♪ carol: welcome to "bloomberg businessweek." i am carol massar. oliver: i am oliver renick. and we are coming to you from newde the magazine in york. carol: hackathon hustlers making a living from coding contests. what life is really like on the border between the united states and mexico. oliver: all that ahead on "bloomberg businessweek." ♪ carol: we are with "bloomberg businessweek" editor-in-chief megan murphy. so many stories, double-issue. and the technology section, you

look at hackathons. megan: there is also a way to make enough money to only work on the circuit. look, we looked at people using these marathon coding sessions to test a product or take it to the next level. think about things they are not thinking of. and offer rewards, sometimes cash, swag. we find people whose entire apartment is littered with tvs, printers, shoes, anything you can think of from participating in these hackathon sessions. oliver: the idea was popularized in the social network. it's a very real thing. oliver: these guys are top of line and could work for major companies, but choose not to. megan: one thing i think that is great about this story, is that it is almost this cycle, this rite of passage, when you are young and don't have a lot of obligations, you probably feel free to go off and have an all-night hackathon and come back to your gross apartment. what just are thinking of longer-term goals, i am not sure

hackathons are all that appealing. oliver: maybe not the most sustainable. in the market section, let's talk about a very interesting story, these different means of communications through texting on platforms that are hard to track. megan: yeah, i mean, one thing that has come out through the litany of scandals since the crisis was that a lot of these activity of alleged collusion between traders was happening in chat rooms, and we should say that bloomberg also runs proprietary chat services. this moves into this social chat services which are known to disappear and can't be tracked. basically unmonitored. carol: great for compliance.

megan: those compliance people love it -- but actually, how they are using these services to explicitly go around compliance. banks have worked so hard to get ahead, financial services company, data companies, have worked so hard to get ahead and monitor these conversations. bankers are no different than anybody else. they will migrate to the platform that provides them privacy. whether that is to get ahead in work or send images they don't want to be seen sharing. carol: some companies are aware it's going on and are turning a blind eye a little bit. megan: i think it is just -- we talk about this with uber, airbnb, the migration towards disruptive technology and how regulators and executives are just always one step behind. yes, they are trying to get ahead of it and know it will be an issue, but they are only as good as the technology. someone is always going to invent something that makes it that much more difficult to

monitor. carol: let's talk about the cover story. i found this really moving, it is a photo essay. we talk about building a wall along the border with mexico. i feel like these pictures tell a true story of what is going on. megan: you know, this is one part of the country that i am not familiar with. it is the area we call north of the border, south of the wall. there is a large amount of area, that actually, whether that is farming, trade, trucks across the bridges, children's, family, playgrounds, territory caught in the middle of where the wall will go and where the border with mexico will be. one of the things that is most fascinating about this story is not only the livelihood and places where they potentially over, thateople come

there are huge gaps in the existing fence, specifically to facilitate these people to come across where they legally live on united states soil but are south of where that wall would run. it is powerful imagery. oliver: it really is fascinating. we talked to the photo editor, clayton carville, about those photos. >> one of the main points of interest is you are looking at the border patrol manning an opening, but for the most part, these fences are not manned, so you have openings so that land owners can access their land. >> that is an important point. because where this wall, there are farmers, golf courses. i mean, people own this land. >> state and national parks. >> there is life. there is activity going on.

>> yes, and there has to be access to these places because it is owned and use. and so what happens in most cases, the wall is punctuated by these openings -- fences that are like you see later in the essay, built on levees which were fortified when this project took place around 2006, so part of the buy in on the part of the land owners is that the levees would he made -- were going to be made better, because it is a floodplain. so she found one man who was dove hunting on a friends private land, undocumented workers harvesting spinach and beets. there is a public park that has actually become a hotspot for finding migrants trying to cross. >> right. and the other piece of it

is that $500 million in commerce is facilitated by the border crossings. in mcallen and reynoso, -- >> the bridge that goes between mexico -- >> it is actually like an incredible chunk of international commerce taking place here. and i think kiersten is smart to recognize this is a huge economic story, and one that we say the topography runs against the rhetoric of what this wall should be. oliver: just looking through this, you capture a great deal of the labor that happens in this sliver that is north of the border and south of the wall. this photo here of undocumented immigrants working, they are basically able to move back-and-forth and border security pretty much looks the other way. isause they understand this just how it works.

