stanley fischer, then alan greenspan. a very blunt and direct alan greenspan.mberg surveillance" from new york city and are nearly -- and our news bureau in washington. good morning. ♪ tom: good morning, everyone. we welcome you all worldwide to washington, d.c., for a special "bloomberg surveillance" this morning. brennan and vonnie are in new york. i am in washington. we look at domestic and international economics. really looking forward. many good questions, particularly to stanley fischer. i will sit one of those in at the top of the hour. let's look at our single best chart. here's brendan greeley. brendan: the dow jones reaches down gently as if the moving away.es .13% that was the friday close. this is the subject of our single best chart. this is something technical analysts look at that shows the breakdown in momentum, a sign that an asset's best days are behind them. joseph writes about equities for "bloomberg." who traced this way? joseph: there is a technical this, athat looks at piece of the puzzle. it is a complementary piece of data to offset th

alan greenspan. i want to bring in a correspondent with bloomberg intelligence, who agreed with some parts of what greenspan said and disagreed with others. government being a catalyst for investment, he had doubts about that but you don't. >> right. former chair greenspan says the best thing government can do is get out of the way to stimulate investment and productivity growth. i can't understand in some spheres would make that case but this is classic libertarian greenspan taking -- i can understand in some spheres he would take the case but this is classic libertarian greenspan taking that view. government plays a very important role in infrastructure investment, things like highways and bridges and energy infrastructure and ports and whatnot. there is a tremendous role for the government to potentially boost productivity by investing in these types of projects. betty: why don't they recognize that, then? carl: there's certainly a lot of gridlock in congress that is preventing these types of infr

former federal reserve chairman alan greenspan joins me this hour. plus if you make a hall million bucks a year should you live in government subsidized housing. turns out in bill de blasio's new york city, you can. this is government gone wild. plus southern sorority put out feel good video and critics say it is demeaning and sets women back. does it really? you will hear my take. we have a lot coming up first donald trump doubling down on his immigration plan and going back at one of the biggest names in the process. donald trump versus mark zuckerberg founder of facebook. the fight over h1b visas, the program allows foreigners with advanced degrees to work in the usa. zuckerberg along with republican candidate marco rubio, they want to triple amount of h1b visas we offer. trump wants to do away all together. donald is insisting a mandate would require businesses to hire americans first or face a hefty fine. so, what we want to know is, is donald trump's immigration plan really good or bad for our economy and for american workers? author of, uninte

greenspan calls that one of the most serious challenges. productivity has become a huge problem. to tom keene. tom: american productivity is not significantly different from zero growth. because of that, if you work backwards through the chain, it is capital investment has been adequate to fund the amount of assets you need. erik: greenspan also said we have a pending bubble and the bond market. stephanie: the epa says 3 million gallons of toxic wastewater has spilled from an abandoned gold mine into the animus river. that is three times the limit. supervised crew was at the minds. i am so proud of our nerds. it was wait until next year. we finished second over the weekend in wall street's midnight madness fundraiser. steve kunz of pine river capital topped thetalked -- 21-team field. more than $3 million were raised for charity. how cool is this? a scavenger hunt around new york city, true problem solving. like super nerd meets i love new york. i love everything about it. i am proud of us for coming in second. coming in second hurts worse

alan greenspan what will this, rate hike cycle look like? will touch on that with alan greenspan.nley fischer. waste i don't want to time asking questions that cannot get answered. we can talk about where they "ultras phrase, accommodative." you sought mark carney deal with that. a challenge how the u.k. and u.s. begin to raise interest rates and the path from there is the big issue as well. manus: tom, have a good one. we look forward to those interviews. fran and i are going to be tweeting everything. two great interviews that nobody wants to miss. francine: china stocks may have posted their biggest two-day gain in almost a month. inflation data shows there was a in exports last month when the country saudis steepest decline -- saw the steepest decline in nearly 60 years. from standard charter and joining us in hong kong, how do you interpret the movement? >> we see a weak spot following a broad-based sign in previous demand. there's 3 billion that is disappointing. that is because of the high base in last july. inflation started to rise. what would be the assessment of the gov

greenspan smoke earth -- spoke earlier. american productivity is not significantly different from zero growth in the last six or eight quarters. , if you workthat backwards through the causative chain, if capital investment has been in adequate to fund the amount of assets you need. pimm: greenspan also said there is a pending bubble in the bond market. the united states postal service is still losing money, just not as much as it used to. they lost $586 million last quarter, down from a loss of $2 billion a year earlier. the postal service is making more on package deliveries, but that is and not enough to make up for the decline in mail volume. apple will hold a product launch early next month, set for the week of september the seventh. it will reportedly pushed its revamp of the apple tv box, along with its latest phone and ipad models. matt: that is exciting. pimm: more things to spend your money on. matt: it is official, as stephanie ruhle reported earlier, under armor is getting a bigger foothold in the nba. the title

the last time we were in a tightening cycle, alan greenspan was the fed president, and there was nothing like the transparency that started under ben bernanke and has now been transferred to janet yellen. >> ben bernanke was more communicative. i would say you would know under timing and the things much better.

