♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: and i'm jason kelly. here at bloomberg headquarters in new york. carol: coming up in this week's issue, a question. can the republican party survive a trade war? jason: we also look at the complicated relationship, to say the least, between vladimir putin and donald trump ahead of the big summit next week. carol: but we begin with our global cover story about tesla. jason: elon musk has made a lot of promises to investors and customers. can he live up to them? carol: building a car turning

out to be pretty tough. jason: amazing. here is max. max: tesla quite famously for the last year and a half had been kicking the can down the road on its goals for its model 3, which is the mass-market sedan. but -- 35,000, jason: $35,000 the average. max: selling price for a car in the u.s. is somewhere around $30,000. $35,000 for the base model. it is the least expensive model tesla has to offer. there is a ton of demand for this thing, and yet, tesla has not been able to produce these in the numbers that they wanted. that has kind of led to this weird bifurcation which has , happened, in which you have tesla bulls who believe in this company and the electric car aficionados, and you have a lot of people in the auto industry saying this is crazy.

i mean, they are losing tons of money. there is no hope to get this thing out, and everyone was looking at this 5000 car goal, which tesla managed to hit at the end of last month. jason: and this story really takes us inside what it is like at the company, which to say the is a unique culture. max: yes. there were four reporters who worked on this story, led by tom randall, who had access to an array of tesla designers. he talked to 20 of the key designers and engineers on the model 3. and i think what comes through, and also what came through in the interview with elon musk that is part of this story, is this is a company that is working just incredibly hard to push to this goal. and the goal is to, you know to , solve global warming, to get gasoline cars off the road. that is something he believes and is willing to sleep at the

factory, to not sleep, to have serious emotional damage. and he kind of seems to expect that of his workers. and that is something that is a little weird for a company that is worth $50 billion. carol: let's go through it. there are employees who talk about timed bathroom breaks, right? max: yeah. yeah, yeah, yeah. and i think to be fair to tesla, we should say that it probably happens at other companies. carol: that's true. max: but there are employees who bloomberg spoke with who talked about timed bathroom breaks, about conditions in the factory that are really intense in terms of, you know, of fires, and even, kind of gross to bring up, but raw sewage, and people pushing through all of it in order to hit these goals. and i think, you know, from the point of view of elon musk, he would say, this is important.

this is what we have to do. on the other hand, you have workers who do not feel that way, who feel this is a pressure -cooker. as tesla becomes a real car company, you would expect that they would start to mature. and i think the big question, you know, and the question that probably animates anyone who cares about this company is can , they do that, and how close are they to doing that? jason: and what is it about a car company that is different from other businesses? a rocket company, a tunnel -digging company. what is it that has been so difficult here? what is it about cars? max: yeah one thing we key in on , is rockets can basically be manufactured by hand. and i think, there are machines, but this is something where the factory is putting out may be dozens a year. that is if it is really on fire.

where someone like elon musk, who is famously a hands-on manager can literally probably go down the line and make sure things are ok. cars, when you are talking about a big mass manufacturer on the scale of toyota, you are talking about one car coming out every minute, and that is what tesla wants to compete with. and we are talking about machines that have the last for a decade. they have to withstand incredibly difficult conditions. they are lethal weapons. and so, if you screw up, people die, and they are regulated as lethal weapons. and consumer demand, consumers are demanding and away i don't think nasa or the federal government is, about quality, about price. carol: it is a big purchase for most americans. max: exactly. it is the second biggest purchase people will make after their homes. so, you have all of these things that make this a really difficult dance, and one that tesla is learning, but they are maybe not all the way there yet. jason: creative director chris

nosenzo joins us to talk about this cover. it pops, a really good one. how did you get there? chris: thanks, guys. we were talking about the story, and they were telling us cars musk to make,elon and there was this irony that his other venture, spacex, has been a good business for him. we took that idea and brought it to the cover. carol: i love it. it is so simple, but it does pop up at you. chris: with a cover like this, we kind of refined what the right photo is, what the right languages, and get it to really hit you quickly. jason: you distill it down. you talked about this theory of the "businessweek" cover, that simplicity wins the day. chris: yeah, definitely. and we really try to focus on the idea and let that thing bubble up to the purest form of itself. in the design and the language -- and the design and the

