i think you need to see an emergency response by the pboc. think you need to see rate cuts not at 25 basis point but more like 50 to 75. angie: michael? michael, what do you think the intervention has done for the mindset of investors? would you play in this market again? really are never fans of the china mainland market because we never trusted the authorities. i think what is happening is by effectively removing the free activity within the mainland market, they have exported the weakness into the china-hong kong market, which we are fans of. that is a much more even playing field, a more honest institutional type of market place. and unfortunately, that has been the victim of the ham fisted ness of chinese authorities. angie: what we are hearing from the fed, they're worried about greece. but i guess also china probably in the next couple weeks. michael: sure. those that is were taken from a meeting or ago when really it was china was a bubble in formation that people were worried about, and greece was what they would be concerned about.

it is certainly an underwhelming amount from the pboc. there we go, gold prices.o down. i think we are firmly below $15. what is the spill on the fact? this is how asia is looking. basic materials -- those are the the aussie stocks -- miners lift. you have the chinese names in the mix. .ew crist there's your chinese name, as well. don 1%. that's the story so far in the markets. rishaad: two greece where there is a glimmer of hope as banks reopened three weeks after they were shut for fear of a collapse. things might get even better later in the year. germany has hinted debt relief might be in the cards, as sher : explains. shery: banks are set to reopen, and today, capital controls and withdrawal limits remain in place on greece. life is nowhere near to coming back to normal. the daily cash withdrawal of the equivalent of $60 will be replaced by a weekly limit of $455. a little bit of a boost, but transfers abroad from greek accounts are still banned. the athens stock exchange will also remain closed. as you said, there is a glimmer of hope. things might get bette

the pboc has so much ammunition and so much arsenal.much conventional monetary policy left all like peers around the world. people would say the chinese will be cutting rates again before the year is out. to get banks lending and perhaps the question is at the extent of the actions it wants to take is unknown. jonathan: enda curran thank you for joining us. for more, let's bring in kevin corrigan. kevin, china, you look at the market. we know it is artificially managed and a drop of more than 8%. i have no direct exposure to equities but a huge amount of exposure to the chinese economy should i be worried? kevin: in terms of participation in chinese stocks, the natural wealth effect from the kleins in terms of the damage to consumption is reason to be limited. you should be a little less spooked than what we might be. secondly in terms of the actual impact that china and chinese demand declines seem to be having yes, we should be worried. as a consequence of some of the disinflation coming out and people will relook and revisit the narr

. >> in asia again despite reports of another cash injection from the pboc. >>> oil enters bare market territory. bp and its volatility. earnings take a huge hit after it pays penalties related to the oil spill in the gulf of mexico. >>> the company's outlook misses analysts' views. shares of the chinese internet nosediving after hours. >>> twitter, the temporary ceo jack dorsey under pressure as user growth could fall short again. it was an ugly day on wall street yesterday with the dow, s&p, and nasdaq ending lower, a lot of it having to cowith mixed earnings. keep in mind of the companies who have reported earnings, 76% have reported its above the mean estimate. taking a look at futures, we're in for a potential rebound. the dow up about 17 points in premarket trade. if you take a look at the u.s. close, yes, i as i just told you stocks ending lower on monday. the dow jones at 17,440. the s&p 500 dipping below its two-day moving average. not a great sign for technicals about 0.6% and the dmakz which has been powered by four main stocks, some of those momentum and high growth stocks

. >> do you expect the pboc to reduce the amount of cash to maintain its economic growth at 7% going forward? >> yes, we do. so we're expecting the pboc to cut rates again in q3 and also to cut the required reserve ratio again in the q3 and q4. so we think the pboc should be more aggressive in monetary policy easing but also we expect the government to really ramp up some of the infrastructure program and to provide a much more direct stimulus to domestic command. so both monetary policy and physical policy have roles to play. >> clearly, the pboc needs to take a step back and we need to do something more given that this economic data continues to disappoint. >> i think it's not quite the time to go that unconventional. at the end of the day, they still have plenty of conventional flexibility. interest rates a long way from zero, so china is not in the kind of liquidity trap or the zero lower bound that many other central banks are in. so you have to remember unconventional effects, both the fed and the bank of england had several rounds of qe before you saw saw, really, any impact.

