alt Hacker News> Record high margin debt
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
> Record high margin debt
$566B in margin debt. Is that actually a financial black swan amount of money? If 50% of that got "corrected" into Money Heaven on Friday, would it be more than a bad day at the stock market?
You're right that $566B alone isn't a black swan. That FINRA figure only captures retail and small institutional margin at broker-dealers. It excludes prime brokerage (hedge funds), securities-based lending, and repo markets. Conservative estimates put total leveraged exposure at $10-15 trillion. The $566B is maybe 5% of the iceberg.
I see visible margin debt as both a canary and a proxy. It's a canary because retail cracks first (less sophisticated risk management, stricter regulatory margin). It's a proxy because when visible leverage contracts, it usually means hidden leverage is contracting too. They're exposed to the same assets. When FINRA margin debt starts falling, it's not just a warning, it's confirmation that system-wide deleveraging is already underway.
That's my 2c. Does that make sense?