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tv   CNN Newsroom With Carol Costello  CNN  August 24, 2015 6:00am-8:01am PDT

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it filled up the back of a minivan and there was just -- it was amazing. >> and you know what? >> that's a great picture. >> thousands of crayon ands markers. he's challenging crayola to match the donations. >> step it up! what a great little man. we wish you wiell, honey. it's time for news room with poppy harlow. newsroom begins. this is cnn breaking news. good morning. i'm in for my friend carol costello. i want to welcome our viewers in the united states and around the world. we begin with breaking news on wall street. dow futures down some 600 points this monday morning ahead of the opening bell. investors are fearful, fearful that when the market opens in 30 minutes it will be a blood bath. u.s. markets may tank, as we've
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seen with global markets overnight. asian markets suffering huge losses in monday's session. take a look at shanghai's benchmark index down 8.5% on the day. european stocks plunging as well. it's shaping up to be an ugly day on wall street. we have live team coverage cnn chief business correspondent christine romans here with me in new york. in hong kong we have andrew stevens. we begin with christina live on the floor of the new york exchange. what you hearing? >> there are two things that drive the market fear and greed. fear took over. investors watched indexes around the world plugged with specific focus on china, there are lots of concerns. as you said, 8.5% drop. the biggest since 2007. that is a huge hit again, sparking concerns that i think for the average person this morning they're starting to wonder what does this mean for the u.s. economy? what does this say about the
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u.s. economy? and what we're talking about there is really fundamentals and the u.s. they're pretty strong. we have to put it into perspective. we had 200,000 job gains over the last three months. that's good. we have strong housing. that's good. the optimists in this market would say, look, the u.s. is the best of the bad lot. the rest of the world there are concerns. and the u.s. is holding steady. at least when it comes to the fundamentals. as we know, sometimes oftentimes the markets are really disconnected from the fundamentals. if people will be asking what do companies do in this environment? ceos get nervous and start to question their business models and question whether or not their sales will drop overseas because we have a global potential global economic slow down on our hands. with the many companies that have major sales overseas, you know, could we see job cuts? could we see a slow down in the u.s. economy?
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all of that plays into it here. >> and just for context here, again, about 28 minutes away from the opening bell on wall street. the last time the dow lost over 700 points in a single day was october 15, 2008. will that happen today? the last time it lost over 600 points was august of 2011. what are we going to see? what are they talking about in terms of whether the s&p 500 a broader measure of the market than the dow whether that will fall into a correction this morning like we saw the nasdaq and the dow do on friday? >> we're very close. the futures are indicating, you know, that we could hit that correction territory for the s&p. again, that is going to spark potentially some panic selling. also, what we don't see is the fact that a lot of this trading is computerized. once it hits a certain level, you're going to see, you know, sort of a cycle kind of play on it and feed on itself, which isn't a great thing. especially because we're at the
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end of the summer here. many people are away, and they're going to have to either come back to the office or reevaluate what is going on. but investors everyday investors need to see more evidence of what exactly is going on before they make any huge decisions. >> all right, standby. stay with me. andrew stevens in hong kong where we saw a huge sell off overnight. what is the sentiment there now that markets have closed? >> it was selling in china. that's a big fall by chinese standards. it's interesting seeing the contagion around this region. japan, hong kong, they are really big, big falls for those two markets. and it was based on the fact that there was a big, big sell off in shanghai. it's interesting because this is certainly not new to see the big falls in shanghai. it's been falling throughout the summer, poppy.
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it peaked in the middle of june. shanghai is down some 40% in the last ten weeks or so. we've seen the government coming in with various measures to try to take the steam out of the sell-off and slow things down. we didn't see it today. the government is very much or regulators very much on the sideline letting the markets do what they do. it was panic selling. remember, this market is characterized by the fact they are small retail investors involved and many have borrowed money to play the market and they want to get out. >> there's more still that the chinese government and regulators can do. i mean, they still have other ammunition. they can pull out here, right? >> absolutely. the question is where do they target it? and it had been targeted. we see a lot of specific targets or action on the markets to try to put a fall in the starkt market. what we like to see more of now is tackling the economy. stuff to boost the economy.
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they can cut interest rates, poppy. there's plenty of room there. they can cut the reserve requirement ratio. this is basically a mechanism which forces banks to give a lot of money at the central bank. they can bring some of the money back to the banks who can pump it out to the economy. they don't particularly want to. they did it in the global financial crisis in 2009. they poured $600 billion into the economy, which created the sort of bubbles we're seeing in china today. they're reluctant to go down that path. remember, poppy, this is a structure change for chinese economy. everybody knew it would be slowing down. this is what we're seeing now. they're trying to manage that slow down, that change to a different style economy. >> andrew stevens live for us in hong kong. standby. christine romans, you're an investor waking up to this morning and saying i know china has problems and there are growth concerns there. why is it hitting us hard? >> because people don't
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understand how china has been trying to save the stock market and the like. it matters because you probably have investments in the s&p 500 in your 401(k). and half the earnings of the 500 companies dprom overseas. china is a very big source of the earnings and revenues for so many companies. when you see asian currencies crashing, which they are. and commodities around the world crashing, which they are, those things affect american companies's bottom lines. that's an important aspect of this. all the markets are moving -- this isn't just the stock market in isolation, you know, deflating. you have commodities moving, oil down very sharply here, poppy. that's going to be great for drivers. it's not so great if you have any energy stocks in your portfolio and you probably do. my advice to people is don't just do something stand there. a lot of times market move like this and you struggle to find the 401(k). this is the last time to pull out after the move could happened. it could be rough this week.
