Eric Roseman, Investment Director at The Sovereign Society, provides more evidence that financial stocks are still trapped in a bear market. While the stock market stages an impressive rally, credit markets attest to an ongoing crunch. Inter-bank lending rates are still high and credit spreads continue to widen. Eric says credit is where the smart money lies on Wall Street. Until these markets stabilize, stay underweight in stocks…

Make no mistake, the boom in finance is over, says Bill Bonner in The Daily Reckoning.

Sure, some banks may bounce back, but they won’t again reach the dizzy profits of the last five years for a long time. During this period banks made billions in profits and bonuses by lending money to people who couldn’t pay it back. Now they are looking to the taxpayer for handouts to cover these bad loans.

So how come nobody on Wall Street has offered to pay back their bonuses?

“Bank stocks are getting extremely cheap,” my friend Andrew told me over breakfast yesterday.

To leverage political crisis in Pakistan, use MCB Bank ADRs, Pakistan’s most profitable bank. It has a return on average equity of 38 percent and loan profitability of 8 percent.

From 1982 until the first half of 2007, global bank stocks led the secular long-term bull market in company profits. Long-term interest rates plunged from over 21% in 1981 to a low of just 3.5% in 2004. As a result, earnings at the majority of banks were literally stupendous, including huge dividend increases and massive shareholder buybacks.

Right now, we have a rare opportunity. We can get paid a monthly double-digit dividend… We can buy in for only 85 cents on the dollar… And we can have the skills of a legendary investment manager behind us.

Yesterday, UK rates came down a quarter to 5%. ECB rates held steady as expected at 4% and all of us who continue to feel poorer can be grateful that we’re not paying a mortgage in Iceland.