Short-sellers seem to be at a critical point with banks. They have generated some gains, but they may also sense that they may be on the cusp of even larger gains--if only the banks stocks would tumble further.

Short-sellers have sketched out a super-bearish scenario to FOX Business Network, which reported that there clearly is a "doomsday scenario" floated by various short sellers. "They are talking about it in hush terms. There are four elements to this doomsday scenario and its impact on the bank balance sheets."

The elements are the impact of Greece, the coming mortgage settlement, the Fed MBS sales and a possible double dip recession. "You put all that together and you have a massive problem. This stuff is floating around and if this does materialize, TARP 2 is not an impossibility." FOX Business Network says the Obama Administration is putting pressure on all the state AG's working out the mortgage settlement to do it, do it fast, and don't do it at the high end, because they know all this stuff is coming down."

Whew! That certainly has the feel of a short-seller pitch. A perfect storm could indeed result in another leg down for these stocks. Hopefully, the previous bailout will allow the banks to weather any storms. But we'll see.

For more:
- here' the video

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