that in such a place -- in such a playful and inclusive way. culturally very rich. >> brilliant ideas, powered by shunned a motor -- by hyundai motor. alix: we are moments away from the closing bell. i'm alix steel. joe: and i'm joe weisenthal. [closing bell] alix: u.s. stocks closing higher after hawkish comments from fed officials. joe: the question is, what did you miss? state of confusion, the markets just don't know what to make of the rate hike. alix: will the new syriza government able to enforce so much austerity? alix: and the single biggest

risk for the u.s. energy business is laying out right now and everything is on the line. alix: we have to begin with the markets. the dow is recording a triple digit move for the 18th time in the past 23 sessions. the idea that we are moving these immense volatility daily sessions not necessarily fundamentals, yes, we obviously do market rally -- it did see the markets rally, but obviously. joe: it was not as crazy as last friday, but we keep getting these interesting move. hillary clinton tweeted a new york times article that said she was going to do something about prescription drug prices. you can see the charts selling all. some interesting stuff happening there.

alix: and it makes sense that the market is rather flat. another stocks that moved quite a lot, and i will have to show you in my bloomberg terminal, because it is the today intraday chart -- can you guess it? volkswagen, and that is on the news that they have averted regulation and are under investigation by the doj. unbelievable move that we saw today. it cannot be over, right? --joe: this story is absolutely unbelievable. we will be following it for some time. i want to dig into the s&p 500 chart. it didn't move a lot today, but right here at my cursor, that is when the atlanta fed president came out and said we are still

looking at rate hikes this year. we are sort of in a fascinating moment and will talk about it with our guest, david servos in a moment. the fed has come out and said we are priced to hike in the markets seem to be liking it. alix: is it technical or actually fundamental i'm looking -- or actually fundamental? speculators have increased their short positions in stocks to the highest level since 2009. and it really echoes what came out of citigroup saying, look, investor sentiment is so horrible. you actually need to buy stocks right now, but everyone hates it

when you need to be in. are these shorts and winding here, or actually fundamentals? joe: when there's this much hate, you tend to be bullish. alix: here to break it down is david zerbos. david: they didn't just punt, but in a bizarre way. they gave us a very dovish, downbeat message about the u.s. economy and the market initially tried to take the dovishness possibly -- positively. then i think the sentiment turnover of people questioned. if there something much more sinister looking behind? i think it plays to our

expectations in the end stages of tv. people still think qe might have something lurking behind it that will cause some real damage and i think that the fact marked hiking and the fed did a lot to damage market psyche. joe: i love this quote that you wrote and i will read it again. "on the face of it, janet yellen appears to be coming around the corner with another round of jell-o shots and instead of cheering, it just or dry heaving." why the dry heaving? david: we wanted our central bank to endorse this idea that the economy is on track for recovery. six years of qe has largely produced an amazing recovery out of the greatest recession since the great depression.

we have things that could have gone a little better, grown little faster, or distributed itself of -- itself through the economy other bit more evenly, but by and large, we came to this rather unscathed compared to what they predicted. and now they are saying, hey, this is worse and we thought it was, or at least open to interpretation. now lockhart is coming out doing some damage control. tom williams is doing damage control. joe: do you expect her to walk back a little bit from her corrective language? david: my answer, yes, i hope so. i don't know if there is something janet is trying to do with the massaging of the statement that i'm missing, but i do think this was a

miscommunication with the market. it was an attempt to be dovish and coddle the market when there was a lot of volatility, but the market took it as a sign that something more negative was going on. i think the fed has to know that those sorts of sentiment indicators are really important during this transition. i don't think they took that into account. they said there's a lot of volatility and a lot of slack and we can wait a while and the market will probably be happy. then they will come one day and said, wait a minute, the stocks are down 2% in the dollar did not do what they thought. it ended up rallying. alix: one of the ideas i have seen floated as if you actually razor target for this -- raise your target for the fed, it actually gives use the space. david: there was a time for all of these things. ben bernanke used to talk about raising the inflation target and he got shot down and that was in 2011. you take risks and do crazy stuff when unemployment is high. when your unemployment rate is at five and none of the models are predicting anything very well, you probably want to step back and say there is risk management to be done.

