to be with valuations at basically frothy levels? what's interesting about today, and people will come on and say look, this is a correction, yeah, there's opportunity to buy things here. there are things out there, though, that you should be afraid to buy. and if you look overall, remember, this is happening in the wake of an unemployment report that's coming out friday that could be one of the better unemployment reports that we have. >> we also have out there in the noise, gary, you said there are other things sort of distracting us from the greek picture. we had china over the weekend tightening up liquidity. pmi coming in, the weakest level in china in about six months. with the strength in the dollar and the weakness in the euro we've also got headwinds for u.s. companies. karen finerman, should we be cautious even about buying into the u.s. markets, even if it's relatively safe? >> well, it's hard to look at this action and not be a little bit afraid. but i do think, i mean, for us we looked -- there's a lot of u.s. companies that yes, have exposure elsewhere. but u.s. part of their business is doing well. we don't know how badly europe is really going to be affected yet. we bought hpq today, for

example. high-quality name that's trading, you know, near the lows of valuation in terms of its multiple. and i don't think anything's dramatically different today that would make hp less valuable. >> some people will say that out there. we pulled together with the help of s&p a chart of companies with great exposure to europe, specifically the percent of sales coming from europe. this is 2008 data because it had to be crunched through with annual reports. but there you have schering-plough, of course bought by merck. the deal closed in 2001, which is why it's at the top of the list. but still, merck has that exposure now. flowserve, paccar, owens-illinois, pall corp. all of these huge percentages coming from europe. can we actually ignore that headwind? it's a q2 story. we'll see it in the next earnings report, guy. >> it would be foolish to ignore that headwind. and one thing you didn't mention that's been mentioned in the 3:30 hit was an australian resource tax now. all these things by themselves in a vacuum not a big deal. in the aggregate i think they are a big deal. i'll say again, we were looking for the exogenous event to sort

of tell us what the top was. i still believe that we will look back in a few months on that friday when the goldman sachs news came out was that event. the markets basically net been lower since. >> over the last couple weeks we've been having debates on this desk of whether valuations have got-tone i appoint where they're too rich. if you look right now, the s&p is basically trading 10% above its 40-week moving average. historically that is significantly high. i think right now what has to happen in the marketplace is the transition has to occur. we have to move away from an environment where small caps outpace large caps, where growth is favored over value, and where in essence junk is favored over quality. i think the transition and rotation has to occur. >> and again, let's not call it greece anymore. let's call it europe. because it's not greece. it's basically europe. the bailout was designed in such a way, like long-term capital, where all these countries have now taken on additional leverage on their balance sheets to support greece. so it's a europe problem. it's not a greek problem. and if you look at one of the

things that masked this problem, it's been the very solid earnings that came out for the first quarter. a lot of those earnings if you go back and dissect what companies have said, they talked about the global re-emergence, the global recovery that's in place. go and read -- that's what they say. and what they say in the mda is that they basically say there's a global recovery in place. well, there can't be a global recovery in place if europe is going to basically double dip second half of this year. and you've got to factor that in. >> i want to bring in brian kelly at the prop desk. brian klee of kanundrum capital, you've been following this situation very closely. i want to throw this possibility at you, a financial crisis in europe. $3.1 trillion in exposure to debt to the piigs countries. zpli think we're at a very dangerous point right here. the whole market is built on confidence, and if that confidence goes it will spread. it will spread to spain, it will spread to the uk. and what we've learned over the last 18 months, this is not an isolated event. everything is connected. so i'm actually playing offense here. i'm getting short. i sold some deere today. i sold some nucor.

a sold a lot of these commodity names and a lot of these global growth names and i sold them short. >> b.k.'s been on this. he's been short. a lot people have been trying to get in his face about that euro. he's been right. before the employment numbers come out on friday in the united states you're going to have a vote in germany that could be critical to what's going on in europe. >> it's a really precarious situation here. >> b.k., let me ask you something. what would change your mind? what would you need to see to cover those positions? >> what would change my mind is if jean-claude trichet woke up tomorrow morning with a bond ticket on his forehead, walked into the european bond pits and bought everything he could buy. i think that's really how you stop this right now, is you do quantitative easing in the euro zone, you buy all the bonds and you restore that confidence. short of that i think this is going to continue to spread. >> brian, joe mentioned about friday's employment data and the expectation that that's going to be obviously something very strong. how is that going to play into your thinking in terms of what happens here with interest rates in the united states and what that may do to the european stocks you're short right now? >> well, i think the employment

