tv Bloomberg Business Week Bloomberg June 30, 2018 8:00am-9:00am EDT
carol: welcome to "bloomberg businessweek." jason: we are at bloomberg headquarters in new york. carol coming up, we have a very : special issue for you. jason: we are going all around the world looking at things getting lifted. carol: a reporter is really following the money trail on some high-profile burglaries around the globe. jason: bees, art, whiskey, so much to cover. carol: we definitely have to start in the u.k. jason: a blockbuster investigation from bloomberg
news this week into brexit and the big short. carol: we have hedge funds hiring posters and cashing in on it. >> the central crux of the story is how u.k. polling companies sold private exit poll data and other data to hedge funds, some of the world's biggest hedge funds on the day of the brexit vote. this was nonpublic information on how the u.k. population was voting on that day. this is information that would have been illegal for the polling companies to have shared with the public at large. this information gives showed organic confidence to the hedge funds that the more u.k. people were voting to leave than to remain. or certainly showing that the outcome was obviously much tighter than the public polls
had been showing in the days leading up to the vote. that would have allowed the hedge funds to gain an advantage and position themselves for a short decline in the pound ahead of what became one of the biggest market crashes in modern financial history. >> hedge funds and pollsters. i guess that is what you're trying to piece together, what the information the polsters put out publicly, what information they were giving to the hedge fund clients. can you dig into that? it sounds like there was an internal conflict between what they were putting out publicly and giving to their clients. >> you are right. there is an inherent conflict. the polling companies are producing daily public polls, which are being published. these are potentially market moving and you often move markets. at the same time, they are selling their private hedge fund clients polls which certainly
would allow them to get a good insight into what the public polls are showing. >> those private polls are more granular, broken down in a different way. what are the insights they provide that are different from what the public is getting? >> that was an unofficial exit poll on sky news. at 10:00. it was introduced with much alled thehich c vote 52-48 for remain. that pushed the pound up to a six-month high in the night. much attention was paid on that. there were hundreds of news headlines based on that poll. what viewers of sky didn't know in viewers of these headlines did not know was behind the scenes, this polling company had also sold a private poll to a hedge fund client for $1
million, which matched the results of the public poll. which would enable the the hedge fund client to have gotten an early edge on what was going to happen. >> take us back to nigel firage, who was very much out in the public and on the airwaves the night of the vote. what is his role in all of this? >> he went on the air, or certainly his words were put on the air just after the polls had closed. basically saying it looks like remains have edged it. that had a big impact on the pound. that basically -- it looked like he was conceding defeat. you can see the pound shooting higher after that moment. now, what is not clear is what he knew at that moment.
he delivered another concession about 70 minutes later with the press association. in that interview he clearly stated that the reason he was giving for calling it for remain was that he had had access to some polling that have been done for financial service firms in the city that showed remains were winning. we know what polling he was referring to at the time. it was for his own pollster. we subsequently found that they actually showed that leave was ahead. there were certainly some questions that need to be answered by him as to exactly why he called it for remain when when the polls, at least one that he had seen were saying leave. >> what happens next? where does it go from here? >> u.k. politicians are already calling for an investigation into the polling industry.
there has already been one. it actually just finished recently following several bad calls from the polling companies out from the general elections. the u.k. government has already done a pretty exhaustive inquiry into the polling industry. it did not look at all that private polling. there are now calls for that to be reopened into the conduct of the polling companies. and the hedge funds. one thing that has already happened as well is a kind of growing clamor of voices calling for the statutory regulation of the industry. the polling industry. at the minute it is self regulated. there is a growing belief that they need some sort of statutory regulation. carol: we're with the creative director of "bloomberg businessweek." you were tasked with taking the european cover and making it into the cover. >> this was a great story. the idea of a short is a little bit difficult to visualize.
