>> welcome to "bloomberg businessweek." i am carol massar. coming up in this week's issue, we have the imposters that are hijacking twitter. jason: we have a catch 22 with kim jong-un. carol: and an unlikely turnaround in the auto industry. jason: this was unexpected from volvo. >> ford has bought a lot of

luxury brands. work, and it them did not, they did not play well together. they were stuck in their buckets. ton alan came in and had clean house and key to company from going bankrupt, one of the first things he did was selloff the vanity brands. the great european luxury brands that they could not afford to keep. a little-known maker of the worst cars in china, when china made the worst cars in the world, they made the worst cars in china. , and thoughtolvo this would be a disaster. they thought they would take this great brand and destroy it. like a fake rolexes. be crappy volvos coming out of china. instead, they left the europeans in charge and go.

made them be swedish, but very aggressive. they got the best of the european, overthink everything, and then the chinese very aggressive, shoot first ask questions later approach. they hit hard as the market was growing, and they have blossomed well. they got a lot of great technology. high quality vehicles. they are hitting the market where people want to be. more crossovers and utilities. you think of the old traditional volvo wagon, but pumped up to a crossover utility style. they are hitting a sweet swap -- sweet spot. >> put them in context. we see them around, but you provide important numbers comparing them to other automakers in terms of production and number of vehicles, and in terms of the portfolio. for 100 years, since the

earliest years of gm and henry ford, the auto industry has been about scale. there are always advantages to size. it is enough to run a factory efficiently, which takes 200,000 vehicles worth of sales. 300,000s arranged from to 500,000, maybe enough for it a couple decent plants, but not one on each continent or major market. compare that with the giants. gm, volkswagen, what yoda, they sell 10 million cars and trucks a year. for brands that are in between like that. porsche,amborghini, you can survive. those are part of volkswagen. an independent,

ferrari is a better example. you can be a standalone. when you are a premium luxury challenge.s a they have been playing catch-up for 90 years. they are never as big as mercedes and bmw. they cannot get the pricing out of it. you do not have a nice enough vehicle to compete. courages given them the to push hard, and aim high. one ofst time i drove them, i thought can i spend thousands of dollars on a chinese suv, and maybe. carol: is this a story about the revival of volvo, or what geely wants to do globally. the idea, to be that big, whatever the next ford or gm of

the 21st century is going to be, it is in that sense more about geely. volvo gives us the insight into where they want to go. what is the most advanced part of this still forming geely empire and effort. in 2010, little tiny geely bought volvo and made it work. now, they are starting to new brands. are trying to take on test love with super high-end electric cars. they will slowly work their way down, but not as far as tesla. which is aincolnco chinese brand but based on volvos technologies. there is a partnership between volvo and geely. it does not matter right now, but if volvo does an ipo, that will be interesting.

daimler and mercedes-benz, fiat chrysler, there is a lot going on. mr. lee does not tell us what his grand plan is. carol: when that headline crossed about them buying daimler, i thought this is an iconic german brand. he is taking a substantial position. i was shocked at it. and it is still opaque what is going to happen, and where it comes from. if you think about daimler's history they have had outside shareholders before. oil money from the middle east. carol: but another carmaker? jason: not necessarily. toyota were early investors in tesla. tesla.ught equity in they supplied components, and did work with them. and they got back out of that. stable and mature company, they will do what they want to do. it is interesting.

jason: that was writer jamie butters taking us into the story of volvo. now we turn to the man who put pictures on this. our design director, how do you do this? enough to fortunate shoot at the south carolina factory. we got shots of them making the cars and a cool shot of the new model which they have not shown anyone. it has a mystery. that theytty amazing let you take that shot. they are careful about keeping it under wraps. jason: they were particular about is not showing any part of the car. there is mystery to it, and it pulls you in. out that theint car company is behind this. it does capture this idea that playerspletion of auto coming together in the u.s. and

china. >> that is a success story, and image gets out of this. carol: i love that you say this. it is about the revitalization of volvo. who is this chinese company, and what are they doing? >> they have an interesting approach to this, and a car that people are excited about. jason: thank you, chris. next, what kim jong-un risks if he opens north korea to the rest of the world. .arol: this is bloomberg ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i am jason kelly. we stayed on the north

korea story, we had to. we write about the historical crossroads that the north korean leader is facing. ,ason: this is about pyongyang and at the -- the economic impact. about extraordinary thing of whatake a wider view is going on now with china joining the sanctions, if you look back at when communism was intact and about to collapse, north koreans work twice as citizens. chinese you fast-forward to today, and the chinese, the same people are eight times as rich as north koreans. so have to ask, why consistently. 's grandfather and his father, and now himself have all resolutely refused, and

