150 dollars off and free shipping too. sale prices are available right now. go to buyleesa.com today. you need carol: welcome to bloomberg usinessweek. >> as donald trump criticizes the u.s. central bank this week hear how paul volcker dealt with the pressure. jason: someone has been shut out of the white house. what happened? carol: the investigation into

the death of a saudi arabia journalist continues to stir up international outrage. the crisis has gone beyond the single incident. the senior reporter for europe and middle east wrote about it. he joins us to talk. >> he was the president of turkey. this is a country that has more journalists in jail than any other. it was not as expected, the president of the united states, the white house, the statement made about the washington post columnist that was killed and rather grim circumstances. carol: what are people saying about the u.s. speaking up for uman rights and then to have turkey leading the conversation? >> there are all sorts of reasons why president erdogan would want to do this.

his own interests. 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 reatment of journalists. he has obtained leverage in a rivalry he has with saudi arabia. more broadly, it is symbolic of a way in which our expectations about what happens in the middle east has changed. >> this is largely about the personal relationship between it the administration in the united states and the crown prince. if that leadership were to hange, how much might that affect the u.s. outlook to audi arabia?

>> is muhammad bin salman -- muhammad bin salman were to be set aside, the u.s. would have to deal with his father. there is no particular reason to believe that he would try to jeopardize this elationship. it might well become more fragile or conflicted. but both sides consider iran to be the main problem in the region. russia has aligned with iran and syria. there are other issues, such as the saudi military. it is heavily based on european and american airpower. carol: things do change very slowly the middle east. this is an interesting relationship. has much really changed

despite the headlines? >> there are risks here. which is why everyone is walking on eggshells. there are political risks. this can complicate life for all sides for a 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 d.c. josh: early on, during the summer, it looked like it would put the senate and play. 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. the democrats can take control and have subpoena power. it will change the entire nation of washington and the trump presidency. however, as tends to happen when elections get closer, partisans are returning to their corners. republicans are consolidating around republican candidates. democrats are consolidating around democratic andidates. what looked at one point there could be a huge blue wave in the house. it now looks tighter. carol: is it the rallies? what are you looking for? josh: polling averages. no one single pole will give us a reliable glimpse of any race. but averages overall tend to be fairly accurate. that was true in 2016 as well with trump. most polls show hilary clinton winning. not by a wide margin, but by a narrow margin.

she won the popular vote by 3 million. you have to win the electoral college. but in the electoral college -- but in the midterms, all you have to do is win 50% 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. by and large, these races are very close. jason: help us understand the president's role. josh: trump is trying to motivate republican voters to turn out november 6. you may remember, i got leaked an internal republican party poll in early slimmer -- in early september that was like a four-alarm that said republicans don't believe there is a risk of losing in congress and may not turn out to vote.

partly because donald trump was talking about the red wave, that republicans would hold onto their margins and expand them. no strategist in either party 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. joel: there is a presidential election on sunday result that is supposed to be a landslide for bolsonaro. we are probably going to see a shift to the right.

what we will see is a shift to the right with him. jason: we have an insider, tom, who's been around the middle east for much of his career and an insider in the trump world. carol: or is he? joel: tom barrack was a big reason trump got a lot of wall street interest. he helped put trump into an nteresting position. that whole celebration at the inauguration, tom was in charge. ever since then, things seemed to have gone totally awry. here was this huge company that suffered ever since he put all of his weight behind trump. jason: he played middleman between the trump

administration and all the middle east interests, both economic and political. saudi arabia continues to ominate headlines. joel: the geopolitical elements of this almost have a biblical level of intrigue to it. we continue to watch that evolved. barack play role because he was the man in the middle east for trump for a long time. it is so near the news. this peels back another layer to what is actually happening. carol: the cover story this week, truly a murder mystery, and great in-depth reporting, taking a look at this couple well-known in the toronto community. joel: yes, the shermans, barry sherman was the founder of a generic drug empire. he and his wife were

billionaires, a power couple. they were found strangled in their house last december. no one knows who did it or why, but everyone has a heory. matt campbell did this fat -- this masterful tale of trying to figure out who the different characters and all the different areas are. carol: pressure ramping up on jay powell this week. jason: and tom, one of the first amendment on wall street to truly back president's presidential bid. >> this is bloomberg businessweek. ♪

carol: welcome back to "bloomberg businessweek." jason: join us every day on the radio from 2 p.m. to 5 p.m. wall street time, and listen to our podcast.

carol: you can find us online and our mobile app. jason: in the features section, founder -- tom barrack was the first on wall street to back president trump in 2016. fundraising dinners. he was everywhere. carol: the extent of his devotion went way beyond that, nd came out a bit of a price. >> this is on the blockade of qatar. tom's longest standing business partners in the gulf region were the qataris. the trump support of the saudi blockade of qatar totally blindsided him. it was not the best interest of him or the best interest of his friends. it was a total flip of u.s. policy in the region. jason: qatar has been involved in almost every major deal he as done.

