tv Bloomberg Business Week Bloomberg January 28, 2018 7:00am-8:00am EST
it's a new kind of network designed to save you money. call, visit, or go to xfnitymobile.com. carol: welcome to "bloomberg businessweek." i'm carol massar. we are inside the magazine's headquarters in new york. this issue, the next generation of digital currency. america eyes energy independence, and an inside look at one of london's most secretive members clubs. all that ahead on "bloomberg businessweek." ♪ carol: we are here with the
editor in chief of "bloomberg businessweek," joel webber. a lot of good stories this week. joel: i try. carol: and you succeed. i want to start with finance, first of all, the digital currency world. while we spend time talking about bitcoin, there's another currency that you guys have been looking into. joel: part of this is, the crypto boom and maybe the receding of said boom that has created a lot of confusion. right? it seems like bitcoin is a hot thing, and then ethereum and ether. where are my supposed to get into this? there is another that has caused a lot of attention recently, called ripple. so we wanted to take a hard look at ripple. one of the things we did is, in talking to the banking community -- because ripple says it is a banking solution. we talked to the banking community said, we don't know what this is for. carol: not so much? joel: xrp, the digital currency affiliated with ripple, the thing is sort of like, what is this going to be for? even though there is a lot of enthusiasm, there's still reason to be really skeptical. carol: it makes you scratch your head a little bit because we
do know the financial community says we are new to digital currencies, doing collaborations or looking to blockchain. we know that there is activity and momentum. joel: what will stick? what is going to be real, and what is the application for it? with ripple, they say one thing the company is very enthused about it. but the customer base is not as much. carol: another story i found fascinating and i think it is a sign of the times, dealing with climate change, the ratings organizations and how they are incorporating disaster scenarios potentially in ratings. joel: which is big business. right? that is what this boils down to. the rating agencies, as we know through history, have been on both sides of it read this is a chance for them to step up to the table and maybe reevaluate some of the things they have been doing. carol: it makes sense.
if you look at some of the weather situations we have had, whether it is hurricanes, floods, fires, this is adding up to a lot of costs impacting cities and the country. that is why they are thinking it is time to rate. joel: they can potentially get worse. it shows productivity on their part to address something that could be snowballing. carol: the bottom rating agencies, sometimes good, sometimes not so much. they missed enron, they did miss the subprime mortgage meltdown. you wonder where they are in this curve. joel: and this is maybe showing that they've recognized some errors of their past ways and they are actually trying to chart a new course. carol: speaking of new course, the cover story this week takes a look at the new world energy order. right? who would have thought that the u.s. might be a leader when it comes to oil domination? joel: this is a story i was really excited to get in the magazine, and the moment i heard about it i was like, let's do it. there's a stat we found out that
the u.s. is almost on the brink of passing 10 million barrels of oil a day. carol: give us some perspective on that. what does that mean? joel: we've not had that number since the nixon administration. we are talking decades, here. that shows how dominant the u.s. has become in producing oil and that really challenges the geopolitical order of things. because opec, russia, they are less relevant. and as the price of oil has climbed up, $65-ish, 10 million barrels of oil a day at $65, that is a disruptive element. but at the same time, this is oil. should we be doing this? is this good for the world? environmental,e right?
