carol: welcome to bloomberg "businessweek." i'm carol massar. in this week's issue u.s.-china trade talks front and center. jason: the magazine has several stories looking at china and its relationship with big tech, emerging economies and its impact on the digital economy. carol: on the cover the technology giant, we're talking about zte.

jason: can paypal survive on its own. carol: opening up the magazine, recession fears. recession isn't inevitable. jason: but there are some things that might crush this u.s. expansion. carol: we caught up with economic expert, peter coy. >> why do expansions die? >> right now, you've seen since october the stock market has come down quite a bit. it's because people are worried the good times are going to stop rolling and yet a week ago this friday we had an incredibly strong jobs report. more than 300,000 jobs created which tells you the economy is really strong. how can these two things co-exist? how can people be talking about a recession and at the same time, you have all evidence of, current indicators are quite strong. because one of the arguments there is that that's a lagging indicator. the stock market is forward looking, sees around the corner, and here's what c.e.o.s and

others are saying, good times may be running out. what do you hear? >> that's true. the stock market, if you think why is it a forward looking indicator? because look, if you think something is going to happen that's going to cause stocks to go down six months from now, why happen? no, you would sell now to beat the crowd, lock in the current high price. and because everybody does that, whatever was going to happen in

six months from now happens right now. that's markets. >> this is the animal spirits to some extent. >> the animal spirits is a very closely related idea and forbes from m.i.t., someone i spoke to in atlanta, actually uses that expression. c.e.o.s, business people, investors, and consumers are not automatons. they are moved by emotion and fear and greed and one of those emotions is confidence. so you can spend all the time you want looking at sort of the monetary aggregates and every other indicator economists like to look at, but one of the most important and least tangible is this -- confidence and animal spirits. so even if things do look pretty good right now, if the emotions change, then it is conceivable to have a recession. carol: ultimately, though, maybe

some people think that janet yellen is wrong, that recessions do die of old age, that we do see this play out ultimately? could see be right? do consumers get tapped out in terms of taking on too much debt, companies the same thing, creating a cycle? >> what you see sometimes is that expansion looks like it's going to die. it's building all of these imbalances but it somehow comes out of it. to a soft landing, and balance is restored and growth comes back. and this is an exceptionally long expansion right now. carol: right. >> and if it reaches june it will be 10 years old. and that would equal the length of the longest expansion in history going back to 1854. the month after that, it would become a record. so, we have seen the average length of expansions has increased over the last couple of decades. so something is going on here. i don't know if we can credit the federal reserve or something

about the nature of the economy, but we seem to be managing to extend these expansions longer. they are not dying of old age. at least the longevity is increasing, let's put it that way. jason: if you're worried about a potential bear market after hearing that, don't be. carol: that's right. we talked to pat rainier about how investors can take stock of their portfolio without overreacting. >> you're probably seeing losses in your portfolio. this is nothing like the last go around so it's a time to say, if i haven't been paying attention to this maybe i pay a little bit of attention, but we're sort of advocating after talking to advisers, do a look at your portfolio and make sure in a world where volatility is a part of the game you have the amount of volatility that you're expecting to get in your portfolio. carol: i also thought it was interesting in this story, it talked about think about what you're investing in. because you might be buying a lot of etf, the broader market, getting exposure to everything but some of your big tech names

have become overly weighted in these indexes. you might have more exposure to big tech than you want. >> right, if you're invested in an s&p 500 investment fund, you're a tech investor. you have about a fifth to a quarter of your portfolio is in tech stocks, which is fine. if you're going against that, if you decide to want to have less than that you're making a contrarian anti-market bet which isn't particularly easy to do but what you do want to watch out for, if you've added an actively managed fund to your portfolio, if you're one of those investors who follows the advice, buy what you know and a lot of companies we have today are tech stocks, you not only have in your core index fund a big chunk of tech, you've added to tech with your shares of fidelity contra fund, with that facebook stock you picked up or apple stock you bought because you feel that's a company you understand.

