maria: i want to look at earnings. we've got the fed out, and all-star lineup. join us on mornings with maria and tom wilson will be here and joe grano will be with us and we'll revisit the stories of the moment as we approach that sunday deadline for greece. charles in for stuart have a great show. charles: thanks a lot, maria. we certainly will stuart is on vacation, but i'm going to take you through the big story and money story today. this start, of course china. it's a bigger deal than greece and now our markets are falling big time falling out of bed because the chinese stocks continue to free fall. and the man calling for a prolonged market crash that will last not only through this year, but all of next year will be here. how is this though not in the

financial times, disheartening. one in five americans are receiving government assistance and now president obama saying let's give out solar panels to the poor just what we need to gre the economy. we haven't forgotten about hillary giving the first interview since announcing her campaign. and she blames republicans for everything. poor hillary there. "varney & company" is about to begin. ♪ >> all right. guys, we've got a ton of news for you this morning and we have now breaking news all united airlines flights are grounded, they say it's due to a technical glitch. all flights, all airports are grounded, a big problem for travelers. we have a live look at o'hare airport and that's on your screen now. that's the giant united hub.

if you have to go through there. the big story now liz: the big story, there has to be something more to it than to be causing all the flights to be canceled. charles: this is worrisome because a lot of people are worried about computer systems worldwide particularly involving airlines. >> true there's been cabin pressure, no pun intended on t the flyhigh flying stocks no pun intended, and we'll watch those. charles: we've got it up there, pre-market, and showing down at least a dollar. the crash in oil prices should have helped the stocks. i was waiting for one more no pun intended because that would have broke the record. [laughter] >> it's not j us inconvenience, but we don't know what's going on. we'll drill deeper. they're saying it's a technical

glitch and the street doesn't like it. and the board doesn't like news from around the world, equity futures are pulling back. at one point we were down 200, before the open rallies back to less than a triple digit loss and now we're opening under a tremendous amount of pressure. a moment ago i talked about oil. and yesterday the market had a rally and oil off the canvass, relatively unchanged, it could go either way. the implosion trade, what you bought, heart precious metals when the world goes to hell in a hand basket. gold looking higher because the world is on the cusp. on the other end of that is copper, everyone is talking about copper because this might be the real proxy. at a six-year low, but a lot of that involves a global economic slowdown, is it overdone or is copper the canary in a coal mine? let's bring in harry dent the author of the demographic. >> you've been predicting a rolling crash that will last more than a year.

have we begun it? >> we have in china we may have one morally at the united states i'm looking at stocks and they may seem oversold and may have short-term resolution in greece. in the u.s. fracking a trillion dollar industry and there's debt that will have to default and puerto rico is coming. the big thing, you're right, saying recently that the china bubble is bursting. we've been saying this is the biggest bubble in the world. real estate started to slow and everyday people poured in on margin debt into chinese stock and they went up 160% in one year and in a declining economy, now the government is having to prop up the market with buying artificial buying and telling pension funds they can't sell stocks they can only buy them. this is desperate. so, i think this is the biggest sign, the china market is down over 30%. i've been looking for that.

a sign that the top is there. we have to get to the point where if something happens to the u.s. we put in a top and already say a 30-plus percent decline and the u.s. did the same thing in 1929 tried to prop up the market and it didn't work. what is it? a series of events or we'll be able to point to one cataclysmic event. your illustration we're sitting on a powder keg. what's the thing that sparks this and doesn't get on a downward slide that doesn't reverse? >> i think it's the china bubble. they're losing control over that. interest rates, long-term rates are headed up another sign we have been looking for. when central banks keep stimulating and quantitytative easing and long-term rates go up anyway. the only thing they can control is short-term rates. they're losing control of that. the china bubble bursting further and especially when it starts to hit real estate harder and in the united states, i think this fracking bubble is going to be the first

thing to go without quantitative easing these energy companies would not have been able to borrow at junk bond rates, 5 to 10% and normally 8 to 10 and oil prices wouldn't come up. we've said the frackers are dead and will have to default, the biggest one, you need oil prices to keep falling. so oil prices have bounced we said low 60's and 70's and retreating again. we get back down into the low 40's and the bond markets-- >> before i let you go and hopefully next time talk more about the demographic issues i don't think those have kicked in yet. eric bolling on yesterday saying cheap oil is the thing that will save our economy, but you think it's the exact opposite? >> no, because it's going to trigger a debt crisis here, yes it's good for the consumer, but it hasn't done much for them regardless. consumers are tapped out and so this is not going to turn around the consumer and the

demographics get bad, especially next year charles. charles: great, buddy, at least you're in tampa to weather the storm in a cozy way. we'll talk to you soon. if you watch "varney & company" and the rest of fox business for that matter you would have known that china was the biggest story come intoing this week and bigger than greece. now look at what it's doing to the markets today. and let's bring in mary pan liz macdonald and mary you lived in hong kong for a long time. you understand the mentality out there. we have a lot of people coming on saying that the chinese leaders don't understand the chinese people. i kind of find that interesting. to the harry's point the notion that he can this control or manage that. >> i was there when the markets crashed and what people don't realize in this country, china did obamanommics on steroids. they did the fiscal stimulus in the united states and the money went three place, under the

mattress, it went into stocks and it went into property and we've seen basically, this bubble inflate in property and in stocks and now you're seeing the deflation. ultimately, china is a developing economy with a very immature financial system and they just don't want to take the steps that they need to take in order to allow the stock market to be based on real valuations. >> right. >> and not essentially on gambling, which is how the chinese people do it. charles: every country wants that. >> no, but china is different because-- remember, china is a one hadden party state. they have a lot of capital controls and you see a lot of distortions in the marketplace. that's a big issue, it's not something they look like they'll liberalize or fix soon. charles: all right, guys. much more on china and the markets in a moment. we have to talk about hillary clinton because she gave her first televised interview since her campaign and she went on the defensive. listen to this. >> i think when your subjected to the kind of constant barrage

of attacks that are largely fomented by and coming from the right-- >> do you bear any responsibility? >> well you know i can only tell you that i was elected twice in new york against the same kind of onslaught. this has been a theme that's been used against me and my husband for many many years. charles: joining us now is the author of clinton, inc. and he joins us from charleston south carolina. all right, daniel not necessarily a surprise she's blaming the right and playing the victim, but on the one hand what got her elected. what's in you about the hillary running for president? >> there she goes again, the vast right wing conspiracy. the truth is not much is new. she's using the play book that the clintons used for a very long time especially hillary clinton consider yourself the victim which she did well yesterday.

blame everybody else, but yourself, she also did. say everything is a lie and sort of stand your ground and blame everybody else, but, of course, yourself. she didn't-- what i found strange was not her interview, which i think was somewhat predictable and soft, what is different is that she was panned called her russe and one said she looked scared and frightened to answer questions and even the daily beast called her playing the victim card. i think that people are not as accustomed to it these days and less likely to take it and to take her stand and say, okay fine, we can live with a politician who does this. in these days we try to value authenticity and i don't think that came across at all. >> what's the game plan for hillary clinton? it's e-mack. it takes time for narratives to take hold. the e-mail story is toxic. trust us, but don't verify what

they did with the servers, is this laying the ground for 2016? a negative narrative is bad for hillary clinton when she's neck and neck with bernie sanders in new hampshire and iowa. >> they never wanted the coordination so they wanted bernie to rise a little so they can pretend they have a real primary and bernie sanders is a real candidate that they have to be scared of 73-year-old socialist from vermont. it helps a little as long as he can rise without overtaking them. i think she's playing it week by week month by month. next month is august she wants to go on vacation to the hamptons probably. the last couple of months she's been riddled by scandal, the last couple of weeks have been somewhat quiet so answer some questions and allow the scams of the past to rest and move on. charles: hopefully cnn, if she had a tough time with that interview maybe americans will get answers when she gets

tough tough questions and actual debates. thanks, we appreciate it dan. >> no problem, she should come on here anytime, right? a lot of fun. charles: it's an open invitation, thanks buddy. >> thank you. charles: we're following the breaking news story, had it moments ago, all united airline flights are grounded and this is nationwide. right now take a look it's live to the international airports. those planes are going nowhere right now. the f.a.a. says if this were a technical blitz, what does that mean? we're talking all flights and airplanes in the united states are grounded on a technical glitch? no word when they're going to resume. we'll obviously be on it for you. microsoft announcing 7800 layoffs mostly in its phone business. check out shares of microsoft relatively unchanged and maybe more less throwing in the towel on that phone business and we're all over china for you pan how the problems over there are affecting your money, your

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futures. down all morning long. down as much as 200 in the best case scenario moving ahead of the opening bell and the main reason why, another stock selloff in china, it's going to hit our markets big time when we open in less than 15 minutes. on that note bring in former goldman sachs partner, peter, the author of "american mojo", and you wrote a best selling novel with china and i can't say the name of it on air. you were aware that china was eating our lunch, so to speak, is this a reversal of things or-- >> if you look how china differs from our market it tells the whole story. there are about 90 million accounts in china. what does it mean? it means there are only 88 million people in chooirn in the country are investing.

what they're trying to do is-- >> you say you have to behave differently. who is you? >> i think if you're-- you can't air brush the communist party out of the market as much as you tried. this is as much of a controlled situation as you can have. what they're trying to do restore order. you have 90 people who invested and the scary part-- >> ask you why, why open up the markets to you will an of these people and why entice and invest in the market. last month, 1.4 million people new accounts every single week in china. mostly illiterate people buying stocks. why would the communist government allow this in the first place and knowing some form of history at some point coming to something like this? >> it's a great question. first of all, the shanghai market was open in 1990. this was a relatively immature

market. when you have winners and a market that's gone up in 12 months it's hard not to-- >> what do they get from it the same thing that the federal reserve has here wow, i'm up beg in the market i'll go out and buy a car. >> you hit the nail on head. the wealth effect that they've created. what china is trying to do is create a robust middle last like our own and it's not easy to do. and they're trying to shortcut it and state media literally pumping up the stock market. charles: do you think it's a mess take to plow hundreds of billions or maybe more to keep this propped up or just let it fall? because that's one of the realities of investing, too, at some point. >> the order is going to come one thing happens, of the trillions, a lot has been borrowed, margins up 400% and that has to be cleared out before you go restore order. >> peter great book we want you to come on got to get back

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get excited for the 1989 world tour with exclusive behind the scenes footage all of taylor swift's music videos interviews, and more. xfinity is the destination for all things taylor swift. >> we've got breaking news for you from the new york stock exchange.

