[closing bell ringing] stocks closing higher, rebounding from a selloff yesterday, but well off the highs of the session. joe: but the question is, "what'd you miss?" and aheadkets today of the looming for decision, u.s. stocks rise and we take a look at hard numbers. alix: and the doomsayer -- our interview with an economist to predicted a global recession because of china. with hisalan patricof take on venture capital in these turbulent times. alix: we have to begin with the markets. it was a very sleepy day. the dow jones was up over 200 points and we are ending up at about 80. it gave up a lot of gains, but not a lot of panic in the markets. joe: we saw a big rally and then

a decline. if this was a couple of weeks ago, you have thought everyone was going negative. instead it was a normal day in the stock market. very unlike recent days. alix: we did see a lot of action overseas. i want to take a dive into my bloomberg terminal and look at the credit if all swaps of brazil, turkey and russia. lower than that of turkey and russia -- let's fast-forward to today and you can see that brazil is now higher than russia. against af insuring brazilian default is rising after the s&p downgraded their sovereigns rating to junk. joe: i also want to talk about brazil. we got the call from s&p that brazil is downgraded to junk.

let's look at what happened on the main brazilian index -- a huge drop right off the bat. insaw brazilian etf's fall late trading, but it was quite a comeback. the brazilian stock market went green and only ended down .4%. this is interesting to me because you think about all of the negativity we have seen in emerging markets everywhere. i feel like if this happened a few weeks ago and we got this big downgrade, we would not have seen this come back. you have to wonder are we may be fatigueome sort of selling of emerging markets. i think it's interesting to brazilian stock market had some life to it. alix: and we have seen certain commodities hold up -- the supplies have not been cleared for oil and copper. joe: speaking of copper, i want to look at this one-year chart

of copper and focus on something that has not got a ton of attention. copper is in a fairly nice uptrend in recent days. you start to look at these signs and maybe there is a respite in the brutal selling of everything that we have seen for most of the year. shorts. is all the i'm looking at the short interest in the copper price -- it is around record levels if you go back around five years. this is only reported until september 1, but there is a lot of short covering that has to happen for the market to get back to normal. joe: it is too early to declare all clear. i want to bring in our guest, willem buiter the chief economist from citigroup. you say there is a 50% of a recession caused by china. how can china bring us all down? china. is not just

it is generally weakness in emerging markets. recession, russia is in recession, south africa is slowing down. only india is performing more or less as expected, but the has nottion of growth been significant and china accounts for 16% of world trade, more than the u.s. a first order player. when they slow down and give little slot -- and there is little's line -- little sign of the slowdown being reversed, they are going to be victims ,ainly in the first instance especially among commodity exporters. also countries in the supply chain for china's industries and trade links and capital markets. even the u.s. will be affected, though not to the point of recession.

it seems like when others are asked about this kind of call, they say developed markets are holding up well. if you look at gallia, 92% are 21%, but theil, developed market can hold up and sustain a slowdown. willem: absolutely. when i say global recession, i at athat mobile gdp growth rate of 2% or less for a year or more. that is perfectly consistent with advanced economies, not just the u.s., but the u.k. and eurozone are doing reasonably well. japan hasn't been performing too well recently, but this is very much and emerging-market recession with spillovers and negative impact, but not to the

point of recession in the advanced economies. so there is no decoupling, but there can be significant the virgins of performance both on the real economies of advanced countries and of the markets. joe: to what extent should the fed take into account this global weakness when it considers whether to raise rates? willem: clearly, the fed has to look at the evolution of aggregate demand relative to potential output and external demand.s a component of not so much for the u.s. as the euro area and u.k. but it is significant. clearly, a greater weakness of external demand and the likelihood the dollar would strengthen significantly if the fed raises the funds rate on september 17. that might be enough for purely

domestic reasons cause them to pause and think should we be doing this at this time? issue that you point out in your note that is fascinating is how much debt there is an all of the countries across the world from japan to the u.s., to the eu and to china. what about china makes it different when dealing with it that load -- it's debt load? willem: china has an explosion in its private sector debt, daily corporate debt. as has greater debt of the nonfinancial private sector now as a share of gdp than the u.s., which is an economically and financially developed economy. things are financially out of control in china and we are waiting for the regulators and supervisors to bring things back do for theol and financial system the kind of that would give the

