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When Fed Signals Stimulus, It's 'Balls To The Walls,' Says Hedge-Fund Manager (VIDEO)

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When the Treasury Department announced one of its bank rescue plans in early 2009, few investors besides David Tepper believed the government would actually provide the capital that banks needed to rise from the wreckage. Most ran for cover while Tepper, president of Appaloosa Management, bet the farm the government wouldn't let the big banks die.

His bet paid off. By snatching up billions in Bank of America, Wells Fargo and Citigroup shares early last year, the former Goldman Sachs junk bond dealer, who reportedly keeps a brass replica of a pair of testicles affixed to a plaque in his office, made his clients $7.5 billion in 2009.

"It was easy," crowed Tepper in a rare television interview on CNBC's "Squawk Box" Friday. "The government told you what they were going to do."

Now, as the government weighs a second round of stimulus, Tepper maintains the same robust faith in the Fed. "Either the economy is going to get better by itself in the next three months" or the Fed is going to come in with more money, said Tepper in the CNBC spot. (Video below.)

"Then what's going to do well? Everything, in the near term, though not bonds... So let's see what I got -- I got two different situations: One, the economy gets better by itself, stocks are better, bonds are worse, gold is probably worse. The other situation is the Fed comes in with money."

Tepper's forecasts come on the heels of last week's meeting of the Federal Reserve Open Market Committee in which the Fed said it might "resume buying vast amounts of government debt to spur the recovery," reports the New York Times.

"You talk about when you get moments," Tepper said, referring to the Fed's announcement. "This might be one of those -- kind of."

Watch the David Tepper interview on CNBC below:

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Filed by Nate C. Hindman