Lehman, the Short Version

Unsurprisingly, there has been a significant increase in short positions in Lehman Brothers (LEH), and particularly since October last year. Back then, the percentage of Lehman's Market Cap on Loan (%MCOL) was 5%, and today it is 16% (please click to enlarge graph). Utilisation is at 54%, so there is still a fair amount of stock available for borrowing. There are 11 Days to Cover.

The average Utilisation for the rest of the S&P 500 is 7.45%, and for the rest of the North America Diversified Financials it is 10.45%. The FT reported this morning that 'Short-selling on Lehman hits a record level." The data would certainly justify that analogy for the past two years. The value of the bank has nearly halved in the past year, so for those investors who increased their positions at the correct time, substantial profits would have been made.

Other heavily borrowed companies in this market include Washington Mutual (WM), with a %MCOL of 24.67%, and Capital One Financial Corp (COF), with a %MCOL of 22.61%, which will be announced as one of Data Explorers' best-timed H1 shorts for 2008. 

Comments

[phinsuntanning]

I told you guys , exactly 2 months ago, just a reminder:

US March 31
March 31 2008 Fiscal Year 2007: Capital/Assets
US
US Broker Bear Stearns 3,0%
US Broker Morgan Stanley 3,0%
US Broker Merril Lynch 3,1%
US Broker Lehman 3,3%
US Broker Goldman Sachs 4,5%
US Bank Citigroup 5,2%
US Bank JP Morgan 7,9%
US Bank Wells Fargo 8,3%
US Bank Bank of America 8,6%
US Bank Wachovia 10,2%

Europe Capital/Assets
Europe
EU Broker UBS 1,9%
EU Bank Barclays 2,6%
EU Broker Commerzbank 2,6%
EU Bank BNP Paribas 3,5%
EU Broker Credit Suisse 4,4%
EU Bank Royal B Scotland 4,8%
EU Bank BBVA 5,6%
EU Bank HSBC 5,8%
EU Bank Santander 6,3%

[The RealExpert]

Jessica, is this supposed to be "news" or "insight?" I can't determine which.

To phdinsuntanning, even 2 months ago what you posted was public knowledge. Let me make it simple. Most of the banks are leveraged 30:1 and they have been for a while now. The unwinding process is going to be very ugly for someone, most likely for holders of the dollar. Dump the dollar and US assets while you still have a chance.