>> welcome to "bloomberg businessweek." i'm carol massar. julia: i'm julia chatterley. we are inside the magazine's headquarters in new york. carol: beijing continues to feel the bites of deleveraging. julia: removing chinese cash. carol: steve bannon has another warning for the white house. julia: all that ahead on "bloomberg businessweek." ♪ carroll: we are here with the editor, joel webber. but start with remarks in asia, that bears close watching. business week has been writing about the debt pile up in china.

china has been doing something to get rid of that. joel: this is called the europe the dog. what we will be talking about is deleveraging. the debt pile up in china is enormous. there's been a number of people. for years, people have been calling for, something is going to give. it will be bad for the global economy. all eyes on this in general. where our story picks up on that is talking about, the number is $30 trillion. that's how much we are talking about here. it's massive. the number people pick up on is gdp. what do you do about that? this will be -- deleveraging will be with us is about. julia: still providing credit to companies that they are not

concerned about, but they are also cracking down on big corporate's that have been spending. >> it's not even called corporate. it's conglomerate. real estate from years ago, they're selling it off and doing it the big way, $4 billion. that's part of the story, cracking down on these conglomerates that may be overreached, bringing them back in. it's also cracking down on state backed companies who, that is the number one place it gets linked to. carol: this is from china, right? the chinese central government since economic targets. they will wait on politicians to make sure they have those targets. it is key to the economy in terms of staying in power.

>> that's where the balancing act comes in. can they pull it off is the question. that will be something we are all going to be continuing to watch. the ramifications for the global economy, because of the size of china's economy are massive. >> that's one of their priorities, poverty, pollution, debt. you have to see what using ping is attempting. julia: priority is the right word. joel: i don't want to get out of his bed graces. [laughter] julia: chinese workers are operating in a place which is one of the -- can we say -- the largest washing machine operation, perhaps? [laughter] joel: you can, i'm not going to say that. carol: we can allege. julia: we can allege. joel: this place is on u.s. soil. you get on a plane, flight to

hawaii, do that again. it puts it right over in asia, and it's a little bit closer to asia than the u.s. the story centers on the chinese casino that opens on japan. it's a little fuzzy. >> it's a lot fuzzy. let's be clear. it's way more financially superior than anything in vegas. joel: macau dwarfs vegas in size of per table numbers. casinos in japan worth that with fever tables. [laughter] carol: right. that loan in the relationship between the company and the u.s. and government officials would be super interesting. matt campbell went there. we got more from him. matt: saipan is the capital of a obscure american territory.

if you want to see it on a map, you've got to look for guam, then go right. it's an impossibly remote part of the world, 14 time zones from washington. the quickest way to get there is to flight to tokyo, then double back. it has been since the 1970's american soil. u.s. dollar, u.s. mail, federal law extends there. this is for more than intensive purposes part of america. >> talk to us about 2014. matt: the biggest issue since the second world war has been finding an economic purpose. this part of the world has no industrial base, natural resources. nothing to sustain its economy. there was an industry in the 1980's really, which became enormous in the 1990's and

2000s, that eventually collapsed. but that meant was the marianas were desperate for cash, they were in a serious financial crisis. but they did is what a lot of out of options jurisdictions have done. they looked for a casino. >> economic answer, isn't it? [laughter] matt: it's all about the money. >> right. matt: the casino led to unusual events which are still unfolding. julia: talk to us about those events, and the company. matt: imperial pacific international was called "first natural foods." they were in the produce foods business. they've recently got into the casino business. their controlled by a mother and son from mainland china. they have certain connections and macau, the gambling capital of the world. they turned up on saipan in 2014, with amounts of money that places have never seen before. this is an island where the best

hotel is a high it from the 70's at the airport. it's tiny. 50,000 people if that. all of a sudden, you have billionaires from china spending large amounts from the island economy. >> they have billions of dollars in terms of development. >> they promised to spend up to $3 billion for now, in terms of developing -- development. became remarkable is as soon as gambling began, a temporary facility, not the casino, the numbers were astounding, the likes of which, they've never seen them before. carol: the financials julia: julia: here are incredible. he would say multiple times, the generation capacity of casinos and macau, way bigger than anything vegas has ever seen. >> if you look at the comparative numbers here, they do it for table. that's the important metric. this is a place that's turning over by some measures six times more than casinos in macau per table.

