It is my contention that when the various Fed and Treasury programs such as TALF, PPIP and the others actually kick in during second half of 2009 this is going to have a revolutionary impact on the credit markets, tightening spreads across the board. It is also my contention that the lowering of private borrowing costs has uber bullish implications for equity markets.
Time will tell, but I do not believe it is the best bet out there to fight the Fed and Treasury. Make no mistake: The Fed and Treasury, through announced policies and others likely to come, will explicitly be gunning after credit market spreads to bring them down.
REITS are a sector that could directly benefit hugely from this phenomenon. I believe that shorting this sector, which is almost certainly heavily shorted, could be quite dangerous.
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