underpinnings for continued growth. they have not started doing that. in the euro area and in japan before that, until the problems -- bankinging center , i think the prospects for resumption of healthy growth in china are dim. joe: i want to ask about the timing of your call. we have seen the emerging-market currencies get smashed. to what extent does it matter if they technically go into a recession and how much is your call describing what he markets have already concluded this year? case,: i hope that is the

for the point of view of my predict to ability, i don't hope for a recession and the emerging markets. but what happens in the real economies is that for most of the people in the world, that is important to -- compared to what happens in the markets. i expect depreciation of the currencies and volatility in bond markets and equity markets and many emerging markets and this will translate into weak economic performance, rising , something of great significant even if no particular trade rides on it. joe: thank you very much, willem buiter, chief economist at citigroup. alix: coming up, alan patricof joins us on the state of venture capital and how the recent market volatility is impacting investing in the private market. stay with us. ♪

alix: i'm alix steel. joe: i'm joe weisenthal. "what'd you miss?" alix: there has been a lot of volatility in the market and there is concern it could lead to trouble with startups. helped growtricof companies like apple and office deacons -- and office depot. he's the cofounder of greycroft partners and joint us now. alix: when you see oil volatility and china falling off a cliff and massive volatility in the markets, what do you think? alan: i think it's amazing the capital community has

blinders on any start up community has blinders on. u.s. them and you think what does it have to do with me? i have been saying this for years -- it's hard to reconcile the fact they seem to be in two different trajectories. a you are raising money on private transaction startup right now and i said to you realize the stock market is down a thousand points, they would say so what? my business is growing at this rate and i have this kind of future. it's hard to get them of conceiving of that -- hard to get them conceiving of that. my experience is private prices hold up. they just don't want to go down. by the same token, when the market goes up, the venture market follows it. about the perspective of someone like you managing a fund? does the market box -- does the market volatility make it harder to track future funds?

the only relationship it has as its you are raising money for comparables in the public. it is at that stage in revenues and hopefully profits that the buyer will use market multiples and comparables. joe: we had a chart of the ipo index. it has -- recent ideas have collapsed quite a bit in recent times. when you talk about these comps, you get to adjust down. that is why i have been saying all along, the unicorns, we have not had a unicorn because that is not our strategy in terms of how we invest. although everyone would like to have an anomaly and something that surprises you. these unicorns only have one exit opportunity, which is to go public. when they get to a certain price, the number of potential

buyers is very limited. they will be affected by the normal metrics that affect a public company. see a readjustment in the price or aftermarket price. alix: we have not seen a tremendous amount of money in venture capital -- the second quarter was the third straight whater of $72 billion -- drives it up and mark alan: it doesn't drive. the fund have money. they are overflowing to a certain degree. i have not heard any fund not being able to invest because they are out of money. always funds that are not able to raise the subsequent funds, but the money is there and the institutions have recognize that over time, venture capital is a higher producing asset and the internal

rates are better than a half in their traditional investments. joe: you mentioned the unicorns -- this is a term for the company's worth over a billion dollars. >> i think we are going to see a lot of dead unicorns because what ice he is businesses raising money at high market capitalizations were not focused on their fundamentals. joe: are we going to see a lot of dead unicorns? alan: mark and i agree 100%. they're going to be surprised -- all of the things we are talking when market comparable metrics hit in the first quarter you go public or second quarter and you don't meet your targets and have the kind of extraordinary growth rate, investors are going to say where's the beef? it does not seem to happen in the private market where people have dreams of sugar plums in their head and are willing to extrapolate growth going on

forever, which it doesn't. alix: why bother going public at all? they just want that hockey stick revenue growth. why bother? alan: that is what we're hearing a lot more of -- companies are deciding that it's better in the secondary market that seem to exist, that investors can get liquid overtime. time.uid over but that can dry up also. we have not seen the fallout and what i would say is we have to see what happens ahead of us. joe: in your experience with these founders of startups, are they greedy? are they -- they don't want to be the next instagram, selling out way too early. alan: i don't think they are greedy. i think they drink their own kool-aid. snapchat turning down $3