so you want to make sure you haven't doubled down on what's turning out to be a momentum play of the last few years. you may have more tech than you think. if you're a great believer in warren buffett, and he likes apple. jason: much to his shareholder'' detriment of late. how do bonds fit into this? i feel an everyday investor probably says, well, bonds are for when i'm old and i'm much more risk averse. but in a market like this, how does it play in? >> what they are, and this is assuming you're buying the kinds of bonds that are intermediate interest rate risk, high quality what they are sitting there for is to be a stabilizer and maybe a little bit of a psychological stabilizer. at almost any age, even if you're young with a long-time horizon, it's no fun to look at your statement and see everything you invested in lost money all at the same time. bonds, as you know, bonds funds can lose money. we're entering into a rising interest rate environment which

means that if you have a bond fund you could see your bond fund lose some value although it will also be picking up extra income as rates rise. it sits there as a stabilizer and then when you're starting to look at short term bonds that can also be very important in an emergency. and one of the things that we learned the last time we had a big bear market is that financial bear markets and mainstream financial emergencies go together. i mean, i remember very well watching my 401-k fall at the same time i was thinking about how long is my job going to last? very common experience so you definitely want to have, you know, short term assets like cash and/or very short term bonds in a portfolio, probably outside your 401-k. honestly, you may even want to have some inside your 401-k. we can't always build up all of our financial cushion outside our 401-k when we're young. and it can be good to know in the direst of emergencies, the money you saved up for the

future is steady. carol: later on in the program, why now may be a buyer's market when it comes to luxury homes. jason: up next, a cautionary tale for every global tech company, how zte was spared from trump's trade war with china. carol: this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." jason: join us for "bloomberg businessweek" every day on the radio 2:00 to 5:00 p.m. wall street time. you can also catch us on our daily show on our podcast. carol: you can find us online at businessweek.com. on the cover this week, zte's cautionary tale. jason: this is one of china's biggest tech companies. carol: it nearly became a casualty with president trump's trade war with china. jason: this centers on china's dominance of 5g wireless technology. carol: zte managed to avoid a

crippling ban on working with u.s. suppliers. jason: that ban has been labeled a death penalty. carol: global technology companies are studying this story very closely. jason: here's more. >> zte last spring, a company that some people had heard of, few people understood, was announcing that it was basically at risk of going out of business because the u.s. commerce department had done something to it. i thought that was a really interesting illustration of just the way that the united states and the chinese economies and technology industries are tied together in ways that we don't really understand. and that create a lot of vulnerabilities, and just interesting wrinkles for the way that this tension is going to play out. zte, being an important but somewhat misunderstood company, really an un-understood company,

i thought it would be a good place to dig in and look at those dynamics. carol: what's un-understood? >> which is not a word, but i just don't think it's a company that many people think much about. zte, at one point, i think, with you like the fourth largest smartphone manufacturer in the united states, but it's like way down there. so it makes phones. but its main business is making telecommunications equipment, the things you put up to have your phone networks. carol: which makes officials nervous because the communications equipment, you wonder what access, for the people who buy those components, what access, what kind of security might not be, or might be at risk as a result of these companies, chinese company making it, correct? >> absolutely. zte and huawei, the bigger chinese telecom manufacturer, they're putting in equipment that power the networks in many countries. and they both have ties to the chinese state and there are questions about, are there going to be back doors in this equipment? will the companies be pressured

by the chinese government to do things? it's just a symbol of the discomfort that the west has with the sort of rise of china. carol: zte did come out and say they did evade sanctions, they paid penalties. paid penalties. so they have kind of skirted the law, right, when it comes at least to u.s. requirements? >> absolutely. the way that a chinese company ends up skirting u.s. sanctions by doing business with another company, as i said, it gets complicated, is that zte relies on the united states for many of its components. some of the most important inputs to zte equipment are u.s. made technology. so you're not allowed to take that u.s. equipment and ship it to iran, even if it's a chinese branded telecom piece of equipment. carol: and they did do that? >> they did do that. they admitted to it. they paid a very large fine in

