tv Bloomberg Business Week Bloomberg June 18, 2017 8:00am-9:01am EDT
oliver: welcome to "bloomberg businessweek." in this week's issue, apple ceo tim cook talks about doing business with president trump while western union finds itself in the crosshairs of the white house. then, phil falcone is making new bet on vietnam. all that ahead on "bloomberg businessweek." ♪ oliver: we are here with editor-in-chief megan murphy.
this is an exciting week. new magazine, new website app. megan: i am excited. it has been a great week, and these past months behind the scenes, we have been doing a complete redesign of the magazine online, and we have totally overhauled the app. also we are putting us at the forefront of our events here at bloomberg. we are thrilled with the results. i think the look will feel familiar to people, but as we go through process we have been making sure we are available wherever our readers are. but also just making it more simple, cleaner, easier to read. we really want the journalism to shine through and stand out. i'm thrilled with the results.
oliver: i like having it on so many different platforms. where do we go to get the app? will it be magazine stories, different type of stuff? megan: we will do two things, if you want to experience the magazine in a traditional digital way, we have that option, we are also pushing for six to eight new pieces of content that are relevant to where you are of that day and dissect the biggest daily stories. we want to have a daily touch, daily interaction with our readers and be known as the trusted name for his this come a finance, technology, excellent journalism where you can go to get a quick pick not only of what happened but why you need to know it. oliver: that's the idea, in many ways, you pick it up and it feels similar. the content feels similar to my it takes the complex subjects and make some open. this time around, i think it is a little bit more in depth and in the weeds. megan: we're trying to dial into the areas where we feel we have an advantage, global business, finance, technology, but we sometimes call "power." economics. we have 2700 journalists, we leverage that and we have so much resource.
we want to continue to do that kind of journalism and make sure we are mobilizing the strength of the newsroom to tell the global stories that really matter. taking people behind the scenes of the people, the entrepreneurs and innovators driving the change you will see play out not just this year but in the upcoming decade. oliver: this week's debrief is especially good, it is also the cover story. it is an interview with tim
cook. megan: i interviewed him right after they introduced the foray into the home speaker market, and anyone who has the amazon echo or has used alexa, it has become a crowded space. i think a lot of people thought apple's foray would be a category killer. what is interesting is how focused he was on music. i was understood and how passionate he was. oliver: i thought it was funny, you're talking about people jamming out. oliver: my reaction to the homepod was them trailing their peers. but he said that we were not always first, but we did the test version. he thinks it will be the best version of the in-house speaker. megan: long time ago, i was a first purchaser of the original ipod.
he's probably not seen it, it was about this big beard tim cook was honest about this. he said apple does not need to be first or necessarily want to be first. they want to be the best. again, you are younger than i am -- they have been counted out more times. whether it was the apple ii, the macintosh computer, the forays into other intelligence early on. never count them out. if they produce a product that is a must-have, it becomes integral to your life. there was another thing we talked about, their entry into the enterprise market. they see that as a huge for them. people are so attached to apple, and moving into the business sector is a huge thing. oliver: and they need to be looking at ways to drive growth.
you also talked about politics and branched out beyond the device world. megan: he was very involved in the climate debate, and the trump administration decision to exit the paris accord he took very personally. one of the things i felt was interesting is he said that america is more important than politics. where he disagrees, he will not be afraid to make his voice heard. but he also acknowledged as a ceo, his responsibility to build an america he wants to live in
and his workers to be part of. oliver: a great interview. making tim cook into a cover model was the job of rob vargas. you guys are putting tim cook right on the cover. it is very much about him. how did you make this choice? rob: we had this one photograph where he looked very pensive. you can see a little bit of a reflection. we thought it was an interesting shot. oliver: it is a strong image of him. the interview captures a lot of different topics. did you put the quote about politics because of the seriousness of his pose? rob: yes, it broad enough not only does because role at apple but his role in the country and beyond. oliver: tell us what you think about the new version of the magazine. rob: subscribers will notice
there is a cover wrap. people who buy it on a newstand will notice a cover flap. it liberates us from having to shout the headline every time. oliver: business week, people knew about the designs, you have gotten creative at times. with the philosophy for designing the inside of the magazine? rob: it is cleaner. we have a lot of information, and we are finding ways to make it easier to digest. i think we are still developing our sensibility. for now, especially we have has such good photography in this issue, we want more of that and to showcase it. oliver: up next, world leaders try to make sense of president trump's foreign policy. and robert moore assembles his dream team. ♪
♪ oliver: welcome back. you can find us online at businessweek.com. in the remarks section, the best-selling author and former "time" magazine columnist joe klein discusses president's competing foreign policies and what they mean for the u.s. going forward. joe: nothing is easy with donald trump. everything is radical. this represents a break from a consensus american foreign-policy. it existed in the center, mostly realistic. trump switched that.
