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tv   Bloomberg Business Week  Bloomberg  January 14, 2018 4:00pm-5:00pm EST

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carol: welcome to "bloomberg businessweek." julia: where inside the head -- the magazine's headquarters in new york. carol: in this week's issue, solving complicated problems. julia: whether the jobs include penn station new york. carol: also, wall street comes down with a case of foam. julia: a.k.a., the fear of missing out. carol: all that ahead, on "bloomberg businessweek." ♪ carol: we are here with the assistant managing editor of
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"bloomberg businessweek," jim ellis. jim, you guys do a solutions issue. tell us about this issue. you have a lot of stories that tackle tough problems. what is the thinking that goes into this kind of issue? jim: often, we look back at things that have happened in the past couple weeks or sometimes throw things ahead to think about financial issues. but we wanted to take a step back now and say, there are a lot of things that people who are interested in business and management worry about, what are the big problems of life and how do you tackle those? julia: take us to india now, trying to do magical things with waste. jim: it's interesting because india, you normally think of as a place that has a true waste problem and it does. , less than a quarter of waste in india is actually even processed. most of it is dumped and often, it is in places where it can foul water, where people can get
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eat -- eaten by the livestock they used -- they use or eat. so it's a really big problem. so there's a city in southern india now and it is looking at innovative ways to basically transform waste into revenue. and it's a mixture of tax incentives and just getting people more involved and separating waste and getting it either to be composted using it , in energy plants, or just getting it out of places don't want it to be. julia: you can't get something from nothing. carol: i love that. i love that. talking about something we are getting a lot out of, the stock market in the united states. already, 2018, couple weeks in and it is off to a really bullish start. jim: it is. carol: and that is her cover -- your cover story. jim: it is. it is a bullish start after a bullish year. carol: who'd have thought? jim: who'd have thought we would be looking at a doubt over 4000?
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-- looking at a dow over 4000? it's one of those things there is a lot of fear, but not the traditional fear we have which is, we are out there but it is a bubble or whatever. instead, what we took a look at this week was the biggest fear, the fear of missing out. julia: fomo! here is mike regan with all the details. mike: if you look at the first four days of the s&p 500, up 3%. that's the best start since 1999. when you say 1999, it instantly causes a reaction. so, you know we are talking about. i think it is causing an interesting tension among sort of your old-school investors who grew up studying how to value stocks, because the fundamentals are good but the valuations are so high that people are wondering if we are in a melt
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up, which is basically when the pace of gains gets a little ridiculous, like we saw in the .com boom. one of the investors i quote is jerry grantham of gml, -- julia: well respected. mike: well-respected, he's been around 50 years in the markets. well-regarded for spotting previous bubbles. he is a value investor. he wants to evaluate stocks based on cash flows and earnings. he steps back and recognizes sometimes that doesn't matter. at the end of the day, the goal is for people, whether a fund manager or speculator, you want to buy stocks that will rise. you don't get extra credit for buying cheaply valued stocks. carol: i feeling the question is whether or not some of these names that have run up higher evaluations have grown into these earnings. we continue to see earnings momentum. whether revenues and earnings
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continue to grow and they go into the valuations. mike: that from those who still believe that valuations still matter. that is the push back, saying the peg ratio, price-to-earnings ratio. divide it by expected earnings. that is not inflated as much as the other metrics look at. to go back to grantham, the quote that really stuck out for me was, he said, the definition of a bubble rally is when you have excellent fundamentals that are extrapolated euphorically. and we have that right now. julia: you coined it in a beautiful way, the fear of missing out. the underlying tradespeople are playing right now. mike: it's another way of saying euphoria. you step back and say, yes, evaluations are skyhigh, but i don't want to miss out. it is obvious there rally is -- that this rally is going on. so grantham looked at all the famous bubbles of history and tried to extrapolate what it
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would mean if it turned into that. it is another 34%, 35% gain. say, 3700 at the top of the s&p 500 by 2019. that just gives you the frame of mind that if it turns into that situation, what we could be looking at. it's hard to say violations, -- valuations, valuations, when that is the potential that this type of scenario could produce. julia: what do you do as an analyst here? because at the back end of the first week of trading, we were looking at this and saying actually, for a quarter of analysts out there that have a target for the s&p 500 at the end of 2018, .5 percentage for point being at target, do you go there is a long way to go here we just sit and wait, or do you revise higher? mike: rights, right. the comparison i made was that the forecast for new year's eve for next year could be hit by groundhog day. [laughter] mike: i suspect that we will see people ratchet up their estimates.
