♪ carol: welcome to "bloomberg businessweek." i'm carol nassar. we are inside the magazine's headquarters here in new york. the cover story, global challenges facing the auto industry. from car production to efforts to reduce emissions and the growing popularity of ridesharing. we've got a question for you, have we reached peak car? what if you worked for a ceo

that required you to exercise on the job and with the ceo? we will tell you about that swedish company. and we begin this week in remarks. a history of trade negotiations in china and what it tells us about the current standoff in beijing. i feel like there was a chance to step back and think about the bigger implications. >> he does a nice job of connecting some dots. this is a dialogue that has been happening for months. the deadline has been pushed back and of for the opportunity to say that even after this thing might reach a moment of compromise, there will be some implications that none of us have started talking about yet. carol: it is not just u.s. and china negotiating alone, everybody else in the world is watching. even the european region starting to come up. joel: china and the u.s., they are economic superpowers. and when they come together on whatever this ends up looking like, it creates a new version of what global trade alliances will look like.

that is what hasn't been taken into account. we have all been talking about u.s., china, but what about everybody else? what happens to them? carol: thank you so much. i sat down with a reporter for more. >> we are hearing from europe, japan, and other places. there is concern about the way the u.s. and china are locking up the series of purchases by china to address the trade deficit. how that might affect the way trade flows around the world and how it may undermine this system that the u.s. spent decades trying to get in place. carol: let's talk about this system of trade. you mentioned managed trade. what has been the system in place? give us the history lesson of how things kind of got put into place a few decades ago?

how we've followed that script since. shawn: when you look at the history, the themes that he has put out there, the focus on a more transactional approach to trade, the idea that a president should be a salesman in chief for the u.s. -- that is something that has been there through history. we often forget the boston tea party was not just about british taxes. it was about chinese tea. that was the tea in question. presidents and politicians in washington have been trying to define that relationship with china for a long time. since world war ii, though -- this was a debate that was resolved in the 1930's during franklin delano roosevelt's presidency. there was a focus on setting rules in the world and allowing the market to get to work. that is where we get the idea of free trade from.

let's set some rules, and let's let people compete under those rules. and what donald trump is increasingly doing is focusing on an old-fashioned version of trade, a much more 19th-century version of trade, which is called managed trade. the idea that the government can negotiate specific purchases for specific goods with another government and that will set the framework for a trade relationship. carol: and you wonder what might be the implications for trade in europe. shawn: if there is a big series of purchases of aircraft by china as part of a trade

agreement with donald trump, that will result in a loss of market for airbus. the big european competitor. the eu would have the right to say, that is not fair. you are not playing under the rules that we have in the global trading system. you are negotiating this mercantilist deal. we are going to challenge that. that is one way it can affect things. the second thing is we are already seeing the way the trump administration is trying to take this trade approach to the european relationship. it is now threatening auto tariffs, for example. that is really aimed at reducing the imports from the eu of cars. of mercedes, bmw, etc. and that is a way of managing trade that is a very old-fashioned and a mercantilist approach to trade. the europeans object to that strenuously.

we saw angela merkel at the recent munich security conference talk about this as an existential issue for the german economy, which is a very export dependent economy. it is worth thinking about the transatlantic alliance and how donald trump is testing that. carol: for another perspective, let's bring in taylor riggs. taylor: one way we think about trade is we look at the chinese economy in particular. in this terminal, manufacturing pmi. this started last summer in june of 2018. red means lower, green means higher. red, red, red all the way down. white are the estimates. concerns about how trade is impacting global economies. carol: good stuff, taylor. thank you so much. japan nudging the door open when it comes to immigration.

plus, why a utility with a criminal past is crucial to california's plan to slow climate change. this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek. i'm carol massar. join jason kelly and me everyday from 2:00 p.m. to 5:00 p.m. wall street time. check out our podcast on itunes, soundcloud, and bloomberg.com.

you can also find us on businessweek.com and our mobile app. don't call japan's new guest worker program a policy change. >> the country is reluctantly coming to terms with the idea that it needs foreigners to combat this demographic problem. its workforce is going to shrink by a quarter over the next 25 years, and already, there is a lot of jobs where they forecast about 500,000 caregivers to take care of mostly the elderly in the next 25 years. who will do this work? >> tell us about this program. that it is aaid temporary program. >> the government has said that. this is a new kind of visa.

