Putting on the Moves - Fast Money Recap (9/15/08)

Recap of CNBC's Fast Money, Monday September 15.

Putting on the Moves - Lehman Brothers (LEH), American International Group (AIG), Financial Select Sector SPDR (XLF),

Dylan Ratigan started the show off with a discussion of news that Wall Street investment bank Lehman Brothers had filed for Chapter 11 bankruptcy. Pete Najarian said that initially the market digested the bad news, but later in the day, when we didn't get more clarity from American International Group, the Financial Select Sector SPDR tipped over. Jeff Macke explained that uncertainty is death on Wall Street. The uncertainty is making it impossible to own any financial stocks at close. Guy Adami said, "For me, it's an extraordinarily sad day, but the market will recover from Lehman Brothers." Joe Terranova explained that a market bottom is determined by the psychology of those who are trading it. He says we are entering the final stage: the stage of "capitulation."

Waiting to Exhale - Goldman Sachs Group (GS)

Goldman Sachs Group is set to release earnings on Tuesday. Adami said the AIG news is a "game changer," but he says earnings have been taken down to a level where Goldman will beat expectations. Najarian said that "counterparty risk" is what dragged Goldman down today in front of its earnings. He pointed out that Goldman called for $149 oil, and now crude is trading under $95. Terranova said that tomorrow we will get a glimpse into how Goldman traded commodities themselves. Najarian mentioned that 100 puts on Goldman traded 4 times the open interest, and the 95 puts also traded above open interest. He said that shows traders believe Goldman could trade much lower.

Main Street

What will happen to the American consumer now that less money is available for borrowing? Macke said it will depend on a lot of different things, but as long as people have jobs, institutions will issue them debt. He mentioned that he is more worried about the employment number and the drop in oil.

To Cut or Not to Cut

CNBC's Steve Liesman joined the traders to discuss the Federal Reserve's rate decision set for tomorrow. Liesman said he will be very surprised if the Fed cuts rates. He pointed out that the fed funds rate is beginning to bake in a rate cut for the future. He also pointed out that financial credit has risen to $3 trillion on Wall Street, and he said Lehman is just the beginning of the process of deleveraging that excess credit.

Market Opportunities - McDonald's (MCD), Church & Dwight (CHD), Amgen (AMGN), Johnson & Johnson (JNJ), Novartis (NVS), Northern Trust (NTRS), State Street (STT), USB (USB)

The traders discussed some great opportunities in some non-financial stocks that were unfairly beaten-up on Monday's market plunge. Adami said to look at McDonald's because it's "bulletproof." He also likes Church & Dwight, which made an all-time high today. Terranova advised viewers to get diversified into consumer staples, health care, commodities and real estate. Najarian said to stick with the pharma plays like Amgen, Johnson & Johnson and Novartis. He said that if you want to stick to financials, look at Northern Trust, State Street and USB. He pointed out that Northern Trust hit a 52-week high today. Macke advised viewers to commit to an exit point on any stock they buy right now.

Commodity Prices With Gartman – McDonald’s (MCD)

Strategic investor Dennis Gartman, author of the Gartman Letter, came to discuss the commodity complex. "The endowment funds, the pension funds that got involved in the commodity market are probably wondering what they got talked into," Gartman said. He explained that those funds bought the highs in a number of commodities. Gartman explained that for the first time in a long time he is concerned about how the whole financial crisis seems to be imploding. He says the rating agencies are the problem here, and they were late to the game informing investors of the problems in the mortgage market and in the financial majors' balance sheets. Gartman said the only trade he has on right now is a large position McDonald's.

Gloom over the Credit Crisis

Bill Fleckenstein of Fleckenstein Capital came on the show to discuss the credit crisis. Fleckenstein said the U.S. will most likely have a difficult recession. He says that will mean that companies won't earn as much as before and some will get hurt. "It's going to take a while to fix all of this," he added. Fleckenstein says investors would be better off holding more cash. However, he feels the U.S. dollar is vulnerable to inflation and the policies of the Fed. "I think we are in the early stages of figuring out just much the credit crisis has put the U.S. economy at risk," he said. Unfortunately, Fleckenstein doesn’t think the end is near. “I don’t think we’re close to the resolution. We may be fairly far into the discovery process into how bad the financial system is, but we’re not as to the effect on the economy. We’re in the early stages of figuring out just how much the risk is, in the economy.” The Bottom Line: The credit crisis began on Main Street and ultimately it will end there.

Financial Trades - Jefferies (JEF), Wachovia (WB), American International Group (AIG), Wells Fargo (WFC)

The crew gave out ways to trade the battered financial sector. Adami said to keep an eye on Jefferies because they're hiring people while the rest of Wall Street is firing. Terranova says American International Group is too big to fail because they touch Main Street. Najarian said to buy puts on Wachovia. He said the bank has more trouble coming. According to Dow Jones, “Wells Fargo said on Monday that it will record a non-cash charge to third-quarter earnings from its investment in Lehman Brothers. The financial services company didn't estimate the size of the charge.”

Final Trade – Your First Move for Tuesday September 16.

Jeff Macke said do nothing - just watch like it’s a movie.
Guy Adami thinks Johnson & Johnson (JNJ) should continue to work and is a buy.
Joe Terranova recommends Alcoa (AA) because "falling commodities prices should lower their input costs."
Peter Najarian says he likes Lowe’s (LOW) because it has behaved well despite a downgrade.

Seeking Alpha is not affiliated with CNBC, or Fast Money