alix: we are moments away from the closing bell. i am alix steel. joe: and i am joe weisenthal. ♪ alix: u.s. stocks falling along with global equities, and treasuries rise, as chinese stocks suffered their biggest slump in eight years, and a bear market. joe: the question is, what did you miss? call it the chinese route, the shanghai composite plunging. alix: and the former greek finance minister caught on tape. we will drill down the

extraordinary phone call. joe: and six years ago, there was talk of a bailout, but now for the golden state, does it finally have its finances in order? alix: you are looking at stocks falling for a fifth day. this is the longest losing streak we have had since january, and, joe, the s&p was flirting with that 200-day moving average. that is a momentum indicator. joe: and it is the big story, that eight point 5% crash in china, but it is not just chinese either, canada on its longest losing streak in years, and this is really sort of a global, order dated selloff. alix: this is the third longest stretch that we have had ever without a correction for the s&p, and we are now at 1,388

days without that 10% correction, and we have talked about this in terms of the market, and we have two sectors leading this, health care and retail. what happens if they cannot hold up? joe: that is right. just a handful of stocks that account for the rally. people really do not think the market can continue with this little participation, so speaking of sort of ugly market, i want to take into the terminal and talk about another thing that is getting slammed, the ruble. you may remember that it was all about the ruble rout, that it was crashing, and ergo, the ruble was falling. once again, it was not quite as deep, but it is heading back towards 60, the combination of the oil and the markets, and there it goes again. alix: and i would think that

would be a much deeper slide. and i asked about that. joe: there was that one day where it went completely crazy. it is obviously more orderly, but i think people are going to art taking notice of it again. alix: joe, you are going to be excited to see this chart. this is the yellow line. hopper prices have fallen by about 7% over the past few weeks. this white line is the premium that you pay it at shanghai to get copper out of a warehouse. you can see that has been rising, up by about 7%. what does that tell you? ok, you can be a bear if you like on copper, but look at that. the premiums are going up, and

that tends to point to stronger demand, premiums at $76 a ton. joe: people look at this as a sign that maybe the floor has not completely fallen out. alix: it is an indicator. you can literally see china demand if you see the premium rise. the demand there is therefore the physical metal. joe: hopefully, this will the the physical bottom. alix: and economist at j.p. morgan, and you have got contagion fears, and, welcome, thanks for being here. joe: michael, how worried are you about this chinese collapse? when you look at the global economy, what is the significance to you? michael: we are concerned, because we see a lot of capacity -- overcapacity in the housing market is tenuous, and there is a reason to be concerned about china, and in terms of what that means for the u.s. -- well, in spite of china's

massive size, about 9% of our exports go to china, so that is about 1% of gdp, and that is somewhat of a headwind of growth in the u.s., but i do not think it is a game changer. for the u.s., not the end of the world. alix: we have seen that tumble as we felt oil prices ball. what was your reaction to that? michael: we see expectations in the market move with oil, so these are probably co-determined. we think it is part of what we see and commodity prices, more general. joe: it is not just china where we are seeing this weakness. we are seeing a selloff. the prices tumbling in turkey

and russia, and is this about china, or is this something deeper going on? michael: some of it is commodity prices, but there is the expectation of the rate hikes in places like turkey, like you mentioned, and that, i think, is another factor we have to can -- consider here. joe: how does the dollar strength particularly me this? michael: this will put pressure on mandates, which may force those countries to hike rates to defend their currencies at a time when, you know, their domestic condition may not be the strongest, and there is a lot of leverage building up in the currencies, a lot of things tied up with u.s. interest rates, so it could be added pressure on banks to hike rates at a time where it may not be otherwise ideal. alix: you said in your recent note that the richmond fed president jeffrey lacher will cast a vote.

