lower. treasury yields lower, hitting their lowest levels, depending on which note you're looking at since 2023. and we'll continue to watch this carnage tomorrow. for the dow, the s&p, is nasdaq, the worst day for all three averages since 2022. we're going to talk more about bitcoin tomorrow with microstrategy's michael saylor. that's going to do it for us on "ove "overtime." "fast money" starts now. on a stock seldoff monday, this is "fast money." here's what's on tap tonight. major averages tumble. we'll break down today's slide and ask how much more pain is still to come. plus, buffett's portfolio hair cut. while berkshire cut its holding of apple in half. the ripple effects on the market straight ahead. and later, inside the monster spike in volatility. the historic drop in the japanese stocks. and why investors are returning for the exits are looking to buy

during this rout ran into roadblocks today. i'm melissa lee, coming to you live from studio b at the nasdaq. a major selloff calls for a supersized desk. full house here. tim seymour, steve grasso, dan nathan, guy adami, and lori cavalsina. the major averages dropping 2% or more, the nasdaq down 6.4% early in the day. still shed 3.5% at three-month lows. the dow dropping more than 1,000 points. its biggest point drop since september 2022. and the small cap russell 2,000 officially giving back all its gains from the start of that supposed rotation last month. it has been down 3% or more for three days in a row. the first time that's happened since 1987. the volatilitysurging to more than 65. that's the highest it's been since the start of the pandemic.

all these moves had an outsized impact on technology. the magnificent seven tumbling, losing a combined $665 billion in market cap today alone. since the nasdaq's record close in july, they have slashed nearly $3 trillion in market cap. the recent selling seems to have been sparked by last week's softer than expected jobs report. but are these concerns overblown? i go to the strategist to set the tone tonight, lori. how do you take this all, in stride, do you stick by your forecast, does anything change? >> look, i would say, in terms of our forecast for the end of the year, we baked in a 5% to 10% drawdown. we are getting close to that 10%. i think this is a really important line. you're looking at growth scare territory if it doesn't hold. it could be a drawdown of 15% to 20% historically. i think the next few days are important. look, i would say, in terms of, you know, what we were seeing on

the price action, yes, if we look back and thursday and friday's news flow, we got a lousy ism report, we got a troubling jobs report that every economist on the street missed. but whati'm seeing in that data is consistent with a slowing economy, not one that's falling off a cliff. and i think one of the reasons it was so jarring to investors to get that interpretation of the jobs report in particular is it does not synch up from companies. which is really generally, that, yes, there are pressures, but they are being managed, and there are still buffers in place, and so, to me, there's just something not quite adding up about that recession reaction, with all of the other news flow right now. >> does it add up to you, guy, or are you in growth scare territory? i feel like a lot of traders have jumped to that area? >> i've been in the wrong camp for a long time. lori came on three, four weeks ago and talked about her outlook, there would be potholes along the way. there was a question about how big the potholes would be.

she addressed this last time. yes, i am in the growth scare camp without question. if you listen to what retailers have been saying, and across a swath of retailers over the last, not only three months, maybe the last six months, they're all saying the same thing. they're seeing a slowdown. man if ifested in the job numbe. i think gdp, say what you want y, i think it's inventory build. and in terms of the vix, i'm glad you mentioned it. 2022, there were two times where the vix showed you the bottom of the market. it was once in june and it was again in october. that's the good news. the bad news, it came at the end of a huge selloff. i mean, the s&p in december 2021 was 4800, by the time it got to june, it was 3600. and the same thing happened in october. unfortunately, we're closer to the top now with this vix spike than at the bottom, i think. >> yeah. tim? >> i -- i think this is much technical going on here as there is fundamental. when you talk about this vix, you're also talking about

dynamic where, what have been the most popular trades on the street for a couple years now? low volume trades, selling volume, and the other side is the street that has to hedge this out. i think some of this is bank of japan and detrigger. everything is selling off. even defensive trades. gold is notable, obviously. after the move it had had. i think some of this is technical. and it tells me, obviously, it's no surprise to know, we've all been talking about the yen move. this has been a supersized carry trade on top of supersized carry trade. we had zero interest rates, and then the yen game this almost caricature of itself, and the bank of japan comes in and gets hawkish now? so, this is a dynamic that was the kind of a trigger. we also forget, if it was any other time with any other stuff going on, we'd be focused on the middle east, we'd be focused on the fact that russia is heading to iran and you have a dynamic here where you have risk off. that's what you have going over weekends.