alliance-based policy that had existed since the end of world war ii, and now it is more america first. he placed more emphasis on short-term gains than on long-term stability. what we have seen as a result is some fairly concerning instances of instability and possible breakup of the existing order. oliver: what are the most egregious examples of that so far? joe: i think the fact that he had to struggle for weeks before he was able to say that he supported article five of the nato agreement, which means all the signatories of the treaty, all the european nations and us, we come to each other's defense. the last time it was used was when we were attacked on 9/11 and many european allies came to
afghanistan. oliver: you are a sort of analyst and a historian. when you look at what is happening so far in the trump administration, you try to sift through the new ideas that are out there. how do you gauge the metric for success? how we know when or if these new policies will have long-term fruition? as you point out, they are novel to some extent. he was not a lot of precedent. >> that was the idea going in. he is been very contradictory sense. sometimes he said he was going to stick it to china, now china is his great ally. he has been very unpredictable. to me, and i am kind of an old folkie, the measure of diplomatic success is the hippocratic oath.
first do no harm. that is what obama was about and george w. bush was not about. he went into iraq and destabilized the entire region. we will not know for years whether and how trumps foreign-policy will work. on the plus side, a number of people he has chosen are really stable, smart, honorable people. they've had to deal with trump's occasional eccentricities. oliver: do you think of someone who is concerned about foreign policy, they can take solace in the team, or are we seeing that trumps personal brand and style will outweigh that? >> you can take some solace, because in the instance of military action or threatened military action, i think he is listened to his military advisers.
it was a judicious strike in syria after the use of chemical weapons. i don't know how long that will last, and a lot of the things he says could be construed as ways to destabilize the region. for example, cutter and this is a guy absolutely opposed to terrorism up to the saudi border. he has not had a bad word to say about him. oliver: robert mueller is simply
-- sending a crack team of prosecutors to ferret out any connection between donald trump, the administration and meddling in the u.s. election. >> robert mueller is the longest -- second-longest tenured member of the fbi. he has been in private practice since he left. he was tasked to be special counsel. we've not seen a special counsel in a long time. this has unique powers. he is the ability to operate basically like a traditional federal prosecutor. he can file charges, subpoena people, throw people in front of grand juries. he can in theory interrogate the president. the extent of his power will kind of -- we will not really learn about it until he chooses to exercise it, and we have issues of executive privilege at play. we will see how willing the president will be to submit to any of this, even though he has
said he is willing to testify under oath to congress. we will see how willing he is to do something similar in front of robert mueller. oliver: robert mueller essentially has the tools a prosecutor does, but he can apply them in ways and do people that are often times off-limits. matthew: a good way to think about robert mueller is he is a repository for all things russia. there is a lot of noise out there, little noise, whether it is trump tweets, lyrical allies of the president going on cable news and talking about how the president is considering filing mueller, but he is to consider all of this, whether happening congressional testimony, whether it is leaked to the press, anything about russia he is to take into consideration and he has a very broad mandate, which is to follow where the evidence leads him in whatever direction. he has independent power to do that.
oliver: he has a lot on his plate. hopefully he has helped from people around him. who will be on his team? does he have one? matthew: he does. he is building one. he has had this role a little over a month. he is setting up shop about halfway between the capital and the white house. he is building what amounts to a crack team. he is pulling from people he worked with at the fbi, and also he is pulling from his old law firm, one of whom worked on watergate. he will probably hire 50 to 100 people. oliver: up next, germany worries it will be the next victim of russia election hacking. and we will talk about "initial coin offerings." this is bloomberg. ♪
♪ oliver: welcome back. you can catch us on the radio on sirius xm, and on the radio in new york, boston, washington, d.c. and the bay area. also, in london and asia on the bloomberg radio app. concern is growing about russian hacking in germany's election this fall. stefan: in germany, we have seen a range of hacking attempts and successful hacks over the past two years. it started in 2015 when the german parliament was hacked and
criminals actually stole 16 gigabytes worth of data. that is about 1.5 million emails. lots of hacking going on and the german government is concerned that in the run-up to the election, increased hacking will go on and hackers will try to influence the german elections that way. carol: talk about the 16 gigabytes. you put in your story, those hackers were roaming around within the german parliament for about a week. stefan: that is correct. i will walk you through how this happened. picture this. in 2015, several german lawmakers got it you know that looked like it came from the united nations, except it didn't. it came from russian hackers, or hackers believed to be linked to russia.
