>> welcome to "bloomberg businessweek," i'm carol massar. >> and i'm oliver renick. we are coming to you from inside the headquarters in new york. >> a scandal of large proportion. >> and the strange business of rare diseases where every patient is a gold mine. >> facebook's anti-fake gold mine. all that ahead on bloomberg businessweek. ♪ >> we are here with bloomberg businessweek editor-in-chief megan murphy. let's start with the opening remarks. you do a great job summarizing a complex edition but it keeps on going deeper and that's the political corruption that exists

in brazil. tell us how you guys took decades of corruption and synthesized it into this really good piece. >> we wanted to show that even decades of corruption is actually sentries old in brazil and sort of deal back the layers as -- of the carwash scandal, which is this latest scandal that's been enveloping brazil. it takes us back to the president before her and its enveloping in the existing president and has the roots in the structure of brazil generally, one of the last countries in western america to have a monarchy that was departed in 1889. but if you go back that far and see the sequence of scandals they have grappled with, it's a natural outgrowth of how the government was set up over not just decades, but centuries now. >> i think when de la rue set was ousted, it brought a lot of hope that the carwash scandal was behind them. that's not the case.

when you are looking through this and when your reporters are assessing this, how do they figure out whether we are on the downswing or this is a scandal that keeps going? what are the signs of an end? >> carwash is a perfect example of every time you thought the boyle has been carter rise, you are exactly right, people thought it was going to be the sign. you have to look at the magnitude of companies involved. you are talking about the construction company that has been at the center of this scandal, as well. it reaches to the very highest levels, but also what we do a good job of showing in this piece is that on a local level, how it stretches and help desk it's just a officialdom of life. people can earn in those type of kickbacks they take. my favorite quote is along the lines of, anytime you think you are moving into new brazil, you will likely end up in old

gazelle. that summarizes the state of affairs. >> it's a great story. you have the company angle and specific examples of politicians and what they use money for and a good history lesson. let's shift gears and talk about the cover story because it's a fantastic look at what i think is a microcosm of a broader conversation that has really gripped politics and markets for the better part of the last couple years, that's the prices for drugs. specifically, you guys are looking at orphan drugs. how exciting was it to see the story come together? >> we are incredibly proud of this story and it reporting that has been done on it. some of the stuff we have uncovered. they sell this drug that is an orphan drug, drugs that treat very rare diseases. they can be profitable for pharmaceutical companies and we are talking about $500,000 to $700,000 a year per patient. but there are very few people

that are affected by this disease that you need the drug for. when you have that model, a conundrum is, it's viewed as a wonder drug for people who have taken it, but the kind of the sales tax that has gone in to make sure the market continues to exist are incredible. we opened that story with an anecdote where a doctor, who had taken one of her patients off the drug, got a call from a sales rep while she was still treating the patient, asking white they are taking the patient off the drug. you should keep them on it. those aggressive sales tactics, in an industry known for aggressive sales tactics, are beyond. >> is a lot of great anecdotes, a complex math story behind the pricing as well. we talked to a reporter in bloomfield. >> you write about the pharmaceutical company, alexi on. tell us about the company and what are the successful for?

>> they have been around since the early 90's, but they surprised everyone around 2007 when this drug for a very rare disease, so the risk, came out of nowhere and begin a blockbuster, making almost $3 billion last year, a really tiny number of patients. with they have been known for is taking this one drug and making it an enormous success even though it treats a very small number of patients, under 11,000 patients. it also costs a huge amount of money come up between 500-700,000 dollars. it's really only known for that one drug and work -- big sales even though it only treats rare conditions. >> in layman's terms, what exactly is the disease and are there other sort of products that service it? do they have a monopoly on one of the best service for or the best drug? how do they quarter this market?

>> you have two conditions, both of them are having to do with part of the immune system called the complement system. what soliris does is clamp down on that system. there are two systems that they deal with and in both of them, the koppelman system goes haywire and starts attacking red blood cells and causes really horrific problems. before this drug came around, neither of these really had a drug that was aimed at treating it. you had to do things like go on dialysis machines for many patients, whose kidneys failed, or get blood transfusions. there is really nothing else on the market right now i'm a though are working on things, because there is nothing else that targets this part of that immune system, which is overreactive in both these conditions. >> this should be a good thing, right? defined a drug that helps a bunch of people that normally didn't have any other options in

terms of treatment. so this should be a good story, but this is a little bit of a twist. what's going on? >> they treat a very small patient population and for a long time, these patient populations were elected. companies wanted to make drugs that service people with arthritis or heart disease, that have millions and millions of patients. they can recoup costs, make profit, so it's indicative of a good trend, more often drugs being made, however, what's happened is, there has been a lot of stories late as of soaring drug prices. at the forefront is the orphan drug industry. these drugs cost far more than most other drugs and for instance, in the case of soliris, you are talking almost $700,000 per year. and that's every year. a lot of these patients are on

this drug for life. that's more than the cost of a new home. so there is governments around the world that is groaning under the cost of this drug and how do they pay for this? they have to take the money out of somewhere else. there is a lot of tension now between the cost of these drugs and the folks that have to pay for it. >> turning the orphan drug store into a cover image was the job of bob vargas. >> big story this week, an in-depth look at what goes on the pharmaceutical industry. how did you guess process all the information and condense it into in image? >> after reading the article and how they turned this insane amount for this drug, we were thinking about waste to do it and we wanted to get across that this corporate powers are almost forcing this drug on the people that depend on it. it's actually administered through infusion, so we had this idea of a hand wearing a suit,

which is kind of represents the pharmaceutical companies as corporations, squeezing the infusion bag, almost forcing the drug into the patient system. >> did you really use a hand model? >> we did. >> i always am curious when you feel comfortable enough to go to the bloomberg businessweek, it's a brand, you want the name act, but you are ok putting the image at the. how come? >> we do it selectively. that's a much of it that you don't recognize it, but i think our rationale for doing it is that we want the idea to come forward and it gives this effect that we think is nice. >> conventional. >> right. >> i think the text is interesting because it's bold in some sense. there's not a lot of writing. >> the photo has a clinical feel and we didn't want to over the text, syndicate simple.

>> we thought about it for a little bit for me landed on this, but once we discussed it up, we knew it was the one. >> the art within the magazine is fantastic as well. >> there was some concern that people may miss it for the sake of advertising, but -- >> the system -- why everyone roams the globe. you will find a certain brokerage office angling for their money. >> this is bloomberg businessweek. ♪

>> welcome back to bloomberg businessweek, i'm carol massar. >> and i'm oliver renick. in the future's section, a very english story about an english profession. >> we talked to our respondent. -- correspondent written -- correspondent. >> the english legal system is

divided between solicitors who, more or less, are the equivalent of attorneys in america. they work at firms. they are due in court. barristers are self-employed and they band together in this organization called chambers where they share expenses but not profits. and clerks are middlemen. the clerks sell the services of solicitors. it's unclear who works for food. so barristers employer the clark's formally, but if you are a barrister i do have a problematic relationship with your clark, it strangles your supply of work. it a complicated power dynamic. as with many things in the u k,

social clark's is a big factor. often from quite upper-class sections of society and clark's are working-class, so it's a professional interaction that crosses social class boundaries and that's why it's so fascinating. >> a layer on top of that, sometimes clark's can make a lot of money and in some cases more than the barristers. >> it is a very well-paid job in relative to the formal qualifications you need to have it, you don't really need any. historically, the clark, chief clark in the chamber is paid 10% of the overall take of the barristers. as chambers expanded, it became unsustainable and was dialed down. most of them are now on some kind of salary and bonus structure. but at the top end, the amounts paid off considerably. about half a million pounds upward.

it's a lot of money. >> not a bad gig. there's a pretty wide range there, as well. where you start out and a lot of these clerks start out very young and they work their way up and become personalities and well-known figures of their own. what are the skills that make a good clerk? >> i use a phrase in the story, wheeler dealer, which is a british phrase. the way we used it in the piece was like a hustler. >> didn't you also use the word and a little bit -- "pimp" a little bit? >> to varying degrees of irony, yes. traditionally, it's a dynastic profession historically. they would historically come in and after living school, to the chambers.

but then they work their way up. they have to sell a commodity and they have to know how much barristers are worth. one of the thing a clerk said to me was that barristers are very bad at knowing how much they are worth and clerks handle money negotiations. so barristers and sometimes all know how much they are being paid, which is a weird situation. that creates this sort of abdication of response ability. barristers are proud of their independence. they are self-employed. nobody can tell them to tidy their room. that's a begin. >> they even have their power to give their clerks new names in case there is another clark. >> if you arrived at a junior clerk and someone had the same name is you, you had a new one. >> speaking of english, there is a brokerage that has a reputation for going after wealthy british.

their tactics have landed them in the crosshairs of financial regulators. here's reporter zeke fox. >> i feel like this is of story coming to a movie theater. but i feel it's already been done. >> all these stories are movies coming soon. >> they say they are the world's largest financial advisory firm, whatever that means. they have offices all over the world like hong kong, africa, basically anywhere you might find bruce ex-pats with money. oil workers in dubai. they are there. they hire brits to call other brits and say, never you are offshore, you need to move your money and a save for retirement in this new way. so the world largest financial advisors have a duty to their clients to do what's best. to some extent, but they weren't necessarily doing either. they were operating on the fringe.

>> so what my story is about is that they came to the u.s. a couple years ago. regulations are much looser. the u.s. operation from what i'm told by former brokers, did not comply with u.s. rules. so they were double dipping, charging both upfront commissions and ongoing advisory fees. thinks you could get away with in dubai, but don't fly here. so i'm told that securities and exchange commission is now investigating their u.s. operations. >> nigel queen is the guy behind this since he was like 15 years old. >> he's been very successful, he's british, founded it after working at another offshore brokerage that collapse. he started in hong kong and opened in offices all over the world. it's a successful formula. it's aided by this loophole in british tax law that allowed people in certain situations to move their pensions to countries

like multi-and avoid being taxed when they withdrew the money. >> sounds too good to be true. >> yes, no recommendations here. i'm sure it's complicated to pull it off, but it's better than your average hits. now the u.k. government has change that law and made it more difficult, so it's restructuring. they haven't addressed any allegations that the former employees told me about. >> what are those allegations? >> after i've heard about the investigations, i sorted talking to former employees. they did describe a boiler room type atmosphere in the new york office. people were come up some were taking during the office. it was just a party culture, people were making a lot of money. >> up next, why president trump doesn't actually want his budget passed. >> there is one republican compass medical may be key to getting any kind of deal done at all.

>> this is bloomberg businessweek. ♪

>> welcome back to bloomberg this is good, i'm oliver renick. >> and i'm carol massar. you can also catch us on the radio at series channel 119, and in new york and in 200 in boston, 90 one fm in washington, d.c., a m naik 60 in the bay area. >> and in london and asia on the bloomberg radio plus at the >> president trump's budget isn't expected to get passed congress. >> but that could be what it white house wants. peter coy explains. >> we got a first look at what the budget looks like. give us the rundown on how both sides of the aisle are reacting and what the hope is to accomplish what trumps are. >> the budget of course is very ambitious. the concept is that trump inks he can wipe out the entire

federal budget deficit and produce a surplus like 2027. at the same time that he raises spending on the military and border control and protects the retirement portion of social security and medicare. >> provide some scope on that. how big of a challenge is that when you talk about wiping out the budget? >> it's a huge challenge because most people who have looked at the budget said the biggest portions of the spending are interest on the debt, which has to be paid, social security, medicare, and the military. those are all being set aside, written off as being out of bounds, which puts more pressure to do something about the discretionary portion of the budget, which is spending everything on the national weather service to the post office to the courts and the state department and on and on and on. >> it's picking away at the

tangential things rather than the big buckets of money that need to be addressed? >> right. then the tax side comes. i do think people would say is, if you want to balance the budget, unit -- might need more tax revenue. when we got that one pager about the trump administration's plan for taxation, they said we will cut rates but get economic growth that will get us back to neutral, so we will be revenue neutral. but in the budget i came out this week, they said, we are going to get more tax revenue, which will help us bounce the budget. >> republicans may not be able to test any kind of health care reform without the help of one republican smith from louisiana. >> here's editor matt phillips. >> in politics, you guess right about dr. bill cassidy, first time republican senator from louisiana, shaping up to be a critical vote in the senate, especially when we talk about health get. >> republic's had 52 seats in the senate, not a big majority.

they need 51 to pass anything that health care bill. if conservatives get their way, whatever health care bill would defund planned parenthood, that immediately loses the support of two female senators. it's sits up casserley to beat the potential crucial 50 vote with mike pence, the vice president being the 51st boat. even though he's not on the working group that is working on the group behind closed doors, this gives him a huge amount of leverage come fairly moderate when it comes to health care of it and they need him if they want to do anything. >> what is he come from? >> he's a louisiana senator, medical doctor, spent a lot of his career working in a charity hospital. he got into politics after hurricane katrina. it shook him seeing how inactive the government was in taking care of its people.

he set up a medical center in an abandoned kmart, spent time in the state senate, then went to the house visiting louisiana. he beat mary landrieu in toy 14, so he's been in the senate for two years. >> his mission was to do what trump promised on the campaign trail, he wants more health care for everyone and make it so that they can afford it. >> that's right. in a political savvy move, it tides the president to his words on the campaign trail, to lower costs and broaden coverage, which isn't something that the bill that came out of the house does. in fact, it goes extremely in the opposite direction and it probably result in 20 million people losing coverage and premiums going up. he said we can do the opposite and he has some plans that are pretty radical in terms of the conservative agenda. he wants state to have the option to keep obamacare, wants to keep a lot of obamacare taxes

to pay for some of the stuff and he wants to take lessons from the retirement industry, 401(k) industry, where you auto enroll people in coverage, rather than lead them opt in come at you make them opt out, which will do away with mandate, but still result in a broad poll of young, healthy people that will have lower costs. >> and people are most likely to stay in been opt out. >> that's right. and the evidence is 95% to 65% if you do this default change. a couple insurance companies have done this and they saw premiums go down by 20%. >> up next, how the old and new generations in iran are forcing the country's old guard to reconsider how it governs. >> facebook is trying to curb extremism. this is bloomberg businessweek. ♪

oliver: welcome back to "bloomberg businessweek." .'m oliver renick carol: and i'm carol massar. ♪ oliver: we are back with megan murphy to talk about more must be. let's go to the economic section because you did a great profile in brazil. politicsran and the

behind what is going on and the different shades of revolution. megan: we wanted to look at the recent reelection of -- who was reelected with a very large majority. towanted to take that back show the demographics have changed who supported him. order came in and there was dental change in the way of life and what you are fighting now is that decades later, arts of that revolution -- parts of that revolution are starting to fade away with public youth. there is a girl who said she can ride in a car with her boyfriend, something that would have been unheard of.

but has a platform for a more western way of life and how that is starting to be pushed forward in iran. oliver: it seems there is a fulcrum point -- the iranian citizens realize how important it is to vote seeing what has happened in previous elections. you guys profiled the older generation that remembers that we forget that it wasn't the conservatism of the past couple of decades, there was a period longer ago in which there was a shift towards liberalism, but reversed. megan: it's reversed in such a way -- in 1979, -- and 1979 is not that long ago. is the economic issues with sanctions in the u.s. deal that we struck has really opened up to a lot of ways of them to consume western ideals.

some people say they download "the walking dead," and have more access than what they used to have. that is like -- the economics of iran has come through for them wanting a better life. seeill be interesting to what policies the president puts in terms of changing the economic structure. oliver: another topic that business week has done a great job keeping a pulse on -- this is facebook and the emergence of people using facebook live, people using facebook newsfeed to disseminate ideas, some that are more harmful than others. tell us about the reporting that went into how facebook is fighting the hate speech. megan: this is really one of the

issues and debates of our time on how social platforms can police this kind of hate speech where it has -- when it has become a very disseminating mechanism. as a way to connect friends, it has become this unbelievably powerful way of galvanizing and giving voice to what was a relatively isolated group to , give platform and send out messages of hate and racism and seen horrible posts of death and killing. for facebook and other companies like it, it is an immense problem they are grappling with. mark zuckerberg have hired people and poured money into this. this story tells us how small band of people with a very dedicated mission of looking at racism in germany on the far right, out using a counter narrative, almost telling a different story, is a way that on a small-scale you can come

-- you can combat this kind of speech if you can scale it up. oliver: i really like the profile of the folks in the company that are combating it. i thought it was interesting to look at the political angle as well. in germany have an answer , measures, punitive economic measures that facebook doesn't do. facebook has taken a lot of criticism for the extremist confit, everything from terrorist propaganda, isis videos, right wing hate speech in europe aimed at immigrants. say, more horrific postings of just very graphic, violent content. there was a case in thailand a somebody who found himself killing his child. there was a case in cleveland, ohio of someone who uploaded a facebook -- who uploaded a video

on facebook of the murdering somebody. these sorts of horrific incidents have brought a lot of attention to what social be get is and is not doing to police content. oliver: ok, so now that they are seeing that this is something that is not going away overnight, what is it doing to combat this? >> facebook is doing a lot of things. the main thing they are trying to do is trying to take down the content when they are made aware of it. in the case of facebook, they have started funding companies and organizations, charities to do what is called counter narrative. this is essentially content that is designed to take the same kinds of digital tools that you find extremist groups using to spread their message, and turning it around, using those same tools to spread a counter message, counter propaganda, if you will, that is designed to undercut people's belief in this extremist content and undercut these groupshat

are trying to create. carol: and basically using the same method that those who use hate speech online use the same tools. >> that's right. you're trying to create viral , using hashtags creating content that will , spread, often trying to target specific groups of people. hoping they will comment on these posts. either positively or negatively and in some cases, that enables experts are enabled in the radicalizing extremists, to enter one-on-one dialogue with some of those people. some of the content is designed to create this one-on-one dialogue that might change the views of some people who are leaning towards extremism, or are a part of extremist groups. some of it is aimed at a general population to try to an ocular the population against falling some of these extremist viewpoints. olivercarol: i find interestinge

stories, you write about this is similar to what the advertising agency is. it is like selling coca-cola. you have to approach it in that way. >> that's right. that's a quote in the piece from peter norman who runs a think tank in london. facebook has given money in order to research what does and doesn't work in terms of counter narrative. he specializes in what a lot of this extremist content is and trying to reverse engineer it. why does it work? why is it effective? if you figure that out can create counter messaging. you think a lot of it is similar it isthinks a lot of similar to advertising any product. that you can take a lot of lessons from selling coca-cola to selling anti-isis propaganda. oliver: up next, indonesia goes to war with its so-called chile mafia. carol: and washington d.c. is helping its cap beside uber drivers. oliver: this is "bloomberg businessweek."

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♪ oliver: welcome back to "bloomberg businessweek." i'm oliver renick. carol: and i'm carol massar. oliver: in the businessweek section, indonesia police is breaking up chile cartels. carol: we spoke to our editor. >> when i heard chile and bank -- when i heard central bank in chile in the same sentence -- [laughter] indonesia,rt about how the central bank, the team has 500 units spread out across the country, we're talking about 7000 inhabited islands, to monitor the prices of many of the items in the basket that is used to track inflation. this story was about a that saw thewn

price of chilies triple. that immediately set off alarms. one of these 500 teens, which is not composed of central bankers , but also law-enforcement and representatives from the national competition agency, they started investigating and they started investigating, and the investigation spread to borneo and an adjacent island. they figured out there was a group of wholesalers a corner the market in this one area chiliessupplies up that was supposed to be going to local markets. carol: what's important here is that chile is an important part of a diet for people in indonesia. >> it's in everything. breakfast food, bull of paste that you get at restaurants every time you order food. yes. olivercarol: so when the price , it impacts some a people in indonesia.