greenspan's comments this morning. the yield continuing to move higher, especially on the longer end of the yield curve. that is exactly what janet yellen actually wants to happen. 4%, justear note, 2.2 under 3% on the 30 year. some shorter horizon inflation numbers have also firmed as well. pimm: commodities. reboundingis which is held by what we saw in china. imports of oil have declined in record numbers. ? it is a bounce for the commodities overall. thetop headlines making news this hour. herlet: clinton unveiled college aid plan in a town called just over an hour ago. reducing the cost of a four-year public school education. she was to cut student loan interest rates. betty: warren buffett is making in one of his biggest gambles ever read he has agreed to buy precision castparts, which makes precision instruments for the aerospace industries. tot represents a 21% premium the closing price on friday. reserve the federal vice chairman says that low inflation will not persist with the nation at near full-time employm

matt: greenspan also said that low productivity is also one of the major challenges of the u.s.. russia's gdp shrank 4.6%. lamenting oil prices could deepen russia's recession further, along with western sanctions. the country relies on oil and gas for about half of its total budget revenue. and the powerful typhoon that slammed china is now blamed for 22 deaths. half a million people help -- had to flee their homes. planes and train travel to a halt. british will send a team to the maldives to determine whether a wing plane -- a plane determined towas makes 370.aysia -- flight 370. and it doesn't candid and unpublished photos of prince charles and princess diana's wedding reception are set for auction. they were taken by a relative who was the only photographer allowed to take informal photographs of the couple and their guests. the auction is scheduled for september 24. those are just some of the top stories for you. next half hour, we will hear from vice-chairman stanley fischer. he will give us his take on when the fed made in -- may raise rates. and midnight madness raising

manus: and alan greenspan.ul piece on bloomberg terminal today talks about the last rate hike cycle in the bond market. we went from 1% to 5.4% over the period of time 2004-2006. anybody that wrote a strategy will remember that quite well. and the margin calls that came after. i think what is important here is those rate hikes, but how little the bond market actually moved over that period of time. it barely budged by about 1%. there were extreme movements within that. the other thing that caught my eye, chinese divesting and japanese divesting. fascinatinge are counterbalances which weren't there in 2004-2006. it is a very, very different scenario, and also, disinflation. it is something which is here, which is prevalent, and which ultimately all bond traders will keep a close eye on. thethan: manus cranny, birthday boy on "levels" with francine lacqua. pulse" with francine lacqua. thursday, it is time for ecb minutes. we will get u.s. retail sales, another big data point. u.s. retail sales have disappointed s

greenspan?years ago when people were first experimenting with zero interest rates, and i get the question all the time about the bubble. i called it the anti-bubble. a bubble is about excessive exuberance, to quote the man himself. it is about the expectation of higher prices -- tom: but will we see turbulence here? jeffrey: that is a different question. turbulence and bubble is not necessarily the same thing, and the expectation of turbulence should be very clear because what a zero interest rate policy and quantitative easing globally interest-rate volatility. he removed the blanket of a zero interest rates and quantitative easing, and you see the volatility rise. we have artie seen this this year, and we will see more of that going forward, so the expectation of higher volatility in financial markets, higher volatility on a bond market, it should clearly be on investors' minds. tom: will we go under 2% again with the 10-year yield with this inflationary and close -- deflationary impulse we se

days, very few people knew who greenspan was.he fed is all-encompassing over the whole country. bizarre unelected officials have this much pow or the markets. get off the zero, work it through. the markets will figure it out. if it creates an opportunity, more to it. trish: i am a journalist, i can get and disseminate to all of you, the better. they give the market so much information that it makes me long for a day when they didn't do that. because people would actually be valuing things with a buy, sell, yin-yang factor at play, i don't think they're doing it now. >> let's be fair, the move yesterday was in reaction to china. we're not worrying so much about the 25 basis points, and to some extent you got to worry about the people's central bank in china and the moves they're making and easing versus our tightening, and you feel like you're dealing with -- trish: because the u.s. dollar is going to go way, way, way up, high and away, which makes it harder to sell things overseas. great to see you guys. thank you so much for com

alan greenspan on "bloomberg surveillance" this monday. ♪ tom: good morning, everyone. "bloomberg surveillance" on this jobs day. let's get to top headlines with vonnie quinn. vonnie: chuck schumer says he will not vote for the iran nuclear deal, breaking with president on the controversial accord. iran willes not think keep its promise not to build a nuclear bomb. on theed his position web during the republican presidential debate. apple watches are available today at 100 best buy stores. it is the first time they have been offered outside apple stores. will stockst buys them by the end of the year. month's sales fell the most in seven years for apple watches. toshiba is getting booted from a stock index that showcases the penthouse best companies. his removal from the jb x decay index 400 follows that the jb x nikkei index follows a scandal. it aims to showcase japan's best comedies and shame excluded firms into boosting profits and shareholder returns. those are the top headlines. brendan: dr. alan krueger is with us from princeton. i w