the pboc introduced new rules on saturday aimed at promoting healthy industry growth.s shrunk to its lowest in more than five years as investors weigh prospects. china has also revealed it is holding less gold in reserves than some analysts expected. precious metals are also falling. platinum hit its lowest since 2009. and greek banks will reopen in the next hour, three weeks after being closed. basic services will return including the ability to deposit checks. restrictions on withdrawals remain. there will be a $450 weekly maximum. alexis tsipras announced a new cabinet. the imf has repeated calls for debt relief. for the first time, germany said that might be possible. let's get the latest from the markets right now. talk about a roller coaster ride, david. david: a different picture than what we started the day with. most of the markets are now down. let me zero in on what is happening in the chinese markets. the hang seng index is down .3%. take a look at how these brokers are trading in the city. you have galaxy securities getting an upgrade from ubs. hai tong, 2

the pboc pumping liquidity into the markets as well. that's helping to settle dust to a further degree. i wouldn't write off any volatility. there's still 5% downward to go. that's what a lot of market watches are telling us. so the best way really if you want china exposure at this point in time is to avoid it. that's the message we're getting outright and put your money to work on the h shares in hong kong. the gap is quite high well over 30%. in terms of the spillover effect it seems to be relatively contained. we're all watching jakarta and malaysia. those two currencies have been the worst performers in the asian fx space so far. so they really seem to be in the firing round in terms of the currency and the market as well. see ma seema, that's where we stand. back to you. >> whenever we receive a big slump in the markets of late we've seen the government come in with very heavy-handed intervention. do you think the market is getting increasingly used to that and they're getting almost come play aunt with the falls because, wow, sti

i think it will be a nod to the imf that the pboc is moving towards a more flexible change. and that's important for the inclusion. >> what kind of reaction are you expecting from emerging market currencies once we hear from janet yellen this week? >> well it's a very interesting question. i think yellen has said a lot over the past couple of weeks. so i don't really anticipate that it's going to provide us with fresh news over what we already know. so what we know so far is that the fed rate hike is getting close. i don't think it's going to be so much of a matter of whether it's going to september or december. right now, we have to in fact have a price in for this year. so, on the back of it i just doubt that we're going to see significant moves following the fmc statement on wednesday. >> i'd also acknowledge that a lot of these currencies are no longer moving on policy but domestic news? >> that's a global story. up until the end, as we call it of the superstrong dollar rally which ended somewhere around march and april of this year. since then specifics have moved curre

see tough transitions for the chinese economy. >> so you wouldn't subscribe to the viewer what the pboc has implemented so far will actually feed through to the real economy in the second half of the year? >> well it might. but this is the challenge. at the same time, you have commodity prices climbing. indeed regarding of that china as an exporter of oil, from that perspective alone, it's a weakness. >> the commodity rout definitely not helping china. matthew, thank you for being here on "worldwide exchange." >>> a want to get you other names in the news this morning. teva has acquired allergan's business for $40.5 billion. a mixture of equity and debt. the israeli group has withdrawn its offer to buy milan. shares of teva are called to open up 11% in europe. brent saunders will join "squawk box" for a first on cnbc interview at 6:30 a.m. eastern. >>> fiat chrysler getting a record $90 million fine from u.s. regulators for failing to act sufficiently following vehicle recalls. we'll see the automaker pay $70 million in cash. and $20 million on outreach. an additional $50 million will b

