For the first time ever, investor margin debt has surged past $1 trillion, marking a stunning reversal after three straight monthly declines (Feb-Apr).
The rebound has been explosive:
May: +8.3% ($920B)
June: +9.4% ($1.008T)
This isn’t just a number - it’s a signal. Historically, extreme margin debt peaks coincide with market euphoria… and eventual reckoning.
Key Takeaways:
FOMO is back - investors are piling into leveraged bets as stocks rally.
But we may not be at "danger zone" levels yet - relative to currency in circulation, margin debt isn’t at prior bubble extremes.
Knife’s edge dynamics - the higher it goes, the sharper the eventual unwind.
The Prophecy Remains: Ecstasy → Decline
Margin debt is at all-time highs. Time to panic? Bubble unwinding soon? Not so fast. The margin debt-to-S&P 500 ratio is still far below past peaks. We've seen far more extreme leverage before. Perspective is key.
