♪ carol: welcome to bloomberg businessweek. jason: we are here inside bloomberg headquarters in new york. carol: in this issue, we full fat steps. -- stacks. jason: and is anybody watching facebook watch? carol: and the social network still has a lot to prove when it comes to hollywood. and we begin with the global

cover story on carlos ghosn. jason: a month-long investigation into how this once glorified ceo ended up in jail. now, this isins us a tour de force of reporting. we really set out to tell the full story of this iconic, global auto tighten -- titan. he links companies around the world and was laid low by this secret plot. he is not in the clear at all, their roots -- there was a complicated story. we set out to tell the full story. carol: is interesting, because there is so much that has been going on this week. we had the french president worry about him in jail, and goh sn come out and say it was a plot against him. >> nobody has heard from him

since it a public setting and he actually spoke this week. so the timing could not be better and it does take this nuanced portrait of a guy and some powers that set out to bring the bill. carol: it is a story that will continue to develop, and anybody is going to want to read the story. we got more from a reporter in singapore. psy cala -- saikawa and gohsn ghosn were very close, he was hand-picked as someone to take over the day to day running of nissan. and he is someone who has written the obituary on carlos ghosn's career. it is an incredible turn of events. jason: take us inside the company.

what many people don't know about is how this internal investigation came together initially that was ultimately handed over to japanese authorities. this was effectively right under carlos ghosn's nose. >> midway through last year, a , a long timeive lawyer by training, began, for reasons that are not totally clear, they had doubts about the propriety about some of the compensation arrangements. he approached a calling for advice on what to him was an ethical dilemma. into, gradually, and internal investigation. nissan's ceo was involved, and was essentially prepared to organize an operation.

they arrested mr. cohen and someone named greg kelly, a longtime ally. jason: part of what was interesting is the coordination that they underwent. he was not much to leave on a private jet to japan for a different airport. coordinating arrests as best they could, in order to essentially keep them from taking each other off. had to be a covert and complex operation to get them both to tokyo on the same day within an hour or two that is what nissan managed to do. they were duly arrested and taken into custody, where carlos ghosn remains very -- remains. carol: i must ask, was this the

spoils of corporate success or was this that ghosn transgressed boundaries? one of the things that remains a somewhat unclear is how many people at nissan knew about these arrangements. where they signed off, how were and what was the illicit part relative to nissan? we know what prosecutors are accusing ghosn of doing, but the question is did he do things without the permission of others. those are all still open questions. there are a lot of allegations going back and forth. it is interesting to see how the process plays out. carol: but does it really matter? japanese courts, they tend to find the individual guilty. true, there are

various ways look at the statistic, but they're all pretty much in agreement that, in japan and if you are charged with a crime, you are almost certainly going to be convicted. the number of people not convicted is incredibly tiny. that said, carlos ghosn is not a typical defendant and has financial resources. in japan, the expected thing is that you confess, and that is how the system is designed to operate, and come up to some extent, how criminal defense lawyers are used to operating. -- criminals who confess who would be coached to confess in a less damaging way. carlos ghosn has made it clear he does not plan to do that. so what we will have is, if not the trial of the century, certainly the trial of the last few years unfolding in tokyo. fund: up next, why a tiny started the world's most

successful hedge fund. jason: atlanta emerges as the hub of african-american affluence and influence. carol: great story. this is "bloomberg: businessweek."

carol: welcome back. jason: joint carol and myself businessweek": every week. us online onn find businessweek.com and on our mobile app. 2018 was a tough year for many hedge funds. jason: tell that to ray dalio over at bridgewater. his fund generated big profits. carol: and taylor riggs is here to show us just how much. taylor: big profits, especially on a year when it it was tough for competitors. that is when you want to see a

hedge fund is starting to outperform. we make this into a graphic that shows the percent return for bridgewater, this macro fund up about 15%, overall gaining $8 billion. next one we have data for is only getting $5 billion. peers, really starting to outperform. always good when the s&p is down. where are you looking to get alpha? jason: this is why people pay hedge funds is to make the sort of money. the other interesting stat i came across is that six out of 10 hedge funds lost money. taylor: that is a lot, especially after the fees. [laughter] jason: ray dalio may be impressive to wall street, but not so much to the northern california county of san joaquin. are -- our editor tells