so they think up to 350,000 people come in on these five-year residency permits. there is very vague language attached to the idea that they may be able to apply to be a permanent resident which is unlike the trainee program, but we know from the experience of germany that had a guest worker program that began in the 1950's, mostly taking people from the former yugoslavia and turkey that people did put down roots in germany, and germany has a sizable turkish population. so we anticipate that the country -- japan is kind of not actually understanding in the way some of the implications are in the long term. carol: we have president trump and western leaders pushing back

against immigration policies in japan saying, come on in. >> and in japan, it is sort of a last-ditch effort. the country has tried to boost female participation and try to expand the labor pool without doing this. and automatization. and so this is an admission that we need another source. carol: i do wonder about when we talk about economic growth, there are different ways to do it. increase productivity or increase the size of the labor force. japan has had such a hard time getting its economy going. what the economic implications might be? >> i think it is a positive for the country as a whole, and we might have to see the pushback there might be socially or politically later on. but so far, the government has

been able to use its majority to tamp down anything. carol: where are the workers coming from? doing?>> vietnam, the -- what jobs are they doing? >> vietnam, the philippines, china. a lot of them are students, for example, allowed to work even though they are on student visas and people in this technical trainee program. they are kind of bottom rung jobs. they are working in convenience stores, hotels doing housekeeping, caregivers, and factories. we know this is how people move up. carol: pg&e's role in california's devastating camp fire last november around

paradise, north of san francisco. the giant utility serves most of the area and warned the sec that it may have accidentally started the fire. this case illustrates how unprepared policymakers and utilities are for the consequences of climate change. >> a man named lane mason is a is aleman, which means he lineman for pg&e but specializes in fixing things when they go wrong. he was in the company's yard when he got the call to go to this town of paradise. it is in the foothills of the sierra nevada. pg&e is one of the big utilities there. he gets up there and starts seeing smoke and a stream of cars going the other way. he gets to town as this giant fire that started just a few minutes before arrives in town and would end up destroying the town, killing over 80 people.

he was there basically trying to deal with all of the broken infrastructure to let firefighters through to try to help people get out. i thought it was an interesting story because he was on the front lines when the fire came through. trying to protect people, trying to help manage the problem. at the same time, that very morning, pg&e filed this report with regulators saying that we may have started the fire. our equipment, a fairly common occurence, power lines will send sparks to vegetation and start fires. we had an outage on this particular hillside where the fire seems to have started. lane was in town for a couple of

weeks, he gets this mixed reception. some people are happy to see him, others are yelling profanities because they blame this company for the deadliest fire in california history. carol: where do we go with all of this? drake: the situation in california is going to have to change. there is another fire season coming up this summer. they will not be surprised if a second california utility declares bankruptcy if they get hit with a big fire. if a company has been negligent, we need to figure it out and address that. we need the power to stay on and there to be some stability for these companies. the current regime for this combination of a changing climate that really wasn't built for this climate.

it was built for a climate, climate climate and business climate, where forest fires weren't that bad and want to this common or easy to start. carol: what are we hearing from various policymakers, regulators, and politicians on this? drake: nobody wants to be seen bailing out a company that may have been negligent, but you are starting to see some legislators in california talk about setting up a wildfire insurance fund. it is interesting, they are modeling it on a hurricane insurance fund in florida. so you see this problem cropping up in different parts of the country as climate change is screwing around with the weather and making these once rare catastrophes more run of the mill.

carol: have we figured out ultimately responsibility? drake: we have not figured it out yet. there is a lot of stakeholders. one of the interesting angles that will need to be worked out is that california has been pretty out front in using utilities to try to mitigate future climate change. carol: pushing forward renewables. >> exactly. now that pg&e has declared bankruptcy, we might see a bankruptcy judge try to get them out of some of these renewable contracts that are very expensive and were key in helping california become a greener place. carol: and there were investors because of that. coming up, we will hear from the ceo of ares capital management and the co-ceo of the carlyle group. michael aragettti and -- are up next. this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. you can listen to us on the radio on sirius xm, in new york, on 106.1 in boston, and of course on the bloomberg business app. my co-anchor jason kelly is at the super return private equity capital event. tell us what is this event about? jason: carol, every february, the private equity world descends on berlin. 2500 people show up, and there is just a buzz this year because private equity is doing pretty great. carol: that's good to hear. you spoke with specific players including michael arengeti. jason: they do private equity, but they are best known for private credit.

