[closing bell ringing] all three major indices closing down, crude falling below $50 a barrel for the first time since january. scarlet: but the question is, "what'd you miss?" but are we missing the bigger story? to killer charts that you can't miss. game --d the evaluation with uber worth $50 billion, we ask experts where do you get these numbers anyway? overall, you are looking at seven out of 10 industry groups in the s&p lower, and it's all about energy. down over 2% because oil prices were off by another quarter percent on this continued oversupply.

although i'm getting notes saying everyone is to bearish on oil. talking you have been about how brent is below $50 a barrel and nymex crude is at about $45. there seems to be no signs letting up with iran getting ready to bring oil to the market as well. alix: and you can't forget about apple. we just had a conversation about apple trading below its 200 day moving average and it makes up 13% of the nasdaq. that is significant. scarlet: i want to talk about the greek stock plunge. they had their first day of trading in five weeks. it was ugly, but what is interesting is investors had a u.s. listed etf that they used as a proxy for the greek stock market. and it turns out they were right. during thet down 17%

suspension, exactly the amount of the index fell today. gr ek rose, but during that five weeks, down 17% . just to give you a sense of how gripped greece positive economy, the pmi index for greece shrank at a record pace in july. admittedly, manufacturing not a huge part of the greece economy, is a badbig leg lower sign overall. joe weisenthal said i've never seen a chart that ugly before. deep dive intoa my terminal and look at what was moving markets today, and that was china's pmi. we talked about how bad the manufacturing number was and this is why. you are looking at new orders in the pmi, that's it indication of what the demand will be in the future.

here at 47.2 -- that is that a three-year low. we don't hit that level until 2011. and this is the real concern -- future demand. scarlet: and that is what cast a paul over a global market sentiment. here's another way to chart the economic slowdown will stop barclays says look at the property. increasepretty steady up until 2013 and that was the turning point -- a 7.6% drop right afterward. in the firstn 58% half of this year. according to our glaze, commercial real estate makes up 25% of chinese gdp. so watch this space. the slowdown in the real estate sector seems likely over the next several years, but barclays is not looking for a crash will stop -- looking for a crash.

alix: i want to bring in our guest, peter fisher. we are talking productivity. good news about the economy -- productivity is slowing, but some bad news, productivity is slowing. confused? so are a lot of economists. when you look at that chart, what are the two scenarios you see? peter: what has to be worrying for us all is the slowdown in productivity has to raise the question of how sustainable corporate profits are at the fed has to wonder whether corporations are not going to start looking for pricing power. the fed is not looking at inflation right up at you can't see a slowdown of productivity that powerful without the fed worrying about it a little. what are the biggest misconceptions when it comes to productivity?

peter: look how good earnings have been, that's -- why should i worry about productivity. we have to confront the numbers we've got and we have to address them. is this a cyclical productivity rebound or a productivity slump? peter: we don't know. fed has to worry about it for its part and it has been a profound slowdown. there is a worry we have to have after all of these years of aggressive monetary policy, low interest rates trying to stimulate investments. they are funding weaker and weaker deals, so you would expect to see a decay in the return on investment from more and more capital investment and maybe that's what we're looking at. certainly are's case to be made for an interest rate increase.

inflation expectations seem to have stabilized will stop there's a chart you highlighted in your report -- some people say it has even found a bottom. how does that fit in with signs that productivity is slowing down? peter: if companies cannot get more out put per worker, they're going to try to do it through prices and see if they can exert pricing power. that has to be with the fed is thinking about. but one of my big worries is that the fed will start raising rates and no one is going to care. alix: why is that bad? it will be nice because risk assets will rally but we will just pump them up a little too high. look where we are with commodity prices. we'll just talking about energy -- you pump them up, they get too high, they come down. if you do that with all the risk assets, it may not be a pretty picture. you had a chart in

productivity versus profit margins and we see an enormous diversions right now. what does that tell you? peter: it tells me those profit margins may not be sustainable. they cannot stay that high when productivity is staying down. either the productivity number has to be corrected upward or -- we have had topline revenue inwth for a long time now the united states and whether they can keep sustaining that is an open question, especially when productivity numbers are that week. to the: this goes back fed raising interest rates and no one will care. what does it mean -- we have not moved off of zero interest rate policy yet. peter: that's a huge worry and it befuddles us all to think the fed has waited this long. we may get a final reaction in the equity markets. in most post-world war ii

