(New York)

Prepare to have your eyes opened, wide. US investors have taken out $642.8 bn of loans against their stock portfolios in order to deepen their positions in the market. That huge margin debt exacerbated this month’s selloff, and is likely to make the next one even worse, as many investors will be forced to liquidate positions. The size of the total margin debt (as a percentage of total market cap) is greater than at any point since the figure started to be tracked in 1980.

FINSUM: Record high margin debt sounds like a great leading indicator for a crash.