Fast Money Recap

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'Fast Money' Recap: No Place to Hide

TSC Staff

Dylan Ratigan summed up the feelings of Monday's market crash when he said on CNBC's "Fast Money" TV show there "was no place to hide" from the wrath of the bears.

Stocks, gold, oil plunged, as the global economy fell deeper into an abyss. The Dow Jones Industrial Average plummeted 679.95, or 7.7%, to 8149.09. The Nasdaq dropped 137.50, or 9%, to 1398.07. And the S&P 500 sank 80.03, or 8.9%, to 819.12

Jeff Macke wasn't in a cheerful mood about the start of the holiday shopping season last weekend, saying the margins for retailers have been a "train wreck." "They had to give away the merchandise," he said.

Guy Adami was a little more optimistic about a rally, saying today's 8.9% drop in the S&P 500 was a "textbook correction" from last week's big rally. Now, he said, "If we collapse tomorrow, I'll jump off the bridge"

Tim Seymour said the "data flows" this week, including the nation's unemployment report, could wreak more havoc on the market.

Adami told viewers there could be a trading opportunity in Liz Claiborne(LIZ Quote), where 18.5 million shares traded today, compared to the usual 3 million shares. He said he would buy the stock on a bounce.

Ratigan said the next big problems could be in the credit front. Meredith Whitney, an analyst for Oppenheimer & Co., said banks are pulling lines from consumers just when they are losing their jobs.

The traders said the financial institutions most affected by this pullback include Morgan Stanley (MS Quote), Goldman Sachs (GS Quote), Citigroup (C Quote), MasterCard, JP Morgan Chase (JPM Quote) and American Express (AXP Quote).

Karen Finerman said the Federal Reserve alluded to the credit problem last week when they announced plans to bail out the auto and credit card loan markets.

Macke expressed his doubts about the federal government's largesse. "Even if they gave the money away to consumers, they would sock it away."

From an investor's standpoint, Finerman said she would short Capital One (COF Quote) but wouldn't short JP Morgan because it could possibly "trade up on a lot of other things."

Macke recommended Proshare UltraShort(SRS Quote) if investors could stomach the volatility.

Adami found the downward action on oil and gold troubling. Oil went down even after China announced plans to buy 1 million tons of industrial metals to replenish its stock. Seymour said OPEC has shown little leadership in addressing the drop in oil prices, which fell below $50 today.

Adami said he liked Johnson & Johnson's(JNJ Quote) purchase of Mentor(MNT Quote), which does breast augmentation work.

Ratigan asked Steve Liesman, CNBC's senior economics reporter, for his assessment of the market plunge. Liesman said the market is banking on a much-longer-than-average recession of 16 to 24 months. He said the doesn't see the market turning up for six months or so.

Macke was skeptical about speculating on when the market might turn up. Finerman said she thinks it will begin to happen when the rate of decline starts to slow.

Liesman said the market will improve when the "market sees a way for business to right itself and set up for profit growth."

The Big Three's Big Day

On the eve of the Big Three's reappearance in Congress, Phil Lebeau, CNBC's auto reporter, said viewers should expect the automakers to present their business plans on how they would use the bailout money to get back in the black.

He said the United Auto Workers may be open to changes in their contracts, executives may take $1 in pay, and the automakers may suggest how they might shed brands and production plants they don't need.

More on the Economy

Jason Trennet, an investment strategist with Strategas Research Partners, complimented the Fed's actions to contain the economic crisis and said it was doing a good job. As a result, he believes the country will be able to get out of the current economic crisis more quickly than people think.

John Roque, a technical analyst with Natixis Bleichroeder, said the trend is definitely down in the market. "There should be a rally, but it hasn't occurred. If there is a rally, it will happen from lower, not here." Roque said most people are putting their money in the 30-year and 10-year Treasury bonds, a strategy Finerman found "scary."

Ratigan noted some people are finding a refuge in fixed income investments instead of stocks. "Carl Icahn and others are doing that," he said.

Finerman suggested one way to play this investment is with iShares iBoxx $ High Yield Corporate Bond Fund(HYG Quote). Seymour suggested getting into high-grade "utility stuff."