will win it. >> why is congress still on vacation? and a guy who has a lot to say about this economy and this country, trace atkins, tv personality and all-american guy. this is "piers morgan tonight." good evening. it's been another bad night on wall street. the dow closing 520 points totally erasing all of yesterday's gains. asian markets reacting as i speak to the plunge. europe will follow in a few hours. is market turmoil the new normal and what can you do to keep your money safe? joining us is leigh gallagher, ali velshi and kai ryssdal, and carmen wong ulrich. let me start with you. another crazy day on wall street. we've seen record fall, record rises and record falls again. yet again i ask you, what the hell is going on? >> every day i get up very early. every day i think maybe piers can just run my answer from the night before. unfortunately every day it's a different reason. last week it was italy. on monday it was the s&p downgrade. then tuesday the market was up so i did actually go to sleep early and then today it's france of all things. these are catalysts. we're such a jittery market that any little thing sets it off. today it was rumor that france might get its credit rating downgraded. france is a big economy. bigger than italy. that got nervous investors saying i don't want to get caught holding the bag when something really bad happens but irony in getting out of the market to preserve your money, the bad thing is happening. there's a lot of nervousness. and momentum. selling out of stocks and moving into things that are safe. gold, another record touching $1,800 an ounce and u.s. treasuries yielding the lowest in decades. the fact of the matter is it's a flight to safety. people don't want risk. they want their money safe. the global -- what did i tell you last week? the global equivalent of putting your money in your mattress. >> ali, when i was young to be safe, you would put your money into banks but banks are ones taking a huge hit at the moment. everyone has specter of lehman brothers hanging over them. can we see the possibility somewhere in europe or america of banks going under of the scale of lehman brothers? >> one of the triggers today was one of europe's largest banks losing 15%. yesterday in the united states for an almost unrelated reason, you saw bank of america losing double digits and today we had the ceo of bank of america come out and say everybody relax. we're okay. this isn't 2008. this isn't lehman brothers. then we had jpmorgan chase's ceo jamie dion coming out everyone needs to relax. you saw the market move up and down a little bit. this market, look at that chart, that's one day's chart. look at the volatility there. people sell off. then bargain hunters come in and buy and then those who are worried about the market sell out. there's very little confidence in this market right now. as for whether or not banks are likely to fail, it's hard to say. premature right now. what we don't have that we had in 2008 was a credit crisis where banks in trouble couldn't even borrow money from other banks. we don't have that right now. we have a lot of money. nobody wants to borrow it and use it. different situation, piers. >> leigh gallagher, let's talk politics here. interestingly in britain where riots have been unfolding in the last four nights, all major politicians came back from their vacations, they were demanded back by the public and the media. i'm surprised given the scale of the volatility on wall street following the apparent solving of this debt crisis, which no one knew was going to be a solution if you like, that none of these top politicians are coming back from their vacations here. >> that's a good point. you said apparent solving of the debt problem. we're rioting here. we're rioting in the markets. i really think that this is not from the downgrade. this started as ali pointed out last thursday somewhat out of the blue even though there was turmoil in europe. i think what happened is the debt debate. we got a deal and believe it or not we expected last week a relief rally after they finally came to an agreement, not only did that never happen, we know what's happened since, but i think that signaled to investors, to wall street, to the general population that we would sooner kind of throw our economy around like a hot potato than enact sensible policy that might help us get us out of this. i think what we have going on is this wall street is kind of catching up to what main street has known for a really long time. the economic news that's out there, the gdp growth slowing down, the jobs numbers, the productivity dropping, that's been out there for weeks now. why suddenly this sharp turn last thursday? i think there's suddenly this realization in the wake of what happened in washington here that we don't quite have any hands on the wheel. >> carmen wong ulrich, gold is reaching record levels. is it still a sensible place to put some money right now or is it now too expensive? >> when they start running in that direction, you want to run in the opposite direction. right now if i had a lot of gold, i would sell it. if it will move anywhere and hit around 1,800 an ounce it may go to 2,000. the bus has left the depot when it comes to buying gold and making a large profit off of it. if you are concerned about security, you don't want to take that risk. that's just one entity, that's one thing to put your money in. treasuries are the only place you know your money will stay there and money market funds. if you're panicking right now, ask yourself if you're a long-term investor. you need to stay and hold and reassess where you are at but not flee into one thing. >> ali velshi, we saw mitch mcconnell announcing this 12-member joint select committee to try to tackle the deficit. is there now massively high pressure on these dirty dozen as some are calling them to do a really spectacular piece of deal making here because i think if there's any more procrastination by washington, the cause is volatility and they'll get hammered. >> we need a solution. >> we need a solution. i'm concerned about the makeup of this committee. there are people on the fiscal conservative side who have shown an unwillingness to be compromising on how it is we're going to solve this problem. i'm a little concern. i'm worried that we've become familiar and comfortable in the united states with the idea that we wait until the last second and possibly beyond to solve this problem. we don't have that time. i don't tend to ring a lot of alarm bills. you know that. this is approaching crisis mode. leigh said this is not