Ont as far as what is going in china, every day, around 2 00 p. M. , chinese time, markets recover because state money comes in to buy stocks. Will be closed on the mainland, and tomorrow they will be closed for the military parades and victory celebrations for world war ii. Here spurredsses by the chinese erik s p 500 ended in correction, more than 10 down from its recent high on july 20. Matt the big losers in percentage terms netflix was down on concern apple is going to meet its lunch with original content. Dollar tree was down because it is trying to absorb family dollar. Erik the guidance with disappointing. And there was no revenue guidance because they have to deal with the purchase of family dollar. The point mac moran makes copper. Copper was down, and i think it that said competitors are not going to stop. There were some winners that were interesting. Cablevision erik i will hold you right there because matt American Airlines . Erik no, marc faber is going to be with us. He is the editor of the of the gloom, boom doom report with us from thailand. Good morning. Marc good morning. Thank you for having me on your program. Erik here is what i want to know where would you turn right now . If there is one market in the world, one asset class that offers either safety, or the prospect for Capital Appreciation over the short term, what is it . Modern think because of central banking and repeated interventions with monetary qe, allin other words, around the world by Central Banks, there is no safe asset anymore. When i grew up in the 1950s it was safe to put your money in the bank on deposit. The yields were low, but it was safe. Nowadays, you do not know what will happen next in terms of the purchasing power of money heard what we know money. What we know is it is going down. If i have to turn anywhere, where, as you say, the opportunity for Large Capital gains exists, and the Downside Risk, in my opinion, is limited, it would be the Mining SectorPrecious Metals. Mining companies, in other words, gold shares, and i would also look, as you mentioned freeport s like t, that havefreepor been hammered because of Commodity Prices. They have gone down before, but i do not think they will stay down forever. Kind of answer the question i was going to follow up with are you effectively calling the bottom of the metal cycle . It is not selected is necessarily the bottom, but how long is it going to take before we see the prices gold has already started to recover a little bit, but the base metals are in a disastrous state, whether it is copper, aluminum, nickel, whatever. Marc i would rather focus on platinum, gold, because they do not depend on the industrial demand as much as base metals. As i indicated on this program already a year ago, the chinese economy was decelerating already then. It was just that the Fund Managers did not want to accept it. Now it is obvious that the chinese economy is growing at nowhere near what the ministry of is Publishing Ministry of truth is publishing in china. No more than 2 . That is a huge impact on Commodity Prices and in turn a huge impact on the commodities of all the producers of the world, russia, africa, and these countries, with falling Commodity Prices, have less money to buy american goods. Matt we saw the chinese devaluation, and then we saw vietnam follow, and cause extent kazakhstan. Do you expect to see that continue . Marc [laughter] countries follow the example of what mr. Mario draghi try to achieve with lowering the value of the currency, which is to create a depression in real income and a confession of world terms, and a contraction of trade in dollar terms, which is negative for Economic Growth around the world. Matt who is next, if you had to bet . Marc i think the chinese will let the currency go down somewhat, but the safest bet if you want to bet against the currency, in my income is too short the hong kong dollar because it will not be revalued against the u. S. Dollar. That is out of the question. If the chinese currency, the yuan, continues to weaken, then there will be a lot of pressure in hong kong on asset prices, and then maybe the government chooses to caution through devaluinge peg and the hong kong dollar. So, you have upside potential without Downside Risk. Rc, i know you are of quantitative easing, but u. S. Stocks mr. Bernanke it, and then janet yellen after that, got what they wanted. U. S. Stocks, until recently, were on a sixyear care. Why is it we should not expect something similar out of japan, where stocks have done well since they began quantitative easing, or europe, where stocks have been outperforming . Why is that not going to continue . Marc because in my humble book wealth is being created through, essentially, a mixture of Capital Spending and land and labor. If these three production factors are used efficiently, it then creates a prosperous society. As america became prosperous from its Humble Beginnings in the 1800s, or thereabout, through the 1960s, the 1970s, but it is ludicrous to believe you will create prosperity in a system by printing money. Economic stuff is him at its best. In the meantime, there was a lot of money to be made in u. S. Stocks, now . No . Marc i did not say the opposite, but unfortunately the money made in u. S. Stocks with distributedid evenly. Benefiteden actually from the stock market post2009. It is not even 1 of the population. T is 0. 