Strategy Session with the Fast Money Traders
I think the market is telling GE something, says Karen Finerman. They need to increase their credibility. The market doesn’t seem to believe everything they’re saying.
I think GE needs to share more of the metrics of their business with the Street, says Jeff Macke.
I believe there are healthy financials out there, says Guy Adami. I think USB is one of them. But it seems the market thinks all banks are guilty by association.
I also think we need to get rid of the ratings agencies, adds Macke. Now they’re doing more harm than good. (Investors are concerned about a debt rating downgrade for GE and that’s likely dragging down this stock.)
Dylan Ratigan is outraged by the behavior of the financial institutions in general. Wall Street needs to eat some of its own, to save themselves. And if they don't eat one of their own, the people of America will eat all of them. It's time to acknowledge that a few people acted in a terrible way. The pull of capital out of the system by AIG insuring without collateral should be criminal.
The silver lining in the day was that some good banks are starting to differentiate themselves from the bad ones, says Pete Najarian. Now that Legg Mason has taken more write-downs it’s starting to look attractive.
GM SLIDES ON BANKRUPTCY WARNING
GM shares tumbled on Thursday after the firm said its auditors had raised "substantial doubt" about its ability to survive outside bankruptcy if it fails to stem its losses and stop burning cash.
The "going concern" warning from the struggling U.S. automaker had been expected, but underscored the stakes for GM as it seeks up to $30 billion in U.S. government aid to restructure outside a court-supervised bankruptcy process.
Now that bankruptcy is officially on the table we’re at the end of the beginning, says Jeff Macke. I think GM needs to go into bankruptcy so it can emerge and begin doing business better.
GLOBAL RECESSION: OIL BELOW $44
Crude futures ended almost 4 percent lower on Thursday on fresh concerns about demand in a slowing economy. The move follows yesterday’s nearly 9 percent rally.
Exxon broke lower on Thursday, reveals Pete Najarian. I’d be careful.
I think crude probably trades back down, muses Guy Adami. In the space I like ConocoPhillips better than Exxon Mobil .
And keep an eye on copper, counsels Adami. Inventories are coming down which should be good for the copper companies.
There seems to be just enough demand for copper to hold prices just above 150, adds Najarian.
CREDIT TURMOIL IS BACK
It seems financial market turmoil is back with a vengeance. Commercials mortgage backed spreads, which some consider to be a tell-tale indicator of this crisis, are growing considerably wider.
The perceived risk of problems in commercial lending is going up, says Dylan Ratigan.
This is the spread between what the credit is rated at, and what it’s being priced at, by the market, explains Jeff Macke.
In other words, perceived risk for anybody who lent money to real estate is exploding, adds Karen Finerman.
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