♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. we're inside bloomberg's headquarters in new york. carol: we look at president trump and what it may mean for the 2020 election. jason: how the company's culture caused it to stumble. carol: keeps climbing.

jason: first up, a private equity takeover of the finance section. carol: i enjoyed it and learned a lot. it is this week's cover story. bloomberg businessweek editor joel weber joins us now. private equity touches us in so many ways. joel: we couldn't keep listening to jason go on and on. when we got together about the different ways private equity touches us, we realize there was a bigger story here, which was in the last decade, since the financial crisis, nobody won this decade as much as private equity. jason: now we've got questions and that's how this story shaped up. you posed them to a lot of us in the newsroom. joel we realized there was a lot of different places we want to go. the fact d.c. has carried interest. so far, that's bit untouchable.

if things change in d.c., we might see that change. carol: we did see lobbying in terms of private equity firms. they are spending tons of money. joel: tons of money. also returns. everyone wants big returns. a world without yield anywhere, how do i get roi? private equity promises that. jason: some institutions have been happy from a return perspective. it's grown so massive, but that scale and that size, there are a lot of consequences, some intended, some not. joel: for the average consumer, you don't know the different ways private equity can touch her life. from the cups of coffee you drink, to your pets, to even light, if you have a pension, the whole point of the pension, you've got to get the returns. private equity is one of the places people turn to. jason: one of the things we talked a lot about is their influence around the world, the individuals who run this firm,

they are in the midst of the most important conversation of our time. joel: donald trump talking to steve schwarzman about china. something else we notice, private equity industry dominated by men. carol: exactly. i love the coverage because i do feel we need more transparency. joel: it's what we set out to do. carol: it's a great cover story. joel weber, thank you so much. more on equity later on. we turn to the week so far in politics. jason: an ongoing impeachment inquiry, subpoenas for rudy giuliani and the state department, and as 2020 looms, that big election, elizabeth warren taking a step forward in some polls. carol: josh greene joining us from washington. josh, what a week it's been, and i think we're starting to figure out, will this have some implications for the 2020 elections? josh: well, i think almost certainly will. it's funny, every week we

finished by saying what a week in washington. yet this one stood out apart from earlier ones because we now have a fast-moving democratic impeachment inquiry that is very serious moving forward, very quickly, has ensnared the president and a lot of his cabinet officials. democrats seem to think this week they have momentum going forward. there's a good chance they are going to impeach the president. what effect that will have on the election, on the markets, nobody has any idea. the big news affecting markets was the slow down in manufacturing data and the rising chance of a recession, anything involving donald trump. as i've learned through hard experience in washington, never assume anything. next week could be different. this week, impeachment took center stage. it is dominating everything. jason: i've got to ask you, as elizabeth warren has been assented, i think to that cover story you wrote where you reminded all of us, hey, don't

sleep on elizabeth warren here. josh: no, i've been bullish on elizabeth warren since before it was popular. i pitched that cover story in september when she was in single digits, got some quizzical looks from my editor. part of the reason we did that was because warren has a lot of candidate skills. there's a lot about what she's doing that appeals to grassroots democratic voters. i see it on the ground when i travel with her in iowa, new hampshire. now i think we're seeing that reflected in the polls. especially as joe biden has started to stumble, bernie sanders had a health scare, warren is the one who has now emerged, we're calling her in washington a co-front runner. but if you look at the polls, she may be a narrow front runner overall for the nomination. carol: that's what i want to follow up on.

