Vox Rationalis

TARP vs. Non-TARP: Investing with Uncle Sam at a 60% Discount

The preferreds are indeed interesting - take a look at the PGF, the dividend of which has been impaired (dropping from about 0.125/month to .108), now yielding about 9.5% and priced about 27% lower than its August average, (when the yield was a bit more than 8%), and 37% less than its average from the first part of the year (when the yield was about 7%). Assuming the big banks' and insurers' preferred dividends survive (which they must, since losing those dividends are would crush their ability to raise additional capital), this fund should have a nice capital gain; if not it still provides a monthly income stream.

Of course, yesterday it lagged the overall market by more than 8%.

One quibble: don't expect 3-month LIBOR to grow at any point in the near future; expect it to shrink.