carrol: welcome to "bloomberg businessweek." in this week's issue, a look at president-elect donald trump and who he surrounds himself with and what that means for wall street and main street. oliver: plus, the fear that has taken hold in tech town. carol: and like california says they may be better off with out trumps america. oliver: all of that head on -- all of that ahead on "bloomberg businessweek." ♪ carol: we are with ellen pollack. in the finance section, you look at consumer financial protection bureau and if it will survive a trump administration. ellen: it is the baby of

elizabeth warren and she is a big opponent of trump's and is meant to protect consumers, an offshoot of dodd-frank, so president-elect trump has talked about rolling back the ugly some of dodd-frank. is it going to survive or not? elizabeth warren paid a visit to the offices of the bureau the other day to kind of boost morale. oliver: this is almost visceral to think about what will happen in politics because they will be opposed to the republican stands like elizabeth warren and it will be interesting to see the financial groups. ellen: and also how people react to it. in our story, one person we talked to points out that the bureau is the consumer

protection bureau and has helped many people recoup money they have lost, they have changed fees that are protecting consumers, so one person likes a point that the various people who will be hurt by this are some of the people who voted to mr. trump. oliver: this is almost like a special election part two. another stories about steelmakers and how the industrial expansion that trump promised could benefit these industries. ellen: it is no accident that we are talking about trump because we wanted to help readers how to navigate what is the new landscape that is going to be and what it is about. the complex deal has lost -- complex steel has lost a lot of business to china. the steel business in the u.s. is a mess. president-elect trump has said he has wanted to invest in infrastructure. the question is, whether this

will revitalize the industry, and a lot of people say it could be very good for the steel industry. carol: let's go to cars. in the industry section, a look at what a trump administration will mean for the automaker. he was vocal on the campaign trail about the companies. ellen: he was and he said he thinks nafta is terrible and he wants to reverse it or i don't know how you technically do that. the auto industry has changed huge amount, in part because of nafta. so many auto companies have set up in mexico, and there is a lot of parts going across country lines, so really, another question which is the theme of this, but we hope it helps readers identify what the issues are and how the auto industry will cope with this. of course, they say they are looking forward to working with president-elect trump.

oliver: cap boils down to the affects trump could have. you do this well in your cover story, talking about the potential upside and how to recalibrate the expectations for the economy because of trump. ellen: right. it is about recalculating. peter is very adamant that sort of no matter what the shifts are in the economy, no matter the political shifts, it is true that business always finds a way to navigate. if you go back and look at history, i think you'll find that peter fields, you will find that business always finds a way how to figure out how to make money. which is what they're supposed to be doing. carol: there could be an upside. ellen: exactly. carol: we have more from peter court. we continue to talk about the

trump administration and what it means in terms of the economy and the market because you see reaction. peter: [laughter] we have seen a lot. what is surprising is that all of the forecast going into the election with clinton is going to win, right? but if trump wins, it will be terrible for the stock market, it will crash. carol: it did election night. peter: it did for a few hours but since has gone up. all the people who protected trump would lose and the market would lose are scrambling to change their story. we decided to take a look at why this is happening. there are a lot of reasons. if you had to pick one, i would say it is the expectation of stimulus, fiscal stimulus in two forms. one is lower taxes, the others higher spending. carol: which is what everybody has been hammering for. the fed has done everything they

can do and it is time for government to act. this is what we are looking at. peter: on election night, they predicted a recession because trump would win and then they backtracked and said they put their foot in their method allowed medical views to dominate economic thinking in his column in "the times" this week. he said, actually, it can be pretty good for the market. [laughter] carol: what i really meant. oliver: that drives home how to think of how to think about financial markets work. right now, we are trying to figure out what sector benefits and you have seen dispersion in the market. everything was moving together the past years. after the election, it went from trump would be risk off to risk on, and also very specific moves in the markets. how much of this is a