>> miramax, property in italy, it always follows the same pattern. they jointly buy it. later on, the qataris buy it outright, usually for a good profit. it was a very good relationship for him to have. now the qataris are on the outs with the white house. tom helped introduce trump to the saudi's and emiratis prior to the presidency. ut his relationship with trump has put the saudis and emiratis on edge. carol: and introduced jared kushner. >> the love connection was made and tom has a involved since. he hasn't been able to communicate to investors he's lugged in.

he hasn't been able to communicate that in a serious way. carol: colony capital is having problems? > quite a few. first thing, 2015, raising a major debt fund, the colony distressed phone, their court -- cord debt series, they only raised half their $2.5 billion for that. then tom decided to merge with northstar. that was a disaster. a lot of the negotiations were trying to figure out what northstar was worth and tom was not around for. he was busy doing the campaign for trump. carol: he was called the wedding planner? >> yes. shares of the combined firm

dropped 60% during the trump presidency. we were experiencing a bull market this week. jason: i have to ask you about his connection to paul manafort and rick gates. they are obviously at the center of the special counsel investigation here. we are told that tom barrick was questioned by mueller's team. what is the role as best you can tell? >> tom and paul manafort are friends. one of the first things he did for manafort was hire and associate of manafort to manage his appearance on television for the trump campaign. after gates left the campaign, he briefly worked as a consultant for colony. so you see these constant touches with these guys for now any lot of legal

trouble. but there is no indication that legal trouble has reflected poorly on tom as of yet. jason: up next, paul volcker. carol: and why companies cannot afford to fire workers, but are we training instead. jason: "bloomberg businessweek."

jason: welcome back to "bloomberg businessweek." arol: you can also listen to us on the radio. 91 f.m. in washington, d.c. jason: and in the bloomberg business app.

carol: federal reserve independence has been a hot topic this month as president trump blasts the central bank for the intention to keep raising rates. he said he may be regrets appointing jay powell. jason: but he is hardly the first fed chair to feel the heat from the white house. there is a fascinating excerpt from paul volcker's new memoir, a window into how past presidents try to impose their will on the fed. carol: we talked to christine harper. christine: paul volker has -- was instilled with this sense of serving his country. he has worked for six residents. starting with j.f.k., ending with obama, nixon, reagan. he has seen us so much. he is living history. jason: specifically about the federal reserve and the excerpts in the magazine go to the heart of the relationship, that sometimes uneasy relationship between the federal reserve and the white house. tell us what he experienced.

christine: one of the stories is about him attending a meeting between henry fowler and william mcchesney martin, who is famous for calling the fed's job is to take away the punchbowl before the party gets started. and president johnson. he witnessed johnson trying to influence the fed to prevent them from raising rates. he describes that in vivid detail. we also excerpt in detail when he was on the federal reserve himself. he had been reappointed by reagan in 1983. after carter had originally appointed him. in 1984, an election year, volcker had a surprising experience.

carol: let's describe it. because it is fascinating. it does not happen in the oval office. 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 nusual and wondered why he was being summoned to this library. his memory was that he just saw reagan and baker, then chief of staff. james baker. jim baker. he remembers reagan seeming a bit uncomfortable. reagan had been a big supporter of the fed and good at not criticizing the fed, although they had a tough time with the economy because of the high interest rates he was using to squeeze inflation out. now, it's an election year. reagan says nothing. baker speaks. what he recounts in the book

is that he saw baker basically say the president is ordering you not to raise interest rates. he didn't know what to say. he had seen johnson, who had no trouble twisting arms. and even he had not gone that far. carol: volcker had no plans to raise rates. now he's in a predicament. christine: it is easy to forget that it was not just election year. you had one of the biggest banks in the country collapsing at that point, continental illinois. there were all sorts of problems in the money markets. he didn't know what to say in his meeting. he just found himself sort of thinking i better not tell us o anybody. carol: i am curious what volcker had to say about the current president. he is so outspoken about t.