language comes together to make that happen. jason: up next the connection , between trump and putin, and what to expect from their upcoming summit. carol: plus, were a trade war might hurt the most inside of the united states. jason: this is "bloomberg businessweek." ♪ "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: and i'm jason kelly. you can also find us online at businessweek.com. carol: and on our mobile app. opening up the magazine this week, we got a preview of the july summit between donald trump and vladimir putin. jason: we compare and contrast the two world leaders, arguably the two most important world leaders on style and on substance. carol: they agree on some things. other things, not so much. jason: marc champion puts forth the idea, are they natural partners? here he is. marc: in one way, it is an unrequited relationship so far.

and donald trump has had a fascination really for vladimir putin for some years. these two men are really partners. analyze would be the wrong word -- allies would be the wrong word, but they are partners in that this culture war going on across the developed world, in the u.s., in britain with the -- in britain with brexit and the populist leaders, and buries european countries. but this is a trend across, and putin is a very much -- and putin is very much on the side of the populists. he is very popular with the populists and the conservatives. but he also set up a similar story. there is a sense that he has a lot more in common with putin in the way he sees the world than he might have with angela merkel or with the fridge president emmanuel macron. carol: that is going to scare

the other nato members at this point. becausethink it does they are still not quite sure what trump's strategy is, what his vision is, whether -- the greatest fear is he simply wants to destroy some of these institutions that have been around for, you know, 70 years or more. that he doesn't like the e.u., that he doesn't like nato, that he doesn't like the wto. all of these institutions that they have sort of built their economies around and international relations around for decades. and they don't know this. everything that his government actually does, his administration does, isn't necessarily an line with what he says and tweets. in the case of nato at this summit, the u.s. is busy drawing up conclusions and things to do, which have very little to do with what trump has been saying.

and yet, they are concerned because they can since increasingly over the last year, it has become clear to them that he has much more in common in his sort of gut reactions with someone like putin than he has with the more liberal leaders. and you saw this in the g7 recently, where he had a mighty bust up with people like trudeau in canada and with angela merkel, and so on. jason: what is it about putin that is so fascinating to president trump, in your estimation? marc: before trump became gavedent, and 2013, putin a very important speech. it was a speech that really would be very, very familiar to a lot of the debate that is now going on in europe and the u.s., right,ll the cultural

very similar things are state -- are staked out and said. on that score, you can say that putin is on a similar line. and there is a more difficult element, where i think you do have to -- it is more of a question of your own analysis of what you see and not really anything that is of the record. but there it is, you know, if strategically these different leaders want to do. jason: in the politics section, carol, the cost of retaliation, we look at how these retaliatory tariffs placed on u.s. exports are affecting farmers and other folks right here at home. carol: right. you have to remember, we have canada and mexico, the european union, and china all fighting

back against president trump's trade policies. jason: and ultimately, it is a political story. this will be a huge issue as the midterm elections approach. here is matthew philips. matthew: you can look at july 6 as the fort sumter of this trade war, where the tariffs went down, china retaliated. just the other day, the president retaliated again with $200 billion of tariffs, 10% on $200 billion for the chinese goods. so i think, it is not crazy to say that we are in the very early stages of a trade war. jason: and this is a trade war that is not just between the u.s. and china. the president has been in europe this week, both in brussels and the united kingdom. obviously, those countries are affected as well, so it is global, but there is a domestic-political aspect to this, and that is what you go into. matthew: that's right.

for the thesis of this story, and the question josh green wanted to address with this is the u.s. economy will survive this. it is the biggest economy in the world. the hit will, depending on how long this goes on, will be significant, but it is not like it will push us into a recession. the question is, can the gop survive this? given its roots as the party of free trade, and also given where these tariffs are going to start to hit hardest and first, and places like the farm belt and the automotive valley and the energy corridor, that is core red state trump country. jason: and there was something that really jumped out to me, which was all the way down to the congressional district level , where this is really hitting home. country really been directly affected here. matthew: as these tariffs start to course through these local economies, especially in parts of the country where it is a one -industry town, it is not want

to be trump who has to stand up in september, october, november at these town hall meetings and talk to these voters. candidates, all of these down ballot candidates, at a time when their party has really put their arms around trump as the party of trump. it makes for some very difficult these,ing that a lot of some of these candidates and politicians are going to have to do come this fall. carol: i feel these political candidates have had to do a lot of difficult explaining on a lot of issues. president trump has come back very strong on immigration, in terms of his tax policy. we know the wealthy are really benefiting, corporations are really benefiting, but this is different. matthew this hits workers and : industries right in the wallet. i mean say what you want about , immigration, it is a broad issue that has been toplined for the past month or so.

