♪ carol: welcome to "bloomberg businessweek," i'm carol massar. jason: i jason kelly. we are at bloomberg headquarters in new york. a special focus on real estate is -- including plans to create the largest home flipping operation the world has ever seen. carol: the trouble building homes for low income residents of new orleans.

jason: we begin with the long reach of the last economic crash. joel weber joins us now. so much to dig into here. it has been 10 years. we wanted to take all of your real estate dreams and ends i tease and put them all in one place. we did. amazing.'s the scope of this, how do you choose what stories to tell? joel: you have to start with the long reach of the last crash. we are barely 10 years after that. we are still feeling the effects of that as peter coy writes in our opening essay. a phenomenonrily that comes from a lack of homebuilding. that has led to a dearth of inventory. that has pushed voices to a point where a lot of people can't afford to get in the game. carol: that's in a nutshell. we went from oversupply to hear, under supply. under housed

phenomenon is what that essay is about. there are other opportunities to talk about real estate. story, whichllow is about a company, if you have ever got to the real estate but -- bug, you can't stop looking at what houses our work. carol: estimate. joel: this is a company that has made a strategic choice to get into the home buying game and they have rolled out this phenomenon in about 14 cities. cash offersinfant you can sell your house and no longer have a broker. this is a disruptive force. they are not alone in it. pat clark did a good job of looking at what this phenomenon might mean for the u.s. housing. then: it all goes back to crash we saw 10 years ago. a lot has changed and maybe somethings haven't. carol: we have more on this overall story with editor brent begin. >> we are not about to have another crash like we just did. when that happened, you had overbuilding and you had a lot

of trade speculative pricing which was not taking in the overbuilding into account. that combination does not exist right now. what we have at this point is under building. we are under housed in america. thatcomes with the fact the large builders the last time were all but almost wiped out. builders, even if they wanted to build more, they can't. they don't want to build on spec. they do want to build on homes that no one wants. they can get the loans to build at that rate. -- can't get the loans to build that rate. we are seeing in other issue, which is that when you don't have enough homes, the existing stock becomes more expensive. people are being priced out. carol: we talk about this so often. i feel he could magazine has covered the so well. whether to silicon valley or portland or seattle, some of these markets have gotten so expensive forced -- for many people who live and work there. try to live there.

bret: san francisco, l.a., and many of those areas, it is all but impossible for somebody to buy a house. they are being priced out of those markets. happening--the only city in america that is considered undervalued right now, would be chicago. that was before the polar vortex. carol: even more so now. could we have another housing bubble? i guess at some point, but that is not the worry. it is the undersupply. there are a lot of other factors. a tight workforce. for builders, hard to find workers. bret: it's hard to buy -- higher. the labor market is tight. when interest rates go up, you are taking about moving and your mortgage might be more expensive than it might have been. you're not going to move. not moving, your house is not available to somebody who

would want to buy it. you have stagnancy because of that. carol: there's the whole concept of nimby, not in my back yard. bret: a lot of that has grown up. there are new zoning regulations that have popped up in the last 10 years. national association of homebuilders has a lot of complaints about regulations bringing up since the last housing crisis. those are having an effect on the number of available lots there to build on if you want to do. carol: some things have changed. we are feeling the effects in some ways because some of those bad loans haven't been cleaned up. bret: the government is still dealing with some of these housing loans. the last crash's extends in many ways. that is one of them. there are those loans. we are not free of bubbles. ubs does a global listing. there are many cities that we hear about often where it is impossible.

