"But we must collapse Fifth Third (FITB), KeyCorp (KEY), SunTrust (STI) and Regions Financial (RF) into other banks if we are going to move through this period. We aren't there yet." "FDIC and Treasury at Loggerheads," 6-10-09

03/11/09 06/11/09 3 month $6.81 $5.64 -17.18%

"Don't go with Fifth Third (FITB). Don't go with Key (KEY)," said Jim Cramer on CNBC's "Stop Trading!" segment on Tuesday. ("Stop Trading!" 6-2-09)

KeyCorp (KEY) is the wild card. Boy, I think this bank's weak. This is the first stress-test "failure" bank, meaning that this is the one that I thought should have been forced to merge with another bank. I do not want to touch it, as it has been poorly run, and I don't see any change in that. I would rather wait for a deal from Huntington Bancshares (HBAN), as that company has changed teams up top and has an aggressive management putting the past behind it.

"If Wells Fargo went up 6, isn't it reasonable to presume that Bank of New York Mellon (BK), KeyCorp (KEY), Capital One (COF), BB&T (BBT) and no doubt all of the others, would do the same?" ("A Bevy of Bank Offerings," 5-12-09)

KeyCorp (KEY) was also losing ground after reporting a far wider first-quarter loss than analysts expected. For more, read TheStreet.com's article.

Q: Where have you been nibbling lately?

A: In the past couple of months, I have owned and added to names like KeyCorp [KEY]. But as I mentioned, now is the time to buy a portfolio of names, because if I give you one name out of the 10, it would be the one that will underperform. That is the Peter Lynch rule: Give a lot of names, and your chances of being right are pretty good.

seems like a good idea

I believe in selling a lot of the smaller regionals. I don't know what happens to KeyCorp(KEY), Comerica(CMA), SunTrust(STI), Huntington Bancshares(HBAN), Regions Financial(RF) and Fifth Third(FITB). Maybe they will be turned into zombie banks. Maybe they get seized.

Contrarians like KeyCorp for its 10.8% core capital ratio and big deposit base. If it can keep on working out problem loans, shares could double or triple when the economy revives.

fin