What is the best-case scenario for financial stocks?

Dragonsbane answered 3 months ago …

There is nothing the Fed can do to save Fannie and Freddie that wouldn't completely destroy someone else. Theoretically if they drop the Federal Funds rate under 1% they might be able to salvage the two (maybe). Same goes for Lehman and AIG. Another scenario that would slaughter the bears is if residential real estate prices start rising immediately. If prices start rising in the next few months, the banks may not have to mark down their assets since they will be able to sell the collateral (houses) underlying their assets.

For disclosure, I should mention I have puts on a few financials and consumer discretionary names.