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'Fast Money' Recap: Financials Weigh on Markets

In other tech news, Lee noted that eBay (EBAY) plans to spin off Skype in an IPO in 2010.

Goldman called it the "worst-kept secret in tech land." He said the IPO's great for eBay's shareholders because Skype has been a non-performing asset.

Lee shifted the discussion to the financial stocks which led the market down. Seymour the action was expected because it would have been difficult for the other financials to top the earnings of Goldman Sachs (GS), and "that's what the Street did today."

Lee said it appeared the financials were reverting to an old trading pattern where Goldman "would knock the cover off," only to be followed by a pullback by the rest of the group.

Lee said the Citigroup (C - Get Report), up 2%, was the only financial winner. Finerman, though, called the stock a "fake winner."

Finerman said what happened today was a "gigantic short squeeze." "There's an interesting arbitrage going with the convertible stock which the TARP owns some and the public owns a lot," she said. "The convert will be converted into new Citigroup shares, but you can't borrow Citigroup shares because of the squeeze."

Finerman said the convert has jumped from 18 cents on the dollar when the deal was announced to 112 cents on the dollar at noon today. She said it's interesting this squeeze is happening to an American icon like Citigroup.

Lee brought in Brad Hintz, a brokerage analyst with Sanford Bernstein, who said Goldman's recent earnings report demonstrated its success in playing the slow improvement of the credit markets.
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