us why they decided to pull money from bridgewater despite gaining over 14%. >> he had a good year in his fund. it was a standout in a generally lousy year for hedge funds. this is one of those global macro funds that can go just about everywhere. it is going to go where the returns are. it will give you market performance, which is what people want. they pay a lot of money for the performance. but they don't always get it. record over kind of a five-year period is mediocre. it brings us to an interesting story about a retirement fund in san joaquin county california. it decided to fire the p a alpha because of what they saw as

mediocre performance. andets to a dissatisfaction a questioning some people are having about what we are doing with these funds. jason: about the entire asset class, in a lot of ways. you alluded to the rough year. one of the pieces i saw is that six out of 10 hedge funds last year lost money. and you are paying a lot of money in order to lose. that does not feel right. about hedge funds is that it is this thing that is going to make money in any market. but actually, it is really hard for hedge funds to know how to measure performance. i kind of know when i am looking at an actively managed mutual fund who will usually be benchmarked around the s&p 500. hedge funds, they will always tell you that we are offering

diversification, doing something completely different. we are going to just be delivering you also is the big jargon. and that leaves investors with a bit of a head scratcher. so how am i supposed to judge you? classically, what hedge funds have a bad year, they are benchmarking us around the s&p 500 but the money flows in. carol: what is interesting is the san joaquin county pension, it is like small fry in terms of what bridgewater and ray dalio often deal with. dalio sentless, ray a long letter. he wanted to hold onto their money. these pension funds don't just make decisions of cells, they often have. so one of the constituencies you are talking to when you are telling a board why you should fund, you're the

talking to the consultant behind the firm who may be making the decision for multiple pensions over time. is important to say that they have kept money in another ray dalio fund. they haven't, you know -- carol: run away completely. >> run away completely. it is a different product with a different strategy. carol: dalio and a bridgewater are still holding onto most of their investors. >> this is a colossus of the industry. he has a record that has impressed a lot of people. and as we say, he is coming off of a good year. things are probably going to get better, not worse. in the economic section, the big game in the super bowl happening down in atlanta. it is a boomtown, especially for african-americans. carol: and we have a chart to illustrate that, just how well

african-american households are doing in atlanta. there is a not going on, we know that, but take a look. it talks about the growth of the african-american population in atlanta, it's rather germanic. we are also -- dramatic. we are also seeing growth in high income households taking off. growing influence and affluence. jason: and don't forget that last column. it really is the home of hip-hop, r&b, and entertainment. --ink about ludicrous t.i.ris and city anda is a vibrant is getting more vibrant by the day and week. there has been a huge influx of population, and a lot of that populations african-american. black citizens0 moving into the atlanta since 2010.

that is about 50% more than the total white population. large, this qualifies as doing well, they are doing well at least the start. black incomes are up significantly come incomes above $200,000. are upber of households about 50% since 2010. there is a real five in town. community is feeling good about the status of the last several years. and that five you can feel at the gathering spot. tells about that. 75% of the getting spot is african-american, and it is like a business club and co-working space were people can get together and have dinner and drinks. go to a spot and work. become -- it is a

gathering spot for atlanta's black techies, executives. you don't have to be african-american, of course. the community's rally behind it, corporations are rallying behind it. they havet few years, had 4000 events as companies like coca-cola and the nfl host events there. a big rallying spot in metro atlanta for a very diverse population. tell us about the sector and industries that have taken root of late. >> atlanta has become the ground zero for america's hip-hop scene. some of our biggest celebrities are hip-hop singers, ludacris and t.i. you have a huge film sector here.

at the same time, you have a mainstream film and music scene here. of course, you have more traditional sectors, financial technology is huge year. tech, aueled by georgia big, so much human capital. transportationnd is huge and getting bigger in atlanta. carol: up next, washington tells the world not to trust beijing when it comes to 5g. foot: and a new breed of soldiers helping ukraine stand up to russia. carol: this is "bloomberg: businessweek." ♪

jason: welcome back. carol: you can listen to us on the radio on sirius xm and on a.m. 11 30 in new york.

