expecting 800 point loss for the dow. the dow opened, down 1,000 and 89 point. awe, look at it now. talk about a turnaround 9:00 points. daigen turnaround that's macdonald. >> thank you very much. i give you full welcome full credit for that. did you think it would be a relief? well it is it is, it sure is, compared to how it was started. take a look at the market 213 loss and the s&p 500 is actually at this moment not in correction territory. if you can believe that, that 10% loss after falling more than 1,000 points last week. the dow opened at 9:35 a.m. eastern time with a 1,089 point loss. biggest point drop ever in the history of the dow industrial

but climbing back looking at early trading this day and see how markets about been all over the place but a comeback. apple rebounding as well this stock has been closed friday in a bare market like so many companies with a lot of exposure to china. a lot of expo o sure overseas. you name it they were in a bare market down 30%. proctor and gamble l making a comeback. oil is still below. down today. below 39 point a barrel but making a bounce back to low of this session so far with under $38 a barrel, and then where's the money been going? treasuries. that is one of the only safe places in this market. so yield on the tenure treasury falling below 2% earlier in this session. and you see a bounceback in the yield there. so some of the fear disapating. we don't want to make lights

that there's more than 200 point loss on the dow and what is behind this major, major selloff. china, is certainly one trigger, shanghai composite index falling 8 and a half percent on monday big etion drop since 2007. mcconnell mcshane with the latest. >> it does seem like a long time ago that weft policy closing down 8.5%. we've come so far from there and market have been is really remarkable to watch here the first few hours of trading. the close is anybody's guess but china did start us off and start it off in the wrong way. people are are focused on stocks but this is a story and went through about this other markets of the stock market taking a look at the asian markets and selloff in shanghai, hong kong. japan in the sowell, south korea severely lower in today's trading but what about currency really that's hat china story is all about when they devalued their currency all of a sudden

we knew that things probably were worse there than we thought. our dollar about that quack today and really that shows a bet that that federal reserve rate hike that we had all been betting on and thinking wowlgd happen in the fall may not happen so qukly afterall. that seems to be the bet now that has worked its way into the market. that's why timing wise, if the fed now does not raise rates, in the lows of the day down more than 1,000 points of the dow jones industrial average hold you have a lot of people talking about rallying in to the close and having put that low in for the day. we'll see been interesting to watch so far. >> it is one thing we should point out is why is our stock market selling so much but it has been overvalued and has been and you have incredibly expensive stocks in this market that we've been talking about. bob says stocks, bonds and real estate are all stretched. at this point and that's what happens when you get expensive markets. connell thank you so much see you shortly, and we want to go

to market watch columnist brett aarons he say we have 16 thorks on the dow. fred aaron as said you can't rule out dow 5,000. okay, brett make your case balds be a 70% drop from here. >> well, look i don't want people to think that that's my prediction or call. i'm saying that's probably low end of the -- possible outcomings. the reason for that is something that is very little -- regarded on wall street very few people have a knowledge of financial history. if you look at the history of the stock market it has traditionally most offed in very long waves, and if it followed -- a similar we've had a long way since the article 80s. if it followed a pattern to the past it would end up down 5,000 that's not based on doom and gloom but evaluations that is using something called a to been cue that compares share prices to the replacement cost of company assets. it is a technical measure most

have not heard of it. however economics have said if you go over 100 years it has been a successful predictor of long-term moves in the stock market. what concerns me is that very few people on wall street know anything about history whatsoever. if you look at long-term financial history, the outlook here includeses some very sort of scary possibilities. i'm not saying this is going to happen, but you can't rule it out o. it is not crazy talk. it is perfectly possible when you look at a long-term chart on the stock market, you see really since the early 80s, we have just gone up almost like a hockey stick and you have to say either the world is completely different and -- or you know, sorry. carry on. >> going to say that that trajectory in the stock market has been coupled with a long-term decline in interest

rates. that's one of the other concerns is, you know, people have been calling for a bond bubble since 2008, and they have been essentially wrong that any time you had a small move up in interest rates if you bought, it was a money making opportunity. however, longer term, that downward trend in rates can't continue. so is this the -- maybe not today. but could that begin right now? >> yeah, it could. look one of the things study of history whether financial history or otherwise will tell you is you don't really know what's going to cause, you know, the shoot of the drop in the fast it has been spikes and interest rates or it's been conflicts. who had a chinese recession as a the possible cause of stock market crash or correction in the summer? >> do you think that it it is jt largely china? because it pairs with this kind of volatility, this --

there are a lot of other things that work here. it is the other emerging markets it's the currency there. it's brazil. russia, china but it is also as i was talking about at the top of the show stocks are overvalued. >> yeah, it is combination of a couple of things. first of all, china is the 800 pound gorilla it is on some measures largest economy in the world. it is interesting how almost knock wants to say that the chinese economy might actually be in recession. but that was the probable -- cause of the devaluation two weeks ago which may be, you know, the -- lehman brothers moment. if u.s. stocks were cheap in relation to future outcome and dividends it would be a different story. but basically stocks are expensionive. they're certainly not cheap from a long-term measure. i find worrying that everybody is saying this is a buying tubts. my sources tell me their clients

are saying buy buy, market overdue, but people were still very bullish this idea is nonsense a lot of bullishness out there and i'm just concerned that people haven't factored in to their forecast the -- the possibilities that equities will significantly disappoint over the time ahead and it is not impossible the dow goes down to 12,000 it is not impossible it goes down to 5 not saying it is going to happen but you can't rule it out. >> brett great to talk to you. take care brett. fox aren't the only once taking a hit today. below 39 dollars a barrel. that is its lowest level since 2009. a fresh six and a half year low, but hey, it is off a fits lows of the day because we had blow 38 l dollars a day earlier below that market volatility closed on how low oil could go and the

upside if you drive an automobile. tom. >> hey, how are you? >> i'm good. how low do you think it can go, tom? >> i think we're probably overreacting right now. i do suspect we'll spend some time in the 30s. but i think that the world is different from where it was the last time we backed off of 40 which incidentally we got to 40 in october 1990, twice. then it took 164 months to get to 40 dollars again. i think this is different. more money supports crude, i think qeelg have a chapter here in the 30s. but i'm not looking for a rout. we've been in a bare market for oil for about 15 months or so. so it is much different than the financial markets at the moment. >> this is one of the -- if you can say that right now -- because it is hard to find upside for people. but people talk about the relative strength in the u.s. economy. this drop in crude will result in a nice -- break on the price eve fuel, will it not for individuals in in country.

>> going to see quite price dividend low test heating low and lowest jet fuel prices since oh, the early part of 2009. and the depths of the recession. we've got about 750 gasoline stations that are below $2 that's going to be about about $75,000 station by thanksgiving and maybe earlier than that. so the problem is i think when it gets a little bit too cheap, there's some unintended consequences those consequences can include people being laid off and some really high paying jobs. they also kowk getting a little bit wasteful and profit a bit in the way that we use energy. >> well talk about the layoff particularly in energy industry. you've seen massive layoffs through this year. do you expect a lot more to come giving those continuesed decline in the price of crude? and how dangerously leveraged are some of these companies again some of them are quite leveraged. >> yeah, i think that timing of

this is such that there's something that they called the bank -- remediation talks nobody ever paid attention to it like rick did for a long time but that all happened in october. not only some of the smaller leverage prices won the get funding to find shale. break costs have been coming don for oil and oil shell production is dropping. we're probably a little bit behind it on the government level 37 but it is dropping. the problem is when you get into o'pack you see production out there, it is not dropping so 100, 200,000 barrel a day last of u.s. shale production doesn't amount to the hill of bean, and particularly, you know this has been all about too much supply. it hasn't been about supply verse demand. >> let's finish your thought. >> if you do get chinese growth

