Banks on the rebound?

We are a long way from resolving the banking crisis, but maybe it is a sign that we have turned the corner when two big banks are fighting over a failing bank. Citibank and Wells Fargo both really want Wachovia, which has recently been considered on the path to failure.

Or maybe this means that the crisis has been overblown.

I suspect that it simply means that there really are a lot of good, relatively solid assets out there that are undervalued due to the confidence crisis.

Who knows, Treasury may get its $700 billion plan up and running and then find that nobody is willing to sell any of those so-called "toxic" assets. Even busted mortgages with foreclosures might suddenly become properly valued by the markets and no longer so "toxic" the banks would be willing to sell them to Treasury at a discount. And maybe private equity funds might become more interested in "turnaround mortgages." Who knows... maybe we will see some new banks formed (via private equity) whose main focus is new mortgages for distressed foreclosures.

-- Jack Krupansky