you have an administration and president talking about expanding into offshore drilling, going into the arctic national wildlife refuge. there's implications of that. joel: there's a job element to this, the economic growth that comes with it, which is why we boiled it down to our cover line, "good for the u.s., bad for the world." carol: fascinating. i want to go back to what you say about geopolitical considerations. because we have, as a nation, right, and this is in the story, about tiptoeing around oil-supplying nations, which has put us at a disadvantage when it comes to dealing with other parts of the world, particularly the middle east or russia. joel: it really shows american ingenuity as well. fracking -- and this is largely via fracking -- this is a technology that has been around for a bit, but we have perfected it and moved it into a place that kind of makes us the envy of the world. and it is true, it is the driving force behind all of this. carol: what is it going to mean for the middle east specifically? there is another story in
businessweek that takes a look at what is going on in saudi arabia, the corruption crackdown, and that is a country that is trying to evolve and fast because they have been hurt by declining oil revenues and other situations. what does it mean potentially for relations with the middle east? joel: i think for the u.s. it just shows we are inching towards energy independence. we are not there yet, but between the growth and renewables, this is a viable diversification you could call it. it does put saudi arabia in a different place. keep in mind, saudi aramco ipo, we don't know if it will be this year or next year, will be the biggest ipo ever. we don't know how much oil they have, but they are not going away anytime soon. carol: making oil a cover star was the job of our creative director. rob: oil stories are particularly challenging because
every business magazine has done them many times in the past. we wanted to get what made this oil story different. it is not just that there is an oil boom in america, but what other repercussions in the rest nothe world, which are great. carol: exactly. there's a good and bad side to this. rob: we didn't want to make it this big celebratory thing or just show a shining oil barrel as a new hope for the american economy. we wanted to show both sides of it. we did that by making the headline large, was fairly clearly get that that. carol: but if you look at the magazine one way and then flip it the other way, is the whole idea that there's two sides to the story. >> exactly. it is obviously very intentional that good for the u.s. is a puff, and a pretty-ish skyline. and at the bottom in the murky oil in red type is a little more sinister, that it is actually bad for the world. carol: coming up, a look inside saudi arabia's ritz-carlton jailhouse. and, a growing threat from india's sacred cow. this is "bloomberg businessweek."
here is editor matthew philips. matthew: it was unannounced and happened overnight. hundreds of people were rounded up, some of the most prominent, richest members of saudi arabia's princes and billionaires and cabinet officials, rounded up and put in the ritz-carlton in riyadh, one of the world's nicest hotels. it is a 5-star prison, and they've been there since then. no access has been granted to anybody since then. they are slowly making their way through this group of people and coming up with settlement terms. they let our reporter in over the weekend, who wrote this, who is based in dubai. got a call and they said, we want to bring you in and talk to you. he very quickly flew to riyadh, went on a sunday night around midnight. he describes the scene. it is kind of eerily empty and there are saudi officials around the lobby with arabic music being piped in. they are kind of going through a headcount. the attorney general of the country is sitting on a couch by himself, and basically looking at who has been released, who remains, and how much they actually expect to net from this. the number is pretty shocking, about $100 billion of settlement deals they have been able to negotiate with these people. carol: huge question i have when i was reading the story. now you've told me how he got
access to the hotel, why did they let him in? matthew: that's a great question. he is one of the few journalists who's actually been granted access to this. the whole hotel has been a lockdown compound for the last couple months. so look, they had a story to tell and they chose bloomberg to tell it. they are winding this thing down, and their story is that this is great for investor confidence, a clearly long overdue anticorruption crackdown, although there are those who think that it's a little bit of that, but also this naked political purge that the 32-year-old crown prince mohammad bin salman, the youngest son of the king, organized behind the scenes. carol: i felt conflicted about the actions.
right? because this is a country, you talk about the crown prince has really been embracing change, bringing about modernization to saudi arabia, allowing women to drive. he's really been trying to move the country forward. at the same time, there was so much secrecy in this crackdown, and it doesn't seem like a lot of transparency since november about what was going on. matthew: that's right. that is the real big question about this, how do the markets and investors feel about this? right now as davos is going on, the ceo of the world biggest oil company, saudi aramco, the ipo of which is a big part of the kingdom's economic revitalization, he is there talking about how this is great for investor confidence. see, the country is cracking down on corruption. however, there's another undercurrent that is more nefarious, that there is no transparency here. we were unable to meet with any of the detainees, they will not discuss individual cases. in fact, one of the most
prominent of the detainees, prince alwaleed, the richest saudi, we don't know where he is. there are a lot of conflicting reports about where he is. we have sources telling us he is still at the ritz, and sources telling us that he's been taken to another site and is still in negotiations, and that he balked essentially at the kingdom's plans to take control over his $9 billion holding company. carol: in the economic section, cows are considered sacred by many in india's hindu majority, but that is causing issues with the government's plan to expand its milk industry. here is the editor. >> the hindu majority in india consider cows sacred. since of the hindu nationalist party, those groups, there has been much more activity around the protection of bovines. carol: talk about the stuff that has come out of the government
that has kind of ramped up the protection of cows. reporter: in may, the government issued a ban on the transport and sale of cows at animal markets because they said the treatment of the animals was particularly bad in those settings. the india supreme court stopped the ban from taking effect, but the message that seemed to go out, at least to people who support protecting cows, said that this is a priority for this national government. in effect, the ban is being enforced by vigilante groups, which have been targeting cattle traders and sometimes transporting a cow from one village to the next can get people to become targets for these attacks. carol: i mean, people have been
killed over this. reporter: yes. last year there were i think almost 200 attacks, and 11 of them were deadly. it is gruesome. but modi has come out against the vigilante groups, but there's still the feeling that there's this sentiment that is taking root. carol: what is happening -- and you guys write about this in the story -- what is happening for farmers in india, they are actually abandoning their cows -- right? -- and opting for water buffaloes to produce milk. cristina: 20 million cows are being abandoned in india right now because if you are a dairy farmer -- and we are talking about, india has the largest dairy industry, $53 billion industry -- a lot of it is very small farms and small herds. if you are a farmer and that cow is no longer producing milk, you would send it to get slaughtered and recover the cost of raising it.