>> again, private land, private commerce. there are tacit arrangements built around trust between the border patrol and landowners, so it is not to say anybody is doing anything wrong, but there is a presumption of giving people access to the land they own. carol: at the same time you have immigrants trying to come across. >> apprehensions. so one of the pictures is a photograph of the border patrol agents as they got a call about a car that was trying to run across, and there was a concern this was a migrant vehicle. what the vehicle did was to sort of make a run for the river and try to hit water. and in fact, the car crashed and exploded, so he ended up running on foot to get across the border. there is also real action taking place. at the bridge, people cross

frequently and present themselves requesting asylum a lot of times from central america. el salvador and nicaragua. carol: using these photos was the job of rob vargas. >> we knew we wanted a picture of the fence. it was taken from various angles. some photographs were at an angle and the fence looked like this thin strip of the landscape, and some sort of at an angle, offense looked solid, but we thought this one was at a good distance, and we could tell what the fence looked like, and it also has an opening. part of the reason we did the photo essay was to explain why the fence needs to be porous. in order for commerce to happen. etc.era, oliver: i feel like it is a very unimposing photo. i thought it was interesting the

way you used to the space, the arrangement of the photo. >> a lot of the fence is unmonitored. so this photographer explored this 55 mile stretch, and there -- in that stretch, there are lots of openings that are devoid you know, of any, you know, border patrol or anything like that, so this also gets at that. it is impossible to have people stationed at all points of this enormous fence. carol: i also love that you do put out front and center north of the border, south of the, because there is this land behind the wall that is u.s. land because you cannot put a wall between the two nations. that.t does not work like >> a fence seems like a simple thing, but there are nuanced parts to it. oliver: up next, the real motive behind donald trump's registry of crimes committed by undocumented immigrants. carol: this is bloomberg. ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. oliver: and i'm oliver renick. carol: in the politics and policies section, a look at president trump's efforts to document stories from alleged victims of crimes committed by undocumented immigrants. oliver: we talked to our group dairy is brought in. >> voice stands for victims of immigration crime engagement. it was called for in an executive order by donald trump and elaborated on by a memo by homeland security secretary john kelly. i heard about this organization and was intrigued by the acronym, so i reached out to ice. and we don't -- the agency is not operable yet, and there are still a lot of uncertainties about what it will look like, but ostensibly being

sold as an organization to engage with victims of crimes committed by undocumented immigrants. the memo by john kelly calls for funding for the program to come from services that previously had been devoted to advocating on behalf of of undocumented immigrants going through the enforcement system. now, ice has said this is about serving victims, but some of the actions and statements made by the administration also allude to another purpose for this agency. donald trump said in his first address to the joint session of congress that it was about giving a voice to people forgotten by the mainstream media. oliver: these community relations officers, how different will their role be from those previous officials who were in charge of facilitating relationships and getting to know the community?

are they now -- will it be separate people? who will be in charge of finding these instances? >> we do know that the community relations officers working with voice are drawn from the same pool of community relations officers currently doing their work. we don't know what their job will entail. the voice program will issue a quarterly report and weekly report compiling instances of crimes committed by undocumented immigrants. carol: they started doing that in february. >> they put out their first weekly report, which i should be clear it is not explicitly tied to the voice program, but was mentioned in the same executive order that called for the creation of the voice program. the quarterly report is explicitly part of voice. we also know they will have a system in place for notifying victims of alleged crimes when

an undocumented immigrant is released from a detention facility or has a court date or is supported. carol: it feels like so much is now focused on the victims of crimes from undocumented immigrants versus maybe kind of helping the kind of undocumented immigrant community assimilate. >> ostensibly this is about helping victims, but when the president announced the creation of this in his speech to congress, he said it was about giving a voice to those maligned by the mainstream media and then immediately went into sort of highlighting these sort of inflammatory cases of crimes committed by undocumented immigrants, so there is this disconnect between the press release and the actions of the department are indicating. from what we can tell, it seems like a huge part of this mission