denigrated the chinese model. which is arguably the most successful formula for transitioning from poverty to prosperity in recorded history. it has all been done while maintaining communist party rules. you have to ask yourself, what is not to like? jason: how does that influence the korean leader's seat at the table. as you try and answer this puzzle, why have they resisted so hard, it is something that seems obvious. answer, it isrude quite brutal really. if they had, a lot of long-term analysts of north korea who know the regime fairly well, their response is if they had done this and had the opening to the

outside, to the global economy that china had, if they tried to conduct the same kinds of reforms, they would even now be dead or in jail, kim and his father, his grandfather. the reasons around that are the peculiar way in which the regime grew up. going right back to the korean war, when kim il-sung was put in charge after the second world war by stalin. inn you had this brutal war which about a quarter of the population of north korea were killed in the war with the u.s. you never had a peace treaty. it came out of that and the maintained the war style command economy that he had run during the war to survive, and asntained that afterwards

the way that the state works. it turned north korea into a stalinist state. carol: what is interesting, china is a willing feature, and in the past few years have shown that communism and capitalism, why did north korea not see the brilliance to that? marc: one issue you have to is north not only korea a dynasty, if you want to dong was -- mao -- kim cannot do that with his grandfather or his father. there is a true cult of personality. the kind that stalin had. that is one problem.

is aecond is that this divided nation, there are two halves. -- twice ast whites popular as the north. they were one nation before the second world war. the north koreans are behind this isolated state, information closed off, if they were to truly understand what is whereble in the south, the gdp per capita is 20 times as high, they would be extremely unhappy about this regime that they have had, and which has been telling them that the south is a terrible place. the people are exploited. and that they live in this socialist paradise. jason: how much risk is there then for kim as he embarks on these and negotiations, potential negotiations with united states and counterparts

to the south that that information and lifestyle will become more apparent to his people? risk,it is a substantial discussion of trading, the nuclear program for an economic opening and investment, and so on. that whatbe sure everybody agrees on is what kim needs is to get the sanctions lifted. cratered,s have particularly to china where it is a dominant trading partner. deficit, andted a they have to fund that with hard cuon the economy now, and have a change of strategy that sounds more like a form and the

champion talking about the remark about north korea front and center. also front and center deals with t. >> we can't seem to be -- we cannot seem to stop talking about it. we are trying to talk about this as we are leading into that. europe cannot talking about it and wrestling with it. jason: it is not going the way addicted. >> the continent has tried to move on. , inepicenter of this london, they are still wrestling with it. we are seeing a lot of numbers illustrate how badly it is going for them. for the comment, they are like, get us out of here, we are done with this. carol: there are so many other issues going on, trade talks with the u.s.. >> italy is starting to rear its head. they have other things to talk about. we were done with

this, why is this divorce taking so long? fargo'sp next, wells ceo on what he wishes the bank had done differently. jason: the curious debate over the consumer financial protection carol: bureau. this is "bloomberg businessweek ." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelly. erol massar. you can also listen to us on

radio. -- i am carol massar. jason: and in london. and in asia. an exclusive interview this week, we sat down with wells fargo ceo. carol: he is telling eric about the banks campaign to rebuild trust after a series of scandals. >> there are a lot of things i wish we would have done differently over the last few years, but over the last couple of years, the changes we are making in the company to make sure customers are taken care of, that we are fixing anything that was broken, and we are building a better company by making good long-term decisions, that we are going in the right direction. when i think about the culture of this company, our vision and values, it is fine. the issue is how we are operating, the policies and

procedures to a compass our goals. that is where we need to make improvements. when i mention about fixing things that are broken, those are things we are making a lot of progress in terms of addressing those issues. insidereporters take us the consumer protection bureau. --on: it is a strange pet strange place. he wanted to dismantle it, and now he wants -- carol: here is more from our reporter. is a powerful and entertaining guy. he is used to these bureaucrats who are measured and careful what they say, that he is neither measured nor careful. no and very sure of himself, and on a mission. personuld say an unusual to have running this bureau at this moment in time. to some point.ic this is someone who in congress was pushing to end this, and he

is now running it. devin: part-time. he has two hats. budgetlso trump's director. he was elected in south carolina in 2010, he is a member of the tea party. he is a founding member of the freedom caucus in the house. they were devoted to roll back much of the things that president obama did, the former president obama, obamacare and things like that. too the cfpb was anathema their growth, and mold any voted multiple times to abolish it. he has been asked under both before congress, he cannot remember, jason: also, he has become a punching bag which is an understatement, it has such political weight.