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at of lot of professional investors are saying there's room to move. >> oil below $40. the first time since 2009. >> yeah. you look at what oil has done since last summer. look where we are now. a year ago oil was over $100 a barrel. it's hitting below $40 a barrel. that commodity is pretty much tanking. we can essentially say you don't ever want to see a commodity do that sort of spiral seemingly out of control. >> it's a demand issue. >> it's a demand issue and we go to china. everybody knows that china manipulates but orgestra s orss in the wheel of the markets. what else is going on? what is china not telling us. the way investors see it is the government is losing control of engineering how china's data is
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coming out. a lot of investors this morning are thinking is china worse off than we think? that could spell bad news for companies. you're seeing the recalibration of stock prices. >> i want to go back on cristina at the new york stock exchange. what we may see today, let's see how how we do. we may see something called the circuit break. i want you to walk people through what it would mean. >> you brought up the s&p 500. that is what would trigger a so-called circuit breaker. but let's put it in context. right now futures are indicating we're about 3.3 3.5% down it's been flux waiting a little bit all morning. you need a seven point drop to trigger that circuit breaker. we're not near that yet, but this is sparking discussion about whether that would happen. just to give people a reset
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point and to prevent, you know, any kind of major, major meltdown. but we're, you know, we're not sure if that's going to happen yet. >> right. okay. you'll be there all day keeping an eye on it. >> it's been stocks don't just do go up. american investors, for the last six years have seen stocks go up double digit gains year after year. you've had 0% interest rates. money has been going into the stock market for years. we're seeing china the economic growth slowing and suddenly invest saying wait a minute. maybe stocks are not fairly valued here. maybe they're overvalued and we need to take some product -- >> there's been a discussion for a long time. i mean, part has been the stimulus that the fed has been pumping in. that's helped to elevate the market as well. as christine is saying with there is a question. wait a minute, are these stocks really overpriced considering what global economic environment looks like? one thing to keep in mind and
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people forget this. the stock market is about companies. how are the companies doing? we're coming to the end of second quarter earnings season and aside from a few bright spots it wasn't all bad. it wasn't so stellar. nothing to write home about. there are two things that can creator a market. you have reduced sales within reduced rev n ne d revenue. that could be part behalf you're seeing. >> and that matters not just here in the united states for consumers an markets but globally for markets. so much talk about what the fed is going to do given this, andrew. i'm interested in how much you're hearing about that in hong kong and china. >> yeah, well, just to going back to allison's point earlier. she's right about these numbers. and how much we should trust the numbers and what it means. at the moment we have growth allegedly officially around 6.8 to 7%. everyone i speak to almost without exception will say that growth is probably closer to 5
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or 6 percent, which is a big different. that is slow. no doubt about it. that's slow for china historically speaking. but it's very important to remember that china, the leadership in china does have a lot of leaders. they have to keep this economy bubbling away so they keep people in jobs. as soon as people start losing jobs in large numbers, that is when you get potential unrest. social unrest, civil unrest. that's what keeps chinese leaders awake at night. they'll do what it takes and can do to make sure they can keep that economy growing even if it is unofficial. they'll do it. >> such an important point to make. they have a lot of ammunition le left. we are on top of this. we'll be live with you for the opening bell on wall street ringing in about just about 18 minutes time. coming up days after what
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could be a deadly train attack. today france honors these heros.
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three americans being toasted in paris and the newest heros of a grateful nation. a few hours ago the country's president bestowed the highest honor to the men. together they likely prevented the massacre of potentially hundreds of passengers. authorities track radical islam ties and his lawyer said it's a mistake. he said he's dumbfounded of any talk of a terrorist attack because he was planning on an armed robbery instead. nick robertson live for us in paris. hi, nick. >> reporter: yeah, hi, poppy.
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european counter terrorism investigation weren't buying that story. the president talked about how they helped avoid the ultimate. the gunman had more than 300 bullets and two automatic weapons. more than 3 500 people on the train. a possibility for a horrible event to occur was real. the president of france using the opportunity and the situation not just to thank these three young american heros, but also to show the world and to show the french people they should be an inspiration for others. it was spencer stone, the air force man his arm in a sling who lead the three friends into the french presidential palace this morning. >> reporter: this morning three young americans arriving to a red carpet ceremony in paris. the french president presenting them with a country's highest award for bravery. the legion of honor.
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the honor came after this increstbi incredible scene was viewed around the world. the gunman hog tied on the floor of a passenger train. the three friends acted on instinct. >> it wasn't really a conscious decision. do something or die. >> reporter: 23-year-old spencer stone lead the charge. >> i saw he had what looked to be an ak-47 and it looked like it was jammed and he was trying to charge the weapon and alec said let's go. he and his two friends anthony sadler, and alex scka alreadies to challenged him. it. >> the suspect is identified as
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el khazzati. he slashed stone multiple times near lly severing his thumb. >> the took action. >> stone's father believing it was destiny the three men moving from coach seats to first class for better wi-fi. >> i expect nothing less from my brother. he's a warrior. his lawyers said he denies that he's a terrorist instead planned to rob passengers on the train with weapons he found in a park. one passenger was shot in the
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melee. stone rushed to help another who was wounded in the neck. >> i just stuck two of my fingers in a whole and found what i thought to be the artery, pushed down and the bleeding stopped. >> reporter: over the weekend president obama called the men personally commending them for their courage and quick action. >> and the french president said there's going to be an irnquiry. he reminded all citizens that the security services can only do so much and that perhaps they will be in a situation like this and faced with this type of scenario and e quoted anthony one of the young americans saying faced with a crisis you have to do shotgomething. a very high honor for t-- from the french president. >> they did what we wished we
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would do. nic robertson, thank you very much. bracing for the open on wall street. global stock markets rocked overnight. futures in the united states down more than 850 points. what will happen when the opening bell rings in eight minutes. that's live next. no sixth grader's ever sat with the eighth grade girls. but your jansport backpack is permission to park it wherever you please. hey. that's that new gear feeling. this week, these folders just one cent. office depot officemax. gear up for school. gear up for great. woman: this is not exactly what i expected. man: definitely more murdery than the reviews said. captain obvious: this is a creepy room. man: oh hey, captain obvious. captain obvious: you should have used their genuine guest reviews
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this is humira at work. vice president joe biden could get the chance to discuss a possible bid with the white house with the man who currently holds the top job. he joins president obama for their typical monday lunch today. it will be the first time since they sat down together in awhile. it comes days after joe biden held a meeting with massachusetts senator elizabeth warren. joining me now to talk about all of this whether he'll jump in or won't. dan pfeiffer cnn contributor and former senior advisor to president obama. lewis political congressmmmenta >> politico has a fascinating piece this morning. that headline gets you reading. the current west wing staffer is
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quoted about saying the members of the obama alumni network. even if their mind is with clinton, their heart is with the vice president. you're a member of the network. are you hearing the same thing? >> well, i think there's no question if the vice president were to run, it's going to split the loyalties of a lot of people in obama world, if you will, because people have grown to know secretary clinton, worked well with her, a lot of people loyal to her. a lot of people personally fond of the vice president. grateful for the work he's done for the president. and political primaries are family feuds and there will be members of the family on both sides. that's not surprising if the vice president were to run. people have to decide who they want to work, who they support. i don't think it's too surprising. >> news this morning that vice president joe biden who is getting all the attention right now hired a new communications director. kate beddingfield was campaign spokesperson for jon edwards. interesting timing? >> it's a good choice, actually.