hong kong is number one. in the u.s., san francisco is the only city in the top 10. carol: up next, the challenge is brad pitt has faced building houses for low income residents of new orleans. jason: 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 us every day on the radio from two-5 p.m.. you think it's up on the daily show and listen to our podcast. subscribe at carol: itunes, soundcloud and bloomberg.com. carol:you can find us online at businessweek.com and other mobile app. movie star brad pitt has faced an uphill battle helping new orleans build. jason: is make it right foundation is being sued by residents of its home for allegedly using substandard material. carol: the foundation is suing its lead architect. jason: let's take a look at this map. it illustrate where make it right has built homes in new orleans'lower ninth ward. carol: that is exactly where make it right has done some redevelopment and brought back new homes. it is an interesting story and there's a lot going on. we caught up with editor dmitry cassidy 80's -- with the editor for more. >> the make it right foundation

is one of the nonprofits that went in. it was started by brad pitt. had been in new orleans, but new orleans and had come to know it through various movie shoots, invested in some property there and bought a home. he wasafter katrina, as going on a tour of parts of the city, he was struck by the fact that nothing had happened in the lower ninth ward. jason: the initial response from the community was pretty enthusiastic right? >> very enthusiastic, because they want to stay, because people were interested in better homes in the area. they weren't -- they were sold on this idea of new homes that built.e they committed to 150 homes. they built 109. carol: he was trying to replace their homes and make them better. homes thatke them people can be excited and feel good about and that would be energy-efficient equally affordable, they were priced very big -- affordable he.

they were subsidized. one of the sources in our story is a woman who talked to rob about the problems, which we can touch on. she was able to get her home for subsidies,ith some which wasas 150,000, quite less than what it cost to build. colorful homes, homes that would instill some pride. there is great homeowner pride in the neighborhood. jason: what happened? dimitra: within a matter of a few years of houses being up, and moved into, and people settling in, there are several ninewners of the hundred or so, i don't remember the price size numbers, that's precisely numbers, but there have been some serious problems with the houses. jason: not just maintenance type things, but mold issues--

dimitra: mushrooms and mold growing and houses. carol: was it a case of, these folks had good intentions, they built a lot of homes. and theye problems have been fixed? or they haven't been fixed? where are we? dimitra: some that we are aware of were addressed. , like one decisions house was demolished last summer completely. it got a lot of play locally in the local press. the entirerayed as organization completely missing in action. thing that we are emphasizing in this story is the best of intentions won't help you if the organization isn't structured in a way to be prepared for anything that might come in the years after these houses are built. glenfer the example of riggio's nonprofit.

it seemed that what they intended to do was less simpler, but ach structure in an organization in place to ensure that there is follow-up and followthrough and that you don't have residence feeling, as many do now, with abandonment and nowhere to go. a womane some people, is now living in a parents -- e-house her parents own. -- e-house her parents own. she is encouraging her parents to walk away from the house. it has gotten to that point where they are not getting the responsiveness they want. she things, let's find somewhere else to live because why are we going through this? that is tragic. when you think about losing a home to begin with and potentially losing one again. it is a sad story.

we did not go into this thinking that we would tell ace -- an uplifting story, but we wanted to highlight something where intentions, by almost all accounts, you have some residents who are very committed to both the work of make it did. and what they robert greene says they built houses, i'm not going to argue with that. i have a house i can point at and tell you that is my house. it was no house before. jason: also in the real estate section, how it monotonous by floor apartment buildings have conquered america. carol: it's definitely a trend. reporter justin fox telling us about the forgettable but john -- unavoidable five over one phenomenon. >> five floors of one wood framed building over one floor of concrete. there are buildings that have the general look that is only three stories high, and the tallest are five over two. five stories over concrete. i came across a blog comment ,"lling them stop -- 'stumpies

which i would really like to push. height byimited in building code. it's partially structural concerns that you can build a 30 story building out of two by fours. it is probably fire concerns. to builda movement taller buildings out of wood, but it is different wood. 2x4's putpieces, not up and the same way as single-family houses are built. this, areyou dug into there specific people, architecturally, or construction wise who are especially successful or have made this a big part of their business? justin: i kept trying to find the group that was pushing it and clearly there are big apartment developers. avalon bay has a lot of these

buildings. so does equity. it's not one particular group. partners is the biggest multi family architectural firm. they have a lot like this. there are many buildings that are not buy them though. carol: and a part of the story is the use of wood. for a wild, we've gotten away from it because of the hernandez fires that have wiped out cities and areas. tell us about the use of wood. justin: by the early 20th century, you pretty much work allowed to build lightweight woodframe buildings at all in central areas of some cities. about two stories, pretty much anywhere. it was relegated back to single-family home construction. bit, over time, partly because of innovations likes --

my fire spring colors, which make these buildings more safe than they were before, but also pushing and nudging of various building trade groups and what industry groups and others, we have got to this point where you can build five stories of lightweight woodframe. carol: up next, has the u.s. -- this -- does the u.s. need another stock exchange echo jason: a hot new trend in regulation, or key regulation. what you need to know about financial sandboxes. carol: this is "bloomberg businessweek." ♪ jason: what am back to

