Dylan Ratigan started CNBC's "Fast Money" show Tuesday night with a discussion of the U.S. stock market, which he said "had the best day in weeks, because it didn't behave like an unadulterated lunatic."
He said the big headline of the day was the U.S. government's $250 billion plan to invest directly into banks. Karen Finerman said "the hope is that these top banks will take the money and start to lend." She mentioned some of the banks need to shore up their balance sheets. Jeff Macke said, "Every other stock besides the nine banks the government is throwing money at are sells." He said he sold his
today and just about everything else.
Ratigan explained that the three-month Libor got cheaper today. Tim Seymour said "the credit market's reaction was slightly better, but we're still at 200-baisis points above normal borrowing costs."
Macke pointed out that
traded horribly today despite the new bank plan. He said "the government can't legislate people becoming confident."
Pete Najarian mentioned that
Fifth Third Bancorp
all prospered because now the "good banks" have a lot of capital and could start spending it.
Najarian says, "If you're a fast-money trader, this is your kind of market." He recommended that investors use derivates to their advantage - such as buying stock in
and selling at-the-money calls to collect the premium.
Guy Adami told viewers the market is very volatile. He says, "unless you're watching a stock like
all day long, the run is over before it begins." Macke says traders have two options in this market "do nothing or have the guts to get long days like yesterday."
Ratigan moved the discussion toward the commodity complex. Adami said Freeport McMoRan is up 48% in three trading sessions and said that trade is probably over. Najarian said investors should look to deploy his options strategy of buying stock and selling calls on a commodity play like
Chris Mutasico, an analyst at Stifel Nicolaus, joined the crew to discuss the government's move to invest $250 billion in banks. He said, "It's a sad day when you have to bail out the banks, but it's a necessary move." He explained that just buying the distressed assets will take too long to shore up the banks' balance sheets. He says the government "can't be too punitive on the banks, because it would remove confidence from the system."
Mutasico said that "over the next several days as earrings are reported we will see the banks start trading on fundamentals," which will take away their recent gains.
Ratigan moved the discussion to
, which all reported weak guidance tonight.
Adami said "Intel is at the lower end of its valuation at 11 times earnings." Najarian said DNA's "Avastin numbers were outstanding. Seymour says "Intel couldn't be executing any better." Finerman said "it's all about the outlook; this quarter is irrelevant."
The Takeover State
The crew talked about the slippery slope of the government bailing out and nationalizing companies. Macke says "we're obviously becoming socialists." He said the only stocks you can own are the nine bank stocks the government is planning to invest in. Finerman said "she is concerned and the news isn't good for the dollar." Adami says an "inflation holocaust" could be the unforeseen event. Seymour says he doesn't feel very confident the auto sector bailout is going to work. Najarian says we will continue to see very volatile markets.
were among the most actively traded stocks in the NYSE today.
Trades for a Bear
Joe Terranova of Phoenix Investment Partners joined the gang to discuss how to trade a bear market. He said health care service companies like
Pharmaceutical Product Development
both have strong fundamentals and were liquidated two days ago. He said these stocks are "global, cash-rich and have limited debt."
Adami mentioned that Covance just singed a big deal with
. He says CVO is becoming a value play here." Najarian said, "If you want to stay conservative look at
Johnson & Johnson
, because they blew numbers away today." Finerman mentioned she owns some JNJ and
Final TradeAdami said to buy
. Macke recommended staying in cash. Seymour said to sell the "20% bounce in
." Finerman said she covered some of her short position in
Simon Property Group
. Najarian went with the
United States Natural Gas Fund
This article was written by a staff member of TheStreet.com.