♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. we are here at bloomberg headquarters in new york. carol: this week, what rupert murdoch plans to do after they sell out to disney. jason: plans to create the world's largest home living operation the world has ever seen. carol: trouble building homes for low-income residents of new orleans.

jason: we begin with a long reach of the last economic crash. joel weber joins us now. so much to dig into now. it has been 10 years. joel: we want to take all of your real estate dreams and anxieties and take them in one place and contain them for you. jason: the scope of this, how do you choose what stories to tell in this case? joel: you have to start with the long reach of the last crash. we are barely 10 years after that and we are still feeling the effects of that at peter writes in the opening essay. that is primarily a phenomenon that comes from the lack of homebuilding. a derth of inventory. that has pushed prices to a point that a lot of people cannot afford to actually get in the game. carol: from 10 years, we went from oversupply which led to -- here we are, undersupply. jason: the overhouse phenomenon is what that is at about. other opportunities. i love the zillow story.

if you got the real estate, you cannot stop looking at what your house is worth. this is a company that has made a strategic choice to actually get into the home buying game. they have rolled out this phenomenon in 14 u.s. cities. there is an instant cash offer that you can sell your house and no longer have a broker. this is a real disruptive force. they are not alone in it. jason: as you say, it all goes back to that crash we saw 10 years ago. a lot has changed and maybe some things haven't. carol: we have more on this overall story with bret begun. bret: we are not about to have another crash like we just did. when that happened, you had overbuilding and a lot of great speculative pricing that was not taking the overbuilding into account. that combination does not exist

right now. what we actually have at this point is under building. we are underhoused in america. that comes to the fact the large builders the last time were all but almost wiped out. the smaller builders, if they wanted to build more, they can't. they don't want to build on spec. and they cannot get the loans to build at that rate. we are sort of seeing a different issue now which is that when you don't have enough homes for people, the existing stock becomes more expensive and people are getting priced out. >> we talk about this so often. whether it is silicon valley, whether it is up in portland, seattle -- some of these markets have gotten so expensive for many of the people who live and work there. bret: san francisco, l.a., in many of those areas and cities, it is all but impossible for somebody to buy a house. they are being priced out of

those markets. you see that sort of happening really -- the only city in america that is considered undervalued right now if you are thinking about moving would be chicago. that would be before the polar vortex. carol: even more so now. we talk about could we have another housing bubble? i guess at some point but that is not the worry. it is the undersupply. a lot of other factors. tight workforce. builders, it is a hard thing to find workers. bret: the labor market is very tight. with interest rate hikes -- as interest rates go up, you are thinking about moving in your mortgage might have been more expensive, you're not really going to move. you are not moving, you are not making your house available to somebody who would want to move. you have a lot of stagnancy. carol: the result concept of not

in my back yard in terms of building. bret: you've got new zoning regulations that have popped up in the last 10 years. national association of homebuilders have had a lot of complaints about regulations since the last housing crisis. those are definitely having an effect on the number of available lots that are there to build on. carol: some things have changed. we are still feeling the effects in some ways because some of those bad loans have been yet to be cleaned up. bret: the government is dealing with these federal housing loans. again, the long reach of the last crash in many ways. there have been issues with some of those loans. you also have -- we are not free of bubbles. ubs does this global listing. there are many cities that we hear about often where basically it is impossible. hong kong is number one. in the u.s., san francisco is hear about often where basically

the only city in the top 10. carol: up next, the challenges brad pitt faces building houses for low-income residents. jason: this is a story inspired by a road trip. carol: this is "bloomberg businessweek." ♪ ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. join carol and me for bloomberg businessweek every day on the radio from 2:00 to 5:00 p.m. listen to our podcast. subscribe at itunes, soundcloud. carol: you can find us online at businessweek.com. movie star brad pitt faces an uphill battle helping new orleans build after hurricane katrina back in 2005. jason: his foundation is being sued by residents of its homes for allegedly using substandard material. carol: the foundation is suing its lead architect. jason: take a look at this map. it illustrates where the foundation build homes in new orleans lower ninth ward. carol: that is exactly where make it right has done some redevelopment. it is an interesting story and a lot going on. some controversy. we caught up with the editor for more. dimitra: there are these houses that have been built by a foundation called the make it right foundation, one of the nonprofits that went in.