or some slog in china. you really cut down on all that global consumption growth that would take away the excess saudi arabia, alaskan oil. >> do you think but how much do you think that demand will be hurt by china if you're saying that hasn't been factored in at this point? >> i think it has not been factored in. i think people are still expecting that global consumption growth is going to grow on the order for a million barrels day. now, if the situation in china becomes dier and they start selling soflt p some of the oil out of their reserves to raise tax or try to do some things to help on the margins there, then you could have some numbers that are into the 20s and that remind us with the asian con contagion. >> how much do you think of the

global commodity boom has been driven by the ocean of cheap money around the world? how much of it was just pure speculation? you can talk about any of the commodities that you look at. >> well certainly speculative money drove it up to 100, and 110 dollars and 145 dollars a barrel. i do think there's a lot of non spklative money, investment money that provides sort of a sound footing, and if that money stays where it normally is which is only the long side for five, ten years i don't think we'll drop below that 32, 40 price that we saw when everything unwound in december, sorry december 2009. so i do think there's an awful lot of money that supports oil. an in the end that's probably going to keep the shale oil business prosperous but this is a scary couple of weeks no question about it. >> but tell me how much mernls could possibly save at the gas pump. because i know you're kind of a nerd. you're a giant fan and a nerd.

so i know you've done that calculation. people use 60 gallons a month. we're going to be saving at least a dollar versus last year when prices were dropping as well. but people are going to have $60 maybe 75 go in their pocket. problem is if those people get their 401(k) statement in another month or so and lost a lot of wealth they're not necessarily going to feel that rosy about it. but it has good news for airlines and trkers across the country. and it is great news for consumers on the gasolining and the diesel side not so much on the airline side because we have a monopoly going on there. >> tom it was great to see you and okay that you're a giants fan. at least you're not a jets. >> go giants. i think we'll see sub two dollar gasoline in the country before the time the dallas cowboys lose all hope. >> which is when -- that's really in september? joking.

>> i think they'll last till october. that was good to see you tom thank you so much. tom on all things oil, and gas ledge, markets neared circuit breaker tear story, that mean it is that markets would have fallen so much. that they would have taken a pause. nicole petallides with that. >> everybody needs to do what that means let's say they were sort of new to this business. they've only been working down here couple of years they probably didn't even study these circuit breakers but today they were front and center, and if you've been here a long, long time you know there are three levels an made the a full screen here for you so you can better understand. a 7% drop in the dow or s&p that would mean a 15 minute halt then level two dropped further then it would account for a 13% drop. another 15 minute halt in trading. that would give them some time to balance the orders, take a breath. however, if it's 20% drop, the

market closes for the entire day. there's a little star on the bottom there, after 3:25 p.m. 7 pbt doesn't matter. 13% doesn't matter. only o 20% matters and if it is down 20% or many, then they shut the markets but those last 35 minutes, almost anything goes that they can close the markets. dow was down ever most points 1,089 right now down 239 points a big imrosmght but other names saw a sell including jpmorgan down 22% down 2%. netflix and apple two names that were down big time. netflix down 15%. apple hit a new low today as well with 92. look at that. positive territory, you're right rub your eyes, you can't believe it. there they are. >> thank you nicole that was apple's largest day decline in

five years, 14 month low and shazam and there's more green in stocks we go back to connell mcshane you're looking at -- >> bunch of the text stocks apple is best example . you're talking about a couple of times down from 92. it is a nutty day no doubt about it. but a lot of other stocks have done similar thing. we have a stat earlier that 14 of the dow 30 were in bare market territory. 20% off a recent high. and then you get a bunch of those stocks that were actually on that list coming roaring back and turning higher for the day intel was an example. one of the ones that did that, and other tech related name that have done similar things. look at this hp is green now. microsoft was way down. green, and back and forth between gains and losses be down as much as they were 5, 6,% to come back. facebook has doing the same thing, so i don't know. it's you lose -- track of the superlatives 13 in bare market territory and a bunch of those come roaring

back. >> connell thanks for that. markets getting crushed now the wrong time for the federal reserve to hike interest rates. former treasure secretary larry summers thinks so saying that the fed would be making a dangerous situation raising rates right now. charlie gasparino on mr. summers and the federal reserve and whatever you want to talk about. sir. >> alone if you read the larry summers made that comment in "the new york times" or washington post. financial times, there's a great op-ed in the journal i forget the gentleman's name but more right of center than mr. summers secialgly saying same thing that now that they should have raised it, 8 months ago, that's when the economy was seemingly improving. now to do it now is crazy. i would say this, if this economy can't take a 25 -- 25 basis points, hike in the fed funds rate then we're in really, really deep you know what. this is a problematic economy. it is problematic anyway. but fed which has access to numbers that we don't.

you know, if they really believe that 25 basis points is going to like implode us, when we do know that keeping rates this low weird anomaly in the market that forces investors to take risks on certain stockings that they shouldn't take risk on. they plowed money into internet stocks that aren't worth that much. we've seen this in the past what low interest rates do. listen, the effect -- this is the state that is call wealth effect. long and short, why so investors go out there. don't put their money in the bank but buy stocks. okay, at some point in buy too many stocks by keeping it too low. you buy stocks that you shouldn't buy. >> that's the question -- when does fed raise rates now to bring equilibrium back to the economy. they're saying this thing is in bad shape. >> bunch of things that i want to talk yo you about. norming one if they don't make a move in september but by end of the year what are they say about the health of the imhi?

that could freak investors out even more. george wrote a book and talked about theming -- it was a very -- he's brilliant and he talks about markets they have some psychology, and telling people that things are really bachelor's degree out there that's why we have to keep rates low. there's a propensity for people to say oh, my god things are bad. hoard our cash. >> one thing given what investors have been is through in the tech bubble collapsing in 2000 which was nothing compared to 2008. but people have been so burned that psychology plays, could play into this downdraft in a way that it hasn't before that people are so willing to sell -- just hawk and across the board. >> the only thing different the reason why it is hard to sort of compare 2008 and 2000 in particular to now, is that the retail investor is kind of like out of this market.

they're in it through mutual funds to a certain extent but these are professional investors and pension funds that are holding this stuff indirectly reflecting wishes of the individual investment but individual investments aren't huge do you consumers of stock t now but they have a lot of money in cash, bonds they buy good. much more. so if you raise markets selloff, yes there are 401(k)s may take a hilt because there's where they have money but they have money. i think the individuals gets hit less than the institution. >> if you look at mutual fund flows every week there's billions of dollars coming out of u.s. stock funds. every week for year an years and years, and money going into -- >> why can't they raise rates? >> that's my -- i kind of agree with you. i'm not disagreeing with you. >> only reason you don't raise rates is if you feel the economy is so tenuous.

you know hillary clinton wouldn't want it. a political dynamic going on with the market. you saw first came out on fox news basically blaming the stock market generations on the obama economy. carlie fiorina i'm assuming will say similar stuff to -- to trish later on today when you see that interview. this -- this there'll rei is a political dynamic here that i think the republicans will cease on if they can. and things get nasty i think this helps donald trump. >> we'll see how he proamps it because he was bairvegly -- the tweet that he put out i don't know if we have that tweet made up. we can get to it later. but he essentially said this is what happens when you do business. i don't to paraphrase but i'm about to. this is whps when you do business with china because the selling is -- in relation to what's going on in china it has a very protectionist tone to it. i can pull it up. you keep talking i'll pull it up. >> protectionism does not have a good record when it comes to

economic growth. most economists left and right not far left and far right but sort of middle grounds like larry summers would agree with this. ben bernanke and others of more center right would say the harley -- >> during the 1930s right after the 29 crash. had an impact. had an impact that was bads on the u.s. economy because when we started going after them, with tariffs. >> we're so tied in with china and asia that their markets are now taking the u.s. market down, get smart usa all of this -- >> here's the problem with donald's statements they aren't taking down our market bus economy that people are translating into that leads to slower economic growth. do you see what i'm saying here at home because they're a trading partner i don't think u.s. investor an banks are leveraged to chienlz internet

companies. no, that's the problem. he sounds good, but i love the guy. personally, great guy but when you scracht surface, a lot of what he says you know -- >> let's keep talking about that. because my me drix is political candidates are going to blame the federal reserve too. see if that happens you back net hour. so next we're waiting reaction out of washington. speaking of washington, hhe president is now back from vacation on the front page of "the new york times" today. golfing you can take a look at the briefing room at the white house. and we will see what happens when we come back.