instead, since nigel farage is a big piece of the story, we decided to lean into him and we give you a lot of nigel. jason: it is a startling cover. a little scary when you first look at it. is that intentional? chris yeah, we wanted it to be : direct. you get a lot of him. he has this expression that is just a lot of emotion coming from him. you get attention with the words. jason: up next, we dive into the price issue with the diamond merchant who stole over $2.5 billion in india. carol: but not in diamonds. plus, how thieves stole millions of bees. jason: this is "bloomberg businessweek." ♪
jason: he was a global celebrity of sorts. carol he was a jeweler to the : stars. >> the national bank reported earlier this year that they had started digging into their international transaction record and learned, initially, they reported that $44 million were missing. this vehicle for this is the very unluxurious and a diamond sounding letter of undertaking. you would use a letter of undertaking if you are a diamond company, you want to buy jewels abroad. you want to make the transaction in u.s. dollars without taking out loans in rupies, converting them and getting them abroad and all the hassle and expense that that entails. instead, you go to a state run bank which had a branch in a city like new york and you would say, hey, i want tomorrow u.s. dollars to buy diamonds.
the state-run bank may not have a branch or a big outlet there, but there is let's say another indian bank that does. you go to that bank and say i want u.s. dollars. if they say we need some kind of guarantee of sorts that you are good for this, the state-run bank says this is a letter of undertaking. we're going to be the intermediary for this transaction. we are good for it. >> simply says we know this guy, he is good for it. it is all fine. proceed with dispensing this money, essentially. right? >> exactly. the money eventually makes its way to the diamond company. the diamonds get bought, and then instead of repaying the bank directly in the united states, the state-run bank pays the bank back with interest. then in india, the diamond company repays the state-run bank in rupees.
that adds the fee for the service. >> if it's working currently. >> right. exactly. in january, some representatives went to the bank and said we want to do this thing that we have done many times before, can we get some letters of undertaking for this? the bank, something had changed, the employee structure had changed. a new employees said that is strange, or sure, we just need some collateral. the people from the diamond company are like well, we don't -- >> we have never had to do that before. it's fine. take my word for it. >> right. they start to dig into their records and look into the bank 's database and look at letters of undertaking, and the international swift system used to transfer money from country to country, and the two don't line up. d they day and dig in and
-- -- dig, at first you get this $44 million number that at first when out, and then it becomes national scandal. the story comes out. the finance minister testifies in the spring, this is actually now up to $2 billion from what we have dug into. we have denials from the companies, or from the lawyers representing these men. the investigation is pursuing and now the question becomes how high does this go? jason: now we move to a different kind of heist. it is sweeter and buzzier. bees are at the center of all of this. they play a massive role in the economy, especially in california. carol: it's led to a specialized kind of thief. >> almonds are one of the few foods that are grown that depend 100% on bees. almonds will not pollinate -- reproduce naturally.
or pollinate naturally. es a big business. >> it is a massive business so big that california has to import bees every year, right? >> beekeepers in california literally can't raise enough bees to keep up with the industry. the pollination season this is a few weeks in february and sometimes in the you couldn't march. really build your entire business around it, though it turns out some beekeepers almost do. but in those weeks, bees come from all over america. two thirds of america's bees are in california. >> truckloads of bees moving to california and that is a recipe apparently for some mischief. >> it is. because it has become such a big business, and almonds have been steadily growing over the past 20 years. they are pushing crops out of california. is now being used for
almonds. 20 years almonds have been steadily growing over the past 20 years. if you don't have bees, you don't have almonds, farmers are sort of desperate which means there is an opportunity for criminals. this is something it never occurred to me but when you have a valuable product that is in short supply, a commodity that can be stolen, somebody will steal it. $1 million worth of bees. >> tell us of a got stolen. >> bees from several owners -- they are kept in hives is our inboxes. in theory, you are just stealing boxes, but that is not as easy as it sounds because bees get in and out of the boxes. you need to know what you are doing. you have to have all the supplies. you would need a truck and a forklift. someone who knows how to deal with bees, otherwise you would be stung to death. when they started going missing, hundreds of hives at a time it was clear it was some professional someone either in , the industry or someone you had employees who knew how to work.
