ishares and shanghai dropped the most in three weeks. joe: the question is what did you miss? turmoil,ncertainty and what is coming next. alix: reading the tea leaves. scanning for hence of a rate hike. joe: and we talked to a texas bank chief about oil, housing, how the lone star state does it different. alix: we begin with the stock for the dow jones industrial average falling, ending the three-day advance. all about the commodities leading declines lower. .omebuilders keep killing it

a hot rally. 16% so far this year. we need that in the market. if you have the biotech, media stocks rolling over, you need more. joe: the new leadership. saying, emerging market action, the central bank of turkey held rates. markets. for emerging every day i feel like a broken record. alix: which has a big impact on commodities as well. a deep dive into my terminal 2 talk about walmart and how much higher expenses are going to get. these blue bars are revenue growth. declining on a percentage growth. these orange bars are operating expenses.

a year on year basis far outpacing sales. wages, and people are stealing. they are raising their wages but they have inventory that is lost, or literally people have been putting meat in their pants and walking out of the door. joe: a lot of people focused on the wage number printed talked about those wage increases. now the are shooting to talk about how much that costs. said whenare ready billion but they raised it $.24 a share. the cost incrementally increasing there. joe: you mentioned the homebuilders. here is why, fresh data. this number i'm looking at is single-family housing starts. the best in years. 2007 since the last time they were this good.

what is remarkable is for a long time people were saying housing is coming back but it is the multifamily. now the single-family homes are coming back. alix: all we are talking about is how rents are going up. joe: we are returning to the old ways of housing. he sees brent as $71 a barrel by the end of the year. how? if you look at global projection it stays steady despite the drop in oil prices. emily: there are many there are many factors. 8-9-year lows. so i admit my target looks ambitious.

the thinking behind it is production is rolling already. we know it is higher than we thought it was going to be. the question is going to be how fast, how far? number two, demand is growing. very underplayed. you talked about housing starts. they are way up. nothe emerging market, great but not bad either. the consumer in china is specially. europe is not a headwind. the first time in five years. drop is big shoe to that we need to see the client rates kick in. if you know that it is a 4% per

annum we need to add for million barrels outside america and opec to stand still. that is not going to happen at these prices. -- this great chart we are looking at shows oil barrel markets last a long time. the blue areas are long. so far this has been short. thewill this not be like other oil barrel markets that last for years and years? jan: that last orange bit, that was not supposed to happen. in 2007 we were having this discussion, they cannot go to where it went. then there was a peek. we are never going to go back there. five-year average oil price above $100 was never supposed to happen. i don't want to say things are

different, because they always kind of our. something happened in the last 10 years in the upstream and demand. both are hard to capture with the smart models. there is friction, if you will. bearish,.n more i think there is a balance that has to happen to fund the upstream. if you want to argue the outside will fund the industry, i'm wrong. if the industry has to fund itself we need a higher price. less, isr the in that the problem for the oil market? you have a local currency so low that deflation costs are so real. that is a fair point. if you look at demand data you see a trend growth number across

the emerging market was 4%. the last 4-5 years we got used to 3%. this year barely over 2.5%. are atg market rates cyclical lows. only 2%. fromorry is, that we go two to something negative. entirely possible we go to something like a recession. that this is one of the symptoms of that approaching. joe: we talked about emerging markets, cratering in the financial markets, the currency in stock markets. you don't think that is going to's right into a recession. jan: i don't think so because i look at oil demand not just small the east, but the

latin economies, and this middle east. i have a series of countries that we focus on that flow to high levels of commodity investing in the air is out of the balloon that is one chunk of change am not going to get good growth out of. alix: if you take açai the supply, part of the reason why oil supply has not shut in is because currencies have tanked. you're looking at deflation costs of 20-50%. jan: fair point. were one ofon, we the few that said it will grow. chinese oil production, we were wrong with that. we thought it was going to fall. it is growing. canadian, production is not falling yet. , the growth has

stopped. partly for a bunch of reasons that have nothing to do with the currency. it is a quilt. many different areas. we know the big oil companies are not doing well at this point. capital spin has begun to .ome down this year before we see the production result, a nether couple quarters will go. joe: what keeps you up at night? i answered you guys. i have three kids for you don't want to hear about that. the thought that worries me is what you hear, a recession is coming, somehow i am missing it, and something on the mac pro, side.-- macro

the middle east is not a stable place. war is spreading. between anyone in the middle east, those are the things i worry about. joe: great stuff. alix: coming up, we -- there is ael surprise winner as a'

alix: before the rig we asked which unlikely industry is thriving due to the flailing malaysian ringgit. they sell in dollars. the cost of productions have gotten cheaper. they are doing pretty well. says 90% ofalyst the company's are denominated in dollars. get to the top headlines. there is a settlement in the big data breach at target during the 2013 holiday season. fromrs stole data customers. now the retailer will pay $67 million to banks that issue visa cards. they will cover expenses including the cost of reissuing cards. of new jerseyndez

will vote against the iran deal. chuck schumer of new york is another. bob corker of tennessee called on congress to reject the plan. alix: a new study links later tobaccoe to use pre-14-year-olds are more than likely than others to try to tobacco products and cigars. e-cigarettes are increasingly more popular. we want to update you on breaking news. analysts it increases based in improved relationships with creditors. the bailout went through with greece. waiting for the for parliament to approve the deal. fed minutes are out tomorrow. we're looking for clues on if

