Deutsche Bank (NYSE: DB) closed at $64.23. DB September option implied volatility is at 49, October is at 51; below its 26-week average of 66, according to Track Data, suggesting decreasing price movement.

Credit Suisse (NYSE: CS) closed at $47.94. CS October option implied volatility of 47 is below its 26-week average of 62 according to Track Data, suggesting decreasing price movement.

UBS AG (NYSE: UBS), Switzerland's biggest bank, closed at $17.02. UBS September option implied volatility is at 54, October is at 56; below its 26-week average of 70, according to Track Data, suggesting decreasing price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

Transportation company DryShips Inc. (NASDAQ: DRYS) started the session on a positive note this morning after announcing a new waiver agreement with Deutsche Bank.

DRYS, which is struggling under the weight of a hefty debt burden, said it has reached a pact with Deutsche Bank regarding the waiver terms for a credit facility worth $1.125 billion. The facility covers two drillships that are currently under construction.

"We are delivering the waivers as promised and we hope to conclude discussions with the rest of the lenders in the near future," stated CEO George Economou.

The sages say to sell the news and have started calling the market grossly overbought on the near-term, yet stock enthusiasm is at the exact opposite of how negative things were 6 weeks ago. We have 6 million on the jobless claims now, although this week showed a real decline in new claims. The rally came on late in the day after the market was down triple-digits at one point. Here are the unofficial closing bell levels:

Dow 8,125.43 +95.81 (1.19%)
S&P 500 865.29 +13.23 (1.55%)
Nasdaq 1,670.44 +43.64 (2.68%)

Top Analyst Calls

While the stock market is rallying, the credit markets are still working on the assumption of absolute disaster. Where is such a dire forecast coming from?

Deutsche Banks published a study that shows the gloomy reality that the credit markets are predicting. They used the iBoxx index of investment grade corporate bonds and found that default rates in Europe are priced at 38%, in the US at 40% and at 51% in the UK. All of these readings are worse than in the Depression.

Nintendo (OTC: NTDOY) is one of those stocks that you just want to own but are not sure that you should own. How many times have you heard that the Wii is selling like hotcakes and that the company is beating the heck out of Sony's (NYSE: SNE) PlayStation 3 and Microsoft's (NASDAQ: MSFT) Xbox 360?

You've heard it a lot. Plus, you may even know how fun the Wii is from personal experience. Maybe you own one and are right now trying to finish the last level of Wario Land: Shake It!. And even if you don't own one, chances are one of your friends does.

Today was a disappointment all around. We were supposed to be up for once. That didn't hold. The "no nationalization" talk failed to help keep the broad market afloat. The breath of relief was quickly replaced by more flight to quality and panic protection. It feels as though the rest of the air is coming out of the market as Joe Public throws in the towel. Here were today's unofficial closing bell levels:

Dow 7,115.42 -250.25 (-3.40%)
S&P 500 743.36 -26.69 (-3.47%)
Nasdaq 1,387.72 -53.51 (-3.71%)

Top Analyst Calls

Mall operator General Growth Properties, Inc. (NYSE: GGP) has seen its share price plunge more than 98% during the past year, with the equity recently plummeting into penny-stock territory amid concerns about a possible bankruptcy filing. Maybe I'm just an impatient member of the MTV generation, but it struck me today that these Chapter 11 rumors have been swirling around Wall Street for what seems like ages. Can we get some closure on this soap opera, GGP?

Well, according to a report today in the Wall Street Journal, GGP's deadline to renegotiate a $900 million loan on two luxury malls in Las Vegas came and went Thursday with no resolution. The mall mogul is still in talks with its lenders to negotiate a new deal -- but it's now haggling outside the confines of its forbearance agreement, which means those lenders, led by Deutsche Bank (NYSE: DB), can demand payment at any time.

Deutsche Bank (NYSE: DB - option chain) stock is falling today after the company reported an estimated fourth-quarter loss of 4.8 billion euros ($6.4 billion). The bad quarter will force DB to take a loss for fiscal year 2008. DB blamed weak credit markets and another wave of write-downs for the loss. The news from DB and some other bad news in the industry is hitting the financial sector hard as a whole, with stalwart Bank of America (NYSE: BAC) down almost 5% today and more than 20% for the week. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on DB.

This morning, DB opened at $28.95. So far today the stock has hit a low of $28.68 and a high of $29.52. As of 12:30, DB is trading at $29.05, down $2.85 (-8.9%). The chart for DB looks neutral and S&P gives DB a 3 STARS (out of 5) hold ranking.

