>> live from pier three in san francisco, welcome to "bloomberg west," where we cover innovation, technology and the future of business. first, the check of the bloomberg top headlines. julian castro says reform in the government dominated the financing how system is still a priority and he has high hopes it can be done. he spoke to bloomberg in an exclusive interview. >> this could be a good victory either in the lame duck session or in the next term of congress where there is bipartisan support for housing finance reform.

>> castro also believes it is still too difficult for many americans to get a home loan. more money has been recovered for customers investing with bernie madoff. two cayman islands funds have agreed to pay a combined $500 million. if the deal gets approved 59% of the money lost will have been recovered. bitcoin will be back on the auction block. the u.s. government will sell 15,000 bitcoin's next month, worth $19 million at current prices. snapchat and square are teaming up. according to a blog post snapchat will make the new feature available for users 18

or older with a debit card. it also gives square access to snapchat users who currently -- send more than 700 million disappearing snaps per day. to our lead, facebook and the word place. some companies block employee access. facebook is trying to break into the enterprise market, testing a new product designed for workers. it allows coworkers to connect with each other using all of the traditional facebook tools like messenger and newsfeed. this is according to a person familiar with a matter who says it could a view publicly within the next few months. what does it mean for companies like linkedin and microsoft? our editor at large cory johnson

is with me in the studio. we have founder and author of the facebook effect, david kirkpatrick. you built a company that provides a company that provides social tools for businesses. how big a deal do you think it is? >> i spent years trying to explain to investors why facebook would never do this. i do think it is a business opportunity. there are a bunch of reasons to wonder whether facebook would really do everything it needs to do for this opportunity.

to be crisp about what the market is, the market here is for businesses to outsource their internets to be run by facebook. the reason we thought this would happen his employees to want their internet to feel like a social network. i don't doubt facebook has the design expertise to do that. i do wonder whether on the security side that they'll want to do all of the things enterprises want them to do. there is the question about whether they are going to be able to convince enterprises and other employees. of we explain how these products are separate. it would be a little bit of a headache for them.

that is a huge issue and there is a question about whether there is a business model for them in this. it would not be ad supported. enterprise sales is not something facebook does in the past. >> does this signal and -- signal expanding ambitions for facebook? >> they have been expanding anyway with the acquisition of instagram. i think their ambitions continue to be connect everybody. i think they are aware that people don't use it with as much approval. certainly people use facebook and some people still block it. i think david sachs has some good points as to why some companies may be cautious.

it is something they have talked about and up to now rejected for as long as six or seven years. >> is this something people and companies are going to be interested in using or is it like google launching google plus? trying to get into one another's territory where there is already a monopoly. >> i think employees do want to use a social internet that works. i think you have to have applications on top of that. in the consumer world facebook photos is the killer app. in the business world it would have to be something different. i think that is filesharing. facebook would have to develop not just the face -- not just the basic social features but they would have to invest a lot in filesharing and other applications. i do think if they want to go down this path they really have to commit to it and make it is -- and make it a sustained development priority for years. i don't know if they really want to do that.

>> some unlike the founder of linkedin has said for years people want their professional and personal identities separate. do they want separate companies to pursue these identities? >> linkedin is not to do this exactly. while david sachs had a good points, the fact is there is no monopoly. most companies do not use collaborative tools. really there is not a major player that commands the marketplace here because most companies are very poor at managing internal collaboration.

that is really primitive and inefficient for the world we are entering where companies need to innovate much faster. there is a market. the fact people are on facebook and know how to use it is promising for this kind of product. there is another issue, companies want to hire young people. you can come here and do everything you do. that can be very appealing and i can see why companies would like it. >> how do you respond to that when you think of all the different companies that overlap in this space. is there an opportunity here? >> there is definitely a market opportunity. facebook is going to learn a lot of the things that we figure out.

having business applications is important. >> they would give it away, keep it in mind. >> if they gave it away, is there something to be had there? >> what is the business model? if they are going to have to develop -- have to devote a lot

of their development they need to compete with all of these other players, which would include microsoft sales force, who are effectively giving away their social networks for free. what is the business reason for doing that? we have already said this would not be the main facebook product. this just looks and feels like facebook. i guess i am curious why they would do that. >> we will have to leave it there. thank you both. we will continue to follow it after we learn more. apple just opened up its app store to 4.5 billion chinese credit card holders. we will discuss the latest strategy in china. ♪