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if you recall, clinton didn't do particularly well in 2008 and you want to have people who know what they're doing and jon edwards did well out there. but something we have to keep in mind is we're talking to the pollsters and pun dants and everybody said there's no particular reason to doubt that hillary clinton is going to so so well. when you talk to voters they're saying not so fast. you look at the numbers in ohio, florida, and pennsylvania her numbers upside down. she hasn't closed the deal in those states. she's under 50 percent in those states. biden can and should take a look to see if maybe he has something to offer that democratic voters might like more. >> you made the point this morning errol he has to look at this seriously given the poll numbers. let's look at the poll numbers. i think the most fascinating a quinnipiac poll showing how
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biden squares up against trump in ohio, pennsylvania, and florida and he beats trump. >> the vice president would be a strong candidate. i think hillary clinton would be the same. the vice president has to decide whether it's something personal he wants to do. whether he wants to get in there and take on the fight. if he does, i think it would be good for the party if the two of them ran against each other. whoever the nominee would be stronger if we have a competitive primary. i think hillary clinton would beat trump in all the states. i think joe biden would beat trump in all those states. it's early to judge who would be a better general election candidate but they would be very strong, i think. >> eroll how long does biden have to decide? >> if you're getting deep in the water the nature of modern campaigning mean you have to start putting together a
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50-state campaign in fairly short order. even operating at top speed, he really have to get started. he himself said by the end of the summer. however you define that. if it's too much -- if it's more than a few weeks beyond labor day, realistically he'll have made a choice and that's not to run. >> it's interesting i've been reading about some people saying as much as vice president want him to jump in. they want to protect him. it would be a third run. it's a tough thing to do and it's a grueling process. we'll be watching. dan pfeiffer and errol lewis, thank you very much. >> thanks, poppy. welcome, again, to the viewers here in the united states and around the world on a busy monday morning on wall street. i'm poppy harlow in for my friend carol costello. you're looking at claps because that's what they traditionally do every day at the opening bell on wall street. it's looking like an ugly day
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for investors and for your 401(k). the opening bell just moments away. dow futures down more than 800 points. [ bell ringing ] [ cheers and applause ] >> all right, the markets are open. you see the big board up there and in a few moments we'll see how the sell-off looks like it's accelerating. the dow down 100 points at the open. we have live coverage christine romans, cnn business correspondent allison kazic joining us. andrew stevens. futures were down more than 800 points. how is it looking? >> that's the dow and it's a big indicator, but we're also watching the s&p 500 because that is a broader indicator of the market and it officially hit
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correction territory just before the market opened, poppy. not a good sign. a sign those claps will probably not last very long this morning. what is really going on is fear and panic have taken hold. investors watch the market meltdown across the globe last night. they're reacting to it the point everyone is talking about is china. it's a huge engine of the global growth and now there are real questions, questions about whether that is sustainable and what kind of ripple effects that will have. that's what you're talking about what is going on in the market. on the fundamentals, investors have to be aware as far as the u.s. economy goes, people are waking up questioning what is going on with the u.s. economy? what is causing such a stark slide? even though china may not be doing as well as everyone had hoped, why is the u.s. suffering so much? and the fundamentals on the u.s. side are there. we've seen a pretty strong jobs
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market. pretty strong housing market. so what a lot of optimistic strategies are saying is, look, the u.s. is the cleanest shirt in a pile of dark dirty laundry. maybe this is temporary. on the other hand, we have oil, which is basically a way to see the -- a way to test economic growth going forward or a metric for economic growth going forward on a global scale. that keeps sliding. it's not a great indicator because it indicates that demand for the raw material isn't as strong. also, we cannot forget when we talk about oil, yes, demand isn't strong, but we also have a supply. because the middle eastern cubs keep produce. we have iranian oil coming on the market. american producers keep pumping out oil. there's a fundamental to keep in mind as well, poppy. >> thank you. stay with us. i want to have your viewers look
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at what you're seeing next to me. you see the dow jones industrial off more than 800 points. it was off more than 950 points a moment ago. the last time the dow jones industrial was down over 700 points was october 2008. we remember what it felt like. don't panic. don't jump out of the market. christine romans here. >> this is rare. when you see a 5% move in a market in a single day it's very rare to see it. it's a lot of selling coming from all around world. it brings you back to the level of your 401(k) to about a year and a half ago. a year, year and a half ago. that's perspective here. the stock market has gone straight up for about six years. we're down more than a thousand points here. incredibly rare to see a move that risk. this is something that spread around the world from currencies, emerging market currencies tanking, commodities
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tanking and the expectations that american stocks, u.s. stocks are inflated here. three ways you'll feel it. your 401(k) is worth a lot less today than yesterday. you're back to a year ago level, at least for the 401(k) but you're up a lot from the crisis. it gas prices are probably going to continue to tank. you know, $2 a gal is what guessing quickly. oil prices are crumbling. all the money is going into the bond market. what does it mean in layman's terms? lock in your refie and buy a house! mortgage rates are down. >> allison, people look at this and they're nervous and the question is -- when does it trickle into jobs? you have a much stronger unemployment rate than a year ago. when companies are nervous they're not in a position to hire. >> right. the exact reason why you see the second quarter earnings weren't so good. this is all about how companies are doing. and when you see reduced sales, and reduced revenue coming from
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china these companies are getting nervous about what the future holds what they're going to be taking in from china. one of the biggest customers for them. that's why you're seeing investors pull out of the companies because there's a lot of negativity about what may happen in the future. a lot of companies sell a lot of their goods overseas. what can stop this slide? i've been hearing, believe it or not, if the fed comes out and says, you know, we're not going to go ahead and raise interest rates. that could maybe calm the market a little bit. >> the fed usually doesn't react -- >> one way they can do it the fed president of the atlanta region is speaking later today. you can bet that investors are going to be listening to the speech later today. >> the fed raising interest rates is the final sign of the u.s. economy is back to normal. so a lot of people want that signal that, look, the u.s. is still strong. when you look at the fundamental
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of the u.s. economy. unemployment rate 5.3%. i don't think we're there yet for a ceo to say i'm not going to hire. i'm scaling back the hiring plans. if it goes on for a long time it could happen. >> let's pull up the big board as i take you live to hong kong. the dow down 983 points. the last time the dow was down 700 points was in october of 2008. we're far worse than that. down nearly 6% at the open. andrew stevens live for us in hong kong. this is building on the sell off that we saw in asia overnight. >> reporter: absolutely. nonetheless, it's extraordinary watching this, poppy, seeing the falls on wall street. yes, the chinese economy is probably weaker than a lot of people thought, but it's not in
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recession. it's not slumping to the stage that, you know, would justify this massive sell off on wall street. i'm curious if was the u.s. market overvalued? is this just a correct there? coming back to the other side of things, we have a big sell off in china today. the shanghai composite down 8.5%. so you to go back to 2007 to see that sort of fall. and what was interesting today, what was key today there was very, very little evidence of the chinese regulators on the central bank in the market. they put a floor under this tanking market. it's a crash in china, essentially. it's down nearly 40% in ten weeks. on the way down, after we had a big, big initial sell off, the chinese authorities started putting money into the market
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doing all sorts of measures. but today we're back in the big selling mode and no real sign of the authorities trying to regulate this fall or manipulate the fall. it suggests either they have given up because they have very little credibility left in the markets or looking at thing like the economy. >> here is the thing that china has more ammunition, more has to try to stop the bleeding. quick break the dow down 823 points. in is historic day on wall street. that's, for sure. more live team coverage straight after this. when you have a migraine, you'll reach for anything to make the pain go away. truth is, most pain relievers don't work like excedrin migraine. it relieves my pain starting in 30 minutes. that's fast!
