After it was announced that the Fed gave the big banks a pass on their “stress” test, the TBTFs announced huge dividend and share buyback plans:
If the banks had properly marked to market their Level 3 assets and some of their riskiest non-Level 3 assets, would they have still passed the Fed stress test, which essentially places a stress-test “bar” on the ground and lets the banks step over it? Probably not. This would explain why JPM insiders have been dumping shares en masse over the last three months:
The “buys” are deceptive because those “buys” are the exercising of compensation options. The most aggressive sellers have been CEO/Chairman, Jamie Dimon; General Counsel, Stacey Friedman (hmmm…); and CFO, Marianne Lake (hmmm…).
With JP Morgan’s announced 90% increase in its share buyback program, the shares will have an even bigger bid in the market from shareholders into which insiders can dump.
The question is – rhetorical, of course – why would these insiders be dumping shares if the outlook for the Company’s earnings, stock price and financial condition was positive?