Here's the problem... Soon, the euphoria in the short covering will indeed be over. Then, what will we be left with? How about earnings? How about profits? How about franchises that can take advantage of what we know is still in chaos that we know isn't going anywhere anytime soon... We're going to have chaos for months...

That's why we want to circle back to some of the stocks that could have made you great money in this bank ride... the solvent, smaller banks that are about to become big banks, as they get to buy banks that can't pass stress tests... then get good branches from the FDIC when they close banks... and there will be many banks that will still be closed.

That's why we like People's United Financial Inc. (PBCT)... a $16 bank that has a high-quality problem... It's been so conservative that it has too much capital... That's right, I'm repeating that... it has too much capital.

PBCT is the largest independent New England bank with a tangible asset ratio... of 19.5%... Its peers have a 6.1% ratio... Three times better... amazing... three times better.

It also has non-performing assets... that is, soured loans as a percentage of all loans... of only 0.25%... Most of them have 1.75%.

This is the lowest non-performing assets, with the largest amount of capital, of any of the banks that I follow. PBCT is a disciplined operator; it's always on the prowl for acquisitions... taking advantage of the same depressed prices that some of the big mutual funds are starting to do...

It bought Chittenden, a large Vermont bank with a depressed valuation, just last year. It's now ready for regulatory-assisted transactions...

Let's cut to the chase...

In the great savings and loan debacle of the late 1980s, another conservative bank, Fleet... a little bank out of Rhode Island... took advantage of depressed prices, and bought neighboring banks, like the very-low-priced NorthStar bank in New York... and most of the banks around it were getting in trouble and blowing up... including the banking king at the time... the Bank of New England...

Because of its innate conservatism, Fleet got most-favored bank status by the FDIC. When the regulators put Bank of New England up for sale, Fleet was allowed to buy it. That ultimately made Fleet one of the largest and most important franchises in the country, and a fantastic takeover candidate in itself...

Ultimately, Fleet sold out to Bank of America... From the time of the NorthStar acquisition, until it was acquired by Bank of America, Fleet gave you a 500% return.

The bottom line...