carol: welcome to "bloomberg businessweek." we are inside the magnesium -- magazine newsroom. defending yourself from online defamation. let's go meet the editor. ♪ carol: we are here with the editor of "bloomberg businessweek," ellen pollock. you write about a capital mystery. meaning capital expenditure. ellen: we look at why companies are investing less in software tools.

the percentage of total investment on an annual basis is down. we treat it as a sherlock holmes mystery, complete with an illustration of sherlock holmes, and we look at why that may be. people say corporate taxes are too high. it is a variety of reasons. it has led to stagnating wages, stagnating standards of living, productivity down. economists are trying to figure out why that is. there is the possibility that companies are returning money to investors rather than buying equipment. it is a problem. it has added up to slow growth. david: a story involving online defamation, dune lawrence writing about how she was defamed online. ellen: this is a story that took courage to write.

dune lawrence wrote a story about how she went online one day and got to a website that labeled her as racist, dumb, bloated on fried chicken. it went on and on. it went on and on for a couple of years. it went back to a guy she interviewed for a story about chinese companies buying u.s. shells in order to get listed on the exchanges. this man cap coming after her. keptap benjamin wey has been indicted on a variety of crimes. he has been indicted for a number of crimes that have nothing to do with this. along the way, what dune realized, there was nothing she could do about it. there was very little recourse for her. every time she would check and search her name, there it would

be at the top of the search results. it has gone on for a couple of years. carol: if you search on general electric, it is different than it was. ellen: ge is a company our readers are fascinated with. it is an iconic company. famous for jack welch heading it up. also, having gone through rough times in recent years, pulled down by its unit, ge capital. jeffrey immelt has been the ceo for quite a while. he has hit on what will be a solution. he is trying to turn the company into a software company. he hopes it will be in the top 10 software companies in 2020.

he is betting big. there are signs the company is changing the way it does business. >> thank you so much. >> it is a real transformation. he has been in there since 2001 and people have been waiting for something to happen. i think people have given up. it is clicking in the last year. they are outperforming the s&p, he is getting rid of financial assets, that caused trouble during the financial crisis. they focus heavily on the industrial side, in the industrial internet. they have developed an operating system to connect this stuff. that is their strategy. >> we associate ge with refrigerators and jet engines, and jeff comes in and he wanted to become a software company. it will catch people by surprise. >> it caught people by surprise, especially the people they try to hire. they set up a software company,

started calling people, people did not know they were there. they did not know ge was in the software business. a guy they tried to hire, he could not believe it. it is a battle they have been fighting. carol: you write that everyone knows about the internet of things. you talk about ge doing the internet of very big things. software is crucial to that. devin: they develop jet engines and power generators. it is not like an iphone. customers keep these things for years, for decades. especially for a power generator. a lot of the money ge makes is in the service contracts. this is a way to optimize. more money for them. it is called predix. it is like apple's ios, google's

android system. it is for big machines. it is more secure. they collect all of this data, and they analyze it. they hope to do this not just for the customers, but for other big manufacturers. david: ge moving to boston, is the premise for that a desire to attract more tech talent? devin: the whole thing is trying to attract more millennials. millennials will not want to work in the suburbs. they want to work in the city. they have gotten rid of annual reviews and all of the stuff that dates back to welch and before that. ge had a different image. they had to change their image and make themselves more appealing to the younger people

and hopefully more software literate people. carol: they have had a great commercial running. when you see it, you did not know it was general electric. >> i got a job. all of this writing code. devin: that technology, despite what they have done, it is an uphill battle. kids and young people would rather develop apps. they don't think ge is cool. that is them making fun of themselves but acknowledging that they are a software company. some people will think they would rather work on locomotives and jet engines. that is the ticket. carol: next up, what to do when you or your business is the target of a social media smear campaign. the next "house of cards"

netflix may have up its sleeve. >> wife football and asphalt coaches may be cursing the price of oil. and, the rap video explaining beijing's development strategy. ♪

david: welcome back. carol: if you have been struggling to understand china's long-term strategy, never fear, beijing has its animated rap for you. ♪ you can read about it in this week's economic section. it talks about reform and prosperity.

david: pretty amazing. you have the dad waving his arm in the air. it is a special kind of propaganda. carol: it does deal with serious issues. david: we talk about the transition the chinese economy is undergoing. it is a consumer economy, and you see it in this video. dune lawrence gives us a first-hand account of her life and career after a series of defamatory articles were written about her. dune: i got this e-mail about racism, got into the

nitty-gritty, sources say you have gained weight due to stress, the important questions. a few days later, out came this story. david: one of the first things that comes up is a photograph of you, colored in red. this paper trail began here and persists until today. how did it come about, and what was he trying to do? dune: he is exploiting the protections that online content gets. it is good. it has created the internet as we have it today. google cannot be liable for some random content that someone else posts. carol: are you racist? dune: i am not racist. carol: do you take kickbacks? dune: no. i spent years studying chinese.

david: you have written an article about all of the harm that this has caused. you are not suing him. you decided not to do that. walk us through this happening to you. dune: i was very naive. i should have known more about this. i did not realize that i would find it impossible short of suing him to get the stuff taken off-line. it seemed egregious to me. twitter, facebook, to them, that is censoring the internet. i thought it would go away. it did not go away. even after he was indicted, it still did not go away. this guy is under criminal indictment.

