Financials Face More Pain

Amback Financial and MBIA face combined losses of $23 billion
Hedge fund manager Bill Ackman told regulators on Wednesday that the two biggest U.S. bond insurers face combined losses of over $23 billion and should be forced to stop paying dividends.

S&P Mulls $500 billion in Mortgage Downgrades
Standard & Poor's Ratings Services is considering slashing its rating on more than $500 billion of investments tied to bad mortgage loans, the ratings agency said Wednesday. The massive downgrade would threaten a broad swath of the world's finance industry, S&P said, ranging from Wall Street's trading desks to regional banks to local credit unions.

Subprime Mortgage, CDO Bank Losses May Exceed $265 Billion, S&P Forecasts Losses from securities linked to subprime mortgages may exceed $265 billion as regional U.S. banks, credit unions and overseas financial institutions write down the value of their holdings, according to Standard & Poor's.

This is bad news for the iShares Financial Sector exchange-traded fund, the IYF.
The smart way to short the IYF, I believe, is to buy the SKF, the Ultra-short financial ETF.

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