you spent time with various candidates. joe biden, this story, every time you talk about president trump, joe biden also comes up, and of course his son. what does this mean for him? is he done in terms of this campaign or that is too soon to call? josh: i don't think joe biden is done by a long measure. trump, despite the fact he's gotten himself in a lot of trouble, did this in part because he was trying to advance a story he believed would damage his chief rival, joe biden. we can see from poll numbers it's put trump and some kind of jeopardy. we don't yet see in the poll numbers that it has cost biden. politico came out with a poll showing 40% of voters still consider biden to be the most electable democrat. that's actually up a tick from the last time. it isn't hurting biden yet and he's not just a viable democratic candidate, i think, but certainly one of the two most likely to win the nomination. carol: josh greene in washington, thank you so much. jason: rudy giuliani at the

center of the impeachment inquiry. carol: weapons manufacturer staffed by trump supporters, selling attack drones to the u.s. government. jason: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. join us every day on the radio. carol: you can also find us online and on our mobile app. in our politics section, president trump's attorney rudy giuliani has not been charged with any wrongdoing. his actions are at the heart of the impeachment inquiry. jason: stephanie baker has been

following this story closely. she joined us from london. stephanie: this how subpoena for communications and documents from rudy giuliani will be central to the impeachment inquiry. they have asked for documents and communications related to a long list of the ukrainian politicians and businessmen he has done consulting contracts with, as well as politicians he has met with up to the crucial call between trump and the ukrainian president, volodymyr zelensky, which is at the heart of the impeachment inquiry. he has resisted, or he seems to be resisting efforts to disclose those communications. he hasn't said officially whether or not he will comply with the subpoena, but he has intimated that there are attorney-client privileges at stake here. and i think that's going to be a difficult one for him to fight,

given that much of what they've asked for doesn't really pertain to his role as a lawyer for donald trump. carol: and that's what complicates this whole situation you're right about. his role within the white house, it's ambiguous, right, official, not official. there are times he said he spoke with understanding or an ok from the state apartment. his role is a weird one. stephanie: exactly. and that's why this will be so fraught. he's cycled in and out of the white house wearing multiple hats while he was defending trump in the special counsel's investigation into russian election should russian interference in the election -- russian interference in the election. he was wearing the hat of trump's personal lawyer, unpaid. at the same time, he was continuing with his private security consulting work.

and then later, when mueller's report was released, we learned he was effectively trump's shadow diplomat, making overtures to ukrainian prosecutors, as well as ukrainian aides around the ukrainian president. and so whether or not he will be able to withstand this subpoena and effectively fight it off really depends on which rudy are we talking about? which hat is he wearing? and that will be interesting to follow. carol: what are you hearing about his ability to claim hey, i am the president's lawyer, attorney-client privilege. how much will that maybe not protect them going forward, certainly with the inquiry? stephanie: he's been on cable news shows talking about this for months. it's hard to claim attorney-client privilege on

issues where he's actually commented at length in the press. and two, i think it's hard for him to argue, or he will argue it, but i think it will be difficult for him to argue that this really pertains to an ongoing, or at the time, that it pertains to an ongoing legal matter for his client, trump. at that point, the mueller investigation had wrapped up and his role was unclear. so, it depends on which lawyer you talk to. i think some of it may be protected, but others i think won't. the question is, will the house investigators have the stamina and the wherewithal to fight it out? and it could take a long time. carol: the other thing really interesting is you mention, as you said earlier, that rudy giuliani kept working his business, right? he didn't stop any of those relationships or contracts. and some of those contracts included a few in ukraine, correct?

stephanie: yes, so i wrote a story for businessweek about rudy giuliani's security consulting business and how he was continuing to do that while serving first as trump's cybersecurity advisor and personal lawyer. and he's continued to do that, both in the ukraine -- i think the last meeting he had on the ukrainian security contract was in march, 2018. if it had gone further than that, we don't know. but he has continued to do business around the world and that is the subject of this house subpoena. they want records of his business dealings with these ukrainian businessmen and records of any payments he has received. carol: here's a story that's got

a little bit of everything in our technology section. jason: one of tech's most controversial startups, founded by a gamer, backed by one of president trump's favorite billionaires, and makes drones that destroyed drones sold to the u.s. military. carol: here's joshua with that story. josh: the company is called andrew and it describes itself as aspiring to be the operating system of the defense department, which would basically be the software that kind of connects all the systems, whether those are surveillance cameras and dashcam's on jeeps or aircraft carriers. and so that's a big goal, but they've started small, as you do. their first appointment was with customs and border protection on the mexican border. which is, in and of itself, a pretty controversial place to

