>> welcome to bloomberg businessweek. i'm carol massar. >> and jason kelly. quite the ceo of lloyd's of london response to the women areion into how treated inside that firm. jason: heavy aims to step out sexual harassment. how they want to be into

video games. jason:, unicorn will go public. carol: we are about startups valued at a billion dollars or more. jason: check out this chart, these are listed in the united states. carol: we are talking about unicorns such as uber and interest. we are near record levels for ipos. michael regan writes about this. could it be a signal that the bull market is and then? -- ending? michael: they are projecting no more rate increases for the rest of the year. people think the fed to know something that we don't know. carol: something bad. michael: something that is coming. the 10 long after that,

year yield curve inverted. friday. mike: the day that will live in infamy. theout getting into all of bond market math, this is a worrisome sign. carol: it is not the way it's supposed to be. mike: you are supposed get compensated for taking on a longer. of risk. -- a longer time of risk. you could get paid more. itn those yields come down, means that people are buying them heavily. the thinking is that people are worried about the near-term. about recession, deflationary , something that will drive bond prices higher and those yields lower. they are getting out of riskier assets and piling into that longer dated bond. carol: you know this so well. is the equity market right? does the bond market know

something? mike: the internal struggles of who knows something and who is right? really discusses these unicorns. all of the day startups that are finally coming to the public market. yft is a good example. uber is waiting in the wings. that will be the big gorilla ikea. there are a bunch of others. airbnb is expected. the list goes on and on. i am sure that everybody knows what these are. >> some of the names that you were talking about. you mentioned are being -- airbnb. we talked about this in 2018. this could be a big year for ipos. we are starting to see that happen. it is. they are being revised higher. to the point of renaissance capital being a firm that

specializes in ipo research. they are thinking that maybe 100 billion in ipos could happen this year. it is not a record, it is a little about that. close to a record pace. that much issuance of new stock makes people nervous for a variety of reasons. one of them is that somebody know something that we don't know. carol: why is everybody wanting to go public? mike: yes. there's a lot of conspiracy theory that sweeps through the market. their backers must be whispering in their ears. this is it, this is the time to sell. the market is looking like it is getting top-heavy. as the inversion shows, there sometime inecession the not-too-distant future. this stockmarket rally has gone on for a decade. it is the longest we have seen.

almostnomic expansion is unprecedented at this point. bullone will tell you that markets and economic extensions, they don't buy old age. wonder abouts you anything that is going on this long. all of these companies are taking this moment in time to tap into the public stock markets. it is making people nervous. of unit wasing going public, we will hear from investor. we will hear from general atlantic. carol: up next, the american who may have a big influence and how much of robert mueller's report we will get to see. app that helped ocasio-cortez.a carol: this is bloomberg. ♪

carol: welcome back to bloomberg businessweek. i'm carol massar. jason: i am jason kelly. join us every day and catch up on our daily show by subscribing to our podcast. carol: you can find us online at businessweek.com and on our mobile app. william barr needs to decide how much of robert mueller's report to release. jason: president trump may have a big say.

there is jillian government. >> president trump was the subject of this but now he is the only one who gets to decide what parts of what was provided to the investigators are not covered by executive privilege. he doesn't care, as long as this comes out. there are plenty of reasons why -- they do not one of those things to come out. >> there are also talking to reporters about how if they released his interview questions, that would set a difficult president for future cedent for -- pre future presidents. attorney general

barr who was appointed by the president after he dismissed jeff sessions, the former attorney general who the this well known, then you have run rosenstein was hanging around for a certain amount of time, ultimately, the president is the decider. what sort of advice to think he will get russian mark -- will he get? >> didn't want that much to come out. part of the attorney general's job is to make sure that executive privilege is protected. barr has saidand, that he has wanted to make as much of the report available as possible. you are plenty of things he wanted a to disclose because of regulations covering secrecy around grand jury proceedings,

other ongoing investigations. he has been vocal about people calling for him to release the full report or at least a redacted version of the full report. he says he does not protect -- intend to do that. it has been hard to pin down what we can expect from the justice department on this. jason: one of the interesting elements around him is that he wrote this long memo about what he thought of this investigation and specifically around the question of obstruction of justice. we know a little bit of what his thinking was before. is there any sense that has changed and how much may he be called to account by people on the other end of pennsylvania avenue of on capitol hill as to what he should and should not do russian mark >> the memo will make it a lot harder for him to appease democrats on this question. he has not said anything other than what was in his sunday memo.