boston, washington, dc. jason: and in los angeles, london, and our app. this: and technology -- in issue, another line john david washington and beijing. -- and rhonda between washington and beijing. arrested in canada in december, president trump admitted as much that she was a bargaining chip, as far as he was concerned. as was always larger treatment in the trade war. it was a little more complicated than that. when you are seeing in the charges laid down by federal prosecutors. they are circulating a lot of from members of

congress and the intelligence communities. they were a front runner in china's efforts to build 5g. it has been seen as a significant threat amongst u.s. intelligence agencies and businesses, as far as what the next internet will look like. carol: this was the u.s. justice department taking this action. what kind of support of a half from allies? -- do they have from allies? for a while, the u.s. has been pressing allies to commit to supporting generally, and to commit to keep quiet way -- huawei equipment out. and increasingly to keep them out of wireless networks more a commitmenth is that australia, new zealand, and

a handful of other countries have made. carol: it is fascinating that this came out in a week where president trump is meeting with the most senior official when it comes to trade negotiations. to have theseing two very high profile things going on caps on. -- on at the same time. yeah, it goes screaming for anyone was hoping the trade talks would go smoothly for sure. jason: as you pointed out, t-mobile is part of this discussion. accusations being levels that huawei stole trade secrets from t-mobile along the way so you have got american companies directly and indirectly. >> intellectual property has been a big part of the indictment.

it is of the crazy stuff. indictments revolved around how they, according to the u.s., not u.s. operations ,- awarded employees to steal but awarded the bonuses based on how much they got away with. the frozen conflict between the ukraine and russia is heating up. carol: how an investor is using crowdfunding to fight putin. >> he is a cardiologist in maryland at johns hopkins. time, sendshis free thousands of dollars to ukraine for everything from medical supplies to drones.

carol: what is interesting and fascinating is he is is one of many who is crowdfunding war great. tell us about all of the different examples. first of all, why is this necessary? they don't have the means or the financial support. backing up to 2014 when the war began, the military was a total disarray after 20 years of neglect. troops that were ready to fight. their technology did not work, trucks did not run. ukrainian the andra -- diaspora filled up filled the gap. they do everything like send orh to buy sniper rifles bandages, car batteries, everything. basically becoming the backbone

of the military. the last twoged in years as ukraine has normalized and gotten it back together. but these sort of volunteer crowdfunding revit citizens are still a huge part of the military effort. carol: tell us about the more significant groups that have arisen and born as a result of this crowdfunding. >> there is one group that is particularly notable called come back alive. it was founded by this i.t. specialist in his kitchen in the early days of the war watching the news, totally distraught by what is going on. he went on facebook and said i will donate a few hundred dollars to buy some bulletproof rest for our soldiers. a couple friends said we will join you, some stranger said we will join you. next thing you know, he's running this quasimilitary organization raising millions of dollars to buy sniper scopes and bulletproof vest.

delivering them to the front, basically being a privately run quartermaster for the ukrainian military. carol: what was your major takeaway, or maybe what surprised you? >> i think what surprised me was that this is not happening more in other countries. i think it will. you see the united states step back from international security agreements, you will find that there are ds pros like this all over the world. there are many eastern europeans who live in the u.s. from all sorts of countries. people from taiwan and israel. i think we will see more situations like this where, in the throes of military conflict, notes of emigres around the and getll activate involved, whether it is donating money, time, social media, whatever, we had to see the beginning. jason: here is that we need, another thing to worry about.

carol: added to the list. if you think the threat of nuclear war was history, think again. jason: this is "bloomberg: businessweek." ♪

♪ jason: welcome back. carol: still ahead in this week's issue, restaurants pivot to delivery in plate optimized lunches. jason: and facebook falling behind in hollywood. carol: we begin in remarks, opening the magazine is a reminder of a real hasn't threat -- and present threat. jason: we are talking about nuclear war, takes you back to

hiding under our desks, but it is still out there. what inspired this? 2, a nuclear arms treaty will not be re-signed by president trump. that opens up a window into a continuing problem in the world, which is arms race. without that that was over in the cold war and we are in a new version now. it takes a long time to get there, but it kind of keeps people in check. >> what is happening is that as these trees expire and don't get renewed, there is a whole new brinksmanship that starts to develop. --ol: this rhetorical article reminded me that most of the nuclear weapons are owned by united states and russia. >> that is what we have talked about for decades, that this brings the chip also brings in china, and emerging power.

