I warned about banking stocks one month ago.  At that time Citibank was trading at $3 and Bank of America was trading at $5+. I warned that the price could go lower. Bank of America went down to $2.53 before recovering to current $4 level. Citibank went down to $1.61 before coming back to $2+ level. I have never seen banking stocks this volatile in my career.

I don’t really worry about nationalization of these two banks – Citibank and Bank of America. Contrary to public fear, nationalizing these banks for short period of time will do good for the economy. You can also get rid of people that put the country and its economy in great danger. Nationalization is no longer about economy. It’s politics now. Anything can happen in the next few weeks.

If you are a hard core trader, you may want to play bank stocks to use the volatility to your advantage. If you are not, then better stay away fom bank stocks such as Citibank and Bank of America. Things can change suddenly and quickly. If you are not careful, it can wipeout your entire savings.

Disclaimer: I do not own any stock mentioned in this blog post.