2017. carol: 1.4 billion? >> in 2017 it was as much as $1.2 billion. then a year later, it seemed like the situation was over. a year later the commerce department came out and said you violated the agreement we reached and we're now going to put a complete ban on your ability to import american technology. which looked like it could drive zte out of business because it wouldn't be able to make its equipment at all. jason: close to home here in the us, there is this company, zte's u.s. headquarters down there in california, a couple of hundred employees who, during that time period, as you write, didn't really have any idea what was going on. were kind of wandering around trying to figure out what does this mean for my job this company, and maybe not getting a whole lot of guidance from their bosses. >> absolutely. when we think about the u.s. and china, it's such a big story that you always focus on the most macro thing possible.

the interesting parts was hearing from people on the ground both, you know, in dallas, as you said, or, you know, in zte facilities in china. they were confused about what this even meant. was it a big deal, that people in texas, basically just stopped hearing from their bosses for weeks because they didn't know if their jobs would continue. it seemed like a very surreal situation. carol: we heard about the story. now let's think about the images behind it. putting zte on the cover this week. tell us about the discussion in the newsroom about the cover image. >> so we had a lot of ideas about this idea of sort of something more conceptual. how the global tech companies are having this death penalty applied to them but it was sort of complex and i think we were sort of more drawn to the idea of showing the zte headquarters which we shot in beautiful light and overlaid it with this really strong headline. and it has a poster quality to

it and pulled you into the story. john: once you get into the story, as we heard, you realize this is just an office building in dallas that held some people who didn't know what was happening next and brought it home in a lot of ways. >> yeah. you know, the building, we actually did a little bit of research on google maps, saw what the building looks like because there are some american flags hanging next to it. we thought that could make an interesting image to give tension to it. carol: a reminder of the globalization of technology, a huge chinese company in america, and we're seeing it around the world. >> it came together. when we had the image, it gave us this nice drama and pulls you in. jason: thank you so much. up next, more on china's tech sector, why some developing countries are thinking twice about making tech deals with beijing. carol: later on in the broadcast, the economics of the world's hottest video game, we're talking about fortnite. jason: how it provides a new business model of globalization. carol: this is bloomberg business week. ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i'm carol massar. you can listen to us on the radio on sir yusmeiro x.m. channel 19. in new york, 106.1 in boston. jason: a.m. 960 in the bay area and in london on dab digital and the bloomberg business app. carol: we've been focusing on the u.s.-china talks this week. chinese companies are continuing to expand their global footprint and the chinese government's influence. jason: chinese companies are installing fiberoptic cable and surveillance systems around the world. carol: there's a chart in the magazine that shows beijing's reach.

if you're looking at a map of the world, it shows where there are internet cables. colored spots show where chinese companies have had an impact, are selling their services, their products. you've got smart city initiatives and other things. jason: it's interesting. you see areas where they are especially interested, the united states, we saw that with zte clearly, that's a focus. but also africa, if you look at the internet cables, the blue. you see a lot going on, on that continent. carol: that's where we're seeing a lot of focus when it comes to chinese companies. some of the emerging economies is a big story for them. jason: africa is front and center in the technology sector. sherrill is based in hong kong. she went to zambia to tell the story there. carol: found out about the promise and perils of buying into china's vision of the internet. >> countries like zambia are in

need of development. they see china as a great way of funding projects. so, for example, in zambia, china is funding a big new airport in the capital. it's also funded some smaller regional airports as well. roads that go directly to the copper belt -- zambia is rich in cobalt and in copper both. so the total debt they have to china right now is about $3 billion, which the imf is becoming concerned about, calling that a high risk of debt distress. a third of that spending, about $1 billion, is on these technology products. what they want to do is increase their broadband reach to the country broadly. but with that technology comes the means of control that we see sometimes inside of china. jason: let's talk about that, because you went to zambia and

you encountered government officials, one in particular, who was educated in the united states but he's all in china. tell us about that. >> so i met the transporting communications minister who is in charge of zambia's technology upgrade. his name is brian mishimba. a discussion with him starts out like it does with a lot of ministers in zambia. what they say is, actually, what has the west ever done for us except colonize us? zambia was formerly northern rhodesia, that used to be a british colony. whereas they say china has always been our friend, they're here building with us, helping us develop. western aid in africa, the united states, is the largest donor to africa. most of those projects have to do with healthcare. so h.i.v. prevention. clean water. it's not quite as visible as a big shiny airport terminal. carol: what's interesting, too, you wonder about what china's mission here. they want access to commodities and things like that. and this country or other

