The bell tolls for a margin debt catastrophe

Cracks may have already started to appear in the wall of borrowed money trading on Wall Street, which is reaching peaks similar to those seen before the tech bubble and subprime collapses.

Increasing confidence in a bull market, historically, is a reason to ring the alarm bells. When markets are persistently clearing record highs and people are leveraging to the hilt amid a fear of missing out, it’s rarely more than a year until it all comes crashing down.

With that as a backdrop, one largely overlooked piece of data released last week presented reason to approach the next 12 months with an air of trepidation: margin debt.

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