Short Selling the Bankers (July 2007) (BAC, WB, WM, CFC, JPM, USB, WFC, NCC, STI, C, STT)

Short selling in banks is always an interesting area to watch, particularly in the midst of a credit lending debacle that has led to a lower credit ranking and higher loan loss reserves in most financials.  It appears short sellers are expecting credit issues to remain a headwind, at least that is how the short interest trends are acting.  Here is the JULY, JUNE, and Change to shares in the short interest:

BANK (TICKER)                                    JUNE    JULY    CHANGE
Bank of America (BAC)            48.7M      35.2M      +38%                  
Wachovia (WB)                          39.98M   31,88M    +25%
Washington Mutual (WM)        47.99M    39.98M    +20%
Countrywide (CFC)                    51.4M      45.7M     +12%
JPMorgan Chase (JPM)           33.64M    31.63M    +6%.
US Bancorp (USB)                    36.62M    35.42M    +3%
Wells Fargo (WFC)                     53.7M     51.8M      +3%            
National City (NCC)                   34.04M    3.72M      +1%         
SunTrust Banks (STI)                 7.04M     7.42M       -5%
Citigroup (C)                               27.17M    31.26M    -11%
State Street (STT)                        6.43M      13.8M     -53% 

Short selling increased overall on the NYSE as seen on the NYSE notice, but this went above and beyond.  Here was a sector breakdown for the May to June period for 2007 if you want to compare.  Interestingly enough, short sellers are lightening up on Citigroup and Sun Trust saw another drop.

Jon C. Ogg
July 20, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.