the pboc is managing a slowdown in the economy, cutting the reserve requirement.ome of those are aimed at the real economy, not the stock market. angie: what should we be focusing on, if it is not too much concern about china? guest: i think we will be shifting our attention to europe. some of the challenge this week as investors had china and europe. china has dominated for the last couple of days. but we will go back to a make or break deadline this sunday in europe. the outcome is concerning. what is encouraging is that, despite the tension, if you look at european peripheral bond spreads, they have been well behaved. in the last couple of days, they have contrasted. there is a reasonable belief that, even if we see a failure in negotiations and greek exit, the european central bank has a toolkit to contain contagion. angie: how have you set up your in guiding this event this weekend? guest: we have been speaking to basic asset allocation views. europe is experiencing volatility likely to continue next week. there is an argument for european equities based on t

this despite the pboc stepping in with further support. >> searching for light at the end of the tunnel. tsipras tells european lawmakers that austerity in greece must come to an end as brussels gives athens a final deadline of sunday to deliver a new package of reforms. >> microsoft is taking an ax to its work force again. the fresh lay offs will impact the hardware and the smartphone business it requires from nokia last year. >> let's get back to our top story. in a surprise move barclay's announced did departure and john mcfarlane will take up the role. he said we are leaving value on the table and a new approach is required. he added that independent executives had concerns about his leadership style for sometime. shares are rallying on the back of this this morning. higher by 3.3% and we will have a first on cnbc interview with john mcfarlane, the now executive chairman and he's heading down to have that conversation. make sure you stay tuned for that. >> another story is the volatility in chinese stocks spreading across asia. sending stocks across asia lower. you can look at the j

also now, it moves from the pboc and more importantly putting a -- csfcom the cfs the with billions ofrs to support stocks. are creatingment measures and policies to support the market. basically, we have seen the stabilization of the asian market now. but, the market confidence has yet to restore. we expect to know further policies which have yet to be announced. you need a healthy, strong market. you need to have strong public earnings. angie: what do your sources tell you in china as to what policies we can expect? government is trying to stabilize the economy. i think that more liquidity measures will be on their way. infrastructure and property markets. and support amote high-value industry to support .he next wave online banking. angie: consumers are not necessarily well versed to how volatile or risky that might be. they take these online banks at their word. 9% annual return. ok, my money is safe. but what is reality? >> their money is not safe. it is very high risk. we have seen some tightening in the policy over the past three weeks. over the weekend, the government tried to

i think the pboc is populated by very competent staff who know what is going on. giveback, the huge gains earlier in the year -- francine: it seems like the government and the pboc is managing the economy very well. yet the markets very badly. james: i think kress is the word one might use. francine: we see significant -- james: i am definitely not confident. china remains top of the pile. with that said, i think the government has made it clear that will sustain the economy. it has plenty of capacity. ultimately, markets will reflect economies. -- extra day. of depression. we will see recovery in the markets. manus: you heard it here first. james: 2015 manus. francine: things can change quickly unfortunately. james is staying here, because we are talking about greece next. greece and its creditors meet today. talks come after another bombshell from former finance minister, yanis varoufakis. manus: he said his secret plan b. not so much a secret anymore. the idea was to sneak greece out of the euro on and investors conference call. i authorized it. -- >> i authori

that the pboc won't be stepping in to help stand this anymore. the fundamentals of the economy are seeing some slight signs of stabilization. i want to mention that the stock calls are down to 689, still suspended in trading this morning -- about 24% overall. a pretty volatile day here today. it is coming up slightly from the losses that we saw a earlier this morning. they were talking about how they still see value in china shares and they expect the share price to rise -- there are some reports coming out saying that 60% of analysts surveyed expect the shares to gain the third quarter. guy: amazing. thank you. let's go to tom in beijing. 7% -- the market was expecting 6.8%. is this down to the stimulus that has then put in question mark can we believe this number? tom: i think there are a couple factors at work. firstly, this is the impact of the stimulus trying to cut interest rates four times now. the first was at the end of 2014 -- they made it easier for banks to lend and refinanced hundreds of millions of youuan. we are seeing infrastructu

