The events of the past week will undoubtedly be remembered among the most dramatic in financial history. Early in the week, we learned of the demise or forced fire-sale of some of the largest, most respected companies in the world including American International Group, Merrill Lynch and, of course, Lehman Brothers.

By Thursday morning the situation had become so grim that banks were afraid to provide overnight loans to one another. Overnight in Australia, interest rates for those dollar-denominated interbank loans spiked into the teens temporarily. There were real fears of a complete meltdown of the financial system globally.

Now the US government has taken an unprecedented series of moves aimed at stabilizing the situation. The Federal Reserve has effectively nationalized AIG, revived a Depression-era creation to bail out money market funds and, apparently, plans to directly purchase bad mortgage loans from banks.

I’m not a fan of government bailouts or federal solutions. However, my goal in The Energy Strategist isn’t to offer commentary on politics or policy but to make money in the energy sector. The bottom line: This move is bullish for energy stocks.

As I noted in Wednesday’s issue of TES, the severe selloff in energy stocks, and for that matter most other sectors, was largely tied to increasing concerns about the stability of the US banking system and developed world economies.

Institutional investors were desperately dumping all stocks to raise cash. Cash-motivated selloffs affect all sectors. This is why many of the world’s best-positioned energy firms were trading at the cheapest valuations in years despite still-strong fundamentals. I suspect recent actions will begin to alleviate some of these concerns and stabilize the stock market.

In Wednesday’s issue, I offered a list of seven top picks to buy now along with three hedge candidates. My feeling was that these seven stocks were simply too cheap to ignore; the panic-driven market was offering an outstanding opportunity for investors. I further noted that I planned to get more aggressive in other stocks once the market exhibited signs of stability.

My view remains unchanged. I recommend focusing your attention first on the fresh money buys outlined in depth in Wednesday’s issue. It’s by no means too late to take advantage of those opportunities. Although the stocks have moved higher, they all continue to trade at valuations that would have been unheard of just a few short months ago.

I’ll continue to monitor the market over the coming few days with an eye toward adding back some of my favorites that were hit hard during the panicky correction of the past two months. I suspect we’re seeing the best buying opportunity for energy stocks since at least late 2006.

As for stock-specific news, I highlighted Linn Energy in Wednesday’s issue. The main fears swirling about the stock in recent days have been Lehman’s ownership of a near 10 percent stake in the stock, Linn’s exposure to hedge contracts with Lehman as a counterparty and, of course, the broader fears of the credit crunch impacting the growth rates for Master Limited Partnerships (MLP) and Limited Liability Companies (LLC).

Since Wednesday, I believe these fears have been largely addressed. Linn came out Wednesday evening and quantified its exposure to Lehman hedges. The partnership canceled all of its hedges with Lehman as a counterparty. Under the terms of those hedges, Lehman owes Linn $68 million. Linn then reestablished identical hedges with other banks in its credit line consortium.

As everyone knows, Lehman is bankrupt. However, trading counter parties are among the first top get paid during bankruptcy, so it’s likely Linn will get the $68 million it’s owed. Management stated that it doesn’t see the Lehman bankruptcy having a material adverse impact on the business.

Some investors with whom I’ve spoken seemed to be under the impression that Linn had hedged all of its commodity exposure through Lehman. This isn’t true. The company has a consortium of banks with which it’s hedged production. In light of today’s announced bail-out package, all of those banks now look like much more dependable counterparties.

Bottom line: I believe Linn’s distributions are safe, and the selloff in the stock was largely driven by a money panic, not a fundamental issue. Even in light of the rally of the past two days, Linn still offers an impressive 15 percent yield, offering a great buying opportunity for investors not yet in the stock. Buy Linn Energy.