they will raise rates in september. what do the minutes actually mean? joe: that is the funny thing about minutes. you have a meeting, a board meeting. it isns out, first of all a very loose summary. it is not specific. they can be edited afterwards and people can make complaints. it is another way of seeing what the fed is thinking but it is not some strict definition of what they talk about. alix: they can go through revisions before anyone approves that. joe: it is another form of communication. people get obsessed about specific lines. alix: i want to talk about what people are looking for. agricole, they think they're we a preference for december. we could see some kind of sway

there. how obsessedmember people got with single words. there was some improvement in the label market. some are going to be looking at what do they mean by some? was that a mean that meant nothing. did that mean we are getting closer? they need to see some more improvement as opposed to just improvement. people are going to be scrutinizing to see what that meant. many i love me qualify how presidents were on board with what kind of call. many is greater than several but fewer than most. there is a hierarchy to pay attention to. many felt raising rates might be appropriate, that would be a strong indication. it is these things that only the high clergy re know about. for the fed watchers these are crucial things. alix: get excited.

joe: when we come back make cautionary tale about social media. researchers tried monitoring social media for any idea that these scottish independence referendum was causing a bank run. what they found was different. ♪

what did you miss? alix: we asked what tripped up the bank of england when it tried to monitor twitter . joe: the chatter uptick they notice was not related to a bank or to scotland but news related to a minnesota vikings running back.

they were looking for those three letters, trying to monitor the social conversation. all they were getting were running backs. there is a lot of work being done monitoring for this stuff. this is an example of why it is so tough. alix: will prices are down. oil companies are relying on bank loans to keep them afloat. in texasost bankers with 60% of loans in the energy sector. we are joined by the chairman dick evans. what it really means is adjusting. independents. we know what they are doing. that you haveubt

to adjust quickly. one of the things that happened in the first quarter of this year was how fast the energy cut their costs. while that is painful for people losing jobs, it is the right thing to do. is coming up and october is what i'm excited about when banks redetermined how much money they're going to give based on the oil price. citigroup expects that to be 10% lower. what are you going to do? guest: we are going to look at the numbers. when you do redetermination's of lower prices, and see where you are, certainly there will be some squeeze. when we did it in march, we had 20% down. about 10% went up. it depends on how successful the driller has been. one of the things that is interesting, and all of this cost-cutting, how improve the

efficiencies have been. in other words, finding more oil for less cost. joe: i want to talk about something not related to oil and housing. texas did not have a housing collapse on the same level as the rest of the country. if you look at the percentage of loans that went underwater, it didn't rise to the national level. some say despite texas' texas' on'-- reputation, they didn't have the risky loans prepared you fall on that? guest: i think it is something else. mortgages, there is not a difference there. we got out of the business in 2000. out of residential mortgages.

it gets down to a good economy. thanve been growing faster the united states for years and years. inn after the down term 1% this year,grow versus the united states at 2%. we still get growth. in january of this year, and we thought texas would disappear in the gulf of mexico. it is a diversified -- joe: the regulation story is not it? guest: not it. alix: what about the effects to the housing market and the rest of the economy? one oil worker loses their job, it is going to affect housing. what do you see is the trickle down? guest: we have not seen it. if you look at it, you still lots of thewth and oil workers moved to the

petrochemical business. it is strong. those plants are run on natural gas. they are big exporters. shift. have had a worker because of the growth in texas, we continued to see good growth. it is not 3%. joe: one month from now, a little less, we could get the first rate hike since the financial crisis. what do you think about monetary policy where it is? is this the right time? guest: they have been too loose, too long. they are pass time. you keep waiting for the perfect data, which seems to be what they do. i don't think you ever get there. joe: we've had no inflation pre-why should they have gone at this point? to -- the straws in the wind show that there is a

lot of opportunity for the company -- the country to grow. there is a lot of backlog. if you look at taxes, the number one problem is skilled labor. we need more of it. there are plenty of jobs. overregulation has limited growth. there is opportunity to build and go forward. alix: how does a rate hike help with that? guest: it is it going to make that much difference except to give the ability that if we have another problem, even though the fed says they can go below zero, i'm am sure they have figured out how to do that, you need to have something in your bag of tricks. i think they are out of chips and congress needs to do something. in terms of what congress should do about regulation, what should congress to? guest: congress needs to help

the country grow pre-tax incentives. we have no personal income tax in texas. it is a job friendly market. we like business print we like to grow. that is the reason why texas is more successful. alix: texas is awesome. joe: we'll be right back.

alix: do not miss this. it glencore earnings are out tomorrow. traders ofe biggest commodities in the world. you have to look at margins. take a look inside my terminal. you're looking at the aluminum premium over the last year. you could see the huge debt down. joe: and the german the on the

greek bailout. they are going to pass the vote. how many party members will merkel lose? that is the one to watch. watch. alix: ha ♪ ♪ ♪

get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. emily: tech investors get worried about china. thed the following u.n. be tip of the iceberg? i'm emily chang. this is bloomberg west. comcast and nbc reach for a younger audience with buzz feed. theal media is ripping up election playbook. all of that ahead on bloomberg west. first of our. turmoil returns to