is going to be a one-time figure. and i think people are going to look through that figure if the contagion in europe continues. as well as you guys mentioned, you have the chinese issue. if china's slowing and europe's slowing, the u.s. is caught right in the middle. >> all right. b.k., stick around. we want to talk more about this risk here on the desk. it seems like the general feeling is that europe will at least be a headwind for the rest of the globe as well as the united states economy and market. steve liesman joins us on the "fast" line. he of course is cnbc's senior economics correspondent. steve liesman, europe accounts for 20% of global gdp. our friend david rosenberg over at gluskin schef saying it is three times as important for u.s. companies as bric countries. can we ignore this? >> you can't ignore it, but i think you can overstate it. let's parse this out into two different components. the first component is contagion. yeah, we can't escape contagion, but a slowdown in europe, the u.s. can decouple from europe. they couldn't decouple from us on the way down, but we can decouple from them on the way

back up. european exports as a percent of total u.s. exports are just 23%. that's a number that's been declining. i talked to dick berner over at morgan stanley. that's where i'm coming to get my numbers. no one knows them better than he does. the asian consumer is the number one consumer in the world today. we're not as worried about europe. we can do okay with a european slowdown. it's not going to be critical for the u.s. economy. contagion, that's a different story. >> can we connect the dots, though? in terms of europe being an important market for asia to sell into and then the impact on the asian consumer to buy our goods, isn't there an effect there around the world? >> there is. but think about what's happened to terms of trade. u.s. goods to china, to asia, are getting less expensive. that's been a help. domestic demand as a percentage of total asian economic growth has been rising. the asian consumer is a new phenomenon of our time, and i think it's something not to be

ignored. we can all get as excited as we want about europe. i think, you know, the proverbial chill pill might be in order here. greece has problems. do you guys think that brings down germany? does it bring down france? does it bring down italy as well? yes, there are problems in the periphery of the euro. but if you add it all up, what matters to the united states, and i think you were right, melissa, i like what you did at the top of the show. it's an individual corporate story. but i don't think at this point it's a macro story. >> steve, let me ask you on a macro level from this standpoint, we needed global coordination, all central banks. the united states right now needs the efforts of the ecb. is the credibility of the ecb in essence lost because of this? ? i don't think it's lost. i think it's damaged. i think the ecb was late to the game in terms of the quantitative easing. i think that's what's sort of inside your question there. there was a lot of criticism. and in a lot of ways, i know federal reserve bankers here in the united states were a little bit miffed that europe wasn't more on board a little bit earlier in helping the globe get out of its funk there and then

they eventually came on board. and they may be frankly paying a price right now for being a little bit too late and a little bit too late in terms of the stimulus they gave their economies. good b.k., i want to rope you in here. you've been standing by on this conversation. do you buy what liesman is selling? >> no, i don't, unfortunately. sorry, steve. but i mean the thing is we are all connected. and melissa, you kind of hit on it. if the asian consumer is the big buyer and europe's slowing and asia's slowing, then everybody slows. we are all connected -- >> hold on with the asia slowing stuff. we only have the one report. okay? >> well, it starts with one report, first of all. and we already know that they're trying to slow their economy. second of all, they've lost control of their m-2, their money supply, and they have to slow that money supply. unless they want inflation. on the order that happened after 9/11 and after the lehman brothers. >> steve, it's gary. let me ask you a question, steve. >> entering a period here of government-engineered slowdown in asia that is going to be anything less than, you know -- anything more than 8%. i don't think you're right about

that. >> steve -- >> i don't think it's up to them. that's the problem. if they don't do that, they're looking at inflation, and we both know that ultimately that will slow the economy down. >> gary. >> steve, real quick, if you're telling me that if europe, if the e.u. prints a negative gdp number in the third or fourth quarter as a result of what's happening that will not impact u.s. gdp, you're saying it will absolutely not have an impact? >> dude, gary, what did you think they were going to print? what was your number? it was 1%. >> right. >> if they do 0.5 and then you take the 23% of that, it's only a 1/4 impact of the number they print. so i am not that -- let's just take it a little bit light. yeah, a severe slowdown in europe, that's going to hurt us, especially if it hurts asia as well. contagion fear, that hurts us. but going from 1 to minus 1 i don't think it's enough of an impact to justify today's sell-off. >> steve liesman, cnbc's senior economics reporter.