they're investigating a major problem with some tickers. nicole petallides is on the floor give us details if you have them. >> so it's not a regulatory-- i understand i'm gathering information for you as we speak you know and got to bring it up-to-date. you have to investigate what they really mean so we're talking about 220 symbols, the investigation that the nyse is doing right now. they're responding into the gateway connection affecting the symbols and the names we are waechg include macy's las vegas sands, capital one financial, there will not be a regulatory open and may not trade here at the new york stock exchange. you may see some of the names delayed on the open as we hit 9:30 which is only five and a half minutes away. charles: so nicole you're saying that even though they're having trouble, and trading names 220 tickers if someone wanted to buy or sell they could get a trade through. do you know if it would be delayed or straight through? >> i think if you did it somewhere else other than on

the floor of the stock exchange, you could. it's called trade away. you can do it in other venues, but the stock exchange is the price point and they're not going to open it up until they get the right price until they're working positively. big crowds on the ramp there and they're gathering around some of the names and 220 names and big ones. >> and what a day for this to happen when we're going to open up under pressure yet again. we could have some disparities to some of these. that's why you need us down herements well, you know i know you're being funny and-- >> no serious. charles: no no listen we can't just have a system 100% of technology. sometimes you need the human element to put out fires. nicole: 1100%. charles: and i'm going to come back to you. and the big story, united

airlines all u.s. flights have been grounded and there's a computer glitch seems to me as we brought in cheryl casone and you know this industry well. >> right. charles: i guess this is boiler plate stuff, but for every flight in america to be shut down what kind of a glitch could it be? >> it's got to be a huge glitch to affect the entire system let's boil this down all right, right now you've got united flights on the ground. you've got a complete ground stop in the u.s. and also flights in the air. those flights are okay i want to be clear here those flights are safe. to me it's telling me there's likely, i'm speculating, i think it has to do with flight planning. we saw this happen in europe about three weeks ago, sometimes when you see things like this happen because when they have an internal computer glitch they can't right out and get to the pilots and crews, the flight plans where they're going to go. all of that has to be happened out before the planes leave and the f. an a a --

the f.a.a. giving a quick statement to fox business they're putting it on united. this is an internal problem liz: we saw this similar glitch on june 2nd with united airlines and the issue is the f.a.a. has new computer technology requirements for the pilots to communicate to the cockpit via ipads. we need to find out more about what the new upgrades the f.a.a. is requiring on the airlines and how that is basically possibly triggering. we don't know. >> the pilots use the ipads within the cockpits you're correct and they do plug in on ground and plug those in. obviously, now, many of the planes have wi-fi capabilities and the pilots are using that as well. to be clear, that's separate from the flight planning of the aircraft. >> that's why i think that this is a-- >> i know it's separate. there are so many glitches with the pilots communicating and also the ticket glitches. charles: i wanted to say if

there are differences because they say we don't have the ability to takeoff, but we have the ability to land? is there a mechanism for communicating? >> yes, the system is in the cockpit is a separate system than the system that i'm talking about where i believe the glitch is happening and that's when united-- it's route planning. >> and other airlines are very active on twitter these days if you haven't noticed and united airlines tweeted they're working to work out the passenger services and apologizing for the inconvenience and responding to use about every angry possible passenger right now. they can't get to where they're going. it's primetime travelling right now. the chicago to new york commuters. >> the second time in two months. >> i don't want anyone watching to think-- this is not a safety issue, it's a computer issue and obviously they're doing it

right now. anyone with a family member in the sky, not to worry, there are two separate systems. i believe in my experience with this particular glitch. if you're sitting at the gate-- >> we should be about be able to get a discount on fog fees, but beyond the keens factor people who are safe that are in the flight. >> yes. charles: we're not going to be able to show you because of the glitch, over 200 stocks quote, gateway issues and the market is under a huge amount of pressure. a lot of people say this is the big one. take a listen to what harry dent told us earlier. >> the china bubble bursting further and especially when it starts to hit real estate harder and in the united states, i think this fracking bubble is going to be the first thing to go.

without quantitative easing these energy companies would not have been able to borrow at junk bopped rates of 5% when it's normally 8 to 10 and oil prices wouldn't have come back up. they're dead. charles: harry dent outlined a whole lot of issues and we're living through them moment to moment. the market is opening and we're hearing the opening of the ringing of the bell. that was harry dent. the futures have been down all morning long it won't be surprising in a few minutes if we see a triple-digit loss. the dow is opening off 46 47 points and probably open down a lot more than that. we've got larry leven and i want to hear what we heard from harry dent. what about the notion that china's implosion will the linchpin that collapses our market? >> it possibly could be. i'm negative on china to the point that china is facing a 1929 style crash and i think

the contagion possibilities are huge so i think it's going to affect the united states markets and global markets. this is only the beginning of what's going to happen in china. charles: the 1929 crash was exacerbated by a lot of mistakes, we had some protectionism, we had the fed a lot of people said they moved in the wrong direction, it was a young organization then. china they're communist, but have to be somewhat students of history. even if it's a sign of panic, and not-- >> it is a sign of panic. charles: so sometimes panic is good? >> no, it's unfortunate to let it go this far. they cannot rule out the markets and they have to work through the markets. the market will be closed. >> well this is different from 1929. you know i don't know who is-- this person putting out the commentary is way off. not you, but i'm saying before by the way, it's 6% of china's

population is in the markets and here it's 30% of people under 30 are in the market. maybe half. >> they say there's 90 million accounts here. >> and listen the government of china is working itself to prop up the market whereas in 1929, the private sector the bankers moved. >> larry, i know that traders are salivating. and you guys have to make a whot of money-- a whole lot of money and could we see-- >> i think we could. there will be more of it and everybody is betting on china being the catalyst that keeps pushing this market down. one of the key things i'm a technical trader and so are a lot of the geeseuys behind me. if they turn them out there, you're looking from a technical standpoint. charles: we have breaking news from the new york stock exchange and they're investigating the problem with over 200 tickers. let's go down there, nicole give us an update. >> right, if you go to the

macy's post it's not open yet. they want to make sure they do this right and i started to hear maybe they would open these things manually. i was asked to leave the ramp area where they were working on that, trying to get the latest information. if you walk the floors you can see some of the names are not open. you can make sure that they open seamlessly. you'll see how stocks are trading and some have not opened yet and they'll make sure the system issues gets these open. >> to your point, they're not open, but we have macy's down 55 cents. how does it work down there? are you sensing frustration, anger panic about the central location where the trades are actually made and you have individuals overlooking them and they're sort of blinded?

>> right, and now they're opening, i just got the word that they're opening them now. it's rare that they have a system issue, but when they do they try and resolve is particularly on a day we're down 144. charles: okay hope you're wearing your sneakers nicole we'll want to check out this stuff. united airlines have grounded all of their flights and all of these stocks are lower. here is the thing, crude oil is getting hit big time this month. double digits would have been a great time or should have thought normally that they would be higher. >> and isn't the do j. talking collusion, and running it up. the airlines have not been able to stay out of the move lately but it's a major time of the day in particular summer travel right now. it's a huge story that develops there and meanwhile this issue of china on the table and

watching the stock market plunge overnight there, charles. we've been all over this all morning and how we see the u.s. markets are opening and the stock exposure to alibaba. and there you have the airlines and-- >> the government of china is way too far into its own stock market. >> that's what they are. in your house, in the deliver room and no freedom. we'll take a look at the big u.s. companies to sandra's point doing business in china. we're talking caterpillar, general motors qualcomm all of those stocks are lower and now look at some of the chinese companies traded here and much lower led by the big one. and the biggest ipo in history, alibaba, that hit again and you've been making money on the china short trade. where do you look on the down side. are you one of these guys who are short and you don't care

short at 10 and one at one. >> if it goes to one, i'm out. i don't see a bottom here what's happening in china. >> really? >> the market beats 1% of this. as the market was rising most of the leverage came in the first half of this year. that's yet to be washed out. the government is going to do do whatever it can. >> you talked about that that was a great time for this and like greece we did everything and then hit a brick wall. china's market made a move about you has it made the kind of runs by the cataclysmic stock. >> the total capitalization was 10 trillion dollars it's now 7 1/2 trillion dollars. that's a lot of money.

sandra: we have to assume you see no fundamental reason for the run upup in china stocks? charles last hour you said the planned move from poverty to the middle class that so much of the market had been based on. are you saying that that story is never coming to fruition. >> i'm saying that the funds were never there in the first place and then good the fundamentals are going to be hit because the capital markets, if they get hit and they will be. >> i agree with shah basically china was building a freedom of dreams stock market, the government comes in and now they're acting like the elevator operator nobody can find the floor in the chinese stocks because the voft is manipulating it and pools of money. >> this is the time that you

should be buying and it's going to turn out to be 27% higher from here. jim rogers a kid with one of the bigger chinese investors. he's been a huge believed to the point he moved his entire family to china, speaking mandarin and he's accumulating a bigger position in china. i used to interview him and i laughed at him and then another bought a house in harlem i met her daughter and mandarin danny, but he's a long-term investor, he's invested for the next five 10 20 a year. we're dealing with a day-to-day, even minute to minute crisis because i think that china will be a major threat to husband and we would be dumb to say china, this is fake. they're graduating 100,000 students in our country every

year, but 50% have gone back. >> commodities, we know that china plays a part. it's down here regardless of china. >> that's a big drop. it flows through jan and february lows. it will be five or six months and all of stocks have hit down lower, but not as much as cooper. cooper has a big deep lyly particularly -- >> it looks like a few people took bob nardelli's buy cooper. >> we'll dealing with that market. that's what the markets are all about. the second thing that has a lot of people here everyone watches remembers a few years ago when their 401(k) blew up

dreams of early retirement and living this moment to moment and this does not help. >> they're looking photographer an average rage like we saw what's what's happening, i think it's a possibility. maria: more than 15% chance? yes absolutely. 78 7800 people got layoff notices today. let's take a look microsoft is up 3/4 of 11 at the moment. talking 7800 jobs and we're also taken an i am parment charge 7 poifr -- in the meantime i want to bring you the news. the issue has been resolved and we were look over 200, roughly 220 names, names such as macy's and las vegas sands and so the

nyse is saying that the glitches that they were looking at, they have been resolved and the traders get that note on their hand held as well. funny guys when the big companies layoff people and the stock goes up that upset people and elizabeth of the warrens of the world get power when a company can pay that what do you think about that. >> they have the right to do that. and it's part of the-- >> there's something unseemly about it. we have to get back to the big stories the light on the regional partners are no longer affected. maybe some grounding gains on united, they were grounded earlier in the year and the carriers are coming back

on-line. they're fixing the problem slowly, but surely. we're going to keep you updated liz: we've got numbers, 3500 flights affected and 138 international destinations affected here. this looks like a ticket issue in the system there. >> the dargest story, the -- and the biggest story, the triple digit move we saw this yesterday and believe it or not, it had a happy ending. it's going to be a big day for the market i can't guarantee a happy ending, but i can guarantee we'll be right back next.

