Bank stocks have just crashed through key support zones ... broken down to new lows for the year ... and started on a beeline for their worst levels of 2010.

That's what my KBW Bank Index chart is showing you — in aces and spades. It's telling you that the 24 major banks it tracks — including Bank of America, Citigroup, Wells Fargo, and JPMorgan Chase — are getting slammed.

But this is more than just about banks. It's also a stark warning for other financial stocks, housing stocks, and ultimately, most of the U.S. stock market.

Why do bank stocks matter? Because banks are the heart and soul of our economy. They make the loans that consumers use to buy houses, cars, and computers. They provide the liquidity to businesses who want to finance inventories, build factories, and construct office towers.

Problem: They're loaded up with millions of foreclosed homes, lousy real estate loans, and other bad assets. Yes, the Fed managed to paper over the banks' problems for a while. But now, the jig is up. House prices have just set new lows, and the bust is back with a vengeance.

Many investors are going to lose fortunes ... just like they did the LAST few times bank stocks crashed. But YOU don't have to take this lying down! You can go on the offense.

What to Do

When blockbuster news like this explodes into the headlines, you really have only two choices: You can either run for cover or come out fighting and by doing so, grab huge profit potential.

The last time this happened, savvy investors who went on the offensive could have made fortunes with investments that are designed precisely for this situation.

Needless to say, not all investments can go up that far in such a short period of time. Nor can we go back in time to grab them now. But this next phase of the debt crisis is shaping up to be even worse than the last one.

The last phase impacted mostly consumers and corporations. This one is also impacting the U.S. government!

The last time, the government bailed out the failing companies. This time, the government itself seems to need a bailout of its own and there's no one on the entire planet rich enough to provide it.