Given the rally that is hitting after the government takeover of Fannie Mae (FNM) and Freddie Mac (FRE), I thought it might be useful to pull some quick data on the financials. Specifically, I pulled the component stocks for the SPDR-Financial (XLF) and the Dow Jones U.S. Financial Sector Index Fund (IYF). I then ran the list through a query to pull short interest and analysts ratings.

Companies among the most-heavily shorted are - Zions Bancorp (ZION), MBIA Inc. (MBI), Ambac Financial Group Inc (ABK), First Horizon National Corp. (FHN), E-Trade Financial Corp. (ETFC), The St Joe Company (JOE), Washington Mutual Inc. (WM), Huntington Bancshares Inc. (HBAN), National City Corp. (NCC), Raymond James Financial Inc (RJF), Americredit Corp (ACF), Capital One Financial Corp. (COF), Moody's Corp. (MCO), Radian Group Inc (RDN), MGIC Investment Corp. (MTG), optionsXpress Holdings Inc (OXPS), Freddie Mac (FRE), Comerica Inc. (CMA), BB&T Corp. (BBT), Piper Jaffray Cos (PJC), Jefferies Group Inc (JEF), CIT Group Inc. (CIT), Knight Capital Group (NITE), Fannie Mae (FNM), Wachovia Corp. (WB).

Short interest in the financial group is overwhelming so I had to hand edit the list above to whittle it down to this handful of names. In addition to bolding the short-interest-to-float field, I also set up the spreadsheet to automatically bold stocks with a low buy percent. As you can see, all but 2 stocks show less than half the ratings as "buys." In other words, there is a good deal of pessimism here from both the Street and short sellers.

Of course, it is hard to argue that skepticism hasn't been warranted. There are some pretty serious underlying problems that need be resolved over the long term. However, it seems that with today's news, there might be an opportunity for at least some short-term shifting of sentiment that leads to either short covering or outright buying.