>> this is what we've been through so far this day. a market in the first five minutes of trading, the dow down 1,089 points blue chips at the best level of the day only 141

point loss on the dow industrial at this hour. and also if but we should point out the s&p 500 isn't even in that 10% correction territory it is back out of that territory. so the dow and the nasdaq are the only two that are in correction territory that have suffered 10% losses or more and i'll point out that the nasdaq is pretty close to being out of that zone as well. getting slammed in a state selloff on fears of china slowing growth. but it might not all be china's fault mike says the markets are taking a hit because profits are down, and mike -- stocks were just expensive. were they not? >> oh, absolutely. you know, 17 times earnings high end of where they are hispanicly. but as you and i worry, corporate prices are the mother's milk of stock prices but through the first quarter of this year, the corporate profit

number by the fed, in other words they look at all of the national income accounts all of the big, small medium about thes that report profits they're actually down for two quarters that is first time this has happened on a pretax basis since 2008. and to me this is the lower corporate profits in the future, and even worse lower take home pay. >> but all there are so many sign it is there. right? mike that we were in store for a market pullback but what shocked people was kind of the fear got away from us. you saw the vicks had its biggest weekly gain in its history last week. that the selloff was so swift and so violent. and i want to know what you think about the cause might be that. leak why now? why did we see such a violent reaction on the downside last week but really just this morning? >> what is come down to roots is the misplaced conception that

money printing by century banks would create more wealth and create economic growth. it is completely fell. doesn't matter if you look at japan, china, eurozone or the united states. none of these economies are in good shape is right now. and what these people fail to understand who want the feds to keep interest rates low, and keep currency values low, is that the genesis of economic growth isn't low interest rates or more consumer spending, it is investment in plant and equipment. it is deterioration of capital interbusinesses that will then supply jobs and higher income. and that's why this recovery has been the worst since the 30s is it has been very, very punk on the investing side and plant and equipment. >> as soon as you see market drop people are crying that the fed including larry summers you can't raise interest rates. you can't raise interest rates here, and we can only continue. how long can we continue to use hooch to secure "the hangover"? >> well, twailg that hooch

you're talking about is the reason we've had such a big hangover. with all due respect to mr. summers. he's wrong. devaluing your currency does not make you richer. it makes you poorper by definition slowly but surely needs to increase rates so it is not big swing on up side or downside that it needs to be stable. so investors know what the speed limit is and that their future investments aren't going to be wort less. so very important and a rise in real interest rates daigen does not mean stock prices are going to go down, in fact, they may go up on such news. >> yeah, but you've seen raised rates and had to pull back -- john hills was talking about the people at the fed are studying sweden. because they did the same thing. do you believe truly that this federal reive going into an election year would raise rates

and continue raising rates? >> no, i don't. i think they continue to poidzen into financial markets because i think they believe despite what history has taught us is if you go back to the kennedy recovery with a stable dollar, or the great reagan recovery where you have a stable dollar, and you saw a real interest rate go up. and those recoveries were powerful and long lasting. for some reason they don't believe that. they think you have to devalue currency and print money and that's how you create wealth when, in fact, the world economies are telling us the exact opposites. >> we're all addicted mike thanks. with "forbes" coming up president obama back from vacation offer the golf course. we'll get d.c. reaction in just a few minutes.

>> president obama's first day back from vacation, and the markets markets are in turmoil. peter barnes on today's white house press briefing, and new reaction to stocks free falling. feater. >> wellway, that's right white house press secretary john ernest set to get into the briefing room for first briefing in two weeks. and of course the big news is the market drop and i'm going to go out on a limb here and i'm l going to predict that he has

will not comment specifically on the market levels or particular volatility but he might say and this is goings to be a stretch. that if there are any concerns about growth in the u.s. economy, that means that congress should approve the president's progrowth agenda, and including infrastructure, and higher minimum wage, and other policy prescriptions to and get the u.s. economy growing faster. i throw out there -- on a limb. back to you. >> no offense peter it is not a stretch since every speech that in which the president has mentioned the economy since 2009 he has also talked about infrastructure spending, right? >> yes. and other measures. so stand by hear him shortly. >> more you talk about markets you're a politician deeper into you know what you weighed in general. thank you peter. 2016 candidates reacting to this setoff. connell mcshane with what they're say or not saying connell. >> you know what you speak of.

i'm just sitting up here reading the donald trump twitter account in my spare time and some of the other candidates have weighed in as well. trump predictable is tweeting you know long stated, we're so tied with china and asia markets are now taking the u.s. market down so get smart usa another tweet after that where, of course, ended with vote trump things are going to gets really messy. so vote trump. so chris christie was on fox news channel earlier with arthur and he basically a little bit of a different approach blaming president obama. all of the spending that we've had and how that ties us because of the debt to the chinese. so supposed to just directly blend in china. tried to move it over to president obama. mike huckabee when he was on this network with stuart varney earlier used this opportunity which was greater than it is for now to call for a flat tax so it is a way of getting out in your policies that you're already calling for. i'm sure when carly is on next hour she'll do something similar. but trump on twitter is just

about as predictable l as negative we would have seen today with cheen the headline and market was down. >> china is bringing markets and companies down. but on the flip side, the opportunity in china also took those stocks up 237 whether it was apple or general motors, or wal-mart you name it. >> big time. i want to mention connell someone on twitter said that bright spot is today with the crazy market activity is seeing you two working together again. >> you knew. a lot of crazy people on twitter so -- >> yeah, yeah connell thank you. markets come back speaking of crazy, crazy days, 114 point loss on the dow we lost more than 1,000 points last week. and then in a few minutes this morning we lost more than almost 1100 points. nicole petallides has the stocks still weighing down the blue chills the most. nicole. right now dow is down a big comeback from our 1,089 drop and

we have names hit it here including chevron caterpillar exxon and intel. these names you look at intel in the green a couple of things to note, three of the four names here were in bare market territory. 20% off of recent highs. ouch. right, and then let's tack a look at the next including wal-mart. apple disney, american express these names as well. 20% off their recent highs, and it is today for example, you see some of these names down 15 to 20% just this morning alone. but apple and disney actually into positive territory. american express still lower at the moment. there's the s&p 500 down 1% at the moment. and we'll take a look at the nasdaq. nasdaq has been hit hard of late over the last week or so. but right now you can see that is for the down sited pside of the tune of 1%. dow is down 6 pnt 5% at the lowest point. right now it is down not even 1% so we're making this comeback right now, and we'll see what happens at the close that's what the traders are watching, the

close they said is where it is all about. actually is actually still down but above 39 a barrel at the moment. this market isoff will it lead to a recession. is it telling us that a recession is on the horizon? to gary b. smyth with this why this economy is it worse than the last recession. gary? i think it is and a the majority is telling a story. i don't think it would have panicked as much as it did this morning if the underpin physician were strong. but i think and you know we've discussed this over the past few week maybe we differ a little bit. i think that basic underpinnings of the economy are pretty fragile right now. >> why? i look at gasoline prices falling that's juice for the american consumer. i see a housing market that is stable and a should get stronger because of low interest rates. a job market that isn't on its

