Short Ideas: Lloyds and U.S. Bank Stocks

According to Reuters, and in a letter to Financial Services Authority to chief executive Hector Sants, Treasury Committee chairman John McFall said there had been anecdotal evidence that some hedge funds had been short selling U.K. bank stocks since the ban was lifted on January 16.

Our data reveals that there has been scarce short interest activity among the banned financial stocks as of the close of business on Monday, our most recent data and the most up-to-date data available globally. Moreover, the short position in Lloyds (LYG) has decreased from 1.27% of its shares outstanding on loan (%SOOL) to 0.88% now. In comparison to HMV’s %SOOL of 22.78% SOOL, this is a relatively low figure.

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U.S. banking stocks also hold similar short positions, with Citigroup (C), Bank of America (BAC), JP Morgan chase (JPM), State Street (STT) and Wells Fargo (WFC), all having under 2.5% of their SOOL.

Citigroup has seen a rise in short interest since January 12, from 1.01% SOOL to 1.38% on Monday. JPM has risen from 0.57% to 0.68% in the same period. State Street has risen from 0.96% to 1.09%, and Wells Fargo has risen from 2.01% to 2.04%.

Disclosure: None

Comments

[ironpants:]

Doesn't mean the ultrashort ETF's aren't totally distorting the bank stocks almost daily.

Jan 22 06:40 AM

[Ishortyou:]

if you want your economic miracle get rid off the 18 months oversupply in housing inventories and the 600K+ new house starts and voula there you have your miracle.

Jan 22 07:53 AM

[Vox Rationalis:]

I bet those numbers are down significantly since then. Twenty percent up days will do that.

Jan 22 08:43 AM

[Lilliana:]

You are all going to miss the UPTURN

Dont you know that BoE is going to buy up Corporate Bond in a tranch of 50 Billion.
Brilliant.
Frees up funds for the Banks
Gets completly away from the Subprime and mortgage disaster,
Will definatly get the UK economy back in the hands of the London financiers.
Banks can now loan to reputable Corporation at honest and valued rates....and make a profit.
Tranch is a bit small but can be increased.
This is the long awaited 'Turnround Point"
Life is Good.

Jan 22 01:30 PM

[gordontravels:]

Available home inventories are killing the building industry. I'd like to see the government do two things:

1. Create a National Bank to take all the bad debt. Scary? At least the total would be apparent and over time could be dealt with instead of our piece meal approach.

2. Don't give willy nilly Stimulus to states so they can spend it on infrastructure. That is estimated to be approximately 90 plus Billion. Instead give them 48 Billion divided into the budget deficits they are running. Force them to pay off the deficit and have a clean slate and... no more money. States would have to live within their means. Are you listening California?


On Jan 22 07:53 AM Ishortyou wrote:

> if you want your economic miracle get rid off the 18 months oversupply
> in housing inventories and the 600K+ new house starts and voula there
> you have your miracle.

Jan 22 03:49 PM

[James Wilson:]

If the shorts keep hammering away they will eventually drive the U.S. Economy into a depression. What good will money be when there is nothing to buy ?

Even banks need some rome to breath and get things going in the right direction.

You can't do much good with someone standing on your back 24/7 !!!!!

Jan 28 05:19 AM

[HumanEAting...:]

Financials may be turning around but mustn't go UP as quickly as they did today. Time to short to short-term trade!

Jan 28 10:09 PM