C'mon Horatio...you know that the slightest hint of anything positive (or even news that is less negative) will rocket the entire sector upward.
Hard to say WHEN that will happen. Who knows? But it'll happen way before 2010! By middle of '08, I think the worst will be behind us. Since the market moves in advance, I would guess somewhere around April we'll see large moves to the upside. Basically, we've got about 2 more lousy quarters to get through. Once they become "less lousy", all these stocks are at least doubles.
Bought a bit more Wells Fargo today when it was on sale. Sold a ton of MBIA puts. Sold a small amount of RDN puts (didn't drop enough to justify selling more of 'em) to add to my position. Traded in and out of FNM all day long. Great action. Though I decided not to hold Fannie overnight.