"bloomberg businessweek," i jason kelly. carol: you can listen to us on the the radio on sirius xm 119 and 106.1 in boston. the one fm in washington, d.c.. jason: in london on dab digital

and through the bloomberg business at. carol: in the finance section, wall street's biggest traders are building their own exchange. proposed members exchange is meant to help traders when the battle for lower fees. jason: nick baker but as the story. >> they have a good shot of taking some market share because of who was behind it. nine huge firms that are biggest -- some of the biggest traders out there. they've a lot of trades they could start to bring into this market. this is a business that could take off. it is still preliminary. they haven't filed for approval. we are probably a year away. it is early yet. the reason why it exists is because these firms, everybody on wall street other than exchanges are angry at the exchanges because they believe those exchanges charged too much. they can's not like disconnect from the nyse. they still have to be connected, but with these can do, -- they can do, they can direct trades

that they are doing to their new exchange. nick: right. they will bill to ignore the other exchanges. on its face, it just adds more complexity to an already complex marketplace. one more place to plug into. on its face, it has to come occasions. the owners of the exchange have a ton of order flow that they could start sending. it means they could start doing a lot of business. jason: are we in a moment where -- that is, right for this type of disruption? nick: investors exchange is part of a solution in theory. they are a small market. two or 3%. they charge dramatically less for things. they are aligned with the members exchange. they are very small. if you look at flash toys in a marketing campaign around that, investors exchange tended to alienate a lot of potential customers with their rhetoric. , justmbers exchange

because they are not alienated themselves against some of those folks, it will have a better shot. there are a lot of folks who were turned off by some of the rhetoric from investors exchange. members exchange may have a better shot. jason: these are real names that people know on the trading side, said that though, virtue, those two being the biggest. brokerage --l know known brokerage houses. 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 real toe market. -- retail market. much of the order flows they are bringing is retail order flow. for the exchange to the -- the succeed, it will have to have diversity. big investors and little investors. it will be interesting to see how this plays out. it is all prillaman area.

-- preliminary. the threat of this thing existing maybe the point. it is even have to open if they get concessions from the big exchanges. carol: that's what i wonder. is it about forcing the big exchanges to cut their costs and their fees? nick: that is one theory. for to be a threat, it can be an empty threat. they have to create the thing. there is reason for them to go through with creating this. if they created, it gives them a tangible voice in the industry. even though there is a threat that in theory, it could be a success even if it doesn't open if these changes cut fees, then creating it does help them ultimately and gives him a stronger voice. carol: also in the finance section, some countries around the world are finding a new way to deregulate. jason: so-called financial sandboxes like in china, canada and arizona, they are supposed to give fintech space to grow. carol: but they may remove some

major consumer protection. >> it's like a playhouse for financial technology companies. generally these are startups that are doing something digital. the idea is that they are going to compete with the big banks or big wealth management firms, but to get started, it is hard because they don't have the legal and regulatory traps set up. they don't have lawyers or regulatory advisors. they need to get started up very quickly. theyoxes are a place where can work in a controlled environment but under relaxed rules. taylor: walk me through how many regulations are able to avoid in this scenario. paula: they are saying that a company and their sandbox won't have to follow things like the truth in lending act or the equal credit act or all sorts of things. it will be immune from federal lawsuits, state lawsuits and private lawsuits. consumer groups are saying, that is scary. we are to have to rely on them

to say that this is a deregulatory environment. but also, they need to keep a close watch on these companies. which is it? are the deregulated or not? there's a lot of apprehension. taylor: give me an example of one company of been following. paula: there are no companies yet. not in the u.s.. that exists right now is in arizona. there are only three companies that have been approved in that sandbox. one of them is called sweetbridge, egg combination of -- a combination of a blockchain company with a type of cryptocurrency they call a token, it is completely digital. what they do is they allow you to make a -- to borrow against the title of your car. titles a thing called lending. consumer groups are wary of it. it is a lot like payday lending. it sounds very risky to consumer groups.

