carol: welcome to bloomberg businessweek. i'm carol massar. >> and i'm david jura. >> the power of facebook live. the realignment of the american political parties. david: all that ahead on "bloomberg businessweek." ♪ carol: we are here with the editor of "bloomberg businessweek," ellen pollack. and in the opening remarks section, the reporter argues that brexit will not stop globalization. we are seeing is trade ties deepening. and we are seeing more of it.

ellen: right, the argument is that if brexit happened it looks like it is going to. if trump gets his way and is more of an isolationist in the u.s., we are at a disadvantage. the rest of the world's deepening their ties. china is trying to launch its own it kind of free trade zone. asian nations. there is a southeast asian group of 10 nations that are forming trade ties. so globalization will not stop , even though brexit has happened. david: given the rhetoric we have heard, if congress doesn't pass that, we'll lose ground. as you look at the trade picture, there's the u.k. stand to lose out as a result of this? it is an entirely possible they could. in trade,e is tied up

there is less room for the u.k. and the u.s. to maneuver. it is a possibility that the west will lose out. david: we are still talking about brexit. since the referendum vote a couple weeks ago. in the feature section on new woman leading the scottish national party. carol: who is she, first of all? >> she is a long time member of the s&p. she was working her way through the ranks for a long time. a lot is going on with the prime minister, etc. but actually, to the north there is a lot going on as well. she is basically the face of scotland right now. she believes that scotland should not sever its ties with the eu and is working to make that happen. david: displaying some reasonableness you might say? in light of that referendum? ellen: she has seemed like the

grown-up of the bunch. there was a committee that suggest that maybe she should be in charge of the whole thing, given all the maneuvering to the last few weeks. she has her eye on a long game. she has been campaigning for scottish independence for a long time. obviously. david: since the last referendum. ellen: since she was 16, actually. she was sort of the face of the campaign during the lead up to the referendum which she lost. now the question is will there , be another referendum? and whether they will win this time. it is hard to know she is trying to pave the way. carol: i feel like she been thinking about this issue for a long time. ellen: she definitely has a plan. the question is whether there will be a referendum and if it will come at the right time. there are people that think she doesn't have enough support yet

and she would rather wait until she was sure. she get along with the new uk prime minister? ellen: we don't know that yet. carol: this incredible conflict between the african-american community and police forces around the country. you have taser standing by to supply body camera's to a lot of police forces. ellen: obviously, there's been a huge amount of tragedy in the last few weeks. even after ferguson, there was this thought, and some of the families of the victims were saying that if cops were cameras on their colors or pockets, then there would be fewer questions about what was going on and it would actually deter police overreacting to things, or police misbehavior. and so that assertive and open question. there is early evidence that there is less violence and there

are fewer problems between cops and civilians when the police are wearing the cameras. and taser, the company known for stun guns, is basically capitalizing on that. david: karen weiss wrote that story. karen: initially, they created something called a taser cam. this was in response the fact that tasers were being deployed all over the country. police forces everywhere and the company started facing scrutiny for the devices. whether or not they were safe. and so they thought if they could record the use of the taser it might protect them against lawsuits and help in justifying why the cops use the devices. they created these add-on module, essentially, to the taser gun. that would record once the device was used. it only recorded a short time.

you basically ended up with a highlight reel of people getting tased. they said they need to record a whole situation to tell why an officer was tasing someone. that led them to develop the first body cam which was released back in 2009. carol: take us back to january, 2015 at the taser headquarters and the ceo and how he made a big announcement everybody who worked there. karen: i will go back to 2014 if that is ok. the summer of 2014, that was as theey referred to ferguson incident, which was one of the biggest incidents about police officer involved shooting to the u.s. a young man, a black man was shot in missouri and there was no video evidence of it. that brought a lot of attention to body cameras and whether or not they should be deployed nationwide as a tool for accountability. taser called 2015 their super bowl.

