The spectre of the 1929 stock market crash looms large for UK investors as traders borrow record amounts to invest in rising stock markets
by John Ficenec
NOTHING has been learnt from the madness of the 1929 stock market crash as once again traders reach for record amounts of debt to pile into rising share prices.
The level of margin debt that traders are using to buy shares in the stock market reached the highest levels on record according the latest data from the New York stock exchange.
US traders borrowed $460bn from banks and financial institutions to back shares, and once cash and credit balances held in margin accounts of $278bn is subtracted this left net margin debt of $182bn in July
Traders are now more exposed to a fall in share prices than at the height of the dot-com bubble at the turn of the century, and just before the financial crisis during the 2007 peak.