Big Bank Bosses Are Dumping Their Stocks As "Credit Risk Ricochets Back"

Tyler Durden's picture

"Credit risk is ricocheting back as a legitimate concern after years of hibernation..." warns David Hendler, founder and principal at Viola Risk Advisors, who considers recent share sales by executives at the big retail banks, in particular, to be smart, as consumer portfolios are showing signs of strain.

Wall Street analysts have been urging investors all year to buy stocks in the big US banks, but, as The FT reports, Wall Street itself is not listening.

We noted at the start of the year that executives of the biggest TBTF banks were dumping their shares as a post-Trump rally took their stock prices higher...


And now, as The FT reports, it continues to gather pace. Insiders at the big six banks by assets — JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley — have in total sold a net 9.32m shares on the open market since the turn of the year. Even excluding Warren Buffett’s big dumping of shares in Wells in April, to avoid tripping over rules capping ownership by a non-bank, sales by insiders outnumber purchases by about 14 to one.

That is an unusually long streak of net sales, across each of the big six.

Last year, for example, insiders at JPMorgan, Citigroup and Bank of America bought more shares than they sold.

Buying and selling of shares by bank insiders can have a powerful signalling effect.

Last year Jamie Dimon, chairman and chief executive of JPMorgan, seemed to call an end to a mini-rout in bank stocks when he bought half a million shares in his own bank in mid-February.

But there have been no similar demonstrations of faith by senior insiders this year, suggesting they fear that the big gains under Mr Trump have come to an end.

Insiders at Goldman and Morgan Stanley have made no open-market purchases this year, according to the Bloomberg data.

So who is the sucker at this table?

Dick Bove gets it... "banks won't be able to hold on to the earnings boost they get from higher interest rates. The hole in the bottom of the piggy bank, as he described it, would be that higher rates would also hurt the value of financial assets held by the bank, thus leaking out any benefits from increasing borrowing costs."

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moorewasthebestbond's picture



The early bird gets the worm.

JRobby's picture

The worm has crawled up your ass and has eaten your brain.

Terrible way to go really.

DWD-MOVIE's picture

I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do…

quadraspleen's picture

wrong site dude. You need buzzfeed

jamesmmu's picture
The Soonest We Could Expect A Us Recession From Current Levels Is 4 Months.

Paul Kersey's picture

"The Soonest We Could Expect A US Recession From Current Levels Is 4 Months."

I went into Sears yesterday, and the huge store was nearly empty of customers and goods to sell. 78% of Americans are already living from paycheck to paycheck. For Main Street America, the recession that started at the end of 2007 is still in full force. Next stop; DEPRESSION.

new game's picture

two options, be a high priority sorter with amazon or get a delivery job getting this shit to households.

14/hour or 17.40/hour(uspo). sundays are mandatory. ps. have a very nice day...

gregga777's picture

"Wall Street analysts have been urging investors all year to buy stocks in the big US banks, but, as The FT reports, Wall Street itself is not listening."

The CON Street Swindlers are all acting in unison. They advise the muppets, er, I mean suckers, uh, I mean the marks, uh, the whatever's to buy what they are selling. After all, they ARE all fucking Swindlers.

JRobby's picture

I hope the bosses have filed all of the appropriate forms with the SEC?

(Laugh Track Deafening)

Gee! They over lent to bad risk borrowers again. Surprising..............

nmewn's picture

I've always found it revealing that when they say buy, they are selling. Swindlers doesn't even begin to cover it my friend. 

They (like other executives) get stock options rolling over (vetting) every year as a part of their "compensation package", very often the majority of their "wages" are paid in company stock. 

Now this "compensation scheme" was sold to the American public as a way for executives to have a vested interest in the company doing well by being paid in company stock, for if they were paid in company stock, they would always do whats best for the company to increase the share price or so the theory went.

But counterfeiting shares out of thin air to use in lieu of wages actually dilutes share value, on the age old principle that something rare has more value than something in abundance. It does have the positive effect in not having the company pay wages out of its earnings however those wages would have to be much less to stay in-line with what a company actually earns, now we can't have that, now can we?

What it also does is provide shares to the short side (those betting against the company) every time an executive dumps their shares for cash as "compensation/wages"...they (the exec's) are no longer "holding that bag"...the common share holder is. Now look at that, the over abundance of shares that are being issued by the company are being used to make bets against the company having been removed from "strong hands"...the execs.

So never let it be said by any executive that they are looking after the interests of the common stock holder or the company if they take the lions share of their compensation in stock...they are being ignorant of cause & effect or lying...five gazzilion shares floating around on a $20 company stock is a recipe for financial disaster in a real market. 

Its a very small club and we ain't init, 3/4's of them are probably short their own stock in private accounts ;-)

Memedada's picture

Inside trading is the name of the game. The article fails to show “a tendency” – the first graph going back 5 years shows nothing. The amount of data is not enough to conclude anything. Unless the change was dramatic – and it was not (compared to 2013 og 15).

Obsidian Samctum's picture

How the fuck does anybody know big bank bosses are dumping? Do they advertise it everytime they dump? How the fuck are people getting this information/disinformation?

willmont's picture

if you are an officer/director of any listed firm you must notify the fsa/sec when you buy or sell. it becomes public information.  not sure what the specific filing is called, or where to find it, maybe.  those bloomberg screenshots show insider activity fairly real time- probably from daily reports.

overmedicatedundersexed's picture

401k's to insurance co balance sheets and pension plans..must be protected..the Fed and sec will not allow them to fall..2008 was seen as a mistake in market policy..

ask Mr Chris Cox sec head at that time..if you can find him. He like so many criminals got away scot free.

JRobby's picture

Cox should be beaten into a pile of bloody meat and shoveled into the tiger cage at the zoo.

DennisR's picture

Fed prints money. Stocks go up. Not sure how you're not following this.

Ron_Mexico's picture

key words here (near the end): "financial assets held by the banks" . . . Now what might those assets be?  US treasuries bought with free money from the Fed?  The way I understand it the Fed is NOT part of the federal government. So couldn't Sessions go after them under the RICO statutes? That's clearly what all of this amounts to, and I'm tired of the endless prating and whining about it on here when nobody ever DOES anything about it.

DjangoCat's picture

I don't think you can count on Mr. Sessions, or Mr. Trump, for that matter.  The crimes will continue until morale improves.

Ink Pusher's picture

The inevitability of Longest Pump to be followed by Longest DUMP. 

Nationalize the FED and Barbeque Goldman Sachs.