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  Thursday, 20 Nov 2008 | 12:36 PM ET

BEHIND THE MONEY: The 2002-2007 Bull Market...Was It Only in Our Dreams?

Posted By: John Melloy

BEHIND THE MONEY: The 2002-2007 Bull Market...Was It Only in Our Dreams?

"No, no, no, no only in my dreams,
As real as it may seem,
It was only in my dreams."
-Deborah Gibson

The S&P 500 today fell back to the closing low of the Bear Market that ended in 2002, eerily hitting the exact 776.76 close of October 10, 2002. If we close below that level today, that will confirm that what we experienced in that five-year period was just a mirage and that we are still mired in the bear market which began in March of 2000.

So does that mean all the progress that the country and globe made in those 5 years was all for naught?

"Even when we were at our peak 6 months ago, the Nasdaq was way off its 2000 high," said Zachary Karabell, president of River Twice Research in New York and frequent contributor to Fast Money. "This has never rally been a bull market."

Well what was it then? What was perception and what was reality?

Innovation by Apple and Google was real. Amazing retailing by Wal-Mart and McDonald's was and is real.

"China is real; Apple is real," said Karabell, who blogs on RiverTwice.com, his firm's web site . "The financial profits were nuts."

In that 2002-2007 period, financials used insane leverage, a phantom housing market and a derivatives boom to become the largest portion of the U.S. stock market. In 1990, they were the eighth largest, according to Merrill Lynch. (After this year's drop, they are currently fifth.) Moving money around the world and providing capital simply didn't belong as THE biggest part of our market. The problem is that because the financial system is such an integral part of the economy, the popping of this bubble will be very painful, dragging every sector with it down the tubes because of its paralyzing effect on business and consumer borrowing.

So what does this mean for your portfolio? Well until this "ponzi scheme", as Karabell calls it, unravels on Wall Street, build your watch list of stories that were "real" over the last five years. When the time is right, you may be able to get them for unreal prices.

Note: I read the rest of the Debbie Gibson lyrics to see if there was some sort of happy ending that would inspire me. That too does not end well. It seems Debbie does not get her man back. He was truly only in her dreams. Let's hope that this market ends up with a happier ending than Debbie.

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Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to fastmoney@cnbc.com .

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  Tuesday, 18 Nov 2008 | 12:34 PM ET

BEHIND THE MONEY: Dow's Bermuda 'Triangle' Points to More Lost Returns Ahead, Analysts Say

Posted By: John Melloy

BEHIND THE MONEY: Dow's Bermuda 'Triangle' Points to More Lost Returns Ahead, Analysts Say

The Dow average is forming a pattern that's generating a lot of chatter among the technical analyst community (there's a community?) and the Fast Money traders. Using a bar chart for the Dow, draw a trend line from the September intraday high diagonally down, touch the November 4 high and keep going. Then draw a straight line across the lows, touching the October 10 intraday low and the low made during the day last Thursday (right before the monster intraday rebound) until you connect with the hypotenuse. You're looking at a right triangle, also called a wedge among chart worshippers. The Dow is clearly bouncing around within this triangle, posting lower high after lower high.

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  Monday, 17 Nov 2008 | 12:41 PM ET

BEHIND THE MONEY: On the Sidelines? Merrill's Top People Say Not Time to Say 'Put Me in Coach'

Posted By: John Melloy

BEHIND THE MONEY: On the Sidelines? Merrill's Top People Say Not Time to Say 'Put Me in Coach'

All this week on Fast Money we will discuss how many investors are waiting "on the sidelines". There is a record amount of cash out there. Each day, a FM trader will profile an area of the market that they feel should be your first place to go, when you are finally ready to say, "Put me in coach."

As for when that magical moment will come, Merrill Lynch's top people say you should still wait. In a new group report by their top analysts, Merrill's chief investment strategist, North American economist, technical research analyst and quantitative strategist said that their work collectively points to some more downside for equities.

"Currently, only 2 of 16 component indicators highlighted by our economists and strategists are signaling that the equity bear market is over," wrote the group in a report this morning. Share repurchases, housing inventory, valuation and new highs vs. lows are among the market indicators used across the various disciplines by the Merrill people.

"History shows quite clearly that being early can carry substantial performance penalties," Merrill writes. "We believe it has historically been better to actually be somewhat late." They recommend staying in Treasuries, defensive sectors and high-quality dividend stocks.

So as you're watching our "On the Sidelines" series, should you listen to Merrill and just jot down the ideas and keep your hand on the trigger? Generally the feeling on the Fast Money desk agrees with the Merrill thesis. Not time yet to dive in.

Also, Merrill's strategist (Richard Bernstein), economist (David Rosenberg) and technical analyst (Mary Ann Bartels), are all ranked among the top four analysts in their respective area by the 2008 Institutional Investor Magazine poll of money managers. I also personally find their analysis to be among the best on The Street.

But if you're too antsy to wait on the sidelines and jumping in already with some active trading strategies, it looks like you're not alone. Bloomberg news reported Friday (in a story written by the astute Edgar Ortega) that Charles Schwab , TD Ameritrade and E*Trade "are benefiting from investors' increased interest in options and more savvy trading strategies after the Standard & Poor's 500 Index fell to a five-year low." Ortega cites Schwab's daily trading, which surged 56% from a year earlier in October.

So tonight we'll try to have a little for everybody: those of you still looking for good ideas, but still waiting on the sidelines and those of you who are in there actively trying to fight the good fight during these wild swings in the market.


