[closing bell] scarlet: u.s. stocks closing lower this afternoon, oil sliding below $39 a barrel. joe: the question is, "what'd you miss?" scarlet: welcome to our one hour exit special, whether or not britain will stay in the european union. joe: we will look at the implication across the world. alix: and we will speak to those in both the leave and remain camps, including lord skidelsky. scarlet: first, let's get to our market minutes. u.s. stocks closing after session lows, losing steam as the session continues. we started with optimism, but dampening that as they are closer than anticipated in the previous days. six out of 10 major groups lower. will talk a lot

about brexit-related stuff, but one interesting thing, because less solar city, investors giving that a thumbs down. solar city only ending 3%. looking at tesla, down 10%. pretty negative reactions so far. alix: pretty ugly for tesla. in terms of what i want to focus etf herea look at the in the u.s. that tracks u.k. stocks three this is a five day chart three we have actually seen a rally up 6%, despite the fact we are heading into this vote. with the volatility, the five year high, shows a swing. --vix index in a lot of crises we have had over the last eight years, the

chinese devaluation of the one they are passing the volatility we see now. volatility heading into this u.k. boat. joe: is it complacently about the results? alix: i do not know, it is fascinating, though. and let's take a look at u.k. yield, they have been rising a little bit, the same story as equities. this is a one-year chart, a bit of an increase in yields is a sign of optimism, because it means people are coming out of a safe haven. if you look at a shorter time , it is note end, very high, below 1.3%, but a risk-on attitude. scarlet: and we are keeping a

close eye on the pound. the pound is gaining, versus the dollar. but i want to show how it is trading versus other currencies. the pound is weaker versus the euro. chart, the pounds increasing volatility over the next week. higher for the first time in three days, but polls have been showing the remain camp has been gaining strength, but it is much more mixed and even. you saying that volatility pick up again. $50, morewas below imports coming into the u.s.. i highlighted cocoa because it is the most exposed commodity to a brexit. andrades in both pounds dollars, so there is a cool curve to look at. keep an eye on cocoa tomorrow. those are today's market minutes. let's take a deep dive into the

number, you can see the function at the bottom of the screen. joe: and i want to take a quick look at the bloomberg pound index, because it is the driver of everything right now. this is the trade-weighted index , against all the major trading partners. not as high as it was in late may, but better than the depths of june. i have a feeling we will be watching this chart and bring it up a few more times of this week. chief simong us, kennedy. it 10:00 p.m.,se and unlike a general election, there is no exit poll because there is no history to tap into. districts will have their votes counted. we will start small in places

like the isles of silly and gibraltar. and, newcastle will be one of the day, urban areas. we will look for a sign of how the nation might have voted in that. early hours of friday morning, the votes will come in. this is a clear result, either way, we may know at 4:00 or 5:00. simon, i will ask you a very ignorant, american question. what is it take so long to count the votes? why can't we get tabulations from key areas right after the polls close? simon: they are all counted by hand. very carefully. the 382 districts will be a central place for the votes. very quickly, did the shift murder of jo cox

the contours of the debate? it is unclear how those tragic events shaped things, it , therew the country down was a great deal of rancor between the political parties. it started to boil over on that day. cox'se awful news of jo death cause the campaigns to be suspended for three days. back, with less vitriol. one of the pollsters of the weekend showing a rise, actually sighted people being worried about the economic implications of brexit more than jo cox's murder. i think a lot of people will

look back and say maybe it was an important point. alix: simon, thank you very much for joining us. and, we have robert skidelsky from the u.s. house of lords. now professor, you wrote that the eurozone could eventually break up into two. -- you say, it is always britain has been a bridge between two different worlds, it can play a role, but not by cutting itself off. you are arguing that the u.k. beingep the eurozone from too messy when the breakup eventually happens. and my understanding you correctly? joe: -- robert: you are understanding me perfectly, and i still believe that. it is a failing experiment and i do not believe it can survive.

