are getting softer and softer. this isn't a parliament or military installation, this isn't a transport system. this is a cafe in downtown sydney. i mean, it's hard to imagine a softer target, is it? >> no. i mean there's a randomness to this lone wolf dynamic which is very disturbing and it's, as we've all discussed, a huge challenge for those in the intelligence field and law enforcement. this is sort of the terrorism paradigm going forward and there's no place really that's off limits. >> you know, the sydney police a couple months ago said that they had prevented a random attempt to grab somebody off the streets in sydney and behead them. i'm wondering if you can give us insight as to how many of these lone wolf events are actually stopped and thwarted by authorities around the world every week or every month? i mean is this common? it just doesn't often come to fruition? >> i would -- there are many that are disrupted we won't hear

about because they want to protect their methods and intelligence. there's some that we will hear about and some where we -- people will say look, that was a very inept group and they were led into this by law enforcement through an undercover operation. we will see the spectrum of activity out there. we're entering a new phase with the lone wolf dynamic. i think you're going to see, unfortunately, more and more of this happening. >> why? why would that happen, chris, if this did not -- if this clearly did not end the way he wanted it to? >> no, but they're not thinking that far ahead. they're not -- by definition, they're not rationale people. and so he didn't -- he may well have been ready to die, but i don't think he envisioned it ending the way it did. >> my assumption now security forces around the world will be looking at the internet traffic the data that surrounds this, chris, if there has been a spike they want to know where it's come from and see if others reveal that sympathies and, therefore, i guess can connect

to further intent? >> they'll be a full-court press with all the intelligence services around the world that are watching terrorism and this dynamic is problematic. it can happen in any town at any time and really, there are varying capabilities on the part of law enforcement to react to it. >> does it surprise you, chris, that this does not happen even more often and that it doesn't happen more often in the u.s.? >> yes, it does. >> why do you think -- why is the -- why is it not more common than it is? >> well, honestly i think after 9/11, i think a lot has been done in the intelligence community to get out there on the intelligence front and enhance their intelligence capabilities and i think they're doing a very good job with that, even down to the local law enforcement level. but even then, there's no silver bullet for this type of activity. i mean prior to 9/11 the fbi

could not surf the internet looking for terrorists who were expressing their views. they had to have some sort of predcation. at least now they can do what we call a threat assessment, which means minimal information they can go ahead and go looking for this type of jihadist rhetoric. >> i just think also, chris, this country is different in that you do not have large dense populations of peace abiding muslims and then people attempting to radicalize them. clerics often times, you see it in france and the uk, i don't know what they are in australia, but you don't have that very negative element that is tolerated for fear that there could be a greater social implication. these clerics that peddle this hatred are tolerated if countries likes the uk because the authorities just don't really know what to do with them. offense times, even if they're incite something sort of hatred, i don't think you have that to the same extent in this country. >> i think that's true. i think we're -- there are some

limit -- many limitations to what we can do here in the u.s., any type of rhetoric on the part of a cleric that's essentially a call to violence, or very violent rhetoric, they're going to jump all over it. unfortunately, that's not the case in other areas and i think we have a greater level of assimilation with the muslim community in the u.s. and although there are many lone wolf candidates out there, i think there are more safeguards and more trip wires here. >> after today's episode here, chris, what gets -- what happens at fbi today and does anything materially change as a result of this one event or part of just a broader trajectory of trying to avoid situations likes this? >> i mean i wouldn't necessarily call this a wake-up call because i think they're on that level of alert as we speak. >> right. >> but i think -- i think everybody, of course, is taking note of this and they're going to run through this contingency plans, task their sources to to

gather more information, enhance their technical coverage if you will. >> what does that mean? >> this will -- it means that if there are wire taps ongoing they'll go live right away and begin to monitor real time which they're allowed to do but don't always do, things of that nature. >> any idea, would you argue that australia has been given a tougher hand in dealing with this than the united states has? >> possibly so. i mean i'm not familiar with what they can do on the prevention side, but i think we've come a long ways in the united states with being able to do those threat assessments if you will and being able to monitor, at least monitor the internet activities. that's where a lot of action is right now. >> that was key in evaluating this situation from the get-go. chris, i hope you'll stay on the phone for a moment. five minutes past the hour on the east coast after 16 hours, the so-called sydney siege which you may recognize as a hashtag on twitter is over.

