collapse, america, andgypt, currency traders show us what is next. matt: tesla showroom's getting a makeover. we get the state take elidel electric carmaker is adding to their stores, including a $300 tote bag. i am matt miller. corey: -- pimm: i am pimm fox. let's take a look at how stocks are paring and there is a continued selloff in the u.s. stock market. matt: as. below 17,004ou go, the dow jones, just nearing 2000 on the s&p 500. a drop of more than 27 points. i can redo the list of the

declines today. the euro stocks down more than 1%, almost 2%, the cac down almost 1.5%, so the route is global. matt: around the world and hitting not only equities but commodities in some places. oil was down almost 2%. look ateven further and that. another leg down in new york crude. two and two thirds percent to $40.23, wiping one dollar off the price. the drop that steep, still pretty shocking to the hold and you still have, i think citigroup is calling for $32 a barrel and we heard a number of whispers that are $30 and lower. pimm: when you get to this level of price, every decline becomes magnified by a percentage term and many investors are looking at percentages. not absolute price when they look at their portfolio, so if they look at this, -- matt: and for countries that rely on oil for revenue are just

pumping as much as they can to try and bring that money to the door. look at the top headlines we are following on our bloomberg terminal this morning. a key democratic congressman has decided to back the nuclear deal with iran. a white house official said jerrold nadler of new york agreed to support the deal after receiving a personal letter from president obama. the president wrote that the u.s. could use military force in iran violates the agreement. jerrold nadler represents the district that has the highest percentage of jewish residents. obviously, israel is an issue that, but he does not seem to be concerned that much. in greece, the prime minister to consolidate power and get rid of dissenting voices in his own party. alexis tsipras says he is quitting and has called for new elections. he has been in office just eight months. tsipras was elected on an anti-austerity platform but

agreed to more spending cuts and tax hikes to get a badly needed a lot. want to bed men, i absolutely honest with you. we did not achieve the deal that we were hoping for before elections in january. that we did not face the reaction that we expected. in this battle, we make concessions but we brought a deal that given the overwhelming negative correlations in europe and what we inherited from the absolute binding of the country in terms of the memoranda austerity measures, that was the best one that could succeed. matt: greece can hold an election as early as september 20. it receives the first chunk of the $96 billion a lot this week and passed it straight back to the imf and ecb. i do now want to mislead and say he is quitting because -- pimm: he intended the resignation and will be running. matt: he intended to be prime minister after the election. pimm: i got a question, it is a battery, a car, no, a tote bag. that is right.

its storesmaking worldwide and in addition to new information kiosks, the sales rooms will sell merchandise such tote bag andt perhaps some children's apparel. tesla is also prepping for the debut of their first suv, the model x. china plans to invest $100 million in uber. one of civic funds management units will invest 80% of the money in uber and the rest of the two uber's china visit specifically. they plan to operate in 15 midsized china cities over the next year. federal government workers have some sensitive jobs, but they also use their computers to log on to double interest relationship website ashton madison. adulterous relationship madison.- -- ashley it includes a justice department investigator and to u.s.

assistant attorneys. this week, they released records of millions of people registered with ashley madison and i have got to say as a footnote, there is no real way to necessarily verify that those are real authentic e-mail addresses, or at least at the moment. we do not know specifically. matt: everybody needs love, man, right? pimm: yes. matt: regardless of where he works. pimm: let's just talk about what is coming up in the next hour of "bloomberg market day." bad news for hewlett-packard as it readies it's up to be split into two companies beginning november first. the reported a drop and 8% decline in revenue. sales from the consumer business fell 22%. matt: plus, speaking of bad news, the world's largest maker of farm equipment said it slumped because of weaker overseas demand and lower tax incentive. john deere also cut their 2014 forecast, so the future does not live that bright either.