elizabeth warren has been associated with it in a lot of ways. , andas become an antihero the nemesis for others. into that awaded mulvaney has wadede into that in a big way. elizabeth warren ran it very early on. it has been associated with her, she is beloved by the left hated by the right. now you have mulvaney who has taken over, and he is beloved by the right and hated by the left. mulvaney is saying i want to elevate the bureau and make it

the gold standard regulator of the fdic. that caused the financial crisis. to cfpb was put in place protect consumers. it was funded to make it a political, and now mulvaney once to reduce that independence. he wants funding done by congress. he seems like he wants to make it a more political group. jason: re-politicized it. employeesks for the as being members of the executive branch, which drives people crazy. that, iis position is voted to abolish it, but now that i am in command, i am following the law, i am following dodd-frank, and it says i cannot abolish the cfpb.

he is trying to do everything, and he believes it is way too powerful, he thinks he is too powerful as the director. he is trying to reign it in. -- rein it in. he wants to make it less independent and more accountable. carol: what i think about is that this was set up to protect consumers. what happens to them? are they being rolled back? >> some of them are, or suspended. there was a rule on the payday loan industry, and he suspended that. there is a case involving, the bureau had sued for payday lenders who are charging exorbitant interest, literally 950%, that case was dropped.

, but reviewing everything reviewthings are under and some rules have been suspended. just ahead, speaking of consumer protections, we will tell you who is making millions off of loans to people with poor credit. carol: and what happens when a community loses its lifeline. jason: this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelly.

carol: i'm carol massar. troubled town a in ohio. jason: this is adam county in ohio. therepent a lot of time the last couple of years. this is an unnerving story. carol: the population is -- i have spent some time in ohio the last couple of years. this came to my attention more than a year ago. i visited the county four times now. it struck me as a classic example of this dilemma that is facing the country, where you have certain parts of the country on the coast that are doing incredibly well, and other areas that are falling behind. the gaps between those places are growing bigger and bigger. what do you do about the places that are falling behind, that are losing their economic

rationale for existing? do you try to invest in them and prop them up, and restore them in some way? or do you help people leave them? that is what brought me to adams county. jason: tell us what the original economic rationale was for this place. alec: adams county sits along the ohio river. south ofut 70 miles cincinnati. it was basically farmland. it had good farmland. there was a strong amish presence. back in the late 1960's and early 1970's, the county became more industrial because it was discovered as an ideal place to put coal power plants. the big utility in ohio built coal plants on the river, it was ideal for burning coal up on the barges.

it was one of the largest in the country at that time. plantsu have these two that employ hundreds of people. people moved into the county for these well-paying jobs. it change the character of this place. now, the question is what is going to happen to these people? carol: it created jobs and rate schoolsreated and a community for the people who live there, and it meant a lot. what happens is the company gets sold, and these plants are designated to be shut down. this changes things dramatically for people who work in these plants. alec: exactly, and there was this revenue coming in from the plants. the schools were well-funded. the general poverty, the schools were well-funded. a drop inare facing revenue for the schools, the areiff's office, the jails

incredibly cap -- incredibly crowded. the county is at a loss at how it will make do without the revenue and prosperity that came from these plants. carol: what is interesting, do we invest in these communities and help fix it, find another industry for the people, or another big theme of your story, americans migrate. when things did not work out, we went to another part of the country, but we are not seeing that. alec: it is striking how much less migration than there used to be. there were great migrations in our history, the dust bowl, the hillbilly highway. that is not happening as much anymore. it is a puzzle because the gaps have gotten so big beach wine -- the thriving ones.

when i talk to these workers, it is more complicated than just saying, just move to the bay area were somewhere where you can find work. that bind,lways ties family ties, ties to the landscape. one family did find a job in washington state, a very well-paying job, but they went out there and felt isolated. they felt removed from their family, and at a loss. they decided to move back to adams county to a less well-paying job just because they did not feel at home where they had gone. jason: one of the characters who makes a cameo is the energy secretary, rick perry. how did the federal government in the recent history here in adams county? alec: it basically played very little role. i was struck by how little responsiveness there was at the

state government level and the national government level to the plight of these workers and this county. there is an academic debate about whether we help people move out or invest in them, which is better to do. at a policy level, we are not having that debate at all. this is not being reckoned with. the attempts by the workers and county officials to get a response or relief washington and columbus fell on deaf ears. there have been efforts by the trump administration to stop the ansure of coal plants in emergency moratorium way, but that has not come to anything. what struck me is that the most powerful moment for these to ars was when one went state senator who represents their district, and they said, we need help for our schools. the state senator said the best thing for you to do is just to move. jason: up next, why it is so

hard to defeat scammers on twitter. this is "bloomberg businessweek ." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i am carol massar. you can also find us online. jason: and on our mobile app.

