jason: i'm jason kelly. carol: i'm carol massar. what new and let's not about the fresh crop of leaders on wall street. jason: we are going to the hottest local can -- all ahead on bloomberg businessweek. carol: with your with the editor in chief of bloomberg businessweek.

eight very timely story and it takes a look at succession planning that we are seeing as a really well-known big bank and financial firm. it starts with jason kelly, which looks at blackstone. >> we try to make this be a package. this is a wider moment of succession on wall street. blackstone is gigantic. jason's story is basically a look at gray, who has been this real estate guru. when you look at blackstone in the portfolio they are more a real estate company than a private equity. >> this is a fascinating story to work on, because this has been a career success. wasonly job he has ever had

straight out of the university of pennsylvania, and he did these signature deals on the way. himself in thes number two job at a firm that controls $434 billion in assets. >> this is a firm that is so identified with schwartzman. important thing with all the succession stories is that it is really about stability. theng sure not only employees know who's in charge of the investors know who's in charge. that is a really powerful thing. investors, oneto of the things you get is an acute eye. he remembered very specific numbers, like ocd, probably. if you are entrusting billions

of dollars to these people, that's the kind of professionalism. >> it's important to note in the private equity world this is a consistent thing. all of these firms who created this business over the past few decades all have gone through this process. this,n you think about this is 10 years after the financial analysis. that, let's talk about a story that is part of it. through the crisis, seen as one of the great leaders of wall street. >> we don't know all of the nuances. this started with a tweet with desks -- with a tweet from the wall street journal, which

culminated in a breaking news announcement on monday that one --the two errors apparent solomon, who was his counterpart has become the heir apparent. part of thisory is package, it is this ultimate backdrop. this is the ivory tower of wall street. who is next in charge is a big deal. jpmorgan --ard from heard about jpmorgan from a reporter. >> the two preeminent close banks -- so many parallels occurred within six months of each other. they rose to prominence.

brooklyn and queens, dimon and blankfein. they both had cancer, which they beat. both of these parallels in my , you know, he wish himself.le i thought that's a buddy comedy. that's a movie. we have seen that movie poster. >> one of the things you pointed out is this idea that you have these two guys who have been a very successful buddy comedy for them, very lucrative, these are , not entrepreneurs, who both have become billionaires. and probably have put as much of a stamp on wall street as any two ceos in history.

>> bloomberg obviously tracks these things. creating something and creating a lot of value. that is a little unusual. dimon, he gets a lot of credit. .hat he did and jpmorgan. if there is some kind of jamie premium -- lloyd, who i don't know as well, has obviously taken what they do in terms of the risk-taking and the financial crisis. they make billions of dollars and killed everybody. >> what happens next?

is ultimately about the succession of the next chapter and each of these banks. and the people on the bench. how do you gain this out? >> it is very clear for goldman. if it didn't go his way that would be interesting. david solomon is widely seen as the heir apparent. i would say one or two years. you don't want to keep them there too long. jamie, as you know, set five years. >> and jpmorgan is a little more complicated. yet if he hangs on for another five years, you point out, it could be a different set of people competing for this job. >> there is a certain twist of

logic, which is you named a pair of copresidents. you have some obvious successors. women, a pairr of , and anothermary gentleman. if you see them being groomed comedy see them being put into ok,r heirs, and you say these are the people who can really start thinking about the next ceo. >> lloyd blankfein and -- returning to cover models. once we look to the front of them, it is remarkable. >> it is amazing because it says so much.

i was part of the story underlying this. we did talk about this idea that the new boss looked like the old boss. >> this is one of those covers where they spent a lot of time make sure you have the exact right words and placement. >> the other story is that a woman was considered. is the same old same old when he comes to executive leadership. to sail thoseing words necessarily. we don't have to talk about the diversity. you see it so clearly. still ahead, we will look at wall street's struggle to promote a female leader. republicans and democrats get a political wake-up call in pennsylvania. >> this is bloomberg businessweek.

