Finance and Economic

The financial crisis is over and investors should take advantage of the "once-in-a-generation opportunity" to buy banking stocks, an analyst said Thursday.

"This comment sounds ridiculous given the conviction on the part of most commentators that the worst is yet to come," Punk, Ziegel & Co. analyst Richard Bove said in a client note. "However, I do, in fact, believe that the crisis is over."

More negative news will come, but it will be "meaningless," and while the financial crisis is over, "problems facing the economy are not," he said.

"An environment has been created that will pump profits into the American banking system," he said. "Investors are so focused on the potential for loan losses and the flawed valuations created by an obscenely invalid accounting rule supported by a soporific Securities and Exchange Commission that they are missing this fact."

The latest phase of the crisis was triggered by the collapse of Bear Stearns (BSC, Fortune 500), and ended up involving everyone from Federal Reserve Chairman Ben Bernanke to President Bush, he said.

"At this point, the only question is whether the solutions being offered have any chance of working," he said.

Recent Fed actions - including cutting the federal funds rate and guaranteeing billions in Bear Stearns illiquid securities - were "brilliant" because they addressed the heart of the matter, he said.

Yet with the federal government now moving aggressively to defuse the crisis, Bove worries that it may not have the necessary resources http://payday-badcredit.com. The Fed has about $921 billion in assets, about half of Bank of America’s (BAC, Fortune 500) assets and less than half of Citigroup’s (C, Fortune 500), he said.

Help from foreign central banks may be needed to effectively rescue the troubled financial sector, Bove said. Some may be willing to help, especially as the dollar drops and eats into foreign producers’ profits, he said.

Concern that the Fed will cost taxpayers money by swapping out and guaranteeing bad securities is "simply fear overwhelming logic," he said. 

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