the kentucky town with only eight housing residents -- bad news this morning -- filing for bankruptcy. where is it again? pimm: hill's view, kentucky. matt: hill's view. pimm: hill's view i believe. a thousand people declared bankruptcy. matt: not as important as to try but interesting nonetheless. pimm: and he gives you an instance in how it happened and how they are using new ways to declare bankruptcy. matt: and maybe other small towns could follow. pimm: exactly. we begin with a look at current global volatility. the turkish hit a low against the dollar yesterday. columbia down 21%, chile down and mexico down 10%. down 24%.'s tenge matt: saudi arabia and egypt under pressure. a plunge in commodity prices triggering real concerns about

global growth with more and we will bring axel merk, he is in san francisco. axel, i've got to ask you, first, to up for joining us, i appreciate your time, second of all, which currency is next? after we saw what happened in china, then vietnam, then waitingan, everyone is for the next shoe to drop. do you think we will see another one? axle: the dollar, how about that? you're focusing on the emerging markets but you are neglecting to say that the dollar has been plunging with major currencies and it has been plunging in a risk off environment. remember, that is not supposed to happen. there is supposed to be a flight to the dollar and safety. sure, measures may be up at you do have ripple effects in emerging markets. when it comes to the big currencies, the dollar has been weakening and the reason -- the two reasons is one, the dollar was rising in the risk high

environment and we on the tail side and the other one is that one of the big end of fisheries, the euro, the euro has been used as a funding currency and as risk goes up, people reduce their bats and the euro is benefiting. so it is not just that the kazakhstan's against currency is down, but the dollar is down, too, and we may see more as volatility steps up. pimm: what is the best trade right now? short the dollar and go along the euro? axle: you can do that but we have not elected that because the policy that, they have to do -- went than just comes as to what happens tomorrow, right now, a lot of volatility in recent days, so that may be tapering off a little bit. the main thing is that things will not play out the way you think they will play out. pimm: what are you talking about, going along with the swedish krone or no? axle: definitely.

the reason is that they have a policy that is not compatible with the fundamentals in the economy and at some time they will have to -- that will not happen to our but i think we see it will outperform other currencies. matt: if we do remain concerned about currencies in asia, do you think we see another country widen its trading ban, abandon it completely, and that results in a total devaluation? is this the kind of situation in 1997, 1998 where dominoes fell around asia and that -- axle: sure, and that might be the chinese currency. ,hey have gotten a lot of that bad press about somehow debasing the currency. they are doing what nobody else is doing. they are moving toward the market regime and guess what? it plunged a couple percentage points but did not fall off a cliff. up theiropening

capital account because they want to be part of the sdr, that is the next step. lots of positive things happening there. in a sea of volatility, the c china is going to bealm -- china is going to be calm compared to emerging markets. we have a product really by the one by mandate but i am an investor in that product and i would not be an investor if i did not like it. remember, if it depreciates at the, you do pick up extra yield, so a little depreciation does not hurt. it is a play. as the dollar weakens, you want to be somewhere as the yuan will be added to the basket which we think will happen and there is no news that will change that. only from a formalized timeline, it may happen in september. there is going to be interest from day one and that depends on how much they open up the markets. certainly, i would rather be in the yuan right now than other currencies. pimm: doesn't matter whether the federal reserve raises rates in

september or december? axle: it matters that they are behind the curve. in emphasis is that they are behind the curve and that is like gold is going up and the dollar is weakening first as major currencies. whether they do the race in september or december or not at all is secondary. the commitment to be behind -- they are spooked on what is happening in the markets and that will be sure they are behind the curve and that is bad for the dollar and major currencies. pimm: thank you for joining us. axel merk joining us from san francisco. still ahead, hewlett-packard ceo meg whitman once again asked investors to be patient as the company disappoints with earnings early and says more restructuring is to come. is there even a faint light of hope at the end of the tunnel for hp? ♪

matt: welcome back to "bloomberg market day." i matt miller. pimm: i am pimm fox. let's go to julie hyman with a look at the markets. julie: an acceleration of the selling. take a look at the major averages right now. we had them all down, well above 1% each, in particular the nasdaq down more than 2% now and the dow jones robbing even more than it did at the lows of the session yesterday. as the selloff continues and starts again. as it does it does gain steam, we get closer, a little bit closer to correction for the s&p 500. take a look at my bloomberg terminal. i sort of mapped out from the highs of the year which was up for the record for the s&p 500 on may 21, down to today and we are down 6.4%, 10% would be a correction, so we have been monitoring this to see if we get to that 10% drop for the first time in four years.