>> welcome back to bloomberg businessweek. online.an find us this the politics section week president trump fired rex tillerson from the state department. and last -- and lost one of the last muttering voices in his administration. >> we spoke about what it means have the president surrounded by loyalists. fundamentallyeed on a lot of things on foreign policy. tillerson had just gotten back from his first trip to south africa. it was one of his more difficult trips. it was a member of his family pass. calling him and saying -- tillerson spends the next few

days without sleep, calling around the world. this was kind of the reason you brought a guy like rex tillerson -- he's sitting next autocrats and dictators. quite that she made quite a living doing that. quite a living doing that. >> he's spent the next few months prepping, working with the white house and the president. twitter that he doesn't have the job. >> you mentioned there was a in substance, there is seemingly a difference in style between these guys. even though back in the day trump seemed to like his look. he cast him as the secretary of state.

>> central casting has rex tillerson in the book of globetrotting energy ceo. he's done very famously. by kind of the ,road shouldered experience running exxon for the past decade. from there and almost on active -- anyy of objective to have a relationship between these two guys but that's a good relationship a good the skip -- relationship between these two guys has fallen by the wayside. >> even though he says he likes to get different opinions, people disagree. tillerson, gary cohn who disagreed about the tariffs. what is going on in president trump's white house?

this idea that we are quickly approaching the presidency. donald trump probably wanted in his heart of hearts to begin with a presidency of one. this attempt to surround with outside professionals who were moderating, who cannot only guide and experienced -- and an experienced commander-in-chief -- and inexperienced commander-in-chief. and were will be trump closer -- and work closer to the way he ran his business. thosere are even fewer of loyalists their too. circle is really dwindling. >> isolation. ideologically, physically.

this is an unprecedented situation in a lot of ways. you have to wonder how much of this he actually -- how much of this he prefers. >> democrats scored a big victory this week. lamb, a former marine captain, x federal prosecutor, ran as a first time to -- first-time candidate in a district that has been heavily republican. -- so republican that democrats didn't even feel the candidate in 2014/2016. some other democrats, like in the senate in virginia and panama, he may have one, he may have come close to winning. whatever the case, it is a big wake-up call to the republican party.

is this could be challenging to democrats. -- there is anow very good chance that democrats will take the house in november. if they do they are going to have quite a range of members in the democratic caucus. all the way from blue dog -- reals to real little >> we often see coalition building in various countries. what would that mean in the house? >> we can kind of look at it by doublingt the problems paul ryan in the house.

he has that same problem where you have some republicans who are just out there. the freedom caucus i'm thinking of, folks like that, no compromise. then you have others who are trying to do business. happening whoever the next speaker is. >> that has stalled over the last year. and various other issues they wanted to get done. he written into a lot of resistance from all these various factions of his own party. >> i talked to one consultant in alabama who has worked in the field for a long time. when the democrats came to power in the midterm elections and

nancy pelosi was elected speaker of the house. youpoint was, halo, would -- hey look, would you rather be in power or not you she did a good job managing those blue dogs, understanding they weren't going to win. she gave them a little slap. i think that's crucial for whoever's taken the speakership next year. that person will have to be fit in that way. from iowa andes maine are dealing with a massive labor squeeze. >> this is bloomberg businessweek. ♪ as

welcome back to bloomberg businessweek.

>> you can listen to us on radio on sirius channel xm 119 and in new york, one of 61 in boston, -- 90 91 in washington dc. >> and in london and in asia on the bloomberg radio plus app. the entire economic section is devoted to three places in the united states where the economy is humming. >> we spoke with a reporter. >> we wanted to take a look at three places where we really have beyond a shadow of a doubt reached unemployment. where anyone who potentially want to job can have one. the rationale is the federal reserve is staring on a situation where within the next year we expect to be under or percent unemployment. we wanted to know what happens, what does that look like in america today?