guy -- >> the one word brian used i think at the top of the show is confidence. steve talks about economies. that's fine. he's probably spot on in terms of what it will do to our economy. but what he didn't talk about was what it will do to our market. and if the confidence is lost in this marketplace, which it may be on the verge of logs, thsing we could see the 10% 15:00% sell-off b.k. thinks we're in store for. >> that's what i'm talking about. 1% on gdp isn't going to matter, but it's all about confidence. spain doesn't have a problem. until they do. and that's the problem. that's why i think the ecb needs to come in tomorrow and start buying bonds. >> and the 23% number that steve was referring to is a domino effect. it's got a domino effect. so while it may be a hard number in terms of goods and services, services has a domino effect. it actually plays out in a much deeper way. >> right. >> so i disagree with mr. liesman there. >> let's move on here and talk commodity and industrial stocks. hit the hardest today as the dollar rallies more than 1%. the push higher in the greenback also sending oil, gold, and copper lower. seems like these stocks have two things against them. first of all, we got the

stronger dollar, pretty much nine-month highs, and then we also have that australian mining tax, 40% is a big number. you can't ignore when it comes to these mining names. >> let's go to your first point. first of all, the dollar. that's important to understand. you have right now a lot of hedge funds that are underperforming the market itself because the beginning of the year they played this lower dollar trade, in essence a carry trade. betting on all commodities to move higher. copper, oil. and you are seeing right now with china slowing down, with australia raising rates, a couple of weeks ago you got the telltale sign. copper prices topped out in the middle of april. that gave you the lead that the market here overall was losing momentum. and i think it will continue to lose momentum until we meet the point of transition. >> you know, the poster boy for this, and i think b.k. might be short this one as well, has been freeport-mac. we've tried to navigate our way trading around that, and we've done it sort of well. that 75 1/2 level has been and will continue to be the pivot point.

it looks like now we want to retest those 66 levels we saw back in february. it becomes a very interesting trade again. but i think b.k. might be on to something in terms of playing this from the short side because they go down a lot faster than they go up. >> b.k., your name has been invoked several times but i want to ask if you're still in the junior miners or with the headwinds you're out. >> i'm still in the junior miners. i think there is a possibility that the junior miners start to be takeover candidates. although this market and today they did not act very well. but in terms of freeport i am not short at this moment. i have been in and out of it, but as of today not. but it would be on my list of shorts. >> the junior miners, are these affected by the australia potential tax or not? that seems like a very high-risk way to play it. >> it's higher risk than it was when i put the position on about two or three months ago. so yes, it can be. i've been in some junior miners that are involved in south africa. it depends where you are in the world, obviously. but yes, there was some weakness today that concerned me. >> all right. let's move on and talk about apple because it did lead the

nasdaq lower today. tech stocks getting absolutely pounded. gary, does this have anything to do with europe? >> absolutely nothing. so don't think that technology was down because people that oent technology were thinking oh, the weakness in the euro is going to hurt the european consumer. absolutely nothing. the reason technology was down is because technology once again, and we have a chart that can kind of demonstrate this, is significantly overowned. and so on a day like today people, as i pointed out many times, they do the wrong thing. they sell their winners. they want to raise cash. the easiest thing to do is sell technology because it was the most liquid and it was where they had the most gains. that's what happened. and the chart basically shows you -- >> let's take a look at this chart. and we'll run through a little chartology here because this is the nasdaq 100 over the rydex nasdaq 100 bull-bear ratio. what does it show you? >> we saw this earlier this morning. this was before the market opened. this was like at 4:30 a.m. so we saw this, and this kind of looked kind of -- it stood out quite early this morning that technology once again in terms

of the sentiments bull to bear is almost at record levels as we've seen in the last year. >> and technology's been one of the sectors that has underperformed, but you have had a lot of indication that it was going to break down. look at google. had the earnings on april 16th. it still has its price gap between 568 and 588. broke down while the market kind of hung in there. but that gave you the lead. right now i think when you look at technology and go back to the commodity space, those are sectors that you want to be in when you look forward to the second half of this year. >> and again, we talked intel ahead of earnings. we showed you what's been happening with the earnings releases. and frankly, this earnings release back on april 15th or the 14th after the close is exactly what's happened over the last year or so. the stock made a 52-week high basically the next day, and that's been selling off ever since. that looks like it wants to go down around -- >> and karen, quick to you. you actually stepped in and bought technology today. >> well, we bought hpq, which really like here. >> the stock or the options? >> we bought the stock. i think it's cheap. the balance sheet's in good shape. ibm i like, that i didn't buy any more today, but it comes in

a few bucks i would. ibm did not have a screaming run to the upside, so i think it should do pretty well on the down side. and i think that goes to joe's earlier point about the smaller caps starting to really pull back. if you look at the performance of the russell 2000 today, really underperforming. and there's more to run for sure. >> we want to go to some after-hours action here because we've got a very, very big mover on our hands right now. intermune down a whopping 79%. you heard me right. 79% right now after the fda did not approve its drug to treat lung scarring. >> unbelievable. i mean -- >> analysts -- >> well -- well, go ahead. >> we want to bring the analyst in. >> oh, we have an analyst? >> brian scorni of think equity joins us on the fast line. it's great to have you with us. what are the chances this drug goes back and gets approved at this point? if you're an intermune holder you want to know what the heck you do with the stock at this point. >> sure. absolutely. you know, i think it's a big

