alix: we are moments away from the closing bell. i'm alix steel. joe: and i'm joe weisenthal. ♪ [closing bell ringing] alix: u.s. stocks closing higher today, rebounding from a selloff yesterday, but well off the highs of the session. joe: but the question is, "what'd you miss?" ripples before the storm. choppy markets today as all awaits the looming fed decision. u.s. stocks rise and we take a look at hard numbers. alix: and the doomsayer -- our interview with an economist to

-- you just predicted a 55% chance of a global recession because of china. joe: and alan patricof with his take on venture capital in these turbulent times. alix: we have to begin with the markets. it was a very sleepy day. that's the best way i can describe it. 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 market. joe: we saw a big rally and then a decline. if this was a couple of weeks ago, everyone would be selling off and going negative. instead it was a normal day in the stock market. we were, but not like going to crash or anything like that. very unlike recent days. that's true. but where we did see a lot of action was overseas. i want to take a dive into my bloomberg terminal and look at the credit default swaps of brazil, chile, turkey, and russia. lower than that of turkey and

russia -- let's fast-forward to just today, boom. you can see that brazil is now higher than russia. the cost of insuring against a brazilian default is rising after the s&p downgraded their sovereign rating to junk. joe: i also want to talk about brazil. we got that call last night from s&p that brazil is downgraded to junk. let's look at what happened on -- intraday on the main brazilian index. a huge drop right off the bat. we saw brazilian etf's fall in late trading yesterday in new york, 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. brazil, turkey, you know. 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 sort of have to wonder are

we maybe seeing some sort of fatigue selling of emerging markets. i think it's interesting that the brazilian stock market had some life to it. alix: and we have seen certain commodities hold up today, despite news that would tell you otherwise. 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 , brazil not getting slammed, carper -- copper starting to rise, maybe there is a respite in the brutal selling of everything that we have seen for most of the year. alix: i will take the other side of that, though, and talk about it is all the shorts, man. i'm looking at the short interest in the copper price -- it is around record levels if you go back around five years. yeah, we have seen a decline and there is a lag here.

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: yeah, it is still way too early to declare an all clear, but i think it is very interesting. i want to bring in our guest, willem buiter, the chief economist from citigroup. you say there is a 55% chance of a global recession caused by china. how can china bring us all down? willem: is not just china. it is generally weakness in emerging markets. brazil is already in recession, russia is in recession, south africa is slowing down. india, off the brakes, is performing more or less as expected, but the deceleration of growth has not been significant and china accounts for 16% of world trade, more than the u.s. it is a first order player. when they slow down and give

-- and there is little flying -- little sign of the slowdown being reversed, they are going to be victims mainly in the first instance, especially among commodity exporters. but also, countries that are 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. simply losing a few tenths of a cent worth of growth. -- gross. alix: it seems like when others are asked about this kind of call, they say developed markets are holding up well. yes, if you look at trading , 92% arelike mongolia exports, brazil, 21%, but the developed market can hold up and sustain a slowdown. willem: absolutely. when i say global recession, i mean that global gdp growth at a 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, of course, hasn't been performing too well recently, but this is very much and anand emerging-market -- 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 divergence 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 as a component of demand.

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 to cause them to pause and think, should we be doing this at this time? alix: another issue that you point out in your note that is fascinating is how much debt there is in all of the countries across the world from japan to the u.s., to the eu and to china. what about china makes it very different when dealing with the debt load? willem: china has an explosion in its private sector debt, mainly corporate debt. it 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 under control and do for the financial system the kind of things, such as recapitalizing banks, 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 in the banking sector and the corporate sector -- 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 already seen the emerging-market currencies get smashed. the emerging stock markets get smashed. to what extent does it matter if they technically go into a recession and how much is your call basically just describing what the markets have already concluded this year? willem: i hope that is the case, for the point of view of my predictive ability, i don't hope for a recession and the emerging markets. but clearly what happens in the real economy for these countries is that, for most of the people in the world, that is compared -- a lot more important than 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 unemployment, something of great

significance even if no particular trade rides on it. joe: thank you very much, willem buiter, chief economist at citigroup. thanks for joining us. 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. the guru is here. stay with us. ♪

♪ alix: i'm alix steel. joe: i'm joe weisenthal. "what'd you miss?" alix: as we have seen in the past month, there has been a lot of volatility in the market and there is concern it could lead to trouble with startups. joe: alan patricof helped grow

such companies as apple, aol, and office depot. he's the cofounder of greycroft partners and joint us now. alix: thank you for joining us. what a pleasure. alan: nice to be here. 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 venture capital community has blinders on and be start up -- the startup community has blinders on. whatee them and you think, 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. if you are raising money on a private transaction startup right now, and i said to them, you realize the stock market's down a thousand points right now, they would say, so what? to get themard