recalibration of analysts and strategists trying to figure out now that they have moved on past political winnings, or they want to happen and we have to revisit and look at it quantitatively? peter: talking about dispersion, the most obvious is that stocks have strengthened and bonds the weekend. we could bonds mean higher interest rates -- weaker bonds mean higher interest rates. i could be interpreted positively or negatively. positive if you believe that we were at risk of deflation. if interest rates are moving upward, getting an inflation expectation moving up, which seems to be happening, look at the markets, that tells you that deflation is the diminishing concern. it is a negative if you think that what we are seeing is more worried about the credit worthiness of the u.s. or that you think that maybe inflation could go not just up to the fed's target but above it, and that the fed, having been so accommodated personal long, is going into a switch mode and going back to its traditional role of restraining and overspending government. carol: turning a silver lining

into a cover image was good job of director rob. crowd: echelon -- oliver: this cover is exciting, tell us what is going on. rob: we wanted to do a cover to two people. what better way than with puppies, kittens, chocolates, sundays? carol: all the stereotypical things. rob: all the stereotypical things. just to cheer up and assure people that things will be ok. carol: was this year one and only idea? the nation is trying -- was this your one and only idea question mark the nation is trying to -- so where the other ideas you kicked around? rob: there were more ideas that

were conceptual, like one for example was the line business will be great again and it alludes to that, but when this was above the other sketches, it popped out and it is so simple. what is point -- oliver: what is poignant about this is there is reflection and how this could be good for economic growth. carol: look at the markets. oliver: at the same time, there is sarcasm and, hey, not everybody is on board. rob: there is a preparation happening with this cover. [laughter] -- hyperbole should happening with this cover. [laughter] we decided to go all the way. carol: is trump too much for california? apply some in silicon valley and sacramento want to go their own way. oliver: and how wall street became the global center for espionage. ♪

carol: welcome back. i am carol massar. oliver: i am oliver. in the politics and policies section, how the election of donald trump has forced california to do some soul-searching. carol: some think the golden state may be better off on its own them with trumps washington. -- with trump's washington. we spoke with thousand hoffman. talk to me about -- with allison hoffman. talk to me about california. they have been getting ready for a trump administration and how it might impact them. allison: california has 39 billion people who live there and it is the democratic-run state and also 2700 miles way from washington, so democrats and sacramento since the election have been trying to figure out how to basically --

they joked about building a wall around california. oliver: that is a great sort of way to describe it, very apropos given terms talking about the wall for immigration plans. -- trump is talking about the wall for immigration plans. how do they defend their existing legislation? allison: what they want to do is make sure they can keep policies and programs they want for themselves. they are really very interested in trying to figure out how to defend climate change, emission regulation targeted and the point of change. california can set standards that are in action not just for california but the whole country, so automakers will follow the california emission standards. what the lawmakers in california are trying to do is step

stricter emission scandals than the rest of the country more than one decade ago and carmakers followed that, even though congress did not keep up. they were able to do that and they feel like they could use that same model to defend other bits of legislation. carol: i feel like you talk about california being a breeding ground for progressive policymaking, and they have led the charge when it comes to carbon emissions and other issues, health care, support. kelly expects california to do that no matter what comes out of washington? allison: i think we can. the same night trump was elected, they legalized recreational use of marijuana, not the first but the largest. they also passed on the crackdown of sales at gun ammunition, so that is a backdoor gun-control measure. the increased taxes on the wealthy.

the united states goes on direction in california the other way, a state that had a 61.5% vote for hillary clinton, the second highest in the country after hawaii, and virtually the entire difference in the popular vote for clinton nationally is chalked up to her winning california. they see no reason why they should go along with whatever the republicans proposed in washington. it has been only five years that california has been top to bottom run by democrats, but you have a situation or the governor is jerry brown, who overlaps with gerald ford during his first term as governor in the nation's 1970's and jerry brown came back to follow arnold schwarzenegger and went the other direction. he has partners in the state assembly and senate, democrats, latinos from southern california, and the day after the election, they put in a statement that the two house of legislators ranch put out a joint statement in english and spanish and said, listen, california was not part of the united states when the united

states was founded, but it is now and we consider ourselves the defenders of progressive values and the country's future. oliver: break down the relationship between washington and what they will be able to

carol: welcome back to "bloomberg businessweek." oliver: you can catch us on the radio and sirius xm 119 and a.m. 1130 in new york, till hundred 1200 in boston, 91.60 in the area. carol: and in asia on the bloomberg radio plus app. oliver: in technology, a look at what trump's presidency might mean for the ipo market next year. we spoke to alex barinka. carol: people are trying to figure out what it means cap donald trump in the white house and we have seen tech stocks trade lower after? the election. what about the ipo market with

