Unless I’m mistaken we can blame some analyst from Goldman Sachs today for killing off the nice advance that we saw earlier. I saw the headline come across that according to him, financials would be just as heavily regulated as utilities going forward. This made financials almost turn on a dime as investors / daytraders pondered the idea of diminished return opportunities in that sector.

Anybody interested in buying financials at this level might consider using any of the three preferred stock ETFs instead: PFF, PGF, or PGX. All three have a heavy concentration in financials. PGF is actually a pure play on that sector with 100 % exposure. The other two are slightly more diversified, but really only slightly.

At this point in the game it’s fairly obvious that the government is willing to do anything it can to avoid another bank collapse. This may mean a gradual dilution of common shares for the weakest players. However, after the fiasco of wiping out the preferred stockholders of Fannie and Freddie I’m reasonably certain that the government will try to avoid doing that same mistake again.