The credit market nightmare has gone from bad to worse, and it's causing a breakdown of many financials that is now taking out their prior lows. The de-leveraging of portfolios combined with the much larger-than-expected writedowns, means current dividend payments cannot be maintained. We shouldn't endure any further pain.

As such, I'm recommending selling shares of Alesco Financial (AFN), Crystal River Capital (CRZ) and Deerfield Triarc Capital (DFR) at market. Deerfield's most recent financials were released after the close, and they essentially said DFR will be slashing its dividend payout. We received no heads up on this development, other than that announcement, and yesterday the stock was marked down hard as a result.

With all the negative rhetoric surrounding the credit markets this past week and the nasty sell-off amid rising calamity in the fixed income markets, I thought the Fed would lower interest rates. Wishful thinking!

At this juncture, I've lost faith in the three above-mentioned stocks to recover any time soon. We're not going to stay in a losing situation for years in order to, hopefully, recover losses. There are too many other, high-yield possibilities that will work for us, to let the capital remaining in these positions sit idle.

I only waited because there were signs late last year that the worst was behind these securities, and that these REITS had taken the right corrective measures to insulate themselves from a further meltdown. Not so.

On another note, Liberty All-Star Growth Fund (ASG) is behaving just like the market -- this Closed-end Fund is down.

I made a point of reviewing the fund's holdings this week and it was pretty easy to determine that the many busted stocks ASG holds don't offer the kind of upside potential we deserve. There's no point sitting on this security and hoping for a turn-around that I can't see happening anytime soon. It's time to "Sell" ASG and rotate our money into better opportunities.

We'll punch out of these crippled stocks and rebuild that part of our portfolio by raising our exposure in some sectors and structured products that are providing a much higher level of predictable cash-flow and safe principle.

Watch for new recommendations in the days ahead and watch your inbox for The 25% Cash Machine newsletter later today.

Bryan Perry

Editor The 25% Cash Machine