this temporary casino, the size of an olive garden, was doing something like 1/3 of the volume of the biggest casino in the world. it raised some eyebrows in the industry. julia: could this be done legitimately, if you're talking about chinese billionaires coming to this remote location? what have people said to you about the possibility that this could be legitimate? matt: i spoke to a number of giving experts and executives. all of them with a lot of experience in asia. they were all deeply, deeply skeptical to say the least of any legitimate explanation for funds like this. carol: what is a legitimate explanation of what's going on?

matt: they are complying with all laws. they do not view their volumes as excessive, and there is an entirely above board gaming option. one explanation, macau is a huge center for flight. some of that capital is something that any law firm has done business, they will tell you macau is a significant venue for money laundering. that's because there's a lot of money trying to get out of china. it has historically tended to flow in large part through macau. whether that's going on in saipan, needs to be left to others. >> why isn't it going to saipan? matt: president xi jinping has been tough on this sort of thing. if you look at the result of macau casino operators over the

past few years, they are all the way down from the boom years, which were 2012-2013. it has gotten tougher to move money through macau. that money is popping up elsewhere. julia: you've pointed out, this is u.s. territory. could you explain how this effective money washing is working in practice, and just the fact that it is a u.s. territory, does that aid but the problem is right now for money and macau? matt: well, when you want to get money out of china, the goal is to get it is safe. julia: yeah. matt: or there are property rights. there's no better place than the united states for property rights. that's a valuable thing potentially to be able to offer. there's also a question of, banks in asia are really, really, really terrified of being sanctioned by the u.s. treasury, ending up on a

blacklist. that's not a fear that is quite so pronounced within the united states, of course. this is all speaking generally, not necessarily about saipan. carol: wall street titan makes a new bet on banking and italy. julia: an american chef cashing in in copenhagen. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." carol massar. julia: i'm julia chatterley. you can find us online on bloomberg.com. carol: former barclays chief bob diamond is taking on a risky bet. julia: an opportunity for small business lending in italy. here's our reporter, elisa martinuzzi from the line. >> this is with barclays, investment banking powerhouse.

he has been tiptoeing another business areas. he tried to replicate banking but didn't quite go according to plan. it's the turn of italy and southern europe. he seeing the opportunity to fund a business that has been the backbone of italian economy, which is bank lending to small-medium-sized companies. >> when you think about italy, you think about the struggles of the banking sector. set the scene force us: is this situation improving here for nonperforming loans in italy? >> i think what's interesting is the timing. for the last couple of years, the focus has been on that banks have built up. they've all been focusing on

purchasing some of these bad debts, prices in the hope of being able to sell those and the assets behind them for profit. now, suddenly, as the economy starts to turn, investors are seeing the opportunity to make money by lending. it's a story that's different to the ones that focus on bad loans we have so far. >> we can imagine good companies there have helped credit, because ash have stopped credit due to debt. talk to me about the plan. what has bob diamond invested, and what did he hope to do? >> that's exactly it. taking advantage of the big banks, established players, dealing with a bad loan debt, and are unable to grow their lending book. what he's doing here is investing in a company founded by a former ceo.

this person was also a foreign minister who is going to be buying a bank, and they are in a discussion now to purchase that license. they injected 600 million euros of capital and to that. they're having a challenge or bank to mainstream vendors. >> this is interesting. he was the former head of a company, and is combining his political knowledge and expertise with banking sector expertise, too. >> absolutely. he's witnessed come up and behind, run one of the bigger

banks. he was able to cross that bridge and presumably have backing for this venture, and will be negotiating with regulators, in terms of the license purchase. julia: a profile of rodeo sanchez. carol: she's american chef with a taste of mexican cuisine. julia: here's our editor chris rovzar. chris: rocio sanchez is a woman opening restaurants in copenhagen. maybe that's something i won't not be familiar with soon, but she's got this incredible career. she's 32 years old, cooked up some of the most incredible kitchens around the world. julia: incredible, some in london, gentleman in denmark, the denmark connection. chris: exactly. she worked for several years at a place, widely regarded the best restaurant in the world.

