of what i call and others have called volatile volatility.nk of it as a squared. cause deleveraging in the system. it will do so in the context of limited liquidity. iswhat people should expect more volatility, more ups and downs like we have seen this week with a buy to the downside until you can identify new buyers in size. >> i have two questions for you that you can hopefully make sense for our listeners on bloomberg radio and liberty. volatility, isn't that much more normal in terms of what we see in the markets? lastve guns foiled the decade because of what we have seen for a global monetary policy. should we see a little bit more volatility? >> yes we should. and we should see exactly for the reason you mentioned. this represents not an abnormal spike but a normalization. it feel so terrible because we're coming for a time when volatility was abnormally low i think as we will rely monetary and creditly, conditions normalize, it is to be expected that financial market volatility, equity market volatility is going to be elevated relative

you mentioned stock market volatility and currency volatility at the start of this year. i would like to suggest that stock market volatility should not be something that people should be so concerned with. even at today's level, which i was told the shanghai stock isket declined by 2%, it around 2900. it is 40% down from the peak, but still 30% up from a year-and-a-half ago. valuations are still very rich. the stock market is rather isolated from the outside world. the impact on the outside world is minimal. currency volatility is something you should pay attention to. since ms. lagarde is here, i would like to say a few words on that. china used to have what we call u.s.ling path against the dollar. now, the stated goal is to move toward a basket approach. that approach is a serious approach. at the when they look actual daily movement, they think, what is the pboc doing? think we should not focus the central bank strategy to much on just a few days movements. if you look at the strategy over a period of half a year or a year, you will realize that moving to the basket

that is generating volatility.orld's standards today for publicly listed companies and publicly listed disclosure on balance sheets and audited financial sheets is pretty high and getting higher everywhere in the world. people, investors, capital is fungible around the world. capital moves at the speed of light today. people want access to chinese companies, and they want chinese companies held to the same standards. number two, they want the market place to determine which chinese companies have access to capital. -- to the extent you start getting more accepted financial statements. corporate governance and a market that determines which companies will be public and which will not be public. i think you will see volatility. a little bit of this is natural evolution. unfortunately, for the chinese, they are doing this in 2014, 15, 2016, in a digital era. they are not doing this in the 1930's. the rest of the world did it in an analog world. they are doing it in the digital world. we're watching it in real-time. th

now volatilities by themselves, should not be worrisome for people who know volatility very well.t is the three issues behind the volatility, that has worried international investors. in terms of communication, you're right. we should do a better job, and we are learning. we are doing it. i am here today to communicate. [laughter] mr. xinghai: but, you have to be patient. because our system is not structured in a way that can communicate or is able to communicate seamlessly with the market. we are learning. china can learn i can assure you , of that. ♪ ♪ bend me shape me, any way you want me as long as you love me, it's alright bend me shape me, any way you want me you've got the power, to turn on the light shape the best sleep of your life. sleep number beds with sleepiq technology adjust any way you want it. the bed that moves you. only at a sleep number store. mr. cohn: you started out talking about the question of volatility. we morphed onto this discussion of free markets and communication. i think these concepts go together. when you look at what's going on in china, and the

they know volatility very well.t is the three issues behind the volatility, that has worried international investors. in terms of communication, you're right. you are right -- we should do a better job, and we are learning. we are doing it. i am here today to communicate. [laughter] mr. xinghai: but, you have to be patient. our system is not structured in a way that can communicate. we are not able to communicate seamlessly with the market. we are learning. china can learn it, i can assure you that. ♪ ♪ mr. cohn: you started out talking about the question of volatility. we moved on to free markets and communication. i think these concepts go together. when you look at what's going on in china, the chinese are trying to move to more free market and there is an inability to communicate more freely, that is generating volatility. the world's standards today for publicly listed companies and publicly listed disclosure on balance sheets and audited financial sheets is pretty high and getting higher everywhere in the worl

are you expecting more volatility in 2016? there will be: volatility in 2016.e have three major downside risks on the horizon, one of which is the massive chinese transition to a new economy, which isl be bumpy welcome. moving from a high low growth rate to a lower growth rate, from being industry driven to service driven. all of that will entail a degree of volatility necessarily. commodity prices is also going to entail a degree of volatilities, and the acer can's monetary policies around the world and changes coming up in 2016 will entail volatility, yes. francine: the risk of deflation and how central banks deal with that. madame lagarde: the biggest concern is to make sure that the global economy actually is on track to provide enough growth to respond to the needs of those people who are looking for jobs, those people expecting more sustainable growth. that is the big concern. francine: and you think we will achieve that? madame lagarde: everybody has to to their job -- do their job. we think policymakers have to cooperate more and they have to really foc

