NYSE Margin Hits All Time High

by: Barry Ritholtz

Now we are getting into the uh-oh region: NYSE Member Firm Margin Levels.


nyse_member_firm_margin

(See our prior discussion on what this may or may not mean here)

Bloomberg News has the details:

The amount of money borrowed from brokerages that do business on the New York Stock Exchange to buy stock rose 3.6 percent to a second straight monthly record, reaching $295.9 billion in February. Margin debt, as the borrowing is called, in January broke the prior high set at the peak of the so-called Internet bubble.

Changes in the level of margin debt have mirrored those of U.S. stock indexes. After setting an all-time high of $278.5 billion in March 2000, margin debt dropped to less than half that amount by September 2002. It reached $285.6 billion in January.

As I read the NYSE rules on this, I do not believe Shorts are included in this;

"Include only free credit balances in cash and margin accounts. Balances in short accounts and in Special Miscellaneous Accounts are not to be considered as free credit balances."

-Rule 421. Periodic Reports

It's borrowed money - not margin data - that matters . . .

Source:
NYSE Margin Debt Advances 3.6 Percent to Second Straight Record
Nick Baker
Bloomberg, 2007-03-19 14:39

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