change the way you experience tv with x1 from xfinity. carol: welcome to bloomberg businessweek. reinventing ge. david: defending yourself from online defamation. let's go meet the editor. ♪ carol: we are with the editor of bloomberg businessweek. about a capital mystery, capital expenditures. >> we are looking at why companies are investing far less in tools, software, equipment,

than they have in the past. the percentage of total investment on an annual basis is way down, and so we treat it as a sherlock holmes kind of mystery, complete with an illustration of sherlock holmes and look at why that may be. it is partly because some people say that corporate taxes are too variety of reasons, but the whole thing has led to stagnated wages, stagnating standards of living, productivity down. economists are trying to figure out why that is. there is also the possibility that companies are returning money to investors, stock buybacks, etc., rather than by equipment, but it is a problem because it has added up to slow growth. story about online defamation involving one of your reporters here, writing about how she was defamed online. >> this is a story that really

took some courage to write. one of our reporters wrote a story about how she went online website thatto a labeled her as racist, dumb, loaded on fried chicken. it went on and on for a couple of years, and it all went back to a guy she had interviewed for a story about chinese companies -- in order to get listed on exchanges. this man kept coming after her. he has actually been indicted for a variety of crimes. , he has been indicted for a number of crimes that have nothing to do with this, but along the way what at therelized was th

was nothing she could do about this. google was not taking it down. facebook was not taking it down. every time she would check her name, there it would be at the top of the results. if you search on general, and you guys covered general electric this week. it is different than it was a few years ago. that oura company readers are fascinated with, a that is iconic, but also having gone through rough times , pull down bys ceounit ge capital, and the has finally hit on what he thinks will be a solution, which is he trying to turn the company into a software company, and

hopes the company will be among the top 10 software companies by 2020. he is betting big on software, and in fact there are signs that the company is changing the way it does business. carol: thank you so much. up with him.ught david: he has been waiting for something to happen. sudden it has started clicking in the past year, outperforming the s&p, getting rid of the financial assets which have caused him so much trouble in the financial crisis, focusing heavily on the industrial side, and also the industrial internet. they developed an operating system to connect all the stuff. ge withe associate refrigerators and jet engines, and he wants us company to become a software company. catch a lot of people

by surprise, especially people they are trying to hire. a software development center on the fringe of silicon valley, they didn't know ge was in the software business. the guy they try to hire away from cisco, he couldn't believe that ge was calling him. it's a battle they have been fighting and are still fighting now. carol: you write in your story that everybody knows about the internet of things, but you talk about ge during the internet of big things, and software is crucial to that. >> they develop jet engines, power generators. their customers keep these things for years, for decades, especially a power generator, so a lot of the money ge makes is in service contracts. this is a way to optimize service contracts and bring more savings for their customers and more money for them.

it is an operating system like the ios for apple or android. it is for great big machines, and so it is more secure. they collect all this data and then they analyze it, and that's what they're hoping -- not just for the customers, but for other big manufactures. companyou mention this going to california to recruit people to work on this. is the impetus for that a desire to attract more tech talent along the corridor and boston? >> they're trying to attract more millennials. will not want to work in the suburbs. they want to work in the city. they've gotten rid of annual reviews that dates back to the welsh era when ge had a different image, much tougher, fired the people in the

bottom 10% of the annual reviews. they have to change their image and make it more appealing to younger people. carol: you point this out in your story. they have a great commercial 't realized you don it's general electric. >> i'm writing code for machines. >> look at it. battle. still an uphill kids are young people would rather develop mobile apps or things like that. they don't think ge is cool. they are making fun of themselves, but a knology and that they need to spread that message and say we are a software company and this is what we are doing and hopefully people will want to work on book of motives and jet engines instead of mobile apps. carol: next up, what to do when you or your business are the

target of a social media smear campaign. david: the european art scandal washing up on american shores. --ol: the next david: the price of oil. carol: and the rapid video explaining strategy. ♪

david: welcome back to bloomberg businessweek. carol: if you been struggling to understand china's long-term development strategy, never fear. beijing has an animated rap for you. ♪ inol: you can read about it this week's global economics section.