question and we're just getting foths now from the company. they still have to meet with the fda, discuss with the fda what exactly the fda wants here. i think there's a likelihood they'll be able to do a very quick resubmission is very low. they probably will have to do as the fda requested an additional clinical trial. and you know, that's not to say that they won't be ultimately successful in doing that. a stock last week, dendreon, that really popped went through the same situation about three years ago, they went to the fda, the fda said you do not have enough data, you need to run another clinical trial. and we've seen how that story has come together very nicely for that company. you know, certainly intermune has major issues today given the fda response -- >> brian -- >> better than overreaction. but i think the drug is definitely not done. >> brian, we appreciate you calling, obviously. give us a sense of what intermune's balance sheet looks like because if they're going to have to resubmit is this a company that's got enough cash to basically go back and do further clinical trials? >> so they have about 150

million. we'll have to see what they report at the end of the quarter. but about $150 million right now. they do have a substantial amount of debt. $45 million is due at the first quarter of next year. but the rest, the bulk isn't due until 2015. depending on what the fda requests for a clinical trial, they may or may not have to do a raise. i certainly think at this point it looks likely to get through phase 3 clinical trial there will be another equity -- >> target -- >> still, absolutely. they have a very successful other program that's partnered with roche right now. roche has put a lot of enthusiasm into this program of late for hepatitis c. and roche has moved forward with another program with hepatitis c. it's still a possibility right now. we'll have to see where the valuation winds up falling the next couple days. >> brian skorny, thanks for phoning in. analyst over at think equity. >> in terms of competitors, glaxo and gilead have a joint

venture with a drug called laterrace. i don't think there are any fda approved drugs for this. idiopathic pulmonary fibrosis. some analysts thought they could do a billion dollars in the u.s. and a billion dollars in europe. very interesting. ? and i bet this company's thinking to themselves why did we not do a capital raise a couple months ago? that's why in biotechnology diversification, can't say it enough. must be diversified. >> we should point out brian was pretty bullish on this stock with a buy rating but the entire street was bullish. so it's not like he was the only one caught with his pants down. we have more "fast money" coming up next including joe's exclusive analysis of what is next for the oil industry. what he found out may shock you. stay tuned. >> announcer: our market players are always ahead of the press. >> blankfein will not be the ceo of goldman sachs at the end of this year. blankfein will be leaving because internally he's associated with too much of this noise, and it's about the institution, not an individual. >> don't wait to read about it

tomorrow. >> what the market has done, though, bp, billions of dollars taken off as if this is greater than the exxon valdez. the market cap that they've been penalized by is so beyond the current scope of the situation. >> you can't afford not to watch. "fast money," 5:00 eastern on cnbc, first in business worldwide. in a market that sees triple-digit swings, it pays to look for a long-term return. sprat celebrated value investor whitney tilson has the market's highest quality names the top hedge fund heads are banking on. plus the latest from louisiana. the oil slick slows, but the damage is done. we'll drill down on what this national catastrophe means for crude and the commodity stocks. all that and more as market's post-market show continues.

the greece situation is more than just a 2.5% pimple on the face of euro zone gdp. three main ripple effects here. number one, portugal, ireland, italy, spain, and greece make up 35% of euro zone gdp. each of those countries are going to be implementing tough austere -- austerity packages. that potentially has an impact on the fledgling recovery both in the u.s. and in asia.

>> that was peter boockvar of miller tabak during the last month warning us to not dismiss this greek bailout. peter, why does it seem so many anniversary investors at least on the equities side missed this coming? because obviously on the currency side we had a lot of shorts of the euro piling into the markets even up to the last week according to the cftc. >> there are a lot of signs. it reminded me of 2007, that investors only bought the umbrella after it started raining rather than seeing the dark clouds and saying maybe i should get one before it starts to rain. a couple weeks ago we had one-year cds in greece trading at levels that venezuela and argentina were trading. this is not an emerging economy. this is not a developing country. this is a western, developed nation. and it wasn't just greece. it obviously had a ripple effect on all the other overleveraged economies where the rising cost of capital is going to impact growth, it's going to impact the financing of their countries, and it's going to impact global growth. we have to remember also what's going on in china too. europe is china's biggest

