and around the world. with ali velslei velshi, richar. also today, aaron burnett will join me live. again, one hour ago we heard from president obama and we heard him make sort of a back handed reference to the downgrade issued by s&p. in fact, did it right off the top. he also said he's hopeful right now. listen to the president. >> this is the united states of america. no matter what some agency may say, we've always been and always will be a aaa country. for all of the challenges we face, we continue to have the best universities, some of the most productive workers, the most innovative companies, the most adventurous entrepreneurs on earth. >> so quickly here a little perspective. in the past two weeks, beginning friday, july 22nd, the dow lost more than 1600 points. you see this graphic here. it takes us through last friday. we're continuing to see, as you've been watching the big board. additional losses today. richard quest is live on wall street. ali velshi, i want to begin with you in new york. ali, at one point in the last hour when i was watching you and wolf and the president, at one point the dow dipped below 600 points. so i have all kinds of questions. let me start with two questions for you. what do you make of the volatility today and what will it take for the markets, ali, to stabilize again? >> they have to become rational, brooke. i'm getting people tweeting me saying why do i say that? let me explain. the credit rating of the united states was downgraded. if you downgrade somebody's credit rating, it should cost more to borrow. slightly greater risk. where you would see that play out very specifically is in u.s. bonds. 3, 5, 10 and 30-year bonds. those yields or the interest rate that it costs the u.s. government to borrow money, have gone down from friday. in other words, it is cheaper today than to borrow money back when we were a aaa rated country. why? because where are you going to take the money? this is big money. u.s. bonds are big money. there are other aaa rated countries that pay higher interest, australia and canada are two examples. they don't put as much debt. you can't take it out of these bontds and into somewhere else. a big economy is where you can do that, are european economies. who is putting their money into europe right now? the debt side of things hasn't reacted to the downgrade. debt markets in the world, bond markets are twice as big as stock markets are. the total value is twice as big as the total value of all stock markets. you didn't see the reaction where you were supposed to see it. you're seeing it play out here in the stock markets and that's why that's irrational. when i say that, it means people are selling because they're seeing other people selling. computerized programs are triggering selling because stocks hit a certain point. that's what you're seeing. sort of momentum. add to that aig is suing bank of america. that is down, last i checked, about 16 or 17%. that's a part of it. it's not entirely rational behavior. >> do you think, ali, the numbers are just this initial shock to all of the different factors you rattled off and that you know after today, perhaps it will start to level out? >> brook e, if i knew the answer to that, i would call in this report from my yacht. i will tell you, it didn't make sense today. >> wishful thinking on my part. >> what you and i were covering together, it's not as bad as this. it was 512 poichbts, from a percentage basis, we're already at 4.4%. the s&p 500 which is reflective of your 401(k) and ira, we have bigger losses today than on thursday. on thursday, that was actually a real reason. if you recall, you and i discussed, this was the europeans talking about the italian and spanish debt. there was a believable issue. it shouldn't have gone on as long as it did. it was a real issue. this is unusual. >> you mentioned italy and spain. let's bring in richard quest, not from you on wall street. richard quest, let's begin with i know that european central, they came out with a statement yesterday saying they're ready to start buying italian and spanish government bonds because of the fears of default. talk to me about how what's happening in europe is playing into our markets and vice versa. >> well, because you and i have talked so many times about globalization. the shear extent of which money just flows across the atlantic backwards and forwards. you're seeing that today. the european markets were down very sharply. germany down more than 5%. the uk down heavily as well. yet, the bond markets in italy, they did rally slightly because of that. what we're seeing and ali talked about it so eloquently a second ago, what you're seeing is not rational. there's no reason. we're no worse off today than we were on thursday or friday. i remember once and old trader once said to me, markets don't crash on a monday in august. well, they don't crash on any day in august. it's just a day when fear dwrips the market -- grips the market and the cycle begins. that's what's happened and it's going to take more than just frankly, a few bits of soothing words from a president and the ecb. to make this right. >> richard, what will it take? what do folks in europe need to see from washington in order for the markets to improve? >> they need to feel that the policy makers are ahead of the curve. remember, it was the debt ceiling crisis that precipitated what took place in the united states. it wasn't a raising of the debt ceiling to $16 trillion. it was the bickering and the inability to get that agreement that caused the uncertainty and the lack of confidence. in europe, it is the inability of them to put to rest this debt problem of countries that have overspent the spanish, the italian, the greek, the portuguese and the irish. and it's that scenario -- look, at the end of the day, markets are you and me. it's our 401(k) plans, our investments, our children's wedding and bar mitts fa funds. that's what makes up what's in that building behind me. it's not some money milking machine. it's real people's money. at the moment, what people are looking for is confidence in the pillars over there. >> richard quest, i thank you. ali velshi, i'm sure you agree that we're all looking for confidence for the numbers in the building to improve. it is interesting, i think you pointed this out earlier, it's this odd juxtaposition between the frightening numbers you see there on the big board, but also you look at some place