according police in sydney australia, bomb disposal units on the scene. reports of two dead, three injured, although local media still trying to work on the confirmation of two fatalities. we're looking at video shot a few moments ago in sydney where it is about 3:00 in the morning. mandy drury, what can you tell us from hq? >> i'm hearing there are currently bomb squads inside the lintsds chocolate cafe sweeping out the premises with robots to make sure there are no explosive devices left inside the quaff -- cafe. there were teams of four, groups of four policemen, a group of four policemen on one -- okay. we're just going to listen to live channel 7 right now and see what they're saying. they're right opposite the cafe and can give us more details and fill in what i know as well. >> turned the lights out in the cafe at about 8:00 p.m. this evening. and they saw their opportunity. and it was from that side that they moved, ran, sprinted, broke out of the door and down the

stairs you can see just over there to the right extreme right-hand side of the cafe, and split up into three groups. four went down martin place, two back up to phillips street and beyond and ran off down there. one came running across here behind me towards more tin place and -- martin place and phillips way that way. it was at that point we saw the two groups assemble. one on the right-hand side of the main door, customer entrance of the cafe, two groups of police i estimate two groups of four, heavily armed, all wearing black, tactical response unit, night vision goggles on from this side, we saw another team of if four coming up the steps quietly on this rear flank on the signal, flash bang went off and in they went, multiple flash bangs, stun grenades, lights, you've seen those pictures, extraordinary pictures from the channel 7 camera taken from above me on level four here.

which was aimed to startle and disable the gunman. those flash bangs went for about five minutes and we could hear in amongst them the sound of gunfire as well. those pictures there, i mean just quite extraordinary and quite terrifying. soon after, the gunman was obviously down, the police were able to assemble the hostages in one corner on the right-hand side of my picture here. at that main customer entrance. it's at that point we saw them quickly thrown on to stretchers and raced down the hill, down towards the street where the ambulances have been waiting for them. as i said, earlier, we saw seven stretchers. we believe two were carrying equipment, five were carrying the injured, and of those, channel 7 is hearing that three were seriously injured, including a police officer. >> chris, such a tragic end. we're going to get an update from ashley brown. ashley is outside saint vincent

hospital. any word yet on the injured people? >> good morning, just in the last half an hour there has been one ambulance arrive here at saint vincent's hospital, the largest trauma unit in sydney. the male was conscious, he was in the back of the ambulance. the sirens weren't on. he was assisted out of the ambulance by a paramedic which is a good sign he was conscious. we haven't been able to confirm if this is one of the hostages that was involved in the siege, but we do understand that the timing does match up. we have gathered outside the hospital. there's been another three hospitals across sydney on standby, waiting for patients, waiting for the injured. they've been on standby since the siege unfolded early yesterday morning. and extra staff have been called in. they have been trained for this. so we are being assured by the health services that they do have the capacity to deal with the injured and that is exactly what they're ready to do here this morning. >> ashley, do we know if any of

the other hospitals have received any of the injured? >> we understand that rpa, roll prince alfred hospital, which is not far from martin place, a little further away from the hospital that i'm at at darlinghurst, that hospital has been on standby as well. we understand a female has been taken there. but we haven't been able to confirm her condition or if, in fact, she was involved in this hostage situation. >> we know that three people have been seriously injured and from what you're saying it looks like the person who's arrived there so far isn't one of the seriously injured people? >> exactly. and that was a relief on the journalists and cameramen's faces when we were waiting for the ambulance to come in and given the sirens weren't on we were thinking the worst, but we could see the patient in the back of the ambulance. he was conscious and he was

being attended to by a paramedic in the back with him and it was all very calm when they unloaded him here at saint vincent hospital about half an hour ago. >> by the way he was dressed more likely to be a hostage than one of the officers? >> no i didn't get the best view of him. i could see his face, he was conscious and he didn't seem to be overly hurt or harmed. as i said he was conscious. i couldn't get a good look at what he was wearing. it is dark here. but we do believe he was one of the people involved in this siege. we're also hearing that a police officer was injured. we haven't been able to confirm on the ambulance. we understand that one police officer may have suffered a pellet wound to the face. >> we saw somebody being dragged out by the officers and perhaps one of their own because -- >> we've been listening to channel 7 australia, channel 7 is right opposite the lint cafe,

