Margin Debt

NYSE Margin Debt 1979 To Present

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By Mark J Lundeen – Re-Blogged From Gold Eagle

The Dow Jones Index in the BEV chart below closed this week a bit below last week’s close; 1.06% instead of last week’s 1.00%, down six cents on the dollar, or basically unchanged from last week.  As I said last week the bulls aren’t in a hurry, but I’m sure the bulls remain optimistic that the Dow Jones will make history sometime in the weeks and months to come.

What happens after that is the question.  Last October the Dow Jones made a handful of BEV Zero’s, and then began a three month 18% correction, as seen in the BEV chart below.

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Stock Market Investor Margin Debt Reaches New High

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By SRSrocco Report. – Re-Blogged From http://www.Gold-Eagle.com

The world is standing at the edge of the financial abyss while most investors are entirely in the dark.  However, specific indicators suggest the market is one giant RED BLINKING LIGHT.  One of these indicators is the amount of margin debt held by investors.  What is quite surprising about the level of investor margin debt is that it has hit a new record high even though the market has sold off 2,500 points from its peak in February.

It seems as if investors no longer believe in market cycles or fundamentals. Instead, the Wall Street saying that “This time is different” has become permanently ingrained in the market psychology.  For example, it doesn’t seem to matter to the market that Amazon makes no money on its massive online retail business.  The only segment of Amazon’s business that made a decent profit last quarter was from its Cloud hosting services.

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Things Are Lining Up Nicely For Gold And Silver

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By John Rubino – Re-Blogged From http://www.Gold-Eagle.com

Beginning in early Spring, gold and silver faced two serious headwinds: Seasonality – that is, the annual decline in bullion demand from China and India once wedding season ends – and the internal structure of the futures markets, where the big players in gold had lined up in ways that historically point towards weak prices for a while.

Both of these negatives are still in place (hence the smack-down of the past week) but both are transitioning to positive. At some point soon, the precious metals environment will lose the headwinds and gain at least two strong tailwinds.

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US Margin Debt Now Equal The Economy Of Taiwan

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By Graham Summers – Re-Blogged From http://www.Gold-Eagle.com

When Central Banks attempted to corner the sovereign bond market via ZIRP and QE, they forced ALL risk in the financial system to adjust lower.

Remember, in a fiat-based monetary system such as the one used by the world today, sovereign bonds NOT gold are the ultimate backstop for the financial system.

And for the US, which controls the reserve currency of the world, sovereign bonds, also called Treasuries, represent the “risk-free” rate of return for the entire world.

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Money Keeps Pouring In

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By John Rubino – Re-Blogged From Dollar Collapse

Someday, stock, bond and real estate valuations will matter again. And the mechanism by which this return to sanity is achieved will probably be the torrent of money now flowing in from people who, for various reasons, don’t care about (or understand) the prices they’re paying.

Millennials, for instance, seem to have reached the “beginners’ mistakes” phase of their financial lives. They’re major buyers of recreational vehicles – see The Perfect Crash Indicator Is Flashing Red — and are now opening stock brokerage accounts at a startling pace:

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5 Reasons to Fear the Fall

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By Michael Pento – Re-Blogged From http://www.PentoPort.com

This powerful and protracted bull market has made Cassandras look foolish for a long time. Those who went on record predicting that massive central bank manipulation of markets would not engender viable economic growth have been proven correct. However, these same individuals failed to fully anticipate the willingness of momentum-trading algorithms to take asset prices very far above the underlying level of economic growth.

Nevertheless, there are five reasons to believe that this fall will finally bring stock market valuations down to earth, and vindicate those who have displayed caution amidst all the frenzy.

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Stock Markets Sit Blithely on a Powerful Time Bomb

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By Wolf Richter – Re-Blogged From Wolf Street

No one knows the full magnitude, but it’s huge.

How big is margin debt really, and how much of a threat is it to the stock market and to “financial stability,” as central banks like to call their concerns about crashes? Turns out, no one really knows.

What we do know: Margin debt, as reported monthly by the New York Stock Exchange, spiked to another record high of $528 billion. But it’s only part of the total outstanding margin debt – which is when investors borrow money from their broker, pledging their portfolio as collateral.

An example of unreported margin debt: Robo-advisory Wealthfront, a so-called fintech startup overseeing nearly $6 billion, announced that it would offer its clients loans against their portfolios.

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