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i'm poppy harlow in for carol costello. we watch a sell off on wall street that has improved quite a bit from the open. i want to welcome our viewers, again, here in the united states and around the world as we're watching the opening on wall street. richard with me, allison, cristina, richard quest. this is a reaction to what we saw in europe and asia. >> it's friday and saturday over the weekend and now asia to europe and europe back here. it's nothing. we don't know how much selling is actually going on. this is not a now. this is marking down of a severe
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very serious, very deep thousand points. you don't see 5% off a major market like the dow very often. >> we've come back quite a bit. we were download a thousa a tho >> this is a low for the s&p 500. markets have gone up for six years. you see a thousand point low it shows you how quickly and aggressively how markets are going up. >> these are computer driven. >> so you're seeing the reaction of just pressing literally buttons. that's why you saw that acceleration when the bell rang. now you see things settle out a bet bit. cooler heads are prevailing at 557 points lower on the down. >> let me remind our viewers. the last time we saw the dow down 700 points was in october of 2008. the last time it was down 600 points august of 2011. when you look at september 2008
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down 770 points. >> it wasn't that much. >> it was a very -- >> from all levels. >> when we talk about percentage wise the markets down 3%. the last time it was down 6%, double where we are now, is september of 2008. i believe we have cristina at the new york stock exchange. what is the sentiment on the floor? >> there's a sense of nervousness. we see it play through into the volatility of what the numbers show now. you're seeing more volatility. we haven't had this kind of volatility in a long time, and part of that is what richard and allison were referring to is the electronic trading. once, you know, people enter into the equation then we have to look and pay attention to what is going to happen over the next several hours. that's going to be really crucial. investors had to digest what happened overnight with the global markets melting down, you
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know, this is going to raise a lot of questions about global economic growth which was largely driven for awhile by china. now investors are starting to see, you know, cracks in that. starting to question whether their economic numbers are even, you know, are even credible at this point. allison brought up that point earlier. when you look at the fundamentals, it really does seem like this kind of panic doesn't really make sense in the face of u.s. economic fundame fundamentals which seem to be pretty strong at this point, which is why the federal reserve is looking to raise rates in the september/december time frame. >> that's such an important point to keep this in perspective. because this is so different than 2008 in in every way. thank you. stay with me. we'll take a quick break. we'll tell you what is happening to oil prices on the other side. it's a critical part to all of this next.
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i'm poppy harlow. want to welcome our viers again here in the united states and around the world as we watch a huge sell-off on wall street. the dow right now down 690 points, accelerating the sell-off we saw in asia and europe overnight. we have live team coverage. christine, to you first. another big part of this is oil. oil prices tanking. >> down another 5% down below $40 a barrel. it's really remarkable. it's been a crash in commodities like oil, but especially oil, and that's really dangerous for a lot of the countries that rely on oil for their own revenue,
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that export oil. also tough for the energy companies that are probably in our 401(k) who have seen their stocks crash. so that's one of the reflections of what's happening in the stock market action. also watching oil, it will be good for drivers. obviously it's good for consumers around the world. it's good for governments that are net consumers of oil around the world. but such a big mo of in a commodity like that can be destabilizing. for the stock market it's a psychological. 700 points down. that's a psychological hit to the investors at a time when the american economy has been moving forward. >> it's about the rest of the world, but we're increasingly dependent on the rest of the world and big question marks about what the fed is going to do. just to give you some context. the dow down 700 points. the last time we saw this in terms of points was october of 2008. however, it was september 2008 that the market was down 6% because, remember, the market was a lot lower then. we're coming off of a six-year bull market and richard quest, many people saying this morning do not panic. this is taking a little bit off the table. this is a little bit of give
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back in an extraordinary bull market. >> there are some evil winds blowing, and the question is do they become hurricanes or do they just pick peter off into the distance? at the moment this market having been down 700 -- between 600 and 800, it's looking for its direction. it's looking to see which -- what is -- >> its direction is down, richard. >> no, no, the next direction. the next direction. does it go further down or does it rally back up again. >> is it just more of a reaction? >> exactly. >> there's got to be something that stops it. >> where are the fundamentals that this market is reacting to. >> let's talk about the u.s. economy. although it's not great, not operating on all cylinders, it is the prettiest girl at the party, better than europe, obviously better than china, so, yes, it is a solid "b." let's give it a solid "b." many would say it would not warrant an 800 point drop in the
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dow. >> but christina, this isn't just about u.s. fundamentals. these are companies, look across the board, big tech companies, big auto companies from, you know, gm to hp to ibm to apple, you name it, these are companies that are just as reliant on the rest of the world as they are on the united states. >> that's right. you can't really look at the u.s. in a vacuum, unfortunately, anymore. christine brought up this point earlier, half of the earnings of the s&p 500 companies which is a much broader index than the dow, half of those earnings come fromover sefrom overseas. the major concern is not what's happening today with u.s. economic data and u.s. fundamentals but what happens a year from now, what happens two years from now. do ceos look at that and say if we have a global economic slowdown, what does that mean to my bottom line? what does it mean to how much money i can pay people and how much money i can spend on
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infrastructure and research? so these are the big questions that are going to drive the market in the days and the weeks and the months going forward and it's just too early to tell how much lower we're going to go at this point, but we need another 10%, maybe 7% to 10% drop to really call it a bear market, which is a long-term switch to the downside here, poppy. >> we're certainly not there yet. we're not even at those circuit breaker levels yet. stay with me. quick break. much more of our live team coverage on an extraordinary day on wall street next.