trading partner at the same time china internally is trying to slow down. >> book, it's guy. it's just drizzling now. only 50 s&p points off the high. is it time now -- can you still have time to get the umbrella in can you get short this market? is that what you're doing now? >> you do have time, again, because you say we're only 3%. but look at yesterday's rally. it was complete ignorance of what was going on in the world. a lot of u.s. investors think it's all about the u.s. and everything else can take care of itself. but in a globalized world that we're in that is no longer the case. >> peter, i'm in your camp and i think this is a serious problem, but i've been wrong and you've been early. liesman says that europe can collapse and it won't have any effect because of the decoupling. you know, explain to me why he's wrong. >> well, not only -- >> or better yet, explain to me why he's right. >> well, he's not right. not only the u.s. exposure to europe, but as i mentioned, europe is china's biggest trading partner. so you're not only going to impact u.s. growth, you're going to impact chinese growth. well, if you're going to impact

chinese growth, you're going to impact taiwan and singapore and south korea and all the other asian nations that export to the chinese that then export to europe and the u.s. so we are all together on this. >> bottom line as far as -- because you talked about buying the umbrella after it started raining. if you bought the umbrella, so to speak, for china, has it started raining yet? can you go into this market and perhaps short it in anticipation of a greater fall because of the interconnectivity of our economies? >> china's stock market, the shanghai index-s now down 18% from its 2009 high. it's down 13 1/2% year to date. i do think there's going to be more down side. but in buying on dips, which people still like to do, asia's the only part of the world right now that i'm comfortable buying on dips. the u.s. economy, still fragile, still dependent on global growth, still dependent on a lot of government stimulus that is going away. to me organically asia still has the best growth. but a slowdown is going to impact their markets and ours. >> hey, beaks, you want in, right? >> i do want in.

i think peter's got the right point here. it's time to put your galoshes on here. the equity market hasn't been paying attention to it. peter's been talking about it for a while. the problem has been if you're short the equity market you got killed over the last couple weeks. so i think there's still time. i wouldn't necessarily be shorting china here. but you can short u.s. companies that are exposed to china, that are exposed to europe, and we've talked about them. again, deere. cliffs has gotten killed. all those names. >> give us the trade, joe. >> i think the trade off all this is fundamentally you have the best reason to own gold right now. i think it acts as the ultimate currency. the european contagion gives you the motivation to buy gold. and i think gold performed very well in today's risk asset sell-off considering how long investors really are in the gold market. >> peter, always a pleasure to speak with you. peter boockvar over at miller tabak. thanks for joining us. sell-off today sending many traders looking for more defensive names like pfizer and walmart with low p/e dividend paying names. may be your best bet to battle the bear, yes or no? joe, i know you've been in pfizer. >> yep.

bought some pfizer. worked out real well. i think those earnings this morning were good. you look at the health care space, you are seeing significant underperformance. i talked last night about -- on the show about being out in california talking to a money manager with north of 1 billion, and they are heavily, heavily weighted right now in the health care space. they say health care retains pricing power, which i agree with. and when you look at allocations to the health care space, right now most folks are underallocated. >> i think scaramucci's been on pfizer. he mentioned that the other day. i would still sort of steer clear of pfizer. i don't think there's tremendous up side. but abbott labs at current levels with valuations and basically drugs coming off patent 2016 i think that might be a place to look as well. >> karen, you've got a couple too. cvs is one. >> they had pretty good earnings. i think today was not the day to have those earnings show. but still the story is very attractive here. but also names -- if walmart can't perform on a day like today, which thankfully it did,

then there's never a reason to own it. but i think it's one of these very attractive franchise at a great multiple. very defensive, obviously, like a j&j. >> what was also a defensive move was going into treasuries today. seeing some big inflows with benchmark yields falling to two-month lows. as traders fled to the safety of the u.s. bond market. should the regular investors stick with this trade even with yields so historically low? steve cortes, aka killer, is founder of ver cruz, joins us from chicago. killer, you're not being paid anything practically to be in treasuries. are things so bad that you want to go to this? >> well, a one-word answer, yes. sometimes you're not being paid a lot, but sometimes not losing is winning. i would point out that i think the decoupling theme is really just complete nonsense. if you believe in decoupling, i think you should probably also believe in the easter bunny. and i think as evidence of that we saw today. now, international markets were very ugly but so was the domestic bond market. and i mean by that high yield bonds, which badly lagged treasuries. >> wait a second. there's no easter bunny?

