🔥U.S. investors’ first time seeing margin debt exceed $1,000B versus cash holdings

Net credit balance of Americans fell further -$70M in June, down to -$1.06T for the first time ever in recorded history. Margin-debt investors owe more $1T than the amount of cash they are holding in their brokerage accounts.
The metric measures the gap between margin debt and free credit balance— the more negative it is, the higher the risk of a long squeeze when the market corrects
Since the 2022 bear market low, this metric has risen more than 4 times.
Meanwhile, margin debt increased another $895B over the same period, reaching a record high of $1.50T.
-> Looking at history during the 2008 financial crisis (the phase of the market slump that was strongest in the past 15 years), net credit balance remained in positive territory, meaning investors then held more cash than margin debt, reflecting defensive sentiment and a broad wave of deleveraging.
But put in context, leverage surged mainly because the market had already swelled beforehand, rather than being a sign of uncontrolled speculation. The truly worrying part is that the pace of margin debt growth has been much faster than the market’s growth rate over the past 12 months—the same pattern that appeared before the 2000, 2007, and 2021 peaks.