For a bearish hedged play on this stock, I would consider an April bear-call credit spread above the $40 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.3% return in three months as long as DB is below $40 at April expiration. Deutsche Bank would have to rise by more than 37% before we would start to lose money. Learn more about this type of trade here.

DB has been above $40 as recently as the end of December but has shown resistance around $41 recently.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in DB nor BAC.

Deutsche Bank (NYSE: DB) warned of a loss of about 4.8 billion euros in Q4. DB is recently trading at $28.36 in pre-open trading, below its close of at $31.90. DB January option implied volatility of 91 is above its 26-week average of 71, according to Track Data, suggesting larger price movement.

Credit Suisse (NYSE: CS) closed at $25.20. CS option implied volatility of 87 is above its 26-week average of 72 according to Track Data, suggesting larger price movement.

UBS AG (NYSE: UBS), Switzerland's biggest bank, closed at $13.43. UBS February option implied volatility of 81 is near its 26-week average of 78, according to Track Data, suggesting non-directional price movement.

Banco Santander (NYSE: STD) closed at $8.67. STD was cut to Sell from Neutral at UBS Warburg. STD overall option implied volatility of 63 is near its 26-week average according to Track Data, suggesting non-directional price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

I'm not sure when it happened, but I think that I've slipped into a Charles Dickens novel.

I got my first clue that something was up back in September, when Lehman Brothers filed for bankruptcy. Amid scandals over bailouts and backroom deals, congressional testimony and AIG retreats, one figure quickly emerged from the mass of bloated plutocrats and greedy execs clamoring for bonuses. Everything about Dick Fuld, from his cartoonishly aggressive management style, to his whining over Congress' refusal to bail out Lehman, to his striking resemblance to Rocky and Bullwinkle's Fearless Leader, made him the perfect poster boy for corporate greed. As more details leaked out, including the story about Fuld being pummeled by one of his employees, much was made of his name. In the public mind and this writer's heart, Richard Fuld was permanently transformed into a complete Dick. All in all, I was hardly surprised to see Lehman fold.

Another clue came when the story leaked out that Merrill Lynch CEO John Thain tried to collect a $10 million bonus. The fact that this bonus was, supposedly, based on Thain's performance in a year when Merrill lost billions of dollars made Thain's chutzpah almost legendary. My wife, who has had dealings with Thain in the past, noted that this aristocratic sense of entitlement permeated every single one of their interactions. I, on the other hand, couldn't help but remember the words of the witches in Macbeth, who hail the Scotsman as Thane of Cawdor, Thane of Glamis, and King hereafter. There seemed to be something ironic about an ambitious, clawing Thain who so clearly felt himself deserving of the spoils of war.

There have since been others. For example, when I first heard of Bernie Madoff, I thought nothing of his last name. However, when I learned that the proper pronunciation isn't "MAD-off" but rather "MADE-off," I couldn't help but laugh. For somebody who "made off" with billions of dollars, Bernie has a name that would put Dickens to shame. Following him, of course, there's been Joseph Forte, the Ponzi schemer who put on a "strong" front, but couldn't hide the fact that making money wasn't his forte. Frankly, punning off these guys is so easy that it's almost embarrassing.

Deutsche Bank AG (NYSE: DB) has sued Donald Trump, demanding that he pay a $40 million personal guarantee that was part of a $640 million construction loan that Deutsche Bank originated in 2005. The loan came due on November 7th with an outstanding balance of $334 million.

The loan is related to the development of the The Trump International Hotel & Tower in Chicago. The building is expected to be finished in early 2009, and the lower floors are already open for business. According (subscription required) to The Wall Street Journal, the building will be the second largest in the United States. Last month, Trump sued Deutsche Bank for an extension on the loan, claiming that the financial meltdown had triggered the force majeure clause of the contract that normally applies to wars, riots and acts of God.

A New York State Court rejected Trump's argument, but apparently he still hasn't coughed up the money. Now he's being sued for it.

It appears that Trump is back in trouble with lenders. Last week, Trump International Resorts (NASDAQ: TRMP) disclosed that it had missed an interest payment.

Thanks to what former Enron CEO, Jeff Skilling, called bad "optics", some top Wall Street executives announced that they're foregoing their normal seven figure bonuses. But I think I am being generous in estimating that those potentially symbolic gestures will only shave a few billion off the Wall Street bonus pool for 2008. We could still be paying $20 billion in bonuses this year.

