i doubt that deutsche bank or bank america, merrill, or citigroup has such a smoking gun in their closet. if they don't, they are being unfairly tarred with this move. >> thank you, jon. always a pleasure to see you. tonight on "fast money" and optionsactio optionsactionsstrategy.com. >>> the dow was down as much as 170 points earlier. but, guess what? we are only down 107. okay. so well off of the lows. nasdaq, also, in the red. >> and the damage really is financials and materials, but the commodities dropped and they never really recovered on that. up next, we will breakdown what the goldman fraud charges will have on the outlook of brokerage stocks. and later we will debate whether this news could derail the market rally and send stocks tumbling into a market correction. >>> and welcome back. goldman sachs shares falling sharply following the s.e.c.'s fraud charges, but how are the rest of the brokers trading? matt nesto takes a look. >> well, thank you, bob. it is pretty complicated if you look at the intraday comparison and i used the broker dealer index which is not the best, but i

he's the sub prime bond trader at deutsche bank right. >> selling? >> selling -- well he's betting against sub prime -- this is where it gets very strange. here is this trader who's the senior trader inside a big wall street firm. it's a german bank but it's still a big wall street firm. and his firm is creating these sub prime mortgage bonds and creating the cdos and he's saying it's all going bad. i'm going to make a big bet. and he spends 18 months at war with his own firm because people are telling him he's crazy and he's stupid and he's wasting him. and he's telling them you're crazy and you're stupid and you're wasting money. he's running around trying to talk people out of buying the stuff his firm is selling. and so he becomes a -- he's an annoying character to a lot of people in his own firm but he's the other principal short seller in this. >> how much of all of this is made up just so that these people that worked at these firms could take the money whether it's credit default swaps, cdos, traunches, all of this language that the average pe

deutsche bank with significant exposure to southern europe. deutsche bank over 10% down. and don't think the s.e.c. hasn't tauxd to the fsa about this and the european regulators. expect there to be some type of follow-through out of europe because they if any place have the knives sharpened even more. >> we can't leave the goldman discussion without talking about john paulson. john paulson had a role allegedly in this whole thing by selecting the basket of securities at goldman sachs then marketed. so you've got to wonder about his own investments and sort of his ancillary impact in terms of his funds. and what we saw in the gold pits, we didn't see a flight to safety. you'd think with the market turning lower you'd see a flight to safety into gold. we did not see that action today. and in fact, if we take a look at some of these holdings, some of those individual gold stocks were down much more sharply than some of the broader measures. >> you wonder that if people now that have money with paulson say, you know what, we don't want to have any association -- >> just repu

a note from deutsche bank this morning says the bank's predictability during the 2004-2007 tightening cycle actually prompted investors to take more risk than they normally would. here's what jeff lacker told steve liesman last week. >> i don't think vagueness is the answer. i think the thing for us to do is to communicate clearly that it depends and it's going to defend on how economic data come in, how the economy behaves and how things look at each meeting. >> the phrase was used constructive ambiguity. is that something you think is a good policy? >> i think history has been unkind to constructive ambiguity. >> yeah. but kathy is an old friend of mine. i'm just -- i'm calling it cowboy monitorism. the question is, is the fed too darn predictable? or as some would say, too boring? let's go to cnbc's steve liesman and former director of monetary affairs at the fed. vince, let me go to you first. i want wall street traders to be scared to death that the federal reserve will have both guns drawn like a cowboy firing away and the street will not know either when the fed is going to go

he does this very quickly with deutsche bank and merrill lynch and goldman sachs. these bonds -- he has bet against it so that he does not leave all $13 million. this is, by far, the single largest bat in the history of wall street. he blocks away and is allowed to resign. -- he walked away and is allowed to resign. he is rich. the amazing thing to me is that that had become -- nobody knows who he is. his name is not mentioned. he is allowed to move on. 20 years ago, when a trader lost a lot of money, he was ashamed. everybody knew his name. a public corporation was an incredible thing to me. i talked to all the people involved. >> digit dr. howard hubler? but i am not allowed to say -- did you talk to howard hubler? >> i am not allowed to say. >> they never paid a price for all of this stuff and people all across the united states are suffering. they lost their house, and the last statistic i heard was that one-quarter of all of these outstanding mortgages in this country are under water. will that pop up here in the next -- >> we are living in a dramatic period.