start, and things have taken off start, and things have taken off from there. every ingredient of controversy is here. the founder is a guy named palmer luckey. he founded the oculus rift headset. there's this piece of technology, bought by facebook for $2 million. right before the election, pick came out that palmer luckey was secretly finding a group that was posting insulting billboards of hillary clinton. suddenly he disappeared. he said he was fired. mark zuckerberg said he was not fired for political reasons. it's been a snafu for facebook. palmer luckey has this reputation as the trumpiest reputation in silicon valley. then he starts a company, whose first project is surveilling the mexican border right at the time the trump border policies are really building up. and that immediately fed into a debate on should tech be

refusing to build things like this? then you have the trump administration, already causing trouble in silicon valley and border surveillance, and they jumped into that. jason: one of the models of silicon valley of late is being connected to founders find and the folks associated in that orbit. how does that play into this story? josh: founders fund is the investment fund founded by peter thiel, who backed the president and the 2016 election. he's the other technologist most associated with donald trump. and he has an uneasy relationship with peter thiel. i've talked to them a lot. they really want to say he had nothing to do with this story. they say it's just an investment fund and they happen to be one of our investors. they really want to play it down.

at the same time, this fits into some of his other business interests. carol: talk to us about the work they're doing. the story opens up with one of the engineers and he's playing around or showing how their drones can work. tell us about that. josh: yeah, so the actual project my story focuses on is called an interceptor and it's basically a drone that at honestly, will fly into other drones and not them out of the air. the idea is that cheap drones are being used in increasing number of military ways. carol: as we saw in saudi arabia. josh: as we saw in saudi arabia, although those are larger drones. we have seen them used in excess nation at times, in -- assassination attempts, in various attacks. the idea is we could build drones and put the software on the and tell them anything that reaches this airspace, ran into

it until it falls down. and they think this is a cheap and relatively easy solution to patrol borders, military bases, and maybe other places. they had discussions from selling them to clients. they have put their foot slightly into another hot button debate in silicon valley, which is whether we should build autonomous weaponry. and if so, what regulations and so on should be in place? his answer is clearly yes, we should build this weaponry. they refer to it as a semi-autonomous weapon. at the moment, they do have safeguards in place. you do have to identify the target and show them a picture and ask someone whether or not to attack.

carol: also an investor in bloomberg lp. just to put that out there. jason: coming up, delta climbing higher. the ceo talks about expanding the company's global footprint. carol: inside wework. how the company contributed to its fallout. this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i'm carol massar. you can listen to us on the radio in new york, one of 6.1 in boston, 91 fm and washington, d.c. jason: a.m. 960 in the bay area, on london in dab digital radio, and on the bloomberg radio app. carol: we caught up with delta, and it's been outperforming its peers and doing deals. we'll hear from him in a moment. jason: let's hear from someone who will talk to us about one region were delta was doing great, and now may need to make

moves. kailey: and delta is making moves, $2.25 billion investment, the biggest carrier in latin america. take a look at how delta has performed. it is a higher growth area and at one point earlier, it's all double-digit sales growth. but the pace has slowed to one put 5% year on year in 2018. now the deal may make delta the largest carrier in south america, replacing them to capitalize on higher growth and see sales growth start to improve. carol: and expand their growth. thank you. delta is among the world's biggest airlines and has invested to strengthen those ties, and that includes the recent deal we just talked about. jason: delta ceo told us what it takes to win abroad and if he sees more consolidation in the industry. ed: i don't think you'll see

consolidation in a meaningful way. you may see it and other parts, maybe not participating relative to delta. internationally, i do think you'll see it. in europe, you're already seeing it. you're seeing bankruptcies. we'll see consolidation trends. on the global scene, that's where we've invested. we've invested in our partners. it's more to have influences within our global network of carriers. you'll see more from delta potentially, but i don't think on the u.s. side. jason: what do those partnerships look like now? and what might they look like in the future, either geographically, or are there new or different things you can try to create that family, as it work? ed: sure. one of the things that has not been successful are the alliances.