he will be coming before some house members. that hearing is not going to be about his budget. he will get questions about what , if anything congress will be able to see. you should know more at that point. jason: do you have any sense of what the timing is when some larger group of people will see some larger version of this report? we should people havevery few seen the whole thing. exactly, barr says that he intends to take weeks, not could to see what he potentially release. whether he decides to release that to congress or congress decides to release that to the public or whether congress decides to release it to the public, all those questions are

still out there. carol: online at businessweek.com, the organizing app that helped house and the ocasio-cortez get elected. ocasio-cortez get elected. jason: it is about to go mainstream. this is a new piece of political attack. it evolved organically from alexandria ocasio-cortez. nobody had ever heard of her, nobody imagined a socialist could knock off the longtime incumbent democrat. organizedhere, she new york's fourth district, in queens and the bronx. she took that seat away from joe crowley, the incumbent. one of the ways she did that was a couple of volunteers built on

-- build a mobile organizing app to get registered young socialists, working-class minorities who are so plentiful in her district and were the key to her victory. now they are taking that tech and they started a company called reach. that will make it more available to democratic campaigns. that was nott working about grassroots knewigning today that they they needed something different to make it more effective and productive? >> anybody who comes from the tech world into the politic this -- world, they think is antiquated and makes no sense. the two people that started the realizedjake and leo that this is not a smart way of doing things. it is not the way to reach people that aoc wanted to reach.

what they did is they took the voter list and they uploaded it to an app that was searchable. allow them to go to the places where her potential voters actually congregated, places like bars and farmers markets and subway platforms. low and behold, when primary day came around, she had the votes to knock off the incumbent in what was the biggest upset of the 2018 cycle. carol: was it a case of finding more people? loading more people into the voter base? what made the difference? josh: the mobility. essentially, politics as it was conducted up until 2018 was based on the lifestyle that people don't live anymore. knocking on your door and try to cash at home and calling on your landline phone and hoping you

will talk to a stranger. picks up their phone? not many people even have a landline anymore. this took the process of canvassing and modernized it for our new era. especially to mesh the lifestyles of the people in that district. democrats traditionally rely on young people and minorities. two very important components of the electorate. barack obama was able to mobilize these people but hillary clinton was not. these two groups in particular are difficult to reach. hasof the things that democrats excited in this technology is that aoc's campaign managed to reach these voters. these are voters that every democratic candidate would like to reach and went over. carol: coming up next, the tech -- tax loophole the epa depended

on. carol: this is bloomberg businessweek. ♪

jason: welcome back to bloomberg businessweek. anderson county. -- i am jason kelly. carol: i am carol massar. you can listen to us at these places. how banks are helping etf's avoiding tax bills. they are called heartbeat. you can see how these trades have spiked recently. jason: it is a massive jump up. >> in september, we saw this enormous and the of cash into a

technology fund. this is something we have been watching on the etf team for a while. we heard about this big index rebalancing that would take place in september. we were waiting for this. what we saw was a really large one, more than 3 billion coming in. it got us thinking about what these trades are all about. we saw these trades in the past. they happen when you see an index rebalancing. this is a very large trade. >> tell me what you picked up on. >> there is a totally innocent explanation for.

this is not what is really going on. , theyy want to do that can wait until the market closes on the day. they could sell the stocks that needed to leave and by the new ones. instead, two days ahead of time, they are having a bank put new stock into the fund, become a big investor in the fund. 14% of the fund increases in size. the stock includes the stock they need to get that up. why would they be doing that? it seems illogical on its face. >> why would they do that? >> this is like facebook stock that they need to get rid of. it has depreciated value but it has a built-in gain. they have to report that game to

the irs. investors have to pay tax on it. investor wants to draw from the fund and they give that stucco it to the investor, conversation for them waving, there is no tax due. have a bank come in and be an investor for 48 hours. >> it is legal. this has to do with the etf structure. they have in kind creations. , they getey work shared back in return. that money's was the fund in assets. they can up and took stocks back from them. what i thought was really interesting, what this means from a tax perspective.

the tax i was really interesting. >> this goes back to a tax law or a change in existing nine. the firstrs before u.s. etf even existed, the only thing congress was thinking -- t cracking down on this. in order to do that, insurance companies, they had all these investments that have gone way up. rather than pay taxes on those stocks, we lose share buybacks -- we will do share buybacks. congress got wind of that and said no more. that is illegal now.

