Margin Debt at All Time Highs

"The mother of all evils is speculation--leveraged debt."
--Gordon Gekko (Wall Street: Money Never Sleeps)

In case you haven't noticed, margin debt is now higher than it was at the housing bubble peak. In fact, margin debt is marking all time highs.

The article frets over whether whether margin loans are being used to fund businesses or real estate purchases, or whether the loans are being used to lever up investment accounts.

It does not matter.

If you borrow money for whatever purpose, then you are leveraged. You are extending your lifestyle beyond the capacity of your income. Someone who has a mortgage on a house and also owns stocks is levered in stocks. The mortgage loan enables the person to participate in the stock market more than would be possible otherwise.

Borrowing from any source while participating in stocks essentially puts you on margin.

Currently the system is becoming more leveraged. Leverage increases instability. The greater the instability, the greater the movement once natural forces of the market take control in quest of balance.

position in SPX