like the u.s. treasury and interest rates and that's faring pretty well. >> clearly what's happening is this -- you remember this from a couple years ago. anything in any direction can affect this market disproportionately. christine roman said something on saturday when we covered this. it bears repeating. i've seen it in a few other places. i heard it from christine first. she said, you know what could make monday's markets do well is if sunday night the administration, the treasury, republicans and democrats from congress all got together and say, hey, we heard you loud and clear. this charade was ridiculous about the debt ceiling. the fact that we held the debt ceiling hostage and told the world that maybe we'll pay, maybe we won't pay, it's all got to do with politics. unlike europe where they have real structural problems. people keep saying we have structural problems in the united states. whee absolutely do not. not when it comes to debts and deficits. we have political problems. problem of plitd cwe're going t prove that this isn't accurate. instead the left and the right, the white house surrogates, tea parties, everybody blamed everybody, including blaming s&p. don't listen to them. moody's has a triple a rating. people do their own ratings. the problem was this was half about politics, the downgrade and politics stood in the way of finding a solution to this. if they had come out and said this isn't good, this is what we're going to do, we've heard the message. i think you would have seen a different result. people are looking for leadership somewhere, saying i got this under control. here's a plan to go forward. you couldn't get congress to agree on what color to paint the walls. >> they come back to work in a couple of weeks. got to assign that super committee, don't they? >> that will work out well. >> as the president mentioned, maybe this downgrade will add a sense of urgency. maybe the men and women will compromise and cut. >> everybody read it a different way. it's the same tea leaves that are being read differently. conservatives are saying see, we didn't cut enough. we don't have cuts that are coming soon enough and liberals are saying, it's because the conservatives held out. i mean -- >> it's back and forth, back and forth. >> i've never seen -- there's nothing more straightforward than a rating from pay rating agency on a country's debt. it's not a complicated thing. i couldn't imagine that people could read this as differently as they do. >> ali velshi, pretty smart guy. i look forward to the day we get to talk to you on a yacht. and do me a favor and stand by. we're not going far from this story. we have you standing by, people all around the world here. cnn 24/7 global resources. whee plan to tap into. there's been good news. it's a three-letter word. we're going to talk about that with ted row lands live in chicago. the president spoke earlier today. what is he saying about the downgrade and can we compromise in washington? we'll be right back. 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[ male announcer ] want to pump up your gas mileage? come to meineke for our free fuel-efficiency check and you'll say...my money. my choice. my meineke. . welcome back to the newsroom. take a look at our team. we have a superstar team. ali velshi, ted rowlands. we're tapping into every single resource for the best articles on-line. go to cnn money.com. dan loath i, i want to begin with you. we heard from the president earlier. off the top, talking about s&p, talking about all this partisan bickering. but i understand jay carney in the dalg briefing moments ago was asked a question about whether or not congress could actually come back from vacation a couple weeks early. what was his response? >> well, his response is that essentially they don't have any control over what congress does, that this is the way it's set up. he wished that they could prod congress to come back. certainly, that's something the president could request. but congress has a way that it carries out its calendar. that's what they're abiding by. certainly, there was from the president today a sense of urgency directed at congress. now is the time, put aside everything that has happened over the last several weeks and months and really work at coming together in a bipartisan way to attack the fiscal problem of this country. >> dan, let me jump in. we have just turned around that sound. let's play the sound. this is from jay carney moments ago in the briefing. then we'll continue our conversation. here's jay carney. >> the markets go up and down. we cannot, we do not and cannot react precipitously in reaction to how the markets behave on a given day or week. we did achieve, after an ugly process, a significant step forward in terms of deficit reduction. that will be implemented. congress will set up this select committee and that process will move forward. and congress will working with this president, we believe, in a bipartisan way, take action to support job creation through the free trade agreements and the payroll tax cut extension of unemployment insurance. >> so dan, he's saying, hey, we can't control congress, we can't make them come back to work. >> right. that's essentially what he's saying. there is a calendar, there is a way that congress is structured and that is certainly what congress is abiding by. but i think what the bigger point was from the white house today is listen, there is a sense or there must be a sense of urgency now. a real need for there to be a bipartisan approach to attacking the fiscal problem of this country. secondly, i think what you saw from the president was trying to reassure americans that, yes, you might be skeptical about what has happened. you might not feel good about your own personal situation, but that things will eventually get better. at least that was the message from the president. even as the stock market continued to fall. >> we're watching the numbers, 394 down, number 11,053 here. as we continue this conversation, he did mention he was hopeful, dan. i want to play some of the president's remarks. these were the first remarks from mr. obama since the credit downgrade on friday. what he said was that no one certainly doubts the creditworthiness of our country, but they do doubt, is the will in washington to make these tough decisions to let the debt down. let's listen to the president. >> it's not a lack of plans or policies that's the problem