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julia: turning the market rally into a cover story was the job of design director chris does him so. the cover story this year -- the cover story close to our hearts, the euphoria in asset prices. how did you choose to show that? chris: we wanted to get into what these tradeers and stock watchers are seeing and this idea that they have a fear of missing out. we took this image of stock tickers, where these prices keep going up and what they are seeing is that they are missing out. carol: you are missing out. [laughter] chris: we wanted to be direct with the reader and grab them. carol: there is a similarity between the domestic cover, and you're thinking, and how you guys approached the international cover, which took a look at what is going on in finland. chris: in finland, they are taking on economic inequality and giving money to people. we wanted to say to the reader, free money. this is what we are talking about.
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carol: up next, the troubled relationship between the u.s. and pakistan and what trump hopes to accomplish. julia: plus, the colombian guerrillas who are hesitant to make peace. carol: this is bloomberg businessweek. ♪ ♪
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carol: welcome back to"bloomberg businessweek." i'm carol massar. julia: i'm julia chatterley. you can find us online at carol: and our mobile app. this week,"bloomberg businessweek" is focused on solutions. julia: and what better place to look for a solution than between the strained relations between united states and pakistan? carol: we talked to matthew philips about trump's recent threat to cut funding to the country. new year, and i feel like there are are new targets to the trump administration. this time, pakistan. they are threatening to withdraw aid. matthew: trump has made no bones
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about what he feels about pakistan. right before the holidays, he tweeted something fairly nasty about deceit and lies, despite the money he has given to pakistan. the length of the war on terror in august when he was announcing his new strategy in afghanistan, he went out of his way to call pakistan out and deliver them the ultimate insult as far as they are concerned, which is to ask india, their arch-nemesis for more help in afghanistan. this has always been a fraught, transactional relationship between the u.s. and pakistan, going back to the cold war when the u.s. was relying on the pakistanis to get funnel arms and aid to the mujahedin fighting the soviets. carol: i love that you say transactional. that's how it has been. matthew: you get aid and assistance and package and you get a lot of money. julia: they want to end the war
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in afghanistan. it is still a path, a route, to facilitate that. so what's the point of this tension? what's the point of halting? matthew: what does donald trump hope to get out of this? this gets to the core of his negotiating strategy. and we have seen it time and again, which is trying to change the goal post, or trying to gain leverage. bring your counterparty closer to your position by talking as much smack, if you will, if you can, in hopes they would take a step towards you. he has succeeded in angering and uniting the warring political factions. and it's not really clear they are going to change their behavior. they already say, look, we are doing more than our fair share. thousands of pakistani soldiers have been killed. karachi, in particular, is much safer. i don't know what it is you want. carol: is pakistan a friend or
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foe of the united states? matthew: where did we find bin laden? carol: right, pakistan. matthew: that cuts to the heart of this. and aid from the u.s. has been dwindling. obama cut down a lot of it and there have been spats as a result of 2011 and 2012, i believe, pakistan cut off the supply route. i mean as it has, you know, from the get-go, pakistan is a doorway for the u.s. into afghanistan. carol: because it's landlocked? matthew: that's right and we need those supply routes. there could be other modes of entry into afghanistan, but they cost more. julia: another place in need of further solutions columbia. , carol: in the economic section, a profile of the guerrilla group refusing to lay down arms. julia: posing a problem for potential investors in the country's oil sector. carol: we have more from christina lindblad. christina: a couple of years ago, the government did reach a
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-- carol: a couple of years ago, the government did reach a peace agreement with fark, a guerrilla group. and negotiations are continuing with another guerrilla group. tell us who they are. christina: the national liberation army is smaller. they are also marxist leninist group. they have refused to lay down their arms so far. they have been around since 1964. it was started by radicalized catholic priests who are inspired by the cuban revolution, along with students. they supported themselves through the years by extorting oil and mining companies in this one particular province where their stronghold is. and this is how they haven't doored. carol: its been a very productive method for them. christina: it has. there is one particular pipeline they have attacked at a rate of once a week. they dynamite it. its down to a very smooth operation, how they do this.
