WSJ LOOKS AT THE FINANCIALS AND FINDS THEM WANTING

If you’re an investor in bank stocks, you can’t ask for a more promising headline on the first trading day of the year:

BANK STOCKS ARE FACING HEADWINDS

Bank stocks regained their footing in 2010 for the first time in four years as loan losses declined, an economic recovery began to improve returns on assets and the government exited from the big-banking business. . . .

Still, some analysts aren’t banking on a quick return to the heady pre-meltdown days. The banking industry’s new reality includes a regulatory squeeze on various revenue streams, skeptical investors and relatively few opportunities for growth. [Emph. added]

Well that’s it, then. Nothing good can possibly happen. The S&P Financials, by the way, are selling for less than 1.5 times book value. . . .