she took that knowledge and brought it to her own place. she's causing a sensation. julia: i mean, this is a strange path she's taken. she was a daughter of mexican immigrants, grew up in chicago. she now finds herself in copenhagen with three restaurants at 32. chris: it wasn't something she imagined as a little kid. she's very funny, no-nonsense. when she was talking to a reporter, she said "i never thought i would be a chef, i was just a fat girl." [laughter] "i liked cake." she went to a vocational school outside of chicago, learned how to cook, she started in turning around the world at some places, then she got a call from noma, and said it was like getting the call to to her. she said "a that's what i'm doing all right, that's when doing, and she worked there for several years.

julia: one thing that stood out was the chocolate chili, obviously. chris: yes, popsicles. one of my coworkers had them, it's amazing. she did a pop up at shake shack in new york. i went down and had a breakfast taco she made with cured egg yolks, which sounds weird. carol: yes. chris: -- but was really delicious. they did a pop up, and was sold out a 9:00 a.m. julia: this is very unique here, with -- it's also it takes something getting used to, i think. the flavors seem to be going well with people. chris: the fried pork skins is a mexican, traditional food. when she is in copenhagen, she can't use all of the traditional

ingredients she would use if she was here. she uses gooseberries, and that has a day and -- so she adds a danish spin on the mexican dishes. she has also become a sensation, because she hires a lot of women chefs. julia: yeah. chris: she got a lot of attention for that. she didn't want to get into a whole thing about women in kitchens, and you know, any of the controversy there. she's just trying to hire women chefs. she found women she liked and hired them. now, she's got a mix. she's got a little crazy. [laughter] she's hired a lot more women in her kitchen than a lot of other european kitchens. carol: up next, steve bannon finds reason to address the #metoo movement. julia: this is "bloomberg businessweek." ♪

♪

julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: i'm carol massar. you can also listen to us on radio on sirius xm channel 119, and on and 11 30 in new york, one of 61 in boston, 91 fm and washington, d.c., and a.m. 960 on the bay area. julia: and in london on dmu asked three, and on bloomberg on the radio plus. excellent house adviser steve bannon sees a problem on the horizon for president trump. carol: we are not talking about russia, we are talking about the #metoo movement. >> it's the night of january 7. he's at the back room of the townhouse, where he lives near capitol hill. they only a few days after the publication of michael wolff's book, in which steve bannon rips apart the white house and the president gets publicly excommunicated, not just by the white house, but eventually loses his ties to breitbart.

he watches the ceremony of all the women's power meant movement, and the backlash, an embodiment of the #metoo movement. he has this oh my gosh movement. this is the next political backlash that is going to, you know, sweep washington and away the institutions. of course, he's the guy who harnessed the last one, the populist ghana nationalist movement. he's telling josh, who, you know, as there watching this, this is a seminal moment. the irony of course is this is coming just as payment has been exiled out of the party -- the irony is that this is coming as bannon has been exiled out of the white house. this could do potential damage

for the republicans in 2018. julia: he declared it's a cromwell moment, we're talking oliver cromwell. we are talking the u.k. what did he mean by that, and where does he see the danger? matthew: he sees this as an anti-patriarchy movement thousands of years in the making. the irony, perhaps the power of this, he sees donald trump the embodiment of so much of the #metoo movement and against this anti-male establishment. as he tells drudge, donald trump the perfect villain. he really sees this in broad, historical sweep. he's never short for a way to look at a historical moment and find some random theme. in this case, the puritanical movement of cromwell.