greenspan? mr. rosenberg: i called it the anti-bubble.s about exuberance, to quote the man himself, right? it is about the expectation of higher prices -- tom: but will we expect turbulence here? that is aerg: different thing. the expectation of turbulence should be very clear, because what the zero interest rate policy and quantitative easing has done, it has not dampened interest-rate volatility. you remove the blanket of interest rates and quantitative easing, you see this rise and you will see more of that going forward, so the expectation of higher volatility and finance markets, bond markets should clearly be on investors' minds. tom: are we going to continue with this deflationary trend with the chinese out of today? it's certainly possible. it can go both ways. that is what volatility means. higher volatility means you can swing both directions, and certainly it can develop in a much more negative fashion. seeing below to present is a possibility. betty: again, that was jeffrey rosenberg, chief investment strategist at blackrock o

in other words while those loans were being made alan greenspan in 2007, it's in the appendix. when he wrote a book before the crash. so before the crash alan greenspan said i'm aware that the loosening of mortgage credit terms for sub-prime borrowers increase financial risk and subsidize homeownership initiatives distorted market outcomes. but i believed then as now and remember you the power to regulate, i believed then as now that the benefits of homeownership are worth the risk. protection of property rights so critical to a market economy requires a critical mass of owners to sustain political support. in other words let's lend these people money so they will be conservatives and of course they don't pay you back. "the wall street journal" said most of these new homeland of low income families often minorities would otherwise not have qualified for mortgage. in the name of consumer protection mr. frank's legislation would ensure that far fewer of these homes were made in the future. [applause] the loans that they kept us from slowing down caused the crash and they were pan

one of the interesting things was alan greenspan after the crisis said there was a flop. oh little flaw that cost $5 billion. [laughter] millions of americans losing their homes and their jobs but there was a flaw with that illustrates the schizophrenia. he took from the economist lexicon that the market's worry efficient but there was research going on that said that is untrue. this is the period of the economic research the work that we did with information imperfections and behavioral economics people are not as rational but that model you are using is totally wrong. totally wrong. their predictions for that model will be wrong. i'm modestly say we were right. [laughter] and with the selective use of economic research their virtues schools of thought -- with two schools of thought they don't work perfectly the financial burkett shows to pay attention to the one that was convenient the politicians chose for the ones that were compensated. that brings us back to why it is so important because it was setting the rules to allow them to do the stains with the enormous effec

alan greenspan was much more of an era when at 5:30 new york see thursday they had to what they did athe discount window. or they do repos or for -- reverse repose. we are in a much better spot in terms of figuring out what the fed is went to do. is the to know, september or is it not? that is what we need to know. we need everyone on the same page. when the fed officials be, they need to be on the same page, and they are not. erik: if the fed does come up with a rate hike, as 60% of economists x deked, or future show they expect, do you think that is horrible for equities this morning 52% probability versus friday. >> i think it is a temporary downturn for our clients. any downward action, those are biking opportunities. i think the market would be volatile. i think there would be downside if they don't tell us between now and then and do increase the rate september. be more volatility. it is going to be downside. i don't think it will be large downside. we want them to that bin and put the cash to work. it is still around the 2100 mark. yet we see investment grade on spread rising. i

trish: we're talking about alan greenspan. alan greenspan will be on the show.ll give us clues whether at the see a rate hike anytime, anytime out of janet yellen. we've been waiting what, six plus years, david? and nothing? we've been in zero interest rate policy environment for what seems like forever. and you know, one of my questions for chairman greenspan is, just exactly what is this doing to the overall market? what is this doing to our system. are we running a risk here, david, of creating another asset bubble by leaving rates like this, low, for so long? david: right. he is the first one to do it. mr. zero interest rate himself. he raised it a little bit afterwards. trish: yes he did. i was looking through a lot of data today, matching up home sales where interest rates were back then. david: right. trish: he was actually in a raising rate environment. david: yeah. trish: which begs the question, as you think about it, david, you wonder in some ways did banks have more intent tiff in lend in environment where they stood to make more money off these loan

if you are looking for the central bank to play the role of alan greenspan in 1998, they are right in the middle of what is going on right now. joe: in the u.s. we have seen some divergent sectors in energy. from the perspective of a u.s. investor, are there any areas that you like that of that others? : material upside versus expectations. i think people have accepted that it did not fall apart a year-and-a-half ago. they're just beginning to adjust the idea that we may have a second leg of the melting market here. -- housing market here. turin, then it really gets quite interesting. the question a few months ago was with would be turned take place? certainly you had a couple months of good homebuilder confidence, which at the very least suggests that the homebuilders themselves see a material pickup in demand. alix: how close are they to a rate hike? : if you had al general were they would go down with the market but they are doing these many volatility events that we have had in the last few weeks and they have ignored it. alix: i want to ask you about the baltic dry index because