but trade is different in a lot of ways because it hits people in the wallet. carol: up next, china's most powerful trade weapon is its own consumers, and that could backfire. jason: and we look at china's effort to build 150 silicon valleys, part of the war between beijing and washington. carol: this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. you can also listen to us on -- on siriusous and on a.m. 1130 in new york, 99.1 fm in washington d.c., and a.m. 960 in the bay area. jason: and in london and asia on the bloomberg radio plus app. in the business section this week, collateral damage in the global trade war. carol: right. we have to think about chinese

actions against american brands that could hurt the mainland partners. jason: it is quite -- it is quite a twist. jim: unlike the u.s., where we have a trade war and we say that is bad, in china what they normally do is whip up the public to sort of boycott the of companies from countries they don't like. and in the past that has been , very detrimental to companies that want to do business in china. china is the largest market in the world. everybody knows that and everybody wants to do business there. you don't want to upset the chinese populace. beijing tends to use that as a negotiating chip. and so, that has happened before with south korea. we use in the story an example of a retailer that has 99 superstores in china. and when they got into a territorial dispute with china, all of a sudden, the chinese media, which is state-controlled said, it is patriotic not to do

business with those koreans. so what happened for the first time in 16 years, they ended up reporting a loss. they also ends up eventually having to sell its stores in most of china. carol: that is a lasting impact. jim there is a lasting impact, : and people forget that it is a different kind of markets, and people respond very well to the push of the public. jason: but for american companies, it is a little more complicated. jim: it is a little more complicated because the american brands currently have either sold out or have joint ventured with chinese companies. someone china tries to use that lever that has been successful in the past with japan and korea, what will happen when they do it with the u.s. is they will boomerang back and hit the -- and hurt the chinese and the sense that company five mcdonald's. mcdonald's now is a minority owner in its stores there. instead, a chinese state-controlled company owns most of the mcdonald's.

ditto for disney. you hear about shanghai disneyland. and big one place drawing chinese tourists, but that is also owned by a chinese consortium with disney as a small minority partner. carol: isn't it ironic because that is what china demanded. you want to set up shop in china? ok, but it will be a joint venture. jim: everybody goes in with a partner, and a partner, besides getting rich, the partner is also able to earn your business and maybe take your ip. who knows, you know? and that is a great way for them to develop, but in the meantime, a lot of the leverage they have gets watered down. if they lean on american brands very hard, they hurt their own state-controlled companies. carol: in the economics section, we focus on a chinese city. jason: this is a city that is part of a massive effort by the chinese government, a bunch of high-tech zones they are

creating. it is huge. carol: nanjing is going head-to-head against silicon valley. cristina: this is a city that twice in history used to be china's capital, but became a runner-up to places like beijing and shanghai, but has now emerged as a new tech hub. we looked at it as an example of cities. 156 tech dedicated special economic zones in china. carol: 156? jason: and an amazing amount of money being poured in by the government. this is not just a private sector effort. nothing really is in china. right? this is the government getting behind it in a massive way. the scale is breathtaking. cristina: it is. right now, we pulled the figures on venture capital, that doesn't the government money. in the year to date, we are running at $60 billion into chinese startups. in the u.s., we are at $44 billion. so, it looks like china may overtake the u.s. in venture

capital, and part of that -- jason: that would be the first time? cristina: yes. part of that is money being funneled from state governments. but there are subsidies of every kind. , they are nanjing telling investors if you put , money into a startup and you lose it, we will make you all. jason: wow. wow. that is a totally different playing field been. cristina: it is not just industrial policy, it is something the world has never seen. carol: it has only been the last couple of decades that china has moved into the technology sector. but today, some of the biggest tech companies are chinese tech companies. cristina: alibaba is among several of the world's biggest tech companies are chinese. those are publicly-listed. and you know, startups, you have a company like ant financial, which is worth $150 billion. i mean, unicorn is not even a name you can use. we should use dragon, right? [laughter]