it was started by brad pitt. he had been in new orleans, love new orleans. knew it through various movie shoots. bought a home there. a year after katrina as he was going on a tour on parts of the city, he was struck by the fact nothing happened to the lower ninth ward. jason: the initial response was enthusiastic, right? dimitra: very enthusiastic. because they wanted to stay. people were interested in better homes in the area. they were really sold on this idea of new homes that would be built. they committed to 250 homes. at the end of the day, they built 109. they were trying to replace the homes to make them better. people can be excited about, feel good about, and energy-efficient.

greater affordability. they were priced very affordably. they were subsidized. one of the sources in our story is a woman who talk to rob about the problems which we can touch on -- she was able to get her home for $130,000. the going rate was $150,000 and that was quite less of what it cost to build these houses. colorful homes. homes that would really instill in some pride. great homeowner pride in the neighborhood. jason: and what happened? dimitra: within a matter of a few years of houses being up and moved into and people settling into their homes, there are several, several homeowners of the 109 or so -- 106 houses. three condo type townhouse units. i don't remember the precise numbers, but there have been many problems with the houses and serious problems. jason: not every day maintenance

phase. mold issues. dimitra: mushrooms and mold growing in houses. carol: was it a case of, all right, these folks had good intentions. they built a lot of homes, came close to what they said they would. there were problems and they have been fixed or haven't been fixed? where are we? dimitra: some that we are aware of were addressed, but then there were ultimately decisions, like one house was demolished last summer completely. it got a lot of play locally in the local press and it was portrayed as really like the entire organization completely missing in action. that is -- one of the important things we are emphasizing in the story is that the best of intentions won't help you if the organization is not structured in a way to be prepared for anything that might come in the

many years after these houses are built. we offer the example of -- the nonprofit and effort because it seemed what they intended to do was just less conspicuous, much simpler, but a structure and an organization in place to ensure there is follow-up and followthrough and you don't have residents feeling, as many do now, abandon and nowhere to go. there are some people, kamaria allen, a resident. she is living in a house that her parents owned. she bought one of her own but had to move out of it and she is living in the home that her parents bought an encouraging her parents to simply walk away. they are not getting the responsiveness they want. she thinks let's just find some place to live because why are we going through this, which is tragic when you think about losing a home to begin with and potentially losing one again. it is a very sad story. we did not go into this thinking

we were going to tell a super uplifting story, but we wanted to highlight something where intentions, by almost all accounts -- you have some residents who are still very committed to the work of make it right and what they did. robert green who says they build houses, i will not argue with that. i at least have a house i can point at and tell you that is my house. jason: how monotonous five-floor apartment buildings have conquered america. carol: justin fox telling us about the forgettable, yet unavoidable five over one phenomenon. justin: five floors of wood floor building over one concrete floor. there are buildings that have the general look that are only three stories high and the tallest are five over two. five stories over concrete. i came across somebody on a blog comment calling them stumpys.

that is really good. jason: i'm at the stumpy on the corner. justin: they are limited in height by building code. it is partly structural concerns that you cannot build a 30 story building out of 2x4's, it is partly fire concerns. there is this movement to build taller buildings out of wood but a different kind of wood. big, hulking pieces of wood. not 2x4's. put up in the same way single-family houses are put up in this country. jason: as you dug into this, are there specific people, either architecturally or construction wise who are especially successful, at made this a big part of their business? justin: i kept trying to find the group that was pushing it. clearly, there are big apartment developers. avalon bay has a lot of these buildings all over the country, but so does equity. it is not one particular group driving it.

humphreys and partners in dallas is the biggest family architectural firm. you are lots of buildings that look like it that are not buy them. carol: an interesting aspect is the use of wood. i think for a while, we have gotten away from it because of arendt's fires that wiped out cities and areas. tell us about the use of wood. justin: basically by the early 20th century, you pretty much were not allowed to build lightweight woodframe buildings at all in central areas of some cities. and above two stories pretty much anywhere. it was pretty much relegated back to single-family home construction. kind of bit by bit over time, partly because of innovations like fire sprinklers which make these buildings a lot safer than they would have been before, but also by pushing and nudging of

various trade groups and wood industry groups, we have gotten to this point you can build five stories of lightweight wood frame. carol: up next, does the u.s. need another stock exchange? we will tell you why some heavyweights on wall street think so. jason: a hot new trend in regulation or rather deregulation. what you need to know about financial sandboxes. carol: this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. you can also listen to us on the radio on sirius xm and am 1130 in new york, 91.1 fm in washington, d.c. jason: and the bloomberg business app. in the finance section, wall street's biggest traders are

