major indexes saw their worst weekly declines in more than four years. the s&p 500 ended the week 6% lower, one of the worst starts of the year in history. oil has reached its lowest level in more than five years. mexico says a fugitive drug lord has been recaptured. mexico's president tweeted, "mission accomplished, we have him." el chapo escaped from one of mexico's most secure prisons using a mile-long tunnel that opened in his cell shower. president obama vetoed legislation to repeal the signature health care law, as expected. this was the first repeal to clear both houses of congress and make it to the president's desk. it would have also cut funding

for planned parenthood. growing that someone will win saturday night's $800 million powerball jackpot. but if no one matches all the numbers, the next drawing is expected to soar past $1 billion. emily: i am emily chang and this is bloomberg west. coming up, a bloody week on wall street finally comes to a close. the nasdaq fell 7% over the last five days. but a hail mary from melissa meyer? anoo! now considering outright sale of its core is in his proxy investor threatens a investorafter an

threatens a proxy fight. first, to the lead. another day in the red for u.s. stocks leads the major indices with their worst weekly declines in more than four years. the dallas raised more than 1000 points. julie hyman has -- dow erased more than 1000 points. julie hyman has this report. julie: worries about global persisted, particularly after a volatile overnight session in china. all three major averages sharply lower on the week. the dow and s&p having the worst starts to a year ever. the nasdaq did not, but it is lower for the seventh straight session, the worst streak since 2011. the individual stocks that contributed the most to the s&p 500's losses were all technology.

app all continuing to decline on persistent worries about iphone continuing toe decline on persistent worries about iphone demand. lowter closing at a record and falling every single session of the week. netflix, one of the other highflyers from 2015, also lower on the week. and marketnot in new carnage. -- immune during this market carnage. in the headlines again. the company changing course and saleonsidering an outright of its internet core business instead of the spinoff. on wednesday, marissa mayer was threatened with the possibility of a proxy fight unless the

company makes significant changes to leadership and strategy. joining me now, an analyst from bluebird intelligence and the head of our global technology coverage. what is happening? brad: nothing official. has changedulation internally. look, this is a death by a thousand cuts. the stock was down last year. they have this accomplished activist investor, off the bow, a new letter this week. we always knew it was likely for the business to be sold. we thought alibaba would be first. out.ally, time is running this has gone so long, the voting skeptically

and cynically about marissa mayer's chances. i think across the board, they are fearful of having a proxy fight and losing. mentioned buyers like verizon and at&t. you focus on yahoo!'s core business. what does this mean? >> if you look at the stakes in , the core business is negative or close to zero. there are different opinions out there. >> yahoos business is so diverse that some companies might find value in pieces of it. that is more appealing to .omebody like verizon yahoo! sports or yahoo! news appealing to a publisher or the business can unity.

in community. -- or the news community. all this is doing right now is raising serious concerns about retention and acquisition and decreasing the chances of recovering the core business. >> how practical would it be to start parceling out the different pieces, even from just a technical perspective? >> we see the interest from different parties. what interesting is that everybody knows that if you buy yahoo! as a whole, you might not be able to get value out of it. if that was the case, they would've done it themselves. that is one way that yahoo! can actually realize the best value it can get for its core business.

been: they have also asking for changes in core management, attacking, presumably, marissa mayer. we have been talking to a lot of people about this. to blame. said she is take a listen. >> if you look at the results of the last three years, they have been disastrous. in thes a steep decline core business. if you let that go on for a few more quarters, there will be no more core business, therefore no more value. under marissa is a -- marissa's watch, and it has to stop. emily: another person told me on the same day that he has a lot of confidence in marissa mayer. take a listen to what max had to say. the hardest working ceo in silicon valley bar none.

there is a gap between the next hardest working and marissa. she is also a smart product person. if you look at the success yahoo! has, genuine success, the credit to take, which the press really never gives her credit for, the product development, the shift to mobile, the opening of new revenue streams is tremendous. challenges and they will take a while, but i doubt there is anyone out there better qualified to deal with them. brad: i think it's clear that marissa mayer is the last ceo of yahoo!. she came in with a lot of leeway --y and had to had leeway from the shareholders. there is not another act for yahoo! the chips are stacked against companies that cannot innovate. if she can't make it work,

probably no one can. emily: thanks so much for popping by today. another developing story we're following, texas instruments and decidedevices have both not to pursue and acquisition of maxim integrated products for now. they say neither potential could reach an agreement on a price. maximus said to be working with to be workingid with goldman on finding a price for a smaller chipmaker. coming up, we will discuss homeland security with michael chertoff.

