Originally Posted by
adam ali
Realizing margin debt is now declining, I wonder what role it played in AUM growth -
Adam
Adam, margin debt is part of it. Here is the latest NYSE margin debt chart.
This chart looks like what I expect margin debt to look like at a major market top. The NYSE debt is about half a trillion dollars, much less than the increase of the top five brokers since 2010. That was an apples-to-oranges comparison, but the best I have. I suspect much of the broker growth is in the bond market.
Another factor on the buy side of the market, there is more money chasing fewer shares. Companies have been buying their stock shares back, reducing the number of shares available.
We have a lot of conflicting information to sort through, and the stakes are high. The market has either topped or it hasn't.
Mike Scott
Cloverdale, CA
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