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i'm poppy harlow in for carol costello. the dow down 667 points half an hour into the trading session. we, of course, have live team coverage. andrew stevens in hong kong, cristina alesci, richard quest, alison kosik. christina romans, we saw a loss at the open, 1,000 points, pulled back a lot. now the sell-off continuing. >> that's right, poppy. this is really fear taking hold, panic taking hold of the market. a lot of investors really looking at bad numbers across the board, across the globe last night and trying to make sense of what that means for u.s. stocks. there's a lot of correlation here and that is what is concerning investors at this point. the focus point is china. the focus point has been china for a long time. investors have known that the growth out of china hasn't been as strong as they would have liked it to have been, but now
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it's starting to show up in their stock exchange which has officially crashed. we're talking about a 40% drop from the peak, that is just enormous. it has investors questioning whether or not china to be the global economic driver of growth, and that, of course, has impacts on oil prices because china is a huge consumer of raw materials, commodities, oil, and that is causing even more panic, so you see how this cycle can easily build on itself, and that's what markets do. they don't really care too much about the fundamentals at this very moment. that's why people are waking up this morning asking themselves why they're seeing such a big plunge because the u.s. economy looks good and looks healthy by the numbers we've been measuring it by. a lot of people scratching their heads but they have to understand the markets don't care about fundamentals. they're looking forward, looking to see what panic and what
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crisis could lurk behind the corner, around the corner, and people are pointing to the asian financial crisis, you know, in the mid '90s. we're not there yet. i'm not saying that, but they are drawing comparisons, and it's all of this fear and this talk of the bubble bursting in china that's really driving a lot of anxious selling this morning. >> let's remember, right, cristina, where we're coming from. we're coming from an extraordinary bull market. we're coming off six years of a bull market. we're taking some of that off the table. we're down 4%. that's not the 6% we were down in september of 2008 when we had about the same point loss. the percentages are very important here. i want to throw this on the screen because it's going to give you some historical context, if we could pull this up on the screen. okay. here is what you're looking at just back in relatively recent history. down down 7-- dow down 700 poins
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in october of 2008. dow lost 777 points in september of 2008. we're not there yet. richard quest, what is your read on this? >> what you have -- let's put aside the actually market movement this morning and last week and actually look at the fundamentals and what you're dealing with. you're dealing with the u.s. economy that's growing moderately by the fed's definition and neseems to be ok for the time being. you're dealing with the eurozone with qe being pushed in the market. there's a huge amount of stimulus going in from the ecb. you have emerging markets where currencies are under pressure because of commodity prices, and you've got many countries like nigheria nigeria, venezuela, russia, that are going to have certain difficulties as a result of the fall of oil. that's the macro global scenario within which you are taking this market fall, and for some reason best known to itself, it chose a
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random friday in august last week to decide to head for the door. >> and china really was the catalyst. you know, i think that the biggest catalyst at least on friday, you talk about random, it was that manufacturing report. >> worst in 77 months. >> you saw wall street latch onto that report and say, wait a minute, we know that china orchestrates its data anyway, but it looks like it's having a problem engineering this data and making it look good, so you have investors scratching their heads and saying, wait a minute, if this data looks this bad, is china really as well off as it says it is? i'm talking about economic growth, and investors are thinking, wait a minute, maybe china knows something that we don't know. i'm going to get out of the stock market because my company that i happen to invest in, you know, invests in -- or sells its goods in china and if people in china aren't going to buy those goods, it's going to hurt the company. >> let's go to china, hong kong, andrew stevens is live in hong kong for us. andrew, so much talk in the u.s.
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about china. many american investors, people who just have their savings in the market, saying why are we being so affected all of a sudden by china when the slowing isn't new. this has been happening in china. >> that's a really good point. i mean, the only new thing is, as you were pointing out, is that much worse than expected manufacturing index report, but we know china has been weakening, and we've known that for a long time. we've known the emerging markets have been weakening. they have real currency issues there. there is no sort of direct correlation to asia financial crisis at this stage. the economies in this region are in a much better shape than they were back in the turn of the century. but another thing to be important to realize here is that there is no real correlation between what's going on in the economy of china and what's going on in the stock market of china. think about this, the china market went up about 160% while the china economy was going in the opposite direction. it was coming off its highs and
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quite significantly, too. so this is -- the two aren't related. what we're seeing in china, yes, there is an economic slowdown. yes, it is -- smart money would know it's actually been worst than most of the official readings. the official readings have the economy growing at about 6.87%. most people i speak to here say -- who look at things like electricity consumption, cargo moving, et cetera, et cetera, they say the economy is growing perhaps 5%, some say maybe even 4.5%. that's quite a big difference. the central authorities have the wherewithal to boost that economy up significantly if they so choose. they have the financial firepower to do it much more than any other economy. they haven't pulled that trigger yet. they would pull that trigger if they felt that the economy slowing down was getting out of control because if it's slowing down too fast and you're losing too many jobs, you get social unrest. the communist party, the leadership, will not tolerate that because that will directly
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undermine their own authority, so that's very unlikely to happen. so this is what's going on. people do realize that the economy is slowing down. i'm just -- what flummoxes me is watching those numbers today when wall street opened, you get a 1,000 point sell-off, i find it very hard to believe that china manufacturing number from last week is responsible for that sort of thing. particularly when fast money or hot money knows that the actual stock market performance in china doesn't bear a lot of relationship to what's happening in the real economy. >> it's a very important point. andrew stevens, thank you so much. appreciate it, as always. joining me on the phone, someone who has such important perspective in all of this, renowned investor, former ceo of pimco, chief economic adviser, mohamed el-erian. are you with me? >> i am, poppy. >> you know these markets better than anyone. is this nervousness, is this fundamentals? what is this? >> in the short-term it's about the lack of a policy circuit
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breaker. people are worried about the slowdown in global growth. know that this is coming from the emerging world, and therefore the fed and european central bank are not in a position to provide the circuit breaker, and they're disappointed that china hasn't done anything. longer term, poppy, it's about prices of assets that have gone far above what would be justified by fundamentals, and people now realizing that the world is having enormous difficulty generating enough economic growth. >> so when you look at this, isn't it very important to put it in context in terms of the remarkable bull market that we're coming off of? could it be viewed as a good thing to see this market in the u.s. perhaps coming a little bit more back to reality, mohammed? >> yes. longer term, this correction will be a good thing. it will be a good thing because it's going to bring financial markets closer to what's just i
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justified by fundamentals and there will be less of a risk of a financial collapse down the road, and, secondly, it will be a good thing because it's going to provide some genuine investment opportunities for people who want to put their savings and pensions and investments. but you know what? short term it's going to be incredible volatile -- >> right. >> -- and the key thing for investors is not to be pushed into doing the wrong thing. do not panic at this point. it's better just to sit back and let this play out, and then look for attractive opportunities. >> again, on the phone with us if you're just joining us, mohamed el-erian, a renowned investor. chief economic adviser. christine romans, richard quest, allison and i all go to him when we want to know what's driving this. >> you point out now is not the time for an investor to do something. you know, you're down 2,000 points basically in about five
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days in the dow jones industrial average. let me ask you about what this means for the federal reserve. you say there isn't a policy circuit breaker. a lot of us expecting the federal reserve to raise interest rates in the united states in september, maybe in december. will a move like this and concerns about china mean the fed will not raise interest rates in the near term? >> it will be very difficult for the fed to raise interest rates in september unless the markets calm down quickly, which is unlikely. they had a window. they had a window when the domestic conditions were favorable and the international conditions were neutral. that window is closing for september. december is still an open question. why? undoubtedly the u.s. economy is going to be impacted negatively by the slowdown in china and by the financial turmoil. however, let's not forget that it will benefit from lower oil prices, and it will benefit also from lower interest rates. so the september call i think is clearer. they are likely not to go forward with an interest rate
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hike. december is still open. >> all right, stay with me. obviously when you have a market like this and an election cycle, here come in the politics. i want to read for you two tweets we've gotten from two presidential candidates. donald trump just tweeting this morning, markets are crashing all caused by poor planning and allowing china and asia to dictate the agenda. this could get very messy. vote trump. i also want to read you what bernie sanders said. we don't have a full screen but i will read it. are in unfettered free trade has been a disaster for working americans. it's high time we ended our disastrous trade politics. so we're going to get into more on the politics of this right on the other side. mohamed el-erian stay with us if you can, my friend, important analysis as we continue to watch an extraordinary day unfolding on wall street. there you have it, the big board improving actually a lot from the 1,000 point dip we saw at the open. the dow down 465 points. back in a moment.
