carol: welcome to "bloomberg businessweek." i'm carol massar. >> we are in bloomberg headquarters in new york. >> this week's issue is focused on equality and how inequality damages >> the economy and businesses. >> the cost of widespread businesses against transgender workers. >> and how dow chemical became an oasis of quality. >> what if instead of the sat

you got to play a videogame? tothe starter and -- aims level the playing field when it comes to college admissions. >> we love the ceo. >> this is a timely one in the wake of the college admissions scandal. lo and behold here we have this exact right time because instead of just talking abut the scandal let's talk about how we can fix things going forward. thecca has this idea totally reframes how education works. >> she is brilliant first of all and we are lucky enough we had her on her extended podcast. she really wants to figure out how to measure how people think. >> it is bigger than video games. the problem when you think about the emissions scandal, what it comes back to is the s.a.t. or act, those tests are the northstar and when you program schools around that, you end up with standardized testing that goes down through middle schools

in elementary school. what if we just rethought the north star and that's how it came about. how do we talk to kids in a language they might understand better, video games. founder,ke with the rebecca cantor. >> we don't have a meritocracy right now. we think we do because all of our kids work hard in our schools and often times kids at the top 30 colleges are really smart high achievers that i will give you an example of two things we could do to make the system meritocratic that make people uncomfortable. one is have all of them based on a relative growth metric meaning of your floor started lower, your expectations of what it should be like in 12 grade are lower. if you start to 20 squares ahead like i did than the bar for what you have to do to get into college is higher. all makes people squirm in angles because shouldn't all kids have the same range of

potential. they showed but our system isn't delivering that so thinking about a relative metric. they are looking at your zip code, they are looking at your race and gender in making a decision about how impressive what you have overcome is. but we don't have a standard -- >> it's a lot of art. >> a lot of art not science. the second thing we could do is really think about what we are measuring and it's interesting because the sats started as an iq test, literally invented by the same folks who worked on the iq test. migrated-- it has along with the act towards testing student achievement. the name change from the standardized aptitude test of the student achievement test. what that means is more money, more preparation, generally means better scores and that's not just in the last mile of your test prep, that means were you born into a good school district or a good private

school. if we want to do dry and undo some of the inequality that is systemic in the system, you can look at have more diverse school district, school zoning that doesn't just cut across one affluent area. we would look at testing skills perhaps that could be picked up in a number of settings, not just at school but maybe at a job. maybe something that kids practiced in different environments than what they are testing in and still the progress shows up. building that test is what we have chosen to tackle. i think america has to decide if this is a powerful enough motivation for an inflection point that forces us to see what looks like.ocratic there's only a limited number of spots so it's uncomfortable to think especially as someone who is progressive and enjoyed my upbringing and was so fortunate to go to a place like harvard and applied to these other schools, you have to think about

maybe i wasn't the most deserving person to go and for a parent who has worked really hard to get their kid to that point, that's a hard thought. i think whether or not we are at an inflection point depends on how honest our country wants to be. >> are you seeing any elements of people starting to change their mind at all? >> i would say first and foremost there are some entrenched in some inertia in the system that's reasonable and there for good reason. you don't want just anyone to come in and wipe out tests that have been relied upon for decades as a fair assessment of merit. it doesn't mean everyone agrees but it certainly how they have been used. you want the bar to enter this new testing arena and we will see new tests come into the arena. that said, there are some problems that standardized testing has most recently been lambasted for particularly in light of the scandal that technology can help solve and in it -- ont's on

excusable that it's not at least being attempted. whether it's removing proctors or not indicating who you are. part of these tests is they are largely paper-based and even if they are not they are it onto an ipad and how hard is it for two kids to team up in a room, saying i'm gonna start the proctor or taken ipad -- phone -- photo on your ipad. kids are smart. artusing state of the technology to keep the system fair is the first talent -- challenge they will have to take on. >> tell us what responses you are hearing come what inroads you are making. >> the ears to this argument certainly resonates when they hear the approach of re-linking education to employment as employers. there is a bloomberg poll that shows about 40% of students feel they are prepared for work when