we did have volatility. a lot of people are expecting volatility.is, at what level does it settle? i think that news coming out from china has not changed significantly over the last few weeks, because there was a certain change in the renminbi fix, but authorities have gone out to explain that this is not about deliberately depreciating the renminbi, but really about adjusting to the new basket. prices is another ,ssue that, with the low prices who are the players that are exposed? what happens to the countries that are exposed because we know that countries like venezuela already have problems. there are these uncertainties, but i think they are a trigger of already high levels to asset prices. rishaad: can i ask you about china? what can of numbers do you expect china to grow at back of -- grow at? what is the sort of number you are looking at? the question is, do you focus on the official numbers or what people are putting together? my sense is that there is underlying growth in china. it is not falling off a cliff. rates of 6%ficial to 7% -- >>

higherre in a regime of volatility with components of what i call volatile volatility. >> looking tolatility verywe see, we are positive on fundamentals. .> the world will is doing fine it has not been contaminated by what is happening in the sector. once it is taken away, it does not do well. >> how do you expect this to slow down? >> it is manic-depressive and its wings from the positives -- swings from the positives to the negatives, to interpreting everything positively, to negatively and you get these enormous swings of sentiment. >> it will be hard for the fed to consider raising rates if we are considering this environment. >> they should be on a path for further hikes. >> there will not be a rate hike in january. it is a probability of 25% or less. >> i think they will do 2%. >> i don't think it will come until late in the second quarter. scarlet: david, you heard commentary from our previous guests. what do you think, is this a correction, and implosion, are we going from optimistic to pessimistic? >> i think it is definitely a correction. looking back over the last five yea

that cost volatility. you ask why a lot of volatility at the beginning of the year?s a price adjustments usually went by steps. it does not always go smoothly. we just hit best of the beginning of this year. if you look at the fluctuation, have we learned what the chinese are trying to do in the last two weeks? imf, we do not look at the last two weeks, so we are embarrassed. [laughter] if you don't mind, i would like to go back to the basics. depending on how you calculate gdp, the second largest economy of the world is going through a list of transitions. industry, export to consumption, lower level of investment and i think there is another one that is happening at the moment, which is also a governance change. that has begun and probably going to continue to roll out -- h has to do it has to trickle all the way down to the provinces and that is also a management change which has to be taken into account by chinese authorities, chinese operators, so risk can be apprehended, risk can be taken despite of this happening. i would say also that given those massive tran

the way you structure those market rules can either diminish the volatility or increase the volatilitywhat we are seeing here, in a sense, is a consequence of some market rules that were not as well-designed as they could be. joseph stiglitz saying do not panic. we are not seeing a cataclysm happen in china. that is a different view than the one being taken in our morning must-read today. larry summers, treasury secretary -- former treasury secretary says -- guy: larry summers saying, pay attention. politicians send -- tend to ignore market signals at their peril. is that a fair point, that policymakers need to listen a little bit more? the noise coming from markets at the moment is incredibly downbeat. >> in the short-term, it is downbeat. areade the point that we going through a massive change in the chinese economy, which is reflected back on the rest of the world. that is over 5, 6 years. returning to policymakers, i am sure they are listening. a bounce back from george osborne when he was speaking about being more cautious. allspect they are taking on depreciation. in the short-te

volatility nervousness in the market when it comes to volatility.are getting the yuan stabilization. after eight straight days of weakening, you are seeing some stabilization. this has been the dollar rally. coming down ever so slightly. we are seeing a little bit more of a stability in the yuan. lastly, you have got to keep in mind what happens to the south african currency. such phenomenal risk aversion when it comes to the rand. a combination of stops and margin calls causing mass capitulation. oft a jump we saw in terms dollar versus rand. back to you. manus: thank you very much. volkswagen's ceo says they continued to view the u.s. as a core market. country visits the after continued battled with -- battles with regulators. for more, let's get to hans nichols, who is in berlin. are they any closer to a technical solution to satisfy the u.s. environmental protection agency? hans: they may be there. they have developed a new catalytic converter that could fix about 430,000 of the 480,000 vehicles. there were reports on this over the weekend. he j