anna: you don't think the pboc is going to be issuing policy as much as they did before.ch do you think the pboc will ease as we head toward the end of the year and the chinese try to shore up that growth target? erwin: well, property market recovery is becoming quite broad now. we are seeing recovery through tier one, tier two, tier three -- we are seeing property prices move up. we think there may be one more rate cut but that is not very exciting compared to the expectations that the market has a few months ago. the share index now is back into more comfortable territory, so some of the emergency measures we've seen will likely be scaled back. anna: so that's the message we are seeing -- how do you regard those measures that we saw introduced last week? the fact that anybody who had more than 5% of the stock was not able to sell them for a period of six months -- how does this reflect real issues toward value a real perspective on the chinese equity story? or are we still in a slightly make-believe world come here? -- make-believe world, here? erwin: we need to get bac

the pboc, i can't remember the last time they actually came out and talked about stock markets. basically now ensuring support for china securities finance to keep liquidity flowing, to ensure a stable stock market. because that is not what the markets look like. we are down roughly -- shanghai composite down 6% last i checked. futures market is where the damage is being seen. continuing to fall. in hong kong, down 4% for hang seng index. hang seng futures down 1000 points. let me get you the latest numbers when it comes to the number of companies that have called to trade in their own stock. stocks have now been held in between the two exchanges. 45% of the total. the kids here in hong kong falling as much as 10%. back to the chinese mainland, some of these companies that are actually falling, the icbc bank of china, not as much. between the two indices, 2800 2800s, we're looking at stocks across both exchanges, only 13 are up at this point. people just dressing for the exits. -- rushing for the exits. back to you. rishaad: we will have much more on that story. we want your opi

we saw global demands in oil increase and partly because of pboc lending. in 2012 they did the same. i think now, you know clearly what 2012 generated was a housing bubble and now an equity bubble which is deflating. so the returns to this sort of policy are a lot lower than in the past and maybe less effective. what we're seeing is the commodity intensive industries are slowing down drastically. >> it's a busy time for you as someone that tracks the price of oil but going forward what's the factor that analysts should keep an eye on? the stronger dollar or iran nuclear deal or weaker than expected data out of china? >> it's a tough question. it's a little bit of everything. euro dollar has been a phenomenal driver and you shouldn't underestimate how the strength in the dollar has also been an additional -- applied additional downside pressure to oil during the collapse. likewise, we're getting iranian barrels into the market. saudi is pumping at record highs. iraq is pumping at record highs but we're about to lose a lot of shale oil in the u.s. demand has

shortly after the market opened at about this point, the pboc came in and announced that they had to say something. they basically said they will do whatever it takes to stabilize the markets. over the past hour or so, what we had was the state backed china's security financial corporation asking the pboc, the central bank we need more than $80 billion to stabilize the market. over the lunch break -- which is why it's interesting to see what happens next -- they decided to come out with $40 billion as a credit line to the country's brokerages. there are about 21 of these brokerages. at this point, i think we have a graphic. i think we can get that up to show our viewers in europe how the morning session broke down. about 2800 stocks. i think roughly about 40 or 50 out of 2800 shares were up. roughly half were unchanged mostly because things ground to a halt. the other half, mostly down. let's take a look at that right now. let's get that up for you here. i mentioned some of these steps. this came on top of what happened overnight. you had about 700 of these fund managers, executives

again after another volatile session responding to the new array of measures that came out of the pboc was up and then dipped into the red. and volatility is crazy. let's move back to the european markets. i just want to mention the euro. clearly yesterday was a big development in the greece euro. we did see decline losses. we pared those losses it's indicative of that point dare lynn carolyn and i just making. it's down half a percent. but it has recover some of the ground it lost late last night sand early this morning. let's look at the bond market because that was also planned in the currency -- playing a role in the currency space. we've seen the safe havens like germany and u.s. bond buying. 2.30 in the u.s. the likes the portugal italy and spain moving in the opposite direction. portugal has just crossed over 3%. once again let's bear in mind whenever people thinking it's going to be contagion or not. 2.3 here almost the same as the u.s. 2.3. and a far cry from greece which is around 17% this morning. let's have a look at that right now. there we go 17.25 on the greek ten-year a