it led the lawmakers to click on a link that looks like a united nations bulletin but secretly installed spyware on their computers. that initiated a chain reaction and hackers roamed the internal i.t. network of parliament for more than a week until the security agencies found out about it. they stole a lot of data and nobody really knows what they stole. the big concern here is, the hackers will release some of that data shortly before the elections and everyone is concerned. carol: i bet the german chancellor is concerned. it looks like she is politically in a good position, but she has to be worried, as well. stefan: she is. top security officials tell me that she is taking the issue very seriously. she is regularly informing
herself about the defenses that have been installed to protect germany. everyone in the government is aware of that, but you already pointed out correctly that her turnout and her polls looking very solid. as of now, she is doing well. oliver: in the finance section, digital currency startups are issuing tokens as a way to raise money. they are called "initial coin offerings." dune: it is like the coin or ether, it is a digital currency. companies are beginning to sell their own -- well, more and more are starting to sell their own coins. one thing that is driving it, obviously, there has been a huge rise in the price of bitcoin and ether.
there is a lot of liquidity and a lot of excitement about block chain based businesses. oliver: are they starting to offer their initial coin offerings? the way i understood, you can have an initial coin offering without any status we would normally associate with an incorporated company. dune: we've got to a place where there is so much excitement that it is very, very easy to do these ico's. sometimes they are raising money based on a website with a germ of an idea. so what exactly are they going to do without? will they do good things?
literally we are talking instantly -- if you can raise $30 million in 30 seconds on the back of an idea? the question is, you have to use that money to make something. oliver: any private company decides to go public, they're going to sell shares in the open market, use and underwriter and have a determination of their value of what their business does, and they will essentially sell investors a part of that business. what are the equivalent counterparts for those elements in the initial coin offering? dune: there are digital investment banks, i talked with a ceo who specializes in this. basically, the better run ones,
he would write a technical white paper laying out what you're going to do and how the tokens fit into your block chain and what will happen here. are you selling decentralized cloud storage? are you selling financial services? what is going to happen? you might put a repository for the code on github. you may or may not do some marketing. it really depends. some of these management teams, you don't actually know who they are. oliver: up next, where brexit could hurt the most and we will find out how bad it is for your health to work around chip manufacturing. this is "bloomberg businessweek." ♪
♪ oliver: welcome back to "bloomberg businessweek." phil falcone is betting on vietnamese las vegas. western union, what is good for them may not be popular in washington. that is ahead on "bloomberg businessweek." ♪ oliver: we are back with megan murphy to talk about more must reads. let's go to the business section.
you guys assess data about brexit. megan: this is something you will see a lot more. we are on the fallout from the disastrous election in britain where instead of achieving a majority to force through a hard brexit, it is unlikely to happen now. what this graphic dissects is where a hard brexit or the inability to negotiate between britain and that you would hurt. it would hurt workers that voted for brexit. we are talking about the northeast, midlands, places where international companies have moved in and done a lot of the resurgence britain needs to maintain. those are the areas where it
could hit the hardest if they failed to negotiate the trade terms. oliver: one of the overriding teams is if some of these new regimes will benefit the people that put them into power. it is a timely examination. there are a lot of questions out there. let's go to the features section. there is a moving story. it is a reshuffling, a bad side effect of what happens in some of these development for technology. it is incredible. megan: i am proud of this story that was done by tim simpson. he has been working on it for many years and will looking at this scandal in 1990's when many american companies discovered high rates of workers were suffering from birth defect problems and inability to have children. there was exposure to toxic chemicals. it was agreed that certain kinds
of chemicals should be weeded out of that process in the american chipmaking and your factoring company. the problem was much of that migrated to asia, south korea, some of the big chip makers there. the safeguards are not in place. this is not a case of chasing regulation in the sense of the risk migrated. the safeguards were not put in place to protect the workers. samsung has come up to apologize to the workers for what they have exposed them to. it is unbelievable that something that could have been universally eradicated has now migrated. it is particularly women exposed to these chemicals.