it was justice department funding for body cameras, and a lot of public demand to do this. so at the beginning of 2015 there was a big sales meeting in annual meeting kind of thing among the taser staff at their headquarters. they have a futuristic office in arizona to celebrate this new rebranding there were doing. they call their body camera and digital evidence business axon. they were wanting to kind of promote the brand internally. the ceo rappelled in from the ceiling in their office to the theme song for "2001, a space odyssey." it was this big, dramatic moment. he had this shield of the logo for axon. they had been working on this cameras for a really long time. all of a sudden there was a huge market for them. it was an exciting moment. definitely internally for them

in the company, the company was evolving into a body cam company. david: we talked to the creative director about the cover story on tasers going to cameras and the cloud. ellen: so robert, tell us about the cover. rob: this is a story we've had in the works for weeks, maybe a month or more. it happens every so often when we have something in the pipeline and so when we originally conceived the art it was going to be this advertising sales treatment because part of the point of the story is that business is booming for this company. we would shoot these as luxury products. then obviously, the news changed things. with the news that happened, we knew we had to change the tone. we simplified it ended these -- it and did these moody photos on

black. we sort of edited the story in time to get it out this week. we knew that we wanted to do a more straighter treatment. and not go overboard. david: when we first saw the cover, carol and i did not immediately know what it was. it speaks to the unfamiliarity of these body camera which are becoming more popular. as an object it is still something new. robert: definitely. it is nice to introduce people to what this thing actually looks like. it is about 300% bigger than the actual scale. but you know, the headline is purposefully put right up next to the lens. you know exactly how the device is laid out. carol: i feel like there is texture to the cover here. robert: it is the nature of the device. it is a sort of zoomed in photo. and so you really get -- you know -- it is not incredibly

detailed, but you get a lot of texture on it. carol: up next, mark zuckerberg grapples with the unprecedented inquiry of facebook live. david: the nfl hunts for a new breed of athlete. carroll: all of that and more ahead on bloomberg television.

♪ david: welcome back to bloomberg businessweek. i'm david gura. carol: you can find us on radio and also on a.m. in new york and boston. am 960 in the bay area. i'm carol massar. david: how facebook celebrity -- live may turn facebook into a news company whether it likes it or not. carol: we talked to reporters. max: mark zuckerberg started pushing personal sharing back to the forefront and created this

live thing when he announced a live he talked about all the great uses you can do with it. there was a baby bald eagle cam and he was excited about. of course these tools come out , and people use them for other things. that is what we saw last week in extremely dramatic fashion. carol: in minneapolis and elsewhere. max: that is right. as many people know there was a , shooting, basically a black man died on camera. 32-years-old. and, this went viral. it set off basically a nationwide conversation on race -- much of it playing out on facebook live. some of it was tv networks rerunning these things. all of a sudden facebook was right in the middle of the new -- news cycle. david: i imagine people will discuss this for a long time. many people of written about this incident saying it crystallized for them that there is a problem in this country and being able to see that in a way that you wouldn't have been able to see months or years ago.

max: it is stunning and i think part of it is this weird nice, controlled space that facebook has created. we think of it as a place where we see wedding photos that are tightly curated. and when you see violence in the most intimate way possible it is very moving. and i think that is why the video was so powerful. carol: that is what we're getting now. curated life versus real life. max: right. when you open the app today, the first button you see is that live button. i think we will see more of that. we don't know exactly why diamond reynolds started taping. carol: she was the girlfriend. max: right, yes, we don't know. part of it was to document. but i think part of it was she was genuinely afraid. she thought, if it is live, then maybe it will be harder for

something to happen to me. there are implications of how this could be used and unfold in real-time. facebook is scrambling to figure out how to deal with this. because this was like a pretty clear-cut case of public interest. we can all agree that we are better for having this out in the world. there are other instances that could come up in the future that may not be so clear facebook hasn't figured that out. david: intimate me think about some pieces written about youtube a few years back and how the company now has people literally watching the footage. they are literally watching a large quantity of the footage to determine what should stay up and what should not. how difficult will it be for a company like facebook to arbitrate this? max: superhard. they have a big team of content auditors to have this kind of very broadly written content policy. it includes things like piracy and also violence and bullying and hate speech. it is the job of these people to figure out -- certain videos are

very clear-cut. but others where it is violent but maybe there is a good news reason to do it, it is up to these people that are in places like india, ireland, austin who have to basically in real-time say, does this violate our policies? and, i mean, those are hard calls to make. those are calls that very well paid journalists make all the time. in real-time it can be really hard. especially if you do not have the cultural context. imagine somebody in india trying to make a decision about an event going on halfway around the world. carol: at one point this video this was pulled down originally. max: we don't know why, facebook called that a glitch. that could mean any number of things. we tend to think it is -- it was probably in the moderation area that it broke down.

