i am scarlet fu. joe: i am joe weisenthal. "what'd you miss?" alix steel is on assignment. scarlet: u.s. stocks closing lower. oil jumping. joe: the question is "what'd you miss?" scarlet: european stocks climbing with the pound. we have the charts you can't miss. , theglobalization of trapping hundreds of millions of people at lower income levels. notlet: helicopter money is the best way forward for world central banks. we begin with the market three-weeke vix rise. u.s. stocks closing lower. a bit of a split when you look

at how major groups fared. s&p 500 energy group was the best-performing, oil prices up by four present. joe: a quick look at bond markets. scarlet: we have a lot going on here. let me finish with stocks. joe: yeah, yeah. scarlet: apple, $95 handle. regulators in china sang the latest iphone -- saying the iphone violated a chinese patent. i just threw in there the etf that tracks bio stocks, nine straight days without again. techif you were to exclude and biotech, it was not a down day. government bond markets, sound the alarm, yields rose a little

bit. german 10 year yields and positive territory, 0.02 present. the gain is more than the coupon. scarlet: that is amazing. joe: similar news in u.s. 10 , slight reseeding of the brexit fears. scarlet: we need to mention the pound. take a look at the intraday. suspended campaigning once again in the wake of the murder of jo cox. the pound has eked out an advance. on thursday.t

of england reiterated once again the economic risks of a british exit. oil.finally, gains and as you mentioned, energy stocks with the best-performing sector today, and that chart right there demonstrates that. look at i'm taking a crude oil to pick up where we left off. you know what, let's switch that. there we go. crude oil seasonality. are signs that it is setting this peak in june. the incomplete line is year to date. the green line is 2015. the yellow line is 2014.

bank of america merrill lynch was on yesterday saying this looks like gasoline coming off a bit. if it rolls over again, it would be too easy to trade. scarlet: you would think so. joe: we will see what happens. chart of the pound-s&p futures. it is appear expression of brexit risks. you get a nice comparison. they pretty much track each other all week. today, there was a sort of divergence reflecting technology stocks. we got a little disconnect

between risk equities versus the pound. you can see the pound calling the shots throughout the week and equity markets in the u.s. followed. scarlet: it is pretty uncanny. joe: it is the story of the week. scarlet: you can see all these charts and more on twitter. , should wehe week start with volatility? >> it is a topic that everyone wants to talk about, whether it is voluntarily funds or the vix out of whack with a huge jump on monday. it has brought up a lot of questions with respect to vix curves.

this is looking at trading in some of these vix exchange traded products. the white line is the total versus the actual total u.s. exchange volume in the blue. it is fascinating. this is causing people to focus on why this is happening. is it people buying because they think volatility will rise? brokersrger lenders and buying them and then shorting them. the short interest is very high. a lot of stuff going on with volatility. that goingntioned back to earlier this week that the vix larger move in

than one might have expected given the movement in the s&p 500. is that a function of people playing the vix products directly? >> it may be. there might have been a few things. there is some of that structural changes happening with volatility. i think there is a fairly solid case to be made that anxiety was not priced into u.s. markets for but ifming brexit vote, you want to jump back in, i have more charts here. this is looking at the vix futures curve. you can see the change between a week ago. the green line was a week ago. the orange line is the futures curve today. the bottom line is the expiration. look at the way it has shifted up. it out to six months, seven months, largely still flat , so not only higher, but the front month jumping up quite a

bit. that will be important as we assess market moves going forward. scarlet: i spoke with ubs earlier today. they were saying perhaps investors are overheads to piling into these volatility products. if the u.k. decides to stay in the eu, that could bring in an opportunity where everyone is trying to clear out those positions and a nice rally and markets. joe: one of the things we have that, brexit, summer fed hiking rates, if none of those happen, how quickly could that collapse? if we get through brexit without a surprise float, the in current -- surprise vote, the inclination is that it will be bullish stocks.

other than that, you are going into earnings season that is projected to be down, but a lot of people will look to that and hope to see some shifting in the wind there as far as corporate profits go. if those things lineup, strategist are keeping her estimates inthere the same range. right, a call for 2175 for the s&p 500 would represent a record high. even as people are keeping their forecasts intact, the road to get there will be bumpy. >> that is the important part. that's why a lot of people don't like to do in the-of-year targets.