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over the years, the pipeline has been out of commission for more than a decade from these attacks. so, currently there has been a cease-fire. and its the first time they have been able to negotiate a cease-fire, even a peace -- even though peace negotiations have been going on for years. so it has been a three-month cease-fire, and this is the first three months stretch with the pipeline has not been bombed once. julia: why are they holding to the cease-fire? because as you pointed out, it's a lucrative industry, holding hostage the industry. why now? why are they recognizing that now is an opportune moment to sit quietly at the negotiating table? christina: i think the leadership of these groups is getting older and the experience of the farc, the other group, the idea that we have to join politics now. we have to come out of the bush and actually pursue a strategy through the ballot box. julia: because it has bought them a seat at the political
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table. christina: right. but for the rank and file this is a scary prospect. we interviewed people in their 20's who have never known another way of life don't have an education or skills. they can't imagine how they will integrate themselves into society because they have always been at the margins. carol: they have also seen what has happened with the farc in terms of the peace treaty that the government has done, there has been various folks part of the organization killed. many, in fact. so, they are worried about a peace treaty, the what does it -- but what does it mean for us, ultimately. there are no other safeguards for us. christina: there is no question that the guerrillas and activists have been targeted. and there is actually a previous history of another group called m 19 that laid down their arms many years ago and they are almost completely wiped out. carol: so their concerns are valid. christina: and the government
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hasn't been able to offer security in remote parts of the country where these people are, -- where these people are basically rejoining society. julia: a monthly check with no strings attached. we look at finland's income experience. carol: why allegations of sexual harassment on wall street have a -- have not surfaced like they have in hollywood. julia: this is "bloomberg businessweek." ♪ ♪
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julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: i'm carol massar. you can also listen to us on the radio on sirius xm and in new boston, and a 91 fm -- 99.1 fm in washington, and am 960 in the bay area. julia: and in london and in asia, on the bloomberg radio plus app. let's get back to the solutions issue. finland is looking for a way to
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tackle unemployment. carol: and they are experiencing with basic income. julia: 2000 unemployed fins are being given a paycheck with no strings attached. >> finally in 2016 in finland, got a call from her husband, she didn't believe him. talk to us about what happened. >> she was out of town and he was at home and got the mail. he says, you got this official-looking letter from the social insurance institution in finland that runs their welfare benefits. and he said, you are in this basic income experience when you will get 560 euros a month for two years, no strings attached, and the government is going to study you and see what you do. she didn't believe him. and it had then in the news so she knew what it was and they joked about it because it is a pool of people, its sort of like winning the lottery.
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that's what a lot of fins are saying. carol: they were randomly selected. claire: there are parameters, so it's low income people that are unemployment. she knew she qualified as a possible person in this, but it was so, she hoped for it so much but didn't think she would get it. she didn't believe him. she had to read the letter for so herself before she knew it was true. carol: this is part of a broader experiment underway in finland. tell us about that experiment. claire: finland has all these welfare benefits and unemployment specifically has these requirements, you can only make so much money part-time as you look for work or your benefits will be reduced. and as a result, people stay on unemployment. this is low-income people. the work that they are finding is fairly low paying anyway. , they tend to stay on on implement because it is steady paycheck, essentially, or a steady check. and finland doesn't want that to happen, so they are wondering if they give people money with no strings attached, where you
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don't necessarily have to look for work, but it keeps coming to you, if you would be freed up to take these part-time jobs. carol: it's the existing system that keeps people on welfare and doesn't give them the drive to find even a part-time job that might lead to full-time. and that is what finland is trying to address. claire: exactly. and i think we have the same problem here in the u.s.. you know, there is talk about job loss due to automation, job s going overseas. obviously we are trying to remedy that. but this is something finland, the rest of europe, america, this is what we are struggling with. carol: it's called? universal basic income. claire: true basic income is universal. finland is testing one component on that, but the idea of that is that if it were implemented, it would be universal in finland. the very wealthy would also get it, but also their taxes would rise. so they would end up paying more than they would be getting on basic income.