back but are we so linked to the rest of the world that is irrelevant? >> no, i don't think so. and let's, you know, you make some great points. as usual. but let me counter them. go with housing many >> give me your best. >> i don't know if my best is going to match you but i'll try. look, housing a lot of people are still underquarter. the prices have not yet come back. to where they were in 2005, 2006 where you have a lot of people buying home it is not saying they're underwater but they don't have any neglect their homes. number, two, mortgage rates they start going up. i know that because i'm moving as you know down to florida, and i see mortgage rates going up every single day. let's look at labor force participation. that's still at a 40-year low and the flip part of that is people want to know do i have a job and if i have a job i making

a decent wage? wage have been stagnant for like what 50 years right now? so people don't have anymore buying power, than they did back in the 70s. that's why no one feels rich anymore. that's the problem. people are ugh tay about a federal reserve with not much firepower left. that you do bond buying, it has less of an impact. people are talking about negative interest rates. remember when you feared green span, or someone of those come out and say they're going to do some emergency stimulus, and the market was up like you know 1,000 points. now what do they do? they're going to come out and say okay maybe we won't raise rates in september. >> i mean -- [laughter] not -- maybe that does bring the market up these days but you're right. i think the fed is out of ammo, an maybe they should have been out of ammo a long time ago, but

i think that the problems are a lot more structural than that. >> gary good to see you whether we disagree or not. gary b. smyth worries about a merging market bond funds. liz mcdonald is working the phones plus still waiting for reaction from the white house to this market volatility. will they speak? you shall see.

>> much of this selloff that you've seen here in the united states in the last week, volatility today is about the merging mosht markets not just china. liz mcdonald is all over this story look at the money being pulled out of the a bond fund . why do you need to care about this? >> in general a lot of money has been coming out of bond funds. so you know we work phones and a talking to wall street first saying look at these bond funds from that invested emerging

market an down draft and familiar names, price, jpmorgan chase. you see them down about oh, more than 20%. goldman sachs in there as well. so across the board, when you see in the red more than 20% down drift that's almost lick liquidation mode there's about 19 economies in the world. besides china that are not going so great but consumers are not doing that well. the economy is not doing it well. we want out of these funds so when they -- >> currency is getting crushed. fierce hoar. let me tell you this is what wall street is talking about. china devalued back in 1994 fed raised interest rates we have the asia jet crisis low end in 1997, '98 not saying we're doing that but a play book played out again via emerge hadding market funds yeah we've seen hot action there. whiteout action concern that some of these funds could collapse. >> liz how liquid are these

markets that's -- that's the question that's the best i think of the day we're testing liquidity and markets right now. we have stop loss ored or erst e have a number of stocks mismaches were occurring across the board that added to the volatility and whip saw action. in other words liquidity was an issue on trading floor today and sellers and buyers couldn't get a match together so there was a -- retracing right now. >> a lot of investors in the last really since the downturn in 2008. money has continued to come out of money mutual fund. gone into bond funds and international funds. that's right. so individuals might be more pex posed to these extremely, extremely volatile areas of the world than we even realize at this point. >> for retirees yes look under

the portfolio because you're in a world of near zero interest rates around the globe. poem people chase around the globe so those are emerging market had funds and we're seeing washout happening right now equity, and the bond funds, they're getting hit hard right now. >> and high yield we've seen a washout hire as well. particularly because a lot of the energy companies borrowed and high yield mark. >> yes, that's right. so the drop in oil, resulted in that. but we want to take you to the qhows. press secretary josh earnest is speaking. president enjoyed the last couple of weeks to spend a lot of time with his family and i hope all of you took advantage of the opportunity to do the same at least for a portion of that time. let met do a couple of comments at the top and then go to your questions. what i just wanted to review prior to taking your question withs, is -- the progress that the

administration has made in materials of building support for the iran deal. and since i was standings at this podium two weeks ago, we have seen 16 members of the united states senate come out and indicate their position on the iran deal. 15 of those 16 announced their support and fen doors 789 for the iran deal this coulding >> including just this morning senator harry reid and of michigan. this is important momentum in the support agreement. last week we did a scene and op-ed from the brent who was national security advisor to a president george h.w. bush lending his full threaded support to this agreement. you've heard the refer in the past to the idea that this

debate that we're having about the current iran deal breaks along the similar faultlines that we saw around the debate leading up to the 2003 and invaition of iraq, and you'll recall those of you who cover that story closely, that he made it clear, the concerns that he had. about the -- about the invasion at that time and somebody indicating his strong sport support for the agreement. couple of weeks ago we saw a letter from 29 different engineers and scientists here in the united states. who indicated that the inspections regime that would be imposed on iran to verify their clients with the agreement could be a model or should be a model for the way that the iea conducts investigation of others in the program. we saw a letter from the signed by a wide variety of retired military leaders and flag officers indicating that they believed there was no better option for obtaining from

nuclear weapon than from this democratic agreement. we saw a letter that was signed by 26 jewish leaders all across the krnts indicating that they believe that this option was what they described as best available one. that is to prevent iran from obtaining nuclear weapon. but we also saw a letter assieged by more than 300 rabbis from across the country. indicating their -- commitment to lobby the united states congress. and encourage them to come out in support of the agreement. we saw an interview from chief, who indicated in an interview with pbs that they believes that l this was a very effective way for the international community to come and prevent iran from developing a nuclear weapon. and finally, i wanted to call your attention to comments of president bush's treasury secretary hank fall son who raised it --

, obviously, the department of the treasury is responsible for implementing sanctions that have been so effective in compelling iran to come to negotiating table and talks with with the international community. and the reason i raise this quote is that many of the critics of the agreement have suggested that what congress should do is actually kill the deal to reject it in the united states congress, about go back to the negotiating table with iran to negotiate a better deal. secretary paulson had a rather dim view of that strategy he said and i quote it is somewhere between naive and unrealistic to assume that we, the united states of america have negotiated something like this with the five other parties, and with the whole world community watching, that we could back away from that. and that the others would go with us or that even our allies qowld go with us. so -- secretary fall son of

administration knows quite a bit about the way that sanctions are applied and certainly raises significant questions about his strategy of this advocated by critics of the iran deal. so -- we've all gotten an opportunity to take where we were last couple of weeks but news that is related to iran deal has kongtsed and i wanted to recap that to this point. so if any of you would like to take a look at letters that i'm referring to we have the letters. thank you for accommodating me, and now we can take your questions. >> on iran actually. administration officials support o the president's decision has been fairly open about the -- house to veto a resolution of the proposal and you're mostly -- [inaudible] do you think there's a chance now that we won't have to use his veto power? >> well, our view has been that we want to engage as many

members of congress congress aso advocate for this agreement this started a night before it was announced when the president, other senior members of this administration reemped out to members of congress to give them a heads up about the deal and outline of the agreement that was going to be announced the next morning. and this i think is -- characterizes intensive communication between senior administration officials and our congress. our bill has been to build as much support in congress as we possibly can, and what we have been focused on is building the kind of support that we need in both the house and the senate to sustain a presidential veto. >> have to veto -- [inaudible] >> we have to see what congress chooses to do but we have to build as much support in the house and senate. >> so this day in the market,