christine: it's not good, right? but the thing he likes to remind me and other people about is that the president has no say over the fed. it's congress. so when volcker was fed chairman, he was unpopular in pockets of congress. there was one democratic senator who was calling for his impeachment all the time, submitting legislation to impeach him. but he had the broad support of the country. when he was renominated by reagan, he won confirmation by 84-16. the 16 where the far left and the far right. so the center of the country believed in what he was doing. he had that power. he was considered the second most powerful man in the country after reagan, probably

the consternation of some other politicians at the time. jason: when unemployment was high, company could afford to fire workers who lacked the necessary skills and replace them with fresh tires off the street. carol: but with unemployment at a 48-year low, that's impossible. so what are companies doing? we got some thoughts from economic senator peter coy. >> the idea that training your employee is something companies have done for centuries. apprenticeships, journeyman. it fell into decline according to the bureau of labor statistics. one reason for that is that companies were afraid they would but all this money and time into people and train them up and they would just be plucked by somebody else. i'm looking at what is happening today. the evidence is that there has been an uptick in training, not huge, but it is on an uptrend. carol: how come? is it such a tight labor market? peter: yeah. as unhappy as they are about the possibility of someone

free-riding on them, they have no alternative but to provide some of their own training. jason: what does it look like on the ground? what are companies doing that is working when these plans are in place? peter: people learn better when they do stuff, this idea of an apprenticeship. it's not just entry-level ork. it is on up. it's rotations. bloomberg has that. you rotate through various jobs and gain a variety of kills. it can also be harnessing computer assisted learning. there is sometimes a bit of a

classroom aspect that can be done in a computer assisted method. carol: i feel like there has been this conversation going on. we spoke to heads of universities about if kids have the skills for the workforce. who's responsibility is it to enter the workforce successfully? is it up to the university, or the employer? peter: there is constantly a clash. companies complain. and it's true, by the way, that and toys are coming to them unprepared. according to a survey by the oecd, out of 22 countries, millenials in the united states were 15th of 22nd in literacy and tied for the bottom in numeracy. and in preparation for technology-fresh environments, problem-solving. jason: a true crime stories centered on the murder of an unconventional billionaire and his wife. carol: this cover story may

have you scratching your head. this is "bloomberg businessweek." ♪

jason: welcome back. carol: still ahead, if you thought luxury air travel was a thing of the past, first class is making a comeback. jason: and alibaba's attempt to keep its lead in china's cloud market with chips. carol: let's get to our cover section. his week's

it digs deep into the unsolved murder of a billionaire. jason: a pharmaceutical executive and his wife were strangled in their toronto home last year. no one knows who did it or why. everyone has a theory. matt: this was the biggest story in the country. by a mile. there was nothing to compare it to in terms of the unexplained murder of two of the most prominent people in the country. in their home? together? inconceivable. they had a public memorial service a week later. they had 6000 people, including the prime minister, justin trudeau. the mayor of toronto. the premier of ontario. these were two people at the center of public life. the reaction to their deaths reflected that. carroll: you looked into this to figure out what happened. the police initially thought it was a suicide? is that correct?

>> the theory that was leaked very rapidly by police was that this was potentially a murder-suicide, that barry had murdered his wife and killed himself. that is something that immediately made his children, his four adult children as you can imagine, very 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 conclusion, that it could not have been a murder-suicide. ultimately, after a little over a month, the toronto police stated publicly they agreed with that after a month. they deemed it to be a double

homicide that they were both killed and both targeted. jason: you start to do some reporting and you dig into who this guy was. his business dealings. he made his money in generic harmaceuticals, a fairly sharp elbowed way to make a fortune. tell us about his business past, and maybe some of the roads that took you down. matt: there are some fascinating things about barry sherman and yes, he was an incredibly successful pharmaceutical entrepreneur. it's a fairly aggressive business. if you succeed as a generics company, you are necessarily achingly revenue, taking away market share from the pfizers and the bristols of the world. you don't make a lot of friends if you succeed. he was a tough operator. very litigious. but very good to his employees. a lot of people stayed with him for a long time. this is the thing about barry sherman where his story

somewhat the parts from what you might expect of his biography and level of influence and wealth. for a very long time, going back 20 or 30 years, if not longer, he entered into side businesses with a quite incredible cast of haracters. a canadian magazine described it as a cast of a cohen brothers film. a mix of convicted fraudsters, people who would later be convicted of fraud, strange investments, strange businesses that never worked

out, often ending up in court with barry sherman demanding his money back. claiming he had been deceived or defrauded in some way. it happens again and again. his colleagues found this very alarming. but he kept on doing it until the end of his life even though they counseled him to stop doing it. it was a quirk of this very wealthy man. that was what he wanted to do with a portion of his money. jason: 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. essentially, the children of that uncle maintained he concealed an agreement that would have allowed them to

purchase 20% of that company. in turn, they argued in lawsuits they should be entitled to a 20% of the company, a billion canadian dollars, probably. these legal arguments were onsistently dismissed. the cousins lost a few times. however, this is a very raw discussion for them and the most outspoken of the cousins, a guy named gary winter, i spent some time with for the reporting of this story, he is very angry with his late cousin. even now. he believes the police were wrong to discard the theory of a murder suicide. he believes barry was responsible. i should stress that is something the police do not agree with. carol: do we know what happened? matt: no and i'm not sure we ever will.