are going to see volatility among the big ones. we are going to see renewed volatility. going to bet is not very successful in promoting economic growth. >> thank you so much for joining the other important day. advisor.nomic i know you are joining me here about your to talk new book, which comes out later this month. thank you so much. mohamed el-erian. do a quick check on how the markets are trading right now, 10 minutes away from the closing l. we are now down about 2%, but coming off -- slightly well above the lows of the session. anddow is still below 16000 the nasdaq, remember the law -- remember a lot of the selling has been happening in momentum shares. the stocks taking a hit like apple, their indexes looking to close down about 3%. much more ahead on bloomberg markets. more of our special report is next. betty: as you can see we are just minutes away from the close on this really turbulent session. we seem to be stuck at this level. remember the dow has been off by as much as over 500 points. today the lowest levels we have seen since august. i want to bring in

mark: it's another day of extreme volatility.uggenheim partners chief investment officer runs more than $9 billion in assets spoke to bloomberg at the open of u.s. markets. his take on the extreme markets -- >> as an investor, i would say no, as a traitor, you may have an opportunity today. i'm paid to invest money so i will just say no. todaynie: do i look at even though things are down and say i will write to market? >> we have -- if you are investment-grade company, we have not seen any spread widening. why would you use this dip in rates to get a bond issue out? there is so much money sitting on the sidelines in corporate credit and pension funds and insurance companies to go to work. this would be a beautiful day to bring it. mark>> howard marks talked aboue psychology of the market. he was asked if he would buy it and he said no but someone has to come in. when does being translate into that? >> i think it is when you see wholesale panic. under 30.s still david: that recently as august, it was up near 40. it has gone up and

then things got more volatile and fell apart a little bit.oint is there is clearly people pay attention to that number in a way they had not in the past. it is the source of a lot of anxiety, whether it is justified or not. betty: thank you. up in the next hour, the chief economist at morgan stanley discussing the jobs and much more. much more ahead on bloomberg markets r. here is how rough it has been for certain sectors this week, as we had to break -- head to break. ♪ betty: welcome back to bloomberg markets. markets are ending this wild week in just about 10 minutes time. bull's opinion, it could not and any sooner. all three major averages taking into down. what this means is that if you look in the s&p 500 for this first week of the year for 2016, we are now down nearly 6%. 5.92%. look at this painful week if you are long on this market. the otherk at some of worst starts to years that we have had. 2016, we're down even more than that. it looks like it is going to be the worst start to write your ever. -- start to a here ever. ever. wha

is volatility here to stay in 2016? >> 2016 is going to be a year where many, many market levels will be tested because opinion is divided and there's real issues and challenges but i like years that start badly. >> why? >> because opportunities start to open up. if you look at last year everything is getting better and by about march, april we realize the world isn't as good as it was and at that stage people were probably too optimistic. >> you were quoted yesterday talking about something else and you described the current environment as the bear market. do you think we're in a bear market? >> yes. i'm one of those technical people saying a bear has to be 20. we're in a bear market. people are nervous and worried. money is on the sidelines and we have had more than 20% draw downs in various markets. particularly in the major in dollars. it's easy to measure in local currency but in dollars many markets have had it and we briefly were there with the advanced markets and one of the big investors said they felt very, ve

how should investors navigate these volatile markets? that is next. ♪ ♪ mark: welcome back to our special coverage live from london. this is the european close. i am mark barton and this is nejra cehic. shares hitting a five-month low -- colburn sent a profit warning two months ago. kasper rorsted will join the adidas board in august 2 take the reins. worth it is currently -- worsted mess is the ceo of ankle. report in the reins would only affect the rumor mill. that is the latest bloomberg business flash. nejra: still with us is virginia, who is managing director. we were talking about how you navigate volatility just before the break. talking about your bamboo strategy being both strong and flexible. we look at the selloff that have happened this year. it has come down to two things china and will prices. if you had to pick one thing that is scaring investors, what would it be? >> i still think people have not realized that the trend growth rate for china could be well below what the government is officially targeting. i would say the

