tv Bloomberg Business Week Bloomberg September 10, 2016 3:00pm-4:01pm EDT
carol: welcome to bloomberg businessweek. i'm carol massar. david: and i'm tdavid gura. in this week's issue, could ask on be liable for allegedly misleading the public about climate change? how canada's prime minister is a little bit like donald trump. carol: really? david: sort of. carol: and does vladimir putin prefer hillary clinton or donald trump for the white house? david: all that on bloomberg businessweek. ♪ carol: we're here with the editor-in-chief of bloomberg
businessweek, ellen pollack, and we have a story in the market finance section. if you look at tech companies that want to provide all the storage for wall street and financial information, what going on? sec wants to put together a database of millions of trade so they can look at what is going on in the market. they want to know what causes these flash crashes. you really need the data in a way that you can manipulate it. to do it by hand is incredibly time-consuming and we need a lot of storage. so, both amazon and google are bidding for this work. there are a lot of players and -- on wall street against this. in part, they feel like maybe the data on be completely secured. carol: they will have to give it up to some extent. ellen: they will have to give it up to some extent. david: the private prison
industry, president obama saying he wanted to reduce the reliance on private prisons. and what this article looks at is how this industry is adjusting in light of changes in demographics and perception of private prisons. ellen: as soon as the justice department said they might reduce their reliance on companies for prison services, you know, the stock of at least one of the companies went way down. their idea, if they can diversify and halfway houses and other community-based systems for helping prisoners transition from actual jail sentences to real life as we know it. carol: let's talk about opening remarks. there is kind of a freaky picture. david: a freaky picture. carol: merging the head of prime minister of canada and donald
trump. they are alike in some way? alan: -- ellen: it is a fabulous photo. it's much better when my child merges my photo and hers. >> it is a little freaky. it's about how both trump and trudeau have used social media. carol: trudeau is really good at it. ellen: he's really good at it and social media loves him. every time he takes off his shirt, which happens on a regular basis compared to most heads of state, he's all over social media. he knows how to use it. now the question is -- would donald trump do that if he were president? it's an interesting question. it's more apples and oranges at this point. but the story makes the case that this kind of celebrity and this social media virality can actually help a leader govern. david: from one shirtless head of state to another.
vladimir putin sat down in russia for a very long conversation and a rare opportunity. ellen it was two hours in : vladivostok. a far ranging conversation in which they talked about everything from the u.s. election to syria to iraq to disputed japanese islands. it was a pretty major interview and a really great opportunity. david: and we talked to john about that interview. john: it came about because vladimir putin had this forum that he wanted to promote and was going to the g20. and he wanted to talk about that as well. but the only rules were we had to ask them about those, but after that, we could ask him about anything. it is more typical of the new vladimir putin. he is much more willing to converse, especially with western folk.
he is feeling confident about dealing with these things. carol: and it was a wide range of topics. john there was no prohibitions. :david you asked about the : presidential election and the hacking story, which continues to have legs here, the allegations that russia had the democratic national committee in. what did he have to say about all this? john: to get things -- one thing about how ready he is to engage. on one hand he says, we don't , care who wins. we are not involved. this is all a rather strange show. and not entirely healthy is the way he pictures it. on the other hand there is a , desire for russia, repeatedly, to be treated as an equal. their politics should be watched as avidly as america's, so they have -- this is coming from a british person -- they still have the hangover of once being a superpower and now being a regional power, but not at that level. carol: was he reluctant to talk
about anything? john he avoids questions and : will, at different times -- i asked at the end if i had a "godfather" and "doctor zhivago." and what would be the better guide to modern russia? he went on about the russian spirit and the need to understand modern russia. he avoided the question. i said i thought he meant "doctor zhivago" by that and he smiled. to be fair hillary clinton has , been occasionally been known to avoid questions as well. david: there's a bit of endurance involved with this. you set down with them for two hours. was he ready to answer any and all questions? johnny: yes he was ready to not , answer every question as you know and that's part of journalism. there is some tendency with putin to think he's particularly