is also the ability to talk about nuclear wars in this context. jason: and we cannot forget north korea, especially now that we think president trump and later may get together again. topicis a complicated because everyone has a power dynamic. also, compared to a conventional warhead. amount warheads, for the , all of these things unfold. the course of the next few months, as the street he gets signed. a fascinating story, no to add to our long list of worries. we got more from the story from our economics editor. >> a very important treaty was signed in the 80's, the intermediate range nuclear

--ces treaty, that band banned missles of a specific range. it ended when reagan and gorbachev assigned to this treaty. it was a major step away from the brink of nuclear war. protestsan for all the -- i remember all of the protests. >> but then we backslide. in 2002, we pulled out of the ballistic missile treaty because the united states wanted a missile shield. as long could not have as there was a tree. carol: and that was -- treaty. carol: and that was to prevent missiles from coming in? >> that star wars thing. and that turned out it was not easy to erect in -- an an ti-missile shielf anyway.

treaty,r was the imf another one reagan and gorbachev signed. on february 2, that is scheduled to expire. the united states announced that it was pulling out. six months after that, it becomes a dead letter. . carol: why does the u.s. wants to pull back? developed a cruz missile that seems to be within that range of 500 or 5500 kilometers. the russians deny that it has that range, but the americans and nato seem to think the russians are lying. so that is one reason. why should only the united states be bound by this treaty? another is that china was never a signatory to the treaty, so china is doing whatever it wants. the u.s. feels that it needs to have missiles in east asia to

offset china. and would be freed to do so if we were no longer bound by this treaty. carol: what is interesting is that you need these treaties to keep everybody in check. them, you without kind of say, let's have a new arms race. everybody build up their arms as they see fit. >> writes, so, there is no perfect treaty. there is always going to be treaty and you always worry that having the terms locked in is an advantage for one side or the other. but if you get rid of the treaty, as you said, there is nothing. treatyimperfect as the is, it at least allows the u.s. to inspect russian missile sites and you get some transparency. that would completely go away. carol: it is funny you said that

china is really the long-term threat to u.s. dominance. at the moment, it is russia's weakness that makes it so dangerous. , as we can see with examples of north korea and pakistan, fairly weak economic countries, but they have nukes. carol: you call it the great leveler. >> the great leveler in two cents. one, they level everything to crash into, another is that they poor, weakay for countries to bring themselves up to the level of a stronger country. and that is kind of why everybody wants them. carol: just ahead, a new kind of jim for runners -- gym for runner. kondo'slus, marie tidying empire. carol: this is "bloomberg: businessweek."

♪

jason: welcome back. carol: join us for "bloomberg: businessweek every day on the radio. you can catch up on our daily show by listening to our podcast. jason: and find us online at businessweek.com and our mobile app. over to the tech section, facebook watch is delivering -- struggling. carol: and you understand why, a lot of us don't even know what it is. jason: our chart breaks it down. it" rates in at 40%.

close to 0% is "uses daily". carol: the crazy thing is the amount of people who use facebook regularly that there isn't more of an impact. jason: and original content is doing well in other places, be at netflix, amazon, or you to -- youtube. >> facebook watch was conceived to be the thing that would bring people back into this experience, the way they have when they are watching youtuber netflix. and spend morew time in front of facebook. has not worked that way, it has been an afterthought for users. there is this persistent red dot, people don't even know what it means. when they click it, they get a confusing see of videos -- sea of videos. carol: why are they doing it?

in 2015, facebook was very proud of its 45 minutes a day on average it was getting from users. but those 45 minutes are being segmented into, on average, less than 92nd session -- 90 second sessions. people were on facebook when standing in line or sitting on the toilet. people managed to make a gigantic advertising business out of the slices of your day. what facebook needed to do to grow was to move into the parts of your day that are more planned out. the time you are sitting down watching tv is a good place to start. facebook thought they could go -- highbuy quite costly quality video and people would watch it, but so far they have not had a hit. they don't even have shows that anybody has heard of. if you have never heard of facebook watch, you are not alone.