and that's what i think we had coming into today. so, all of these things, i would be in the camp of, i don't think the u.s. economy is falling out of bed overnight. i think that if anything, be careful what you wish for, because we want jobless claims to go higher. they haven't really, i think, changed their tune that much. i think this is very technical. which also means, i think, you know, the chartists and the technical folks will tell you that a lot of stuff is broken and it's not going to resolve in one day. >> if it's technical, that's actually good news. that means there's an end in sight. it's not a fundamental shift on how you're viewing the economy, in terms of the outlook for companies and earnings. it is fundamental by nature. >> yeah, i think that's right. i'm not going to tell you i think the economy is in a great place. part of my view for the last month or is that i think the consumer the tapped. but i don't think it all happens overnight. this isn't the u.s. piling into not only hard landing, but really hard landing, because that's what the price action was, i don't think that's what

we have right now. >> households have the least amount of money and the most amount of debt right now. it's funny, when you go around the table, everyone is going to have a reason why the market sold off. tim named them. then it could be the fed reserve being late, no money in the tank for houseed whos. the other one is the iranian response, i think tim mentioned that, and then the beginning was a.i. valuation over the market. take your pick. it's all of the above. but i think it is technical based. i think we have to touch that 5,000 level in the s&p, for not an all-clear level, i think things remain bad, probably get worse, the unemployment rate historically is on the lows, but still, to move where it was to get up to the level it is now scares and spooks a lot of different people. so, we'll see how the week turns out. it's only monday. >> yeah, i'd be surprised if it was that data last week that caused this sort of price action. when you see the nikkei down 12% overnight and giving back, you know, all of the gains that it's made over the last few months,

it's hard not to pay attention, but mel, i actually think there is something fundamental here. i agree with the technical take. this concentrated trade, we've been talking about it, guy said he's been wrong. i've been wrong on the price action. i think we're going to be right on the fundamentals. i think it is important to understand that. when you see the mag seven open like it did today, it speaks of that concentration, but something that we saw over the last couple weeks in these earnings reports. they just didn't have the sort of upside or the sort of acceleration that they've had over the last, you know, year, year and a half or so, and when you think about this, i think -- we talked about this last week, i think there's a huge potential of massive overcapacity. when you think about gen a.i., the buildout of servers, into data center, a lot of these companies have been forced to pay huge premiums just to get 24e78. and now, when you hear the story that, you know, jensen huang has been telling this for 18 months, and he's laid out, it was h-100,

that's hopper, and then next year was blackwell, and the year after that, it was ruben. you can have confidence this was going to happen, that companies were going to continue to upgrade these chips. i just don't believe that, because we didn't see anything about monetization, and if the economy is slowing, these companies are going to have to slow down their capex pretty soon. >> back to the economy slowing, though, that narrative is fueled by that jobs report, right? these are all -- >> isn't that what the fed wanted? isn't that -- >> sure, yeah. >> when we think of the long and variable lags, i think just like the fed was too slow to recognize inflation in 2021, i think they probably should have been -- i know some of you guys disagree, probably cutting a little bit, because as soon as that started to put pressure on the consumer, to steve's point, the savings right started going down, and really consumer credit started going up, that was probably the point in which they should have been worried about a 50-year low in unemployment rising very quickly over the last -- >> so, i hear what you're saying on that, and i think what you're

saying is, you don't necessarily think friday's payroll number was a disaster. part of the thing the market is digesting means that this -- they could be very far behind the curve. this move, friday's payroll number is nine months in the making and there's a lot of bad stuff coming. guy, what's the sohn rate? >> .53. >> sorry. we -- >> it's claudia sohn. >> a rolling three-month average on unemployment. but the case -- they are late, because usually, they start cutting eight months after they stop hiking. they should have started cutting in march, right? so, they're very late. >> well, the thing that's interesting now is that everybody thinks they're late. now everybody's flipped to the other side of the boat. every economist -- not every. almost every economist on wall street has increased the number of rate cuts they are expecting by the end of the year. now all of a sudden we're pricing in a intermeeting rate cut. this is different from what we saw a week ago, which makes me think that's completely wrong,

too. >> yeah, one of the charts we've been talking about a lot, if you look at the past four interest rate cycles, when we've gotten to the first cut, markets typically sell off. so, you know, i -- at least in my career, i remember we always have this debate, they always wait too late, and i think what happened with that fed meeting last week is, we got to the point where, even the holdouts, right, they all changed their calls and we had a few julys, weed that 50s come in, but nobody was saying they weren't going to do it anymore, it's time to move to the next charter. and that's naturally the worry they just waited too long. and then we got the reports that came in. add on the fact that sentiment, if you look at the cftc data is worse, more extended than we were in early 2018. and february 2020 pre-covid. so, it was almost like this was the match, the kinding was extremely dry. i think steve's right, everybody's got a different reason. it almost didn't matter what the reason was. >> let's focus on the mag seven names. falling another 4% today. nvidia among its biggest drags, falling 6%. it comes on reports that nvidia