bad at that and i don't think that he is, really. if you are interviewing him in english you have the slight , delay of a translator so it's hard to interrupt. i think to some extent, he's not that used to being challenged on bizarre topics. carroll: you did kind of challenge him. you did push back on some things. john: his people at the kremlin said he wanted to be challenged. which is interesting. he finds it boring if people don't confront him. it is part of his personality. i met him a couple times before. always kind of off the record things. there, he's probably even more direct. there is a degree of the kids know about putin. you only have to look at one of them. a picture of david emerging naked on a horse. there are many of me in a similar position. his whole personality in this is to challenge you, but
actually in this particular interview and other ones, to be fair, he is more relaxed and more cautious if those things don't sound contradictory. carroll: was or anything where he was more revealing than he has been? john: when you land a blow, he smiles a bit. the question about gazprom the , value of it has gone down. he tried to defend it and i said he would be unlikely to keep a general that lost 4/5 of his army. and he did smirk a little bit. and went on talking. he has some degree of -- he likes combat, putin. you think of the obvious things. that is part of his personality. david: what is your sense of how he regards the united states? there was a moment he talked about the relationship between john kerry and sergei lavrov, his foreign minister. they see each other fairly
often. the dialogue seems very robust. he has a sense that he remembers the world when russia met america. for all the things he says about america, all the dismissals he has, it is still the core of the way he would like the world to be. it is a little bit like a jilted spouse or a jilted lover. carroll: getting the perfect image to capture vladimir putin's conversation with bloomberg was the job with creative director robert vargas. david: we talked about the coverage. let's start with the u.s. cover. a portrait of putin. clearly, among other people. >> when we shoot heads of state, and we did the same when we shot obama we want to approach them , more as people. david: less opposed. robert: yeah less posed, just , catching them in a moment that feels natural and authentic. we felt that this photo actually does that. he was aware of this being shot
, but he seems to have his guard down a bit. he's not confronting the camera. carol: he's not smiling. robert: he's not smiling. which i think is the default, to not smile. carol: did it go smoothly? robert once we got there, it : went smoothly. if he wanted to walk off on us, he could walk off on us. we were preparing for the worse. -- we were preparing for the worst. we did not expect the airline to lose the photographer's equipment. and so, after that happened, it was a bit of a panic. he found the one lighting set up in vladivostok. which is not known for -- nun in the end he did figure it out. david: the international cover is icier. robert: we liked it for the tone. it is a tone you don't see a lot. carol: did you create the tone
afterwards? robert: the photographer created the tone afterwards. it was shot -- in the situations, lighting did not go as planned. a little darker than usual. when he lightened it up, he got this blue tone. it was a mixture of doing it in post and a happy accident. we ran with it and the framing is a lot more traditional but the color gives it a different feeling. david: up next, hospitals give patients a dose of virtual reality. carol: dozens of lawsuits challenge the alleged obsession with youth. david: and an effort to win a new generation of fans. we have a handy guide. carol: that's ahead on bloomberg businessweek. ♪
carol: welcome back to bloomberg businessweek. i'm carol massar. david: and i'm david gura. you can also listen to us on the radio in new york. 1200 in boston, 901 fm in washington, d.c. a.m. 160 in the bay area. carol: hospitals using virtual reality is a painkiller. david: we talked to caroline. >> it is still in the early stages. they are trying a new technology to see if it can help relieve pain. the theory behind it is that our brain can be distracted. when we think more about pain, we feel more pain. they have seen this in the mri. the basic theory behind using virtual reality for pain is
basically the same as meditation. we want to take your mind off of pain and transport you elsewhere. so you're not thinking about the pain. david: you profile a number of patients. let's start with a burn patient who has a pretty horrific horrific -- pretty injury. how is virtual reality used to help her in treatment? >> we talked to a teenager who unfortunately was in a bonfire accident. one of the things they have to for burn patients is basic need shake the dead skin off there once. that is obviously extremely painful. they gave her this virtual-reality software called snow world. using her head and the focus of her eyes, you throw snowballs at penguins. the idea is to take your mind off the pain.
they would give it to her during times they would dress her wounds as a distraction. carol: another patient waiting for a vital organ and the use vr to take this patient's mind off of the waiting process. >> yeah, so similarly, he was playing this game which involves throwing balls. they all seem to be checking things -- they all seem to be chucking things. it took his mind off the pain he was experiencing and also to help him hopefully reduce the amount of pain medications he was taking. he was able to go somewhere else because he had been stuck for so long in a hospital room. it started to feel like he was in a prison cell in a way.