this is something that has faltered even though they spent more than $1 billion on trying to get content. jason: what is the biggest dating -- gating factor? >> people on facebook are in a passive experience, they want to be entertained, they want to see what happening -- what is happening, and then go on with their day. they don't want to hang out. that could change, we did not think of amazon as a place to watch videos, but now i watch shows on prime. bedid not think you would watching full shows on youtube, but some people spend hours of their time on youtube every day. carol: what was facebook's intention? a fun watch when you click on that red dot. >> zuckerberg, when this started, he was very insistent that there would be no pre-roll advertising. that is what you see on youtube

before your video even starts. i do know that you, but i look at the corner and try to wait for the timeout until i can click. that is something he did not want for facebook watch. but it is hard to get to advertising projections without that. they started for the advertising called mid-roll, which interrupts your video. now they are starting to move into more modes of moneymaking. they have little banner ads at the bottom of the video, sometimes they have pre-rolls. they're also trying to do branded content when advertisers pay for a branded video and some kind of subscription service. so there are a whole lot of ways, ultimately, the goal for facebook is to get them to a level of moneymaking that content creators on watch will want to create content without being paid by facebook up front. bighey will say i have a enough audience that i don't

even have to get their check ahead of time to know i want to invest. so far, we are very far from that future. now to something people are watching. kondo is in the midst of a media blitz about tidying up. carol: the guru is helping people discover what sparks joy. reallynetflix series has , really made her teachings take off. though she is extremely popular, two best-selling books. in her first book on been on the new york times bestseller list for 150 weeks. carol: unbelievable. >> it taps into something more than just keeping your house clean. it came tove to say, my attention when i first read an article. the whole idea is you are supposed to pick up something and say "does this bring me joy? "

>> it is a very different way of thinking about products, goods, and things we had. most of us buy things because we enjoy shopping, and we enjoyed having things. what she preaches is you should think of your possessions as temporary, unless they bring you real joy, or as she says, sparks joy. america, even more so than japan, it is a new phenomenon. people are using it to ask what is important to my life? someis interesting, and in ways, is a lot more than a home improvement or organization philosophy. it is about how do i live my life? and that is what netflix has picked up, of letting her go and talk to families. it tells you a lot more about the family and then it does about the process. carol: let's talk about that. i have watched a couple of episodes and i was surprised. she is speaking japanese and they have a translator.

, this notionual that we can have dual language, particularly a dual language that a lot of americans don't have any clue what things mean. but that is a testament to netflix and their strategy of trying to take content across markets. one of the things they have done in expanding globally is looking for things that will be hot in markets and has crossover potential. carol: you also have the business strategy of kondo. she is selling her book, but she also has these consultants and strategy sessions. >> you could be a mini-marie. [laughter] carol: my husband wishes. >> you can sign up for these sessions that she does, and you are basically trained. you can go through training and learn how to be a consultant. their plandemarked,

and have a sort of teaching to think about this and how you can help other people de-clutter their homes and lots -- lives. it is not as expensive as you would think, it is less than $3000 in trading -- training your -- in training. but then you pay her a licensing fee. some people have turned this into real businesses. carol: up next, forget farm to table, it is about farm to desk. jason: and a glorious comeback. carol: this is "bloomberg: businessweek." ♪

♪ carol: welcome back. jason: you can also listen to us on the radio on sirius xm. in new york, boston, washington,

dc -- in the bay area, in london, and of course, the bloomberg business at. -- app. this change is overhauling its delivery method. is being closely watched by the whole industry on the cutting out the middleman to deliver directly to customers. in is a fast casual restaurant based in new york. it is very popular, it has expanded to boston as well. they serve that sort of veggie focused grain bowl salad type of thing everybody is doing. , youalk up and assemble get little bit of grain, some chicken, vegetable, bring it back to your desk, and that is her lunch -- your lunch. they are doing more and more meals for delivery. and in some locations, as many as 30% of sales are delivery. carol: is good, but also that.

