As we noted here, October 2013 NYSE margin debt stood at a new record high of $412.5b (up from $401.2b in September) and exceeded the prior high from April of $384.4b and net investor worth dropped to a record low. However, as BofAML notes, NYSE margin debt and the S&P 500 have +0.76 correlation using a 48-month (4-year) correlation as of October 2013. This is the highest correlation in our data history back to 1964. A positive correlation means that margin debt and the S&P 500 tend to move together; which as they helpfully note means – as long as the market rises, margin debt is not a risk. Better keep BTFATHing, it’s the patriotic thing to do.
Chart: BofAML
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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/R9EXAj8PWkA/story01.htm Tyler Durden