is sort of influencing narrative as much as influencing policy. carol: it's interesting that you point out, because isn't it, doesn't the data show that undocumented immigrants don't do the majority of crimes? >> yes. i mean despite the assertion that illegal immigrants routinely victimize americans, research show this is not a particularly crime prone cohort. you know, there is no correlation between high immigrant areas and high instances of crime. there is research that suggests that nativeborn americans are twice as likely to be incarcerated as undocumented immigrants. and in fact, if you remove the undocumented immigrants from detention facilities, native born americans are three times as likely to be incarcerated. oliver: up next, how the bank of canada inspires some fed governors. carol: the strategies competing for the big slice of 10 billion -- trillion market in actively managed funds. oliver: this is "bloomberg businessweek." ♪

♪ oliver: welcome back to "bloomberg businessweek." i'm oliver renick. carol: and i'm carol massar. on can also listen to us boston, andew york,

washington, d.c. oliver: in the global economic section, new york federal reserve bank chairman bill dudley has a special trick when it comes to monetary policy. he looks north for inspiration. >> this story goes back 20 years to when he was chief economist at goldman sachs before he joined the fed. he has been on a crusade to get central bankers focused on the stock market and how that sort of interacts with interest rates, and so what he tries to say is that if the stock market continues to go up when we are raising rates, that does not necessarily mean conditions are getting tighter even though we might be trying to tighten them, and so the reason why it has become relevant in 2017 and this current tightening cycle, this idea that goes back 20 years, is that is what we have seen so far this year since the election, the fed raising interest rates, raised rates twice over the last three months or so, but stocks keep going up, so on balance, conditions have been getting easier so that raises the question do they need to start raising rates faster to counteract that at some point. oliver: how far does this go back?

theory?bill dudley's so, bill borrowed it from the bank of canada in the early 1990's. at the time, the bank of canada was having a similar issue where they were setting interest rates, but they were being subjected to big swings in the canadian dollar because of the time there were a lot of international investors, capital flows, a lot of the problem's we deal with today, but they needed to figure it how to communicate that. they needed to adjust interest rates based on these moves in the exchange rate, so they combined interest rates and the canadian dollar exchange rate

into a single index so that people could see actually see net-net whether conditions were getting easier or getting tighter regardless what they were doing with interest rates, then that could get investor to expect them to respond in kind with interest rates to what was happening with the exchange rate. carol: it shows there is another thing we as investors have to think about when it comes to the fed and monetary policy. they have this dual mandate, but it shows through bill dudley and his thinking and impact on the fed that there is more at work here. >> that's right. this goes beyond the traditional notion of central banking, if we raise the interest rates, we are tightening. if we reduce interest rates, we are easing. it gets a little more complicated than that, you have to look at everything else going on in the world. in 1996, he was saying it is not enough to judge the stance of monetary policy based on where the interest rate currently is because we cannot observe that so-called equilibrium interest rate that fed officials have been obsessed with trying to figure out, so he says you need to look at the stock market, broader financial conditions, to see, to guide your next steps.

carol: in the markets and finance section, the race to corner the market in etf's. oliver: we talked to reporter rachel evans. >> with the active etf's being proposed, we have a situation where passive investments have been taking more market share from active management. you see flows into exchange traded funds. where you are seeing outflows and stagnation is the active mutual funds. really, these active etf's are a hybrid between mutual funds and etf's to stop the rot. carol: it is a story we have been talking about a lot at bloomberg. why do folks see active etf's as a good solution? >> right, it's a story we have heretalking a lot about at bloomberg.