these women and black dresses, all my god, this is anti-patriarchy, antimale. it's big and it's, you know, hundreds of years in the making and there's no stopping it. julia: for a lot of people, that night, natalie portman it was quite jarring. she made it more about me too, she made anti-male. then, you tie that to reporter, and what we've seen over the last few weeks. you feel like that's a fuel on the fire moment for the administration. matthew: that's right. after the golden globes, you have a scandal, allegations of domestic violence with rob porter. the white house handled that, it was bad on every front. they seem to have known for quite a while this was an issue in his past. security clearance, the fbi provided to a number of people including chief of staff john kelly.

the initial reaction was these are not founded in reality. this is exactly what bannon is talking about, which is this white house in particular seems ill-equipped to deal with this movement, in particular. it's a chicken and egg thing about which came first, whether the women's march that happened the week after the inauguration would happen without donald trump, we are not sure. we are in a moment here that has momentum, probably because will cause serious problems for republicans in the midterm. candidates for congress, the vast majority of them are ranked democrats. carol: next, the #metoo movement moves to europe's sports leagues.

julia: and, angela merkel pays a high price to stay in power. carol: this is "bloomberg businessweek." ♪

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julia: welcome back to "bloomberg businessweek." ahead, angela merkel -- all of that is still ahead on "bloomberg businessweek." ♪ julia: there is still so much more to read in the magazine. let us hone in on the business

section. we see the me too movement in focus once again and it is going to european >> sports. >>so much conversation in the u.s. about this. we are seeing it pick up on the other side of the atlantic. one of the most interesting things is the shift in sports. that is where the story hits. you can think about all of the gorgeous, scantily clad women you think about on the podium at the tour de france. formula one. even darts which has an audience. all of them have changed their tune and said this could project a different view of the world in sports than we want to project. in the last month we have seen major change. julia: are they coming under pressure as a result of declining viewership? is there a backlash? : it was on the heels of

some stuff that happened in london and i think they used that moment to look at themselves, look in the mirror and say -- you know what? nothing has happened. there have been no allegations but they are merely saying projections. was the londonnt charity event. it was all male. the event.ng at and there were allegations of sexual harassment and inappropriate conduct. that changed the conversation perhaps. joel: in europe especially. it had been primarily a u.s. movement. moment. wildfire what the sports community realized was that there have not in any allegations yet but the objects are bad and we need to change the narrative sooner rather than later. strategically they have done that. instead of scantily clad women,

you are seeing more elegantly dressed men and women. julia: it is going to work? : not everyone has gone a long. some people say it is part of the sport. carol: the women holding the signs. boxing at least, in europe, we may see it for a little bit longer. carol: what was interesting is that there were women models saying i great -- i made great money doing this. joel: that is an interesting nuance. even though it is a great job, the sports league is saying that they need to change the optics. carol: speaking of women defending their position, there is the european cover story on angela merkel. a year ago she was in a strong position in her country and globally. she was a beacon of moving everyone forward. doubt come the most

powerful woman in the world. carol: and has been for a while. joel: and probably still is but her power has been diminished by a coalition she had to form. a constant theme in german politics. it is often called a grand coalition. not one has the chance to be so graham because it diminishes her power. diminishedr is within germany, it is potentially diminished on a world scale. julia: she has been in this coalition a number of times before. this one is a game changer. unprecedented. we pick up the story with david. >> it has an agreement for a coalition government at the agreement still needs to be approved by the 460,000 members of the social democratic party. that is where the rub comes in. in order to get a deal with the social democrats, she had to

give up a lot. carol: your story talks about how she has been in the past a really good negotiator. she does not blink but this time she blinked. what is different? julia: and what does she give up. david: the social democrats walked into the negotiations and want three- ok, we ministries. and they said we want finance, foreign, and labor at a minimum. normally in german politics what happens is the social democrats say they want one thing and the christian democrats want another and it goes round robin. ors time, they said take it leave it. she had to take a. although neither party could afford to walk out of the room without a coalition agreement, she would have been in far were shape had she done so. julia:?

