♪ taylor: welcome to "bloomberg businessweek." i'm taylor riggs. jason: i'm jason kelly. we are joining you from bloomberg headquarters in new york. taylor: how technology is changing the most basic component of business and finance. that is money itself. jason: cannabis used to be illegal. now it is investable. taylor: first, we have a bloomberg exclusive. steve bannon slams nikki haley's decision to announce her

resignation earlier this week. jason: and specifically, her timing ahead of the midterm elections. steve bannon sat down in london. i was in the room what john micklethwait. here is what he had to say. steve: i think the timing of it is very suspect. i have been out with these congressional house races. if president trump -- i've called this for many months for this to be his first reelect. if he loses the house of representatives, he will be impeached. they will bring impeachment hearings immediately. it is imperative that we keep the house. john: virtually every pollster would tell you that looks highly unlikely. steve: we went from 60 seats down to 30. now i think it is 25 to 30, which means we have a narrow gate. to get to that 23, there is a

very narrow gate you have to go through, but it is doable. the kavanaugh hearings give us traction for the first time to try to, against all odds, just like in 2016, to close strong and say that. nikki haley's timing was horrific. it reinforced i think with republican women that donald trump is someone you don't want to back. john: do you think nikki haley is aiming herself to be the president? steve: i think nikki haley is incredibly politically ambitious. i would not say as ambitious as lucifer. i am probably taking him out of context, but she is ambitious and talented. john: do you think she could challenge trump in the primaries? steve: i take nikki haley at her word, it is not 2020. everything she has said yesterday and everything about her stepping down could have been done on the evening of november 6. if she is going to stay to the end of the year, there is plenty of time to do a transition, to pick someone to take her place. the timing could not have been worse because it stepped on the

kavanaugh first day of the supreme court, it stepped on the 50 year anniversary of the lowest unemployment in the years. the timing was exquisite from a bad point of view. very suspect of the timing. taylor: in another bloomberg exclusive, we look at the present and future of saudi arabia. the kingdom found itself under scrutiny this week over its alleged role over the disappearance of a journalist. jason: a group of bloomberg journalists traveled to riyadh for a wide-ranging conversation with crown prince mohammed bin salman. our executive editor riad hamade told us what it was like. riad: this is the fourth time we have managed to interview him, and we were taken into the royal palace. he had an advisor, i think it was the information minister, sitting to his left. in the back further down in another area was the communications team sitting there as well, listening to our conversation. jason: they have seen riyadh as

an able figure, democratizing and changing the economy and the view of saudi arabia around the world. vision 2030 is the seminal project he is working on. where does that stand at this point? what is the sense you got from him in the conversation? riad: in terms of democratizing, that is one thing he is clear about. that is not what he is about. he is interested in opening saudi arabia economically, to some extent socially. those are the pillars of what he is trying to do. where his vision 2030 stands at the moment is significant changes that have been made. subsidies have been cut. there are some social reforms that have been introduced. there are targets that have central ministries and companies in the kingdom changing.

but at the same time, he originally in 2016 had set very aggressive targets, very aggressive timelines. that has been steadily pushed back. there is a sense that things are slower than he originally anticipated, including the aramco ipo. jason: what is the state of that? that is one of the most eager offerings in history. riad: before this interview, there was a lot of reports in the media, including our own, saying the aramco ipo was a concern on hold or canceled. now he is saying it will be delayed, but it is not on hold, and we are still planning to do it. but instead of the end of 2017, 2018, which was the original plan, he is saying it will be 2021. jason: you were speaking to him at a time that a saudi journalist had disappeared. that story is ongoing, obviously. what did he say?

