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Are Bank Stocks Getting Too Cheap to Pass Up?

Buzz on the floor Tuesday was all about the exchange between JPMorgan CEO Jamie Dimon and Fed chief Ben Bernanke at a conference on Tuesday.

Dimon expressed concerns that the swell of new bank regulations and oversight have done more harm than good.

“I have a great fear that somebody will write a book that the things we did in the crisis will slow down the recovery,” Dimon said.

Fast Money trader Brian Kelly thinks Dimon’s comments go the very heart of what ails not only Wall Street but also Main Street.

”Banks don’t know what they’re going to need for capital requirements – that’s why the banking sector is terrible. If we had a healthy banking system we’d have a recovery.”

In fact, bank stocks are likely on every trader radar in the country with the financials the worst performing sector of the year.

Considering a titan such as Bank of America sunk to a 2-year lows this week, are bank stocks now trading at a level where they’re a value investor’s dream – just too cheap to pass up?

Or are the headwinds so strong that they’re a value trap – an investor’s worst nightmare?

Top hedge fund manager Anthony Scaramucci says the consensus among his peers is that “that we’re going to have a recovery and it’s worth holding these names – I don’t think they are a value trap.”

And of all the big bank stocks, he thinks Goldman is the most attractive. That's largely because he thinks Goldman is the most oversold due not only to increased regulations facing all banks but also mounting legal issues. "But I think the firm will generally be exonerated," he says.

”The macro environment is causing the sector to sag – this gives value investors an opportunity to look at individual names and decide what’s favorable,” says Scaramucci and he thinks Goldman is worth a look. "I think you'll still see very high rates of return on Goldman."

Fast trader Guy Adami just can’t get on board with the banks. “Price is truth and financials have been grim death since January,” he says. “Even after the market bounce on Tuesday they couldn’t sustain gains.” He does on to say there will probably be a time to buy Goldman but he doesn't think its now.

Looking at Bank of America, Fast trader Karen Finerman admits the valuations in BofA are attractive. “The idea that a franchise like Bank of America is trading below tangible book value this far out of the crisis is astounding.”

Joe Terranova wouldn’t touch it. Bank of America is struggling with the ghost of Countrywide, the mortgage company acquired by the bank in 2008. “The legacy loans they have from Countrywide, what’s the impact it’s having on their ability to return to normalized earnings,” he says.

What do you think? We want to know!

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Trader disclosure: On June 7, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (AAPL); Karabell owns (CSCO); Karabell owns (DD); Karabell owns (GE); Karabell owns (GOOG); Karabell owns (GS); Karabell and River Twice Capital own (IBM); Terranova owns (XOM); Terranova owns (KSS); Terranova owns (CVI); Terranova owns (OXY); Terranova owns (TM); Terranova owns (BJ); Terranova owns (DIS); Terranova owns (PFE); Terranova owns (V); Terranova owns (HPQ); Terranova owns (FLX); Terranova owns (JPM); Terranova owns (MCD); Terranova owns (PEP); Terranova owns (VRTS); Terranova is short (DELL); Terranova is Chief Market Strategist of Virtus Investment Partners, LTD; Adami owns (AGU); Adami owns (C); Adami owns (INTC); Adami owns (GS); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU)

For Anthony Scaramucci
Skybridge is a Fund of Funds Manager
Funds Held May or May not Own the Recommended Securities

Zachary Karabell
River Twice Capital is short (SPY)
River Twice Capital is short (CAT) puts
River Twice Capital owns (EMC)

Brian Kelly
Accounts Managed by Brian Kelly Capital own (GLD)
Accounts Managed by Brian Kelly Capital own (SLV)
Accounts Managed by Brian Kelly Capital own (IWM) puts
Accounts Managed by Brian Kelly Capital own new zealand dollar
Accounts Managed by Brian Kelly Capital own swedisk krona
Accounts Managed by Brian Kelly Capital own canadian dollars

For Joe Terranova
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSWI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
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Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (SUBK)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK &URL PLC
Virtus Investment Partners Owns More Than 1% Of (DRYS)

For Mike Khouw
Cantor Fitzgerald is a market maker in (AAPL), (AMZN), (C), (CSCO), (CVS), (JDSU), (QQQ), (QCOM), (GOOG), (F), (GE), (SMH), (T), (YHOO), (XLF), (SLV), (EBAY), (EMC)

For James Iuorio
Iuorio is short (USO)

For Jeff DeGraaf
**No Disclosures


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