deutsche bank is raising its price target. yahoo! also putting in a nice quarter as well, partly because of $35 million in payments with the pact with microsoft, the search pact starting to kick in. it's set to open higher. huntington banc shares posted its first profit in over a year with easing loan losses also looking higher this morning. gilead is a loser on its earnings. first quarter topped on broads, but it now sees about $200 million on impact from health care rebates. at 9:30, david, i'll tell you about a little deal. we're seeing more and more of these, more mergers happening these days. >>> all right, thank you, bertha. of course, apple is an exciting company. at&t, though, still one of the largest, most important companies, perhaps hasn't provided quite as much excitement, certainly not to its investors over a period of time. reporting numbers, however, this morning that were better than anticipated is at&t. of course, this is the old sbc, but we use the at&t name. we forget that the old at&t more or less withered away. t

right now the range is supposed to be $17 to $19, deutsche bank and piper jaffray.d this is what is known as a privately backed ipo, and not one of the publicly backed ipos. it's got a strong bloodline. sequoia capital owns 15.1% of the company and neither they nor the top holders are selling. i like that. based on the valuations of similar companies like on semi, which you know we like and dios, i'd be willing to pay up to 12 times next year's earnings for alpha and omega, that comes to $23 -- long day. come on. i've been talking about goldman all day. trying the make you some money. it comes to $23 a share. if it prices within the expected range $17 to $19, i think you're getting a great deal and can buy as much as you want. at $23, only buy half. so, in other words, let's go over this. you want 100 shares, buy them all at $19. you can only buy 50 at $23. splitting it. oh, also, only buy this if you can get the ipo shares. get in the actual deal. i don't like to buy in the after market.é÷ t)y >> jim cramer is your most valuable asset. >>> let's go over the game pl

deutsche bank is down by ruffle 3%. commerzbank is following suit. alliance is down by 2.5%. that is mainly on the renewed stories about the greek and financial situation. the government spokesman was saying that the german stance have not changed, despite the record high risk premium that we are seeing on greek bonds. and those three companies mentioned alliance, commerzbank and deutsche bank have set to have the greek bond exposure on their books despite the fact that deutsche bank was saying earlier on this year at their annual press conference that they don't have a lot of exposure to greek bonds. but what means a lot is still the big question. but nevertheless, alliance does have greek bonds on their books and commerzbank, as well. that is all from here. with that, i'm sending it over to stephane. >> and it's exactly the same picture in paris. all the banks are trading lower. credit agricole has the highest unit because of its banks. we have also a negative session from eads regarding the number of orders from airbus since the beginning of the year. 60 orders for the fir

whether it's if germany, is it deutsche bank? is it barclays? they each have their homegrown possible villains, the guys that came out so far on top. who do you think is next, knowing what you know about how these thing unwind? >> well, there's no question that deutsche bank and ubs were at the top of the league tables in the cdo space. so if we're going to look at cdos and subprime toxic assets, those are two likely candidates for more inquiry. >> okay, larry, we're going to leave it there for now. thanks so much for being on our show. larry mcdonald, the managing director at pangaea capital. >> thanks for being so -- that's great. that's fantastic. come back. bring him back, larry. >> absolutely. >> we got to call him larry. that's fantastic. >> that's his name. >> well, lawrence, larry. >> moving on here. >> link. >> viewers, contain your excitement. apple's earnings less than 24 hours away. so without further ado we unveil the next best thing to a 4g iphone, the "fast money" 360 on apple. >> we'll be buyers of apple going into the earnings.

