A fresh sign of investors piling into stocks with borrowed money rather than cash has emerged. According to The Kobeissi Letter, net credit balances, the cash investors hold in brokerage accounts minus margin debt (money borrowed against stock holdings), fell $70 billion in June to a record negative $1.06 trillion. A negative reading means investors collectively owe more than they hold in cash. That deficit has more than quadrupled since the 2022 bear market, over which time margin debt itself climbed $895 billion to a record $1.50 trillion. Kobeissi contrasts this with the 2008 financial crisis, when net credit balances stayed positive, meaning investors held more cash than debt amid a broad flight from risk into safety. The current numbers point the opposite way, with Kobeissi describing investor risk appetite as being at unprecedented levels.
Why it matters · Investors are carrying more borrowed money against stocks than ever, which means a market pullback could trigger forced selling that amplifies the decline.
Worth asking · Is a record-low net credit balance a warning sign, or just normal behavior in a strong bull market?