what was his reaction, especially to some of the questions around the saudi government's role in all this? riad: our interview was late wednesday. at the time, he said he does not know what happened to him. he said khashoggi had left the consulate. they said he would like to know what happened to him, and he invited the turkish authorities to come in and search the consulate to see what happened. he did say that right now he is not in saudi arabia. he would know if he was in saudi arabia. he did not want to go beyond that. taylor: we have had many controversial power players on bloomberg this week, but the businessweek cover featured a plant. jason: a pot plant. here is joel weber on this week's cannabis cover, and the other big stories. how did you get into the pot

business? joel: we wanted to step back for a moment and look at it through an investing angle. this is not a user's guide, it is an investment guide. it feels like there is so much hype. is there hype, or real substance? one of the interesting things i took away was the amount of institutional money that is doubled down in that space. when you look at the major shareholders, it is like vanguard and fidelity. we are starting to see up north with canada legalizing in just a matter of days what could become a massive opportunity that we will see how it spreads. jason: you also look at the future of money. very timely story, a set of stories this week, given what happened in the markets. joel: what we wanted to do with this package is talk about as

everything digitizes, what does it mean for money and investing? what does it mean for how you invest your savings? one of my favorite stories is about jon stein, who created betterment. it is the original robo-adviser. and it is 10 years old already. all he was trying to do is create a very simple product using etf's to keep fees incredibly low. now, everybody else wants in that game. to me, it is a strategy story. how did this guy with this great idea continue to scale his great idea for his business? jason: joel weber, thank you so much. from cash to credit cards to financial planning, as we have been talking about, money does not look anything like it used to. we look at the transformation. taylor: let's take a moment to dive into this week's cover. chris nosenzo had to come up

with an image that created a pot story. chris: we wanted to show it as a new luxury item. people are excited about investing in it. we wanted the design to be luxury, but sort of friendly. i think it came together in this vision for investors to see where the product's going. ♪

♪ taylor: welcome back to "bloomberg businessweek." i'm taylor riggs. jason: and i'm jason kelly. join us on the radio from 2:00 to 5:00 p.m. eastern time. taylor: and online at businessweek.com, and on the bloomberg business app. jason: this week's business section is a pot takeover, an investment guide to the cannabis craze. taylor: along with canada legalizing cannabis sales next week, companies are seeking exposure to the budding marijuana industry. here is editor silvia killingsworth on turning pot into gold. silvia: there is a lot that has to happen.

it is complicated to trade between the u.s. and canada because there are a lot of regulations and rules about it. if you want to list on the toronto stock exchange, you cannot have cannabis holdings. another roadblock is getting banks to invest and finance. carol: that is a huge one. if this has got banks scared to get involved. silvia: there's reputational risks, the risk in investing and no one knows how it will perform. it is hard even in canada, where it is legal, and becoming more so to get the biggest banks in canada to invest. carol: there is still a fair amount of money, whether it is

from venture capitalists. access to capital is still there. silvia: absolutely. it will open up more as regulations change. carol: medical marijuana you guys also cover. that is where the market potential is tremendous. silvia: absolutely. the medical marijuana sector will be huge, and that is because so many more people are invested in marijuana as a medical pain reliever. a big place to look in the future is going to be the opioid arena. and many people are using marijuana as an alternative to chronic pain medicines like opioids. carol: you take a look at the market cap of some of these companies and compare it with the number that has been designated for the potential market size of the cannabis market. the math does not quite match up. these market caps have gotten a little crazy. silvia: yes, they absolutely

have. i think this is what we are starting to see, the warnings of a bubble or pulling back a little bit. there is clearly a lot of excitement. people are calling it the green rush. i think we will have to see over time how things shake out. jason: a potential pot bubble was fueled by corona beer maker constellation brands, with $12.8 billion into cannabis growth over the summer. this is the ceo bruce linton. bruce: cannabis will be about how you migrate to the top, and that is why being early gives you the product development. i like the reference to blackberry. i said the last time we had this much of a lead in, it involved a guy named bell making a phone call. carol: look how that turned out. bruce: this will disrupt the next 100 years and we are in front of it. jason: let's look at a businessweek chart. this is one of the company's tracks by the global cannabis competitive peers index.

