• Early morning futures have been improving.  But the world watches with faint breath as the bank bail out plans are about to be unveiled. From what I have gleaned I would like to participate.  But I had better wait for the details.  And, of course, small investors are unlikely to be offered such sweet deals.
• Junk bonds are suddenly all the rage.  Yields have narrowed as bond prices advance as yield hungry investors show more willingness to accept risk.  I haven’t added to my JNK position for several weeks but I might.   Fidelity investors may want to look at their High Income fund which has advanced 6.7% so far this year.  Vanguard’s High Yield Corporates fund is up 6.9%.
• Better credit corporations clearly see higher rates down the pike.  Cisco raised $4 billion last night by by issuing single-A rated bonds in two tranches: paying a rate of 4.979% on the ten-year component and 5.916% for the thirty-year.  In November/December this would not have been possible.  In fact, investors were avoiding any companies which had expiring debt as it was then unlikely to be refinanced.  An appetite for risk may be spelling higher equity prices.
• Gold was whacked pretty hard yesterday and I added a small amount to my GLD position.
• Bank America (BAC) seems like a trader’s dream.  Average daily volume has been almost 400 million shares over the last ten days, making for easy entry and exiting.  Indeed, it may trade more than 10 million shares before this morning’s opening. From the price action the stock certainly appears to be the largest potential recipient of TARF largess.
• GM is laying off 10,000 salaried workers around the world.  As the company struggles to meet government payment/restrictions of its bail out money there is growing concern it may have to seek bankruptcy.  That would not be good for the markets.
• Am I the only one who feels the ARod steroid story to be overdone?  It was the lead story on NBC Television Saturday night and this morning’s WSJ had his three-column photo above the fold.  And last night our President had to answer a silly question concerning our national pastime.
• From Mish:  Insanity Prevails
• Lastly, with melt-downs all the rage here are some great ones from The Daily Beast:
• Watch Six Hilarious Celebrity Meltdowns

Make it a great Tuesday!