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carol: in the finance section a , look at a different sort of challenge, sexual -- alleged sexual harassment on wall street. julia: some women are wondering when the #metoo movement moves into the banking sector. carol: here is max. max: it seemed like a good time to listen to women. carol: its always a good time to listen to women. max: always. bloomberg is the first place i've worked where that has been emphasized, women trying to get their voices in. but now we are not trying to listen to women about anything, we wanted to ask them about their experiences with harassment. the was not one obvious man to write about. but also, we also heard about so many men whose behavior was questionable or just objectively bad. women weren't able to speak out publicly. it seemed like a good idea to pivot, to explaining why women were not ready to speak out.
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and what it is that is special about wall street, that has kept stories quite. carol: because then it makes sense. and talk about it. because often when somebody goes to work at one of the big banks on wall street, there is often something signed that if there is some kind of problem, they have to do arbitration. max: the goal was to figure out what was different on wall street and arbitration was one of those things. wall street banks were early and often, they got to arbitration early, according to an expert i spoke to at cornell. and they used the system according to data according to , the american arbitration where ifhey have data you have a problem like sexual harassment, often if you work at a big banks it's true at other , companies, you often sign away your right to sue and you agree preemptively that you are going to take your issue to
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arbitration. julia: with my experience, i had an interesting conversation with a woman when i was there and she , said to me, if you are going to talk about this, you have to get a payoff because you are not ever going to work in this industry again. and i think the dollar value of it and being able to go somewhere else and get a job and it being very clean is different from working in the financial sector or at least it was at that time. i can't talk from recent experience. max: such a good point. carol: hollywood played out that way, when we saw actresses who and then youon never saw them anymore. max: not just how much women are paid, but how they are paid. a lot of your money can be dependent on a bonus that comes from your boss. so that's another difference with other jobs. wall street money often comes in discretionary bonuses and women feel not only are they giving up careers, and not only giving up a lot of money, but they are vulnerable because of how the money is paid out.
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they feel that they don't want to upset bosses who have this discretionary control about the money they get. carol: you did talk to j.p. morgan chase and goldman sachs about these issues. what did they say? max: absolutely. a lot of men and women in the industry will say, one recently -- reason we are not hearing anything is because things got better after the lawsuits in the maybe we are not hearing 1990's. anything because the bad behavior was cleaned up. julia: did you talk to men, too? i have talked to a lot of men in this industry, and they are horrified by what's coming out. i started thinking, a small minority of people are behaving badly. there are a lot of people out there, a lot of men that are horrified that say, we are getting a bad name. the whole gender is getting a bad name here. it's individuals acting badly. max: there are some men responding to the #metoo phenomenon feeling victimized. so there were men on wall street that i talked to. first of all, i'm sure you are right when you say some men are
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horrified by the behavior. i definitely did talk to men who said this is really upsetting. , i feel for these women. but i have to tell you two, these men are basically like, things used to be so much fun, and now there are so many rules, and there is so much fear and embarrassment and i wish we can , go back to the old days. they act almost as if, the way wall street men talk about new regulations, that is sort of saps the fun out of wall street. some men, i shouldn't say every single person. but some men talked about this #metoo movement as if it was an oppressive regulation that made things less fun. carol: up next, more from the solutions issue. the philanthropist restoring japan's forest. julia: plus, why the worst transit center in the united states could get worse. carol: hard to imagine. yes, we are talking about new york's penn station. julia: this is "bloomberg
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businessweek." ♪ julia: welcome back to
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"bloomberg businessweek." i'm julia chatterley. carol: i'm carol massar. still ahead in this week's issue, looking for light at the end of the crumbling tunnels in the new york's penn station. julia: how an army of robots may one day feed the world. carroll: and, the number uber managers can call at the sight of unwanted visitors. julia: still to come on "bloomberg businessweek." ♪ julia: we are back with assistant managing editor jim ellis.
