Financials Feel the Hate

 | Aug 23, 2011 | 11:50 AM EDT
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Stress in the system? Or just crazy valuations that signal nothing other than hatred of the financials?

I am talking about the remarkable declines in regional banks that had been relatively unscathed. The ones that seemed so conservative. The ones that should have benefitted from the big refinancing moment that Ben Bernanke engineered. The ones that shouldn't be in danger because of Spanish savings and loans (that's what the troubled ones are like) or Italian runs, or the ever-present derivative book of Societe Generale. I am talking about the banks that were supposed to take advantage of the chaos.

I am talking about First Niagara Financial Group (FNFG) and Hudson City Bancorp (HCBK), of New York Community Bancorp (HAVNP) and Astoria Financial (AF) and of People's United Financial (PBCT). I know that Hudson City, New York Community and Astoria have, at various times, taken too much risk on the investment side, with Hudson City really surprising people with its leverage, but some of these banks are taking out their 2009 lows.

In particular, I am struck by how People's United, so well capitalized, is in free-fall, and First Niagara, considered to be the bank that has most taken advantage of the craziness, is plummeting through old levels.

This retreat is about hatred of a cohort -- a hatred that knows no bounds -- that isn't necessarily linked to risky lending or a bad book left over from the bad days.

The negativity also affects reformed banks like Huntington Bancshares (HBAN), which has had endless insider buying.

Just another miserable portion of a terrible group, a dank corner in a dark building.

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