doug. you've been staring at that for a while, huh? listen, td ameritrade has former floor traders to help walk you through that complex trade. so you'll be confident enough to do what you want. i'll pull up their number. blammo. let's get those guys on the horn. oooo. looks like it is time to upgrade your phone, douglas. for all the confidence you need. td ameritrade. you got this. >> going to check the big board here again. it feels like deja vu all over again. the good news at one point before the open signaled a selloff of 200 points.

it's early in the session, a couple of rallying points fell. and we'll keep an eye on that in a minute. oil made a nice reversal yesterday and it's carrying on today. up slightly, but remember it's been in a free fall so even up 30 krints -- cents is a relief. gold looks like it's starting to fall apart, it's up 11.61 for oil. not just china, but a six-year low and some people say, yes, we have to look at the greek etf the saga continues, it's above 10 it's been lower than that, but we've entered into a calm quiet period another moment let's call it a moment of truth. could be sunday could be before then. now the 10-year treasury yield.

i'm surprised at 2.24. we know that a lot of money typically flocks to our treasury as a safe haven. united, the flights in the regional partners are no longer affected liz: it's a huge stop nationwide. people cannot get boarding passes. 130 international destinations are affected here and we're getting information basically uel has a good departure record, it's pretty decent. looking at the others. charles: we'll keep an eye on that. and in the world of streaming video, rolling out a host of

original films. and showtime is rolling out their own stand alone. pete, so many things out there, traditional cable, a lot of people say it's the beginning of the end for them. or is that premature. >> i think it's premature, it's going to a la carte. when you cut it down to internet it's pricier, $60 a month and add the $10 a month, $15 a month, $7 a month services on it ends up being about the same as cable or more. charles: we're hearing about the grand am -- grand ambitions, could that be the coup de grace, i can cut the cord? >> if you can get a cheaper

broadband than what the cable or fiber company is offering you, that would be the ultimate holy grail in this, but that's not to say it's bad news. the power is shifting more and more, netflix can create cultural moments with shows. >> if i'm the cable companies, how will you fall asleep if you don't have the channels to flip through. it's a marketing game. before we go disney is looking to grow the "star wars" franchise and han solo, a prequel that sounds cool to me. >> and han solo i don't know doing a story about a guy i know who will survive because he has to grow into the "star wars" guy. >> and i'm not going to pooh-pooh that one. >> appreciate it pete. enooh more companies are backing away from donald trump. so what does it mean for the rest of the field, the g.o.p.

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>> take a look at this guys. sell off is a sell rating the

worst case of the morning, 200 points to the down side. almost there, 192 points as pressure mounts and selling bee gets selling and the question mark is china. let's look at the chinese companies that trade here they're down and been down big time for a long time more than a week and bigger names, alibaba, the biggest ipo of all time hit an all-time low. much more on the markets coming up. right now we want to bring in the david, donald trump has taken over the g.o.p. i don't know if you consider yourself part of the establishment part of the-- part that loves donald trump, but almost every single day he loses a business endorsement, a new form of criticism, one that can't gain traction i thought was his 401(k) policy.

ultimately had donald trump been good for the brand or bad for the brand. >> don't be surprised if donald trump continues to lose businesses and there's a press conference announcing his doctor announced he has a severe and curable disease and he must drop out of the race to take care of it. charles: is that politics 101, excuses to get out of the race. is that the first one. >> he's an interesting character, no question about it and his immigration comments certainly have caused the firestorm, but i would remind you tom tancredo who ran for president and similar positions on immigration didn't become-- >> and he never held at 15% and never got the traction that donald trump has gotten. >> we're a long way away from-- >> why does the establishment hate donald trump? >> i don't know that the establishment hates donald trump. we want to make sure that we elect someone who can make it

work or-- >> you're saying is businessman can't or donald trump because they can't-- >> voters want to touch their candidates, talk to their candidates and donald trump actively blogged that he doesn't like to shake people's hands. if you're going to iowa with voters, those things matter. charles: will you admit that there's something wrong with the political class, that something has gone wrong and if you want more examples of that look over to greece when everyone is giving things away. president bush exempt from these these politicians spend too much money and make too many promises they can't fulfill. that's why there's a fever for someone who says no. >> until donald trump comes out with specific plans rather than platitudes. >> wouldn't it be a pr fiasco to keep donald trump out of the

debates? >> if he meets the rules and requirements he's going to be allowed to be in the debates. you like how they're set up or not. >> change the rules ad hoc? >> fox news is going to decide who is going to be in the initial debates. working somewhat with the party. charles: here is the thing, a lot of people remember that in a lot of ways people feel like the republicans have shot themselves in the foot over and over again through the primary process whoever comes out of it is wounded, wounded to the point they cannot win. it felt like there would be a gentleman's understanding that this wouldn't happen this time. does donald trump change that? >> they may wish that there's never been an election competing forces want hurt each other. it didn't hurt barack obama when hillary and he went at it and it's not going to hurt the candidate. remind you, that money can give you name i.d.

charles: he's selling a whole lot less ties, but we're getting a wrap. so back to the big board, guys we've got to talk about this. off now 164 points and trickled to down the 200 point move a moment ago. we've got charlie gasparino coming in.

. .

charles: breaking news for you right now. 3500 united airline flights frownedded nationwide. now faa says issue has been resolved. it was a computer glitch. they say it is fixed. delays and ripples certainly last throughout the day. want to check airline stocks. they have been under a lot of pressure. they're still down today. a lot of them really a lot lower. want to bring in tom parsons from bestfares.com. you say this could not have happed at worst possible time. why? >> this is one of the busiest seasons of the year. only good news it is wednesday, which is one of the slower days when you talk about peak summer i don't think there is such a

thing as slow day in the sky anymore. it's, and starting early morning that is a big ripple effect all the way through the system. they probably lost at least two waves maybe three which they have takeoffs to and from all their hubs and they have about nine of those. charles: right. >> when you look at newark, chicago, houston, washington, d.c., that affects a lot of people real fast. charles: tom, you mentioned that these days there is no slow time. a lot of people say that is deliberate. that has been manufactured by a handful of airlines including united airlines. recently they were, there is talk about them perhaps being involved in collusion. >> right. charles: when you get something like this on top of those sort of accusations it does rankle passengers out there potential passengers. how does the industry deal with that. >> i mean they're going -- promise you, this is not something united wanted to happen today. that takes away from their

coffee time and all times of other things when they do get a break. when we look at the fact, i really think too when you go back to that collusion i think a lot of that has to do with the department of justice. remember they allowed these airlines to merge. they took flights out of the system. one morning they woke up, they said we have a very tight system out here. two choices add more planes, more flights or, put pressure on air fares to make them go high. southwest was only one that added flights last year, 8% new flights. charles: this year when they announced they were going to add more entire space went down. tom, thanks a lot. it will be a real rough day particularly for business travelers. we appreciate your expertise. >> thank you. charles: let's get back to the markets because the dow is pulling down again. we keep getting down minus 190, 192. if it doesn't hold what does that mean? we'll probably test it again.

oil crashed yesterday, and turned with the markets. so far holding up maybe found support. nevertheless a major move. 10% for crude oil for the month holding up. gold is store of value where you go where the world is imploding. we certainly have a lot of hot spots. we're focusing on copper at six-year low. might be ultimate proxy for global economy and gold. copper holding up. look at greek etfs. vote could happen before that. meantime we probably see freak, anything involving greece directly including this etf drift lower. this is down 3% right now. earlier today before we started trading, we had on harry dent infamous and famous for a lot of smart market calls. he said earlier on the program talking about potential crash he is thinks is in place. take a listen. >> china bubble bursting further. especially when it hits real

estate harder. in the united states i think this fracking bubble will be first thing to go. without quantitative easing energy companies could not borrow at junk bond rates at 5% when it is normally eight to 10 and oil prices wouldn't come back up. they're dead. charles: senior correspondent charlie gasparino. what do you make of what harry dent has to say? >> when you have global recession stocks will fall, that is a given. i don't believe -- this guy has been calling for the end of the world for last 10 years or so hasn't happened. even after the financial crisis. that doesn't mean he is wrong. at some point he might be right 50 years from now. i will say this i spent most of the morning trying to figure out what is our direct impact on our economy and our markets and our big banks what is going on in china which is fairly unpress debted. market imploding and government coming in to pie stocks. we didn't even do that. we bought bonds quantitative easing. charles: we don't have

communists that control banks. we did buy, we didn't necessarily buy directly but we saved banks, lynchpin of the whole market. >> we didn't buy stocks go directly into the markets that way. we did other things. what i'm saying, seems like the our banks are not sort of holding chinese internet stocks. our investors are kind of, hedge funds might take a hit on commodity prices but not big. seems like this is at least for the short term, this is an implosion of the chinese way of doing business, the notion that the communist party can come in and control the animal spirits of communism. that is what you got here. i don't think it will spread. obviously the market is off but remember markets trade off headlines. bad headlines, they don't like that. charles: you talk to a lot of hedge fund guys. you think the risk is more on the commodity side or chinese stock exposure. >> well, chinese stocks are going to get crushed right but who holds those stocks? not us.