>> don't cry. don't cry, guy. >> gee whiz. i'm kidding around. >> i bought a chart along which shows this very point i'm talking about. it shows high-yield spreads relative to treasuries. and i used the hyg, which is american high-yield companies. this is not international companies. domestic. as a percentage of the ief, which is a treasury etf. overlaid with the s&p. and we see that during the equity rally for the last year most of the time this risk grab was very correlated. in other words, as you wanted to buy high-yield bonds you also wanted to buy the s&p. however, in recent weeks the s&p vaulted to a big new high above its january high. not confirmed by high-yield bonds, which really got smoked today. i think this is a very dangerous sign going forward and tells me you want to continue to own boring, staid treasuries. >> karen, you're sort tlt, which is converse. >> the converse of what he's saying. let me ask you something. clearly on a day like today you're absolutely right, there's a flight to quality and

treasuries are where you want to be. but if you really believe in the fundamental reasons for making that bet, why wouldn't you make an offensive bet reflecting what you really feel? if you feel like the global growth story is slowing down -- >> short the u.s. stock market? >> -- you could make a lot more money short the freeports or the very go-go names. >> yes, great question, karen. i do think i have exposure to that. i'm not short those names. but i bought the dollar, which i think is a better way to do it. i do think the u.s. equities will outperform in a down trade. so i don't want to short s&p. i want to own the dollar. which is a trend i talked about on the show yesterday. i added to it today. i'm looking to add more. i think the dollar will rally immensely. most of that flow of funds finding its way into treasuries. >> all right. steve cortes, killer, thanks for joining us. >> i hate treasuries. >> you hate treasuries. >> it's basically you're acknowledging and accepting that you can't get more than 2% -- >> you know, steve made a point. there are times when not losing money is better than making money. not losing money is better than missing the opportunity to make it. and this europe situation is serious. the cost of capital as peter talked about and steve talked about is going up.

and when the cost of capital is going up, earning at these companies are going down. i don't believe in decoupling. i think liesman's wrong. >> but if you believe you that play it from the other side. you just play europe from the short side. >> no doubt about it. but there's no way that the european markets are going to collapse. and i'm not talking about the stock markets. i'm talking about the economies. and it won't affect the united states. >> dude, i'm with you. >> not happening. >> all right, dudes, got to take a break. more "fast money's" up next. ok, traders. meet your giant-brained, multi-armed, wicked-fast, tireless, robotic trading engine, also known as automated trading from thinkorswim. just drag and drop to program your strategy. there's no code to write. you point and click, thinkorswim hears and obeys. your killer strategy's on-line. automatically, even when you're not. thinkorswim. download it free. at thinkorswim.com. rated #1 on-line broker by barron's.

welcome back to "fast money." despite the massive sell-off today and six private lawsuits filed, goldman sachs managing to rally, get this, more than 1%. has the stock found its bottom here? i mean, the question really is even if it's found its bottom, does it mean it's going to go higher? >> no, but everything's tradable. we talked about it, i still think that friday when we had an outside week that we talked about that day when it closed in the 16 0z, we said it's headed to 150, bounced from there. then 147.81, that was the level. basically held there. if you want to trade around that 147.81 level be my guest. everything works to trade. as long as you know you're out, a close below 145 this goes down

to 136. >> how about a reason for goldman sachs going up today? short covering. a lot of people have been playing goldman sachs from the short side over the last week. >> i told you on friday i just can't figure out, if i told you i knew for sure that they were going to settle with the s.e.c. and there was going to be a management change, i could not tell you if the stock would go up or down. >> i would say up huge. >> i just -- >> i would say up huge. i think there would be the expectation that all right, they've put, you know, the bad blood behind them and they can move on now. and there would be a focus back on the value of this premier franchise. >> but buffett just told melissa yesterday that he's very comfortable and as one of the largest holders he wants management to be there. >> and what will he say if there's a new ceo? get me out? no. he's going to say this is a very deep bench and there's lots of talented managers there. no doubt. no doubt. and i believe that's true. >> and women. >> good point, guy adami. >> he will flip-flop. i already told you, i made that point, he will flip-flop. but right now the situation's too fluid and there's just too much noise surrounding what's going on day to day.

it's a very hard name to be involved with. >> i think you're 100% accurate. the next has to come from the investment banker side. >> we've got to point this out, it actually closed down a nickel. >> oh. >> i know. >> but relative to the rest of the market, intraday it had been higher by as much as about a percent. it did finish down a nickel but relatively speaking, when you don't lose too much money, right, gary? you're actually winning. who said that? >> i heard that. >> i heard that somewhere from someone. >> still better than treasuries. >> moving on here, the oil well in the gulf continues to gush as the coast guard tries to fight back the oil already in the water. joe, you've been plugged into the story of course. you've got your sources here. you've got three headlines you're bringing to the table. first one, the future of deep water drilling. >> normally, you say there's fear and greed in every situation, but unfortunately this is a disaster, i think you say there's fear in opportunity. and i think you find out about the fear and opportunity by reaching out, talking to people in the industry, talking to neemt over-the-counter trade, the traders themselves, and people at these actual