it talks about reform in china and prosperity. ♪ david: pretty amazing. you have the dad waving his forefinger in the air. in the subwayhai system and saw a cartoon like this. it is a special kind of propaganda video, i must say. carol: it does deal with some serious issues in china. david: we talk about this transition that the chinese economy is undergoing. in this comical video. carol: they want that kind of prosperity for everybody. david: dune gives us a first-hand account of how her life and career were thrown into disarray after a series of defamatory articles were written about her. this guy was saying that i am preparing a series of investigations to look at the

kickbacks you have been taking from short-sellers to write articles about chinese companies, your racism. a few days later, out came the story. on my i just googled you phone good one of the first thing that comes up is a photograph of you colored in red ist captured."is cap how did it come about and what was he trying to do? creates -- it has created the internet as we have it today. google can't be held liable for random content that someone else posted. carol: are you racist? >> i am not racist. carol: do take kickbacks?

>> no. david: you've written this article about the harm this has caused. what prompted you to do that? you're not suing him? walk us to the calculus of how you approach to this. >> i was very naïve. as a journalist, i should've known more about this. i did not realize i would find it impossible short of suing him to get the stuff taken off-line. facebook, tole, them that is censoring the internet. away.thought it would go afigure it, eventually, i'm journalist, but it did not go away. after he was indicted on criminal charges related to securities fraud, it still did not go away. this guy is under criminal

indictment. youl: it does impact personally, would you put in the article, as well as other victims. david: you're not alone. >> i am the least of his victims. carol: another scandal, i rediscover masterpiece -- a thescovered masterpiece by amount of da vinci. who runsa businessman his businesses out of a tax-free warehouse storage for altra high-priced art. you have the russian billionaire artsing him of selling him and dramatically marking up the price and pocketing the difference. carol: not nice. obviously he is innocent until proven guilty. it has brought the attention of prosecutors in monaco and in the u.s., who are scrutinizing some

of these art deals, which includes some of the deals and himthe billionaire and looking to see if this could because the two did as fraud. could be seeing a misunderstanding of what the relationship is between a buyer and seller of art. that is at the heart of this dispute, what role do art dealers play in these very high priced, often no paperwork involved deals -- these paintings are in the hundreds of millions of dollars. david: when it comes to investigation of this, is the u.s. looking into it? chargedo arrested and him with fraud and money laundering. prosecutors have opened up an inquiry looking into several of these deals, which he is

right in the middle love, so it could potentially lead to fraud charges against him were other people as they go down the road on this investigation. carol: the could be other clients, right? >> definitely. my guess is that there are going to be more and more complaints coming out of the woodwork that this has become more and more public, and also now that we have the u.s. authorities looking into this. carol: you have already watched all of house of cards haven't you? david: i'm working on that. carol: i have your next fix. it is called occupied. >> this is a political thriller from norway. carol: is it doing well? >> it is getting a town of critical buzz on netflix. it is set in and around all slow -- oslo, norway in the near future.

the plot is kind of convoluted. it involves oil drilling and gas drilling, norway decides to stop doing this prevent damage to the environment. russia does not want norway to stop doing this. david: next up on bloomberg businessweek, how mathematicians art changing the face of trading in the u.s. stock market. the university of arizona shows you what happens when your bonus is tied to the price of oil. carol: redefining how men by close. bro-tailers. ♪

carol: welcome to bloomberg businessweek. i am carol massar. david: i am david gura.