>> how did you pick up the places you end up going? >> the first two were really easy. it was an obvious choice. >> we do love our superlatives. >> also extremely low unemployment. portland has the oldest median agent -- maine has the oldest median agent in the country. and then marietta georgia is one of the only places in the country really seeing a tick up in inflation at a time of low unemployment. >> let's start in iowa. it's not a place of ton of folks spend a lot of time in. nicely about why people should care about it. >> this is an interesting case, because it is the home of iowa state university. it has got this interesting dynamic.

you have a real fix labor market at the entry level. you got his employer ship crowding into this place. you can almost feel the competition for these workers. really tight labor market everywhere else. that was interesting. >> your labor pool is always so big. what are they doing to train unskilled workers and bring more workers to the labor pool? it didn't confirm any of my priors. ton ofted to meet a employers who were hiking wages left and right. i found a bunch of employers who are getting inventive in order to track down. there were some anecdotal reports of wage increases. flexiblen more

schedules. or working on something to pull people who have been previously qualified candidates in previous jobs into this field. the chamber of commerce is really -- and their advertising for it at food banks. >> driving the story in iowa, then you went to portland maine, not as young, so you visited a chocolate store there. tell us about that. >> portland was an interesting case. i started off in a chocolate store in freeport. what i found was this guy who the retails nexus of chest and the fact that retail is changing the online. and also the manufacture. he's also dealing with the back

that he struggling to find a manufacturer. he took it over from his parents. he's having to face down some tough decisions. he loves chocolate. you can deftly tell. in hows a lot of pride artisan chocolates are. he's having to make some hard choices. >> but he has raced wages. >> he has raced wages in the past few years. he doesn't have any pricing power, so he can't really pass that on the customers. >> for the final leg of the story you dispatched -- to marietta, which is just outside of atlanta. a third different scene attached to a major u.s. city, but facing

inflation. >> arrieta is one of the most interesting cases. it's dealing with this combination of a really low unemployment rate. atlanta is really booming right now. driving combination is up wages and driving up inflation. it's one of the only in the country where we are seeing this tight labor market spillover and cause the dramatic up front of prices. >> why some of japan's elderly women see prison as a safe haven. >> and the global am dishes -- ambitions of india's controversial yogi turned tycoon.

>> welcome back to bloomberg businessweek. >> still ahead this week globalism versus nationalism, , make your call. jason: spending your golden years in a japanese prison. carol: and the yoga guru in charge of a corporation. jason: all of that is coming up on "bloomberg businessweek." ♪ carol: we're back with the editor-in-chief of bloomberg businessweek, joel weber. remarks this week looks at globalization. with so many nationalist politicians pushing back on globalization, but there is a

lot of good that gets done as a result of it. joel: we wanted to think about how overall themes are merging now and a lot of the trump policies that have emerged of late, especially with the resignation of gary cohn, have centered around this idea of nationalistic policies. keep in mind, the global economy has been global for a while. free trade sentiment is part of the reason the world is a more affluent place now. jason: and part of what you address in this story is globalization gets knocked down, but it gets up again. remember "tubthumping?" joel: it has almost felt resilient, and we see that in europe and in asia, and we have even seen it in the u.s. a little and that is why these tariffs have had these carveouts

because it is not quite as easy as it seems to pull this off. carol: globalization means you are going to a low cost producer that helps in a developing economy and helps them become consumers, which benefits the whole world. joel: reversing globalization helps the few, but hurts the many. that is the overarching tension we are seeing between the global sentiment and the nationalistic fervor. carol: let's talk about another future story. this is one of my favorites, that is the photo essay. it looks at the elderly in japan. we know in terms of demographics, the japanese have an aging population, but tell us what is happening. joel: it is the oldest population in the world. the elderly population is twice as much as in the u.s., and when we specifically looked at women as this photo essay does, which is just remarkable, some of these stories -- in japan, they are ending up in prison.

