>> stocks are selling off and investors wonder if september could be worse than august. emily chang: this is bloomberg west. will volatility cause a liquidity crisis? apple may be giving netflix a run for their money. all of that is ahead. first, to the lede.

stocks around the globe continuing to tumble. investors are finding more reasons to be worried. matt miller, break it down today. the dow and nasdaq ended down. check not having a good day either. matt: this proves the kind of leverage china has over global equities. all they do is devalue their currency or release bad economic numbers and you have massive turmoil. the dow jones industrial average was down 500 points. the first day of september, after the worst august in 17 years for the dow. the s&p 500 had the worst month overall in august. in four years. we kickoff september with a drop of 3.8%. it was a very bad day for energy stocks and financials. there were only three gainers on

the s&p 500. cablevision was up. american airlines was up today. oil got crushed hard. a third gainer is only at 139.44. it is going to get bought for cash and be a done deal. it might as well not be in the s&p 500. you had huge losers in tech as well. netflix is one of the biggest losers of the day i concern that apple will eat its lunch making its own content. back to you. emily chang: netflix had a bad day. apple down. i am with a ceo. you say that corrections are the best time to invest in disruptive technology. what do you mean? >> absolutely, when pressure is on and the market and economy is unsettled, they think about cutting costs and increasing productivity and it plays into

the hands of disruptive innovation. emily chang: would you espouse a rosy view? matt: netflix has its issues. the problem is, if apple is making deal with tv and movie companies to make content, it is not necessarily going to be better then house of cards. at least some more competition there and they have a deal with a catastrophe over at amazon. a lot of companies are getting in on this game and a lot of people are walking in front of my camera. emily: i do not want to listen to you either. let's get back to kathy. you think china's hard landing has already happened? why are you so optimistic? >> it is no secret that the cycle is over and they have cut in half because of china. this is not a surprise.

you look at electricity and the hard landing took place and they have more room than any other country. their short-term rates are the 4.6. rates have been cut five times and they will continue to cut. we think they will get that right. matt: the currency may be overvalued point percent to 30% of any on who you are listening to on the street. interest rates are way too high and they have to stamp out corruption which the kind of did the after glee but they definitely did not do for real. doing those three things even alone at any time would be difficult but doing them all at once is going to be infinitely difficult. the kind of turmoil that that will put the market through, investors tell us, analysts tell us it will be really hard to deal with, not the kind of thing that you bounce back from a 10% correction. will a you go chased

down the person who ran in front of the camera. we will come back to you in a moment. talk about the private markets and how startups are doing. one company him particular collects and monitors the private market. this is an area that has been notoriously hard to track. i was seeing a shift in investor sentiment? is cash starting to dry up? it has been interesting to watch the growth of the company and see what you are putting out. is a liquidity crunch coming? >> there is finding over $1 billion and getting put into the market. what has happened last week and this week, we do not see it playing out. there is low economic activity and you see a lot of people are in "wait and see" mode.

emily: how big a cash crunch are we talking about? >> we're talking about $1 billion every week going into startups so we will see this play out in a barbell effect. companies get a little bit smaller. we could be talking about hundreds of millions of dollars not getting invested. emily: we are hearing a lot of investors talking about profits. we talked to a ceo who said we are in bubbles. in private tech. these will get hit one it plays out. on the other hand i spoke with mark andreessen. he is not completely seeing through these rosy-ite glasses. he is a lot less dire about what is coming. take a listen. these are startups and some of them will work really well and some will not work at all. some environments are easier to raise money.

it takes -- makes sense to prepare for environments. to me, that does not translate. into a call for everyone to panic. emily so, there is not a sense : of urgency and there is no need for everybody to panic. what do you think? >> a lot of things kill startups. aside from liquidity crunches. the wrong market, the wrong higher, the wrong team, not hitting a milestone. if we are panicking, it is all the time and it is always hard. this is another factor we cannot control that we must consider. emily chang: you helped me out with the data that shows private versus public capital. explain what we are seeing here. >> the people who are bullish on the market are also bullish on putting it in startups. this is a good place to chase. just a lot more capital to go around. this is a good place to chase

deals. emily: how many of these unicorns survive? >> maybe one third survive and want to get bought out and one third die. that is probably roughly the outcome. emily: maybe one third will survive. >> maybe not that many. if you look at historical ipo's they have to be turned toward profitability. the markets want to see growth but it does want to see that you have control so it will come down to which companies are able to operate in any environment and continue to get revenue. emily: i want to take a slight turn to uber, who are facing a class action lawsuit. from drivers in california. the is another twist in ongoing tussle between them. we did get a statement from over notng that we were

surprised. one of the three main plaintiffs will not qualify. they will appeal the decision and there is no typical driver, the key question at issue. how big a setback is this? >> there are other proms to overcome than legal issues. it is not great for them when especially when the markets are resting. ultimately they are growing so fast that it seems like a long list of things they have to do with as they mature. emily: how does the shakeout uber.out for inr >> the big thing is, if you need capital, is there another

investor who will give you a bigger check? at some point, that stops happening and companies need to go public. that is the investor who goes the full market price. at some point, you reach a ceiling and some people wonder if uber is there. emily chang: thank you for joining us. we will follow the stuff you are putting out. thank you, kathy, for stopping by. apple's hollywood lands. we will tell you why and iphone maker wants to produce tv shows next. ♪

emily chang: apple has plans for original programming. they are in talks with apple for exclusive shows. they are expected to unveil a new top box at an event next week. how much will this be for existing -- how much of a threat with this the for existing services? what is really going on here? >> everybody gets into the game of doing original content. the concern is -- emily: why apple? >> you think of apple, what kind of content willie do? will it be family friendly or racy? it is more associated with the brand. that is a big question. they need original content for, when they offer a package of content, they deliver the same thing everybody else does and a few unique things.