a long stretch since we have gotten that. something else i have been looking at, u.s. stocks versus the rest of the markets around the globe because u.s. stocks are really catching up with the declines we have seen elsewhere. we have seen emerging mark got -- markets selloff by more than 40%, we have seen the bloomberg commodity index down about 13%, also. s&p 500 had until now held up pretty well until the past four sessions when we saw this losing streak and now finally the concern about global growth seems to be affecting the u.s. it has been infecting oil. i want to point out the decline on the weekend oil prices, down 5%. the longest streak of weekly losses since 1986. one of the only places we are seeing buying is the treasury market. yields pushed lower as people are looking for safety anywhere in this market. you see the one week chart of the ten-year treasury having the

best week since june. gold has been getting something of a bit in this environment. volatility, options have been getting a serious bid, up 25%, up 25% yesterday. it take a look at my bloomberg terminal and i will graph it out here today. first off, you can see price changes. if you look at year to date, you can see where these 25% moves look like. this is the highest level we have been for the year on the brakes index which measures kind of an investor fear or investment sentiment index. this -- , when right now, we're at 24. we are not yet at extreme levels. remember when it was 80, 90 during the financial crisis? now we are back up by 24 which is well above, about twice as much as where people think we should be in normal times. pimm: good chart. matt: thank you. pimm: let's take a look at top

stories. let's look at north koreas leader. he has told his army to prepare for war. the action followed a brief exchange of artillery fire between north and south korea and he also forces gave south korea until tomorrow thetop propaganda across demilitarized zones. south korea has responded by putting their own military forces on alert. matt: they are taking them on. why would he do that? has: deutsche bank investigated money laundering in the russian unit. that has been to determine whether a senior employee took bribes. unexplained funds were found in the accounts controlled by the employee and the employees spouse. deutsche bank is not commenting. theas is trying to regain reputation for cool in the united states. the german shoemaker hopes wrapping sick artist kanye west and the third version of their

easy boost she will one up nike. will one --st she shoe will one up nike. i do not have a pair. matt: i'm pretty sure our next guest does. hewlett-packard reported earnings that fell short of estimates, blamed on a slowdown down in i.t. spending. the picture does not look right or. meg whitman says that there is " difficult business environment for several quarters to come." cory johnson would like to point out that these difficult quarters have been happening for years and he joins us with more in his yeezy boost shoes. corey: meg whitman is also known to wear the shoes. matt: she should stop spending money on those now i would say. if restructuring still lies ahead for hp. it seems like a never-ending restructuring. pimm: two companies on november 1. corey: there will be displayed

and you would think that after more than one decade of restructuring, it would stop. matt: by the way, you are used to this. just to explain for people who are not aware -- corey: enterprise business. matt: on one side it is i.t. services, enterprise business. corey: software, service. matt: on the other side is pcs, printers. and ain't ink that we know hp so well for. corey: ink and paper has been the driver or cash for the company. we don't know which way that will go. stock is up today. in the midst of the market, stock is up. you wonder, how can a company report really coming topline? ,he revenue was down a percent the biggest decline in quite a while, but you see declines in revenue. pimm: why? corey: how can they miss on the top line? and beat on the bottom line?

the answer to that question, and i did that was overlooked and not mentioned was the massive restructuring charges that this company has taken in every single quarter, nearly $649 million from a quarter from one year ago, just $25 million one -- yesterday. have a lot of leeway over how they report this restructuring charge and when they take the restructuring charge. it is not illegal but it is long-term restructuring that they decided to take only $25 million. pimm: if it is a one-time charge, don't they throw it out anyway? isey: it's not one time, it a movable number and they choose how much to take. without having done that, they would have missed the earnings per share substantially. they were gains of other items. i'm trying to say something. matt: dude! i don't think you are right about this. it's not only that number. we both spoke with coffered yesterday and he said he loves