the majority of the population. how troubling and how expensive did it get for them? >> it tripled in price. we are talking about half of the country lives either low or really right at the poverty line. so these are the populations that are most impacted by inflation and loses the most pairings that is why the government is so vigilant. but cartel-like behavior and smuggling has been a particular problem in this country because of the logistics of moving food around. and also, they are very strict food import controls. there are few parties that could affect the price of certain items. --ble cicadas with chilies that was the case with chilies. the regional team is also broken cartels in meat and it's looking at sugar, so it's an interesting way desk you think of bankers living inside their office, shuffling papers.

realm, in the economic just to provide a little bit of scope. you have the issue of inflation -- higher prices, prices based on -- at least in the u.s., we think about the basket of goods. using go up because it is so much. the have an inflation issue. why is it so critical for the central bank economically to get this under control? why is inflation such a problem? >> they have inflation targeting 5% inflation for the year, but they know they are monitoring for regional differences. then this one place for investigation started, inflation started to trend above 5%, and that is why they began to act. like i said, by the standards of venezuela and other developing countries, inflation a 5% is not have ach, but if you

large percent of the population that is very poor that is super , exposed to changes in food prices. and if you have a staple, let's say milk tripled in price and the united states, that would be -- you could see people really reacting to that. carol: in the technology section, washington d.c. has a new plan to help the city's cabbies compete with uber drivers. oliver: here is a reporter joshua bruce stain. -- here is a reporter, joshua. oliver he was having : trouble coming getting competition from an industry that was doing a pretty good job of pushing out, but they are starting to adapt. joshua: that is the hope and washington d.c. the local taxi regulator at the end of this summer will actually remove the taxi meters from all cabbies. the hope here is to make taxis a little more like uber in the sense of being nimble.

they are going to use smartphones or tablets to make new services that will the taxi industry there. carol they are stepping in : aggressively to stir up an industry, the taxi industry, the drivers that have been around a long time. joshua: traditionally, the uber story has been both the taxi companies and the regulators resisting change. at this point, change is not worth resisting. it has come and that there is a -- it has come, and there is a real scrambling to figure out what do taxis offer now? what can they be? oliver: we are better to have this symbolic shift. there is a lot of pushback. was there a turning point that may regulators and lawmakers in d.c. say, we have to figure out our own situation? is a getting to plan with existing the taxi situation dwindling? joshua: the taxi industry is not doing very well. the department of for higher vehicles, use because the taxi commissioner, they removed the

word taxi from the name, and they have a new vendor. they are trying something new. part is recognition of reality. carol: what is their approach though? what i understand is that they are not going to have one app. there is want to be multiple choices for the driver? joshua: it is interesting. are they have done is a removing meters. there is a process for certification for smart phone apps. that thee and developer, you would develop an app, show it to the department, and if they approve it, the drivers can decide to use it. what those at the does -- what those apps do is that they search additional meters and melee on other services that might attract drivers. delivery services for one. maybe. these are things that will happen, were not sure what they will look like. oliver: the taxi industry and the government does not have a

specified, a dedicated technology group to come up with a solution here are stuck on the ? they are just kind of crowdsourcing to a certain extent from programmers saying, you must your best idea and see if we can roll with one. joshua sort of a controlled : crowdsourcing. actual payments will be handled by square at first, have seven different developers who will make his first generation of apps. there will be a limited app store for taxi drivers to choose from, and we will see if a couple of those rise to the top. they could also add more in the future. oliver: coming up the next wave , of virtual reality entertainment and the company leading the charge from hollywood. yre musicd why the f festival may have been doomed before it began or tried to begin. oliver:

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar.

oliver: and i'm oliver renick. you can also catch us on the radio in new york and 1200 in boston. london on dab, and in asia on the bloomberg radio plus app. what it willng out be the future of movie theaters. oliver: we are talking about virtual reality parlors. i am of a site about your story because it sounds that a lot of fun, and it is going to be a big misstep for bringing virtual-reality public. tell us about what you are looking at with imax right now. >> earlier this year, imax 'sought some people into it center nla where it is demoing a vr games that will be

a new format for a new sort of friday night out if you like, or a news about for entertainment that will be an alternative to going to an imax theater. an eye-opening experience because today, as a film reporter, you get to see a lot of virtual reality. it is a really important part of the hollywood story. the adaptation to a new technology, a new medium, not just for marketing films, but there are people who really do believe it's going to be a new medium for which to tell stories. being around -- beyond just gaming, which it's really known for at the moment. and it just felt to me, for the first time, something that is in myself doing. i really enjoyed a lot of the multiplayer games. and it is eye-opening. it is apparently doing financially very well for imax. oliver: are they in a beta testing phase right now? >> it's a pilot program at the moment. they have one center nla and

, will open one in new york and midtown. oliver: the infamous failure of the fyre festival is quickly becoming the stuff of legends. carol: the failed bahamas music festival may have never had a chance. oliver: a lot of us have heard about this disaster that was the fyre festival. you guys go into some of the details in business week. indeed, under the hood, as much of a mess financially as it was for people who tried to take part. tell us what happened. >> all right. there was a festival held in the bahamas to promote this brand called fyre. app that youns is use for booking talent. it so they hold this festival to raise awareness for their brand and get people hyped up and excited about it. but when people arrived there at the festival that they paid $1200 to to attend a music $1500 festival with big names, they arrived to a total

disaster. [laughter] carol: what you mean total disaster? no music? no places to stay? no food? what? >> once they arrived, they realized these tense look like they are disaster shelters. and the luxury villas and fancy accommodations just didn't exist. so, they pulled their stuff out of the shipping container. their luggage was brought in that way. and they were removing it from the shipping container they stumbled upon. and then stayed at the tents for a while before they were called over to the mess tent, which was just -- the types of meals being sold or given to them there were not with a were promised. they were promised gourmet meals , but instead they got a ham sandwich with cheese on it. prepaid paid -- and the for all of it. oliver: so the revelers, they

have loaded up their fancy wristbands with the money per instruction from the organizers. to get to the island, and they are there with hurricane relief tents. ham sandwich. what about the talent, the stars? was this dead on arrival people got their sub the situation? >> it seems that way. blink 182 was one of the headliners and they pulled out even before the festival began they were notaid going to be able to provide the type of experience expected of them because the place just wasn't professionally done. blink 182's stuff is actually stuck in the bahamas right now. it was taken by the government. carol: talk about what happened to the money. paidaid the revelers, they anywhere from $100,000 to $200,000 in terms of packages

did and billie mcfarland and fyre got a couple loans, millions of dollars. don't forget ja rule. carol: you are talking about millions of dollars in loans. where did this money go? >> we don't really know. a few monthly for the festival, they took out a $4 million loan to help pay for everything. three weeks of for the festival, they took out another $3 million loan. was funded million for this festival. now, -- carol: who are these people that loan them the money? [laughter] >> they were going to repay that second $3 million loan with rfid payments. those wristbands -- people have loaded up thousands of dollars on those wristbands that were to be used to on-site get upgrades.

boaty you wanted to rent a for a day, you would load your spending get a boat for your friends. then you go out and you can have fun. that never happened because the festival was canceled. apparently, nobody has gotten their moneybag yet, and the lender has sued fyre or jeffrey atkins to get his money back, which he alleges was never repay. -- repaid. carol: "bloomberg businessweek" is available on newsstands now. oliver: what did you like? i didn't realize how important chili was to the economy. also, the london story driven windows into the world. we all learned something. oliver: for sure. , thee the story about iran pushback against democracy, and the story about brazil about political corruption. great history lessons that we should talk about. carol: a lot of history there. oliver: more bloomberg

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♪ jonathan: coming up, the stories that shaped business around the world. donald trump takes meetings and making deals while back in washington, his first budget makes waste. >> that is something that is not being received two on capitol hill. >> economists are foul. jonathan: iteris attack -- a character attack racks up the threat level. >> opec did with they could do. jonathan: jpmorgan opens up. >> competition is a good thing