more scope for policies in both rate cuts and reductions in the bank reserve requirements and the pboc should have done this earlier and there was a fair amount of tension which the stock markets are now reflecting between the central bank people that are still cautious and hawkish and the government people who ultimately are in charge of china who i think are pushing for a stronger policy response. >> great stuff. we have to leave it there for today. thank you very much as ever. co-founder and chief economist. >> the airport's commission has announced its backing the expansion of heathrow airport but it remained unclear whether they'll act on the commission's recommendations. >> some stocks taking flight easy jet, ryan air and aig leading the sector higher. in fact the ceo urged speed of action on the new proposal saying the company would open a base at heathrow if the run way was built. the airliners flying high but we should point out this stirred a lot of political attention. the expansion of heathrow. >> the statement from the iag chief executive. he says despite the diligent work

the pboc is getting involved, they're going to cut rates.sh, you have brokers and mutual funds getting involved, they are going to commit a certain amount of capital and not sell. that harkens back to what we saw in the 1920's and 1930's. so far, largely unsuccessful. there is a consensus that this is not working and to some extent it is causing the panic to grow. of scary thatind they have to go back to the 1929 crash to think about what to do. bestnot sure that is the way book. boris, thank you so much. boris: my pleasure. pimm: still ahead on the bloomberg market day, it was a working fourth of july weekend if you are a republican running for president. a couple of lucky presidents got to spend -- a couple of lucky candidates got to spend it at mitt romney's house. ♪ ♪ betty: this is the bloomberg market day. i am betty liu, with pimm fox. pimm: it was a fourth of july weekend, what better time than for patriotic americans to go to summer cap. -- summer camp. betty: mitt romney posted a few presidential candidates at his house. chris chri

at the end of the day, we think the main thing is that the governor of the pboc has done a terrific jobcing xi jinping that he needs to get in. at the end of the day, it is about liberalization. yvonne: what about the msci and their inclusion? do you think that could be an question now also? hayden: it was said they were going from 0% to 32%. in the and, you also need the global investors, and last week was a huge change. sovereign wealth funds and central-bank and super nationals can now go directly into chinese government on and just registering, so as far as i am can third, it is open right now. we are invested in chinese bonds already, and we have been recommending it to clients, and it has been fantastic and client portfolios over the past 10 years and probably will continue to be, offering a high nominal yield and a high real yield, and it is aa rated. you cannot find many of them these days. reporter: and you already think risk is properly priced and so forth? hayden: it is not in the bond markets right now, and we think that is about to change, and we've introduced monetary poli

the last couple of weeks and it's very important to remember that the chinese authorities, be it the pbocregulators or beijing are going to be in the stock market trying to do their upmost to stabilize sentiment because of the wealth effect and remember it's underpinning the housing market so it has social stability implications. they don't want to see the stock market going. if the stock market goes the housing market goes as well. they'll be trying to bolster sentiment in the market. right now is to no avail. we haven't seen many bargain hunters or evidence of people buying the dips. perhaps they feel this has further to run. we need a deeper investor base. more professional investors in the market. they try to do that with the smart connect but all is going into a shares. anyway at this stage in the narrative. that's where we stand. back to you. >> sri, thank you so much as ever. now let's talk about ipos. the first day performance of an ipo, very very important among new lysters. the top ten performers include the likes of shake shack, etsy and fitbit. etsy is now below it's trade sin

how detrimental is that to the pboc's credibility? >> well i think for a time being it's all about stability in china. a lot of moving parts here. we have a weakening real estate market certainly on the construction side. we have a weaker equity market. the broader economy is slowing down. so the currency is currently a macro economic anchor if you will. it provides stability, but having said that there is some indication that the chinese authorities might widen the trading ban at some point, reintroducing volatility. it will be a gradual process because right now we are in a stabilization period but over the next few quarters i would expect more volatility come back into play. previously it was volatility that was one sided, broad appreciation. this time there will be volatility in the truest sense of the word which is a symmetric volatility around a broader level that is stable against the u.s. dollar. >> fred norman co-head of asian economics research at hsbc. >>> some flushes on the bombardier bombardier. a potential train merger.

