Look at Bank Preferreds in 2010 - TheStreet

What if 2010 is the year for the banks? What if the economy is so strong that people get hired and stop thinking of foreclosing simply because they are employed or getting more hours or getting more money.

I thought we could start seeing some of this in 2009, but you couldn't, not with employment still being


big issue.

But there's a ton of stimulus still headed our way, and I have to think that the biggest beneficiaries that haven't yet moved are the banks that have slathered on so much equity that buyers are simply trying to cope with the explosion of stock pretty much every day.

So maybe a chicken's way to play it is with preferreds. My friend Matt Horween, who has made a ton of money in 2009 with preferreds and steered me toward that terrific


(F) - Get Report

preferred, suggests that people look at the


(C) - Get Report

preferreds that yield about 8.78% -- yep, still paying -- and the

Bank of America

(BAC) - Get Report

preferreds that yield 7.84%, among others. These will certainly scoot higher if things get better, and in the meantime at least, and unlike with the common stocks, you are paid to wait for them. (Use limit orders; these do not trade well.)

I think these preferreds make a nice compromise. I still think you go high/low -- you buy


(JPM) - Get Report


Goldman Sachs

(GS) - Get Report

and you buy Citi common; the first two are calls on dominance and the end of Meredith Whitney's endless negativism (the last analyst squawks that count, and she must squawk to make her firm count) and the latter is a call option on a turn. I own some BAC for my charitable trust,

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, but I am always antsy about a new CEO, no matter where he is from.

Still, I keep thinking -- the group had a huge run from the bottom but it has done nothing ever since, unlike pretty much everything else.

Maybe time to circle back, but this time with the preferreds in tow!

Random musings

: My favorite chemical analyst, Frank Mitsch from BB&T -- a longsuffering Jets fan -- reports that

PPG Industries

(PPG) - Get Report

is rehiring. I am sure there are others not far behind; this is an important signal. ... This will be my last filing for 2009, so everyone have a very happy new year!

At the time of publication, Cramer was long Goldman Sachs, JPMorgan and Bank of America.

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