01 they took the bulk. The majority of americans do not anyway. Shares in other countries, 90 of the population do not own any shares. So, the printing of money has limited impact on creating wealth. You, why is i ask it the homeownership rate is at a record low . Please explain that. Homeownershipt at a record high before the financial crisis . Marc [laughter] someoneo laugh when like you tries to lecture me on what creates prosperity. Erik i am not at all. I am just as adjusted inequality as you seem to be, but as i am agentg to you, being the for our viewers, i am trying to figure out how to make money. That is what they want to know. Marc that is why i told you if i were you, i would buy mining stocks. I am not saying they will go up, but they will go down less than other shares. By the way, if you ask me about relative value, i think emerging cheap, but not yet the return expectation i would have over the next seven to 10 years by investing in emerging markets would be much higher than, say, u. S. Stocks. The emerging markets are overhyped and expensive in terms from historic perspective. Marc, you must then have, years,e next seven to 10 a neutral, if not positive view of what happens in chinas future. I was going to ask what happens to president xi . To power . D on he has no control of the markets. If they continue to intervene like this, they will not have foreign reserves left to hold up the currency. I mean, can he hold onto power as we held head into this victory celebration for world war ii . Marc well, i mean, we have to put the achievements of china and president xi in the context 20, 30 years was ago, and what it is today. It is a remarkable change. Will china have a setback . Do not forget, the u. S. , after the 1800s had setbacks, the civil war, world war i, the depression years, and world war ii, and the country continue to grow. I think china is, from a cyclical point of view now, in a very serious downturn. Serious. And from a secular point of view, i think there is still tremendous Growth Opportunity in china in the long run. Cyclically, they are going to have a tough time. C, make you very much, joining us from thailand this morning. One of my favorites, editor of the gloom, boom doom report. Time for the five things you need to know. Times reports ierre andurand thinks oil is going to go down into the 20s. There are a number of people that think it takes oil in the 20s for excess supply to be mr. Impact alpha andurand predicted last year. I get it. He made a good call, and not many professionals have called for 20 oil. Erik tom petri. He ishe is also matt also an incredibly smart guy. I would also like to point out that a lot of people in oil are getting fired. The story last night conical phillips, chevron. It looks Like Companies might agree with that. Number 2 Goldman Sachs is sticking with its bullish view on chinese stocks in hong kong same valuation is an expensive and improving Economic Data will spur a rebound. Tomorrow, markets will be closed through the end of the week, only in the mainland, as i pointed out. You will see Hong Kong Open up on friday. Erik i need to interrupt you because we have adp reporting private payrolls increased in the month of august by 190,000. The economists we surveyed were looking for a gain of some 200,000. Lets take it to vonnie quinn, who has a few more details. Vonnie i do. 173,000, which leads 17000 and goods producing jobs. Economists were looking for 200,000. The friday estimate has come down. We are now looking at 218,000 friday for the average estimate of economists in our survey. This will not do much to change that. It is short of the median by about 10,000, but the previous number as well was revised by about 7000. Overall, we see the trend continue. Looking at Market Reaction really not much of a reaction. Futures were higher before holding on to the gains. Erik thank you. Number three i picked this for matt miller. Contractwagen ceos extended through the end of 2016. Offll remember, he squared with feet. He has done a tremendous job, truth be told. Matt he has. I am only joking a little bit because the volkswagen brand was outsold by subbarao. Subaru. Erik i cannot blame americans for not wanting to buy the pas sat. Matt it is sovietera. Volkswagen has some outstanding bugatti,amborghini, so, he has been a great job. And if you face off against ferdinand and win, he is the first and only to do that. Erik what about number four . Matt General Electric the deal might get to look from regulators. Ge will sell certain assets including servicing contract and intellectual property to an italian rival. Erik massively important for jeffrey immelts effort to transform ge back into an industrial company. In 10 years i promise you they will go back to a giant conglomerate that has a financial company. I started with siemens 10 years ago and it is the same thing. Executives like to buy things better than they like to sell. Erik quick number 5 we talk about whether m a will shut down, and there is a market that has effectively shut down and that is the investmentgrade debt market here in america. More props to the financial times. It has been 10 days since an issuance, the longest drought of issuance in at least 10 years. Matt 10 days. That is surprising. Why is that . Erik because it is a volatile market and i think more a sellers rike than panic. Not for highend traders . Erik highend . Matt highyield. Erik more news from bonnie. Vonnie Senate Democrats bob casey of pennsylvania and Bobby Cremins came out in favor of the iranian deal. Of the u. S. Isrt preparing to extend sanctions over the fighting in ukraine. According to the wall street journal, was quoted sanctions against russian and ukrainian separatist individuals and companies will be extended until march 15. In mexico, president and make it and you tell will deliver a different speech than he did one year ago. Last year he talked about reforms on telecommunications, and this year is ago is raising rising facing rising violence and a slowing economy. Ruled uberudge has will have to defend a lawsuit. If the status is changed from contractors, they would