♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. we're joining you from headquarters in new york. carol: this week, the future of retail. e-commerce giants amazon and walmart are after global expansion. next stop on the battleground, india. jason: plus, sears files for bankruptcy. why eddie lampert couldn't keep the retail giant afloat. carol: first, to the politics section. it is a story that has dominated

the conversation this weekend that is disappearance and the suspected killing of a journalist in istanbul, which has set off a geopolitical reaction as governments are looking for answers from riyadh. jason: it is a fast-moving story. reporters on the ground throughout the region. the story is titled "damage control in the kingdom." riad hamade was here in new york this week and helped us put into perspective. riad: right now, i think it is in limbo in the sense of the plan, vision 2030, that the prince has espoused. he wanted to transform the country economically and socially. i think that a lot of people are now questioning whether he is going to be able to push through with that. you see efforts also by the u.s. and you see the trip from pompeo. you get the sense that one aim behind all that is to ensure that it does not derail completely some of the changes that the crown prince tried to

bring in. carol: what does he mean by transformation? i am thinking, is this like china, embracing to some extent certain market principles, but yet the government is still very much in charge. riad: i think that is not a bad comparison, actually. china is on a much bigger scale, but he never wants to transform or change the political system in saudi arabia. everything he said was he wanted to entrench the rule of his family, his own rule. he really focused on the economic side of things, the social side of things. and initially, mainly on the economic side, he hinted he wanted to liberalize the social aspects. when i say liberalize, nobody is talking about making it a liberal country where you can wear what you want. but just a little bit more

relaxed. and he has done some of that. carol: is it shame on all of us for misreading things? we have been excited about the aramco ipo and thinking things are moving much more rapidly than they are. riad: i don't know if it is shame on us. we have written a lot about the fact that things have turned more authoritarian in the last couple of years. we have written that people who do not necessarily agree with some of the policies have been told to get off twitter or not say critical things on twitter. we also have written about arrests that have happened and been heavily criticized, especially after the women activists were arrested. there was already heavy criticism coming in. nothing like this now, but it was not that he is getting away scott free on this. carol: how will ultimately, though, the disappearance of

this journalist in terms of how it plays out -- it can play a couple different ways whether or not it directly -- that saudi arabia and the crown prince is seen responsible for his death. how will that change the future? in terms of the global relationships with saudi arabia? riad: i think it is going to be a factor now going forward, and -- in every company, every businessman going into saudi arabia, it is going to be something they, at the very least, ask about. whether they come to the conclusion and say we do not want anything to do with this, or, ok, it happened, but this is still an opportunity to make money, i don't know. we will have to see. let's remember, the saudis, the turks, and the americans are clearly trying to figure this out, to figure a way out of this

without a major upheaval. how it will end at the moment is anybody's guess. i think this is going to remain something that people -- it is stuck in people's minds now. people years from now are still going to remember this and if you are talking about investors, they are going to wonder. they are going to wonder whether this is something that can happen to anybody. if it is to a journalist in a consulate. jason: you also wonder what sort of questions the companies will get from their investors. riad: exactly. i think this is what we are hearing already. the banks and big ceos got calls, people asking questions. i think that is not an easy thing where you snap your finger and it goes away. jason: we are here with editor joel webber from

"business week." joel, an interesting week. we heard from riad about what is happening in the middle east, the global implications. how do you weave this magazine together? joel: this is the most frightening story any of us have heard about for a while, and we are still trying to figure out what it means. but this is an opportunity to step back and make this be more about geopolitical stuff. the saudi-u.s. relationship has been something that has lasted for decades yet something like this becomes a test of it. turkey, which is not known for human rights activists, it has become a flashpoint in all this because so much we know about this situation comes from their intelligence agencies. carol: the full implications are unknown. let's stay with politics, although much closer to home. in two weeks, u.s. voters go to the polls to vote in the midterm elections. for the democratic party, voter turnout may be the key for taking seats from the gop. in georgia, that is front and

center between stacey abrams and brian kemp. here is margaret newkirk in atlanta. margaret: there are allegations of voter suppression, allegations of cheating, all kinds of things going on. stacey abrams is trying to ride a wave of minority new voters in the state she hopes will bring her to victory. carol: it is interesting. i think she has been preaching this for a couple years, playing into changing demographic shifts, especially in atlanta. so many people have moved in, and trying to get the minority vote. margaret: that is what democrats are hoping. plus, there is the blue wave and the year of the woman. all of those things possibly making it more potent. it has been promised before. people expected it to deliver in 2016 and it did not. jason: early voting started on monday. what are we hearing at all about turnout?