any increase in conflict in messy,has always been and socks in the united kingdom -- sucks in the united kingdom. i don't think by getting out we can isolate ourselves from a terrible situation within the european union, as the eurozone finds it more and more difficult to keep together. alix: -- skidelsky, polls show an attitude toward the eu on the decline across the continent, if the u.k. does vote to leave tomorrow, do you think that would accelerate political disunion, and seymour brexit tight movement, or would people look at the u.k. and say, we do not want what happens to them to happen to us? no, i think the

first is more likely. if one major country votes to thek away, it could be start of some disintegration of the eu. this would be the first time it has happened. no country has ever left the eu. if the eu starts to be less attractive, a major player like britain -- for a mayor -- for a major player like written, eu.rs may want to leave the so i think it is quite dangerous. britain should stay in the eu for the sake of the eu. more than for the sake of britain itself. the big question to me is, are these referendums binding? lord skidelsky: no, they are not legally binding, they are advisory. that ifs inconceivable

there was a vote to leave, that that would not become a commitment by the government. i don't think our government could survive. but there are interesting games to be played if there is a leave vote. , am interested in what cameron what extra concessions cameron might be able to get if he goes back to europe and says, look, you have got to give a lot more. what i am not sure about, is if you can have another referendum. the first.er that has never happened, because there has never been a referendum on actually leaving. onre have been referenda treaty changes, and one referendum followed after another, that was true of denmark. but i do not think you can go on having referenda. but nothing will happen very quickly, even as there is a

leave vote, it will take two years or more before britain leaves. because there will be a huge of theof negotiations modalities of leaving, and the consequences of leaving, which will take time. scarlet: so there will be a lot to sort out. if the u.k. boats to stay, what would need to change? is out of the bottle, something has to change. a lot of people are unhappy with the status quo, what will the eu's relationship be with the u.k.? lord skidelsky: cameron has a number of concessions, and i'm not sure they amount to very much. one of them is that the u.k. is no longer committed to the eu goal of political union. symbolic, but it has always been a point at which

people have been very upset about in the united kingdom. they do not feel that they want to be committed to that particular journey. a lot will depend upon what happens to immigration. immigration has been a key issue. 2015, there was not immigration into the u.k. from mainly eastern europe of about 330,000. there is got to be some way of if people are to be more at ease with membership in the eu. as you know, there is free movement of labor within the eu. lord robert skidelsky, you're staying with us. you're watching a special it -- addition of "what'd you miss?" ♪

let'si am mark crumpton, get to first word news. hillary clinton campaigning in north carolina after donald forps scathing critique of qualifications to be president. secretary clinton hit back during her appearance in raleigh . clinton: donald trump offers note economic solutions for our challenges. he just continues to spout reckless ideas that will run up

our debt and cause another economic crash. mark: secretary clinton also invoked her religion on the same day donald trump questioned it. reporters, as us methodists like to say, do all the good you can for all the people you can in all the ways you can. donald trump reportedly told evangelicals in new york that the public does not know " anything about hillary in terms of religion." former house speaker dennis hastert has reported to a prison facility where he will begin a 15 month sentence after he admitted guilt and a hush money case in an effort to conceal past child molestation. he is one of the highest u.s. officials to ever serve prison time. in los angeles, lawyers have delivered closing arguments in a copyright lawsuit, claiming members of lead zeppelin stole the opening of their 1971 hit "stairway to heaven."

