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- SEC Appoints New Chair and Board Members to PCAOB
- FINRA, Georgetown Team Up to Deliver 'Certified Regulatory and Compliance Professional' Program
- FINRA Board Meeting - This Week's Agenda
- Statement on Cryptocurrencies and Initial Coin Offerings - SEC Chair Clayton
- Company Halts Initial Coin Offering Over SEC Registration Concerns
- Kevin O'Leary Explains One Big Thing People Don't Understand About Bitcoin (But Need To)
- CME Bitcoin Futures: A Better Way to Buy (or Short) Bitcoin?
- Address at ICI's 2017 Securities Law Developments Conference - SEC Commissioner Stein
- New York Pension Fund Seeks More Pay Disclosure from Wells Fargo
- Wells Fargo Sanctions Are on Ice Under Trump Official
- Josh Brown: Here's How to Buy Bitcoin, But Realize It Could Be One Giant Bubble
- Trump's New Tax Plan Could Cost Citigroup $20 Billion
- Morgan Stanley Fires Former Congressman Harold Ford Jr.
- Al Franken Will Resign Over Sexual Misconduct Allegations - His Full Resignation Speech
- Ex-NFL Player Gets 40 Years for Running $10Mn Fraud
- Bitcoin Blows Past $15K, Adding $2K in Under 12 Hours
- Financial Adviser Settles Charges for Defrauding Private Equity Fund Investors
- New Cross Market Equity Supervision Report Cards - FINRA Phone-In Workshop, WebEx Presentation
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NEWSLETTERS & ALERTS
Wall Street News
Margin Loans Hit Record Levels – Red Flag?
Here’s yet another reason to be cautious about the Wall Street rally - or not. Margin debt, a measure of speculation, just broke a 2-year high according to the NYSE.
However, margin levels can be viewed in two, contradictory ways: (i) as a bullish sign that investors believe the market will continue to rise; and, (ii) as a bearish sign that investors are overexuberant about the market’s prospects – much like in 2000, just before the dot-com bubble burst. In the latter case, if a market selloff (or panic) ensues, margin investors will be first in line to unload their ‘extended’ holdings.
That said, many analysts, including BNY Mellon Wealth Management 's Jeff Mortimer, thinks that concerns of a major correction are overblown.
“This isn’t a signal to me that markets are reaching an exuberant level like they did in the 1920s or 1990s, when speculation was rampant,” he said. “What our clients are doing is borrowing against the portfolios because interest rates are so low. They’re not leveraging up because they see the market exploding to the upside; they’re using leverage because they can pay it off at any time.”
Stay tuned – ‘20-20 hindsight’ may indicate who’s correct.