emily: president obama has announced a new counterterrorism task force charged with sorting social media. of representing washington, the attorney general, the director of the fbi, and the director of national intelligence, among others. representing tech, executives from apple, twitter, facebook, microsoft, and linkedin. it in thest discussed daily briefing earlier. take a listen. terroristsnnot allow to use online communication is some sort of safe haven that is beyond the reach of law enforcement or national security. that certainly means that there are some complicated issues to work through. the solutions are not necessarily obvious. what is obvious is that there should be some common ground. : what exactly is that

common ground? joining us to weigh-in is the former homeland security secretary, michael chertoff. thank you for joining us. brad stone is still with me as well. one thing we do know is that terrorists have been using these andforms like facebook twitter and sending direct messages. but why can, and more can,tantly should -- what and more important a should, companies like facebook and twitter do that they are not doing? secretary chertoff: i think a lot of these companies do look at what is posted online and if it is clearly inciting terrorist activity, they will take it down. that might be viewed as sympathetic to terrorists the first under amendment. the government has to recognize

that there has to be leeway for what is protected speech under the constitution versus what is actually incitement to violence. brad: ever since the snowden revelations, we have seen again and again that users of this technology are reacting very of -- we havehint talk aboutok encryption. what do you think will change attitudes at the big tech companies? is atary chertoff: there strong security reason to have encryption and you don't want to compromise that. what do you do when people use various kinds of social media in order to advocate violence or engage in trafficking in child pornography?

as we speak, when companies find child broader fear similar material, they take it down. there is not a problem with things that are outside the protections of free speech, taking them down and reporting them. but that's a different compromise than having security or encryption be weekend. emily: tim cook said last month the reality is if you put a backdoor in, the back story is for everybody, the good guys and the bad guys. i think that is what you are alluding to. letif the companies don't the government n, aren't they in charge of deciding what is terrorism and what is not? can they really police all this stuff, and should they be? secretary turnoff: first of all, i want to be clear. i do -- secretary chertoff: first of

all, i want to be clear, i do work with some of these companies. i think a backdoor does compromise security. a dutch company wrote a letter saying they would not be in favor of degrading encryption for precisely that reason. on the issue of social media, i think we can have a cooperation about what is inciting violence. i think you have to be careful about not trying to write a set of rules that will wind up, for example, taking down statements but might be political don't fall outside the protections of free speech. we have to be careful we don't throw the baby out with the bathwater. brad: considering the attacks in san bernardino were conducted by , how relevantle

do you think the discussion is around encrypted communications attacks and of threats we are seeing today? secretary chertoff: it's a great point. if you look at the brothers in the boston marathon bombing, often you have people who are not using e-mail or telephones to talk. they are talking in the privacy of their on bedrooms. unless we are going to require everybody to put a wiretap in your own bedroom, they are not going to because, encryption or no encryption. the good news is there is other data out there, made a dead in -- metadata, financial connections that are very helpful and identify people who are risks in terms of terrorism. there are many tools that technology furnishes that don't impinge on people's rights or only in a very small why a -- very small way, and give law

a lot more tools than we had a few years ago. emily: by the way, we got a statement from facebook about this meeting. they said we explained our policies and how we enforce them. facebook does not tolerate terrorism or terrorist propaganda and we work aggressively to remove it as soon as we become aware of it. bloomberg reported on this situation in texas last may. attacked a cartoon exhibit of the prophet mohammed. the fbi is saying one of those exchanged 109 messages with a terrorist living overseas. they can i get access to the content of those messages because it was -- cannot get access to the content of those messages because it was encrypted. is there any way to improve that ? : thetary chertoff government has ways to decrypt

things that are encrypted. they also have ways of getting information once they apprehend somebody. the telephone communication was not encrypted. if you knew- somebody overseas was a terrorist and they were having 109 conversations with somebody in the u.s., that's a pretty good red flag that that's someone you should take a look at in the u.s. i understand in law enforcement wants to use every tool possible, but we don't organize society to make everything else subordinate to law enforcement. in this case, copper my thing on encryption is going to hurt innocent people, and i -- compromising on encryption is going to hurt innocent people, and i think that's part of the problem. secretary chertoff, always great to have your views here. thank you so much.