i think we will largely be flat, ,ut then we will go but then we will go down first. that is what ended up happening. the vix jumped a little bit, january and february rough, so there is the potential for more disruptions. joe: you showed that chart of the vix curve. long-term volatility has not changed that much. regimen't look like change. what did it look like back in august? did we see a real shift in the longer end? whaten you have a selloff you expect to see is a sharp jump in front months. .e had a highly inverted vix when you have such a steep selloff, a lot of people use the as an indicator as to win

the selling reaches its peak. just because it is inverted, it doesn't tell you about where the market has to go. there were some people that had pretty good timing saying that so steeply inverted that we have to think about how much selling there is still to go. scarlet: you mention earnings and earnings she's -- season. we had fire, come out with preliminary results. they have their own issues, right? outlook have we heard from companies? quitehey been unusually given the uncertainty and volatility and the markets. ? >> a lot of people paid attention last quarter to the american consumer, indications of growth they're, and those are the lingering questions, whether they american consumer has the

buying power to keep going. estimates are still pretty negative for the coming quarter, but people are making projections that we will be in positive corporate profit territory by the end of the year. if that doesn't happen, a lot of people will be wrong. scarlet: how globalization could be unraveling and how this has aided the rise of politicians like donald trump. ♪

"what'd you miss?" the voice and data recorders from egyptair flight are damaged and will need repairs before they are analyzed. that is according to the associated press. searchers recovered the second

box today. the defense has rested in the trial of a baltimore cop charged with murder in the death of freddie gray. the officer declined to testify in his own defense. the judge presiding said closing arguments will begin monday. he is the third officer to stand trial in the case. six have been charged. a federal appeals court has upheld a political corruption conviction. the x connecticut governor is free on bail. americans gave more to charity last year than ever before. individual accounts for more than 70% of that. the biggest increase came in international affairs due to

disasters such as the earthquake in nepal and the syrian refugee crisis. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. scarlet: "what'd you miss?" globalization is fraying and could be unraveling. incomes have fared the worst of the past few decades. that is showing up in politics. they can be seen in the u.s. presidential race and in the brexit vote. joe: thank you for joining us. why is globalization seemingly going in reverse? having me.u for at the moment, the language i would use is that globalization is fraying, stalling, not yet going into reverse, but there are clear warning signs that

this could be next. of globalization as the increasing integration of the world economy, in some ways the world is still globalizing, more information flowing across borders, but goods, services, capital, the world has stopped integrating after two and a half decades in which world trade grew faster than world output. global output growth has been sluggish, but world trade growth has been slower. that's why the world bank and talkmf have started to about a peak moment of globalization. scarlet: we have a chart that backs that up, that world trade growth has slowed. disagreement on why. what is the most credible reason? a lot of economists have

looked at this. what we can say is there is something at the corporate level, a structural change, how global supplies work. you're seeing u.s. manufacturing imports as a share of gdp after a multi-decade rise peeking out at 8%. what is interesting is the politics, actual protectionism. since 2008, there has been a rise in tariff protectionism. not as much as people were fearing in 2009 in 2010, but it has been there. the biggest factor has been the absence of new trade liberalization. 15 years before the crisis in 2008, about 20% of the growth in international trade was driven by liberalization, nafta, expansion of the european union,

but those trade deals they are politically difficult to get through now. joe: you wrote a great piece on this. i want to talk about the politics. you have a chart that is probably one of the most important charts in the world showing how the middle class in developed countries have not seen their incomes grow very much while everyone around them has done a bit better, leading to the rise of the brexit campaign, the donald trump campaign. so you argue in your piece that the needs to be better internal distribution. that seems really obvious. why haven't the elites in these countries been more proactive about this as opposed to letting the situation go where more and more people end up on the losing side of this? >> to me, this is fairly obvious. we know that trade between two countries makes both countries

better off. off ins it make better each country? is a factory is outsourced to somewhere else, factory workers lose their jobs. goods, andet cheaper the owners of that factory see higher profit margins. the gains going to the top should be enough to compensate the losers, but they rarely are. how come it this is been the case for the last two and a half decades are we only starting to see the impacts now? why is this anti-globalization backlash happening since 2008? there are two things going on. we have had a nasty global recession that has left people feeling less comfortable and more aware. particularly in the u k and the reserve bank, the

of india's governor has mentioned this before, the easy availability of credit to middle income and lower income people across the west's move over some of these difficulties. scarlet: we talk about the financial's asian of the u.s. and economies across the world, it has now decreased. why is this home bias so strong? >> it is certainly cross-border bank lending as a big driver of financial d globalization. globalization. saying you need to increase capital levels and lynn end more. banks pulled back from overseas lending. you saw that in the eurozone in

