2. The Insurance Comeback
I think several things are at work here. First, there have been enough catastrophes out there to take out a lot of capacity, and insurance rates are going up. Second, the group's just done nothing for ages, and it is way behind the broad market. Finally, and most important, the asset side has come back to life with a vengeance. These companies owned a ton of miserable, awful housing-related paper -- and, as housing increases in value, this paper's coming back.
To me, AIG is the best way to play it, because this company has pretty much everything that had been negative, but is now good.