How so? After buying $159 billion worth of preferred stock in 24 banks, I have not seen any evidence that the Treasury required the banks to lend it out. There is nothing stopping the banks from using the money for paying bonuses. And while the original estimate of 2008 bonuses was down 20% from 2007 -- to $26.6 billion -- I am thinking that eliminating executive bonuses could lead to at least a $6 billion lower figure -- particularly if this cut provides bank CEOs leverage to reduce the amount of bonuses paid to lower level people.

So far, top executives from Goldman Sachs (NYSE: GS), UBS AG (NYSE: UBS), Deutsche Bank, and Barclays have said they will skip their bonuses for 2008. Ironically, the ethically challenged UBS has the most interesting idea -- starting in 2009, it will be able to claw back bonuses in the years after their award with a third paid immediately, while the remainder will be put into a participant's account and can be reduced if there is a loss at the division or the whole bank. I started proposing an escrow account along these lines in October 2007.

Over the past few weeks, as the full dimensions of the economic meltdown have come into focus, most analysts have concluded that the financial crisis is the child of numerous parents, including predatory lenders, deregulating legislators, and excessively optimistic borrowers. Even so, the vast majority of the responsibility has managed to attach itself to the financial industry.

While taking the blame for tanking the economy, establishing Republican socialism, and possibly destroying Western Civilization, Wall Street has had its own problems. As the major players in the financial industry have crashed and burned or been eaten up by other, lesser players, the streets have been filled with the saddest form of performance art. Once arrogant masters who strode the universe on the southern end of Manhattan have become masters of the cardboard box, carrying their personals home to overpriced condos that were purchased at the height of a real-estate boom. The dive in the housing market, which has already hurt so much of the country, has only threatened New York; right now, fingers are crossed from TriBeCa to Harlem.

In the midst of this, Doubledown Media held its annual Wall Street Boxing Charity Championship in New York's Hammerstein ballroom. Admission prices ranged from $125 for general seating to $10,000 for a ringside table, and the event raised money for two charities: a youth village in Rwanda and Tuesday's Children, an organization that serves the families of 9/11 victims. The fight card featured professionals from some of Wall Street's biggest names; for anybody who is particularly interested, the winners included a guy from Deutsche Bank, a guy from Citi, and a guy from the NYMEX. The guy from Morgan Stanley lost in a decision.

I am the Global Editor at MoneyShow.com and each week I interview an investing expert. This week, I spoke with Christoph Scherbaum, editor of the German edition of Personal Finance, who says German investors are cautious, but optimistic about their market.

Q. Christoph, some experts predict the beginning of a prolonged slowdown that will push consumer price inflation in Germany to as low as 2% next June. What do you think?

A. Consumer prices are not really a problem. August inflation was less than 4% and is estimated at 3% until year-end. The delayed effects of rising commodity prices will have a steeper decline. In addition, second-round effects through higher wage developments are now more visible. Therefore, the European Central Bank-despite poor economic data-will wait for a reassessment of its inflation target for 2010 until the second half of 2009

Q. To what extent do you think the US's financial worries are extending to German financial institutions?

A. It's a difficult question, but we have no big problem with our banks. German Finance Minister Peer Steinbrueck recently stated: "Although this financial crisis undoubtedly is the biggest economic risk for the German economy, I think the potential impact on us-after inquiries and interviews with the Bundesbank president-to be limited". He also reaffirmed the intent of a balanced federal budget in 2011.

The New York Times reports that since we've had such a catastrophic run with home mortgages, it's time to watch the collapse of commercial ones. The same names surface when it comes to the collapse of our financial system -- in the case of commercial mortgages Deutsche Bank (NYSE: DB) ($25.1 billion), Morgan Stanley (NYSE: MS) ($22.1 billion), Lehman Brothers (NYSE: LEH) ($40 billion in commercial mortgages and property), and Citigroup, Inc. (NYSE: C) ($19.1 billion) are among the biggest holders. They are also big names in Auction Rate Securities (ARS).

Why do people think that commercial real estate could be tanking? Here are four reasons:

• Declining property prices. The Times reports that the Moody's/REAL Commercial Property Price Index has dropped 12% since its peak last October.
• Commercial mortgage write-downs. According to the Times, Morgan Stanley reported commercial mortgage write-downs of $400 million and Wachovia (NYSE: WB) said it would take at least $1 billion worth of such write-downs.
• Potential Riverton default. The Times reports that Riverton, a 1,230 unit Harlem development, was premised on the idea that developers could convert "lower-priced rentals to apartments priced closer to the higher market average." But the Times reports that Monday Fitch "issued a negative watch on part of the Riverton Apartments trust" since the developers had not made much progress -- threatening commercial mortgages that Citi and Deutsche Bank hold.