Being Short New York - Fast Money Recap (9/22/08)

Recap of CNBC's Fast Money, Monday September 22.

The Bailout

Dylan Ratigan the host of CNBC's Fast Money kicked off the show discussing the market's negative reaction on the news of the U.S. government's bailout plan to inject $700 billion into the financial sector. Karen Finerman said there is a lot of concern on Wall Street because nobody knows how the government is going to implement the plan. She says there is a fear on the street about what happens if it doesn't work. "Is there anything else they can do?" she added. Tim Seymour says the dollar move last week wasn't real because it was just the deleveraging of the “carry trade.”

The New Banks - Goldman Sachs (GS), Morgan Stanley (MS), Northern Trust (NTRS), Wilmington Trust (WL)

Ratigan moved to news that Goldman Sachs and Morgan Stanley received approval from the Federal Reserve to change their status to bank holding companies. Pete Najarian said Goldman and Morgan will now get their growth from gaining deposits. He says Goldman Sachs went down because it hasn't moved more in the direction of becoming a bank like Morgan has. Guy Adami said he is sad about what is happening at Goldman. "I don't think they can frankly exist as the way we used to know them," he said. Finerman says Goldman needs to buy a bank like Northern Trust or Wilmington Trust.

Expectations Going Forward

Ratigan asked the traders what their expectations are for the rest of the week. Najarian said he expects volatility to remain above 30%. He says the market will go up or down 200 to 300 points a day all week. "You will see overreactions in both directions all week," he added. Ratigan went on to commodities including crude oil and gold. Adami said there is a clear flight to hard assets. He said don't pile into gold because it will go down as fast as it went up. Seymour says gold will continue to catch a bid.

Big Buybacks - Microsoft (MSFT) and Nike (NKE), Corning (GLW), Ameriprise (AMP), Cisco Systems (CSCO)

Next, the traders talked about some large buybacks at Microsoft and Nike. Finerman said that the Microsoft buyback will be accretive to earnings. She mentioned that Corning, Ameriprise and Cisco Systems all have enough cash to do stock buybacks. Seymour pointed out that on an overall basis, buybacks are down 56% from last year.

Hiding Spot – Teva Pharmaceutical (TEVA)

Ratigan asked if health care is the place to hide in this tough market. Najarian pointed out that $100 billion in sales for patented drugs are coming off patent protection from 2009-2012. He said this will play right into the generic space for names like Teva Pharmaceutical.

Model for the Future

Jeffrey Harte, an analyst at Sandler O'Neil, came on to discuss the future model of investment. He says the good news for the i-banks is that they will now be regulated by the lender of last resort. He says the Fed will be much tougher on leverage. "There is still a lot of trouble and problems left to come in the housing market," he said. Harte said the housing market is not going to bottom in 2008. He said the bigger issues for future problems will come from the regional banks and not the investment banks as they "mark-to-market" their holdings.

Short New York - Vornado (VNO), iShares Dow Jones US Real Estate (IYR), Boston Properties (BXP)

The traders discussed some ways to play the demise of Wall Street and loss of jobs, specifically in the New York area. Finerman said she shorted Vornado because it has a lot of exposure to New York City real estate. She advised viewers to look at shorting iShares Dow Jones US Real Estate or Boston Properties.

Short Ban - American International Group (AIG)

Jon Najarian joined the traders to discuss the ban on short-selling which he disagrees with. He explained that a lot of investors were driven out of the market by the ban. "If you're going to put in a prohibition on short-selling, then it needs to be everyone," he said. "Otherwise you pretty much get a rigged game." He says the SEC should get rid of the ban and bring back and enforce the uptick rule. Najarian highlighted some unusual options activity in American International Group. He said the options volume on AIG was "explosive" today.

Trader Radar - AutoZone (AZN)

AutoZone was among the most actively trades stocks on the NYSE Monday. What's In

The Charts - Abbott Labs (ABT)

Carter Worth of Oppenheimer came to talk about technical analysis. He explained that technical analysis measures the emotional state of the market and it's the most accurate measure. Worth said he likes the chart on Abbott Labs because the stock has been trading up while the market has been collapsing. He says the stock has great breakout potential. He thinks the market will go dead for the next couple of months with no new lows or meaningful rebounds.

Final Trade – Your First Move for Tuesday September 23.

Tim Seymour recommends long UltraShort MSCI Emerging Markets ProShares (EEV) as a bet against emerging markets.
Karen Finerman said to play corporate buybacks with Microsoft (MSFT).
Peter Najarian picked Mylan (MYL) is a bet against generic drugs.
Guy Adami said stay defensive with Johnson & Johnson (JNJ).

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