According to the latest data from the US Financial Regulatory Authority (FINRA), as of the end of February this year,Stock marketInvestors' total margin borrowing (Margin Debt) reached a record $814 billion, up 49% from a year earlier and the fastest growth since 2007 (before the financial crisis).

Review historical dataThe last time margin lending balances grew so fast was in 1999, during the dotcom bubble.

Does the high level of margin borrowing necessarily indicate that the market is about to collapse? Let's hear what Wall Street analysts have to say.

Bloomberg: the market is far from a crash

According to the historical data in the above picture, it is not difficult to seeThe increase in the balance of margin borrowing is always accompanied by a bull market; after the leverage growth rate has peaked, the stock market is likely to usher in a historic slump within a few months.. But Bloomberg research analysts also point out that it is hard to know what amount of margin is a sign that the stock market is in danger of collapse.

One measure is to refer to the ratio of margin debt to the total market capitalization of the US GDP or stock market. In recent weeks, analysts have observedThe margin debt / GDP ratio is about 3.6%, a record high.. But as early as 1929, the margin debt-to-GDP ratio had reached 6% and 8%.

So Bloomberg believes that the current market has not reached the pre-crash frenzy.SpeculationStage。

Wall Street bull's point of view

Some analysts sayThe rapid growth of margin debt will fuel the bubble. They worry that if the market falls, today's historically high borrowing levels will hurt investors.

Margin lending fuelled the bull market, but also exacerbated the bear market to some extent. As the stock market rises, the level of margin debt is bound to get higher and higher. This is why margin borrowing will be one of the causes for stocks to fall in the event of signs of a stock market crash.

-Edward Yardeni, president of consulting firm Yardeni Research

Margin trading is a double-edged sword--Leverage increases the purchasing power of investors, but it also puts them at greater risk.. When the stock falls, the lender can ask the investor to take out more collateral or sell the stock, which is called margin call.

As a result, some regulators have expressed concern about investors taking on too much leverage risk. On Tuesday, the Commodity Futures Trading Commission (CFTC) said in a notice to investors that combining leverage with Internet hype could be dangerous.

Speculative short-term trading is always risky, but it can be the beginning of disaster when it is accompanied by unfamiliar products and markets, leverage and the advice of anonymous investors.

-United States Commodity Futures Trading Commission

The lack of transparency in the current market makes it impossible for the average individual investor to know what is going on behind it.

-Josh Galper, CEO of Finadium, a research and consulting firm

What do you guys think?