then you want to step back even further and say, this is not the time to double down on to en get extra devilish -- extra dovish right at the end. and the market wants almost endorsement of all that has been achieved. and that endorsement is sort of taking the stimulus away in very small increments and showing the market they can handle a 25 basis point move. that is all we want to see. joe: right now, the markets are forecasting still close to a 50% chance of a move by the end of the year, either october or november. does that sound right to you? david: i think it is higher. i think the market got spooked. they delivered a message that was probably not 100% intended to be delivered that way and it will cause reaction in the market having second thoughts about what they did. the storyline for me -- i loved your chart with the cursor at the bottom and dennis lockhart

coming out and giving us almost a damage control speech and saying, we are still on track here. in the market goes, thank you for telling us we are actually ok am look at a gradual rate hike. the market wanted to hear that. alix: are we in a low rate environment for the long-haul? yields on october and through december death are negative. they turned negative on thursday. david: cliff is a smart guy and i think there is reason to believe the funds rate will be a lot lower in the cycle than it has been in previous cycles. there was one really interesting piece of the fed meeting that not everyone talked about, which was the negative dot. and it is only one guy. janet in her press conference is

very open to the next time around if we need them, we can raise rates. that is huge for the markets. joe: it seems people think the fed committed some big mistake at its last meeting. is this a temporary market hiccup that they can easily fix? david: absolutely a temporary market he got. it was a communication error when thinking about sentiment versus models and it just kind of backfired on them in the way they judged march -- market sentiment. they got cut down at the knees when they were told that the recovery was not nearly as good as they thought it was. that was a sort of nasty piece

of news for the market to digest. and it outweighed the extra dovishness that came from the speech. but i think john williams, and a number of other people -- jim bullard was out. but he was already there, so we do not count him as much as the other two. they are going a little extra these days to try to unwind this misperception. joe: david will be staying with us after the break. alix: coming up, of bit of good news -- a bit of good news to report. we have the chart that explains it. ♪ alix: i'm alix steel. joe: and i'm joe weisenthal.

people and started bringing money back into the country. take a look at this chart last year through june. outflows amounted to 77 billion euros.

in july and august, the flow reserves -- reversed and about 6 billion euros came back in. and no changing of the guard in greece, and can tsipras execute the necessary reforms? david is here with us. david: i think they have a good chance. he abandoned most of his marxian principles, because they would have driven the country to abandon him or bankruptcy, a growth -- or both. maybe they just -- i think he comes from a different breed. think he has a chance of knocking the oligarchs down and doing some things that could make a difference in greece.

i'm hopeful for it, but he has had to change his stripes completely. he is a different guy now, and we will see. but if there is someone who could actually do it, it would be him. it doesn't make me super excited about investing in greece, but it is probably a lot safer than the current crisis. joe: obviously, it looks like the government could be more stable and there is still this lurking radicalism. the golden dawn party, which is described as neo-nazi, got third. you can see the vote share compared to january, big jumps on all the major refugee destinations. how concerned are you about that? david: it is terrible and it's a party that is a really awful party, but the idea that you have people floating around in

the far right of the hungarian political system or the austrian political system, or even the dutch political system, they are there. and probably hiding in parts of the u.s., there are plenty of people like that. they just don't have a political party to vote for, whether it was the old david duke story or how the story goes. it is a phenomenon that unfortunately exists everywhere. and in greece, because it is so fractured an open and the parties -- the party system is the weighted, you see it come up to the front of the polls a lot easier. alix: enter your point that it is kind of -- and to your point that it is kind of everywhere, take a listen to what one

political analyst had to say. >> price of donald trump on the right, bernie sanders on the left, the labor leader in the u k, this is what i call a little bit of flat earth politics. these people are campaigning on policies they really cannot implement. what is interesting is their followers do not terribly perturbed about -- do not seem terribly perturbed about their electability. alix: what do you think about that as these parties keep gaining momentum david: we always have the nice love or hate distinction. as economy feel and things get better, the fracturing of parties to the hard right and hard left tend to disappear. i'm hopeful that a lot of the hard work that has been done by central banks and i our economic agents who have reacted to the incentives that central banks have given them will give us the growth probably necessary to keep this stuff from becoming significant in the political

