It was a tough week to be a bank. Not only were shares decimated earlier in the week, but a report in the New York Times suggested some of the nation’s largest banks are like "dead men walking.”
They say “the growing mountain of losses from bad bets, measured in today’s marketplace, would overwhelm the value of the banks’ assets. The banks, in their view, are insolvent.”
Better not tell that to JJ Kinahan, Chief Derivatives Strategist, Thinkorswim, Inc. He says, "one trade I like is long the XLF . But he sees the move as strictly a trade. "I think the stimulus package will spark a quick rally. But then I'm out.”
It seems to me trading the banks isn't much different than tossing a coin in the air and betting which side lands face up, muses Dylan Ratigan.
It’s different from a coin toss because they don’t add a third side to the coin when it’s in the air, bristles Jeff Macke.
BATTLE THE BEAR: SODA SURGING
PepsiCo reported a quarterly profit on Friday that met Wall Street expectations and said it may buy back up to $2.5 billion of its stock this year, sending shares up nearly 2 percent.
We have a rising dollar right now which should hurt Pepsi as well as Coca-Cola, explains Joe Terranova. But from a technical standpoint I think you can play both from the long-side with a stop out in Coke at $40 and Pepsi at $48
In the consumer space, Wal-Mart looks to be breaking down, adds Jeff Macke. They should be doing business but they’re not.
GOOD SIGN? JUNK BOND SALES BOOMING
Sales of junk bonds, or high-yield, high-risk bonds were booming this week, notes Dylan Ratigan
That’s a positive sign, admits Jeff Macke. But to issue those bonds they have to pay a high price. However, it was the most active the debt market has been in a while.
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Trader disclosure: On Feb. 13th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (AMGN) & (AMGN) Puts; Terranova Owns (IBM) Call Spreads; Terranova Owns (XBI), (OTS), (FCX), (KCE); Finerman's Firm Owns (DNA) & (DNA) Call Spread; Finerman's Firm Owns (MSFT), (RIG), VNO); Finerman's Firm Is Short (BBT), (TM), (IYR), (IJR), (IWM), (MDY), (SPY), (COF), (USO); Macke Owns (AAPL), (MS), (TM), (SDS); Seymour Owns (AAPL), (BAC), (EEM), (FXI), (YUM); Seymour's Firm Owns (VIP)
Kinahan Owns (GE); Kinahan Owns (GE) Calls
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