coming up, a special sit down with the french economy minister. manual mccrone joins us next. joins usel macron next. ♪

emily: in funding news, an investor has just funded a german startup that allows people to have multiple banks without having to switch banks. is someone who probably disagrees with that assessment, the minister of economy for france. he has been at the electronics show where more than 200 french companies are represented. emmanuel macron is meeting with some of the finest minds in

silicon valley while he is here. hundreds of french startups at ces. you guys have seen an explosion in tech innovation. what behind this? we create every year now 1500 startups. that's a big explosion indeed. emily: why though? innovation is part of the french dna. we did not convert this energy into business. i think the new generation is much more pro-business by creating startups. now, they are starting startups in france to launch a business. ofhave launched a series

pro-business measures to help them. that's a big change in the french landscape. now we have startups everywhere and a lotealth care, of industries. all of them were at ces, and they got more than 19 awards .ith a lot of new innovation brad: minister, first, i want to compliment you on your red rooster on your lapel. it's very nice. it's a symbol of french technology. brad: the ride sharing startup goober has had a difficult time in france. uber has had a difficult time

in france. they portray france as hostile to innovation. how do you see it? emmanuel: that's wrong. look at the reality. u.s. is one of the first markets for uber. they use it. but they did something not completely compliant with the law. they are a big success in france and changing a lot of things in mobility, hiring a lot of people , but the issue was -- brad: the executives went to jail. emmanuel: they didn't go to jail. ew it wasectly neknwe

against the law, they were asked to stop the service, and they decided to do so. you have to be extremely precise on these issues. is a big success in france and we love uber. because they hire a lot of people. i have thousands of young people with low qualifications working for uber. that's great. to respect our laws, and they know this. emily: we are heading into commercial. we will continue after the break. thank you for joining us. ♪

emily: bloomberg news just learned that sam alton will be replaced. programr the y, nader

-- combinator program. he came up with google's. in. sam alton takes over as the president. he will be a will to do more of everything, he tells me. he is over polygram and jessica livingston. brad stone, head of the global technology coverage, obviously very interesting changes. i spoke with sam, he tells me it is a promotion. he felt it was overdue, that was a joke. this is how they have been operating for a while. combinator spokesperson likened it to the google alphabet. iconic start of school. people look up to it.

combinator gets a lot of attention. scaled -- it scaled in an amazing way. -- not justanies software, hardware companies, all sorts of things going through the process. we will see if the direction changes. the question is, is the climate in silicon valley changing. if that happens, and the optimism deflates, does y combinator need to change? emily: they have a fellows program, speaking of how they have built out this organization. i spoke with jessica livingston with paul graham, she said when they first started it, it was very small and in former -- informal.

we had to add structure, but it still works. in most ways, it is better then when we were small. because ynteresting combinator, people love it. but others still criticize it. brad: the list of successes, they have been leaning on for a while. , but is airbnb, stripe in terms of the real successes, the number is small. emily: big changes at y combinator, even though sam alton remains president in a different way. we will be right back. ♪ emily: the world's most wanted

drug lord, el chapo is back in custody after a shootout. the arrest comes six months after his brazen escape from one of mexico's most secure risen through a mile-long tunnel. the event has been closing out today. joining me now, the editorial director, victor. what is the latest you can tell us? victor: basically, we already know -- he tried to escape again this time from the marines that were hunting him in northern mexico. let me tell you what we have confirmed. at 4:00 in the morning, mexican marines, with assistance from u.s. intelligence, particularly the dea, they zeroed in on the safe house he was in and some of his gunmen. morning, abouthe

10 minutes later, a shootout started. he of managed -- he managed to evade the marines. his gunmen were all killed, five people were shot. sewer.o ran into a we already know he likes to do that. he likes to go underground. we have seen from other situations involving him. he emerged blocks ahead. he commandeered a vehicle. he made a run for it in the vehicle. motel on then a outskirts of the city. that is where he was finally caught. he tried one last time to evade the marines. this time he was not lucky. emily: what is the consensus on extradition? what are politicians saying about sending him to the u.s.? victor: that is the big question. that is the big debate that has been sparked by the apprehension

of el chapo. at this point i can tell you the house the senators majority leader has called for the immediate extradition of him to the u.s.. he argues we cannot hold this criminal. we have to remember, he has escaped from maximum security prisons twice already. on the other hand, we have the minority leader calling him for him to be jailed here in mexico. he has to do his time here on mexican territory. there will be a big debate. there will be pressure from the unit state. -- united states. we had some who were very angry after his last escape. this will be a big debate. what will happen to him? he might go to the u.s., sometime soon. emily: sounds like coming from a netflix series. thank you so much.

