Edward Harrison

Bearish on Banks - Why Now Is the Time to Sell

A friend just sent me this link of Chris Whalen apoplectic that Goldman is upgrading the banks:

finance.yahoo.com/tech...

Tomorrow, you will probably see a post I wrote about Goldman.

Bearish on Banks - Why Now Is the Time to Sell

Your comment is on the money. Goldman's upgrade of TBTF banks shows that shorting could cause some serious pain. If you own shares, taking out an out of the money put would be a better way to proceed. If you want to get some speculative exposure on the short side, again puts are better.

Clearly, the key constraint to what I am saying is that the gov't sees the financial sector and TBTF banks as THE key to recovery and will do anything to support them. I think the recovery is well progressed enough that the props are going to be removed and this will be negative for the banks.

On Oct 05 11:34 AM Scott Diering wrote:

> Although I agree with you, and I am shorting financials (seekingalpha.com/symbo...),
> I remain concerned about the deftness of the financial elites to
> pull the strings of their elected puppets and keep the trough open.
> And, I question their willingness to pump-and-dump their own stocks.
> But, it is not beyond the possibility.