recoveries, the fed starts raising rates while the economy is accelerating, so you're getting top line revenue growth and the equity markets trade off a little bit when interest rates are raised, but the may rally because the economy is strengthening. scarlet: i know the fed keep you up at night, but what specifically makes it so that you can't sleep? peter: they keep telling me they are going to raise rates even more slowly than i expect and i don't know what that means. i don't know how you tighten monetary policy unless you raise rates more than i expect. i worry that it could end up being like 2005 or 2006. they raise rates and then the markets get overheated. much, peteryou so fisher, senior director of blackrock investment institute. juliet: let's get to

hyman for results from aig. julie: aig coming out ahead of analysts estimates and returning cash to shareholders. operating earnings per share at $1.29 stop we did see a decline year-over-year in their core insurance assets. it has been selling off units to raise cash. $410ompany saying it got million in the quarter through the sale of stock in a consumer finance company. they also raise 3.7 billion dollars in cash, so these are earnings related items. be moreany is going to than doubling its quarterly dividend to $.28 a share and it will be raising its authorization by back by about $5 billion. shares are up a little bit in response to these earnings, but not much. shares have already risen year

to date by about 14.5 percent and our trading near their highest since 2008. another stock i want to mention his twitter. the stock has closed at its lowest price since its ipo. we flagged it earlier because it was added intraday record low and is closing low. it has been declining ever since we got the earnings news and the companies forecast and outlook disappointed investors. coming up, we showed you a couple of charts, but here's one that has economists around the world confused. alex and i will explain what is after the break. ♪

i'm alix steel.

scarlet: i'm scarlet fu. alix: before the break, we should you a chart with puzzling economists. every economist could understand this is something to consider but nobody knew how big a deal it was or why it is happening. hot moneycative of fleeing or is is with the government wants to happen? they want to activate or an investment? scarlet: capital outflow is not the same as capital flight. with the dollar firming, some economists are saying this is companies being prudent and paying down their exchange lows and building up their currency denominated assets. 200 billion -- that's not so bad. another bigbout

number -- 50 billion -- that's the number attached to uber's relation after microsoft reportedly invested $100 million. scarlet: but is it were really worth it? join other -- joining us is someone who literally wrote the book on the topic. "the darkauthor of side of valuations." thank you for joining us. i want to start with a chart on private company valuations. series a and series b companies have risen over the past nine years but nothing like which are companies the purple and orange lines. those are sharply higher. airbnb your uber and where we see a bubble? i'm not sure i would use the word bubble. i think we are capturing is a structural shift.

years ago, few at a public market, they never met. that's no longer the case. now, there is a gray line and i think facebook was the first company that kind of played on that gray line which is you can attract institutional money and public money as a private company. once you can do that, the lore of going public service to drop off. i go public? if i can get the money, why not stay private and not have all of the structure put on me as a public company. that is part of what you are seeing. alix: how do you wind up giving a 50 billion -- a $50 billion valuation to a company where we know very limited financial elements. we have revenue coming in at $415 million, an operating loss of $470 million. that's all we know. guest: the first thing i would do is take the word valuation out of this question.

the way to think about it is you are william -- willing to pay $50 billion if you can sell it to someone else for $60 billion. most investors in this game have no idea what the value of uber is and they don't care. alix: what is the endgame? endgame is that you sell it to someone else. if they can go public at $80 billion, what does it matter? sense, uber is an interesting company. it is a company i tried to value and got a lot of heat are trying to do it. it's interesting because it could be worth $50 billion. there are a couple of things -- awesomesolutely competition. if you think about cab service, it can't get any worse. taking them out of the picture is going to be easy.

is playing a regulatory arbitrage game and it's a game you know will and sooner or later, treating drivers as independent contractors. playing the insurance game of these are private individuals driving cars, that game will and soon. but the thing uber has going for it is a very aggressive management team. in this game, where you are businesses,xisting you have to be aggressive and take on people head-on. on those grounds, i think uber could be worth more than $50 billion. would i invested it at a $50 billion value? not really. alix: how much do you think it could be worth -- back of the envelope alkylation? closer tohink it is $20 billion or $25 billion. they have shown me things over the last year that i did not think they could get.