>> it impacts you personally. david: you are not alone. dune: i am the least of his victims. carol: a rediscovered masterpiece by leonardo da vinci. keri: we have a russian billionaire, dmitry rybolovlev, and a well-known art dealer, yves bouvier. bouvier is a swiss businessman. he runs his business out of the freeport, a tax-free business storage for high-priced art. you have rybolovlev, the russian billionaire, accusing bouvier of selling him art, marking up the price, and pocketing the difference. innocent until proven guilty, i want to make that clear. it has brought the attention of prosecutors in monaco and prosecutors in the u.s. who are scrutinizing some of these deals.

they're looking to see if this could be constituted as fraud. it could be seen a misunderstanding of what the relationship between a buyer and the seller is. that is at the heart of this dispute. what role do art dealers, and if call them art dealers, play in these high-priced, often no-paperwork-involved deals? these paintings are in the hundreds of millions of dollars. david: when it comes to the investigation of this, is the u.s. looking into it? keri: monaco arrested and has charged yves with money laundering and fraud. most recently, prosecutors have opened up an inquiry looking into the deals, which mr. bouvier is in the middle of. it could lead to charges of him

or other people. carol: there could be other clients involved. keri: my guess is there is going to be more and more complaints coming out of the woodwork now that it is more public. also, now that we have u.s. authorities looking into it. carol: if you have watched "house of cards," i have your next fix. it is called "occupied." we checked in with her editor. bret: this is a political thriller from norway, 10 episodes. carol: now airing in the u.s. is it doing well? bret: it is doing well. it is getting a ton of buzz and acclaim. it is set in oslo in the near future. it falls in a climate-science fiction category. it involves oil drilling and gas drilling.

norway considers stopping doing this, and russia does not want them to stop. thus ensues the political drama. >> next up, how mathematicians are changing the face of trading in the u.s. stock market. carol: we will take you inside america's deepest mine shaft. david: what happens when your bonus is tied to the price of oil. carol: redefining how men buy clothes. ♪

david: bonuses are often tied to a company's performance. the university of arizona does this in an interesting way for its football and basketball coaches.

it is tied to the price of oil. carol: that could be good or bad. david: we have seen the price of oil decline. those bonuses have dropped 38%. you have these guys that make money, bonus packages are shrinking. carol: universities are trying to attract top talent in terms of coaches. they are trying to figure out different ways to do it. this is a way of transferring the risk to the coaches. david: these bonuses given by anonymous donors to the university, it really stands out as a school that does this differently than other institutions. carol: you can see what it is like to be lowered into the deepest mine in america. matthew: almost 7000 feet down from the surface. it is really hot and wet. it is like you are in a tropical rainstorm.

they bored through an ancient lake and it is pouring into the mine shaft. they spent a couple of years trying to figure out how to stop getting the water coming in. they had to build a huge pumping system to shoot it out. it is like 180 degrees down there. the rock carries the heat of the molten core. they have to have a huge refrigeration system to cool it. lots of ways to get hurt. rio tinto takes things very seriously, takes safety seriously. i never felt in danger. david: what is the bet they are taking? matthew: they are going to be about $7 billion in by the time they get their first ounce of copper out. the bet is the historic crash we have seen in metal prices is going to rebound.

they will have timed it perfectly, they think. by the time it is in production, the surplus will be going way, and demand will be rising. it is a bet. they will be $7 billion into an -- and you talk to analysts, they are saying i would not be doing that. carol: the hope is there will be demand at some point down the road. matthew: irrrespective of what happens to china. they are hooking this to the growing demand in the u.s. they think by the time this is at full capacity, they will produce about as much copper as the u.s. imports. they will close the copper gap. they think wind turbines take several tons of copper, lithium-ion batteries take a lot of copper. that is what they are hanging this on. david: have you heard of bro tailors? carol: sam explains.

sam: these are online retailers who have a swagger to their identity. david: they are rated bro. they mirror the 20-something-year-old man in america. they specialize in one kind of garment, shorts, rugby shirts, they mostly sell online. they have become successful. carol: even the names for some of these garments is fun. it is a growing business. sam: companies are taking advantage of how easy it is to be an e-commerce retailer. think of almost any garment, and there is a company that wants to sell it to you with irreverence, wit, and silliness. they are speaking the same language as their customers. david: it works.

>> you are up in the high country. carol: we are here with ellen. and has to do with robots in europe. ellen: the number of elderly are going to increase dramatically over time. they have decided one of the solutions is robots. they are investing in companies that create robots. the idea is a robot will escort you from your room in a nursing home to the dining room. it will help you with your shopping, will have a touchscreen. they are creating a wide variety, hoping robots help patients alzheimer's. if you repeat yourself a million times, the robot will not be annoyed.

david: how often will they have these companions? ellen: the sense is some of these projects will come out in the next few years. david: an article about do-it-yourself quant types. ellen: the idea is you don't have to live in new york city or london to be a quant or investing, using algorithms. we call them free range quants. we interviewed a guy who has created his own algorithms, writing his own code. they are doing the kind of trading that big operations in new york are doing. their view is we can do it too. they use open-source coding.

they think they can play with the big boys. carol: diy for coders. they are giving the established elite a run for their money. ellen: some of the traders are like -- they cannot compete with us. you may think that, but there are smart people everywhere. carol: in the company section, you have a story about coca-cola and what they're doing with milk. this is an area they are interested in working in. ellen: we call it designer milk. i think they call it specialty milk allegory. milk that is lower lactose, high calcium, lower sugar. coca-cola is collaborating with a dairy company. there are other companies doing this. dean foods is doing this. the idea is that you are more likely to buy fancy milk.

one of the reasons coca-cola is doing it, soft drink sales are down. people are trying to avoid sugary drinks. those specialty milk sales are up, something like 20%, as regular milk and soft drinks go down. i have not tried it. for me, it is skim milk and nothing else. david: thank you. ellen: thank you. carol: "bloomberg businessweek" is on stands now. we will see you next week. ♪

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