I expect this latest bailout to have results but not those intended. Having now taken the financial black hole that is Fannie and Freddie onto the public balance sheet and having previously taken billions in bad loans in exchange for treasuries I contend that "the full faith and credit of the US government" is no longer worth a goddamn thing! We are now officially the United States of sub-prime.
These actions are unprecedented. We have opened a new chapter in American history. This is the era of crony capitalism.
I expect interest rates to ramp up over time. I've done some research and found some ideas to take advantage of this nascent trend. Put SDP, PST and TBT on your watchlist. I have taken no action as of yet but these will be on my radar. When treasuries weaken you want to own PST and TBT. As a result, interest rates go higher which is quite bad for utilities and that's where SDP comes in.
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