The Globe and Mail reports in its Tuesday, June 30, edition that the borrowed money fueling the U.S. stock rally is becoming more expensive, raising concerns on Wall Street about how much longer this can continue. A Reuters dispatch to The Globe reports that inflows into leveraged exchange-traded products, increased stock options trading, and high hedge-fund exposure are straining the balance-sheet capacity of large banks, leading to higher loan costs for stock trading. Primary dealers are carrying record equity repo exposure, surpassing $220-billion (U.S.). Repo is short for the repurchase agreements in which traders borrow from banks for terms as short as a day in exchange for securities, then repurchase the securities when the loan expires. Rising repo costs are manageable in rising markets, but when stock prices flatline or fall, they can prompt a quicker retreat from trading. Morgan Stanley's Martin Tobias says, "Equity funding is the canary in the coal mine for a reset of investor perception about financial conditions." He says the risk is that high costs could make some trades using borrowed money too expensive to attempt, further narrowing markets.