Summary
PSE indicator commentary on US margin debt as of March 2001 (data through December 2001). Posted with an image chart showing margin debt levels. Margin debt (money borrowed to buy shares) can be expected to peak with the stock market. US margin debt last peaked in March 2000 at $278.5 billion — coinciding with the Dow’s January 2000 peak and the NASDAQ’s March 2000 peak. PSE expects margin debt to again peak in similar fashion at the next market high, expected towards the end of the decade in line with the 18-year real estate cycle. Speculative asset prices are primarily fueled by debt.
Key Claims
- US margin debt peaked in March 2000 at $278.5 billion, coinciding with the stock market top. — confidence: high
- The Dow peaked in January 2000; the NASDAQ peaked in March 2000; margin debt confirms both. — confidence: high
- Margin debt can be expected to peak again at the next market top (projected end of decade per the 18-year cycle). — confidence: high
- Speculative asset prices are primarily fueled by debt. — confidence: high