Courtesy of Pam Martens.
Wall Street Bull Statue in Lower Manhattan
By Pam Martens: June 3, 2013
The New York Stock Exchange has released data showing that the amount of borrowing against assets held in brokerage accounts as of April 30, 2013 has reached an all time record. Called margin loans, investors have borrowed $384 billion against their accounts, topping the prior record of $381.4 billion in margin debt set in July 2007 – just before the onset of the financial crisis.
The ramp up in margin debt has been occurring at a steady pace. It stood at $284.6 billion in June 2012; $330 billion at the end of December 2012; and has risen each month since then to reach $384 billion at the end of April 2013, according to the most recent data listed at the New York Stock Exchange.
But just who is it that is taking out of all these risky loans? If it’s the small, retail investor, that should set off alarm bells in Washington.
In January, a study by Morgan Stanley showed that hedge funds’ holdings versus the cash provided to them by investors stood at 153 percent versus 143 percent in early 2011.
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