“Keep an eye on the growth rate in margin borrowing instead of the absolute level of margin debt, as staggering as it may appear. Margin debt is growing at an annual rate of 27 percent, as you can see in the lower panel of the chart above (black dotted line). That might sound high, but, historically, it’s nowhere near previous peaks.  When stocks topped out in 2000, margin debt was growing 68 percent, according to Merrill Lynch research. And just before the peak in 2007, it was expanding 78 percent. Reaching those levels would be a red flag, but we’re not even close now. The real trouble starts when margin debt stops growing at a fast pace while stocks keep rising.”

http://www.moneyandmarkets.com/stock-market-rally-watch-part-iii-56156

Did you like this?
Tip Freedomwat.ch Staff with Bitcoin

Donate via Installed Wallet Copy