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"On Tuesday, WND reported margin debt, the loans made by stock brokers to permit investor clients to buy stocks on credit, has reached a record high of $466 billion, approaching for the first time half a trillion dollars. "
When I was young My mom talked about how buying on margin is what lead to the great depression. This is all kinds of not good. margin calls could trigger a market crash.
Fwiw margin requirements in the 20s were as low as 10% meaning as broker would lend up to 90%. The fed rate is now 25% a major firms release 30% or less. A better indicator of the potential problem would be historical and currently equity percentages. The total dollar amount borrowed is irrelevant if you don't know how much collateral if behind it
Fwiw margin requirements in the 20s were as low as 10% meaning as broker would lend up to 90%. The fed rate is now 25% a major firms release 30% or less. A better indicator of the potential problem would be historical and currently equity percentages. The total dollar amount borrowed is irrelevant if you don't know how much collateral if behind it
What are you talking about? The margin requirement is 50% with certain people allowed to go to 25%, but most institutions won't go below 30% or 40%.
What are you talking about? The margin requirement is 50% with certain people allowed to go to 25%, but most institutions won't go below 30% or 40%.
Intial margin is 50%, house calls start at 30% after that in most cases in regular accounts where the house Merrill, Morgan, Goldman will start asking you to do something and the 25% is a fed call
yes like cutting back QE, Or upping the prime lending rate.
An event will come. It always does. Up markets don't last forever. And this one is being fueled by the Fed's printing of a large amount of money.
Margin debt is destabilizing to markets.
“The timing of the hyperinflation onset by the end of 2014 remains in place, with the odds of that occurrence estimated at 90 percent,”
Laughable! The USD is going to suddenly crump because second world/rate Russia is going to stop using the dollar to trade in oil? Like this is some new idea?
Margin debt is always a problem. Nothing new there.
But the 'Fed's printing of a large amount of money.'
But the 'Fed's printing of a large amount of money.'
Can you elaborate on that one?
QE III & IV
Need I say more?
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