Sept. 10 (Bloomberg) -- U.S. financials face more ``chaos'' as the credit market worsens, investor Jim Rogers predicted.

``Balance sheets of many of these financial institutions are still terribly impaired and there are more problems to come,'' he said during a Bloomberg Television interview. ``We had the worst credit bubble in the history of the world. You don't clean that out in a year or two or three.''

The chairman of Singapore-based Rogers Holdings said he's still betting against U.S. investment banks, even after ending his short sale of Citigroup Inc. a few weeks ago because the bank's stock fell too low. Citigroup shares closed at $14.56 on July 15, the lowest since 1997. The largest U.S. bank by assets has rallied 25 percent since then.

Rogers also called the government takeover of Fannie Mae and Freddie Mac ``outrageous'' and said the largest U.S. mortgage finance companies should have declared bankruptcy.

``I'm happy some people will be able to get lower mortgages, but I shouldn't have to pay for it,'' he said. Fannie Mae and Freddie Mac executives aren't ``turning in their Maseratis when they're asking us to bail them out.''

Both companies dropped to less than $1 this week in New York Stock Exchange trading after regulators put them into a government-operated conservatorship, ousted their chief executive officers and scrapped dividends. U.S. financial stocks in the Standard & Poor's 500 Index fell 6.6 percent, the most since July, yesterday after Lehman Brothers Holdings Inc.'s talks to sell a stake to Korea Development Bank broke down. The group lost another 1.8 percent today for a year-to-date slump of 29 percent.

Rogers, who correctly predicted the start of the commodities rally in 1999, said he's still bullish on oil. The fuel has fallen 31 percent since its July 11 intraday record.

Short selling is the sale of stock borrowed from shareholders in the hope of profiting by buying the securities later at a lower price and returning them to the holder.

(Source)⇒Bloomberg