coming up, we will talk about y combinator founder, paul graham's recent controversial essay. what he says startups are causing inequality. we will be back. ♪

emily: now to y combinator founder paul graham's recent and controversial essay and the uproar in silicon valley and his argument that economic inequality is actually a good thing. youmain points are -- cannot prevent great variations in wealth without preventing people from getting rich. you cannot do that without being -- preventing them from starting startups. got a hours, his essay

slew of responses. we're joined with mark suster. thank you for joining us. thank you for taking on this topic. you wrote a response in which you said, you do not celebrate income inequality. you said the celebratory nature of this conversation felt tone deaf, and seem to ignore the -- ignore that those those without privilege. i wonder does it change anything for you? i think, first of all, i am a venture capitalist. i find the same companies paul funds. my goal is to create disruptions. those disruptions should be positives for society. uberll give an example, is something you can view as a negative or positive. the huge positive is not only

providing a much better service than a traditional taxi, but also taking drunk drivers off of the road. i think it has been positive. we also look at the downside, what happens to drivers who get disrupted? had we provide health care, retraining, and retooling? the biggest point against paul and his essay is that it should not be about celebrating inequality. of course inequality exists. we live in a democracy that is capitalist. we need to figure out how to address the issues of poverty. address the issues of retooling the rest of the economy that is left behind by the digital privileged. emily: a lot of people found his argument objectionable. that is one thing. others out there said it was patently untrue. there is no an -- relationship between startups and inequality. they do not go hand in hand. do you think there is a relationship. this is a huge issue for the entire country, potentially and this election as the tech

economy explodes and people get richer? mark: let's say this, the tech economy is hugely important for job creation. it is hugely important for innovation overall. it is hugely important for the united states and our competitiveness in the world. i agree with those things. , theurse tech itself people who are getting extremely rich are very, very small number of people. why would i hold those people up as an example of inequality? you get a whole bunch of false arguments that we suddenly need to protect this class of people. his post was very reminiscent of tom perkins's post which came a year before saying, they are coming for us because they are rich. i think he has invented an evil boogie man who is coming for silicon valley. i don't see that happening. it is not only tone deaf, but i also called it colorblind. it ignores the fact we are

leaving behind african-americans who are dealing with high incarceration rate. -- rates. they are dealing with gun violence and lack of educational resources. they're dealing with a nonnuclear family unit. we are dealing with 13 million latino immigrants in this country that also need to be able to get the tools and health care they need. i do not know why -- as a friend said, it is like we are of 20 touchdowns in silicon valley, and still spiking the ball in the public's face. why would you do that, paul graham? emily: let's take a slightly less extreme interpretation. potentially he is saying that inequality is a necessary evil of startups. it is not to be celebrated, but perhaps it is a fundamental outgrowth of the startup ecosystem. is that true? mark: we have a capitalist society. the fact that mark zuckerberg gets extraordinarily rich by creating facebook -- i don't

think anyone has a problem with that, myself included. i was a start up onto for new or -- start up o entrepreuner. to write a philosophical argument that says inequality is good. it was the tone he chose. he said, you do not want to hunt me, i am the hunted, for me. i am like, cry in your own beer, paul graham. you are not the hunted. no one is after you. move the conversation away from the privileged few to the masses of people who need better education, better tooling, better health care, better family units. emily: to that point, he says in his essay, and the lighting -- illuminating variations in wealth would be -- mean eliminating startups. since you're here, i have to ask about the environment. we have seen volatility in the public market. this after a difficult 2015.

we are also hearing that venture funding was down 30% last fall. what is your take on where we are headed? is this a bubble about to burst? what do you call it? mark: let me tell you what is happening if i do not assign a label. what is happening is right that markets, which is what venture capital is -- we fund private companies that one day will become public. there is a direct relationship with the companies we invest in, and the value of public markets. public openings these are buying our companies before we become public. have beenvestors overpaying in terms of valuation for companies for the last three or four years. we have been in a tech bull market since 2009. it has been unabated. that correlation between private market valuation and public

market valuation, we have been able to look the other way for a few years. you're not like to be able to look the other way. you're going to see the correction. it is already happening. you have seen it with fidelity doing the markdowns of the late stage private investments. that market shifted dramatically in q4. the public does not know this yet, but i can tell you that venture capitalism massively slow down in q4. -- slowed down in q4. they're lowering the value -- valuations for startups. stages,t in early before companies have profits, and usually before they have large revenue. $2are typically investing million to $59 in the early stages. it has not had a huge impact on the early stages. in the later stages is more where you see it. emily: ok, thank you for joining us. thank you for being brave enough to take on paul graham.

by the way, we did reach out to him, he declined. he did not feel like live television was the appropriate form -- forum. --tory that we are watching drones were huge at ces this year, but one cavity in particular is getting a lot of buzz before it goes on sale. this is the lily camera. it is capable of taking hd video. the toss it -- you toss it in the air like a frisbee. it is available for preorder at the moment for $799. the company has booked $34 million in presales. it was not all fun and games in las vegas this week. wheelker of the one electric skateboard called in federal marshals to shut down the booth of a country making a similar product. -- company making a similar product. josh: we are here at the consumer electronics show in las vegas.