there is an elderly crime wave because the women are so isolated that they can't take care of themselves and are shoplifting. what is happening is, if you look at the number of women in prison, one of five are seniors. nine out of 10 of them are in jail for shoplifting. they are shoplifting, getting arrested and going to prison so someone else can care for them. carol: there is a phrase in the story talking about them being economically vulnerable. you used to have generations taking care of older generations, you used to see that in japan. you do not see that as much anymore. joel: and you lost it. one of the nuances that come out of this is that the guards are becoming caretakers. carol: at the prison. joel: the prison guards are becoming caretakers and you're seeing this attrition because people didn't sign up to be caretakers. it is a nuanced story about

demographics. jason: another fascinating feature this week, a global issue, takes place in india. there is a guru there who is a tycoon. joel: he happens to be, this is a multibillion dollar company and some analysts have said he can take on nestle and unilever within india and they are using all products and ingredients that are popular within india. he is technically worth zero dollars, which i think is the most fascinating part about this. carol: a pledge to poverty, but -- joel: he is a tycoon and a yogi on top of it. that is why he has such a cult following. this story has so many fascinating nuances. carol: a lot of contradictions in his life. we got more from editor jeremy keane. jeremy: when he was younger, he renounced material wealth and

came to prominence as a yoga instructor in india when yoga was becoming popular around the world. via tv he was a tv host. from there, he built a company that began doing products and medicine. toothpastes have close in them, that kind of thing. now he is the brand ambassador for $1.6 billion company. carol: so he takes an oath to poverty and built his company,

selling products, on tv, it is a big company. tell me how you make sense of that? >> you have good partners. he had a schoolmate who is currently the ceo or managing director of the company. he is the 19th richest person in india. a net worth in the neighborhood of $6 billion. baba ramdev remains the ambassador at arms length. at key points, they are hired other smart people. another fellow who was ceo for three years and took the company from 50 products to more than 500. carol: this is a huge company in india and significant to a lot of folks who live there. jeremy: his products are everywhere, it is the largest growing consumer goods company of the country.

it competes with big names, nestle, unilever, they have had to adjust their models to some degree to compete. jason: and you have a larger-than-life personality who has a mysterious past and present to a large extent. he is omnipresent and yet elusive at the same time. jeremy: the reporter was a -- expresses surprise that he sent a few emails and was suddenly invited to the holy city where the company was based, hopped a train and went to what sounds like a well appointed estate. even though baba ramdev's net worth is zero, he seems to live comfortably and says as much. there is no set of codified rules for him that says you can't live well. although most you see if you go down to the ganges, they have taken a vow of poverty, live off of alms, and this fellow has taken another path.

jason: he is not begging. joel: no, and he says this is part of his mission as a yogi. he wants people in india to be healthier, spiritually well, and he sees the company as a vehicle for doing that. carol: next, will a woman ever get a shot at the top at goldman sachs? jason: and the rise of the gif economy. carol: this is "bloomberg businessweek." ♪

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jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i'm carol massar. you can find us online at businessweek.com. jason: and on our mobile app. let's get to the finance section where we go into the succession planning at goldman sachs. carol: those plans didn't include a woman. >> we haven't seen a woman in charge of a major bank on wall street. this week, when goldman sachs made david solomon the sole president, he is the front runner to become the next ceo. it means it would continue the pattern of men running wall street banks. but solomon says the bank needs to do better at promoting women to the top ranks so one day, we will see a ceo. carol: sounds like a lot of lip service. >> we have been hearing it for years. we know the economy does better when women are in charge. but the banks ceos all say that not only are they still run by

all men, but the people below the leaders are still also all men. jpmorgan has a couple of candidates who are a little promising. carol: mary erdos and a few others. let's be fair, we are talking about goldman because their succession plans were laid out this week. they are front and center but you are right, it is all the firms. we don't see a lot of women in prominent positions. >> when we look at other firms, a lot of them have under 25% of women on their executive teams. that is not too many women. you need more women and not just a token to be in position to be selected as ceo. carol: why is it happening still? especially when you talk about goldman 10 years ago with blankfein saying this is important. why are we still having this conversation? is it because it is a boys club?

