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NYSE Margin Debt Grows by $20.1B and About to Hit New Record High!

New York Stock Exchange (NYSE) margin debt grew in February 2015 by $20.1 billion or 4.52% to $464.93 billion, its largest monthly increase in over eight months! Total NYSE margin debt outstanding is now just $790 million shy of its all-time high set one year earlier in February 2014 – when the NYSE finished the month with record margin debt outstanding of $465.72 billion! NYSE margin debt outstanding has grown by an incredible $291.63 billion or 168.28% from its financial crisis bottom set six years earlier in February 2009 – when NYSE margin debt bottomed at a 5-year low of $173.3 billion!nysemargindebtnearrecordhighNow check out the long-term growth of NYSE margin debt, from 1971 through 2015, a period of 44 years! Besides nominal NYSE margin debt data priced in USD, we also provided a much more valuable and far more meaningful and accurate figure to analyze – NYSE margin debt as a % of US GDP. As of the end of February 2015 (monthly margin debt data gets reported by the NYSE 4-6 weeks after the month has ended), the NYSE had total margin debt outstanding of $464.93 billion, equal to 2.63% of US GDP!

One year earlier, at the end of February 2014, when nominal NYSE margin debt outstanding hit a new all-time high of $465.72 billion – NYSE margin debt was equal to 2.73% of US GDP! This was the second highest NYSE margin debt/US GDP ratio in history! In March 2000, at the very peak of the NASDAQ/technology/dot-com bubble, the NYSE margin debt/US GDP ratio hit a record high of 2.78%!


The last two US stock market bubbles peaked with margin debt equal to between 2.62% and 2.78% of US GDP. We are currently within that range! When the last two stock market bubbles burst, nominal margin debt made dramatic declines from their bull market peaks of 53%-55%. During both stock market crashes, margin debt didn’t bottom until it was worth only 1.18%-1.20% of US GDP! Most investors would be shocked to learn that the 44-year median margin debt/US GDP ratio is only 0.79%!

Another worthwhile way to measure NYSE margin debt in accurate and meaningful, real terms – is NYSE margin debt as a % of the NYSE’s total market cap of all US-based listed companies. NYSE margin debt is currently equal to 2.43% of the NYSE’s market cap. In January 2014, the NYSE margin debt/market cap ratio reached a new all-time high of 2.65%, surpassing the previous record high of 2.6% from February 2000 – just prior to the peak of the NASDAQ/technology/dot-com bubble!

nyseshanghaimargintomarketcapIn our last update we spoke about Shanghai Stock Exchange (SSE) margin debt surpassing RMB1 TRILLION for the first time in history. As you can see in our chart above, the SSE margin debt/market cap ratio surpassed the NYSE margin debt/market cap ratio in October 2014 – and gained an additional full percentage point during the following four months! SSE margin debt is now worth 3.44% of its market cap vs. NYSE margin debt worth 2.43% of its market cap! The SSE has become an even larger and more dangerous bubble than the NYSE!


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