Is another big bailout under way? Judging from yesterday’s hot-and-heavy stock market rally (186 points on the Dow), a good number of investors think so. Stocks rolled to a fourth consecutive day of gains on word that five major central banks, including the Federal Reserve, have agreed to provide an unlimited amount of three-month dollar loans to European banks.

In recent weeks, customers have wheeled cartloads of deposits out of euro zone banks, fearing that the banks’ holdings of Greek (and Portuguese and Italian and Spanish) debt might cause the institutions to collapse. It was becoming a self-fulfilling prophecy, where loss of confidence threatened to trigger the very collapse people feared.

Ironically, the odds are now close to 100% that Greece will, in fact, default on its debt. But if the central banks provide adequate liquidity to the European banking system, and the Chinese (along with several other emerging industrial powers) step forward to recapitalize the continent’s banks with new equity, the banks will be able to write off their bad Greek loans — and survive to fight another day.

That’s what the stock market is “celebrating,” if you can call it that.

I’m certainly hoping policymakers can put this fire out, because it would make our lives as investors a lot easier. However, I’m not eager to chase stock prices too much higher from here. Above 1,230 on the S&P, I’ll probably be looking to do some selling.

On the other hand, certain areas of the bond market (not Treasuries, for sure!) offer surprisingly good value. High-yield corporates, for example. I don’t really care for the junky junk, but a better-grade “junk” fund like Vanguard High-Yield Corporate (MUTF:VWEHX), $3,000 minimum, is yielding 7.3%.

That’s almost indistinguishable from the 7.5% compound annual return I’m projecting from here for the Standard & Poor’s 500 Index over the next 10 years. Why take equity risk if you can get essentially the same return from bond interest?

Of course, someone might argue that defaults likely will cut into the returns of even a conservatively managed fund like VWEHX. Granted. However, it’s also possible — perhaps even likely — that VWEHX will reap capital gains on its bond portfolio as the current abnormally wide spread between Treasury and corporate yields narrows.

Since April, according to Merrill Lynch, the yield spread between the average junk bond and Treasury paper of comparable maturity has expanded by 300 basis points. So there’s plenty of room for spreads to come in, which would probably result, at least in part, from a rise in high-yield bond prices.

Let’s buy VWEHX for 2% of the model portfolio. We’ll take a corresponding amount away from our Raise Your Rate CD stake (8% of the portfolio after this change, down from 10%). Keep buying VWEHX at $5.65 or less.

Note that Vanguard imposes a 1% redemption fee if you bail out of VWEHX in less than a year. If this is a problem for you, MetWest High-Yield Bond Fund (MUTF:MWHYX), $5,000, sports an excellent performance record and no redemption fee. No transaction fee, either, when you buy through Fidelity, Schwab, TD Ameritrade and other leading discount brokers.

Bear in mind, though, that MetWest reaches somewhat lower on the quality scale than Vanguard does. If you’re worried about a double-dip recession, you may find greater peace of mind with VWEHX.