10 thoughts on “Margin Debt Misconception

  1. Lance

    Hi Gary – Could please elaborate on this chart’s meaning and what it’s telegraphing?

    1. gary Post author

      I’m pointing out that margin debt at all time highs is a misconception. Stocks are much higher and interest rates lower. It’s just a way for bears to spin a statistic but in reality when looked at in the proper context we still have a long way to go before we need to worry about margin debt.

  2. luc

    8th may is tomorrow (you said that this might be a bottom for dollar) and DX ist even close to 92, do you consider possiblity that 94 was the low ? or we should see downfall after tomorrows reports and possible 92 bottom at the beginning of next week ? Do you think that decline could stretch even up to around 15th may

    1. gary Post author

      It might be the low or we might have one more short cycle down after another bounce. I would not go long the dollar just yet.

  3. KP

    Actually what this seems to show is that during in the last 2 crashes stocks were bought and liquidated by highly margined retail and institutional investors. this time the stocks are owned by the central banks. Specifically the Swiss NB who has been buying billions of dollars worth of stock worldwide to prop up teh markets. It is well known in finance circles that the SNB is the purchasing arm of the Fed.

    Since retail investors are at the lowest margins in a decade one can assume that the shares are owned by Central Banks who are diversifying out of bonds and currencies. Zero bound is killing the markets. What is shows is that when the markets turn down the CB’s are possibly going to bankrupted.

    As bonds collapse in the next 2 quarters this will put stocks as the only place to go. (Armstrong’s 2015.75 thesis)

    agility and liquidity are critical here

  4. ted

    This chart says it all! We are in BULL. Everyone hates it because they missed it, but it’s a Bull. I do see S&P 3,200-3,500 as a possibility in the next 3 years.

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