. A mere 400mm shares covered lower, and short interest too will be at the lowest it has been in more than 5 years.

Coupled this with the epic monkeyhammering that the VIX is subjected to every single day and the only possible conclusion is that pretty much everyone is convinced that nothing can ever again go wrong.

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Cdad's picture

You could knock this thing over with a feather.  A lack of liquidity cuts both ways...and margin clerks suck.

Have fun everyone!

Wait...does that NYSE short interest margin figure include equities beginning A-C, and SE-SU ? ;)

slaughterer's picture

I worry about ZH readers.  They might actually think there is a reason to be short right now.  

edb5s's picture

There are plenty of reasons to go short right now, but the Bernank has 85 billion reasons (a month) NOT to go short.

LongSoupLine's picture

Nothing can fucking go wrong...nothing.

Fuck you wall street. Eat shit.

Water Is Wet's picture

I like your style LongSoupLine.  Keep up the good work.

Kaiser Sousa's picture

yes, yes i agree.

always concise, lucid, and straightfoward in expressed disdain for all YOU SOCIOPATH COCKSUCKER MOTHER FUCKER BANKER SCUM....

i yield the floor now to my esteemed ZH sound money brethren....


RougeUnderwriter's picture

Screw the iceberg - full speed ahead

SunRise's picture

I'm with ya man:  "Drill" the iceberg is the plan, but Bumbles bounce and icebergs don't. 

Like the Truck driver told his buddy when the brakes were lost barreling down the mountain:  "Hey John, wake up man . . . quick . . . cuz you ain't neva seen a wreck like this befo"!

fonzannoon's picture

If the fed gives me free money I will buy on margin. I promise.

Dollar Bill Hiccup's picture

That make's me so happy! (or maybe its the Thorazine)

Nothing can ever go wrong again! 70% annualized run rate, here we go!

Lost Wages's picture

Thorazine is not enough for this market. Maybe a lobotomy.

Cognitive Dissonance's picture

Two scoops.........because you can never be sure if one will be enough.

Manthong's picture

Gee, the market must be a great bargain at this price..

if you are all in for hyperinflation.

kaa1016's picture

Everyone is on the same side of the trade. Long stocks and preaching about the death of bonds. That's a warning sign. This reminds me of AAPL the week before the iPhone 5 launch. Nothing could go wrong. Sentiment couldn't have been more lopsided. We all know what happened next. The run up in the market wasn't as steep as AAPL's run up so the fall of the market shouldn't be as sharp either. Anyway, stay away from these broad macro bets. Selective shorts and selective longs. Like long JCP today, via options of course.

Water Is Wet's picture

The ten year is still under 2%!  No one, most especially the market, is preaching about the death of bonds.

Dr. Engali's picture

When the fed is buying the bulk of the issue...there is no market in bonds.

kaa1016's picture

I with you. I think we've seen a short term top in stocks and yields. Bonds are far from dead.

NotApplicable's picture

All of these "death of the bonds" types are going to be very surprised when they get taken out by these very same zombie bonds.

Bonds die the same day that governments do. My bet is they'll kill us ALL first.

lizzy36's picture

Happy days are here again

The sky above is clear again

So lets sing a song of cheer again 

Happy days are here again. 

Now i am off to chase some rainbows and double down on my AMZN position. Tom Lee told me a 4000 p/e mutiple is CHEAP. 

JJSF's picture


Calculating sentiment using $331M isnt really the way to do it here. Comparing outstanding margin debt in dollar terms to 2007 highs in dollar terms doesnt factor in that as a percentage of total money supply then vs now you will see that $331M is nothing.. To compare apples to apples a chart showing not dollar terms but percentage of money supply would give a a more accurate gauge.


falak pema's picture

behold the new super cycle market : Fidelity Stock Market Super Cycles - Business Insider

How can the world of finance riddled with statistics and analysis like never before be so far apart between the contrarians and the status quo optimists? 

Mind boggling! 

davidsmith's picture

just as the subprime bubble popped



So what exactly is supposed to pop this time--and when?

Dr. Engali's picture

The bond market....and  when is the 16.4 trillion dollar question.

Poor Grogman's picture

In the final analysis the market just reflects the whims of central bankers.

So the longs better hope the bernanke doesn't wake up with a nasty hangover.

The tequila takedown could be nasty...

ekm's picture

Whoever talks about CORRECTION is simply trying to lure suckers.


Correction is no longer possible. DOW has only two options:

1) Creep higher

2) Total collapse, let's say 2000 pts/day for 3 days in a row.

firstdivision's picture

Looked at FB for the first time int he past few days, had a good "loller" over it.  It is actually going down towards reality for once.

thismarketisrigged's picture

and the nasdaq goes from down 20 pts this session to green. cant make this shit up.



thismarketisrigged's picture

consumer confidence hits lowest since 2011, schillers forecast below expectations= dow plus 100, s&p up 10 plus pts,


this shit has gone so far, i laugh every time the market goes up, knowing this fraudsters will soon enough pay big time

Downtoolong's picture

Do you know what your pension plan manager is doing today?

But, but, but, sir, I don't want to be a muppet anymore.

mikehuntsmells's picture

Something stinks here and I cant quite put my finger on it.

orangegeek's picture

Hats off to Ben and Barry for another up day in the markets using tax payer dollars.


And thanks for raising my taxes so you could do it.