Finding Positives in Goldman Sachs
DOW: STUCK IN THE MIDDLE WITH YOU
DOW: STUCK IN THE MIDDLE WITH YOU
Stocks dropped on concern the global economy may be worsening. Major Indexes lost 2%, and have been down 4 out of the last 5 days. 29 out of 30 Dow Industrial stocks were losers on the day.
Guy Adami tells that with the Dow being stuck in a solid trading range is fantastic. "It's the only edge in the market right now. Sell the rips and buy the dips." says Adami.
"Take a look at the way Burlington Northern bounced off of $80 and immediately got up to $84" says Pete Najarian. It's another example of a great entry point to take advantage of these trading ranges.
With concerns over China and emerging markets, shares in tech bellwethers IBM and Hewlett-Packard are down near their lows. If emerging markets start to come back, Pete Najarian really likes both of those stocks to make a comeback.
GOLDMAN CEO SPEAKS
Goldman Sachs added to its late-day rally after the bell as CEO Lloyd Blankfein addressed a Maryland financial conference.
Some of the key headlines from his speech:
- Reformation as a bank holding company is not having a "material impact" on how they operate as a business.
- Tremendous opportunity for the purchase of deposits going forward
Keep in mind that since Goldman Sachs and even Morgan Stanley converted to bank holding companies, their share prices have continued their steady declines.
Guy Adami doesn't think there is a problem with Goldman. He feels that since Goldman has been quiet, it makes it easier for Wall Street to take shots at it. At some point, those shots won't work against the "smartest guys in the room".
Tim Seymour believes that even with continued losses in earnings, Goldman is still well ahead of book value, and value players think this is a good story.
Karen Finerman sees one positive in that credit default swaps have not moved materially for Goldman.
When asked hypothetically if they were holders of Goldman shares right now, would they start to sell? Pete, Tim and Guy said no, while Karen feeling lukewarm would not commit to an answer.
OIL FALLS BELOW $60
As oil hits a 19-month low crossing below the $60 level:
Guy Adami doesn't see any money flowing into commodities futures right now, so it makes sense why you get these swings back and forth. He also believes that the Oil Services sector will make for some great plays when the money comes back into commodities next year.
Karen Finerman says you have to be short oil right now.
Tim Seymour wants you to watch Petrobras , with record earnings and a great P/E it presents a solid value.
HOW CERTAIN IS A GM BAILOUT?
The GM Watch continues. Shares are currently at 66-year lows. They reportedly may run out of operating cash by year's end.
Uncle Sam's SUV-Sized Problem for GM :
1. Needs at least a $30 bln loan
2. Massive Union / Health Care obligations
3. Poor Management
4. Cars people don't want
The most rational thing taxpayers can demand for GM loan dollars according to Jon Najarian is to clear the way for each of the Big 3 auto companies to sell "clean diesel" cars not just overseas, but in the U.S. as well. He also recommends that crash test standards be eased to help permit better fuel efficiency. In terms of financial backing, Jon advocates the government provide loan guarantees rather than actually provide the money. On the trade front, Jon is cutting his auto shorts seeing not much more downside to go with many of the stocks already trading in single digits.
Karen Finerman added that she believes the biggest problems at GM are with the cost of labor (via the unions) and with poor management.
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On Nov 11, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU) (BTU) (C) (GS) (INTC) (MSFT) (NUE), Pete Najarian Owns (AXP) Put Spread, Finerman's Firm Is Short (IJR) (IYR) (IWM) (MDY) (SPY) (USO) (BBT) (VNO) (COF), Finerman's Firm Owns (CSCO) (MSFT) (OIH Puts), Finerman's Firm Is Short (USO), Seymour Owns (AAPL) (BAC) (EEM) (F) (MER) (SBUX), Seygem Asset Management Owns (EWZ) (FXI), Jon Najarian Is Short (FSYS)