here. it's a lack of political will in washington. it's the insistence on drawing lines in the sand. a refusal to put what's best for the country ahead of self-interest or party or ideology. that's what we need to change. >> so, dan, i realize you can't bring congress back to work. but can the latest news suggest that the white house will press the super committee, this bipartisan committee of 12 to go bigger on debt reduction than the $1.2 trillion they are charged with finding? >> well, look, i think all arrows are certainly pointing in that direction. that super committee which is yet to be collected of 12 bipartisan group of 12 people will be charged with as a floor, cutting $1.5 trillion. it's clear now, at least based on what everyone is saying, that that number may just be the beginning. in fact, i asked jay carney if perhaps what the president will be pushing forward in terms of recommendations he talked about that today, if that will be pretty much the grand bargain with a few tweaks. it's going to be all of the above. i mean, i think the president is going to look at what he was able to hammer out with speaker boehner, look at what the gang of six also was able to work out, that bipartisan group. then that's what the president will be pushing. i think things changed from last week to this week where that may have been the $1.5 trillion -- may have been a ceiling. right now it may be the starting point. >> dan lothian thank you. i want to bring in ali velshi from new york again. we were talking about u.s. treasury, interest rates. i know we have ted rowlands in chicago with more on that. >> i'm taking a look at commodities right now. pretty much everything is down but for gold, which is up again. most commodities are down, cotton is up a little bit. ted is at the chicago mercantile exchange in chicago where these commodities get traded, where s&p futures get traded. you're in the only place on earth right now, ted, where money is actually going in. money is coming out of every other market. give me a sense of what's going on with treasuries. the one thing that should have been hit hard by this downgrade didn't get hit hard. >> yeah. on one level that's accurate. but people are saying, listen, this downgrade did one thing. it was another negative component into this fueling of the selloff that we're seeing today. as you've pointed out, what happens when you sell off? you have this money to park. where are they parking it? ? treasuries because it's the only game in town in terms of a safe-haven. people are selling because they heard of this downgrade possibly or at least it's a component. then they're going around a circle and buying that same product which was downgraded because they think it's safe. they know it's safe. the bond market trading just ended here at the top of the hour. investors, while they're surprised somewhat that the interest levels are not going to go up, they say it makes absolute sense because people still trust the u.s. government. they know they're going to pay and as you've pointed out, it's really the only place to park your money. >> you're also on one of the most active -- the most active trading floor in the united states. probably in the western world. i know you were talking to people. was there some sense of how this day turned out? what were the traders down there saying about this downgrade and the effect it's going to have? >> well, they were -- the downgrade, like i said, most traders believe it is a small component in an already battered mood, if you will. >> right. it was a catalyst to kick this selloff today. people were looking at the numbers. as you know, they get to certain levels and it can go from a sort of periodic slowdown to a free fall. that was a big concern which we saw a little bit of it when it got down to 600. the people here are looking at the reality that the treasury market is not going to be a problem in terms of interest rates. this was a big concern after the rating drop. people thought my car loan is going to go up or this loan because of this. clearly today, we know that is not going to happen, at least in the short term. >> ted, thank you for that. brooke, ted is not given to overstatement the: when he said bonds are the only game in town, at the moment they're the only game in the world. he's exactly right. the way he categorizes was perfect. the downgrade comes, people say i better take my money out of these things. they go everywhere in the world. stock markets, commodities, they look at everything around the world and end up where they started because in the end, in this uncertain world we're in, believe it or not, even a downgraded u.s. treasury is a safer investment than much of what else is out there. >> also, ali, if i may add one more layer of positivity, aren't oil futures traded at that exchange and oil is looking pretty good. >> oil gets traded the other most exciting place in the world, which is right here in new york. the new york mercantile exchange. but way down. you're right. >> way down. which is great news for us. >> they're down as much, if not more than the stock markets. last i checked, it was over 4% lower. in theory, that should lower gas prices, which you know is basically like a tax cut, right? because a tank of gas, you buy the same amount of it all the time and if you pay less for it, that's money that you can spend somewhere else. some weird things going on here. we're fixated on the stock market t may not be the most serious. it's an interesting day where the dow is down 390 points and it's better than an hour and a half ago. >> it's all about perspective. ali, thank you. stand by for me. our colleague poppy har low is also standing by. i'm told she had an interesting interview with a trader at the new york stock exchange who had a story to tell about the moment the president spoke today from the white house. perhaps that may tie into things. more cnn newsroom. dow down. the sons of former slaves and the sons of former slave owners will be able to sit down together at the table of brotherhood. i have a dream today! [ male announcer ] chevrolet is honored to celebrate the unveiling of the washington, d.c., martin luther king jr. memorial. take your seat at the table on august 28th. welcome back to the newsroom. we're not going too far from the story there at the new york stock exchange. the dow down 385 points. we're 35 minutes away from the closing bell. i have my colleague, ali velshi h