carol: welcome to "bloomberg businessweek." jason: we are here inside bloomberg headquarters in new york. carol: donald trump promised to drain the swamp in washington. but a biographer shows he has done the opposite. jason: facebook and twitter executives were in washington promising more transparency. google founder larry page has

all but disappeared. we mark 10 years since the start of the last financial crisis, ray dalio has plenty to say. of a buzzis a bit kill, especially for investors who have been in equity markets. carol: taylor riggs, what a ride. come into my terminal. this is just one of the basic market stories i love. 1924.oing back to this is the longest in history. in ride we have our regression mine and our standard deviations. line and our standard deviations. ,eading into the fourth quarter you marty have a revision of price targets because we have already met those goals so far earlier on in the year. jason: with so much behind us in

this bull market already. this makes for a nice cover story in "bloomberg businessweek." "the most boring bull market ever." carol: even a boom can feel kind of blah. chris: i think it is probably we are looking at the boring quality of the stock markets over the last 10 years. the story is one of these retrospectives. when i say boring, some people get a little bit upset. boring was exactly what people were hoping for this time 10 years ago and they would have gladly have taken it. a kind oflooks at disaffection that has gone on in the stock market. this is changing nature. used tos has been describe the bull market.

i think this was the theme we were trying to capture. bull markets have been -- past bull markets have been pretty celebratory, but this one has not been like that. on the part of companies themselves, there has been a kind of reluctance to get involved. boring, but i think there has been the most hated bull market. discontinues to grind higher. you use the word disaffection. companies are not going public like they used to. chris: that is one of the big features. the reason is debatable. tons of companies went public in the 90's. the pace is way below today, like 75%. on the correcter

rate, but there is no question with this bull market -- one of its big features has not been ies sexy ipo's compan doubling in a day. there have been mature companies gettingblic, companies huge right after going public like facebook. but i don't think the same kind of celebratory aspect has happened. ipo are three letters are less popular, three letters that have been very popular are etf, this shift from passive to active. chris: from a journalistic have this sortu of monolithic structure in the stock market. not many people own individual stocks. here are -- there are teh

but they are monolithic, all kind of quasi-monopolies that get bigger and bigger. these are passive products, the ultimate buy and hold. they are machine intermediated etf's. they are possible because of the electronic infrastructure of the market. quant strategies no one gets, things like smart and risk parity that are all mathematical experiments to the populace.

but they are not the yahoo! and month, which is what you had back in the 90's. carol: we are here with the creative director of "bloomberg businessweek." creativetasked with covers this week. this one is all about the long bull run. chris: we were thinking about lean on don't leave -- the cliches of the business world, but once in a while we find opportunities to lean hard into it. carol: you are having some fun with discover. tois: it is the dumbest way make the joke, and it works really well. carol: it makes the bull really lon ones we did itg,. we were like, perfect -- it makes the bull really long. once we did it, we were like,

perfect. carol: this one is simplistic, clean but powerful. tois: it to me a long time get the pine, but it is clean and works right well, into the story works perfectly. and the story works perfectly. it talks about how you cannot find larry page in silicon valley. a very clever cover. ray dalio tells us where the next economic downturn may come from. carol: and when tech executives need to act accountable, where is larry page? jason: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." jason: you can visit us online.

carol: and our mobile app. jason: google is facing one of the biggest challenges in its 20 year history. its cofounder is nowhere to be found. carol: tech ceos were up on capitol hill testifying about election meddling. orsey and sheryl sandberg were there. larry page, a no show. jason: an empty chair in washington, but the mystery extends to silicon valley. ustin: we spent a lot of time with my colleague trying to figure out where he is. the one has heard from him in has heard from him in the past couple of years, especially with the challenges facing google and alphabet right now. a lot of google employees are

asking that same question. carol: he runs this massive company. is he not at headquarters yet though -- at headquarters? is he not at headquarters yet austin: he is the ceo of alphabets. in terms of how involved he is in the day today, that is vague. people are saying we have not seen him as much as we did two years ago. reports are suggesting he is more withdrawn than ever. google disputes this, but it is quite clear he is not involved in the more societal challenges. the societal challenge thing is so interesting. this is a company that came out and said years ago, don't be evil. they have put on this cloak in many ways, be good for the world, care in a much more holistic way.