they have a window into the economy that not many other people do because they are lending to all sorts of companies. >> more people are in it. competition increases. that is the natural evolution. i am not experience that as compromising the opportunity in the asset classes. a lot of people that are allocating tend to be smaller first-time funds with a little more focused strategy. jason: and still a hearty appetite on the part of institutional investors? theael: in addition to illiquidity, the other thing that there is an insatiable appetite for is yield. whether it is real estate lending or structured and asset-backed credit, the opportunity to generate current

yields, the floating-rate, i don't expect that to change. jason: how much do you worry about interest rates rising? michael: i worry if they are rising for the wrong reasons. if rates are going up because the economy is fundamentally sound, that is constructive for credit. it means earnings are moving in the right direction. 80% of the credits we manage are floating rates. generally, when interest rates go up, the returns go up. the offset to that is if rates go up too fast or too much, it can strain cash flow. it is something we keep an eye on but on the balance, it is positive. jason: biggest worry for 2019 going forward? there's sojust feel much geopolitical uncertainty and movement. when you saw in q4 of 2018 that technical shock that worked its way through the market i think is a great reminder that the

markets, just based on structure and tone are still a little fragile under the surface. there is still enough risk of exogenous shock. jason: there was shock, but it seems so long ago. are we due for another one? michael: i kind of hope so. it was a kind of appetizer. ares are the areas where operates best. when a retail investor is moving out of the market and the daily liquidity is coming below their intrinsic value. it was an enjoyable couple of months. carol: you also caught up with kewsong lee at the carlyle group. jason: he is the newish ceo taking over for the founder david rubenstein, probably being the best known of those.

so they have a pretty big task ahead of them, getting their arms around this big global enterprise. he and i talked about what happens going forward in 2019. kewsong: we are seeing growth moderate, but it is not stalling. we don't foresee a recession in 2019, but i would be remiss if i did not say that there is a little bit of uncertainty about what happens after 2019 in 2021. a lot of it will depend on policy responses as well as how geopolitical events unfold. jason: what do you make of the case that private equity could use a little bit more uncertainty, a little bit more volatility in the market? bring valuations down. kewsong: i'm more of a fan of

that argument than i'm not. i think that recalibration is healthy. we have all been conditioned to an absence of volatility. the central banks are very accommodative. there was an absence of volatility. now the volatility is back. and it does mean, more likely than not, that returns will disperse. because when it gets harder to do things, you will see separation of performance from those institutions that can perform in good times and bad. and maybe there is a little bit more of the rising tide that generated the return. i think recalibration, resetting one feels clear. all of that is probably better than not in terms of recalibrating and helping to reset expectations. jason: what is the heartiest appetite for? at this moment and this part of

the cycle. kewsong: i think the desire for illiquid private equity and the asset classes generating consistently three, 5, 10, 25 years -- no matter how you measure it -- that continues to be in demand. how do i concentrate more investing dollars with fewer general partners, and what are the institutions i can get behind? i think the private credit asset class is expanding. people are realizing that maybe there is a benefit in doing things more directly and disintermediating the public markets with private capital. they are becoming more and more of interest. carol: i love hearing from these pe guys. we will get back to you in just a moment.

why automakers may not be able to count on china. how difficult is it to buy a car in beijing? this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. still ahead in this week's issue, just how physically fit you need to be in order to work at sweden sportswear maker. also, can selling lift tickets make skiing in viable business? are we at peak car?

i have not heard this phrase, but it makes sense. >> there are 1.3 million automobiles on the planet. the automobile is a 100 year old idea. maybe it's time for something new. that's where companies have made a realization, saying we have hit peak cart. the future of our industry will not look like the past. carol: you really break it down among some of the major cities and regions in the world. >> everyone of these is because of the future of where we live is probably going to be more in urban areas than in rural ones. people are not buying cars, cars are getting more expensive, and they are using things like mobility services. it's going to be a shift, a revolution, if you will. carol: i got more with jim ellis. >> autos are the largest industry in germany.