where the siege took place, and there have been very much at the forefront of the coverage, blow by blow, tweet by tweet, of what's become happening for the past 17 hours. it sounds like it's a violent and tragic end to this standoff and our hearts and prayers do go out to the family members of those who have been killed. it seems as if reports are saying the gunman did shoot one of the hostages and that the sound of that gunshot was the likely trigger for those teams of police storming in to end the siege. at this stage, it's still unknown exactly how many people had been held hostage. a lot of the information was being kept very quiet by the police and even the hostages were sending information at the behest of the hostage taker to media outlets and the police telling the media outlets to keep the information quiet because it was a delicate negotiating context where anything could have maybe set

the hostage taker off. we are unsure, carl, still, of what exactly the fate of the gunman is, but at this stage we know there are two dead and three injured at the sydney siege cafe, the lintds cafe in martin place. >> importantly hostages seen with their arms in the air running away from it. there were hostages that escaped. still a number undetermined. >> police said, details to follow in their words. meantime the dow has lost all gains, down 45 points. s&p also in the red to the tune of 4 points. below 2,000. we're back after a short break. (vo) rush hour around here

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today there's a new way to work. and it's made with ibm. if you're just joining us this is the end of the siege in sydney. the new south wales police announced over half an hour ago that siege had ended. we're still seeking details on how many of the 15 hostages were able to escape. there are clearly fatalities and

the bomb squad have been in attempting to clear the area. joining us is edward, the former u.s. ambassador to australia. welcome to the program. i'm sure you've been following, as we have, these events in sydney in the financial district. what are your thoughts? >> i have, indeed, and i just want to say, sorry for those who were injured this. but i can only harken back to my days there with the trems does security that australia does have in few south wales as well. i worked closely with them during the sydney olympics and they are terrific and commended for handling this in the way they did. >> can you talk about the security relationship between the u.s. and its allies like australia even at the diplomatic level it try to further the ability to quash this sort of activity? >> it's extreeblgly close and i think probably with along with britain, australia is number one ally in that regard in terms of

security arrangements. we've shared intelligence. we worked very carefully to share information that would enable both our countries to deal with that terrorist threat that is global. no longer is geography a safety for either us or you, for australia, because of the way they use the social media now. everyone is on the front line, everyone is dealing with the fuse of the moment. >> mr. ambassador, we were talking to a former assistant fbi director a moment ago who worries that lone wolf activity, because of those dynamics you mentioned, social media, the easy acs sess to visibility, is going to get worse despite all the efforts of law enforcement around the world. do you agree? >> i do agree entirely. we've seen that happening now. multiple places around the globe. including the interesting one i saw and even one of our local papers if washington about one of the people really promoting or really being a violent person

in supporting of the islamic state ends up being a well-s dressed businessman in indiap in why is that? just his attachment to social media. we are seeing terrorist actions by individual who take it upon themselves. several incidents even in palestine and this is the israeli issue, not the one we're talking about, but many of the attacks are individuals who have undertaken and basically, because of their personal anger. >> the relationship between the big technology companies, social media makers as it were, and politicians on capitol hill, has been troublesome in many instances. we're told that video that the hostages took on youtube has now been blocked and, therefore, that's not available for public view. rightly presumably. do you think that we need to up our game in the way which we ask the twitters and youtubes and

facebooks to block content and to help the security forces track these lone wolves, or would that be to no great end? a big cost for little benefit, do you think? >> i recognize the delicacy of such an action, which is the die violation of freedom of speech and access of information. i have to tell you, i think that they really are fomenting trouble and it would be really quite useful if there could be some self-control, where they would not run. in fact, there have been some examples where there was some really violent displays or videos of executions which various media have decided not to run and we should approach them and seek some global understanding of some self-censor. >> we're in the midst of a dramatic pendulum swing in the narrative in this country when it comes to surveillance, comes to interrogation. if we get more episodes like this, or even if we don't, does

this change that conversation in your view? >> well, i think it does in that it becomes more intense. and more individuals are drawn to the issue now as a result of something like this in sydney and that's understandable. i think we all have to be very, very careful that we look at these issues rationally and with some attention to the counter arguments, which is human rights and the ability of citizens to have certain protections, and we don't want to take -- you can't allow incidents likes this to destroy what we believe is democracy. >> it's easy to say. it's a tough mission. >> you got that right. >> look at our screen right now, mr. ambassador. this is obviously a hyper emotional time. >> you've got that right. we've been through it here in the united states. >> how does it inform the decision to put boots on the ground, to fight islamic state

itself? the core of the problem, you know, the australians are warning that they have a large number of their own people that are fighting with islamic state on the ground. britain has the same. this country has the same problem. do you think we need to get more aggressive than people might be comfortable with in the middle east at the eye of the storm, or does this event point in the other direction? >> that's a very tough question and you're going to get a variety of answers on that front from the different people's political spectrum. i would come out on the side of we're going to be needing to do more. i understand my own president's reluctance to get involved yet again, but i think if we're going to depend on local forces which we do need to have, let's face that, we do need to have local forces on the ground, but i think they're not going to be effective without some international support and that's going to lead us to put people on the ground. >> is the danger there, ambassador, if you do that you radicalize people to behave in this way on your home soil?