be entitled to on implement and workers compensation. In the u. S. Olympic committee id toack los angeles b host the 2024 olympics. It came after los angeles agreed to a contract that would require the city to cover financial losses. They will compete against brohm, paris, rome, paris, budapest, and hamburg. I think they have a good chance. Erik thank you very much. I want to go back to futures to remind people how eggs are shaping up after how things are shaping up after a drop on the dow. More importantly, the s p 500 futures contracts are up. Yesterdays stocks, as measured by the s p 500, dropped almost three percentage points, with an acceleration into the close, as you are you were as you were reporting yesterday afternoon. The the Hong Kong MattHong Kong Market close. Europe has been swinging back and forth between gains and losses. It does not look like you will recovery. Aped matt we do not see move erik we do not see a lot of movements in other markets. Oil is something we should keep our eye on. Under 45 a barrel. We will be back after a short commercial break here on Market Makers. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Matt welcome back to Market Makers. I am matt miller. Time for futures in focus. We are taking a closer look at the mix. What a started was in september for the fear gauge, jumping 10 , already a high level, after a record month in august. A record game. Volatility jumped in august by 135 , the biggest gain ever, and now sits below 32, a level that before august we had not seen since 2011. Joining me is bob iaccino from toe to discuss thevix discuss the vix. What do you see ahead today . Bob i think we will get a reprieve from massive selloff we have seen simply because Chinese Markets, as you have mentioned all morning, will be closed, so we get to see how much, exactly, u. S. Stocks will trade on fundamentals, especially with the nonfarm, the payroll to just reported. The payrolls you just reported. Having said that, we have only had three other closes since the trading. Tarted we have only had three other times when the monthly close was this high, and in each finishede, the vix higher at the close of the next month, the s p finished higher. You mentioned it is a fear gauge. That is the point. It is uncertainty as well. We do not know how much this will affect Global Economy and view of the Global Economy. Matt i know it inverted. Does it stay that way or flip around at some point. Does flip. K it 80 of the economists thought the fed was going in september. The market changed in a matter of two and a half weeks, but the vix is not necessarily telling us that. The vix does not tell us if it is a bear market correction. Us the market does not know if it is a bear market or correction. We will see where the fed doesnt go in the we get more worried. Bob, when you wake up in the morning, and you grab your mobile device, what is the first thing you look at what are the indicators you are looking at to get prepared for this kind of market . Espresso first, and then my mobile device. Then i look to see if the s p has reacted to china. About one year ago we all had to become crude oil experts and i have to do work for an oilbased firm, so that was easy for me. This is harder, trying to get a perspective that someone like marc faber has. I do not have that. I look at the reaction versus what is going on in china. Earlier in the show, both of you mention the Chinese Government was not brian buying equities, and that did not translate. That is what i look at, news in china versus what the futures are doing. Matt bob iaccino, i appreciate your time. Erik . Erik have you lost your appetite for common stocks . I cannot when you. There are other instruments, or specifically investing in the dead and or equity of private u. S. Companys. Michael forman is ceo of the ingest bbc in many bdc the nation. Bdcsl, in some circles, have a bad name. People are concerned because typically the loans you make or the debt you invest in is highyield and there are second secondly concerns that managers are charging too much money and transparency into is not adequate enough. Can you respond to those issues . Michael sure. Thank you for having me. We have about 20 of the market. In some respects we have change the market and brought an institutionalized approach focusing on transparency, best practices, and trying to really been great performance to our clients. Fsic since its listing, we started raising money in 2009, listed in 2014 and we have performed well. Even today, we are trading at a slight premium to net asset values. We think we have delivered terrific performance. Lets talk about high yield. You raise equity. You can limit equity. If the highyield market does fall out of bed, and it has been falling out of bed, isnt that bad . Michael well, we invest in credit. Erik i understand. Certainly there is volatility in the markets. We take a longterm approach to investing. In these markets, if you do not have to manage to liquidity, we think you can get outsized returns. Think the real risk is managing to daily liquidity. We do not have to do that. We can take a longer approach, by somewhat illiquid assets. You hat stands out for michael it is a time to be cautious. We like investing at the top of the capital structure. Inare located locating first liens where you get paid before junior debt and equity. In terms of volatility, we are of fsic. 8. 5 in terms one of the reasons people like credit is they are floating rate instruments. At some point the fed will start to shut down the path of raising Interest Rate. Start down the path of raising Interest Rate. Fixed yield assets will lose value. Floating will increase. We think we are a great hedge against Rising Interest Rates if we ever see inflation,