Dylan Ratigan hosted CNBC's "Fast Money" Friday night. He began the show by discussing the amazing moves seen in financial stocks such as Lehman Brothersundefined, American International Group (AIG) and Washington Mutual (WM) this week.
"The moves in these stocks have never been seen in the history of Wall Street," Ratigan said. Pete Najarian said the financial sector looked terrible, but the coal stocks, steel and everything commodity helped the
Ratigan mentioned that S&P put American International Group's credit rating on negative watch. "Have they no sense of shame?" Jeff Macke said. He said S&P and Moody's have a lot of explaining to do. Tim Seymour said that AIG has a lot of balance sheet issues. Joe Terranova told viewers that he owns AIG puts. He also mentioned that AIG's credit default swaps will continue to move higher and that the CEO will have to come out with a plan for the company by Monday morning.
Ratigan moved the discussion to the general stock market. Macke said the reason the indices didn't look so bad was that previously beaten-down stocks moved higher. Terranova pointed out that the dollar came in weak, and investors knew the commodity stocks would come on strong today and move the S&P up.
Seymour said there are good valuation stories in the commodity complex. Macke explained that the dollar has rallied too far, too fast. "I would have loved to have stayed long the dollar forever, but if you give me 10% to 15% in this tape, I am taking it," he added.
Ratigan mentioned that
has a lot of exposure to the financial sector. The stock fell 5% today. Seymour explained that 53% of GE's profits last year came from the financials, and that's why the stock is being hit so hard here. "I am getting sick of carrying GE with "Fast Money," Macke joked.
Ratigan brought up the fact that crude oil dropped below $100 today. Terranova said $100 oil lends to complacency among the American consumer. He said the only trade in the energy space is the refiners. Seymour said the consumer is dead.
Ratigan told viewers that
hit a five-month low today. Najarian explained that Steve Jobs looked a little bit thinner at their conference this week, and traders sold off the stock. He said he's long the stock but also holds puts for downside protection. "I blame the board of this company for creating a cult of personality around this stock -- and that's what it trades on now," Macke added.
Sanford Bernstein analyst Brad Hintz, who also is the former CFO of Lehman Brothers, joined the traders to discuss the battered investment bank. Hintz said he expects Lehman to open for business on Monday. He explained that it will be extremely challenging to do the due diligence on a $600 billion balance sheet in a quick manner. "Lehman doesn't have a funding problem; they can fund themselves," he said. Hintz said the problem is the "crisis of confidence" in the equity markets. He told viewers to avoid the brokerage stocks until you start seeing credit spreads coming in on investment grade.
The Bull Case for Main Street
The "Fast Money" traders discussed the following bullish developments for Main Street: the possibility of a housing bottom, the commodity price decline and the rally in the consumer stocks. Macke said he would add an activist government to the list. He says the U.S. government will give money to
, and it's bullish for the stock.
Najarian said he sees opportunity in
if the housing market is at a bottom. Terranova recommended
, the coal stocks and
Research In Motion
in technology. Seymour explained that commodity prices are going down because of demand destruction. He says job losses will get worse into the holidays, so he isn't aboard on the bullish case for Main Street.
The traders spoke with
Scott Cohn about the latest developments with Hurricane Ike. Cohn said this hurricane has the potential for something catastrophic in terms of economics and human loss. He said if the storm surge comes through the Houston ship channel, it will be a major impact to the country because of the refineries located in that area. "We will start seeing higher gas prices, and it's already happening here," Cohn said.
The traders discussed
, which is set to report earnings next week. Terranova said that if it reports earnings south of $2, it will be in trouble, but if it reports north of $2, it would be seen as a positive for the market. Najarian is concerned about Goldman because of its exposure to the commodity complex.
New Funds For AIG
Charlie Gasparino joined the traders to discuss late-breaking news that American International Group has hired
to advise the company on raising new capital. He said the details of the plan will likely be announced over the weekend. Gasparino mentioned that
The Blackstone Group
are also involved in the plan.
Macke recommended buying General Motors on the dips. Seymour said the bounce in emerging markets will continue, so play it with
iShares MSCI Emerging Markets Index
. Terranova says Goldman Sachs will announce an earnings surprise to the upside. Najarian picked
This article was written by a staff member of TheStreet.com.