rob: why do i care so much about volatility? why am i afraid of volatility? it' s an opportunity to buy. u.s. equities better than bonds. i like non-us equities, meaning develop marketings -- developing markets even better. so now volatility is my friend. john: there is value emerging in different places. one being energy. we go from a secular growth story today. and very quickly. what is different is some of the fundamentals are changing. 2 million barrels oversupplied today. now we are one million barrels over supplied. in emerging markets, what is interesting is john' s absolutely right. if you look at the price-to-book and the msc i, that is 2008 levels. the msc i is a composite of the global stock. global emerging markets. gary: do you agree with robert c chan -- robert sechan? jon: -- john: the relative performance will be subpar. rob: when i look at the market place today, there is a huge it ranges from two to 10. john: active management should outperform. you' ve got clients who normally know what they are going to get with an index. rod: is it easier

julie: sun-itis and has been volatile, and now reuters -- sun edison has been volatile, and reuters iseporting there is a suit over a deal to buy vitamin solar. sun edison has a complicated structure which has a couple of affiliates publicly traded, and it is one of those affiliates buying vivant. the structure has come under scrutiny, and now, again, is being sued by help a loser. you can see the shares are down, but the stock -- chart looks unusual with these straight lines because it has been halted several times over volatility. remember, if the stock drops too far, too quickly, it gets automatically halted, and that is what has been going on. gotten a lot of negative commentary as of late has well over this capital structure we are talking about. i will bring you more details when we get them -- details on this suit, and exactly what it is about. right now it is reuters reporting it, and we will let you know. isty: it looks like the link .ppaloosa is a 10% holder vivant is the company name. vivant and i think appaloosa had been an investor in sonatas in itself. betty: thank you, j

market, we got fairly volatile but nothing compared to the volatility we see in asia. does that compare with the volatility in europe? vix has hadght, the a big down this month at it is the biggest monthly gain since august which is another chaotic time for the market. the u.s. stock market as a whole has had two 4 billion dollars a volatility so it has been a bad start to the year. matt: thank you so much. coming up, the exclusive interview with former greek finance minister, what he says about the tense behind the scenes talks to reach a bailout deal with europe. ♪ the only way to get better is to challenge yourself, and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. matt: welcome back and right in the matt

markets don't like this volatility. they act in atty: benign way when it happened, but look at where we are now. do you think we are headed for a recession? mohamed: i put that at 30% a few months ago when we talked. people reacted quite a hit. 70% as we do not. actuallyhis year, it's quite hard to get a recession unless we get a major -- a major global disturbance. think a massive policy mistake out of china or a massive market accident because it turns out some people had way too much leverage on and are forced to sell. so far, the probability is not dominant. i think you get a high probability, the gig is up to 30% next year and then we get closer to the t junction where major decisions have to be made. betty: what factors into your 30% probability? mohamed: the first thing is we have not motive growth so far. the longer you fail to promote growth, the higher the chance of secular stagnation. your sister adjusts to lower capacity and lower potential. and we have prices that are decoupled from fundamentals. it will be

but you have this concept of volatile volatility.market segments that still have not caught up to the reality that we have changed the volatility regime. scarlet: paul krugman wrote over the weekend about how oil has gone nonlinear. a 10% to 20% drop works in a very linear way, but a 70% drop has very drastic effects on produces extreme long linear behavior. it doesn't really show up on people's models. go through thee risk selloff, are we seeing in terms of nonlinear responses? mohamad: you see it in the emerging world, very nonlinear there. even though there is value, very few want to step in. in other words, nonlinear means unpredictable. people do not like unpredictable elements. it also means the damage you create is no longer symmetrical. in the case of the oil market, the impact on producers, negative, immediate, the benefit on consumers takes a little longer to work through because consumers do not react that quickly. so you have this asymmetry in response time. all of which makes people want to reduce risk. it is not just a