it also employs almost one million germans. carol: wow. jim: it is a huge piece of their economy, and you sort of top out in the number of unit cars. they are having to deal with the notion of switching from internal combustion engines to electric vehicles. that's important because electric vehicles take fewer people to make. therefore, employment was going to go down anyway as you go through this shift. longer-term, we are talking about fewer cars overall. that has an impact in germany, simply because a big piece of their middle class is built on non-college-educated people who can go to work in the auto business and basically have middle-class lifestyles. it is sort of what the u.s. was in the 1960's and 1970's with

detroit before detroit basically got rid of the unions. carol: a ticket to the middle class. so what's a germany doing? jim: they are working on the idea of preparing people for the shift, the initial shift toward electric vehicles, but overall, there is not a lot you can do when so much of your economy is built on pushing metal. a big piece of the german corporate idea is that they have decided to become huge, or even bigger in the markets where cars are still expected to grow, most notably china. china is the largest auto market in the world. volkswagen is the biggest company, you know, its biggest part of its business in china. carol: you took my segue.

the world's biggest auto manufacturer in the world's biggest market. how does china play into all of this? this has been the area of the world where so many global automakers have been kind of salivating over, that's where we are going to see growth. china is dealing with some things that may be pushing car sales down. jim: right. so many people thought no matter what happens, it's hard not to say that developed markets are mature from an auto standpoint. there are only so many cars you youdrive at one time, but can certainly own a lot at one time. that's worked int eh -- in the u.s. carol: it's expensive to own a car in china. jim: it's expensive in china. china has been making it more expensive to have a car. china had a really big growth spurt in cars between 2007 and 2017. the auto market grew at a 12% annual rate. that's huge.

double-digit business in that kind of business is unheard of. last year, the chinese auto market shrank by over 4%. carol: big change. jim: something has happened. one of the big things is the uncertainty over trade, but it's more than that. a big thing that happened is the notion that mobility services have taken off there much more than here. when we talk about uber and lyft, there's a company in china called didi. it's massive. carol: there is a step that -- statistic that jumped out at me, 30 million active users per day last year, almost all. jim: it is the uber in china and they ran uber out of china. they had more rides in china than uber had globally. china has become a big place for

massive urbanization. carol: let's talk about beijing. beijing has a lottery. unless you win a lottery, you cannot have a car in beijing. jim: it is difficult. they have a lottery. in a city with over 20 million people, they are only allowing 100,000 new cars to be registered this year. carol: small percentage. jim: small percentage. often it takes years to win a spot on the lottery. they also allow you not to have to go in the lottery if you buy an electric car. you have to get in line and wait. currently the wait is about eight years to be able to buy a car in the city. caroline: if we are at peak auto sales. i have been able to chart this on the bloomberg table. i am looking at u.s. auto sales on the left and on the right

axis, european auto sales. a lot of concern as it has been stagnating. maybe consumers are not confident buying new cars. if it's changing habits. if you are doing more ride-hailing versus purchasing your own car. are we at the peak of the cycle? carol: coming up next, what titans of private equity are saying about dealmaking and real estate. we will hear from blackstone's global head of private equity when "bloomberg businessweek" returns. ♪

carol: welcome back to "bloomberg businessweek." i am carol massar. join jason kelly and me for bloomberg businessweek every day on the radio from 2:00 p.m. to 5:00 p.m. wall street time. catch up on our daily show by listening to our podcast. you can find that at itunes bloomberg.com.

you can also find us online at businessweek.com and on our mobile app. jason kelly is in berlin for the super return conference, where the biggest names in private venture capital are gathered. jason: if there is such a thing as a hidden tycoon, it is bruce flat. $350 billion under management brookfield has. they are well known in the real estate world. they own a big chunk of cannery wharf, a big part of lower manhattan. they are also in private equity and the infrastructure businesses. >> there's always opportunity. there is a lot of consternation and politics and things out there. the world is generally in a pretty good place right now. the economies of the world are either good, or actually some of them are improving. if you look back over many years, it's pretty good in the world and the environment.

jason: in the news obviously is brexit. maybe happening, maybe not. you are a huge landowner in london. how do you play all this? >> look, this is a long game. we invest for many years. we make investments assuming you will have issues when you go through it. this one just happens to be political. we just don't pay attention to the short-term news. it will be what it will be. we assume everything will work out in the long-term, and i'm quite positive it will in one direction or another. i think london is a great place, a great global place to invest, and it will be for a long time. jason: what is the biggest thing people are worried about as we go through 2019? what are you most worried about? >> we are 10 years into a cycle. at some point this cycle is not going to be as good as it is today. it always turns. they have not been repealed.