>> there is that element, but if you don't do it, you end up having probably the same consequence. >> mr. ambassador, thank you so much for your time. appreciate that very much. joining us former u.n. ambassador to australia. i want to take a moment to keep our eye, at least one eye on the markets, dow down 66 points, s&p 1994, the rubble which crossed 60 this morning, now at 64, crude down to 56.83. there's been a large wave of selling and i'm not arguing it's related to australia by any stretch, but simon, in the past hour or so, markets have taken a turns for the worse. >> in fairness they're probably just picking up the down drop we had last week with the dow falling 3.8%. a lot of concern about oil and what point it bottomed and the degree to which, obviously, you could get dislocations moving down there. a big surge, of course, the flight to safety into treasuries which you're seeing around the world or into bond markets

around the world. >> ten-year this morning, makes a good point, around 212. currently 210. deutsch out with a report this morning, arguing it's going to go below 2. as people are looking for signs of disinflation or deflation around the world. we'll keep you posted on what's happening in sydney this hour after a short break. don't go away. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

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right now. we have seen a steep sell off, down 91 points on the dow. s&p falling below the 50-day moving average. one eye on the markets and one eye on the tense situation in sydney, australia where a 16 plus hour standoff has just ended. about an hour ago. bustling cafe taken ahold of in downtown sydney where we are still learning the fate of the gunman behind that situation as well as the hostages, multiple dozen of them taken into custody late yesterday evening. >> also want to bring in bob, former assistant secretary to department of homeland security. good to have you with us this morning. thank you so much. >> good morning. it's a pleasure to join you. >> how would you in your own view characterize what we've seen out of sydney in the past 16 hours?

>> so this type of incident has been on the minds of security officials in the united states and allies as well because there's been a number of recent examples in the uk, belgium and france, that highlighted this type of attack as something we have to be sensitive to and expect. it's not surprising in so much the australians themselves over the past few months have been heighted on to this concern and as you've noted previously they made a number of -- >> hoping that signal comes back but i think we lost the secretary. >> i am here. i am. >> we lost you for a moment. >> sorry. >> your point about the ways in which law enforcement in australia has tried to adapt in recent months? >> that's correct. i mean even here in the united states, the department of homeland security recently published an intelligence assessment that was really speaking to this type of attack

across the united states potentially, within australia or europe, based upon foreign fighter returns, or the influence of isil on those that can't fight but are sympathetic to their demands here in the united states. >> secretary, unfortunately, we have been living in a world of heightened vigilance for these issues for some time with the uk earlier this year upping their threat level to severe, and in australia, they increased their threat level earlier this year too. i'm wondering how you think, if at all, we need to as just our vigilance given the state of affairs on a global scale at this point? >> well, i know from my past experience right now, the white house and the department of homeland security and the security council in general are looking at that, that very issue. they have to -- the conditions exist here in the united states that number one, would warrant such a threat alert and number two, would raising that threat alert actually result in anything that would be positive for the american people?

i think what we're finding is that these incidents have the potential of being so random and potentially undetectable that raising the threat level would not necessarily allow the resources to be applied where they should be applied. they could almost be misdirected. i think what we have to do is exactly what's been going on, more public engagement about reporting things, engaging with different cultures in our community that can help us identify those areas and those people that might actually be sympathetic to those types of, you know, to isis or whom ever might be fomenting this kind of thinking to result in a violent act, that's where we have to spend our time. there's a whole range of things that are being considered right now, i'm sure, within the construct of homeland security and our national security here in the united states. >> talk about a sea change that would be if, in fact, that's the way law enforcement is going to have to tackle this in the future. mr. secretary, thank you very much for your guidance, your insight today. >> sure. >> former assistant secretary to

the department of homeland defense. we do have some footage coming in at this hour of sheikh haron, thought to be the gunman behind this 16-plus hour standoff. he's been described as a cleric and activist and a known quantity to australian authorities. of course, the man who is allegedly taken those hostages in a standoff more than 16 hours at the lindt cafe in downtown sydney that just ended about an hour ago. you are looking at some file footage we have obtained of sheikh haron at this hour. one more look at the markets. we are seeing the dow slide into negative it territory. the s&p below the 50-day moving average. dow at 17186. nasdaq down by the most nearly 1%. we will keep one eye on the markets and update you on the situation in sydney when we come back after this. they're coming. what do i do? you need to catch the 4:10 huh? the equipment tracking system