>> if you were an almon farmer, you may not be asking a lot of questions about where these bees are coming from. >> right. i would hope it's not done that way, but as it gets closer to the season and you don't have the bees that you need, you might not start asking questions you would have asked earlier. bollinger almost all almond farmers are very scrupulous and professional, if they are desperate that is how they make , a living. if a guy shows up and says i know you are short on bees, i have a truck here. you might not say what is the providence of those bees? >> how do they cracked this case? >> just luck. is still a relatively small community. two thirds of the bees are in california, an overwhelming amount but beekeepers know each other. they recognize each other's boxes. even if someone repaints those boxes, there are other ways in some cases you can recognize it. basically, a guy from the industry drove by a field
outside fresno where the way the bees were being kept did not look right to him. he pulled over and looked at it and called the sheriff department and said you should take a look at this because it doesn't look right. when they there, in fact, it was like a chop shop for bees. >> what do we know about the perpetrator? >> the accused perpetrators were ukrainian immigrants that have worked in the bee industry. more around sacramento and they were found around fresno. there is a bit of a difference in the fresno community and the sacramento community where you could maybe exploit to the idea that people wouldn't know you as intimately well. these were just guys that had worked in the industry who new what they were doing, what is -- that had access to the equipment. what seems to have happened is they repainted the boxes, of their own logos on them, and were in the process of splitting the hives, which is something beekeepers do. when the hive gets too big, you can actually build a second one.
then they were going to sell this to another state or maybe -- where somebody wouldn't know. they were very close to getting away with it. carol: when the ai software you were developing turns out to be racist. jason: questions of fairness as dismissed amazon workers appeal to a jury of their colleagues. carol: this is "bloomberg businessweek." ♪
jason: welcome back to "bloomberg businessweek." carol: you can also listen to us on radio on sirius xm channel 119. 106.1 in boston. 99.1 fm and washington, d.c. inon: and in london and asia on the bloomberg radio plus. in the technology section, artificial intelligence clearly getting smarter with facial recognition software still getting confused by darker skin tones. carol: there are problems out there. you have companies that
include microsoft working hard to overhaul this problem. >> law enforcement has actually been using facial recognition technology for years in various applications, i think more so than people realize. the thing that really kind of highlighting this application recently was the aclu did a bunch of public records requests and found out that amazon was marketing its facial recognition product, called recognition, to law enforcement agencies. >> there aren't guidelines out there to make sure it is being very careful? >> law enforcement has been eager to adopt anything they think will give them some sort of edge. they follow a common thread where they want to get out fast. it's not quite ready for prime time in some instances, and there is no guideline saying it has to be ready for prime time. >> one of the issues is a false positive, right? that you are mistakenly accused of a crime. >> absolutely.
there was a pretty compelling example of this shortcoming in the u.k. where a civil rights group there did a bunch of records requests and got the results of facial recognition that some police departments for -- were using there. there was one police department that was using facial recognition to sort of scan the faces of people as they went into a public event. the false positive rate was in the 90%. which means only one in 10 people who were tagged were actually the person who they said it was. the department said we didn't arrest anybody, but that doesn't -- but that does mean they had to explain that to nine out of 10 people. it also raises the question, why are you using this technology at all if it's only giving you one out of 10 checkmarks? >> where are we going? is ibm and microsoft going to hold back their facial recognition software until it's perfect?
are regulators point to come in and say we really do need a set of guidelines? >> microsoft -- i think all of the tech companies are rushing to improve their products. they have an incentive to do this just in the sense of their -- since that they are trying to sell it. microsoft has said it has really dealt with this racial disparity issue. it has dealt with it in its labs and they are not clear how it will work out in the field. there really aren't regulations. this could happen in the federal level. it could happen on the state levels and it is still early days for this. carol: interesting story about amazon. for workers there who are facing dismissal can now appeal to a jury of their colleagues. jason: the whole process is raising questions about the ultimate fairness of it. carol: exactly. fascinating story. >> through the process, jane walked into what she thought was just a meeting with her boss one day and there was an hr rep there.
three got three choices. number one, leave and take severance. number two, go on a performance improvement plan which especially at amazon is it legendary kiss of death. and number three, engage in this kind of jury of your peers style thunderdome where she and her manager would each express their point of view and then after oral arguments and written statements, the other amazon workers would vote on what happens. >> how does that work? >> the selection assets is like a conventional jury selection process in a court of law where she is advocating for herself, but has the option to dismiss certain panelists who she is worried will be less than -- the other choose your own or -- 201 adventure of component piece of that is that she was able to choose from basically a panel of three non-managers or
one manager to hear the case. >> her boss made a presentation to that jury, but she didn't see it. >> that is right. what jane and the attorney who represented clients like her and others in the area in seattle are saying is that in cases like this, typically the worker bringing the case doesn't get to hear the manager's inside of the story and often it is the manager who gets the last word. the complaint from workers is there the ones losing seven of 10 of these cases is because they're not getting a fair shake. >> amazon and other companies like this have a strong incentive to figure things out in order to retain workers, it sounds like. >> that's right. has aany of amazon's size tremendous incentive to try to avoid the kinds of -- at this point it is about a 10% replacement rate a year.