it is a mouthful. it is marked by market value, but also colored by location. a lot of green. that is all cannabis. taylor: and it is all the rage. we do have an index for that. it has outperformed gold, bitcoin, and the broader market. canopy growth is a big one as well. interesting when we dive into the terminal. canada legalized a lot of this starting next week. remember when bitcoin was all the rage? not anymore. some of these weed stocks are all the rage. they are outperforming on a normalized basis going back to years. if you are losing your money in bitcoin, maybe weed is the next thing to go into. jason: despite signs of a bubble, other beverage companies are now pivoting to pot. taylor: from the black market to stock market to maybe even your local supermarket. here is reporter craig giammona. craig: what is happening is the beverage giants are the first movers on this. they have shown up in a big way under the idea there will be a big market for cannabis drinks, whether with thc to get you high, or cbd for wellness

benefits. but it stems from constellation brands. they make modelo and corona. they made a big investment in canopy growth. that was an inflection point for the industry. it set off the stock boom we are seeing. coca-cola has expressed interest. it is the beverage guys who have shown up first to take part in what they see as a big growth opportunity. carol: you talk about fomo, fear of missing out, for the beverage companies. i think they shocked the world when they said we are interested in this and we are pursuing it. it set off a storm, in contrast to pepsico, who said we are not interested. craig: a big divergence. coca-cola is probably the best-known brand in the entire world, arguably. it is a company from atlanta. they are not considered a risky

or cutting-edge company, but they came out and said, we are looking at cbd for wellness drinks worldwide. they made a very fine point. they said, we are not looking at thc, this will not be coke to get you high. but we are interested in cbd as it pertains to wellness strength. maybe it is drinks targeted at the yoga crowd. jason: is this a build or a buy play? craig: i think in the initial days, it will be a buy play. the action you will see will be north of the border into canada. i think primarily by these big companies partnering with existing companies that have access to the plant they need, and have expertise in cannabis. taylor: still ahead, climate change will get worse. here is how you can bet on it. jason: the problems with cash and credit, and how tech resolves them. taylor: this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. taylor: and i'm taylor riggs. you can also listen to us on the radio on siriux xm, channel 119. also on a.m. 1130 in new york, 106.1 in boston, 99.1 f.m. in washington, d.c., and a.m. 960 in the bay area. jason: and in london on dab digital, and the bloomberg business app.

climate change front and center this week as hurricane michael slammed into florida's panhandle with a force not seen in the centuries. plus, a new ominous united nations report urging companies to spend trillions immediately to avoid irreversible damage. taylor: one thing is clear as the world grapples with record hurricanes, floods, and wildfires, climate change will get worse. now a small but growing group investors are betting on it. here is chris flavelle in washington. chris: i did reach investors who did not want to participate in the story because they did not want the appearance they were profiting off of disaster. but it will take money, it will take new ideas, new products, and somebody has to fund those things. the people who were looking for opportunity, they wanted that. they wanted to make clear they were part of the solution, because if someone doesn't fund these changes in how we live and how we get by day to day, we will be worse off in dealing

with these effects. carol: systems have to change. that include food collection, insurance, agriculture. talk to me about the type of investments that some of these folks are starting to look at. chris: two big categories are infrastructure, that is protection against water often, and agriculture, finding new ways to grow crops in drought conditions and higher heat conditions. but it was not just those typical categories we think of. there were ideas of insurance. how do you insure utilities against extreme weather? how do you play the market knowing some places will be more hard-hit than others? i was impressed by the variety of strategies people are looking at here. jason: are you able to generalize about the type of investors getting into this? are they especially pro-risk? are they pro-environment?

where do they come from, if you can generalize? chris: i think there was a pro data angle. people had a scientific background or they had scientists on board who knew the data. they were not especially ideological. these were not people who were advocates necessarily, but they say our job is to look at trends and make money based on trends, and here is what we are doing. my guess is it is a growing field. jason: it is not just investors wagering on climate change and its affects. companies are playing a role, too. taylor: audi reveals its tesla challenger. they teamed up with amazon to install home charges for its electrical vehicle buyers. here is our contributor to