-- after the election. what about the ipo market? alex: outside of this this road reaction -- visceral reaction after trump was elected, for ipos, it is more rational. the markets need to be behaving and the companies have to be ready to go. i think the markets behaving is going to be the number one question mark with trump because we do not know what a lot of the policies are and that could breed uncertainty going forward. you see the fix of volatility x, the have seen the vi volatility index come down below , 15, which is perfectly fine if you take listings out, so looking into after the holidays, our markets going to behave and is volatility going to stay down? i am hearing a lot of companies that are looking to go that are potentially considering getting out earlier next year than they might have been considering

before because when he comes in, there might be time before policy decisions are made. that is the market side. carol: getting it under the wire. alex: exactly. it has been a slow year for ipos, but after labor day, we have seen a rush. some companies have come out to trade well. if you look at tech stocks that have gone out this year, they are up almost 40% as of now, since listing day, pretty good returns for investors. that is a good sign for companies who are potentially looking to go. we have seen a lot of activity from snapchat, as reported, looking to go public early next year, all the way to a change from small to mid size companies like blue apron. carol: staying in technology,

silicon valley fears a trump administration they lead to a brain drain. here's ellen hewitt. we have been talking to people curious about donald trump's plans on immigration and what it means for silicon valley employees and how they employ a lot of focus from outside the united states. ellen: it is the question on a lot of people in silicon valley right now, given this is a place for many immigrants come to work for a period of years at major tech companies of the world. they are often here on visas like h1v, employer-sponsored for them to work, or the tn visa, which lets people from canada or mexico work in the u.s., and that is part of nafta up here at a lot of people in silicon valley that are here with work authorization, who are really concerned about what a trump presidency could bring.

their main concern is general fear because trump has said things about how he feels about h1v's, nafta, but has not made strong statements on specific lansbury do you end up with people concerned with their -- specific plans will be, so you have people who are concerned with the future, said general fear but not a certainty of what will come next. oliver: any immigration efforts trump is going to install throughout the country, it will affect everywhere, but silicon valley sort of feels like it is in california, where there is immigration, and then you have tech, which draws people from around the world, are those the two things that could make them react a place to the policies? ellen: i think you have silicon valley as a place for immigrants play an outside role-played a lot of skilled immigrants feel they came here because they were

drawn to working in silicon valley and then you have companies that are recruiting hundreds of thousands of people overseas to work of them. it feels close to home. anyone who works in silicon valley has experienced this sense of working around immigrants from all over the world. because he has sorted the growing global tech saying, there is the thought that people who may have been on the fence on coming to the u.s. for a tech committee go to europe instead or may go somewhere that is not the u.s., vancouver or someplace, somewhere they do not feel this new sense of being unwelcome, which many of them told me and my coworker that they felt that the selection made them feel like maybe they were not as welcome as they had once thought they were in the u.s. oliver: the brain drain. carol: exactly. what does it mean potentially for this valley economy, one that has been on fire, whatever metric you use, so is there concern that if there isn't that

access to workers employed workers by tech companies, you could see somewhat of a slowdown in silicon valley? ellen: we had the blackberry ceo saint silicon valley would be hit hard by restrictions on h1v visas, the ones most often used for workers, and that is something trump has said he wants to crack down on, the abuse of the h1v system but he also said he thought it important that silicon valley have access to high skilled talent around the world, so people are unsure about what might come next. i think it could have a huge impact on silicon valley. carol: next, how trump may be more like john maynard keynes than republicans of like to admit. oliver: and the spies vladimir putin has on wall street. ♪

