Wild Ride for Stocks as Oil Prices Tumble.
CUOMO: All right. Here's the big question when you look at the markets. Is it a correction that we're going through? Or is it a step toward a recession? Very scary proposition, but it is out there and gaining some momentum. So, let's look at what makes it true or not true. At one point, the Dow Jones dropped as much as 565 points before closing down 1.5 percent for the day. So how much of an effect did the price of oil have on the markets? How much is fear? How much is it things that are hard to define? We have people in the business of hard to define. Christine Romans, CNN's chief business correspondent and the anchor of "EARLY START," of course. We also have Richard Quest with us this morning. CNN international business correspondent. Tough duty in Davos, the host of "QUEST MEANS BUSINESS" on CNN. Try to suck it up for us a little bit longer, Richard Quest. All right. So the headline we often talk about is oil, Christine. Anybody can read this, graphics going down. The question is why and what does it mean?</s>CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT: Because there's tons of oil. The world's awash in oil. At the very same time that China, the biggest importer of oil, is actually slowing. The economy is slowing. And it's slowing kind of dramatically. So this looks like just a big chart going down. It's going from $103, $108 a barrel to $27 a barrel. So quickly, it's destabilizing. Very destabilizing. Great for your gas prices. Destabilizing for the...</s>CUOMO: Ooh, gas prices, you tell us to light when oil goes down, Romans, you're making me crazy.</s>ROMANS: This is like a tax cut for consumers. And you could see gas prices that continued to move down, a buck-86 right now. Much better than it was a year ago. If you tap over there, Chris, you can see seven years ago. This is -- this is a really good thing for consumers. That money goes right into the American economy. So this is something that's good. But...</s>CUOMO: It's coming right out of my 401(k). But the market's dropping, Romans. You're giving me with one hand, and you take with the other.</s>ROMANS: Exactly. Exactly. Most people don't feel bad for bankers or oil companies but bankers and oil companies are the ones who, when oil prices fall so quickly, it starts to disrupt their financing. It disrupts their projects. And that can start to have a knockdown effect.</s>CUOMO: All right. So now here's the big point that we also want to bring Richard in on, is it's not just us, all right? So all across the world we're seeing it. How so?</s>ROMANS: The red here is a bear market, a 20 percent pullback in stock prices. Look at all these countries in the bear market. Look at all these countries in a correction. That's down 10 percent from its recent peak. This shows you a cauldron of fear and uncertainty that has spread around the world. Now, the U.S. economy and the leverage has taken, the U.S. economy is still fundamentally strong. You've got a job market that's improving. You've got -- you've got a housing market that's back to 2006 levels. You've got gas prices. Auto sales strong. But, at what point does all of this come back and start to hurt the American economy? That's the question.</s>CUOMO: Richard Quest, if you can't see, Christine Romans, dressed all in black, just referred to a cauldron of fear overtaking the world. Sounds like "The Lord of the Rings." You're in Davos with business leaders. Give us hope.</s>QUEST: There isn't any, frankly, the sense of fear. Because the reality is, that's exactly what's happening at the moment. You're talking about the U.S. Well, the U.S. is the best performing; it's got the strongest economy and it's got the lowest unemployment for all of the major economies that came out of the Great Recession. So, you put the U.S. to one side, particularly, of course, with its strong dollar, very strong dollar at the moment, that might be hurting exporters but is absolutely brilliant for American tourists going overseas. On the other side, let's look at the rest of the world. Europe, slow, sluggish, not much growth in terms of unemployment. Asia deeply worried. Deeply worried about the effects of China. Japan, terribly worried about economics not working. Brazil, Argentina, Latin America. So what I'm saying here, what I'm saying is there are real genuine and fundamental fears about the strength of the global economy, and although some people may be using the "R" word, "recession," at least for the time being, caution is the word.</s>CUOMO: And look, and to be fair, Christine, you've been using the word "correction" also.</s>ROMANS: Right.</s>CUOMO: Stocks have been trading up for months and months and months.</s>ROMANS: Seven years. This will be a seven-year-long bull market in March. For six years, stocks have gone straight up. Straight up. So a pullback because of all of this international fear, I don't think is unwarranted. The question is, is it overdone? And that's what people are starting to ask now.</s>CUOMO: Especially on a day like yesterday. We both have a lot of friends who work on the street. And they, you know, what happens? The market is down 565. And all of a sudden, you turn your TV back on later on, and it's come back up 300 points. You know what that is? That's guys who are in the game buying in. They drive the prices down, and they buy it. There is a little bit of this casino effect that goes on, Christine. And everybody else pays for it. Look at that. You know, Quest doesn't like it. He's smiling, but that doesn't mean he's happy. Am I wrong? I mean, isn't that who's buying it up when this happens?</s>QUEST: Not necessarily, Chris. If we look at what happened yesterday, there wasn't much institutional activity that took place in the market. It was a kneejerk reaction that unwound itself at the end of the day. Your point is that, basically, those on the inside were making out like bandits. I don't think we can say that about yesterday's trading. I think yesterday was a fear-driven market. And what we're looking for now is any form of reason. And unless -- until oil hits -- Christine has hit it bang on the nail. Until we get stability in oil, so that everybody from manufacturing, from transport, from airlines, everybody gets some idea of budgets and future profits and losses, because of fuel, we're going to see this volatility. And the Chinese, by the way, the Chinese top regulator told me here yesterday in Davos, "Get used to China's volatility. It's here to stay."</s>CUOMO: All right. Let's see what happens when the corporate earnings come back and companies start announcing stock buybacks again. Let's see what happens to the market then.</s>ROMANS: I'll tell you, the biggest buyers in August when the market fell were retail investors who were millennials, you people who haven't had a chance to buy stocks for six years, buying stocks.</s>CUOMO: They'll have a chance now. Everything is on sale.</s>ROMANS: Yes, it's all on sale.</s>CUOMO: Christine Romans, Richard Quest, thank you very much. Appreciate it -- Mick.</s>PEREIRA: All right. Just-released e-mails on the Flint water crisis leading to more questions about missteps at the state level, including why one of the governor's e-mails had to be completely redacted. We have a live report ahead for you.