so, watch out for the financials this week, deutsche bank trading up 1.7%. siemens is an interesting story. we may see an upgrade in the outlook for this year. the stock is trading up 2.6%. i did speak with the company this morning. of course they can't make any comment. however, if you look at the order books, they could be quite profitable. that's frankfurt. >> and in paris, publicist is trading higher this morning. the company has a new client in the united states. it's going to manage the u.s. advertising spending of chevrolet, the carmaker. but didn't give any financial details for the contract but it could be bigger than carrefour, which is already one of the largest clients for publicsis. up 3%, up 2% at the opening of the french market earlier this morning. the industry posted a 5.2% increase in sales for the first quarter of the year. the company's guidance is still targeting an increase of the net profit this year. they are confident that the efficiency will bring 200 million euros in savings this year. this stock is up 1.7%. it's one of the best -

he does this quickly with goldman-sachs and deutsche bank. these bonds go to zero. now he's got some bets against it, so he doesn't lose all $15 billion. but he loses $9.5 billion. it is i think by far the single largest trading loss from a single bet in the history of wall street. he walks away. he is allowed to resign. he is allowed to keep all of his deferred exentation, millions of dollars, and he is rich and goes away. the amazing thing to me, another reason i got reengaminged with the subject -- nobody knows who he is. his name is not mentioned. he is just allowed to move on. 20 years ago, when a trader lost a lot of money, he was shamed. everybody knew his name. that this had happened and been regarded as a private matter in a public corporation was an incredible thing to me. so i went and talked to all the people involved and wrote the story. >> did you talk to howie hubler? >> not allowed to say. >> you got to some of these guys, and other books have gotten to them, but you never see them on television. you envision that they are at a country club up in con

apart from that, we're just getting flashes out from deutsche bank. they're interested in buying aree va, but they're not paying another price should another bid be put on the table. that's frankfurt. over to paris now. >> we have plenty of companies reporting back to fundamentals today. the company said there are initial signs of recovery. therefore, it has decided to increase slightly its guidance for the full year, positive reaction on the market. we're up 4.5% right now. positive trend also in the advertising sector. posted an 8.1% increase of its revenue for the first quarter, which was way below expectations. the company says that the business conditions are improving. the ceo of publicis raised its guidance for the full year. and they believe that publicis will be able to outperform the market. there's a stronger than expected increase of its full year sales, up 12%. restocking is on the way and the company confirmed its guidance for the full year. the stock is one of the top gainers. remy cointrei awe is up 4.2%. >> every time you say cointrea

the ones that are rubber-stamping effectively the toxic bonds being sold by the goldman sachs, deutsche banksnd merrill lynchs of the world to your pension fund or some dumb german bank. joining us now, former california state treasurer, phil angeledis, phil, why the subpoena? >> well, pretty simple. we've interviewed hundreds of witnesses, we've asked companies across the board and government agencies to provide us documents and mootdy's has not complied timely. we've made it clear to people that we're not going to have the clock run out on us and moody's didn't begin producing documents, so we a issued a subpoena and we'll do it whatever we need to. >> have you had any insight as to whether there has been the deliberately manufacturing of toxic securities that are bundled together, stamped with aaa through some formula and sold to unwitting pension managers. is there evidence of that? >> well here's what we're doing. we're doing a full scrub. one of the issues we're looking hard at is kind of the flow of toxic loans all through the system. when i started this journey as chairman of the comm

what it mean for deutsche bank? what's it mean for europe? we're going to be hiring an awful lot of people in london, that's for sure. >> it's going to go offshore. howard knows. i've known him for years. the most wired guy in new york. the most wired guy on wall street. you just heard him. what do you make of it? >> let me ask you this question. when was the last time a 1,300 page bill in congress was good for the stock market? this is insanity. i mean, if you read it through carefully, you're basically creating a bunch of new bureaucracies that we don't really need. i you take an akem's razor approach to this thing. if you look at what caused the problem, two things. one is a money based policy. rules based policy, take that out of the equation. two, no skin in the game for home buyers. if you go to a 10% or 20% requirement like they do in canada, plus mortgage insurance if you don't put the money down, you don't need all this stuff. i mean, it's insanity. by the way, larry, i've been listening to this show. i feel like alice in wonderland