beginning their own exchange. carol: the proposed members exchange is to help traders with the battle for lower fees. jason: nick baker brought us the story. nick: nine huge firms, some of the biggest traders out there. they've got lots of trade they can start directing into this market. so, this is a business that could take off. it is still preliminary. they have not filed for regulatory approval. maybe a year away from existing, but the reason why it exists it is these firms -- basically everybody on wall street other than exchanges are angry at the current exchanges. they currently charge too much. carol: it is not like they can disconnect from the new york stock exchange. they still have to be connected, but what they can do, these

owners of the new exchange, they can direct trades they are doing to their new exchange, correct? nick: right. they will not be able to ignore the other exchanges. this adds more complexity to an already complex marketplace. one more place to plug into. the members exchange. it does add to the complication, but the owners of the exchange have a ton of order flow. they can start sending there. it means they can start doing a lot of business. jason: are we in a moment where -- that is, shall we say, ripe for this type of disruption? nick: it is part of the solution. only 2% to 3% of the market, but charged dramatically less for things than the big incumbents. they are in a way aligned with the exchange, but they are really small. and marketing campaign around that -- investment exchanges alienated a lot of potential customers with some of their

rhetoric. i think the numbers exchange, just because they have not alienated themselves, they may have a better shot. the investors exchange is not fighting the good fight in some respects. a lot of folks were turned off by some of the rhetoric over the years. members exchange, they may have a better shot. jason: these are real names that people know on the trading sites. citadel being the biggest. also some well-known brokerage houses as well. they could get some real volume here. nick: when you talk to folks associated with this company, it is clear they don't want this to be a retail market. but that is kind of -- much of the order flows they are bringing his retail potentially. for the exchange to succeed, it will have to have a diversity of order flows. big investors, little investors trading there. it will be interesting to see how this plays out. this is all preliminary. talking to some folks, even a threat of this thing existing is making a point.

this thing does not even have to open if they get concessions. carol: that is what i wonder, forcing the big exchanges to cut their costs and fees. nick: that is one theory. for it to be a threat, it cannot be in empty threat. they have to go through the motions. if you set that aside, if they create it, it gives them a more tangible voice in the industry. even though there is this threat, in theory, it could be a success if it does not open, if the exchanges cut fees. it does help them ultimately give them a stronger voice. carol: some countries around the world are finding a new way to deregulate. jason: so-called financial sandboxes like china, canada and

even arizona. they are supposed to give fin tech space to grow. carol: they may also remove some key protections. paula: it is like a playhouse for financial technology companies. generally, these are startups doing something digital. the idea is they will compete with the big banks or wealth management firms. but to get started, it is very hard because they don't have all the legal and regulatory traps set up. they don't have lawyers and regulatory advisors so they need to get started up very quickly. sandboxes are a place where they can work in a controlled environment but under relaxed rules. >> walk me through how many regulations there are able to avoid. paula: what they are doing is a company in their sandbox will not have to follow things like the truth in lending act or equal credit act. they will be immune from federal lawsuits, state lawsuits and private lawsuits. consumer groups are saying that is pretty scary. we are going to have to rely on them to say that this is a deregulatory environment, but keep a close watch on these companies.

there is a lot of apprehension about this program. >> give me an example, one company you have been following. paula: there are no companies yet, not in the united states, because the sandbox that exists right now is in arizona. there are only three companies that have been approved in that sandbox. one of them is called sweet bridge. it is a combination of a blockchain company with a type of cryptocurrency that they call a token.

it is completely digital. what they do is they allow you to make, to borrow against the title of your car. this is a thing called title lending. consumer groups are very wary of title lending. it is a lot like payday lending. it sounds very risky to consumer groups. the company says no, it is not risky at all. we have all sorts of controls. the arizona attorney general says no, it is not risky at all. don't worry. it has not started yet. we cannot see what any of the results are. we cannot see with their marketing materials are. we cannot see if any of the consumers who have used the service have defaulted on their loans and what happened to them. >> is this just big lobby effort to sort of cut out the competition or are their legitimate concerns about the lack of consumer protections that they are really trying to highlight? paula: the big banks and big wealth management companies at first were very wary of these things called the sandboxes. it has been going on in the united kingdom for several years and considered the model. about 100 companies have gone through that sandbox. in the u.k., they monitor them

very closely. sometimes they are more scrutinized than a regular financial company. they have not relaxed the regulations or laws. in the u.s., there is relaxation of laws and rules that are envisioned. the big banks and big wealth management companies at first were very wary of this, but now i think they have bought in because they can start sandboxes of their own so they can play in the sandbox too. the startups that are more nimble may or may not have an advantage, although i think that is one of the upstarts of sandboxes. is that you have the financial industry in the united states and globally in the hands of very few companies now. a handful of big banks. if sandboxes can do that, that is a good thing. it has to be done so that consumers are not abused or we don't set up another financial crisis like what we had in 2008.