>> i think pboc it is around the edges. if they cut rates it is good for capital markets but not good for the economy. they have already borrowed too much already so might want to stimulate the stock market. the long term credible of investing in china. you go after malicious short sellers. when you start arresting people for short selling the credibility for foreign investors especially large u.s. institutions putting as much money as policy benchmarks into the a-shares. they will stick to hong kong or ways to play asian growth. maria: why would you foreigners put money into the chinese market as a way to stop selling chinese government will shut things down? >> right. >> we always known prices have been suspect around controlled economies like china but now they're explicitly suspect. the fact that gold, something i watch very closely, hit a new five plus-year low overnight. i think it means selling in china hasn't abated. maria: gold story is your indication? >> i think it is best forward-looking gained to it tore for ch

you have the pboc stepping in. i do not think these require safe havens.ver understand the appeal of gold? bob: you needed an inflation hedge, a safe haven, or an anti-dollar. erik: as a financial instrument yes, but underpinning as a financial instrument, the understanding that most people have of supply and demand in the gold market -- maybe it should be graphed long-term against inflation. it is all the other things that create volatility around its path. >> let's talk about the fed. does the fed's willingness to buy that to engage in quantitative easing, permanently impair cold appeal as a safe haven? knowing if we ever get into that situation it might be there? >> i think temporarily. if money is rising, then commodity prices must go up area you have an increase in commodity prices. maybe you had a europe look like it will fall apart" got caught up in that. it became overextended. i think things -- i think of things precrisis and -- precrisis and post crisis. >> let's talk about china. you can't i chinese stocks maybe you want to use your money -- if

in addition, you have modest fed pboc policy diversions and a modest weakening of the renminbi . francine: thank you so much for that. manus: here is a look at what else is on our radar this friday morning. amazon.com has overtaken walmart is the world's biggest retailer by market value. that is after the e-commercae shares jumped by 19% in after-hours trading on the back of the surprised second-quarter profit and sales that the estimates. -- beat estimates. revenues rose 23%. a fast-growing cloud computing business and initiatives to more customers. francine: has agreed to merge to coral group. the combined business would be called ladbrokes coral. manus: in the u.s. the government has opened fire on a cinema in louisiana killing two people before shooting himself dead. between six and eight other people were injured. they know the 58-year-old shooter's identity but they are not ready to announce that yet. francine: john kerry has defended the accord with iran, telling critics that it is "fantasy" to think america could've held up for a better deal. but senator bob quarter think

the new measures that regulators are trying to put in place to the pboc, to the securities regulatorsced. a list of things to hopefully stem the decline. the first show is they have not got this right yet. they managed to create a situation where margin debt can be built up this month. when things start to unwind they throw all these tools at it and nothing seems to be working. the other side of the argument is we don't know how much worse this could actually look. for the latest one you'll get more from my colleague, they are looking at intermarket and affiliation. let me just give you a sense of how asia is trading overall. that is how asia looks if you slice and dice according to sector groups. anna: david england joining us from hong kong. some breaking news from the m&a space. aetna is going to buy hume on a $437 billion. just as we said, it is then confirmed by them themselves. so the transaction is projected to realize 1.2 5 billion and they are giving us all kinds of details at the pricing. $230 perfume on a share and they get to keep their commitments and kentucky. the hume o

