Dylan Ratigan hosted CNBC's "Fast Money" Friday night. He began the show with a discussion of the emergency gathering at the U.S. Treasury with the members of the G7. He explained that the members are meeting to discuss the lack of willingness by banks to lend to consumers. He pointed out the Dow traded in a 1,000-point range today. He explained it was the single worst week in the Dow's 112-year history.Joe Terranova said one of the key indicators today was the $100 intraday reversal in gold. "Clearly something happened in the gold market today to make it turn lower," he added. Jeff Macke says the G7 will do whatever it must do to grease the wheels here. Karen Finerman told viewers she didn't trade a lot today. However, she said Excel Maritime ( EXM) is very interesting because it trades at just one times earnings. Ratigan mentioned that Lehman Brothers was forced to sell its bond portfolio down 90 cents. Guy Adami says that at least we know it did price, and it went through. He says the credit markets appear to be easing. Adami mentioned that Jim Rogers said this morning that we could see an "inflation holocaust." He said Rogers might be right. Terranova says that proactive policy action right now has a cost -- and that cost will be inflation. Macke says he fears both inflation and deflation in an equal measure. "It's a global recession at least, but that doesn't mean we will be bribing the border guards with gold," he added.
Ratigan mentioned that Morgan Stanley ( MS) had a horrendous day and week. He explained that Morgan is trying to deleverage or bring more money in to stabilize the firm. Finerman said she was surprised the merger agreement sheet between Morgan and Mitsubishi UFJ Financial Group wasn't tighter than it appears to be. Terranova said he bought Morgan today because it's a valuable franchise. "This was perception over reality, and a lot of this was caused by Moody's," he added. Wayne Angell, a former Federal Reserve governor, joined the crew to discuss what the G7 might be discussing. He said the G7 should recognize that we have a lot of good things going for us, such as the strong dollar and the reversal in gold today. "You can't have inflation and deflation at the same time. American households are cutting back on their spending because of the decline in their home prices due to their mortgage debt," he said. He said to forget about inflation because it will be all downhill through 2009. Angell says the Treasury's best option is to recapitalize a new government-sponsored enterprise and for the government to take preferred stock with warrants on the common. "We will have people running to get on board with that kind of configuration, it will give the government and Fed money," he explained. Hedge Fund Liquidation Ratigan explained that huge hedge funds have been forced to liquidate positions due to margin calls. He mentioned that Chesapeake Energy's ( CHK) CEO was forced to sell almost all of his stock to meet margin calls. Terranova says the action in crude oil today was due to forced margin selling.
Macke says this puts to rest the whole idea that the commodity run wasn't a bubble. " UAL ( UAUA) is going to get blown up because they're reportedly hedge out in crude at $137 a barrel," he added. Adami says Chesapeake could be a buying opportunity here due to the forced liquidation. Terranova says to find a rival of Chesapeake in the industry and buy it. Capital Injection CNBC's Steve Liesman joined the traders to discuss the capital injection plan and the G7 meeting. He said they aren't thinking about insuring bank accounts above $250,000, but they're thinking about guaranteeing inter-bank lending. He says the G7 members are discussing a term sheet that will outline the capital injections that are available to banks and everyone. He says it could include the government buying any troubled asset, including common stock. "I am not hearing anything in terms of further Fed action," he said. Market Repair Jon Najarian joined the traders to discuss how to repair the markets. He said you can restore the trust in the markets with transparency, with the G7 doing direct investments and by guaranteeing some of the credit markets that are frozen up right now. "I am happy that they're discussing a global solution and not just a U.S. solution," he added. Najarian also mentioned that we need a whole new incentive for the ratings agencies. Finerman questioned why we even have ratings agencies. Final Trades Adami said to take a look at Johnson & Johnson ( JNJ), which hit a 52-week low today. He said don't rush in before JNJ reports earnings. Macke said he bought some McDonald's ( MCD) this week, but it hasn't worked out. "Don't expect it to come screaming back," he said.