After Lehman:  Who May be Next?

Despite the the bailout of Freddie and Fannie and Lehman's questionable survival, the S&P 500 Financials Sector is still up over 20% since hitting a low in mid-July (see chart below of XLF , an ETF that tracks the financial sector). Will the Financials stay above their July lows or fall back with the latest news? Here is the latest data on how short interest has changed over the past few months and where bets are being made.

Data from Thomson Reuters shows that short positions for some of these banks are still up from where they were six month ago. However, in the last few months, some banks' short

interest has risen while the short interest in others has fallen.

Wachovia's short interest is more than twice what it was in May. Washington Mutual still leads the pack.

CNBC Investor Intelligence:

- Stock Blog: Options Action on Financials


Many of these numbers appear down because growth of shares outstanding have outpaced actual short shares. Wachovia short interest increase has outpaced growth of shares outstanding by a 16:1 ratio.

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