Investor Net Worth Hits Historic Low, Margin Debt Levels Resume Their Accent

Margin Credit is used as a gauge to help understand the relative pricing of equities. Margin Credit doesn't necessarily drive equity growth but is more or less a product of hubris, hope, and the margin utility to brokers to lend to customers. Investor Net Worth is the sum of Credit Balances and Free Credit minus Margin Debt and is used to determine the ability of borrowers to cover margin calls using cash in their account thus preventing a broker liquidation of shares to make good on the margin call.
According to data from NYX Data compiled by Benzinga Investor Net Worth is at historic lows as of March, below the levels associated with the Great Recession, the Dot.com Bubble, and the 1987 Crash.

So long as margin lending remains opportunistic for brokers any broad market sell offs will continue to be contained to 5 percent.  Once rates are raised and lending is less advantageous to market participants, expect liquidation to compound any market fears that will be present.

For context of the current margin credit situation, Street Talk Live produced a great chart going back to January 1980 that is basically an extension of the first image in this article.

The continuation of the market hubris appears to rest of the perception of when the US Fed will raise its Federal Funds Rate.  Should the market be caught of guard, volatility will surge and panicked selling will be compounded by broker liquidations.