now it is up to a jury to decide if they used an obscure instrumental track called "taurus." global news 24 hours a day, powered by our 2400 journalists, in more than 150 news bureaus around the world. back to you. are back with lord robert skidelsky from the u.s. house of lords, and emeritus professor of economy at the university of warwick. i want to ask you to put on your economist had. you talked about immigration, and that really does seem to be the defining issue of this whole campaign. voters, the people who have not shared in the u.k.'s prosperity have a point relatively free flow of labor has disadvantage them in some way? lord skidelsky: of course, they

have got a point. in the era of mass-migration, labor really towed from heavily populated lightly populated countries, as did capital. that is how a part of the world group. and now it is flowing the wrong way, uphill. have a sizable net immigration into heavily populated countries, of course they start getting upset. and they do have a point. the country has got to have a population policy. you cannot have a complete laissez-faire attitude toward it. and that is true within the european union as a whole. you have a flow of labor from eastern europe to western

europe, and that is excluding the syrian refugee problem, this is just economic migrants. and there is a good thing that there is a flow, but it cannot be unlimited. this isot simply say how we are going to run the european union, because that sort of freedom into labor is only possible within a country or political system, and there is not a political union. the aim for that, but there is not one at present. and there are none of the facilities that enable one to smooth these flows, compensate losers and things like that. wonder, very quickly, i does europe rollback of the economic immigration it has now or roll ahead with political integration? what is the sequence here? i am sorry, i:

did not get that. are you saying economic integration came in the wrong order? yes, i think that is true. you can see it clearly in the case of the eurozone. normally you have a political union which makes possible a reunion. here, the idea was you start , and hope ition becomes a political union, but of course, it might break up. that is the alternative. i think it was the wrong way around, they could not get a political union, so they try to take it by stealth, almost. , andhat has become a truce the real opposition that now exists in europe to the free movement of labor. point, by leaving the european union, britain is still committed to the free union of labor, and free movement of capital, because that is an obligation of

membership to that european economic area, which is a than thelarger group european union, which britain will remain a member of. to: if the u.k. does vote leave, how do expect the remaining eu members to treat the u.k. in the ensuing free trade negotiations? would they taken attitude of being tough on the u.k. to discourage others from following their lead? lord skidelsky: i think free-trade was still continue because that is part of the arrangement with other members of the european economic area. see that there were be any discrimination particularly against the united kingdom. what the united kingdom would lose, is any part in shaping the future development of the eu. and that, i think, is a big loss, because things may happen there in the future. the immediate consequences will not be serious, there will be a

lot of ill will, the germans will particularly make noises during -- noises. said, do note expect any special favors, either get out or get in very there will be a lot of that, but in concrete terms, it will not be much. experience inour the government, does cameron stand a chance of keeping his job after thursday? if he swings a remain vote, his position will be a lot stronger, because if he fails, and there is a vote to get out and leave, cameron's position will be very, very hard. and i'm not sure it will be sustainable. but i must say, i do not look forward to the prospect of the other prime ministership.

alix: lord robert skidelsky from the house of lords, and professor from the university of warwick. scarlet: company reporting -- comparable sales of dropping .5%, and an estimated gain of 7/10 of 1%. up, we look at the underlying strength of the u.k. economy, the three charts you cannot miss, next.

alix: i am alix steel, "what'd you miss?" brexit aside, there is strength in the u.k. economy.

5.7%, a nice big jump. credit-usingt, conditions, and a new, national living wage, warmer weather. all of that helping to boost sales, despite the fact you have a brexit hanging over you. joe: theoretically, off to the races. scarlet: on top of that, unemployment coming down. april, thending in lowest at the cycle. pretty much below the pre-crisis average of 5.1%. the downside, they say to be careful because for the u.k. it takes six months for gdp growth. i am looking at another way

of looking at the labor data, it shows the difference between the u.k. and the u.s.. i'm looking at the u.k. employment rates. the u.k. employment rates, it has been rising long-term. to 1998, it was only a 71%. the u.k. has not had the same labor force process -- participation rates that the u.s. has. we have the u.s. employment population ratio. 63%, nowt was around below 60%. these long-term structural issues with the labor market that of concern people in the u.s. have not played out in the u.k. the same way at all. alix: that is what he starts are so interesting. a few months ago we said the doe is in a better position to raise rates than the fed, in part because of the charts we just showed. but with the brexit, that goes out the window. if we get through this, are we looking at a better economy or a more aggressive deal? coming up, the ramifications of a brexit if it does happen. this is a special edition of