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we are looking at pursuits and the game changer to talk about the most intimidating tree hugger you have ever seen. jim: it's an interesting quick profile of cw nichols, who is a welsh-born guy who has become very japanese and is a japanese citizen. he has lived in japan for millions of years and what he's tried to do is look for ways to protect japan's forests. a lot of people, when you think of japan, particularly outside of the cities, tokyo, you think it's a beautiful wooded place. and what he discovered is that as people age there, a lot of farmers move on, more people move to cities, they are not protecting the wildlands as much as they used to. so he took it upon himself as a way to do that. i mean, he bought 50,000 square kilometers and he uses it as a way to make sure he will have sustainable land use and use it as an example for others to follow in his footsteps and do
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that, which you wouldn't think you would need that in a country where 67% of lands are actually protected. carol: all right. we have to go to one of the features stories, because julia and i really love this. its an example of, this is a solutions issue. you are taking a look at a bad problem in new york city. when you think it can't get any worse, it can. we are talking about penn station. jim: penn station. the place we all love to hate, we need it. it's the busiest transit hub. it gets a half million people every work day. that's hard to believe. and there's also a big transit hub under it and that is 200,000 passengers per day. builtunately, it was not for this many people or this day and age. it also has crumbling infrastructure and every problem you can imagine that goes with a construction site. so to try and that and bring -- try to tackle that and bring that into the 21st century is a
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major, major issue. julia: here is reporter devin leonard. devin: everyone knows penn station is a mess. there are too many trains, too many people, too many trains. underneath the station is even more worrisome. there are two tubes, one tunnel with two tubes that go under the hudson river and they basically date back to 1910. and they are literally falling apart because they were flooded during hurricane sandy. but if they fail, the whole northeast corridor shuts down and that will cost $100 million a day. there are all sorts of economic statistics about why that's a problem, not just for new york, but for the whole country. carol: i've gone to washington, boston, when you go into the tunnels it gets black. and you're like, in a hole, like i don't know where i am. you throw some numbers out there, 45,000 travelers every weekday in penn station. it is more than laguardia, jfk and newark airports combined.
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this is a crazy busy station. devin: 650,000 people a day and that's, it's about, it's not what the station was designed for. about a third of that many people. essentially, we are dealing with a system there, the number of tracks, the tunnels, all that dates back to 1910 when the pennsylvania railroad built this thing in the first place. the only thing that has really changed is that they knocked down the station above ground -- carol: crime. crime. devin: and they crammed madison square garden's on top of that. but everything else, it's a system designed for a different time and a different number of travelers. julia: it reminds me of the movie, "what lies beneath." you talked about the darkness. you actually went down there to have a look at the conditions. the deteriorated quite automatically. talk about what you saw. devin: i made the point in the
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story that you go to there in the dark and i literally commuted out there for 20 years. without really paying attention to what's really, with a ton of really looks like. when you get going, you see they are coated with sulfates and chloride from hurricane sandy. they are literally eating away at the concrete and the wiring and the metal and they have been eating away since -- for five years now. julia: you talked about these flood doors. they date back to world war ii. carol: let's say it again, world war ii. julia: german u-boats. i'm just astounded that they are still there and holding back water. devin: well, they are not holding back the water. and that's the whole thing. would they even be able to hold back the water? people told me about that, these flood doors that date act to -- date back to world war ii. if the tunnels collapsed and the
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water came through, that's the one thing holding up the river. it's like, that seems a little --but when you see them, you have to be kidding me. that looks like it's out of "the bride of frankenstein," let alone the wiring in all of that stuff that dates back to "the bride of frankenstein." carol: anytime i've gone to that station, i run. it's not a fun place to be. its really decrepit. are the tunnels safe? devin: they are safe for now. the big issue, there are two issues. if there is another superstorm like sandy and the tunnels are filled all the way up with water -- carol: and we are seeing more and more of those kinds of storms. jim: i know. historically, there have been worse storms than sandy at catches the high tide. all these factors that made sandy very powerful but it wasn't the worst storm new york has ever seen. in any case, if those tunnels up, there is ay