>> users of the most popular payment card in china can now make purchases in the apple app store. union pay has a monopoly on tank card clear it -- on bank card clearing in china. will it help apple win more customers? joining us is the ceo of a provider of western intelligence brands. this is an interesting deal. we know apple and tim cook and jack maher have been speaking. what is the significance of this? >> it is much more important today. when you think about what china union pay is, it is a clearing house for 4.5 billion cards.

it gives chinese consumers access to the itunes store, much like we have access here in the states. rather than going through some cumbersome process -- it is as simple as it has been here in new york. >> what is the fundamental difference for the way people in china are paying for what they buy? i am always struck by europe versus the u.s. >> china was traditionally a savings culture and not a credited economy. people typically paid for crash. -- for cash.

in the last decade we have seen the rise of the credit culture. we are now middle class and upper middle class. that is what makes this deal so important for apple and for china union pay because suddenly the chinese consumer can seamlessly by what their ted -- by what their debit card or credit card can from apple. >> what is your take on it pay deal? is it not too far behind? >> it is a good question. the truth is it is a little like saying what is the importance of a paypal -- once you have the set and mastercard and extreme -- and american express, it still will get leverage. there's not much of a middleman between your debit card and credit card and the purchase process, which in this case

would happen with apple. now really they cut out the middleman. the bank working directly with apple. it really lessens the need for that partnership. >> we will continue to follow this story. tons of data is collected every second by the weather channel company. we will be back with how one cloud in particular is helping the weather service keep its forecast accurate. ♪

>> welcome back. the weather company best known for the weather channel relies on a new cloud for 3.2 billion

forecast locations. the company has partnered with amazon web services to analyze massive amounts of data collected over 64,000 stations around the world. cory johnson checks in with the weather company chief information technology officer. >> everybody knows a weather channel. we have expanded. we expanded into the digital space. 170 million downloads per app. b2b platform. 100 to 150,000 transactions. aviation, energy. >> have you built this from the ground up? how it has this company come together? >> we have a big partnership with amazon. we have the ability to move resources. the atmospheric science is ours. the computer sciences ours. we brought the best of the atmospheric and computer science

together to create the world's best weather forecast. >> i'm trying to get a sense of what the business looks like. >> we were focused on our own businesses. we were focused more internally. as we built the platform that has public apis that power most of the weather apps that you see in the app store, that power most of the mobile devices that are running ios eight. we are outwardly focused in taking our data.

demo what does it mean you are more outlay focused? >> we are helping other people take our data and use it in their businesses. in the indie mobile space, the default widget on the iphone is our data. we did not build that app. it takes weather data and consumer data and real-time information and intersects that at the right time and the right place. >> how weird is it? >> think about beer sales. so can umbrella sales and cantaloupe sales. there really isn't a product or service. >> i would imagine by sending your i.t. hassles to end up

-- to amazon, you end up being focused more. what kind of savings are we talking about? >> some of the services are two thirds last then running it ourselves. it is significant. the impact of money savings has been important. the ability -- when i started with 13 data centers, 13 data centers get in the way. >> 13 data centers running every possible kind of code imaginable. >> we did get that decommissioned. >> we cannot build b2b businesses or help aviation customers, media customers, retail customers, we cannot help them with their business and how they are being impacted. >> is reliability an issue? >> we run our environment in four regions around the world.

we run 150,000 transactions per second at a global average of one millisecond in response time. >> does amazon allow you the capacity to scale up? >> absolutely. we can scale up in traffic. we have sunny days, cloudy days, and the stormy days. our traffic patterns due very. in the b2b space it is a bit more consistent. our forecasting models run pretty consistently. we are always starting a forecast. on the consumer business, those

really spike on this. >> cory johnson with the weather company chief information technology officer at the amazon web services conference in las vegas. kevin rose launches his latest venture. we will speak to the digg founder and google ventures partner next. ♪ >> time now for bloomberg television on the markets. the s&p 500 did manage to eat out enough to close at records. the nasdaq falling by 3/10 of 1%. a lot of it missing estimates, particularly in japan and in the u.s.

>> is bigger always better? kevin rose doesn't think so necessarily. the google ventures partner is on to his latest venture, a mobile app that allows users to share tiny photos and videos. today he is launching tiiny 2.0. how'd you describe that?

