tv Bloomberg Business Week Bloomberg June 25, 2016 7:00am-8:01am EDT
a second scottish independence referendum is very much on the table. those comments came after a the cabinet hi te.er the brexit vo lower the uk'say a one credit rating after the country voted to leave the eu. uk's a1it may lower the credit rating. we will be speaking to the managing director of credit strategy at moody's investor timece at 5:20 p.m. u.k. later. want to recap the big market moves yesterday. the pound falling the most on record against the dollar to its lowest level since 1985. it had dropped as much as 11%. european stocks something most since 2008 after falling as much
as 9%. the yen was the haven currency biggestce with its one-day move against the dollar since 1998. gold had its best day since 2009 , rising 8% earlier on friday. let's get an update on the latest news on the brexit vote with anna in westminster. sow significant was sturgeon' statement. anna: an independence referendum could be on the table or was on the table and she took it on the step -- another step towards that today. talking aboutn how legislation is being ve the way for a possible independence referendum.
we want to be sure they can when it before calling one, of course. will they try to go for another independence referendum before the conclusion of talks between the eu and u.k. from enabling scott and to -- scotland to stay in the eu? we heard from jeremy corbyn saying he would rule out a second brexit referendum. he blames the conservative party for the move. blame him for not capturing what they see as the traditional labor voters. not supporting any emergency budget the chancellor might be planning in the wake of that brexit vote. mark: the six founding members of the eu are meeting in berlin today.
how are european leaders reacting to the brexit news? anna: many of them talking about the timing of this and the overwhelming message we are getting from europe right now is this needs to be dealt with quickly. wetark contrast from what heard from boris johnson yesterday who said there was no need to rush. it i spoke to the former chancellor in the u.k. yesterday howhe was talking about there were advantages to doing it quickly because it takes away that uncertainty. we had the foreign minister in berlin saying it needs to be a quick process. the french minister sing the process needs to start now. anna edwards bringing us brexit coverage throughout the weekend here on bloomberg television. special coverage all weekend here on bloomberg tv. we have hourly updates throughout the day and a special
live show at 5:00 p.m. on radio. we will bring you surveillance from 12:00 to three clock and sunday, a full day of coverage starting at 5:00 a.m. u.k. time. ♪ he is their device guy right now. it is a more collaborative environment then some places i've written about. carol: you talk about ping-pong tables and comcast is getting this whole thing on and it got away. >> once upon a time, it was symbolic for comcast to be all "we get internet and we get technology." that era was 78 years ago -- 7-8 years ago.
david: they are putting a lot of eggs in one basket, this x1 system. >> what they saw five or six years ago, a lot of customers were getting overwhelmed in terms of too many cable channels and so many movies and tv series on demand. the menus were not keeping up. you could remember a couple numbers -- i like some channels in the 300s. people are starting to cut the cord and they see all this and think, we better design a better system. 1012 can they rolled out x committed this proprietary system. it aggregates everything according to john the. -- genre. kid come i want to
see all the movies available for free on demand. it has been a good product for them. their customers that have x one watch more tv, watch a broader selection of tv. part of the reason comcast is adding tv customers at a time when the industry as a whole is losing them. carol: it's not just about being ownggregator, they want to you in a lot of different ways. you are tapping into other company systems, whether it is nest or sonos. >> they suddenly decided we could use the same platform to aggregate your entire home. that is kind of terrifying for th a lot of the consumers. we built this platform on your tv. we can use the software platform
to hook up with your thermostat, , all these door smart devices people have in their homes that people are controlling individually through apps pr. the idea is you will control it all through your ex one tv and voice activated remote control. david: you've heard of trump tower. st? about trump 40 wall carol: the lifestyles of the free and famous. all that ahead on "bloomberg businessweek." ♪
on serious xm ma'am 1200 in boston and a.m. 960 in the bay area. 40 wall st is -- what is the favorite story of yours? >> they would be tied between two separate guys who faked their suicides, allegedly, once they got into trouble. one of them just went to jail a couple weeks ago. , his scam came to light in the wake of 9/11. both of them allegedly picked their suicides. carol: a laundry list of crazy schemes. people, companies at 40 wall. it is a donald trump building. >> it is a donald trump building.
