As raw data shows nothing about those shorting airlines & insurers prior to the attack,can we also guess they might not have been the ones long gold and or involved in the terrorist attack?:
Tuesday September 25, 1:12 pm Eastern Time
NYSE data shows mixed pre-attack short-sale trends
By Kevin Drawbaugh
WASHINGTON, Sept 25 (Reuters) - Short interest trends in 24 top U.S. airline, insurance and investment bank stocks were decidedly mixed in the three months before the Sept. 11 attacks that some have linked to possibly suspicious trading activity, New York Stock Exchange data showed Tuesday.
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Hard-to-explain increases in short interest were evident in only a handful of the stocks based on the NYSE data, which analysts and traders said was difficult to interpret.
Regulators worldwide are investigating whether those behind the attacks that left thousands dead tried to profit from their inside knowledge by playing the markets. Some attention has focused on short selling of stocks hit hard by the attacks.
The NYSE data showed significantly and steadily increased short interest in just five of 24 leading airline, investment bank and insurance stocks from June 15 to Sept. 13:
--UAL Corp. (NYSE:UAL - news), parent of one of the airlines whose jets were hijacked and crashed, had short interest of about 4.4 million shares in September, well above August's level of 3.1 million, July's of 2.6 million and June's of 2.4 million.
--XL Capital (NYSE:XL - news), a Bermuda-based insurer, saw short sales of its stock jump sharply on the NYSE to about 5.1 million shares in September from 1.8 million in August, 1.7 million in July and 1.6 million in June.
--Short sales of stock in Morgan Stanley (NYSE:MWD - news), the investment bank, crept up steadily to 17.6 million shares in September from 15.8 million a month earlier, 14.9 million in July and 14.5 million in June.
--Lehman Brothers (NYSE:LEH - news), another investment bank that had two floors in the World Trade Center, had about 7.0 million shares sold short by mid-September, compared with roughly 5.6 million in August and July and 4.3 million in June.
--CNA Financial (NYSE:CNA - news), a leading business insurer that reported an unexpectedly large loss Aug. 2, saw its short interest rise more than five-fold in September to 1.8 million shares from a range of 345,000 to 386,000 shares since June.
DATA SEEN DIFFICULT TO INTERPRET
``It's very difficult to conclude just from looking at the raw data whether there's any evidence or not,'' of suspicious trading, said Ed Keon, chief quantitative strategist at Prudential Securities.
``It's certainly conceivable. Whether it actually happened or not, I'll leave it to people with much more experience in this area than I have.''
Shorting is a common, but risky way to exploit a falling share price. Shorts borrow shares and sell them, hoping to repurchase them later more cheaply and pocket the difference as profit. They then return the shares to their owner.
Osama bin Laden, fingered by President Bush as the prime suspect in the attacks, is the heir to a Saudi construction fortune. His wealth is estimated to be as high as $300 million.
Experts on Mideastern extremists said bin Laden or associates may be capable of sophisticated financial speculation. But some doubted whether bin Laden, holed up in Afghanistan, could have shorted NYSE stocks.
The stock price of UAL, parent of United Airlines, declined more than 40 percent between Sept. 10 and the close of trading on Sept. 24, underperforming the S&P500 by 35 percent. Rising short interest in the stock before the drop could simply be explained by general investor pessimism on airline stocks that started several months ago, traders said.
Like UAL, shares in investment banks Morgan Stanley and Lehman and in insurers XL and CNA have also fallen since the attacks, although CNA's was already down well beforehand.
Authorities in Washington, London, Tokyo, Paris, Frankfurt and elsewhere are probing unusual trading in stocks like these and in related put options before the attacks.
The data obtained by Reuters from the NYSE are contained in monthly reports on short interest that broker-dealer firms regularly submit to the NYSE, the American Stock Exchange and the Nasdaq on positions taken by the firms and by clients.
The clear paper trail left by shorts in the United States has led traders and analysts to speculate that, if there was unusual pre-attack shorting, it probably occurred in Europe or Asia.
European exchanges do not routinely report short interest data. The Hong Kong Stock Exchange does, but other leading Asian exchanges do not.
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