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carol: welcome back to "bloomberg businessweek." i'm carol massar. all of you: the best business schools in america as we bring you the latest nba rankings. carol a rehab for people who are : so rich, they may have lost touch with reality. >> and why new york has become the global epicenter for espionage. carol: all that ahead on "bloomberg businessweek." ♪ carol: we are here with alan, and there are so many must reads. let's go to the focus on section where you do your regular

rankings. ellen: we have been doing this since the late 80's ranking on a variety of metrics. this year, number one, harvard. th and number two, is stanford. what is interesting is we really look at how valuable it is and how much it costs to get these degrees. david: and there is a score tied to it? it is by a larger margin? ellen: they have pulled further ahead than they were before. the first time, rice make a list. university of michigan is not on the list. when people think about the cost of schools, they don't always think or add in the cost of leaving their current employment. david: let's talk about a story in the industry section. it is about what will happen in

one industry, aerospace, particularly boeing if president-elect trump -- ellen: boeing is one of the biggest exporters and the united states, to be honest, i did not know. they have a lot of orders pending for china. the feeling is, if president-elect trump the is coming down hard on china, which he said he will do, well china council those orders? that will china cancel -- will china cancel those orders? if they do, the beneficiary is airbus. so airbus has a lot at stake here. and boeing is planning a plant in china. the question is, how is the new administration will do those plans? carol: we are talking about billions and billions of dollars that go to boeing as a result of china. ellen: they are a potentially huge customer. carol: staying on the president-elect, because there's

so much to talk about, the teachers section, you look at whether or not if donald trump is a key economist. ellen: this is a story that digs deep into economics and how various economic theories are going to affect the trump presidency. it is very interesting because one of the things that economists do is a lot of modeling. there are various theories about modeling. really, what tax cuts are going to mean for the economy, and president-elect trump he has promised tax cuts -- and president-elect trump has promised tax cuts. we go into it so people can understand the difference in these models. the question is what the tax cuts will be like?

and if spending well be more possible because of the changing in the models, and what infrastructure spending will do in terms of the stimulus? it is a complicated story that really explains some of the thinking behind what is going on. carol: brendan was a reporter that took a deep dive into this story. >> brendan, you have the daunting task of trying to assess how donald trump's white house is going to spend its money and justify spending its money. how do you start delving into that -- into those we've? brendan: i will leave you with an image that will distress you for the rest of your life. ready? donald maynard keynes. there is this ancient idea that infrastructure spending and deficits spending comes with a multiplier meaning you get more economic growth and what you spend.

that is what economists refer to as a model of the economy. behavior we expect to have been given this and put. every president, every congressional majority that once to make changes to the tax coder create new spending produces a model of the economy. they did not officially score barack obama's infrastructure spending this way, but they did say, we will get americans back to work and it will come with a multiplier. we will get back more than we put in. that has been going on in washington since the newt gingrich republican majority. republicans have been pushing to shift the way that the congressional budget office models legislative changes. they want dynamic scoring. if you reduce taxes, increase economic growth and that growth creates new tax receipts and the tax receipts are somewhat offset.

this is something come at the direction of the republican majority more recently, that the ceo has started doing. it is a cautious dance in washington. the president proposes his budget and it comes with a score produced by omb housed within the white house. his macroeconomic model, he says it will happen in a goes to congress and congress goes to the think tank and comes back and says this is how we think the economy operates and what we can get away with. it all goes to the cpl that produces an official score. everyone is anchored to reality and that reality is what do the official institutions within congress, how do they think about the economy? what does that say about the long-term effects of a fiscal plan?

republicans and democrats want the same thing. democrats want to give away pumpkin pie and say it will be free. republicans want to give away pecan pie and says it will be free. carol: in the feature's section, vladimir putin -- the spies they say vladimir putin has been employing -- has been deploying on wall street. >> it is kind of funny. tell us, let's start about the different characters. who does this story focus on and why? >> the story focuses on a nonessential -- a nonofficial person of the government of the state development bank. it it in the heart of wall street for a number of years until the fbi arrested him last year. carol: so he was a spy?