carol: exactly. jason: you heard it here cristina lindblad, nomenclature. first. cristina: the government is backing these companies, giving other investors in china and the world, you know, they are almost like too big to fail, at this point. carol this is such a reminder : that they are done being the manufacturing center of the world. cristina: they want to be done. carol: they want to move big-time beyond manufacturing, so they are pumping all of this money into artificial intelligence, semi conductors. they want to be leading not just domestically, but globally in these interest rates. cristina: electric cars, a lot of ai is part of the effort. people know, a lot of say when the scale of these investments are involved, it is in a global -- it is inevitable that they will incubate some world-class players. the problem know, there is one

big downside to this. we have seen this movie before in steel and solar, in which china created huge capacity intro prices down for everybody in the industry to the point were several chinese companies were on the verge of bankruptcy, and had to be consolidated. so they are dangerous for sure. carol: to illustrate the momentum of chinese companies, let's bring in taylor riggs to take us inside the bloomberg terminal. taylor: it is a story behind the numbers. so, coming to my terminal here. this week, we are looking at america's tech comeback. we are doing that by normalizing it back five years. in white, i have the chinese technology etf's. that tracks the china technology stocks. and in blue this tracks the , american big tech companies. now, you can see in white, chinese stocks were outperforming a little bit. then they underperformed and

since the election of donald trump, technology stocks in china have outperformed again. there were some concerns about the trade rules and if they are blocking investments between chinese and american companies what that would mean. interestingly though enough, since the trade were really started to break out, american companies in blue has started to outperform. we will take the hit makers, for example. there is not a lot of supply from the american companies, yet there is a lot of demand from china. so, china needs these tips that -- these chips that the american companies make. that makes investors still bullish on technology companies. carol: just a reminder of the importance of chinese companies and their overall market. jason: up next rio tinto offers , a glimpse into the unique risk and rewards of doing business in china. carol: plus, move over quinoa. peru has a new superfood to share. jason: this is "bloomberg businessweek." ♪

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jason: welcome back to "bloomberg businessweek." carol: still ahead -- jason: we go to saudi arabia. a $2 trillion ipo maybe i lies. -- maybe on ice. carol: but we start with a feature on rio tinto. jason: an amazing story here. the mining giant, several executives jailed by the chinese government. carol: it gets into the complicated relationship of a foreign company operating in china. jason: and a $1 billion hack at the center of it all.

carol: we have more from kit chellel. kit: rio tinto is one of the world's largest mining companies, and its biggest customer is china. it supplies to the chinese steel industry. we are talking about vast quantities of raw material, hundreds of millions of tons of iron ore being shipped up from australia to china. these deals back in 2008, 2009 were billions of dollars. the stakes were very high for both sides. tensions began to rise, and rio tinto found itself in serious trouble in china. carol: as you say in the story, relationships were good, then all of a sudden it wasn't good. what happened? kit: there were several pressure points, but the main pressure point was by a historical quirk. rio tinto was selling iron ore to china at an annual benchmark price. the price has stayed the same for a year.

but during that time, it was a booming time for the chinese steel industry. the actual market price rose steadily and dramatically throughout the period. rio tinto was selling large quantities of iron ore below market prices. it was helping the chinese industry make a profit. when rio tinto wanted to move away from that system, people in the chinese steel industry realized that would cost them a lot of money. carol: a big element of your story is when things started to go wrong between rio tinto and china, it involved spying by chinese authorities. kit: in about 2008, rio tinto became concerned that it had been hacked. it was concerned and went to mi5. that is the british spying agency. the company was told that yes indeed, communications were not secure, and one of the countries that was accessing emails, confidential documents, and phone calls was china. and the story tries to follow what the impact of that breach

was on the company. jason: one of the things you point out in the story, and as i read it i thought any executive who is doing anything complicated in china and elsewhere, cybersecurity really comes to the fore in a big way. because not only was rio tinto told that the chinese were looking into their communications in all methods, or just about every method, it felt like there were friendly countries that were monitoring them as well. that i would think would send the chill up the spine of any ceo trying to understand how to do business around the world right now. kit: i think the first thing to say about that is the reason the other states could see what was coming out of rio tinto was because of the chinese breach. other states were monitoring what these chinese hackers were doing, and they could see the flow of information coming out. i did not see any -- they could just see what was happening.