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are all the green lights you? no. it's called grid iq. the 4:51 is leaving at 4:51. ♪ they cut the power. it'll fix itself. power's back on. quick thinking traffic lights and self correcting power grids make the world predictable. thrillingly predictable. welcome back. take a look at the markets off their early lows but in the early gains the dow lost as much as 102 points largely falling in tandem with oil which continues to be the main story in the markets today. let's bring in ash carbon, director of floor operations for ubs. we did see a reversal in the markets about an hour ago. what forces were at work in addition to oil? >> primarily oil. the other thing was that the

bath was weak. take yourself back to 3:00 on friday. gained only the amount of points we lost in the final hours in both the s&p and the dow. so that was kind of noncommittal bounce. when oil rolled over, it began to drag heavily. the situation in sydney didn't help any either, but i don't know that it was the main drag. you took out as you aptly said, the 50-day moving average, you now are going to focus in on the 100-day moving average. that would be 17096 in the dow and 1987 in the s&p. so they will become critical areas. the other is so far the heavy selling in the oil is in the u.s. version, in the west texas intermediate. if they start to move into brent and brent breaks 60 you could get a more severe reaction. >> 53, three bucks from here, that's half off. that is half off of june high on how many markets do we say that about, art?

>> it is amazing. we've had several occasions even in the stock market this year where suddenly, within a month, you get two or three-week dramatic shift. but this change in oil is really -- >> have you seen it? how many of these types of 50% drops in the course of six months have you seen in your career? >> very, very few. very, very few. usually comes after some dramatic fed action, volcker tightening, things like that, but nothing like this where it all crept up. >> there's been a conversation about some of the weakness in high yield being driven by oil as well, concerns about some of these companies operating in the oil patch, financing themselves and how expensive it becomes for them going forward not only to produce but also to borrow money. now there are questions about whether there will be trickle on effects elsewhere in high yield. do you see anything to that end? >> i'm quite disturbed by the divergence between the stock market and high yield. usually they follow a somewhat

similar pattern and with the high yield being under such pressure, you would have thought stocks would have reacted earlier and more dramatically. but i think one of the things that's going on here is, in a zero rate environment, everything kind of gets levered to something else. and people are beginning to wonder whether oil will begin to put pressure on other assets. we're seeing all the commodities going down. you think oil is bad. take a look at coal. that looks like a falling safe. so we have some real difficulty. >> but it seems like for most people at home, these falling commodities are a good thing, especially in the holiday season. people are going to have more money to spend. that money is going to get spent somewhere, so intraday, you know, issues and volatility are a concern for a certain segment but if you're at home thinking about your investments overall how should you look at this move in oil and be worried about what the markets are doing in one

day? >> it's obvious that personally you should enjoy it. you're going to have hopefully lower heating costs and lower driving costs, but overall, as i say, so many of these things are now interlinked simply by the leverage that's there. it's going to be somewhat difficult. there's a chance everybody remembers the contagion that showed up in 2008 and while we don't see a direct link when you begin to see these divergences somebody is out there, blaming it on hedge funds, blaming it on something else, but they seem to be linked and it is not donat n deflationary. that will make the fomc commentary important and hopefully the press conference after, people will get to chair lady yellen and say okay, how much was oil in your conversation in there? how much was europe in your conversation? we still have mr. draghi remains

the prince of promises. we haven't seen the qe yet. we've got to say, where's the beef? >> we get the fomc statement in the middle of this week. technicals, seasonals aside, you always say geopolitics is the wildcard in the current focus. how much focus will be there on geopolitics given the situation in sydney? >> i think there will be a great deal. isis is back in the main headline again. they're making moves in country in iraq and several other places. as a sponsor if you would of lone wolf reactions such as we saw in sydney, they will become far more critically important and it will begin to move sentiment in congress certainly and elsewhere, that maybe we do need something like boots on the ground to take this where it needs to go. >> art cashin as always appreciate you being here. >> pleasure. >> with that, mandy drury has new details on the hostage situation in sydney. >> hi there, carl. we were hoping for a peaceful resolution to the sydney siege.