-- market volatility and its impact on the economy. >> market volatility is the key concept.ffecting all currencies including the turkish lira. negatively discriminatory or separate from the term of emerging markets. that position, we will look at it as well as other emerging markets. as i said, this is not because of our platforms, but because of global economic turbulence. >> you would expect the lira to appreciate? >> with these reform packages, we declared transformational package and also eight macro structural reforms. i'm sure after implementation of these reforms, in the last month, we have updated 30% since the first three months. platforms, i'm sure meanwhile that we will be rebalancing this currency rate. >> you are going to be raising the minimum wage by quite a out. and mark -- i'm that should in theory have an inflationary impact. are you worried that inflation is too high? the minimum wage is a 20% increase. aroundas some concern turkish budget and fiscal policy, but everybody turkishtes that fiscal policy was not affected by this. we have a balanced budget. th

rob: why do i care so much about volatility? why am i afraid of volatility?s an opportunity to buy. u.s. equities better than bonds. i like non-us equities, meaning develop marketings -- developing markets even better. so now volatility is my friend. john: there is value emergingpl. as i said in my state of the union address, ensuring the security of the united states and the safety of our people demands a smart, patient, and disciplined approach to the world. and that includes our diplomacy with the islamic republic of iran. for decades our differences with iran meant that our governments almost never spoke to each other. ultimately that did not advance america's interests. over the years, iran moved closer and closer to having the ability to build a nuclear weapon. but from presidents franklin roosevelt to john f. kennedy to ronald reagan, the united states has never been afraid to pursue diplomacy with our adversaries. and as president, i decided that a strong, confident america could advance our national security by engaging directly with the iranian gove

it has become more volatile.y, markets capital outflow, bigger investments in the currencies. commodity prices have come down. structural changes have not been made. china to some extent. these are big economies that are pulling in more now. anna: when you pull -- when you manage a business, one of the ways to do that is around cost discipline. can you flesh out what kind of discipline you'll be instilling you mightt? paul: lose on the roundabout. we can manage it. you see it in the 2015 results. if gross is lower, yet to step up your cost. one of the initiatives we're going to roll out, being much tighter on where we put our money. aching clear choices with categories we're going to invest in. continuing the looking at redesign. leveraging our office is better. these are the big buckets we expect our improvements. does the story around the stock market concerns about the story in china dominate the headlines of course. do you see those trends reflected? for unilever is 4% of our turnover. the chinese economy is

in a high volatility market. feel like i say that every week, but if you look at the backdrop, the fix was above 32 intraday, now it's back down a 23, recently closing above 27. as long as the floor under equity volatility is elevated and we see the potential for it continue lower in the near term, that should help stocks. doesn't look like it's happening over the last hour or so. alexandra: not -- ramy: the note about the tale of two cities, go into that little bit more. i know that volatility is inherent in the ups and downs, but what is your take away? jim: we are limited in how back we can look at how far back we can look at volatility. 1997, when the shift in implied volatility happened, we had almost a full three years before stocks peaked in 2000. 2007, it was july when that happened, giving us about three months of a heads up before the financial crisis hit and we were deep into a bear market. we are certainly on the clock but the question that we posed -- and we don't have the answer -- is that clock mor

volatility,ind of though, does that create?ime the market has to reprice expectations, the fed has to reprice there is. doesn't that gap create traum ma? steven: the theme is that they make up the 52% inflation and they have to go to neutral very quickly wake up to 2% inflation and they have to go to mutual very quickly. i think if there is a sudden adjustment -- say, one day we wake up and the wages are picking up and it turns out we all agreed to pass the national rate and the fed has to move quicker, the economy is certainly not ready for that. scarlet: on the other hand, if the fed doesn't get there, you write that being at the central bank means never having to say you are sorry. if it is not in the realm of something we can achieve in the next 12-18 months, do you just set new targets, create new metrics to put on your dashboard to focus on? steven: if it is possible to send a delegation to venezuela and often had to achieve an economic miracle, it would not involve fiscal policy at that point, although larry summers -- y

such a volatile session, a volatile week, four-straight days of losses.ghai composite, 7.3% down. that is it for the day. some of those losses now being pushed to hong kong. 225ikkei t ng looking positive. have furtherwe afield. singapore market, down. kuala lumpur, just .5% off, on the way lower. a question of stability. we will assess what china's volatile market say about the state of china. you are watching "trending business". we are back in a couple of minutes. ♪ stories come for days, two shutdowns, trading and china halted for this thursday after stocks job -- drop 7%. $637 trillion wiped away in 15 minutes of trading before the automatic circuit breakers were triggered. stanley'so led morgan retail brokerages leaving the country. as a newings departure person named president. understood that the new person was promoted before fleming decided to leave. the united nations security council imposes new measures against norco korea -- north korea. what ever happened was a violation of united nations resolutions. pyongyang said it was to protect itself