jason: listen, we talked to an executive coach, that is literally the phrase he used. he is an executive coach who specializes in wall street and goldman sachs was one of his main clients. he says it is a boys club and our reporting over the last year has shown there is a ways in which wall street is not getting better at certain kinds of diversity -- for example, black bankers. in some cases, getting worse. we talked about the fact that black bankers are disappearing from wall street, so something isn't working and it is a fair enough hypothesis to put forward that in 2018, there is something about powerful white men, where they are still not comfortable with the idea that they will be succeeded by women and people of color. >> you can have women coming into your pipeline at the entry level position, but a lot of people say if i don't look up and see someone in a role that is powerful, revenue making, that could lead to ceo, you get

discouraged. you leave and the people you start out with, the men that get promoted over you, that is discouraging and you might go to another career. carol: in the technology section, a profile of tenors. jason: this is a .gif search engine. carol: it is attracting a huge audience, bigger than twitter. here is editor jeff muska's. >> it has been running about four years and builds itself on the backs of people's desires to put .gifs in messages to one another or tweets or anything else. carol: take a step back, because we know what they are. it is a video file. >> short video chips, graphic interchange format. it goes back to the early days of the web. in the past 10 years, people have the bandwidth to see video all the time and they be have become a bigger deal. jason: people will text them to

each other, drop them in in email and it is usually a silly face or someone falling down, but it has gone commercial. they have taken a commercial direction. >> advertisers now see .gifs as one of the key ways they are trying to get their brand messages into people's messages to one another. the sales pitch, as they try to become more commercial -- it has mostly sustained itself on venture funding -- .gif's can act as a way for people to share ads. jason: where did this company come from? >> it is basically the brainchild of a couple of guys who were either short form video search engine creators -- the other guy sold a company -- a giant video game company, and they got their start after creating branded .gif's for the

premiere of "taken 3," the liam neeson revenge vehicle. they have attracted interest from the likes of dunkin' donuts, nestle, kfc -- now they have about a dozen brands paying them anywhere from $100,000 to $500,000 a pop to put premade .gif's next to search results. carol: they have created an ad network. give us an example. >> on valentine's day, dunkin' donuts paid tenor to put a valentine shape desert with meme language "donuts before dudes" next to .gif's searching love. carol: every file in tenor, is it being paid for by a company? >> know, so far it is the occasional ad. they have a dozen corporate clients so far and the service has only been in place for about a few months.

the hope is they will expand the ranks of branded .gif's and add them to the messaging service called .gif keyboard that as of this week is rolling out on every new samsung smartphone. jason: how much intellectual property concern is there around .gif's in terms of who owns it and all of those issues? how much of the market do they have cornered, i guess? >> the section 230 question hasn't been litigated in this area. for the moment, while tenor isn't the early leader in terms of .gif market share -- giphy is the biggest. tenor is the only one trying to commercialize itself with established brands. carol: how amazon became

corporate's nightmare. this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. you can listen to us on the radio and in new york, boston, 91 fm in washington, d.c. and in the bay area. carol: and in london and asia. this week, a profile of amazon's growth spurt the last five years. jason: and how the rest of corporate america is struggling to keep up.