unfortunately and tragically it was not to be. according to local news channel 7, of the two that are dead, one is the hostage taker and another is reportedly a hostage that gunman shot. we're also hearing that instead of just three seriously injured, there are a parentally five that have been wounded in the shoot-out. just to give you a little more detail on who exactly this gunman was, it was an iranian refugee, haron, known as sheikh haron, he was known to the police, on official's radars last year. sentenced to 300 hours of community service for writing hate mail, offensive letters to families of eight soldiers killed in afghanistan. they were obviously over there supporting the united states campaign there. he was also charged later with being an accessory to the murder of his ex-wife and earlier this year, he was charged with sexual assault that occurred back in 2002 and he's been out on bail

on the charges. this is a guy with a record. his former lawyer spoke to abc in australia and said, it's not a concerted terrorism event or act. it's a damaged goods individual who has done something outrageous. a strong ideology. that is so strong that it clouds his vision for common sense and objectiveness. and it's very clear, guys, that his extremist views came to the fore. he has a website that made it clear how he felt about australians supporting u.s. campaigns in places like afghanistan and against isis with graphic images of children he said had been killed by australian and u.s. troops. a tragic end. again two dead, one supposed to be the gunman and another a hostage that he shot and if you sort of do a little bit of backtracking, it is probably that shot that prompted the storming by police into the cafe which ended it all. back to you. >> mandy, just a terrible end to

the story. thank you, mandy drury, at hq. joining us on the phone is don clark, former fbi special agent head of new york and houston divisions. agent clark, good to have you on the phone. thank you for joining us. >> my pleasure. good to be with you this morning. sorry about the affair. >> it's been a terrible thing to watch for the past several hours. how important is it that he is not going to be questioned? >> well, you know, certainly they would like to question him, no question about it, to try to find out more information about it. but, you know, they will be able to move out throughout the world and the country to try to find who is this person and what he has been doing and to whom he has been relating and talking to and what he's been doing and they will be able to put the picture together to really see who's behind this thing and what's his motive to bep. >> is it likely they have

answers to a lot of those questions because he was so visible on the internet? >> oh, i think so. because, you know, let's face it, in the modern days activity and investigative type of area, with all of the information systems that can go through and so forth, they must have gathered some kind of information to know who this guy is and what he may have done in the past or what he may be looking at at this point and they may be looking along that line. >> do we have a sense on whether isis is organized enough to be directly and intentionally radicalizing people like this or has it become a banner that people who have an ax to grind or their own issues might be taking up and doing these lone wolf type of attacks without any organization necessarily behind them? >> well, that's a good questionp. you know, yes, there are some people themselves that will want to take on things to solve all

of their problems just themselves, but trust me, i certainly believe and i think many others would agree that there are very few of those types of people because that could be an illness or some other type of activity with an individual. so it certainly does happen. but on the other side of that coin, clearly, that there are organizational structures throughout the world that will be working those types of activities to achieve something that that particular organization wants to do. >> certainly many questions, many leads that law enforcement and authorities will be working this morning. don clark, we appreciate your time and input today. >> thank you very much. any time. >> as we continue monitoring the situation in sydney, we are also looking at the markets. the dow now at or near session lows. currently down 141 points. we are definitely keeping an eye on that as all major averages

move below their 50-day moving average and toward that 100-day moving average as well. all ten s&p sectors in the red and we will bring you more on the markets and the situation in sydney after this short break. thanks. ♪ [ male announcer ] fedex® has solutions to enable global commerce that can help your company grow steadily and quickly. great job. (mandarin) ♪

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breath is negative, lost 700 points on the dow last week, feeble attempt at buying and been quickly lost. bp is on the floor.