exposed toen as 2015.recently oliver: another story, the same geographic area, this is a different story about an ex-hedge fund guy who is trying a casino business. megan: phil falcone. one of the noted persons that made billions for calling the subprime housing market before the crisis. he then lost a fortune. he has started a casino in vietnam and has plunged hundreds of millions of dollars. he is running a casino in vietnam, and you cannot legally gamble in the country. a little bit of a conflict there. oliver: we got the details and the narrative from matt campbell. >> it is an enormous that by phil falcone. to really generate something that he has not been able to do for a long time, which is make a killing. he has that heavily on this project in southern vietnam. he has put nearly $500 million into it over the last decade. he is trying to be the person who brings las vegas to vietnam to create something that has
never existed in that part of the world, which is a mass-market casino resort. this place is enormous. it looks like something was picked up off the las vegas strip. >> how did he get into it? matt: he was approached by a pair of canadians, investors who had put into this project. they were looking for funding. they found their way to him. he said, sounds interesting. he wrote $25 million.
to become an initial investor, and then going forward, either sell or bring in others to dilute that state. this was never intended to be a big thing. the harbinger, phil falcone hedge fund, collapsed. because of this scc investigation. it was one of the few assets left in the portfolio. the other was a wireless business. it became a big part of what phil falcone still has out there. as a result, it is important to him. >> the project in vietnam is interesting. it is not easy to do a casino business in that country. matt: there is one big problem. it is illegal for vietnamese citizens to gamble. this is not as much of an issue as it might seem at first blush.
the big money is from chinese gamblers. if you are running a casino in a remark part of vietnam, you want vietnamese gamblers. there is a big battle for years by phil and others to try to get the government to relax these rules. it looks like that may be on the verge of happening. it is unclear whether the project will get a license to allow it. oliver: refugees, immigrants, and ex-pats make scapegoats for some politicians, but in the case of western union, they are a market opportunity. >> it would be interesting to write about a company that is about moving money and people across borders. it has been for a long time, at a moment when both of those things are politically controversial.
there has been a huge populace backlash against immigrants. oliver: let's start with western union. this is a focus of the story. what exactly does western union do for this particular set of people? drake: it is a huge financial lifeline for people who go abroad looking for work and for the families back home they are sending money to. they are in every country in the world except north korea and iran. have been going after a double belonger population. it is all over the place.
oliver: these are people who have homes in two places? drake: exactly. people who have allegiances to a home country and the new place they have gone too. oliver: you focus on greece. give us an example. what is the process like when somebody arrives off a boat. they get to the country and the first thing they need is money, right? drake: it is incredibly easy. basically, you'd show up and you need a code someone will send you. we talk about wiring money. the money actually does not go anywhere. what happens in transfers is that someone goes to a counter, puts cash on the counter, gets a code, send that go to a relative, and they go to a western union location anywhere in the world and get the corresponding some back minus fees. it is easy. you don't need a bank account. oliver: how a health insurance startup plans to survive. a moscow billionaire challenges silicon valley titans. this is "bloomberg businessweek." ♪
♪ oliver: welcome back to "bloomberg businessweek." you can also catch us online and download our app. a health insurance startup finds out the hard way it takes more than a founder named to succeed in the trump era. here is our reporter. >> josh kushner is the younger liberal brother to jared kushner. he is married to a supermodel. the company is interesting. it was founded in the idealistic idea of obamacare.
it was created to sell obamacare plans by josh kushner. it is an insurance company. it is about tech savvy. you are going to book an appointment through an iphone app, text with a nurse, talk to a doctor. it is almost $750 million from big investors and the kushner family. the demand for a obamacare plans has not been what people expected. that put the company in a difficult position. the election of donald trump makes things crazy. oliver: i remember this company. i saw their ads everywhere on the subway. greats were pretty
but there has been a fall from grace here. what do they need to do to make this work with obamacare potentially undergoing major changes and potentially a repeal? is it dependent on obamacare? >> what i learned is it is hard to start an insurance company. make sense. if you do not have many members, it makes it hard to negotiate with providers. insurance companies make money by going to a hospital and getting a good deal. oscar was not able to do that. enrollments were not high. they were losing money. the interesting thing is what oscar is banking on is that trumpcare and obamacare will not look that different. there are differences, but the basic structure obamacare created is that you have insurance exchanges, something pushing people to buy insurance on the open market. that is probably going to stay the same. oscar is banking on if they can survive the next year or two, they will be in good shape. they formed a partnership with the clinic. oliver: travis kalanick is
taking a leave of absence. i talked to a reporter about the company without a leader. >> travis kalanick said he would take a leave of absence. he said that right before the meeting where board members presented to uber employees the results of the investigation into gruber about its culture, discrimination, a range of issues. during that meeting, one of the board members responded to ariana huffington by saying the addition of a female board member would mean more talking. it was a sexist remark.