lets the patient go somewhere else, not be staring at the same four walls day in and day out. workers in silken valley are fighting alleged ageism to keep their jobs. carol: we talk about jobs in silicon valley and a lot of people go there often. multiple jobs. multiple offers and all that good stuff. if you're older, it's a different experience. >> that's right. carol what did you find out? :>> it is very hard to be older and admit that and get a job. you have to pass for younger. david: talk about how people are doing that. starting with fashion. as you detail in this piece there is acute awareness of how , young people dress and you found young people modeling themselves on that. >> that's right. the uniform is jeans, t-shirt, sneakers. you're 56 years old, you
might feel funny doing that. if you show up in a suit or baggy trousers, you will look really old. people we met were going to parking lots of places they were interviewing at and checking out the fashion and figuring out, ok maybe i'm not going to go for but igenes, t-shirt look, will wear slim fitting khakis and a polo shirt. carol: and it makes a difference? >> absolutely. carol: that's interesting. you write about one woman, i think was 50 -- and she was looking for a job. adjusting her wardrobe, talking about the social media she got involved in. >> she made sure she had a ton of connections on linkedin. she understood what millennials were reading, the music a were -- what music they were listening to. celebrities they liked. carol: kim kardashian. >> and superheroes.
she checked out urban dictionary a lot which has a lot of millennial slang, she knew not to mention things like the sound of music. you will be ancient. you've got to get rid of a lot of references to your favorites when you were growing up. you've got to replace them. she did that. david: are companies in silicon valley aware of this? you quote mark zuckerberg talking about people being smarter, more ambitious. lending to the belief that young people driving silicon valley where it is today. what do companies have to say? >> publicly, they say they are age diverse and privately admit they prefer younger people. there are all sorts of reasons for that. people tend to hire people like themselves and you have so many companies out there founded by 20-year-olds, 22-year-olds, and hiring a
56-year-old seems really hard. carol: i kind of thought after the financial crisis, a lot of older individuals lost jobs after the financial crisis, and i felt like the last couple of years companies are serving to , appreciate the experience older workers had and welcoming them back. that is not the case in silicon valley? or what? >> they're helping young people and people from the u.s., college grads, people overseas coming. carol: they can pick and choose. >> i don't think they would turn away old people that are qualified but they are not looking for them. carol: how family connections can muddy is this relationships. david: and some call foul on the new soccer stadium. ♪
david: welcome back to bloomberg businessweek. i'm david gura. carol: and i'm carol massar. in the markets and finance section, a bank you may not have heard of. david: from a soccer team you may not have heard of for $100 million. carol: we spoke about recent criticism of bank of california. >> bank of california has been making tons of loans and it has grown tenfold and bought a few smaller banks in california. and also a bunch of assets from banco popular. carol: and stephen sugarman is the man behind the growth of this bank, correct? zeke: yes. he was running a hedge fund. he wrote a book called "the forewarned investor." it was about how to find
fraudulent companies. it turns out his new bank, one of the red flags might apply to his own company. david: let me ask you about his aspirations for the company. there has been this rapid growth. it is still very much a california-based bank. zeke: he says there is a tradition of midsized banks finding success staying focused on the state. he was to be the go to banking california. there are billboards around l.a. and he just made a deal to name a new soccer stadium. he really wants to build his brand in the city. carol: it is a successful bank, right? zeke: profits have been growing and it has the best stock performance of any midsize bank the last couple of years. he's been doing really well. david: you mentioned the red flags and the stadium. let's start there. this bank signed the deal upwards of $100 million for naming rights to the mls stadium in los angeles and things get thorny? zeke: about $100 million. the highest price paid for mls
naming rights. this is for the second soccer team. so kind of surprising it would , be so valuable. it turns out even sugarman's brother jason is a minority owner of the soccer team. carol: a lot of alarms go off here. how does the bank get to do this? where's the board? where is the oversight? zeke: they say the brother had no involvement in this deal and anytime they have deals that involve related parties, independent board members look at it and sign off on it. but it is hard to imagine two brothers wouldn't talk about a deal like this. carol: especially that the $100 million they are going to invest in mls club is more than or equal to the prophets, you point out, to tweet 14 and it's a lot of money.
