Fast Money Recap: Is RIO Ripe for a Short Squeeze?

Recap of CNBC's Fast Money TV Program, Monday March 2.

Play the Short Squeezes: Wells Fargo (WFC), Vale (RIO), Miners ETF (GDX), Gold ETF (GLD, Ivanhoe (IVN)

With the Dow dropping to its lowest point in 11 years, many traders are wondering how to make money in the current market. Jon Najarian recommended being on the lookout for potential short squeezes. Wells Fargo is a good candidate; "I think you could get a pop into the mid to high teens on short covering." Vale, with 35% of shares held short is another option. He would buy Miners ETF, sell Gold ETF against it and would take a look at Ivanhoe.

Dow Drop

The Dow had an historic drop on news AIG needs yet more money and fears that if it fails, the entire financial sector might fall with it. Dylan Ratigan commented AIG is essentially insuring $500 billion in credit but is keeping nothing in collateral. Joe Terranova thinks Tuesday might be a time to buy and the negativity might have peaked on Monday. Zach Karabell commented deterioration in the economy could be slowing. Jeff Macke cautioned investors to keep a lot of cash and that no stocks are cheap because the things are so uncertain.

Oil Drops 10%

Oil fell to $40 a barrel because of worries over slowing consumption. However, Joe Terranova would not short oil and Tim Seymour pointed to increased demand in China. Zach Karabell is confident and thinks when consumers stop being afraid, the economy will be buoyed up by spending.

Dollar is Up: McDonald’s (MCD), Hewlett Packard (HPQ), Pepsi (PEP)

The dollar rose on Monday and is expected to continue its climb as confidence falls in Europe and Asia. Jeff Macke remarked this could be bad news for companies like McDonald’s Hewlett Packard and Pepsi with significant overseas exposure.

When Will the Bailouts End?

With AIG taking its fourth government handout, people wonder how long these organizations will need to be bailed out. Letting them fail isn’t an option, because if AIG goes bankrupt, there could be a significant domino effect worldwide. Former FDIC chairman, Bill Seidman, says the requests for more money will stop when the government earnestly offers to step in and take over failing companies; When I ran the FDIC if a bank came to us and said we're not going to make it; we need money -- we said we’re taking you over. And we fired the management.” He doesn’t see a market turnaround in the very near future.

Is Healthcare Really Unsafe? Merck (MRK), United Healthcare (UNH), Genentech (DNA), Dendreon (DNDN)

Healthcare stocks such as Merck and United Healthcare took a beating when Obama unveiled his Medicaid reforms. What was the cause of the decline? CNBC’s Mike Huckman explained, “The President is proposing that there be greater rebates to Medicaid on the popular drugs that Medicaid purchases. That brings down margins for Big Pharama." The introduction of new generic drugs will also put pressure on the sector. Huckman would consider buying Genetech ahead of results for its cancer drug Avastin; he predicts a positive result could bring the stock to $100. He would also look at Dendreon, which is producing a drug for prostrate cancer.

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