By Wolf Richter
Nov 21, 2018
A note from Pastor Kevin Lea follows this article.
It gets serious. Margin calls?
No one knows what the total leverage in the stock market is. But we know it’s huge and has surged in past years, based on the limited data we have, and from reports by various brokers about their “securities-based loans” (SBLs), and from individual fiascos when, for example, a $1.6 billion SBL to just one guy blows up. There are many ways to use leverage to fund stock holdings, including credit card loans, HELOCs, loans at the institutional level, loans by companies to its executives to buy the company’s shares, or the super-hot category of SBLs, where brokers lend to their clients. None of them are reported on an overall basis.
The only form of stock market leverage that is reported monthly is “margin debt” – the amount individual and institutional investors borrow from their brokers against their portfolios. Margin debt is subject to well-rehearsed margin calls. And apparently, they have kicked off.
In the ugliest stock-market October anyone can remember, margin debt plunged by $40.5 billion, FINRA (Financial Industry Regulatory Authority) reported this morning – the biggest plunge since November 2008, weeks after Lehman Brothers had filed for bankruptcy:
During the stock market boom since the Financial Crisis, this measure of margin debt has
To read this article in its entirety, go to: https://wolfstreet.com/2018/11/21/stock-market-margin-debt-plunges-most-since-lehman-moment/
Note from Pastor Kevin Lea: This and many other recent financial articles provide evidence that we are on the verge of another major financial collapse which will dwarf the one experienced in 2007/8. Could this coming collapse be so severe that the entire current financial system (based on fiat currencies and debt) will collapse? Time will tell, but someday the world will be ruled by a global leader who will be able to control the buying and selling of everyone on the planet (Revelation 13).
A week ago, Christine Lagarde, head of the International Monetary Fund encouraged all the central banks to switch to digital currency (https://www.bbc.com/news/business-46203869). A global digital currency system would be a perfect tool to monitor and control the buying and selling of all the citizens of the world.
It appears to me that we are getting close to the days when two-thousand-year old prophecies are able to be literally fulfilled for the first time in history.
I pray the reader has trusted in the biblical Jesus as your Lord and Savior. If you have, then you have spiritual treasure which cannot be taken away for all of eternity (Matthew 6:19-21). If not, you are likely to see your so called earthly treasures slip through you fingers, and then what will you do?