the peaks that we saw average 33 during that higher volatility.ing this time we have not averaged those, have we? .t hasn't quite gotten there but sort of you should brace yourself for that kind of shock, you are saying? the point. kind of friday we got the 27. the point there is that this doesn't feel very comfortable, but it is relatively benign to the types of shock we expect to experience over the next several years. people want to call it top-tier volatility with a bottom in stocks. is really what we are trying to have people brace for. julie: are you seeing people hedge themselves further our -- further out as a result of that mentality? is what you are talking about a growing mentality? people battening down the hatches and getting ready for anything? it is developing. the backend of the vicks futures curve, it is still relatively low. historically at the transition point it takes a while for that backend to get the message that risk is now sustainably elevated. it is still relatively low, expect that to lift sustainably. that would be anot

that volatility continues. previous wife days, guess the average -- the previous five days, guess the average change? approaching 6%. 1/3 of 1% this morning. $33 a barrel. choppy sessions in crude. non-decision,fed .84%. -- the fedhikes may have one view but the market has the opposite. let's get to caroline hyde. caroline: it's all about guidance this morning, really laying the pressure. i want to dig into two. this stock is having its worst day since 2015. a swedish telecom company -- why the fall? it's looking very weak for 2016. like 2016 is not looking rosy. h&m.o does once again it cut its forecast, as are the numbers we have for their fourth quarter. they dropped 8.4%. the dollar is eating into their numbers, it would seem, but also the fact that it was too warm. painful warm weather, bashing into retailers. but their guidance for the first quarter, say many analysts, are looking particularly week. -- weak. i want to focus it on anglo american. just for once they are in the green, and let's give credit w

christine: there will be volatility in 2016.ee major downside risks on the horizon, and one of which is the massive chinese transition to a new economy, which will be bumpy but will seem resolute and is welcome , going from a very high growth rate to a lower growth rate and moving from being export-driven to being industry-driven and all all of that -- and all of that will have a high degree of volatility. the lower commodity prices are also going to entail a degree of volatility, as well as economic policies around the world and changes coming up in 2016 will yield volatility. francine: your biggest concern is a risk of deflation? christine: the biggest concern is to make sure that the global economy is actually on track to provide enough growth to respond to the needs of those people who are looking for jobs, those people who are expecting more sustainable growth. that is the main concern. francine: and you think this will achieve that? christine: everybody has to do their job. what we have called for is an upgrade of policies

>> before it was not volatile enough and now it's more volatile than maybe it used to be, but i thinks the pattern. it will remain very volatile because interventions, especially monetary policies instead of lowering volatility, they post pope it and then it explodes, and this is actually what monetary policies shouldn't be designed to do, but that's the end effect. and so i think that volatility will stay very high and that it will hurt a lot of investors. >> hurt by how much? on january 7th you said that the s&p 500 would fall between 20% and 40%, and this prediction you've been making consistently over time. i mean, in july 2015 -- in july of 2015 -- >> it would crash up to 40% and in august 2015 you said the u.s. would stall a bear market. you said we'd be in style for a 1987 crash. where are we with all. predictions? >> i didn't say there will be, i said there could be. >> okay. >> and i want to say one thing about the u.s. market. as you know, the average stock in the u.s. from its 12-month high is already down 26%. there are lots of stocks that are down 50% or more. the indices

christine: there will be volatility in 2016.ve three major downside risks on the horizon, and one of those is the massive chinese transition to a new economy, which will be bumpy but will seem resolute and is welcome coming from a very high growth rate to a lower growth rate and going from export driven to being consumption driven to being industry driven and all of that will entail a degree of volatility. the lower commodity prices are also going to entail a degree of volatility as well as economic policies around the world and changes coming up in 2016. francine: your biggest concern is a risk of inflation? christine: the biggest concern is to make sure that the global economy is actually on track to provide enough growth to respond to the needs of those people who are looking for jobs, those people who are expecting more sustainable growth. that is the main concern. francine: and you think this will achieve that? christine: we need an upgrade of policies. policy makers need to agree more and agree on the right set of policies