the company says, it is not risky. we have all sorts of controls on us. the arizona attorney general, which will be overseeing the six permit says it is not risky. don't worry. it hasn't started yet. we can see what the results are. we can't see with their marketing materials are. we can't see if any of the consumers who have used the service have defaulted on their loans and what happened to them. taylor: is this a big lobbying effort on their and to cut out the competition? are there legitimate concerns about the lack of consumer protections that they are trying to highlight? paula: the big banks and wealth management companies at first were very wary of these things called sandboxes. it has been going on in the u k for several years. it is considered the model. about 100 companies have gone through that. in the u k, they monitor them very closely. fact, they are sometimes even more scrutinized than a regular financial company.

they haven't relaxed the regulations. in the u.s., it is different. it is more relaxed asian of laws and rules better are in vision. -- relaxation of the rules and laws. i think these become police have bought in now. they can start sandboxes of their own. they can play in the sandbox to. startups that are more nimble, they may or may not have an advantage. i think that is one of the upsides of sandboxes. the financial industry globally in the hands of very few companies. a handful of big banks and wealth management companies. more competition is welcome. sandboxes can do that. that is a good thing. it has to be done so that consumers aren't abused or we set up another financial crisis like what we had in 2008. carol: up next, zillow finds any use for its home pricing algorithm. jason: also ahead. koenigsegg wants to go

mainstream. check this car up. carol: i think i want one. jason: you deserve it. carol: this is "bloomberg businessweek." ♪ the latest innovation from xfinity

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jason: what about to "bloomberg businessweek," i'm jason kelly. carol: still had this week's issue, saudi arabia does valentine's day. jason: the shine coming off canada's prime minister. carol: in the special real estate section, the next evolution of zillow. jason: many of us were familiar with that real estate website. howse it to help find prices and use it to find -- spy on our neighbors.

jason: we want to know the -- carol: zillow is buying homes from ordinary people and selling it to make a profit. here's the country, but the map circled in yellow, that shows you where zillow is planning to be buying and selling homes this fall. jason: they are not alone. the red circles are redfin, another well-known company in the real estate space. zillow, which is had a lock on those, they're getting into a competitive business. we talked to patrick clark. he dug into what is going on with zillow. you go to their website, and a pull together the public records and whatever else they have and they come together with a number that they are willing to offer you for your house. carol: that is it. take this number and we will give you cash right here and now. patrick: almost. they will send a person to look

at the house and make sure there is not a hole in the roof and make sure bidding looks right. they will also have a local real estate expert in phoenix or whatever market they are in. there in about a dozen soon. -- they are in about a dozen. they will have an expert make sure this is not crazy. and will offer it to you then, the value of the proposition is, you can transact today or two weeks. you get to pick your closing. carol: zillow gets a fee for a. jason: it is a little higher than what you would pay a real estate broker. patrick: indeed. 6-9%. they also make a little bit of money of selling a home for more than they buy it for. they're aiming not to make money on appreciation, but by charging the speed. carol: they become a fairly big homebuyer of properties in an area like phoenix. patrick: that's right. they are buying hundreds and

thousands of homes. they will have to borrow a lot of money to do it. zillow finances each of these purchases. they do it in cash. they have to hire on the ground employees and those employees have to manage teams of contractors who are going to go and speed is the essence of business model. the longer they hold the home, the more they are paying hoh fees,costs, taxes, insurance and all that. there tried to get a rapid turn. jason: why did they feel the need to get into this tougher business? patrick: other people were doing it. longform --eal long-term competitive risk for them. , if this is the way people want to sell their homes, and a lot of people start doing it, you can't do it on zillow but you can do it on other websites, the other website becomes the starting point for people's homebuying process.

