banks have little direct exposure to greece, portugal and spain, but as morningstar's jim sinegal explains, there could be serious indirect effects. >> if the european financial system gets into a lot of trouble, it's an enormous problem for the european economy. the european economy is a major part of the world economy. >> reporter: sinegal says it may take years for bank earnings to improve substantially, but that doesn't necessarily mean investors should avoid the stocks. >> we think the high quality banks-- banks like u.s. bank, pnc, banks like j.p. morgan-- they are all very high quality banks. they are trading at single-digit multiples on current earnings. basically, if anything goes right for those banks, we think we're going to see the stock prices appreciate. >> reporter: and any improvement in financial stocks would not just be good for those firms; it would also be a positive sign for the u.s. economy and the overall stock market. erika miller, "nightly business report," new york. >> susie: a milestone for apple today-- for a moment, it was the world's most valuable public compa

bank analyst jim sinegal says that endorsement comes at a steep price. >> basically, if things go poorly and b-of-a has to raise more common equity, that will actually lower the risk of his preferred stock investment. if things go really well for b-of-a and the company is earning $1.50 to $2.00 a share, trading at $15 to $20 in a few years-- actually, any time up till the next ten years-- buffett will be able to buy that stock at $7.00. >> reporter: in a statement, buffett explained why he picked b-of-a, saying "i am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them." the deal is similar to the one buffett made with goldman sachs in the depths of the financial crisis in 2008, except this time, the dividend is less. but it's clear that b-of-a still faces big hurdles, like billions of dollars in problem mortgage loans. analyst erik oja says b-of-a also faces liability and legal bills related to the sale of rotten mortgage-backed securities. >> those mortgage buyback liabilities, those will continue fo