wondering what's the level of concern -- the administration has about the slowdown in china, and the potential ripple effects in the global economy and certainly in the u.s. economy. >> well as it relates to, you know, we've seen a lot of volatility in the china stock markets over the last several weeks, and china i'm sorry the treasury department has been closely monitoring global markets including those financial markets in china. you ever seen readouts by the treasury department of conversations that secretary lew has had with senior chinese officials in the last couple of weeks. most of those conferses, however, have focus od on the recent shift in china's exchange rate regime and economic reform agenda. and this is king the -- consistent with the case that we have long maid to china that they should continue to pursue financial reform to increase

move to a more market determined exchange rate system. so that is a case that we had continued to impress upon the chinese is to be a priority of the united states. >> what would you say to those watching this volatility up and down about how it was happening in china would affect the u.s. economy? >> well there's no doubt that they -- the global economy is more interconnected than it has ever been, and there are a variety of reasons for that. technology is not the least of them. but what i would encourage them to go about is resilience of the u.s. economy. u.s. business over the last 65 consecutive month was that longest sustained private sector job growth streak in american history. unemployment rate in the united states is 5.3% lowest level in 7 years. looking at economic growth more broadly and if you take a look at the most stable combination

of personal consumption and fixed investment we've seen that growth rate -- we've seen that those who measures of measure equipment growth have increased that is faster than growth of the overall economy which is an indication of how durable the u.s. economy continues to be, even as we see some increased volatility overseas. however, the administration certainly the president is very mindful of how this would be a particularly bad time for self-inflighted wound and why we make the case congress to to take care of business. we've talked about this a little bit earlier this surming. that one of congress's most important responsibilitieses to pass a budget for the federal government. and it is our view welcome that congress should pass a budget on time, that reverses this sequester an avoids a shutdown.

we certainly would like to see congress take the long overdue step of reauthorizing the bank, that a longer term invested investment in transportation infrastructure. would be beneficial to the economy. not just in the short-term but materials of creating jobs and stimulating economic growth but laying a foundation for the long-term strength of this u.s. economy. so continue to be confident about the long term trends when it comes to u.s. economy. we would like to see congress take the kind of common sense steps that would build on that momentum that the u.s. economy continues to enjoy. >> okay. >> josh, following up -- >> that was white house spokesman josh earnest he not start the briefing with the market with the economy. he started with iran. and it wasn't first question. but the second question that

finally got to the news of the day. the one thing that people care about, this day, a market that opened down, more than 1,000 points of decline in the dow industrial that we've never seen before in the dow's history. he finally got to it in 20 dollars goes to peter barnes for calling what the spokesman would say yes, he did talk about we need to invest more in our infrastructure. but he talked about china related, our situation to china's economy, the changes in china's economy, and also talked up the resilience of the u.s. economy. but we go from the white house to a woman who would like to live in the white house? carly fiorina joining trish regan talking about the market correction, take a listen to this. >> i've been expecting a correction for some time now. because the underlying fundamentals of the u.s. economy are not that strong 2% growth is

lackluster, of course now we have the fed backing off on zero interest rates, and china's economy is slowing. there's no doubt that china has some real issues in front of it, and the deevalluation of the one as well as the huge selloff in their markets spell trouble ahead. ahead >> trish, if there's anybody that can talk about markets, it would be this woman >> well, you know. >> running a publicly traded company >> absolutely. she ran hp for a number of years, so she knows what it's like to be a publicly traded company, she's well aware of how the feds affect the market and well aware of the china situation. we spoke about the market and we spoke a short time ago when things were really getting kind of crazy, we had a wild day as you can see, we're down triple digits but nothing what we thought 9:35 this morning. anyway she's making the point that, you know, we don't have a good economy right now. the fundamentals, they're really lousy. so how is it that you have a stock market that's been on such a the past six plus

years. the two just don't add up and she's blaming not just the administration for what we've seen there but also the federal reserve >> and how does she match her own economic plan with writing our financial system >> less regulation; right? less regulation for sure, a better tax code, she -- tried to push her a little bit on specifics for tax code for example what would she believe of. she just made it clear we need something a whole lot more simple. we're going to talk about that coming up at 2:00. a whole lot more simple, and she would like to see just an ease for which businesses can operate that they don't have right now. we spoke about a variety of topics that of course today really being the focus of the markets as we watch this wild ride. and i think, you know, she's got a point when you say you can't leave interest rates that low for that long when you don't have real economic growth behind it and expect

that you're not going to get some kind of. it's something that we heard carl icon say and bill growth alluded to, and alan talked about the other day when he was on with me. rates have been so low and there's a irony that when they go up and eventually they've got to go up; right? >> right. >> the market's not going to be able handle it, so maybe that's what we're seeing in the stock market today >> and all in 56 minutes from now, you will be able to say trish and carly fiorina. thank you so much, trish. >> thank you >> severe volatility. let's -- very nice to put it. nicole on the market that has come back from nearly 1,100 point loss -- to, you know, it is it's a loss, but it feels good >> it does. i think we have the right to smile here because the dow at its lowest point earlier this morning just after opening bell was down the most ever in points. 1,089 points. so much so, it was almost hitting that 7% circuit breaker to the downside where

we would have been halted for 15 minutes. that did not happen. but it certainly worried a lot of folks, a lot of investors. so let's take a look and run through what's going on here. 2.03 on the ten-year yelled had been down below the 2% markets. the dow, the nasdaq, the s&p all down ruffle 1% after we saw extreme selling across the board. when we take a look at sectors be we can talk energy and financials still being weak. technology giving it a go to the upside, and we're seeing some names even bounce back off these unbelievable lows today such as apple, that turned out to be a winner and netflix. i know they're going to go back and forth but the traders watching the closing bell very careful and hold around the levels, not sell off on the close like we did on thursday and friday. that's going to be key. so the next several hours are going to be very telling. >> thank you so much, nicole. at the new york stock exchange. joining me now sky bridge capital anthony, charlie gasparino should be here

shortly. i have a box of tissues for him because when he's late, you know what that means? he's going to be sweating. he's in the gym or he's running late, and he's going to be doing some push-ups in the greenroom >> exactly. >> good to see you. you called this turn around >> yeah. that's more luck than anything else. i think what aware seeing to viewers is not to react to the short-term information. off of the bottom, we have a three to eight percent balance and that was just a technical assumption based on what we saw on the technical side of the market that it was deeply over sold. even the gloom and doom guy mark said it was deeply over sold this morning. so i don't want to take too much credit for that. but i think the key thing here and what people need to understand is they need to own stocks not to ten minutes, not to ten years, but look at it as a one to three hold in their portfolios and take it easy. >> did you hear josh ernest at the white house, he didn't even -- i don't know. we're market people, we're

financial people, but he didn't even start with the markets and this biggest decline in the dow industrial, how do you start with iran and you wait for not the first question but the second question to even bring it up >> yeah. i think there's two things going on. they're out to lunch on what's going on in the overall economy. or they would choose to ignore something like that and focus on what they're trying to get done right now, which is the iran deal. let's say super smart people will choose the ladder. but, again, i don't think largest percentage move was down 500 points in 1987, 22%. these moves, unfortunately, were stuck with these moves because there's a lack of liquidity in the marketplace. the vocal rule, the doctrine of unexpected consequences that the vocal rule has taken out some of the principle investing from the commercial investment banks. so you're going to see larger gaps like this going forward >> and i worry about

particularly when you see major league baseball outflows from bonds, treasuries, that's where a lot of the liquidity is dried up. not in stocks but the bond market. treasuries are -- that's where the money has been going >> but at least -- treasury market is the most liquid in the world, at least there's a bid there. in the stock market, you've got program trading with very little principal backing up the program trading and that's why you're seeing the gaps like you're seeing >> today, this morning >> yeah. i said i would have some tissues for you in case you were sweating >> how many pullups did you do? >> no. i'm writing a column, doing my thing >> so what are you writing about? >> about this and how i think this is going to change -- i mean what is this? when you have a market -- this isn't normal. i don't care what anybody says, this doesn't happen and every day, yes, program trading and high frequency trading that occurs, makes -- makes it more volatile. bad news happens.

