US margin debt hits a new high: leverage exceeds that of the internet bubble, what are the risks in the investment market?

Question

The latest data from 【Block Rhythm】 shows that the Trading Margin debt in the United States surged again in November. In just this month, the debt increased by $30 billion, reaching a historical record of $1.21 trillion. Even more alarming is that this marks the seventh consecutive month of rise.

In just 7 months, the margin debt in the United States has surged by $364 billion, with a rise of 43%. Even after excluding the impact of inflation, it still grew by 2% month-on-month and 32% year-on-year, both reaching historical highs. What does this indicate? It indicates that the leverage play in the U.S. investment market is becoming increasingly exaggerated.

A more dramatic comparison comes — the proportion of Margin debt to M2 money supply has now jumped to 5.5%. What does this mean? This is a height not seen since 2007. It is even higher than during the internet bubble of 2000. Everyone knows how fierce that bubble was, and today's data has already surpassed it.

In simple terms, margin debt is the amount investors owe to brokers for borrowing money to buy stocks or other securities. It sounds like margin trading. This practice allows small funds to leverage large positions, doubling the returns while also doubling the risks. The current level of leverage has reached an absurd extent, and the data is right here.

FunGibleTom · Accepted Answer

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RektButSmiling · Answer

1.21 trillion? This leverage is even more ridiculous than the internet bubble, US stocks are playing with fire here

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Another 1.21 trillion and 43%, what&#39;s the point of all these numbers if it’s just going to blow up in the end

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5.5% M2 share exceeds that of the internet bubble era... Fine, I&#39;m ready to buy the dip

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A crazy increase of 364 billion for 7 consecutive months, isn’t this just betting on who will catch a falling knife next?

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Margin debt hitting a new high is a headline I see ten times a year, yet I still haven&#39;t learned to avoid the trap

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To be honest, the leverage game in US stocks will have to pay off eventually, the more borrowed now, the worse it will explode later

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Looking at this data reminds me of 2008, but whether I can get out unscathed this time is really uncertain

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So another "historic" big dump is coming? I&#39;m really lucky not to hold any dollars

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1.21 trillion in Margin debt, is this laying the groundwork for the next crisis or do some people really believe US stocks can keep rising?

0xSunnyDay · Answer

Wow, 12.1 trillion? This leverage is really bold, even more intense than the internet bubble!

SleepyArbCat · Answer

It’s starting again, 12.1 trillion... this number makes me want to take a nap

I just woke up yesterday, and now I have to be alert again, really tired

The internet bubble has been surpassed, who will catch a falling knife this time?

Wait, is this real data? Why does it feel like TradingView hasn’t updated...

Leverage is over 2000, will my gas fees still be discounted when the crash happens?

DegenRecoveryGroup · Answer

Wow, this number is really scary, has it surpassed the internet bubble?

12.1 trillion? No way, are we going through this again?

Rising for 7 consecutive months... is it really going to explode this time?

5.5% M2 ratio? My goodness, this is insane!

Leverage players need to seriously think about how to survive this year.

It sounds dangerous, how long can this really last?

The question is, who will take the last baton?

It&#39;s the same familiar formula, with the same taste...

Is this explosion going to be even more intense than the last time?

A crazy leverage party, and in the end, it all ends in a blast.