>> the best way to describe it is when you think about instagram, they are very curated experience. hugh take the time to get your filters right, to describe what you are doing. this is about capturing those little moments. you cannot enlarge it and it is these little tiny things that live in your profile that you share with your friends and followers. a great example of last night, it was awesome. we saw a tiny moment. he did not want that all over the internet. it was this tiny thing you can share and send to the people you care about.

>> how does it compare to snapchat, where you are sharing in less edited moments? >> it is not really about that privacy. we do have a following model where you can come in and follow creative people. they are getting creative with the different moments of their sharing. you see all these little animations looping over and over. we feel like there is a bunch of things that you want to take the time to apply a filter or give it the right description. there are a time of little things you do through your day. it is just a quick little tap and hold. >> you also launched watch a, and app that aggregates news from top wristwatch blogs. why do you think something like

this can be a big deal? >> there is always room for handcrafted markets. people are bringing them together in one roof. there are large enthusiast blogs. whether you are talking about fans of collectible air jordans and risk watch is certainly something hundreds of thousands of people are into. this can be anything from vintage handbags to luxury watches. you name it. it is an exploration -- we may take a model and applied to a whole different set of verticals. >> people can say this is just another photo sharing app. i am curious about your strategy.

you have this idea that you are trying to build apps that sink or swim. we just want his out there and see what attraction like you -- see what the attraction is like. it is even quicker to develop than to launch new projects. we are not pretending we have the silver bullet. we just want to go out and try some crazy ideas. get something out of users hands every couple of months. we will build a team around it and throw the team from there. and like you have a long history from cofounding date to google ventures. i will say i am just waiting for you. we were sitting around and realized that post something new dictates 45 seconds to minutes when you are getting the right angle. we were wondering if you can remove all those steps and take the anxiety out of it. same thing goes with the collectible space. the best option for are scratching their own itch. they are not sitting around

saying i want to make the next billion dollars. it should be something you inherently know to be true. and then you want to go to explore that and see there is something there. >> i'm curious why you made that transition. you had some other projects you are working on before you went to google ventures and now you're going back to entrepreneurship.

>> you go out and get to meet some awesome founders. you get that nervous energy when you hear a good idea like you are part of the team. you're really just sitting on the sidelines. i love creating an love building stuff. i just want to get that creative drive back and get back in the game. it feels really good. >> how involved are you at google ventures? you let investment's at companies -- google ventures launching a fund in europe. do you know what is going on with that? >> he moved out to london. we see europe as a great opportunity for us. entrepreneurs not existing in just the united states. google ventures has been a lot of fun. you will see me doing investments ongoing. to help them scale and growing watch us overtime has been a -- over time has been a blast.

>> what is the next sink or swim app? >> as a notch for now you do not want to divide your focus and your attention to thinly. you don't want to launch 10 different things at the same time. we kind of have a third app in the wings. i don't think you will see us build another one until we decide something is not working. or if we decide that one big whale that we believe is going to be massive we will focus our efforts on that one thing. we are just happy where we are at for now. i'm going to keep focusing on refining those products. >> google ventures -- google ventures partner kevin rose,

great to have you here. diamonds may look cool on your finger. but they may be even cooler inside your electronics. we will explain why the gems may lead to thinner and lighter devices next. ♪

>> we know the diamond takes billions of years to form deep in the earth. serve a purpose far beyond jewelry. it may be that the diamond is the new ingredient to performance. one of those applications is your smart phone. over the last few decades we have watched performance increase and devices miniaturize. a started out the size of brick's. now they have miniaturized. >> the temperature is actually the same. electronics run exceptionally hot. has figured out how to use diamonds as an alternative.

>> diamond will be able to be incorporated directly on-chip where you will not sit -- not need that same heat level -- that same level of heat conducting. >> heatsinks are parts that are added to devices to keep them from overheating. they take up a lot of valuable space. >> if we cannot continue to make system smaller, we have to include heat sinking materials, very thick metals on the bottom of these chips. >> attaching diamonds directly onto microchips eliminates the need for thehugging heatsinks. it doesn't even better job of keeping devices cool. diamonds naturally diffuse heat. in fact it is the best conductor of heat that we know. mined diamonds. these are synthetic diamonds produced in labs. >> we take a material like the silicon wafer.