investors are keeping an i on that volatility -- keeping an eye on that volatility.are going to speak to the president of citizens for affordable energy. ♪ ♪ despite the strong jobs report, growth prices hitting their lows. down about 1.5%. close to that $30 a barrel. on thers are focused volatility in chinese markets. joining us now is john high-priced are, the former shell president. john, you say, things are going to get worse in the first quarter before they get better. how much worse can they get? john: i think we can continue the downward slide for some additional period of time. chain, the entire manufacturing sector, which reports the upstream part of the oil business, is going to be very hard hit with a lack of orders, lack of profitability, very difficult conditions to try to operate their plans because the business has just declined tremendously. there is a circuit breaker in the system that not too many people are talking about yet. that $32 a suggest barrel, some of the operators, that is the remote ones out of the countryside that make 2, 3 productions

major market volatility takes center stage. this is what they had to say. >> i think people are confusing the supply demand picture and if they are seeing there is a slowdown in the global economy. i think that is wrong. there has been a disconnect between what the financial markets tell you and what the real economy shows you. >> a super cycle started in the u.s. and it is coming into emerging markets. >> what is true for the u.s. is not true for the emerging markets. >> other crises when they come together right now, we think in thisecond half of the year is so severe you start to see a rebalancing of the market. >> i think back to 2008 for a couple of reasons. the financial imbalances are small. a view for a number of years. >> retail money, you will expect and these short file corrections, you will expect selling. and we saw. but i believe this is a capitulation without a bear market. next guest says there is no reason to own u.s. stocks right now. where in the world should you invest? weore you we get to where could be put

volatility is rest taking.what you see is just read pricing and how much -- morecap will technical? ofthere is a fair amount emotion. supplying oil will be lasting. to continue to understand the growth rates in china and the economy. i think there are fundamental things. i do think it is more fundamental. planning to go public this year, are they going to pull back? they are now looking to see where they can go in february. to do it week by week. investor demand in a normal market violent. the question is -- they want to make sure they are going into in an writing environment. are you preparing for a pullback to affect your bottom line? as this.e a resilient when there is volatility, about 30% of the revenue is volume related. is whendo find companies are unsure of things, they tap experts. why are they buying and selling it? that is a service we offer to 10,000 companies around the world. services, daschle in these types of markets occur, they tend to try to tap the services. i was asking about market structur

volatility in the markets.th sides of the aisle blaming each other for a lack of progress and financial waste. >> it's one of the few regrets of my presidency that rancor and suspicion between the parties has gone the worse instead of better. >> i told my administration to look each and every day at actions we can take without congress. >> with congress or on my own. >> i'll be working with congress to accomplish his where i can. but i'll act on my own if congress is deadlocked. >> where congress isn't acting i'll act on my own. >> whenever and wherever i can take steps to stands opportunities for more american families without legislation, that's what i'm going to do. >> we are getting a resounding no on the other side of the aisle. we are thing an absolute emphatic no with an exclamation point. we have to address this bill in a consequential and productive way. >> this has become a problem of greed. do you want to do something about this problem or play games. dierdre: democrat tom daschle and republican tren

do not ignore the volatility, but ride it out. i am going to say maybe the markets are starting to listen. biggestly in oil is the two-day rally we have seen since august. david: unfortunately, there is not much reason to think the markets might not go back down and back up. stephanie: you have got to say what is janet yellen thinking? janet yellen is data dependent. she has to put blinders on with all of this. lots of data, lots of thoughts from a lot of world leaders from davos here it -- from davos. david: let's get thoughts from matt miller back in new york. matt: we have seen massive rallies, especially in asia, with the nikkei, big gains in japan. 6% there, and the hang seng up 2.9%. the shanghai, pop -- the shanghai comp up. check out europe. we have rallies there as well. that is a live trade right now. the stock 600, the broadest measure there, up 3%. the's the stoxx 600, broadest measure there, up 3%. keep in mind, the cac and the dax are in bear markets, had reached a 20% job from their highs. was justie -- the ftse abo

not nearly as volatile as where heed. we had those ecb comments. we just got crude inventories and energy is, in fact, helping lead the markets higher. investors looking at all kinds of cues, including the ceo of morgan stanley. james joins "squawk box" this morning and gave us his take on the markets. take a listen to that. every single one of them is down. in three weeks. what happened? what was the trigger point here? you could imagine a correction off the highs. i'm not seeing this kind of violence. >> joining us fidelity investments. it's good to have you back. good morning. >> the market has become uncoupled from fundamentals. do you think that's anywhere near being true? >>. >> certainly the u.s. economy domestically remains in good shape. we're kind of in a mid-cycle expansion heading towards late cycle. what's going on in my mind is a liquidity event. you know, the china story with the yuan coming down and the chinese central bank trying to make that slide more orderly. they draw down on the foreign exchange reserves, and at the same time