is seeing delays for the blackwell chip. deirdre bosa has the latest. >> the nasdaq has riped up $2 trillion in value. the mag seven hit particularly hard today, shedding more than $650 billion in value. you touched on it with nvidia. part of the rerating the fundamental. lowered expectations and unwind in the a.i. trade that's powered megacap tech performance. the last earnings raised questions over returns and mon if ii tization. adding more fuel to those worries, that report you've been talking about that nvidia is delaying blackwell, its next a.i. chip, as dan was saying, that could push out billions of dollars in revenue that was expected this year to next year. so, again, a change in those expectations. further pressure that could from regulators. alphabet shares took a leg lower after losing its doj anti-trust

suit over search. it faces a second one with the doj in trust, while apple, amazon, meta, they are facing lawsuits from anti-trust regulators, as well. a drawn-out appeals process is likely to push out any immediate effects, but greater scrutiny and decisions like what we got today could impede megacaps from doing deals or distract them amid this a.i. arms race where investors are already starting to get impatient. >> all right, deirdre bosa, thank you. i want to drill down on nvidia and this notion of this delayed ship. once upon a time, we thought a delay in blackwell would have been a sale deferred, not a sale denied. but maybe things have changed, maybe they missed the boat a little bit in terms of being able to sell those chips three months out, as opposed to immediately. >> yeah, that's possible. it's also interesting, though, at the same time, all the potential competition. amd's been worse. it's not like amd rallied on that news. so, it gets back to dynamics on,

what do you want to pay for this company? we know on a short-term basis, you could put a 25 multiple on it, feel pretty confident, but do you have that out a couple years? i just -- you know, i look at the charts, and everybody says they want to buy nvidia lower, but -- >> here it is. >> yeah. and again, interesting to see where it bounced today. somewhere around $95, $96, you have major support. you have a dynamic here where -- 150 day. are you going to get some places where the markets need to test again lower? one day is not going to do it. and that's why this -- this just isn't a place to be jumping. in just take a pause. >> i bought more today. >> you did? >> i'm long higher. so, i wanted average. i'm not -- i don't have a full position, but i bought more around where it closed. it traded down to $90. if we test the $200, it will be d down. >> everyone is focused on

jackson hole what the fed is going to say on august 22nd, i'm focused on nvidia's august 28th report. 40% of their sales come from microsoft, google, amazon, and meta, and even though they had good results, amazon probably less so, they sold them all. i think the bloom is off the rose for this trade. this year, so, they're going to report their second quarter on august 28th, and, you know, the implied move is 20%. that seems light, if you think about it, between now and then. and they are expected to grow earnings and sales this year 20%. that's going to decel next year. 26 times next year, you better hope that investors have that confidence, because if you start seeing the back half guided down, they might call a mulligan on this, say, hey, we're expecting x percent of blackwell in the quarter that they're in right now, but if they push that out, those are this things that you lose confidence in a story that's been just lock it, take it to the bank for 18 months or

so. so, again, i think i know how this ends a little bit. i think it goes back to that 90 level and probably before. but just like tesla, you know, we talk about that all the time. if this thing gets pressed too hard in the results, then it's a really bad press, but right now, i just feel like the fundamental story is still in flux. >> let's put the blackwell potential delay aside. if they're able to address capex from the hyper scalers and some of their customer base, they say things are fine, basically, all these guys said, they're going to spend the same level they projected or more than what we projected earlier this year, then is the story in tact? >> the story is in tact, i mean, the spend's been there. it these -- price to earnings -- it's reasonable. priced to -- i mean, if you want to go back and look historically and semiconductor, they don't trade at 25 times revenue. maybe they do for a period of time, until they get back down to below ten, between seven and nine. then you can say, it's different this time, which i've heard over and over again. okay. that's fine.

it's still price to revenue expensive. you want to play the technical game, look what happened at march 8th. look at june 20th. this is a 30% drawdown from those june 20th highs. it filled in a gap today which was really good, so, it got to levels that make sense, but i don't think it's out of the woods. >> i think when we look at the kind of broader megacap growth a.i. theme broadly, the valuations, the positioning, we're just so stretched. we only have data from late last week as to how much they've come in, and it's barely, you know, sort of a blip on the chart. and we don't know exactly where all that data shakes out, but i just don't think we've had enough damage to really come in and say the risk is out yaet. for more, let's bring in rebecca patterson. great to get your take, especially on a day like today. has anything fundamentally changed about the markets? >> i think today is fundamental