the margin -- we both spoke with coffered yesterday and he said he loves -- corey: he said it was encouraging. matt: there are two things that were less bad. margins on the what? i.t. consulting side. corey: i think consulting business was the last smaller and he liked the fact that the margins were bred as well, but i am just pointing out that there were a lot of one-time items that made these numbers but better. in particular, the restructuring cost was really, really odd given the company has got a lot more restructuring to come and more than one decade in the past of it. pimm: no shortcomings an issue? corey: maybe. pimm: i don't know, just -- matt: that is ugly. pimm: if someone comes along and says, you know what? i can buy back my shares and take my profit -- corey: i don't know. matt: cory johnson, thank you so

much for joining us. pimm: such a pleasure. corey: i was shocked you did not correct pimm's pronunciation of the shoemaker. matt: adidas? you know what, right? corey: the brothers. matt: the name of the shoemaker? adidas. there you go. pimm: coming up on "bloomberg market day," why the world's largest maker of farm equipment sunk or the percent and cutting their forecast -- sunk 40% and why they are cutting their forecast, next. ♪

crop prices are hurting john deere bottom line. agriculture equipment began to fall last year and net income for the year through october will miss estimates. karen of bloomberg intelligence

joins us now. did i pronounce it correctly? ublehart? pimm and i have been talking about how farm equipment sales have been falling and your point is, we knew that already. surprise is construction business. karen: rick results for a while and the surprise is that the north american construction market has weakened quite a bit when construction spending is good. it is adjustment to energy crisis right now but they are mainly north america unlike cat, who is more global, so it hurt them more than expected. that is only 15%, 20% of the company but when ag is down that much, it matters. specific reason why construction is hurting caterpillar or is it someone else benefiting? karen: mining markets are we, energy is weak, basically the commodity market. adjusting the

field of inventory out of the energy market into other markets with access capacity and equipment. matt: is there anything that could turn around deere's fortunes. is there something in front -- and farming? i can't imagine people will continue to plant so much corn. karen: this is a global market and the demand side is actually quite good. the problem is supply ran ahead of itself and we basically need that whether to fix the problem. matt: we need bad weather all over the place. rain in california would be great. karen, that's all we have time for. thank you for that. pimm: more coming up on "bloomberg market day." matt: not for me. i'm out of here. ♪

♪ back.welcome i am pimm fox. let us take a look at the top stories at this hour. oil has not been on a losing streak like this since 1986.

headed toward its eighth consecutive weekly loss. west texas intermediate crude has been training well below $41 a barrel today. the oil glut will likely persist with oil barrels above the five-year average. there is concern that the chinese economic slowdown may hurt demand. in another sign of improvement in the labor market, payrolls rose in 34 states last month. california added almost 81,000 jobs, followed by texas, adding 31,000. states that lost jobs included new jersey and north dakota. a new study says that california can blame about a fifth of its record drought on climate change. a shortage of rainfall is due to national weather patterns. a study says that warmer temperatures are making california's dry conditions even worse. worse than it

really was. this is a delta airlines jet being struck by lightning in atlanta. a passenger on another plane on the ground took this video. no one was hurt and the plane was not damage could it flew on and it flew on to las vegas. those are your top stories at the moment. markets are closing in europe. for the latest, let us go to hans nichols. s: nothing but negativity and red and all the european equities. the indices are down more than 2%. down 2.4% the last time i checked. the ftse 100 down 2.54 percent. and the dax is down 2.4% today. you look at them of the last two weeks and they are down almost 12%.

went down 5.5% on the day. earlier, they were raided by goldman from cut to sell to neutral. that could affected their share price. also down about 2.5%. bonds, it is a mixed picture. we saw german post those pmi numbers influencing things that little bit. that led to the european composite pmi with 54.1. that is close to a four-year-that was reached in june. the french business index continues to disappoint and at a four-month low. you take a look at german yields and they were down just a little bit up and down throughout the day. yield down the u.k. about six percent. the u.k. clearly had the biggest rally in their bonds. points, they dropped

for greek debt. a big move at greece as everyone is looking at uncertainty there and trying to figure out what is going on. pimm: thank you very much, hans nichols, reporting from berlin. oil companies continue to dominate the commodities and emerging-market picture. it is hovering around $43 a barrel and analysts differ on whether we found the floor on crude prices or if we are heading for a rebound. the head of commodities for merrill lynch predicts that west texas intermediate crude will climb to $45 a barrel by next month. olivia sterns asked him earlier if we have found a floor and oil prices. the market is obviously looking for a floor and we are still probably early. i think we are seeing gasoline markets sliding. we are at the point where in september or october just where we are trading right now, the markets do not want the trolley of products. this whole summer and winter are really week in our view. olivia: hovering around $40 a

barrel. is this the floor? francisco: it is hard to tell. it depends on what happens to be emerging-markets mass picture. we have seen a meaningful move an emerging market currencies on the back of the chinese operation growth. it is hard to say we are going to see a floor here or not. over the next three or four weeks, we should find a floor. it will be in a bit of a rebound to the year and as we head into the winter. i would say in the next few weeks that it is the right time to start buying into this. you can expect a five-year or tenure rally. that is our expectation right now. >> what does it mean for equities? we have seen huge selloff across companies in particular? but exxon and chevron really

taking it on the chin. francisco: the equities are in a very bad -- they have a lot of leverage. there are several things going on. corey? i'm not talking about energy 21. i'm talking about some of the majors. francisco:. they have more expenditures than revenues. it's one of the majors that put it out on their earnings announcement and put a chart that said these are earnings and these are expenditures. there is a big gap between both. something has to give. we have studied and growth predictions and potentially cutting dividends. that are why majors are getting hit because they will wonder when they will be able to maintain those high-end yields. olivia: there's a deficit of revenues. we were speaking to the former

president of shell and he was saying a similar thing yesterday. in yourg interesting notes was the analysis of the currency impact on the price of oil. how much of the decline in the price of oil do you think is because of stronger dollar? 5% could be20%-20 traced back. we have seen a decline in oil around $50 or so. i would say about 25% of that is related. is really related to supply-demand conditions. that has been our estimate. you can make a very similar case for the run up in the 2000. about 25% of the run-up was related to a weakness. a very weakas currency through most of the 2000. i think the reversal of that is about 25% as well. : i have been thinking about

the depletion rates of shale drilling and the long-term production in the u.s. we have this notion that they always have new places finding more oil than we knew about 10 years ago. with those rapid depletion rates, could we be overestimated what this country is capable of producing 10-20 years from now? francisco: it is very possible. it is hard to look in the future 10-20 years for a market like oil. every week. the one thing i will tell you is that we expect production to decline pretty meaningfully. we are currently penciling in a decline of 850,000 barrels a day. pastprices lower in the month and a half or so, we could see that pattern become even more pronounced and a steeper decline. you go back to 1985, for

example, and u.s. production was in a bit of a rebound before the saudi's pulled the plug on the oil price. we saw a very steep decline for four years. a very much depends on where oil settles and if it rebounds. the one thing i can tell you is that the cost structure industry has been coming down to help families, but no one makes money at $40 a barrel. i do not see a lot of reinvestment. the headncisco blanch, of global commodities at bank of america merrill lynch. still ahead, is one city in kentucky the next detroit? we are going to look at the first time to follow in detroit's footsteps by following -- filing for bankruptcy. let's take a look at markets and we will continue on "bloomberg ."rket day ♪

pimm: welcome back. i am pimm fox. let us take a look at where markets are trading right now as the selloff intensifies. we are taking a look at what is going on in the major market nowces for the s&p 500 below 2000. we are nearing a session low on the s&p 500, down more than 41 points. the dow jones industrial average dropping nearly 2%, a decline of more than 320 points. the nasdaq also suffering and lower by more than 2.25%. let us take a look at oil prices if we can. and drop of more than 2.5%. and westymex crude texas intermediate selling for $40.30 a barrel of crude. we are going to watch and see what happens in the markets all through the rest of the market day.