but we don't know and facebook has not said. the bottom line is algorhythms are written by humans. somewhere, somebody has to decide how much violence is too much violence. and that is just starting to happen. david: up next, is donald trump a fluke or the future of the republican party? carol: and rebuilding detroit one bite at a time. that is ahead on "bloomberg businessweek." ♪

♪ carol: welcome back. this week's politics and policy section is devoted to the upcoming conventions. david: peter talks about how both parties are entering historic realignment. carol: we asked him what the rise of donald trump means.

peter: over the years the movedican party kind of politically to the right at the same time there was a fragile coalition with the libertarians, the marijuana smoking anything goes. they had the religious conservatives all about opposing abortion and gay marriage. and so on. and, then there is the business all, " don'tich is bother me with abortion and marijuana. just get my taxes down." carol: open up markets. peter: exactly. these groups didn't play well together. they all sort of agreed that the -- on small government and low taxes. that was all they could rally around. trump comes along and has a tax cut but also has, let's preserve social security and medicare. no cuts there. >> right.

entitlement. >> lets have major defense spending. it doesn't add up. many people don't believe he is is not really a small government, low-tax kind of guy. the party exploded. the tea leaves are public opinion surveys in politics, taking that if you look at that stuff it portends that this was going to happen. david: the research centers that back in 2014 when trump was not running for president, they went and looked at adult americans politically and nonpolitical and asked them 23 questions, each case is a duality. do you believe that immigrants are good for this country or not so good. things like that. and, they used those numbers to create clusters of voters and then one cluster of bystanders. seven clusters of voters. then they went back and said, well what is the political

affiliation of these clusters? two of them were business conservatives and steadfast conservative. others were neutral to democratic. and you can kind of look at that , as a roadmap for where we are today. and just for example, the business conservatives while both leaning republican disagree on a lot of things as we were kind of just saying. and so you wonder, do the business conservatives belong in the same party? it is not so obvious. carol: how do you write a cohesive party platform with the election just a few months away? peter: donald trump has said clearly that you guys go right -- write whatever platform you want, i will run this campaign i want to run. carol: that doesn't work. peter: not if he wants the support of the party. but he just seems to have said you guys can come with me or i , will go it on my own. david: on that note, i interviewed many establishment

republican politicians asking if they support donald trump as presumptive nominee, and almost invariably, they say i will support the party's nominee. how long will that continue? how long will they say that if trump is going in a different direction? peter: i talked to the former house majority leader who now works in business. he is one of the people who has not signed on to trump at all. he is not one of the people who said i'm hillary. there are some that have gone that way. he says look, as disappointed as we are in trump, he says how can you vote for hillary clinton who to been moving steadily left capture the bernie sanders and elizabeth warren vote? so, it is a lot of up in the air right now. david: coming up, we ask you --

peter if democrats can become the party of business. carol: all of that ahead on bloomberg businessweek. ♪

♪ david: welcome to "bloomberg businessweek," i am david gura. carol: i am carol massar. we are inside the magazine's headquarters. david: a government playground for swindlers. carol: it is all ahead on "bloomberg businessweek." ♪ david: we are here with ellen pollack. editor-in-chief for

bloomberg businessweek. there's something in the global economic section about chinese who have moved to big cities and are now moving back. what is causing that to happen? ellen: more opportunity. people left their families, and many times left their children and went to work in factories. now they are trying to go home and there are more opportunities. china is encouraging this, helping them start small businesses. and also, china is trying to make some of these areas into tourist destinations. so there are more opportunities there. carol: what does it mean for all of the workers in the city? ellen: there still are plenty of people there, but also some factories are not as busy as they were on because a lot of manufacturing has moved to cheaper locales like vietnam. and also china is trying to become more of a service sector economy and consumer driven economy so they are really encouraging these other kinds of businesses. david: the government is encouraging this. how difficult is it for a

chinese person to move from one location to another? ellen: it is not so easy because there are registrations that make movement much more difficult, but it is made easier since they are encouraging businesses. we talked to somebody who was starting a fish farm at home and hoping to start a restaurant, and hoping tourists would, and pay good money for those things. it is not easy and people do not have a lot of money to pick up and move. carol: they want to go back. ellen: they miss their families. that is a huge draw. carol: we want to talk about the companies at the startups. you guys have a story about silicon valley and the automakers vying for control over information of our car.

