How to Profit From the 10 Biggest Wall Street Lies of 2009

#8 The Fed Only Buys AAA-Rated Bonds and Securities

This is a cornerstone of the Fed, a true shibboleth (Google that one). But one of the first set of bonds the Fed bought under the TALF program were
bonds backed by motorcycle loans made by Harley-Davidson (HOG) to its
customers.

The Fed program was designed to provide loans and capital to businesses that were shut out of frozen credit markets, which is a good thing. But
loans to Harley made to boost the sale of motorcycles to people who could not get loans elsewhere? C’mon, Dr. Bernanke, you should know better.

Lesson for investors in 2010: The Fed will not continue to pursue this nonsense (who needs a hog in a recession, anyway?), and
Harley has $5 billion in debt on its balance sheet that will become very expensive in the coming quarters. Take a look at put options on this little
piggy, as they are quite liquid.

Next: #9 The U.S. Dollar is Dead