billion and it is apparently worth a lot more than that today. i think there are people on both sides and the fundamentals of some of these companies are very strong. they will survive and i don't thank you can paint a broad picture and say all of them are going to have a collapse. , we are certainly going to see some failures ahead. alix: best protection on which one is going to nail it and which one is going to collapse? alan: i don't have access to the figures, so i can't tell you. it would be silly to pick one because i don't know what the results are. alix: much more with alan patricof. we will be back talking about media. ♪

alix: i'm alix steel. joe: i'm joe weisenthal. "what'd you miss?" of the things we have seen recently is the legacy media companies really getting hit hard. there's this you that the disruption from startup media is really starting to take its toll. people are cutting the cord and not watching tv. are these legacy companies in terminal decline? this question gets asked a lot. we are certainly seeing a transition from h additional linear television -- we thought move to cable -- we saw it moved to cable and now we are seeing streaming coming in and over the top. aboutk there is concern how that is going to happen in my guess is a lot of these companies are going to have to

figure out a way of incorporating the over-the-top technology. we have a whole new set of companies, whether it amazon going into the field of content or apple going into content, hulu, netflix -- netflix doesn't have it all to themselves anymore. you could say it is a natural transition. everyone was nervous when radio was obsoleted so to speak with television. isor 70 years later, radio still around and still listens to. we have different versions of radio, whether it is pandora, spotify or listening to it on the internet. don't tell that to tom keene. are we going to wind up with more mergers or different types of content companies? and i startuld alix looking for new careers? ton: i don't think you have

look for another job in the near term, but i think one has to be aware that there are other technologies coming into play and news is being transmitted all kinds of ways. we did not have the huffington zzfeedwe did not have bu -- five or 10 years ago, they didn't exist and now people are reading it. -- they have been hit hadley. buthey have been hit badly, there is still a market for magazines, although it is segmented. every magazine is not going to be around.

you are a well-known supporter of hillary clinton. the media is having a lot of fun talking about her weakness in the poll and a new poll shows bernie sanders overtaking her in iowa. should they be panicking? alan: i think team hillary is aware and they are not sticking their nose in the ground. she has an enormous strength, which is somewhat clouded over. if you are looking around the table at the 17 people in the other three or four in the democratic -- who would you rather have mark i would say in every instance, i would rather have hillary clinton than anybody else. , theseomentary

distractions will go away. i think the e-mail issue is a nonevent. i think people have not focused on the fact that e-mails are always there. you cannot destroy an e-mail. you send it to me, i send it to you, it is two sides. it's in some storage, is in deletion, it exist. making a, it is mountain out of a mole hill because i think hillary is anxious to get these all brought out and it is the republicans who are stalling the release of all of these e-mails. i think she would be happy if they were released tonight, but it can't happen. she has overproduced. they send e-mails back that should not have in send. whennk the big focus is she is in the hearing. if you saw her speech yesterday on iran, it was tremendous and would give anyone comfort.

you would rather have her implementing this and supervising it then anyone else in the states. you saw the conversation on campaign finance reform. i can't tell you how much i support that. politicalolved in fundraising would like it to go away and go to an easier, simple system. as long as she has concept like that, people will focus on the issues and who can deliver. alix: thank you so much for joining us. ray to have your respective. -- great to have your perspective. joe: we will be right back. ♪

alix: i'm alix steele. joe: i'm joe weisenthal. "what'd you miss?" do not miss this --

tomorrow morning, it will be an to see if the volatility has seeped in. joe: we will get more data tomorrow. see you back here tomorro

emily: square aims to go public by the end of the year. ensuring people he will remain ceo, but what does it mean for twitter? i'm emily chang and this is "bloomberg west." what's so different about 2015 compared to 2000? i will talk about cap -- about tech bubble fears. i will speak with erin leavy about what he still has to prove. and why businesses