retail ivestors and banks in china. commodity prices will get hurt because china will stop buying gold, copper guess what some hedge funds might get hit like that. charles: not contagion because remember a few years ago whoever hear of the thai bhat. it almost toppled entire global economy. >> the thai bhat didn't -- charles: it was spark for something that got real ugly where people who won nobel prizes lost their shirt. >> that's right. because they were leveraged gazillions to one, long-term capital you're talking about. i don't see that right you no. charles: okay. >> that's what people are saying. something bigger here their way of doing business. here is where it gets key. it is not working. what does it say about their prestige and ability to carry on and basically dominate as economic power. >> their government wants to control the economy, market, businesses everything. they want control and they can't control. >> the question is can they control? charles: we'll see. as long as harry dent has been

calling for a crash we've been saying china was going to implode. they're still up over 70% over last year. >> they don't use gaap. charles: neither do we. >> we do, that is the problem. charles: we'll come back to talk about that. thanks, charlie. hey, let's head out to capitol hill because we have fbi director james comey pleading his case that terrorist groups like isis could take advantage of data encryption technology like the kind that apple and google use? we have blake burman on it. blake? >> charles, good morning. because it is encrypted much of your information on cell phone or computer can't be seen by the feds because they have a password. fbi head james comey that is making it harder for law enforcement to catch terrorists and bad guys. he hasn't determined yet to congress to actually force them. comey and those in the business of national security say

encryption allows terrorists to go dark that is the term they use. meaning they can communicate terrorists with one another, knowing intelligence officials can't read their texts, messages and other writings. comey and deputy attorney general will testify shortly, quote. the benefits of our increasingly digital lives have been accompanied by new dangers. we have beens toed to consider how criminals and terrorists might use advantages in technology to their, might use advances, rather to their advantage. now some have raised the idea creating what would amount to master technological key that would unlock the encryption features. however in the new era of data breaches silicon valley is pushing back against demands to loosen encryption. apple and google recently strengthened that feature. charles: blake, thanks very much. we're always on guard. that is vulnerable spot for entire economy and many of us. we want to get back to hillary clinton. last night she sat down with cnn or one-on-one exclusive

interview. take a listen to what she said about the criticism she receives. >> well, i think when you are subjected to the kind of constant barrage of attacks that are largely fomented by and coming from the right -- >> but do you bear any responsibility? >> i can only tell you that i was elected twice in new york against the same kind of onslaught. this has been a theme that has been used against me and my husband for many, many years. charles: joining us now former senior advisor to president george w. bush and fox news contributor karl rove. karl, i got to tell you, what i hear a presidential candidate complain about being subjected to scrutiny and questions itorries me but this has been the modus operandi for them a long time. to hillary's point, it's worked! >> well it worked in getting her elected to the united states senate. i'm not certain it will work getting her elected president.

first of all we have some 20 some odd years and problem is getting worse not better. when she left office of secretary of state she has approval rating in the 60s. now has approval rating in the high 40s. significant drop. people are taking a close look at here her on a number of issues she is not trustworthy and or credible and she is making those questions and concerns larger. charles: although aside from all those things you're saying, of course intelligent, well-schooled voters focus on these kind of things but there are a lot of people who are apolitical. when they come around to every two or four years going into the voting booth other things move them. this subjective, constant barrage, i am a victim women are victims could that resonate enough that nothing else matters ultimately? >> well i think it depends upon what is the substance of people's concerns. and i don't think that will be sufficient in the fall of 2016.

you're right right now a lot of people who are paying attention to politics, they tend to be more partisan, they tend to be better, they tend to be better involved in these things they're paying attention. a lot of people aren't and won't pay a lot of attention until the fall of 2016. but those people the swing voters who decide presidential elections do put a lot of emphasis on personal characteristics of a candidate. that's why these numbers about trustworthy and cares about people like me and somebody i can relate to are so bad for clinton. those are exactly the kind of characteristics that will play a big role in how those people make those decisions in the fall of 2016. she not off to good start. got plenty of time to correct it. she will not correct it by giving epsoddic interviews to the press and complaining about being asked tough questions. she has to answer the tough questions. why did you -- charles: karl, 30 seconds left. got to throat out a question about donald trump and where

again, it feels like the traditional gop establishment which many people think you're at center of, one of the big players there, would like to just see him go away. where does he stand in this big crowded field? is he helping or hurting you? >> he is not going away and i think he could be the todd aiken of 2016 election saying outrageous things about subjects that cause people to question the entire republican ticket. before you paint him as republican insurgent, as a strong conservative who is representing the grassroots of the party against the establishment, just remember this. between 1989 and 2010 this is a man who gave $314,000 in campaign contributions to democrats and 2,890,000 to republicans. the largest contribution he made was to help the democrats take over the senate in 2006 and mcharry reid leader. gave money to harry reid, ted kennedy, hillary clinton.

charles: we got the gist of it. you didn't need the whiteboard. we'll talk to you real soon. up next we have big cuts coming to the united states army. we're talking about 40,000 fewer troops over next few years. don't we need the boots on the ground to defeat isis. actor tom selleck gets some drought shaming in california. we'll tell you what he is accused doing right after this. ♪ ♪ i built my business with passion.

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charles: checking the big board down almost 200 points. this is really really, treacherous stuff. hey, stuart is on vacation. he will be happy probably knew before we did. microsoft, look at that.

the only stock up right now out of the dow 30. that is absolutely amazing. >> announced layoffs. charles: 800 layoffs. a lot of people get upset when stocks go up by firing 8,000 people. getting to the price of oil. down big yesterday. we got a reversal. still low enough hopefully at some point we get breaks at pump. gas is down only fractionally. down $2.76. "the washington post" reporting that the washington redskins are losing a trademark battle. cheryl what is this all about? >> they could still appeal it and i'm sure they will. basically a federal judge in northern virginia ruled against the washington redskins. they will be losing that trademark. this comes from a lower court, u.s. district court that basically said this you're seeing on the screen is offensive to native americans. this lawsuit brought by four different native-american communities that they wanted trademark taken away from the

redskins, washington football team because it offended them. they have taken to the next level. this judge still voting against the redskins. charles: when you say trademark, are we talking about emblem or also include the name? >> the name emblem, everything. mascot as well. that entire image they do not own. what the redskins have been fighting in court, the team says, it hurts us. any entrepreneur, any joe sitting in his apartment hey, i will make some redskins attire and sell it on the street. totally fine. charles: they don't control that anymore. >> don't control it anymore. they will appeal i will say. they will definitely appeal. fighting this tooth and nail. charles: it has been going on a long time. let's check airline stocks. remember we had the big news this morning faa was telling us or told us a computer glitch grounded all of united airlines flights. that has been cleared up. although we're being told, we've been told worldwide, as a matter of fact, those flights are grounded. so it is not just of course a u.s. issue. lasted for about an hour.

now 3500 flights affected are back on course. let's face it. there is a ripple effect. we'll have delays for the rest of the day. charles: a lot of aircraft starting their day going to overseas destinations. that is what that means. >> you're saying this is the biggest travel day for businesses? >> tuesday and wednesday are two of the biggest traveling days for business travelers because sandwiching it in with a weekend. charles: i want to talk about this. this is huge. the united states army planning to cut 40,000 troops over next few years. this is how we will beat isis? is this how we fight an intelligence war? joining us now is chris harmer, with the institute for the study of war. it is interesting chris this comes a couple days after president obama tells america that this is generational fight more of an idealogical fight and there is no way the united states can beat them with brute force. it would be akin to whac-a-mole. it doesn't feel right t really worries me. where do we stand with this. >> first point, violent ideology

is not defeated by better ideas. it is defeated by force. osama bin laden was not killed by a better idea. he was killed by seal team six. circumstantial terrorists you can appeal to these people with better ideas. idealogical terrorists will not be swayed or argued with. you have only one option to destroy them or be destroyed by them. in terms of cuts to the military, this is basic math. a nation that can not manage its finances can not protect its interests. we're $19 trillion in debt, plus another 5 trillion in funny money from the federal reserve and 100 trillion to 300 trillion unfunded liabilities. united states has extraordinarily high cost basis of warfare. we can't afford it unless we get our financial house in order. charles: ultimately when you talk about financial realities and talk about defense, we talk about rome all the time as cautionary tale for america. and i toward the end of the roman empire, this great empire

militarily took over the world was hiring mercenaries. we have to make this priority. how do we work on this in washington, where we're cutting defense but we still see social programs, whether means-tested or not go through the roof? >> i would simply say that we are not a wealthy nation because we're strong militarily. we are strong militarily because we are wealthy. our military strength rises from our economic freedom and economic performance. everything that the federal government does to degrade that, excessive social programs, social engineering reduces ability to defend our strategic interests. we need to be forward-deployed and forward engaged. china is spending more. russia is spending more. isis is growing. we need to respond accordingly. charles: chris that's why we love love to have you on the show you help us a lot. thank you. >> thank you. charles: irs scandal. we have another bombshell. this might be the one.

was lois lerner collude with federal agencies to bring conserve -- charges to conservative groups. >> on the advice of my counsel i respectfully assert my fifth amendment right and decline to answer that question. push your enterprise and you can move the world. but to get from the old way to the new you'll need the right it infrastructure. from a partner who knows how to make your enterprise more agile, borderless and secure. hp helps business move on all the possibilities of today. and stay ready for everything that

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charles: quick check of markets of the wasn't it around this time we started to creep back off the lows. obviously still getting crushed, off 173 points. take a look at oil, oil was interesting yesterday. reversed with the market. holding up there. not found near-term support. gold is sort of proxy for the global imploding. a lot of people would be buying it over the years because of this. working out up $7.20. look at copper, talking about

industrialized global economy. this is key cog to it at six-year low. it hasn't hit a bottom. greek etf is starting to drift. that deadline is sunday. we go from 19 players to 28 players. maybe deal happens before them. that probably continues to drift lower. meantime ultimate safe haven has been the 10-year treasury. yield unchanged, 2.23%. of the latest on irs scandal. get this guys, a new document dump shows irs targeting scandal may go even deeper than anyone ever imagined. gerri willises, she has been on this from the very beginning. you're following it closely. the plot continues to thicken. gets worse every time. >> let me background people not up-to-date. we're talking about the targeting scandal and heirs refused to process applications from tea party groups and conservative groups. these are groups that wanted free speech.

irs said no. that is the central issue. here is what we're learning today it wasn't justice department. it wasn't just the irs that wanted to persecute and prosecute these groups. it is also the justice department. and it is also the department of justice and the irs. all these groups coming together, three agents. charles: irs, justice department who else? >> we have the irs, we have the fbi and the department of justice and three agencies. charles: who was operating this? was irs at the center of this asking these other agencies to -- >> let me lay it out for you. here is what is going on. doj recap from act 8 2010, lays this out. describes officials from fbi justice, irs, discussed how to use federal election law to bring criminal charges against these groups. charles: oh, my goodness. >> listen to this. there is another amazing thing out of this information. 21 computer disks, irs computer disks went to the and these

were filings. irs filings from these groups. over a million pages of confidential information, which are not supposed, feieral law banning this from happening. >> last year they said this was happening, irs was meeting with the justice department to probe non-profits. but at the same time, watch this remember eric holder justice department said he would investigate the targeting of non-profits. >> here is what we're talking about now. >> they're investigating themselves. >> this conversation will turn to a special prosecutor. charles: this is amazing. we're talking targeting. i had a feeling this would happen, gerri. we're glad you're on it. real justice needs to prevail. this is really despicable stuff, using the government as a weapon against agencies or people with different political opinion. let's go out to greece. it is not just greece. we have our own greece puerto rico. it has major financial problems. hillary clinton says she has the answer. let them go bankrupt. what difference does it make?!