he has now stepped off the board the same day. it has been a crazy run of news. oliver: who is running the show now? eric: that is the question i am asking. the hope is to hire a chief operating officer. right now, they do not have that position or a chief financial officer, chief marketing officer, general counsel. there are a lot of positions open. travis is taking leave. it is a management committee. there are people who run the u.s. and canada, latin america, india. they are running these big regions and overseeing them. there are other people doing product.
it is more of a committee where they are gathering everyone together with hopefully the guidance from francis, who is now the senior vice president for leadership and strategy who came from harvard. the hope is she can help the executives. i can't tell if they are going to vote or if there is a consensus type of leadership. it is going to be leadership by committee until they can find a coo. oliver: you have to wonder what the straw was that broke the camel's back. eric: it is coupled with a lot of the scandal overall has been tied to this indian rape case. scandals, he'sse
been tied to. at the same time, his mother and father were involved in a tragic accident. his mother died. the funeral was on friday. he is in a state of grief. oliver: a software company is a hit in russia. now, it is catching the eye of silicon valley. you have an interesting story about a russian businessman whose product has gotten a second life. tell us about boris. >> he runs a company that has come to dominate russian business software markets. they put it second in terms of revenue in the country, at about a third of the market. they have about 5 million russians using it for varied business things.
accounting, finance. companies.gwhole >> you talk about this space. software services, so on. this guy is a big player. jeff: in russia, yes. the competitive advantage is he is aggressive about keeping pace with changes in the market, particularly holding regular seminars to update clients on changes in russian regulatory life. >> that gives him an advantage. oliver: why you should try the high risk world of free diving. ♪
♪ oliver: welcome back to "bloomberg businessweek." you can also catch us on the radio. a look inside the world of free diving. where holding your breath becomes a competitive sport. >> so great to have this in the magazine. tell us about pursuit. emma: we scour the globe to bring readers the best travel, food, cars, shopping. we do that by testing the things out and using our intelligence to tie you what to buy. >> it is cool stuff. oliver: you are ticking off a few of those big boxes this week.
travel and experience, that is how i would describe free diving. this is wild. emma: this is our sports category. we sent our writer to a free diving course in egypt. it is when you take a breath that the service, low down a rope down into the sea and hold your breath and go down as far as you can. it is this up-and-coming extreme sport. it is crazy. >> how did the reporter with you do? emma: he did pretty well. he stayed down for over two minutes and 30 seconds. if you start this with no experience, you cannot even do a minute. this was after he learned how to relax his body so much he is able to fight the urge to come up as soon as possible, which is human instinct. oliver: i can't get past the deep end of the pool. he was there for a week, right? he was preparing for this. it is interesting how you talk about the yoga mindset is akin to what they have to do.
emma: it is about relaxing your body using meditation to resist the reflex. says,is when your body get up there now! they use different techniques where they wait themselves. they use wetsuits so it is easier. there are competitions around the world for people into it. people can stay down for five minutes at a time. >> there is a big community. is it expensive? emma: it is not as expensive as scuba diving, because you don't need the all the equipment. there are different locations
that are good for this. the best one is in the bahamas. the one in egypt is popular with people from london and moscow. the hotels are pretty cheap. everything is pretty inexpensive, because it is only you when the water. oliver: pursuit is more than a section. go online for more stories. i spoke about why now is the perfect time to plan a roman holiday. >> pursuit is a daily website. all of the travel, food, we are doing everyday online. it is a lot to read thomas e, drink, eat, buy. oliver: let's talk about one story in particular. you are breaking down where to go in italy. it looks like it might be cheaper than usual right now. chris: it is always a good time to go to italy, especially the summer and fall. norwegian air announced they are starting on hundred $89 flights,
-- $189 flights from newark, which is cheaper than usual. they will offer cheaper flights right now. oliver: what is the initiative? chris: they are opening new flights and entering new markets they weren't before. they want to get attention for the new routes they have. the other reason we are excited about italy is there are new hotels that have been renovated. old hotels are now totally up-to-date. oliver: i thought you went to italy to get the historic, not necessarily the most modern. now, we will go in these hotels are nice and fancy. chris: they are walking that line between you want the classic italian food, flavor, architecture, hospitality, but you also want the fancy bath products, comfortable bed. a classic example is a hotel in venice that is more than 400 years old.
emily: i'm emily chang and this is the "best of bloomberg technology," where we bring our top interviews from this week in tech. coming up, tim cook opens up about apple's car ambitions for the first time. more from our exclusive conversation with the apple ceo about the company's focus on autonomous tech and the push into cars. plus, travis kalanick takes an indefinite timeout. why the ceo says he takes a break from the company he cofounded and what it means for uber ahead.