one of the toronto papers has been in court, trying to force the police to disclose documents on their progress of the investigation. that paper has been largely unsuccessful. it has been silent. there are many ways to solve a murder here and there is dna evidence. people can come forward many years later. but the longer it goes, it does not help the odds of ever finding out who did this. jason: a compelling story, told and written with a lot of ashen and insight by matthew campbell. we looked to our creative director to come up with a cover to illustrate this mystery. >> we wanted something that would get you right into it, pull you into the mystery of it. this is one of those covers where the art is playing with the editorial and making sure the words are right and making

that kind of like we really like. ♪

line carol: welcome back to "bloomberg businessweek." jason: join us at bloomberg businessweek every day from 2 p.m. to 5 p.m. wall street time. you can also catch up on that daily show by listening to our hard cast. carol: you can also find us online and on the mobile app. we do have a story this week

in the magazine that talks about first-class air travel. it is taking a look at the busiest route for first-class travel. no surprise that it is around those long halls. jason: but different cities than it was in the golden age of air travel. carol: they definitely set the tone. in the business section, frequent flyers may be happening here that first class air travel is making a comeback. jason: many airlines cut back on those cushy seats in the wake of the financial crisis, but demand is on the upswing. carriers are finding ways to meet it. our editor joins us from berlin. david: first class is back. that is what they are telling us. after the financial crisis, it started in 1999, when ba introduced the lie-flat seat from new york to london. all of a sudden, it is like do

i really want to pay twice as much to get a better wine list and extra legroom? most said no. then the crisis comes in and companies are saying, sorry, dude, you are flying in business. so airlines have been pulling their first-class seats. 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. david: emirates has showers in the first class. several of them have private cabins, almost like a train compartment. some of them even have fixed walls where you are isolated in what looks like a bedroom and it is more like a luxury hotel room than an airline seat. carol: what does it cost a

customer to get a first-class seat on a flight? how does it compare to coach? hat are the mathematics of what makes first-class ork? david: we spoke to some experts. broadly speaking, if you pay $100 for a coach seat, $300 for a premium economy, and 200 for first-class. multiply that times 10 to get to what it really cost your in other words, you're talking like a factor of twelve, broadly speaking, over coach for first class, and double for business. but if you do the math, each first seat only takes up the space of five economy seats. you are getting twelve times as much money for only five

times as much space. in business, the math works out pretty well, too, assuming they can fill those seats with paying passengers, which isn't always easy. carol: chinese internet companies are starting to make their own semiconductors. jason: and what is new in the restaurant business, thanks to uber. carol: this is "bloomberg businessweek." ♪

♪ jason: welcome back. arol: you can also listen to us on the radio in boston, new york, in washington, d.c.. jason: and in the bay area and london. the solution section this week takes us into the cloud. some of the world's biggest companies are battling for dominance in this exploding

technology frontier. carol: amazon, microsoft, and ibm are seeing growth in cloud services. and chinese firms led by alibaba are carving an innovative path to compete into the market. the company is starting to make its own chips. >> you have these big tech companies that are already using massive computing power. they want to sort of control the entire hardware stack, as people say, which means developing chips. the other thing is china is really hot on the idea of ai. this is a policy that starts with the government and goes down to these large tech companies, including alibaba. jason: what are they going to use this for? >> china, as a strategic program, they want to control it because they think there are potential military advantages and economic ones. it's also part of the made in china 2025 plan.

for alibaba, there's this idea 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. so no token, no metro card, no nothing. it is just facial recognition. they are developing these chips to do that. carol: that's the point, right? this is super high-tech and you need a super high-tech chips to be able to do hat. max: intel and nvdia are dominating this. intel makes server chips and nvidia makes video. you need them both with a.i. even with this new effort from alibaba, you will still need the chips. but if alibaba is successful, they will not need to buy as many intel and nvidia chips. in the long-term what china wants and these giant tech companies want is to be able

to cut out the big u.s. semiconductor companies altogether. carol: so watch out. 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. te and every chinese company is dependent on american modems to make cell phones and connect to the internet. if you look at china as a whole, i think mark 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. so this is a long-term effort to reduce its dependence on america. jason: you also think about the relationship a consumer has with a company like alibaba. as you said, part of the reason they were doing this is because it will come right out

of your alipay account. >> and you would need to have their app on your phone. in this vision of the chinese future, the chinese consumer is using a chinese app and it is being run on chinese made ardware. this government driving a futuristic vision of the world is going to create a lot of value there and make these chinese tech giants even stronger. jason: and now in the technology section, the ongoing problem for facebook. how it is looking to prevent election meddling with the midterms coming in just over a week. carol: has the social network really learned the lessons it should have? this story starts at a

telecommunications summit in london last month. sarah: if we get to a place where facebook has learned from its lessons, has really 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, but ways to build in protections as you grow. jason: facebook is trying to ut a better face on how it is reacting specifically in elections. the idea of meddling. this concept of a war room has come to the floor. 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 need to figure

out where the odd activity might be. where the damaging activity might be where they might need to take down or take action. everyone from all of these different teams, the engineers, the policy people, they are in this room working together. the question is whether this will be enough. jason: you have this steady drip of senior executives saying, peace, i'm going to do omething else. sarah: the former ceo of oculus has left. his departure is significant in the context of these other founders leaving. the co-founders of instagram left this fall, and the ceo of whatsapp left. the only ceo left is

zuckerberg, the person who will chart the path forward, and he always was the last word, but the future of facebook is so much more dependent on these other roperties. perhaps facebook's interests in figuring out how to make money off of them and make them creative to the overall core business is what caused discomfort for these founders that ended up leaving. jason: welcome to virtual restaurants, uber eats! carol: we have to go back in time, with the new big business of selling old watches. >> mechanical watches are very much back. when the global economy went south, watch brands went south. but they are really babbling. it's a luxury. people love having them on

their wrist. it is like a fancy car. ou don't need a fancy car, but if you can afford it, you want to wear it. it tells people something about you and these can be really beautiful. jason: and the prominence of the watch does seem to matter to a lot of people. sometimes people like this idea that it is a little worn. >> you want to have the box in -- and the papers. that is a big part of it. but there are little elements that may take us to an amazing watch. you have a time when cartier was split into three companies. if you have line from london with the london stamp on it has the very special. if you have the tiffany stamm,

that is very special. carol: special to me is getting food delivered at home. sometimes i just don't want to go out. let's go to the food section. what do we talk about with "the app that ate your phone"? what is she talking about? >> uber eats uses the data they have, based on what people are requesting and order, to create virtual restaurants. say you've got a sushi place, a neighborhood with a bunch of sushi, but no poke. people are searching in that neighborhood. uber will reach out to one of the sushi places and say, start serving poke. and they will have the materials on hand and they will have a secret poke restaurant that you don't see. there are 1,600 of these around the world. so people will walk by and see this restaurant that only exists on ubereats. they are crowdsourcing what

people are hungry for. literally. in some cases, they can change how the restaurant is facing out to the world. so if a place that did not serve brunch, if tons of people are requesting brunch, they'll start serving. it's changing the face of dining. carol: so these virtual restaurants, uber will take a piece of their kitchen and devote it to the other food? >> a pizza place, if people are requesting wings, they will have a little part of their kitchen that will only make wings for people and sell through uber eats. it's actually a real department within uber eats. carol: and this is seeing a lot of growth? >> yes, and it is all over the world. it is in india, thailand, montana area it is everywhere. carol: bloomberg businessweek is available on newsstands now. jason: must-read? carol: tom barrack, the guy from the financial community

that came out first to endorse then candidate donald trump. it's an in-depth story that examines the relationship between him and the trump and asks whether he is really a trump insider? jason: this relationship stretches over decades. carol: your must-read? jason: when christine harper went to write this book with volcker, i was so excited, and it delivers and it is so timely given everything happening right now with the federal reserve. carroll: very relevant. you can find more stories on bloombergbusinessweek.com. on 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. jason: and check out our daily business week podcast. last week we talked to retired general stanley mcchrystal about the difference between myth and reality. also, a new lacrosse league

was all the talk in my house this week. it was all the talk in my house this week. >> more bloomberg television starts right now. ♪ . .

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nejra: overregulated. 10 years after the crisis, we speak to a guest who says legislation about the financial sector has gone too far. 10 months on from the new european union rules, the full impact from the legislation is still to come. plus, we will break down what the midterm elections in the u.s. could mean from wall street. welcome to "bloomberg markets: rules & returns." i'm nejra cehic in london.