countries in africa, too, can provide this but you do wonder if it's about increasing their footprint around the world. is that part of what some people are speculating that that's what china's up to? >> that's certainly true. the trillion dollars in spending that china is currently embarking on, on a worldwide basis, is buying it enormous influence and lots of new friends. that's certainly a part of their foreign policy agenda and it's certainly something the u.s. needs to be more aware of. we've seen a few initiatives by the trump administration to push a little bit more on the infrastructure spending side to try to counter a little bit of the massive chinese spending but what we've done so far is not nearly enough. jason: and one of the elements that's important to point out in your reporting here, is that they like the equipment, as you say, they like the shiny airports, the ability to use cell phones effortlessly and what not.

but there is also an appreciation for kind of the chinese way of governing, too. in terms of, maybe like keeping a little more control over people, especially as there are more calls for democracy, maybe. they kind of like what they see in the model. >> yeah. what's very interesting actually, in order to find a test country for where this is actually happening, i had to pick a multiparty democracy, because -- like zambia. there is a lot of kind of repression equipment and stuff being sold in more repressive places but you can't see the impact of that as easily as you can in a place like zambia, which does have a multiparty democracy and ostensibly free press and therefore you get people starting to complain about it, saying look what's happening to us. we're starting to be repressed. you see the measure of freedom of expression declining as more chinese influence comes in. what china is offering, a model development of stimulus spending.

spending a lot of money on infrastructure, try to grow the economy and bring people out of poverty. it's worked in china. it's very appealing for african countries to do that. at the same time, that model comes with the china model of less free expression, so the press, for example, in china, is meant to be an instrument of the government. it fosters development. it helps push the government's agenda, and policy lines. not act as a critique. and so in the west we have a very different model of what that's supposed to look like but in some countries, leaders in some countries, as you mentioned, are seeing that china model and saying, hey, that works for us, too. carol: let's take another look at the chinese technology market. so what are you focusing on? >> when we talk about china we talk about trade. i wanted to shift and look purely at the markets.

what we've done is look at all the large cap chinese and u.s. stocks and correlation. it's a good day when i mention correlation on air. so coming to my terminal, we have chinese index, etfs, baidu, alibaba, the big stocks, and then the invesco qqq etf, a u.s. technology, like all the stocks, apple, microsoft and intel. on the bottom of the screen is where it gets interesting. that is correlation. one is you move perfectly positively together. we're the point a. that is a really high correlation meaning these stocks are really starting to move together. i think it's globalization. carol: i think you really saw that with the negative apple news and all the suppliers around the world react, many of them. jason: and you get the sense these companies are connected in ways we didn't fully anticipate, across borders. we heard that from tim cook

around the apple announcement. >> i think it's supply chain. like you were saying they can all move up together and they can all move down together. carol: it's definitely worth watching. thanks so much. coming up next, how paypal escaped obscurity by embracing its competitors. jason: ahead, garages around the world refitting vintage cars with electric batteries. carol: this is "bloomberg businessweek." place, the xfinity xfi gateway.

and it's strengthened by xfi pods, which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today.

>> welcome back to bloomberg businessweek. ahead, nancy pelosi's dealmaker reputation is definitely being put to the test. >> real estate experts see discounts ahead from luxury home buyers. as well knownis for who founded it as what it does. >> the company has had a very

good couple of years. >> reporter jay bennett with more. >> the company is known for the paypal mafia. these guys who were in various ways founded in the early years. for a lot of people, paypal is associated with email options. it's got its fingers in every part of the sprawling digital payment ecosystem. >> for a certain segment of the audience, they may have heard of paypal, but they've heard of venlo. kids are talking about venlo then paypal. a couple of acquisitions that have framed the company in a different way. >> a big one was braintree. braintree processes payments for uber, for stub hub, a lot of these instantaneous mobile phone