that's number one. number two is interest rates, if they go up a lot, that's an issue with all asset classes. we do not think that will be the case, but those are two things that we worry about that are really not controllable. we can control some things. we finance our businesses as prudently as possible. we can ensure everything we buy is going to go through recession at some point. we know we are going to go through a recession at some point but we cannot control it. jason: given all we have talked about, are you a net buyer or net seller in the world right now? bruce: last year we invested 35 billion, we sold 12. this year i bet we will some more than that -- sell more than that. i don't know we will invest that much. last year was a bigger year. on balance we are more conservative than a number of years ago.

carol: jason, you caught up with so many well-known names in the world of private equity, including joe barada at blackstone. jason: blackstone, they are the king. and joe barada is the prince of private equity. he made his name doing big deals around merlin entertainment. we talked about that and what blackstone sees ahead. joe: as we look at our portfolio, there are small pockets of weakness. maybe the auto build in china and at some point in the u.s. housing is strong, consumer spending seems to be strong. there is certainly a deceleration in topline growth. we are not seeing the telltale signs of a recession in the near-term. jason: europe is especially

interesting, to people here, but also to you. you did some of the seminal deals for blackstone. legoland, madame toussaud, merlin entertainment. you are intimately knowledgeable about that market. how do you look at europe right now? joe: the recovery of europe has been a bit of a disappointment in terms of the amount of economic growth. brexit was unforeseen and is an issue. we are investing in the u.k. we think it's a great economy, but there are some unpredictabilities. maybe you will pay a lower price than in a pre-brexit world. for us europe is a selective market. we have to find a company we can think we can do something fundamentally to transform its

growth. jason: you name checked warren buffett on the stage. you talked about long-term capital. how is that process going? of sort of raising money that you hold for longer and still are able to deliver the returns your investors expect? joe: we began the discussions with investors about six years ago. every other asset class has multiple structures to own different kind of assets. safer assets are afforded a lower cost of capital. private equity has one structure. you hope to generate 20 plus percent returns. we created a vehicle and raised about $5 billion three years ago to buy really high-quality companies with high predictability and hold them for a decade plus. it has gone really well. we have made three investments. we are about to make our fourth. i'm sure we will be back out with another vehicle. jason: you talked a little about valuations in europe.

take us back to the united states. are you seeing any weakness there? prices have been pretty high for some time. joe: i think in the last year, wide swaths of the market have been repriced. smaller gdp growth businesses, industrial concerns were trading 20% to 30% higher a year ago than they were today. i think some sectors have been repriced. it takes a while for that to translate into the private market. i think sellers of certain kind of assets have to realize prices have come down. carol: what a great bunch of interviews. jason, thank you. when a ceo forces you to keep up with his workout routine and hot spring hopping in idaho sounds like fun to me. this is "bloomberg businessweek." ♪

carol: welcome back to

"bloomberg businessweek." i'm carol massar. you can listen to us on sirius xm channel 119, 991 fm in washington, d.c., am 960 in the bay area, and the bloomberg business app. no one skips sports hour at swedish sportswear maker bjorn borg. we are talking about sports hour. the company's ceo has made fitness mandatory. it's a great story. >> he's a former swedish special forces sergeant who then set a record skiing to the north pole, became a business consultant sort of talking about the experience, and has sort of imposed what seems like a strict philosophy and what he calls framework onto his businesses, which is all about setting and achieving goals.

a big part of it is it's not just about your work. it's about wellness overall and fitness is a part of that. bjorn borg is a fitness company so he really pushes this fitness to the extent that every friday morning the company shuts down and everybody in the company works out together. carol: wherever they are. there are a lot of management books out there. i'm sure you're aware of them. there are all these different philosophies. his it seems to be very disciplined when it comes to time, working out, goals, all that stuff. >> it seems extreme, but the people there seem to like it. they also have all kinds of seminars. you can meditate if you want. they have life coaches coming in. there is healthy food. they leave at a decent hour. if you follow a schedule and get done what you say you are going to get done, you should be able to get out. swedes have a lot of vacation time. carol: is this just a story about a cool guy with a cool management philosophy and what

he does with his employees? is it somebody who does this and gets results? >> he does get results. the people who work there seem to really like it. i did not get the sense they are putting on an act for me. people seem to be into it. carol: we need to know where we are going, where we are, what to do, and why we are here doing this. that kind of guides so much? >> it does. it's very formalized. they have a software program where you set goals based on the framework every month. with someone very senior at the end of the year and they are not just professional goes. some of them are supposed to be personal, like i need to work out more, spend time with my children, be a better husband or wife. it is meant to be overall wellness, making you a better person. carol: also, resorts are going head-to-head, snapping up ski