no one had ever looked at 40 wall. it's one of the most important parts of donald trump's empire. he's got golf courses and trump tower. 40 wall, there are few things that are worth as much. wall, fornside 40 example, a lawyer pleaded guilty to stealing money, millions of dollars from his clients, he pled guilty a few weeks ago. are people mother with strange stories getting in trouble with regulators or getting in trouble with the law. david: what made you interested in looking into this building? >> donald trump doesn't have a political record to speak of. hisyou can do is look at business record and we are business reporters. is really fun because
buildings are amazing, real estate is amazing. i don't remember the last time i saw also many people getting into trouble -- the fec keep the list of all the buildings where have complained about companies. no building is home to more of them than 40 wall. carol: and trump's book, he said the tenants at 40 wall st are many of the top-notch businesses in the world. to be fair, literally the girl scouts are in 40 wall st. there are a lot of upstanding people, but it's true, we found an investment advertiser on the 17th floor was accused of running a ponzi scheme just a few months ago.
a lawyer went to jail, a hedge fund manager faked his death. one guy told me how much he loved the views. -- hee left, he cried went to jail later for running one of the biggest immigration fraud mills in the country. david: how to donald trump come to have the least on this lease hold on this building? >> the story of this building burr.ack to alexander the manhattan company wanted to build the biggest building ever. come ins were closed on knitted up in the 1980's in the secret control of edna and .ernando marcos it fell into disrepair and
donald trump went to the german family, the hindenburg's and said look, you should stay on the land. donald trump got the leasehold. we found an article from 1983 that says it is a ghost town. he found a lot of tenants. some of the run into big issues. david: the tax loophole is getting ready to close. katherine burton about how some of the world's richest money managers are trying to find a workaround. carol: you write about a deadline that's coming up on december 1. that is the deadline that hedge fund managers who have money sitting in their offshore funds have to recognize it as income and bring it on shore. david: why did this come about? why has there been this 10 year period? congress figured it was a
loophole, it wasn't the worst loophole they've ever seen because it was just a deferred income and eventually, they would have to pay it to so they gave them 10 years to bring it on shore. the hedge fund guys hoped there would be individuals who come up with ways for them to protect their money. >> absolutely. that's why some people have brought the money on shore. there are others who are waiting and most of those people who are waiting are people with chunks of money. david: what are these managers going to do? advisors have said the best way to mitigate these taxes is to give money to charity. give it to your school or another public charity. if you want to get really fancy, you can do something, a private charity that you control. couple that with a life insurance policy. you end up having to pay a little bit of tax, but your
heirs are tax-free. george soros, john paulson, these are the guys you're talking about. >> yes. david tepper, steve cohen, john paulson, george soros, these are people that have still not brought the money on sure yet. least $100re at billion. carol: that's a lot. >> eventually, the money will flow into various coffers -- connecticut and new york will be specific beneficiaries. david: whole foods trying to whet the appetite of millennials . we will explain why. ♪
young shoppers with experiences. >> whole foods is trying to appeal to a millennial audience. sales at the regular stores have been down, so they are looking for alternative models. a lot of younger shoppers are enamored with places like trader joe's and all these low-priced, no-frills, trying to match that. carol: this is the market that whole foods created. organic food, different choices from your traditional supermarket but they are getting hurt from all this competition out there. >> they are victims of their own success. they got shoppers to go to the market more often and not live out of their freezers. a lot of other places have replicated the model. , and nowere first we are getting hurt. one thing they are try to do is bring in more experiential thanks to the stores. -- things to the stores.
getting millennials off their couch and not ordering on ins to cart. rt.instaca there is something called the teapot. it will allow you to personalize a blend of t4 yourself. you can also order beer and wine at the cafe, sit and hang out. for yourself.a a place to hang out and also shop. a lot of the millennials he talked to were not buying groceries. they are there. the millennial he was with did not commit nor did most of the other millennials he saw there. there were a lot of gen x'ers. >> did he like it, did he think it was promising? did.
it is cheap and clean and well lit. there is a playlist you can subscribe to on spotify. david: this sounds very silverlake to me. a very hip neighborhood in la. will this work across the country or just in this hip corner of l.a.? >> their opening 19 of these stores, so they think it's going to work. they have this big sign that says silverkale. .hey want you to instagram it carol: it's an anagram. -silverkale. >> all these big chains are looking to do cooler, younger versions of themselves.
elon musk needs all the big batteries he can get. it's all ahead on "bloomberg businessweek." we are here with the editor of "bloomberg businessweek." there are so many more must reads. you talk about poland -- the rest of its world is turning its back on coal. poland is not. >> poland is doubling down on coal. they get 90% of their energy from coal. while the rest of europe is moving on, there's some any parts of europe that are really going to wind and solar because it's important for the economy. ,avid: you look at fleet street the long legacy of tabloid newspaper starting to feel the pressure that newspapers around the world have felt.
