'Fast Money' Recap: What Good Is Goldman?

The trading panel discusses the investment bank's cloudy future.

Author:: TSC Staff
Publish date:: Nov 11, 2008 7:20 PM EST

Dylan Ratigan hosted CNBC "Fast Money" show Tuesday night. He started the show with a discussion of Goldman Sachs Group (GS) - Get Report. He mentioned that Goldman CEO Lloyd Blankfein spoke at a Merrill Lynch conference today. Blankfein was quoted as saying "our reformation as a bank holding company isn't having a material impact on the way we operate our business."

Guy Adami said the problem is that Wall Street doesn't know how Goldman will make money going forward. He says "at some point the smartest guys in the room will come out and say something." Tim Seymour said the good news for Goldman is that value guys are looking at the stock. Karen Finerman says "the one good thing for Goldman is that credit default swaps have not moved out materially."

The "Chart of the Day" was the

Dow

. Ratigan pointed out that the Dow is stuck in the middle of the range. Adami says "the only edge you have in the market is the range, so sell the extremes and buy the dips."

Najarian said that if you want to trade the range, then play

Burlington Northern Santa Fe

(BNI)

at $80,

Norfolk Southern

(NSC) - Get Report

at $52 and

Union Pacific

(UNP) - Get Report

at $60.

Seymour said one interesting play is

Frontline

(FRO) - Get Report

, which should announce a 35% dividend yield next week.

Seymour said the story of the day was the announcement that

American Express

(AXP) - Get Report

gained emergency approval to become a bank holding company overnight. Najarian told viewers to look at

IBM

(IBM) - Get Report

and

Hewlett-Packard

(HPQ) - Get Report

. He says "if the emerging markets start to come back, these tech names will trade higher."

Ratigan asked the traders what they think of oil-related equity names. Adami explained that there is no money in the commodity market right now. He says "stocks such as

Exxon Mobil

(XOM) - Get Report

and some of the oil service names will be great plays early next year when the money comes back."

Seymour said to watch

Petroleo Brasileiro

(PBR) - Get Report

, which is trading at three times earnings. Najarian told viewers that commodity play

Archer Daniels Midland

(ADM) - Get Report

is seeing a lot of bullish options activity.

Ratigan moved the conversation to China. Seymour said if he would be bullish on any emerging market, he would be more bullish on China. He said you can play China with the

iShares FTSE/Xinhua China

(FXI) - Get Report

PetroChina

(PTR) - Get Report

and

China Mobile

(CHL) - Get Report

Finerman says "China is absolutely full of it, and the stimulus package is too little too late." Adami pointed out that

Jacobs Engineering

(JEC) - Get Report

traded down 7%, despite having a great backlog and big exposure to China's infrastructure build-out.

Ratigan brought up

General Motors

(GM) - Get Report

. He said the stock is at 66-year lows and a bailout appears to be certain. Jon Najarian said one thing General Motors,

Ford

(F) - Get Report

and

Chrysler

can do is sell clean diesel cars in the U.S. like they do overseas.

He says, "they can have these cars in this country in months, but they need to relax on crash testing and EPA." Finerman said we need to fix the union and labor problems at General Motors, or the bailout will not work. Najarian told viewers he is coving his short position in names such as

Cummins

(CMI) - Get Report

and

TRW Automotive

(TRW)

Hedge Fund Pains

The traders discussed some ways to play hedge fund liquidations with 13Fs due out this week that show some of the largest institutional holdings. Finerman said investors should read the 13Fs for Citadel Investment, Atticus Capital, Harbinger Capital and Pershing Square Capital. She says "they are very big holders of some stocks, and if you have seen stocks that have moved a lot, than that could be the reason."

Ratigan said investors should watch names such as

U.S. Steel

(X) - Get Report

MasterCard

(MA) - Get Report

Alpha Natural Resources

(ANR)

and

Cliffs Natural Resources

(CLF) - Get Report

Najarian mentioned that Wall Street whale Julian Robertson has been buying

Apple

(AAPL) - Get Report

Visa

(V) - Get Report

and

MasterCard

(MA) - Get Report

. He says "you have to like Visa at these levels."

Liz Claiborne CEO Interview

The crew spoke with Bill McComb, CEO of

Liz Claiborne

(LIZ)

about whether this year's holiday season is in trouble. McComb said he is grateful that he downsized the company a year ago. He says "woman's apparel and accessories are down 15% to 20%." He said the best period he can think of to compare the current economic crisis to is right after Sept. 11, 2001. McComb explained that Claiborne has cut capital spending by 50% and implemented additional expense controls for 2009.

Legg Mason CEO Interview

Legg Mason

(LM) - Get Report

CEO Mark Fetting, joined the traders to talk about the state of the mutual fund industry. Fetting said now is the time to look at asset managers like Legg Mason. He explained that it's more deprecation of the market and not capital outflows that have hurt Legg Mason's assets under management. He says "Legg Mason Capital Management led by Bill Miller just got a big client to come in for $1 billion."

Trader Radar

Shares of

Tyco International

(TYC)

were among the most active names on the

NYSE

Tuesday.

Final Trade

Seymour recommended

Focus Media

(FMCN)

. Adami picked