companies. and what the people tell me right now, and i am pretty highly convicted in this. i know others will disagree. but deep water drilling, and i'm talking about drilling 5,000 feet or more, which is what we have here, you could basically in essence take that off the table going forward in this country. i think deep water drilling is over. we move toward land. >> let's clarify. that means existing projects will be shut down more than 5,000 feet or just no new ones? because i would imagine that would be a sizable percentage of the market. >> you will see a moratorium. >> on all -- >> on new projects 5,000 feet or more. in addition to that, current projects of 5,000 feet or more will be heavily, heavily inspected. and there are companies that have significant exposure to this -- >> such as? >> diamond offshore. ensco. transocean. these are names that have significant focus on deep water drilling. think about the risk that's associated with it. think about the implementation that the senate is going to do with damages. they're going to raise the

liability cap in damages. >> so you think there's opportunity in land drillers if you want to go from one to the other? >> i think the opportunity would be absolutely moving to the land drillers themselves. and bp and anadarko, when you look at those two companies, i think actually they line up okay. >> karen, you are in rig. >> i've added to rig. we've added bp since the spill occurred. we've had rig for a long time, obviously getting hurt on that. but we also have what we call a catalyst position, which is really just trading this spill and how much we think the market has excessively penalized. i cannot see how this administration would be able to withstand a huge spiel ke in oi prices. it's great rhetoric right now until -- >> you are not going to see -- the market is not betting on a huge spike in oil prices right now. what the market is betting on is shut-ins in the gulf. and that will be reflected by bp and anadarko. they're the first ones to shut in production. any hurricane, they've done that in the past. what's the effect on that? it's not rising oil prices. it's earning power's potential

for those in the gulf. >> so all this, the shut-ins, plus the moratorium on new projects more than 5,000 feet deep in the ocean, all that combined will not result in higher oil prices? >> in the long term it will absolutely affect the growth of supply. but in the near term -- >> so it will impact oil prices? >> in the long term. way down the road. increasing -- >> a year -- >> down the road. in the near term traders are actually worried and betting that right now if you see shut-ins you will actually see prices fall because the spr will release oil into a market that's already flooded. >> joe, what is the worst case scenario? is there something in a come out -- if the situation gets worse, may we see -- may we see wells that are actually operating right now be shut down? >> here's the worst case scenario. the worst case scenario is for the entire country. and it's something that i actually believe could happen. first of all, i don't think they're going to get this mess cleaned up anytime soon. if you think about it, the mississippi river, the tidal flow does not push the oil into the river. what goes into the river? boats. ships carrying goods and

services and oil, they cannot go into the mississippi river with any oil on their hulls. so they're going to have to clean the ships off before they reach the miss miissippi river. that's a tall order. you're in essence talking about shutting down the southeastern economy. >> so would you then be bullish on some of the shippers because they're going to be displaced for a very long time or is it the reverse scenario where they won't have the business, so therefore their business will go lower? how do you connect the dots? >> i think on a micro level you can look at the shippers as having a benefit from what's going on right now. on a macro level, and i have a lot of macro concerns here, i'm worried about the economy itself if you do see that occur in the mississippi river. >> okay. got to take a break here. more "fast money" up next.

welcome back to "fast money." we are live at the nasdaq marketsite in new york city's times square. okay. what was the big money doing during today's big sell-off? whitney tilson, cnbc contributor and managing partner of t-2 partners, comes to us live from his value investing conference in pasadena, california. whitney, good to see you. what is the hedge fund equivalent these days of putting cash in your mattress? >> well, we're not doing that. we're not buying gold and going into the hills with machine guns

to wait out armageddon. but i think we are playing defense. and that means on the long side big cap blue chips, strong balance sheets. and those stocks are probably the only undervalued pocket in the market today. and on the short side we're doing what we always do, and it's a target-rich environment. companies with terrible fundamentals and very high valuations. and we're talking about home builders as sort of our favorite theme right now on the short side. >> in terms of some of those big blue chip names, can you give us a couple? >> sure. we just got back from the berkshire hathaway annual meeting. they just reported great first quarter earnings. i've talked about that many times in the past. we own some microsoft, some kraft, some pfizer. but i'll share with you our latest addition to the portfolio and that theme we're going to be presenting in detail tomorrow here at the value investing congress. anheuser-busch inbev. it has the same ticker, bud, as the old anheuser-busch, but it's now a global company. they're the leading beer seller in seven of the world's ten largest markets. and we think there's enormous opportunity to cut costs and

drive cash flows over the next couple years. we think this stock's a double in the next couple years without any big tailwinds from a v-shaped economic recovery. >> you mentioned berkshire. what was your read in terms of buffett and what he said about goldman sachs? >> it was pound the table defending goldman sachs. i mean, he has a big economic stake in goldman. he has a 50-year relationship with the company. so i certainly expected him to defend goldman. but it was even more full-throated than i expected. >> whitney, bruce berkowitz of fair home disclosing a large position in goldman sachs. can you get your arms around goldman sachs and get in the stock at this point? >> we haven't pulled the trigger. but i will tell you we and a lot of other smart people we know are looking hard at it. goldman's a premier company. extremely well managed. obviously, they've hit some hard times here. but it's trading just over book value. and generally, goldman at a slight premium to book's a pretty good buy. but you know, it requires a

