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Chart of the Week: NYSE Member Firms’ Client Margin

Posted By Barry Ritholtz On April 19, 2005 @ 12:23 pm In Markets,Trading | Comments Disabled

e last addressed Margin debt back in September 2003 [1].
At that time, we noted that margin was only modest, and represented little
danger to the market. As the chart below shows, Margin has scaled up
significantly. At present, while Margin debt is 20% below its 2000 peak, it’s
the highest it has been since early ‘01.

NYSE Member Firms’ Client Margin
click for larger chart

Margin_march_05 [2]

Source: NYSE [3]

It is at the greatest spread relative to the Nasdaq since
the last time we last addressed the issue. Margin debt holds the additional
risk of “forced selling” into any further weakness. As we saw post-2000, the
daily liquidations exacerbated the downward movement as the markets collapsed.

Random Items:

Here It Comes: The Sarbanes-Oxley Backlash [4]

The Cruelest Month? [5]

How to Pick the Tech Winners [6]

Higher Oil Prices Can’t Do the Work of the Fed [7]

The Long Emergency [8]

Genius loves company [9]

Quote of the Day:

"I have no special talents. I am only passionately curious."
-Albert Einstein

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2005/04/chart-of-the-week-nyse-member-firms%e2%80%99-client-margin/

URLs in this post:

[1] September 2003: http://bigpicture.typepad.com/comments/2003/09/nasd_firm_margi.html

[2] Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/margin_march_05.jpg

[3] NYSE: http://www.nyse.com/pdfs/margin0205.pdf

[4] Here It Comes: The Sarbanes-Oxley Backlash: http://www.nytimes.com/2005/04/17/business/yourmoney/17sox.html?ex=1271390400&en=526bbbd625461134&ei=5090&partner=rssuserland&emc=rss

[5] The Cruelest Month?: http://online.barrons.com/article/SB111360851591808543.html?mod=b_this_weeks_magazine_main

[6] How to Pick the Tech Winners: http://www.businessweek.com/bwdaily/dnflash/apr2005/nf2005047_6796.htm

[7] Higher Oil Prices Can’t Do the Work of the Fed: http://quote.bloomberg.com/apps/news?pid=10000039&refer=columnist_baum&sid=agwo_SRsapps

[8] The Long Emergency: http://www.rollingstone.com/news/story/_/id/7203633?pageid=rs.NewsArchive&pageregion=mainRegion&rnd=1111689845570&has-player=true&version=

[9] Genius loves company : http://www.thedeal.com/NASApp/cs/ContentServer?pagename=TheDeal/TDDArticle/StandardArticle&c=TDDArticle&cid=1112030891267&r=InFs&p=M4YD5AR2

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