When Meredith Whitney talks -- about banks -- the market listens. Last week, Whitney was sounding alarms with a bearish outlook for the banking sector -- as if things weren't already tough enough for the big banks.

Thursday brought a market rout that rolled into a weak Friday, and almost all financial stocks ended the week lower.

The story became more interesting when famed hedge fund manager John Paulson of Paulson & Co. took on Whitney by making a big bet on the banking sector and, in particular, stating that Bank of America ( BAC) would double its share price in two years time.
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(Could a pay-per-view steel cage match between Whitney and Paulson be in the works? Not likely, but a Street.com poll pitting the two against each other may be in the works, so stay tuned.)

So just how bad was it for the big banks? Well,

Citigroup ( C) ; Goldman Sachs ( GS) ; JPMorgan Chase ( JPM); and UBS ( UBS), were all down on Thursday and Friday.

Paulson's call did help Bank of America eke out a 0.06% gain in Friday's session.

Talk about the slow road to recovery. We wouldn't be surprised if Meredith Whitney had already taken cover in the bank-implosion shelter.

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