zeke: it is a large amount to spend on advertising. a huge amount to sink into anyone deal. david: steve and his brother, it's part of a very influential family. whether anything untoward is happening or not, there are a lot of members of that family in positions of influence. zeke: right. the brother's father-in-law is a famous movie executives who is the lead owner of the soccer team. and the brother also ran an asset management company or consulted for an asset management company that the bank acquired. so definitely, their relationships have been big as they grow. carol: there are a lot of cases about these related party deals. what does sugarman say about this? zeke: now he says the board has vetted it, everything is
independently valued, and it was impossible to avoid given his relationships in southern california. in the book, he wrote that disclosure does not make the transactions ok and it could be a sign of problems down the road. david: speaking of oversight, they've invested a lot of money in the bank itself and there is a relationship there some would see as questionable. zeke: yeah, so after oaktree invested, the bank lent money to oaktree and oak tree paid fees to subsidiaries of the bank for asset management services. since then, oaktree sold their whole stake. more, get,e this web the president of poetry owns the best will team with peter guber, the father-in-law of the brother. more people that know each other. david: up next, is exxon liable for climate damages? the ongoing investigation and controversy. carol: ahead on bloomberg
david: welcome back to "bloomberg businessweek." carol: we are inside the magazine's headquarters in new york city. david: what exxon said about climate change and why it matters. carol: take a cruise ship through ground zero. david: and why some women are bailing on the veil. ♪ david: we're back with the editor in chief with bloomberg businessweek. so many must reads. a look at a little hollywood
across the pond. london has become the capitol for a lot of people doing animation and special effects work. >> big in london. it has been going on for a while. the u.k. has given all kinds of tax breaks for this work and as a result, a lot of companies doing it on the west coast of the u.s. have suffered from the closings and they cannot compete with those tax breaks. now that brexit has happened, it has become an even better place to do special effects. you have a lot of classic hollywood movies like star wars and the special effects are being done in the u.k. carol: there are a couple of moving parts. lawsuits. a widely popular videogame and then you have cisco systems.
ellen: who knew that sometimes these problems are caused when there are outages, glitches, not so much by video -- by the videogame that you are playing or not so much by the web hosting company but by the networking equipment. there was a controversy when a very popular videogame, game of war, fire age, which is not something i personally have played, they had some very significant outages and they blamed their web hosting company, peak web. peak web tried to figure out what was happening and it was software bugs in the networking equipment. by then, it was too late. david: a look at saudi arabia. we have heard about that country's plans for the future
in light of the fact that oil has become so cheap. here, you are looking at social changes underway. there are some. elllen: saudi arabian women are not permitted to drive. and yet women are modernizing and they are allowing women to modernize more. some women have stopped wearing the veil that covers almost all of their face. they are still wearing headscarves. they are wearing more colorful robes. while that may not seem like a massive change in saudi arabia it is and it makes it easier for women to work and makes it easier for them to be out in the world. some people think it is partly because the price of oil has gone down and it is more important for women to be out and working. a major change.
carol: there is an interesting story about exxon. does exxon become the phillip morris of climate liability? ellen: it is really a fascinating phenomenon. there were some big stories in the l.a. times and climate news about how exxon scientists had unearthed the threat of climate change decades ago and exxon continued to fund organizations that were climate change deniers. a hashtag developed. #exxonknew. there were some people saying that exxon could be the new tobacco industry where tobacco companies were sued becasuse they had known about the health effects. david: and suppressed it. ellen: it has ballooned into interesting litigation.
paul: the basic allegation goes back to the late 1970's. exxon understood, its scientists understood and told top management that man-made climate change was real and already affecting the atmosphere. and that the company did not adequately disclose this to the public. that is the basic allegation. carol: how did it become known to the public? paul: the most significant one was a nasa scientist who testified in 1988 about global warming saying it was real. that resulted in a front-page new york times article. politicians like al gore shed light on those kinds of findings. the point was that for more than
a decade, exxon had already been doing its own research. and was synthesizing the research being done by others. exxon scientists were saying to exxon management that this is what the consensus is among scientists out there. carol: how did it become known that exxon knew internally that maybe what they were doing was contributing to global warming?