>> yes, digital. newspapers in the u.s. have been feeling the pinch for quite some time. it took a little longer for the street.rs on fleet 's revenues for digital have not made up -- they are not doing some layoffs and rethinking business models, etc. ,arol: this week's cover story you along with john, our editor in chief, sat down with president obama. >> the president is a really smart guy. you already knew that, but when you talk to him, it comes out at you because he thinks on his feet, so to speak.
thought through a lot of issues and really, we try to talk to him mostly about business and the economy. -- heomething he is obviously feels very strongly about. we talked about his legacy and about theught position of the country right now. perceived andis what he is perceived to have done for the economy and business. we asked him why he is still considered to be an the-business president when stock market has tripled since he took office and we've come out of the worst financial crisis in decades and decades and decades. the economy is expanding, albeit slowly. he seems to think his relationship with the business community is stronger than it used to be. they develop an
understanding between business leaders and the white house. carol: i love that you guys asked him whether or not one of his daughters mika work for wall street. -- might go work for wall street. >> he said he did not think his daughters would work on wall street. has he thought about his legacy going forward? his plans us what were, but it was very clear that he is very future oriented. he has a genuine passion for , very interested in the sort of intersection of innovation and medicine. while he did not say what he was going to do, i have the feeling that he was going to do something that really looked at innovation in the future. carol: how do you take a unique photo of one of the most photographed men in the world?
david: we asked robert vargas. >> there's consistency in the way he's been shot for other magazines. , helly a gray background feels very post, feels very formal. we wanted to do something more natural. a response to everything that's been done. something that feels unique to us. we hired this photographer, jordy wood. he is good at represent people in a naturalistic way. he did a good job with obama. he got as the same sort of feel. david: i imagine a photographer take time to set up the shot. >> he had three minutes. it was 90 seconds total that we had with them. you plan out what
you are going to do in that short a time? >> there's a lot of prep work ahead of time. sort of just having conversations about what were looking for -- what we are looking for. carol: no wardrobe changes or anything like that? >> just one shot. we did have to direct him a little bit. it was very fast. david: coming up, finding a cure for alzheimer's. a new theory about how the disease works could lead to a breakthrough. carol: is the shell revolution just a pipedream? just ahead on "bloomberg businessweek." ♪
david: welcome back to "bloomberg businessweek." carol: you can find us on radio in boston, washington, d.c. and the bay area. whyalked with robert about what we know about alzheimer's may be all wrong. >> one theory of what causes this mysterious disease is really predominated research, these comes of protein -- clumps of protein called amyloid. it has dominated drug development and big drug companies for years have focused heavily on this one theory, trying to block these proteins called amyloids.
so far, the trials have not worked. most of the drugs are still targeting amyloid, prompting people to look at other possible approaches. carol: what is a new possible approach getting a lot of excitement? >> amyloid is one thing found in the brain. brainr thing found in the neuron tangles. after these amyloid drugs have failed or have done poorly in trials, now, the companies are starting to focus more on these tangles. there are some drugs beginning trials. these tangles can
andad and kill brain cells spread like a virus. david: this sounds like such a challenging disease to find a cure for. what makes it particularly so? >> it is very hard to test. in thousands of people and you would essentially wait to see if they would get worse or better compared to those given placebos. a super objective numerical readout. the cause has long been mysterious. brain.ard to study the it is called the black box for a reason. it is the largest untapped market for drug companies. carol: millions have alzheimer's
but a lot more will have it. fewer people are dying at an early age from cancer. people are living longer not dying from other causes. we already have more than 5 million americans with alzheimer's now. that is projected to go up to 13 or 14 or 15 million. there could be a huge explosion and right now, there is not a lot for it. huge costs. that's why the drug companies are pursuing it. they has spent hundreds of millions of dollars and net not come up with anything to slow the progression. david: how pipeline economics could spell disaster for the shale industry. full advantage of this huge amount of natural gas we have tapped with the shale revolution. ithave to be able to move
around, that means redoing the pipeline infrastructure in the u.s. that means a lot of new pipes. building new pipeline is getting a lot harder in the u.s. it is not just environmentalists and property rights activists that are pushing back. the economics are changing on pipeline companies quite quickly. much senseking as for them as if they just a new,e years ago to build a big pipeline system where you have to have consumer sign up for the long term contracts. carol: you write about various energy companies pulling back on the pipeline aspirations. getting caught in the crossfire are some families. you write about one. >> this family in northeastern pennsylvania near the new york state border, that is right in the middle of the marsalis shale region. with the pipeline company is try
to do, move the gas from the marsalis in the northeast where the demand is. they have a 23 acre homestead, they have a business on that property. they make maple syrup. they negotiated with the pipeline company for two years to try to alter the route in some way that did not go through ve of maple trees. williams was able to get federal approval in 2014, which give them the right to enforce eminent domain against the .amily in early march, they came with u.s. marshals with rifles and bulletproof vests and .hey chop down 90% of the trees it has ruined their business. the optics of it are not very good for williams, especially