sky team alliance, i don't think we've brought a lot of great value to customers. i don't think we've brought great values to our member airlines. we're going at this thing in a different approach, making bilateral investments in the most important partners. we under 49% of virgin atlantic, the two closest carriers to either side of the country. we're invested in air france, klm, invested in gold in brazil. as a consequence, what you see is this network of influence that we're having within those companies. this companies want to know what delta has learned about operational efficiency and prowess. we want to learn what it takes to win those local markets. and then over time, while we can't own them in terms of consolidation, we can have meaningful investment that we created an network of carriers that will be uniquely tied, where you have delta as the centerpiece. that's our goal. when you think of the long-term,

we serve 200 million customers a year. if you look at the customers from all those carriers, you're up to over 500 million customers here. there's never been a network -- airline network. forget consolidation, that delivers that kind of value across geographies. we have an opportunity to create that. jason: do you have people knocking on your door saying why don't you come over and speckle that magic dust on me? ed: there's a lot of questions at all times. we answer every every knock. sometimes we say no, we can't do that. there's a strategy that's unique. i think that's an advantage for delta. jason: let's talk about your customers, both business and consumer. i don't want to put words in

your mouth, but a little bit of weakness from a business perspective from the asian markets, overall. generally, businesses it feels like, or a little bit cautious right now, globally, maybe for geopolitical reasons. we certainly heard that through earnings reports from some companies. what do you see? ed: i see a healthy u.s. consumer. consumer demand is very, very healthy in the u.s. we just finished the busiest summer in our history by a meaningful amount. revenue is up 7% year on year. there were also up the year prior. we are within the fortune 100, in the top quartile of growth companies, and we've been there the last couple years. people don't expect delta to be seen at that level. we're seeing a lot of growth in travel. jason: you can see the full interview online at businessweek.com, or listen to it via podcast.

get that in our feed. carol: up next, private equity having a moment. jason: where's the money to be made, who's making it, and how? carol: this is "bloomberg businessweek." ♪

♪ jason: welcome back to "bloomberg businessweek." still ahead, our deep dive into private equity. we will have a chat with an investor with a new book. it is all about the biggest risks he has ever taken. carol: a billionaire restaurant tour has a new book.

his book, why you should shut up and listen. jason: never, never. but we begin with the big picture on pe. it is this week's cover story in a special section takeover of the finance section. $4 trillion in assets, private equity is everywhere. carol: from your pet shop to your dentist office. but how does private equity make money? here is this week's explainer. jason: private equity is not that complicated. managers raise money from limited partners, the wealth funds looking for places to invest. next, the firm identifies a takeover target. managers take a chunk of the money they raised, called equity, and pair that with borrowed money. that pays for the purchase. in an ideal world, the firm owns the company for a few years and sells it for a profit. they distribute the winnings to investors and keeps a healthy portion for itself.

investors agreed to a structure known as 2 and 20. every year they pay 2% of the assets to help fund the operations. the real money comes from the 20. after distribute 80% of profit to investors, the firm keeps 20% for itself. carol: that is the mechanics of private equity. let's talk about why we are doing this. you have been involved in coverage from day one. jason: this was important for a couple of reasons. one, to take a step back and realize the influence these firms and individuals have across the political landscape, certainly the economic and business landscape. and it has come to politics in a big way as we get closer to 2020 and issues of inequality and where money is coming from. issues of who is making the money carol: a little bit more transparency is what we want. we will continue to cover it

here on this addition of businessweek. now, let's get to a story in the technology section about a company that was the subject of a recent cover story, wework. jason: we kicked off 2019 with the expectation that it would be one of the hottest ipos of the year, until it wasn't. for a variety of reasons including governance and a lack of profitability. carol: we hear how the issues may have stemmed from the company's own culture. >> attention on the company has evolved as it has become bigger and bigger. like you said, it got this round of funding from softbank that valued at $47 billion. all of a sudden, a huge company. as it prepared to go public, that's when people started looking at it, thinking, is this company ready? it feels like at each turn, there is more that is revealed.