-- bad. >> it is a lot of revenue they would not have otherwise had, but the profitability is not as good as in-store. carol: explained that. -- explain that. >> if you order from any of these third parties, they charge you a delivery fee but also charge the restaurant a huge portion of the revenue. sometimes 20 or 30% of that bowl will be going. that is difficult in a business where margins are already tight. about you were talking how digital delivery is going to be a bigger and bigger peace of the restaurant space. >> bite 2022, they're saying it could be 20 -- 10% of all sales. every restaurant everywhere. so when you're talking about a counter service lunch place come it could be closer to even 40%. carol: so what is a place like

dig in doing? >> they have been proactive in thinking about delivery. they realize this is not going to go away, so they have to change the way they operate to make this a better experience and more profitable. jason: one of the things they are doing is this idea of gaming out the temperature of the food and cooking it in a way and placing it with the different foods so that it essentially keeps cooking as is being delivered. >> it is a little kitchen geekery. they have an engineer and a chef working just figure out how do you cook food that gets possibly better as it travels? it is mostly if warm, stays cold, and the temperatures and textures are what they should be. carol: i think of something like a sweet green and is so efficient.

this is what restaurants are doing, they're trying to make their app works so well that they don't go to and hoover eats. er eats.n ub >> it is protecting margins, but also the relationship with customers. we think of online travel agencies that, 10 years ago, started to get in between hotels and airlines. the same thing is happening for restaurants. they're saying we don't want to send a loyal customer over to grubhub with a will see 10 options for lunch. jason: st. barts is getting a root. -- reboot. cold fitness classes are going global. >> we talked to mind-body, and ks a lot app that boooks

of these classes. we asked why people go back, a lot of the times, it is the community. jason: which ones should people know about? soul cycle, flywheel, a lot of the once you have heard about. we look at new and up-and-coming ones. switch playground, where you go with a friend and you partner exercises. there is one called training makes, which came from australia. jason: when you have mentioned, the mile high running club with the dirty 30. it is very intense, treadmill based, is a hard running workout. you definitely feel that you have got your sweat on. >> treadmill workouts are amongst the most popular. we have a lot of these haa i.t. -- hiit exercises.

parisians are exercising in london, in a way, but even they are spinning off a running class called rescission run from their jim's into their own city of -- studio.to their own carol: that is what struck me, it is all around the globe. >> we sent some people in the hong kong bureau to one in hong kong which had these like 3-d graphics on the floor. it lights up when you are supposed to touch during yoga classes it can be quite technology forward. carol: you also covers some colorful watches. rainbow. of the two weeks ago, i was in switzerland at this watch trade show were all of the brands show their new stuff. and a couple of brands have these watches with a rainbow colored bezel. precious stones arranged in a rainbow formation.

-- blingy bling he and bright and a surprise for a conservative company. they are popular and -- jason: very expensive. >> yeah, and rolex watch one last year that was $96,000. i took a picture and ask to like this kind of thing? people were like "oh my god, i wanted." -- want it." jason: st. barts, very devastated. but we made the journey, and just reading this, the place is amazing. >> after the hurricanes in 2017, a lot of people don't know that a lot of the hotels went off-line so they could redo everything. this winter season is the first time everything is back.

the big hotel there is not even totally open. but right now is an awesome time buto, everything is similar is refreshed, a new coat of paint and some cool places to hang out. "bloomberg: businessweek" is available right now. jason: your must-read, i know what it is. carol: it is the cover story, what a great deep dive into what is going on with carlos ghosn. it feels like just a trickle of details have come out and it is the first time you get an understanding of what is been -- behind hunt this the scenes. jason: it is a great reminder that none of this is what seems to be. carlos ghosn coming out and speaking for the first time. you also have the president of france weighing in. this is far from resolved. carol: he is still in jail, so there's more to be had here and to find more stories on businessweek.com.

jason: and check out our podcast. carol: more bloomberg television starts now. ♪

♪ chang and thisy is the best of bloomberg technology will bring you top interviews from the week. apple, amazon, tesla, facebook, it has been a big tech week for tech results. to sheryl sandberg about how the company is trying to move past its scandals and controversies. and intel claims a permanent ceo after months of searc