that completes the picture in china is that in these recent measures, these recent measures from the pboclly filtered in to that part of the economy. this is not the official survey. it is more private and smaller companies. it is also a fairly important piece of the chinese economy. as we speak the shanghai composite is on the way down. it will continue to fall. it wasn't only the china data. we had a slew of other data out of the region. really bad imports and -- import data out of the philippines. you put everything together and you take that initial numbers from the u.s. and it highlights the difference between the slowing growth momentum here and in asia. that delayed -- played a big part. why you have the strong u.s. dollar putting pressure on asian fx this morning. add in what i just mentioned the chinese manufacturing data. the reason you're looking at a fairly bad and to the week -- end to the week, if you have these cyclical sectors on the way down. minors and related industries like heavy machinery and construction on the way down. i mentioned fx. one currency worth mentioning

the pboc's move could sound alarms over the plans to liberalize markets and open up to foreign investmenteeted this picture with the response to the stock declines as panicked. meanwhile further evidence of a slow down in the world's second largest economy. new car sales fell in june. that's the first monthly fall in two years. the decline prompting the auto association to slash it's forecast for 2015 sales in half. let's get more on how markets traded in asia with adam joining us live from singapore. >> it was a pretty solid day for asian markets. drawing comfort from the fact that shanghai continued to rally for the second straight trading session but it wasn't just because of that. it was also early signs that we could be getting that deal out of europe between greece and the european creditors. that also boosted investor sentiment but if you're wondering why japan didn't go along for the ride it did really. they ended the day higher by by .2%. that was distorted by huge falls in fast retailing because of a disappointing outlook for the current quarter. let's dive deeper into the numbe

is it because the pboc is stimulating the economy and helping the consumer out? it something else? >> i would say that what i'm most concerned about is my month to month sales and what we're really obsessed with within our company is that. if i take you back to the third quarter of 2008 when the great recession was upon us we saw within a matter of three or four weeks our demand fall off a cliff and that has not happened here. it is not like 2008 which is what i read a lot in the financial press. our month to month sales are good and frankly it's back to the point i made earlier which is you have a real middle class in china. a lot of people think there's so much fabrication and nonsense but we don't see that. we see this say real country with people that want to buy real things. they keep eating healthy. >> you have exposure to india as well. this is one of the priethbright spots earlier this year. but it's quickly changed. investors have run out of patience with modi and his made in india campaign. >> i'm a big fan of modi. i located my factory in india because

that it feels to me like the credibility of the government, the ability of the government and/or the pboc has been completely undermined here. state media was hyping up the benefits of equity ownership and everyone went in on borrows money, in many cases have lost their savings now and they're angry with the government. feels like the central bank put is not arriving well in china. >> the impact on this and the wealth effect of this is fairly limited. only 7% of the chinese population. but you are quite right, the people people were so enthusiastic about the shanghai stock market was because the state media and beijing were very clearly behind it. they went with a kitchen sink approach over the weekend really pouring everything they had into this anden monday and tuesday were both very weak days. i think it reminds us that the limits of beijing's policy ability and it reminds the population of china that maybe beijing doesn't have the magic touch that they've had in so many parts of the economy in infrastructure, in the development of the state owned enterprises and so on, so for the. thi

the pboc prints money to give it to the agency that buys the stock. >> can we not -- >> bank of japannk of england. >> hearing stories about chinese companies buying stock in the market. my point was china needs to create reforms to allow greater participation in the market more foreign capital. right now china's market is a very small market. that's the fundamental problem. that's been my message. if they're going to move it higher black rock wants in. >> those are are your words. >> when you look at chinese stocks they're valued at 18 to 20 times erpingsarnings. you're also talking about a market slowing in terms of gdp growth. >> but china's number one job is to create jobs. it's not gdp growth. as they transform into a service oriented economy they'll create jobs with lower gdp. the biggest thing is why the state owned companies of china are not as competitive as western companies and they're being heavily supported by the chinese. that's one of the great needs to allow these companies to freely compete. so i believe as china evolves they'll allow more foreign capital and be judge