cross-border lending. drivers a been at a big of cross-border capital flows. there were protests in seattle against the wto, then what you have right now, the rise of donald trump, brexit campaign, was it abstract then and it is concrete now? connect the dots for us here. >> it has been brewing in the backdrop but never had mass appeal. an anti-globalization campaign has not taken power. u.s., it has been to push hillary clinton away from pro trade positions. england, whichever side wins, a substantial portion of the british public will have said firmly that we don't one is much immigration. ony are having an impact

public debate and public policy moving ahead. it is that type of thing that could stop globalization from fraying. joe: fascinating stuff. up, the sum of all international fears explained in one chart. we will show you next. ♪

scarlet: i am scarlet fu. "what'd you miss?" the sum of all international fears. this shows how investors have stockswn european relative to the s&p 500. it is a ratio. when the line goes down, stocks are underperforming.

it is a 60% underperformance since 2010. 2010 as when the european debt crisis began in earnest. he says u.s. stocks or valley towards the high-end. european stocks are downright cheap. they are pricing in a dire set of outcomes. thursday and the united kingdom decides to stay in the european union, perhaps a buying opportunity. eventually maybe they will come back. i am looking at a chart that should make the federal reserve happy. they did in hike rates again, lowered long-term as to men's. people say that long-term estimates. let's look at these lines. growthite line is wage measured by the atlanta fed, up

3.5%. line is u.s. services excluding energy. that's 3.16%. the teal line is up 2.5% year over year. is corsi pi, up 2.2% year-over-year. i think the fed should get some credit. core pci,ple line is of 2.2 percent year over year. i think the fed should get some credit. scarlet: people don't know how to forecaster factor in inflation. joe: the numbers speak for themselves. coming up, helicopter money. is it just financing. what it is and isn't, next.

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british opposition leader jeremy corbyn says parliament will be recalled from recess on monday to pay tribute to jo cox. he asked prime minister david cameron for the move. the two men appeared side-by-side at the sight of the killing in northern england and laid flowers. >> she was taken from us and an act of hatred and a vile act that has killed her. it is an attack on democracy, what happen yesterday. it is hatred that killed her. mark: david cameron said with

there is hatred, division, and intolerance, we must "drive it out of our politics." governor haley spoke today during a memorial service for .he victims of the shooting prosecutors are seeking the death penalty. battling in california are hoping wind won't send the blaze boring through canyons west of santa barbara. 140 homes and ranches would be at risk. 800 firefighters and fleets of aircraft are battling steve touraine. so far, no containment. in japan has eased a ban on alcohol consumption. drink onre allowed to

base and that off-base houses. other drinking off-base is still restricted. the restrictions were imposed after a sailor drove the wrong way on a freeway and hit two other vehicles, injuring two people in okinawa. global news 24 hours a day powered by our 2400 journalists and more than 150 news bureaus around the world. i am mark crumpton. back to you. scarlet: let's get a recap. u.s. stocks falling, the s&p down for the sixth time in seven days. was a real loser, off by almost 1%, closing out a down week, partly because of apple and google, but the biotech names have continued to get hit hard. joe: the attack and biotech names with a story today. were a lot of sectors in the s&p that gained if you strip those names out.

today, all this week, and probably next week, all about what happens and how people see the brexit vote. that comes on thursday, so expect more shifting. debating helicopter money is pointless if you can't define what it is. in the last several months, people have been talking about how helicopter money could be the method that central banks used to get out of this current malaise. my guest is skeptical about this idea. >> helicopter money has effectively happen with quantitative easing. when central banks by government that they cancel it at point. helicopter money is simply monetary financing with a central banks providing debt to governments. if you're going to say there is

no appetite for normal fiscal expansion with that markets -- see markets, then i could the could be a case for monetary seeingng, but we are not a surplus of safe assets. we are seeing a shortage, so i prefer to see more fiscal expansion and debt finance been helicopter money. joe: in the paper you wrote , you helicopter money suggest that the enthusiasm is based on a fundamental misunderstanding of how money isks, how fiscal policy sterilized, as you put it. explain what people don't get about money. >> it is pretty natural to think just like in a household, where do i get my money from? i can borrow it, earn some money, then i can spend it. governments don't work like that. if you think about what money is, it is an iou in a government

system. when they borrow money, they are that has already been taken out of circulation. similarly they can tax it out of circulation. when you think about why you might want to engage in monetary financing, that is to say to not try get back out of circulation, you can think that makes sense if there is no threat to monetary stability or inflation, but thinking about money this way as something created by government and destroyed in the act of debt financing attacks inancing changes the way which you can think about money generally and helicopter money specifically. joe: there does not seem to be any constraints on policymakers orm financing their spending