you are right. these days, it is understood there is such a thing as military state hackers. it is understood your email might be under threat. back in 2009, it was a different time. this issue was not widely understood and not taken as seriously as it would be now. carol: we hear from the editor in chief joel weber. so much this week talks about china and trade. joel: if you could take the biggest themes of the year and pack it into one issue, i think we have done it this week. trade war. it has been rhetoric, now it is reality. we try to go to the front lines of the trade war in china and the u.s. to do the reporting and show what the data looks like, at the places that will feel that the most. jason: at that level, it is already happening now, and it will really amp up. as the midterms get closer, this is a political story. joel: that is why we did the

politics lead about this. what are the repercussions for the gop that will directly affect trump's base? that is why it is so critical to take a close look at that. as we approach midterms, it will be part of the story. carol: we had news about elon musk planning to open a huge facility in china. tesla is our cover story. joel: if you could take the theme of the year, i think the other most important business story of the year is elon musk and the model 3. everybody knows that elon musk is an entrepreneur. this is an incredible story. he met his match in the making of the midsize sedan. jason: this is a guy who was able to successfully launch multiple times into space, and yet what is really tripping him up is making a car. joel: a car, and it all boils down to this. it is a do or die moment to make this car.

and he hit the numbers. 5000 per week. he got that. now he has many thousands more to make, potentially in china, at a time when tesla's burning through cash. on the horizon, we have a bunch of new entrants into the market -- electric vehicle market that will be coming out with electric cars. that wouldn't really be happening without elon musk. carol: up next, from arkansas to manhattan. how bank of the ozarks became one of america's top construction lenders. jason: and investors eye a supersized $2 trillion value of the proposed offering of saudi aramco. carol: this is "bloomberg businessweek." ♪

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 . in the features section, we find a bank that not many people have heard of, bank of the ozarks. carol: it is headquartered in little rock, arkansas. jason: it is getting a lot of attention from its competitors here on wall street. here is peter robison. peter: george gleason is one of the kinds of people who make new yorkers look like slackers. he is one of the more hard-working people i have ever met. he talks a lot about working 80 hours a week. he mentioned that he did not wake up at dawn to write his bank's earnings report, he woke up at midnight while he was on the road. he has found his identity in making his bank grow and making it grow efficiently. he can name eight metrics off the top of his head, and he

keeps a scorecard in his pocket of where the bank ranks among the largest banks. according to him, it ranks at the top. jason: he has either been able to out hustle all of those rival bankers, or he has done a lot of deals that they would not and probably should not do. tell us about how and why he has grown as fast as he has? joel: the bank started in 2003, and it established in dallas. a real estate unit. it continued to grow. it weathered two downturns and managed the downturns well. there were a couple periods where other banks stepped away. one was in 2011. they made bad loans, and did not have the capacity.

the second period was in 2016, when other banks had received a warning from banking regulators telling them that there were some risks bubbling up in commercial real estate, and that the regulators would be watching the situation. gleason jumped in at that point and decided it was time to take some market share. at that point, they developed some relationships with some of the bigger developers around the country. time will tell whether that decision was a good one or whether there were risks the bank did not recognize. carol: tell us about where he is today. the largest lender in the united states for the construction of residential and commercial real estate. this is amazing. this is not a household name. this is not something we talk about on a daily basis at bloomberg, but this guy has become a giant. joel: it is amazing. it is the kind of thing you would not expect. who is the largest lender to construction, which we have all seen around the country, these gentrifying neighborhoods around the country.