he was the chief architect of all about with his cofounder, and created this company that is admired in many ways. for him to be absent at this moment seems especially conspicuous. how do you circle that square? austin: i agree. this should have been a home run page four page to show up -- home run pitch for larry page to show up and represent the values he stood for. that absence was quite jarring compared to jack dorsey and sheryl sandberg being there. i don't know how to square that. he has to come out of the shadows and speak to what his values are right now, whether that don't be evil model has evolved at the company, but you are right that shareholders deserve answers. i don't think anyone can tell you what larry page thinks about

these issues. there are so many factoids or people you spoke to that sound like larry page's inner circle. what are they saying about what he is up to? he has always been more attracted to the more futuristic projects. is whetherquestion that is the most relevant thing to be thinking about right now. maybe the present is the challenge for our, not the future. the challenge, not the future. story, we talk about a hyperloop for bikes. floating tubee they envision connecting san francisco to their mountain view

campus, in which bicycles would be propelled by a mix of oxygen and helium at faster speeds. those are the things that are capturing larry page's focus. another person who could have sat in that seat is the ceo of google. sundar? austin: larry page was only officially invited. and mark zuckerberg had testified previously. austin: it may have been the reason cheryl was at this hearing. -- sheryl was at this hearing.

sources indicate the senate would have been fine with sundar presenting, but he also chose not to go. thought that facebook and twitter would take most of the kids in their absence, but that turned out to be the complete opposite. they paid a steep price for not showing up. carol: that did not happen. jason: lawmakers doubled down and kept bringing up the absence. did they anticipate the blowback? austin: there is no doubt that perhaps they did not go to's -- the senate hearings because of the showboating. it is not really that material, but some of those theatrics played against them. the place card for google and kept a blank notepad and a microphone there, muted the whole time.

a fascinating symbol for looking at larry page right now. carol: there were also lots of cameras there. so many of us remembered that shot from that day. austin: especially compared to how present ceos are today, with human musk going on a -- elon musk going on a podcast smoking marijuana, and jeff bezos, where is larry? jason: coming up, another financial crisis. are we ready? carol: ray dalio has some thoughts on tomorrow's threat. this is "bloomberg businessweek." ♪

jason: welcome back. carol: you can listen to us on york,on sirius xm, in new

boston, washington, d.c. -- areason: and in the bay and in london. carol: 10 years ago this week, lehman brothers collapsed. jason: one of the big questions everyone is asking -- are we better equipped to deal with the inevitable next crisis? if there is a crisis, and inevitably there will be another one. you can do everything you can to prevent them, but they are going to break out. what then? the apparatus to stop a crisis once it inevitably starts? my concerns is that we are less prepared in that department than before. jason: why?

peter: partly because of what the crisis engendered. engendered a real anger in the public. the bad guys got let off while the good guys suffer the consequences. >> there was no old testament justice. peter: right. meted oldey had testament justice, people would still be angry. the recession dragged on for so long because the republicans were not passing the fiscal stimulus the democrats thought. are angry. and they put that anger into legislation, congress did. significantly tied the hands of regulators to deal with future crises. carol: what specifically?

reserve getsderal something, a provision that allows them under unusual circumstances to help non-bank financial companies bear sterns and aig, both of which were rescued. that has been circumscribed with dodd-frank. cook upwould have to some justification for why it was advancing credit today. it could single out one financial institution. it would have to save a whole class. carol: what are the others? peter: the fdic issued a blanket guarantee of all bank liabilities. banks are liable to depositors,

covered by deposit insurance. this ensures other creditors to the banks don't get special treatment. but there could be a run to the banks even if depositors are credited. that is not permitted anymore under dodd-frank. peter: the treasury department in the fall of 2008 provided major help to money market mutual funds, part of the shadow banking system, an alternate way for people to save and invest. the would not be permitted same way today as it was back then. three of the crucial firefighting tools do not exist. carol: we have been talking to well-known investors who were there during the financial crisis to get their perspective on where we are. you talk to ray dalio, who runs the world's largest hedge fund.