a rate hikes. what is the significance of that? michael: i think it is a little bit of a signal that they are looking at a hike. lacker is a hawk. he has not been dissenting, and i think what that would signal is perhaps as we go through each reading, you will find more and more people on the committee who may be uneasy with staying with a zero interest rate. joe: ok, you had an interesting quote recently, and i will read it. with the fiscal tightening, you write that the situation is looking more and more like low end inflation with pitiful growth. michael: we had the inflation and the unemployment rate. something like what we are

seeing now. i do not think people will think we have these inflation risk, but that is because we expect that to begin to normal life policy, but just because inflation has been low for number of years does not necessarily mean it is going to remain low in the future. alix: so, michael, what would have to happen to the nation to the cap, like he sought in the 19 excuse? michael: they would have to sit on their hands and watch things decline and wage pressure grow, and wage growth is not a bad thing if you have good productivity growth behind it, but right now, we are not seeing productivity growth. if we see wages pick up, we probably would have to worry about inflation coming back. joe: we talk about a lot of the stories, but what keeps you up at night?

michael: i think we talked about one of them, and their are the productivity numbers that have failed to pick up. they are quite strikingly low when you look at the comparison. so that is the thing that most worries me. i think in the last years we have not worried about it because the slack in the labor market has in so large, but i think as we are getting closer to full employment, we probably will take more notice of the slow productivity trend. joe: what do you attribute the slow productivity to? michael: that is a great question. i think some of it has to do with not enough capital spending. particularly, we are not seeing this in kinds of corporate spending on i.t. and things like that in the past that have driven productivity, so i think it is certainly not a monocausal

thing. joe: ok, j.p. morgan economist michael feroli. alix: and we have a question for you. what kind of companies outside of china are shorting this? ♪

i am alix steel. alix: joe: and i am joe weisenthal. what did you miss? alix: stocks sell off.

joe: companies making cashmere sweaters and the like are seeing their shares short. is the latest sign of how crucial asia is to the global market. alix: the luxury market is enormous, and giftgiving is enormous. joe: there is also the expectation of massive demand in the future, so even if china is not huge, the expectations could be baked into the stocks. boston was picked over washington and san francisco and los angeles for the 2024 olympics, boston. public support was low. the u.s. olympic committee may back los angeles.

can you imagine the traffic? that could be be worse. joe: the disney ceo says espn will eventually be sold direct to consumers without a cable subscription, but bob iger said it would not happen any time soon. it would not happen as a big change. they have been a big money marker for disney. alix: and another headache for struggling toys "r" us, and some credit and insurance vendors are removing the chain from some policies and declining to renew coverage in other cases. losing coverage could raise concerns for toy suppliers as they weigh the risks of shipping to the retail chain, and those are the top headlines, and greece's yanis varoufakis was working on a plan b to save his country in a contentious which ration, and the former finance mr. sounded off on a parallel currency and the eurogroup more

broadly. joe: the finance minister admitted to hacking into the greek tax department. mr. varoufakis: we decided to hack in, just copying the code of the system website, the computer in his office. joe: this is literally the best story ever. it does not get any better. first of all, it is hilarious, a finance minister going on a conference call with hedge funds a couple of days after the his post, but this id that they had this their petitions program to basically greet a parallel banking system -- that they had this idea. they have a spreadsheet, and the idea is if we cannot pay each

other, why don't we copy and paste the entire banking system onto another thing that are associated with our tax numbers as opposed to our account numbers, and then we do the same transactions. theoretically, when the banks open, then all of the transactions go. presumably, because there would be some skepticism that those iou's may not be worth as much as euros, they would trade at a discount, but, basically, an artificial system. alix: but he went on to talk about the plan of the german finance minister. mr. varoufakis: we were creating something with every tax number just about aces them that can function under wraps.

alix: well, that was not what we wanted to talk about, but he was talking about house all of this was. -- how secret this whole thing was. joe: the idea is if you're going to have a good land, if you announce it, it is not going to work. and then perhaps even more important is this idea that he claims that wolfgang schaeuble told him he wanted to crush greece, get them out as a message to france, create fiscal integration, and according to varoufakis -- it is credibly important. alix: and he pointed out that wolfgang shauble wanted at grexit. he clearly said that, and it's sort of goes the french flexibility way or the german hardliner way. like the latter.