strong stomach given some of the uncertainties and variables out there. and we're trying to see if we can get comfortable with those. we haven't yet, but we might. >> last, we talked to you, whitney, was on the heels of hewlett-packard taking over palm. what did you do with your position? anything in the days that followed? >> it's trading at a very slight premium. so not enough of a premium to want to short more. but we don't think there's going to be any bid topping the 570, which obviously surprised us that anyone was willing to pay that for this company. so we are still slightly short but anticipate that we're just going to cover as the deal goes through at 570. >> all right, whitney. thanks a lot for joining us. whitney tilson joining us from the value investing congress in pasadena, california. we do want to quickly touch on gold, the traditional flight to safety. we did not see that today. it was down $14, posting its largest one-day dlan since april 16th. joe, you are still confident in gold even though -- >> and i absolutely -- gary talked about, you know, basically winning by not losing.

i disagree. i think the performance today in gold -- >> relative to the market. >> relative but -- >> wait, wait, wait. but the whole trade is because of the situation in the world -- >> if you pick an asset right now in this market that people are so darn long of, gold has got to be at the top of the list. so risk is coming off the table today. people are raising cash. gold should have been down today -- >> but don't you own it for the days when it's risk off? >> no, you own it for fundamental reasons like you see right now in greece. >> sorry. got to pull the plug on -- yeah, yeah, yeah. more "fast money" up next.

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today's triple-digit sell-off confirming one thing, that nothing is certain in today's markets. but there are still ways to profit amidst the volatility, and that is through options. scott nations of nations shares and an "options action" trader, joins us with the best protection plays. and scott, i've got to ask you, volatility, the index, intraday at the highest levels since february. so premium is a little more expensive than it has been in a couple of months. so what are you doing here? >> well, i want the protection. so i want to buy the june 108-117 put spread on the spider. i can pay about $2.15 for that. i want just broad-based

protection. so the way to do that is to buy a put spread. buying a spread lowers the cost of the trade tremendously. i don't want to protect against an apocalypse. i just want a bunch of protection. and as you mentioned, when volatility really gets pumped up on days like today, that oust money put gets pumped up even more so. it's even a better reason to use spreads on a day like today. so i want to buy that 108-117 put spread, again, pay 2.15, down side break even is 114.85. up side break even is 119.70. but because we're long that 117 put, i get protection in the s.p.y. down only about 50 cents from here. >> scott, what are you holding this trade for? is it till expiration? what's your plan with it? because it's a long time to wait with volatility moving around as quickly as it does. >> right. i'm not going to -- it's unlookly iunlook unlikely i'll hold it to expiration. but i want to hold it past may expiration which is coming up

soon. that's the reason i like june. >> scott, you can catch him and me on "options action" friday nights at 5:30 p.m. eastern time on cnbc. we have the final trade coming up after this. one: kills weeds to the root. two: forms a barrier, preventing new ones for up to four months. roundup extended control.

all right. time for the final trade. joe. >> costco. >> guy. >> abbott. >> karen. >> hpq. >> gary. >> u.s. dollar. >> i'm melissa lee, see you back here tomorrow at 5:00 p.m. for more "fast money." >> announcer: tomorrow, going global. the team turns the uk scramble and euro zone debt woes into your next power play. then, ready for retail? we've got your next move. "fast money," tomorrow 5:00 eastern on cnbc. first in business worldwide.

jim cramer. and welcome to my world. >> you need to get in the game! >> firms are going to go out of business, and he's nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. >> "mad money." you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just glad this day ended. it's also my job to entertain and to educate. so call me at 1-800-743-cnbc. with the horrible guadalcanal-like bloodletting that we saw today with the dow plunging 225 points and the s&p

giving up 2.4% -- >> the house of pain. >> -- i think it might be time to adopt a new theme song to help you understand what's going on. and what you should do about it. 35 years ago barry mcguire wrote a song. it was called "eve of destruction." and with the arguments the bears are making right now, every minute i put the tv on or read, i think it's more relevant than ever. ♪ tell me over and over and over again, my friend ♪ ♪ how you don't believe we're on the eve of destruction ♪ >> that's exactly what we're hearing, right? right? or how about -- ♪ don't you understand what i'm trying to say ♪ ♪ can't you feel the fears i'm feeling today ♪ >> oh, yeah, sure, i feel the