there are not huge surprises for someone who has covered them for so long. i think the culture has been consistent. but it is interesting to see how investors have viewed the conflicts of interest, corporate governance structures, personalities at the top, and not always reacted favorably. carol: family was a big element of his company and ultimately part of its undoing. how did all of this go under the radar for such a long time? >> it is interesting. there are two ways to look at the role family plays in wework. this has always been a company about communal spirit. remember they had community adjusted financial metrics they used earlier. it has been part of the those. -- ethos. they talk about how life is better together, make a life,

not a living. they bring work and life together and that ends up blending personal and professional. and the people at the top, adam and rebecca newman, the people who helped run we work -- wework are very comfortable having family ties played the role. -- play a big role in the workplace. obviously, adam and rebecca are married. when you look at the origin story, it is adam and miguel, the other cofounder, and then rebecca emerges as someone with a cofounder title. this is not something they discussed, but she became more important as the company became bigger. beyond that as we mentioned, there are a lot of other family ties. rebecca's cousin was the head of real estate for a long time. his parents ran the summer camp where they used to have summer retreats.

his brother-in-law worked as vice chair. there were others disclosed in the s-1. his brother-in-law ran the gym and fitness offerings. another family member paid for some of the live events they put on. it goes on and on. there are people who are personal friends who work at wework. including people he knew from his childhood so he feels a strong sense of loyalty to people. this is something his wife has described in interviews. it comes out in how he chooses to do his professional dealings. they were, at least at the top, comfortable with strong personal ties among the executive team. carol: still ahead, gender equality and private equality, -- private equity or should i say lack thereof. jason: plus, a new scale to measure wealth. this is "bloomberg businessweek." ♪

jason: welcome back to "bloomberg businessweek." carol: join us every day on the radio starting at 2:00 wall p.m. street time. you can also catch up on our daily show by listening to our podcast. jason: and find us online at businessweek.com and through our mobile app. carol: we continue with our takeover of the finance section. jason: speaking of takeover, those in the industry amount to a small group of the economic elite. carol: and they are mostly men. sabrina asked the question where are the women? >> i looked at the top 10 ferns by assets and try to look at -- firms by assets and tried to look at the number of women

making these investments. what i found is there are very few women and most only have one or two on these teams made up of dozens of investment professionals. carol: we need to talk about the financial community overall. are they kind of the same or is it worse? >> according to a study earlier this year, it was mostly asset managers. i don't think they included banks them but they compared private equity to hedge funds and looks like they have worse representation then even those industries which are known for not having women. and most women are in investor relations and marketing. jason: this is only going to change if the source of money decides it is an important -- is important. that's where we saw the movement on sg and governance issues and fees. so far, does not feel like the limited partners are pushing

that hard. article no they are not. -- >> no they are not. they are being vocal and asking questions and board members are starting to ask more questions. but the limited partners association put together a checklist, basically, to get more information on diversity numbers. jason: one thing that is institutionalized is the fact that the money has just been so good and investors have been happy with what they have getting back. carol: and with bonds paying little, institutional investors are desperate for the study, -- steady high returns that equity managers have been able to deliver. >> if you look over 25 years and compare how private equity has done to the public market, you would see a 13% gain from private equity versus 9% from the public market. carol: so better. >> over 25 years?