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possibility it might crack and collapse. there is a level of the sediment above the tunnels washed away because of the building. -- because of the building of battery park city. carol: in downtown new york. devin: yes, that changes the water. that's a concern. but even if that doesn't happen, amtrak says these tunnels and track, within seven years, one of the tubes might have to be taken out of service. that would basically slow, practically shut the whole system down. because you could only run a fraction of the trains through one tunnel, one tube instead of two. carol: dramatic. julia: in my introduction to new york from -- in they had derailments and it was my entry. the critical question here is, and you chart through the attempts to do this, why has it been so difficult? who is responsible the is it and -- responsibility is it and why has it been so difficult to enact an essential upgrade? carol: and amtrak owns it? devin: amtrak owns it, yes, but
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they, amtrak is permanently underfunded. and then you have this situation where, its not really -- it's shared by new york and new jersey. most people going through there are from new jersey, people coming through the north river tunnels. so there have been efforts at various times. amtrak can't afford to fix it up themselves, so various projects have been proposed with the two states would share this expensive thing. julia: and costs are rising. they have been jumping. devin: i know. if you look at gateway, it would involve the new tunnels, rehabilitating old ones. four tubes coming through the hudson would be great. then you fix a whole bunch of other things. that started off as $13 billion about four years ago. well, now it's up to $29 billion. carroll: up next, the silicone -- silicon valley company turning robots into farmers. julie: and uber shields data
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from unwanted eyes. carol: this is "bloomberg businessweek." ♪ ♪
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julia: welcome back to "bloomberg businessweek." i'm julia chatterley. carol: i'm carol massar. you can also find us online at julia: and on our mobile app. in our solutions issue, what if there was a way to eliminate pesticides from crops and soils, and reduce carbon constructions? carol: well there just might be a robot for that. we talked to reporter amanda little. amanda: potato was a machine for the lettuce bought, which was the first ai enabled robot as far as i know, used for thinning lettuce. there were several of them and they all had names that were salad-themed monikers, potato, egg, chicken, caesar.
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potato was one of these first-generation machines and it was sort of testing out this new robotic technology that would emit these sniper-like shots of concentrated fertilizer that would kill the unwanted salad seedlings and let the other seedlings grow. carol: fast-forward to 2017, and this lettuce bot is being used by a lot of farmers. amanda: they get this prototype, this first robot working and within a year, it is thinning 1/5 of all of lettuce in the united states. so it really was a very fast adoption of technology, and these investors saw the potential to build this into other kinds of agricultural robots. so he decides to take this kind of template and build it into a robotic weeder. julia: there is a question about whether this reduces the power
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the likes of monsanto have in the agricultural sector. carol: the farming industry. julia: yes, and also, if it's too expensive for smaller farmers, does all the power of a larger farmers that afford this technology, versus the smaller farmers who can't. amanda: that is a big and important i raise that in this point. story. right now they are talking about a leasing structure about this technology, and they won't sell them the individual machines that a farmer will loan. -- will own. they will only lease it for critical periods of time during critical weed growth periods. and eventually, as this gets integrated into all aspects of harvesting and fertilizing and so on, and that may change. but for now, they are thinking about a leasing platform. they were pretty vague about the cost, and i asked them, what
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does this mean and will this be available to the little guys? and one thing he was emphatic about, it will be easier to scale this and make it affordable for the little guys, the economies of the scale of john deere. this is one of the farmers in arkansas, where they were testing early prototypes of seed and spray. he spent $500,000 a year. he farmed 6500 acres of cotton and corn. he spends $500,000 a year on herbicides. this is a very heavily weedy part of the world. but a 90% reduction in cost is huge. carol: looking for a different solution, how uber is pushing legal boundaries. julia: by locking phones and computers when law enforcement officials raid their computers.