will resent mutual fund companies for reasons they never really explained. that did not matter much, it'll fund companies did not go do that. >> they are different from etf's. in terms of how they work. >> they trade directly. an investor start an account. they don't want a basket of 500 stocks to sell, they want cash. mutual funds don't really use this loophole often of giving and withdrawing investors. >> we're thinking about the coronation that was necessary, to get the bank that buys into the fund a few days ahead of when the selling is planned. only about the coronation. >> the understanding of what we have about these trades work is

a few days before the index balances, before stocks leave up thed, they will pick phone and call three different bank. -- banks. these banks are what we call participants. they have a specialized, privileged role. they are the only people that can create and redeem etf shares. given that the etf manager needs to have this creation coming in so they can have a big creation coming out, they call out these authorized participants. they say we have this big index rebalance coming up, you guys mind doing us a favor? aboutnk will hem and haw it. they will make a decision based on the relationship they have with that etf. they can't get paid a commission or it be by the etf manager.

this is the cause of the capital to be tied up. hedge,t that it takes to the bank is not going to take any risks. they don't want to be exposed to the market. they will hedge their exposure 100%. these are small but nonzero costs of doing these transactions. >> because? doing this with the relationship. if you're doing business with vanguard, you want to be continuing to be doing business orh the -- blackrock vanguard. >> look at these trades. >> come into my terminal. one of the etf's, we are hearing about this in the story --

somehow, they got a bank or an to avoid the taxes on the capital game, just to see them withdraw two days later. the index is about to change on facebook and up about, getting to do that, they could avoid the capital gains tax at the shares more than doubled. >> this is big money. >> fascinating report. think you so much. thank you so much. the ceo of this company responds to bloomberg businessweek's report. that is next. ♪

-- -- they veryll ahead, difficult task of beating microsoft in video games. jason: how this president is moving to improve diversity. carol: we begin with the ceo of lloyd's of london.

this was a report on a deep-seated culture of sexual misconduct at this company. jason: they are trying to stamp this out. carol: the ceo, john sat down with lumbar television for an exclusive interview. john: i was very honored to take on the executive position at lloyd's of london. 's i wantot the lloyd to be part of. my colleagues feel the same way. i don't care how long ago they were, it is not acceptable in this day and age that any woman should not feel safe. thatun through the actions have been announced, we have to go through an independent cultural survey. we have to see what more we can do. what i am clear on, we are not doing enough. we had ensure that everybody, whether it is a woman or a man should feel safe at any time of day, doing anything associated with the lloyd's market.

tohow can you manage convince people that they will feel safe outside of the building? it is wanting to police behavior at work but a lot of the instances did not happen within the building itself. john: you are right. we operate globally, not just in london. we will impose on sanctions. whatever one of the constituent companies chooses to do -- if anybody is treated inappropriately, we will be incredible decisive. that include -- that could include lifetime bans. we want except any form of bad behavior. >> i skeptic might say that this is a form of crisis management were closing the door after the horse has bolted. leaving able to bring about an overhaul of cultural change that your predecessor did not manage

i think five years? >> my predecessor did a wonderful job in bringing the marketplace forward. the changes the market has made have been incredible is significant. everyone i have spoken to has been shattered by the article. i have no doubt that everyone wants to be doubled every two ensure that these events cannot occur. >> it is wanting to regulate behavior. it is another to regulate thought. what will you do to actually change a kind of attitude that leads to sexual misconduct? john: two things, we are doing mandatory training. really understand and look after actions that they think are inappropriate undertaken by others. how do they intervene in a situation where someone is feeling uncomfortable? experience the bystander to step in and help,

-- the other is to understand what is working well and to that it is understood by everyone across our business. >> what sort of response have you gotten in talking with other business executives about this? john: none of the participants in our marketplace -- there are almost 100 insurance companies operating at lloyd's. they are all lined up behind what i said yesterday without hesitation. everybody felt there disappointed to read the news. they are determined to stand behind actions that i have been discussing. >> bloomberg spoke to 18 women with 18 years of experience between them. and bloomberg spoke to these women, some of them said they had gone to the hr departments and had been persuaded to stay silent. systems need to change in