sterilizing the excess money in the system using traditional measures. what if the central banks promised to finance the spending to help politicians get there in terms of their willingness to spend more? would it be useful if it built the political logjams instead of the financial ones? it seems we are in a bad place when you look to technocrats to break the logjam of democrats. that our elected officials took us to where we need to go, and if they can't get us there, we elect other people who can get us there rather than there being some kind of reverse takeover from some central banks in the ministry of finance. it is a governance issue really there. joe: i want to press you on this point. people have been arguing since the downturn that we need more fiscal stimulus that these

fiscal policy makers have a rolling cremating -- creating demand. is there any defense of some sort of end run or is that a dangerous road to go down and better to work the traditional political avenues? environment where there is deficient aggregate demand, and i'm not completely convinced that is the case in the u.k. or the u.s., but in situations where there is decision aggregate demand, the appropriate way of getting aggregate demand into place is to government action, but not stimulated by a monetary policy official deciding that is the right thing. you said you are not totally convinced that there is a shortfall of demand currently in the u.k. or the u.s.. a lot of people say that there is some sort of persistent shortfall, a persistent shortfall on inflation measures.

your reading of the current situation does not necessarily conform with that? >> well, when you look at lots of different measures of excess capacity, there are not that many measures of excess capacity still in place in the u.k. or u.s. the bank of england and the last quarterly inflation report shifted toly -- where there would be no access capacity. level ofs., average wages growing at 3.5%. unemployment dipping below 5%. these are not economies where you see loads of excess capacity. that said, there has not been a lot of investment. the productivity problem is the real issue. potentially there has been a lack of investment which is likely to be associated with the hangover from the crisis.

there is excess capacity, but no rationale to invest in more capacity or invest in infrastructure, which would lead to high levels of productivity, which is now showing up in the figures. we are in a bad place with not insufficient aggregate demand, but not a huge amount of excess capacity either. joe: that was the cohead of global asset allocation at columbia threadneedle investments. scarlet: the case for universal basic income and why it would change the dynamic of labor markets. we will discuss this, coming up. ♪

scarlet: i am scarlet fu. it is time for the bloomberg business flash. u.s. prosecutors abandon their case after a two-year quest to bring civil suit. he was the cofounder of countrywide financial. he denied any wrongdoing and said the national real estate collapse was at the root of the crisis. we now know more details about lakeshore hathaway's investment in apple. warren buffett's company acquired a stake for $99.49 a share. purchased 9.8 million shares of apple for $976 million. creating the world's biggest maker of wind turbines.

siemens has struggled to make its wind business profitable. that is your bloomberg business flash. "what'd you miss?" ande is a new normal economic growth, specifically job growth and wage growth. the backdrop is job disruption. guest proposes an idea that has been around a while, universal basic income, a safety net provided by washington. is it feel -- feasible? let's ask our guest. he is a former president of the service employees international union and, one of the most influential labor unions in america. thank you for joining us. tell us the simple pieces. why should the government right everyone a check every month? >> if you read a growing body of , you knowevidence

that in 10-15 years that this could be a huge disruption caused by technology. of the jobs.g 45% what are we going to do? if are going to provide stability in our economy, we have the biggest idea of the 21st century, which is an old idea, which is give everyone $1000 a month, in the party and provide stability. what do you have to save out to get there. ons would not be necessarily top of what we have, but a replacement. are 126 programs that transfer cash from people to -- from the federal government to people. you would not need food stamps, unemployment insurance, because

it is replaced by a payment. it is what martin luther king ,nd richard nixon all agree on we need a guaranteed income in order to end poverty. a block onently had the show with a critic of the basic income idea and instead says everyone should begin to the job. >> work is very important to people. most of us define ourselves by the work we do. yes, income is important, but working, being part of the community of mainstream society is very important. that isone dimension not well recognized by the basic income advocates. joe: if you think we are going to have this huge

technological-german disruption to the labor market and there , does universal basic income only so part of the problem? think we are talking about supplementing, not substituting for work. i think people will work, but there is not the kind of steady employment that my generation knew. is work? raising a child, taking care of your mother? these are often uncompensated things, but universal income would pay these people to do those things that women have judicially done for a long time. work for me was fundamental, but if you talk to millennials, they've had a much more difficult time in the job market. they don't think work is so fulfilling. you will see this change over time as old people like me begin to retire and young people redefined the future. scarlet: you're saying this generational shift put us at a tipping point? >> when i will, you went to college and got a job.

