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Markets Slammed; Banks Dive

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WORST DAY FOR BANKS IN FIVE YEARS:

The headline: Banking Index Posts Worst Loss in Five Years as Citigroup (C), Morgan Stanley (MS), Merrill (MER) Hit New Lows.

Dylan Ratigan explains that Washington Mutual (WM) plunged 16% on Wednesday after warning credit losses this year may amount to $2.9 billion.

Tim Seymour explains that volatility is back to pre-Fed rate cut levels and he wonders where investment banks will make their money in days to come?

Guy Adami replies, they will make their money from trades! Guy speculates that the Street is overshooting on the downside and thinks Goldman (GS) is a buy at $205.

Karen Finerman reveals she is long Goldman because she feels there are a lot of places they can make money. And she’s short Lehman (LEH) and Merrill.

Pete Najarian likes State Street (STT).

On a related note, Dylan Ratigan explains that Goldman has set aside $16.9 billion to pay its employees this year - that's enough to buy ALL of Bear Stearns, according to Bloomberg. Bear Stearns market cap is currently at $14.7 billion.

Symbol
Price
 
Change
%Change
SC0Y
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GS
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STT
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WM
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AFTER HOURS ACTION: AIG (AIG)

The headline: AIG Down After Earnings; Losses Tied To United Guarantee Unit

Pete Najarian doesn’t think the stock is a buy on this dip. Why try to catch a falling knife, he says.

Guy Adami wonders if AIG has exposure to subprime.

AFTER HOURS ACTION: CISCO (CSCO)

The headline: Despite Strong Quarterly Profits, Cisco Shares Fall About 4% In After Hours Trading

Pete Najarian says the Street expected Cisco to blow-out their numbers, and they didn’t. He’s long CSCO and not happy about it. But he’s holding.

Guy Adami recommends buying the dip.

Tim Seymour adds that Cisco is growing in emerging markets and he likes CSCO for this reason.

Symbol
Price
 
Change
%Change
CSCO
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WILL CHINA SELL THEIR DOLLARS?

The headline: Dollar Dives To New Record Low Vs. Euro After China Signals Plan To Diversify Foreign Currency Reserves.

Is the dollar becoming so limited in value that it’s devaluing American assets in a meaningful way, asks Dylan Ratigan.

Only the Treasury Secretary can answer that question, replies Guy Adami.

Karen Finerman reminds Dylan that there are benefits to having a weak dollar.

Tim Seymour concurs. He speculates that the government is probably quite happy with the weak dollar because exports are strong as a result.

Symbol
Price
 
Change
%Change
S&P 500
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WHAT WAS GREEN ON YOUR SCREEN?

The headline: Research In Motion (RIMM) & Amazon (AMZN) Among The Few Stocks Finishing Higher Wednesday.

Pete Najarian likes RIMM. In an awful tape the stock popped 4 bucks, he says.

Guy Adami recommends buying Allstate (ALL) as a trade, with a stop out at $50.

Symbol
Price
 
Change
%Change
BB
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Trader disclosure: On Nov. 7, 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Najarian Owns (CSCO); Najarian Owns (AMZN) Options, (C) Options, (DISH) Options, (GOOG) Options, (LDK) Options, (YHOO) Options; Finerman's Firm Owns (AEO), (WMT), (TWX), (TSO), (YHOO); Finerman's Firm Is Short (MDY),Short (IWM),Short (IJR), Short (MBI),Short (LEH),Short (MER); Finerman's Firm And Finerman Own (GS); Finerman's Firm Owns Russell 2000 Puts; Seygem Asset Management Owns (EEM), (F), (GFI), (GLD), (HMY), (LDK), (YHOO); Finerman's Firm Is Short (SPY)