that is a contest cost the instruction to nine figures. >> even after you go through that process, you still have the same options, go back to work and essentially figure it out, even if you lose or at that point, you can also take severance. i have to imagine from a cultural and just a workplace comfort perspective, that is a little bit awkward. >> in theory, you have a lot of -- a lot less leverage if you are taking either of the two options. even one of the attorneys we spoke to said even the handful of clients he had consulted for ahead of their peer hearings, the one prevailed wound up leaving not long after anyway. >> let's go back to jane and how did it turn out? unfortunately she was sitting by the phone while her manager gave the closing arguments and she heard later from her career ambassador at amazon that she had lost. now, she was down to the two
options, the severance or performance plan. she chose to keep working. she had a day to decide and said, i basically don't have that many other options. i need to see if i can pull it together. >> how does this all play together to the broader tech workforce? >> it's hard to imagine that other companies are looking at -- are not looking at programs like this, particularly in an era where executives can be regularly felled due to one crazy employment problem or another. whether it is the netflix chief saying crazy stuff in an employment meeting a couple weeks ago, or the head of a company having to step down for getting involved in a consensual relationship with an employee. >> intel, just recently. >> what level? >> for the most part among the folks that we talked to, it is very much the product manager level.
jason: welcome back to "bloomberg businessweek." carol: still ahead in this week's special heist edition, we have the art vigilante that will hunt you down. jason: and the tools for the discerning burglar in your life. but we start in the politics section. we are going to take you to texas. jason: that is a place right near the border where we have been spending a lot of time lately.
it is a town where the economy is driven by the prison. carol: the community is banking on president trump's immigration policy for a revival. >> we went to raymondville, texas, a.k.a. prisonville, texas. during the bush administration they made the decision to hook their economy to a prison. the passed $100 million of bonds to build a prison that would be the biggest immigrant detention center in the country. it closed in 2015 after a riot and a fire. and the economy just tanked. , it has tripled the unemployment rate of the state rate. you have a lot of shattered store door front. a lot of rusted silos. this used to be a farming community, but the drought has made it difficult. they're helping to revitalize their economy and reopen this prison on the back of the trump immigration crackdown there -- crackdown. they are close to signing a long-term contract with ice to open this thing back up and put
immigrants in there. >> politically, they may not be so much in favor of what is happening out there. >> this is a county that voted overwhelmingly for hillary clinton. it's largely hispanic. it's one of the few blue pockets of texas. it's also one of the poorest parts of texas. they realize the irony of this, of kind of trying to restart their economy on the policy of donald trump, someone they don't agree with, but they really have no choice. >> i feel like we talked about this a lot, and area that ties itself to basically one industry. when the industry goes away, it's just destroyed. when the prison went away, it talked about the ripple effect. not only did the prison shut down, the walmart shut down. they were talking about $32 million of a ripple effect on the economy. it's not just what happens right
nearby, but it had a spread, if you will. >> they are aware of the political liability. they are 50 miles away from brownsville, texas, which is where this infamous walmart detention facility is, where all these children have been kept and has been the site of protests. they are nervous about this turning into a similar situation. right now, mtc corp says they say they do not have plans to detain children there. the mayor has not got not guarantee. he is a little bit nervous that that might end up happening. >> this mini economy of sorts that is building up around the detention of immigrants and migrants coming across the border here, be a children the families, adults, this is -- >> it's a billion dollar for some of these towns along the border. trump requested 40% increase to
isis budget from -- ice's budget. $3 billion of which is going to go to investing in detention facilities. they are packed. they are overcapacity at the moment. people in them are spending more time in them, especially given this policy to prosecute all of them. there is a situation a couple of weeks ago in arizona where a handful -- a few thousand immigrants were transferred into a federal prison. it is a big business. there is a lot of money involved. now that the government is doing business with of these private prisons again, there's a lot of money to be made. jason: we are here with bloomberg businessweek editor-in-chief joe weber. we just heard from matthew. how do you balance the breaking news, the news of the day with some of the broader features of the magazine?
