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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Tue, 01/29/2013 - 16:07 | 3195955 Cdad
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 ? ;)

Tue, 01/29/2013 - 16:38 | 3196094 slaughterer
slaughterer's picture

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

Tue, 01/29/2013 - 17:02 | 3196198 edb5s
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.

Tue, 01/29/2013 - 16:03 | 3195959 LongSoupLine
LongSoupLine's picture

Nothing can fucking go wrong...nothing.

Fuck you wall street. Eat shit.

Tue, 01/29/2013 - 16:10 | 3195979 Water Is Wet
Water Is Wet's picture

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

Tue, 01/29/2013 - 16:26 | 3196052 Kaiser Sousa
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....


Tue, 01/29/2013 - 16:03 | 3195960 RougeUnderwriter
RougeUnderwriter's picture

Screw the iceberg - full speed ahead

Tue, 01/29/2013 - 16:38 | 3196081 SunRise
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"!

Tue, 01/29/2013 - 16:04 | 3195962 fonzannoon
fonzannoon's picture

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

Tue, 01/29/2013 - 16:04 | 3195963 Dollar Bill Hiccup
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!

Tue, 01/29/2013 - 16:09 | 3195974 Lost Wages
Lost Wages's picture

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

Tue, 01/29/2013 - 20:15 | 3196948 Cognitive Dissonance
Cognitive Dissonance's picture

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

Tue, 01/29/2013 - 16:10 | 3195966 Manthong
Manthong's picture

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

if you are all in for hyperinflation.

Tue, 01/29/2013 - 16:14 | 3195981 kaa1016
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.

Tue, 01/29/2013 - 16:20 | 3196020 Water Is Wet
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.

Tue, 01/29/2013 - 16:28 | 3196054 Dr. Engali
Dr. Engali's picture

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

Tue, 01/29/2013 - 16:32 | 3196072 kaa1016
kaa1016's picture

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

Tue, 01/29/2013 - 16:42 | 3196113 NotApplicable
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.

Tue, 01/29/2013 - 16:13 | 3195992 lizzy36
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. 

Tue, 01/29/2013 - 16:19 | 3196016 JJSF
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.


Tue, 01/29/2013 - 16:20 | 3196021 falak pema
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! 

Tue, 01/29/2013 - 16:21 | 3196030 davidsmith
davidsmith's picture

just as the subprime bubble popped



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

Tue, 01/29/2013 - 16:26 | 3196048 Dr. Engali
Dr. Engali's picture

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

Tue, 01/29/2013 - 16:22 | 3196032 Poor Grogman
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...

Tue, 01/29/2013 - 16:23 | 3196044 ekm
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.

Tue, 01/29/2013 - 16:25 | 3196050 firstdivision
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.

Tue, 01/29/2013 - 16:35 | 3196090 thismarketisrigged
thismarketisrigged's picture

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



Tue, 01/29/2013 - 16:37 | 3196096 thismarketisrigged
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

Tue, 01/29/2013 - 16:58 | 3196183 Downtoolong
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.

Tue, 01/29/2013 - 17:12 | 3196235 mikehuntsmells
mikehuntsmells's picture

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

Tue, 01/29/2013 - 17:11 | 3196236 orangegeek
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.



Wed, 01/30/2013 - 06:19 | 3198071 GNWT
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