transactions you are not aware of. paypal and also bevenmo. it is handling these informal payments like buying a drink, or getting a present for a friend the stuff that used to not get paid back. i've only got a 20, sorry. now, you can bill friends on venmo. it's the enemy of cheap skates everywhere, really. carol: but it is not profitable. >> it's not profitable. it's a common problem. very popular especially with millennials by paypal is trying to figure out how to make money off this thing which was born in this kind of social sphere. they're trying to move it, partners with stores. carol: let us talk about partnerships. this is key. whether you have a visa or mastercard, or the banks out there wanting to process transactions. that's how you make money. what paypal has become smart at is even though they're considered the enemies, they've learned how to partner with

them. >> it was a very concerted effort on the part of the current ceo. when he came in, paypal, you know, the default option on paypal, when you go to the page, used to be your bank account. you could switch it to a credit card but it was confusing and hard which was by design. every time, paypal takes a cut from the merchant of the payment, and when that payment is made to your credit card, a lot of the cut goes back to the credit card companies. so paypal did not like that but the problem is, that made credit card companies incredibly angry at paypal. and shulman decided to forgo some of that profit but start playing nice with the banks and card networks. and it's worked. visa and mastercard for a while were trying to create a paypal killer. now they are not doing that anymore. so apple, samsung, the tech companies that have pay options now also see paypal as a partner as a way to drive more transactions through their payment platforms. carol: a pal, you might say. with us now is the editor of the magazine, joel weber. and we just heard from drake bennett, a smart story on paypal and it's a lesson of how you have to work with your enemies to get ahead. >> i love that paypal is still a story. like the dream of the 1990's is still alive 20 years later. the story is one of how paypal escaped the palm pilot, which is what it was invented for. then escaped ebay, which

acquired it, and then managed to turn foes into friends and find a path towards profit. jason: it feels like the quintessential "businessweek" story with the paypal mafia. when you think about the big themes this week, china finds its way into so many different features and segments of the magazine. >> how can it not? as these trade talks continue, this was an initial round this week. we expect more on the trade talks ahead and we wanted to use that as a way to look at the relationship between u.s. and china in different ways. technology figures prominently >> the story is really one of how paypal escaped the palmpilot, which is what it was invented for. then it's -- escaped ebay. which acquired it, and then managed to turn foes into friends and find a path towards profit. jason: it feels like the quintessential "businessweek" story with the paypal mafia. when you think about the big themes this week, china finds its way into so many different features and segments of the

magazine. >> how can it not? as these trade talks continue, this was an initial round this week. we expect more on the trade talks ahead and we wanted to use that as a way to look at the relationship between u.s. and china in different ways. technology figures prominently in the trade talks because that is one of the reasons why we are even having the trade talks. that's really why zte is on our cover this week. carol: fascinating and a reminder of the connectivity among global technology. >> we call this a bank shot off the news at "businessweek." huawei has been dominating the news lately. but it also affords us an ability to look at zte which, last spring, was that company in the headlines when trump effectively put them on thin ice. carol: one of the stories we found fascinating is talking with our reporter on the ground in hong kong, talking about, we know china has been very big in making investments for commodities and infrastructure

in emerging markets but they're also building the digital silk road. >> it's part of the belt and road initiative. they have been very successful in making inroads into africa. the technology section this week looked specifically at a case study of one country grappling with the consequences of this relationship now. jason: up next, the key to nancy pelosi's legislative agenda. carol: big dairy about to flood u.s. schools with chocolate milk. jason: this is "bloomberg businessweek." ♪

welcome back to bloomberg businessweek. >> join us for bloomberg businessweek every day from the radio that on the radio from two to 5 p.m. you can check out our daily show. us online onnd businessweek.com and our mobile app. house speaker nancy pelosi faces multiple challenges to say the least. >> she needs to shift the discussion as quickly as possible to the agents that helped the democrats win the house in 2018. >> nancy pelosi was speaker of the house from 2007 32011. by all accounts she was an effective speaker. she was good at keeping her caucus in line and making sure everyone stays together in votes the way leadership wanted them to vote. they were able to pass things like the afford of all care act. now she is speaker of the house again.