they leave the entire education system and 40% of employers feel kids are prepared for work. interestingly, 72% of college providers feel their students are prepared. there is a bit of a synchronicity in terms of where perceptions are of the value of educational experience and employment experience and it's not unreasonable because there probably are some colleges that really prepare kids for work and life and others that don't. ist has to happen now employers have to take a lead on saying here are the skills coming more important in an age where human intelligence is involving higher order thinking skills and machine skills is doing the lower ones. we have to see people who can imagine and create. we have to see people can synthesize quickly, they can build a cogent argument. there is some of that in standardized testing but it is a myopic view. a little bit of argument

supported by some evidence and the challenges how often for all of us are we dealing with the static system where everything is written down for us. never. you need technologies that can really bring forward the employer's desire into the education market as a reality in a tried and tested tool. that'll make our job so hard. it's not a quick process to go out and find those definitions of skills that matter i would say that argument of bringing the employer's into the conversation about how their work is changing and what the future will require and bringing that back, many parents care. >> what's your goal? >> to set a higher floor for high school. some schools would do a crappy job teaching and it's no fault of theirs. there systemic problems that make them teach. if you can relieve a little bit of that pressure around content. a little bit around teaching so

many different modules of ap biology or science curriculum or history curriculum, not get rid of it but just reduce and focus on a few concepts. maybe some schools choose to bring that to light with solar power go-cart races. them some choose to have internet jpl for a couple of weeks. i want to test that we deliver to be generalized enough that their progress shows up in that we recognize what they have and it doesn't mean all kids don't do well on the sat will do poorly on our test. who aree some kids total diamonds in the rough who are out there slogging through content that doesn't land for them. they be there is a way to recognize some of the skills they have going on behind the scenes. whether a job after school or watching a sibling, i hope our tests are able to at least setting northstar for the system. >> for more of our chat with

rebecca cantor come and check out our podcast. where on the globe you are more likely to be a master of your own fate and likely to stay poor if you are born that way. >> old habits die hard or don't die at all. >> this is bloomberg businessweek. ♪

>> in the equality issue, a study on how inequality leads to slower economic growth. chart becausehis basically it shows very clearly that economic mobility as we describe it as we like to think about it is not happening so much. here is the u.s. right there in the middle. you have to go way up to finland and sweden and canada, our

neighbors to the north to really see a situation where folks can really rise beyond where their parents were. and it impacts education. >> there -- there is definitely a correlation. we spoke with reporter gina for more. >> one of the stories that stuck out was about this girl and she is in her early 30's, she lives in new york city and she has had this classic story of growing up in situation that might've been opportunity. she was born in flatbush in the 90's so it wasn't the worst place in the world but she deftly remember hearing gunshots and having crime in her neighborhood and she wanted to get out of there. she was born to a single mom. her mom was unemployed a lot when she was younger. her mom always really encouraged her to make more of herself and

move up the income ladder. so she actually really excelled in school and made an effort to do that and got a scholarship and studying in upstate new york but while she was in college, her mom died and she ended up being completely alone, she graduated, had a degree in andish, the economy was bad she had to settle for what she could take because she did not have any familial backing. at 22 she found herself working in sales, did that for 10 years now and now she is enrolled in and i treat -- i.t. training program. she is learning how to do basic technology skills and hoping to get onto the ladder that way. the story speaks to even when you do the right thing, even when you are trying really hard i think if you have the situation behind you where you don't have a lot of the support people in more affluent and more stable households might have, it

can be hard. >> you talk about this bigger broader theme that individual students are likely to earn the same income as their parents in places in nations with higher income inequality and that is something we are facing in the united states and elsewhere. that's a bigger thing going on. alan krueger came up with that title when he was at the council for economic advisors. the interesting point to keep in mind, we do see much greater intergenerational stickiness. the inability to progress in places where inequality is high. that means it's a lottery of birth where where you -- where you are born affect how your life turns out is so much more important in these places. if you are born at the bottom in a place where the bottom is relatively much lower, there is also a good chance you are more likely to stick their and not climb up. >> what do you take away in terms of what needs to happen