>> good morning. looks like we're continuing to see general derisking around the oil trade. some of the oil stacks are up while the rest is not. oil continued to move down, markets slowly started moving down with it. you can see 5649, west texas intermediate. we started at the open in positive territory on crude but as you can see slow decline down. there's the s&p 500. put that up and you can see what was going on here. we started slowing descending along with that as oil started moving down. that slide started accelerating about an hour ago. it is odd that energy is one of the only sectors on the upside. the oil service index, osx, a simple mess for a long time, is down off of the highs but still in positive territory. this is a basket of the big oil service names like anadarko and apache. finally, if you look at financials here's one where we've declined with the rest of the market, energy being the exception. that chart tracked pretty much the oil index starting in

positive territory or oil in positive territory moving straight down. the volumes over here are not particularly strong, but the direction has been very clear. just starting positive and moving to the downside. finally want to note, credit and what's going on there. that's what everybody is watching besides oil. high yield is trading well below the october lows and that's one of the reasons, of course, declining oil has been bad for the markets overall. that's the hyg you're looking at, the high yield etf. back to you. >> thank you for that. bob pisani on the floor. joining us is bob mcafee later than we would have liked given the events in sydney. welcome. >> i'm thinking back to three months ago, you got very cautious on the markets and it's looking smarter and smarter. >> well, you know, i think the issue that we face is that there's a lot of turmoil in the world, a lot of chaos, and i think things we can't anticipate are happening almost daily now

and as investors we have to be kau us some because we've been in a long, long bull market and you don't want to be a pig at the trough when it's time to make the bacon. this is one of those times where i think caution is totally appropriate and anyone who is fully invested has to ask themselves the question, what is going to give them the lift to take them to the next level. one thing i do believe, it's possible we can get a speculative blow off from here but the conditions you have are fully valued and an awful lot of reasons why cash is going to feel more comfortable than equities. >> anyone who doubts you did turn cautious you were talking t bills back in the fall. >> and i'm still there. 70% t bills personally because my view is that there are times you just don't want to play and i frankly think this is one of them. look at the news of the last three or four weeks. i mean the social fabric in the united states is being

threatened by, if you will, the results of post 9/11 paranoia persisting and changing the way our culture works. i just think if you look at this, that's just not a good backdrop for rising stock prices. i just don't see it. >> unfortunately, we've gotten used to living in a world where these headline comes on a daily, weekly, monthly bases. sometimes the market gets very involved and other times -- >> you're right. >> shrugs it off. >> that's a really important point because with zero interest percent interest rates it's possible and the gains going on, think of what happened last week. we created another massive opportunity for bank speculation that may well turbo charge things. i'm not saying stocks can't go up. i'm merely saying that from a risk/reward point of view, i'm looking and saying for myself, i want to be much more conservative that there will be a better day and, you know, the rothchilds used to say the time

to buy real estate is when there's blood in the streets. right now in america we're seeing a change. suddenly people are not just accepting the status quo. people going through the streets and saying, wait a minute, you know, maybe this pursuit of the all mighty dollar has gone far enough and it's time to balance things out a little bit. i don't know where that's going to go. as an investor i would rather watch this from the sidelines than in the trenches. >> wouldn't the counter argument be, yes there's geopolitical question marks but nowhere near the kind of upheaval we've seen in years past and even if you look domestically, the nahb report out today, was pretty good. >> no -- >> the low gas prices are likely to help consumer spending, people freaked out post alibaba saying that was the top but they bounce back, could the run continue from here? >> absolutely. john, i think the point, every point you're making is right. the u.s. economy is actually pretty strong. right. i was last time right after the

black friday and everybody was in a 'tissy but turned out november sales were terrific as you would have expected given full employment. absolutely it's possible. i'm merely saying that if we woke up tomorrow and the market was doing the same thing it's been doing the last few days you won't be shocked by that. if it does that for a month you will be able to buy everything back up the truck. that's when i want to go in and be buying apple and google and the other things i like in my sector. >> west texas, 50% off the high, that's not blood in the streets by your definition? >> it would be if you're a speculator in oil. realistically, i look at this and say, stock prices are still at the upper band of valuation ranges. it's not to say they can't go higher but saying for myself, i want to be more conservatively positioned because i would like to have powder just ins case blood really is in the streets. i think john is making the right points here. there's nothing that says this is the pivot point on the

downside. i just a few months ago hit the point at which personally i was unprepared to take the risk of staying in the market. i'm not sure i'm right. i'm just saying, that i feel more comfortable watching what's going on now with the huge pile of t bills than i would if i were 100% long. >> i can only imagine. roger, thank you so much. >> it's always a pleasure. >> great to see you guys. >> we want to get back to the story developing in sydney. joining us on the phone new york congressman, former chair of the homeland committee congressman peter king. thank you for being with us. >> you're very welcome. thank you. what's your take on what's happened? >> we can't give definite answers yet. i would say this has all the indications of a radicalized islamist who is very influenced by isis social media. what's changed in the face of terrorism in the last year i would say is with isis, they are appealing not just to members of their organization and not to

