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<h2>Securities-Backed Loans… Just the Tip of the Iceberg?</h2>
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<blockquote class="wp-block-quote"><p>Aging bull markets are naturally predisposed to excesses –particularly in debt and leverage– and once again nontraditional loans are taking center stage.</p></blockquote>
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<ul><li><strong>Markets are relaxing merrily on a powerful time bomb</strong><br>Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) – or “shadow margin” because no one knows how much of it there is.</li></ul>
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<figure class="wp-block-image size-large"><img src="https://ns2020-investech.investech.com/wp-content/uploads/2020/12/iceberg.jpg" alt="" class="wp-image-4898"/></figure>
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<p>It’s been over 12 years since we warned about the highly questionable mortgage lending practices that mushroomed during the Housing Bubble. Now it appears that innovative lending is back in vogue. Securities-backed loans (SBLs) are among Wall Street’s hottest new products in this bull market, and they’ve been growing faster than Jack’s beanstalk over the past few years:</p>
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