condominiums, offices. and the largest construction lender is a relatively small bank in arkansas called bank of the ozarks. jason: what is the secret sauce here? he defends pretty vigorously his underwriting and the way they go about their diligence around projects. what do they do? peter: the bank really manages the risk at all phases of the project. they talk about how they have more asset managers, more servicers looking at the loans. they are looking at construction reports, they are looking at the sales, and warning the developers about potential problems with the construction. but the reason that some next stay away from this area is there is the risk that the project doesn't sell, that there is a downturn on the market. and by the time the development opens, there are not the sales to support the project. jason: i have to say, even reading this story and hearing

about these big towers in miami and new york city and other places, you do sort of have this natural reaction back to the financial crisis, when a lot of investors and developers lost their proverbial shirts here. he doesn't seem as worried. peter: gleason's argument is that banks get into trouble when they follow headlines, and that he trusts in his own underwriting. and his own underwriting is based on looking at population growth, job growth, household formation, down to the neighborhood in different cities. his argument is, over time, his approach will be proven right, and people who worry about a bubble are looking in the rearview mirror. carol: in the finance section, saudi aramco's $2 trillion zombie offering. jason: this is a massive deal that may not happen at this point. 10% of the world's oil and pays

for the saudi state. carol: so many questions, and will it ever go public? and the dilation -- valuation. jason: here is more from will kennedy. will: it was a moment when saudi arabia was reforming. saudi aramco, as we know, is the crown jewel of saudi arabia. a state oil company that produce 10% of the world's oil and underpins the fiscal standing. of the saudi state. he wanted to raise $100 billion and be the big sovereign wealth fund. that meant a big payday for wall street. it was seen as one of the biggest deals for a generation. two years later, it appears to have gone into the sand a little bit. it was meant to happen this year. they already delayed it to 2019. the saudi oil minister said it is nice if it happens in 2019, but the timing will not go to -- critical for the saudi state.

people we spoke to who were close to the process, some people are starting to question if it will happen at all. carol: i read this story and i am thinking, so saudi aramco and zombie ipo. a couple years ago, never whatever thought those words be together. -- never thought those words would be together. we were thinking, maybe it might happen next year or later, or not at all? will: that's right. a couple of things have probably changed. the timetables they laid down was always ambitious, but the biggest problem perhaps is valuation. when he announced the idea of floating saudi aramco, they put up a $2 trillion valuation on the company. there were no trillion dollar companies in the world yet. there was always a big ambition. and while no one disagrees that saudi aramco is an exceptional company with extraordinary profits and turnover, most people who crunched the numbers available based on oil prices and how much oil saudi arabia

produces come to a valuation between $1 trillion and $1.5 billion. the government has been unwilling to compromise on the valuation. that is one reason why it is heading for the long haul. jason: what is the connection between aramco, the decisions, and oil prices? how do those play with each other? will: this is another interesting aspect of the story. we have seen a real shift in saudi policy here, which is fascinating, and told us where the ipo is. in the first quarter of the year, saudi officials seemed very happy. oil prices kept rising, prices rallying steadily. global stockpiles were drained and oil prices were rallying nicely. in the first quarter, saudi oil

ministers were happy for the price rise and happy to see the market get tighter. and then donald trump intervened, and he started tweeting as he does, and used his twitter account to say, no. two opec. -- no two opec. we cannot have higher oil prices. it is putting too much strain on the american consumer. he has always had a very anti-opec attitude even before he entered politics. opec cannot let prices rise too high, we need to see more production. saudi arabia has a very close political relationship with trump. what we have seen is a very quick change in a saudi oil policy, which has kept a lid on prices to some extent. there is also another reason why investors will see risk in the ipo. saudi aramco, who is setting its business goals? are they set by the board of saudi aramco to the benefit of all shareholders? or are they set by the saudi state with the saudi state's

political and economic agenda in mind? and i think those issues were very clearly highlighted by donald trump's intervention. jason: next, the ceo leveling the playing field between credit unions and big banks. carol: and peru has a new superfood. jason: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." jason: you can also listen to us on the radio on sirius xm channel 119, and on a.m. 1130 in new york, and a.m. 960 in the bay area. carol: and in london and in asia on the bloomberg radio plus.

