Have the Banks hit Rock Bottom?

I just noticed Barclays PLC hitting an astounding P/E ratio below 5, where long term PE ratios sit around 16 and an undervalued company would be somewhere around 10. Given the price has sunk to historic lows of around £3 (used to trade around £8), this now means that if you buy a Share in Barclays PLC you will get around 10% of your money given to you each year in the form of Dividends. Thats 5% more than a savings account.

Major british bank at PE ratio of 5? Dividend yield sitting over 10%? Either the earnings are grossly understated or we have parted basic investment logic. And so one thing comes to mind: Is it that the banks hit rock bottom or is there more drops to come? Since economic fundaments change slowly this is probably due to investor irrationality. Under normal conditions I would say run to the nearest broker and buy. But market forces are not moved by pure rationality, from where I'm standing it seems unlikely but there may be further drops to come.