Investors strapped themselves in for another wild ride with stocks falling sharply on Wednesday erasing most of the previous day’s gains.
Again the Street found itself focused on Europe but rather than Spain, Portugal or Italy – France landed in the spotlight -- and that spooked investors because France is one of the main economic engines of the entire European Union.
Chatter was somewhat broad based with rumors all but whooshing out of Europe.
First, there was chatter that France may be downgraded as soon as this evening however it’s worth noting the 3 major credit rating agencies have all denied those rumors.
Also, investors grew worried about the stability of French banks.
"I think there's concern about just how much Greek debt French banks really do hold and how much the European Central Bank is willing to backstop all this," says Bret Barker, portfolio manager at TCW.
Nothing was terribly specific, but the chatter alone was enough to send investors running for the exits.
"Memories are fresh. People who during the last financial crisis did not sell right away, next time around are ready to sell quick and ask questions later. People are seeing this as 'next time,'" says Ed Crotty, chief investment officer at Davidson Investment Advisors.
However, American investors may be so skittish that they're missing something – something important. There’s a cultural difference that sets current events far apart from the 2008 financial woes of the US.
Unlike the US, “France is a culture that would support nationalization – and that would put a floor under all of it,” says trader Zach Karabell.
Also, he says that France is a wealthy nation – the nation is awash in reserves. There’s money to do what needs to be done even if that money is needed to takeover a bank. “The Armageddon scenario won’t come to pass.”
In other words, there is a big back stop.
And once American investors catch on that French banks are relatively stable “this market should rip,” adds Fast trader Brian Kelly. He’s a buyer of the S&P and playing it long calls.
On top of that, Kelly thinks technicals line up well for a bounce. “The market has been bouncing off 1100. It’s already happened twice and if it happens a 3rd time we could be going to 1250,” he says.
Got something to to say? Send us an e-mail at firstname.lastname@example.org 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 Web site, send those e-mails to .
Trader disclosure: On Aug 10, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders;
Cortes owns (JNG); Cortes owns (PG); Cortes owns (WMT); Cortes owns (S&P); Cortes is short Silver; Cortes is short Gold; Cortes is short the Euro; Cortes is short the British Pound; Najarian owns (APKT) puts; Najarian is short (GLD) puts
For Brian Kelly
Brian Kelly Capital own (GLD) call spreads
Brian Kelly Capital own (SLV) puts
Brian Kelly Capital own (SPY) straddles
Brian Kelly Capital own (MCO) puts
Brian Kelly Capital is short the Euro
Brian Kelly Capital is short the British Pound
For Zach Karabell
Rivertwice Capital & Karabell own (AAPL)
Rivertwice Capital & Karabell own (GOOG)
Rivertwice Capital & Karabell own (GS)
Rivertwice Capital & Karabell own (COH)
Rivertwice Capital is short (QQQ)
Rivertwice Capital is short (XLF)
Rivertwice Capital is short the Euro
For Fred Cannon
KBW expects to receive or intends to seek compensation for investment banking services from (WFC), (BAC), (MS), (JPM), (GS), (C) in the next three months.
KBW currently makes a market and/or acts as a liquidity provider in (WFC), (BAC), (MS), (JPM), (GS), (C) securities.
For Colin Gillis
CNBC.com with wires.