ellen: they need each other, they do not need each other, but in this case it is about data rather than the cars themselves. and you know, new cars can do all kinds of things and collect all kinds of data. there are even cars that can weigh you. which is a little bit frightening as far as i am concerned. cars can be plugged into apple apps, google apps, but a lot of car companies are trying to develop their own data services because they do not really want you relying on the silicon valley companies so much. and the question is, who is going to be able to harness the data because eventually they will be able to sell you stuff on your dashboard or screen, and you will drive by a staples and get a coupon for staples or something like that. and so, the question is of who ultimately will control the data could affect a lot of things. david: there is a story about a guy who ends up swindling some of the biggest energy companies in the world out of tens of millions of dollars. a fascinating piece. ellen: it is one of those criminal romp kind of stories. you can sell credits for making biofuel and they can be separated.

it is a murky marketplace and they try to keep track but it is not always easy. there has been more than one guy but we focus mostly on one who has been trading rins without making the biofuel, which is really bizarre. and he made tons of money. carol: a lot of great pieces to that story. we spoke to brian grilli about it. brian: phil ripken, he got into the business years ago and built a factory that was to produce biodiesel fuel. that would be purchased by diesel producers who needed to blend biofuel, fuel made from waste and poultry fat and such like that into their diesel because the government requires it.

and he built this factory and he produced a little bit of low quality biodiesel and he finally gave up. but he still made a lot of money because the government program that requires us to blend lots of biodiesel into diesel allowed him to do it in effect, under wraps. david: he was able to do this with something called rins? what are these and how was he able to organize this shell game? brian: the government requires refiners to blend a certain amount of corn-based ethanol and biodiesel fuel into gasoline and into diesel. this is billions of gallons a year and it varies by producer but it is a lot, and they have to blend in so much. but if for one reason or another they cannot hit the mark, they can buy these credits, which are called renewable identification numbers or rins. and producers of biodiesel

generate these credits for every gallon of biodiesel they produce. each gallon is attached to a 38 digit number. and so they can strip these numbers off, they can sell the diesel -- excuse me, the biodiesel to say, marathon, and they can strip the number off and sell that in a market for these numbers for refiners who need these credits to make it up to their minimum for a given year in blending gallons. so they have some value. the value over the years has varied from $.30 or $.40 a gallon to a couple of bucks a year ago. recently, just over a dollar. carol: it is a legitimate business.

if this all went as it was supposed to, it was legal. brian: and the credits are designed to give people some flexibility in what they do with their refining because refiners, they do not really above this whole program, and they have made efforts to get rid of it but yes, it is a legitimate business and fraud comprises maybe under 1% of it. but for sheer moxie, these guys like phil rifkin who have made tons of money off selling essentially made up numbers, never produced any biodiesel, just sold a bunch of numbers, and not to people who are innocents and do not know what they are doing. he was selling these to exxon and bp and marathon and conico phillips. carol: in the markets and finance section, what is behind the record-setting bull market for bonds? david: we talked to reporter kathy burton. kathy: traditionally when people look at the bond markets, they say that those guys are usually smarter, so when they see yields so low they think there might be a problem. in fact, things are not great.

there is growth but it is not great. carol: subpar. david: right. >> there is really no inflation, which is a problem. jobs growth is good. so it maybe is telling us something that maybe it is not quite as dire as the market is saying. david: has the notion of what a haven is changed in light of these prices and what we are seeing? are havens changing? kathy: it does not seem so. it's seems like people keep buying these bonds. carol: talk about the big players. what do you have to say, what does bill gross say? certainly not bashful. what is he saying about what we are seeing in the bond market. kathy: he says it makes no sense. he called it a black hole and says there is no way to get yields. isis certainly a person who

not betting they will go lower. david: is he in the minority, is he representing the mainstream view for a lot of fund managers? kathy: it is kind of split. if you talk to some of the hedge fund guys they will not go near sovereigns because they have gone so low. and it is risky, because in the short-term the prices can go back up very quickly. and then there are people -- some of the mutual fund guys say, they could go lower. carol: i wonder if we are in a bit of a predicament. right? yields so low make it easier for sovereign nations to finance their debt. correct? >> that is true. >> if it starts to go higher that can become problematic. kathy: that is exactly what one of the managers that i interviewed said. he said, we have to keep rates low because all of this debt will get rolled over and you want it to roll over at that same level or lower. not higher. carol: up next, will hillary clinton win wall street's vote? david: and to the newer getting consumers to buy bikes in detroit.