certainly you really can't afford to pasture it forever. most of them can't, so they are letting them loose. that creates problems for other farmers. that is why we are seeing these rescue shelters like the one in new delhi. there's about 5000 new ones that have cropped up since 2011 to take care of this growing population of stray cows. carol: up next, the deal that bought u.s. lawmakers time to keep the lights on. plus, how hedge funds secretly manipulate the government to make investments go their way. this is "bloomberg businessweek." ♪
♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. you can also listen to us on radio on sirius xm channel 119. and on 106.1 in boston. area. in the bay bloomberg radio plus app. in the featured section, an investigation into dci group and how it helps hedge funds influence lawmakers. we talked to a reporter. reporter: this is a house subcommittee of the house of foreign affairs. they're thinking about international issues and specifically latin america. what can we do to try to kind of build prosperity and economic growth in latin america?
their lead witness is this guy, james k. glassman, this silver-haired, washington wise man who's a former top ranking u.s. diplomat. he founded a think tank. he has this incredible resume. he published, "the new republic" and, "the atlantic" in the old days, so really incredible guy. he comes in and has these very specific points to make about latin america. he says argentina is mistreating its bondholders and it needs to change that. he says now puerto rico is threatening to do the same thing to investors in this public utility that it had. and by the way, there's also this tax dispute with this bank in puerto rico, and the government is wrong there. they need to fix that. and by the way, isn't it too bad what happened to the general motors bond owners? all of these random topics. carol: but very specific. reporter: yes.
and at the same time he is speaking -- and this doesn't come up at the hearing -- he is working for this company that is essentially a kind of affiliate or front group for a public affairs firm that represents people in all four of those cases. carol: this company is called dci. we will dig into this. first of all, this individual sounds like someone we in the media would want to talk to when it comes to latin america because it sounds like he is very informed. why does he have access? just because lawmakers reach out to him? him zach: right, so that's a good question about how that hearing got put together. i don't know if we will ever know the whole story. but james glassman has been, since about 2000, taking positions, thousands of op ed's, testimony before congress, and writing studies. during almost all of that time he's been working for one company or another that is affiliated with this one public affairs firm that has clients who have interests that line up with the positions he's taking.
and carol: tell us about this company, dci. who are they? you say they are public relations firm, that sounds not very threatening. as you say, they work pretty closely with the hedge fund community. zach: this kind of covert influence operation has been around washington for a long time. people call it astroturfing sometimes. it has been around for decades. but what is relatively new, there is a new client base coming in of hedge funds. rather than, say, tobacco or telecom companies, traditional users, you have a hedge fund that makes a bet in the market, they buy a stock or bond, and government has an opportunity to make a decision that could make the value of that bond or stocks go up. him so the goal of these campaigns is to influence government not to benefit a company, but to essentially benefit the price of a security. carol: interesting. through policies or policy changes.