and technical, but i would lean on the technical. whether you're invested only in u.s. stocks and bond, you have to remember, we're in a global economy, global markets, and i do think what's going on with the unwind of the yen carry trade, people borrowing yen to buy assets, and as people lost money of those trades, they needed to take profits elsewhere to manage their books. so, i think that was a catalyst that's effected a range of assets around the world, including u.s. equities. so, that's part of it. we talked about tech, regulators, earnings, rollouts. certainly with the consumer. we saw that in earnings. we've seen that in consumer confidence data, especially at the lower end. and of course the job market. and as you all said, one payroll, i mean, it would be ridiculous to overindex to one number. payrolls get revised, sometimes by a lot. it's one data point. but i think we now have enough data points to feel confident the u.s. economy is cooling. but cooling doesn't mean a hard

landing or recession or fed cut. it just means we're cooling. so, what i'm watching now is, are the technicals going to get bad enough and last long enough that they could start to impact, to start to infect, if you will, the underlying economy? then it becomes fundamental, but right now, we're not there, and we saw that in the service sector confidence survey today, which was actually better than expected. >> rebecca, the one thing that's held up reasonably well is credit. it has not been -- nobody's talking about a credit event yet. should we be worried about one given all the things that have been taking place? >> this hasn't been a credit-driven expansion. it's been abn income-driven expansion. so, we don't have a lot of leverage among households, which is really good news, actually. so, i don't think we have to worry about that side of the equation. in terms of corporate credit, while you have seen some bo borrowing, it looks nothing like what we saw leading up to 2008.

so, again, i don't worry about the leverage, in that sense, in the economy this time around. we know there's leverage in the system. we know there's overhangs of debt. the biggest one is with the u.s. government. but in terms of having a repeat of '07-08 dynamic, because of household and corporate leverage, i don't think this looks like that. >> rebecca, it's tim. it is great to have your global perspective, and i was just going to go back to the great safety trade in u.s. debt. some might argue that, hey, at 375, there's still a lot to do, even though we've had a move from 480 down to 370 in a year's time. a lot of it is technical, as well. a lot of this is unwind to carry trade. help us understand what this move in treasuries has meant. it's been so violent, and it feels overdone, especially in the context of what you're talking about, the economy. >> yeah, in the very short run, the move in treasuries, to me, does feel probably a bit overdone. so, it really depends on your time frame. if you're a shorter term trader,

if, you know, then i think it might make sense to take some profit on those positions, but if you're medium or long-term and thinking about diversification, i would just hang on. and, you know, i think today, reflecting on it, you've had a couple good lessons, and one of them is on diversification. you know, you have so many investors out there saying, you need geographic diversification, and i think it's helpful at the margin, but we're seaing today, it's no panacea. everything is moving together around the world. you need diversification across asset classes and sub asset classes, types of companies, even your liquidity profile. so, to me, things like treasuries and gold, which i have liked for some time now, i'm taking a medium, longer term view and i would hold onto both. short-term, i think this has been a big move and probably -- unless we get new bad news in the short-term, it's hard to see it going a lot lower from here. a lot's priced in. >> rebecca, when you said it

doesn't look like '07-08, there could be a host of reasons why the selloff happened, what is the tell, from your perspective, when the yen carry trade is coming to the end? what's the tell that you look for? if there is one. >> yeah, it's a great question, because when you do have these technical selloffs and melissa said it earlier, you know they're finite, and when you start thinking you're close to the end, that's when you want to start getting back into the market. but not at the beginning of it. lori mentioned earlier the cffc data. you can get currency positions in that, it's somewhat lagged, it's not perfect data, but that's one thing to look at. the other thing to look at for people who have access to it is going to be what the big investment banks that have large foreign exchange trading desks are saying about what they're seeing. and i believe there is some news on that out on bloomberg this afternoon, for example, with one desk saying they're expecting some of the systematic traders who are basing some of their positions on volatility to have

to unwind further. so, this could go a few more days. so, i'm looking for color from trading desks. that would be the most timely thing to watch. and that's just going to be their color. it's not going to be scientific, but it will give us a sense where we are in that journey. right now, it's hard to say, but i would guess we're still close to the beginning. >> rebecca, thank you. great to see you. >> thank you. >> all right, so, we're talking about huge moves, continued deleverages, we can be calm about what the fed might or might not do, but how about just blowups on wall street? you see these moves and you think, someone is getting blown out. many funds out there getting blown up as we speak with these massive violent moves. and could that then prompt the fed to come in or prompt -- i mean, it's sort of like, a vicious cycle. >> well, they say, when policy makers start panicking, markets start rallying if the fed stepped in here, they would be panicking and that would be really scary. i'm -- you speak about what might be going on on wall street, i'm glad guy brought up

credit. the credit guys are the smartest guys in the room. and that's the next leg of anything, if we've got it, right? and so, that would be where i would be scared, but the move in the vix and the kind of, you know, vol-selling strategies, and it led into bad paint before today tells me, yes, we're waiting for that. >> doesn't tell me there's anything remotely close to what happened in 2008 at all, because of the lack of leverage. to me, it's probably fundamental, there was some valuations in concentrated names. last summer, we had the july 18th top, it took two months or so, a little more than that, to go down 11%. well, here we are, if we were to get down to that 5,000 level, if it really is technical, there you go, 11.5%, 12%. the s&p is up on the year 9%. so, that's why i don't think there's any cause for alarm. i think the speed in which it came down right now versus last year is probably the reason why you will get a pretty violent, you know, bounce-back.