who tweetspresident policy announcements, opinions, but also has freshmen members of her caucus that also tweak their opinion and are not shy about whatever piece of legislation or business the democratic party is working on. different waybe a she's going to have to employ the skills before. >> there are a couple of things we should break down. it is mind boggling the democrats aren't a unified party. >> any party would expect to have -- democrat from new york city is going to look different from a democrat from illinois. conference, nancy pelosi is good at building consensus and listening to her members and hearing what they need in order to keep everybody taking votes they can present to their voters as progress. some progressive members would

like a more ambitious agenda on medicare for all, universal health care, universal higher education pre-k, pre-education. and you have some moderates worried about fiscal issues and aking sure that they are in position to take the mantle of fiscal discipline from republicans who abandoned that. >> you know this better than most, there is a balance for nancy pelosi. she have to think about those issues that got democrats elected. she has to balance those issues voters voted on. the presidential election, may be gaining back the senate. >> if you look within the subject area, there are a few thatfic policy approaches have been approved of by voters.

if we look at health care, voters overwhelmingly say they think people with pre-existing conditions should be protected from having their insurance taken away or insurance rates rising. if democrats can protect that element of the affordable care act, that is a popular thing with voters. if you look at gun control, there is widespread support for universal background checks. you abandon a more sweeping gun-control measure that would include an assault rifle ban and more restrictions and focus it on universal background checks, you can get those incremental wins. staying focused on politics, trump agriculture department will put chocolate milk back on school menus. who knew it is part of a rollback of former first lady michelle obama's signature

effort that mandated fewer salty snacks and more vegetables in school lunch rooms. >> the change means big dairy is thrilled. >> lunchroom wars are nothing new in america. back to the ketchup is a vegetable controversy. there was a huge debate over the obama era kids act, which made some drastic changes and andiring more whole grains skim chocolate milk. not 1% chocolate milk. skim turned out to be a big issue. skim doesn't taste as good. we are passing on the chocolate milk. reporting,out in the the fattier milk is what drives customers and keeps people coming back.

someone who was raised on a dairy farm and in agribusiness his old life. after he was appointed he came in and announced a change. the first change was to put 1% chocolate milk back in lunch rooms. >> why and how radical was the change that the trump administration made a? he said this was such a --terpiece of her centerpiece of her first lady michelle obama's time in the white house. >> it was so soon after purdue had been confirmed and made a point in saying in the press release that his role would make school and -- making school lunch is great again. practice, the changes could

have been more radical. the big change is the sodium levels, what was happening with the sodium levels it was a cudgel to force food process companies to lower the sodium levels. i talked to one consultant who described it as a cheese apocalypse. you won't beyears able have macaroni and cheese and a cheeseburger. the scale of that was apparent to the food industry. when the administration changed it had the opportunity to stop that change from happening. -- together we are talking about fortnight. >> no fun and games for luxury home sellers. for buyers, that may be a different thing. drive a mean green vintage machine. >> this is bloomberg businessweek.

welcome back. >> you can listen to us on the ,adio on sirius xm channel 119 1061 in boston, 90 91 fm in london on dc >> in the bloomberg business app. in the economic section, how the highest videogame on the planet -- how fortnight is emblematic of a new digital model of globalization. >> here's reporter and dad. >> as my son was playing fortnight, he started talking about something he and his friends were doing. that was gaming globalization. they were changing the server they were using to brazil or asia to take on what they saw's

weaker players, build up some wins and build some teenage playground/street credit. what he didn't realize what he was doing was leveraging the internet, leveraging the new globalization all of us live with every day. we kind of forget the new world is a different one. it's not just a daily one but an hourly one we deal with. i love your stories. you called it digital arbitrage, this is what they were doing. >> they spied an opportunity to make some profits in the form of wins, some easy profits by simply changing the regions they were playing. was a whole there cottage industry that sprung up in youtube videos and chat rooms

explaining these kinds of tips and tricks. my son and his buddies weren't alone in doing this. >> fortnight is a phenomenon. it was created by this north carolina company and is a multiplayer game where you start with 100 or so players and basically it's a fight to the death, essentially, virtual you squat up and do also is of different things to of and become the winner each individual session. two i haven't mostly right? job.t you are doing a good dad is playing it. this is an old-fashioned shoot them up game, the type of game we have seen. it's got some fun dancing in it. importantly it is free.