he put that inside a microwave plasma reactor. >> methane and hydrogen gases are combined under intense pressure to form the diamond, which then bonds to the surface of a silicon wafer. because diamonds are so strong they can be formed into incredibly durable but remarkably thin layers. >> you package these discrete chips and those are our electronics. we are making the existing materials and devices we enjoy every bit best enjoyed today more energy efficient, producing lest wastes. it also developing the next generation of technology. >> the first products will hit stores within the next 12 to 24 months. while we see a great improving in size and performance, the change in price will not be as substantial. >> the biggest misconception is the cost. they have been a good job of construing diamond as a luxury item when really it is not.

the cost is in the methane gas. methane is one of the most abundant molecules in the universe. >> the cost benefits are not -- are not limited to consumers and small electronics. >> 50% of the costs are just on the cooling side. >> that means amazon and apple is spending a lot of money just to keep their servers cool. but they could see huge reductions in operating costs over the next few years as diamonds become more common in electronic systems. >> making devices that are thinner and more powerful is very important in not only addressing today's problems but for continuing tomorrow's electronics. >> we have the potential to make our devices much smaller and

much more powerful. there are limits and then there is a new technology which posts -- which pushes right past those limits. >> bank fees have sent people scrambling to find his work. that chase is the subject of a new documentary. we will speak with the director next. you can watch us streaming on your phone, tablet, bloomberg.com, and amazon fired tv.

>> welcome back to "bloomberg west." banksy is notorious for surprising londoners with public murals. a scavenger hunt was prompted across the city. the residency is the focus of a new hbo documentary, which premieres tonight. we spoke with the director of

the movie and started by asking how new yorkers even knew banksy was in town. >> he announced he was doing the residency a couple of days before he arrived. he replaced an image on his website with an image of a silhouette of a boy vomiting flowers. it indicated something was changing, something was happening. all of his fans had their hackles raised. basically he started the residency on the first day and posted the first piece once people started to recognize that something was up. it really caught fire through social media. >> how do we even know it was him? >> that is the thing, you don't know anything about him or her. the idea is that nobody knows anything about banks see as an individual, popularly thought of as a man. the banksy project is pretty specific. there is enough indication that

it was in fact banksy. >> i would love to hear your opinion on some of the outstanding questions, is banksy a man or a woman? >> i can't say i know more about the individual. it uses the residency as a way to put a frame around the city and look at the ways people were affected by what he was doing. >> i am curious about that. what reaction did he or she give you to the film? >> i think they wanted to make sure they were being accurate with some of our storytelling, which is helpful for us. no one had looked at the entire residency as a whole. we were discovering the stories and it was sort of helpful for them as we were making the film. it is definitely implemented by many people. whether or not there is an individual at the center of it, i can say as far as they are concerned there is. everyone refers to him as an individual. >> explains how this team uses social media.

>> there is a history of street art existing online and growing in popularity. it is something that can be disseminated all over the world. the idea was the show would play out online as it was in public. he was playing with the idea of this new public space. >> how is it we still have all of these questions, that we do not know who banksy is?

>> that is, to their credit, an example of how meticulous they have been and how effective the project has been. it is interesting, he turned new york into gotham city. people were chasing after him. >> you are currently working on a documentary about technology and sex. this is a show that focuses on technology, what can you tell us? >> i am doing a series of hbo -- it is a look at sex culture in america.

sex is something that is as old as humanity and it has remained practically unchanged. we are seeing this very physical things shifting in certain ways because of internet technology. it is looking at how technology is changing our lives and social media is changing our lives through the lens of sex. >> things like snapchat and sexting, are those good or bad things. >> it is certainly changing the way we interact with each other. we look at individual fetishes and how people will find each other online and how certain fetish cultures are able to connect. >> his film premieres tonight on hbo at 9 p.m. we focus on one number that tells us a whole lot.

what have you got? >> how about 33%. it is a study of avid nfl fans who say they spent 33% more time on their devices than the average mobile user. 71% on social media while watching the game. it was a thrilling game from the defensive side yesterday companies from the giants. one great catch during the game. it is interesting, nfl fans are one of those groups who may not be as active on facebook when they know stuff is going to be shared at work. >> i think i would be on the side of david sachs. it reminds me of facebook trying to do grab search. everybody says it will be huge. thank you all for watching this edition of the show. we will see you later. all the latest headlines on your phone, tablet, and

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