Many attributed at least part of the late '90s stock bubble to an increase in stocks bought on margin -- loans from a broker secured by an account's assets. Same for the great stock crash of 1929.

Even Alan Greenspan, typically one to assume investors always look after themselves, voiced concern before the market crashed late last decade, warning that the Fed "recognizes that considerable risks can be involved in the purchase of equity on margin, especially in volatile markets, and believes that lenders and borrowers need to assess carefully the risks they are assuming."

I wanted to revisit this topic, in order to see how today's margin levels stack up against those of the late '90s. To get an accurate view, I took total margin debt outstanding and divided it by total stock market capitalization (NYSE and Nasdaq).

Frankly, I was shocked at what I found. As a percentage of market capitalization, margin debt is at nearly the same level today as it was during the dot-com bubble:

Sources: NYSE, World Exchanges, author's calculations.

How can this be? Are we in a bubble equal to 1999-2000? Is today's market just marinating in a swamp of blind speculation?

Probably not.

First, stocks as a whole traded at over 30 times earnings in the '90s. Today's market trades at around 16 times earnings. If we're talking objectively about bubbles, today's market isn't within a hundred miles of the late '90s market. Not even close.

One factor causing the current margin boom could be interest rates. Margin debt is cheap right now. At E*TRADE (Nasdaq: ETFC), margin rates start at 8.14%, and go as low as 3.89% for balances over $1 million. Charles Schwab (Nasdaq: SCHW) charges customers between 6% and 8.5%. optionsXpress (Nasdaq: OXPS) charges as little as 4.25%. Interactive Brokers (NYSE: IBKR) lends to customers for as low as 0.5%. Most of these interest rates are calculated based on prime rates tied to the Fed Funds rate, which is currently at an all-time low, and a tiny fraction of where they were 10 years ago.

Combine cheap debt with relatively low stock prices, and there's room for arbitrage -- and investors are likely exploiting it. One could, for example, use margin to buy a high-yield stock like Annaly Capital (NYSE: NLY) or Altria (NYSE: MO), and earn more in dividends than the cost of the loan. Provided you can stomach volatility, that's about as close to free money as it gets. (But please, please, don't try it).

Another reason margin debt could be booming: Most brokers let you draw personal checks against a margin account, essentially turning it into a checking account with a revolving line of credit. Margin, then, might be replacing other forms of credit with less Fed-sensitive interest rates, such as credit cards and auto loans. Which would you take: A 15% (or more!) interest rate on a Visa (NYSE: V) card, or an 8% interest rate from E*TRADE? Me too.

A third, and most likely, explanation for the margin boom is the stock crash of 2008-2009. Total margin debt outstanding today is not much higher than the amount outstanding in 2005-2006. The reason margin debt as a percentage of market capitalization has risen is more due to the fact that the market has fallen. In that sense, margin debt isn't necessarily booming; stocks prices are just depressed.

What do you think? Let me know in the comments box below.

Fool contributor Morgan Housel owns shares of Altria. Interactive Brokers Group, optionsXpress Holdings, and Charles Schwab are Motley Fool Stock Advisor selections. The Fool owns shares of Altria, Annaly Capital Management, and Interactive Brokers Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.