bloomberg opinions nathaniel bullard in washington. nathaniel: audi launched its new electric vehicle in the u.s.. it is called the e-tron and they had a launch in san francisco. toward the end of the launch was an announcement they will be partnering with amazon to install the charging systems. carol: what is the big deal here?because i think any time amazon says they are going into a market or goes into a market, the established players freak out. nathaniel: that was my thinking. they will come in and do the installation for you. then what? imagine you drive in and instead of pulling out an app and picking out a bunch of different settings and saying how long you will be home for, you drive in, you park, you plug in, and you say, "alexa, you can charge it slow." or you can say, "i have got to leave in 90 minutes, top it up as quick as you can." carol: here is amazon, who reaches so much of the general public. is this the thing that finally ramps up electric vehicles much more than it has been? nathaniel: electricity is different from fuel. i cannot get gas at home slowly dripped into my vehicle. but i can get electricity like

that. you have this spectrum of offerings, and you have got consumer preferences that are plugged into it, because it sits at home all the time. that has the opportunity to plug into your prime account, and all these decisions you make around purchasing in the way that traditional gasoline filling does not allow you to do. the tesla thing was chicken and egg, and it was a essential. you needed a network to fuel them, and once you had the network, you could have more cars. this is like saying, it is an endpoint in your home. but if it is something you are doing in your home, what else can you do along with it?

what other relationships do you want to bundle with that? it is probably different than the relationship of buying gasoline if you are out on the highway. jason: the challenge of unpredictable weather is nothing for the world's ski industry. resorts are banding together in the face of climate change. taylor: in this week's pursuit section, a powdered path to snow. here is our travel editor nikki ekstein. nikki: one thing we think is fascinating is snow farming, taking over in the alps. this is a low-tech practice that is on the cutting edge. it is such a weird dichotomy, but here we have at the end of the spring season these very advanced ground control operations, where they are harvesting the snow that settled from last season, covering it with reflective tarps to protect it from the heat of the summer, and sometimes monitoring it by drones to make sure it lasts long enough to create a cold

base for when the new season starts. carol: i did not know about that. i also did not know about the northern tip of japan. how many snow resorts there are and how much snow it gets. nikki: if you think about vale, which is one of the best places to ski in the u.s., they get 350 inches of powder a year. hokkaido in northern japan gets 600 inches of snow a year, and is much more reliable there than anywhere else because of how the climate patterns and snowdrifts exchanges across the different parts of the world, coming off the sea and going into siberia. it is in the perfect spot to take advantage of those climatological conditions. jason: ww, the company formally known as weight watchers, is shifting its focus from weight loss to wellness. taylor: plus, the rise of crypto and the death of cash. this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. taylor: still ahead, ww, the company formally known as weight watchers, swaps its focus in favor of the growing wellness trend. jason: plus, the future of technology from one of tech's biggest titans, that is microsoft ceo satya nadella. taylor: but first, tech brawl in the future of money. cash is king, right? not anymore.

peter coy told us money is not what it used to be. peter: what would it mean to have more private money? we are already seeing that happen to some degree with the death of cash. in sweden for example, it is only 13% of all transactions done in cash. the swedish central bank is looking at what happens in a world with no cash at all? the rise of cryptocurrencies is also, some people see it as a vision of, why do we need government money at all? but then the opposite is also out there, and that is what is fascinating. you can have such different ideas. it would be more government money because look at how badly the private sector seems to keep doing with all this lending, that the private money goes bad. and the fed steps in. another form of government money

is the reserves and the banking system. it used to be $1 trillion or so. the size of the fed's balance sheet has increased massively in the financial crisis, and still is very slowly shrinking. carol: i think it is important you bring up the financial crisis, because you are seeing this private money system works until it doesn't, which is what we saw in the financial crisis. is one of these systems better that we would not get to another financial crisis? peter: joe stiglitz does believe a government directed money supply, taking commercial banks out of the equation to some degree or having to be purely conduits and not decision-makers, that make the system safer. funny thing is, i also talked to john cochran, who is a conservative libertarian at the hoover institution, who sort of agreed with stiglitz on the idea of having government money in banks being very narrow. but for completely different

reasons. he sees it as a way to avoid runs on the commercial banks when there is a crisis, which is a problem now. carol: it is interesting because if we think about bitcoin, it would be the ultimate private money. peter: yeah. carol: but we have seen it very volatile. we understand just have that as a system does not quite work, at least not yet. peter: that is why some people say, how can you have a cryptocurrency with nothing behind it except its own rules? the value of bitcoin is down by two thirds from its peak last december. that alone is not to be a total knock on it. maybe it could be made to work. but it is not there yet. jason: consumer preferences also

driving change in the future of money. taylor: we spoke to max chafkin. he looks at the start of the so-called robo-adviser business. max: what is interesting about jon stein is he is a little older than a millennial, he is 38 years old. i think of the millennial as 35. but his early career happened during the run-up to the financial crisis. he worked for first manhattan consulting group, working on banks, on marketing stuff. he came away kind of jaded, thinking the banking industry does not pay enough attention to customers' needs, and started betterment as a response to that. basically, that has been very effective in term of betterment's marketing. they present themselves as

different from the normal wall street thing. the other piece of this is they have a website and an app, and they were early to this. jason: tell us about this rivalry that seems to be forming, not always a nice one, between betterment and wealthfront. wealthfront, formally known as kaching. max: kaching was a silicon valley startup. the idea was you could invest money in e-traders. you could put your money behind a guy with a clever investment strategy. kaching pivoted to a betterment approach, a similar version of what betterment was offering. we have seen that happen now with lots of silicon valley startups. stash, acorn. there are a bunch of these silicon valley companies. schwab, vanguard, pretty much every big financial institution has a robo offering. jason: how worried does jon stein seem with all that competition coming at him? max: they are talking a big game. jon stein and betterment's view

is they helped create this category. they are going to stick with their guns. there are signs there is a little bit of pressure on some of these robo advisories. wealthfront had a controversy earlier this year. it created its own proprietary fund, a risk parity fund with much higher fees. some people thought that as a way to drive extra revenue to the business, and wealthfront, because there was consumer outcry, had to pull back on that a bit. we are seeing ways in which these companies are under pressure where the competition is heating up. on the other hand, the category is relatively small compared to the overall amount of money in the wealth management world. carol: that is when you think about the growth factors. you said jon stein, you are not

going into cryptocurrencies, he is not looking to make loans. but you think of the trillions of dollars in 401(k) plans and institutional plans. is that where he sees the opportunity? max: he sees the opportunity, and a big amount of money, he would like to help manage it. but 401(k) is definitely one of the next steps. it is where most regular people have their savings, and betterment recently introduced its own 401(k) offering. this would be like your benefits manager would switch from an ancient financial institution to using a software-based approach, which is a little bit cheaper. again, it is friendly to the youth. so you could imagine companies that want to cater to younger, millennial type employees. they may use this as an enticement. jason: as i mentioned earlier, i was in london for a bloomberg conference. i saw the interview between john micklethwait and steve bannon. i also got to sit down with the head of global level management for deutsche bank, fabrizio campelli. i asked him about this greatest

wealth transfer in history we are undergoing. do you know who is at the heart of it?pesky millennials like you. i learned you like to be catered to a little bit differently. fabrizio: regulation is causing us to become more of a channel, as opposed to having the likely overlapping role as a chairman, distributor. it is causing us to be more product neutral than we were. this means we need to reinvent ourselves for new clients as a competitive channel in the face of many competing channels. we become a lot more product neutral. essentially, if you apply this to all wealth managers, it is a challenge to the suppliers who need to decide how to correct distribution methods. jason: does that change the way you structure teams? does it change the way that people are deploying into various parts of the world? fabrizio: very much. they are fundamentally different clients.

even if the demographic is slowly picking up a lot of wealth, it is a relatively small population of global wealth. they are an incredibly different consumer of the services we provide in many ways. they like to deal with us very differently. they favor different parameters and criteria in choosing a financial service provider. first of all, 70% of them choose pricing and transparency as the key indicator of how to choose a bank to bank with. 67% of them choose their banks over performance of the financial services provided. about half of them favor their bank based on the technological platform they provide access to. and their parents or their grandparents still actually value normalcy, the history with the bank, the relationship, having gone through the first loan together, getting money for their first business venture in a new market. 66% of our clients in all of

management globally are about over 60 years old in average. when two thirds of your client base is still anchored to a certain dynamic and behavior, while a new generation of clients, 40% are millennials, under 40's. they choose their suppliers differently, we need to change our appearance. that consists of two changes. the people, but also the technology. jason: is your bias toward partnering, acquiring, building quickly? fabrizio: there is no uniform blueprint, but i can give you the sense of how we are dealing with this. in traditional service, anything that is truly technologically

enhanced, we partner up with people that are better at technology than we will be as a bank. the notion we can become technology companies is misguided. we enjoy certain competitive advantages over disruptors, which we want to build upon, but we will never be able to replicate the incredible effectiveness at developing and bringing to market new technological ideas that some of these disruptors in joy. that is where we should always draw the line. when we identify new products, new services that may be adjacent to banking that are relevant to millennials, we want to capture the competitive advantage. taylor: businessweek uncovers the biggest supply chain hack against companies. that was last week's cover story. and we hear from microsoft ceo satya nadella on software security. jason: plus, betting on wellness that works. we hear from the company formerly known as weight

watchers's president mindy grossman. this is bloomberg businessweek. ♪

♪ taylor: welcome back to "bloomberg businessweek." i'm taylor riggs. jason: join us for "businessweek" on the radio from 2:00 to 5:00 p.m. wall street time. taylor: and online at businessweek.com, and our business app. jason: ww, the company formally known as weight watchers, is shifting its focus from weight loss to overall wellness. taylor: our own carol massar spoke with the woman driving these changes, ww president and ceo mindy grossman. mindy: we want to be the most livable partner that you have on the planet. we do not dictate what you have to eat. you can eat anything you want on our program.

but it fits into your life, and i think that is really important for people today, this idea of livability, this idea of your family healthy with you. what we talk about is if you have amazon for shopping and netflix for entertainment and spotify for music, we want to be your everything app for wellness, but we also want to support you with community. an ecosystem is the way you need to think about it. we are science led, technology enabled my community supported. carol: i know you are on alexa. tell me what other things you need to embrace, what you need to do. mindy: we have invested significantly. we are a technology experience platform with a human experience overlay. that has been important. i think the brands of the future will take technology plus meaning and help people live more fulfilled lives.

and that is what we are trying to do. and we are trying to give people more and more value for that. we have a specific group, and the more we can personalize what we do and how we support, the more valuable we will become. those technologies and capabilities and that digital community are why our retention is at an all-time high. our subscriber base last quarter, we added one million year on year. people are seeing the value in what we can provide them over a longer-term. it is a journey, not a beginning, middle, and end, particularly in health. carol: what percentage is that roughly? mindy: about 30%. carol: can you continue that? mindy: we believe the more we can recruit by getting people to understand how meaningful we can be in their lives, retention is very important as well. carol: right. mindy: and our ability for people to continue to have success on the program. and what we are also seeing in terms of that retention is not only are people inspired, but they want to inspire other

people to lead healthier lives. carol: where is the most demand? mindy: if you look at our subscribers, they all have the app. about 1.6 million of those also choose to go to face-to-face meetings. but the community called connect is also in the app. that is like our facebook, instagram digital community. we believe that is very much responsible for our retention being at an all-time high, because people want to share. we also know that when people share and they do things together, they have that much more success. carol: got to ask you about oprah. it has been a big factor for the company in terms of her

investment into it, but you have obviously been a big factor in the changes you have made in the last year. would you like to see her more involved in advertising? is there another role? mindy: oprah has been fantastic. i like to say, who wouldn't want oprah as a board member? we are talking right now about going in to 2019. she has been incredibly engaged in what her part will be in that, and she believes in everything we are doing. it is why she invested in the company, because that was her belief. my joining the company was because i also believed in what this company could do and the evolution of being a partner in wellness. and that is going to be a big factor for both of us. taylor: coming up, we sit down with microsoft ceo satya nadella. jason: on what he calls the silicon and supply chain, a response to last week's businessweek story "the big hack." this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. taylor: i'm taylor riggs. you can listen to us on the radio on siriux xm, channel 119. also on a.m. 1130 in new york, 106.1 in boston, 99.1 f.m. in washington, d.c., and a.m. 960 in the bay area. jason: also in london on dab digital, and of course on the bloomberg business app. last week, bloomberg reported chinese hackers implanted tiny microchips in the services that may their way into data centers of some of the world's biggest companies, including amazon and apple. and supermicro, the company at the heart of this hack, are disputing the reporting. taylor: in an exclusive interview with caroline hyde, satya nadella reveals how microsoft is protecting itself against such attacks.

satya: when it comes to operations security, software supply chain, it is all about every day being in practicing. in that case, we are confident we had no exposure. but we are constantly, we have a lot of people dedicated to it, a lot of technology dedicated to it,, a lot of rigor and process dedicated. caroline: do you think the legislative agenda is where it should be? regulation is where it needs to be when it comes to privacy of individual data and when it comes to security of company data? satya: we are already living in a world where, for example, i think the secular movement allowing individual data is that we should think of privacy as a human right. gdpr legislates that. we have done a lot of work implementing that into our products. we have taken some of the rights

from gdpr globally. i think it is something the united states will look at. we know california has looked at it. we hope there will be more of a national privacy law, because we don't want increased costs that will harm the small businesses, not large companies like microsoft. but if you want a level playing field, i think having a legislative framework that can reduce cost to the adopted is a very important thing. the other is the cloud act. i think the united states, if we are to go to the supreme court and fight the government on this case, we did in a bipartisan way work with the legislative bodies to get the cloud act passed. i think that really creates a real equilibrium of how nations can balance their need for privacy on one end and national security on the other end. it is something i hope will be bilateral deals between the united kingdom and the united

states and other governments, which is very needed. jason: staying with technology and security, digitizing prison mail. last month, pennsylvania became the first state to eliminate personal mail in its prison systems. taylor: instead, families send mail to st. petersburg, florida, where it is inspected and converted into a searchable electronic document. here is editor jeff muskus with a story from this week's technology section. jeff: pennsylvania became the first state in the union to eliminate the delivery of personal mail to prisoners. in the state's 27 prisons, its roughly 48,000 prisoners no longer get letters or birthday cards from grandma. those letters and cards and so on are sent to a florida company

called smart communications inc., which tears them up into pdf size pages and scans them and will print out copies for the prisoners to receive by hand on an 8.5 by 11. the other big draw for this among the prisons is two things. they say it will help keep contraband out of jails -- carol: drugs specifically, right? jeff: that's right. they are not as quick to trumpet this, but this market mitigations database will keep the mail on a database in perpetuity. carol: i felt like this story was a reminder of how much of what goes on in prisons, whether it is health care, phone calls, mail, is being done by private

companies. jeff: absolutely. of the roughly $80 billion that goes toward the american prison system every year, about half of that, to some estimates, is at least private companies. carol: do we have an idea how expensive this is, this service to digitize mail? how expensive it is for the present system in pennsylvania? jeff: they are already experimenting with smaller systems in individual prisons in other states. pennsylvania was not the first. but for pennsylvania alone, the contract amounts to $360,000 a month. jason: they are pretty happy with it so far is what i get from the story. what is your take? jeff: the prisons seem to be happy with it. the prisoners, less so. the story opens with a prisoner

who has been in jail for 26 years, who says that the handwritten letters and cards she was getting from family members were a key lifeline, and it is not the same to get a print out when you can no longer tell what the design on the card used to be, if it was mashed onto that scanner, and you cannot feel the handwriting of your own loved ones. taylor: bloomberg businessweek is available on newsstands now. jason: and also on our mobile app. your must-read this week? taylor: i like the betterment ceo interview. if we look at the industry as a whole and what robo advising and cost-cutting in terms of fees have done, it is probably difficult for some companies to make money, but they are attracting millennials. jason: timely with what was happening with the volatility this week. my must-read was this package on pot. i loved the numbers the writers were able to put around it, the recreational, the medicinal, and the investable. more bloomberg television starts right now.

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