--r eats and uber move starting to get into the moving business. you start to see them get into other businesses which increases the potential market. but that is my judgment and i'm not going to put the judgment on someone else. uber is clearly a unicorn. how has the unicorn changed over the past few years? i think the $1 billion number we put on a unicorn has created a lot of gameplaying. i have posted on this on my blog about how vcs were playing that game and founders were playing the game of taking a company look like it is worth $1 billion by structuring deals to give you that value. way we come up with a $50 billion value for over as we take microsoft's $100 million and get a rough estimate of the company and extrapolate from there. that is a interest game with

these private businesses because the way that .2% is structure could make it .5% or 1% very easily. they want us to talk about them in this context. of thes become part pricing game because you want to get other people and that is how you win the pricing game. you on people outside to say i have wish i had gotten it at 50. are doing their job for them because we are talking about it. when we come back, all that glitters is not gold. what is the commodity valued just once? that when we come back.

alix: i'm alix steel. scarlet: i'm scarlet fu in for joe weisenthal. this is "what'd you miss?" alix: we asked what commodity has recently dropped -- the answer is diamonds. weak retail sales credit is a big issue here. it's causing serious pain for the likes of the beers. .- pray like of deboers scarlet: i think we need to bring the millenials in here. companiesk out these and their high price to earnings ratios. scarlet: companies like netflix and amazon trading at pretty ridiculous levels. our guest teaches at the stern school of business at nyu. metrics, amazon and netflix are terrible investments.

but they have made anyone who has been against them look like fools. how do investors determine which companies are worth having nations for versus those that have to deliver immediately? guest: that is because you have read and grandpa security analysis. you need to think of every stock as a railroad stock. amazon and is netflix are far from it. you have to dig deeper. i'm not suggesting these companies are correctly value, but looking at the pt ratio tells you absolutely nothing about these companies. scarlet: what should we look at? guest: you have to look at what creates the earnings in the first case. for facebook, it is their user base. they've taken the users they have and they have been incredibly creative about making money off those users. in contrast, you look at twitter -- it hasn't figure out a way to convert that user base into

earnings. i'm looking at what they are doing to put the pieces in place to create those earnings and then i look at the price at which i would be able to buy them. alix: does that mean these companies would be good buys with those kinds of metrics? price.at the right i will give you my sense of where i think these companies are good buys. for facebook am i think closer to $70. for twitter, we're getting close to the right rice because i $27, we are or getting to a price where becomes intriguing, not quite interesting yet. but there is a point at which it will be a much better investment than buying coca-cola or mcdonald's. in the debate over pricing versus valuation, i want to get your thought on what is going on in china. investors have dismissed

traditional metrics and economic fundamentals during the run-up over the last year and half. what is your take on how to value this market now that things are recalibrating? guest: i think the chinese government got what it deserved. it created a market where it encouraged traders and drove down investors. you push them out at any cost. if you are an investor, you are going to walk away from the game. the chinese market is all mood and omentum. there are no economic fundamentals. is, it's a shift in mood that nobody can detect. in a sense, it can be stopped by government edict or putting pressure on investors. it has to come on its own. what keeps you up at night? myst: i don't think about

investments at night. if you think about what's happening in the market and to your investments at night, i think there is something wrong with the fully as you have created for yourself. perspective. think about your kids and your family. can we come take your class? guest: absolutely. scarlet: we will be right back. ♪

alix: do not miss this -- you have australia and india they have central-bank decisions tomorrow. take a look inside my terminal for what you need to look at. australia exports on a yearly basis down 20% in the past two years. they cut at the may meeting, but watch out. scarlet: disney reports earnings

tomorrow. watch their operating earnings higheme parks are in the teens. that leaves disney with a margin in the high 20'

emily: twitter shares close at their lowest since their opening. does it make them an easy acquisition target? i'm emily chang and this is "bloomberg-- this is joins mee stripe ceo to talk about the company's $5 billion valuation and taking on paypal. busier withit