Michael Shulman

Don't Stop 'Banking' on a Bailout

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In Vegas, hitting triple 7s pays out. But when the Dow Industrials (DJI) tank 777 points in one day, my only bet is to invest on the short side to make big profits on failing companies' huge losses.

The financials are falling like dominoes -- overvalued, under-capitalized and potentially toxic dominoes. I just hope you were able to get out of the way in time. Or better yet, perhaps you were able to get on the short side of the investment banks like Lehman Brothers (LEHMQ), Washington Mutual (WM) and Wachovia (WB).

Despite the political tantrum many nearly half of the House of Representatives members threw by voting against the $700 billion federal bailout for the vexed financial sector, the bailout will still happen. It took a long time to create this Wall Street mess; if it takes a few extra days for Washington to produce the best-possible outcome, we can afford to be patient.

Take a look at how patience has paid off for those of us who've been betting against the banks has paid off. …

A 'Short' List of Losers Produces Big Options Wins

Oh, how the mighty have fallen.

But those companies' sketchy business practices (subprime loans, anyone?) gave us plenty of warning that they were going to implode.

Whether or not investors chose to listen, however, is another matter entirely.

Fortunately, my ears work just fine -- some say it's because they're attached to a rather big head -- but tell that to my ChangeWave Shorts subscribers, who booked three money-doublers in the midst of one of the market's ugliest sessions ever.

I predicted the likes of today's market massacre as early as last year, and I also foresaw the demise of the latest round of toppled titans.

But I'm no psychic -- just a data nerd. And the writing was definitely on the walls, on the ceiling and the floor, and even on the windows.

So, now that we have this mess to deal with, we all want to know what's coming next. Plain and simple, neither the banking crisis nor the short-side profits are anywhere close to being over.