not just a goldman sachs, but at merrill lynch, deutsche bank, ubs, down the line, all the firms that were concocting the sorts of schemes that goldman sachs is accused of concocting, all those firms need to be investigated before we proceed too much further down this line. the american people are being stolen from and lending and investment is not happening in this country as a result of the corruption in our government that is allowing the banks to steal our money. >> thank you, dylan. hear from from dylan on his show coming up at 4:00 eastern time here on msnbc. greatly appreciate it. >>> departure planes are still up in the air for thousands of passengers in europe. some flights are taking off. this one left glasgow this morning. british officials say even though restrictions are still in place in air space below 20,000 feet flights can take off and fly above the ash cloud. we're just getting word that british airways confirms 26 long haul flights are headed to london. it is not clear where they'll land. meanwhile, the british royal navy as we know came to the rescue of many soldi

deutsche bank, ubs, lehman brothers, and the rest of goldman sachs, who were the firms that were the most aggressive with this type of trading and security in general? do you believe that there is, if we once we start pulling, we're going to see a lot more of this? >> this is certainly not an isolated example, dylan. i mean i think that some of these securities that were underwritten by all the firms that you mentioned, might be different in little nuanced ways. but what we're talking about is, yes, a really overarching effort to figure out a way to short the mortgage market. to bet against the mortgage market. not only for their customers in some cases, like mr. paulson, who was the hedge fund manager, cited but not named in the s.e.c.'s case. but for the banks themselves, to take on big negative bets. this was how they did it. this type of security. >> were they invent the security, they find a sucker, which is usually a pension manager or somebody who represents a large pool of assets. dumb money, you look for the marks, whether it's a municipality, somebody who manages teachers'

probably billions upon billions of dollars into these instruments so you read today probably that deutsche bank creating them. ubs was creating them. why they went after goldman begs the question, if everybody was doing it, why goldman? i think that really dove tails into the political agenda behind all of this. that is is that goldman is the biggest fish out there. they're the ones who have engendered most of the populist vitreol towards wall street. that's why they went after goldman not so coincidentally on the raging debate about wall street. i think there will be more action brought. >> brown: what do you think. >> i think that's absolutely right. it was very widespread. i think goldman and other transactions followed the same pattern, whether it's fraud or not will be seen. but many other institutions were engaged in this. every time you say the people were betting that housing prices would go up, there has to be another end of that bet. they were betting that housing prices would go down. what happened was this is a completely deregulated market. congress deregulated it in december of 20

continue to like not only because they've underperformed but because oil prices are going higher deutsche bankust raised their outlook for wti the reality is these will be priced higher. chinese companies are going to brazil to buy licenses. these are names that big cap emerging market oils underperformed, and this is a great time to be buying names you that wanted to own in 2007. >> thank you. it's time now for the cold calling segment of the program that's sweeping the nation. one trader, one stock, 30 seconds to make their case or else they get a dial tone. dennis gart mon now giv dennis gartman now gives us the pitch. >> i've had plenty of dial tones in my life. i'm going to continue to be a buyer of gold. that mains want to buy gld. because of diversification. if you're one of the administrators for a reserve position for one of the large central banks in china, indonesia, india, you've looked at the euro, it's caused you problems. you see the despondency taking place in greece. and you have to go someplace. you're leaving the euro. you're moving out of that, moving into gold. gld is the

again, the guy really wasn't one to predict that there's another guy who was a traitor at deutsche bankcome and still is as of right now. he ignores them and he really risks his career to bet against housing and bet against mortgages and to pull this trade off. so in my view these guys are all sort of the climbing up a mountain and they're going to the top and paulson makes it to the top and a few others come close, and why some succeed and why some didn't is a fascination of mine and that sort of what i wrote the book and these guys are in it. so that's sort of drives the book, as well as the dynamic of writing about winners. i thought you would be more enjoyable to write about and to read about the individual to figure this out and we can learn from them as opposed to those who made mistakes. so that's another reason what i threw myself into this book and into this project, and i still find it kind of fascinating. first thing i wanted to discuss is why the experts didn't see it. and that kind of runs through my whole book, because it's a fascinating, curious time in our financial syst

