WHY TODAY'S MARKET FEELS A LITTLE TOO MUCH LIKE 1999

3. MARGIN DEBT — WHY FALLS TURN VIOLENT Margin debt is borrowed money used to buy stocks. Borrowing feels great when prices go up. It’s devastating when prices fall.

In our financial opinion: This market isn’t confident. It’s more leveraged than any point in history and pretending doesn’t matter. Borrowing to buy stocks is at record levels:

Higher than 2000. Higher than 2008. Higher than 2022. That’s not a coincidence. That’s a pattern.

Margin debt makes everyone feel smart on the way up. On the way down, it turns into a meat grinder. When prices fall, people don’t get to be patient. They don’t get to be long-term. They don’t get to “ride it out.” They get liquidated.

Borrowed money turns hope into a deadline. Nobody gets to stand on the sidelines. When forced selling starts, it hits everything and everyone.