trish: ominous warning there from alan greenspan. chad, are you worried about the a bubble in the bond market or a bubble in the equity market right now? >> i think all valuations across the quality spectrum are frothy at this juncture. so you want to move up into higher quality investments. yes, the equity markets are somewhat overvalueed. are they bubblicious with p-e multiples of 20 plus? no. forward-looking multiple is 17 times. 10 to 15% correction in the markets shouldn't be a shock to anyone. but also, you have overvaluations in the high yield market as well as in particular you have it in more of speculative high momentum stocks. trish: seems we deal with sentiment every august. every august it hits us. now the market losses accelerating last several minutes, now down 231 points. go ahead, chad. >> remember, august, the depth to the market is thin. it is a very, volume is very thin as well. so, you're going to have a little bit more volatility within august. plus you have a convergence over the last several days of three thin

if you are looking for the central bank to play the role of alan greenspan in 1998, they are the obvious one to look at. they are right in the middle of what is going on right now. joe: in the u.s. we have seen some divergence among sectors and energy. from the perspective of a u.s. investor, are there any areas that you like that of that others? michael: one part of the domestic economy is material upside versus expectations. housing. i think people have accepted that it did not fall apart a year-and-a-half ago. they're just beginning to adjust the idea that we may have a second leg of a new housing market here. is one part of the economy that is still in a deep recession. if you make the turn then it , really gets quite interesting. the question a few months ago was when would the turn take place? suddenly you have a couple months of good homebuilder confidence, which at the very least suggests that the homebuilders themselves see a material pickup in demand. alix: how sensitive is the homebuilder sector to a rate hike? michael: i think you had a ction,l corre you would go down with th

i talked with alan greenspan, former head of reserve just yesterday about this very issue and he indicated that he was very worried about a bomb bubble. we'll have more on that in a moment. i want to go down to the new york stock exchange because lori rothman is watching the activity. walk me through what happened when everybody was surprised to get this information. >> absolutely. so this has been, well, it's the security, a familiar face on the fox business network. >> 2:45-- >> 1:45. >> excuse me eastern time and you said whoops, and what happened. let me let you pick it up there. >> bloomberg put out from the fed, they wanted to do a comparison story on it. >> bloomberg, so bloomberg broke the embargo, bloomberg at 1:42, trade the news, another system i use, 1:43, but all indications it was bloomberg that the headlines hit at 1:42. if you go back and look at your intraday charts, you'll see that the movement in the market when it hit because it caught us by surprise. >> it caught everybody by surprised. is this unprecedented? how often has it happened? >> no, we've had leaks before and

greenspan, whon became a very good friend of trained in mathematics at brooklyn college. unfortunately he died recently. later there was richard bellman, who became a famous mathematician and system analyst working for the rand corporation. he is a legend there now. he also died some years ago. aere was peter, who became highly distinguished mathematician working in new york. eshkin, val fitch, who wanted nobel prize. these were all my buddies, somebodies, strange. unique atvison was los alamos. endedame a legend when he up at the university of washington. he became famous after the war at the university of washington because he never finished his phd, but nevertheless was an invaluable member of the physics department because he was so smart. of appened to be the son man who won a nobel prize for discovering the wavelike nature of the electron. he was the son of a nobel prize winner. he and i spent a lot of our time trying to avoid army duties and saluting -- we hated saluting. it didn't make any sense. here we were working on this fantastic project and we still had to s

in other words while those loans were being made alan greenspan in 2007, it's in the appendix. when he wrote a book before the crash. so before the crash alan greenspan said i'm aware that the loosening of mortgage credit terms for sub-prime borrowers increase financial risk and subsidize homeownership initiatives distorted market outcomes. but i believed then as now and remember you the power to regulate, i believed then as now that the benefits of homeownership are worth the risk. protection of property rights so critical to a market economy requires a critical mass of owners to sustain political support. in other words let's lend these people money so they will be conservatives and of course they don't pay you back. "the wall street journal" said most of these new homeland of low income families often minorities would otherwise not have qualified for mortgage. in the name of consumer protection mr. frank's legislation would ensure that far fewer of these homes were made in the future. [applause] the loans that they kept us from slowing down caused the crash and they were pan

greenspan says we are in a bond bubble theater stephen roach, are we in a bond bubble?we learn from japan, tom, long rates can stay lower a lot longer than you think. tom: the money question this morning with mexican peso moving down, kazakhstan bid, even larger economies turning, central bankers out there in the commodity area -- what is the tantrum that you see coming if we finally get fed action? what level of tantrum will our viewers and listeners see? look, we have got the markets overextended. we have the currency markets in way. -- in play. vonnie used a provocative statements, well, it is a necessary evil. no, it is not. a necessary evil was the financial crisis, the life we have not seen since the 1930's? the fed needs to be mindful of the risk it is creating. vonnie: where are they overvalued? i am not arguing that you're incorrect just wondering -- where are assets overvalued? bonds, tryry equities, what else is left? currencies are overvalued. chinese is telling you that -- china is telling you that now with the renminbi. there is excess liquidity being inje