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all right. i'm poppy harlow in new york. live team coverage of the huge sell-off we're seeing on wall street right now. dow jones industrial average off 425 points. you have to tell you, that say lot, but it's a whole lot better than what we saw at the open when the dow sold off 1,000 points. this is building off the sell-off we saw last week. this is building off a horrific night overseas in asia and european trading. lets go to michael jackson lee to g to get the politics. >> reporter: it seems like the economy might finally take center stage on the 2016 campaign trail. as you know, so far the economy really hasn't been a focus for
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many of the candidates on a cycle that has been largely dominated by issues like immigration, issues like isis and national foreign policy. we are hearing from some of the candidates this morning responding to the extraordinary, you know, markets plunging this morning, several hundred points or close to a thousand points. donald trump, who has been leading the republican field, he is using this as an opportunity to talk about his own issues. he tweeted this morning markets are crashing. all caused by poor planning and allowing china and asia to dictate the agenda. this could get very messy. vote trump. someone else that we're hearing from on the democratic side of the field is bernie sanders, who has been really nipping at hillary clinton's heels. he said the results are in, unfettered free trade has been a disaster for working americans. it is high time we ended our disastrous trade policies. so, poppy, as you can see for each of the candidates, this is going to be an opportunity for them to talk about their own
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issues for someone like trump, he has talked about the issue of china and asia and how he believes that other countries are taking advantage of the united states. for someone like bernie sanders, free trade and the free trade agreement has been a big issue for him and something that has actually put someone like hillary clinton in an uncomfortable spot. so i think, you know, for the first time maybe during the cycle we are going to see the candidates really focusing on the issue of the economy and the markets. >> what do you think this does, m.j., for a donald trump or a carly fiorina, the only two candidates who can get up there and say i have run a big business, i know how this market works? >> right, this is a huge opportunity for folks like trump and fiorina who had had the private sector experience and really who have labeled themselves as business leaders and who have had experience and understand the markets. i think so far they really haven't had the opening to talk about issues like that as much as they could maybe this week because the economy has been actually, you know, on a bit of
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a roll. the unemployment rate is down at 5.3%. as you know, and i think criticizing the obama economy hasn't been as easy as maybe in the 2012 cycle. >> right. >> now is their opening to really go after the president and his economic policies in the way that they want to. >> let's remember you bring up those fundamentals, the u.s. economy, much lower unemployment, and those still exist even when the market is selling off like this. those still exist. let's not lose sight of that. m.j., thank you very much. with me on the phone, someone who can help us put this in perspective, mohamed el-erian, former eerly the ceo of pimco. a globally renowned and respected investor. your take on this in terms of the fundamental and nervousness and what investors at home should do right now. >> this is a financial issue, not an economic issue. the u.s. economy is still in good shape. it will continue to produce jobs. it's not at its key velocity but
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it's doing better than elsewhere. it's a financial issue. it reflects we have overrelied on central banks and central banks cannot deliver genuine growth. they can buy time for politicians, but they cannot deliver genuine growth. this is right now a financial issue. it becomes a real economy issue if the circuit breakers are not triggered. >> richard quest, question for mohammed. >> good morning, mohammed. richard quest here. sir, you talk about the wider issues at the moment for emerging markets, currency imbalances, commodities, low oil prices. how concerned should we be that the emerging markets could lead us towards a 1997 scenario again? >> so 1997 and 2008 were very particular scenarios. they had to do with shocks to the plumbing of the system. the plumbing of the system is in
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much better shape right now. having said that, we must not forget that the emerging world accounts for half of global gdp. we have relied on them as an engine of growth and china as the locomotive. and now they are exhausted. they no longer have the ability to pull the global economy along but they have nobody to hand off to. yes, we should worry. i do not think we are looking to a blockage in the plumbing system, but we are looking to a repricing of markets that had fallen in love with finance and now have to price in fundamentals. >> mohammed, larry somers just tweeted as in august 1997, we could be in the early stage of a very serious situation. do you agree with his concern?
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>> i think that it is not going to be easy to turn around the emerging world, and the reason why is simply it's very hard to function in a global economy in which the advanced countries overrely on the central banks. it's a complicated issue to explain because it's so technical, but fundamentally think of it as follows. in the advanced world, we are supposed to be responsible. we're supposed to be mature. we provide the global currencies. we provide a global system. and for the last few years our politicians haven't stepped up to the responsibility of comprehensive economic policy, so we have overrelied on central banks. and now the cost and risks of doing so are becoming apparent. so, yes, it's something to worry about in terms of global growth and the emerging world and anybody else, even well managed companies find it very hard to
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navigate a world in which the advanced country politicians aren't stepping up to the economic governance responsibilities. >> i'd like to jump in -- this is alison kosik on the set as well. is there a lesson in here for central banks because a lot of this i think, and tell me if you agree or not, a lot of this is driven by central banks stepping in to prop up economies. >> yeah, we should feel sorry for central banks because starting from 2010 when they realized that other policymakers were paralyzed by political dysfunction, they stepped in to buy time for the system to heal, and they were hoping to hand off to the politicians, but the politicians didn't respond, so they got in deeper and deeper using untested instruments and getting more and more uncomfortable. central banks stepped in for good reasons but they made asurchss, that they would hand off to reasonable politicians and that has not materialized as
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yet. >> mohamed el-erian, thank you, my friend, for calling in and helping calm some of the nerves. before we get to a quick break, i want to pull up the big board again. it's important to put it in perspective. the dow off 300 points, nowhere near the 1,000 point drop we saw at the open. we are coming back here, and that is a good sign as we are just about one hour into this trading day. much more of our live team coverage next.
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welcome again to our viewers around the world and here in the united states. i'm poppy harlow in for carol costello today as we watch a huge sell-off on wall street. guess what? it's getting a whole lot better. thedo dow down 330. it was down 1,000 at the open. i want to show this to you.
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christine romans, this is broad based. >> the dow is 30 stocks. when you look at these 30 stocks we can show you how they're doing. you see the red arrows sort of everywhere, but if you're tuning in now it looks terrible but if you have been tuning in with us for the past hour and a half, this is much better than it was before, but every stock is lower. the s&p 500 is the broader gauge, probably what your 401(k) is based on. that's about at a -- i would say a ten-month low right now. >> richard? >> what's fascinating about this is there's no rhyme or reason -- >> absolutely not -- >> -- to the spread. off major manufacturer like caterpillar just down 1.5%. >> which has bigger exposure to china than -- >> you have mcdonald's which is at the cheaper end -- >> look at apple, only down half a percent. >> for old war horses like me -- >> it's an excuse. >> pardon? >> no, not that.
