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Halftime: Get Into Goldman Ahead Of Spin-Off?

According to CNBC’s Kate Kelly, Goldman Sachscould spin off at least part of its proprietary trading operations as early as this month.

The move comes in the wake of new rules that limit Wall Street firms from betting their own money in financial markets.

Though details are still sketchy, a couple of options are on the table. One is to seed a hedge fund staffed by former Goldman proprietary traders with Goldman money and replace it in the coming years with third party money as the new rule goes into effect.

Another possibility is to move proprietary trading into the firm's asset management unit, where Goldman invests clients' money rather than its own.

How should you trade Goldman in the wake of this news?

Instant Insights with the Fast Money traders

I think this is a reason to buy, says Jon Najarian. I like the idea of a spin-off.

The move allows Goldman to retain intellectual capital and not have restrictions on the work it does best, muses Joe Terranova. I’m bullish.

Also, keep in mind the performance of the capital markets in July was very strong and that should bode well for Goldman’s earnings in October. On top of that, from a technical perspective, I think the stock is poised to break out. Right now is a good spot to get in.

I’m not sure I’d start nibbling at Goldman in the high 150’s, says Zach Karabell, but I think the stock is fine.

Goldman has already had an amazing run, reminds Brian Kelly. I don’t know if the spin-off is a reason to buy. However, if you like the bank space, then a long position in Goldman makes sense.

Read More:

> Goldman Sachs May Spin Off Proprietary Trading This Month


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BLACKBERRY BAN?

Shares of RIM slipped on reports that Saudi Arabia will move forward with its ban on BlackBerry’s instant messaging service as soon as Friday.

Elsewhere in the region, government officials in the United Arab Emirates (UAE) say they will shut off BlackBerry e-mail, messaging, and web browsing features on Oct. 11 if the government is not granted more access.

But perhaps the greatest concern for investors is that India, which constitutes one of the largest emerging markets and has 1 million BlackBerry users, is threatening to stop BlackBerry services as well.

What’s the trade?

I don’t care what Saudi Arabia does with BlackBerry and I wouldn’t hold my breath waiting for India to ban BlackBerry, says Zach Karabell. I expect RIM as well as Apple , and the new Android to dominate this space going forward.

I got out of my position in RIM, reveals Joe Terranova. I think there are better places to put money.

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THE RETAIL PLAY

Retailers topped the tape on Wednesday ahead of July comp sales due out on Thursday.

How should you play the space?

I’d play it with bargain names such as TJX, says Brian Kelly.

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OIL MARCHES HIGHER

The traders were closely watching the action in oil after official figures showed a higher than expected fall in crude stocks.

What’s the trade?

I’d play the refiners from the long side, counsels Joe Terranova.

The higher oil goes the better the chance that the driller moratorium is cut short, adds Brian Kelly. I’d be long the OIH .

If you agree with Brian, check out Diamond Offshore, adds Terranova.

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WHEAT RALLY

In the chart of the day the traders look at wheat, which rallied to fresh 22-month high on concerns about a prolonged drought in Russia.

What’s the trade?

I think the trade is long Agrium , Mosaic and Potash , says Joe Terranova.

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BP PROGRESS REPORT

BP reported big progress Wednesday in its attempts to permanently cap the well in the Gulf. They say mud pumped into the well to stop the flow of oil, now appears to be successfully controlling its pressure.

Despite the relative success, BP shares moved lower.

What’s the trade?

I wouldn’t be long BP, says Joe Terranova. If you want to play the space I’d look at Occidental or Suncor .

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MEDIA EARNINGS

Media earnings are moving center stage with News Corp releasing results after the bell Wednesday and Viacom doing the same on Thursday.

What should you expect?

We’re seeing a broad based recovery, says David Bank of RBC. Just an incredibly buoyant network advertising market at a time when other positive factors are baked in. Largely these stocks are cheap.

I’d play the space with OmniCom and/or Interpublic , says Jon Najarian, as beneficiaries of ad spend ahead of the mid-term elections.

Or look at Belo or Media General as plays on races on Texas and Georgia, adds Brian Kelly.

My play is long Disney , says Joe Terranova.

Hear more from David Bank including which stock he likes best ahead of earnings. Watch the video now!

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UNUSUAL ACTION: FIRST SOLAR AND PACTIV

Jon Najarian has two stocks on his radar due to unusual options action.

A large volume of calls traded in First Solar and Pactiv ; that action suggests to Najarian that positive catalysts may boost both companies.

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BURGER KING DOWNGRADE

You might say that Burger King was dethroned by analysts at RW Baird; they downgraded the stock to Neutral from Outperform and cut the price target to $19 from $24.

What should you make of it?

I still like the stock here, says Brian Kelly. I’d get in.

If you want to play the space, I’d look at McDonald’s , says Zach Karabell.

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CALL TO THE FLOOR: ISIS

The traders are closely watching developments in the health sector. Genzyme and IsisPharmaceuticals just came out out with two very positive studies on their new cholesterol lowering drug.

What should you make of it?

Find out from Isis CEO Stanley Crooke. Watch the video below!



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Trader disclosure: On Aug 4, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BAC), (BX), (GOOG), (INTC); Terranova owns (AMZN), (AKAM), (APA), (AGU), (ADBE), (BAX), (BBY), (BMO), (C), (COP), (CVS), (EMC), (FCX), (GOOG), (GS), (JNPR), (JOYG), (KOL), (KR), (MMM), (MOS), (MSFT), (PCP), (PEP), (PFE), (POT), (RIMM), (TER), (SKX), (SU), (UAUA), (WYNN), (XBI); Finerman owns (AAPL); Finerman's firm owns (ARM); Finerman's firm owns (LEA); Finerman & Finerman's firm owns (RIMM); Finerman's firm owns (WMT); Finerman's firm owns (DAN); Finerman's firm is short (IJR); Finerman's firm is short (MDY); Finerman's firm is short (SPY); Finerman's firm is short (IWM); Pete Najarian owns (C); Pete Najarian owns (CTRP); Pete Najarian owns (ALL); Pete Najarian owns (GS); Pete Najarian owns (MGM); Pete Najarian owns (PFE); Pete Najarian owns (RSH); Pete Najarian owns (ETFC)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
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For Barry Ritholtz
IntercontinentalExchange (ICE)
Borg Warner (BWA)
Sprint PCS (PCS)
Arch Coal (ACI)
Clean Energy Fuels (CLNE)
American Tower (AMT)
Riverbed Technology (RVBD)
UAL (UAUA)
Southwest (LUV)
Isilon Systems (ISLN)
Citigroup (C)

For Jeffrey Holford
Jefferies expects to receive or intends to seek paid investment banking assignments from Pfizer Inc. and Sanofi-Aventis SA within the next three months.

For Dennis Gartman
***No Disclosures***

For Rob Samuels
***No Disclosures***

For Mike Khouw
***No Disclosures***


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