bonuses tied to the price of oil. carol: it could be good or bad. bonuses have fallen by 38% as the price of oil has fallen. it's interesting, because universities are trying to attract top talent in terms of coaches, so they're trying to figure out new ways of doing. this is a way of transferring risk to the coaches. bonuses given by anonymous donors to the out asity, really stands a school that does this way differently than other institutions. carol: you can read what it's like to be lowered into the deepest mine in america. >> i am 7000 feet down from the surface. it is hot and wet, like a

tropical rainstorm. blankoard through nh and they basically had to build this huge pumping system to shoot the water backup. degrees down0 there because the rock still carries that heat of the molten core of the earth. they have this huge refrigeration system that cools it. it is an engineering marvel really. carol: lots of warnings, right? >> yes, lots of ways to get hurt but rio tintoine, takes safety very seriously. i never felt in danger. david: what is that that they are making here? in byy will be $7 billion the time they get the first copper out.

the bet is that this historic russian metals prices, all 50% since 2011, will rebound and they will have time to perfectly. inthe time this thing is production, the surplus will have been neat and away and demand will be rising on the back of renewables and lithium-ion batteries and things like that. it is a bet, because a going to be $7 billion in, an analyst say they would not be doing that. carol: the hope is that there will be demand at some point down the road. they're hooking this project to a growing demand in the u.s.. they think that by the time this is at full capacity, that they will be producing as much copper as the u.s. imports, closing the copper gap, and things wind turbines take tons of copper, lithium-ion batteries, that's what they're hanging missing on. david: have you heard of bro-tailers, a retailer

targeting a man. carol: we caught up with sam grobart. he explains. : these are retailers with a stagger to their identity. young 20or the something old men in america today. they specialize in one kind of garment. they mostly sell online, and they have become very successful. are fun,en the names that this is a growing business, isn't it? sam: more and more companies are taking advantage and were seeing more bro-tailers companies. think of almost any garment, and there is now a company that was to sell it to you with irreverence, wit, and silliness. what we are seeing with these retailers is they are speaking

the same language as their customers. to your credit, man. you are in the high country. carol: there are so many other must reads in the magazine this week. one in the technology section caught our attention, robots in europe, especially for senior citizens. european commission and eu realize they have a huge problem in that the number of elderly are going to increased her medically over time, and they have decided that one of the solutions as robots, so they are investing in companies that create robots. robot will escort you from your room and a nursing home to the dining room, help you with your shopping, the robot will have a touchscreen. they are creating a wide variety of robots. they are hoping robots help patients with alzheimer's. if you repeat yourself a million

times, the robot will not get annoyed. carol: how great is that? david: how far along our way. how soon might we have these companions for exercise and socializing? >> the senses some of them will come out in the next few years. david: in the markets and finance section, an article about -- do-it-yourself types. >> the idea is you don't have to live in new york city or london quant and be investing using algorithms. we call them free range quants. a former mathw professor who has created his own code, as a partner in canada, and they're doing the kind of trading the big operations in new york are doing. they're feeling is that they can do it too, open-source coding,

and they think they can play with the big boys. carol: it is really interesting. established elite a run for their money. of the of them, some traders and big firms are like, they can't compete with us. there are smart people everywhere. people,peaking of smart in the company's section, company news, i story about coca-cola and what they're doing with milk. this is an area they are interested in working in. >> we call it designer milk. i think they called the specialty milk category come milk that is low and lactose, high calcium, less sugar, a of milk, andnds coca-cola is collaborating with the dairy company. there are other companies doing this to.

the idea is that you are more likely to buy fancy milk. one of the reasons that coca-cola is doing it is because soft drink sales are down. people are trying to avoid sugary drinks, and those specialty milk sales are up like 20%. regular milk and soft rings go down. david: have you tried this stuff? >> i have not. im milk andis sk nothing else. david: thank you very much. carol: bloomberg businessweek is on stands now. david: and also online. carol: we will see you here next week. david: have a great weekend. ♪

>> from our studios in new york city, this is charlie rose. >> we turn to the ongoing battle between apple and the fbi, fight over access to the phone of the san bernadino shooter. it continues and the two sides will meet in federal court next week. time magazine managing editor nancy gibbs and writer lev grossman sat down with tim cook. nancy gibbs is with us and i'm pleased to have her here. this is the cover of the time magazine talking about his fight with the fbi and why he won't back down. let me start with the obvious,