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i'm saying part of this could just be an excuse to create a little more volatility. the reality is you think about who is trading these stocks. investors kind of like volatility. they don't kind of like it. they love it. >> these are day traders we're talking about. for everyone that it matters a lot for the 401(k), they don't like it. >> it's a completely different market than it was five years ago, ten years ago, or certainly 30 years ago when i started in the business. you've got much more volatility. that thousand points you saw at the open that is evaporating back up again, that's what happens when the computerings and the algorithms take control and they're programmed to make a particular -- to take a particular direction. so you have to have -- i was going to use a crude phrase but i won't, but they have to be of steel is what i'll stay if you are going to trade this market. >> you have to have intestinal
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fortitude. you like that one? stay with me, we have ken rogoff on the phone, economics professor from harvard. ken, what do you make of this market? >> it seems apop lip tick when you look at it near up, but i think it, in fact, is simply the way markets behave these days as richard was saying. china has just been always solid, nothing ever seems to go wrong, and it's an underpinning for many of the emerging markets in the world. when china goes down, it hurts brazil, it hurts indonesia, it hurts russia. you know, it hurts countries all over the world, and it's not just the weight of the countries but i think the potential instability that markets probably don't like. yeah, u.s. firms get a lot of
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profits from overseas markets, but europe and japan are really not doing so badly. i'm not talking about the markets, i'm talking about the economies. the united states, it might not be spectacular, but it was strong enough that at least until a couple days ago the federal reserve was thinking of raising interest rates. so i think it's important to have some perspective on this. what really is going on here is people are worried about a hard landing in china, which they were told by at least the chinese would never happen. people, you know, said this time is different, china can't have a hard landing, their leaders are just too smart. well, it's just not easy to manage an economy that size, and it's at least a possibility at the moment, and i think it has markets spooked. >> christine romans here. also a reminder that stocks don't go just straight up. they have almost gone straight up for six years. the u.s. stock market, the last time it had a true correction
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was 2011. even with this big decline you're looking at stocks that are the low nest ten months, maybe a year. a reminder american investors have been pretty spoiled by their returns. what should a typical investor do today, someone who doesn't care or understand the intricacies between commodities, currencies, bond yields, and the stock market and the fed, what should the typical investor do? >> the typical investor should do nothing. you are going to lose trying to trade these markets against the pros unless you have some special inside information on your local company. yeah, we just saw it today. the stocks were down 1,000. if you'd rushed out and sold, you would have cost yourself a fortune, and if it turns out as could well be that china comes in with some program that at least satisfies people for a while, suddenly the markets could go way back up.
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we're in a volatile situation. it's not straight down. the amateur should not try to beat the professional here. >> sage advice, ken. stay with me. kristicristina alesci is live o floor of the new york stock exchange. >> what we're seeing right now is a lot of panic and fear driving a lot of selling around the world. investors in the u.s. really reacting to what was a global bloodbath overnight, and they're trying to make sense of it all. poppy, we've talked all morning about how u.s. fundamentals are pretty good. you know, in an ironic way it could be hurting us, the fact that the u.s. economy is so strong because we see the dollar really, you know, sort of a stalwart against a lot of the emerging market uncertainty, and that could actually make it more difficult for u.s. businesses to sell their products overseas. that may be playing into it. at the same time we have this idea that the fed, you know, the expectation that the fed would raise rates in september taking
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some of that stimulus out of the economy at the very same time that the emerging markets are melting down. so often times we use the terminology perfect storm. well, this looks like a perfect storm, not to mention the fact that august is very -- is a time when a lot of investors and traders are on vacation, so we don't have the kind of stability in trading to really see what this would look like when everybody is in the market, right? we have very thin trading. in addition to that, we have volatility just going very -- we've seen a lot of volatility today and last week, poppy. >> absolutely, and then overnight in asia and right now in the final hours of trading in europe. thank you very much. we're going to get a quick break in. much more of this remarkable day on wall street that's looking a lot better than it did at the open. still a huge sell-off, down 491 points. back in a moment. (music)
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you are looking at a live image of the big board from the new york stock exchange. the dow jones industrial average off 350 points. this sell-off improving from the open when the dow fell more than 1,000 points. just want to set this in perspective for you. let's look at the numbers. the dow has gained 185% in the last six years. okay? from the losses we've seen over the past week, it is off about 13% from that peak we saw in may of this year. so this is not 2008 again. where will it go? that is a big question. more team coverage in a moment. i want to get to other news we're following very closely. three americans the toast of paris and the newest heroes of a grateful nation. france's president bestowed his country's highest honor on the men and a british man.
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together they likely prevented the massacre of fellow travelers. his lawyer says it is all a mistake. she says that her client is dumbfounded by any talk of a potential terrorist attack saying that he wanted, instead, to carry out an armed robbery. nic robertson and jim bittermann are in paris for us. tell us about what these three american heroes experienced this morning. >> reporter: well, poppy, the french president left everyone in no doubt when he was talking to these three men who are being seen as heroes here. he left everyone in no doubt what could have happened on the train. he said it could have been the ultimate carnage. the gunman had over 300 bullets and two automatic weapons. there were more than 500 people on the train. he applauded their actions. he said he wanted to honor them before they went home. he said we should all be inspired by them. it was spencer stone, u.s. airman, with his arm in a sling
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who led the three friends, him and his two friends led them into the presidential palace here this morning. >> remarkable scene after that phone call that they got from president obama over the weekend. you can only imagine the heroes' welcome they're going to get when they come back here to the united states. nic, stand by. jim, to you. what do you make -- this is first time we're hearing from the attorney for the suspected gunman, and the attorney comes out, first thing they say is, no, this was not terrorism. on what grounds? >> reporter: well, i think she's saying what she would be expected to say about her client, but i don't think anybody is buying it. basically she said that he found all those weapons in a park in brussels. hard to imagine, but in any case this guy is a guy who was known to authorities both in spain and in france. he was a subject of an s notice which goes out to the intelligence community that says pay attention to this guy, keep him under close surveillance.