varney will be right back.

charles: checking price of oil, remember all morning long it was hanging in there tough. then we got really, which is so important, the weekly inventory report. crude oil was up, was it no. 384,000 384,000, a build. that means less crude. people thought, the experts said there would be a 700,000 drop. obviously way off almost by a million. natural gas supplies, those went up 1.2 million. we were expecting a drop there as well. consequently a little bit of rally and strength we saw in gas and oil has evaporated. the question how far down we go. we have broken 52. that was support all morning long. we have to get a chick quick of

markets. bad news is hurting everything. we were coming back slightly on the dow. now we're near lows of the -day, down 208 points. central theme here, china is down big and hitting us here at home. let's do this. look at some big chinese stocks. these are names that you know including alibaba, that huge ipo at lowest price since going public. there is another big story this morning. unite the airlines flights were grounded but faa says the issue is solved. it was a computer glitch. you have to expect major nationwide delays and ripples throughout the day. airline stocks have already been under pressure but with oil going down have not turned around. we have been on hour 1/2 and haven't gone to greece. we have to do that. still hanging around like a dark cloud. our man from greece, ashley webster doing amazing job. ashley. thank you, charles.

the bank behind me in central athens has been closed 10 days. there are two atms, the one on the left has run out of cash. the question how long can the one on the right last? we're hearing more and more banks running out of cash. with no solution on the horizon the situation is more critical hour by hour. what is being done to get this fixed. alexis tsipras went before the european parliament. he probably regrets the decision. took an earful from other european lawmakers especially the germans. he had a few things to say on austerity. here is what tsipras told the law makers. no exaggeration my country over past five years has been transformed into austerity laboratory. because you kept asking for money. that is the because you kept asking for money. i'm not responsible for the woes of greece. are the wicked foreigners. no, it was your own government. on taxation, he said previous

governments allowed tax evasion to run riot. none of the reforms improved functioning and efficiency mechanisms of state. so in other words it is dysfunctional and it is still dysfunctional. charles, bottom line the greeks have to come up with a plan by the end of tomorrow. it gets looked at by everyone in the e.u. all 2countries by sunday. does greece get a life own or do we seijas is it laves be reuters release ad poll that more economies now that ever before say greece shut off the eurozone. charles: because merkel is playing hard ball. ashley, we'll be out to you shortly. we've been telling you about puerto rico. they pose a greater threat to the united states than that situation in greece. take a look what hillary clinton had to say about it. congress should provide puerto rico with the same authority that states already have to enable

severely-distressed government entities including municipalities and public corporations to restructure their debt under chapter 9 of the bankruptcy code. is that really a good idea? we'll ask one of the best, manhattan institute's steve malanga is with us. essentially hillary clinton is saying rewrite the rules or give them an easier way out? >> here is one of the problems with that. that certainly would give them an easier way out. what she is talking about allow municipalities within puerto rico, not the territory. charles: not puerto rico. because you epup a pandora's box. if they can do it why can't california and other states. >> right. first challenge, certainly that would help puerto rico. but part of the challenge, if congress does it they're changing rules in the middle of the game. many people bought municipal debt in puerto rico knowing essentially these entities can not file for bankruptcy and puerto rico the territory can

not file for -- >> wait a second. i hear what you're saying. jeb bush is saying that puerto rico entities should be allowed to file bankruptcy. 60% of the puerto rican debt is held by our own u.s. muni bond investors. what would that mean to them. charles: a haircut. >> almost certainly a haircut. >> why do you go to bankruptcy except to change the contract. you're changing essential this in midstream and that's unfair. if you want to change it proactive -- charles: wouldn't be the first time. we changed the rules with general motors bonds. we changed rules -- >> that was incredibly unfair. incredibly unfair. charles: that is is unfair. that is how you build 72 billion in debt in the first place. who regulates that, these promises? gdp is 72%. the debt is 72%. is that the magic number, 100% debt-to-gdp? is that the red flag. >> we don't have states anywhere near this level obviously.

part of that because puerto rico's economy is not commensurate with any state economy. it's a very very weak economy. >> the thing is when you have bankruptcies in california watch who fights it? unions and pension funds right? a real sticky wicket. charles: why hillary clinton stopped short saying do it with states. steve, thank you. cheryl, what are you watching? >> charles i want to show you some companies in this country that have the most exposure revenuewise to china. a couple of them are really getting hammered. this is wynn resorts. wynn. this is steve wynn's company. that stock was down 4%. look at general motors, another story we have to watch. that stock is down almost 4 1/2%. gm china is very important company to them. qualcomm dunkin marriott apple yum, caterpillar all names all of them down as china's market falls overnight. charles: cheryl, thank you very much.

we have new data out from the census bureau. the welfare state is alive and it is well. a startling amount of americans are getting some form of government assistance. we have the shocking numbers for you. we'll give them to you right after this.

this allergy season, will you be a sound sleeper, or a mouth breather. well, put on a breathe right strip and instantly open your nose up to 38% more than allergy medicines alone. so you can breathe and sleep. shut your mouth and sleep right. breathe right. >> i'm nicole petallides with your fox business brief. the dow jones industrial average is down 185 points full percentage point to the downside and we are seeing selling across

the board. the s&p down 22, the nasdaq down 62 and let's see some of these names weighing on the dow. 29 of 30 names down. goldman saks as well as united health. apple 3m united technologies also lower. the only name up is microsoft. they announced layoffs and restructuring. s&p is at 2059. we're watching that. going in and out of negative and positive territory for the year 2015. all 10 sectors are in the red. telecom and tech in particular. don't forget the china story on those. analysts cutting tesla and harley-davidson. both are lower. much more "varney & company" coming up. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul?

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charles: now this. you know about this public water district, the whole drought in that state is amazing. now california's claiming that actor tom selleck has been stealing water. cheryl casone. tom selleck? >> "magnum p.i." has been drought shamed absolutely. he is accused of stealing water from the municipality where his house is. charles: how? >> with his own commercial water truck. he already received a seasoned

desist order, telling him quit stealing our water. he basically, this is from, i will give you the municipal water district. they say basically 12 times they have documented and caught him, actually hired private investigators, which is like kind of funny he played one on tv. charles: yes it is. >> they followed him and the truck went to their well 12 times, back to his house. he kept doing it. even after they said stop it. he kept doing it. >> what was he doing? taking a fire hose and pumping it out into the truck? >> he has his own truck, commercial water truck. charles: a lot of water for showerss right? >> yes. charles: in his mind i'm paying a lot of money in tax. >> this well is 74% of the provides water needs of county. >> basically one water well. yes, to your point liz, it was a hydrant. it provides most of the water for this, within this water district. he is taking it for himself.

he and his wife -- charles: "magnum p.i.," baby. it is his water. now, we've got to show you a number and it is going to shock you. one in five americans right now participates in a government assistance program each month. we're talking about 52 million americans. emac is on this story. to large extent a large part of america is already greece. >> well, this is out of the census bureau which tracks it. that is 1/5 right now, 21%. that is up from the more than 52 million getting he will welfare. it is up from 42 million in 2004. so we added 10 million people. that is up 24%. the issue here is what is the true poverty rate? because the official poverty rate doesn't count food stamps. it doesn't count medicaid. it doesn't count the earned income tax credit. charles: you have to these are means tested. you have to be lower income or no income to qualify for them. two things in my mind emac. we have a welfare utopia.

yesterday, chicago will give people bikes for five bucks. president obama talking about giving out solar panels. we want to help people. when do we hit the point we're not even helping them. >> we need truth in government numbers the poverty rate.e census bureau has a supplemental poverty rate. it shows with the government assistance programs in, the child poverty rate is actually lower and african-american poverty rate is lower while the elderly poverty rate is higher because of health costs. charles: it may not matter. when you are buying votes remember voting costs, supreme court said it is okay for taxpayers to help people up to 400% above poverty. that is buying a lot of votes. but it is backfiring, how do you get people to work if you give them everything? >> you can not outrun the math on entitlement programs. >> "entitlement nation." that is what we're becoming. that is what bernie sanders is saying. charles: destroys the country, you guys. along the same lines, right.

we're talking more focus on the race for the white house. look at that we can barely fit it all on one screen. obviously crowded gop field. 14 candidates and there will be a lot more. will we see a clear winner by the time we get to the debates in cleveland next month? we have "wall street journal," manhattan institute scholar jason riley. they are all the voices getting muffled with one or two standing out. is this good or pad for the process of the gop? >> at this point it is fine. charles: don't we have to weed out? does it get confusing? >> it inevitably will. it looks to me if you are a republican, a conservative you see a very strong field out there. you see a very deep bench. and so, you let the process take its course and debates will be one important way of vetting the candidates. right now, really it's a popularity contest. most well-known people tend to be surging. charles: ones that are surging.

only two guys are surging right? jeb bush is not conservative per se, even though like to be portrayed as one. you have donald trump. they're surging in all the polls. they keep going up. jeb to me is sort of a mystery. i never hear from him. never says much. a lot of people in the core gop don't like him but he is surging in the poll. we do know why trump is surging in the polls. he hit a nerve. >> you may not describe jeb as conservative but his record as governor is conservative. charles: common core? >> record as governor. charles: the platform he is running on now, jason? do we even know what it is? >> jeb bush has conservative governance record as executive of a state. he has run something and ran it quite well. charles: how do you juxtapose that with donald trump. >> i don't think that trump is a viable candidate in the long run. i think this surge reflects really, what is his base?

celebrity worshipers and so forth. that is not a group that will make somebody president. charles: who loves him, core conservatives who feel the meally-mouthed politicians let them down after they gave big victory in november. this is it what they're telling me. >> i'm not sure he is running. charles: they want someone not afraid and who doesn't back down or afraid to tell the truth as painful as it is. >> i'm not sure he is running. he has not filed all the financial paperwork. we don't know if this is another false start like ones before. as secondly, conservatives get to know trump, he gave money to former governor eliot spitzer, to current governor andrew como to senator hillary clinton and clinton foundation. his trade policies are not all that different from bernie sanders. trump is conservative? depends on how you want to measure conservatism. >> you say he is opportunistic? >> that speaks for itself. i don't think that this will be sustained. i think this is a, this is what

we saw with the herman cain before and others four years ago. i don't think it is -- charles: a blip. but an exciting blip. >> new hampshire is the game-changer. charles: we'll see something a lot changing before then. jason, thanks a lot. really appreciate it buddy. you may not be able to take money out of the banks in greece, but if you're state worker in illinois you may not be getting paid at all! jeff flock, he has got the details and we'll be back after this. ♪ (piano music) ♪ fresher dentures, for the best first impression. love loud, live loud polident. ♪ ♪ fresher dentures... ...for those breathless moments.