>> he was a spy. the spy is not a technical term that they would use in the intelligence world, but for all intents and purposes, and the public would certainly believe he was a spy. >> what was he doing the cost the fbi to go after him -- what was he doing that caused the fbi to go after him? >> he was under nonofficial cover, an employee of the rfis. the russian equivalent of the cia working as a banker on wall street trying to insert himself into relationships on wall street that he could use to manipulate and mine information for the russian government and intelligence services. carol: what did he actually end up doing and how did he get

caught? >> this is the funny bit of this story. he was here for a number of years. he was the first wave of russian intelligence agents sent to the u.s. after the big illegals case in 2009, 2010. there were 17 spies arrested across the country living undercover in the united states. the first of the new generation to arrive, and he accomplished very little during the time he was here. he was under fbi surveillance for a large portion of that time. largely, seems he got very little information that was not effectively the same as any other wall street analyst would be able to accumulate through reading think tank reports and corporate statements. carol: up next, some charities are seeing a title wave of contributions since donald trump

one for the white house. david: and a rehab for people who suffer from affluenza. we will explain that just ahead. ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. >> some liberal nonprofits have seen a spike in donations since donald trump was elected president. carol: ira, tell us about sarah wechsler? >> she is a 35-year-old freelancer in portland. a writer and started making donations to planned parenthood, the aclu, the council on american islamic nations,

hundreds of dollars at a time. carol: sarah wechsler was just an ordinary voter like the rest of us? >> she is one of many people who quickly turned to various organizations, trying to opposed trump and his agenda. >> while small, they do add up throughout a lot of people throughout the country. what is this order profile people doing this? they always regular contributors? >> the organizations have not made too many direct appeals yet. this just started happening. these donors are new donors assert they don't really know if this is clinton's voters. they just immediately felt

motivated. the biggest number that we have seen so far was a million dollars from 14,000 donors, which is the biggest day they have ever seen. to the largeilar numbers. whether it is people volunteering your people giving money, or people just calling, it is many many times they normally see. carol: it is unusual after an election if your party wins, i will provide money from my side so that midterm we can make a different? are we seeing a lot more volume? guest: is normal. planned parenthood said after a midterm defeat or particular legislature threatening the agenda, they will see an uptick, but it is not like this. it is record-setting. the council on islamic american relations have a place on the website where you can volunteer. normally, nothing comes in.

they may beget one at a day if they are lucky. within a day after trump's election, they had 500. it's activity they are not used to seeing. the question becomes how do they capitalize on this or keep that momentum? a lot of them have made specific anti-trump appeals. you're greeted with a pop-up that says help us fight trump. others the anti-defamation , league told me they want to take a more wait and see approach and give tom a chance -- they want to give trump a chance to show that he will not live up to some of his rhetoric. it is an interesting case because they do not want to be seen -- for example, they don't want to be seen as stoking fear with hyperbole. for instance, the national research and defense counsel spoke to someone there and said they would love to have exaggerated on the thread and hope we are wrong. carol: up next, if you think

life is too good for you, we will show you where to go to compress. oliver: and the annual gift guide. all that still ahead. ♪

♪ oliver: welcome back to "bloomberg businessweek." i'm oliver renick. carol: and i'm carol massar. you can listen to us on am 1200 and boston. 91 fm in washington, d.c. oliver: and in london and in asia on the bloomberg radio plus app. carol: there is a special rehab for 1% spurs. oliver: we are talking about

people who suffer from affluenza. bob, you wrote about an interesting rehab affluenza , rehab. what is that? >> it is a very controversial term. this rehab doesn't believe in it, but it is a term that gets thrown around a lot. the idea behind affluenza is that rich kids grow up in a world without any consequences, so they do not learn responsibility. they actually suffer from some sort of psychiatric disorder. this is not a formal psychiatric disorder, but in court, it came up once in this horrible case. oliver: ethan couch popularized this term. guest: ethan couch got in his a drunk driving accident and killed people. and his psychiatrist said he suffered from affluenza. the rehab they wanted to send him to was dewpoint academy.

-- do port academy. -- newport academy. it is in orange county and connecticut founded by a young man named jamison munro who started the place when he was 28 shortly after he got out of rehab. it is probably the most luxurious rehab for adolescent you can imagine. carol: i am assuming you went there? bob: i visited the locations in connecticut and george county. -- and orange county. carol: walk us through what it is like. bob: there is psychotherapy, someone gets time with a horse. there is nutrition classes, massage therapy, yoga, meditation. as jamison munro told me, it is the sort of place where the hard work of trying to get at the root causes of your addiction can happen in the most comfortable way possible. oliver: horses, nutritional

