tv Bloomberg Business Week Bloomberg July 29, 2018 4:00pm-5:00pm EDT
carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. we are joining you in new york. carol: this week's issue is about the space race. jason: so much going on. tiny rockets and drug therapy at the international space station. carroll: we are talking about space aged balloon rides. jason it goes back to money. : billionaires are pouring money
into the space race 2.0. carol: it is an economic story. lebron suspect what we are from our reporter who took us to spacex. jason: not to elon musk, but to a woman behind elon who is making it all happen. max: gwynne shotwell is the coo and president of spacex. she has been one of the people closest to elon musk over the last 15 years or so. she is the person besides elon musk who is most responsible for turning this into something more than a wild set of dreams to colonize mars. jason: where did she come from? max: she is from the midwest, north of chicago. she started at chrysler and moved into the aerospace industry. musk founder in 2002 when there was not a lot there. it was like, we're going to make
cheap rockets and make spaceflight cheaper and eventually get to mars. gwynne said, we will have to sell some of these rockets. she had to do this amazing thing which was convince nasa and some of the private telecom companies which by satellites and send them into space to trust a rocket company that had never launched a rocket. carroll: that is what is amazing. she got the meetings with the people that mattered. how did she do that? max: she said, you are trying to sell the team. there is this great guy, musk, very smart. you are also trying to come up more importantly, you are using the small steps to make the case you are going to do something larger. they were very transparent about their progress. they were test-firing engines -- -- when they had testfiring the engines even when they had , failures, they were very
transparent about saying, here is what went wrong and here is how we think we are going to be up to fix it. this is why you should continue to bet on us. carol: into positives rather than negatives. max: absolutely. and they were charging less money. there was an incentive for these satellite companies and the government to take a risk on these guys. musk is saying, we're untested, but if this works, this may save you hundreds of millions of dollars on every launch. jason: tell us about her relationship with musk. she's unique in her longevity. also, there is a yin and yang about it. it often falls to her to walk back some of the things he has said or not said. max: there has been all these executive departures at tesla. spacex has been a little more stable.
even within spacex, gwynne has been a constant. elon musk on one side is this brilliant, volatile, emotional leader. gwynne has probably very high emotional intelligence, very good at managing people and very positive and probably not swinging as much in certain directions. she is in sales and that is where she came up with the company. it is what she started doing and she has now expanded her purview. she is very good at leading a room and translating the technical stuff into a business model and a story that customers can understand, that employees can understand. even as we are seeing to a certain extent, the public can understand.
jason: what inspired the space issue? joel: we were looking up at the sky and the idea came to us. jason: is space the next economic frontier? joel: we are watching all of these businesses open up this vast potential that has never had the opportunity to be tapped like it is about to be tapped. we are talking about on the ground and in orbit, and by looking at mars. jason: we are also talking about huge amounts of money and the hugest personalities devoting an infinite amount of time and resources to this mission? joel: it helps to have billions to play around with, like musk and bezos. everyone has grand ambitions. all of this gets to a point of how this is being commercialized. bullish projections say this is a trillion dollar industry within the next few decades. carroll: it is fascinating. you talk about the billionaires involved. you cannot do a space issue without talking about musk and bezos. billionaires are similar in some ways but also have different
strategies. joel: elon musk is a remarkable story with spacex. tesla gets all the headlines, but spacex is a $28 billion business. gwynne shotwell makes spacex work. amazon is consuming everything, and disrupting everything, yet he's been methodical with his space company. which has yet to reach orbit. we have seen a recent lift off and landing. you watch him and you're like, this is a methodical way of doing business. who knows what happens? jason: next, we speak with one of the engineers behind nasa's mission to bring a piece of a comet back to earth. carol: and what was it like for
carol: welcome back to "bloomberg businessweek." jason: you can also find us online. carol: and our mobile app. carol: in space this week, a plan. -- a profile of nasa's posh mission. jason: a plan at the space agency to do something that has never been done before. carroll: and that is to bring a piece of a comment back to earth. dimitra: the caesar mission is a team of people led by steve squires, a professor at cornell, who successfully led the mars rover mission. opportunity and spirit.
