Profit from Obama’s TARP 2 with Preferred ETFs

Thomas Smicklas submits:

President Obama cannot permit continued failure and a loud "no confidence" vote directed towards the financial sector. He will act boldly, probably this week, to announce a very large and very public TARP 2 initiative designed to restore confidence and stability. If, indeed, he does act, it will make my adding to PortfolioiShares S&P U.S. Preferred Stock Index Fund (PFF) and PowerShares Financial Preferred (PGF) today an astute move. If not, I still have a nice dividend cushion one big step removed from bank common shares.

Although I do like certain banks over others, in this economic climate not diversifying risk within a sector (especially financials) seems foolhardy. Going a step further, I believe that the current proposed and House-passed stimulus bill (called in some quarters "porkulus") will not do much of anything to jump start anything except pet progressive social programs and to buy votes for 2010. Surely

President Obama knows this, and needs a huge TARP 2, attacking the deep recession with a surge of support for financials, and by extrapolation, housing and the markets. I won’t quarrel with this approach. That’s politics.

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