Bank stocks have been slaughtered in the last 6 months. Many regional banks are selling at a fraction of their previous prices. Some of them are yielding over 6%, leading one to inquire how secure the dividends are.

It is interesting to watch the herd. The same people who never saw it coming now are predicting the other shoe is about to drop. I have certainly taken a hit in this sector, but I am willing to see how oversold this group is.

Some of the bank products were absurd and never forsaw a declining real estate market or the degree of the escalating mortgage market on the ARMS. I detect the greed of fee based loan originations creating terrible loans and record losses.

Banks went through stupid markets in the 1970’s and again with the S&L’s in the 1980’s. It seems this industry has a very short memory.

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