Four Bailout Queens Advance - But Why? (C, USB, JPM, GS, FRE, FNM, AIG)

Over the last two days, some questionable financial stocks have risen sharply. Shares of Citigroup (NYSE: C), AIG (NYSE: AIG), Fannie Mae (NYSE: FNM), and Freddie Mac (NYSE: FRE) rose Tuesday and continued that increase today on large volumes, sparking interest and a bit of curiosity regarding the motivation behind this move.

After all, these bailout queens helped precipitate the economic disaster in 2008 - in conjunction with Goldman Sachs (NYSE: GS), which has largely avoided the depths to which the aforementioned companies fell mostly due to its Teflon-like qualities). Their stock took a heavy beating in 2008 and 2009, but they seem to be recovering.

Does anyone really know why?

AIG recently unloaded two chunks of itself for $51 billion, so there is reason to have a little faith in the company's long-term prospects. Citi has also been praised by analysts lately (including myself) for its long-term potential. Fannie Mae and Freddie Mac are also essentially going to be in business as long as the United States government continues to function, so there is also stability there.

But all of this isn't enough to exhibit such a drastic spike (AIG went up 13% yesterday). Whatever the reason, though, I don't see this move having legs. Soon, the four stocks listed above will take hits like the rest of the big hitters in the financial sector, like Goldman Sachs, JP Morgan Chase (NYSE: JPM), and US Bancorp (NYSE: USB) did Tuesday.

Of all of them, I'd stick with Citigroup for a long-term investment. Citigroup - the best-performing stock of the bailout queens for 2010. Who would've thought?