structurally, systemically? >> one of the studies comes out of the international monetary fund and they find in these places we are talking about with low economic mobility and high economic inequality, you see more growth. it seems to hurt a country's potential and the idea is that if you've got a lot of kids who might be innately talented but are born at the bottom of the income scale and don't have equal access to opportunity, you might see a real loss of talent. you are not tapping your potential einsteins. so this plays out down the road and you see your growth get mired in the mud. we are talking about the 331-year-old lloyd's of london, and exchange for the worldwide insurance market. >> this story made me a little angry and exasperated. there they still do business the old-fashioned way, face-to-face pen and paper. >> but an investigation

uncovered a deep-seated culture of sexual misconduct and an atmosphere of relentless harassment. here is gavin finch. >> for the last several months of spoken to 18 -- more than 18 women at lloyd's and in the wider insurance industry and the picture they paint is of a women that is hostile to where they face sexual harassment. across the whole range from unwanted comments about appearance or bodies or even their sex lives to unwanted touching, groping and even sexual assault. >> one of the things the outgoing ceo sought to do was ban alcohol given their been drinking on the job because that was an element that seemed to be contributing to this environment. that didn't go over so well. alcohol during the

working day was only for the lloyd's staff, the vast majority of the people who work there are not employed by the corporation, they are employed by the big insurance companies. but it is fair to say that the majority of the issues that were raised to me by the women i spoke to, the root cause seems to be alcohol. the last corner of finance, the last corner you can get away with daytime drinking. it's not just condoned, it is sort of -- it is encouraged. whereociable market people are making deals on the -- going into the pubs and going back to their offices and then may be back to the pubs and then back to lloyd's. >> what does lloyd's plan to do

especially because the ceo who had taken this up is a big cause is on her way out. >> she is gone now and the concern certainly is that the women who remain in the market, that they are -- -- that their great champion has left. in these issues she was pushing will fall back down the order of importance. he got a statement from the new it was said to bloomberg very distressing the kind of behavior was still going on, that lloyd's takes it extremely seriously and he would be a top desk he would be talking to the market to ensure this type of behavior is stamped out. >> is this more pervasive than most people know across the city or how isolated is it? >> it seems to be a problem pretty much at lloyd's, of course there is actual harassment everywhere, but it

does seem to be particularly an issue at lloyd's in the wider london insurance market. we spoke to a number of women who had international experience and working in banking and other professions who had subsequently moved to work in insurance and they all said this is a particular problem to insurance. >> hedge fund billionaire and basketball team owner tells us where he sees investing inortunities thanks to that coming maybe economic slowdown. >> this is bloomberg businessweek. ♪

>> welcome back. >> you can listen to us on the and on am 11 30, 99.1 fm

and washington, d.c. >> and through the bloomberg business app. andvenue capital ceo cofounder stopped by the bloomberg business summit. >> i asked about where he may find a silver lining during an economic slowdown. >> there is a lot of stress in the market and what i mean by that is last or the economy grew , today wears a going to grow? going to bethat is a 20% to 30% reduction in growth. we don't have a recession but what we really have is a slowdown and for us what we do on the credit, a slowdown is great. there's a lot of different opportunities out there that we can take advantage of today. >> let's dig down a little deeper. retail is something people keep saying may experience more

stress or distress, what do you see there? you havek opportunities on the retail side and energy side. you are seeing that continue and then you have a lot of idiosyncratic opportunities where specific situations were able to come in where we have been able to buy the debt, we you of one situation where bonds are due in 2023 as the senior debt. like $2 billion in market cap. it will go from 75 to park. you have a lot of that here in the u.s. and you have much more in asia. for us a loss of opportunities. >> you were pretty early on a relative basis to this asset class and get it feels like more and more people coming in, is the demand rather for this type

of investment from institutional investors enough to absorb all of these new managers? >> there are more and more people doing more and more. i think that's fine. i think competition is fine. buying come in and start and get out. i think we are usually ahead of the curve. they usually take us out and they are taking much more risk. >> you've always been very interested in that side of the equation and as we go into 2020, talking the rhetoric is about a lot more scrutiny of wall street, a lot more questions about income inequality, how much do you worry about additional scrutiny i guess on your business and on broader wall street? >> it's fine to have scrutiny.