pete he does not think we are on the verge of a crisisr. i think he is right. bridgewater's depression gauge is not on. one, he when we do have shares the concern of people like tim geithner, that we need those firefighting tools. jason: one of the influential folks peter talked to was ray dalio. he founded the world's biggest hedge fund and he is one of the world's most influential voices on all things financial and investing. he has concerns about the ability to fight the next financial crisis. we asked him to stop by. carol: he does not think we are in a bubble. but he does see growing financial and political risk that reminds him of a previous era. i don't think we are in the

midst of another bubble. when you hit zero interest rates, you have a different type of debt crisis. you are more likely to have a depression. the 1935-1940r to period. 1929-1932, we had a debt crisis and interest rates hit zero. 2007-2008, the same thing. do only thing for banks to is print money and buy financial assets, which pushes asset prices up and puts a lot of liquidity in, and contributes to a greater wealth cap. both periods of time, the

economy did not improve for a large segment of the population, we have populism. the last time we would say when populism was popular would be in that period. that population -- populism issue is an important issue. when the next downturn comes, which will probably wepen in a couple of years, are going to have a different type of downturn, similar to the one that happened in 1937-1940. now banks are beginning to tighten monetary policy. prices are sensitive to monetary policy is the duration of those assets has lengthened. central banks need to be careful to raise interest rates much faster -- not to raise interest rates much faster than is built into the curve.

when you think about the next downturn, it will be very different and the one in 2008, 2008.n the one in populism, i think there will be more conflict. times are good right now, and we are at each other's throats. i worry about the effectiveness of monetary policy reversing back. -- reversing that. monetary policy has interest rates, and we can't lower interest rates as much. and this has quantitative easing, which can push liquidity into the system. that is at its maximum. when we have a downturn, it will not be as effective. the downturn in our form of debt crisis won't just be debts. it will be pension and health-care obligations and unfunded obligations.

think it will be about us having to sell a lot of treasury bonds to the rest of the world. that will be an issue about two years out. two years out is what i am worried about. terms,king in financial if we look at what you are seeing through the lens of the markets, how bad is it likely to be relative to what we went through in 2008-2009? ray: i don't think it is going to be as severe. i think it will grind on. all of these obligations will be a problem for funding. it will be more of a dollar crisis than a debt crisis. jason: to come, the troubles at tesla. maybe there is a solution.

carol: the swamp keeps building up. jason: this is "bloomberg businessweek." ♪ xfinity mobile is a new wireless network

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jason: welcome back to "bloomberg businessweek." carol: elon musk need some help. he needs someone to keep them in check. jason: how about a gut check on the swamp in washington? carol: with the 10th anniversary of the financial crisis looming large, we went behind the scenes

with joel webber. carol: everyone is back from summer. it is getting busy. what is the thinking behind this week's issue? joel: we are 10 years after lehman brothers, which reshaped wall street and the financial industry. we have written about it for basically 10 years. it was an opportunity to move forward a little bit. we are now in the mist of what is the longest bull market ever. let's not forget what that means. jason: what is your conclusion on that? bloomberg is uniquely suited to cover this. thisave the ability to tap massive amount of talent in the newsroom. el: there is a phenomenal

story by the head of the u.s. equities team. even as someone who covers this data day, there has been -- day-to-day, there has been nothing like this, where this keeps going and tracks on and on -- drags on and on. we don't know where this is going to go. chris, how are you going to talk to your grandkids about what we are seeing? how are we going to look back on this? jason: it also feels like 100 years ago we had big tech names on capitol hill. it was only about 10 days. what are the implications of that story? joel: when washington convened that meeting, there was a pretty prominent seat that was vacant -- google. it was interesting.

time we a moment in thought tech would be under the microscope in a new way it has never been. arol: sheryl sandberg and jack dorsey show up. no one from google. el: we said, there is larry page right now? everyone question should ask, especially google shareholders. facebook has been under the microscope, but what about google? if you don't show up at this meeting and prepare to discuss your business and what you are -- thebout climate climate of tech, it looks like a major error. this was an attempt to go find larry, who has not had a press interview in about four years. jason: thank you.

intod that in-depth dive the presidential conflict. we talked with the executive editor of bloomberg opinion, and he also knows a thing or two about the president, having written a biography of donald trump. carol: one would say the administration is financially conflicted. circle trump's inner came into the campaign with extensive business ties and have maintained them in office. some were caught doing things illegal or swampy. >> he has filled them with bigger alligators. one of the promises he made to washington -- to voters is that he would go into washington and implement new ethics. we have not seen any of that. we have seen lobbying and conflicts of interest.

say,: some folks would take a look at other administrations. there are always conflicts of interest. what is different this time? tim: we start with mark twain from the gilded age in our peace. not a new problem. . threat the 19th century were riddled with corruption and conflicts of interest. you had scandals and the warren harding administration. -- in the warren harding administration. were problematic, such as roger and billy clinton. other era since world war ii has had as many conflicts of interest and indictments attached to it as this one. this is in a class by itself. ross: you point out wilbur

has been caught up as much as any cabinet official in a liack of disclosure and effort to deally unwind what he owne through his work as an investor before he became the commerce secretary. tim: wilbur ross is a great example. we shouldn't say people with deep as miss experience shouldn't go to washington. we want them in washington. these are creative, talented people. the argument is how you take money out of the equation so the public is certain good decisions are made? wilbur ross has a vast portfolio. he is around 80 years old. he has been in scores of companies. it is almost inevitable something he will touch in this administration could be attached

back to a business link in his past. the stuff of years ago could be left aside and someone could do the right thing. when they still have investments, the argument goes out the window. this also applies to betsy devos. they came into the administration still retaining actively portfolios of traded companies or privately held concerns. he owned aase, shipping enterprise that had ties to the chinese government. there was another company that did steal transactions with companies based in south korea. ask, can hetion to negotiate a trade deal with south korea or china uninfluenced by what is in his own wallet? betsy devos has had investments in for-profit education ventures, including a company

that collects money from indebted students, which had a contract with the department of education, which she was overseeing. that stuff should just be gone. there was no transition team whispering that says, this looks -- whispering, this looks really bad. this is a problem with bad management. jason: another pair of leaders in trouble in the corporate world. tesla is in crisis again and again. jd.com.nd the head of jason: this is "bloomberg businessweek."

jason: welcome back. carol: you can find us online. jason: and our mobile app.

tesla was in the news this week. musk was tweeting about response times. the stock was downgraded. carol: and the customer -- the company lost another .igh-ranking finance official maybe musk needs another pair of hands. jason: we have another solution -- musk needs a new board. >> the string is showing. ambien use.lk about i am concerned about help at the company. what is needed is a chief operating officer, a safe pair of operational hands. room. an adult i9n the >> on paper is an attractive thought.

-- it's an attractive thought. but it ignores a deeper problem you would have to fix for that to work. jason: governance. >> fixing the board. jason: why is the board the way it is? it is stocked with people very byendly to this dynamic, many accounts brilliant ceo. he put these folks together, right? to what you get with any kind of tech darling company that explodes onto the scene. but there are other factors. the board looks like the board you would have at a startup. his brother is still on it and the independent director goes way back with him.

he sits on the board of some of his other ventures. jason: antonio. liam: you have this other theation where musk's chairman of the board into the biggest shareholder in the company and for many people synonymous with tesla. carol: it is not unusual you see where the board is stocked with a lot of buddies of the ceo. tesla is now eight years as a listed company. it is hard to call it a startup. jason: we look at another troubled ceo, richard liu, the founder of jd.com. he is facing criminal accusations, and the company finds itself dealing with the fallout. a coupleu was arrested of weeks ago on suspicion of

rape. legal woes are putting his company at risk. >> jd.com is the number two marketplace in china, after alibaba. it is a big deal there. he was trying to expand abroad to one degree or another for several years. their billionaire founder, chief executive, and chairman, he has gone to aspen and davos, set up a new york gallery with jd swag -- but the first time he pops into international headlines was when he was arrested over labor day weekend. carol: what were the charges? was arrested on suspicion of rape in minneapolis and arrested with no charges

having been filed. so he was allowed to go back to beijing and was not charged, but the investigation is not closed. what is interesting is the story gets into the structure of the company and how much control he has. jeff: this is the question of sidelines,n the possibly incarcerated for a significant time. this has much bigger than manyions for jd other companies because it is structured as a variable interest entity. is rare in theit united states but common among chinese companies. several executives control the most important aspects of the company. jd has to contract with the

executives to get dividends from those assets. the road,has been on courting a block of big-name investors, who would be exposed to this in a meaningful way if this were to go sideways. jeff: absolutely. this is a key man risk for jd . liu is pretty essential when it comes to closing a deal with google, for example, or tencent and other mega companies that have taken an active interest in the company's future. jason: alibaba is well-known and front, this is a company still baked into global e-commerce and has a lot more ambition beyond china. jeff: when dealing with a

under who controls about 15% of outstanding shares, 80% of for aoting shares -- , the board ofsons liuannot even meet without under its own bylaws, even if he has been kidnapped or arrested. it's been almost a year since hurricane maria devastated her to rico. that island economy was struggling already. now it's looking at ways to help victims. carol: and what it's done for miami, can it be sustained for other cities? this is "bloomberg businessweek." ♪

carol: welcome back. jason: you can listen to us on the radio on sirius xm, new york, austin, washington, d.c. -- >> and in the bay area and london. we take you to puerto rico this week. it is struggling to come back from last year's hurricane. now, it is counting on small but transformative industries and ideas to bring back the economy. jason: we are talking about blockchain technology, even medical marijuana. >> people forget maria was not the only disaster that visited that island in 2017. they filed for the largest bankruptcy in u.s. history, $74 million, which makes detroit look like nothing.

already on its back because there was a federal tax break that have blurred a time of fargo -- pharmaceutical companies to manufacture on the island. thousands of jobs left the island. the storm blew entire parts of the island away. it destroyed the energy grid. it has to be rebuilt. the government is taking the approach of making these bets on different kind of industries. carol: i love how they describe it as a venture capital fund. one of the bets they are making is blockchain and digital currencies. earlier in the year, brock pierce was a big name in

the community. he made it to the list of richest crypto billionaires. he owns the mighty ducks franchise. he wants to create a community in puerto rico of crypto investors. the island has favorable tax status. there is a favorable tax on capital gains. this is very attractive to john paulson and a number of big, wealthy, east coast investors. and lead,lockchain apparently -- weed, apparently? how is that manifesting in puerto rico? cristina: the island is trying to build on that farm a

foundation -- pharma foundation it has. the governor has a degree in engineering. he wants to turn it into an innovation center for marijuana. he wants to make sure the laws are very clear. we are now seeing investment coming in. photograph a growth facility inside an old building, an old government building that

has been rehabbed as a marijuana farm. nexgen hopescalled to be able to expand. carol: we will end this week on a lighter note. we want to talk about art basel. ,his has transformed the city making unsafe locations in the miami area safe and hip. jason: the company behind this thinks it may have the secret sauce to helping other cities. basel started in switzerland. the company behind it was getting a lot of requests from other cities to do what they did in miami in other places. was a huge part of turning miami into a town with many different neighborhoods full of arts, bringing miami back a little bit to the international scene. carol: a revival?

neighborhoods: are places where you would go and hang out. the company behind art basel ies,loped art basel cit which is a miniature version of what they are doing in miami. they are doing their first one in buenos aires. jason: we have seen cities over time go for the buildout -- bilbao effect. they put together a amazing museums. a lot of city say, i want to get a piece of that, but it does not work out so well. bilbao put on something that cost 220 million dollars, and they recoup their money

quickly. on the map.ompany people have thought alton cultural institutions, they will be what turns our city around. but this has not traditionally worked. carol: because not all cultural products have been transformative. chris: we have a whole list of projects. a valencia, when complex cost billion dollars, that immediately had construction problems. $115er in rome cost over million. there was a budget crisis after that. people really thought this effect was going to help elsewhere, but it did not happen in denver or in valencia. carol: didn't it happen in a leg

-- in los angeles? chris: downtown los angeles, it led to the disney concert hall. you have to invest $100 million in a building. you can use a lot of funding for the arts that you are you had in your municipal plan. the company comes in with rolodex and the infrastructure and knows how to draw international attention and artists to the city. hopefully you get some of the boost from that, investors to come in and check out your city. bloomberg businessweek is available on newsstands. jason: and online and on her mobile app. -- our mobile app. what is your must read of the week? carol: there is a visual component to this story.

you can find out about the conflict from the trump team. you should check it out. yours? carr'si love austin where is larry page story. about five here for minutes and delivers a story everyone needs to read. more bloomberg television starts right now. ♪ selina: i'm selina wang and this

is the best of bloomberg technology where we bring you all of our top interviews and this week in tech. apple unveils a asked her iphone x x. and a cheaper 10 are. with a kickstart more growth for the first trillion dollar tech giant? some investors aren't convinced. plus coffee on the run. plainnvenience in tech is intbu