yeah. quite good returns. carol: they are not priced every day, there's not a lot of transparency. can we take that at face value? >> warren buffett had mentioned some of the concerns with the space, saying the math is not always honest. so there are a number of concerns with how these terms -- returns are calculated. one is the math around the internal rate of return. it is a key metric investors use to gauge how private equity funds are doing. the math around that is the shorter amount of time you can invest actual money of the better returns will look. -- money, the better returns will look. sometimes, they can invest the leverage capital, and at a later date called the actual money,

but that's a work which shortens the amount of time and can pump up a return by three percentage points. carol: because it is a shorter duration. private equity investments are multiple years. >> yes. that is interesting -- carol: that is interesting. it is not always sitting in the private equity offices, it is waiting until they find an investment in the they tapped the pool. >> precisely. jason: it has created a a lot of wealth for investors and individuals who run the firm. and as a result, some critics blame pe for exacerbating today's wealth gap. carol: so to better evaluate wealth, we have more on a new index to pinpoint one's wealth. >> one million is one-times 10 to the sixth. 1000 is 10 to the third power, so that makes you a three. most people watching this are

worth more than a thousand dollars, we hope. but that gets it. all the way down to -2, which is one penny. from the negative two on up to an 11 is on the scale. jason: 11 is a bezos. >> there are only two people in the world who right now are 11. there was another one, a french billionaire, but alas, he is below. jason: now he's just a 10. carol: that's what i love about it. you grow up and think i want to be a seven. jason: you are a 10. carol: thank you. it does create this metric. >> it jealousy is not the point. it is really just a metric to be used for good or ill. jason: why do you think this is

important? jason: you are a 10. >> did i say it was important? [laughter] seriously, like any scientific measure, it gives you more specificity. it is just one order of magnitude rather than three. jason: it is important going back to elizabeth warren. we are having a much more serious conversation about the happens and have-nots -- have's and have-nots. but it is not necessarily binary. sometimes it feels that way, but ultimately, when policy comes from politics, there are going to have to be decisions made about tax rates and reaching certain thresholds. >> i like what you said about have and have-nots. that is very binary.

and yet there are gradations. to somebody living on the street in a cardboard box, a person with $1000 in the bank seems incredibly wealthy. carol: up next, what to do if you crash your $3 million body. -- bugati. jason: and advice on taking risk. carol: this is "bloomberg businessweek." ♪

carol: welcome back to "bloomberg businessweek." jason: 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, on the bloomberg business app. jason: taking risks is something michael tennenbaum has managed

most of his life. carol: he writes about it in his new book, and in it, he talks about why that approach made him successful doing deals and literally swimming with sharks. michael: when i went to wall street at the beginning of 1962, a couple of classmates went to morgan stanley. they told me their net worth was $5 million. they did not take risks. once they were in a good club, they were in. this change over time -- changed over time as the commission structure eroded and the income and profits of wall street were attacked. they had to take more risks and that's how they survived. they put their money at risk to get transactions, block trades, for example. risk then became, i think, almost a central idea of wall street and universal banks.

jason: you took what many would say is the biggest risk of your professional career, which is you were in california time, hanging out, leaving a lucrative career at a big wall street firm and starting your own shop. you capture that moment and it's a great moment between you and your wife. looking out at the water, and she knows you well enough to say, listen, you've got to do this. what convinced you this was the right move? michael: when i was young, i used to like to swim. i dove off the low board a lot. now and then, i went off to the high board. you would walk off, say why am i doing this? you did not want to climb back down the ladder. sometimes you did. it was like that, i was so tempted to leave, i hated the

climate in the 90's. but every time i got out to the end of the board, i looked down. finally, i said it was enough. i think she was afraid i would retire and hang around the house. carol: got to do something. michael: right? i took friday's at the house, so she would go to town on friday. jason: what did you see in terms of opportunities? you mentioned jerry is something in the 1970's. fast-forward 25 years later, you saw an opportunity around the stress -- distress and a new form of investing. what was it? michael: i number of people have reviewed my book and says it has a lot of candor so i have to be candid. i do not know what i was doing burden [laughter]