but i don't think anyone thinks we're going to be making new highs any time soon in the s&p 500. >> i think the discussion about the emergency cuts, the fed acting, in my career, and we spent a lot of time looking through this data, the emergency cuts, the big chunky cuts, those are associated with major cry ce crises. i think the fed speak we've seen so far is giving a nod to that. the other thing i would add, just to play whauf dan was saying, i think when we go back to the gfc, we learned a lot as a financial system. we have cleaned up a lot of things. we have derisked a lot of things. it's not to say we won't ever see a blowup, but it limits the systemic risk. >> all right, let's get to a news alert now. san francisco fed president mary daley delivering remarks on the economy. cnbc's steve liesman has the developments.

steve? >> hey, melissa. she's talking in hawaii, saying the fed is prepared to do what the economy needs when we are clear what that is. she says there's a lot of data between now and the next meeting. she does see upcoming policy adjustments as required. she says rates will need to be adjusted to balance the two objectives of the federal reserve, of low unemployment and stable inflation. it's too early to tell if the economy is slowing to a sustainable pace, but the fed is prepared to do, as we said, earlier what needs to be done. and then, just broadly, on the economy, looking at what she says, let me just look at a couple other notes here. she noted that the unemployment rate is still low by historical standards. and that there's more room for confidence underneath the labor report that we're seeing a slowing and not a falling off a cliff. she says what we're hearing is the economy is downshifting, with inflation still above target. our context are not laying off

workers, they are slowing the pace of hiring. so, i think this kind of dovetails, melissa, with goolsbee this morning who said, yeah, we need to cut, but there isn't the sort of sense, at least not yet, of the hair being on fire in the way the market is trading and otherwise priced for the fed to reduce rates. >> do you get a sense, or did you get a sense from mary daly's remarks that she was a little bit more -- i don't know, like, trying to dampen the volatility out there, versus goolsbee, who, you pointed out earlier today, seemed to leave open the idea to anything, that anything is possible. though he was very sober, but still leaving the possibility open that there could be additional rate cuts. >> yeah, you know, mary daly said more than once that inflation is still above target. and so, that has to be a consideration. certainly is one for her and other members on the fed that there isn't, like, this blank check to cut rates, because

inflation is at target. i think they're going to feel a little bit more constrained, and i think that may be reflected in what daly is saying here. she's talking about an adjustment. i don't think she wants to get out ahead of her colleagues or the economy. i think maybe -- it sounds trite, melissa, the most important thing she might have pointed out is, there's a lot of data between now and the next meeting. and that is simply true. and i think one of the things she's trying to do, and i think goolsbee tried to do it this morning, to remind markets that, a, the slowdown is what the fed sort of wanted here, and what the markets were hoping for, and b, that it's only one jobs report so far, and that jobs report, when you look underneath the hood, was maybe not as bad as markets have priced in. >> yep. steve, thank you. >> pleasure. >> steve liesman. going to go back to powell's line, they will be data dependent, not data point depe dependent. and yet the markets want to be data point dependent at this point. >> right, listen, i'm sure

jeremy seigle is a fine guy, emergency 75-point -- what was the emergency? friday, on the back of the jobs number, he said, this is -- there's no emergency. the stock market can go down, too. so, rate cuts are not some magic salve for the market. be careful what you wish for, again. and by the way, a rate cut actually makes this yen carry trade worse, counterintuitive. if the fed had a set, they'd start to think about hiking rates if they want to get in front of this. >> they do have a set -- >> they have a set of mandates. >> two of them two of them. >> 75 basis points would just set the market on fire, i mean, that -- in terms of it being -- >> you guys remember this, the second day of january in 2001, the fed had a surprise rate cut, and it was the sharpest rally that i can remember, it was vicious, and we hear that all the time. i mean, the sharpest rallies take place in bear markets or so, so, i actually think, like, to guy's point, there's a lot of knock-on effects that we're just

not pricing right now. you would have a pretty sharp rally. >> usually a signal that the top is in in the market. it's usually six months, 12 months later that you actually peak in the market and everything collapses on itself now. to guy's point, be careful what you wish for. it usually is a signal the top is in, but they are trying to stay ahead of the weakness and that long and variable lag. >> we know monetary policy is restrictive here, so, what's the big deal? if they go 25 or 50 right now and do another one -- the next -- the next meeting or the meeting after that -- look, i don't think this changes the trajectory of what the economy is doing here. it changes the traject ory of what the market wants. let's not forget, the s&p has had a 62% move from the cpi low of '22 to the high we had a couple weeks ago. that's a 62% move in a year and a half. that's crazy. >> main street doesn't care about yen carry trades or if the fed's going to go 25 or surprise at 50 and stuff like that.