deadlocked. the law catches up to technology very slowly. incumbents want the law to favor them, technology companies gradually get more powerful, it is hard to get a compromise. that make good decisions but you have this patchwork of precedents, it is very confusing. david: i think back on the recent case involving apple unlocking iphone and how that law dated back more than a century. what they were grappling with here. notite the fact that did work itself out in the courts, they were people who wanted a precedent to come about. >> both sides one of the precedent to help them. , the principle is as old as the constitution. how does it apply here? -- peopleour phone should be secure in their papers. how does that apply to your
phone? this is on your phone, i have your phone. but if i have your phone, i just have physical possession of your phone. the phone belonged to the county. the cloud is on my mainframe. the fact that your personal looks are on there, you at it more like someone's file cabinet and not a computer. carol: i think about uber and lyft. how do you quantify or qualify those workers? sharingyou look at the economy, there's a tremendous desire on the part of people in it to say we have a fundamentally more efficient way to do this. to let people stay in different cities overnight with airbnb and get people around with uber. on the other side, they are not .ubject to regulations
why are these companies doing so? have built a they better mouse or because they don't have the same regulatory hurdles? we don't really know. everyone has a strong opinion, but i don't think anyone really knows for sure. david: a lot of these legal battles are being fought across borders, especially when it comes to our data. one of the fundamental problems you see with the internet, it is a global network that is subject to national law. 1990's, people said the internet would lead to the demise of the nationstate. nationstates are still here. there is still this tremendous desire to say -- it is never settled. how long do these laws apply?
david: how elon musk plans to find materials to build batteries for his new model three sedan. the most interesting thing about the giga pack break him of the conference rooms are all named after metals. -- it is still under construction east of reno, nevada. they are thinking very deeply about the battery supply chain and the ability to get the materials they need. the giga factory is raw materials on one side, finished battery packs out the other. carol: where is he getting these materials? he's competing with others that also need the raw materials for batteries. each metal has its own unique supply chain. lithium is mined in argentina and chile. there's start up companies trying to find new deposits in nevada and northern mexico. tesla has executives out there
talking to everybody. what have you got, when can you produce it? they are taking a portfolio approach to make sure they have the quantities of lithium they need when they need it as they ramp up manufacturing. carol: can they ultimately owned mines and quarries? >> tesla has not bought any kind of mine yet. it would make sense. the company is big on vertical integration. doing -- elonof musk is a fan of doing things and house when he can. to drive down costs and bring a more affordable car to consumers. there is no agreement like that yet. carol: you talk about each tesla model x and how many batteries go in. there's a lot. teslank about a model s, each has 3000 battery timesin it 500,000 cars
-- they'rer, you get working closely with panasonic, trying to bring a supply chain that has largely been based in asia to nevada so they can quickly make the battery cells, manufacture them into packs, ship them by rail to fremont and have a tighter turnaround time between engineering, design and finish. happens if elon musk does not get access to these raw materials that he needs? >> then it is a pricing question. you have lithium producers looking at supply and demand. but it is plentiful, a question of can the model 3 come out at a price point that people want?
>> it is a celebrity dog lapping up a lot of dough. cavalier king charles with 360,000 instagram followers. sad to contemplate. toast is now out with a book called toast hamptons. by the dog'sritten owner. carol: shocking. >> katie is a blogger, married as "theomedian known fat jew." this is a model for leveraging fame in 2016. it is not just for pets. if you have a huge social media following, you have to figure out how to make money off that
any $17 book is not a terrible idea. dogs with as many followers as this can make thousands of dollars per post. companies and brands reach out to people like toast. >> people will buy products that a dog like toast advertises for. actually doke dyson sponsor instagram posts with dogs like toast. david: who is toast advertising for? >> mini fashion brands. he is a stylish dog. -- many fashion brands. karen walker sunglasses. she wore $150,000 in jewelry. a lot of advertisers want in on this game because it is a
practical way of reaching their core audience. pupol: there's a list of approved restaurants. >> the possibilities are endless. david: "bloomberg businessweek" is available on newsstands now. carol: and online. i liked the story on comcast, the x1 device. there are so many companies trying to control your home. you can link it to other devices like nast. very cool. what about you? david: i liked the piece on whole foods 365 stores. the attempt to woo millennials and get them to shop at markets again. carol: lots of good stories.
brexitome to a special update. the scottish minister called the talk with the eu in the wake of the u.k. brexit vote. speaking after a meeting of the say a scottish referendum is very much close on the table. she also said the government will set up an advisory panel on the legal and financial issues of such a move. german chancellor angela merkel has spoken out again this morning on the uk's vote to leave the