we will turn our attention to tesla, preparing to release its first suv. this is the model x and the showrooms are getting a makeover. they have launched a massive revamp of the stores worldwide and it will include the sale of tesla merchandise, such as a $300 tote bag. here now to discuss this revamp in the future of selling electric automobiles is my cohost for the next hour betty liu. betty: have you been to one of the showrooms? there is one near me in short help you you go to the stores and it is more of an experience like the way the apple store is an experience. you go in there and there are pictures of them. you can do test drives, but more importantly, the questions that people get in the showrooms has more to do than just a car, but also, tell me about the growth of electric car market and charging stations and can i refill my tesla? this is why the showrooms are

different and they are refurbishing them now in preparation for the model x, which is the car for someone mom and i take a my kids around to their swim team meets. it is the suv, right? it is going to be the suv in the next step of the evolution for tesla. pimm: this is the suv that has the winglike doors. these are all company owned stores, just to be clear. betty: exactly. that's right. pimm: i understand they're going to be selling $300 total bags. they want to turn tesla into a lifestyle brand. betty: in many ways, it is a lifestyle brand. it's not that you're going to buy an audi or a bmw versus a tesla. if you want a tesla, you're

going to buy a test love because you buy into the vision of elon musk. pimm: do you wear your tesla t-shirt and hat? betty: you may. pimm: and the driving shoes. [laughter] betty: and tesla golf balls. the had 200 stores around the world and the ultimate goal is that in about five years by 2020, they will be selling half a million cars. the big one of course is the model three, the car that is going to be for the masses. pimm: the one that is less expensive. betty: exactly. the target for the model x right now -- the company has not exactly said how many they plan on selling to back in 2014, there were estimates that they would likely sell about 10,000-15,000 of the model x. in the last quarterly report, elon musk had ratcheted down the target for this year. pimm: it does not matter because

they ended up raising $500 million. betty: they did it and they need the capital to ramp up. the stock has gotten hit along with everybody else. you just mentioned the stock , itet drought, but any case looks like they have a loyal buyers and we will see if that translates over to the model expert pimm x/ . pimm: bmw and porsche have their own lifestyle brands. you can have your tesla battery and your tesla hat a decent time. thank you very much, betty liu could let us look at the top stories costing -- and let us look at the top stories crossing the bloomberg terminal. yale university is defending the way it spends its endowment could ap says that it overspent at the expense of students. yale responded by saying the criticism was based on speculation and that it provides students with extraordinary support. hurricane danny is picking up

steam and has been upgraded to a category two hurricane. as wins with more than 100 miles an hour. danny is in the atlantic ocean and 900 miles east of the leeward islands. the national hurricane center says it is expected to weaken over the next couple of days. now to a small town in kentucky. 13 miles away from louisville, it is finding a way to put itself on the map. theview, kentucky became first city to file for bankruptcy since detroit two years ago. only 54 cities, towns, and counties sought court protection from its creditors since 1980. the small town joins the list. dispute of contract a local company, truck america training, over a land sale with the city resorted to pay $11 million in damages. ofse are your top stories the moment. for more on kentucky, we have

kate smith will be latest. this is an interesting story to 8000 people in the town? kate: for them to see themselves on national news will be shocking. pimm: how to this come about? awsuitthere was the les with the large legal seven mom. with the issue with the smaller towns is that they really have not fully rebounded from 2008. their tax revenues coming a lot smaller to you go through your rainy day fund and you found yourself living paycheck to paycheck. when something like this comes through, you cannot afford it. pimm: what happens now? they declare bankruptcy and they tear up all their contracts with their various suppliers and vendors? what happens? kate: not quite. you have to establish that you are allowed to declare

bankruptcy, which is interesting in the public world. the first thing you have to do is actually prove that you are insolvent and there is no way that you can pay this be you have to go in front of a court and say, look, we raise taxes here, we sold this asset there. pimm: demonstrate good faith. kate: exactly. the largestof problems for the municipal bankruptcies. to try to was almost not able to declare bankruptcy because of this. this is actually a much bigger hurdle that perhaps the average person would realize good first, i have to do that run off the bat. pimm: let's assume that the yes, you can seek protection from chapter nine. do they start selling things or what goes on? kate: for a chapter nine municipal bankruptcy, it is raining and all of your debt. they will probably have to go back to the trucking company and say, now we are praying groep so we will only pay you ask cents on the dollar. for what those recovery rates

may be -- they have about $100 million in their assets -- excuse me, and their liabilities. pimm: i think it's 10 million. it's 100 million to $10 million. kate: i do not think the trucking company will get the resolution they were hoping for here. pimm: does this mean smaller towns will use the bankruptcy code for things it was not originally intended? kate: i think that is a really good point and that may be the case. i read this interesting study the other day and they were saying that municipal bankruptcy incidents are not up. there have not been more, but they were actually arguing that the stigma for bankruptcy is kind of evaporating a little bit. if you take detroit as your example, that was a really expensive and difficult procedure. the people who really came out of detroit hurting were the investors. they were not the pensioners. the bondholders.

detroit just recently came out with another bond issue. the: the argument that reputation on the market is forever stained -- we are thinking maybe not so much. pimm: maybe in the future for hillview, kentucky, it will perhaps not be all bad. kate smith, much appreciated. coming up ahead, we will have more on the slump in global equities. that is next. ♪

julie: welcome back. i'm julie hyman. i want to take a look at how stocks are trading here in the u.s. and also mention what is going on around the globe. we see this global selloff continuing good this selloff here in the u.s. is deepening. we are seeing a bigger selloff now that we did yesterday at this time. islso want to mention what going on with the stoxx 600 in

europe. if you look on the chart behind me in my bloomberg terminal, it is down 13%. the stoxx 600 has entered what is technically called a correction, a decline of 10% or more. there you see the yellow line drawing of the declines that we have seen from this year's high speed i am looking at the events vix as well. it looks like it might be having a record up week. i'm seeing an increase of 88% on the week. -- talk aboutout options. joining me is mark sebastian. should i believe my eyes, 88% vix in a week? mark: let's not forget where it's coming from. that does not discount the fact that we have seen a massive move in the index. it amounts to we are not worried about anything to really

elevated and getting near full unusual tode that is see in a three-day time period. julie: we are looking for signs that this will flush out or will it continue to arrive at a correction for the s&p 500, for example, or even a bear market? for aigns do you look at crystal ball prediction? mark: we will jump into the weeds and talk about vix futures for a lot of people are used to the index. one real warning sign is when they trade to a premium to the cash index. expectation that volatility will increase. the index is above the september future that expires in mid-september. what is more alarming is that september is over october,

october is over november, and november is over december. when we see the entire vix futures curve in verse that is a really bad sign for the market. it is a sign that there is a lot of strategy and it typically aes not point torrents near-term end. every time we have seen a major 2008, move like 2011 and a third of that has been the entire futures curve moving into what is called backwardization and that is what we have seen this morning. , according to the way it is trading, it is not lining up to see much better. julie: in another way, vix traders are predicting the volatility will increase in each subsequent month of the year? am i getting that right? mark: lessening. the market is so stressed it righ.

inhave it at 24 and 25 september around 15. november is 18.25. i cannot see the actual price is right now. when that curve shifts that way, that is saying that the market is really panicking and is expecting three to four months from now all till the to decrease. insurance,ink about it is nevertheless expensive that insurance that expires tomorrow or the next day. that is the way the market pricing is fixed. the market pricing is really a lot of stress. julie: we're going to have to leave it there. we do not get to your trade today, what we will bring you back. more on this selloff next. ♪

is 9:00 in san francisco and new here in new york and midnight in hong kong. betty: welcome to "bloomberg market day." the selloff showing no signs of

abating. the s&p 500 looking at its worst week in three years. hong kong and all of asia falling into a bear market. pimm: the stocks that led the market higher are now leading the market lower. we will look at the collapse of the fab live momentum stocks such as netflix and facebook. betty: media stocks collapsing this week. is this the beginning of the end of the pure television business? a longtime executive joins us in just a moment. ♪ pimm: good afternoon. i am pimm fox. betty: i'm betty liu. let's begin with a look at how the markets are at this moment. stocks are tanking again as he conceded the s&p falling below at