zach: that is right. carol: so what is the difference -- as you said, companies have been sending people to talk to lawmakers, testified before committees, doing lobbying for a long time. it is kind of a way of doing business. what is different about what massive companies would do versus what hedge funds are doing? zach: right, great question. in terms of techniques they are similar. if you think of the interests of hedge funds and how they are different from corporations, exxon mobil, there's been certain kinds of regulations they disliked. they disliked them in the 1980's, 1990's, and today, and probably 10 years from now. that is just part of being an oil company. there's a certain kind of regulations that you see as unhelpful. very different for a hedge fund, which might make a bet in the
market, pursue a lobbying campaign to make that payoff, and then turn around and sell that security at any point, maybe go short. it kind of makes corporate lobbying seem quaint. carol: staying focused on capitol hill, we take a look at how a land made up of immigrants is fighting so much over immigration. here is economics editor peter coy. peter: this is fairly new for the u.s. to have this kind of partisan divide. we sort of take it for granted on a day-to-day basis. well, of course republicans are strongly against immigrations and democrats are strongly in favor. it was not always that way. until as recently as 2006, returning to the pew research center polling, there is only a few research points gap between voters on their favorability toward immigrants. carol: so republicans and democrats alike are ok with immigration and immigrants. peter: right. i mean, neither party was all in, strong in favor, but kind of very close. what has happened since then in the past dozen years, democrats have taken a much more
favorable, and republicans a little less. not way less. what has happened is that has made immigration into a wedge issue for both parties that they can use to try to drive and consolidate the people on their side and try to pull them away from the other side. carol: how did this happen? peter: that's a great question. i mean, i think there's a lot of factors that went into it. one is that organized labor, the afl-cio, was traditionally a little anti-immigration on the grounds that the incoming workers would be taking jobs away from -- especially on the low skilled end of things. starting around 2000 or so, they sort of reassessed and said actually, a lot of people who are in our unions now are themselves immigrants, and some of them are undocumented. maybe our interests have shifted
and what we should be trying to do is make sure that employers don't discriminate against those people. we don't want huge numbers of them coming in, but -- that was one big change. carol: it is interesting you talk about the republican party and the business groups out there and how republicans will listen to those groups on issues like taxes. peter: and the deregulation. right, but when it comes to immigration? peter: the two big powerful voices in washington -- the business roundtable and u.s. chamber of commerce. both are quite open to immigration. they see it as a force of, like the japanese said, vitality. they put out the press releases, but they are getting ignored by the republicans on capitol hill and the white house. carol: just ahead, nigeria goes old-school when it comes to cryptocurrency fraud protection. and a look at the cost of free speech. this is "bloomberg businessweek." ♪
♪ carol: welcome back to "bloomberg businessweek." still ahead, china defines the dachshund defying the laws of economics. protests and counter protest. and the private british club hoping to plant flags in new york. that is all ahead on "bloomberg businessweek." ♪ carol: we are here with the editor-in-chief of "bloomberg businessweek," joel webber. many more must reads in the magazine this week. there is feature story on china talking about how they are maybe
kind of getting around the laws of economics. joel: the chinese, i think it is just a fascinating story. we can basically do a china issue every single week. i think this is a particularly interesting one because there is a lot of questionable data. carol: yeah. joel: when we were talking about this story, i said i think the thing that really resonates with me about this is that the writer basically says we don't understand why this is happening, and yet maybe they had actually figured out something that no one else has figured out, which is part of a conversation i think we haven't had before. carol: there's some basic rules of economics. china continues to defy that. you guys talk about their growth, still there but slowing down dramatically. joel: looks like a great, steady line. it is almost too perfect. carol: and talk about a steady line, their mountain of debt continues to grow. some would argue you need to overhaul their system. joel: this is probably the year of deleveraging, which will be an ongoing conversation i know bloomberg news will be focused on and "business week" as well. that is ultimately what the economic story is here. what everyone is trying to wrap their head around, what is the outcome going to be here? every other time something like this, the debt grows like this, it ends badly.
tighter controls if you look at the internet. all of that would go against thinking how you fix. what do the economists you guys talk to say? joel: there is another theme i think is important with china, almost the further you get away from beijing, sort of the more bearish people get about china. which is interesting sort of a subtlety to this conversation. he come i would think, falls in that camp. yet he says i've always been a bear on this, yet, have i been wrong? he is saying, let's talk about this. carol: you think about some of the things china does. when there is a problem, they got a ton of money they can throw at something, they have thrown a lot at something like infrastructure. joel: maybe their version of capitalism is maybe a better, different version of ours. that is why it is a mystery. carol: it is a mystery. right? and i guess the other debate, at some point, is that the next big financial crisis? joel: if it were to be, what would it look like? is it as global as the financial crisis we had 10 years ago, or is it a different version of that? there's a lot of other people who have comments on that. but it doesn't look like it is an impending situation at the moment.
