Much ado over the past month or so about our banks. Goldman Sachs, Bank of America, Citigroup, and plenty of regional and smaller banks have made the news. Bad debt, toxic assets, executive compensation, stress test, etc.

But have you seen the yield curve? The U.S. Government is lending money to banks at 0%, while those banks are lending anywhere from 5%-8%. That's pretty healthy, and in order to get a loan, a person has to be credit-worthy! Not more subprime mumbo-jumbo anymore (at least for a while).

Refinancing is going NUTSO! Mortgage Bankers Assn. Estimates nearly $3 trillion of mortgage originations this year.....most of which will be mortgage refinance. A loan made in ~2004 might have had a spread (difference from U.S. Govt rate vs. mortgage rate) of 1% or 2%......now that spread is ~5%! Even a fool could make money.

The U.S Govt is doing what they can to get the toxic assets (aka. bad choices) off of financial books. By doing this, we're one step closer to a healthy financial system. Why wouldn't financials be a good buy?

FAS is a good way to play this short-term, XLF long-term; both are exchange-traded funds, which are good to use if you're not comfortable with choosing a bank (like me).