paul: it was basically through good shoe leather reporting. the l.a. times working with an environmental reporting group based at the columbia journalism school and also inside climate news, an online publication that is on writing on environmental topics. david: you detailed about how surprised exxon was by that reporting. that someone was colluding against them. paul: they reacted as they described in a whack a mole strategy. they tried to respond to each individual report, subsequently to congressional calls for testimony. they did not get out in front of the story and say -- this is what we knew, this is what we didn't know, and this is why we behaved the way we behaved. they were not organized to do that in that fashion. we were very defensive. they went into a classic corporate defensive crouch. carol: this reminds me of the tobacco industry and what they knew, how long they knew it, and it became public. paul: this is exactly what exxon was so afraid of. they did not want to be compared to the tobacco industry. some of the people that pick up on this critique, individual outside scientists,
organizations like the union of concerned scientists, have been making a comparison for a number of years. when the investigative reporting crossed paths with the theorizing that oil might become the next tobacco -- that is why this is such a potent criticism of exxon and why it amounts to more than a one or two week pr issue. does exxon become the next phillip morris? carol: also in the future section, a photo essay on the arctic circle. david: cruise ships are taking advantage of the northwest passage. >> this was a project pitched by a photographer. she has done a lot of work on longer-term projects in the arctic. she did a huge piece on the iditarod.
she is someone thinking about the arctic north. carol: she likes to be cold. >> i guess so. she had access to a place to sleep on the crystal serenity cruiseship, the first commercial cruising vessel sailing to the northwest passage. she pitched it as an idea. we thought it was a great business story and something worth seeing. we sent her to get on the ship in nome, alaska. david: if you get on this boat, what do you see? >> the cruise starts in seward, alaska, not all the way up the coast. it comes around to nome and then you move through a series of interconnected waterways that are frozen for most of the year. but because of climate change and the time of year, they are clear.
the view -- icebreaker boats. brown tundra uncovered by the melted ice. carol: and a sad part of the story. >> what is interesting also is this will be the first ship when it lands in new york to make this voyage. for centuries, there have been hopes of finding a northwest passage to asia as a shipping route. we are not anywhere near that being a reality at this point. carol: a growing debate as to whether delaware's business court is active. david: the fda. carol: where to find your favorite classic sitcom every night of the week. david: straight ahead on bloomberg businessweek. ♪
david: welcome back to bloomberg businessweek. carol: you can also find us on radio on channel 119 and on a.m. 1130. 99.1 fm in washington, d.c. in the politics and policies section, why delaware's historically -- court is courting business. david: delaware has had a number of laws favorable to companies in terms of defending themselves from lawsuits, expediting matters, it has been a jurisdiction or court that has favored directors over some
investors. in lawsuits. it has been looked upon as having favorable laws for companies. half of the public companies in the u.s. are incorporated in delaware. they may not be based there. carol: you bring in transpacific global. it is a great story. it is a little bit of a soap opera. it is a couple that created the company. they loved each other. >> it is a great story. the founders met at nyu the graduate business school. they formed this translation company. it is based in new york but incorporated in delaware. they were fiances though they never got married. over time, they did become fiances though they never got married.
their relationship split up and they seemed to follow. they could not agree on how the company was going to be managed, or run. what happened was that the state of the company ended up in the delaware courts. they were each at 50% owners. and the judge did not know what to do. he ordered the company sold. what happened that there was pushed back by top employees. they rallied around and said the judge has gone too far. this is beyond the power or should be beyond the power to order the sale of a profitable company. and what you have now is a grassroots fight going on in delaware over whether judges should have this power to impose a judicial fiat that this profitable company be sold. you have about a dozen top executives in this company who have formed a group, citizens for a pro-business delaware, and they have taken out ads, in newspapers and on the radio.
carol: they reached out to someone to form this. there is some question on who is funding this. david: one of them reached out to an acquaintance who knew someone at a shop in new york city that organizes strategic campaigns. they put together collectively this effort to push back against the judge. or the judge's ruling or the judge's power in delaware. there are about a dozen top executives but they will not tell us who is behind the company or pulling the strings. they say that all of the top executives are. but right now in delaware, in this jurisdiction that is so friendly towards companies, you have a group saying -- the delaware courts have gone too far and they are hostile to companies. david: why regulators are looking into the safety of tattooing? carol: we spoke with the editor.
