Here’s my quick take on Geithner’s bailout plan, which is far more important to the Markets than Obama’s stimulus plan.

Geithner : This bank mess is too difficult for the government to handle. Let’s give it over to the hedge funds and private equity guys and let them sort it out.

Result: Great deal for the funds. Terrible deal for the banks. Terrible deal for consumers. Bank stocks will collapse. Banks will be owned by hedge funds and private equity in a few years. Long SKF, for a trade. (you cannot invest in these short ETF’s long-term, and shorting in general is not a long-term investment strategy) .

Long-term (three years out), ignoring the complete corruption inherent in this idea, this is a great plan, as it gets rid of the banks in a secretive way, behind closed-door negotiations with hedge funds. The toxic securities mess will be cleaned up over time.

Short-term this will bring great pain onto the existing banks with toxic assets.

Bottom-line: I am long SKF and will hold it now, as many bank stocks will collapse further as they are restructured by private funds. I don’t think the SKF will be as volatile as it has been in the past (which has hurt it’s performance – these ETF’s are the daily inverse – so volatility eats away at returns), since the Geithner plan will stick. But, as mentioned above, SKF is only a trading vehicle and mainly for day trades.