carol: another feature in the magazine this week is about the cost of free speech. joel: this is just a fabulous idea, a photo essay that started about a year ago with the march in washington. we had a photographer who basically started to photograph all of the various marches. in addition to the marches, things like charlottesville. we were there throughout this tumultuous year photographing it all, and then susan berfield did this amazing piece to accompany that, which is, what is the cost of free speech? right? when there are rallies, what happens to businesses? what happens to overtime and stuff, what happens to businesses? it is a fascinating undercurrent that we are allowed to have free
speech, but what are the economics of it? carol: i will say, it is getting more expensive. we have more on this story from reporter susan berfield. reporter: this is a photo essay. a photographer went around the country for the past year and he was shooting some of the rallies and events that we know about -- charlottesville, berkeley. and then a lot of rallies and protests in smaller towns, mostly centered around white nationalists or extremely conservative people coming into town, and the counterprotesters that also amass and what happens in those situations. carol: specifically you talk about one individual who came to florida, the university of florida in gainesville, richard spencer. tell us about him. susan: he i think takes credit, probably rightly, for coining
the term, "alt-right." he is a white nationalist. he run something called the national policy institute. in the past year he has tried to go on public university campuses to speak, and that has caused universities a lot of grief and trouble and sometimes expense. he actually rented the space where he was going to speak at the corner of the campus. carol: the campus did not invite him, correct? susan: correct. the university of florida gainesville did not invite him, did not want him to come, tried to stop him, but he has first amendment rights at a public university to rent the space. he paid roughly $10,000 for the auditorium itself and for security within the auditorium. carol: what do you mean he has the right to rent space at a public university? reporter: the first amendment guarantees the right of free speech in public spaces. unlike private universities, public universities cannot turn people away because they are controversial, because their
speech is hateful, not even necessarily because their speech could potentially incite violence. if the speakers themselves incite violence, that is something different. carol: tell us what was involved. the university of florida at gainesville knew that this was going to be potentially --there could be riots, people that were going to be coming to protest his speech, so they had to prepare. susan: imagine, you know, charlottesville was middle of august. richard spencer was there. it was the unite the right rally. violence, death, injuries. a few weeks after that, the university of florida here's -- hears that richard spencer, the same guy, was to come to their campus. they begin preparing. initially they do try to turn him away. he threatens a lawsuit. they realize they are not going to have grounds to turn him away so they begin planning, and they
really draw on law-enforcement from throughout the state. they also deal with richard spencer and his group and try to understand how many people they are bringing. they are trying to understand the counterprotesters that are going to come. in all, the university president estimates they spent $600,000. the event was two hours on a thursday afternoon, but it practically shut down the campus. in the end, he came, got on stage, and was shouted down, and left the stage early. carol: up next, nigeria battles bitcoin scams. and the challenge of getting millennials to love slot machines. this is bloomberg businessweek. ♪
♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. you can also find us online at businessweek.com. and, on our mobile app. in the technology section, bitcoin scams have become commonplace in nigeria, so a group of traders are taking matters into their own hands. here's editor jeff muska. jeff: starting in late 2015 through the end of 2016, nigerians became interested in bitcoin for mixed reasons. a lot of nigerians, about 3 million, became victims unfortunately of a 30 year global ponzi scheme with origins in russia. in the course of a year and a half or so stole about $50 million worth of money in bitcoin from them. this in a country where a per capita income is less than $3000. the push into bitcoin came as the local government started to crack down on the scheme and bar local banks from dealing with
the originators. they say, no problem, if you want to buy in, just buy in in bitcoin. a lot of people got burned. nonetheless to hear this huge industry of bitcoin and cryptocurrency traders that have sprung up in nigeria tell it, this is really the origin of people in nigeria taking bitcoin, an alternative currency, seriously, as a way to make money and score value. carol: let's see some numbers behind it. you include that in the story. you edited this story. nigerians are trading about $4.7 million worth of bitcoin every week from 300,000 per week about a year ago. that is a pretty tremendous ramp-up. jeff: absolutely. currency exchanges and crypto traders who say it took them
years and years to get up to 10,000 customers now say they've added 90,000 in the past year. carol: this story takes a look at kind of these informal exchanges that have been created by people in terms of kind of monitoring and managing bitcoin. tell us about that. reporter: in nigeria, where the local exchanges are becoming flooded with people who are new to cryptocurrencies, and scammers have flooded into the marketplace. the most common way to try to rob people in nigeria of their cash are either by what's known as cloning profiles of existing reputable traders, photos from the internet, maybe some identifying information and just passing it off for long enough to pass a cursory background check. or by the same token, trying to arrange for payment in the local currency and then disappearing once they have got the money. carol: a rather sophisticated way of scamming people. jeff: some old, some new.