that's what turned the game out of this studio in north carolina into a global phenomenon. there are 200 million registered users. fortnight is a country bigger than brazil. it's an old-fashioned shoot them up game that has become this cultural phenomenon. although beyers, they were doing fortnight dances. it's a huge business story as well. >> how 2019 could be the year of the discount. >> at least when it comes to luxury homes. are entering a difficult time for sellers. 2018 wasn't great for anyone. now it's looking like prices are going to be coming down, inventories coming up and buyers may be able to have a discount. macro and micro economic trends

are causing issues for everyone around the globe from los angeles to new york to london. each of these different places has different economic impacts affecting it. we are seeing a bit of a hangover from the housing boom. too much building. massive amounts of condos in new york city. massive amounts of large houses. in london you have massive amounts of both. with a brexit chaser to make it that much more painful. this great chart shows the delta. vancouver taking a massive hit. that was, by all accounts, a bubble, right? >> that had a lot of foreign investment coming into the city that ultimately slow down.

there's a finite number of people that want to spend tens of millions of dollars. downork has been slowing for a couple of years now. 2019 eightng in tremendous amount of inventory held back. they simply can't hold back anymore. there are several thousand new units hitting the market. >> was it in the last week or so where it was the median price? considered pretty significant? impacting every single level of the market. discounts to luxury homes, it's all in pursuit this

week. >> they marked a new trend in vintage cars. people are electrifying them. >> people just taking the engine out of the car and putting in a battery. now becoming more popular. will basically take out the engine of a classic car, be it from the 60's and put in another kind of battery. a car that is more powerful, faster and safer. >> as you described in the story, back in the day it involved a lot of jerry rigging the batteries on batteries on batteries. >> now it's a lot easier, the technology is a lot better. >> demand is huge. >> it has been in the past three years.

now we are getting demand from all over the world. whaleked to companies in in london and new york. a lot of different people doing it. >> i wrote a whole notation. a 1973 vw bug and it was converted and it went from 40 horsepower to 400. this is a huge change. safe?were like is this basically what you are dealing with is the motor and the axles. the cars can be retrofitted to be safe. old pedal didn't have the acceleration to pull into a highway. you are much more number also is safer. >> also a lot quieter.

people will pull up next one of these cars, anyone who has been next to a beetle. you know what it sounds like. and it glides to the light. >> a can cost under $2000 and 5060, even what hundred thousand dollars. a lot of people we talked to are doing it in the $20,000 range. it can take up to six months, six weeks, it doesn't have to be that long. >> one person learned how to do it by watching youtube videos. >> it's a big thing on youtube. i probably wouldn't do it myself. >> none of us around this table can do it well. classic cars are annoying. at the end of the day they break down, they are difficult to deal with. they arrive in summary different ways.

who aret of people classic purists, this is something they never thought they would be into. but all of a sudden the cars and a problem anymore. >> what is your must-read this >> just reminding us that with all of our focus on the u.s. trade talks, let's going on now is china is making some inroads in terms of investments, but also influence over some emerging economies and this week we focus on zambia. jason: it's such a great follow-the-money story. i liked talk talking to her. it took us somewhere we didn't expect to go. carol: definitely a must-read. what was yours? jason: it is fortnite, you probably could have guessed that. it's a fun conversation. it is like catnip for anyone. but in a totally different context, fortnite as globalizing forth. carol: you look at trade differently after reading that story.

jason: check out our daily business week podcast on itunes, sound cloud and bloomberg.com. carol: more bloomberg television starts right now. . . amazon prime video is now on xfinity x1.

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david: his father was a ceo of a philadelphia chemical company. his grandfather had a retail chain started in massachusetts. he headed to new york and the world of finance. jes staley moved to latin america and to running morgan's brazilian business. after returning to new york and taking over equity capital markets, he made a move for j.p. morgan taking on the struggling