a booth had a hoverboard product and federal marshals showed up and sees all of the rich and ice. -- merchandise. the manufacturer, a chinese company, was accused of encouraging on a patent of one we'll. it is a start of that introduced a similar product several years ago at the show. one we'll says the company is just making their same product cheaper. having them at the same show damages the reputation. >> we have patented on the u.s. and internationally on both the design and function. we engaged our ip lawyers because we heard there were going to be knockoffs appearing. we went through the formal u.s. legal process to get a temporary restraining order against one of these companies that is trying to sell a knockoff. josh: there have been concerns about low-quality hoverboard catching fire, hurting people. if there wasfelt

another on the market that looked exactly the same, it could hurt its own sales. >> knockoffs do not have the same double of engineering. many times the companies do not understand what they're building. that is damaging to the market as a whole. ♪ emily: that was josh for las vegas. realize racks to riches story, how a vietnam immigrant came to america and founded a company worth millions. ♪

emily: alibaba sports just signed a contract for nfl broadcast rights in china. this agreed to his company -- a company spokesman. alibaba had a joint venture with a chinese private cap -- equity

form. at the same time apple and google are vying for nfl rights in the u.s. according to reuters, the company are seeking digital rights to live stream games next season. last year, they live stream for free, drawing 15.2 million viewers worldwide. he is not your typical silicon valley founder. grew up in a decade after the vietnam war, 50 miles southeast of ho chi minh. now he is in charge of the popular food delivery service. it is brad's's latest story in bloomberg businessweek. tri tran is with us in the studio. you got a huge response. >> people reacted to the story. : it recounts our journey, and your journey. what kind of feedback as you get? tri tran: thank you for having

me. welcoming the reception of people reaching out to me, a lot of them offer numerous, but also minority population. the via anime -- vietnamese community, my own parents and their network of friends and colleagues have been welcoming. they understand the struggle. they can relate to the struggle that they have gone through. starting at the company is also a challenge of its own. people recognize, that is incredible. emily: it is a compelling story, giving -- given the immigration debate. you have people like mark zuckerberg on one side, pushing says -- h-1b visas for people like you, and then you have people like donald trump. tri tran: this is the land of opportunity. it is true. my parents recognized the future

for their own children was not indian on the -- in vietnam. it turns out that hard work does pay off. i think that is the story that is related to me. brad: you have been here from his 30 years. you have been in silicon valley for many years. why did you decide -- i don't know if i asked you this, why did you decide to share the story now? is it because of the immigration debate? the express of many immigrants, particularly muslims are encountering hostility. forgotten, maybe startups were reserved only for the selected few. i feel like hard work is more of a fundamental ingredient to make this work. sharing that story i think would be more genuine. that would be more genuine than saying, work hard. do you support donald

trump? tri tran: not really. it is more like, get people -- immigrants like me, a chance. to interview to the economy just like anyone. contribute to the economy just like anyone else. you talk to hillary clinton about the creation of a 1099ind of employee, not contractors, not w-2 employees, but something in the middle? what would be good for your business? tri tran: we classify our delivery team as employees. for us it is clear. the point i made with hillary along with the other executives and founders of other startups would be, maybe there is an opportunity for companies to have a need for a different kind of classification, where

employees get to be more flexible. right now instead of going to a clipboard to change a shift, you can do it on the phone. that is what we can do with our staff. i feel like that might be a good alternative, instead of always having only these existing choices. umcher i've used my several timesy. sprout? sprig? how many can there be? tri tran: food is diverse. people eat a lot of different kinds of foods. that is the beauty of life. that allows a lot of different companies to exist. we all pick and choose our own ways on how we do it best. have the option to cook the food in 15 minutes or less, and your own home would be the way most people would find fitting for their needs.

there is a lot of room for a lot of us. to me, that is not a challenge. the primary competition for us is more like people who are usually going to the grocery market and spending a lot of time doing that. people that spend a lot of time cooking. they don't have the time left to do what they want. emily: as a working mom, it has saved me. .ri tran, founder of munchery thank you. thanks to you, brad stone, with us for the hour. be sure to check out the latest edition of "bloomberg businessweek" on newsstands now. read brad's story. have a good weekend. ♪

announcer: from our studios in new york city, this is "charlie rose." charlie: the remnant is a new film based on the 2002 novel. explores the existence of first rappers in the 1820's. plays hughcaprio glass, a legendary frontiersman who suffered a bear attack, was left for dead by his companions, and crawled to utter miles to safety. here's a look at the trailer.