there are other reasons as well. zillow has carved out a business by selling advertising to the agents who represent homebuyers. it has always been harder for zillow to reach people who are selling their homes. that is a different universe of potential ad sales that zillow can now access by going in this direction. if you go to zillow and say, can you give me an offer for my house and you see the offer and say you would never sell for that, zillow will try to connect you with a traditional agent who will manage the process and eventually, they are not yet selling these, but eventually they will sell leads to agents. think it iss, and i pretty credible, that these will be good, high quality leads. these are people who have already entertained in their mind the idea of selling. it is better than somebody who is starting to think about it. jason: what are the challenges? the algorithm has to be right.

as much as they are making some iftheir money on the fees, they are routinely not selling a house for as much as they think they can, as you say, either they are holding it for too long and your to deal with the carrying costs, or they're not making the margin they need. how confident are they that they can get this technology right? there are famous examples of their estimates being way off. the ceo of zillow once sold his house at a significant discount thanks to the estimate. that was fun for everybody who has complained about the zestimate on their own home. jason: they bought a new home for a new premium to this estimate. that was also off by a bit. [laughter] patrick: it's tough. zillow has different levers they can pull. they have a lot of data, they are getting a lot of data.

they should be able to, they think they can read where the market is going. if the market looks riskier than test to them, they can charge more. -- to them, they can charge more. they can stop buying homes. there is the risk that they will wind up holding hundreds or thousands of homes on their books. they're are going to realize the market has turned on them and they cannot sell them for what they thought they could. that will be sticky. is expanding their business model, taylor riggs here now with another look at the company. taylor: expanding the business model and how that is translated into their income statement. they going to loan origination and flipping homes. that is an expensive business, but they have tried to do it to get ahead of their competitors. long-term, it will provide value, but short-term it is putting pressure on margins. is the remains versus interest tax amortization, those

markings are turning negative. all because it is an expensive business. long-term it might pay off. carol: the investment community is watching to see what it means for the copy. jason: a smart take on where does next. taylor riggs, take you so much. up next, how the murdoch media empire is going to change after that is the deal. carol: plus, why justin could -- justin trudeau keeps tripping over himself. jason: this is "bloomberg businessweek." ♪

jason: this is "bloomberg

businessweek." welcome back to -- "bloomberg businessweek," i'm jason kelly. carol: you can catch up on our daily show, check out our podcast on itunes, soundcloud and bloomberg.com. jason: find us online at businessweek.com and via our mobile app. in the business section, rupert murdoch failed most of his 21st century fox media empire. that sale to disney will close soon. jason: the price tag is $71 billion. the murdoch family fortune is about to balloon. jason: we learn what to expect from rupert's next generation. >> the question was, who is going to take over for murdoch? i have to say, looking at this, it is a great escape plan. rather than give the keys of the empire to one of my children, i'm going to sell most of it to disney and i'm going to position them to build their own empires. once this deal with disney closes, it is getting pretty close, they're going to have a huge amount of money to play

-- howrol: how much echo much? felix: about $12 billion. they will be pretty well-positioned. carol: three siblings. felix: three siblings from his second marriage. james and block land and elizabeth. that is who people are keeping an eye on. it is kind of fascinating. from the start, he positioned lochland to take over what is left of 41st century fox, which will now be called fox corporation. it is about a third of the size of the previous company. it will probably grow. lochland is that he will be out there, buying stuff, acquisitions. the question is, what is his taste? jason: james goes with-- felix: he will set up his own investment company and maybe an incubator. the question is, what will he be interested in? he is looking at live streaming.

