⚠️Is the leverage BUBBLE in the US bursting? US margin debt plunged -$85 BILLION in July, to $1.42 trillion, the largest drop EVER. That is especially notable after margin debt surged +$198 billion in May and June, the largest 2-month surge on record, suggesting a sharp reversal in leveraged positioning. To put this into context, the 2nd-biggest monthly drop was -$80 billion in January 2022, just as US equities entered their 2022 downturn. The S&P 500 went on to fall -25% from its January peak to its October 2022 low. One month does not prove a bear market has begun, but a record unwind immediately after a record borrowing binge is a major warning sign. The bigger risk is a feedback loop where falling asset prices trigger more margin calls, forced selling and further deleveraging. This is a key signal to watch going forward.