NYSE Margin Debt Rises To New All Time High As Net Worth Slides To Record Low

Tyler Durden's picture

With everything else in uncharted territory: central bank balance sheets, the stock market, global debt, it was only a matter of time before that old-school indicator of exuberance - margin debt - also joined the ranks of things that are "off the charts." Never one to disappoint (except when Waddell and Reed dumps a "massive" 75,000 ES trade which promptly kills its liquidity replenishment points of course), the NYSE has reported that April margin debt, as expected, hit all time records, just in time for the S&P's own all time high fireworks spectacular.  Rising from the just shy of summer of 2007 levels posted in March, or $380 billion, April margin debt not surprisingly rose to a record high of $384 billion. Additionally, even when netting out account credit metrics, such as Free Credit Cash and Credit Balances in margin accounts, total investor net worth just hit an all time record low of ($106) billion.

In short: investors have never been more levered.

And that is only looking at legacy metrics. Recall that as per recent regulations requiring that hedge funds expose gross leverage via Form PF, just the top 50 or so HFs have gross exposure of over $1.3 trillion, which means they are levered massively more than their LP realize, and than the naive NYSE margin statistic indicates.

But that is a topic for a different day.

For now let's just bask in the simplicity of the good old days, where NYSE margin was relevant, and not get too scared by what the true margin level in the market may actually be, especially when one takes into account the leverage on the Fed's own balance sheet.

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NotApplicable's picture

I find it hard to label anyone who is leveraged as an "investor." It seems more akin to auto-erotic asphyxiation.

You might get off better than ever, or you might end up dead.

Zer0head's picture

"Now it's time to start thinking about adding on another monthly payment" says a woman with her kid looking at cars in SoCal (on NBS news)

EscapeKey's picture

I could talk about asphyxiation 'till I'm blue in the face.

Also not forgetting lovely 30:1 levered 3.5% down FHA mortgages.

Duffminster's picture

The reasons this market should crash are at least 10 times greater than why it should go higher.  You know what that means don't you.  Its going higher.

Jim B's picture

The Exchange should pretend it is gold and raise the margin requirements (/S)

buzzsaw99's picture

the bernank is pleased

DeadFred's picture

The squid will be pleased soon. Just waiting for the right moment to lower the boom. All your VaR are belong to us.

PAWNMAN's picture

What a side show this "market" has become! Just load up on margin on Tuesdays. Who needs a degree in finance from an Ivy League institution when investing is this easy!

disabledvet's picture

should be fine. "all trades are winners." now lets talk moonbases...fully paid for by the private sector.

Dareconomics's picture

Retail investors going all in is a negative indicator for the stock market. 


EscapeKey's picture

Retail investors? They still exist?

I thought it was Benny and his merry men.

DeadFred's picture

No retail. Hedge funds and retirement money, but the squid sees it and knows hunger.

spine001's picture

it is easy when you are playing with somebody elses hard earned money. Let me tell you, when I participated in the CNBC million dollar portfolio in 2011, it was so easy to make huge bets with funky money and return a huge 30% in only 30 days of trading!

John Bigboote's picture

This type of margin debt is not only encouraged but will be enabled indefinitely. Precious metals, not so much.

chump666's picture

A bullet proof market?


Japan's 'non correction' that was actually a take-down crash was just a taste of something wicked this way comes.


ebworthen's picture

BTW - I'm pretty sure my friend Larry Kudlow has started drinking and snorting coke again.

"Ben Bernanke is a miracle worker and the economy is recovering" (paraphrase).

Yup, save a couple of lines and the Brunette for me Larry.

p.s. - ROFLMAO!  Larry Kudlow just said that Bitcoin is not money; nothing is money until it is tied to something else.  Larry!  Hello!?!?  The Dollar?  "King" Dollar!?!?  Oh boy...

bluskyes's picture

I would think that it's not true money, unless it has no tie to anything else. Fed Notes are tied to debt. Gold is tied to nothing.

NidStyles's picture

Gold is tied to its properties, its scarcity, and its popularity. 


So I would say that gold is not exactly tied to nothing. Fed Notes on the other hand, they are only tied to taxation and debt, neither of which the people want, so it's a no brainer which one will win out over the long run.

Everybodys All American's picture

...and that does not count the leverage on the Feds balance sheet I would presume.

Yen Cross's picture

     LMAO, not at you Tyler. Commodity currencies should be screaming if equity markets are at all time highs.

The aud/usd just tankered out down to .9555. Iron.copper,gold,silver,lumber,ect... all in the shitter. The usd should weaken when risk is on. (it strengthens) Bond yields are spiking as well.

   June gloom Bitchez. Be careful of this month end rebalancing/flow crap.

Tombstone's picture

Don't worry...when TSLA hits $250 and FSLR hits $150, it will be time to think about a top.  Until then, ride the wave of Benny Bucks rising higher and higher.

Racer's picture

Shorts are also leveraged, are these included in the calculations?

jcaz's picture

Yep, which makes this point rather moot, actually......

venturen's picture

Are you leveraged if you have a money printer in your basement?

Xue's picture

Best thing you could do now is to keep lots of dry powder in cash and hedge it with a bit of gold, waiting for the next stock market reset.

HeliBen's picture

This should end well. Bernanke needs to pull the ole soft landing and Goldilocks economy talk out right about now...