>> it is an interesting question, because i think the fund provider see it as a good solution to their situation. they're seeing a lot of outflows into etf. carol: that does not mean it is good for the investor. >> that is the real question. we have seen $100 million for low in two funds, drop in the ocean compared to the amount of money that flowed into exchange traded funds at the same time. so where the real disconnect comes is, we have these fund managers who want to keep the money and active funds, but we have the investors who are more and more moving into passive funds because they see those as better value for money, so there is an interesting disconnect between the supply and demand for these products. that question really has not been answered. we haven't seen demand pickup to show there is a point to these funds. oliver: now when you say a

mutual fund sort of wrapped in a package that looks like an etf, how do they get the disclosure to trade intraday? >> so when it comes to etf pricing, and etf is still a passive etf, meaning it will probably still be cheaper. an exchange traded fund has tax efficiencies a mutual fund does not have and brings the costs down. when you get to the disclosure side, the way they get around this is they are trying to give the regulators, give investors a different type of disclosure, so it varies from structure to structure, but the way they are trying to approach this is rather than disclose holdings day in and day out, they are hoping they can do that once a month or once a quarter and give the markets and intraday value. this gives people an idea of what might be in the fund. carol: you write in your story, transparency risks exposing the secret sauce that active managers use. that's the whole idea, not disclosing what is in the fund, and that is where the active side comes in. maybe that will help them be the markets. >> exactly. and when it comes to active etf's, what they have done so far is disclose their holdings every day. carol: so you know exactly what is in the fund. >> the problem with that means you can potentially if you are

another investor, you can front run those funds. or you can replicate those strategies and not pay the fee. these new structures are trying to get around that by not disclosing day in and day out, so you cannot front run them, but in order to do that and get regulatory approval, they need to give something else in return. carol: up next, toronto's hot housing market. oliver: this is "bloomberg businessweek." ♪

♪ oliver: welcome to "bloomberg businessweek." i'm oliver renick. carol: i'm carol massar. incubatore tech that's running on christian values. all that ahead on "bloomberg businessweek." ♪ oliver: we are back with "bloomberg businessweek" editor-in-chief megan murphy to talk about some must-reads. let's talk about housing. this is a big focal point in the economic recovery here, but you look at it in canada where there is a shortage of housing.

oliver: the average home price of a toronto house, $905,000, so this is, you know, rivaling some of the most expensive metropolitan areas in in the united states, but this story takes it from a different angle. people are so desperate that people are forgoing the house inspection. which as anyone who has bought house knows, it is pretty critical, but it is usually a necessary process. while you are seeing a huge raise for these properties, they're saying prices drop by 30%, people desperate to get their offers accepted. that means sometimes, you're going to buy a house and may have termites. so you show an example one time there was a house with a bathroom that looked like a bathroom, but the plumbing was not hooked up. banks and consumers don't care,

but it will open up problems later on. carol: so much for learning everything from hgtv. it is happening in other cities. it has even happened in the united states. people skip those inspections because the housing market is so tight. oliver: but that's the thing. when we look at these trends, this is one of them, when we see a drop in inspections coupled with rising prices, it is evidence of a speculative boom. now, canada has been talked about for a long time, toronto, vancouver as well. the issue is that foreign money keeps flowing in in vancouver, a ton of asian money. in toronto, there is still a lot of european money and asian money and it keeps pricing levels heavily inflated. oliver: let's go to the opening remarks section. megan: i love this story. oliver: let's talk about the use of big data and trying to figure out what works and markets. this is a fascinating look at

a really sort of internal topic here, how to beat the market. megan: the conclusion of this is that you cannot beat the market. this is what i love about this piece. the author has such a way of dissecting the balloon talking getting the reality, which is people are frustrated they're being told about alpha, they are being told about strategy, how hedge fund managers will get them better returns, and they are finding that a dart board of stocks may produce a better return for them. thishe really tackles in know,is whether it's you going through the data, extrapolating it and trying to find the connection, a lot of it is no better than -- just licking her finger and putting in the air. carol: we have more from peter coy. >> smart beta is the one everybody talks about. smart beta is a great idea. the old idea of standard index funds cap weighted has a problem. because you chase the market. as soon as the stock goes up in price, market capitalization rises, the manager is trying to track the index has to buy more of it. so you're buying high, and you are selling low, not too smart. smart beta is intended to break

that link between cap weighting and the performance of your own fund, and you can go a long ways just by breaking that link. what happens is people try to get smarter. i have a quote from the musical "gypsy," you gotta have a gimmick. that is what everybody is doing. every twist and turn on smart beta, and what they will do, and this is not just smart data, but -- beta, but a wide range of investment products, the asset managers will say, i will devise a strategy, then i will test it out on historical data. how would it have performed over the ups and downs of the market over the past 10, 20, 30 years.

time: we hear that all the with amebody comes inwith new product, right? back testing, right? back testing can look fantastic because if you keep twisting the knobs on your strategy, until by chance you have the correct combinations. but then when you let it loose in the real world where it has to fend for itself, it's flat. it's nothing. oliver: there are some interesting studies looking at that specific point, back testing can lead to -- something worse. >> i talked to rob for this article. and yeah, he's right. because let's imagine the thing you found performed quite well in recent years. you could quickly get a regression to a mean. it was performing well because that particular asset you

hitched your wagon to went up kind of too high, so what is the next thing that will happen when you go live, it will underperform the market. you would be worse off than if you stuck with something -- plain vanilla. oliver: where are they going wrong in terms of how they analyze what works in the markets? you have to look to the past to find trends and what performs, under different economic or business cycles, but at what point do they get to tricky and creative? >> there is a big, long running debate about whether you can beat the market at all. so, the three factor model which a lot of viewers would have learned about in business school -- gonna if not they are google it, right? will tell you that there are certain things like buying value stocks or by small cap, then people talk about

momentum, but the problem is that finance professors make a living and gain tenure by looking for even more factors, so people have found hundreds of factors. john cochran in chicago called a zoo. you know what? they don't all work. it is not just finance professors. it is asset managers. the finance professors are going for tenure. the asset manager is going to draw in funds. the sell side people have a huge incentive to invent a product for you they will take you will outperform. carol: up next, a tech incubator founded by a mega-church. oliver: plus, the world oldest tour operator decides to let its clients holiday with other cultures. carol: this is "bloomberg businessweek." ♪

♪ oliver: welcome back to "bloomberg businessweek." i am oliver renick. carol: i am carol massar. the world's oldest tour operator, thomas cook, is changing a long-standing policy. allowing multi-nation lodging. oliver: we talked to reporter

christopher jasper. christopher: there is still a customer that would like everything booked for them rather than go onto the internet and book a hotel separately from a flight and so on, go to the likes of thomas cook. they will even still looking brochures, believe it or not. they will go into a shop on high street and come away with a package that includes pretty much everything, flight, the room, the bus transfer from the airport. it may include most meals as well and most of their bar bill. depending on if they tend to stay in the hotel most nights. carol: typically they would group people from the same country altogether, but they are changing the policy. what is going on? christopher: if you go back to their origin in the 1960's and 1970's, traveling abroad in europe was still an alien concept then. people were nervous about it. they were also not really used to eating foreign foods, so the tour operators would arrange for specialty hotels to cater for different nationalities. so brits in spain could look forward to british food in the evenings, whether look forward is quite the right phrase, i am not sure. germans going to german hotels, bratwurst and so on at their place. because they were so specialized, even as time went

on and people became more cosmopolitan, the industry tended to concentrate them in the same hotels. there were individual brands for individual countries, so it was rare that the two would mix. you would get a hotel predominately british or predominantly german, and 2-3 decades ago, if a brit ended up in a german hotel or vice versa, they would often complain to the holiday company. oliver: and another sign of adapting to a changing marketplace -- in the future section -- carol: how cincinnati megachurch

crossroads developed a side-gig as a tech incubator. >> cincinnati is a pretty religious city. it is in the bible belt, so to speak. and there were some people within proctor and gamble who were pretty high ranking marketing executives there that started a bible study, and it was a mix of proctor and gamble people and other people in the community, and it grew really quickly. and some of the people who started that were brand managers for products like clearasil and pantene. so, these are people who really understood how to build brands, reach people, and communicate.

and one day, one of the core of this had an epiphany of sorts about whether or not they should take a bible study to the next level and start a church. carol: the church actually has an incubator and investment fund. i mean, they are helping to create or trying to create entrepreneurs. >> yes. so, when i talked to the sort of senior leadership, including scott weiss, a former corporate executive the got his start at p&g, has come back to cincinnati to voluntarily serve as ceo of what is called the ocean accelerator, which got -- which was launched, which got its start in 2015, and with some funds from a for-profit venture capital firm which was started by church members called ocean capital, they offered 25,000 dollars in seed money to a class of entrepreneurs that applied to be in this incubator. carol: they actually compete, right? they make their pitch, people review it, and they get chosen hopefully.

>> yes, but there is a pitch contest that is part of their entrepreneurship conference, but that is different than this ocean accelerator, which is a pretty intense, 4-5-month with -- these entrepreneurs have to be there every day. it is not a casual thing. they are there every day 9-5, they have bible study, mentorship, a full staff that is guiding them through building their companies, and there is a lot of -- there are hundreds of accelerators in the country. that is not a new thing. but what is unique about the ocean accelerator and its association with crossroads is they have this bible-based curriculum and the way they see the growth of a startup is uniquely tied to two all the founders spiritual growth as well. it is very much about thinking through the ethics of raising money, the ethics of your company's business model, and that was really interesting to kind of watch and report on. oliver: let's talk about the actual products they are putting forward.

their mission is to "increase god's place within the marketplace." does that mean the entrepreneurs are limited in terms of the products they are presenting? did they have to be religious focused, christian-oriented, applied to a christian audience, or is there a fair amount of independence? >> there is a tremendous amount of independence. the class that i followed, only one was explicitly targeted towards the christian market. the rest of them, if you did not know that these founders were christians, you probably would not be able to intuit that from reading about their company's product model they are offering. carol: up next, silicon valley's fear of president trump feels a -- fuels a push to mexico.

oliver: and the drone maker working overtime to edge out the competition. carol: this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. oliver: and i'm oliver renick. you can also catch us on sirius xm radio. new york, am 1200 in boston, 99.1 fm in washington dc, and am 960 in the bay area. carol: and in asia on the

bloomberg radio plus app. oliver: silicon valley executives are being wooed by a tech friendly mexican governor. carol: we talked to reporter andrea navarro. who isave a governor of the hometown of mexico's second-largest city. right there, he has been making a pitch to companies in silicon valley and the west coast in general, telling them to bring their workers here. they have a plan to receive as many workers as tech companies want to send. they have been open to receiving more investment for these companies to set up shop there, and he will gladly take anyone who runs into any issues with their h-1b visas and the u.s. carol: i love that he has actually been taking his pitch to silicon valley.

so he has gone there. tell me, do we know at all in terms of who he has been meeting with? is this all of the big tech companies? what are the specifics on this? >> he said he met with as many as 40 companies, many of which decided to remain off the record and he could not name them, but we do have some names, facebook, tesla, even microsoft. they declined to comment on whether or not they met and what happened in that meeting, but we do know he has been very active since february. he also put out an article in several newspapers, claiming to be open to anyone who wants to come here. and it is also important to know that water guadalajara is a booming tech hub. it is not like it is brand-new to many of these companies. carol: tell me more about what is going on. we think of tech communities

around the world, silicon valley, some other cities doing things, but tell me more about guadalajara as a tech hub. i mean, how long have companies like intel and others been there? >> it is very interesting because it started many decades ago around the 1970's and 1980's. we had hp, kodak, but at the first stage it was just for manufacturing, so they would just produce stuff there and export them to the u.s., but now it has been evolving into becoming a design city, and a production -- taking the next step to not only being a manufacturing center. and now, we also have a bunch of startups setting up shop there. there was one i visited, a software development company that started out in silicon