arena. it is always a danger, and in any downturn you saw with places like greece, the radical on both the left and right rises and it is a scary phenomenon. but i'm an optimist. i'm an optimist on the outlook for growth and on the outlook for success in the western world and the middle east, at least in the markets, and i think these guys are going to find themselves without a lot of people to tell to when things get -- to sell to when things get better. alix: thank you very much. joe: when we come back, is the china slowdown real question mark weeks explain why one group says it is a myth that the nation slowdown is intensifying. ♪ alix: before the break we told

you about a new york taste research group that said it is a mess that china's slowdown is intensifying. joe: a survey by china's

facebook said pessimism is divorced from facts. the fed chairman yellen referred to concerns over china last week when the fed didn't raise interest rates. if you look at this chart from bloomberg, the nation's official gauge slumped to a low last month. alix: but is it real? in daschle headline, scott walker will -- international headlines, scott walker will drop out of the presidential race will stop you -- will drop out of the presidential race. he had scheduled a news conference for this evening. joe: charter shareholders have approved a deal awaiting regulatory approval. alix: green to u.s. officials, vw is cooperating with regulators probing diesel issues on the road and lab tests affecting half a million cars. it is the biggest event in the oil world and is happening right now. joe: thanks are deciding how much money to lend to the oil companies based on reserves and the price of oil. he cut the price of oil has an down nearly 50% in the past year, it could be ugly. alix: barry patrolling could be

the worse off -- the worst off. citigroup's says their borrowing base could be cut by 5% to 15%, putting a squeeze on the company. joe: joining us to discuss the capital markets control on oil is brian. we are in this predetermination of bank loans. what could it be? brian: it could be bad or not that bad. we saw in the spring was oil down to $60 per barrel in the spring. we did see a reduction of about $10 or so.

this time, the oil prices are again about down another 15% since the spring. when you look at the high-yield energy index, there are about 560 players and about $200 billion worth of debt. then you look at the reserves and that is about $100 billion. you are looking at somewhere between $10 billion to $15 billion that could be wiped out. alix: wow, that is a lot. you can see money flowing out of high-yield into investment grade. at what point does this start hurting investment-grade companies? brian: there are about 20 or 25

major sectors in the investment index. it is one of the worst returns in the sector. the yield cap blanc -- the yields have blown out to about 20%. right now about 225 basis points over. joe: what are they doing about regulators breeding down the next and being tough -- down there necks and being tough on borrowers. brian: what we expect to see happen is they are going to be working these borrowing bases in terms of the current strip price, which will be the base. and they will go to sensitivity analysis. historically, that has been about 20% discount.

maybe we only come in a -- at 15%. maybe they give a little more credit to their risk factors. those are the types of things that they might be looking at for some mobile room. alix: and what we are looking at is the debt of these companies tanking in the market. there are these four lines here and you can see the worst is energy 21, trading around $.18 on the dollar. getting close to bankruptcy brian: -- getting close to bankruptcy? brian: we think they are getting close. we think there will be about 45 issuers over 2015-2017. we have already had 15 default this year. we are well on our way and we

did he gets worst -- worse before 2017. joe: and there become buddies to come in and buy up the cheap assets? brian: the dollar value in the m&a is a record, but the deal count is down about 40% on average. there is too much debt on the books. there is very little equity value. i think the m&a that we will see will be car -- will be concentrated in the larger cap names. alix: thank you so much. we will be right back. ♪ alix: i'm alix steel.

joe: and i'm joe weisenthal "what'd you miss?" alix: the set you apart speaking again tomorrow. joe: get a thing you've got to watch tomorrow, the richland fed index -- the richland fed manufacturing index. analysts expect a slight uptick from last month, but we will see about that.

that is all. thank you for watching "what'd you miss?" alix: happy fall. ♪

john: we are here to talk you about breaking news. governor scott walker dropping out of the presidential race. governor walker is about to speak in madison, wisconsin. he was a top-tier candidate in the republican field from the outset of this race. he remained in the top tier for a few months before he suddenly began a precipitous nosedive that began right around the time that donald trump got into the race for the presidency.