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  Friday, 14 Nov 2008 | 1:08 PM ET

BEHIND THE MONEY: Don't Expect Jedi Council-Like Solution From G20 Leaders This Weekend

Posted By: John Melloy

BEHIND THE MONEY: Don't Expect Jedi Council-Like Solution From G20 Leaders This Weekend

Some traders have cited optimism about the G20 meeting of world leaders in Washington this weekend as one reason behind the monster rebound yesterday. There is some speculation about a substantive announcement involving nations that run a surplus providing loans to countries hardest hit by the credit crisis.

The Hollywood-like image of world leaders sitting around a table ala Austin Powers, Dr. Strangelove or the Star Wars' Jedi Council and coming up with a plan to solve this deep, complex and heterogeneous crisis seems a bit too far fetched for traders.

"You have 20 nations there and a five-hour meeting," said Tim Seymour, founder of Seygem Asset Management and a FM Trader, "That leaves 15 minutes for each leader to speak. How much can you get done in 15 minutes?"

What Seymour does expect to happen is a "plan to create a bigger plan" with working groups created to tackle different aspects of the crisis. Look for more symbolic action, rather than a global coordinated effort that the U.S. wouldn't participate in anyway, he said. You can see some of Tim's trading thoughts on a daily basis on Seygem Asset Management's website .

And yes, we were incorrect in this blog yesterday in calling for the market to breakdown. It did in fact break the lows significantly. It also snapped back by a violent 900 points in a flurry of panic buying. Traders these days can be right about a call and still be broke by 4 pm. It's what bear markets do and as OptionMonster.com's Pete Najarian likes to say these days, "If you don't have real-time quotes, you're dead."

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to fastmoney@cnbc.com .

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  Thursday, 13 Nov 2008 | 12:10 PM ET

BEHIND THE MONEY: Can the Market 'Hold the Line'?

Posted By: John Melloy

BEHIND THE MONEY: Can the Market 'Hold the Line'? Traders Say 'No'

With the Dow average heading into this day just 110 points from its credit-crisis closing low set last month, this is clearly a make or break day for the market. We plan on debating at length tonight whether major indexes can indeed 'hold the line."

Stocks are up slightly this morning because...well...we have no idea. You would think that after lowered forecasts from bellwethers such as Intel and Wal-Mart, along with a a surge in jobless claims to a 7-year high, that indexes would surely be lower. In fact, we declared that "Intel's Warning Points to Bad Day Tomorrow" on last night's show as well as on our website .

FM Trader Jeff Macke said this morning that he will be dumping any stocks into this false rally. The market is likely to rollover as more people follow his lead, he suspects.

Dennis Gartman, a frequent guest on the show and writer of the must-read "Gartman Letter", tells us this morning: We've observed that "since the bear market began in earnest in late '07 that the volume rises as prices fall, and it falls as prices rise. This is all the more ominous in light of yesterday's rising volume" on a day when the Dow lost 400 points. Translation: Look out below.

We're also watching Goldman, Citibank and Google as market barometers. They are all solidly in the red this morning. Without these stocks higher, which are some of the most-owned and most-watched these days, it may be tough for the market to stay higher.

As for the debate tonight, look for it to be accompanied by the great hit "Hold the Line" by Toto. Unfortunately like Toto, this morning bounce is likely to have disappeared from the scene before tonight's show begins.

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to fastmoney@cnbc.com .

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  Wednesday, 12 Nov 2008 | 2:10 PM ET

BEHIND THE MONEY: Goldman or Morgan Stanley...Who's Telling the Truth?

Posted By: John Melloy

ISN'T IT IRONIC?

About 45 minutes before Fast Money was set to begin last night, we started to get some headlines from Goldman Sachs CEO Lloyd Blankfein speaking at the Merrill Lynch Financial Services conference taking place here in New York. They were largely ignored by most of the business media, but we decided to make them our lead.

The headline that really struck me was this one: "Goldman Sachs: Bank Holding Status Won't Change Strategy."

It became our top story of the night for two reasons: One, Goldman sharply rebounded in the middle of the day yesterday and now we knew why. And two, this comment directly contradicted the widely-accepted notion that the Wall Street business model as we know it...is dead.

Well, according to Blankfein, who is now the steward of a highly-regulated bank holding company, it is not. The CEO reportedly put up a chart showing Goldman's return on equity since going public in 1999 versus its leverage ratios during that same period. They were not highly correlated, he pointed out, therefore high leverage was not key to generating high returns.

Huh, that's funny. Then why did Morgan Stanley management say the exact opposite, from the very same podium this morning? Management there says the new risk environment will shave 3 to 5 percentage points off the firm's return on equity.

It seems the market believes Morgan Stanley. Both stocks are off more than 8% as of 1:40 p.m. New York time. And we stand by our decision to go with "Goldman Sticking to Guns" as our lead.

SOMETHING TO WATCH FOR TONIGHT

We've been covering on a nightly basis the different scenarios that may unfold if General Motors did indeed get taken over by Uncle Sam. For the latest analysis on the subject from Jon Najarian, co-founder of Optionmonster.com, click here .

But tonight, we take that one step further and look at what kinds of wonderful vehicles that may be created by this state-run automaker. We have a nice history put together of the fine automobiles produced by past governments. Think puke-brown colors, boxy chassis and roomy glove compartments for all your socialist propaganda.

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! If you'd prefer to make a comment but not have it published on our website send your message to fastmoney@cnbc.com .

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  Tuesday, 11 Nov 2008 | 4:43 PM ET

BEHIND THE MONEY: Options Market Foretold Starbucks Earnings Miss Today

Posted By: John Melloy

Here's what we didn't get to in last night's show...

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  Sunday, 1 Dec 2002 | 12:00 AM ET

Fast Money: Behind The Money News Story