joe: one of the things is working with the newsroom and the bloomberg newsroom. we have been all over this. breaking news left and right on all of the various outlets. -- various elements of it. when we think about business week, it's sort of like what is next? how can we provide context? this is a business story. there is this community in the south that has been devastated by the lack of a prison and now they are in this opportunity where we are going to see a new prison complex come into being. carol: it's ironic, right? a largely democratic region who voted for hillary clinton who might benefit -- -- their economic revival is contingent upon president trump's immigration plan. joel: there is a whole backdrop to this that becomes hyper relevant as the immigration topic heats up and evolves. that is what we are witnessing. carol: when we have these big
macro stories, we cover it on a daily basis and hourly basis here. joel: there is the big stories and then the ones where you can slice it really thin until something that is hyper local. that is the kind of thing we try to move on. it feels like fabric rather than just a big headline. carol: up next, india's push to fast-track bankruptcy. jason: and how netflix plans to conquer hollywood. this is "bloomberg businessweek." ♪
jason: welcome back to "bloomberg businessweek." carol: you can also find us online at businessweek.com. jason: and on our mobile app. we go to india and the prime minister, a lot of reforms of taking place there, including in the area of bankruptcy. carol: he is making a lot of changes. the new code stipulates that cases must be resolved in nine months rather than four years,
which is what it has been taking. jason: turning out to be easier said than done. a lot of speed bumps along the way. >> they are trying to create a whole new bankruptcy process for companies from scratch. that obviously is not so easily done. they have many companies that were really struggling where owners would hang on, kind of squeeze everything they could out of it. banks not willing to crack down, there was a lot of capitalism involved in lending to some of these companies. they put a new bankruptcy law in the books in late 2016 that has slowly been moving towards. -- moving towards full implementation now they have this overstrained bankruptcy court system or they don't have enough courts and judges and it is still a challenge because it's a question of whether or not you can save the companies and actually pump some more money into them and salvage them. it's a little bit crazy, although there is a lot of hope that there are signs it is actually working.
of this broader picture here that modi has this very aggressive reform agenda. it's one thing to talk about reform. it's one thing to even put the pieces in place, but then the actual day-to-day execution of all of this. it gets very messy. especially when you have this collision it feels like, of the old indian world, in some ways and the old way of doing business, with some pretty sophisticated people on the other side trying to keep the piece of what is theirs. >> that is so true. it's not just the companies that is running them. it's the bank piece of them. is really cracking down on them, too, saying your standards for him you are going to lunch to comment how you are going to deal with, what you are lending and so on, that he is coming at it from every angle. they are trying to do something that is going to help create some jobs.
by forcing new management to take over companies because there is a mechanism in this that essentially does -- it is supposed to push out the old owners of these companies or the founders who really would make no much effort to actually try to do what was best for the company. to create opportunities for newer, younger managers to come in. but there is a question of experience and who do you have there and how quickly is that happening? again, even the court system itself is so strange. -- strained. one judge in dehli was complaining about not being able to hire enough people to process everything because salaries for the jobs are also very low. >> there are a couple of numbers in the story. they talk about $210 billion of bad loans on the bank's books. they have to deal with that because there is worry that as long as that sits there, there are concerns about a really big financial crisis in india. >> exactly. they are big companies. there will be opportunities, --
i've read some other articles in doing some research around this. not everything around our story about the reluctance of some to in so easily.ve will there be some process of either appeal or delay? one of the examples we give which is right in the start of the story, the sr steel example, i think there has been some delay now on that case, and they're not going to think about it or the judge will not deal with it until later in the summer which pushes it passed this 270-day limit. the new law basically says, we have got to resolve this. if we think it is going to be worth saving 270 days otherwise , we are forcing it into liquidation. carol: let's stay focused on india for a moment. it talks about netflix and how it is hoping for its next 100 million customers to come from india. jason: huge ambition around this project. netflix has unveiled its first primarily aimed at the indian
population. >> it hired an executive based in l.a. but knows a lot of people in the region to oversee scripted programming, and it is now mounting what it says is its most aggressive slate of original programming in any country, relative to when he got there. it has only been in india for a couple of years. by next year they say the release 16 or 17 original different pieces. probably 12 or 13 movies and 5% different series. india even know it is a huge , economy and is a lot of trade with other companies, has really local and parochial pacing. all of the biggest movies are bollywood for the most part. >> this is obviously an ambitious plan but to your point inut is culture, audacious netflix's thinking they can really make a meaningful business here. >> netflix's strategy has
traditionally been, everybody around the world has somewhat similar tastes. they don't group taste based on geography. it is all personalized. they believe there are people in india who will watch a german show, people in germany that will watch a japanese show. so on and so forth there it -- forth. while they are banking on their shows to be popular in india, there is a little bit of a recognition of the india is different from other places. so they have to make a lot of local shows. the one thing they are doing a little differently in india relative to the local players, they are not trying to replicate bollywood. >> give us some size and scope and importance of bollywood. >> globally, bollywood is the largest film industry in the world in terms of the number of projects that come out. there close to 2000 bollywood movies every year. it is an entertainment for everybody.