joe: nowhere was it put together as cyclically as he just did. alix: we were excited pretty much all weekend about it. it was good stuff. coming up, black gold is not so golden. oil has hit a bear market. joe: here is a question for you. the answer, when we come back. ♪

alix: i am alix steel. joe: and i am joe weisenthal. what did you miss? the fastest pace in three years,

a contraction of 28%, and a long position, those dropped, while short holdings climbed 20. alix: but brent money managed inflows were up in the two weeks in july, so while you had this drive down in oil, wti, brent was a different story. joe: they are unequivocal. alix: somewhere may bullish, but now everything is talked out. well, remember when california was in a higher financial straits? they were racing to close a $41 billion deficit. joe: glenn beck, of all people, sounded out on the idea. glenn: there is only one man who can save california.

barney frank to the rescue. joe: it turns out the current governor, jerry brown, may be the one to have come to the rescue. their bond rating was raised to their highest level in 14 years by s&p, and joining us now from irvine, california, building ride from an economics blog, calculated risk, and they are paying down deficit loans. bill, how did they do it? bill: when we talked, i told you that was going to happen. you have to realize where the state gets their money from. in california, it is very dependent on income taxes as property taxes are so low, whereas another state like texas has no income tax but high property taxes.

when the economy can back in california, the income taxes came back and especially capital gains taxes with silicon valley. alix: let's talk about the capital gains tax. it was cited as a very big reason for how their revenue became large we saw a run-up in 2007, a run-up during the tech boom. is this a bad sign? is this going to burst? bill: well, it would be better for the state if they had more taxes from property, like other state. i looked at, yesterday, if i moved to texas and bought the same value house, of course, it would be a big mansion in texas, but i would pay about seven times as much in property taxes, so california has got very low property taxes, and that is not the one that swings as well. so income taxes are going to fall off again.

joe: another thing you like to look at on your blog is port traffic. what is the indicator there? what is that telling you? bill: well, always be careful with data. some of the traffic has been diverted from l.a. following the labor issues this year, so we don't know if all of the traffic is back yet, but what that tells me is that there is a slowdown in china. we are shipping fewer goods, and chinese buyers are not buying as much. alix: another item in california is the drought impact, but usc -- uc davis -- how big of a long-term impact is this? bill: well, i think so far, it is minimal. it is a real pain. there are companies that are

struggling. there is a friend of mine who has a flower business that sells to home depot, and nobody is buying seasonal flowers year, and if we have another year of drought, we're going to have some veer problems, it will probably see food prices go up and some real problems. the good news is it looks like we going to get a lot of rain, and i hope that happens. joe: the real cause of california issues were the housing issues. much off the old lows from a few years ago. is there still more room to run in these cities that have really been slammed by housing? bill: i think the answer is probably yes. what happens in california -- this is not the first housing bubble we have had, and what happens is the first place that recovers is the coast, so if you look at san francisco, they

are back at old highs, or new highs, i should say. that slowly moves inland, and stockton is picking up and doing well from the lows, but like you said, they are still 40% off the highs. as long as the economy is good, stockton should continue to see some improvement. alix: thank you so much, bill mcbride from the blog tax related risk. joe: we will be right back. ♪

alix: i am alix steel. joe: and i am joe weisenthal. what did you miss? twitter earnings are out tomorrow. the company has had all kinds of turmoil. the stock has not done great. there is a ceo search going on. people are going to be paying very close attention to total number of users. that is sort of the key metric here, lots of concerns about if they can keep their growth up. it should be very exciting. alix: i am looking at a machinery company, like a caterpillar, and they are reporting their third-quarter fiscal quarter, and taking a look inside my terminal, this is all you need to know. if is revenue. we are going to have to deal with the revenue sure, is what you are going to be looking at. it could come in at about $3 billion, and it could the $4 billion.

why is that the worst? joe: this is another good macro read on econ and commodities. that is all. thanks for watching. ♪

>> from our studios in new york city, this is charlie rose. mr. -- misty copeland is here can you last month she became the first african mac in woman to be named a principal dancer in american ballet theatre's 75 your history. the news came just a few days after her new york debut in the role of odette in swan lake. she began her training at the in usually late age of 13 and in the two decades since, she has overcome numerous obstacles to achieve the highest honors in dance and become a rare, pop-culture celebrity. here's a look at her