the old way cryptocurrency aficionados have responded are, with old-school anti-fraud detections. a few hundred up to 1000 people, generally a handful of people in charge of acting, mistrusting bankers, hand verifying passports or id information and in some cases hold money in escrow in certain transactions. carol: in the small business section the company gambling on people in their 20's to play slot machines. here is reporter chris palmeri.
chris: it has been a slow recovery from the great recession when people realized they could cut back on gambling. the big challenge for the industry is younger people just aren't playing as much as their parents or grandparents, particularly slot machines. it has been sort of a 1%, 2% growth nationally, driven a lot by new properties opening up all around the country. carol: it is interesting to go to vegas. i am not a gambler, but there are great shows to see, places to eat and the younger generation embracing that part of it. reporter: exactly. they will tell you in vegas it is about 65% non-gambling revenue, at the big casinos which is a total reversal from a decade ago. steve wynn just said he is building two more new hotels because they make more money on hotels. carol: let's talk about slot machines because casinos make a lot of money on slot machines. so, how are companies, how are casinos kind of adapting slot
machines that are out there to attract millennials? reporter: the idea is that the millennial crowd has spent so much time on screens already from smartphones to video games. when they go out on the town, they don't want to sit in front of a screen and push a button. they are looking for devices that are more interactive, that create an opportunity for people to play with their friends or spouses. these games are looking a lot more like arcade games than slot machines. carol: tell us about the cofounder of gamblit gaming and what he is doing. reporter: he was an electrical engineer the previously worked for a company that made these ticket receipt printers for the slot machines, and decided he would start a new company to address this issue, to young people more active on the casino gaming floor. he came up with these ideas and learned a lot in the process. some of his original presumptions haven't panned out. for example, he thought these devices -- one game is a video poker game that looks like a table, you have four people standing around it and get a couple of cards, and then cards pop up in the middle of the
table and everyone competes to grab the card they want and get the ace or whatever. it is an interactive, fun, communal thing, while you are gambling. the assumption was that you would put these in bars where young people hang out and it would be a big hit. not the case because the people at bars are watching sports, flirting with somebody. they are not interested in gambling. so really, the machine on a traditional casino floor did a lot better revenue wise. these are some of the things he is experimenting with and working with caesar's and mgm and some of the biggest casino operators. carol: up next, the engineer creating technology that helps american olympians go for the gold. and the best place to network in london may be coming to new york. this is "bloomberg businessweek." ♪
♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. you can also listen to us on radio on sirius xm channel 119. on am 1130 in new york, 106.6 boston. am 960 in the bay area. and in asia on the bloomberg radio plus app. in pursuits this week, the game changer is a bioengineer and the training gear he created for olympic athletes. reporter: there is in the past decade or so, increasingly every year, there is investment in countries, that america spends on getting their athletes a little bit faster. sometimes we are talking hundredths of a second faster, and that could be different between finishing in first for the gold medal and fourth for no medal at all. carol: talk about the individual who is very much involved in making sure the u.s. athletes are really high tech.
