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Discussion Starter · #1 ·
I'm watching YouTube videos/ News articles (and videos) and they say debt is at all time highs and the market is filled with margin. Do you think they're using the term "margin" to just mean debt (margin, bank loans, etc...) or do you think it's literally and means people are using margin from their brokerage?

If from the brokerage then that's crazy. Questrade charges 6% on their margin. Then again, a bank unsecured LOC isn't much better. Actually, you keep hearing debt is cheap but from my experience, only mortgages and HELOCs are cheap. ..... then again, I have no frame of reference; I've never had a unsecured LOC or loan before. I just compare them to a HELOC and they all seem high in comparison haha.
 

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My guess is that they mean margin at a brokerage. I'd have to dig into the fine print though to be sure.

Questrade at 6% is crazy as some quick googling finds TDDI margin at 3.75% then dropping for larger amounts. Royal bank's brokerage at 4.0%. Scotiabank's brokerage at prime plus 1.65%. Interactive Brokers is supposed to be the best but they have been known to make drastic changes with little or no time for the investor to react.

I haven't checked my unsecured LoC as my HeLoc rate dropped to 2.45%. IIRC, years ago it was 5%.
Personal loans used to be significantly cheaper than the LoC but had a schedule to the repayments.


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I'm watching YouTube videos/ News articles (and videos) and they say debt is at all time highs and the market is filled with margin. Do you think they're using the term "margin" to just mean debt (margin, bank loans, etc...) or do you think it's literally and means people are using margin from their brokerage?

If from the brokerage then that's crazy. Questrade charges 6% on their margin. Then again, a bank unsecured LOC isn't much better. Actually, you keep hearing debt is cheap but from my experience, only mortgages and HELOCs are cheap. ..... then again, I have no frame of reference; I've never had a unsecured LOC or loan before. I just compare them to a HELOC and they all seem high in comparison haha.
Impossible to know for sure unless one cross checks their source. That said, if you are interested in this statistic you want to find separate statistics for "retail" versus hedge fund/institutional margin debt. Very different indicators.
 

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https://www.yardeni.com/pub/stmkteqmardebt.pdf

Notice on the charts that margin debt rises sharply then turns down just before big market tops. NYSE margin debt is still headed straight up so as long as it is going up it is indicating higher prices. The size of the recent rise in margin debt along with higher prices is indicating the next drop in margin debt could see a huge decline in stock prices.

The fed is no match for the margin clerks. The Margin clerks have the power to crash the markets.
 

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Discussion Starter · #5 ·
https://www.yardeni.com/pub/stmkteqmardebt.pdf

Notice on the charts that margin debt rises sharply then turns down just before big market tops. NYSE margin debt is still headed straight up so as long as it is going up it is indicating higher prices. The size of the recent rise in margin debt along with higher prices is indicating the next drop in margin debt could see a huge decline in stock prices.

The fed is no match for the margin clerks. The Margin clerks have the power to crash the markets.
Thanks for sharing, very interesting and they answer my questions in the asterisk: "Debit balances in margin accounts at broker/dealers." Obviously everyone is different and people could be using the term differently, but typically when you say Margin, you mean accounts at your broker/dealer. The term Margin doesn't include loans from Banks.
 

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Thanks for sharing, very interesting and they answer my questions in the asterisk: "Debit balances in margin accounts at broker/dealers." Obviously everyone is different and people could be using the term differently, but typically when you say Margin, you mean accounts at your broker/dealer. The term Margin doesn't include loans from Banks.
Institutional balances are in there and don't incur anywhere near the borrowing rates that brokers charge retail margin investors.
 
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