crooks targeted the twitter account of our reporters. carol: i hope you are following this. >> my twitter has been impersonated along with my colleague and other reporters here. carol: what does that mean, impersonated? >> people have been creating accounts with my photo and handle, and offering deals that are too good to be true to my followers. in early may, i was getting ready to leave work, and i checked my notifications. one commented on my tweet. what was kill your was that they have my photo, my name, and they were applying to my tweet with an offer for my followers, trying to look like me. me .5 or, if you send

ethereum, and i will send you 500. it is too good to be true. it is an age-old scam. this is not anything new. people call it an advanced the scam, were you ask someone to send a small upfront payment and promise them a chunk of money. jason: what was your initial reaction? lily: i was surprised it was happening to me. surprisingomplete be because i had seen this all over twitter. it is rampant on twitter. i had seen it targeting cryptocurrency exchanges. all these higher profile people. it seems to have moved down a little bit to a lowly reporter. i do not have that many followers. carol: do we know who is behind it? lily: we do not know who is behind it. some people say it is bots.

something programmed to do it. happened, itme it happened last week again. the second scammer seemed smarter. they blocked me on twitter so i could not see what was happening. it was essentially the same scam where they responded to my own tweet. the only reason i sigh is because some other reporters screen shot it and tweeted it to me. the scammer responded. jason: there is a weird circularity of this tale to some extent. you write in-depth, you are and expert. what have you found along the way about how this is being handled, and how rampant it is. lily: what i will say, this has

been a right world for scams. you have -- jason: the crypto world. world.he crypto you have new people to this space. there try to figure out how to buy and sell. have a regulatory landscape that has not developed yet. it is uncertain, and there are not a lot of protections. it is not like the credit card world where you can call amex and say, i did not make this charge, do not charge me for it. there is no central authority to protect investors. carol: where is twitter in this? lily: twitter said it is working on it. it is still a problem. the second account is still a problem. only after i sent twitter my passport. people do not want to send a

personal document like that to twitter. they said they are working on it , and that is where we left it with twitter. carol: in the finance section, we have a story who covers the real estate market. it looks at a spike in home loans that people cannot afford. jason: a lot of it echoes back to the financial crisis. >> angelo is a character. it is just the way he looks. he wears these tight shirts. he was wearing this red silk shirt, open to the chest. he wears these jackets, cufflinks, and always a handkerchief in the pocket. his hair gel that. he is a real character. homeless, and now he is making his way up. he is focusing on government loans, mainly fha. he worksa lot of --

with a lot of people who remind him of his past, people of loan incomes and bad credit. jason: reading the story, it is hard not to think back to the financial crisis, and a lot of the behavior that was at the core of really triggering the great recession. what is going on here, and how is it different? prashant: it is different in certain ways. one important way is that back then, a lot of these loans were not government loans. these were private-label securities. this time, it is the government that is ensuring the loans directly. they are still being packaged, exchange securities to be technical. the main difference, people have to have incomes and jobs, and it has to be documented, but then there are other ways it might

remind you of the past. a lot of these people are putting down very little, sometimes nothing. fha loans are supposed to have but a lot of people are getting assistance so they are paying nothing. their credit scores are quite low. they are devoting huge amounts of their income to debt payment. carol: we brought up angelo because he is quite a character, we all agree on. he works for a non-bank lender, and he is making a lot of loans to people who probably could not go to jp morgan or citibank to get a mortgage. prashant: he told me that. talking about the a man whose car was repossessed, and he was

telling him we are not going to worry about that repossession. we are pretty lenient. -- what he told me is, right next door is a bank of america, and this guy went in , hee, and he demonstrated showed basically what they would do. they would kick him out. areays that is how they different. they are not going to kick him out, they will try to work with borrowers like him. jason: this nonbanking world is bigger than it was in the financial crisis. so much has been done theoretically to check the behavior of some of the biggest banks, all of the names that we know. what is being done to regulate the nonbanking world. put some size and scope around this. 80%hant: nonbanks now have

of these fha loans. they have 50% of new loans overall. back then in 2007, it was about 20%. jason: i just want to make sure we understand. vicki percent of loans being made for home -- 50% of loans being made are for home purchases. prashant: almost 50, yes. a big share. it is way bigger than it was during the subprime crisis. carol: up next, combating the opioid crisis. jason: how to plan evocation on your own private island. carol: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek."