jason: this week's game changer is cathie mahos. what i found so interesting about this is it is combining technology and community. credit unions and big banks, there is a gap, and she is trying to fill it. carol: she used to work for michael bloomberg when he was mayor of new york city. >> credit unions are organized as financial cooperatives, so the idea behind a credit union is that everybody who deposits there is a member, a shareholder, and an owner of the institution. when you think about what we do, which is taking this fabulous structure and putting it at the disposal of low income communities, it creates not only the ability to deliver high-quality products and services, it is empowering the entire community. over time, i think the mainstream credit union movement has evolved a bit to look more like the traditional banking sector. but organizations like ours are

dedicated to taking that structure of the credit union and bringing it back to low income communities. jason: talk more about the melding or blending of the big banks, which play an important role, but sometimes people are intimidated. how do you take the best of that element, technology, etc., and scale and scope, and implement it on a community level? cathie: we work with a lot of big banks. we have a lot of investors that are big banks that will give us large deposits or large investments, and we redeploy that in our member institutions around the country so they can do more lending. we fit into that credit gap, that small dollar loan credit gap. our competitors are payday lenders, creditors, high cost financial service providers. what we are all about is trying to take this model of a financial institution, a self-sustaining financial

institution, and make it available to those of modest means. carol: that is where we wanted to go, because i feel credit unions have been around for a long time. but in the story this week, you talk about processing software. cathie: technology provides us the opportunity to leapfrog over some of the traditional obstacles to scale. for credit unions, the challenge to growth has always been how do you build enough of a base of members and of assets to be able to really scale your service delivery? with the advent of financial technology and fintech, we can do a lot more remotely. people are moving to mobile labs, mobile banking, accessing loans online.

we are taking this technology, and how can we use it to leapfrog? carol: you see that happening in emerging markets. they skip the financial world and go to their mobile phone. that is part of their identity, and how they tap into the financial world. cathie: the fintech revolution globally has for the first time opened the door to financial inclusion and financial access for millions of people. we have not seen that happen as much here with fintech. what we are trying to do as a nonprofit is take the power and the tool and bring it to mission of financial inclusion. carol: this week, we talk about the latest superfood from peru, lucula. jason: we have all the super foods at the local markets. this is not one i heard of. kate: the newest superfood, which is lucuma. jason: what is it?

kate: it is the kind of thing where you feel like you have heard of so many before. this is a new one, and it is surprising. it looks like an avocado and a mango hooked up somehow. it is orange, it is the shape of an avocado, but it has the texture of a squash, a flavor that is caramel-y and maple-y. it is so good for you. peru has a propensity for delivering super foods to the world. it is a combination of the andes mountains and the amazon. a lot of crazy things grow there, and lucuma is the newest thing. carol: does it taste good? kate: i would not advocate tasting it plain. it is hard to taste it raw if you are not in peru. it is surprisingly delicate. it spoils almost as soon as it comes off of the lucuma tree. doesn't that sound cute? jason: it sounds like a dr. seuss book. [laughter] jason: how do you get your hands on this superfood?

kate: you can get it at walmart or find it -- some whole foods have it. but usually it is powdered. usually it is frozen powdered. i have it at my local health food store, so i am sure everybody can find it. but it is really easy to use. you throw it into a smoothie, and you are seeing it in a lot of juice places as a booster. it is also a popular ice cream flavor, especially in california. jason: what does it do for you? carol: it is like a multivitamin. kate: it does everything. it is like high-end zinc and potassium. good for your skin and blood. it is good for fertility. it is called the gold of the incas. it has a long history in peru. carol: how come we are only now hearing about it? kate: that is a good question, and people in peru are thinking it is time to get the word out. they have all these fantastic fresh fruit stands and juice

places, so they use it a lot. they have been bad at getting the message out. carol: "bloomberg businessweek" is available on news stands now. i love talking to cristina lindblad about china. it reminds us of the amount of money and time and effort the chinese government is putting into developing its technology field. specifically, silicon valley, which has about 156 cities and are creating many silicon -- mini silicon valleys. jason: that was just one of the stories that really hit the nexus between china and the trade war. i have to say i loved saudi , aramco. a deal everyone i talk to on wall street has been salivating over it for two years. not just the bankers, but the private equity guys looking at the proceeds coming out. jason: more bloomberg television starts right now. ♪

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david: let's talk about how you became a very famous soprano. >> keep saying that. thank you. ♪ david: you are performing in "carousel," which is a broadway play. >> i just thought wow, it would be really exciting to do something new. ♪ david: famous sopranos are sometimes labeled as divas or prima donnas. renee: i just couldn't do it, i've never been good at it. >> ♪ you'll never know just how much i miss you ♪