obviously, that is going to be the key indicator. margaret: the first day was monday, and turnout was triple what it was in 2014. jason: still here with joel weber, editor of "businessweek." the midterms looming large. how do you cover them in the magazine? joel: we try to find case studies of where is a race that is going to be highly competitive? we think this gubernatorial race in georgia is one of them. stacey abrams could be the first female black governor in u.s. history, and she is going head-to-head with brian kemp, who is straight out of an americana ad. he has explosions in his ads and shows off guns. stacey abrams represents what democrats hope will happen, this massive demographic shift that should benefit them. it is this massive test. the early turnout seems favorable. it is three times as much as it was a couple years ago like we learned. but now it is a question of what can be sustained.

it is going to be close, no matter what. everyone agrees. it is one of those case studies i think everyone will be watching for. carol: i love the magazine because you are staying on the news in what is going on in the middle east and midterms, but you do a special section on retail this week, and it too is in the news considering the sears bankruptcy. joel: that is the best part of this. we can look way back in american history and say, sears invented what retail would look like for america. it helped build malls, and you could order a house from a catalog and it would get delivered to your property somewhere in america. boy, those days are gone. what is the future of retail going to look like now? one of the stories that is in this, what is the future of retail? emerging markets. emerging markets with 1.3 billion potential customers is india. it is amazon versus walmart, modern-day sears going head-to-head investing billions

in india, and they are neck and neck trying to get market share. jason: coming up, we will have more about that story from brad stone. he went to india and has great details. joel: it sounds like a great job. jason: you have a great job, too. joel weber, thanks so much. coming up, it was spooky quiet until markets were hit one week ago with a storm that came out of the clear blue sky. what changed and why? carol: we just talked about sears finally selling out. we will have more on that story. jason: this is "bloomberg businessweek." ♪

jason: -- carol: welcome back. i'm carol massar. jason: and i'm jason kelly. join us for "bloomberg businessweek" every day on the radio from 2:00 to 5:00 p.m. wall street time. you can also catch up on our

daily show by listening to our podcast. carol: and you can find us online at businessweek.com, and on our mobile app. president trump targeted the fed again, calling it his biggest threat. its monetarymed policy for last week's sharp selloff in the stock market. we spoke with peter coy about the nasty surprise and what is worrying investors moving forward. peter: the stock market has been remarkably calm. the five calmest quarters of the last 20 years have come since the beginning of 2017. people got used to the dow and s&p fluctuating in tiny little bits, trending upward over time. out of the blue, in the first half of october, there were two days in a row where the s&p fell a total of 5.2% in back-to-back sessions. carol: everybody kind of woke up. peter: where does this come from? it is as if a hurricane hits the shore that had not been on the radar. not that it was the hugest

decrease ever, except in terms of the change from the background. according to goldman sachs calculations, the ninth biggest spike in volatility from a background level. jason: break it down for us. what did you see in those couple of days as you talk to people? market experts everywhere scrambled to explain it but also to do the big sweeping, what it means pieces for where we are and where we are going in the near term because we are in the midst of the longest bull run in history. peter: right. people naturally jumped for whatever explanation suits their proclivities. the democrats immediately said, this is trump's trade war finally showing up, scaring the market. trump turned around and blamed the federal reserve. of course, he has been on a campaign to complain about the

rising interest rates, the federal funds rate put on by jay powell, his pick to chair the fed. and then we had other people talking about oil prices or inflation and so on. so when i started asking around, it was funny because some people said, trump has a point here in that high interest rates probably are a factor in the stock market. trumpo not agree with that the high interest rates are wrong or that the fed is making a mistake. many people say that with the economy moving this hot, we have 3.7% unemployment, we have a record number of job openings, over 7 million, that it is appropriate to raise interest rates. you don't want to let the economy overheat. if that happens, you get too much inflation and the fed has to extinguish the inflation by

cranking up rates which causes a recession. the goal is to raise rates. it is a tricky process, but to raise rates just enough to keep the economy growing, and yet not overheating. carol: for more on the markets, here is michael novogratz in an exclusive interview with eric schatzker. jason: he is one of the prominent investors in digital currencies. they started their conversation on the crypto craze and bitcoin. michael: i do not see us breaking 10,000 by the end of the year, but if the institution starts coming in, it will put in new highs. eric: you trade crypto. you go long you go short. , how do you feel about it right now? michael: we are long. bitcoin has held really well, above 6200. it gets you scared. there seems to be support there. what is interesting is in the last six months, people have divided the world into bitcoin and everything else. and bitcoin seems to have vested

with restored value. eric: except last wednesday. bitcoin drops 5%. what is up with that? michael: it will not be without volatility. we are still a very young asset. eric: mike, you are a macro man at heart. i want to talk for a moment about the markets. you cannot ignore them when you andthinking about bitcoin you still run a macro operation outside galaxy digital, if i am not mistaken. if you look at the s&p 500 at $2765, the 10 year at 3.15%, high-yield spreads at 3.5% over, dollar index at $95, i could go on. what does that tell you? michael: we have had an unbelievable run for nine odd years in equity markets. breadth is getting narrower and narrower. trump has got a big election coming. my instinct is he gets beaten badly in the house.

but even if he doesn't get beaten badly, even if he just gets beaten, the trump trade which drove this last run out is degraded a bunch, because he is going to have a house that is going after him like chihuahua dogs, nonstop barking, investigations. his ability to get anything done, we go right into the 2020 election. i think you are losing political support for the market. if you look at the rate charts, 3.5% looks like the next step, then 4%. we have got inflation showing up. you look at amazon raising their own minimum wage, everyone will be forced to move that way. oil prices going towards $100. short rates, short stocks. i think we put in a cycle high in equities. we will see. that is a big call. that is a big call. i could be wrong, but it feels that way. the stock market looks very vulnerable right now. i think short stocks and short rates is the right trade,

certainly going through the election. eric: it did not feel last week like election nervousness was the catalyst for the selloff. what is it going to be? michael: it was rates. and i think you have oil, rates, the election. there is no way the election -- and less trump's when the house, i would change my mind. i do not see it happening. maybe they will do a little better in the senate, but i have a feeling you will see the blue wave show up. i think he loses the house. you lose the political support you have had for this market. everyone says, tax cuts and regulation, now you have a president who will literally be attacked 24 hours a day. carol: how eddie lampert rode the worst trade of his life, sears to bankruptcy. , jason: the future of retail and amazon's quest to win india. it is this week's cover story. carol: this is "bloomberg businessweek."

♪

jason: welcome back. i'm jason kelly. carol: and i'm carol massar. you can also listen to us on the radio on siriux xm, channel 119. and on a.m. 1130 in new york, 106.1 in boston, 99.1 f.m. in washington, d.c. jason: and a.m. 960 in the bay area. as well as in london on dab digital, and the bloomberg business app. carol: in the finance section, requiem for a retail heavyweight. sears finally filing for bankruptcy. take a look. i have to say, i grew up with the sears catalog. you cannot wait for the holiday catalog. it was such a great thing to get and go through all the toys. this is the fall of sears, but specifically the sears wish book, which came out around the holiday season. take a look at the number of pages. what was it, close to 600 back in the late 1960's.

you can see how it trailed off. jason: it peaked when we were kids. i remember dog-earring the pages, circling it, and delivering it to my parents. carol: it is a big indication of how retail shifted away from sears. was not exactly what people wanted. a change in its destiny. jason: let's get another look at the numbers, so here we have taylor riggs. taylor: while you are looking at the decline in the pages, i am taking a look at the decline in the market caps and share price. let's look at the market cap on the right-hand axis. these are the white bars. we have gone from $30 billion market cap, falling now to about $44 million. this does coincide with the drop in the share price we are seeing on the left axis in the blue line. share price at one point, $120. you are now getting $.40 on the dollar. as we know, eddie lampert became

ceo around 2013, could not do much to turn around the value of the company. carol: there was so much hope and optimism when he took it over, but it was a decline pretty much from its peak over the last decade. great chart. thank you so much, taylor. it was hardly a surprise, but that does not mean it was a simple story. that is true when it comes to sears. there are a lot of moving parts over the last decade. i talked to reporter kathy burton about why eddie lampert could not keep sears afloat. kathy: he started his fund when he was 25 years old, but he already had these very big people as investors. he had george soros, richard rainwater. he had all these people. and he was a very, very good stock picker, a value guy. and he made these massive returns, like over 20% until the early 2000's, over 12 or 13 years. he made a lot of money. but then, the switch came when

he decided he could be an operator of the company. and i talked to one investor who said, i shorted that stock, it doubled on me, and this is the only time i have ever done this, but i held on because i knew it was going to zero. carol: because he changed his philosophy or his investment strategy, as you said becoming an operator, that is when he started to lose investors. kathy: exactly. carol: i think you said his fund was $15 billion? kathy: now it is a little over $1 billion. carol: what went wrong with the sears investment? about value in the properties, where the stores were. what happened? kathy: there were a lot of people who jumped on as shareholders after eddie did the merger because they thought there is a lot of real estate value.

there are people jumped in, but over time they realized he was bleeding the company. he did a lot of things under standard value investor maneuvers. for example, he did a $5 billion share buyback. this was when the shares were near their highs. it was completely a ridiculous thing to do. it made no sense. took, were the moves he did he benefit typically from those moves? kathy: yes, because as the biggest shareholder, he would get, when they spun off the company, he would be the biggest shareholder of whatever they spun off. they spun off a group of real estate and he became the biggest shareholder of that. he did benefit. i think what happened was he thought he would be a good operator, and when that did not turn out to be true, he tried to position himself to be in the best position possible for what

came. jason: still ahead, the modern space race. a growing number of chinese startups. carol: plus, an e-commerce battle royale on the other side of the globe. here is chris nosenzo on the cover image. jason: this is "bloomberg businessweek." chris: we have this story about amazon and india. it is a new market for them. they are trying to figure out how to get into it. we sent a photographer to shoot a lot of different locations and situations. these photos of these two agents delivering packages on a boat felt like it got you into the story and really explained the measures they are going to. it was this interesting, arresting image. we have a great photo so we don't have to do too much work with the display or the design, so we kept it simple and direct. and i think it works quite well. ♪

♪ jason: welcome back. i'm jason kelly. carol: i'm carol massar. still ahead, the devil instagrams prada. the legendary fashion icon is making a comeback on social media. jason: plus, the backup cloud is held together with tape, and is in trouble. why amazon, microsoft, and google are worried. carol: let's get to this week's cover story. the battleground for e-commerce supremacy has shifted to india

where amazon and walmart both see opportunity. both retail giants are spending billions of dollars to turn indians into devoted customers. jason: but a proposed law in india could force changes in how those companies operate. bloomberg's global technology senior editor brad stone joins us with details. brad: 1.3 billion people, the second-most populous country in the world. china is in the iron grip of alibaba, so india is the big opportunity. it is a decentralized retail environment. i went to india. this is what surprised me. a chaotic glory of stores and carts and animals running around, and infrastructure that needs a lot of work, and here is amazon and walmart via this acquisition competing to dramatically modernize this economy. jason: one of the things you talk about is that india by virtue of what you just described, skipped a few steps that we saw certainly in the

united states around how people buy things, ultimately. the retail chain is not in the same evolution. brad: the department stores and malls and big discount stores like walmart, it never really happened there. there are some moderate size players, but for whatever reason, probably having to do with legal structures and a cash-based economy and poverty, it did not happen. but there are very cosmopolitan populations in the major cities, and that is where amazon is starting, where flipkart started 10 years ago. flipkart, founded by former amazon engineers who started selling books, trying to copy the jeff bezos recipe and proved that there was a market. now about five years ago, amazon came in and started competing head-to-head, fueled by this amazing capital market. flipkart was able to raise a lot of money from softbank and tiger

global and other companies, and it was off to the races. carol: but amazon wanted them as well? brad: flipkart was independent. amazon started investing. flipkart started to wobble a bit. they raised money from microsoft and ebay, and then amazon actually started to talk to flipkart, these secret talks we report in the story, and walmart got wind of that. walmart had talked about investing in flipkart in the past but it had never happened. they started bidding against each other and the value of flipkart went from $11 billion to $20 billion. amazon made the higher offer, which will surprise a lot of people. but the flipkart board went with the walmart offer because they thought it would be easier to be efficient, they would not have the antitrust review, which the amazon guys were confident they could get past. but flipkart went to walmart.

the walmart ceo visited flipkart and gave a pep talk. as we speak, both companies are in their big holiday periods, because diwali is coming in india. carol: jeff bezos is also a member of the solar system's most exclusive club. they are dominating the industry of commercial spaceflight. jason: now they face competition from a rival with deeper pockets, china. here is max chafkin. max: what china has been doing is trying to encourage private sector companies to compete with the big aerospace giants and the big national space agencies. carol: the government has loosened regulations to loosen the monopoly the government has had on this space. max: as we write in this issue, there are three of these upstart rocket manufacturers. they are all kind of aping the

spacex model, taking the launch market. they are starting with lighter, low earth orbit launches rather than trying to do the big, heavy launches, which is what spacex can do now, and following the elon musk playbook. if you take a step back, this is what china has tried to do in other parts of the industry, encouraging the manufacturers to get into developing their own intellectual property, and trying to take this model of transitioning from a lower end manufacturer to developing actual intellectual property. jason: one of the things interesting to me is tying it into the belt and road initiative. this is part of a bigger macro chinese effort, as you say, to really evolve and expand the economy. max: when you turn the clock back to 2003, 2004, when elon

musk was starting spacex, this was a brilliant move by nasa to put a little bit of money behind these rocket companies, because what they were trying to do was lower launch costs. at the time, it was expensive to send anything into space, so they gave these contracts to and -- to elon musk and other people, including jeff bezos, to launch into space at a lower cost. it has been incredibly effective. spacex has an enormous share of the market because they are so cheap. and because telecommunications is an industry of strategic interest to every country, china can get its own launch costs down and it will be a huge thing for their economy and further defense interests and strategic position. jason: as you say, really positioning itself in the market as one of the only big alternatives to spacex. max: we saw recently the russians, who had been a major

player, basically getting out of the market, focusing more on space services, designing satellites, because they cannot compete with the chinese and elon musk. the other thing that is interesting is there are spacex clones in china, but also in the u.s. it is not as if the chinese are the only ones who have decided this was a good idea. we see this worldwide. carol: still ahead, a deep dive into demographics. how real estate investors are using data on seniors to drive decisions. jason: plus, we hit the mountains with a test of the new rolls-royce suv. this is "bloomberg businessweek." ♪

♪ carol: welcome back. i'm carol massar. jason: i'm jason kelly. join us for "bloomberg businessweek" every day on the

radio from 2:00 to 5:00 p.m. wall street time. you can also catch up on our daily show by listening to our podcast. carol: and you can find us online at businessweek.com. jason: in this week's technology section, a brutal legal battle between sony and fujifilm has big tech scared the backup system, which is actually reels of magnetic tape, is at risk. carol: who knew? let's get more from susan decker. susan: the backup cloud is magnetic tape. it is not quite the cassette tapes we remember from music or the vcr for movies, but it is the same underlying technology that has been around for 100 years. you still go old school when you want to make sure stuff is saved for posterity. jason: now it is the subject of a massive legal battle. when i saw your name on this story, i thought this is going to be a juicy one because this means the companies are going to war. it is quite a battle here. susan: it is.

there used to be six manufacturers of these magnetic tapes. these are the equivalent of a cassette tape, but different in terms of looks. there used to be six of them, now there are only two, sony and fujifilm. fujifilm is the larger of the two. they have been going hammer and tongs at it for the past two years. we are starting to see movement where we are going to get decisions on whether one or the other might be banned from the u.s. market. carol: what are the charges against one another? susan: there is a basic technology, a standardized technology known as lineartape open that has been developed by ibm, hewlett-packard, and quantum, the companies that make the drives and libraries. but they need the tapes to actually put the data on. these companies have each come up with patented features to reduce the noise or make it a little bit less susceptible to humidity, and they patented those. they have each said, you are

using my technology, and have filed complaints against each other with the international trade commission, asking the commission to shut the other one out of the market. jason: i want to back up one step to talk about the fact that what we are talking about here is your data, our data. so much data that is being stored on a daily basis. you do a nice job of talking about the sheer volume of this. help us understand what we are talking about. susan: every day on the internet, there is an exabyte of data. that is the equivalent -- that it is about 300 times the total holdings of the library of congress created by the entire internet at least once a day, sometimes more than that. a lot of that data ends up in the ether. it is your text messages or things like that.

but for financial data or health records or scientific research, there is a large amount of that that has to be kept. some for regulatory purposes, like health records or financial records. and some of it has to be kept because they do not know what to do with it, like the research data where scientists would go back and say, this was stuff we worked on 10 years ago that has relevance now. let us find the underlying data. you need a place to store that. you do not want it attached to the cloud, because the cloud can be vulnerable to hacking. most of the time it is secure, but if you get a software bug or malware that gets into a program, it could cause problems. wherewas an incident something disappeared. the way they were able to recover is we back everything up on tape. they go to the tape and they download it and put it back up into the system. if it is disconnected from the

internet, it is stuck in a vault in a cave in pennsylvania, then you are not going to be as susceptible to hacking. that is the overview of what the market is going on. carol: staying with data for a moment, m.i.t.'s age lab is partnering with a real estate firm to use demographic data for seniors to make decisions. jason: we caught up with al rabil and joe coughlin. here is what they had to say. al: we are investing primarily in medical offices and senior housing, health care real estate. it is the same primary dynamics that were the drivers in our investing in student housing, meaning demographically driven, highly fragmented sectors that have operational intensity. we look for a first mover advantage, and really look for outside knowledge that gives us the capability to generate outsized investor returns. we're excited. the vast majority of our investments the past five years have been in those sectors.

we see significant room moving forward. carol: that brings us to joe and the m.i.t. age lab. you have done a lot of research and work on demographics and what that tells us about what is going on in society and what the demands will be. joe: they say demography is destiny, but it is not necessarily history. one of the things we are looking at is that new expectations of an older generation are creating new demands. as i write in my book, there is more technology, more education, more money, and greater expectations to live longer and better. carol: that brings us to your developments. al: on the senior housing side, we are looking at experiential dynamics. we are not just looking at a place for people to age. it is more about experience. i think the expectations have been ratcheted up. this sector, while having been around for 30 years, is a very nascent sector. the first 15 years was not-for-profit.

the last 15 years you have a for-profit model. if you put 2008-2009 and the downturn in there, you have 12 years of operating history in a sector that is $1.5 trillion in value today and likely to double in the next 10 years. jason: you are very much in the for-profit business. you have got institutional and personal investors who want to make money on the other side of this. where does the money come from? how do you make money here? al: the money comes from us taking investors' money. we are typically buying assets that are either transition assets or under managed assets. we recently acquired a property in brookland from the jehovah's witnesses for $202 million. we are in the process of putting $100 million into that building and converting it into the highest end senior housing that exists in this country today. that will be 275 units. of lower have use

manhattan in brooklyn heights. that will be a home run not just for tenants, but financially for us as well. carol: financially, it makes more sense to target senior living or senior audience than it does the younger audience? al: we see enduring demand dynamics. you have got an american turning 72 years of age every seven seconds. in raw numbers, that is 40 million americans 65 and older in 2010, going to almost 80 million in 2030. that is the backdrop. that is not the end of the story. joe: 70% of discretionary income in the united states is controlled by the 50 plus. the 60 plus are the world's third largest global economy. this is not your grandfather's old age. they expect more, and they will buy it. carol: coming up, can we call it a prada bounce back? can we? details on the company's attempted turnaround. jason: plus, an off-road test

drive of the first ever rolls-royce suv. you're going to want to see it. this is "bloomberg businessweek." ♪

jason: welcome back. i am jason kelly. carol: i'm carol massar. 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. jason: and a.m. 960 in the bay area, as well as in london on dab digital, and the bloomberg business app. in the features section, miuccia prada and her husband patrizio bertelli oversaw prada's rise as a global luxury powerhouse. now, struggling to turn the company around after three years of declining profits. carol: i spoke to stephanie baker in london, and she told us how the brand is making a comeback on instagram. stephanie: they had a perfect storm.

in 2015, the slowdown in china hit, partly driven by a crackdown on corruption and lavish gift giving, which impacted a lot of luxury companies. that was the same time i think the luxury fashion industry really changed. instagram took over as the main trendsetter in terms of determining what is fashionable, taking over a role held by "vogue" and "elle" for many years. it was at this point that prada thought it should have, realizes now, it should have embraced all things digital. both a coordinated social media campaign, as well as rolling out online shopping, e-commerce sites globally. i think both things really held them back. in the past year, they have gotten their act together, taking social media much more

seriously, have started rolling out a global network of e-commerce sites selling their whole collection online, and getting caught up to where the rest of the luxury industry is now. carol: i find it is interesting, and you point this out, you think about prada as a brand. they were always several steps ahead of the other luxury brands when it came to trends. it is kind of surprising they missed this trend, the social media trend. stephanie: it is. and it is hard to determine exactly why that is. both miuccia prada the founder and her husband and co-ceo patrizio bertelli, who we both interviewed for this story, they are a bit of rebels in many respects. i think they dismissed the whole social media world initially as something irrelevant to what they were doing. they have a very intellectual approach to design. they are very bookish and

philosophical in their whole approach. and i think they did not realize how instagram was changing the world's fashion. i think introducing their 30-year-old son lorenzo to the business, i think he helped explain to them the importance of social media. he is 30 years old, has his own social media profile from having been a semi professional rally car driver. so i think his decision to finally join the family business helped move the company forward on the social media front. jason: from high-end passion to -- fashion to high-end cars. carol: hannah elliott got to take a spin in the rockies in the latest rolls. she relived the experience, and no doubt, she has the best job ever. hannah: it is exactly what you would expect from a rolls-royce off-road. you have the same magic carpet ride you get in the phantom or the ghost, except you are up

even higher and going up the side of the mountain. jason: what is the market for this? you said you went out to idaho? hannah: jacksonville, wyoming. jason: what was it like driving it in those conditions? hannah: it is a little counterintuitive at first because you think, rolls-royce, very urban, very cultured or cosmopolitan, then you have it in this outdoor setting. but then when you remember, harrison ford has a place out there, sandra bullock, kanye west, all of these world leaders, the head of the world bank has a place out there. there is a lot of money out there. rolls-royce was very canny when they said we will put our off-road vehicle where people who can afford it will want to drive it. carol: that is where they have offices or a show room? hannah: they have a show room, but they did their launch there. they have a very small footprint, but the launch was there. jason: give us the numbers.

the cost, the power. all the bells and whistles. hannah: this is a v-12 suv. the price starts at $325,000. it's 563 horsepower, so it's very powerful. i think back to the price, most will cost close to a half million dollars with options and customization. carol: tell us what is standard on a rolls-royce suv, and what are the options? hannah: standard on the cullinan as with many rolls-royces, you have the umbrellas in the doors, you have the deep pile lambswool carpeting, the starry night sky headliner that looks like a constellation, you have the champagne cooler in the rear seat, you have the picnic tables that are like beautiful wood that opens so you can work, massage seats, all of that. massage seats i think are an option. all of those come in the cullinan.

and on top of that, especially for the cullinan, you have this new rear door that opens like a hatch, and there are two seats on the rear that you can tailgate. jason: i love that the back, the trunk is separated, unlike a lot of suvs because you don't really need to be exposed to people putting your luggage in. hannah: exactly. this is a very big thing. do not let the valets disturb you. we're going to separated. jason: one of the things you point out, which i understand is just part of the rolls-royce mystique, is that it is unbelievably quiet. hannah: it is kind of eerie in a way. the only sound you hear is the sound of wants hitting the windshield -- sound of bugs hitting the windshield. and it is very surreal when you are off road. it is tilted up like this because you are going up at such

an incline, but still perfectly smooth, perfectly quiet. carol: nice ride? hannah: incredible. it has six off-road driving modes, and this is the first ever four-wheel-drive from rolls-royce ever. engineered by a woman, actually, which is great. carol: "bloomberg businessweek" is available on newsstands now. jason: and online at businessweek.com and our mobile app. what is your must-read? carol: i like the story susan decker wrote. it reminds me that is a backup cloud and it is held together by tape. who knew? it is interesting there are very few companies in the market and legal battles going on. i learned some things. jason: it is a good story and we did learn a lot about it. but yes, i was making fun of you. my must-read, india. brad stone literally wrote the book on amazon. this is amazon, walmart, and one of the biggest economies going at it. some opportunities and challenges. carol: when i grow up, i want to be hannah elliott because i want to go rough roading in a

rolls-royce suv. jason: more bloomberg television starts right now. ♪

david: when you are the head of the imf -- christine: i take in store for the hard days. david: how did you get to be the head of the entire firm? david: it was synchronized swimming. you became a member of the national team of france. christine: i did european championship and many international things. david: did you experience a lot of discrimination? christine: i was told i would never make partnership because i was a woman. >> would you fix your tie please? david: people wouldn't recognize me if my tie was fixed. just leave it this way? i'