>> we still have to explain how amazon got to the point where it is today, where it is the muscular unusual company that literally every other company in corporate america is afraid of and has to have an amazon strategy at this point. jason: you pointed out in this that on conference calls, it is the most talked about company, more so than trump or taxes, or maybe second only to taxes? >> we have a function in the terminal that allows you to see keywords that come up in conference calls and other areas like that. if you do the analysis of companies in the s&p 500, they mentioned amazon more often in the last year than they mentioned donald trump. not as often as they mentioned taxes, but you can see -- it goes to show how often companies get asked about amazon in almost any industry you can think of. carol: it has become a verb like google or xerox. >> we talk about that in the piece. google and xerox are verbs because of their products. amazon is because of what it

does to other companies. carol: take us back. i feel like a day doesn't go by without us talking about amazon. tell us how sprawling they are. shira: the scope of amazon is uncommon. business school case studies are about focus, companies drilling down into one, maybe two areas they do well, but amazon has a dominant e-commerce operation. it has an extremely successful cloud computing business where it rents computing horsepower and other services to companies large and small, including the u.s. government. it has a video service, it delivers items in one to two

hours, it owns the whole foods grocery store chain, it announced this health care joint venture with berkshire hathaway and j.p. morgan. its fingers are in many pots. jason: what makes it so? jeff bezos is arguably one of the most fascinating figures in business, in media, potentially in politics in an indirect way. is this bezos materialized? what is the connection? shira: part of it is that amazon for the last 15 years has broken all of the rules of modern corporate america and gotten away with it, and part of it may be that bezos has this long-term vision of the company. he articulated that literally from the first moment the company went public in 1995, and it was always about -- look, don't think isn't it kind of

weird that amazon is buying a grocery store chain? trust us, we have a long-term vision for the company and investors for the most part have trusted jeff bezos. jason: more amazon. we look up the ketchup flying off the shells at whole foods. carol: we talked about sir kensington's. >> it took the world by storm in 2010, but the real birth of it was in 2008 at brown university in a campus apartment. these two econ majors read this gladwell story about how heinz dominated the category and they were foodies, but let's give this a try. they started making ketchup in their kitchen and came across this all-natural, not too sweet version and they started packaging it and two years later, they were able to sell

40,000 jars. jason: such an interesting example of capturing a moment in the zeitgeist. >> precisely, ketchup is a comfort food staple and if you are a college kid you think about it in terms of burgers and fries, but they looked at the bigger picture and saw an opportunity that happened to coincide with america's culinary obsession or renaissance, where people wanted to upgrade every aspect of their pantry and foods. jason: and are willing to spend money on it. they are not price-sensitive and quite the opposite, are willing to pay a premium. kate: it is a badge of honor if you are going to spend eight dollars on a bottle of ketchup that looks really cool, iconic, black-and-white logo. you get to say here is my ketchup. you can brag about it. carol: we talk about the disruption of so many industries, wall street, the financial sector are, but food

is being disrupted too. they are this week's game changers. kate: that's right, these are dusty isles of the grocery store that have been unchanged for decades, basically. these two guys came in and it is basically the middle of the grocery store that is unchanged, so they walked down those aisles and see what looks the same. jason: they are picking off new subcategories, looks like. kate: they see the potato chip category, there are dozens of choices. salsa, you can have a different line every day. but ketchup was not changing and now they have a new product that has one dominating brand and they are getting into the ranch dressing game. carol: because hidden valley kinds of owns it. kate: totally, and the dressing category is a $2 billion industry and of that, ranch dressing takes up 36%. the next closest one is italian dressing, broadly defined, and

that is a 17%. of the ranch dressing category, hidden valley is 51%. carol: "bloomberg businessweek" is available online and on the app. jason: favorite story? carol: i liked the photo essay on elderly women in japan. the aging demographic story is not new, but many women in japan are shoplifting and ending up in prison and are happy to be there. i found it a striking story. jason: also in the way it was presented. the images are powerful and capture it in a way words don't. speaking of powerful images, the two bald guys on the cover got me. if presented a fascinating package about succession on wall street. not just that goldman sachs, but jpmorgan and all across. carol: more bloomberg television

starts right now. ♪

wouldulation rollbacks ease constraints on community banks, or well the house go even further? how much disruption will we see? and the future of the banking union. markets:o bloomberg rolls on returns.