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>> we've got some news crossing on apple. sources are telling "the wall street journal" that apple asked its suppliers to manufacture 85 to 90 million new iphones by the end of this calendar year. that would be a record number for this company. apple plans to add forced touch technology for two new iphone models according to journal. much more coming up next hour. apple down 1 1/2% as you see on your screen. an illinois judge ruling that illinois can not pay state workers in full without a budget. jeff flock joining us with more details. >> push is coming to shove in illinois, cheryl as we speak. i am at star park state park. this is the most popular park in illinois. you see the beautiful wildcat falls. take a good look at it, you might not see it for long.

without a budget as you report they can't pay state workers and may have to shut down state parks and other facilities. government wants them to be paid. look what republican governor bruce rauner said. legislators are guaranteed their pay this month. you should be too. the law which legislature passed which insures they would be paid in event after budget problem. rest of the state workers not so much. he is willing to shut government down because he says the state needs to restructure. take a look at the numbers on this he said, you can't tax your way out of this problem. look at number of losses in terms of residents in the last 20 years. 1.36 million residents lost. that is $45 billion in annual income. that means $7 billion less a year that the state gets in taxes. democrats want increase in taxes. governor rauner says, you can't tax your way out of this. we may have a government shut down in illinois, cheryl. >> you will be covering it.

jeff flock. thank you, jeff. >> we had a real busy morning so far. full two hours of "varney & company" on the books. here are the highlights. we have more varney two minutes away. >> first off don't be surprised if donald trump continues to lose businesses that he has a press conference announcing his doctor announced that he has a severe but curable disease and he must drop out of the race to take care of it. charles: is that from politics 101? excuse to get out of the race, is that the first one at the top? >> they have to worry about the wealth effect they created. one of the things that china is desperately trying to do to create a robust middle class like our own. it is not easy to do. state media literally pumping up stocks. charles: not just greece. we have our own greece. it is called puerto rico. it has major financial problems. hillary clinton has the answer, let them to bankrupt! what difference does it make?!. ously turns romantic

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. charles: two ways to look at this on your screen, down 136, or up 90 points, moments ago down 210. this is where we turned yesterday. are people starting to buy the weakness the markets all over the place. down triple digit, but an interesting move. lot of things happening from china, a ripple effect major sell-off there as well. we're calling a china syndrome. a couple of these names have begun to turn, maybe that helps us out, we're not sure what's going on. the markets all over the place. alibaba at the top of the list hot ipo since the day it started trading. remember, oil held all morning long but a build of inventories reported the last hour, the expert said there was going to be a drawdown same thing with gasoline now got to

turn there as well. copper, this might be the key, a great proxy for the industrial global economy at a six year low finding support. and finally a 10-year yield yield typically goes down when demand is up slightly doesn't mean there's not a flight to safety, obviously there is. joining us kevin kelly. bottom line, we've already seen the market come off the lows of yesterday. in fact a 300 point reversal, one of the biggest in the last five years is this a buying opportunity? >> selectively. you have to be conscientious what you're getting into. charles: come on kevin! is it a buying opportunity? conscious, selective stuff are you looking to be opportunistic and buying this dip? >> we're being opportunistic overseas. charles: really? >> if you look at the names working in europe, daimler mercedes-benz has done very well u.s. and chinese sales

it's the german automobile manufactures that are producing the great results. gm is down 20% recently ford's not doing well having a hard time over there. the euro being down you're seeing a lot of german names doing well. charles: what about gm? you brought up general motors. it's starting to gain market share fiat is taking most of the market share we're under pressure a lot of people aren't sure what to make of it. are you a buyer? >> absolutely not. we would be a seller of gm going back to china, right. people talking about alibaba it's going to affect consumer confidence over there. charles: the crash in the stock market. >> the crash in the stock market is going to impact their consumers, but stocks are halted. they can't get money, they were borrowing on margin anyways. gm has significant exposure over in china. this is going to impact them significantly. >> more than 50% of the stocks in china on the exchanges are frozen. you can't sell it you can't

trade it. what happens when they reopen and how would that impact gm? not everybody in china is in the stock market. >> great question, going to impact gm that's where they were looking for growth. they weren't looking for growth in the eurozone area they had to pull several brand out of europe because it wasn't doing well. >> that's interesting. >> the real threat to the consumer who might hold gm stock in the united states isn't that gm is traded in china. it's the revenue picture. if the banks collapse because there's been this rush to sell stocks that's where you get the calamity, right? >> the revenue growth, absolutely. that's where you're having a problem. charles: be opportunistic, look at europe that means you think greece will be ugly and stick with daimler. haven't gone with that in a long time. thank you. >> thank you. charles: take a listen to what harry dent said on the program right before the start talking about the crash in america, it

might have begun. >> the china bubble is bursting. we've been saying this is the biggest bubble in the world. real estate starting to slow, real people poured into margin debt into chinese stocks, they went up 160% in one year and declining economy, the government is having to prop up the market. charles: so your reaction. we have adam shapiro emac here. >> go ahead ada we know this is his big prediction for a long time, and i like his demographic work, it seems as if there is a hiccup the guys say this is a big one. >> take a deep breath as emac pointed out earlier in the program, a small percentage of chinese consumers own stock. the danger is the leverage, they borrowed from banks. look what's happening there. in the united states, if you hold stock in companies that trade with china that's where you might be in trouble. for instance, just to look at numbers, we have a graphic to

explain this to you. the number one sector in may for trade was 1.8 billion, transportation in vehicles. after that computers in electronic 1.3 billion in may, and chemicals dow, dupont 1.2 million. here's stocks that might get hit, apple, apple had $30 billion in sales 2014. 16.8 of revenue. qualcomm, 13.2 generated out of china. 49% of revenue. and engine 1.57 billion if they trade with china, that's my exposure. charles: something like a qualcomm with over 40% that's a huge swath to what they do, what they make. i can see them getting hit before apple. not buy a car because the market's influx, but you might

buy the iphone in china. >> we have to be careful how we report the numbers on china and have to be clear about in context what the effect of the market downturn is going on in china. china is pulling a japan playbook with the government stepping into prop up the markets there. charles: governments have stepped in in different forms of fashion. >> but directly in the stock market. charles: this is a communist government that can do those kinds of things, but would like the elements of capitalism, too. >> the stock traded in china, less than 4% is owned by foreigners. real danger is if you own companies that would be hit if there's an economic slowdown in china which there is. >> good point. charles: bring in amerrittas's partner, lenore hawkins. >> put it in context down 30%, but up 70% for the year. but china being an emerging market, this should never

account for a small portion of somebody's portfolio. if you look at really long-term perspective china is interesting in that it's going to be a bigger part of emerging market indices if they get involved in the indices. charles: so you know, here's the thing, and i've made some of the points that you're making in terms of the numbers emac's made amazing points. american investors understand that these things start a certain way and it continues. if china's market continues to break down and give up more chunks as rapidly as they are. you know one word we're hearing a lot this week, emergency, emergency measures in china. emergency measures in greece. that word scares the heck out of people when you talk about markets and economies. >> with china, it's very difficult to know what's going on there because whatever information we do get we know is not exactly accurate.

charles: so then you're okay you're all singing or whistling past the graveyard, hunky-dory you are okay with everything? . >> no i'm biding my time i think it's a good buying opportunity. >> go ahead adam. >> is it a danger? you and i can't buy stock in china. that's off the table. the problem is hong kong you get a contagion, hang seng closed down 6%. that's the danger, is it not? >> definitely. but pay attention, take your time. this is going to be a good -- at some point, it's going to be included in the indices, and right now, it is the most underrepresented of i think basically any index in the world. hardly anybody owns china and it's becoming one of the largest economies in the world. charles: they had the msci, they were going to include them they made the pitch they were turned down and giving a wink and a nod, next time around we'll have some of the

stocks in there. go ahead. in october, we've got the vote whether or not china is included into the strategic drawing rights packet. charles: i think they will. i really do. the brits have their own rescue packages building a brand-new silk road there are a lot of reasons china wants to keep this up. does this equate to greater risk. >> i'm going to quote obi-wan kenobi. be cautious as obi-wan says. charles: let the force be with you we appreciate a calm voice coming on especially one as accomplished as you. thanks a lot. talk to you soon. >> thanks charles. >> we have big news talking about apple's exposure in china. just now bing reported by the "wall street journal," the company has asked suppliers to make between 85 and 90 million

new iphones by december 31st. that's crazy. that would be a record for the company. we have larry on the phone with us. larry when it comes to the iphone thing, it's a global phenomena and nothing looks like it can stop it. >> you got it, charles, it is a phenomenon nothing can stop it and continues to grow. every time a new phone comes out we wonder will there be cannibalization on apple's side and there never is it continues to go bigger and brighter. the phone is going to be slimmer, faster, smarter people are going to buy it. the big, big market we call the fablet mark the 5.5" people think it will be great in the beginning. that continues to drive. that's the key, and we're talking about the growth in china. it's the fablet and the screen size as well. charles: you're talking -- you

use the word cannibalization and now talking about the fablet, the tablets are the collateral damage i don't think they necessarily mind. that microsoft laying off up to 8,000 workers in the phone division. clearly apple is the world leader, they won this war, why doesn't the stock move higher? >> you talking about apple's stock right? charles: yeah. >> i believe apple stock will move higher. right now everything is in a flux, and what happens is when they come out with a new product i believe it will move higher. talking about microsoft and nokia, that's really an emerging market side, and they're always going to get the emerging market side. the big thing with the tablets, what people don't realize is you're not going to pick up a tablet and make a phone call, that big device a fablet you pick it up use it as a tablet and make the caught. people are using both i believe the tablet numbers could be better and i think we will see it as things progress

and maybe microsoft gets hurt on the surface side. charles: very few companies have ever been on a roll like apple is right now. thanks a lot, larry. another gop candidate, believe it or not ready to enter the race. scott walker plans to announce. why isn't he running on what everyone else is worried about? talking about the economy, stupid. we'll be right back. people with type 2 diabetes come from all walks of life. if you have high blood sugar ask your doctor about farxiga.

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. charles: check on the big board pulling back down again remarkable things going on. we were down 210 point, all of a sun reversed to being down 120 points. sort of like yesterday. people want to buy the dip, a lot of them obviously made moves and couldn't seduce others off the sidelines. this is going to go all day long. stick with us all session long. look at shake shack the stock hammered yesterday, morgan stanley cutting rating they call the stock an underweight. a lot of focus abroad talk

china, we talked greece, we got a problem at home it's called puerto rico. the puerto rican delegation to congress is blaming the u.s. mainland for their crisis. adam, hillary has gotten into the game saying parts of municipalities should be allowed to file for chapter 9. give them relief, why not. what would the real ramifications be? >> you can get the municipalities have chapter 9. because to import anything into puerto rico it has to come on a ship, built in the united states, flagged by the united states, you know so that drives up the price of milk. >> hillary clinton and jeb bush saying yes puerto rico should go bankrupt. they do not take into account the hit it will be, it will

deliver to the viewers out there in their muni bond funds. >> oppenheimer and franklin have the greatest exposure. have you those funds. charles: we have to assume a lot of retirees saying aaa, bonds in their 50s making pretty good money and here 60 years old you buy aaa tax free bond, what could go wrong? >> the federal reserve drove down rates and the puerto rico bonds are weak. charles: here's what i would say as a counter. puerto rico grew 56 of its own food the united states introduced transfer payments, right? food stamps, housing assistance. i think the dynamics of the island changed. things are unfair with respect to trade. dynamics of the island. my wife is puerto rican her father's hometown no one would go there unless you have an uzi. >> you made the case why the u.s. government policies and

laws have contributed to the nightmare. charles: leave it there. big news scott walker we know he's number one in the polls recently. now it's rumored he's going to make it official. his bid for the white house should come next week and largely running on social issues like anti-same-sex marriage stance which is interesting. currently one in five americans, this is a big deal what a lot of other people talk about, the economy. one in five americans, 52 million collecting welfare and other goodies. we have a large part of america that is already in greece why isn't he focusing on the economy. i don't understand this i understand everyone is trying find their niche, and donald trump found his with immigration isn't it a mistake for the gop to get involved in gay marriage and confederate flags when everyone cares about the economy? >> hey, charles. i think they're chasing news cycles a little bit. you have to respond to events as they unfold.

if you go to scott walker and look at protocampaign he's running and the hype video they released in advance of next week's announcement. this is a campaign of scott walker's that is absolutely focused on the economy, absolutely focused on reforming the size and scope of government with pro-growth policies. so yes he's issuing statements and putting out press releases on a couple ancillary issues if you want to call them that. charles: but guy you're saying they're ancillary, i happen to be a huge scott walker fan. what he's done against embedded union opposition is remarkable. why respond to it. are you going to respond to everything in the news cycle and set yourself up perhaps to lose not on the fundamentals of this country but on ancillary items that you talk about? >> i think if you're a presidential candidator presidential candidate in waiting and the supreme court comes down with a national constitutional right to same-sex marriage sitting on the sidelines and saying

absolutely nothing isn't an option. the press is obsessed with social issues and the hot-button issues they're going to ask you about it relentlessly until you say something, i don't particularly agree with what he had to say on the issue but if you look at -- i've seen a few of his speeches on the stump, he's unofficially a candidate. on the stump he's giving a speech that is very, very heavy on economics reforms and a little bit on national security. the social issues are on the back burner for scott walker and i expect that as he rolls out his campaign and his narrative, it's going to be a very heavy emphasis what he did in wisconsin, which is all about the economy. charles: i hope so. i think it's a winner forum and as far as the mainstream media being obsessed with these things, they're obsessed with making republicans lose or helping them lose. guy benson, thanks a lot. >> thanks charles. >> a hot summer for the gun industry. huge spike in sales last month experts say the spike is

because of recent massive shootings. we'll be right back.

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check out shares of alcoa, down about 4%. that's ahead of the day's earnings. remember alcoa typically kicks off earning season that begins tonight after the bell. alcoa up first. gun sales up big this summer. background checks spiked 11% in june as compared to a year ago that makes it the busiest june ever according to the fbi. liz and adam what's going on? >> women, first-time gun buyers are pouring in. the highest performance since the fbi began tracking the data in 1999. seattle city council is considering a new tax on guns and on ammo. so when you see gun sales going up you're going to see the cities across the country looking at it for possible revenue. charles: also to deter. the obama administration talking about leveeing heavy fees on ammo to the point where people can't buy bullets. >> millions of americans who safely use firearms every day. there are a few americans who

do heinous and awful things with the weapons, and i don't think you're ever going to get in our country a movement to disarm people. so people want their guns. charles: they do they do. they're clinging bitterly to them. if you own the stocks. >> who are you quoting there? the president. charles: next week, history will be madsa the first federally approved drone delivery takes place in the united states a nasa aircraft will carry medical prescriptions to a rural field hospital in virginia. we are dragging behind the rest of the world. not in the technology but deploying the technology? >> the company that made the drone f-l-i-r-t-e-y is privately owned they're calls it a kitty hawk moment for the industry. it's good pr to deliver medical supplies to the dressed areas in west virginia who have been hammered hard by the crackdown

on fossil fuels. >> quick before we go from that to amazon delivering books a book i ordered in the commercial break. >> how long until we no longer need pilots at united or delta or american. charles: talk about people bitterly clinging onto something. i want a pilot, i don't care how good the pilot is. remember we've been off all day, drifted back off the lose of the session dow off 192 points. up next charlie gasparino is going to talk about who the real losers are in the china stock market sell-off. and much more on apple they want to make up to 90 million iphones by the end of this year.

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charles: back to the americans despite one major market at the top 188 points right now. the price of oil holding out until the important weekly oil inventory were ported now. bills rather than drawdowns, hence the market itself going down. want to get back to china the big thing with inner market today. charlie, we have to discuss have to discuss a earlier he went away and make phone calls at night you have to tell us who the losers are. >> business from major u.s. investors, wall street

executives. i don't think a major hedge fund will implode here. maybe they'll take some hits. i don't think the u.s. government takes a big hit. the chinese are the biggest creditors. not so anymore. charles: they still have over a trillion. >> we buy more of their debt and vice versa. >> they are not going to hurt their own position. >> they are not as important in that regard anymore. where this gets tricky and china standing as the global economic power and whether the system with the command and control from the communist party half s. half commies. that is what they are losing right now. their global prestige. charles: this one hiccup in the market still up 70% that they lost all the work they've made to bring higher. you think they're losing.

the currency is a lot higher than it was. they develop their own thing to rival the oms. they may be included in a basket of security that takes them a step closer as the worlds reserve currency. >> charles, there's never been an economy that went straight up. >> the correction there is different. we talked about cap accounting. at least our companies have cap accounting. the chinese companies what is the account in the chinese banks? we don't know. when the fear and loathing spreads, watch out. it collapses every 15 to 20 years. 2011 talks about these issues. it is how much that they borrowed and the leverage. >> just a few moments ago treasury secretary jack lu spoke about the stock market. let's listen to what he had to

say. >> i will say china's markets are still pretty much separated in world markets. there are missing moving towards being more integrated for right now they are not. i don't think you see the direct linkage there. >> this is exactly what you're saying. >> where do we get hit? china's growth gets cut back. they start growing a 3%. do they buy our goods as much? that is where you see the economic impact. >> as far as countries to which we export they are at number three. >> is the potential economic hit for economy. in terms of contagion i don't think it is. this is going to slow down china's rest to become globally dominate in the economy and using the economic matrix and militarily. charles: they've done an amazing

job of that. they've taken over large parts of africa -- >> how can they ballot race? >> the money they use to baghdad and other countries they now have to shore up their own banks. charles: like i said, i don't know that we should be dancing on china's craze. -- china's craze. >> are having a parade so maybe we can stand for u.s. capitalism. charles: we want to check out the shares of general motors. he is selling them in large part because of the exposure of the country. hanging out all the billionaires at the annual allen & co. conference. he spoke of general motors ceo. what does she have to say? >> gms a huge exposure to china.

expecting a growth of 67%. he planned to invest $14 billion in the next year in the chinese market. how concerned are she about what is happening and this is where she had to say. >> at the very market. we are building chevrolet, building cadillac. even with market dynamics changing, we are well-positioned and will it continue to focus because it's an important market. >> the import market has fielded 1 million vehicles in sales as of april. charles: stay right there. there. this guy breaking his way to go straight to the floor of the new york stock exchange. nicole. >> charles a moment ago all the stocks on the new york stock exchange were halted. over 3000 on the floor of the exchange. in the meantime you can see the posts behind me. the traders mulling about as they keep going to the ramp to get the latest.

on the top of the trading post there is a banner across the top. these are individual brokers. you see the banners that go across the top and that yellow banner across the top came up in the entire trading went wild when everything is halted. earlier today at the opening bell we had a conductivity issue over 220 stocks they said they were open right on time. it took them a moment to get those names in. at this point now i will bring you over here. come on over. you can see more traders here are all lined up. this is the ramp. this is where you have traders waiting to get the latest. we are talking over 3000 stocks to trade on the new york stock

exchange that are still halted at this time. i haven't heard from the nyse. they always do a good job keeping us abreast of things. at this point the nyse is at a standstill. charles: thank you nicole. the point that she made an appoint you are talking about is the stocks are still trading. >> what is the nyse? nicole correct me if i'm wrong and she's listening. a small group of floor traders who make market and a computer system that makes 80% of the markets. >> a group of floor traders say from time to time when they come to the rescue -- >> that is true. because there's a computer that's operational, all the stuff going to the small group is now being treated away at a different exchange because they are still making prices.

and through archipelago. by the way, this is nothing. >> what he is sane and simple numbers, the other day at 4.5 billion shares traded through the floor. most of it done. >> not as important as it used to be. >> floor is an anachronism almost. it can be a backup plan. even if the floor just hit the new york stock exchange up. they still may prices. it's not like the pricing system went down. if that have to need to trade away from the new york stock exchange. this is a much more sophisticated then. most of the guys on the floor don't trade a specialist. they trade is brokers, private investors. >> i guess another sidebar as we

start the day with computer glitches that grounding entire fleet of airlines. we have computer glitches that sort of royalty new york stock exchange is not the markets. a lot of people are comfortable with the idea that maybe there's ultimately some human being that might step up in case the machines turn on us or fail us. >> i guess yes. for better or worse rare with computers. if you couldn't use your e-mail -- computers from the system. the floor is an anachronism right now. unless i'm missing something, what is the volume like at the new york stock exchange? the market is down right now not because floor traders don't have access to the system. the market is down right now because of headline worries that of china and all the stuff are talkingabout. how big is the volume? trained to be traded in a one-point range since the cole

broke the news. price disruptions about the new york stock exchange. start getting crazy weird. charles: i'm a word about the manipulation of high frequency trading. fortier the 2% of all the trading is exploratory. >> with the market is structured right now, before the new york stock exchange is not a stopgap by high-frequency traders. >> let's go back to the floor of the new york stock exchange. i don't know how much you've heard that a lot of people want to understand how the market works. they used to depend on the guys surrounding you right now is there ultimate backstop. do they play an important role? >> they are relevant. they play an important role. today is a highly unusual day. i have been down here since

1995. i have never ever ever seen all stocks on the new york stock exchange halted in this manner in the middle of the day. they have been a glitch of some sort but still a slew of traders on the ramp. you are 100% right. all the stocks can now trade away. if you think the customers will send their orders here the rest of the day i highly doubt it. once they start routing them away -- [inaudible] >> i don't know. >> we are getting quite close. >> said they are trading. i don't know. if you are getting close i guess it's trading. >> that would be the one question i have. i think they are. like i said this is 10% right now. >> i don't disagree.

i know this doesn't have the big market share and everybody trades away on a day like this. mostly looking at the new york composite index is a compilation of the stocks right here on the floor of the new york stock exchange. there are so many people on that ramp piled up, trying to figure out what is going on. we've had so many glitches from the opening bell to united airlines. the technical issue to blame for trading and other venues. >> if you are the average investor unlike what happened at the nasdaq where really nasdaq stocks -- if you're an average investor it is nothing. >> what is more important is when they had a glitch in march and a blood of atf couldn't trade and people were overpaying for ats. they make up 30%.

>> do you think this gives them more confidence or less confidence? >> it should give them more confidence. it is working. i would be worried about -- >> people want to know about food on a trade that will be executed. >> yes yes. nicole should go right to the new york stock exchange. luscious double check. trade him all our stocks which is the -- >> called the blue-chip names. we have tried to pull up close and they are all coming up. >> there is a public consolidated data fee. charles: nepal we want to come back to you. help us understand how the average person cap at a trade into the stocks moving up and down and get those guys down there have a tough time. what is the exact problem.

>> sorry and doubled to doing this. the answer is yes. have a confirmation for you. i also have statement from the nyse communications and here it is. we are currently experiencing an issue that we are working to resolve this quickly as possible. we will be providing further updates and terrain are up most to communicate thoroughly and transparently and ensure timely and orderly market reopening. >> for the average guy. what does the new york stock exchange do. >> you want to play stock, it gets matched on one of the exchanges. two ways of doing it. through the guys that can operate because of a glitch or through the computer which is 90% of what goes on. a computer is still working.

that is why the average investor -- it's interesting the stock exchanges down for your trade still get matched. >> i agree it is to a certain next time a small part. the bigger ratio is how does this happening. how do you have all of these people here? how do you have thousands of stocks of the new york stock exchange? >> they are not halted. i know you are real close to the guys down there and there has been a lot of talk about them being obsolete for a long time. the fact everyone watching is still getting trades through the market and still trading. i would be concerned if i were them. obviously times the computer system to tom and they come to the rescue. >> this is the opposite. this one looks like they are doing their best to get it back

open. charles: i have fond memories. i wrote a book about it and can't forget i don't want computers taken over my job. i hate to say at the embodiment of how technology helps the market. charles: it is called creative destruction. >> it is tough on a down day to have this happen. nicole, since you broke this news the dow was up 175 minutes completely flat since then. i know winners will trading away from there but i find it interesting to market moving up and down has been relatively flat. what is that speetwo? >> you make a great point because i've been watching the market over the last 20 minutes from 175 to 193 but scenario range to the down side. where's the reaction? >> first of all half of these

guys will be at the bar in 15 minutes. >> they are not going to be at the bar. >> wait a minute. the nasdaq is still trading. so that's another backstop. >> so are all of the other exchanges. i still find it mystifying what the market has been a change. we keep talking about the fact that this is done. we have moved completely sideways. the market down 120 200 will be completely flat after a roller coaster. >> what is odd is you can make lemons out of lemonade. >> there's a story. >> we are having fun with charlie gasparino. >> in five minutes they are all going to run.

>> nicole go ahead. >> i want to make an important point. they battle it out to the ipos. the ipo there in the nasdaq. the nyse each day the two exchanges battle it out. they can have the most orderly opening. this is like a pr nightmare. this is the black qaeda have all these traders standing around waiting as trading is suspended here. you have trading and the other venues happening smoothly. >> charlie keeps pointing out -- >> they talk about when they're going to be there. >> the moment they are no longer they are doesn't mean done. you guys were in the dark and everybody else's trading. they are all wondering how much longer. >> someone has to explain why we

are moving sideways. >> you've been saying this all morning. we were moving a 10-point clips pc. this is really odd to me. them might be something more. we don't necessarily know what is going on. this market has moved sideways since this is happening. i don't know if somebody pushed the path or what but it's weird. >> they think i want to jump back in because his people meltdown in europe and asia to have a choice. u.s. treasuries or equities in the united states. charles: you think this market will react one way or the other. >> maybe that is why it is not moving. i just use simple logic here. if only 10% of the new york stock exchange or 20% trade on the new york stock exchange to

begin with most of them trade elsewhere. only a portion of that trades to specialists. >> there are areas that they trade out. there's a lot of small. >> if you're ever down there, you will see there's two times where people trade a lot. at the close in at the open. not now. >> it's pretty interesting. charles: what i am saying is these dark pools would talk about, when it comes to liquidity you can execute orders, but are they known for having the robust liquidity that can handle -- if something went wrong right now, by the way we just had a big move to the downside. it feels like a dam just opened up. >> trading is halted here but i don't know if that is related. simple logic is the new york stock exchange despite the headline we are running is not

down. you can trade the new york stock exchange. >> the guys with their coats on the floor and the computer system. >> i think you raise a bigger question. why did we just dropped roughly 45 points. i feel like there is pent-up salé and an somewhat open. i am worried about the ability to handle a major amount of volume. the individual ones you know what i mean. >> i don't think the market is trading because of this. by the way, let's just say the pent-up -- charles: hold on a second. we've got something. but nasdaq declares self help against new york stock exchange.

reporter: i don't see that but i will say what does that mean exactly. we know the nasdaq continues on. we are using the word disbanded, by the way. they see a market trading is temporarily suspended. >> i think that means the nasdaq because of the new market structure you could trade anyway. >> or the other way around. >> think about nasdaq. let's be clear. nasdaq wants you to think the new york stock exchange. reporter: all open orders will be canceled. they have to backtrack a little bit. nyse says all open orders will be canceled. still have a slew of traitors behind me. >> those orders go through the

computer aspects as well as the specialists are just that the specialists are handling. reporter: they weren't even able to -- i didn't answer the question because i don't know the exact answer. i would think it's all open orders. every order routed into the building in any way shape or form would be my best guess. charles: i think this does add to confusion and anxiety. a couple years ago we had within the system has spooked people big-time. remember the crash and i think this might be some extra pressure. i got a feeling a lot of orders to your point are being rebuilt and put back in the system. it feels like this ticket is caught. every now and then we go further to the downside and wonder what is going to happen when we get the all clear. the initial knee-jerk reaction would be more panic and more selling is the first thing to

do. reporter: no doubt at all. people should be getting nervous about what's going on with computer systems. we also had a story about united airlines. i don't know. is there any correlation? probably not. these things make investors nervous. they try to believe in the markets. the big picture is so far things are handled smoothly. a lot of the noise i heard this morning was right when it happened and everybody went low. since then very orderly. charles: is it too early then maybe you can ask around later on? >> we talked about this. the biggest thing is cybersecurity, cyberwarfare, hacking. any officials from the exchange talked about baghdad? >> so many ceos when you interview them, that is a huge

fear. >> i am all for sensationalism. i just worry we are making way too much of this. if the new york stock exchange wasn't essentially a tv set which is what it is a backdrop -- if it was in a backdrop, we wouldn't care. i'd just like to know the amount of volume being halted and how many stocks have to be reprised. charles: covering this makes it worse. >> we should cover it. we should just put them in context is >> got a lot of dual listing from the nyse stocks that include that companies like hewlett-packard, schwab cadence, walgreens. those stocks trade on nasdaq. we talk about backup plans has another one. >> we had one big rally attempt

where we got almost 100 points out the worst price of the session. now we are starting to break that a little bit. not a sense of panic. but the pressures to the downside. >> i don't think people realize 90% of the stocks are traded away from those five guys. >> alternately you say this is a victory for the system itself and people should feel confident in our market. [laughter] >> drinks now. >> technical glitches like when the nasdaq went down you couldn't get pricing. let's talk about what happened. you can't really trade that way. the flash pressure is around us. this is technology. i believe working pretty good. >> the lows of the session. i know the news perhaps.

>> u.s. but we have to find out. how many stocks got affected? how many orders -- how much of the volume and not at the bar. >> but, you know -- right. and the point to be made, the intercontinental exchange itself owns 11 other exchanges besides the nyse so there's a lot of trading going on off the floor of the nyse. >> oh yeah. the new york stock exchange is open it's been trade, you know? what am i missing? >> if the atm across the street goes down, there's another atm you can go to. >> so we're not greece, is what you're saying. [laughter] charles: the folks on the floor that's a big story. you know a lot of these guys personally. >> these guys are still making money. charles: i'm sorry, say that again? all right, guys, here's the thing. we talked about disruptive technology. how do we replace charlie

gasparino? there's no such thing -- [laughter] that one computer chip element need to get that -- >> i am the missing link. [laughter] >> you are destructive technology. [laughter] charles: for the audience, there is major news and that is the chinese stock market is under a tremendous amount of pressure, it has been getting hammered all night long. halted trading, we also want to reiterate the situation in greece, there's going to be a major gathering this time of all the e.u. members, not just the countries that share the currency, not 19 but 29 -- 28, rather, have to try to hash this out. those are your two big stories. we had computer glitches united airlines was halted for a while, major computer glitches at the new york stock exchange. it's a big, bigtime news day. stock market off at the lows of the session, down 214, well, the lows are 230, but let's face it we had one rally attempt that's

failed, but this market's going to continue to be all over the place. keep it right here. on that note, we'll give it to you, neil cavuto. neil: charles payne, thank you very much. for those just tuning in, we have a problem on the floor of the new york stock exchange. it is very difficult to get at least computerized trades through. that has effectively topped all major -- stopped all major trading on the floor. the nasdaq, for example, was quick to remind folks that trading is being carried on in new york stock exchange-related issues, but if this is seeming very flash crashy to you like the incident a couple years back, you're not alone. and it occurs on a day we had a massive selloff going on following china's big hit, about a 6% hit. that market down close to 30 plus percent from its highs reached three weeks ago. also that market had some technical issues just trying to implement government restrictions on trading a third of all shares there were suspended for trading.