carol: up next, zillow finds a new use for its home pricing algorithm. jason: still ahead, a supercar maker wants to go mainstream. check this car out. you deserve it. carol: this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." carol: still ahead, saudi arabia does valentine's day. jason: also, the shine coming off of justin trudeau. carol: and in the special real estate section, the next evolution of zillow. jason: so many of us were familiar with the website and we used it to price homes and spy on neighbors. carol: now, zillow plans to start buying homes and then reselling them at a rocket.

-- profit. you are looking at, of course, the country, but these maps show you where they plan to be buying and selling homes. jason: and they are not alone, those red circles are redfin, another real estate company in that space. zillow is getting into a much more competitive business. we talked to patrick clerk who dug into what is going on. >> you can go to their website, give them your address and entry information. that all together public records, whatever else and they quickly come up with a number they are willing to offer you for your house. carol: that's it, take this number, we'll give you cash right here. >> almost, they will send a person the house and make sure that is not a whole the roof and everything looks right. there will also have a local real estate expert in phoenix,

whatever other markets. they will have an expert eyeball it and make sure your and then they will offer to you. and in the value proposition is that you can transact today, two weeks, you get to pick. carol: and they get a fee for it. jason: a little higher than what you would typically pay. >> indeed, 6-9%. they may also make a little bit of money by selling home for what they buy it for. they're saying they're aiming to not make money on appreciation, but by charging the fee. carol: they have become a big homebuyer in areas like phoenix. >> that's right, they're buying hundreds of homes. they will have to borrow a lot of money to do in -- do it. each of these purchases are a line item.

that's a higher both tons of on the ground employees, but does employees that have to manage teams of contractors. speed is of the essence for zillow because the longer they hold the home, the more they are paying financing costs, homeowner association fees, taxes, insurance, all that. jason: why they feel the need to get into this business? >> others were doing it. there is this long-term competitive risk for them. which is if this becomes the way people want to sell their home's a lot of people start doing it, and you can't do it on zillow of his other website, you have no use for zillow. only other website becomes the starting point for this process.

but there are other reasons as well, zillow has always carved out a business by sending -- selling advertising to agents with homebuyers. it is hard for them to reach people selling their homes, that's another universe zillow can now access by going in this direction. and you go to zillow and get an offer and then say i would never sell for that, zillow's going to then tried to connect you with a traditional real estate agent who will manage the process, and eventually, not selling these as leads, but eventually they will sell leave spirit -- leads. the theory is that these will be quality leads, people who have already entertained and there mind the idea of selling. it is better than somebody who is starting to think about it. jason: one of the challenges does appear to be that the algorithm has to be writes. -- rights.

as much as they are making money on the fees, if they are routinely not selling a house for as much as they think they can, as he said, either they hold it for too long and sound the carrying costs or they are just not making the margin they need. how confident are they they can get it right? >> there are famous examples of the estimates the way off. the ceo wants sold his house for a significant discount than his estimate, which is fun for everybody with complaint -- who has complained. jason: and they got a new home at a high premium to these estimates. >> and was also off by a bit. it was tough. they have different levers they can pull and i have a lot of data, they are getting a lot of data.

they think they can read with the market is going for if the market looks risky, they can charge more, right? of the market looks risky, they can just stop buying homes. but there is the risk they will wind up holding hundreds of thousands of homes on the books and they are going to realize the market has turned on the third they can't sell them for what they thought they could come and i will be sticky. carol: taylor riggs is here with another look. taylor: expanding the business model and their income statement. they go into loans and flipping homes, that is an expensive business but they have done it to get ahead of competitors. it is putting pressure on margins, so what i have chart here are earnings before the interest tax appreciation. those margins are turning negative, as you can see your -- as you can see. long-term, it might pay off.