i talked to one of the directors of a show, he said other countries have the circus, film, bollywood is all of those things in one. >> what is the potential for netflix realistically? we are talking about a country where some people struggle just just to get running water. >> netflix is expensive for your average indian consumer. it is twice as much as your average pay-tv service. it is a lot more expensive than your average movie, which means at the start netflix seems to be targeting the 10 million or 15 million people who have a disposable income who probably know some english. most of the netflix service in india is not totally localized. they feel like if they can start with those 10 million or 15 million, they become a big advocates, it opens up the whole market. carol: the bloomberg terminal is the backbone of everything we do at bloomberg news. it makes us smarter and tell deeper stories. we just heard about netflix, great story expanding in india.
>> you know i love a good chart. especially when it comes to free cash flow. let me break this down for you and see what we are charting. we are looking at some strange things going on. we have seen in the share price really rally in the last few weeks. we are still hovering around the $400 level. even though we have seen massive negative free cash flow. for the last six quarters you , have had a negative cash flow of more than $300 million. that has improved a little bit in the first quarter, but still not a positive number. carol, i hear the bulls are still out on the stock because of that big international growth. they are expected to grow bigger and better in the second quarter and investors say they are willing to hold onto it because they like the momentum. carol: this tells such a great story. you think about netflix, they have to spend money on content, and content is king to prevent subscribers globally. yet wall street is looking at
their cash burn and how much they are going through it. sometimes it makes them a little bit nervous, but we should remind everybody that stocks have gone up more than 100% this year. jason: up next, the crusader fighting to prevent the sale of looted art. and costing auction houses millions of dollars in sales in the process. carol: we have the tools an ambitious thief can't live without. jason: 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, 106.1 in boston. 99.1 fm in washington, d.c. carol: also in london and asia. here is another take on our heist coverage this week. what have a profile of an archaeologist fighting the sale of stolen antiquities. jason: he has a database of tens of thousands of pictures. he sits at his computer and is
comparing and contrasting, trying to unlock fraud. >> this is a 45-year-old greek archaeologist who, over the years has built a tremendous photo archive of pictures that have been seized over the years by the greeks, the italians, other authorities, raids on swiss warehouses of the photo collections of traffickers, accused traffickers, merchants, people who are buying and selling in the archaeological underground. these are vases, statues, in some cases look like they are just the dug out of tombs. from these tens of thousands of pictures he has got, he has built this huge online archive of literally about 100,000 different objects that might have been stolen from archaeological sites. he just sits there, lays in wait essentially in his house in cambridge, england waiting for
, auction houses to put out there online catalogs. he clicks they do through them online and tries to make a match for what is being sold to what he knows has gone through the underworld of the antiquities trade. every once in a while, he finds a match. what we did was follow him while a christie's catalog from a sale in new york was coming out to see how quickly or if he could even find a match between one of these tens of thousands of objects that he has in his secret online archive and what was coming out in the auction catalog. >> how does one get into this business? >> the really important thing to understand about the antiquities trade is that countries like egypt, italy, greece, the source countries for these ancient artworks, all of them have these laws that says anything that comes out of the ground is the property of the state. knowing that, this archaeologist
really felt like it was part of his national duty and duty to the ancestors and people who have been buried in these tombs, that there are things that were dedicated to them by their families centuries and millennia ago be respected. one day, the police asked him can you join us for some raids? very quickly in a series of raids he gets to see how law enforcement goes after these things. on one particular raid, on a remote island in greece, on a -- and a closet they missed on the second last day of this week-long raid they found photo albums that had belonged to an art dealer. in them were thousands of pictures of artifacts that he had not seen the people hadn't , seen the report of the underground private trade. private collections. that was the beginning. this was over a decade ago. from that day he started building this collection. he is the only person in the art market who has the entire collection and is able to
cross-reference it and actually find something that has to get pulled out of auction because his picture showed a pot that was cracked up in pieces encrusted with dirt. , it matched perfectly a vase that was in pristine condition, totally restored in the auction catalog. he moved quickly and got it removed. >> how to the auction houses view this guy? >> they hate him. he essentially is holding them hostage. in their case, he is kind of a robin hood who comes in and steals from the industry. he is literally, the dozens of works he has gotten off of auctions have cost them tens of million in sales. he is done the same with museums. what they like is to see the archive. he is so secretive about the archive that when it went to his house to see what he was doing, he wouldn't let me watch him login.
