In Reply to: Stopping drugs from coming into the country. posted by mh on July 29, 2025 at 09:40:26
Smith also pointed to record levels of margin debt among investors. The trend of investors borrowing money to buy stocks is often considered a sign of an over-extended market rally or a speculative bubble.
According to data from Finra, margin debt has topped $1 trillion, an increase of 9.4% in the last month, and a jump of 25% in the last year.
"Much of the new credit is to younger investors with fewer reserves," Smith said. "Any sort of hiccup could trigger a wave of selling due to margin calls. Leverage amplifies moves in both directions."
This is likely partially fueled by the recent meme stock rally, which already seems to be running out of steam. Stocks like Opendoor, Krispy Kreme and Rocket Companies, which surged last week on retail-driven momentum, are already back in the red.