resorts. can they save skiing and make selling lift tickets in a viable business? >> the thinking was always to get that daily lift ticket price as high as possible. with the cheaper pass, they were giving up some revenue seemingly, but getting people to come in early. they take some of the lumpiness out of the business model, get some revenue over the summer, their slowest time it, and get people committed to skiing before the snow starts falling. carol: so they know the revenue ahead of the season, essentially? >> right. so they stop selling those around thanksgiving, and have locked-in a huge chunk of the revenue, whether it snows are it was kind of contrarian thinking when it came out in the mid-90's. carol: tell us about the guy behind this?

>> wharton educated, wall street guy who came out of private equity. had a bit of a life reevaluation after 9/11 and moved out west. he became ceo. very smart and focused guy. the original epic pass, which was his idea, kind of changed the industry. from there all the other resorts that were independently owned trying to cobble together something similar, try to partner, but were not ever able to match the gravity of vail until two years ago. carol: tell us about that. >> it is basically three companies that each own a couple ski resorts. there was a fourth company called intrawest which i think

owns seven or eight resorts at the time that had been in trouble and they were looking for an exit. these three companies got together and said let's smoosh our mountains together, by this fourth company. overnight there is a company the size and scale of vail. carol: and they too have a pass. >> they too have a pass. carol: it felt like there were a lot of folks that wanted to partner with the second company and go up against vail. >> allterra is run by rusty gregor. kind of a ski bum vibe. he came out of university of washington. he was a linebacker, is a very laid-back guy. knows everybody in the industry, friendly dude. carol: he was working, right, at a ski resort? >> yes. he was a lifty out of college. obviously was a very intelligent man. now part owner and ceo. when this company kind of formed, he takes the reins and starts going through his

rolodex, calling on his ski buddies through the industry. there is a sense that alterra generally likes to own the mountain. own.n't mind if we don't carol: a different reason to check up a mountain, at least in idaho. i talked about discovering your own private hot spring. >> we sent our writer to go find these hot springs and sit around simmering and learn about this. he went around the area between idaho falls and boise and found these great places hidden in the woods in the mountains where there is only one or two people, or no other people, and you can sit and enjoy nature. carol: how easy are they to access?

some of these you have to hike to. >> some are on the side of the road, and people have built pipes into what is essentially a giant human cauldron. some you have to hike up into the woods. he hiked, walking through snow to get to these places. no matter how hard it was, he would find people up there. carol: tell me about kind of the one that everybody goes to find. >> the one he was most excited about was called goldbug. it was a little further up north, up a switchback trail. it's a bunch of pools. we got a great picture of it in the magazine. it is a series of little pools, totally hot. carol: gorgeous. >> you are looking out at the rockies with pine trees, snow, and then of course when you get in and out when you have this cold moment. when you are in there, it's utterly peaceful. carol: that's what i love about this story, that you kind of give this is what should

buy, this is where you should stay. not every spring is warm, right? >> he went to one that cooled down, and actually one was too hot. the best times to go are summer, fall, and winter. even if it's cold, it's great to do this. spring is the time when the note -- melt can overwhelm the pool. carol: we are in a sharing economy so you will have some folks there. >> most people wear bathing suits, not everyone does. carol: warning. >> it's a natural experience. something that makes you think you have to treasure these things before climate change might change this. carol: he makes the point that the environment could be changing, whether it's climate change or mining, that it could impact these springs the future. >> these springs are heated by plate tectonics, but the surface of the land could be affected by mining, overflow, deforestation, so these things might not always be there. carol: "bloomberg businessweek" is available on newsstands, online, and the mobile app.

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♪ david: he's the son and grandson of rabbis. but after thinking about a career in journalism, he ended up at harvard law and a private sieges law form -- prestigious law firm. michael chertoff felt the need to serve a larger purpose. he went on to be a federal prosecutor, putting mob bosses and corrupt politicians behind bars. his defining moment came on the morning of 9/11, as head of the criminal division at main justice, he rushed to fbi headquarters to handle the crisis with fbi's bob mueller, who reported to him. national security became his calling and he went on to serve