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so he was already suspected of having some extremist islamic ties and because of that, i think the french authorities are not buying that excuse provided by the lawyer. he's being questioned now as we speak about two miles behind me in an intelligence headquarters out in the paris suburbs. the police have another i would say 24 hours from this point to hear from him before they have to either charge him or let him go. i suspect we'll hear from the prosecutor sometime during the day tomorrow and we'll see what kind of charges are leveled against him. poppy? >> so we don't know what charges they're likely to bring then, jim? >> reporter: not at this point, but because the terrorism prosecutor is in charge of this investigation, we're assuming that that means that french authorities believe this is terrorism related. poppy? >> jim bittermann in paris for us. thank you very much. nic robertson live in paris as well on that heroes' welcoming that these men have gotten in
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france for sure. thank you both. to politics next we go. will joe biden jump in. he has a meeting with one of his party's most influential members over the weekend. but if he goes for it, will it split president obama's inner circle? next. a number.y has but not every insurance company understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
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again, you're looking at live pictures of the big board. the dow jones industrial average off just over 2%, 353-point loss so far. about an hour-plus into the trading day but it was a lot worse at the open when the dow fell 1,000 points. let's remember, this is part of a six-year bull market.
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we're seeing some pull back but this is not 2008 all over again. full coverage go to to see the latest. also want to get to some politics now. will he or won't he? that's the question on the minds of political pundits and voters as speculation continues to swirl around a possible 2016 bid for joe biden. with him scheduled to have his first face-to-face meeting today over their usual monday lunch, there's speculation swirling about whether the vice president will jump into the 2016 contest. michelle kosinski, cnn white house correspondent is live from washington. this started bubbling up, michelle, a few weeks ago, but it accelerated over the weekend because of a very key meeting that the vice president had. >> reporter: yeah, that was part of it. meeting with senator elizabeth warren, who, of course, is the hero of many liberal democrats and progressives out there. you remember this huge ground swell months ago wanting her to run for president. now that she said multiple times she's not going to do it, so
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tantalizing to see this last-minute kind of secretive meeting happen on saturday between biden and warren. he flew here from home in delaware just for this meeting that lasted about two hours, then flew right back. what sources have been telling cnn is that he wanted to run this by her, get her thoughts on a potential run, and also state his stance on certain issues, including the economy. kind of a heart-to-heart discussion there. i think a lot of people are thinking if only to be a fly on that wall because the overarching question is, how close is he to making this decision and which way is he really leaning? i mean, without an official word, the talk in washington that has been nearly constant is, you know, what are the signs that he's really going to do this, that this is his time? and i think that meeting with warren is one of those signals that if he's not leaning toward a run, at least he's looking at it extremely seriously. i mean, he had this week-long
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vacation, very quietly in south carolina with just his wife, but he was talking to advisers. and he went home to delaware, met with advisers. so there's been this sort of incremental build up and what we've been able to glean from what biden is doing, and then you have this super pac that has now sprouted up, draft biden 2016, and listen to what they're saying. this is an e-mail that they sent around to democrats around the country. while the vice president thoughtfully considers his potential candidacy, draft biden 2016 has already assembled a who's who of staff talent focusing on deft media strategy, aggressive fund-raising, innovative digital outreach and a dynamic field operation that aims to be up and running in all 50 states. they're putting it all out there. doesn't mean, of course, everybody thinks this is a great idea, even some within the white house, but you can see why this
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is such a big bubble of speculation and such a topic. i mean, how much this would change the race. for him to directly challenge hillary clinton and then what does that mean for those who support bernie sanders? it would be a shake-up and one that many are eager to see what effect it would have. >> michelle, if this election cycle so far has been anything, it's been anything but normal and expected. so what's another shake-up, right? >> of course. why not. >> why not. michelle kosinski live for us at the white house. thank you very much. still to come, changing gears here, the former prep school student accused of raping a classmate expected to testify in his own defense. we will hear the latest on that trial next.
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i'm a gas service rep for pg&e in san jose.. as a gas service rep we are basically the ambassador of the company. we make the most contact with the customers on a daily basis. i work hand-in-hand with crews to make sure our gas pipes are safe. my wife and i are both from san jose. my kids and their friends live in this community. every time i go to a customer's house, their children could be friends with my children so it's important to me. one of the most rewarding parts of this job is after you help a customer, seeing a smile on their face. together, we're building a better california. we are keeping a very close eye on wall street this morning. the dow right now down 363
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points, about just over 2% here. huge sell-off accelerating on what we saw last week after a big sell-off overnight in asia and in europe, but things have improved dramatically from the open. i want to point you to, full coverage there, the latest on what is driving this sell-off and what it means for you the investor at home. also to this story we've been tracking on the program. the former new hampshire prep student standing trial for allegedly raping a classmate says he intends to take the stand, and we could hear from him as soon as this week. owen labrie has pleaded not guilty to charges including the rape of a 15-year-old student on the campus of st. paul school last year. the jury listened to emotional testimony from his accuser last week as she broke down under questioning by the defense. joining me now for the latest, cnn's boris sanchez. you have been following this throughout. what do we know at this point? >> it's been a very uncomfortable, difficult trial to follow because of the emotional testimony we were talking about from the accuser. right now there's a friend of labrie's on the stand testifying
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about the senior salute and about an encounter they had after the alleged incident. the next pivotal moment is for owen labrie to give his testimony and this may sway his testimony. this is why. if you recall, he not only says the encounter was consensual, he says they never actually even had sex. last week two medical experts testified who took the rape kit from the accuser. they say there's no definitive, conclusive physical evidence as to whether or not they had sex. so there's a big question mark. there's a gray area for the jury, and that's where owen labr labrie's testimony may sway them. >> there's also something here contextually that's very important. that's something i understand called the senior salute, a tradition at the school? >> seemingly, yes. it's something that several witnesses have talked about already, including a friend of his who took the stand. some were saying the senior salute was a way to score when young men apparently had encounters with young women. they would kind of write it on the wall of a laundry room and take score.
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some say it was based on sexual encounters, some say it was just kisses. here is what his friend said in court. >> senior salute would be towards the end of the school year in the spring term. seniors would, guys or girls, would send e-mails to usually younger students asking them to usually hang out would be the term that i would use, that i was familiar with. >> and what did that mean, to hang out? >> usually seniors would try to just like kiss another student. that would be considered like a score is what the term was then. just to kiss another student. >> labrie is set to take the stand this week. it will be interesting to see how he answers questions about messages they exchanged in which he asks her whether or not she took birth control. questions that seemingly contradict his account that they never had sex. >> you'll be on the story. boris, thank you. before i go, i want to point you again to wall street. take a look at the big board.
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the dow off 357 points on what has certainly been a historic day on wall street. we're only an hour and a half into the trading session. how will things end? full coverage on full coverage here. team coverage from the new york stock exchange. i'm poppy harlow. "at this hour with berman and bolduan" starts right now. this is cnn breaking news. hello, everyone. i'm kate bolduan. john berman is off this morning. we want to welcome our viewers here in the united states and around this world. a lot going on at this very hour. let's get straight to that breaking news. the stock market trying its very hardest to bounce back here in the united states after a major sell-off in the opening minutes. here is a live look at the big board. the dow right now down 340-some points. that is -- that looks sunny and rosy after an epic 1,000-point plunge into the minutes right after the bell. this


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