Joe E

These 32 Commercial Banks and Thrifts May See the Dung Hit the Fan

The continuing decline in house and condo prices is a serious worry for banks with a lot of residential real estate (and related construction loans) on their books. Nobody wants to buy real estate right now because of the possibility of looking stupid later when (if) prices go down further.
Even the best capitalized major banks are in no position to withstand a serious recession at this point, at least without seriously diluting shareholders. The brands can survive, but current shareholders may see their stakes diluted enormously. This means lower stock prices. However, a coming recession is not certain and the big banks have lived through tough times in the past. They also have the Fed as their friend.
If the economy holds up, then your analysis might look too pessimistic later. If the economy, especially employment, gets worse to a significant degree, then your analysis will seem brilliant.
I also think that there will be some relaxation of the mark-to-market rule for banks which has caused much of the recent markdown activity and depressed earnings/capital. ACAS gave an example of a debt security they were forced to mark as worth $11 million dollars even though it produced and is producing $8 million in cash flow each quarter. The fed has made a start on this for banks by accepting non-treasury securities as collateral for some loans. The Fed is unlikely to let major banks go under because of a new and arguably flawed accounting rule change. This by the way is not meant to contradict your analysis but just to mention a possible counterforce.