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August 27, 2013  Tue 9:12 AM CT

XLF: SEE CHART GET CHAIN FIND STRATEGIES
Banks haven't yet seen any gains from this new yield curve, but they've seen plenty of fee declines. I think that, for the moment, people have had enough of them. This group has just died. It's almost as if they have all collectively had a Nasdaq freeze. You feel like finding out if they are even still trading.

If you ask me, what is most worrisome about this market is where the earnings gains from these stocks are going to come from. They might make more money on certificates of deposits. They could have some good fees away from real estate. But the quickly-rising rates could be a recipe for shortfalls for this group, and we are busy trying to trim them back for my charitable trust. I also think that when Congress comes back there will be more calls for raising more capital, which means fewer dividend boosts and buybacks.

TheStreet.com logoThe refinance and mortgage businesses had been mainstays. I think the former is just kaput. The latter can pick up if we get more job growth and the pent-up demand works off. Plus there's good auto-loan business and credit cards are strong. But there needs to be more earnings streams that can replace the mortgages and refis and they haven't developed yet.

The stocks are cheap. I don't think they are going to get clobbered. They have valuation underpinnings and if we can get the economy moving again the refis won't matter. Things can't be that much better for the brokers, either, as there's been very little M&A and we now have the lowest corporate bond market issuance in five years.

But still, this group has become a deadweight loss at a time when we need it to accelerate. Still, one more group you can't count on to deliver the momentum that is needed to break out of this range.
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