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carol: here is our reporter, olivia. olivia: uber is starting in 2015, getting rated regularly and offices for all different reasons, accusations drivers didn't have permits to operate as taxi drivers, they weren't paying proper insurance or taxes in various cities ranging from paris to brussels to amsterdam. so police would show up at the uber offices and uber designed a program, which was essentially a panic button that would shut down all the computers in the offices so they wouldn't be opened by law enforcement at that time. carol: is that ok legally? i'm sure there are lots of companies out there with delicate information, that unless there is a warrant or just cause, they want to protect that information. olivia: there are different views on whether it's legal and there is a patchwork of legal framework in europe and africa and parts of the middle east, and every country has a different rule. we understand that some tech
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companies do have these panic buttons. what is remarkable in the case of uber is how frequently it was used and how frequently the company's offices were raided abroad. julia: just explain how this works. if the raid took place in brussels, for example, how does the person in brussels in headquarters there correspond with head office? was this something that operated out of the overall hq in san francisco? how did it work? bolivia: we understand that about two dozen times that the button was pressed. the police would show up either expectedly or unexpectedly. when we say expectedly, they would get a tip there are coming or they would see them coming down the street. and then somebody in that office would dial a number or page a number that would set off an alert in headquarters in san francisco, at uber's offices in san francisco, and it would immediately initiate this program to shut down all the computers.
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carol: tell me how you found out about this story. olivia: well, i can't say too much about that -- [laughter] but it is remarkably mentioned in the richard jacobs letter that came out recently as part of the waymo case. it is not called by name, but it is alluded to. there is also a lawsuit in which it is alluded to. then just developing good sources. the most interesting part of the program is that it is called ripley, a reference to the movie "alien." and the character whose name is ripley, was known for nuking things into oblivion. that's what they saw this tool as, nuking a whole all of uber's i.t. in the various offices so police could gather anything. -- could not gather anything. julia: up next, the slowest rollout at tesla. how elon musk plans to meet demands. carol: enough with casual dining, table cloths, napkins
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and chairs are back. julia: don't forget the coffee. this is"bloomberg businessweek." ♪
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♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. julia: i'm julia chatterley. you can also listen to us on the radio on sirius xm channel 119 and also on a.m. 11 in new york boston, 99.1 fm in washington d , c, and a.m. 960 in the bay area. carol: and in london on dab and asia on the bloomberg radio plus app. we have focused a lot on solutions in this issue. julia: yes and one company requiring a solution is tesla, still struggling to meet production goals. >> the model three is coming out, its just much slower than elon musk and many of the folks
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who ordered the car originally anticipated. and the latest news is that the company expected to hit a run rate of roughly 5000 cars per week by the end of june. so they keep kind of pushing back this production ramp and so far, customers are willing to wait. i mean, most people have already been waiting for the car for two years. but there is a lot of anticipation as to the quality of these cars is like in the early models, and you know, how much longer are people willing to wait? julia: we keep asking that question when they get the latest delay. take us back to march 2016 and some of the claims elon musk made at that point, when the model three was first made. because they were pretty bold addictions. -- predictions. dana: in march 2016, when he first unveiled the model three at the tesla studio near los angeles was this amazing event. it was this late-night event. he showed three cars and they had a livestream showing reservations. as he was speaking, thousands of
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people were ordering the car online and you had people waiting in long lines at stores all over the country to place their orders. and very quickly, tesla announced they had hundreds of thousands of reservations. and then in may of 2016, any -- in a shareholder letter tesla , kind of stunned everyone by announcing they were moving up the build plan because of model three demand and that they were going to make 500,000 cars per year in 2018. it's 2018 right now and tesla is nowhere near making 500,000 cars. since the spring of 2016 to now, you have seen these sort of wildly aggressive and optimistic predictions be sort of walked back and delayed. and i think true believers are still excited about the car. the early reviews have been positive. but the number of cars tesla is going to be able to make this year, that number will have to go down. julia: but we are focusing on quality and efficiency. is it far better to have these long delays as far as the
