Action Alert: a pick up in margin debt could be a sign of a another brewing asset bubble
Action Alert: a pick up in margin debt could be a sign of a another brewing asset bubble, according to the WSJ (subscription), or it could reflect improved investor sentiment. Analysts suspect it's indeed, both, but are more worried by the former given the massive monetary accommodation around the world. According to the Journal, investsors held $379.5 B in margin debt at the end of Q1, just off the record $381.4 B from July 2007. The big question is, what's the Fed's responsibility in this? Ironically, Fed Chairman Bernanke (helicopter Ben) was speaking today on monitoring the financial system and he addressed the question of asset bubbles. He also commented on investor search for higher yields, though he didn't say the Fed could be part and parcel behind such actions. Analysts and others attribute much of this potential bubble with the FOMC's uber-easy money policy that has spread globally since the crisis began five years ago (Bank of American analysts report global central banks have eased 512 times since 2007). :theflyonthewall.com