valley, then moved its offices to guadalajara because the costs there are lower and they have many advantages like nice weather, so it has been evolving a four hour flight from silicon valley, so it is now a booming tech hub that includes many of the world's most important companies in smaller startups. carol: it is interesting when you talk about the cost equation. that is why companies move offshore out of the united states where they can find cheaper ways of doing business. you talk about wages in guadalajara for wiseline are three times less. that is significant for a company. >> it is significant. and what the founder of the company was telling me is that it is not only the labor cost itself, but other costs, renting the place, transportation for its employees, and the lifestyle

there are also allows people to stay there and not have as much rotation as one would see in silicon valley, where prices for apartments are too high and people have to move out eventually, so it makes for an easier lifestyle for people, and that is part of what has been, has helped make the city more attractive. it also has a great beach, so it has a lot of things going for it. oliver: china's dji is the world's leading commercial drone maker. carol: but how do they keep growing? >> a chinese company called dji has been the leading maker of nonmilitary hobbyist or drones for the last few years, a $10 billion company. they make about 65% of the market, but they are worried about growth, so now they have the factories set up and prototyping set up so they can

bring a new drone from start to finish they say in about six months. their first stop is agriculture. carol: that was interesting. they sound like they are controlling the whole process and spending a lot on r&d in terms of efforts to figure out new ways to use drones. >> they say, again, the company is now worth a few billion and controlling, taking in a few billion in revenue off the drone

market, and they say of their 8000 staffers, about 2000 are working on r&d or engineering. carol: they do film making, surveying, spreading out to different areas. >> that's right. they are telling customer that whatever you need to do, we can make a drone to do it. oliver: we have been talking about all the different uses for drones, and agricultural, tell us how it is being for used for farmers, who's controlling it, what it is replacing. because it is pretty interesting. >> on the ground, the agricultural drone has been used mostly for crop spraying come up -- but the efficiency advantage is significant. the anecdote in the lead of the story in this week's issue says two guys in the space of a morning can controlling the drones remotely get more done than 4-5 guys with the old-fashioned, you know, crank- operated pesticide dispensers. carol: how did they get to be there? when i think of high-tech, i often think of german engineering, a u.s. company

leading the way -- this is a chinese company home grown, and they really own this market. >> the company got its start selling to drone hobbyists in north america and europe and they have done a good job in the last couple years of keeping growth moving by getting their phantom line of drones, which are mostly high impact camera photography and to about 400 apple stores in the west. oliver: is it because countries like the u.s. is more concerned with the drones for their militaristic capabilities? as you point out, this is not military use. this is recreational. perhaps they cornered that part of the market when we were concerned with other uses. >> i think that is part of it. there are some civilian drone making companies in the u.s. that have been less successful in the last couple of years for a variety of reasons, but dji has kept its growth going. carol: the drone market is growing rapidly. there is competition at the high end and low end. >> that is what they are worried about and trying to head off with rapid prototyping with promises that on the low end, particularly china, there are a handful of companies that can make toy drones for about $100. which is a lot cheaper than what most go for. increasingly, there are companies particularly in china that make drones good enough to compete with dji, to they are worried about specialization is

a way to differentiate themselves. carol: "bloomberg businessweek" is on newsstands now. oliver: and also online at bloomberg.com. carol, great issue. what was your favorite story? carol: i enjoyed the story about the church in cincinnati. an offshoot of procter and gamble. who knew? combining religion and creating entrepreneurs. they had an accelerator. i felt like it was a slice of american life i knew nothing about. how about you? oliver: the photo essay. the cover image, the area north of the border between mexico and the u.s., but south of the wall, an entire community back there because back-and-forth. really speaks to potentially what could be disrupted if we do put a wall directly on the border. carol: right.

oliver: more bloomberg television starts right now. ♪

♪ caroline: i am caroline hyde. this is the "best of bloomberg technology." where we bring you all of our top interviews from this week in tech. president trump hosts president in florida. we will dive into the major issues impacting tax payers and startups. plus, trump's administration cracks down on one of silicon valley's beloved visa programs. h-1b. they increased scrutiny for computer applicants. a