they're looking at the stock market and saying, it's still up 9% -- >> you think they're looking at it, saying up 9% or looking and saying it was down 6% today at the lows? >> listen, they don't know what the intraday action is unless they're watching "fast money." >> i have main street calling me today talking about japan. i'll just define main street as a couple buddies of mine. main street, what's happening? but truly, japan was on the ears of main street in terms of people that follow the market that are not professionals. >> i will say, an analyst told me his mom called him today and asked -- >> main street. >> main street did know a little bit more. but look, i do think that -- i loved your comment on the data point dependent. this was a messy jobs report, right? there's a debate going on in the economics community about whether or not there was weather in there, and i know they said there wasn't. they think there was some weather impact. so, again, are you going to do an emergency sort of shift on a flukey data point?

i'm not sure. berkshire hathaway's cash pile at $277 billion. warren buffett's firm adding to its reserves by slashing its apple holdings by half and selling $3.8 billion of its bank of america shares over the last few weeks. apple still remains its largest holding. berkshire shoring up its cash pile, should you be, as well? a lot of focus was on the apple sale, which was disclosed over the weekend. selling bank of america plus apple, you get a bigger picture of somebody who is worried about where valuations were, worried about where the markets were going, you know, worried enough to bulk up the cash? >> timing mechanisms are tough. that was flashy red at the beginning of this year, and the market didn't really care, went up on its merry way. it sort of looked right past it. so, that's the whole thing. market doesn't care about valuation until it does. but you should absolutely -- listen, if you agree with him when he buys things and get e lated that he bought one of your stocks, you should be equally whatever, interested when he

sells something. apple is obviously his biggest holding. but bank of america, i mean, again -- it's not to be mean or anything, we talk about this when it was a $44 stock, we said, there's zero reason this stock should not be trading at book value, which was $34. look what the low was today. that makes sense, as well. >> guy says this all the time. when passive goes active. so, berkshire went active, okay? and the top three holders now are vanguard, blackrock, and state street. all passive investors. they own 3 billion shares between the three of them. there's 15 billion shares outstanding. you can't get out of this. the fact that he got out of this, that's why the stock underperformed all spring while everything else was going crazy about generative a.i., and the last point, this product stinks. buffett might have -- it -- he might have been a beta tester. he might have said, you know what i mean? this is not good. and they're pushing out a lot of those offerings, so, to me -- i don't know. do not miss a cnbc special on today's major market selloff,

that is tonight, 7:00 p.m. eastern time, right here on cnbc. coming up, japanese stocks plummeting. what it means for global markets an the understood winding of the yen carry trade. plus, a huge spike in the vix touching its highest levels since the pandemic. how options traders are handling the volatility ahead. "fast money" is back in two. ( ♪♪ ) morgan stanley is partnering with the women's tennis association to remove boundaries... ( ♪♪ ) because this game is for everyone. your shipping manager left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates

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welcome back to "fast money." stocks plummeting to start the week as recession fears sparked a global market selloff. the dow dropping more than 1,000 points. the nasdaq leading the losses down nearly 3.5%. the japanese yen rallying against the dollar today, hitting its highest level since january. it's a sharp move in the currency over the last month, and comes as the bank of japan has taken a more hawkish tilt to its monetary policy. and raised speculation of an unwinding of the carry trade between the u.s. and japan. what could that mean for the market? let's bring in ben eamons. great to have you with us. we talked about the carry trade in the past. it looks like the unwind is upon us. and i'm wondering, how can investors tell, how can you tell, if we're near the end of that process?

>> yeah, it's difficult, mel, you know, because you're looking at that cftc data, and that's just part of the market. we have a foreign exchange market that is so large with its fx forwards, there's some data on the imf side on that, and that actually showed more like a $4 trillion estimated position, and that's barely changed. so, from the last time that we spoke about it, but also just the last sort of weeks, and the futures data indicates that, too, if you look at the last few days, the open interest in these contracts for yen futures is barely shifting. as much as we have movement in the japanese yen, it may not be really, you know, major short coverings yet, just not to the extent that you get real calamity. nonetheless, a vix today at 65 is clearly a financial distress moment. caused mostly by the yen. i think that's the interlinkage. so, my sense is, there's more to go here, but it may need another catalyst, say data catalyst or boj catalyst, before we see more