necessarily an american problem but it may be up to us to solve it. europe at this point has gotten much more serious structural problems than we have. we can actually solve this politically. i think this is what has to be done. i hope they get the same signals but nothing has indicated that they get the same signals that main street does. this has to be solved. it has to be a compromise and bigger than the one they agreed to the other day. >> leigh gallagher, people talk of a double dip recession. there's a view that we never left recession and the economy has continued to slow down with a few little blips up here and there. what's your analysis of double dip stroke recession? where are we do you think? >> double dips are rare. we've had three of them in the past 160 years. doesn't mean we won't have one this time. if you look at the definition of a double dip, or a recession, it's two quarters of declining gdp growth. we're not there yet. we could get there. then the other definition is whenever the nber, the entity that decides we're in a recession, says we are. that's more subjective. whether or not we get there or not, is it going to look much different than it does today with rising unemployment, declining growth, declining productivity, consumer confidence that is really in a sorry state? it may not look that different once we get there. >> one thing you said is some people think we never left this. recession in the old days affected everybody a lot more generally than this one did. this is an entirely bifurcated recession that we came out of. there are people that never felt much of the 2008-2009 recession and right now there are some people who have never since seen anything that looks like a recovery. we just could be milling around where everyone down here feels like it never got better and nobody up here understands what's wrong. >> if you have unemployment at 9%, the recession never ended. that's the way it is to american consumers. this did not stop. this did not end. this is not a double dip. this is a worry and concern that it will get worse. what's worse than 9% unemployment? many folks haven't seen that in their lifetime. that's the big concern and big panic. >> thank you all very much. when it comes to the economy, not a lot of people think that president obama is getting it right. joining me now is james fallows, national correspondent for the "atlantic." james fallows, you wrote a fascinating piece about president carter and his administration basically surmising that lack of passion in a president and the way he speaks to his people can be a real death nell. >> it's true. i think there are some, few similarities between the carter administration and its constraints and what's happening with president obama right now. there have certainly been notable rhetorical moments for president obama where passion has been the hallmark of what he has done. i think the problem we may be seeing may be a general predicament for modern leaders and general for president obama. the general predicament, dealing with the economic maic nothe ec, this affecting the entire world and something that's difficult the president can't do with the snap of his fingers. for the areas that president obama has been able to talk to various parts of the american psyche, economics has not been his natural or strong suit for reasons we can discuss. he's on weaker ground personally than many other areas but structurally it's a difficult situation for him. >> it's interesting you should say that. let's play a clip from a speech he made following an assassination attempt on congresswoman gabrielle giffords, for example. i'll talk to you after this. >> if as has been discussed in recent days their death helps usher in more civility in our public discourse, let us remember it is not because a simple act of civility caused this tragedy, it did not. rather because only a more civil and honest public discourse can help us face up to the challenges of our nation in a way that would make them proud. >> you see, what was fascinating there to me was you could see the passion in the rhetoric and it really connected with people. when i watched the president last week talking about the economy, he seemed listless. and passionless and it didn't inspire most people to open a crisp packet. >> when we hear that tucson speech or clips before that, his famous 2004 convention speech in boston or the race speech in early 2008 which really saved his candidacy, we see him talk about areas he spent his entire life experience thinking about, reflecting upon and being able to reach different parts of the american populous with. when it's a matter of how to create more jobs quickly and combine long term challenge of dealing with deficit and short-term need for stimulus, and things like that, it is intrinsically a little duller as a topic and also it's something that isn't as connected to what he is about and where we've seen him most effective. that may account for understated or passive affect that you describe. >> you wrote speeches for president carter and then when you wrote that memorable article in 1979, you made your feelings pretty clear, i guess, about the way his lack of passion in the end resonated adversely on his presidency. what advice, if you were writing speeches right now for president obama, what advice would you give him to ramp up the rhetoric in an effective way? >> i think that it's worth recognizes first this economic challenge is more than purely a rhetorical one. even ronald reagan as great an orator as he was, in 1982, he wasn't able to say in those days, that the recession was better than it was. if the president could kind faceways to talk about economic challenges and strains on people in a way that seemed less arm length from predicament of ordinary people who haven't been in harvard law school and don't have friends that are investment bankers and the such, challenge and finding ways to use simple story. not the story as government as a family but why he can have hope measures we're taking now will lead to better returns next year and in our children's time. >> we need the president to reconnect with his voters really, don't we? >> we do. i think it's a matter that there's among his natural base there's been a sense that he's not been fighting hard enough for them these last six months especially when from their point of view and from my point of view the real narrative is the emergency for america is lack of jobs, lack of demand, possibility of a new recession, as opposed to the emergency being long-term debt issues, which are an issue but in my