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Point of No Return or Perfect Buying Opportunity? [view article]
As Congress looks to bailout the bad loans made by companies like CFC, the banking sector will rebound because the risk of write-offs will alleviate in the short term. However, next year we will see the beginning of another spike in adjustable rate mortgage resets which will be followed by increased defaults followed by increased writedowns etc peaking into 2011. With the some tech favorites hurting from pressure on the consumer, we may begin to see funds rolling money back into some of the financials trying to catch the bottom. So a short term trade in the financials may be a good idea (maybe up to election???) but long term I wouldn't touch them with your ten foot pole.

Quick side note: Home equity loans (which make up billions of dollars on the balance sheet of many lending institutions) become virtually worthless when a borrower defaults. Jun 25 08:41 PM

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