“The storm has passed,” says Egan. The federal government has taken unprecedented steps to intervene in the market. With the government standing behind the major financial institutions, investors should consider them “downside protected” and instead focus on the upside.
"In real estate, the worst has also passed," adds Egan. But the structure of the market is changing, largely because baby boomers are aging. They went from a 2-bedroom apartment, to the 3-bedroom house to the 5-bedroom house and now they’re downsizing. But that would have happened anyway creating an oversupply of inventory. However the declines are largely over. Although home prices could still drop, they probably won't dip any more than 10%.
For ratings agencies to survive they have to be early and right. If they’re not there’s no reason for them.
But perhaps more pressing is the decision in New York court to allow a lawsuit to go forward which alleges that McGraw Hill (the parent of S&P) and Moody's as well as others may be responsible for not properly revealing the risk of investing in a fund that purchased bonds backed by subprime mortgages. That's a very important case and well worth watching.
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Trader disclosure: On Sept. 15th, 2009, 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), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AA), (AAPL), (BAC), (BX), (FCX), (NOK), (RIG), (SBUX), (UNG); Finerman Owns (PDE), (RIG); Finerman's Firm Owns (BAC) Preferred Shares, Finerman Owns (BAC) Preferred Shares And Owns (BAC); Finerman's Firm Owns (WFC) Preferred Shares And Is Short (WFC); Finerman Owns (WFC) Preferred Shares; Finerman's Firm Owns (WMT), (RIG), (MSFT), (NOK), (PBR), (PDE), (BDK); Finerman's Firm Is Short (IJR), (MDY), (SPY), (IWM), (USO); Najarian Owns (AAPL) & Short (AAPL) Calls; Najarian Owns (BAC) & Short (BAC) Calls; Najarian Owns (BUCY) & Short (BUCY) Calls: Najarian Owns (C) Calls: Najarian Owns (FCX), Owns (FCX) Put, Is Short (FCX) Calls; Najarian Owns (JPM) & Is Short (JPM) Calls; Najarian Owns (JOYG) & Short (JOYG) Calls; Najarian Owns (MS) And Is Short (MS) Call; Najarian Owns (MSFT) And Is Short (MSFT) Call; Najarian Owns (PALM) Calls; Najarian Owns (RIMM) Call Spread; Najarian Owns (TEVA); Najarian Owns (V) & Short (V) Calls; Najarian Owns (WFC) Put Spread; Najarian Owns (YHOO) Calls