Behind the AI-driven global bull market, leverage risks are escalating. US margin debt has hit a record $1.4 trillion, leveraged ETF assets doubled to $220 billion in two months; South Korea's KOSPI crashed and triggered a circuit breaker due to high leverage and concentrated holdings. Barclays and Morgan Stanley warn that leveraged derivatives could trigger a negative spiral of deleveraging, amplifying market drops.
Leverage Risks Loom: US and South Korea Data
The global AI bull market is hiding massive leverage risk. US margin debt has reached a record $1.4 trillion, and leveraged ETF assets have doubled in the past two months to $220 billion. Meanwhile, South Korea's KOSPI index experienced a violent swing due to high leverage and concentrated positions, triggering a circuit breaker. Barclays and Morgan Stanley have warned that leveraged derivatives could spark a negative deleveraging spiral, further amplifying market declines.
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