now, people used to go down in wall street and be traders and analysts and can't find jobs. law schools are down 30%. we are beginning to see a big shift in the job market. it does not mean people will work, but we have to find a way to provide stability. the idea that the basic income could replace a lot of different transfer programs that we have, one thing that makes the transfer programs compelling is that they are countercyclical. and a downturn, we pay more. as people go back to work, they go down. if you have a steady check of $1000 or $2000 every month, you would lose that countercyclical element to smooth out the business cycle. >> when huge downturn's come, do you do something on top of that?

and 2009, welfare and food stamps were not enough. we through $1 trillion added and it did not work that well. incomef we had had basic there would have been more stability in the economy. on the: on the left, see that in bernie sanders and donald trump. what is the response from the left and the right to universal basic income? what did you learn? >> we should call this the united states of anxiety. see that in bernie sanders and donald trump. 21% of people think the economy is good or positive. 50% of people don't think the american dream is alive. 47 people don't have $400 if they have an unexpected hill. they are hurting. be happeningwill when we lose 3.5 million truck drivers, the largest job in 29 states, and 8.6 million people

service them, insurance. that will happen in the next 10 years. we are talking about a synonymy -- tsunami of change. the guillotines are coming for us, and no one laughed. joe: thank you. scarlet: we are less than one week away from the brexit vote. what would it mean for the eurozone and the rest of the world if the u.k. decides to leave the eu? ♪

scarlet: i am scarlet fu. "what'd you miss?" christine lagarde joined the central bankers and sounding the risk posed by a brexit.

the former ambassador to the united states broke down the economics of brexit. some of the issues, the two biggest ones, immigration and the eurozone thing. the argument has been a bit bogus. we do control our own frontiers. we have had the best of both worlds. keep arguing and saying we can't control our frontiers if we stay in the united kingdom. friends in turkey saying that if the turkish migration deal goes through that we will be flooded with turks. turks will have visa free access to the shinned and countries -- -- countries,nies not a vote. be looked at their

merits, and if they meet the criteria, we should be welcoming. some of the rhetoric and nonsense and focused on the facts would be very helpful. don't need aeans visa to go to the u.k.. you don't have controls over who can come and work there. that is the problem. been why the remain campaign has been losing the immigration debate. do you see that changing over the next week? show fact, the numbers immigration from within the eu has been a plus for the british economy. it has not been a drain on our public services. they have been paying taxes, filling jobs. we just have the lowest unemployment figures in britain since 2005, half the european average unemployment rate. it can't be all that bad. is aact that there

willingness on the part of some of those citizens to do the lower paid jobs has helped to keep inflation down and the british services industry up. i think it got muddled up with the fact that there are people coming from outside the european union, but that is a separate issue. immigration from within the eu is something which i think has been a net beneficiary. that the remain campaign has been losing that argument. are thether issues leaders who have come out saying that we need to keep england in the european union. we can't let brexit happen. the is the risk to credibility of those leaders if the brexit camp wins or gains a high number come next thursday? >> i think there is a real risk of not only for britain, but the rest of europe and globally. is thathe arguments

britain won the second world war, we can manage on her own, we don't need everybody else. we won the war because we had a lot of polish pilots. we succeeded because we had 2 million american servicemen in 1944, soefore june britain is part of an international community even though we don't always like to remember that. , there is a risk of somebody pulling at the thread of european construction. tell me that if you guys go, we will come under huge willure because europe hold a referendum of their own. glue thatity, the holds the european countries together in the postwar world would come unstuck, if you like. for europe and the united states, which looks at europe as

a strategic and economicssue and destination for important u.s. investments, there is a great deal at stake, and i hope therefore that we will not vote the wrong way. former u.k. ambassador to the u.s. speaking earlier on bloomberg . scarlet: what you need to know to gear up for next week, coming up. ♪

scarlet: don't miss this -- a slew of good and a slew of events, but let's start first with china may property prices at 9:00 p.m. eastern time. >> fed chair yellen begins her testimony to the senate in the house on tuesday. scarlet: it all culminates with the brexit vote.

on u.k. votes formally thursday. >> i think we will be talking about that a lot next week. scarlet: absolutely. that is all for "what'd you

mark: i'm mark halperin. and i'm mark halperin. this is a special "freaky friday" edition of "with all due respect." mark and i will be here all weekend's topics were so big league no single anchor could possibly do the job. is in our washington bureau. welcome. margaret: