tv Bloomberg Business Week Bloomberg October 27, 2018 3:00am-4:00am EDT
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the death of a saudi arabia journalist continues to stir up international outrage. the senior reporter for europe and middle east wrote about it. he joins us to talk. >> he was the president of turkey. that has moretry journalists in jail than any other. there was the statement made about the washington post columnist that was killed and rather grim circumstances. carol: what are people saying speaking up for human rights and then to have turkey leading the conversation? >> there are all sorts of
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reasons why the president of turkey would want to do this. it helps him to dispel some of the anger that has been turned at him by western countries, liberal countries and liberal governments about his treatment of journalists. leverage in ad rivalry he has with saudi arabia. is symbolic of a way in which there are expectations about what in the middle east? x this is largely about the personal relationship between it the administration in the united states and the crown prince. if that leadership were to change, how much might that affect the u.s. outlook to saudi
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arabia? x you would still have the king in place. there is no particular reason to believe that he would try to jeopardize this relationship. it might well become more fragile or conflicted. sides, consider iran to be the main problem in the region. russia has aligned with iran and syria. are other issues, such as the saudi military. it is heavily based on european airpower. carol: things are changing slowly in the middle east. this is an interesting relationship.
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has much really changed despite the headlines? >> there are risks here. everyone is walking on eggshells. there are political risks. this can complicate life for all sides for a bomb time to come. -- long time to come. carol: with only a week to go before the midterms, there are a host of hot button topics. we talked with josh green in washington dc. josh: the senators i have been talking to in the last week or so say that the republicans may pick up a couple of seats. the real ballgame is the house of representatives. can take control
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and have subpoena power. it will change the entire nation of washington and the trump presidency. when theto happen election gets closer, are consolidating around their candidates and democrats are consolidating around their candidates. carol: is it the rallies? what are you looking for? averages.ing polling averages overall tends to be fairly accurate. that was true in 2015 as well with trump. most polls show hilary clinton winning. she won the popular vote by 3 million.
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you have to win the electoral college, fifty percent plus one. there are tight races in suburban areas that voted for hillary clinton, but have a republican representative, for higher education areas that have trended democrat. these are the seats democrats are looking to win back. these races are very close. then: help us understand presiden't's role. josh: trump is trying to motivate look voters to turn out on november 6. turnpublican voters to out november 6. there was a memo that said republicans don't believe there
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is a risk of losing in congress and may not turn out to vote, partly because donald trump was thatng about the red wave, republicans would hold onto their margins and expand them. no party strategist believed that was true. the message got to the white house that instead, you need to find a way to mobilize republican voters. that is something trump is good at. jason: huge stakes for global business. carol: we talked about this with joel weber. onl: there is any lecturing sunday -- an election on sunday in brazil, supposed to be a landslide for bolsonaro. are probably going to see a
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shift to the right. we have an insider, tom, the middlearound east for much of his career and an insider in the trump world. was athis story -- tom big reason trump got a lot of wall street interest. he helped put trump into an interesting position. that whole celebration at the inauguration, tom was in charge. things seemed to have gone awry. that was this huge company suffered ever since he put all of his weight behind trump.
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middlemanplayed between the trump administration and all of the middle eastern's interests. saudi arabia continues to dominate headlines. joel: there is a host a biblical level of intrigue, with the -- almost a biblical level of intrigue, with the geopolitical implications. tom was the man in the middle east for trump for a long time. this peels back another layer to what is actually happening. carol: the cover story this week, truly a murder mystery, taking a look at this couple well-known in the toronto community. shermans.sermons -- barry was the founder of a drug
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empire and he and his wife were billionaires. they were found strangled in their house last december. no one knows who did it or why, but everyone has a theory. author try to figure out the different characters and all of the theories. onol: pressure ramping up jay powell this week. tom, one of the first amendment on wall street to truly back president's presidential bid. >> this is bloomberg businessweek. ♪ jason: --
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podcast. carol: you can find us online and our mobile app. first on wall the street to back president trump in 2016. he was everywhere. carol: the extent of his devotion went way beyond that, and came out a bit of a price. >> this is on the blockade of qatar. his longest standing business partners in the gulf region were the qataris. the trump support of the blockade of qatar totally and these were not in the interests of his friends. it was a total flip of u.s. policy in the region. jason: qatar has been involved
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in almost every major deal he has done. italy,max, property in it always follows the same pattern. t.ey jointly by it -- buy i it was a very good relationship. now the qataris are on the outs with the white house. tom help introduce trump to the emiratis prior to the presidency. but his relationship with trump emiratishe saudis and on edge. the connection with the crown
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prince was made, tom hasn't been involved. he hasn't been able to communicate to investors he's plugged in. capital is having problems? >> quite a few. they only raised cap their 2.5 billion target. -- half their $2.5 billion target. tom decided to merge with northstar. that was a disaster. a one of the negotiations were trying to figure out what northstar was worth. tom was not around for this. he was doing the campaign, or the inaugural committee. carol: he was called the wedding planner? >> yes.
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the combined firm dropped 60% during the trump presidency. a bull experiencing market this week. i have to ask you about his connection to paul manafort and rick gates. they are at the sense -- center of the special counsel investigation. tom tom was -- tom was questioned by the team. >> tom and paul manafort our friends. -- are friends. a higher associate of manafort's helped tom manage his appearance on television for the trump campaign. left the campaign,
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he briefly worked as a consultant for colony. you see the's touch with guys who are now in legal trouble -- guys were inith legal trouble, but there are no implications this has reflected poorly on tom. paul volger. carol: and why companies cannot afford to fire workers, but are we training instead. jason: "bloomberg businessweek." ♪
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ol: president trump blasts the central bank for the intention to keep raising rates. he said he may be regrets appointing jay powell. but he is hardly the first fed chair to feel the heat from the white house. emo openser's new mo a window into how past presidents try to impose their will on the fed. carol: we talked to christine harper. volker haspaul worked for six presidents. he has seen us so much. he is living history. jason: tell us about the uneasy relationship between the federal
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reserve and the white house. christine: he was observing a meeting between fowler and martin, famous for calling the fed's job is to take away the punchbowl before the party gets started. trying toesd johnson influence the fed to prevent them from raising rates. been reappointed by reagan in 1983. in 1984, an election year, volkecker had a surprising
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experience. carol: you say it happens in the library? walk us through. christine: volcker remembers being asked to see the president, not in the oval office, which he thought unusual. his memory was that he just saw reagan and baker, then chief of staff. seeming ars reagan bit uncomfortable. he had been a big supporter of the fat and good about not criticizing them. -- fed and good about not criticizing them. year.t's ann election reagan says nothing. baker speaks.
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volcker saw baker say, the president is ordering you not to raise interest rates. he had seen johnson, who had no trouble twisting arms. carol: volcker had no plans to raise rates. now he's in a predicament. istine: and one of the biggest banks in the country was collapsing at that point, continental illinois. there were all sorts of problems in the money markets. he didn't know what to say in this meeting.
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carol: i am curious what volcker had to say about the current president. christine: not good. to remind he likes m me, the president has no say over the fed. it's congress. one democratic senator was calling for his impeachment all the time. he had the broadest support of the country. he was renominated by reagan, and won confirmation by 84 to 16. the center of the country believed in what he was doing. he was considered the second most powerful man in the country probably to the conservation of other politicians. jason: companies could afford to
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fire workers and replace them with fresh tires when unemployment -- hires when unemployment was high. carol: but with unemployment at a new low, that's impossible. peter: companies have trained employees for centuries. this was on a decline according to the bureau of labor statistics. companies were afraid. they thought they would put all these money and -- this money a nd time into people and be plucked by someone else. training is on an uptrend. carol: how come?
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market?ch a tight labor peter: as unhappy as they are about the fact of someone free-riding on them, they have no alternative but to provide some of their own training. doing what are companies that is working when these plans are in place? peter: people learn better when they do stuff, this idea of an apprenticeship. it's rotations. bloomberg has that. you rotate through various jobs and gain a variety of skills. harnessing be computer assisted learning.
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there is sometimes a bit of a classroom aspect that can be done in a computer assisted method. today kids are graduating it to's responsibility is enter the workforce successfully? is it up to the university, or the employer? peter: there is constantly a clash. companies complain. employees are coming to them unprepared. according to a survey, millenials in the united states 22nd in literacy and tied for the bottom in nume racy. jason: a true crime stories centered on the murder of an
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into the unsolved murder of a billionaire. e and his wife were strangled in their toronto home last year. no one knows who did it or why. matt: this was the biggest story in the country. there was nothing to compare it terms of the unexplained murder of two of the most prominent people in the country. inconceivable. they had a public memorial service a week later. people that attended included prime minister trudeau. these were two people at the center of public life. the reaction to their deaths reflected that. carol: the police initially thought it was a suicide? >> the theory that was leaked
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was thatdly by police this was potentially a hader-suicide, that barry murdered his wife and killed himself. that immediately made his adult children upset. they pushed back very hard against that notion. they hired a high profile criminal lawyer to help them put together a private investigation. that investigation began looking into the forensic details of the scene, the evidence that could be gleaned from the place they died, to try to refute the , that it could not have been a murder-suicide. the toronto police stated publicly they agreed with that after a month. they agreed they were killed and
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targeted. jason: you start to do some reporting and you dig into who the sky was, his -- this guy was . he made his money in generic pharmaceuticals, a fairly sharp elbowed way to make a fortune. past,s about his business and maybe some of the roads that took you down. matt: barry was incredibly successful. it's a fairly aggressive business, a fairly zero-sum business. you don't make a lot of friends if you succeed. if you succeed as a generics company, you are taking away revenue and market share from bristol's ofand the world. he was a tough operator.
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gious.iti but very good to his employees. a lot of people stayed with him for a long time. story departs from what you might expect of his biography and level of influence. for a long time, going back 20 or 30 years, he entered into side businesses with a quite incredible cast of characters. a canadian magazine described it as a mix of convicted people who would later be convicted of fraud, strange businesses that never worked out, often ending up in
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shermanth barry demanding his money back. it happens again and again. his colleagues found this very alarming. but he kept on doing it until the end of his life. it was a quirk of this very wealthy man. that was what he wanted to do with a portion of his money. and you spent some time with a family member when you went back to toronto. tell us about the dispute. matt: there's a dispute regarding the acquisition of a company barry bought and operated. he bought it from the estate of an uncle who had suddenly died. the children of that uncle maintained he concealed an agreement that would have
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allowed them to purchase 20% of that company. they argued in lawsuits they to a billionitled canadian dollars, probably. these legal arguments were consistently dismissed. his is a very raw discussion for them and the most outspoken of the cousins. guy is very angry with his late cousin. believes the police were wrong to discard the theroy of a murder suicide. he believes barry was responsible.
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carol: do we know what happened? matt: no and i'm not sure we ever will. been tryingthat has to force police to show progress on the investigation has been unsuccessful. the longer it goes, it does not help the odds. a compelling story, told and written with a lot of insight. looked to our creative director to come up with a cover to illustrate this mystery. art side was playing with the editorial and making sure the words were right. we wanted to create something with a pot of tension.
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magazine. around those long haul routes. jason: but different cities than it was in the global age of air -- golden age of air travel. they definitely set the tone. first class air travel is making a comeback. jason: many airlines cut back on those cushy seats, but demand is on the upswing. our editor joins us from berlin. david: first class is back. crisis, itinancial started in 1999, when ba introduced the lie-flat seat.
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it was like, do i really want to pay twice as much to get a better wine list and extra legroom? most said no. companies are saying, you are flying in business. there has been a dramatic decline over the last decade or so. now, they're saying, you've gone too far. there's a lot of rich people with money to spend. jason: this is being led in part by some of the big middle eastern brands and asian brands. emirates has showers in the first class. several of them have private cabins and fixed walls. you were isolated in what looks like a bedroom.
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it cost at does customer to get a first-class seat on a flight? how does it compare to coach? what are the mathematics of what makes first-class work? david: experts say as a rule, what you'd pay -- if you'd pay coach, multiply that times ten for what it costs. a factor of twelve, broadly speaking, over coach for first class, and double for business. each first seat only takes up the space of five economy seats. you are getting twelve times as
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companies are battling for dominance in this exploding technology frontier. chinese firms led by alibaba are carving an innovative path to compete into the market. >> you have these big tech usingies that are already massive computing power. developing chips. china is really hot on the idea of artificial intelligence. jason: what are they going to use this for? china thinks there are potential military advantages and economic ones. baba, there's this idea
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you are going to be able to walk on to the subways and a camera will scan your face and take the money out of your alibaba account. it is just facial recognition.. they are developing these tips -- chips to do that. carol: you need a super high-tech chips to be able to do that. nvdia are and dominating this. even with this new effort from alibaba, you will still need the chips. successful,ba is they will not need to buy as many nvidia chips. alibaba wants to cut the u.s.
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semiconductor companies out altogether. carol: how does donald trump play into all of this? >> the u.s. government got into it with zte. zte was not able to buy american components. company isry chinese dependent on american modems to make cell phones and connect to the internet. writes 75% of the semiconductors are coming from outside the country. without a domestic chip industry, china will be totally dependent on the united states. jason: you also think about the relationship a consumer has with a company like alibaba. part of the reason they were
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doing this is because it will come right out of your alipay account. >> the chinese consumer is using a chinse app and it is being run on -- chinese app and it is being run on chinese made hardware. this government driving a futuristic vision of the world is going to create a bottom value and make these chinese tech giants -- a lot of value and make these chinese tech giants even stronger. toon: one company is looking prevent election meddling with the midterms coming in just ov er a week. story starts at a facebook like a telecommunications summit in london last month.
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we get to a place where facebook has taken responsibility for the problems of the last few years, what that looks like in an ideal world is something within the process of building up these products. it is not just about growing, ion ways to build in protect s as you grow. jason: facebook is trying to put a better face on how it reacts as a vaguely -- specifically to elections. what are you hearing from their plans? sarah: facebook has brought a bunch of journalists into their war room. they have a bunch of monitors tracking what stories are going viral, all of these factors they
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need to figure out where the odd activity might be. activity that they might need to take down or escalate. engineers worked together, but the question is whether this will be enough. executive says, peace, i'm going to do something else. oculusthe former ceo of has left. his departure is significant in the context of these other founders leaving. the co-founders of instagram ceo ofis fall, and the whatsapp left. the only ceo left is zuckerberg,
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the person who will chart the was forward, and he always the last word, but the future of facebook is so much more dependent on these other properties. facebook's interests in figuring out how to make money off of them is what caused discomfort founders. jason: welcome to uber eats! carol: we have to go back in time, with the new big business of selling old watches. when the global economy went south, watch brands went south.
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people love having them on their wrist. it is like a fancy car. it tells people something about you and these can be really beautiful. of thethe prominence watch does seem to matter to a lot of people. sometimes people like this idea that it is a little worn. >> there are little elements amazing take us to an watch. you have a time when cartier was split into three companies. a watch from that period is special.
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carol: special to me is getting food delivered at home. what do we talk about with "the app that ate your phone"? the data theyses have, based on what people are requesting and order, to create virtual restaurants. you have a neighborhood with a bunch of sushi, but no poke. uber will reach out to one of the sushi places and say, start serving poke. people have the materials on hand. will walk by and see this restaurant that only exists on ubereats. they are crowdsourcing what people are hungry for. they can change how the restaurant is facing out to the
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world. if tons of people are requesting brunch, they'll start serving. it's changing the face of dining. carol: uber will take a piece of their kitchen and devote it to the other food? >> if people are requesting wings at a pizza place, a little part of their kitchen will only make wings for people and sell through uber eats. carol: and this is seeing a lot of growth? >> yes, and it is all over the world. arol: bloomberg businessweek is available on newsstands now. jason: must-read? barrack, the guy from
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the financial community that came out first. story thatdepth examines the relationship between him and the trump and asks whether he is really a trump insider? jason: this relationship stretches over decades. when christine harper went to volcker, ibook with was so excited, and it delivers and it is so timely given everything happening right now with the federal reserve. saturday, we have a story about a small dna technology company originally founded to make pharmaceuticals, but shifted its focus briefly to solving old murders. podcast, also have a when we talked to -- last week we talked to retired general bristol about the difference between myth and reality. was, a new lacrosse league
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