conceiving of that. as a result, when the market is down, it seems 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 and runs wild, the venture market follows it. it does not go along with it. joe: what about the perspective of someone like you managing a fund? does the market volatility make it harder to track future funds? -- to attract money for future funds? alan: the only relationship it has is if you are raising money for it is at that stage in comparables in the public market. revenues and hopefully profits that the buyer will use market multiples and comparables. joe: we had a chart of the ipo index. it is a measure tracking the price of ipo's, and it has collapsed -- recent ideas have -- ipo's have collapsed quite a

bit. when you talk about these comps, you have to adjust down. alan: that is why i have been saying all along, the unicorns, we have not had a unicorn , but that's because that is not our strategy in terms of how we invest. although everyone would like to have an anomaly, you know, something that surprises you. but when 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. the revenue growth, the profitability, how it compares to other comparables. you see a readjustment in the public price or aftermarket price. alix: we have not seen a tremendous amount of money in venture capital -- the second quarter was the third straight quarter of $72 billion plus. these numbers are completely staggering to me. what drives it up? alan: it doesn't drive.

the funds 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. of course, there are always funds that are not able to raise the subsequent funds, but the money is there, the institutions have recognized it over time that venture capital is a higher producing asset and the internal rates are better than they have in their traditional investments. joe: you mentioned the unicorns , the term that has come up for companies worth over a billion dollars. marc benioff had something to say about unicorns. mark: i think we are going to see a lot of dead unicorns because what i see 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%. joe: so we are going to see some

of these billion can -- billion dollar companies dead -- : 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 don't seem to care about profit margins, 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 markets that seem to exist, that investors can get liquid over a period of time. that there seems to be a market. but that can dry up also. we have not seen the fallout and

what mark said, 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? they have an option to exit at 500 million dollars, but they're holding out because they have $1 billion, 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. you saw snapchat turning down $3 billion and it is apparently worth a lot more than that today. i think there are people on both sides of it. the fundamentals of some of these companies are very strong. they will survive. i don't thank you can paint a broad picture and say all of them are going to have a collapse. i think it is going to be -- selectively, 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.

i really don't. it would be silly to pick one because i don't know what the results are. alix: fair. all right. 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?" we are back with alan. one of the things we have seen recently is the legacy media companies really getting hit hard. and there is the view that the disruption from startup media is really starting to take its toll. people are cutting the cord and not watching tv. you have done a lot of media investing -- are these legacy companies in terminal decline? alan: this question gets asked a lot.

we are certainly seeing a transition from a traditional linear television. we saw it move to cable and now we are seeing streaming coming in and over the top. i think there is concern about what impact that is going to have. my guess is that 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's 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. remember, everyone was nervous when radio was obsoleted so to speak with television. 60 or 70 years later, radio is still around and still listened to. we have different versions of

radio going on, whether it is pandora, spotify or listening to it on the internet. alix: don't tell that to tom keene. but does that mean we are going to wind up with more mergers or different types of content companies in the future as we transition? joe: and should alix and i start looking for new careers? alix: for sure. no, i have had that same conversation with other newscasters. i don't think you have to 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 in all kinds of ways. we did not have the huffington post, we did not have buzzfeed -- five or 10 years ago, they didn't exist and now people are reading it. magazines certainly have been

seen the, and we have demise of "newsweek," but i figured has been resurrected recently. there is still a market for magazines, although it is segmented. every magazine is not going to be around. you go out and look at a magazine rack at a newsstand, there are still hundreds of magazines out there. i wonder sometimes how i have enough traffic, but they seem to survive. the fashion magazines certainly are stronger than ever. joe: you are a well-known supporter of hillary clinton. allen: you couldn't resist, could you? [laughter] joe: 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 team hillary be panicking, or is this what you would expect? alan: i think team hillary is aware and they are not sticking their nose in the ground. that certainly would not be the case. i think she has an enormous strength, which is somewhat kind of clouded over.

if you are looking around the people and the other three or four in the democratic -- who would you rather have leading this country, looking around the table? i would say in every instance, i would rather have hillary clinton than anybody else. i think these momentary, early 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. everybody's e-mail -- 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. -- it is in some storage facility, it is in deletion, it exists. therefore, it is making a 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've sent e-mails back that should not have been sent. i think the big focus is when she is in the hearing. i think she will perform really late. -- perform brilliantly. if you saw her speech yesterday on iran, it was tremendous and would give anyone comfort. you would rather have her implementing it and supervising its than anyone else in the states. you saw the conversation on campaign finance reform. i can't tell you how much i support that. anyone involved in political fundraising would like it to go away and go back to an easier, simple system. as long as she's got concepts like that, i think people will

focus on the issues and who could deliver. alix: thank you so much for joining us. 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?" alix: do not miss this --

tomorrow morning, it will be an -- it will be important to see if the volatility has seeped in. joe: we will get more data tomorrow. alix: that's all for what you miss, guys. se ♪

announcer: from our studios in new york city, this is "charlie rose." he has been called a master of the art of narrative history. he tries -- twice won the presidential prize and medal of freedom. he has written 11 books, including "1776" and "john adams." his latest is called "the wright brothers," which tells the story fromo bicycle mechanics dayton, ohio who taught the world to fly. it is great to have you. guest: thank you, sir. ch