why david: she has been chancellor for so long. she has been leader of the free world. she had so much more to lose because she is the chancellor affectively. she would've been falling from a higher place. the social democrats had nothing to lose. they have been junior partners in this coalition for the last four years and they got nothing out of it. they were always sort of perceived as the secondary elements. they could have walked away. there was a lot of pressure within their party to go into opposition and not the in a coalition government with her again. they got pummeled in the last election. a shocking showing. and angela merkel struggled as a result of the rise of the asd

parties. what he afraid to go to fresh elections in case they increased their support further? david: neither side could afford to go into new elections because of the rise of the right wing party, called an alternative to germany. fearful of the rise of this party. carol: where is she today? your story talks, if you go back a year ago, that she was in a very different position. how weekend issue today -- how weakened issue today? oday?she t david: she is seen as vulnerable. there are some conservative members of her party taking potshots at her saying the coalition will never last war

for years. she does not have that stature on the world stage that she did a year ago. ed that to the fresh face of macron in paris. she does not look quite as all-powerful in europe and in the world as she did. carol: up next, working for a start up turned out to be extra hard in your. julia: -- in europe. julia: -- carol: this is "bloomberg businessweek."

julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: i am carol massar. section, the economic why some from paris and india

are encouraging their children not to pursue careers in india. >> -- in technology. about 1000 new tech companies born last year and increasing valuations and we are having bad international investors make big bets on indian companies. including softbank last year. new little unicorns being born. it is not all working out for people in the rank-and-file. julia:? why? stock option programs >>, the way that silicon valley works used to attract and retain the best and the brightest are not working out in india so well. because either the programs are badly designed or because founders frankly are cheating their employees out of their rightful payouts. in silicon valley, you

hire great talent, you offer them stock options, you hope that at some point you ipo or ultimately you get bought out by somebody. you make a because you own the stock options worth significantly more. silicon valley and why is it not working in india? >> think of paypal. masseuse atin-house google who is now a millionaire. it has worked. it helps create the next generation of investors and it keeps the echo system -- the ecosystem robust. one problem in india this book -- beside the bed design is that there have not been as many ipos or big buyouts. 2013, theen, since first high-profile case, we have

seen a steady trickle of lawsuits and complaints. to law firms think they are getting a lot of calls from disgruntled employees. carol: are they promised options? sudden, whenof a the company is sold, they do not. >> they are brought on. the company says they have a plan. and that was drafted and codified but some did not>> the. read the fine print. there was an instance where a and thewas acquired founders and the original investors got a payout but the employees said --what about us? go with ahad lawyers fine tooth comb through the plant it said that stock options -- that there was no accelerated investing in a takeover. carol: in the technology

section, the university was once looked at as a blueprint for the education of the future. julia: but first, it had to reconcile a pretty dark past. sarah: a singularity university was not founded as a university but more as a place where people could go think about big ideas that could change society. like solvingeas hunger and poverty and rethinking government and think about how to make that happen. when it was founded, this guy, right, a big thinker -- ray, a in silicon valley who wrote a book about singularity which basically means that machines are getting smarter and smarter and overtaking human intelligence. and one day, we may merge with machines. so, he is the cofounder. the x prize,tarted

peter is a cofounder and they attracted all of these big thinkers in silicon valley around them. and it was a printer -- and it is, a very exciting place where students would come and spend summer summer at singularity university thinking about these problems and hearing from these big thinkers. you have given us the good news. let us look at some downsides. talk to me about the astronaut, dan and his involvement with the program.

people looked up to him and thought of him as a mentor. , he was in france and looked up a former student. this was in 2013 that he looked up the student that had been in the program a couple of years earlier. and there was an incident in paris where he ended up giving her a massage for her aching back and she says he touched her inappropriately. reports withfiled police and other authorities in france. she reported the incident to singularity university and just thought that the outcome was not what she would've wanted to see. buteft the summer program

he is still a affiliated with singularity university and still teaches at their executive programs which are a little bit different. there are two sides to every story, obviously so i have not heard back from the astronaut at the time ofprograms which are at different. this taping but perhaps he disagrees with her account of the story. julia: there were allegations made of sexual assault in this case. talk about some of the financial irregularities because this to me is also quite fascinating. we had a financial controller arrested for misuse of the company's funds. talk about that. sara: when it was starting, it was a little bit chaotic and she was the controller at another organization here in the bay area. at singularity university.

