Joined Nov 11, 2007
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NYSE Margin Debt Hits All Time High

“The latest reading on April margin debt at the NYSE showed an all-time high.  The most recent reading of $384,370MM topped the all-time high from July 2007 when margin debt reached $381,370MM.

As I’ve explained in the past, this is one sign of how the disaggregation of credit has come to dominate many borrowing trends in the last 30 years.  Instead of seeing credit used for productive purposes it has increasingly been used for things such as speculation in asset prices.  My guess is that this is largely the result of a Fed driven economy whose policies have been uniquely asset price focused leading many to speculate due to excessive faith in the “Bernanke Put” or the “Greenspan Put”.

This trend is particularly interesting during the most recent recession since household credit has remained extremely tight….”

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