is also into environmental causes. maybe investments there. andt of success in asia, india in particular, building up star, he is a lot of relationships there are some people are thinking maybe he could make some investments there. he has been sitting on the tesla board. thele are saying, if any of siblings, james sees the most likely. he has a lot of runway in front of him. he will have a lot of money. he might it be making some big moonshot investments. carol: what about elizabeth? felix: after she sold her production company to her father back in 2011, she set up her own investment vehicle. she has been making investments artistic,duction, creative side of the industry. animation. she is a company in los angeles

called vertical networks, which makes short form video for snapchat and facebook and youtube. onple expect her to do that, a bigger scale. -- do we knowin what his original intention admission is? how long did we talk about his successors? felix: it is such a contrast to the other big secession story in the media. sumner redstone. massiveolved into this acrimony with competing lawsuits. maybe rupert bob -- murdoch saw that and said, i don't want to end up there. let's take care of this. he is 87 years old. this positions himself and his children really well for the future. carol: and the politics section this week, canada's justin trudeau is facing a general

election this year. jason: the popular prime minister has been causing some headaches for his liberal party. carol: reporter josh talk to taylor riggs. electedau was a lit -- in 2015 and it was a surprise when, or at least the scale was surprising. at the time, canadian seemed pretty comfortable with it. his numbers soared and he a lot of allies at the provincial level. things were going well. ofce then, he is had a lot typical accumulative controversies that incumbents often have. the tables have turned heading into the election this fall. he once had a fairly large lead over his next closest lot -- rival. that has shrunk to a percentage point or so. it is now a razor thin lead for him. he is dealing with a lot of controversies. the most recent one, a pretty expose of one of about whether he pressured his then justice minister and attorney general to intervene on the behalf msnc labs.

--lor: that justice manager minister was overseeing rural areas with mistrust and corruption. how important has that unfolding been to trudeau? the justice minister is from an urban area, but the whole idea was to appeal to roll voters. she was shuffled from a justice, which is a very procedures job to veterans affairs witches less so. it raised eyebrows the time. 4-8 months later, we have a resolution that this newspaper is reporting that he has been hising on his -- leaning on justice manager to play ball with this company. it has been an expose of question. trudeau has a lot of questions that are scattered regionally across canada. he tried to calm rural voters, odds with the downtown liberal party that he

runs. he is trying to compete out west. that is where the justice minister is from. he is trying to figure out come back as well. that is where this company is based. montreal. all of these things are crossing together. as he looks at his electoral map, he thinks, how can i ask great together and have it -- to scrape together and have a majority government? taylor: you talk about other parties. ear looks to be the main competition to trudeau. josh: he is an interesting guy. he is mainstream as far as conservative parties go. the flirt a little bit with to skepticism about globalization. he supports brexit and reminds people that he supports it. given the current -- controversy about the issue. he is skeptical of a human migration pack, which we have seen right-wing parties motivating their supporters around.

it would be a shift to the right if he won power. it is those two parties that have governed canada historically. kudos liberals, and the middle, and sheer on the right. the big question is the third party on the left. the new democrats. they are in a freefall. that could be good news for trudeau. their voters will probably favor him over shear. carol: up next, how one might say i love you in saudi arabia. jason: sweden's supercar dreams. this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek," i'm carol massar. jason: you can listen to us in the radio on sirius xm channel 119 and a.m. 11 30 new york, one

061 boston, 91 fm in washington dc jason: i am 960 in the bay on dab digital in the bloomberg business app. carol: the super rich thought they had a secret supercar they love to drive. jason: it is something. we are talking about swedish carmaker koenigsegg, which makes million dollars sports cars. jason: they want to go mainstream, taylor riggs spoke to our editor. >> they came up with a car that is now the fastest street legal car you can buy. per hour.9 miles it sells for $2.1 million. not the kind of thing that runs down to the dealership and pick up. this is something that aims at the truly superrich. interestingt was an place to take a look at. the company has decided they are not ok with just the superrich. they want to make things for just the rich.

they are coming up with a new car that is going to sell for $1 million, or a little over and that puts them squarely in competition with the luxury super luxury cars that a lot of us have heard. taylor: what is the business access of this car? trying to do so the price to $1 million. for rory is it a competitor. what is furry have that they want to achieve? -- ferrari want to achieve that they have? jim: for rory is the most profitable supercar producer in the world. it is about $80,000 of profit in each for ari. you say, is that a lot of money? yes. it is a lot of money. audi hasdes or an about $17,000 in profit. is thing about a for rory andcan go back -- ferrari you can reintroduce models that collectors want.