she was able to do things like issue cashier's checks that she cashed and was working with the president of this other organization. they took singularity university's credit card and racked up all sorts of personal charges. the direct of this other institute bought a motorcycle fraudulently. finally, other people realized what is going on and both were arrested and ultimately pleaded guilty to felony charges. julia: up next, the global battle for artificial intelligence experts. putl: and luxury -- finally females in the driver seat. julia: this is "bloomberg businessweek."

♪ carol: welcome back to "bloomberg businessweek."

julia: you can listen to us a.m.1130. also on the bay area.0 in carol: and in london and in asia on the bloomberg radio plus app. in the technology section, silicon valley is looking for a feel-good ai express. good ai experts. >> big tex companies are looking for them to help them with driverless cars or to upgrade face recognition software. there is a pretty wide range of industries interested in ai . julia: what qualifications do i need?

>> the baseline requirements tend to be high-level math and statistical understanding. you need a grounding in key programming languages including python. carol: what is interesting about the story is you talk about wanting a seven-figure salary which you can get if you are which you can get if you are an ai expert. it said just a supply demand question? >> it is hard for people to company -- a company called

ai in montreal has released a report suggesting it is more common typically for companies to require the kinds of people who can dominate or lead a particular subfield. admits its methodology

justearching for just -- based on linked in files. julia: they could have missed people or they could just have gotten the creme de la creme individuals. >> even if you just have a it you may not have been caught in this. carol: it you may not have been caught in this. carol: if you are in the upper are verym sure you well-known known in the industry and sought-after. >> at facebook, google, and ai.ent>> even they say they are having trouble recruiting because there is a shortage of talent. julia: luxury carmakers are finally realizing the sheer scale of female buying power. carol: it is about time.

here is editor chris rovzar. ai. even they>> we thought it woulda great time to check in on how super luxury car companies are attracting this growing audience. especially in saudi arabia, it is a totally new audience. julia: and a high-end audience. >> the phantom. are being driven around by men who are not related to them want to be at a distance. now, women will be in the driver seat. they will be purchasing more fun cars. maybe the rolls-royce rage. julia: it is cheaper, kind of. over $300,000. no one expects these women to scrimp. overnight, people started marketing cars to women because people know how powerful women are in that marketplace. julia: an alpha martin, it is not just rolls-royce wondering

how to cater to this audience. they have all been thinking about this. >> they created a panel of women to figure out what women want. they have not been great in figuring this out in the past. mclaren started making a sports series for a broader audience. lamborghini will be making an suv. you see these companies that would never even consider making an suv. and ferrari. they're going to call it a ferrari utility vehicle. because women are this missing segment for them. and in the lower tiers of the arket, -- julia: you can get the marketing pretty wrong. had a very embarrassing mishap. in china. >> car companies have gotten a lot better in the last decades but they are not perfect. audi had an ad in china last

year where there was a bride and groom at the altar. the future mother-in-law was pinching and poking the bride like you would test a course. it was gross. you watch it and you can't believe it. carol: "bloomberg businessweek" is available on newsstands now. julia: and online and on our app. your favorite story? carol: he takes us to a specific part of the pacific, called saipan. gamblinga tremendous company there were we are seeing an unbelievable amount of gambling volume rivalry macau. julia: bigger than anything produced in vegas also. the problem is the laundering. carol: they look at the relationships and everything going on. julia: where are the authorities in this case? carol: unbelievable.

an intricate story. julia: more bloomberg television is coming up next. ♪

♪ i'm emily chang and this is "best of bloomberg technology." take onp, russian bots a u.s. a gun control. an expanding twitter campaign against america. elon musk's spacex successfully launches a rocket. out its most affordable option to date, but there is a catch. we will