i think at times we get a bit of a bad rap but if you sort of look at the vast majority on wall street is constant doing the right thing. i think you should absolutely have the discussion because of the end of the day you want to talk about these things but to be perfectly honest i don't think it's an issue. has another look at the market. >> this is interesting, going into credit. let's come into my terminal here and what we have is the triple c credits. these are typically some of the worst rated companies, the worst rated credits. we haven't seen those outperform, that is counterintuitive. you would expect to see that white line really compressed lower. credit could start to perform well in the economy and it makes sense you could see that white

line as long as the economy does ok. starting to impress heard yields are falling. >> mark is one of many wall street titans and leaders participating in our march madness brackets for a cause. he is playing alongside some of the people he is playing alongside. >> ken griffin, talk about the money being made -- raised. >> we are going to raise in excess of half $1 million, the winner gets 50% of their profits directed one of their charity, they will get a check for $250,000. i love this contest. i'm deeply involved and i can't get enough. >> one of the highlights on bloomberg.com, check that out. the company vows to become the first large industrial name with an openly gay ceo. this is bloomberg businessweek. ♪ this isn't just any moving day.

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jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. carol: still ahead in this week's equality issue, a dating app helping chinese men have kids. jason: and of the real struggles of transgender workers across the country. carol: in california, by the end of this year, all companies will be required to have at least one woman on their board. editor joel weber is with us and you got this great visualization.

joel: i call this the room for improvement chart. we look specifically at california where the state has recently passed a law. public companies based in california, by 2021 will have to have a significant number of women on boards, and right now, there are very few. we tried to show you the gap and where you will see displacement start to happen as more companies put women on boards. carol: it shows you there is a lot to be done. joel: exactly, and if you want to learn more about we did a longer story to accompany the graphic that extrapolates what look like if this went to a bigger national movement how many more seats might become occupied by women, which is a really important topic because when you look at the makeup of boards we are talking about male and older

and we can transform what corporate boards look like, and that is the heart of the equality issue. jason: speaking of leadership, a story about dow chemical. maybe not the company you would expect to be on the forefront. joel: another one near the news because it dow chemical part -- parting ways on april 1. it is an interesting one to look at because it has a gay ceo. after tim cook, the most prominent leader of a public company to be gay. and it's not just at the top. it permeates throughout the company. michigan is not a place you think of as a bastion for gay rights or equality, and yet the company's culture has really embraced a more forward way forward. carol: it is amazing the progress they have made. and i love the title.

joel: how dow got woke. [laughter] and i think of this as an important culture story. when we think of all the places where this plays out, culture is sometimes the most difficult to change, so it is a case study in how the company has been able to do that. jason: and you assign the story to somebody who knows this company back from his days as a beat reporter covering this little town of midland, michigan. that is jeff green. we got more from him. jeff: the company has a history of hiring women and minorities, because if they were a good chemist, dow really did not care what you look like or who you were as long as you can do chemistry, that was his thing. let's do this and not so much care about the other social mores of the day. the foundation of the company was sort of disruptive. and then you have this sort of backdrop. people start to come into the company who had previously been

in the closet coming into the company out and nobody cares. going back 20 years. we talked to some people who, when they formed an employee resource group that they met at some one's house in 2000. they said hey, we should go to the company and ask them for same-sex benefits, because that was just starting. seemed like a good thing to do, they had this meeting, they were not sure what would happen, they got together and form this group that is now called glaad. they went to the company and said we should have same-sex or domestic partner benefits and the company said ok, we will look at it, and then they just said ok. jason: tell us about the significance and process there. jeff: their ceo came out slightly before tim cook, there was just much less publicity. he basically knew he was gay in college, he said, but he stayed in the closet through most of his dow career.