it's simple. i hired to brilliant young men. we sat around and discuss strategies and they were not good. but i was always a contrarian investor. so i uncovered opportunities that were cheap. i made a lot of money for wealthy people. i would go to them and say we are going to buy this and we want you to come in with us. none of them would do it. so we did it and we made a lot of money. then i thought, dummy, you are a contrarian investor, what does that mean? so i started a fund. you might say i started -- i got the memo very late. jason: and in another book, the ceo and owner of the houston rockets, he talks about all of those things. his book is called " shut up and listen." it is a pretty powerful series of lessons. he describes where he is finding

opportunity. >> when things start slowing down, it is an opportunistic time. even right now, i just bought a very successful restaurant company out of bankruptcy. it has nothing to do with the success of the individual restaurants. they are very successful, it is just the fact that, once again, the old peter principle. poor management has done a poor job in setting up the capital structure of these restaurants or did major mistakes of the corporate level. therefore, it is a very opportunistic time for me because that is how i have grown. that is why you build liquidity and your balance sheet in good times. you don't have to acquisitions in your good times. you eat the weak and the bad times -- in the bad times. jason: you talk about having capital to run your business and

take advantage. tilman: why pay a huge multiple when everybody is trying to do it? why not wait until a dip in the economy, which always happens. and you get more for your money. jason: before we wrap up, something we all know a little bit about them unfortunately, fender benders. carol: it takes on a whole new meaning when your ride is a $3 million supercar. >> hannah elliott has advice for when you crash your bugatti. >> you will call them directly and say you may want to send a truck. and then the car will be sent back to france. and you aren't going to see it for a while. it will be some months. jason: i have to say, this is even more intense than maybe i thought it would be. >> it's pretty intense. lamborghini has a program called the flying doctors where they

have engineers they deployed anywhere there is a major crash from one of their valuable owners. those guys will strip the car down to basically nothing. and gradually graft in new layers, build new components on site. anything needed. or lamborghini will ship the car to seattle, and in their labs, repair their, so you are dealing -- there, so you are dealing with things most shops don't have. carol: how much does this cost? i'm curious about the do you file claims with your insured -- insurance? >> it is a case-by-case business. none of the guys i spoke to really wanted to share with me their insurance numbers and that sort of thing. i was told insurance didn't

-- did cover repair for the bugatti that was hit the driver -- by the uber driver. another told me that if they are under 200,000, he was not reported. it's not worth it proportionally. if the car is worth a couple million dollars, it's really not worth it. i spoke to guys at haggerty and they said this was a touchy subject, case-by-case thing. to get a quote on this, you are talking thousands of dollars just per month. jason: it is a reminder that it's one thing to be able to afford a car just to buy, but the ongoing maintenance even outside of a crash is massive. >> it is incredible. for one example, a mclaren f-1, they said it is a special car built in the 90's. they estimate that just maintenance is $30,000 a year.

and they recommend each year sending the car back to the factory in england for oil changes, break checks, realignment. anything you might need on a regular car. it will cost so much more and they will do a headquarters. -- it at headquarters. carol: businessweek is available on newsstands now. jason: an online. a loaded question what is your , must-read? carol: private equity, of course. it is a great cover story in a series of stories looking at the growing influence of private equity. it touches so much of our lives. we touch about influence in washington and women in the industry, so many facets. jason: i have been looking at the industry for a long time and i learned a lot working on this taking advantage of the smart people we have. carol: your must-read? jason: wework. it is such a 2019 story in so many ways. we started thinking this would

be the ipo. we scratch the surface of little bit and whoa, as you would say. carol: it will keep on giving. jason: more bloomberg television starts now. ♪

scarlet: i'm scarlet fu. this is "etf iq," where we focus on the access, risks, and rewards offered by exchange traded funds. ♪ scarlet: escalating the price war. charles schwab shoots down the fee-based business model that it helped to build. it has moved to zero commissions on equity and etf trading. seeking return and stability. kelly ye makes the case for an actively managed high-yield low volatility fund. china's communist party celebrated its 70th birthday. we explore a pair of etf's that will allow you to bet big on i