You know which investments I like right now? Banks.

The charts can be pretty confusing and don't really tell the full story. (Try putting trendlines on a Citigroup or Wachovia chart over any period in the last two years.)

What you have to do is take a look at the dividend and see if you can stop yourself from buying a few shares.

Citigroup (NYSE: C) is yielding almost 4% and Wachovia (NYSE: WB) is throwing off 4.3%. That's about as much as you can get for a U.S. Treasury and you've got the chance of capital appreciation and some resistance to a summer slow down on top of it all.

Do yourself a favor buy some bank shares and go to the beach!

It looks as if the subprime chickens are coming home to roost. Tonight, after the market close, Bear Stearns announced that two of its hedge funds, which had invested heavily in lower-grade mortgage debt, are in worse shape than most observers had expected.

One of the Bear funds has lost all but 9% of the value it had as recently as the end of April. The other fund has been essentially wiped out. (Yep, nothing left.)

Undoubtedly, the debacle at Bear Stearns is a bitter pill for the so-called sophisticated investors who had plowed several billion dollars into the funds. It's worth remembering, though, that these folks knew they were sinking their cash into IOUs of less-than-stellar quality.

Furthermore, the fact that Bear Stearns was borrowing money (using "leverage") to purchase additional junk paper for the funds was no secret. It was all disclosed in black and white.

So there's no scandal of global proportions here. People misjudged the risks of a speculative investment and lost money -- a lot of it.

Despite all of the subprime news, I still like select banks for solid yields and forward potential.

Today's Dow 14000 close is generating a lot of excitement among the investment community's professional chattering class. But big, round numbers are far less important than what's occurring beneath the stock market's placid surface.

Here the news is decidedly mixed. While the major equity indexes are testing multiyear (and, in some cases, all-time) highs, fewer and fewer individual stocks are coming along for the ride.

Take one of my basic indicators, the percentage of NYSE common stocks trading above their 50-day (10 week) average price. Back in late April, when this latest intermediate-term rally (off the mid-March lows) was lifting off, a robust 80% of Big Board stocks were quoted above their 50-day average.

In June, at the first significant market peak before a swirl of turbulence set in, the figure reached a still-healthy 77%.

This month, despite two stabs at new all-time highs by the Dow, our gauge shows barely 60% of the NYSE roster in an uptrend. Historically, such a sharp weakening of the market's internal cohesion has almost always signaled a pullback in the offing.

I'm not saying stock prices have to tumble tomorrow. But this is a time to be extra careful with new commitments. If you're sitting on stocks or mutual funds you don't really want to own, my advice is to sell them now, while the selling is good.