i had to be outside of the house for him to do that. he changes his password twice a week. his theory is that were the trade to get their hands on this, they would know what was in the archive and would never put these things up for sale again. the pot christie's tried to sell they would never try. in other words, it would drive this vase underground and the public would never get to see it. academics would never get to study it. he wants it not to essentially burn the object, so that they are never seen and never sold. jason: now, you may be inspired to carry out your own heist. this is a story for you. seven tools every burglar needs. >> someone who is just familiar with the aisles at home depot could actually be a very good burglar in the sense that they have the kind of tools to get into safes and roofing materials and front doors and drill holes through walls. this can all be found at your local hardware superstore.
the stereotype is that it is all george clooney with remote-controlled, crazy james bond tools, but it is not like that at all. >> i think about one thing that is low-tech and that is 3m electrical tape. you tell about the antwerp diamond heist. $100 million. >> that was another one that was pretty extraordinary in terms of the payoff. i interviewed the author of a book about the antwerp heist. he was explaining how the tools that they used were up against one of the most daunting security systems and europe. -- in europe. it was in the antwerp diamond district. to get around it, they used electrical tape to short out one of the alarm systems. they used a can of hairspray to full a thermal imaging sensor and put a block of styrofoam on a broomstick to block the motion detector. all told, that was probably about 50 euros worth of things they pick up at a hardware store, and got around a multimillion dollar security system and left with about $100 million worth of diamonds.
it's that kind of thing where it is really just the ingenuity that people apply to these kinds of tools less than the sophistication of the tools themselves. >> talk to us about smartphones. more people have security systems on their phones, that is how they are opening the locks to their homes. burglars can use that to against them? >> they can. that is one of the more alarming uses. i think there is a kind of naive transition to digital locks. you see it in hotels and also now even with cars where you can click a button and even start the car without actually putting a key in . that all uses radiofrequency transmissions that can be captured and replayed later. when i try to point out in the article was that android phones are actually a burglar's tools in waiting in that you can just show up and capture someone else getting into their hotel room, the signal they send to open the door. >> how do you protect yourself? >> remote cameras are a great
way to be vacationing somewhere else or even at your place of work and see who might be ringing your doorbell trying to see if someone is home. there are high-security locks that are extremely difficult to pick. i left several versions of those that are affordable and easy to install. even things like a burglar a burglary safe -- things like a burglary safe which is a safe , fortified on all six sides. by speaking with people at the lapd, learning how much that would help if more consumers got a safe that would help prevent safe crime altogether. carol: bloomberg businessweek is available on newsstands now. jason: what is your favorite story this week? carol: must read is the rundown of the tools that a thief uses to do a break-in. you think the are going to be high-tech. a lot of them are low-tech and a lot of them you would find used by a contractor. jason: very prescriptive. i will look in your trunk to make sure you are not buying into these things. i loved the bees. i think my almond milk every morning. i had no idea they were so
♪ david: let me ask you about the country you are from. khaldoon: the uae is a federation of seven emirates. oil is finite. we have to prepare herself for the future. david: you lead a group that bought a team in the premier league. khaldoon: manchester has been the most successful club. david: do you ever go down and say let me kick some footballs? >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. alright. ♪