that is coming up on bloomberg businessweek. ♪

♪ carol: welcome back to "bloomberg businessweek." david: i'm david gura. you can also find us on the radio on sirius xm and a.m. 1130 in new york, 99.1 fm in washington, d.c. carol: let's get back to the politics and policies section. focus on the upcoming republican and democratic conventions. david: earlier we talked about the role that donald trump had on the republican party and now we will talk about hillary clinton and the effect she is having on the democratic party and democratic voters. carol: we will talk to peter coy. peter: america is a land of contradictions of many different interest groups.

a party that appeals to just one interest group is always going to be a minority party. if you want to win, you have got to pull people into your big tent. so there is a message that can appeal to some business people and some union members and some you know, i do not. carol: it has worked before to some extent. peter: it has. somebody leaves one tent, you pull them into the other tent. so i do think that clinton can have a pro-business message without seeing mass defections from the democratic party. david: i want to see if you share a sense i have of the way the democrats have campaigned. i think it has been fairly reactive. donald trump will say something and we learn more about his positions, and then we have democratic politicians reacting. including hillary clinton. is that at their own peril that they are not doing more to lay out what their stake in the

terrain is going to be? peter: that is interesting. i think also hillary clinton is not just reactive toward donald trump, but to bernie sanders. he is trying to be the centrist and the centrist is always going to look kind of bland compared to the people who are throwing the smoke bombs on both sides. and she runs that risk anyway because she is seen as kind of mechanical, robotlike, super cautious. she has certainly a legit platform. it is actually well vetted by real economists and so on, so i think she has got something to say. it just gets lost in the media. david: perception of it. carol: in terms of donald trump alienating a lot of the latino voters, which would be so important in some of the swing states. peter: the latino vote is big

and growing. it is interesting. up until this election you could have imagined a scenario where as jeb bush was hoping to do, latinos would drift toward the republican party in the same way that other ethnic americans, italian or irish americans in the past -- carol: we have seen that. peter: it has happened. latinos did not always identify themselves as latinos. they were starting to, even on the census they were identifying themselves as white. why should a mexican-american call himself a latino? i mean, there is no rule about it. but it is a matter of self-identification. in trump has almost forced

identity, the latino identity, on people who may not have had it and it is negative toward republicans because they are perceiving themselves even third-generation hispanics or latinos suddenly say, you do not like me? i do not like you. carol: that can stick. that can stick beyond this election cycle. peter: there is a phenomenon in physics, like a magnet. take a big hunk of iron and put it in a strong magnetic field, it magnetizes. when you take it out of the field it is still a magnet. and that is the republican party after donald trump. david: a profile of zak pashak, building bikes in detroit. carol: and aiming to be part of the rebound of that city. we spoke to tim higgins. tim: he went to detroit and spent a long weekend looking around and came to a couple of conclusions. the city did not need any more bars, said he did not need to open one there. and also, perhaps he could tap into the manufacturing muscle of the city and make something. it had been a long dream of his

to make something and he kicked around the idea of bicycles. he had the idea that they fit into a world and maybe he could make a city bicycle in the city of detroit. carol: how easy has it been for him to do? i think about the bicycle industry. i think you point this out in your story. i don't know, go back a couple of years, there was almost no bicycles manufactured in the united states anymore. tim: absolutely not. the 1980's really saw the beginning of the end for us-made bicycles, and like a lot of consumer products, manufacturing went to asia. it was for low-cost manufacturing. so the idea of making bicycles in the u.s. is odd and quirky, and he admits that some people thought that he had a goofy idea. so just getting going with this, it was something requiring patience and determination. just getting the skill set, he had to train his workers and find people who could use manufacturing know-how and start to create bicycles.

carol: take a step back from the company. detroit bikes is his company but i mean he actually created a , prototype in his garage, correct? tim: he spent a long time trying to figure out the bicycle business from his garage and worked out prototypes. and that sort of thing. then he decided he had the opportunity to buy out a factory, they are cheap there, and bought a factory and started the process of trying to figure out how to make a factory operational. carol: how did he buy a factory? you are leaving out a big step. he came from money, did he not? >> his former stepfather was an oilman in calgary and a co-owner of an nhl hockey team. he came from money and had invested when he was a young man in various things and created money of his own. and through that process he got into the bar business in calgary and vancouver, so he had money, he had things to sell off when he came to detroit. david: next, the nfl wants to recruit players from living rooms.

