Another good read from Seeking Alpha.com on oversold banking sector.

Dated April 21, 2008

http://seekingalpha.c...

This is just one person's opinion, but he makes some very good points about the panic selling of real estate asset backed paper at $.10 on the dollar, as if the underlying real estate is going to zero, when in reality, at foreclosure the real estate would sell at $.60 - $.70 on the dollar and are at a minimum worth $.50 on the dollar.

IMO real estate pricing will soon reach a floor because the raw material cost of building a new home, apartment or condo is already approaching 30% more than the cost of pre-existing homes already on the market, and if real estate prices fall any further municipal and county governments will begin to see their property tax bases significantly erode, adding to layoffs as local governments also cut their budgets. The rebound in the banking sector may take some, but many banks may have already reached a low risk entry level, where the upside potential is greater than the downside risk. The same cannot be said for the investment banks and brokers which have lost a great deal of credibility outside of the U.S. where the greatest potential for growth exists.