i am carol massar. jason kelly. you can also listen to us on the radio. carol: and in london. and in asia on the radio app. in the technology section this week, the medical industry has a new alternative to opioids. jason: this involves electric shock treatment implanted in the spine. called neronique modulation.- neuro its origins date back 50 years ago. it treatment we can use to treat pain. it is a device that is implanted at the base of the spine, and it delivers shocks to help reset the nervous system. it is it feels like

getting a lot of attention because of concerns about opioids. it is expensive. it is about $30,000 for the advice. they are estimating the market is $20 billion. there is a lot of opportunity there. one of the issues is going to be insurance, can you get your insurance to pay for this? the people we talked to, they were lucky and able to pay for this with insurance. obviously, over the long-term you would think this would be a value proposition because you would otherwise be spending tons of money on opioids and other drugs. jason: how does it work? julie: it is delivering regular shocks to the spine. you can moderate it by flicking a switch. you can turn it off if you want to, if you are not feeling it.

and for people in the original the never device, it decreased his pain levels, which is a big deal. carol: there is a clip from one of their directives or executives, we are learning to adapt to the language of the nervous system. this is a bigger and broader trend in health care that we are starting to understand how the body works, whether it is in you .now -- immunotherapy and here we are understanding how the nervous system works, and using a device that works with it. cool thingsf the about the drg, it is setting the interpretation to the nervous system with the electrical pulses. it is basically telling your nervous system, stop, calm down,

everything is fine. it is tied to nerve damage. jason: it is interesting to think about the cooperation between the tech world and the pharmaceutical world. there have been existential questions about how tech plays, you think about the entrepreneurism that moves into this. you have to imagine a little skepticism. julie: definitely. for example, the cost is going to be prohibited for a lot of people. $30,000 for the average person, to come up with that will be costly. a is much easier to buy prescription of pills and take that, and go about your business. there are, specialists who see this as a real avenue to keep people away

from drugs. it is more of a focus there. jason: apparently, according to pursue, luxury getaways have gotten exclusive. carol: so exclusive you can book your own private island. >> a lot of times when people want to get away, he want to go where they do not see people. you can go to a resort where you are on your own and look out that the water be at -- look out at the water. at getting your own island. this is a trend that is expensive but it is growing around the world and people are responding to it. carol: let's talk about cost and the locations you can go. the focus this week is a private island that cost $3000 a night, and it is you and your spouse, or up to four people.

the staff of the hotel are on a different island. they are on an island behind your island. they will come to your room and give you massages, cook your food. it is totally decadent. we talked to a couple who went on their honeymoon and they want to go there every year because it is so relaxing. jason: what is driving this trend? >> is privacy. it is very quiet. it feels like you are on another planet. a big trend in hospitality is experience. people value time more than anything else. time is their most precious commodity. nothing makes you focus on your time then how luxurious it isn't being in a quiet place alone. carol: it is like you make time stop which is precious. who is behind it? >> it is a guy who does island hunters on hdtv.

-- hgtv. him, hey thing about has done this and he was to do a hotel that is for one person. you just go on your own. i don't know what the market is for that. it is a crazy idea. jason: it is interesting to think about experiences, and isetimes the best experience a complete lack of experience. >> what a strange and interesting luxury. carol: and you mentioned there are places around the world? >> there are places in belize and in the maldives, and in fiji. ates you want to look turquoise waters and get away from it all. isol: bloomberg businessweek available on newsstands now. the story on adams county, this is where people

are struggling. jason: i do not have another must read, that one guided me. the death of reporting, the characters he is able to draw out. it does not end on an optimistic note. a reminder that there are city's thriving, but there are several that are not. jason: more bloomberg starts right now. ♪ . . .

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emily: i am emily chang, and this is the "best of bloomberg technology," where we bring you all of the top interviews from this week in tech. in the next hour, changing

forever. how tech companies handle personal data. how it will affect you, and what the likelihood it is implemented in the united states? plus, zuckerberg faces the wrath of european parliament. we will bring you the highlights. tech leaders to send on