i think they are going to. the trend is a television box in preparation for a television service. everybody has been talking about doing an a la carte video service where you are not stuck with a cable bundle and they look for apple to provide the unique and friendly way of doing that. that has held apple for a long time. it is clear they are going to do it. the question is, how du make it different? -- do you make it different?

emily chang: doesn't get more complicated? >> does it mean they will be better? all of the companies are having a hard time. they will higher producers and hollywood people. well. amazon as how does this disrupt the broader pay-tv industry? >> the bigger issue will be about business models. whoever delivers the best and easiest business model that allows people to get access to the content they want on the devices they want --

fundamentally, it is about a business model where apple, potentially, has an upper hand, if they can figure out a business model that allows them to get access to this on devices. netflix is working on this. emily chang: you are sticking with us. >> indeed. emily: we are focusing this week on emerging leaders in virtual and augmented reality. we turn to a unicorn that harnesses a power. ofharnessed the power virtual reality. >> it is an app that uses a camera and looks at things, making them come to life. you want to make the physical

world limitless. what we mean by that is the heart of that [inaudible] ads are about amazing storytelling. you are able to tell a much more entrenched and engaging story because it is not just one dimensional. it is three-dimensional. that is the reason the engagement level is so high. if it is a dog, it will tell you the species of the dog. where is the and -- the nearest vet, all the trivia about the dog, where can you buy the nearest dog food. the nearest dog walking agencies. it goes on. it is a simplistic way to explain it at this behavior is

not such. discovery andbout it is more about finding things. there is one behavior that i am interested in a blue shirt. you can type and get 10 results. i have seen the opportunity is really big. it would be a shame to sell his business and move out on the journey to take it all away. ; they have an estimated valuation of $1.5 billion. tomorrow, will show you how virtual reality transforms the work out. up next, youtube plans to dethrone twitch. i will speak to the head of games next. ♪ emily chang: it is time for the

number that tells a whole lot. today's number is 225,000. this is how many apple iphone accounts have been breached. they only target jailbroken phones and makes unauthorized store purchases. it is the largest theft caused by malware. back to youtube's latest venture. they focus exclusively on gaming content. it could be big money. for googles video site. the biggest competitor is twitch, who do not have a foothold in mobile gaming. still here is ryan wyatt, the

head of gaming content on youtube. first of all, why did youtube decide to do this and what has been the response? >> we have grown bigger and we have seen amazing communities come up. it is more than anywhere else in the world. we realized we needed to create an experience. that inspired us to create youtube gaming. emily chang: not everybody understands watching others play video games, including jimmy kimmel. actually, we don't have it. i'm sure you have heard it. he was like, "why would anyone want to do this?" why would they?

how big is the market? >> yeah. look at basketball. you can play its. people -- it. people watch. we are seeing people and teens enjoying this. sometimes it can be difficult for people to understand but again it is a massive, growing peoplety and culture of consuming it for entertainment purposes. jimmy was funny. >> the big question i have is what makes youtube gaming different from twitch? >> a great question. if you look at the ecosystem, we wanted to be the first one stop shop. we wanted to take a corpus of content that we had and bring it together. it makes us unique. >> are you doing additional things like original gaming it shows or original content that

makes it somewhat different? >> yeah, you know, say we did "videogame high school." we are looking into e-sports. there is premium content being positioned with people playing in million-dollar tournaments and selling out arenas around the world. there is the opportunity to do different kinds of content in the space. emily chang: we have it. let's take a listen. jimmy kimmel: gaming. i don't get it. watching another person play video games is like going to a restaurant and having someone eat your food. emily chang: that is how he feels about it. it was not popular. apparently, someone is on your

side. twitch is on playstation and xbox one. is the real target desktop and pc gaming? >> we want to focus on all content. we have the content on the plot forms and it is really about making a platform -- on the platforms and it is about making a platform. you can watch people playing games and it is about building a product and the ecosystem to help creators get content out. those are the focuses. go ahead? emily chang: i am asking about mobile gaming, which seems to be a particular opportunity for you. >> sure. yeah.

mobile gaming is huge. there is a lot on youtube and the mobile games market is incredibly fast and people are didn't advance of it. -- people are taking advantage of it. we want to move it on plat norms and we are focused on mobile from a game perspective and making devices and software so that people can consume the content. that was the idea between -- behind the gaming, making it accessible. emily chang: thank you so much for joining us from los angeles. we will watch other people play video games just for you. thank you. thank you, bob, for joining us throughout the show. great to have you. that does it for bloomberg west from san francisco. we will see you tomorrow. ♪ announcer: the following is a

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