Borrowing heavily to buy equities: An indication of trouble on the horizon?

An article in the WSJ reports that stocks are supported by record levels of borrowing (known as margin debt). Per the author, margin lending growth has proven to be a decent indicator of overvalued markets.

“Rising margin lending from Swiss and U.S. wealth managers can make a downturn far more painful. … In the U.S., margin debt is more than three-times the level ahead of the 2008 crisis and is greater even than its peak in 2000 before the dot-com crash, according to the B.I.S.”

bubble debt
Source: Paul J. Davies | "The Global Stock Market’s Hidden Juice" | The Wall Street Journal | 09/24/2017 | Visit