Investor Net Worth Drops To New All Time Low, NYSE Reveals

Tyler Durden's picture

One can debate whether or not margin debt as reported by the NYSE has any relevance in a world in which the retail investor is long gone, and where the marginal buyer are hedge funds (and primary dealers who use excess reserves as collateral for marginable derivatives and futures) who fund themselves using far more arcane "shadow" repo conduits as we have explained previously, it is indisputable that the leverage statistics disclosed monthly by New York Stock Exchange provide a useful glimpse into how the broader market is obtaining "dry powder" to keep BTFATH.

And while in July margin debt did dip modestly from near all time highs hit back in June when total margin debt was virtually tied with the previous record, at $464 billion, it was that other metric tracked by the NYSE, namely Investor Net Worth, calculated by subtracting margin debt from the notional represented in free credit cash accounts and credit balances in margin accounts, that was the notable highlight in the July report: at a negative $182.1 billion, a decline of $6.3 billion from the prior month, investor Net Worth has never been lower.

This happens to be a deficit which is more than twice as large as the net worth shortfall reached during the last market bubble, which hit ($79) billion, peaking during the quant freakout in the summer of 2007 and subsequently surging to a record high of $184.6 billion in August 2008, as repo desks closed all margin positions with virtually any and every counterparty, leaving everyone in a position of record high "net worth."

Does this, or anything else, matter in a market that is exclusively centrally-planned by the central banks and various HFT algos? We urge you to direct your questions, rhetorical as they may be, on this topic to either the NY Fed or its oftentime execution trading arm, Citadel.

Source: NYSE

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blu's picture

Yo Tyler, you forgot kermit-in-a-ditch.

James_Cole's picture

Margin debt should be renamed what it really is, future taxpayer bailout. A minor transaction cost every decade to ensure the wheels of wall street are well greased to keep making every last man woman + child in america fabulously wealthy & gainfully employed.

max2205's picture

Investor?.......what's an investor?

NotApplicable's picture

Just think of how much worse it would all be without the margin debt...


SAT 800's picture

Margin debt is very serious; it's one important factor in the earth shaking crash of 1929-32; and it's very important today. The Nothing that supports the stock market positions, (the "negative wealth"), contributes greatly to the violence and speed of the ensuing crash.

Quaderratic Probing's picture

And the slaughter in gold markets

SAT 800's picture

Negative 182 Billion !! Holy Shit. You realize what this means; not only is this market a bubble; it's a bubble inflated with a vacuum.OH, man; are we fucked up now.

rainingFrogs's picture

yeah, really, life sucks in a vacuum.  at least it doesn't blow up, in a vacuum, I mean.  maybe collapse on itself.  this must be what a black hole looks like from the inside.  doomed doomed doomed. was that Elvis floating by? what happens when an unstoppable force collides with an immovable object?  enquiring minds want to know ... I need a drink ...

Dr. Engali's picture

Remember when all this used to matter? Yeah, me neither.

Al Huxley's picture

How about crony insider net worth?  How's that looking?  I'm guessing it's never been higher.

NOTaREALmerican's picture

Don't forget tho:   Debt that can be rolled over is really equity.   

IANAE's picture

until it suddenly isn't...

NOTaREALmerican's picture

If everybody thought like you do we all wouldn't have above average kids.

Maplehood's picture

A related analysis published earlier today.  Margin debt flashing some nasty warning signs...



In.Sip.ient's picture

"investor Net Worth has never been lower"

It does explain how they finance the low low prices for gold.

Sell gold at below any kind of market requires some kind

of subsidy.  Now we know who is doing the subsidizing.



trader1's picture

did NBC just get trolled?  or are they trolling you?  

oh, there's just too much dark humor in this story...on so many levels

Douglas McAuthur McCain, of San Diego, California, was killed over the weekend fighting for the Islamic State of Iraq and al-Sham (ISIS), according to the Free Syrian Army. Photos of McCain's passport and of his body -- which feature a distinctive neck tattoo -- have been seen by NBC News. According to an activist linked to the Free Syrian Army who also saw the body and travel document, McCain was among three foreign jihadis fighting with ISIS who died during the battle.




<hands up if you thought it was John McCain's son?>
NOTaREALmerican's picture

Was this name confirmed by the NSTB or FAA?

trader1's picture

i heard it was the BS&L Department.

knukles's picture

Either way, couldn't have happened to a nicer kid.  Originally from Lake Wobegone, he too was above average.
Just not exceptional.

SAT 800's picture

No, he wasn't; he was sub-normal. I guarantee it; go find his test scores. He was sub-normal; if he wasn't I'll pay you for your time finding the data.

john39's picture

this is all part of the propaganda designed to brink the war on terror back to the U.S. and European countries...  just wait until they start publishing stories about 'returned jihadis' out to kill you and rape western civilation.   Even is this real, and its not... the bankers beat them too it by a decade...

Equality 7-25-1's picture

This is all part of the campaign to rescue tanking ratings... Death to Cable TV!

trader1's picture

anyone can become an internet sensational comedian these days ;-) 


relevant and funny (in context of russia/ukraine):

BandGap's picture

I am worth more than all the riches on earth. So are all of you.

Ever since I realized this shit is going down I have seen the value of life in a much brighter hue. Hug your kids, make friends, enjoy the world for what it is, not what we have made it.

LawsofPhysics's picture

...but, but, but, I thought "debt is money"...




stupid fucks.

NEOSERF's picture

Dark pools dying, HFT under attack (finally), massive margin bets, lowest net worth on record, record low volume on the NYSE, yield seeking at all time high, and QE is ending....the market just keeps levitating and each of the last 3 times QE was stopped there was a crash so what makes this time different given the world is a much worse place than it was 3 years ago?  Can't wait for those traders to get back after Labor Day, should be a doozy.

LawsofPhysics's picture

"so what makes this time different" --  Who is left actually participating in the "market" and the size of their dry powder.

just my two cents....

SAT 800's picture

And that's why it's a good idea to check in with Zero Hedge; regularly. This kind of reportage is very important.