carol: and you have heard this from the investment community. jason: really smart take where this goes next. taylor riggs, next. where the murdoch empire goes after the merger. jason: this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." carol: join us every day on the radio from two-5 p.m. wall street time. you can also catch up on our daily show on itunes, soundcloud, and bloomberg.com. jason: and fund is online. -- find us online. the sale to disney is coming soon. carol: the murdoch family fortune is about to balloon. jason: we heard what to expect from rupert's next-generation. >> the question was whoever would take over. and looking at this, it is this great bit of a state planning. so rather than give the keys the avenue hard to one of my children, i will sell most of it to disney and the that position them to build their own empires. once this deal with disney closes, and it's getting pretty close, they will have a huge amount of money to play with. carol: how much? >> about $12 billion will be coming out to the family. they will be pretty well-positioned. carol: three siblings. >> three siblings from his second marriage. that is very much a people are

keeping an eye on. it is kind of fascinating. from the start, he positioned auckland to take care of fox. it is still a third of the size of the previous company, but it will probably grow. they have said that we will be out there, buying stuff, making acquisitions. the question is what is his taste? jason: and james? >> he will set of his own investment company. the question is what is he interested in? people are like he's looking at live streaming tv space, but he's also really into environmental causes. he also had a lot of success in asia, have your particular, and the a lot of relationships are -- they. he has been sitting on the tesla board, and people are thinking of any of the siblings, jean

seems the most likely. mid 40's at this point, a lot of runway in front of him, a lot of money. he might be making some big investments that could be surprising. carol: what about elizabeth? >> after she sold her production company back in 2011, she set up her own investment vehicle, and she has been making investments in kind of the production, artistic creative side of the media industry, animation. she is his company in los angeles called vertical networks which makes short form video for snapchat and facebook.

i think people expect her to do that, only on a bigger scale. carol: how much time have a talk about who's going to be his successor? >> it is also such a contrast to other big succession stories is what happened with the redstone. that just evolved into this huge, massive competing lawsuits and acrimony. and maybe rupert murdoch saw that i was -- that and was like, i don't want to end up there, let's take care of this. he positions himself and his children well for the future. carol: in the pot succession justin trudeau is facing a general election.

jason: but the prime minister had has -- has been causing headaches. >> trudeau was elected in 2015, and it was a surprise win at least the scale was surprising. at the time, canadian seemed pretty comfortable. his numbers soared and he had at the provincial level . since then, he has had these accumulated controversies incumbents alstom have. -- often have. so the tables have turned. he once had a large lead over his next closest rival in canada's multiparty system. that has shrunk to maybe a percentage point or so to now a razor thin lead. he is dealing with a lot of controversies, the most recent one, pretty explosive about whether he pressured his justice minister and attorney general to intervene.

>> that justice minister was helping to oversee rural areas that have a lot of big-city mistrust. how important has that scandal been? >> the justice minister is argan but all of the changes were part of an effort to affect urban voters. she was shuffled from justice to veterans affairs, which is substantially less prestigious. it raised eyebrows at the time. fast forward, we have is revolution that this newspaper is reporting that trudeau had been leaning on his justice minister to play ball with this company. this has been a huge, explosive question. now, he has a lot of problems that are scattered regionally across canada. he is trying to call rural voters, many of whom wrestle at very urban, liberal, downtown party he runs. he's trying to save seeds out west, an important region, that

is what the justice minister is from their -- from. and he is trying to court quebec. so all of these things are crossing together as he looks at his electoral map and thinks how can i scrape together enough to have another majority? taylor: you talk about other parties, and then enter is in sheer, the character looking to be the main competition.

>> sheer is an interesting guy, fairly mainstream as far as conservative parties go. he flirts with elements of globalization, supporting brexit, going out of his way to remind people he supports it. he is skeptical about the u.n. a migration path, which we see lots of parties motivating supporters. it would definitely be a shift to the right if he won power, but it is steadily those two parties that have governed canada historically. the big question is the third party on the left, the new democrats. they are in a freefall, good news for trudeau, because their voters will favor him over sheer. carol: up next, how one might say i love you in saudi arabia. jason: plus, sweden's supercar dreams. this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." jason: you can listen to us on the radio on sirius xm it in new

york, boston, washington dc -- carol: the bay area, in london, and on the bloomberg business at -- app. the superrich have a super secret, a supercar they love to drive. jason: we are talking about the swedish carmaker that makes million dollars sports cars. carol: they are looking to go mainstream. >> they have come up with a car that is, right now, the fastest street legal car you can buy in the world. its 249 miles per hour, but it also sells for $2.1 million. not the kind of thing to run down to the dealership and pick up, this is something that aims at the truly superrich. we thought it was an interesting place to take a look at, because the company has decided they do not just target superrich, they want to make things for just rich.