of that. >> what would that catalyst be from your standpoint? a u.s. data point, or a boj catalyst? >> i think it's more the bank of japan in this case, because, they actually got intervention. we were trading 161 on the yen and there was a lot of fluter in the market, a lot of speculation, when they will come in and do something about that. now they've got their intervention, and so, the bank of japan surprising with that hike last wednesday, i think was obviously a trigger for people covering shorts, and you can tell from asset manager data that was clearly happening. on the other hand, it is also about the bank of japan now having to hike rates, because inflation continues to be high. so, i think the next bank of japan meeting will be the key meeting, not too far off from jackson hole, you know, what that could be, i think, if they signal that they're going to be on hold, and it comes back to the japanese yen. >> ben, tim.

maybe a comment, a review on my comment, and maybe a question. should we be surprised that the bank of japan has stepped in here? if you are in the carry trade, you are a sophisticated an ves or the, you were the smartest guys in the room back in the day. i'm curious, why should a sophisticated hedge fund or professional investor be caught offsides by this move by the bank of japan? and then, finally, where do you secret? >> yeah, you know, the bank of japan is sort of like very nuanced in its language, and it's difficult to parse the language going into that meeting, you know? we missed maybe probing, and then we got more signals, that wasn't happening before this meeting. so, they simply did surprise. it's in the history of the bank of japan. so, i think that's the reason why these funds, ctas and lever

funds got caught offguard, but i also note that i think it's also about people getting worried in general about the environment, so, the yen is a flight to safety, you know, instrument, flight to safety generally, so, i think they played a role here, too, because we did have the geopolitical sort of environment, sort of context of iran playing in the background, as well. and if you take that to credit, credit spreads have widened a bit. it's still very marginal. if you think about it, if you price quote unquote emergency rate cuts, i think that seems for now a bit moderate. >> so, ben, everyone's focused on this direction right now. what's the knock-on effect, what's the next domino, if you will, that will fall? is it the fx desks on a lot of these banks? what is the next thing, if this gets worse, what should we all look for? >> yeah, that's a tough one, steve, because, you know, it's

not the fx desk itself, because they, you know, they pair positions. i think not the ones in the risk zone. it would be those funds that have borrow yen and bought, say, a.i. stocks or other riskier assets. we don't know the extent of their position, but there's some data out there that it's in the trillions of dollars. and so, that is, i think, ultimately the catalyst, that that data watching is about more pearing back. people start to pile on one another. i think that's what happened overnight. the move in the nikkei really prompted a lot of people to cover the yen short positions while there's no liquidity. so, i think that is the data to watch. >> ben, great to see you, thank you. >> thank you. >> ben emons of fed watch. so, what do you make of this pull-back in the nikkei, tim? >> excuse me. i think it's interesting, in that it was happening well before the last couple days. so, if you look at, at least intraday high, from where they

were, to the lows, i think it was a 26% move in three weeks. and this is something that's been a function of where you've seen some slowing. not necessarily in the economy. i'm someone that's been talking about japan and talking about the fundamentals around the companies themselves, governance, payout levels, and where i thought at least a handful of the japanese companies were big winners here. i think that gets kind of interesting here. look, this trade has been bigger than all of us. all we've said for the last month -- excuse me, year and a half, is that the yen has to give ground. this was supersized on top of supersized. i think the next level to watch is 138 and probably going to test that. coming up, the vix soaring to its highest levels since the depths of the pandemic today. we'll look at how options traders are playing it next. and what if anything is worth a buy? we'll go around the horn and find out where opportunity may lie, right after this. can irreversibly damage your vision. it can progress faster than you think.

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welcome back to "fast money." today's market selloff got us wondering, are there any names now worth buying, from precious metals to big pharma, there are a few areas catching our traders' attention. so, what would you buy tomorrow? guy? >> i know gold sold off,

however, gold wins to this. tim says it all the time. there's going to be a day for gold and we're talking about, again, you want to say current si crisis, say what you want. there's things going on. gold wins. phys is so much better than gld. >> tim? >> ah, yeah, and long sprout, as well. i think it's the kind of value or, at least, the beaten up megacap pharma, so, that's bristol myers, that's pfizer, that's j&j. these are companies that have had their own issues, thee are companies that certainly valuation are defensible. you know what their business is, and it's not a function, necessarily, even of the broader economy. so, i feel comfortable there. >> steve? >> i added to three positions. my btc,btc, my eth, and my nvid. think about it. if we're getting closer to cutting, then we're devaluing the dollar, which in theory should make more sense for bitcoin to rally.