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delivery is concerned, rather than pushing them out there and and then going, guys, we have to recall them because of problems? what is the bigger evil there? dana: the delays frustrate people and certainly some of the more bearish analysts keep wondering, how many more delays can consumers stomach? the longer you delay, the more electric vehicles are on the market. the absolute worst thing for tesla at this point would be a massive recall. tesla does not have dealerships, so if there was a massive recall i don't know if they could , handle all of that. julia: in the pursuits section, casual is out, formal is in. we are talking about food. we talked to editor chris rouser about the trend. chris ever since the financial : crisis of 2008, there was a trend toward casual dining, inexpensive options. carol: austerity eating. because we had to. chris: it was the first agile restaurant to get three stars in
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"the new york times." carol: that's a big deal. three stars in "the new york times" at the casual place. chris paper napkins, people : sitting on benches, eating with their hands. carol: primitive. chris: after that, you have the wave of food trucks. everything with shared plates. you go to a restaurant now, things come out whenever chefs want them to. carol: really casual dining. chris super casual. : then the economy is booming again. especially here in new york, restaurants really follow the lead of wall street. and that trend spread around the country and chefs listened to their diners and realized people want a more special experience when they go to restaurants. they want to sit at their own table, they don't want to share tables with people anymore. they want waiters to be dressed up. they are willing to spend a lot of money on expensive dishes. they want appetizers, entrees, desserts. carol: nobody sharing plates anymore. chris: they just want a fancy,
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old-school dining experience. julia: you said this began in 2016 with the opening of leica coup in new york. chris: yes. it opened in late what -- in the summer of 2016. it is still one of the hottest restaurants in the city. it was sort of the harbinger of this trend. very dressed up. sort of frenchy. the waiters are in suits. but they are nice. the lighting is fun and funky and the environment is not stuffy. it is not like, per se, you are feeling like you are in a church. not that way. it is an evolved version of the restaurant. it's called redux. carol: and it costs more. [laughter] chris: yes. the proof is in the pudding because people are buying these expensive dishes. so people are spending $95 for crab. people are really going for it. carol: you talk about nonchalant
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elegance. [laughter] julia: i love the way you said that. carol: so a la carte menu, no , burgers. chris: for the past 10 years, it seems like no restaurant is complete without a juicy burger that has to go on instagram. april bloomfield was a pioneer in this. and these new chefs are like, no. no burgers. we are dressed up. carol: i like how they said, not a lot of greens on the plate. chris: there was a scandinavian trend of burying everything on the plate and flowers and leaves and things, and that's a little fussy and over-the-top. and that is also not part of this trend. julia: midsummer night dream on a plate. carol: a lot of duck. chris: duck and caviar. it used to be, you would be able to judge a plate-based on roasted chicken. how well do they do the basics? now that has turned into duck, which is familiar but can also
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can show how ambitious the kitchen is. and caviar on everything. carol: "bloomberg businessweek" is on newsstands now. julia: an online and our mobile app. favorite story? carol: you know what it is. you will love this story, too. this is a story by devin leonard, as he looks at penn station. it's a messy maze of hallways. it is really old and run down. julia: the tunnels. carol: they have been there a long time and because of hurricane standing, they are in worse shape. julia: they have flooded. he also talks about flood protection doors, put in place in world war ii. carol: a long time ago. julia: against german u-boats. they are still there. i have been to train stations all over the world. thought-provoking, beautiful buildings. come to new york a bit of a , letdown. carol: when it was first created, it was really a beautiful place. julia: the political football it has become to get the funding to sort this out, versus government level and federal level. carol: going on for a long time. fingers crossed it gets fixed.
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julia: more bloomberg television right now. ♪
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♪ >> president trump says an immigration is deal is probably dead as tension grows about keeping the u.s. government-funded pass this friday. what asian stock is set for the brighter stock after european shares continue to climb. strenuous data says a large fed rate hike. >> jpmorgan and wells fargo flag is a prize. >> lots of money coming their way. bhp sets egg. it is seeking to


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