if they do, let's face it, what happens in the business doesn't go away, it goes to ubs, deutsche bank goes yaefr seas and the u.s. specifically gets the shaft so to speak as opposed to the market in general. >> jeff, got to leave it there. thanks so much for stopping by. jeff harte is usually in -- both of you. you and jeff harte. >> much more fun not on satellite. >> all right. moving on here. the options market is saying the best of earnings season is over. how do you protect your profits here? to help us do that is mike khouw of cantor fitzgerald, who's also an "options action" contributor. and mike, you're looking specifically at a tech stock, correct? >> i am. i'm looking at broadcom. you know, one of the important things to look at in the options market, early in the earnings season it isn't that uncommon for companies on their earnings to move greater than what the options market is implying. after the first couple of weeks are over, you start to see that less and less often. but one of the things to keep an eye on are the single stock stories. obviously, we've seen some of the

he was at deutsche bank. people made fun of him.hey called him a fool because he was worried about housing and he was buying this credit default swaps. people were working with him and his senior people, his bosses, yeah, you could do this stuff but check back with us daily and we want to -- just to make money to keep his bosses happy so he could keep his trade on. but if this trade hadn't worked he was the fool who bet on housing. the housing never goes down on a national basis and the fed can always cut rates. great. don't you know you're taking a real career risk and he really did. gep if he hasn't done this trade. and housing collapse all perfect storm, perfect storm. we always write a perfect storm. it wasn't a perfect storm. people made mistakes. and didn't see this thing coming. oh, yeah, perfect storm come up -- the people who blew it came up with this kind of explanation for a perfect storm. greg litman yeah i missed the trade and so did everybody else. our analysts said don't worry. so he gets real career risk and he takes

deutsche bank, i think, mkm. >> we had, i think, in march the first kind of -- i wouldn't say it's a great number. but a decent number where most of the jobs created were actually private sector jobs. larry summers is talking about the economy approaching escape velocity. when you look at the encouraging numbers that are out there, exports have really risen from their april 2009 lows. that is a source of growth. i think a lot of the stimulus is actually worked. we talk a lot in our article about not just the companies that directly benefit from stimulus spending or the loan guarantees, but then their ability to create sort of small economic ecosystems that support more jobs. what's going on with electric cars, for example. >> you look at the minority unemployment rates of hispanics and blacks, that certainly is an issue. then you look at policy changes in washington that will result in much higher tax rates on a variety of different levels in the new year. what are the dangers of that derailing part of this recovery? >> my first job was in 1992. i was asked to call some economists an

it go back to another german firm, deutsche bank. lost so much money that german taxpayers had to bail it out. and back here at home, the american taxpayers provided the nation's biggest banks with bailout money including $10 billion with goldman sachs which has been repaid. ali? >> all right, allan, thank you forea very good explanation of why we're all connected to this thing and why i'm here reporting on this today. >>> hey, listen, for some people life begins at 100. i'll tell you about a woman who proves the old saying that you're never too old. right now, there's a nurse saving a life in baltimore. 20 minutes later, she'll bring one into the world in seattle. later today, she'll help an accident victim in kansas. how can one nurse be in all these places? through the nurses she taught in this place. johnson & johnson knows, behind every nurse who touches a life... there's a nurse educator... who first touched them. ♪ you're a nurse ♪ you make a difference >>> you'll watch this show regularly, then you know i'm a bit of a techie.