but this is under scoring an anxiety in the markets. they don't -- clearly people don't like the notion of fed easing on top of china imploding or coming off its highs i should say, it's not quite imploding. but the markets don't like that and, you know, i agree with you. i think it's, you know, we're still the tallest midget in the room, we still have a lot to be happy about in the u.s. but still a midget >> what about the the reaction by the president -- what about the reaction -- >> i'm not a midget, but i'm vertically challenged, i feel i'm throwing a rock at you >> that's all right. >> sensitive much? >> by the way, you have an interesting day today >> yes, you did. what were you doing this morning? >> well, listen, i met with candidate donald trump, i had a great meeting with him, i think we cleared the air on the hedge fund side >> you were very harsh on him

this morning. >> did he see it? >> i thought it was harsh on the industry, and the thing is that we all learn something from the donald when people attack you, you attack back a little bit. but he's a friend of mine, i consider him a friend, he will be a friend of mine five years from now as neither has hast past. we cleared the air. >> why did he go after the hedge funds then? because it's easy? >> no, i think -- twisting money around >> yeah. all right. so he said some harsh things about the industry. i said some harsh things. he's not italian, but i'm italian, sweep it under the rug. but, listen, i don't like the elizabeth warren barack obama rhetoric about the hedge fund industry. i'm paying my taxes. i give a lot of money to charity, and i'm not here -- no one should be writing -- >> and you employ people >> but i don't employee people, they employ themselves. we have 75 people working, we have 46,000 accounts. i do think we're making

something for this society where fiduciary people's money, and i don't need someone to tell me i'm just pushing paper. >> he should understand that. he was a speculator too >> let me tell you something >> was donald a speculator? >> i guess a likable guy >> i like him a lot >> he's fantastic. but if he likes you >> i would say most of the candidates like him. i don't want the industry attacked, and i think he respects that. >> i think donald's a decent guy. i like him a lot. i have problems with him from a policy standpoint >> he's talking about his family, got beautiful kids, i don't think he's at his best when talking about a hedge fund industry >> did he get into policy details with you at all >> no. >> anything about the wall, how he's going to finance it >> not at all. we're friends. clear the air. we're moving on. >> and i'll say he doesn't need to at this point because his poll numbers are sky high. whatever he's doing, is

working >> something that's interesting i speak with a lot of people that are attached to various campaigns, they have internal polls that are much better than these public polls. even the internal polls now, he's starting to make headway. the internal poll sought his support much sort of, even that's changing now >> yeah. when mama mcdow tells you all the that things donald trump has going for him >> and those moms don't vote a lot >> my mama votes and -- >> i'm just saying. >> the republican party. wie got some great candidates, you know, i'm supporting governor walker, i think he's obviously my choice. everybody's got a different choice but at the end of the day republicans have a stable of great candidates, and it's a good year to be a republican for that reason >> so donald didn't convince you to jump ship yet? >> on being. [laughter] >> charlie. [laughter] >> you believe in loyalty; right? >> yes. >> what kind of neighborhood did you grow up in -- do you

believe in loyalty >> yes. >> do you know what's very cool about donald trump he believes in limit too so he understands you have to be loyal to people. i just, again, no reason to go after the hedge fund industry. what did we do to you? and i'm not a politician so therefore i don't care. he can say something negative about me. big whoop. >> you really insulted by that stuff that he did today >> yeah. >> i don't need to be hearing that because i've heard it for six and a half years >> we got it >> you were really insulted by it >> the democratic administration made it unpopular to be a hedge fund manager >> we've got to go. love you both. and, by the way, thank you for that market turn around. yeah, you do. >> i need to do more pullups. look at him >> no. he wasn't even sweating. i was disappointed >> i was writing >> scott and martin doesn't think that the fed may ever raise interest rates. scott, so we've got a heroin drip in our future. >> yeah. the fed's in a

little bit of a milk per se and that's putting it nicely. and they came out with a call a couple of hours ago talking about the rate hike that's going to disappear for december, jumping over december and possibly not even until like that middle of next year, early spring of next year. so i think that's really what's at play here. i think the fed is out of play, and that may be one of the problems that we're starting to see a wild fall of volatility >> let me ask you this, though. is this volatility that we've seen made by cheap and easy money? is that why you're seeing a collapse in the commodity bubble, which franklin commodities should have never rallied back from the '08 lows >> well, the economies did get better from '08 and you're right. i mean the commodities did rally back and now many of them are back at '09 lows, which is rather frightening really. but if you're looks at other reasons for volatility, yes.

also other central bank intervention around the world has largely contributed what i think we've seen in the last few months and certainly what we saw in the last couple days. so you're right. i mean it's further the fed gets kind of away from this problem or away from this picture. maybe the better off we all are going to be. but i don't even think it matters if the fed raises rates in september. i've been saying a long time i don't think they're going to raise this year. let's just say they do raise in september, guess what? i think rates are still going to go down on them because the commodity numbers show that we're in environment, economic growth is not strong. there's not much they can do >> thank you so much, scott. still ahead, the price of oil hitting a new low. a mid- to global selloff. but why that doesn't equal relief at the pump. not yet it doesn't. especially if you live in the midwest

>> breaking news. north and south korea reaching agreement to end the military standoff saying we'll give you more details when we have them. the price of oil continues to drop but lows today. phil flynn, how long is this going to be front and center? >> well, if you can tell me how long the stock market's going to keep falling, i can probably going to tell you where oil is going to go kimberly that's what we're following right now. you know, earlier in the month it was all about oil signaling there was something wrong with the global economy. turned out to be right. and now of course they're trying to tag it off of the stock market with the rebound in the dow. so really that's what we're looking at right now with this oil. it will be interesting to see. you know, i could i have have $40 -- if you're above $40, the global economy's probably okay. if you're below $40 in

the $30 handle, to me that's a sign there's a big problem with the global economy. if by chance we can turn around the stock market, turn around crude, maybe the worse is over for right now. but we still have a long way to go >> hopefully we'll see $2 gasoline nationwide by october maybe. >> maybe. not in the illinois, but we are hearing good news that the refinery -- we're hearing some talk that they may try to restart that earlier we also had that breaking news coming out of the san francisco fed that said that inflation believe it or not was marketly lower in the first year than previously reported. that may cause another problem for the fed when they look to raise rates >> thank you so much, phil flynn. you are a workhorse, my dear. always awake. and speaking of gasoline prices, and that refinery in indiana, jeff flock. that's where he is. what's going on, jeff. >> getting blown around just

like the markets today. i tell you. it's an eerie sight back there. you look at that refinery, typical there's smoke and steam coming out of those pipes but, no, not today. and what's the one positive with the oil going down? take a look at the day and the ten-year on oil. the one positive is typically gas prices going down but this refiner right here is almost single handled responsible in the midwest for the price spike. take a look at chicago gas versus the national average. i tell you pretty amazing. how much worse we're doing here. california also has a similar problem with refinery problems out there. and i would leave you with the worse performing sector on the s&p 500 today. what do you guess it is? >> energy >> no. kidding. it's energy. take a look stocks like marathon, exxon mobile, chevron, those are all down and leading the down on the s&p 500 today. not a good day for oil and not even a good day for people

that usually benefit from it like the people that drive cars. >> jeff, i'll end with this. the s&p 500 energy sector is the biggest loser among all the sectors today. for the month, the quarter, year or two, and the one year. there's no low >> hope you're not in it >> there's no love there. thank you, sir. >> thank you >> and the housing market improving but should we count on it in the long run? the impact of the federal reserve and this market down draft coming up 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors

that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town, the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. when you're not confident you have complete