"what'd you miss?" ♪

mark: i am mark crumpton with bloomberg's first word news. bernie sanders is all but ignored you that hillary clinton will be the democratic residential nominee. in a c-span interview he was asked what role he will play at the democratic national convention. sanders: a does not look like i will be the nominee, so i will not be determining the scope of the election. i will happily be meeting with secretary clinton. >> how did it go? senator sanders: pretty well, we served together. mark: he wants to lead a pensions committee next year.

in the meantime, the vermont senator will be in new york tomorrow to address voters in a speech entitled "where we go from here." hillary clinton has received an endorsement from a national security adviser under presidents gerald ford and george h.w. bush. he says hillary clinton would bring "unique experience to the presidency." the united nations says funding shortages made force it to reduce already limited food retribution in yemen in august. roughly half the population suffers from a lack of the food. requested 1.8 -- $1.8 million, but only some of that money has arrived. global news 24 hours a day, powered by our 2400 journalists, in more than 150 news bureaus around the world. i am mark crumpton, back to you. scarlet: let's get a recap of

today's market action, ending after session lows, flipping before the brexit vote tomorrow, the dow off by 49 points. we did see fragile sentiment as the polls showed it was too close to call. the it could go either way, polls driving the pound, equity markets follow them pretty closely, as has been the case for a week and a half. camp, youhe positive wind up having health care, telecom, but utilities got pretty beaten up. tesla fell the most since 2014 after it announced it would try to push solar city, and ugly day for tesla. scarlet: "what'd you miss?" we are dedicating our entire show tonight for the chances and implications of a brexit. let's ask the big question, what exactly would happen if the u.k. was to leave the european union?

bloomberg television explores the possibility of a brexit. leaving the eule would be a huge, historic shot. here is what to expect. occasion ofented the nation leaving the biggest union of countries in history may lead to an emergency meeting. expect pro-europe, france, and germany, to make sure they remain united. there could be wild swings in the british currency, and even a crash. currency markets have not priced exit..k.'s one thing we know for sure, just four days, all 28 leaders will hold a summit. action couldful in allow populist groups to gain power after the exit. european leaders will have to be strong to prevent anti-eu feelings from other countries.

have cameron will likely to trigger a law that ejects the country from the eu. it will be a crucial moment in shaping the uk's relationship with the eu in the years to come. france, germany, and all of national elections coming up. this could impact how they negotiate with it the u.k. we could well see a new vigor leading the u.k., david cameron may lose the support of his replaced byay be the strong euro skeptic boris johnson. and he could face immediate pressure from scotland, a country that in the u.k., was typically pro-euro. in the long-term, britain has two years to negotiate a brexit, some talks could take much longer. in the u.k. would lose some influence.

we could expect chaos and drama before we really know what the new britain will look like. alix: earlier today, we spoke mp, who is in, favor of a new britain, he is favoring the leave campaign. democracy, tomore make decisions here, and especially about who works here and who lives here. the big issue for me, and the big issue for large numbers of people who will be voting to leave across the country tomorrow. mp whou are a labour backs a brexit, that is fairly rare in your party. have beenmore who unwilling to come out, even if some of question whether jeremy corbyn is really as committed to the remain idea as perhaps he stated? john: we are finding across the country a significant number of labor voters coming out for

leaving the european union, and certainly, there are those who remain silent who would support leaving. so it is bigger than the few of us who have spoken out. but i think we are pretty representative, maybe even the majority of the people who vote labor in the country. mps arest labour sticking to the party line. if we do get a brexit vote on thursday, and mps go to vote, will they start switching their opinion? john: if there is a brexit vote, then we are out. to do ande attempted i think we will be successful, is negotiate a good trade agreement, good all around, without all the political superstructure that goes with it , which is where the european project as they call it in badlyls, is going so

wrong. not just in this country, but elsewhere. people do not want to be part of a european country, they do not want to be part of the united states of europe, they want to be part of their own country. alix: but john, the vote on thursday is not binding. technically, parliament can choose to do something different. john: in the real world, the vote is binding. out,nk of we vote to come , as germany in particular their business leaders have been saying today, will negotiate a sell deal because they more products to us than we sell to them, it is in their commercial interest to keep a trade deal without trade barriers. i have got no problem with that, and the overwhelming majority of people in britain have no problem with that. john, one thing that is

interesting, is the geographical divide between those who support remain versus those who support lead. some say the brexit campaign is an english revolt, backed by euro-skeptics, most of london, staying, wales, support -- what is that due to british unity, if there is a vote to leave the european union, yet you have most of the u.k. in support of remaining, and most of england in support of leaving? john: i do not think it will work out like that. situation, wales will vote similarly. groundswell.e a the big divide is not that one, it is a big divide, a fascinating one. it is between the middle classes in the working classes. that will become the very

difficult polarization that we will have to deal with, without -- whatever the result area the working classes hugely voting to leave, and the middle class is hugely voting to stay. somewhat say, and i have said it many times, the middle classes are getting the benefits, and the working classes are getting the problems. mp, john mann. scarlet: could of opera brexit cause a collapse in the stock market? plunge ind be a european equities. and in the u.s., after-hours trade to highlight. same-store sales estimates, and barnes & noble gaining, making up some of the 7% drop in regular trading. fulls & noble says for the year, if is comfortable sales up 1%. ♪

scarlet: "what'd you miss?" equities have been common in the run-up to the referendum, u.k. stocks of outperformed the rest of europe, but they could be at risk if a brexit scenario does occur. banks, saying the euro 23%, could fall as much as bank of america, lester maddock. european stocks could fall around 10%, that means a 6% to 7% drop for the s&p. a rally if it remains, but not as intense. they could lower their your target, and the s&p could code down to 2000. our guest, bill

morokoff from axioma. bill, you stress-tested the possibility of a brexit and came up with this number. give us a sense of what else is at risk here. bill: we looked at historical, political events, looking for where the markets plunged, 20%equity and it currencies to 25%, that was the big stress tests. it is not a prediction or forecast or crystal ball. but, risk management requires you consider extreme events. joe: what are the extreme events that you saw? bill: we looked at three specific scenarios, the european greek debt crisis in the summer they fell 25% in a six week. period.eek

there was political turmoil, a lack of confidence. we also looked at black wednesday, when the pound was kicked out of the european exchange mechanism in september of 1992. that led to a pound-dollar drop of 30%, although the equity markets rallied up. and we also looked at the scottish referendum. going into are potential 25 percent decline, what is the most successful way to hedge that? bill: you want to have a good, flexible risk management to evaluate your own portfolio. we do not manage money, but we you have the systems and capabilities to understand what is in your portfolio and how it reacts to a wide range of the stresses. there could be a rally, and you do not know, you want to check out the different possible scenarios. scarlet: since the referendum

was announced, the pound has weakened and u.k. stocks have remained upbeat. a lot of people in the leave camp go back to that 1992 black wednesday as an indication the market and economy will do just fine if the u.k. leaves the european union. bill: sure, and long-term, economic analysis does not show the next 20 years, we're looking at the medium-term, and what reactions could we see for a portfolio manager? scarlet: you mentioned the scottish refereum, some say that is most analogous to what we are facing now become because it is similar. is that a good example? work very wellt as a stress test, per se. it the reasons behind it, does not have that big of an

impact on the overall markets. we looked in to see a significant reaction. joe: i want to pull in a chart for my terminal real quickly, that looks at the volatility, that is the white line against the brexit, it shows how much of this is moving the market. aftermath,s in the how much does dependency matter? if it looks like the rest of europe is coming together in a brexit, and we see politicians everywhere say we want to vote, too. how does the immediate aftermath affect markets? is an excellent question, where would we see the scenario of a 25% drop if there is a lot of political uncertainty. on the other hand, maybe northern wales, ireland leaves, that is when you