just direct followers of their organization, but through social media, they're reaching out to people on the fringes. we've seen that in canada with the attack of the parliament, we saw that in new york city with the attack on a police officer with an ax, and it appears we've seen that in sydney. people who are on the per riffy and who may have emotional disturbances, being influenced by isis. isis has opened up a new front, brought in a new wave of volunteers which are harder to stop in advance. >> congressman, so what is the appropriate response to that? because if this isn't an organized group that is directly radicalizing people, if this is in effect a marketing campaign where they're reaching some disaffected people who are taking individual action, it seems that, you know, government would want to be careful not to overreact but there is appropriate reaction? how do you approach that? >> i believe the appropriate reaction is to -- we have to increase surveillance, if you will, getting sources within

communities. now the reality is, that these people are going to come from the muslim community because these are muslim terrorists. and while that's maybe 1 or 2% of the population or less, that's the community they're going to be coming from. it's important to find sources and informants in those communities that can tip off the authorities and someone acting more extreme, more dangerous, more radical and so they can be watched. again there's no foolproof answer but that is the best thing we can do right now is to try to spot these people in advance. the only way you will do that, have any hope of doing that, i believe, is by people in the community who see someone who's acting more radical, someone in the mosque or, you know, the local store or whatever and talking in a more extreme way than before. if they mention isis in any way, in our society, that's not enough to lock anybody up, even bring them in for questioning but it is enough i believe to keep an eye on them and ask more questions about them.

>> congressman, this event is happening as the u.s. is undergoing a shift in strategy, new leadership atop the department of defense. from a macro perspective do you see the way the u.s. is approaching counterterrorism changing all that much? >> kayla, i don't think so. i believe we have to overseas going after isis, doing the air attracts. i don't believe the president should be ruling out ground tra troops. the country is being attacked here, with some of our closest allies. australia and canada, nobody has been a closer ally than australia. they and the british are the two closest we have. we can't let our guard down. because we go weeks, months, years, without being attacked in a large way, many people, certainly many americans, think the threat is behind us. no, many ways it's more dangerous than ever. i say we have to continue and

increase the military operations. at the same time, monitor as much as we can, open sources, find out who's on the internet, who is going to these extremist websites and then try to follow through on that. try to drill down. >> congressman, you mentioned trust if i understand you correctly, particularly within the muslim community, as being an important tool to be able it to combat this going forward. asking people to report suspicious activity they see inside their community. over the past week or so, we've seen some marches throughout new york and other cities in the country where people are raising issues about their trust of the government and police forces. is there trust that needs to be restored there in order for that deterrent effect to work? >> there has to be trust on both sides but also i think it's important for leaders in those communities to speak out. i think a lot of those demonstrations have been wrong. i think that some of the rhetoric is terrible. i think that the police overall are doing a phenomenal job. whether new york, chicago or

boston, the police do a better job than they're getting credit for. the attacks on them are not only wrong but counter productive. >> thank you for your time. >> thank you. >> events out of sydney. >> we are monitoring the markets at this hour. the dow now at session lows, down to 17,131. all major averages touching their lowest point since late october. of course much of that has been driven by the steep declines in both west texas and brent oil at this hour. >> peter shack now, our ace market statistician tells us this is the first time since june of last year the dow has been up 100 and down 100 in the same session just to give you a sense of the volatility of the intraday swing. today alone. >> volatility, of course, is what traders are preparing to be the new normal as we go into a year where interest rates are likely to rise. but you can see that largely the

driver still is oil. >> yeah. still got to get through a lot this week. nike earnings, oracle, fedex earnings and, of course, two-day if fed meeting and a press conference and we'll see if chairman yellen has anything to say about the series of events we're talking about. let's get over to the judge, and the half back at hq. okay. p. carl, thank you very much. welcome to the halftime show. our starting lineup for today, stephanie is the coportfolio manager of jim cramer's charitable trust. josh brown is ceo of rid holtz wealth management pete najarian co-founder of option munster and nele gilbert is the cofunder of [ inaudible ] capital. our game plan, energy surge. surge. why goldman sachs says now is the time to buy some of those names. the ones they recommend and the debate on that call. we're, of co,