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the financials are going to have 0 or negative earnings for the next several quarters. i believe they are going much lower and a handful will go bust or get bailed out.

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If you had been more specific on what you meant by the broad term "financials" I could easily refute your contention. In general it is unlikely any of them will "go bust" and earnings will continue though perhaps at a slower rate than in the past. Don't confuse earnings with loss in Cap Value.

Jimbo

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I am referring to any company involved with or having exposure to over the counter derivatives. That includes the main brokerages like goldman, lehman, merril, and tons of other institutions. I am not confusing loss of market cap with earnings. These stocks are going to be posting major earnings losses for the next several quarters and they are going to get slaughtered. Most already have been. They were involved in a big ponzi scheme with the foundation of it being based on suprime paper. Now that the foundation is starting to fall apart, the pyramid ponzi scheme is going to crumble. Only thing keeping them afloat now is major liquidity injections coupled with a devaluation of the dollar.

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lol, riiiiiiiiiiiight...the only thing keeping f*cking goldman sachs afloat is liquidity injections and a devaluation of the dollar.

it couldn't be that even if every single dollar goldman has invested in subprime paper off and on balance sheet were worth absolutely nothing, goldman would still be an extremely valueable company. their earnings were solid, but suspect. even if the suspect part (8bil trading profits w/ 2.5bil coming from inhouse pricing models of illiquid "level III" assets) was worth nothing they'd still have 5.5bil in profits. they were also smart enough to big time short mortgage backed assets and made a ton there. so point is that goldman is not a bank standing on a shaky cliff.

one thing i've noticed is that CDS markets seem to very strongly overreact and if i could find a way to go long a CDS index on 1 company (namely goldman) i'd think that it could be a profitable trade. i'd want to build a position though as the cost of insurance against goldman debt might rise as the extent of their exposure increases (they and mnay other banks might be practicing accounting tricks to get the total amount spread over a few quarters...though it may be more attractive to get it over with in one fell swooop...who knows what they'll choose to do)

either way, i don't think your absolute statements of how goldman et.al. are involved in a ponzi scheme (lol) are anywhere near correct.

and i'll put my money where my mouth is.

i'll offer you even money that goldman does not post any negative earnings in the next 3 quarters. to rephrase, goldman will post a positive profit for the next 3 (or 4 whatever you want) quarters. you can name your price.

Barron