Margin debt hit $1.5 trillion, higher than 2007 both in absolute terms and as a share of GDP. Mark Moss argues the financial system is so leveraged that any small trigger—a reversal in AI stocks, a funding shock, geopolitical tension—could spark forced selling across markets. You don't need to predict what starts it.
Let's compare what we have now, the $1.5 trillion, to where we were in 2007. All right. Today's reported margin debt, it's not just bigger in absolute terms, which it is way bigger, but if we look at it, say relative to GDP, it's also way higher. And so we can see that the spark could be pretty much, it could come from almost anything like AI stocks. Are we in a bubble? Could there be an AI reversal? Maybe there's a funding shock, maybe an energy spike, something over in the Middle East with Iran, something like that. Now, it could be something that none of us see coming, a true black swan. Okay. Now we, we don't need to predict it, right? We only need to know the system carries enough leverage to turn just a small little spark into this force selling.