so they're coming up with a new car that will sell for a million dollars of a over $1 million, putting him squarely in competition with the super luxury cars that a lot of us have heard of. taylor: what are the business aspects of his car? for our is a big competitor, what are they have this guy wants to achieve? >> ferrari is considered to be the most profitable on a per car basis of any in the world. it's estimated you have about $80,000 of profit in each car. you ask if that's a lot of money, yes, it's a lot of money on a typical luxury car, you are thinking about $17,000 in profit, less than 20,000. the thing about a ferrari's you can go back into the history books and bring in and reintroduce models that collectors want, update them. it has got a brand that people understand they want. so what could is a big -- koenigsegg wants to do is change the manufacturing. they are joining forces with another company, remember sob -- saab?

they are now on hiatus in that building cars, but the company has been bought by a chinese businessman who has maintained the factory. he has kept going and operating by doing testing work for other carmakers that has let him keep about 700 people working. part of the crazy plan they have is to get ready for that, he will joint venture to deal the new car. and then, they will have the factor outbuilding more cars and

then on the side, they will start rebuilding and eventually rebuild the factory. the factory was actually very large, even though it is hardly doing any work now, it go for years doing the. -- doing both. so give them a real facility and at least a jumpstart to get the old factory working. they're both in southern sweden and both near one another, such makes a lot of sense. jason: in the economic section, valentine's day used to be tense in saudi arabia. carol: the holiday was banned, but attitudes are shifting. jason: that means a potential new market for red roses and greeting cards. >> valentine's day has been banned in saudi arabia, never officially, but in practice of people who tried to buy and sell merchandise, you know, they were punished. but there have been lots of

changes socially under the de facto ruler of the country. this year, i think businesses felt a little emboldened to push the envelope. there have been outright edicts warning florists not to sell red flowers in the days leading up and the days immediately following the holiday. carol: they talked often about opening up the market, releasing some of the restrictions and, of course, we know we have some really atrocious things have been going on. we're tied to tell this to valentine's day, in terms of restrictions easing what is going on really. >> this is a tension at the heart of leadership in that country that has relaxed a lot of social mores, but in other areas, has tightened a lot. dissent has been sanctioned. we've all heard in various different ways.

so i think that that is that as people feel like in their personal lives they enjoy more freedoms, that they will not be pressing so much for democracy or what we see in other countries. carol: there are some a thing as we take for granted, silly holidays are celebrating birthdays. and if we do a strict interpretation of islam, these are things they don't -- >> i was not aware until i edited the story that there are some a muslim holidays that they do not allowed to be celebrated. no birthdays, no imports from the christian religion. so we did talk to some people, consumers, who said it is not for me. they weren't against having

stores selling merchandise and people going to restaurants celebrating valentine's day, but they said not for me. jason: this gets to the heart of the idea that this is an economy that has to be diversified, and so much of that plays into the politics and relationship with the ruler and people. >> that's right, and they have had a hard time because there has been this government austerity program. in trying to steal the economy away and develop other influences. we did a story last year about how many businesses were going out of business. it is important that they allow these spaces. it immensely of cuba, there, they say the government groups and relaxes. the idea is sort of in times of great economic strain, the authorities, they look the other

way. they aren't saying we sanction this, go ahead. carol: "bloomberg businessweek." is available on newsstands now. jason: must read this week, i have to go with this real estate section. still jumped out to me as i love things like estimates, everyone uses them. but zillow getting into the home buying and selling business. carol: talking about strategy, what is next for the murdoch family? they have sold off so much from the company empire and media empire, so now you wonder about the next generation. what kind of investments they will make. jason: gillette told that story so well. carol: check out more stories all week.

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

>> the following is an independently produced program. the opinions expressed do not reflect those of bloomberg lp, its affiliates, or its employees. kim: i'm kim komando and back with a good, weird, and a scary for the world of tech. these are getting smart. crooks demand you do one thing or else. you need to know this so you are not the next victim. turned tocompany artificial intelligence to finish something no one else has been able to do or 197 years. stay with me this hour and i will tell you all about it. remember the video last year