ethereum is the groundwork, the structure that all of the cryptos trade off of. that's why i like the two of them. >> do we need to see a risk-on -- >> yeah, you need to see it recover, because it's correlated with the overall market. risk-off comes off the table, so did bitcoin. yes, we need to see a little bit of a bounce. >> lori? >> i'd go with financials. we've been overweight the sector, but been a little annoyed they haven't looked particularly cheap lately and probably got our buying opportunity in here. i do think the tech big megacap growth unwind has further to go, and i think this side has got to, you know, benefit from that, as the kind of big chunk of value. >> dan? >> yeah, if we're going to have this period of volatility, and we can all agree there are going to be fits and starts. really mad rallies and tests of other lows, i look at robinhood. they get 20% of their sells from options. i think options had its largest

all-time volume day on friday, i'm sure it was huge, too. they also -- crypto is going to remain volatile and i think that is a large chunk of their sales, probably just under 20% or so. that stock was down 25% at one point today. got back a lot of those losses. but still closed down a lot, so, that looks interesting to me. all right, coming up, the vix surging to its highest several since the pandemic. we'll check in on the wild move and see how options traders are "ft neit. asmoy" is back in two.

welcome back to "fast money." volatility exploding amid today's massive selloff. the cboe volatility index soaring, hitting the mid 60s. david bull joining us on the "fast line" for a closer look at the volatility explosion and how options traders are using it. are we going to see higher values in volatility, but a spike that will mark a bottom? >> hey, melissa, thanks for having me. it was an explosion of volatility this morning, with vix hitting 65. couple tidbits to remember. vix is a calculation based on s&p 500 options. and so, this 65 print while

astronomical was pre-market. it was kind of a perfect storm for volatility. coming out of the weekend, a summer weekend where you had fundamental dynamics, you had positioning, you had derisking from the yen and what the nikkei was doing, essentially setting all global carry trades on notice. vix did settle in in the mid 30s, which implies about -- this is not perfect, but about a 2% move per day, which is pretty wild, given about a week and a half ago, we were on a streak of 350 days where we hadn't seen a down 2% move and now we are expecting for the next one, two, three, four weeks, essentially a 2% move every day. >> that sounds like we're going to get whiplash here. david, in terms of the vix curve, should we make much of it? because we are going to the election, so one would think that volatility would be higher closer to. >> correct. it is pretty normal on a big

risk-off day to see the vix term structure specifically. this is usually the vix term structure, there's more uncertainty the further you go out in time. but with apple opening up down 10%, nvidia opening up down 15%, there was massive uncertainty within the next five or ten minutes. there were people putting circuit breaker numbers in chats this morning. so, that uncertainty was in the short-term, so the whole level of the vix curve did rise today, though, it is uncertain going out in time, but i think the market not only thinks that we'll stabilize somewhere, even if it's down, you know, a large amount from here, but massive volatility in the front part of the curve, but still expecting a lot of volatility as we go into the election cycle and the fall which is generally more volatile in general. >> all right, david, thank you. david boole of baycrest. were you surprised at the 65 this morning?

>> yeah, absolutely. when was -- i haven't seen a number like that since financial crisis, right? >> covid. >> maybe covid, we saw a couple days. we had vinny and porter on the show a week and a half or so ago, one of their mantras for the rest of the year was make volatility great again. they couldn't have been more spot on. the vix was 14. and katie stockton was on the show and she suggested the vix could have a spoike. i don't think anybody saw these levels. >> are we too late to hedge positions, dan? >> probably. vol's blown out, so, you had an opportunity to kind of buy cheap protection. now you have the opportunity to probably sellup side calls against positions that you own. >> yeah, when i saw the 65 print this morning i called my desk to see if my screen was right. we had been expecting, as guy mentioned earlier, a pothole. but you know, we did run some numbers, and luckily, we picked 35, but when you close above 35 in the vix, it's a buy on the

market 12 months out. you want to know where it peaks, but it's ultimately a buy signal. >> up next, final trades. (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com (vo) what does it mean to be rich?

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news alert on southwest airlines. elliott management has reported a 7% stake in the company. the activist says it believes luv shares are undervalued. time for the final trade. let's go around the horn. lori? >> energy. >> tim? >> value and defensive. pharma. bristol myers. >> steve? >> iot was the only thing green on my screen today.

>> dan? >> robinhood. volatility. >> is that a new jacket? >> it is a new jacket. >> great color. raytheon, defense stocks are actually defensive and offensive. >> lori, thank you for being here on a night like tonight. thank you for watching "fast money." "mad money" with jim cramer starts right now. here. "mad money" with jim cramer starts right now. ♪ my mission is simple. to make you money. i'm here to level the playing field for all invest offers. there's always a bull market somewhere, i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money," welcome to cramerica. i'm just trying to save you money. my job is not just to explain, but to teach and, of course, entertain. so call me. i know days like today make you want to cry