. >> he knows the synthetic cdo market inside-out since he was so instrumental at deutsche bank in designing those. >> he'll understand it. >> yeah. >> going back to my experience, my experience i couldn't get the s.e.c. to focus on the issuer. in fact, what happened is the s.e.c. focused on the attacker. very similar to david ayhorn's experience. and now i think the s.e.c. -- my sense is they're doing a much better job and more aggressively attacking -- -- >> not the messenger. >> not the messenger, but the problem company or manager. there's a risk they go too far the other direction. >> right. >> before you start, let me see if joe has 3m earnings ready to go. >> i feel comfortable with $1.40 versus 1.21, well above expectations. they say they're raising 2010 sales and earnings. now sees the full year result at 540 to 5.60 which is well above the $5.16 the street is looking for. sales increased 25% to $6.3 billion, well above the $5.44 billion, which is what we're talking about. can't see where the stock is going to trade at this point, but is good. >> they have several things they cite.

fund, an overseas bank -- and a lot of them did and that overseas with bank of switzerland or deutsche bank. and then that bonn gets traded around -- the bond gets traded around. the relationship with the homeowner does not exist. a servicers enzi estate appeared just someone who is hired by the investors to make sure you pay your mortgage so that they have their income stream every month. and other things happen to it, because then that the bond has to be protected against risk. so that is where the credit to default swaps, ind. that is where the mortgage insurance as written by companies like aig, and that is where all the trouble began because you had a bond as an underlying instrument, the credit protection insurance was written on top of that, and sometimes insurance was written on top of that and it was getting farther and farther away from the homeowners. and when the homeowner started to default, everything started to crumble. >host: when your 400,000 home is worth 200,000, you are stuck in a home or default on mortgage. who ends up paying the price? guest: the reverse part of the p

precise opposite of the type of security that was involved in the famous paulson/goldman/deutsche -- whatever the bank over there? >> a, they're real loans. b, they're better loans. 57% loan value is a very positive sign. if it means that at least for now, bankers have learned some lessons or it means the capital markets have learned some lessons. but it poses a very interesting question because you talk about fannie and freddie. secretary geithner has just in a sense opened the debate and said he thinks there's going to be a role for fannie and freddie down the future but what should it be? the country has never really squared away on this issue. should we go to a real free market and just skaterize t ise mortgages the government will bear? >> the reform bill making its way through congress, there's no fannie. is there? >> no. the biggest dilemma, maybe fannie and freddie do serve a purpose but the fact they also had shrld interest in mind so they had a profit motive while they also had the government subsidy, that created all the problems. alison, would you recommend that your clients buy one of the

. >> deutsche banc, others, citi. there were other banks like this. the real question is, was this illegal. was the disclosure not there. and the defense that the banks are giving is, we showed you all the cards in the deck. you got to see every card you wanted in the deck if you invested in this security. the only thing we didn't tell you is who constructed the deck. >> a little detail. just tiny little one that the guy who does not work for goldman who runs a hedge fund was the guy shorting. that's a little left out. >> there's two pieces to this. one is at the time, the defense that goldman would give you is nobody knew who paulson was. in fact, some people thought he was a silly hedge fund investors losing money shorting all this stuff. but everyone did get to see what was in the deck. the question is, just knowing what the deck was as opposed to who made it. >> what's so fascinating reading all these stories on the goldman story is seeing the different people in the banks, the two or three people in the banks who even in late 2005 were

banking committee. senator, good luck getting some republicans on board. thanks so much for joining us. >> thank you. >>> and we mentioned the developing news today about the earnings doubling, but is green good? donny deutschy called "america the angry" at 3:00 p.m. eastern. [ female announcer ] sometimes you need tomorrow to finish what you started today. for the aches and sleeplessness in between, there's new motrin pm. no other medicine, not even advil pm, is more effective for pain and sleeplessness. new motrin pm. right now, walmart has rolled back prices on top lawn care brands like poulan pro, brute by briggs & stratton, pennington, scotts and spectracide. along with thousands of others all over the store. it's rollback time! save money. live better. walmart. >>> the same plant that gives us tequila may have a bone benefit. researchers study benefit frs the plant and found it helps bones absorb more cal sum from food. however, before you grab that margarita, experts say this is burned off when changed into alcohol. >>> president obama called her the god mother of the civil rights movement and at 98 years old, she passed away. >> reporter: when dr. martin luther king jr. delivered his most famous and