Watch out, leverage! Looking forward to a margin money disaster?

Watch out, leverage! Looking forward to a margin money disaster?The entire current growth of the S&P 500 is based on transactions with leverage. In June, total margin positions increased by almost 6% in just 1 month. Pessimists are afraid of a market crash similar to the crisis of 1929 and the beginning of the Great Depression.The growth of shares in May-June was accompanied by the fastest increase in margin debt since 2020 (the same leverage provided by the broker). Is it a lot or a little?The amount of margin debt exceeded the amount of free funds on the accounts by 4.7 times. That is, on average, traders hold assets with leverage of 1:5 in their portfolios.So, the leverage is 1:4.7, and in some assets even higher  this is a historical record. Even in 2020, it was less. Markets are rising, and along with them is the debt of investors. But in 2020-2021, the debt was almost free due to zero rates, and now the margin has become much more expensive. Rates at individual brokers have increased several times.Now the growth of indices is based on debt financing  a similar situation was in 1929. Back then, even small customers brought cheap credit money to the market, and it did not end well. But its not worth waiting for a similar collapse in 2023  the system has seriously changed.But this does not mean that there will be no negative consequences. At a minimum, the following chain of events is likely: when investors are unable to service expensive debt, they will begin to close positions so as not to go into a deep negative; when everyone realizes that the market is overbought, a correction will begin; for those who have not sold yet, margin calls will work  a complete capitulation of the bulls before the general collapse of the market.And this is not Armageddon, but a very real scenario. Correction is inevitable, but a significant amount of credit money in the system will make this process more dangerous.Let's see what happens.Profits to yall!#ForexChief #SP500 #stocks #Market #forexnews #blockchain #worldnews #crypto