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.
This version of the original article by Steve St. Angelo has been edited for length (…) and clarity ([ ]) by munKNEE.com to provide a fast & easy read
According to FINRA, the Financial Industry Regulatory Authority, investor margin debt reached a new high of $669 billion in May surpassing its previous high of $665 million this past January:
…If we look at the Advisor Perspectives updated chart, the total Margin Debt is nearly $170 billion higher than the peak in 2007:
Also as you can see in the graph above, we are almost ten years into a business cycle without a significant correction…
It’s hard to forecast how these markets will move, but due to the massive debt and leverage in the system, I believe the economic and financial markets today are setting up for one heck of a fall with major fireworks coming in Q3-Q4 2018.