The United States and other major economies have rescued the financial sector. The threat of imminent bank failures across the industrialized countries has all but ended at this juncture. That's good news for global investors, depositors, businesses and individuals alike following weeks of financial market turmoil that culminated into a global stock market crash last week.

But just how the government and the private sector will mesh is another story.

The United States and the United Kingdom are now the most aggressive lenders and owners of their domestic banking systems. And how they direct and manage these companies will dictate not only the fortunes of shareholders, but the future of global investing.

I've got a bad feeling about government in the private sector; so the sooner the government finishes its job stabilizing and recapitalizing the banking sector, the better.

For now, we're stuck with a financial services sector that largely falls directly under government control for the first time since the Great Depression.

Debt ratios will now skyrocket everywhere, as every country - including Germany - opens their purse strings in a huge way to accommodate bank liquidity and lending. We will have a different financial marketplace going forward with far more government regulation and control. I'm sure George Orwell, author of 1984, is spinning in his grave right now.

One thing is for sure: Global long-term interest rates - especially American bond yields - are going to rise significantly over the next three to five years. In addition to death and taxes, I'd bet higher long-term rates are almost a 100% guarantee in this life after the tidal wave of government guarantees and bailouts of the financial sector.

Funding costs will surge for the Treasury and I've got to believe the Chinese, Japanese and other big holders of Treasury paper will want higher interest rates to compensate for holding heavily indebted U.S. paper. Though the Fed can manipulate the short-end of the market, it can't control the long end. And that's where investors can look to make money as long-term interest rates eventually rise once deflation is finally quashed.

The systemic risk to the financial system is now behind us. That's the good news. The bad news is that consumers and companies along with the rest of the real economy will continue to feel strained by tepid economic conditions, still weak interbank lending and lousy corporate earnings for at least the next six months.

ERIC ROSEMAN, Investment Director