greenspan affected by the dollar?oint they also that the dollar is an aftereffect of the u.s. economy being stronger than the rest of the world. tom: at mike and i have a book called greenspan's-isms. the biggest threat they say is monetary policy and the threat of a hike. are the outlier calls interesting in today's fomc minutes or do they not matter? >> you will not find out much for the minutes today. but he is basically saying if the fed were to move that pushes real rates higher in there for the public and wall street will think the fed is losing credibility because they are changing inflation goals and that is a little bit esoteric. i have to ask. the landmark work by michael for rowley. do you reaffirm that we all better get used to lower interest rates and lower gdp doubtures deco >> no about it. we think it is fallen well below 2%. one application of that is over a long period of time equilibrium interest rates move lower but the reason why the fed is thinking of tightening is because that low potential growt

. >> i'm steve greenspan and i'm from poison ivy removal dot com. looking to fran xhiz out my business. been in business 45 years safely removing poison ivy without using toxic chemicals. we selectively manually remove the plant by itself our ideas are immediate, 100% safe and guarded against future growth. >> how much money? >> half a money, $750,000 to do. >> build out the franchise and develop products in the wings now. >> get that away from me. >> okay, you guys. two numbers. the first one is the product. and the second one is the pitch. as someone who has been covered in poison oak -- scale of one to ten, yeah. >> i hope that everybody hires you, yeah. it's the worst. >> not a joke. >> you look ready. heather the product and then the pitch? >> put them down yet. start with you. >> i didn't put them down yet either. >> what are you doing over there? >> okay. >> okay. >> go ahead. >> so i give awe ten for the product because i have been stung by poison ivy and it's awful and love it's environmentally safe. seven on the pitch because i believe in

this is an original greenspan.fferent environment and janet yellen has moved away from that promise of a steady, gradual pace. a number of her press conferences she said do not expect that steady drumbeat like we saw. tom: this is critical not only when we get the parlor games september, october, december, but a vector of it when smart guys like carl say back to they are looking at that light path. vonnie: stressing -- the fed isarl: currently telling you about 100 basis point of tightening next year, 125 per year thereafter, that is not going to happen, this will be a much slower pace. that is why janet yellen will be able to get away with raising rates despite all of this noise, they can raise rates, say one and done for 2015 at a much slower pace thereafter. -- if you pull that off you do not get the dollar ripping it has in past cycles. what do you make of the data we are seeing at the moment? we were seeing good data and it became a very mixed. and it is now difficult to say what is going on. carl: the gdp num

i saw yesterday that yellen is going to go in september to bury the greenspan put and bernanke put toay see there's no put. i'll doing this based on monetary policy. >> they're looking to buy our stocks that would help. >> but the question is would that be a good thing with the markets? >> it's moral hazard. that's thinking that the fed is always going to be there so you don't factor in the risk that should be there in a free mar t market. you love the puts. >> of course we all love the put but i feel very strongly that monetary policy is there to create price stability and the fed also has a dual mandate. >> dual? >> yeah. >> i think it's crazy. i mean, i think the best you can do with monetary policy is perhaps either pull economic growth forward or delay it some or slow things down. it's not there independent, people in the economy create growth. if monetary policy created growth there would be no reason for free enterprise system. you could have the fed print money and have politician spend it and it would be over but it doesn't really work that way. >> let's check out the trading

do you agree with greenspan this economy is quite sluggish?is horrible there has been no recovery literally, since the great recession now we have not fallen further, but whether you look at employment or any of the numbers he is completely correct, it is just really sluggish, really no recovery and we can't keep on like this, and keep prosperity in america. >> what do you expect fed to raise rates they want to getaway from zero policy. >> let me tell you what they would like to do keep rates low if they could they are facing a lot of opposition, the low interest rates have not worked have not worked at all what they have done, by the way, with low rates maria is suppressed money to come into is it marketplace by keeping rates low i believe they precipitated the problem in housing and capital markets, but they believe, that lower rates will stimulate the economy they believe lower rates are insurance against the economy falling further they would like to not do it but i don't know what the political pressures are on them to do it. >> are charl

on monday morning, we will host the interview with alan greenspan.ou don't want to miss that interview. mark your calendar on monday. ♪ pimm: welcome back. let's get a quick check on some of the market movers today. we are taking a look at some of the movers and we cannot get away from media stocks. ramy: two down his into uppers -- netflix is down 2.2%. this is its worst day since march 25. it's the worst performer on the nasdaq 100 today that is despite a target boost by pivotal to $175. it is still trading at 150% higher year to date. let's look at what the analysts are thinking about. this is the highest percentage of accelerations in the past 10 months. this is all the way from back in october of 2014. the average price target is $115. analysts think it could get as high as $154. as $144. micron is the second worst performer on the nasdaq 100 right now. this is because of a downgrade from drexel hamilton to hold from a buy. it's down 3%. let's talk about a couple of uppers. we were talking about a media 3.4%.wn but viacom is up it is one of the