♪

♪ carol: welcome back to "bloomberg businessweek." i am carol massar. david: i am david gura. in the technology section, the nfl may be recruiting players from joystick to pigskin. >> it is people playing games ranging from games you have probably seen before, sports games, all the way to games with potions and sorcerers and goblins and orcs. things if you watched you would have no idea what was going on. carol: it is a big industry. >> it is a huge industry. some of these matches on digital streaming get over a million viewers, which a lot of american sports and entertainment people

would love to have for their average viewing. it is a massive business. sponsorships, there is tv rights. all of it. it is a fully fledged, getting to be very mature sports industry right now. david: we can debate the sportsness. you see that at least are -- leagues are getting into it. what do the -- where do leagues see value? eben: the real value they see is in the demographics. e-sportsour average player and user is a young, mostly male kid who does not really consume tv in the way that we grew up consuming tv, and that is a valuable demographic for sports teams because their entire demographic is pushed via tv. if you are not getting that regeneration of fans via a tv broadcast you need to find other ways to do that. carol: you write that the nfl is actually adding professional players, not on the field, correct? but to the electronic gaming world.

eben: you are already seeing it in european soccer. fifa, ea. you have seen them sign professional fifa players and they will compete at events wearing that team jersey for that team. so you might be playing, and man city might be paying you to play as man city so when they win in the online version, it is their team that is winning. it is a form of marketing. carol: yeah. >> it is a way to make their team a little more prevalent in the eyes of young males who are doing this more than they are watching soccer on saturday morning. david: we mentioned the nfl, what are they doing exactly? eben: they are doing their due diligence on this exact thing. they are looking at the big nfl game, madden. carol: that is a huge game. >> massive. david: she has some experience. carol: i had four brothers. i learned. eben: madden has kind of professionalized their tournaments in the last year.

they just announced majors and it has a million-dollar prize purse. so as the game becomes more e-sport, you will see those nfl teams getting involved. carol: what are the financials involved in e sports and the potential for the nfl? eben: they are huge. some of the prize purses for the biggest tournaments are $10 million. the idea of having a seven-figure prize purse is not crazy anymore. you know, it is something that happens a handful of times throughout the year, so there is big money involved. and when that happens, obviously you get eyeballs. when you have eyeballs, you have sponsors that want to capitalize and certainly as madden grows, i think you will see nfl teams getting involved. talking about sponsoring a player who will go and competes in their jersey and second of all, hosting events. nba arenasy sell out but if you can sell out an nfl arena, why not give that a shot? i think when you see these ea

sports majors, you begin to see them in bigger places and that usually means stadiums owned by nfl teams. david: you profile somebody that says he can do this as a full-time job? >> sure. we have reached a time where there are full-time madden players. the way they monetize themselves is not just in the winnings. they also have youtube and twitch channels where they get paid per prescriber. this guy has won sponsorships already and gives online tutorials that he gets paid for. carol: "bloomberg businessweek" is available online. david: and online. what was your favorite news? carol: i enjoyed the cover story on taser. i think of taser and i think of stun guns. i think of body cameras. but i had no idea they were , involved in the cloud business. they really are becoming a technology company and a lot of police forces are using them. david: and the body cameras. i liked the profile of the guy who swindled the u.s. government. here is a guy who made tens of millions of dollars and now he is in jail.

it is a fascinating part of the story. carol: there are a lot of great reads. we will see you next week. ♪ . .

i'm emily chang. this is "best of bloomberg west." we bring you all of our top interviews from the week. pokemon go was unleashed into the world. the mobile game sent nintendo stocks soaring, and it led to fans with injuries. we will explain what all the fuss is about. the biggest technology ipo of the year. the japanese company line debuts this week. amazon prime day's transit -- tr