US Leverage Data Hits Record Highs
Behind the global AI bull market, the shadow of leverage risk is rapidly expanding. The latest data shows that US margin debt has soared to $1.4 trillion, a historic peak. Concurrently, assets under management in leveraged ETFs have doubled in just two months, surging from approximately $110 billion to $220 billion. These figures indicate that investors are betting on AI-related assets with unprecedented borrowed funds, significantly increasing the market's underlying fragility.
Korean Circuit Breaker and Institutional Warnings
South Korea's KOSPI index recently experienced sharp volatility and triggered a circuit breaker, driven by high leverage and concentrated positions. Barclays and Morgan Stanley have issued reports warning that the elevated levels of leveraged derivatives could lead to a negative deleveraging spiral: as prices reverse, forced liquidations further depress asset prices, amplifying overall market declines. Analysts urge investors to remain vigilant about this 'sword of Damocles' and the concentration risk in leveraged positions.