Don't forget the margin

We have been pointing out the falling margin balances over the past months. Rising margin isn't the problem, the problem is when it all reverses. The margin delta has been declining for months, but few have been paying attention to this (outlined in January here). MS writes: "Rising rates are increasing the cost of margin while markets are 15-20% lower from 2021 highs,hurting the 'buy the dip' mentality. We think lower liquidity will continue to point to a broad de-rating and lower prices at the index level".