see markets get skittish and plunge. alix: i am curious about the implodes we might see, just how much money was set out of european assets due to the possibility of a brexit vote. almost 4% of assets under management, compared to any other country in the world. might we of inflows see if we have a remain vote? tol: that is hard for us project as a risk management provider, that is why he won a stress test on your portfolio. if you had your positions or bet on assets leaving, you will know what it is like if the flows reversed. estimated $140 billion sucked out could get sucked back in. that is a lot of money on the sidelines. scarlet: thank you for joining us today. alix: could a 20% valuation of the pound be a good thing?

grading winners and losers in the foreign exchange market. ♪

alix: i'm alix steel, "what'd you miss?" the british pound giving up some gains after leeds is leading. sterling tends to fall, and kicks back up. investor wrotere about this, says the pound could stall by 50% or 20% if a brexit occurs. he says too many believe that a vote to leave the eu will have no effect on their personal financial position. this is wishful thinking, it would have at least one immediate effect that will affect every household, the

value of the pound will the client precipitously. ken veksler joins us now from barcelona. can, what does that gap in sterling look at friday morning? obviously, the reactions, should the vote be delayed -- february, the referendum and some hedging strategies. the on that, it becomes somewhat 135 our markets where the pound could go. i do believe that is what we will see, we will see those trends happen. what doest, i case of this actually look like in the broader market, and how are they behaving accordingly?

from there, i think we will see a bit of a bounce, which will be sold into. in the case of a vote to stay, we haven't anchor point, looking 152, and could finish at 153. initial 24 tohe 48 hours, there is a chance in which to look at. joe: there are some obvious things we know, if they stay in they would be theoretically bullish, if they leave, they would be bearish. certainly, volatility is way up. is there anything else we should pay attention to, that maybe we are not watching? other, more exotic trades that should be on our trades besides the obvious up and down? ken: i have always looked at it from a relative value standpoint, i think a lot of people are misjudging. misjudging either side,

staying or leaving. there would be a genuine higher print, should they vote to leave. if we see a vote to leave, most think the euro will suffer a consequence to read in relative terms, i think the euro sees a lot of upside. the sterling, on a relative value basis, they have their own concerns going forward with an election just a matter of a few weeks away. there could bet, opportunity to pick up volatility-adjusted returns, that 185 market will return. the pound-aussie, that will be an interesting pair. and, the benefit from a leave

it thaty is it, why is the japanese yen is a safe haven of choice? why would it not be better to go into the swiss? ken: calling it a safe haven is fair enough, that is a obvious narrative. calling anything japanese is probably a misnomer, that that is why the market is given a run. leave,he u.k. votes to into an of the boj action zone. that may be sterling-driven, it gives them a chance to intervene. and we will get rumors of price checking by the boj. zone, belowto 105

that on a sustained move, you will get serious rumblings, not actual action from the bank of japan. that liquidity in the market will cause problems. alix: and how is pound liquidity right now? ken: nonexistent. truthfully, if you are involved in the next 48 hours in the at worst, you could be carried out feet first. unless you are obliged to be trading in the market in , a genuinely is best to stay out. no one wants to weigh the risk of the event, one of leg of that binary outcome is in unknown scenario. of axiomaveksler management. scarlet: what you need to know ahead of tomorrow's brexit vote. ♪

scarlet: i'm scarlet fu, "what'd you miss?" closed aty, the polls :00 p.m. eastern time, and the votes are counted. alix: and, a big rush of results. the results should be clear by 11:30 eastern. talk aboutople places like bolton, right in the average of the view of euro skepticism.

also, sunderland in early town that could be closed. morning,tarts in the it will be exciting for several hours. alix: mark: i mark halperin.

mark:john: and i'm john heilemann. donaldh respect to trump, america is plenty great. ♪ i know you do, i know you want a mac and cheetos. today, in gotham city, donald trump stepped up to the teleprompters and delivered his roast of hillary clinton.