But with money still tight and revenues falling off, the key question for these companies isn't how cheap they are, but how much cash they have. In other words, can they survive without having to sell all the furniture?

The bond market is also obviously affected by concerns over survival. The price of corporate junk bonds has fallen to record lows.

On the other hand, bank bonds are selling like hotcakes. Can you guess why? Yep, it's the government stepping into the breach once again. To help banks raise much-needed capital, it has guaranteed bank bonds.

You hear of lots of money pouring into the safety of Treasuries. That's fine. That's bond investors reacting to risk. That's NORMAL.

But lots of money is also fleeing Freddie and Fannie bonds into government-guaranteed bank bonds. For decades Freddie and Fannie bonds were the safest bond investments next to Treasuries. And, then, on September 7th, the government announced its promise to safeguard Freddie and Fannie's $3 trillion bond market.

So what's happening now is very ABNORMAL.

Freddie's and Fannie's bonds get about a percentage point more in yield than Treasures. Investors liked getting the extra yield while accepting very little risk.

But why settle for those yields when you can get even better ones from bank bonds. Not only that, you can also get a government guarantee that is just as strong if not stronger than the ones covering Freddie and Fannie.

So investors are selling off Freddies and Fannies and going to greener pastures sprinkled with government manure (all you have to do is hold your nose). That naturally has driven down the price of Freddie and Fannie bonds while raising their yields.

And that's great news for a group of companies which invest almost exclusively in the bonds of Freddie and Fannie.

They're very conservative in using leverage but they do use it. Then they simply apply the time-honored formula of borrowing low and investing high. Freddie and Fannie bonds give them more than enough spread to enable these companies to give their investors up to 8-10 times more money than your current savings account is probably earning. Plus, there are no minimums and no extra charges or fees to pay.

A couple of the companies that are investing in the debt of Freddie and Fannie and other GSEs are MFA (MFA), and Anworth (ANH). The long hand of Uncle Sam is making them and companies like them big winners.

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