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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? can a business be...alive? >> the yield on the benchmark ten-year treasury at its lowest since april, falling below that 2% mark earlier in the day when stocks were in the tank. and there's speculation that the federal reserve might hold off on raising short-term interest rates.

gerri willis is here and, gerri, i talk about gasoline prices falling, that's great news for your tank and lower longer term interest rates. that is go ahead grate news >> it sure is. well, look, if flight to safety means good for things people who want to buy houses; right? because you want to get a mortgage, you want a low rate and here we go off to the raise races. and banks decide things are too dicey and are things so bad they don't want to lend but i'm not so sure they want to do that >> again, it's a i confidence issue, a psychological issue for individuals, will they have enough confidence to go out? you watch the market route and even if you haven't lost a lot of money in the stock market, it still -- it makes you nervous -- >> look, i think people make decisions on far more normal everyday things. i'm having a baby in september, so i have to get a house today. you know, stuff like that. instead of, well, the benchmark yield on -- i don't think they do that. i don't think they go there.

i think they have, you know, very practical considerations when it comes to the housing market >> jason, what douse >> i think the equity markets in the housing markets have been low for a very, very long period of time. and i think the correction we're seeing today could potentially see a housing correction overweight next year or two. i have big concerns about the housing market, yield rate is in did you believe digit territory >> yeah. bill all of those numbers have been improving. your job market numbers have been improving >> they've improved but not enough. we're not based on fundamentals right now >> and wages have been growing >> a housing selloff in every market across the country? because some of them have barrel recovered >> that's correct >> so -- i see new york having trouble because they are way too expensive. miami >> china too >> china right. and you're right. and housing markets are local. so san francisco, new york city, miami -- >> they used to be and they weren't and now they are again >> right.

>> right.? >> who said alan -- we can't have a national housing bubble because markets are local and it's too hard to move >> right. >> that's what he said >> look, the top economists for the nar, national association of realtors one time told me it can never go down because it's never that kind of market, well, guess what? it was that kind of market. i do think the individual markets that are most exposed right now have the retain big cities, new york, miami, san francisco -- >> inflated values, yeah. and look at the home ownership rate and how low it has gone from the '90s. and i think that's going to continue to drop even lower just as it needs to drop >> i don't think the drop -- i would love to see it go up, but i would love to see it go up on fundamentals, which is individuals get jobs so that they can afford houses and buy them. >> and rents are extensive >> yeah. >> and a lot of areas and those expensive rents, people

talk about deflation, that inflation will send people into buy particularly if longer term interest rates stays at a low >> and i think this whole thing with millennials not wanting to own, i think it's a poess. as soon as they get up off that mom and dad's couch, they're going to eventually want to buy, and it will eventually help the housing market. i'm a long-term bull on housing, i think americans love to own houses or multiple houses. when but i think the situation we've had is not conducive to that >> except the only thing that i would caution is interest rates rise and when they do, it will hit those millennials. so while they want to buy, it may be a much harder thing for them to buy with this interest rates on the rise >> but interest rates would have to go up a lot for -- the prices adjust. people always talk about, oh, houses were so cheap back in the early '80s. i'm, like, yeah, when interest rates were did you believe digits, that's why they were cheap. so that would -- a spike in longer term interest rates >> right. >> warrior cause housing to

correct. but it would take a lot from here >> this is our natural world in this country where people are buying houses, they're trading up, we're getting back to that in my view. but we really need some help usa say fro as you say from the housing market, none of this part-time junk >> the interest rate is at a 38, 39 year low >> some of that is the baby boomers, though, not getting back in the market. jason, gerri willis, always great to see you. thank you so much. stocks suffering but not as much as they were, 241 loss on the dow right now. we want safety. so where do you go? we'll tell you. straight ahead you focus on making great burgers, or building the best houses in town.

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dagen: european leaders reacting to the global market selloff. mcshane, what are they saying? >> it is interesting, they're talking these two leaders in particular about china where government intervention necessarily hasn't been the problem. talk first about the french president francois hollande. holland headlines crossing out of berlin where he is speaking china will find right answers to secure the economy. china will find the right answers. not sure what that means. german chancellor merkel said china will do what they can to stablize the situation. all the talk about the chinese bost maybe intervening and now more to come in terms of liquidity, both leered of france

and germany think china will act more. maybe should act more. see what happens next few days. dagen: thank you so much, connell. donald trump was tweeting about china and asia. that we're so tied with china and asia, their markets are taking down the u.s. market. you know what? we were there and are there because those nations are growing. let's be protectionist, that always help. investors worried about the drop in these markets. you want to look at where the dow is faring at the moment, 270 point loss. selling is picking up steam. afternoon will be critical. well off the 1089-point loss earlier in the day. where is the safety in this market? hedge fund manager, jonathan hoenig is not worried about the stock market. david scranton says we should be. jonathan, you first, give me something upbeat. >> elephants are dancing. this is the front page news on

every business website across the country. that is bullish indication. market has been down last couple weeks, the fact it is such front page news, the fear index spiked dramatically last few days, is my indication at least some short-term capitulation is in the market. trend is still downward. this is front page news. the action although extreme downside in the morning is confirming that potential. dagen: jonathan, i want follow to up something you said. you still think the trend is downward. you think we're in correction territory with the dow at end of friday. do you think we're headed toward bear market territory, which would mean 20% loss. >> i would disagree, fair market, i don't use that term. what is worrying me, dagen, however, isn't so much weakness in the stock market but a lot of the credit markets. junk bonds, leveraged loans, corporate bonds, that is he will two the impetus that will ultimately bring stocks further

down within the next weeks or months. dagen: the blowup in '08 was credit driven. david what worries you? >> well, worries me as i mentioned a few weeks ago here with neil that this bull market has been overblown and quite frankly i wouldn't be surprised if the s&p 500 sees is a hundred before it sees -- 1500 before it sees 2500. i said that with neil a few weeks. i'm glad it didn't happen in one day. that would be diss is truss. markets almost over month had one day with 300 point swing or greater on the dow. seems like following day it would rebound. even as narrow channel now for about six months. i think finally what we're starting to see is the markets are no longer able to shake off bad news be it greece or puerto rico or china. the swings are starting to get larger. i'm not surprised to see that i do believe, yes, we will see us get into that correction territory in the not-too-distant

future. dagen: i will point out of major market gauges s&p 500 is only one not down from 10% of the recent high. it is close. it was down that much this morning but it is above that level right now. if you want to look at the three market gauges. 1917.73 is your 10% correction level for the s&p 500. there is a little bit of good news. jonathan, gold is down. not that i'm ever a fan of that metal, are you going to buy longer-term treasurys when the yield is already closer to 2%? where do you find some ideas of safety here? >> ironically, dagen, i think you have to resist the urge for safety. that is your emotion talking. you want to think with your head, not with your heart especially times like this. people looking for safety in the portfolio or to reduce risk is one place to start, tiny

position, 1% positions as short-term trade. start with those if you want to reduce risk. don't bail out on opportunity for long-term trends, this too, even though it is terrible today, this too shall pass. dagen: you fine safety through good allocation. jonathan, good to see you as always. jonathan hoenig, and david scranton, thank you. what vice president joe biden's meetings for elizabeth warren means for his possible 2016 run. why hillary clinton should be worried. very worried. technology empowers us to achieve more.