alan greenspan calling it one of the most serious challenges facing the u.s.ed economies. the former fed chairman says low productivity is a problem. he spoke earlier today on bloomberg " surveillance." notmerican productivity is significantly different from zero growth in the last six or eight quarters. and the cause of that, if you work backward through the cause is capital investment has been the amount to find of assets unique. "arlet: he said there is a pending bubble" and the bond market. according to the new york times, coco cola funding scientists who argue american should get for exercise and worry less about cutting calories. health experts contend coke is trying to deflect criticism of a sugary drinks and encouraging obesity. twitter partnering with the national football league. they plan to funnel almost three times more content than last videoincluding more highlights as well as pictures from games in progress. twitter will use an automated formula to prominently does lay nfl suites and related advertisements. buddy baker died after a short battle

michael: i don't think they want to reinforce the idea that there is a yellen put, or a greenspan put, and they are responding to markets. i think they are trying to say, there are some worrisome international developments, related to china, and that is causing them to reassess the growth outlook. i don't think they want to convey the idea that this is simply, equities are down 10%, we have to change policy. that is definitely not the message they want to send. at first, it seemed the consensus would move in september, now it seems closer to the end of the year, maybe december. but that is the time of the year when the quiddity usually dries up. is that something that folks are taking into consideration? michael: certainly, there are those concerns about your and liquidity. we have seen the fed do some pretty big actions in september. they began tapering in december, they cut to zero in december. , don't think december, per se -- the calendar configuration will preclude them from hiking. particularly because it happened at the middle of the month. i think that probably gives them enou

charles:d carson, let me ask, everyone had their gotcha moment, yours was about greenspan, you were not sure what his job was, i loved your response with respect to a brain, since have you been in this process, what are some things that you learned you may have had a wrong assumption about 6 months ago you're brain must be moving a million miles an hour. >> there is no question, that a lot of times in particular early on with somebody would ask a question, i would assume that i knew what they were talking about when i didn't or i would go off on a tangent. i am very analytical now, i see the question, coming 6 whiles away, and -- 6 miles away, you probably won't find very many of those. charles: you are learning before the job. >> absolutely. charles: all right, that is the way it has to be, have you gone so far to think then who would -- how your relationship would be with federal reserve in who would you put in key positions right now? >> well, i thought a lot about federal reserve, you know, i think it has done a little bit of overreaching. but i'm not saying we need to get rid of it

between uber wealthy and people that are just trying to make it, it is a interesting conundrum to use greenspan's record, trillions of dollars that are pumped in to system but if you boil it down why aren 't the wages going up. charles: i don't know if you saw minutes were released early, they say it was an accident, when it happens someone makes a lot of money this is the thing that makes people distrust wall street. >> absolutely. with technology, it is you know, there is a lot more accuracy but at the same time there is a lot more margin for error. i have no clue who may have bought before rally or got out at top. charles: i think shaw bought you about that is a different thing. let's talk about risk and opportunity. nobody wants to jump in. for those who like to build positions who think they can benism else, forget -- nimble how can we make money? joining us kathy wood, you are a true investor you think long-term you have made people a lot of money, where would you lock right now? >> this is a perfect market for arc invest that is our themes disruptivecused on disrupt invasion, they are not

what we don't want to see is another greenspan, 14 hikes in a row in the course of two years. >> that'se important over the medium term of course but i do think it would be an incredibly surprise if the bank of england went before the fed. we know the fed is the biggest and most important central bank in the world. the dollar is the reserve currency and mark carney has that extra freedom to wait until somebody else goes first and see how they react and as we were discussing earlier, the strength of sterling against the dollar and more importantly on a trade related basis he has extra breathing room. >> it makes up a third of britain's economy. definitely an impact there. there's more pressure on them to actually raise rates but haven't you noticed in the last six to 8 weeks the bank of england has been much more vocal about raising rates but also david miles saying himself it could happen in 2015. >> both central banks have the weak commodity prices to contend with. it's interesting to see how he views the drop in commodity prices because he said it's really just temporary. now we see i

reporter: what do you think of ellen screen dance -- alan screen been -- alan greenspan's recommendation? mr. hoenig: if you can get the ,hole industry 20% real capital it sounds at may believe, but real capital. i think you could have a letter regulatory relief and there. one of the decisions they made in the debates in 2010 around dodd-frank was do you want to some fire industry, specializing and have commercial banks and investment banks and trading banks be separate? and they decided that they wouldn't. so it takes reversing all that, which means more capital and simpler models. and we will have to see if they are ever willing to do that. tom: some people on wall street say the problem this week is dodd-frank. banks won't take risk. there is no one to come in and take the falling knife. and bond dealers cannot take any inventory anymore. there is a law of unintended consequences at work. mr. hoenig: i find that a little bit hard to accept. i can think of a menu of reasons. one, we have had zero interest rate for seven years. you put lots of money into the system. it has to be deploye