he did not rush right out. in 2008, he started to tell people closest to him. and as he was promoted and rose in the company, he decided he needed to broaden this. come 2014, he realizes at this point, it is probably sending the wrong message to other workers that this high-level executive people probably have a good idea is gay, is not openly gay. so on coming out day in 2014, he goes on an employee webcast in an auditorium and comes out. and says, i've been with the company for 30 years, with my partner for 20 years, and it is time for the two to be part of my work identity. this is when this all comes together, but keep in mind, he is not ceo at this time, he is two jobs below. you could infer that some companies, that's where he ends his career. and that is not happens. carol: what is interesting is that he says there is more to be done at the company, but he talks about adding an inclusion

goal to top executives of bonus structures. their bonus is contingent, to some extent, on making sure there is diversity and inclusion in whatever territory they oversee. jeff: it is part of the conversation now, not necessarily exactly this percentage, it is an evolving conversation. he didn't, but they also had cut right before he took the job, hired their first inclusion and diversity executive so they have a focus on making this a broader mandate across the company. there is some work to do, only thet 27% women, and minority population is about .1%. and as you go up in management, those numbers go down. jason: we have heard about how the company has changed, we also have to remember it is still the same massive important company. taylor riggs, help us understand

what is going on. taylor: it is a massive company and it is about to change. what i have done is ranked it by the percent of revenue contribution to the total company. for example, dow dupont is 20% of revenue from packaging, 17% from industrials, all the way down to 5% of revenue from electronics. we have seen every major segment is contributing to growth, year over year, growing anywhere from 6-20% of sales. with a big company, sometimes it is good if you can get size and scope, otherwise, it might help them target their individual niche. as you can see, so diversified. carol: we are seeing this a lot around corporate america. where they are focusing on businesses that make sense being together. taylor, thank you so much. up next, states looking to break up big tech. jason: plus, the proposed megadeal that exposes a grim outlook for europe's banks. carol: this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: and i'm carol massar. join us for bloomberg businessweek everyday on the radio from 2:00 p.m. to 5:00 p.m. wall street time. even also check out our daily show. jason: and find us online at businessweek.com and our mobile app. in the technology section, an effort by state attorneys general to break apart the tech companies. carol: we talk about the fight brewing in california and washington. >> there are a number of attorneys general who think there is a problem with tech companies being too big, too much market power, too much control over consumer data. what my colleague and i wanted to do was to check in, because there has not been much talk

about what the attorneys general are doing in september, when a group of them met with jeff sessions who was then attorney general at the justice department. sessions had called within -- called them in because he was concerned that the platforms were suppressing conservative views, but a number of these attorney general's steer the conversation, we were told, towards market dominance and privacy issues. we have also heard a group of those states have since taken a further step and are investigating a possible antitrust action against google, in particular. which had not been disclosed before. jason: we do seem to be at this moment over the last 18 months or so were we are doing a broad overview or revision of our own view as a society of what role these companies are holding. what happened? peter: i think the 2016 election happened and that starkly made people realize the dark side of

technology, just in terms of it having the capability to affect people's perception of reality. it also broke across partisan lines, you have conservatives who are concerned about the suppression of free speech and you have people on the other side who are concerned about the market dominance and privacy issues. as we reported in the story, ted cruz sent a tweet and set this -- and said this is the first time i've ever retweeted elizabeth warren and he agrees with her on antitrust. at least in terms of the market power of tech. carol: this is not the first time people have railed against big technology. i think about all of the states that went against microsoft in the late 1990's. is this akin to that or something different? peter: there is a real precedent for this. there was an antitrust case brought by 20 states that led to the rise in google, but before that case, microsoft had

a freer hand to bundle its own search engine with its operating system. although that case did not result in microsoft being broken up, it did force the company to change its behavior. a lot of people are pointing out the parallels today, the similar scrutiny against google can have similar effects and allow new competitors to emerge. carol: in the finance section, european banks have yet to recover from the financial crisis. jason: and a proposed merger between deutsche bank and commerzbank could be the start of a long and painful process. eliza: you have two large institutions there, deutsche bank being europe's biggest investment bank, that have basically been in a painful reorganization, not being able to tackle a long-term decline in revenue and profitability. over the last six months or so, there has been increasing

speculation this would happen. notwithstanding the fact there are a lot of observers point to the fact that putting these institutions together will not help them tackle the individual and combined weaknesses, namely going to remain. an investment bank that deutsche bank brings the table that is -- brings to the table that is theficient, and of course, two combined institutions would still be extremely exposed to the interest rate cycle, which in europe, is a negative territory. but also, to a german commercial banking industry that is extremely competitive. carol: it was one thing after another that is pushing back against european financial. you talked about low rates and rising costs at the banks, there's competition from fintech. brexit is having an impact, and bigger and more broadly is this

failure to create a banking union, right? across the region. that really hasn't happened, it is so fragmented. elisa: you have bigger institutions in germany that only control a fraction of the market. the estimates out there at the mind and -- at the moment point at deutsche bank and commerzbank together having potentially is a 10% or 15% market share. that leaves them behind the hundreds of savings and corporate lenders they compete with. these companies don't actually need to make as much profit as privately owned institutions. so the combination of these institutions would do very little to change that. that, as you say, as part of the remnants of the banking union little to change that. which hasn't really happened. you still have distinct markets and distinct local regulators that still have a say in how these institutions are run and

how the market can compete. jason: what happens from here? in your best estimate? elisa: i don't think there is a sense here that there will be a massive appetite to expand in europe, given the structural inefficiencies that remain. and this unfinished project, which is bank unions. even within the eurozone, the 19 countries that share the currency don't have a single deposit insurance guarantee scheme, for example. it means countries do not trust each other fully and still require banks to have funds locally in the event something happens. that gives you a sense of how fragmented it is. jason: earlier this week, in berlin, angela merkel spoke with bloomberg editor in chief john micklethwait about the potential merger between deutsche bank and commerzbank. >> absolutely a decision of private business, with all of the challenges, opportunities, and risks and only the players themselves, the

stakeholders themselves can evaluate that. we have sometimes the government and the banking sector invested in there is not foreign, but i'm waiting for the stakeholders to give their final say. carol: check out more of german chancellor angela merkel's conversation with john micklethwait, just go to bloomberg.com. up next, the fight for transgender employee rights and the decision facing the u.s. supreme court. jason: plus, the dating app helping gay couples have children. carol: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. you can also listen to us on the radio on sirius xm channel 119, and on a.m. 1130 in new york, 106.1 in boston, 99.1 f.m. in washington, d.c.

carol: a.m. 960 in the bay area, in london on dab digital, and of course, through the bloomberg business app. jason: in the equality issue, the widespread discrimination facing transgender people in the workplace. carol: and the decision in the supreme court. on whether or not to extend protections to trans americans. jason: here is reporter josh adelson. josh: amy stevens is nearly 60. for most of her life, she was known to coworkers, including her boss at the funeral home that fired her, as male. she made a decision with help from her wife, from her therapist, after decades of wrestling with this, to come out as a trans woman. she came to the realization, and a few years later, something she was not able to keep to herself at work anymore. that she was not able to just wait to go to the bathroom when she knew nobody else was there

and continue to wear male clothing and be treated as though she were male. she came out to her boss through a letter that she wrote, she enclosed her therapists is this -- business card if you wanted to get perspective from the therapist, she offered to answer any questions. a couple weeks later, she was fired. and now, her case could end up redefining how the federal laws are interpreted across the country, about whether or not it is legal to fire someone because they are trans. jason: tell us about amy's decision to launch what has become a series of legal actions. as you say, this has gone up and up and up. because they are trans. she did not have to, she made a conscious decision pretty quickly after her dismissal that she was going to fight it. josh: she says it is about everybody in the human race being treated equally and

fairly. she made a phone call the same day she was terminated to the aclu. she was meeting with them by monday. her case lost at the district court level, but then she won at the appeals court level. now, the question is will that sixth circuit precedent setting appeals ruling in her favorite stay in place or will it be taken up and potentially overturned by the u.s. supreme court. while there is concern amongst lgbt advocates that with the current makeup of the supreme court, her case could be used to eliminate transgender protections in circuits where they do exist. amy stevens says she has no regrets that she would do it again, because it was the right thing to do. carol: you talk about the unemployment rate according to one survey amongst the transgender population. already higher than most. josh: in a survey, was 15% at a

time when the unemployment rate was much, much lower. trans people and advocates say discrimination is pervasive. the attorney for the michigan aclu's lgbt project who has been working with amy told me that when he started the job more than a decade ago, mostly they got calls from gay and lesbian workers. many people may not have thought there was a chance of winning on behalf of a transgender employee. there was a chance of winning on he says that now, most of the calls that they get are from trans people. carol: also in the inequality issue, chinese gay dating app is evolving from helping two people meet to help them find surrogates in the united states. jason: beijing is not known for supporting the lgbtq community, he says that now, most of the

but the service may help china with its demographic problem. jason: -- carol: we got more from our reporter. >> a friend of mine about a year ago said you have got to write about this company. she works in public health, and she said they just do all of this work with the government. anti-hiv stuff, and they are also doing this new program they help gay guys go overseas and have babies by surrogate in the u.s. i'm like, that sounds like a story, why is that happening? it turns out, it starts with the founder of the company himself, who goes by the name geng le. he started this at four -- this app for gay men. it is kind of a community app. but it is kind of a community, not just about dating. in china, outside of the big cities it is still not totally cool to be out and proud. but the service may help china so this app has really made a

big difference for communities outside of the city. he said that after 35, he just got baby fever, just really wanted to have a baby. so he did some research and found out that it was illegal in china and in thailand, which had been a popular place. carol: surrogacy. dune: surrogacy! surrogacy is illegal in china. but also, being a gay guy. it is hard to do anything as a single parent. so he decided to go to california and have a baby by surrogate. when he came back, he brought the baby home and thought i am going to start this as a business, an offshoot of my dating app blued. carol: so he had a baby, a son come in california. was his son a chinese citizen or american citizen? i'm curious about those dynamics and how the government sees this. to your first question,

the babies are born in the u.s. and automatically have u.s. citizenship. when they go back to china, there is a very arcane system that continues to be sort of problematic for even regular chinese people without surrogate babies. you have a residency permit, and you have to get it from your parents home town which is often not where they live. it is very complicated. there is no clear, laid out route for a parent of a baby born by surrogate. sometimes, you can, they will work out, but in fact, for a lot of these gay men, it is an advantage to have a u.s. passport. partly because they're worried about putting them into this chinese system that will be biased against them for not being part of a normal family. even the ceo and other men i to, talked to are saying long-term that they will move abroad with their child and set them to an

-- send them to an international school anyway. just to be in an environment that fits the better. carol: "bloomberg businessweek." is available on newsstands now. jason: and online. and on our mobile app. what is your must-read? carol: the story about lloyd's of london. who knew how egregious and difficult it was for a woman to work in the u.k. insurance industry. specifically at lloyd's of london. it is such a well toned and -- well told and well-written story.who knew howd difficult it was for a woman to work in the u.k. insurance industry. sounds like the me too generation and movement has yet to catch up there. jason: absolutely. it is hard to read at times, but really worth the time. carol: your favorite story? jason: i love the cover, rebecca walked into our studio and we really did not want to let her go. she is so dynamic, we spent a lot of time with her and i really would recommend our extended podcast, because she really goes into the whole theory and how this is a long game. luckily for her, she is 27 years old, she will be at it for quite some time. carol: and you can find more stories on businessweek.com. check that out.

jason: and check out our daily podcast, available in itunes, soundcloud, and bloomberg.com. carol: more bloomberg television starts now. ♪

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emily: he started an e-commerce company in 1995 around the same time as amazon when nobody believed anyone would ever buy anything from the internet. today, mickey mikitani's rakuten is known as the amazon of japan but also competes with google, netflix and airbnb, a streaming service, credit card and banking services and more. though many outside of japan still don't know how to pronounce rakuten's name. >> rakuten. >> ra-cue-ten. emily: thht