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apple back in the red. it had been at $92. intel at 24.87. jetblue great example. that stock was down over 20%. transportation index. look at it now. down just 1.6%. some feel good winners, for you.

fireeye, netflix, gap, doing well. we're, watching back half of this day now, because traders say the close is really important part now.

trish: vice president joe biden, meeting with elizabeth warren. he will decide to announce whether he will run for the

presidency. vince says hillary clinton, two shot as it, unsuccessful. why can he make a go of it now? >> hillary clinton should be quaking in her pant suit. this is opportunity, joe biden meeting with elizabeth warren overthe weekend. sounds like planning out presidential run. this is good opportunity. before hillary clinton is going to be anointed. she will be the one who is democratic nominee. what you've seen especially over last week. increasingly clear her email practices meant to keep information from the public are becoming a liability for her. you have got joe biden sitting on sidelines, man, this is late in the race, if there ever has been a time to jump in it is now. he had lunch with the president today. pretty clear something is afoot. it may very well be joe biden jumps into the race. dagen: does he have time left to really organize a campaign and get major financial backers

behind him? >> that's a great question. the suggestion, i think if you look way hillary reacting publicly, the spokesman came out to explain email practice, she had to do videos, a press conference addressing it, suggests to me that not just voters are concerned but institution in the donors, that they will back up the hillary campaign until it really matters. you don't ask people to relax unless they're hysterical. democrats are getting a little hysterical about this email scandal. joe biden says if i jump in you have to be before the october debate, the first democratic debate. if he has a good showing at that debate maybe he can take some momentum away from hillary. dagen: many in the democratic party including hillary clinton see her as the anointed one. >> right. dagen: the next not only democratic nominee for president but next president of the united

states. don't you think it would take a lot more than this email scandal, it would have to get much worse than it has already to really turn people against her? >> probably. although we can't underestimate the extent bernie sanders is guy really chipping away at hillary clinton. attracting populace vote, going to elizabeth warren if she jumpses into the race. joe biden maybe trying to do infrastructure support from elizabeth warren or at least get populist backing. he could have impact in the race. i think again as we always say, it is way too early to tell whether or not the polls will show that hillary will be the frontrunner for sure. dagen: he does have that. he has shoot from the hip, don't know what he might say element of a bernie sanders and donald trump. so that seams to be resonating with people. >> yeah absolutely. thank you. dagen: thank you so much, vince. i appreciate that. sorry to cut you off. the dow moving further into negative territory.

take a look how the market is holding up right now. almost 300 point loss on the dow. we're going to have our experts here. you love these ladies. we'll be right back.

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and this savings applies to every vehicle on your policy. call to learn more. switch to liberty mutual and you could save up to $509. call liberty mutual for a free quote today at see car insurance in a whole new light. liberty mutual insurance. dagen: we're not out of the woods yet but 254-point loss sure looks better than 1089 point loss where we started today. liz claman, liz macdonald. liz claman down at new york stock exchange where she will broadcast from come 3:00. >> dagen, you say it should look better, anything down 267 is better than with we opened at. i talked to a lot of traders. ran into three of them.

they were all having a healthy discussion so to speak possibly we would end session higher by the time we hit 3:59 p.m., 59 seconds at the closing bell. there is slight possibility that could happen. considering the dow was at one point down 1089 points. we have come off the floor but there is big struggle particularly with nasdaq. it is struggling the most. dagen: emac, there were pricing anomalies this morning sort of like the "flash crash." i'm looking at $13 billion s&p 500, etf, $13 billion in the fund, based on numbers i was looking at it was down 35% briefly. it was not. >> it's a dividend fund, right? dagen: yeah. >> it is really unusual. dagen: the shares were down way more than underlying. >> doesn't seem like a fundamentals issue. it is a theme we're hearing from traders throughout the morning

and trading day. this is test of the liquidity of the markets, whether the markets, traders can make the buy and sell orders and whether they match them to settle these trades. it was some inflection points where there was some stresses. i saw thousands of orders coming in from my guys. talking about, certain trades that they couldn't complete them. there was no liquidity. looks like they're retracing. let's do a gut check. historically we've had corrections or, market downturns of this severity, not 1000 points i'm talking now. once every 20 months. declines, have lasted in correction mode. we've had 27 of them since world war ii. they last ad little over 2 months. we're not quite there yet. >> wonder if any conclusions drawn today or more questions heading into tomorrow. i think to liz claman's earlier point, people wanted to even when the futures were down, whatever they were 6, 700 points

before the open, already had people say all right, buying opportunity, buying opportunity. if we hold lows at open, we put a bottom in and straight up from here. trading irregularities. more questions about market, whatever is happening in china. we'll have more questions tomorrow. i don't think we'll conclude anything today. >> other issue, were investment houses dumping solid shares, maybe dumping apple to settle trades elsewhere to settle liquidity i t. there could be pressure on equities. dagen: liz claman, you have different psychology of investors given what they have been through, not just in 2008, but back in 2000. that it is, more than ever, it is sell first, then ask questions eight months from now. >> so funny, dagen, you said that, same three traders who huddled together, said it doesn't feel, this is the term they used, like the old-fashioned fear. that is what you're talking about.

old-fashioned fear i'm out, i'm out. october of 1987. the dow sold off 22% on that black monday. look at our percentage loss. 1 and 3/4%. it is not worst thing in the world. feels horrible only if you sold. your losses right now are only on paper. a couple traders said they were doing deals for stocks down 12% this morning. apple, netflix and you see where they are now? they're either higher above the flat line or down 1%. somebody is making money today. >> somebody was willing to step in, connell. you're grinning like a mcshane. >> this is always interesting. you went to '08 and 2,000. liz went to 1987. you may have brought up 1994 earlier. 1994 or 1998 are comparable time periods to make what happened in asia. >> i brought up '94 back then china did devalue. >> and fed raised rates up. >> expectedly.

dagen: fed raised rates in february that year unexpectedly. people had no idea it was coming. it shocked people. that was the year of orange county blue up. orange county and three davids blew up. >> or 2008, september when the house neglected to vote for president bush's $700 billion bailout, the tarp bailout. you saw the market drop 777 points. >> that's right. >> there is another one we've certainly come back up off of that floor. even in 2008, the dow was 8,000, you put your money in, didn't look back. still doubling money. >> to dagen's point. this is the most telegraphed fed rate hike when it comes in history. the argument should the fed raise rates to show we're a strong u.s. economy? yes the banking system is healthier? yes we want to get some kind of pricing power back into our companies and banks. dagen: mcshane, you get 15 seconds. make it good. >> that is not going to happen.

market coming back, i mean, big-time bet now seems everybody is talking about, last couple hours, or however long you've been on, fed will not to ahead with the rate hike. >> we're talking january much next year, so. >> we have time on our hands. >> that's right. dagen: maybe janet yellen has bigger -- >> what? dagen: pants than we expect. see i'm editing. mcshane, mcdonald, and liz claman. liz claman will be live from the floor. >> oclaman. dagen: she will be live at 3:00 p.m. this afternoon. you know which hour of the trading day is most important. >> the final. dagen: yes, exactly. liz claman, thank you so much. >> you bet. dagen: we'll be right back.

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dagen: take a look at the dow intraday chart. oh what a comeback it has been.

still down 341 points on the dow. this after the market lost more than 1,000 points last week but 345 loss is a heck of a lot better than losing more than 1,000 points in a matter of minutes. trish regan all over this. carly fiorina too on "the intelligence report." trish: thanks so much, dagen. it has been a wild day, wild ride. 9:35 this morning, you know we're down almost 1100 points. this comes on heels of friday and thursday. it has been a bloodbath. we're down 349 points. we had sort of rallied back to be down 100 and change. down 34right now on the dow. it just ain't pretty. where can you hide? what do you do right now? is this selling going to continue? is this start of something much bigger than correction? joining me fox business's nicole