New York. It’s the center of the financial universe. And that financial universe is facing its biggest crisis ever.
How did we get here? Let’s flip back the calendar to September 6th, when the federal government seized Fannie Mae and Freddie Mac before they collapsed. Authorities placed the two agencies under conservatorship – which was a little like putting a finger into a dam with a big leak. Ultimately they couldn’t stop the deluge.
This past Sunday, Lehman Brothers went bankrupt and the same day Merill Lynch CEO John Thain threw in the towel, selling his firm to Bank of America .
Then, on Wednesday night the government bailed out AIG, averting the single worst financial collapse in history.
In just two weeks, the U.S. government has taken-over half of the domestic mortgage market valued at $12 trillion. The Federal Reserve has put a third of its balance sheet at risk and New York has watched as 2 of its four remaining brokerage firms disappeared.
These 14 days have changed America forever and left the financial industry wounded like never before.
Who are the new winners on Wall Street?
I think boutique investment banks are the winners, says Guy Adami. You can’t race after them but Lazard , Greenhill and Jefferies have been hiring when the others have been firing. They’re getting back to basics and at the end of this, they should be on top.
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Trader disclosure: On Sept 19, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (MSFT), (WMT); Adami Owns (AGU), (BTU), (C), (GS), (INTC), (MSFT), (NUE); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (NOK); Finerman's Firm Owns (WFC) Puts; Finerman's Firm Owns (BIIB) Calls, (DNA) Calls; Finerman's Firm Is Short (BBT), (IYR), (IJR), (MDY), (SPY), (IWM); Najarian Owns (AAPL) And (AAPL) Collar; Najarian Owns (ETFC); Najarian Owns (NOK) And Is Short (NOK) Call; Najarian Owns (RIMM) Call Spread
Terranova Is Co-Portfolio Manager Of The Phoenix Diversifier PHOLIO; Phoenix Diversifier PHOLIO Owns (IGE), (DBC), (DBV)
Terranova Is Chief Alternatives Strategist Of Phoenix Investment Partners, Ltd.; Phoenix Investment Partners Owns More Than 1% Of (ABD), (ARE), (BIG), (BRE), (CNTY), (CNW), (CLB), (OFC), (DLM), (DRH), (DLR), (EPR), (ESS), (EXR), (AGM), (FL), (GBL), (GNET), (IGE), (LNET), (MAC), (OIIM), (PSPT), (DBC), (DBV), (SLB), (GWX), (SSYS), (SKT), (UA), (BIV), (VV), (BLV); Phoenix Investment Partners Owns More Than 1% Of Goldman Sachs Financial Square Fund - Money Market Fund; Phoenix Investment Partners Owns More Than 1% Of Seagate Technology Tax Refund Rights
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