it is not like it is one of the well-known big tech companies. it is an individual working out of his house. reporter: we wrote about him. he heads the usoc's technology and innovation. he goes around to the olympic committees and says, hey, what can i do? what do you need from a tech perspective that might make that 1% difference? for example, the ski team told him recently our athletes are having a hard time visualizing the slopes. what can you do for that? he and his team built a vr platform that has all the slopes they would be competing on in one headset, and a skier sitting on his couch between workouts or after dinner can pop on a headset and visualize that slope in pyeongchang where he or she will be racing in the olympics. carol: so they do kind of test runs. reporter: exactly. you can mentally see the exact run you are looking for, etc. that can be the difference
between winning first or getting fourth. there's a lot that he and his team are working on. some are things like that, others are totally cutting edge, not available to the public yet kind of stuff. it is fascinating. it is a cool space. carol: also in the story you talk about what he did for the u.s. women's cycling team. reporter: that is what he actually said he was most proud of. they worked with an eyeglass company to create connected sunglasses that the cyclists wear and projected on a screen inside the sunglasses was data on how fast they were going, what their power output was, their heart rate was. carol: as they are working out, automatic feedback. jeff: they're seeing all of it. it is more efficient because you don't have to look down or across. if you are a serious cyclist, you have exactly the power you want to be in, in the
most efficient and best performance zone. he has built those for the ski team this year. in the goggles when they are training, it is a similar kind of technology. and that is the kind of stuff that can make that tiny difference. carol: mounir zok, who is he? he is a game changer in the pursuit section this week. eben: he's a biomedical engineer who started a few different sports wearable companies in europe. he was working with the italian ski team and a few other of italy's olympic teams. the usoc based in colorado springs in america was looking for a guy to head their division that has the expertise to do stuff on his own. not just partner with people, but maybe in the time he has developed some things by himself. they enticed him to come over. he's now out in silicon valley, obviously the cradle of tech and innovation. those are his people out there. carol: originally he went to their offices in colorado. reporter: i think it was pretty clear that he's probably best suited to be out closer to all the companies that the usoc is working with. carol: what was most striking to
you in talking to him? eben: the most amazing thing to me, i think a lot of these things he is working on are things being developed by massive companies, moonshot laboratories. we've heard under armour and nike and indeed us talk about smart tech technology for years. a future where the shirt you are wearing tells you what you are eating, your heart rate and he has already built that. there are olympians that will be competing in south korea doing so using a smart textile skin suit that measured all that already. carol: also in pursuits, what it is like to be a member of a private club in london and the plans to expand to new york. reporter: i was just there two weeks ago. it is the most fun club, a
private club that has restaurants, meeting areas, lounge areas, and a very cool nightclub downstairs. it has been hot since it opened in 2012. carol: it is a private club. reporter: a private, members only club. only certain people can get through those red doors, and that makes it even more cool. recently they announced they are going to move to new york and take that format, which costs them $50 million to build it in london, to here in new york. union square. carol: tell us about the experience. members only clubs have been around forever. reporter: totally true. london, new york, a lot of places have these private clubs that are members of only. you go in, oftentimes you have to wear a blazer. they have health clubs, fancy dining rooms, but have become kind of old-fashioned and they aren't super fun. the thing with lulu's and soho house is that they really went for a younger audience. the entrance fees are in the $2000, $3000 range as opposed to
much higher for some other clubs. because of that they are attracting a really cool crowd and have this prolonged energy. carol: and a prolonged waiting list. reporter: yeah, and it discriminated against bankers in some cases. they really want creative types, whatever that means. they really sort of try to curate the membership to create something that seems really cool. carol: it is interesting, the club in london has george clooney as a member. reporter: they got some big deal people and backers. these are all backed by vc's and big international investors because this is actually a great value proposition. carol: talk about the value proposition. it sounds like if you got an annual membership, you have cash flow right away from day one. reporter: you got the real estate play, or you own real estate in cool neighborhoods, which is a long-term gamble. immediately, because you pre-book memberships, you have a day-to-day cash flow. these people aren't going every day.
you have these fees from a few thousand people who don't really even use the space, so your day-to-day stuff actually turns profitable. carol: the other thing we see along this line is you also have high-end co-working spaces. reporter: these places are admittedly a little snobby, and can be expensive and their primary competition is wework wework co-working type of places that have gotten fancy. fancy amenities, restaurants, things like that. that is kind of a competition, and those also have total international financial backing. those are big investments. carol: anybody think they are tied to the economy? they are in london and moving to new york like ok, things are going really well. i just wonder what happens maybe in a downturn. reporter: we've noticed this with restaurants too. the move back to fancy exclusive experiences as opposed to shared plates and communal things, that is definitely a trend in hospitality and dining now. people really want fancy now. carol: "bloomberg businessweek" is available on newsstands now, and on bloomberg.com and our mobile app. more bloomberg television starts now. ♪
♪ nejra: the mifid squeeze, moody says europe's new regulations are damaging to asset managers. how credit negative is mifid ii? a deal favorable for the city of london. plus, trump one year on, the differences the president has made towards differences in the american financial sector and what is next. welcome to "bloomberg markets: rules and returns". i am nejra cehic in london.