the u.k. insurance industry? we take any form of inflating incredible is seriously. i heard that. one of the other things we said we would do is set up an end -- an independent managed and multi-access point that anyone can go to. least, we can give them advice. it cannot be right that people -- >> john micklethwait tells us why his firm started its own internal estimation amid that college admissions scandal. >> what the workplace is right for transgender americans. we will hear our first word account. jason: this is bloomberg businessweek. ♪

jason: welcome back to bloomberg businessweek. i am jason kelly. carol: i am carol massar. -5:00 p.m. wall00 street time. you can check out our podcast on itunes, soundcloud and bloomberg.com. this week, leaders in business, politics and academics gathered in new york for the bloomberg equality summit. jason: that is where i sat down --h john micklethwait winklereed. when this news first broke, it was pretty shocking. this is something that we had no knowledge of, we had no idea this was all happening. any time this happens, it takes your breath away for a minute. we reacted as you described, we

tried to react in a pretty focused way. one of the things that we felt was really important to do was to make sure we are communicating. we went out to all of our stakeholders. that is both externally and both -- also internally. investors are very supportive. theyunderstood the context were engaged in a personal basis. her investors were very supportive. they understand what we are trying to accomplish as a firm. our growth equity franchises. naturally, they have a lot of questions.

when we have committed to our undertakens we have this internally. we own this to our investors. we are working on this. jason: help us understand the broader context of the work you are doing. this is something that you notly personally have taken since you arrived a few years ago. what moment ruf in your work, internally -- what moment are you at in your work, internally? jon: the reason we feel it is so important is it is not just a is onen -- diversity aspect of it. i like to view it in a much broader context. in the will that we live in today, being a fiduciary,

investing on behalf of the stakeholders and also having an organization that people feel they really want to be part of, it is really important in my view that there is an expression of value. what do you stand for as a company? what is important to you? what are you trying to accomplish? diversity is one part of it. i like to start more from the what sort off values do you have as an organization? what weou think about are doing? why we are doing it? i like to think about the environment at the firm. i start with inclusivity and that leads into the idea of diversity. are we in organization where people feel like they really want to be part of this living, breathing organism that is a

firm? like when i got to the firm, i think we were in the beginning stages of getting our heads around that. in the past couple of years in particular, this whole concept, this value orientation -- what you stand for? -- what do you stand for? what are you trying to accomplish? carol: inequality issue, tumor talked to trent americans. -- trans americans -- bloomberg talked to trans americans. i asked this woman about her journey. >> it was hard for me growing up, being ginger-queer. rasco, i was the not exposed to diversity.

i was scolded and disciplined for displaying these tendencies and wanting to exist in an identity that was not normative. carol: how did you know that you were gay? you said that you knew in fourth grade, you are still young. by that time, did you know this is you i am? >> i did not know. i am writing a book, i am writing a memoir on my life saying that i have always been me. when people asked me in fourth grade if i was gay, i did not know. tople assigned an identity make way before i had a chance to identify on the inside. i was just being me. 4000 -- fort thousands of queer kids around the world. that is just who they are.

i like playing with girls toys and barbies and dressing up. i did not want to be a little boy. there was no education at that time surrounding ginger -- gender identity. world showed up in the without definition. carol: that must have been really hard. >> it was definitely a struggling. i was definitely bullied, i was harassed. strong ind to be so my personality, in who i was without having any figure to identify with. i was just being me. yearsn't until recent that we started to have this conversation around transgender identity. it was a struggle until i

finally understood in college lgbtq people have a great history. people have been erased from the narrative of history. i thought i was discovering a great history that i was a part of. nine individuals, trans individuals, they spoke about their individual experiences. we talked about getting support or not getting support and what could be better. what could be better from your own experience? >> i think we need affirming health care. they have a right to have a service provider that understands the unique needs without triggering them and disrespecting them. i think we need basic rights in terms of equality with our government. trans people deserve to serve in the military.

they deserve to exist in our society. they can pursue whatever desire or dream they have. from thethis onslaught trump administration against transgender people. i think it is about recognizing our humanity and not doing eisen us and dehumanizing us. showing that about we are fathers, mothers, brothers, sisters, colleagues. thingsre a multitude of that we are not just -- we are not just one thing. if starks -- it starts with recognizing our humanity. >> new york mets to figure out a way to lure amazon back. my conversation with bill ford. carol: why microsoft may remain the king of video games despite what apple and amazon try to do.