view not an emergency. so finding some ways to tell that story again and how the challenges of right now can lead to promise later on. that's what all political narratives do and he's capable of doing that so we'll see what we hear. >> we need audacity and hope. james fallows, thank you very much. >> my pleasure, thank you. what's really behind this market turmoil? i'll ask a man who makes his living reading wall street's tea leaves to explain this, if he can. [ male announcer ] how do you stop tacos falling over? [ speaking spanish ] ♪ [ male announcer ] old el paso stand 'n stuff taco shells. old el paso. feed your fiesta. soft! hard! [ male announcer ] how do you decide between crunchy and soft tacos? why don't we have both? [ male announcer ] old el paso. hard and soft tacos. ♪ feed your fiesta. we'll never stop sharing our or getting lost in a good book. we'll always cook dinner, and cheer for our favorite team. we'll still go to meetings, make home movies, and learn new things. but how we do all this, will never be the same. on our car insurance. great! at progressive, you can compare rates side by side, so you get the same coverage, often for less. wow! that is huge! [ disco playing ] and this is to remind you that you could save hundreds! yeah, that'll certainly stick with me. we'll take it. go, big money! i mean, go. it's your break, honey. same coverage, more savings. now, that's progressive. call or click today. [♪...] >> male announcer: now, for a limited time, your companion flies free, plus save up to 65%. call 1-800-sandals. conditions apply. jubilant round of applause there for the new york stock exchange for another catastrophic day. i can't get my head around that vignette every night. joined now by kai ryssdal to get perspective on this. we hear all of the experts and all of the washington speak and the economists and so on. put this in layman's speak. what is going on with these markets? why do we see wide fluctuations? >> i think what they are seeing is a realization that the global economy is stuck, right, there are two things going on. one is the huge all. debt that we have that we've been talking about for years and the other thing is the no growth. the global economy is slowing almost to a standstill. in the united states the first part of this year, basically zero growth. when you don't have growth, you don't have jobs, you don't have expansion, you don't have rising incomes, you don't have good inflation. >> where is this growth going to come from? this is the great unanswerable question right now. >> let me answer it backwards. and tell you why it is not happening. it's not happening because companies in the united states and around the world in fact have discovered a way to make money without spending money. they are getting more out of the workers they have. since they don't have to hire, since workers have higher productivity and number came out a couple days ago, since that's happening, they don't have to hire people. if they don't have to hire people, people don't get bigger paychecks and raises or paychecks at all and that's where it will be stuck. >> americans will be looking at the news, thinking hang on, why should the american economy have a horrible day on wall street because of what happened in france? who cares what happens in france? >> let me tell you exactly what happened in france. in the early morning hours of the east coast our time there was a rumor about a french bank. if you think back to 2007-2008, the bank was the first bank that we knew of that was really going to be in trouble. so today people saw that and said we're in it all over again. american banks got clobbered. >> if a bank will collapse in france, it could happen here. >> you say bad banks and it's 2008 and we're back in it. >> because of lehman brothers they know a big bank can fail. nobody is too big to fail. >> we have to pound out a couple of things -- the banks are healthier now. they have more money. they are well capitalized. more regulations in place. not as many as some say there should be. there are more regulations. they're doing fine. the rest of the economy looks at the banks and says could they conceivably be in trouble? i got to sell. >> how unnerved are you by what's going on? you have a very expert view of all this. >> unnerved isn't the right word. i'm uneasy. these are trying and difficult times. i think if you look at some of the things that are happening, forget the dow and the downgrade. think about the structural issues in the european economy. you have the european central bank bailout plan. they'll prop up italy and spain and portugal and all those guys. here's the thing. you can prop up the bad debt as long as you want. they have bad loans all over the place. even if you prop it up, it's still a bad debt and someone has to take the loss. what they have to figure out over there is who is going to take the loss. >> bad as the european situation is, how significant is it that china's economy also appears to be slightly slowing now? >> slightly slowing is a relative phrase. chinese economy goes from 10% to 9%, not a big issue. what they want to engineer in -- china, i was just there a month and a half ago, they want to engineer the soft landing, get it to six. they would be happy at 6%. >> why? >> because that enables them to have growth. it enables them to get the next billion people into the middle-class, all the peasants in the country side a. lose them to keep on competing not overheating. when you get an overheated economy specifically in china, you get inflation, rising food prices with rising food prices 100 million chinese grandmothers upset about pork prices. a bad thing. >> biggest problem facing president obama is jobs. how is he going to get americans back to work? >> i've said this before. i said this the last time we were here. the american economy is a huge, intractable beast. there's a case to be made the economy we have today in august of 2011 is the economy we're going to have in november of 2012. the only thing the president can do is nibble around the margins. payroll tax cuts. those things that he already presented. hope there's some kind of budget deal when the supercommittee comes out of congress at christmas. >> as always, you put a great perspective on it. thank you very much. kai ryssdal, a voice of calm in the midst of this absolute chaos. coming next, dave ramsey. [ waves crashing ] [ martin luther king jr. ] i still have a dream that one day on the red hills of georgia, the sons of former slaves and the sons of former slave owners will be able to sit down together at the t