She thinks large-cap banks are oversold and smaller banks are over valued. But while she said there is room for gains, she also issued a dose of caution about how far the companies can go. She said "The banks should trade at tangible (book value) or a little better."
She remains very worried about the state of municipalities and their debt. Budgets remained constrained, High unemployment continue to drive regional weakness, spending is rising faster than governors can manager. She predicts wave of municipal debt defaults.
She said, "There's been so much backroom political maneuvering to keep these cities from going bust... There's been every effort on the part of states to prevent really this tidal wave of defaults which is going to happen sooner or later, If people want to tell me 'you're wrong because this hasn't played out,' stay tuned."
Here is the video: