>> welcome to bloomberg businessweek. >> we are coming to you from inside the magazine's headquarters in new york. >> inside president trump's chaotic white house. >> and how brothers managed to turn lines of code into millions of dollars. ahead on bloomberg businessweek. ♪ >> we are here with the editor

, joshef megan murphy green takes a look at what has been going on at the white house. >> josh prenot who is one of the writers for business week, peeled back beyond the administration before it was the administration. , the ks we saw during the campaign in terms of who is in and who is out has only continued. withn laugh about it anthony scaramucci being ousted this week as communications director. he was the fourth official to depart in 10 days. the gravity and seriousness of this is something we need to start thinking about in terms of , if they are unable to get a hold on their own white house -- if it will be a revolving door -- if we will not be able to see stability in terms of how it is run, the leeks, how the press is dealt with, how they are operating as a white house? there is little hope -- is there

any hope they will be able to progress with a legislative agenda. the collapse of health care, moving into a phase where they need to get something done. and they want to get tax reform done. >> i was thinking about coverage, we continue to seek chaos but how do you continue to cover the score at -- the story. >> especially when there is no communications director. >> it is tough to cover any news that is constantly rolling. we need to take a step back and way in -- get beyond the noise and comity. there has been an element of levity in all of this. this is the leader of the free world. we see venezuela and north korea and the middle east with the battle against isis. people who need health care in the u.s. and you want to see manufacturing and whose life is not based on out 22,000 but based on everyday ordinary choices. we try to connect the chaos with

the everyday impact in foreign-policy initiatives and domestic policy. is veryruption we see unusual and will really doom this white house to failure unless they can get a handle on it. the -- thestory is hna story. tell us about it. >> we were talking about a conglomerate -- they used to own many things to shares of deutsche bank, airlines, apartment buildings in new york -- it spans a broad array of businesses. we do not see these conglomerates that much more in the u.s..

chinas a huge company in that has been on a mac it -- massive acquisition spree. it is starting to look like it is teetering a bit because it has more regulatory scrutiny in terms of systemic risk to the economy and its lenders are circling. this is a bigger problem in china in terms of the debt pile up. this is a highly levered company. china's debt pile up. we have talked about it before. how dangerous it could be. hna is at the heart of it. >> it is a complex story. >> hna is an incredibly acquisitive very dynamic chinese company that has emerged from total of security over the last probably thebe most prolific dealmaker internationally among chinese corporations. it owns just under 10% of deutsche bank, it owns a quarter

of hilton and other assets over the world. one of the funny things about hna is the ownership structure has been somewhat impenetrable for a while and the subject of lurid speculation within china, all of it denied by the company -- it is not in the sense of a western firm comic easy to easy tond -- understand. >> why do we need to understand what is going on with hna? willis is a company that own a large number of assets all over the world or are ready does in many cases. it is a systemically important organization that by its own goals wants to be one of the 50 largest companies in the world of buying strategic assets in airport space for example, air travel and transportation generally. is ang who is behind it fairly understandable thing for regulators and investors and

journalists to want to understand. >> a pretty big customer of theirs and a deal that is pending right now, is the acquisition of sky bridge previouslye funds run by anthony scaramucci. this is the first time i heard of it. now there is this investigation. thatmportant has acquisition bid to thrusting hna into the public spotlight? >> it brings a lot of attention. this was a deal announced in january. anthony scaramucci was divesting in the expectation of a white house role which did not arrive until the summer and was quickly taken away. it was very much from the beginning something that was seen in the context of the trump presidency. you've seen in the brief time when mr. scaramucci was in the white house, suggestions that it

would be better to know precisely who is behind hna and what are its connections to government officials in china because if they are in fact, paying a large amount of money for a company owned by a close adviser to president trump, that is the kind of thing you would want to know. whether that fades from the scene, this debate become something that no one pays attention to -- with mr. scaramucci leaving, that remains to be seen. >> you are tasked with finding -- how easy was that to do? >> you run into interesting walls. for example, for a long time hna has said that a chinese businessman has owned a large chunk of its shares. book value of $18 billion. the thing about him is no one has ever seen him. one has been to an event where this person has appeared. he has never run a public company. on paper, he should be

enormously wealthy, he is very of secure. bloomberg and other organizations have sent reporters to various addresses around beijing associated with him from corporate filings and they are invariably not the places you would expect. a nondescript office or small apartment or uv spot in one case. he is nowhere to be found. >> hna was turned into a cover story for asia. this is well known in asia and you make it look ominous. not know much about the company until we did the story. it is worth a lot of money but its finances are suspect. there are dubious things happening with this company -- there was no shoot, the ceo is very hard to get a hold of. we took the letters hna and

applied this scary graphic. >> how do you portray this unknown corporate situation -- the story is really about who is behind this. have you portray that visually -- in this case it is very red and bold? >> was very challenging in cases like this. we have the headline which help explains -- putting letters on the cover is not much. part of it is applying the dark treatment and the scary letters -- even if you do not know what it is, it makes you want to know. >> up next is a goldman sachs veteran who could end up leading the world's most expensive and influential central bank. >> more decline for the dollar. >> this is bloomberg. ♪

>> welcome back to bloomberg businessweek. >> you can find us online as well. >> in the politics section, gary cohn went from president of goldman sachs to top economic advisor of president trump. there has been a lot of speculation in washington over the past couple months that he wants this job even though publicly he said he loves his job right now, as the top

economic adviser privately he has been telling people that he does want this job. trump has signaled recently that he is giving gary cohn" closeion and -- consideration and he has rocketed to the top as the lead contender for the nomination. the market expects him to get it. it is not surprising that any president especially this president would want to put his man, in this case, in a position. when you think about powers invested in the presidency to establish a legacy beyond their term, you have two things. to appoint a supreme court justice and the ability to appoint the chairman of the fed. on the campaign trail, trump had not nice things to say about it isan yellen, and

understandable he would want his own person. >> it sounds like the presidential bucket list. let me ask you, we all want to be out to the party, i'm sure gary cohn, it is a feather in his cap to be considered. does he really want this job? a thoughtful job, lots of research, lots of meeting, it is thing heigh profile had a goldman sachs or at the white house. >> let's think about who he is. what his career has been and how he would fit in. gary cohn is a guy who was at goldman sachs for 25 years. decade as theast firm's number two. the skills that make a successful trader -- aggressive and risk-taking and relying on gut instinct and hypercompetitive. how does that translate to being

a fed chair where everything is done by consensus? he speak softly. when we think about janet yellen over theast three years and going up to the hill and the market watching every word tha she says. the difference between the word moderate and modest to describe their expectations for economic growth. there is a lot. you wonder whether this kind of hyper aggressive trader is going to be a good fit to an institution that is more of an almost university setting than an investment bank? to talkdent trump loves about the u.s. stock market i record high. >> but he is not so vocal about the u.s. dollar. >> he is wrong on the currency markets. been offncy market has

the dollar very hard this year. the currency market is very skeptical of donald trump's ability to push through his agenda. we saw after the election that there was a lot of euphoria in markets about this progress stimulus agenda infrastructure, tax reform -- that has not materialized. skeptical. oliver: let's start with the equity market. there are unknowns. the dollar and the currency market, you might be able to argue is more of ap or, relative -- is more of a pure or relative market. is that what is important? what drives the dollar that can be a read through for trump's performance? >> you got it right. the currency is the play against country versus country.

the dollar versus the euro for instance. we know the economy is ok and the labor market and the fed will inch toward higher rates. we did not know the european economy would do so well. the euro has risen against the dollar. 2015 yesterdayce because of the upside surprise on the european economy. it is a pure play. alongs. economy is going as people expected while other places are doing better. >> the currency market is a huge market and it is an indicator about how investors feel about a country and the economic outlook? >> it is the biggest financial market in the world. 5 trillion a day changes hands. people looking at currency -- they are looking at the u.s. economy and its stability while global peers are heading toward the exit door of qe. of otherts the outlook

currencies relative to the u.s.. >> why is the story important? >> we have had a four-year rally in the dollar and investors have seen these easy trades -- the fed will hike rates and the dollar will rally -- that has eroded and collapsed this year. it is important for investors to look at portfolios and think about what that means out of this rotation of long dollar trades and into short dollar trades. up next, why some investors are starting to wonder if the stock market is to calm for its own good. warren buffett are obsessed over hot dogs. this is bloomberg. ♪

oliver: welcome to bloomberg businessweek. carol: you can also listen to us

on radio. here is how you can listen to us. asia.: and in london and in the finance section, investors who have made bets have done well recently. carol: that does not necessarily mean smooth seas ahead. is a measure index of the ups and downs in a market based on the s&p 500. chicago board maintains it and when the vix goes up it means that people are uncertain and it is usually when the stock market is going down. sometimes people say it is a good hedge -- you buy a product connected to the vix, protection against losses and your stock portfolio. carol: but it is a fear sentiment? >> exactly.

lately it has been low. i just did a calculation -- there have been only 26 days since 1990 when the vix was below 10. 17 have been since this may. oliver: 10 straight days below 10, first time ever. they keep racking up the superlatives on how low the vix is. usually when we think about the vix, it moves inversely to the stock market. people pay attention when it is high. we are now paying attention because it is very low. there are a lot of theories about what that could mean for the market. what did you determine in what did you set out to clarify with this article? -- the i found out is natural thing to do if you fear the stock market is high is to buy protection by getting into the mix. ratees, options, exchange

notes. people do that. then they found out that they were losing money doing that. stocke thing, the feared market correction never happened so it was like spending insurance. it was extremely expensive form of insurances because of the way the notes tend to be based on vix futures contracts. the way one rolls into another can cause you to lose a lot of money even in an ordinary market. some people said, i have an idea. let's go the other way. let's bet on the vix going down. which seems kind of perverse when it is super low. yet that has been a huge winning bet. carol: in the future sections, 3g capital has gained a reputation. oliver: it is looking to change that reputation. they were selling less hot

dogs and losing market share and overall hot dogs have an image problem. that all added up to a big problem for the company that owns the oscar meyer brand. it is one thing to be losing sales of the categories growing. -- but young is off add up the fact that people are buying more of other people's hotdogs in the category was declining which makes it a market share fight -- this was a problem for craft-heinz. oliver: the thing about the hot dog situation is it is also about the ability of a company who is renowned for going in and buying -- 3g here, buying companies and taking private equity and stereotypically going in creating opportunities and removing excesses. the hotdog initiative was a challenge for them. taking a brand and investing and rebuilding it. >> that is right. what we tried to do with the

story was use the hotdogs to show what kraft-heinz is trying to do. they're owned by 3g capital which is this notorious private -- they arefor famous in the u.s. now. he bought burger king, they did the heinz deal, they got together with warren buffett and kraft.heinz anmd they tried to buy unilever earlier this year and they got rejected did the model with them is -- they got rejected. you buy a company and you get the margins up in the stock price goes up and then you buy something else and start doing it again. oliver: what happened with unilever? was that a result of their style be known on the street and unilever saying they did not want that? >> pretty much yes. they said the price wasn't right publicly.

we know that privately, unilever freaked out. his thing unilever, was profit with the purpose. they thought they could serve the bottom line and do right socially. there was skepticism. they said no way are we going to let ricci come in here and destroy everything we will. 3g come in and destroy everything we did. investors are not buying stock because they think these guys are selling cheese and mustard and are great at it. it is about doing deals. when unilever said that, it is a real problem. carol: so go back to the hotdog problem. they cannot buy up company stock, now they have to look at the company and look at the business and figure out how to perform better at selling hotdogs. >> there is still a lot of speculation that they will do a

deal this year but we do not know what it will be. the company does insist, we were going to do this hotdog thing regardless of whether the unilever deal happened. it started last summer. it depends on what you think about where they were and their imaginations about unilever at that time. what this company does best is buy otherompanies -- companies. the packaged food business is not great out there. the sales are down quarter after quarter. people are not buying as much of this stuff as they once did. the hotdog is a great example. the who says don't eat hotdogs. their carcinogenic and toxic. people are trying to avoid processed meat. oscar meyer is an older brand with heyday behind it. hero these guys now suddenly that industry square in the face and saying we have to sell more food. revamping how online

business is being done. oliver: and a contraceptive pill for men. carol: this is bloomberg businessweek. ♪ who knew that phones would start doing everything?

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>> welcome back to bloomberg businessweek. >> still ahead, tesla model three to the masses. >> good ideas to compete online. >> and a spanish architect is building beautiful and affordable homes. >> all ahead on bloomberg businessweek. ♪ oliver: we are back with megan

murphy to talk about more must reads in the magazine this week. tesla, what about the price point? megan: the thing that is interesting about this is what market is tesla chasing here? people who are looking at porsche and mercedes and audi or trying to compete away from previous, energy conscious middle-class price point? the car has had great review so far -- people are excited. the challenge will be can they make enough to tap into that demand and what is the lifespan of tesla? will it be consistent? sustainable as a business model given the valuation that tesla has? the stock is been up tremendously and everyone is expecting it to be a mass-market carmaker. megan: it has not shown yet that it is a mass-market carmaker.

it isn't there yet in terms of production. musk, theseout elon grand visions that he has have a funny way of coming true. he has launched rockets, reused them,-- oliver: he is so nonchalant about it. megan: what is so fascinating about this is the massive shift toward the electric car industry. we see what is going on in europe and the u.k. with outlawing diesel cars as of 2040. this is a seismic shift. he has proven to be ahead of it. for tesla the game will be meeting that demand. the position a lot of companies would love to be in. oliver: there are so many things investors have trouble with with tesla. elon musk is such a unique person. he will say that the stock is overvalued -- at the end of the

,ay, it feels like there is because of those visionary ideas, people might just keep giving him money. megan: we will have to see what happens with the model three. it deals like the product has delivered already. what we talked about in this article, they loaded on option packages. at $35,000 can end up as $40,000 with add-ons. people are attracted to tesla for the idea and the hope, the optimism of tesla. the product has to deliver. once he gets those two matchup, it is possible that it is worth what people are paying for it now. carol: two brothers, i love the story. thisrobably haven't heard but it is crucial to the internet. this is stripe, founded by brothers in ireland.

they are now in silicon valley. specialize in the backbone infrastructure of online payments. they have done a deal with amazon, another big step, their company is worth a shade under $10 billion trade this is a brutal industry. everyone knows from their credit card fees. they have built something that has relied -- for so many transactions. americans spend billions of dollars every day online. so much of that is going through their payment processing. what i love about their story is, these brothers are interesting. 16 and gotduated at into m.i.t. based on his sat score. they have an unusual company. a lot of smart guys and

a great disruptive tale which we love. we have that story. on any given day -- >> on any given day in the u.s. we spend $1.2 billion online. that will probably double five years from now. stripe runs a lot of the infrastructure that we use to buy things online. you will never see it and you won't know it's there but without it you would definitely recognize that you don't have it. stripe is essentially solving a software andtdated infrastructure that was behind the transaction process of online purchasing. online commerce. brothers and not a lot of corporate experience behind them get into an industry that i would think is largely dominated by some of the biggest financial institutions and corporate behemoths in the world. >> e-commerce is crazy in that it outpaced the infrastructure

behind it. it was growing rapidly but the scaffolding below it really wasn't there. the people that were designing that scaffolding were not exactly going to win awards for elegant coding. these were banks and middlemen. they were doing it in a slap -- way. in 2010 along come these brothers. it helps to be a genius and a prodigy -- carol: and they really are. >> they are prodigies and geniuses. they are incredible. they decided to debug this process. saiding in 2010, they there is a big opportunity here and we can fix this and we don't need a big bank behind us or a large company. we just need good code. if we had an institution like that behind us we would probably not be able to do it as fast and elegant as we want to. carol: in developing the code,

also developed relationships with banks and others so that they could actually go to uber and say, i have a product and we will handle all of your processing. >> if you think about running a business and receiving payments, before a company like striking along, you had to go to the bank or get a lawyer or pay a lot of -- before stripe it was inefficient. if you are a company, you are thinking awesome. it is the least exciting part of setting up a business. you can make a lot of mistakes. they came in and said we will do this forward with seven lines of code that you can cut and paste into your website. oliver: turning stripe into a cover image was a job for the creative director.