. >> makes me fine for the day alan greenspan had a briefcase that gave us calmness in predictions of interest rates. christina alesci, keep an eye on things. appreciate it. coming up, autopsy results, they are in on that black teenager who was killed in a police shooting in st. louis this week. at first glance things do not a look good for the police. what might a second glance tell us? you'll hear next. having a perfectly nice day, when out of nowhere a pick-up truck slams into your brand new car. one second it wasn't there and the next second...boom, you had your first accident. now you have to make your first claim. so you talk to your insurance company and...boom, you're blindsided for a second time. they won't give you enough money to replace your brand new car. don't those people know you're already shaken up? liberty mutual's new car replacement will pay for the entire value of your car, plus depreciation. call and for drivers with accident forgiveness, liberty mutual won't raise your rates due to your first accident. switch to liberty mutual insurance and you could save up to

bank of japan who have tried to paper over the natural recession that would have occurred after the greenspan now it is coming unstuck, the paper is coming off the wall the great thing is what should they do? i'll personally think they should face that reality rather than adding more paper in this paper has made the boom which far richer. they have been absolutely screwed with low rages and higher costs. we thank you so much. euro pacific capital senior market strategist. there are no more free markets. back in two minutes. >> china will reopen in a few hours. liz klayman is with me. you covered this crazy, dramatic day. should we be prepared for another selloff? >> he should beyou should be prepared to be up to find out exactly what china does. three and a half hours is when the chinese markets open. i was kind of stalking him today. tomorrow, tell me what's happening in china and then i can tell you what will happen tomorrow. china overnight last night set the tone for what was nothing short of a stomach churning ride today on wall street. we had traders telling us they had not seen anythin

growing worried, for some i'm -- i heard this from investor after investor and heard this from alan greenspanre's concern we are in a fed-induced asset bubble. meaning the federal reserve kept rates so low for so long, they pumped so much money into the system, stuart, that valuations just kept getting higher and higher and higher. so you had the market running up, simultaneously the economy was basically doing nothing. so you have 2% growth and a market that is on fire. somehow the two don't add up. >> is this a perfect storm in problems with the fed pumping out the money, keeping interest rates low for a long time. china on the brink and an economic policy which, as you say, only produced 2% growth? perfect storm? >> perfect storm for a market selloff. not a systemic crisis a la 2008. if this is a debt cries you have a problem. it could be problematic because of more thans markets, employses like china and elsewhere that are dependent on -- latin america, on commodities. if in fact they suffer so much because oil prices come down so much, then in concern we could have a real problem on our

the story goes back to alan greenspan who many thought was trying to eliminate recession from the u.sor at least make them less intense. well, what he really did was he ended up giving us a condition where right now any type of recession at all, any type of business cycle closure we get is going to be viewed in a very negative light because it's an all or none scenario with central banks. but they really are bucking logic because the business cycle is going to hit. the logic is going to hit. the anvil will touch the ground and they always show up late in the business cycle, which brings me to the title. all roads lead to qe. this isn't my assessment. everybody i talk to that really gets down to being objective, i just don't think the u.s. economy's really in store in an election year for super negative rates, and i also don't see the fed really willing to raise rates. so they take a little bit potentially with a slight rate increase, maybe paired with rates they're paying on reserves, the interest rate on reserves, but at the end of the day if there's any surprises, if and when, when

but i think, unfortunately, even allen greenspan toward the end of his term was prone to think about how he's going to be reviewed in financial markets, how he looks on the cover of qult business week" and affects the decision making at the fmoc. it shouldn't. if we saw a correction and increase in real gdp to something approaching a healthy 3%, 3.5% in late 2015, 2016, i think that would be terrific. and that would also have implications for those that focus on income disparity, that's tremendous implications there, as well. because stock market rallies fueled by printing money tend to hold the top 1%. monetary policy is helpful for everyone else in the economy and the antidote to volatility is transparency. i think rule-based policy is the answer. my favorite is a taylor rule approach. one that weighs inflation more and little more hawkish. weighs employment more or the gdp gap and more dovish. whatever your favorite rule is, let vees a real rule. use a little math. this input into the policy making from the division of affairs are sophisticated and the outpitted unsophisticated an

here is alan greenspan with me on this very topic. >> we have pressed interest rates well below normal for protracted period of time. trish: what is danger in that? >> the danger they will come up to where they have always been for millenia. trish: what does that do to the markets when they do? >> not good. trish: not good. he warnedded us all. austan goolsbee. we're off 357 right now. is this a bubble that's popping? >> you can't, you can never figure out if you're in a bubble when you're in it. i think this is coming from china. and, the thing that is happened in china always makes crises and panics worse when people don't feel like they can trust the numbers and they don't know what the real story is and what you had in china they have destroyed the information content of the market prices. government is just going to intervene. they will buy up a bunch stuff so you can't tell anything what is worth and official statistics can't be trusted and that is the type of environment that leads to wild swings as people get rumors, they get some information. we'll be down 1000. we're back up

at this point, and greenspan was taking action.ng to make sure it did not effect the global economy. we got janet yellen talking about raising rates at some point. it is interesting to see these two levels. caroline: you got barclays, standard chartered talking about currents -- talking about foreign currency. emerging markets, you got russia, south africa being pounced by china, their biggest trade partner. guy: we had a big move by the chinese today. we have data we need to take you through. how the asian markets high responding -- how the asian markets are responding. >> good morning. the big story, china did day to of china cutting the value of the yuan by 1.6%. intervention.this today we are hearing from sources that the bank has to intervene in the onshore market through asian banks. to prevent the yuan from dropping. the currency already down more than 1.8%. that would be a four-year low. the onshore yuan can decline 6.4572.low as around look at the offshore, currently what it is doing right now. it is tumbling down more tha

. >> i thought it was funny, he thought greenspan was the treasury secretary.e's the neurosurgeon. >> he looks at the brain. >> i wish i didn't know as much as i know about alan greenspan. thanks, kevin. >> thanks for having me. >> we know a little too much, right? >> maybe. >>> when we come back this morning, the countdown to the jobs report. prediction on what the numbers will mean for the fed's next decision. we'll be right back. ♪ ♪ it took serena williams years to master the two handed backhand. but only one shot to master the chase mobile app. technology designed for you. so you can easily master the way you bank. >>> the counterdown to the jobs report is on. economist john writing and jason frenner are here with predictions. >>> spoiler alert. donald trump refusing to rule out a run as an independent candidate if he doesn't get the gop nomination. we'll break down the winners and losers from the republican debate. >> and it's been a bloody week for media stocks. losses in the last four sessions erasing $44 billion in market cap. we will talk to an analys

tom: even if they say we want have a greenspan measure format.erest rate to get us away from stan's ultra accommodative stance there is damage to the system if we do that? >> there could be. the rates could be damaging for consumers are when money for homes. there has been no connection for 20 years between wage growth and inflation. at our guestsook at jackson hall. greeley, jim bullard is a neutral voice and always makes news. how far apart are these chosen four from vice-chairman fisher? >> they're pretty far from each other. i think esther george is the most sensible of the bunch and i think that my friend has been kind of out to lunch for the last couple of years so i think the fed is very divided right because it has no basic rules. tom: the money issue here is in the last two days we have all had heartburn and heart attacks over these markets. what could be worse than what we have seen? >> there is a school of thought. you look at gary gordon that yale i can't rim his name right now at stanford and what they have been arguing is that the f

. -- greenspan calling it a bubble 1.5 weeks ago.he fed will be raising it and hiking. , as he willke that .25% and that will put 10 year treasuries higher. francine: the number of people will expect the rate hike in september is slowing down 24%. patrick armstrong: i think they will do something cute, 15 basis points. to a yellen, she says it is gradual and not like the past and not do it every single month. to reinforce the message, i think she may do 15 basis points to say we started in september and not have an impact on the economy. it is symbolic. manus: our new word. our new word is "cute." the u.s. equity market and this is what i want to understand, the u.s., the biggest weekly drop since 2011. european stocks, volatility is ramping. patrick, try to make sense of this. hike?, cute rate --rick armstrong: growth some growth in the united states bring into haiku does not mean anything but symbolic, i think. -- in the united states and the but does not mean anything symbolic, i think. valuations, the prices, not the way they wer

re looking at a it used to be greenspan. potc push.e a china feels like why we had a correction.ore to come. our core view is that valuations have stretched because of policy and liquidity in the system. people are getting anxious. i think it is a confidence factor, that is where we see the world's economy. francine: if you're going to answer our twitter question, would it be market confusion? that the markets are all over the place and we were talking about a possible rate cut from the fed? that we have to remind ourselves that half of the world equity market is made up of the united states, still theost dominant economy in world, and it is growing. there is a good story to be told. globalization from the point of portfolio investing has become and angle broken concept. we are seeing asset returns. in simple terms, e.m.'s on the returns on developing markets. there are good stories in emerging markets and bad stories. everyone has been dragged down by the china theme, but there are reasons why countries like turkey, south africa, russia, and china itself, why investors are placi

alanel: that was the year greenspan was retiring and everyone else was at jackson hole and how the wellad gotten to be a much safer place for he was discussing the garden party. he did not come back until this year where he was received rather royally because he seems to be doing a good job in india from the numbers we are getting. we did ask about central bankers and whether or not they still control the leverage of power given what has been happening in markets. this is what he had to say. if our growthear would move faster. we have said that central banks have done what they could do. it is not a view universally held by central bankers. but i think in general across the world, central banks have done pretty much what they're capable of. now others have to step up. that an implicit criticism, even though i am sure he intended that way, of mario draghi in the bag is at hand? it is more criticism of fiscal authorities around the world who are not stepping up and filling in the gaps. words, central bankers have done and continue to do whatever they can do. is in a in his case, he differ