tattoos. it does not matter who i look at, everyone seems to have some. it is a growing business. >> it is estimated that 30% of americans have them. carol: do you have one? >> no, i do not. david: i don't either. this piece details how the fda is looking at the risks of tattooing. talk about the science and the concerns that some people have raised. >> it turns out that the fda has authority to regulate the inks. it would fall under cosmetics. but it never has. carol: how is that possible? >> they look at that experience. they say there have not been enough complaints over the years to justify the competing claims on time and money.
between 1988, and 2003, there were just five complaints to the agency about the inks. we spoke with the head of the tattoo national association. named sailor. he he attributed the rise to the do it yourself kits. you can see them online. and there are videos on how to do it from home. and the proliferation of cheaper inks. researchers have started to look at this issue. there was a dermatologist who compiled data that had been coming out of the u.s. and europe and incidents of people finding things in the inks like mercury or charcoal. carol: these are not good things. >> there is no such thing as a category of tattooing. some of the pigments are industrial grade. they could be used for printers
the third volume is being translated for u.s. audiences on september 20. in total, 1500 pages. between now and september 20, you have to get moving if you want to catch up. you should read them in order. it is an interesting trilogy. the first book -- wound up on the reading list of mark zuckerberg and president obama. these are people that like to think about the future. it is good to understand how the world might end through the lens of another culture. think about how often we get to set those narratives and here we have china doing it. carol: so much is censored in terms of what comes out of china so we do get a glimpse of chinese society. bret: as much as this is a a sci-fi book, it is amazing what the sensors let him get away with. he weaves that narrative into a
larger one like stories with brains in jars. david: the reviewer writes that it is confusing but it is also something that will grab a reader. bret: the reviewer loves this. carol: he has read the whole series. bret: he is very passionate about it. it is a harbinger of more chinese sci-fi we are going to see in this country. it is hard to generalize all of that but we will see more of it because we like to think about the world through different lenses. this is a new one for us. carol: the new vintage tv guide. david: it is ready to stream. sam: i was watching the hbo series "the night of." at the end of every episode, there would be a little promo
for a documentary that hbo aired a year ago. it was very good. it got me thinking that -- carol: that is what they wanted you to do. sam: it did occur to me that television providers are now like publishers in that they have a backlist of shows. now, there is a whole wealth of shows. carol: like, mom and dad you watch that. sam: you can go back now. in a conversation with other staffers at business week, we decided to create a lineup of all of the great tv shows. david: the anti-cord cutting plan.
bret: legacy tv. carol: what about the monday lineup? sam: the idea was to re-create the perfect night of monday night television. nonfootball monday night. carol: i love lucy. the show that never goes away. sam: nor should it. we picked the episode from 1952, one of the famous ones where she is consuming a health tonic but she does not realize it is 23% alcohol. david: she is getting snookered. carol: she gets drunk in the process. sam: hilarity ensues. it is a great way to start off the week. it is a foundational episode of television comedy. we then go to another block in the foundation. about a dozen years later. the dick van dyke show. i picked an episode with mary tyler moore, dick van dyke, and
carl reiner. mary tyler moore in that episode has to apologize to carl reiner for saying on live television that he is wearing a toupee. david: looking at mtv's rich history, has this not been readily available for a long time or are these networks doing more like hbo? is this newly out there? sam: i think when you look at streaming services, and while we are saying this celebrates old-fashioned television, everything in this story is available on the new streaming services. all of these shows were around but i think now, more packaging is happening. it is happening right there on the screen when you go to the menus. you see one show and then related shows next to it.
providers realize they have a lot of material. carol: what was your favorite story? david: i like virtual reality being used for health care. being used in hospitals for patients with severe burns and organ transplants. it is a distraction. carol: i loved the pictoral essay. the cruise through the north west passage. the pictures depicting the individuals that went, what happened on the ship, and a little bit of what they saw and the tragic part of the story was that the reason they can do this is because of global warming. david: an amazing issue that you can get on newsstands or online. we will be back here, next week. ♪