how did you think about bringing this into an image? >> we did shoot one of the brothers in israel months ago but the company was by both of them so we needed to get both of them on the cover. luckily we were able to shoot them in new york a couple of days before we had to ship the magazine. the photos turned out great. the photo represents who they are. not these silicon valley bros. we got this nice shot and we ran it. carol: people will look at it and have no idea who they are. but talking about these three lines of code which represents what they are all about. a few lines of code can impact a lot of sellers online. spacess one of those that is not exciting but it is challenging.

that they have managed to carve this massive space and begin that realm is impressive. oliver: up next how venture capitalists are trying to break the code in silicon valley. carol: and the medical product that is coming up. ♪

oliver: welcome back to bloomberg businessweek. carol: you can also find us online at businessweek.com. oliver: and our mobile app. silicon valley is trying to change the culture that has been sexist for a long time. >> for a certain group of men and venture capital, it is almost like the catholic priest situation. where people suspect or sometimes actually know that the person is a bad actor -- praise

on women who come to him for funding and instead of dealing with the problem, the best way is to shuffle this guy a long to another venture firm. they get moved along often with glowing recommendations, sometimes it seems like a situation where the person banks, ok i am in a new environment, i will start russian everything will be fine. but then they slip back into there'll habits and start treating the female print doors in a poor -- female entrepreneurs in a poor way and then the person gets moved along again or the investors often are -- do a lot of diligence and think they know everything about this venture capitalist and then it turns out, they haven't been able to get a full picture. beyond andhis goes is more extreme than the club

clubbiness ofthe it being a man's world. >> it is related to that in that you know you will have to do again.s with this person morally the right thing may be to speak up but you know that that same guy is going to be on a deal that maybe you want to get in on the deal to sell you and to smooth things over maintain good relations with the person. you don't know when you will be in a situation when you need a reference from him too. let's say you are raising a new fund and a potential investor calls you up -- or calls up that guy -- you want him to say good things. there is this kind of unspoken code where people will say good 's thatabout other vc they know to be poor actors.

male birth control could be a $33 billion business. oliver: why has no one figured it out yet? >> if people have been paying attention to the news over the last for years you might have noticed every few months there seems to be a headline saying, new breakthrough in mail earth control. le birth control. i want to find out why you don't see anything. there are a lot of ideas out there. there are a lot of hurdles that make it difficult and maybe more difficult than female birth control. some of it is biology. the female birth control pill works by mimicking pregnancy. constantly and

there is no natural off switch for that process so it is difficult to find something that stops it. oliver: i thought that was a thereuote in the story, is no conspiracy behind it is just hard to stop. >> let me go to the supply side of the equation. do men want to take a pill? >> most surveys find that acceptance is theoretically high. men say they would be willing to do it and they are interested in it. you never know when something actually hits the market -- and when you look at a hormonal solution like what women have, it is famously associated with side effects. there is a question that men are theoretically interested but what happens when you are actually faced with that choice. talk about some of the research. it is complicated. is it small biotech companies

doing it or the large pharmaceutical industry? this is a potentially huge market -- billions of dollars. >> it is definitely not the big companies. they were involved in funding research in the 1990's but have mostly pulled out. is small biotech companies, academic scientist at peopleities, nonprofits, at the gates foundation have traditionally been interested in this. it runs the gamut. the conventional approach is a hormonal approach but there are a lot of other ideas out there ranging from a pill to something like a medical device. a german company that is making a switch that would be implanted that literally you can turn the flow of sperm on and off. oliver: up next how animals can predict the future. carol: and the winemaker rescuing old european grapes from obscurity.

oliver: this is bloomberg businessweek. ♪

carol: welcome back to bloomberg businessweek. oliver: you can also catch us on the radio on these channels. carol: in london and over in asia. in the technology section, an online database tracking animals and predicting national disasters. oliver: we talked about the icarus project. germany, he is been working for the last decade or more to develop concepts about movement ecology. oliver: what is that?

>> the idea is that by studying movements of groups of animals whether herd migration or a handful of cows and chickens running away when they should be asleep or resting -- you can get a better sense of what is coming? the most part the research is focused on earthquakes. carol: we've seen in the past where animals can feel changes in the environment or weather and move to a safer place. it has been somewhat reliable. >> that is what this guy is developing. in indonesia in 2004 it demonstrated that elephants plead the tsunami -- ran away from the sin on me before anyone from the- ran away tsunami before anyone knew about it. sheeplso happened with and goats around volcanic

eruptions. a few more years of research he is preparing to launch a satellite that will viewhim a better birdseye and a larger database to play with. is interesting because their culture and a lot of things we think about we often see animals as being of changes and the environment but this is actually putting data behind it. this is a big data project here at tell us about what is behind this and the institute that is doing this? this could be pretty costly. where is this coming from? >> the german-russian space agency put up a combined $13 million to develop a single you satellite and get it up into the stratosphere. the russian agency will be doing a spacewalk to put it into orbit. for the most part this is a

general research effort funded predominantly by the max pla nk institute. section,n the pursuit this architect is making innovative homes. carol: they are amazing and relatively affordable. >> we have a story on a spanish architect. he lives in valencia and he creates amazing modernist homes on the coast of spain. he is been doing this for years. he is only 41 years old. his practice has been taking off. what they do is they think about the homes holistically. how does the exterior relate to the interior of the home? it is a new practice that is invoked. it used to happen a long time ago and people are thinking back to, this is what i want. the interior reflects the exterior. like: like flank right --

frank lloyd wright. buter: they look incredible when you move to the details it has a lot of square footage. it is about efficiency. the homes aremes bigger than they appear. to tuck space into places you would not necessarily see. basements and attics that are open with big glass sheets. from the outside it just looks like a cool spaceship. be?l: how did he come to >> he had a job in portugal doing municipal work and creating buildings. wasn't for him and he wanted to be able to experiment more. it is a lot of bureaucracy when you're dealing with big buildings. he decided to move home to valencia and open his practice which is making small family

homes. he thought he would be able to experiment more and he has been. carol: having looked at his homes, their stunning. they look like museums. how do you run a family in this home that is all white -- where are the items? thinkn you look at it you you would never want to make spaghetti sauce in their because it would be ruined. but they have incorporated household items like the toilet plunger or garbage can or door handles, they have thought the details through so they are integrated seamlessly into the home so you're not thinking about them and they look like design pieces. in this way they are allowing clients to live seamlessly and not worry about the stuff. carol: also a california winemaker planting vines in sandy soil. oliver: and it is gaining admirers.

zinfandelsen making and many other popular wines. halfway through his career he toted to make it his mission find forgotten vineyards growing forgotten grapes and resurrect these old styles of wine that people have forgotten about. carol: have they forgotten for a good reason? >> they are a more pharrell -- more wild flavors. were made to be put into blends. oliver: when i hear that, it sounds like a big task. a -- these are all grapes that are grown and rocky soil in abandoned areas.

these are not really wines that you would have heard of. carol: are they good? >> yes. they are served in restaurants. expensive?they >> no. a lot of people are not competing for these grapes so he is able to make the wines for a low price and sell them for under $130 a bottle. oliver: i thought that was interesting, the part about the actual cost of production, the bottom line is affected because these are not highly in demand. he can keep the price low. it seems like from the interview, he is not terribly interested in trying to squeeze out every dollar possible. >> one of the things that disappoints them about california wine is that it has become too expensive.

people are saving these bottles are not actually enjoying them. a lot of how it works is people are buying grapes from other people. it is almost like trading. he is finding vineyards where people are not competing. carol: bloomberg businessweek is available on newsstands now. oliver: as well as on bloomberg businessweek.com. what was your favorite story? carol: stripe. if you and i do something online, they are probably handling transactions. they have a partnership with amazon, $9.2 billion valuation and you learn about the company and the two brothers behind it. i love it. oliver: i like the icarus project. how to useking about the instinct of natural animals to better prevent ourselves from natural disasters. i like the architect. carol: i love it. oliver: incredible imagery.

bloomberg television starts right now. ♪

♪ emily: coming up on bloomberg best, the stories that shaped the week in business around the world. another staffing change rocks the trump west wing. apple stores are seeing bright times ahead, the barrels of oil keeps rates low, and a stronger job report. >> the u.s. has a strong economic report but i do not think it moves markets much. alix: the dow breaks through 22,000, so, where are stocks going from here? >> dow 30,000 is going to happen. next the time to sound the warning is when everybody is making a lot of money. alix: