When Greenspan Talks - Fast Money Recap (7/31/08)

Recap of CNBC's Fast Money, Thursday July 31.

Thursday closed with bears taking over the markets. The Dow slumped 1.78% lower to 11,378.02, the S&P 500 dropped 1.31% to end at 1267.38, while the Nasdaq shifted 0.18% downward, finishing at 2325.55.

Former Federal Reserve Chairman Alan Greenspan said the US is “nowhere near the bottom” of the housing slump and is “right on the brink” of a recession. “I’d be more surprised if we didn’t than if we did, given the financial state,” he said. Jeff Macke said that “Greenspan is the worst retired guy since Brett Favre,” and it “doesn't matter what he thinks.” He said that the market was an accident simply looking for a place to fall.

Tim Seymour said that the real reason for today's losses at the end of the day was the report on jobless claims. He said that the jobless claims “were highest in four years,” and that is what he feels moved the markets. Guy Adami said that he believes Greenspan is “still relevant because he is speaking.”

Exxon Mobil (XOM): Adami said that Exxon Mobil had nice moves and that investors should “trade Exxon on valuation.” I like Exxon right here, right now, says Guy Adami. It’s a value. If you think oil is going lower, I’d play Exxon too, says Tim Seymour.

I don’t think oil is going anywhere, exclaims Jeff Macke. This is just a ridiculously hard market.  

Walt Disney (DIS): Macke said to look at a stock like Walt Disney. This time Disney overcame the economic downturn and the pullback in consumer spending. Despite all of that the Street took the stock lower. I fully expected Disney to do well, says Jeff Macke. But it’s hard to predict if the consumer will hold up for them.

Washington Mutual (WM): If you look at the risk reward around WaMu, I think it’s ridiculous, just ridiculous, says an exasperated Karen Finerman    . Unless they go out of business (which she thinks is unlikely) there’s a lot of money to be made in this stock. 

Merrill Lynch (MER): Macke said that “everything is unclear with the financials,” and that “I don't think we have a bottom in.” Adami said to take a look at Merrill Lynch because he feels it “looks pretty interesting here.” He said it is “about the trade.”

Deutsche Bank (DB), HSBC (HBC), Barclay’s (BCS): Tim Seymour says “I am more bullish on the European guys.” Seymour said that their respective “write-down damage is not as bad as the big boys.”  He said to take a look at Deutsche Bank, HSBC and Barclay’s.  

Imclone Systems (IMCL), Novartis (NVS), Celgene (CELG): Moving onto biotech news, the traders spoke about Imclone Systems. Adami said that this “space is hot,” and that Novartis, his favorite biotech, has to do something. He said that the company “has a good chance to buy Celgene.” Adami continued, saying that Celgene has huge earnings growth and it has “revenue growth potential.”  The two companies already partner on Ritalin. Macke warned investors that they must know biotech “backwards and forwards.”

Walt Disney (DIS): Macke said that Disney is a “classic example of what is wrong with this market.” He said that “Bob Iger is a stud, and I do not use that word loosely,” and that he feels DIS is a “tremendous company.”

The GDP Numbers:

Joe Lavorgna of Deutsche Bank provided his thoughts on the GDP numbers. Lavorgna said that he feels the economy is “kind of growing but it is nothing great.” Talking about the jobs number due tomorrow, he said that the fixed-income market has built in a weak number and investors should expect “a rally in equities.” He said it is important to look at temporary hiring and said he believes that earnings will look a lot weaker in the second half of the year. Macke commented that “everything trickles from loss of jobs,” and no one is going to the retailers. He said that right now, investors “can't own these stocks.”

Bottom in For Financials: Prudential (PRU), American International Group (AIG), Citigroup (C)

Frequent guest Jon Najarian made sure to make an appearance and speak about the markets. He said that he feels the “bottom is in for financials,” and that Prudential “just reported a great quarter.” Najarian said that he has positions in American International Group and that he believes “they stop the bleeding and report a gain.” He said that it has “unusual call buying.” Macke said to look at Citigroup. He said that the trade pays off if investors “sell every rip.” Adami said that AIG is “not just an insurance company,” and that it has the “same type of exposure” as Merrill Lynch. He said he would “avoid it here,” because it may have a write-down coming.

Deal or No Deal: Yahoo! (YHOO), Microsoft (MSFT)

Christa Quarles of Thomas Weisel Partners talked about Yahoo’s annual meeting. She said that there are three things the company may do in its meeting. The first was to “put the Microsoft deal to bed”; the second is talk about what the firm will do with its three-year growth plan unveiled in March, and finally, the possibility of Yahoo! introducing a new ad platform product. Quarles wrapped up the Yahoo! discussion saying that the firm has lost a large number of executives and this will “impact their ability to recruit.”

Meanwhile, in Omaha: Burlington Northern Sante Fe (BNI)

Wrapping up the show was a discussion on Warren Buffett and what he is holding.Adami said that Buffet has “had the rails cold,” and that Burlington Northern Sante Fe (BNI) is a buy but not at $105.

American Express (AXP): Karen Finerman said that she likes American Express because it is a “premier franchise.” However, she did caution that she thinks we're going to see some headwinds.

US Bancorp (USB): Adami, speaking up again, said that another good holding was US Bancorp. Adami continued, saying that the firm has “the best management in the banking industry,” but “it is still a bank,” and very difficult to trade in the current economic climate.Macke gave his input, saying that “Buffett's taking his time, and he's building positions in these things.” Finalizing the Buffett discussion, Seymour said that he loves “what he's doing with the rails,” and that it is a long-term trend with demand backing it up.

Final Trade – Your First Move for Friday August 1.

Jeff Mackeis negative on Elan (ELN).

Guy Adami prefers getting long Celgene (CELG).

Tim Seymour says go long Freeport McMoRan (FCX).

Karen Finerman’s says go short BB&T (BBT).

 

 

Seeking Alpha is not affiliated with CNBC, or Fast Money

 

Comments

[doylegroup:]

Would somebody tell Mr. Greenspan he is no longer the "chairman" and shut his big YAP!! He is very much part of our credit crisis we are currently experiencing.

2008 Aug 01 08:06 AM

[TinyTim:]

Part of.
I would say, cause of.

2008 Aug 01 12:32 PM

[Stockguy456:]

He saw the ship sinking and got off the boat!

2008 Aug 01 03:16 PM

[kurt walter:]

Just quietly go away, Greenspan.

2008 Aug 01 04:23 PM

[bizant:]

botom will be in march 2009.

2008 Aug 01 09:57 PM