isseminating volatility mitigating volatility, and therefore you have to be very clear and determineduidance. there is some lack of guidance at the moment on what the guidance that the is given is not perceived as being credible, and that is a problem. hans: is there anywhere in particular that you think there is a lack of guidance? turning points are always hard to predict. what the fed has done in the past was basically followed it through. hike rates ifnly growth continues. if growth continues, that has always been good for equity valuations in the u.s. the fed will continue to tighten, growth will be isong, and the u.s. economy the strongest economy of the industrial world. we expect growth of 2.5%, it's pretty strong growth. it's more of a medium-term demographic. cyclically they will continue to move forward. : what are your three smartest place for this year? it's not a good town to have a flight into cash. this is a high volatility area so we recommend taking risk somewhat and to have a diversified portfolio. it's not selling emerging markets. neutrala general equity position

how do you trade that volatility?> well, i think you have to look at the trading activity yesterday. you have to ask yourself does that look like capitulation? it actually does a bit. you have to come loo at the chart. right now we're at the bottom of a trough. we've been in these troughs from, as we've made new lows, since october. every time we've gotten into one of these troughs, we've seen a rally of anywhere between 2.5 and $5. you can trade it that way. in addition, you know, if iran comes on-line and this may be an opportunity to actually buy the fact and buy crude oil at the bottom. >> i don't think we're getting back over 35 that quickly. when you look at the volatility that's happening, oil volatility and trading up near 60, and basically predicting close to 4% daily moves. that's a lot to stomach for true hedgers to come back in the market. i like scott's theory on the fact when iranian oil comes back on to the market that might be a great time to buy. what i would rather do is widen out my markets because

a big story today with all of this market volatility.t has put added significance on tomorrow's jobs report. as the first measure of the u.s. economy. will it add to the turmoil or provide relief? my guest joins me now from florida. let me ask you whether you think this is noise or something more here. it's obviously having a profound effect on the markets today. negativeina's having ramifications all over the globe but i don't think that's the total story. we entered 2016 with some of the iny same headwinds we face ,015, namely these were stocks valuations are excessive and the fed is no longer in a friendly mode and technically, last year, the markets advance was very narrow, the breadth was very poor and all of those items continued for 2016. david: let me ask about this jobs report -- mohamed el-erian writing today about how tricky this jobs report is going to be. and street is watching this if the number is low, that's a good thing. what are you looking at for when that job report comes out. the consensus forecast is for 200,000 new

do we get more market volatility? and as you say, that stock market in china isn't a free market by any stretch. anna: the pboc did not surprise anybody with its fx statement today, and that seems like pretty good news compared to what we have had so far this morning. can we haven't really talked about payrolls, and we will do that during this show. let's get to the first word with caroline hyde. caroline: thank you. german industrial production unexpectedly fell in november, led by investments. outputs ingested for seasonal swings, which slid. it's a for #that a slowed -- it emergingh sign that markets may weigh on economic growth. after a tumultuous week, chinese markets are up. that is after state-controlled funds intervened to support stocks. yesterday, regulators scrapped the four-day old experiment of circuit breakers. they had also moved to stabilize the yuan. saudi arabia is considering plans to take it state oil company public, according to a report in "the economist." owns 10 times as many oil reserves as ex

volatility when you're buying.f you owned the stock in the 200s and you were buying protection to the downside you've saved yourself because volatility was low. right now it's extremely high. >> i think this is such a no touch in the context. if apple is a hardware company, this is not an auto company. >> it's a car company. >> what is it? what do you have it at? >> what do you think it should be, more like a gm or ford? >> talking about deliveries. they are not making. talking about pushing out the time line, yes. ultimately this is a stock multiple does not fit what the underlying business is. >> quickly, if it does go through 180, then it gets messy very quickly i think. >> yeah. >> if it holds 180 you can have a similar move. again, it's knowing your parameters and what you're trading against. >> meanwhile, let's get some other earnings movers. seema mody at headquarters with the details. seema? >> take a look at shares of paypal up 5% after hours, the company posting better than extent pected quarterly results