NYSE Margin Debt Rises To Fresh Five Year High As Short Interest Slide Continues

 

Submitted by Tyler Durden on 01/29/2013 14:59 -0500

• New York Stock Exchange
• NYSE Short Interest
• POMO
• POMO
• Short Interest

With the Fed no longer even pretending it is not all about the stock market, where some mysterious trickle down force is supposed to boost the economy the second the S&P hits new all time highs, and injecting billions into stocks via Primary Dealers courtesy of the daily now-unseterilized POMO (today's edition saw another $3.4 billion enter risk assets), there is apparently no reason to worry about anything. Sure enough, institutions don't need a second invitation to BTFD especially if they can do so on margin. According to the latest NYSE margin debt data, the December of margin debt used for various leveraging activities rose for the fifth consecutive month, reaching $331 billion - the highest since February 2008, when the market was declining, and back to the levels from May 2007 when the market was ramping ever higher to its all time highs which would be hit 3 short months later, and just as the subprime bubble popped.

Margin debt, or gross institutional leverage ex-shadow banking leverage via various repos, vs the stock market:

And just in case there is any confusion whether the shorts have thrown in the towel, here is a chart showing total NYSE short interest, which has declined in virtually a straight line since June. A mere 400mm shares covered lower, and short interest too will be at the lowest it has been in more than 5 years.

Coupled this with the epic monkeyhammering that the VIX is subjected to every single day and the only possible conclusion is that pretty much everyone is convinced that nothing can ever again go wrong.