jason: this is bloomberg businessweek. ♪

carol: welcomecarol: back to bloomberg businessweek, and carol massar. jason: jason kelly. you can listen to us on these stations. carol: bill ford is one of the biggest names in private equity. he is the ceo of general atlantic. jason: he joined me for an exclusive interview. we talked about new york's trouble keeping amazon hq to -- hq 2. >> you have someone of a airbnbes, uber, lyft and will introduce investors to the

large rideshare market. all of these are highly anticipated, next-generation software companies. you have to go back to 2012 when facebook went public and introduced investors to the social media space. , also, we had that great crop of cloud software companies. this is becoming a great year. when you have a very constructive equity market like we had over the last several these combining with markets, they are not too hot or too cold. they create the best conditions for a good ipo market. we have seen the levi strauss deal work. it sets up a nice condition for this year. nice conditions, but about getting into deals? >> private market values are up. there is no doubt about that.

it makes our job more challenging. that is not any different than it has been in the past. discerning, companies that can emerge as market leaders and are serving very large markets. history tells us you can get your returns even when you're paying a full valuation. we get in trouble is companies that are serving relatively small markets. you're involved with the partnership for new york city, your co-heading. you guys have been very involved, especially on the backend by amazon, not to come to new york city, where do we stand on that? is that still live? we have really tried to turn around amazon's decision. to see we can turn this around.

this could be a negative symbol to business globally. new york had great momentum in the tech space. cap is here,a google has a cap is here. we have leading companies in for square space, our unicorn ipo's. the space had momentum. getting amazon would only have distinguished new york as a leader in technology. also, media. given amazon's move into media. this would have been another catalyst for development there. we hope they can turn it around. we still want to send a really strong symbol to the global business community. new york wants them to build their business here. jason: you are past winter. -- past but the prize winner.

split the prize once. how do you feel about do? -- duke? do it. felt great about congratulations to dwight anderson forgetting 16 of the sweet sixteen. on to fifthng place. this is coach k. it is probably the best college best ballplayer. it is hard to go against them. they have a good chance to win. google and apple have both announced a video game streaming services. they both want to be the netbooks for gaming. >> discharge sums up how big the market is. look at smartphones and tablets. $15 billion, $13 billion, dominating.

people who use xbox is, play stations and really expensive pcs to play these large, expensive games take years and sometimes hundreds of millions of dollars to make. allow thesel change to be streams through the internet. game,ow you're playing a you won't need to have a console or a pc. that allows the tech giants like apple, google and microsoft to jump into this industry. >> when people think about video games, they take about what you're talking about. you have to buy the latest console and what are you planning on? and when is the next big game coming out. some of that may not change. like you said, this whole notion of that hardware case, that is radical, right? >> we have had hardware consoles

for decades. they became popular in north america with nintendo coming out and sony quickly following with their playstation and early 2000's, microsoft fought their way into it. out,had a new console come it cost of between four and $500,000. -- four and $500. some people liked playstation, some people liked xbox. at this point, if we are going to be streaming games, that really shakes it all up. jason: how does it shake up the videogame makers? those are stocks that we talk about every day, whether it is activision blizzard, ea, take two, how does that change for them?

>> sometimes these are bigger than movie releases. at $725 redemption million in its opening weekend. that is more than the latest avengers movie made. this is a big-money production, it takes years to make. hundreds of stars work on those games. people willing that shell out the money for the games. these game makers still have a lot of power, they have a content. just like hbo has not gone away in the netflix world, maybe to have gotten stronger. they have that premium content that everybody wants. they hold a lot of power. when the streaming services were announced, they were announced without any deals with those major game makers.

there is no sense of whether or not those games will actually be available. if those big tech giants want them to be available, they will have to pay up to get them. >> bloomberg businessweek is available on newsstands now. jason: what is your must-read? regan, all of his stories about the unicorns come into the market. this time, when we don't know whether to believe what the fed is saying, what a credit market is saying, we're trying to figure it out. jason: that came up in my competition with bill ford, it is obvious why he is so focused on that. love garrett on video games. we talk about it so much on our daily show. this way that people are consuming the games and how they play them, it will change them. >> you will find more stories

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emily: i'm emily chang, and this is "the best of bloomberg technology," where we bring you the top interviews from this week in tech. coming up, lyft officially hit the public markets this week, the biggest listing of the year so far. we will break it all down. plus, apple meets hollywood. after months if not years of speculation, the iphone maker unveiled its streaming plan with a star-studded event from steven spielberg to reese witherspoon and oprah. a lot of excitement but also stil