I agree with Rogers on shorting the financial sector; I have had positions in both SEF and KRS for over 6 months. The financial sector, especially the big US banks, have been on life-support . . . courtesy of the FED, and over half of their profits come from the FED. Looking ahead, their profit margins are being squeezed.

Obviously, I have positions in gold and silver, and a rather large percentage of my portfolio is in cash. As for emerging markets, Rogers must have data that is not readily available; but at the end of the game he is often right.

Shorting Financials, Part 2:
I just read a fascinating commentary by Kash Mansori at The Street Light, regarding the extent of US Bank exposure to a default in Greece, Ireland, or Portugal; his analyses are based on detailed BIS data. On several occasions over the past six months, I’ve written on this blog that the US banks (notably GS and JPM) were selling CDS swaps to Europe. But I didn’t realize the extent of these CDS sales.

In this latest analysis and commentary by Mansori, he quantifies the extent of bank exposure for US banks as well as for European banks. Here’s the link:

http://streetlightblog.blogspot.com/2011/06/betting-on-pigs.html

RE: Why Western Banks are Going Down
The implications of his analysis are worse than I had imagined, and the bottom line is that US banks are exposed to the same extent as European banks. As it turns out, the Obama financial “overhaul” (i.e. Dodd-Frank legislation) has done nothing to solve 2008’s financial problems, does nothing to prevent the next global financial crisis, and does nothing to regulate the CDS derivatives. So once again, the big banks have put American taxpayers at great risk.

Got SEF?
Got KRS?