you can update them and it is a brand that people understand they want. what koenigsegg wants to do is get to that. to do that, they have to make a change in how they manufacture. taylor: talk to me about the changes in the manufacturing. jim: they are joining forces with another company in sweden. the old swedish carmaker that is now on hiatus? they're not building cars. the company has been bought by chinese businessmen who have maintained the factories. they have kept it going and have kept it operating by testing work for other carmakers. that is kept about 700 people working. it us at the factory ready to start building saabs again someday. part of the crazy plan they have that, they do a joint venture with koenigsegg to build their new car. then they will have the factory

upbuilding new cars in the hundreds. then, on the side, they will start rebuilding saabs again and rebuild that factory. the factory was very large. hardly doingt is any work now, it could go for years doing both saabs abnd koenigseggs. it gives koenigsegg a real facility. it gives a jumpstart -- it jumpstart's the old saab factory working again. they are near one another. it makes sense. jason: in the economic section, the times they used to be tense in saudi arabia. carol: the holiday was banned, but attitudes are shifting. jason: that means it's a potential new market for red roses and greeting cards. here is casino in black. >> downtimes day has been banned -- valentine's day was banned in saudi arabia. not officially, but those who tried to buy and sell

merchandise, they were allowed. there has been lots of changes. under the de facto ruler of the country. businessesi think felt emboldened to push the envelope. another thing does happen this year that hasn't been out in previous years, there have been edex worrying -- warning florist not to sell red flowers in the days leading up and after. they talked often about opening up the market. releasing some of the restrictions. we have someknow really atrocious things that have been going on in saudi arabia. we are try to tell this to valentine's day in terms of restrictions, easing, what is going on. cristina: this is a tension at the heart of the leadership in that country. they have relaxed a lot of social mores it.

in other areas, they have tightened a lot. they have been sanctioned. we've all heard in various different ways. -- the bet ishat that as people feel in their personal lives they enjoy more freedoms, that they won't be pressing so much for democracy or what we see in other countries. carol: we take summary things for granted, silly holidays or birthdays. strictdo a interpretation of the muslim religion, you see that they don't. cristina: i had been aware of until i added this story, but there are some muslim holidays that wahabbism does allow seller rated. no birthdays, no imports from christian religions. some people who said it is not for me. havingren't against

stores selling the merchandise and people going to restaurants and celebrating valentines dinners, but they said not for me. jason: this gets to the heart, and the case of saudi arabia, to the idea that this is an economy that has to be diversified. so much of that ties into the politics and relationships between the ruler and the people. cristina: that's right. local businesses have had a tough time in the past couple of years ago there is been an austerity program. the bigger goal of trying to steer the economy away from oil and develop other industries, but at the same time, we did that story last year about how many businesses were going out of business. important that they allow these spaces. it reminds me a little bit of cuba. there, they say that the government grips and relaxes.

is that in times where there have been great economic strains, the authorities, what they do is look the other way. they're not saying, we sanction this, yes, go ahead. carol: bloomberg businessweek is available on new stance now. jason: and on line and on our mobile app. must reads this week. i love this real estate section. zillow jumped out to me. everybody uses them. zillow getting into the home buying and selling business-- that is a whole new twist. carol: definitely a turn. talking about strategy, what is next for the murdoch sacco they've sold off so -- murdoch's? there saw so much, and now you worry about the next generation and what they will do with those billions of dollars. what kind of investments? you can find more stories on businessweek.com. our dailyck out

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>> welcome to daybreak australia. i'm haidi stroud-watts in sydney. >> i'm sherry ahn. >> i'm sophie kamaruddin and hong kong. we are counting down to the asian market open. haidi: haidi: the stop stories we're covering. haidi:stocks set to rise as wall street surged to a 10 week i. the kiwi is down but the aussie is little change. trade records back in washington and signs of pro