Margin debt at highest level ever
I came across the chart below (click here for the website) that I find to be very telling of the current state of the markets. With QE apparently having a smaller and smaller impact but the conventional market continuing to rise there was a piece (or many pieces) missing.
Margin debt levels appear to be a part of it. As you can see in the chart below we are at new highs and only reached there highs back in September. Since setting a new high we have screamed through it. We can not definitively say when this will peak but it is not looking good when it roles over.
This is not a Baseball game. It is more like Gladiators fighting to survive, the end can come at any time and without indication.
You are right Birdman, just because we are at new highs does not mean it can not go higher. I just think having this high of margin in the market is not good and no matter how much higher it goes it will cause a bigger crash. When people are forced to cover their margin bets it turns into a title wave.
The problem, though, is that on a risk/reward basis it doesn’t pay to overstay the welcome. The record margin debt, the extreme sentiment readings, the insider selling of shares — all provide good anecdotal evidence that bull run is very mature.
While it could, of course, prove to go higher it is generally better to try to capture the meat of the move and to leave the higher risk play to others.
Marc Faber….just threw out his middle finger to stocks.
He has done the vicious cycle routine on a couple occassions before. Who knows, maybe this time he will be right. I kind of doubt it though. Not yet anyway although I know many are calling for a crash to play out soon.
Faber and his vicious circle.
http://www.zerohedge.com/news/2014-02-04/marc-faber-fears-vicious-circle-downside-just-beginning
HeavyHitter, your posts are useless to us unless you cite the source for your supposed information.
OK..CSF
Sorry, had no idea you manage the site and enforse your rules.
PLEASE POST THE “YOUR RULES” ON THE HOME PAGE
Thank you for your cooperation.
We appreciate both of you on this site guys. Please continue commenting and making your messages as clear as possible.
margin debt a small part-non listed derivatives, spx futures–all part of it.
and not incl in margin debt although margin debt is nothing to sneeze at
Tune into this weekend show hal. We will have Chris Martenson on to chat about his thoughts on this topic.
Nice, Always love to hear from Chris. Good catch, Cory.
Here is Marc Faber’s most recent statement on cnbc
Right on……Franky
If people only knew what’s coming.
THE WORST TIMES IN THE HISTORY OF THE WORLD
I see it where i live ! People are struggling and can’t make ends meet .
Some areas it terrible. Very sorry Franky.
However we know Gods Word is true.
The poor will inherit The Kingdom Of God.
The last… will be first…….and the first …will be last.
The day of judgment is coming
see zh for the faber link
As usual Jim Sinclair brilliantly states the outlook.
We all remember when the Reserve Bank of Zimbabwe’s Gideon Gono praised Ben Bernanke for the similarities between his QE monetary policy and Ben’s QE policy of the US Federal Reserve. Recall that Albert Einstein said that doing the same thing over and over again and expecting a different outcome is the definition of insanity if you want to predict the outcome of the USD. In hindsight, Mr. Gono acknowledges that while things looked better in the short-term in Zimbabwe for a while, that his QE policies in the end turned out to be brutally disastrous, causing in his country the following ills that his country still has not recovered from 5 years later: frequent power outages, a shortage of skilled labor, a persistent liquidity problem in their banking system, a rapid rise in production costs which killed their manufacturing sector, endemic greed-induced and exploitative renter’s markets, and much more.
The signal to noise is getting low again on this site; I’m off for awhile.
OK…Mr. Wonderful
HEAVY,,,,,Question= Just what “DONT” you like about CFS ?
His false accusations against me and personal attacks.
Not only that the man is persistent with his Mr. Wonderful characteristics.
So please, if we can drop the subject before something else happens.
My haitus…is next soon.
The highest does not necessarily mean it is the top though. More innings to go.