Not sure if I’ve mentioned it here before, but I’m fond of my handy-dandy Ebay-based bankruptcy indicator. It works like this: When high-profile companies are in dire financial straits, or at least employees perceive that to be the case, insiders start selling … golf shirts and baseball caps.
Back when when Bear Stearns was going under there was a paroxysm of ponchos, pens and golf shirts, one that grew into a flood in the borked broker’s dying days. My hypothesis is that something similar happens in most such cases, with disgruntled employees selling off everything that isn’t nailed down to try make some money from the impending end.
Not yet. So far there is only one lonely Freddie Mac golf shirt , and three pieces of Fannie Mae clothing — and in all four cases the stuff is from an Ebay store, not an auction.
So, insiders at these two companies haven’t started selling, at least not yet anyway. But watch the golf shirts. They tell all.