Not only do I think the housing index will retest its lows, but I think it makes new lows. As a result, the financials could do the same. Home foreclosures are up 125% over last year and 25 million Americans owe more on their mortgages than their homes are worth. Bill Gross thinks total write offs will total $ 1 TRILLION and only half of that has made it through the system. I’ve been saying for a while now that the banks have broken revenue models because of the implosion of sub prime(a big ticket for them) and the vaporizing of their derivative products like CDO’s. Sure, there are arguments for a bullish case I guess, but for my money, and I put it on the line everyday, I trust my scenario. Watch for more capital raising and obscene dilution.