I don't make predictions. But, what the hell, let's see how these two trades turn out over the next year. The first is highly speculative, and individual investors aren't even allowed to do it; the second is highly defensive, and can easily be entered into by just about anybody.

The first trade is to go long the ABX subprime index. You want a specific tranche? OK, buy ABX-HE-AA 07-2 at a price of 45.

The second trade is to buy 10-year TIPS, inflation-indexed Treasury bonds, at the auction on January 10: just submit a non-competitive bid, and accept whatever the clearing price is.

If someone reminds me, we'll look back at the end of the year and see how these two trades fared, both on an absolute level and in contrast to the S&P 500.