plans, these are things that i did not grow up with. these sound like things that affluent people are always around. how does a rehab center to combat that employee to very things that are already part of that lifestyle you go -- lifestyle? bob: it does seem counterintuitive. you can also argue that newport academy is part of a growing trend in substance abuse treatment that treats substance abuse less as a will power problem, or a willingness to be treated. -- will power or moral feeling and more as an illness to be treated. if you can destigmatize the addiction and make the whole experience less punitive and more therapeutic, then arguably, you may be able to reach more people, particularly adolescents who will rebel if they are being punished anyway. carol: you said jamison munro does not believe in affluenza? bob: it is a loaded and pejorative term. he will not say that he thinks it is something that needs to be treated. he will argue that everyone

deserves a specially tailored fory nurturing treatment their substance problem. and that it would be nice if everyone could do it. carol: will they talk about the amount of people that come to his center dealing with affluenza? bob: in the article, he talks about how money, is its own issue for kids, particularly in the way that they are parented. from his own experiences, you have kids who are given everything under the sun, but are also neglected by their parents. for instance, dad is never around. and moms never around either, she is doing other things and the kids are left on their own. they suddenly have all the money and can do what they wanted to. there are researchers who say

this is analogous to children in poverty who are neglected by being in single-parent households or have parents who work. what you get is a kid who feels terrible, but then the message from their parents is, we have given you everything, so you have no right to feel terrible. one of the things the academy does is tell the kids they do have a right to feel terrible, and it is ok to feel bad about yourself, even though you have these belongings, you still can have problems. for some kids, that is a breakthrough. oliver: that is very unique about treating this sort of behavior, the affluenza. in many ways, some of the effects of growing up this way crop up in a traditional kind of abuse. they have found something distinct here they can treat that will not be answered in other sorts of relocation

facilities? bob: they believe, again, it is like a spaghetti hitting the wall response. with kids, sitting them down in a 12 step program and telling them they have to admit that they are powerless over a substance, may not be the way in for them. the way in may be collaborating with a horse, or going out and picking roses. it may be making lunch for everyone. carol: the etc. section is out with its annual giftgiving article. oliver: i am thinking -- here is our editor. carol: it is the ultimate giftgiving guide. everyone comes up with gift giving guides. what is your approach? >> retail therapy. we wanted to provide as many possibilities and 14 pages as possible. 78 items. we looked for everything for things from your pet, things for your home, beauty supplies, and

something called an eco-capsule that will help you live off the grid. oliver: the first page is a ton of small stuff, some that i would not think of gifts. when i look at them, no matter who you are you can find something here. >> stocking stuffers, everything from jiggers to pour your cocktails, soaps, and net dog -- two handknit dog toys. coasters, catchall trays, intense burners, stuff you can fit into a stocking stuffer that is affordable and pretty cool. carol: including a handknit cannoli for your dog. which i really find it is fun. there is a custom-made motorcycle made to order. and there are ping-pong tables made at the conference tables. >> we have a ping-pong table that is pretty cool that will

convert to 45 seconds into a conference table. if you want to make your table look like a start up five, you can get your company's logo printed. oliver: this one was my favorite. a rug that wraps around your entire apartment basically. >> if you like to meditate, you can stand -- you can spend thousands of dollars on a nirvana rug that is cozier. carol: this is the eco-capsule, over $80,000, and the private island. >> the eco-capsule hitches onto any sort of vehicle and lets you live off the grid. it is like a mobile home. you have solar and electricity. rainwater powers the faucet. oliver: "bloomberg businessweek" is available on newsstands now. carol: and also online.

oliver: a lot of good stuff. carol i loved the russian spy : story. with all the activity going on in new york city, it is happening on wall street. people who you think are analysts, but are actually russian spies. there are funny aspects to it. oliver: like a spy spoof, working hard, it did not get anywhere. i like a more serious tone. election politics, the battle between california and potentially donald trump where they want to build a wall around legislative policies and retain their independence. there could be quiet bit of conflict. carol: california has been very progressive on a lot of issues. more bloomberg television starts right now. ♪

welcome to you medicare, your decision, the guy that takes you through the medicare options available through humana. are you sure you have the right medicare plan? are with the right company? do you wonder if you can save money? no matter what coverage