this is going to travel out to a specific comet, 67p. >> a well-known comet? dimitra: comets are very important to nasa. we know more about 67 p than any other comet. it is a top priority for nasa in the science community. there is a lot of organic material, clues in pristine condition that will give us answers to questions about the start of the solar system and the beginning of life. jason: what you take away from writing this about how a mission gets put together now? it is different now than it was 30 or 50 years ago, even from the mars mission? dimitra: i can't speak to 30 or 50 years ago. i think the mars mission is instructive in terms of just
telling steve squires about putting together all the pieces. he is in competition with another project. a nasa competition, new frontiers, up to $1 billion, a pretty healthy sized budget. the difference today is you are building on everything that came before. i think that is a very important point. there is so much research at your fingertips so you can figure out, if i had this budget cap, how can you create a project that can get out to a comet, which is hard and far to get to, cost-effectively and do what i need to do and bring a sample from the surface of that comet back? that is the key. it is all about the sample. it is about acquiring it and keeping it pristine in the process of acquisition and the process of transporting it back and bringing it back so it was in the same condition it was before. carol: primordial matter. this is the stuff of life and
everything we are all made of. on a comment, it is frozen and pure. dimitra: it is primitive. i think that it has not been tainted so much. they have very high hopes. the key is, make sure it is not compromised in any way on the journey back. getting there is tricky. not to minimize a space craft that can give you there, but the key is bringing it back. you want to minimize certain things and ensure it is all about this capsule it will be in and make sure that the land back on earth and get to the facility where it is going. jason: nasa turn to a company in robotics. carol: we sat down with the
founder. >> honeybee robotics was founded here in new york city 35 years ago. in the beginning, we were providing robotics for the u.s. industry. in 1986, after the challenger explosion, nasa wanted to invest in robotics and this gave me to fulfill the chance of my childhood dream of working for nasa. carol: what kind of robotics? stephen: everyone knows what a robot arm looks like. mostly our work is at the end of the arm. robot hands, things like that. we know how to manipulate things. sometimes they are not hands, but drills or scrapers. that is the kind of work we are famous for. jason: you have a part in potentially what is one of the most ambitious space missions we have seen in our lifetime, the caesar mission. tell us about that in the role you may play.
stephen: i am very proud of my involvement in the caesar mission. if selected, caesar will be the fourth new frontiers mission, a billion-dollar mission. the goal of caesar is to send a spacecraft to a comet and to take a piece of the comet from the surface and take it home to the utah-based training facility and bring it to a cure ration -- to a curation facility. jason: your job is to get that material out of the comet. is that right? stephen: we are going to develop what reaches out and touches the comet and puts 100 grams of sample onto a return vehicle, supplied by the space agency, which will take the sample home to earth.
carol: there are so many moving parts. you guys are certainly part of it. when you think about the grander mission, what could be the longer-term implications of getting a piece of a comet and analyzing the information, where that leads to in the future? stephen: the science questions that caesar seeks to address are among the most fundamental. we are trying to answer the questions of our origins. it is possible that earth's water came from comets when the earth was very young. we know that comets have organic material. the stuff of life may have actually come from comets. we are looking at ancestry, the story of not only the earth, but people and life on earth.
that is very important. a company like ours, we reach out and touch a comet. someday we think we will reach out and touch small bodies, bring asteroids home for space mining operations. it is completely different. it is apples and oranges. space mining will seek to bring tons of rock back to the earth for processing. we will certainly use our caesar involvement on our resume to put the rubber to the road with industrial missions. carol: rare minerals we get from china almost exclusively. maybe someday we will find these on an asteroid and even shall he you have this -- stephen: we know tons of asteroids have rare earth metals. they are used in the electronics industry. to bring back parts that we know have metals and him would be worth many tens of billions of dollars. they will be worth tens of billions of dollars. they are extremely valuable.
for america, we don't have to worry about getting her metals to another country. we're not wondering the earth to do it but we are plundering a route in space. carol: when you think of space, you probably think of the shuttle launches from cape canaveral. jason: a new book that is coming out has been discovered. these are photos that have been under wraps for a long time. they take you right there. clinton: i met john in the spring at a photo festival. he is a fine arts photographer who has spent many years doing lots of different kinds of work. in the 1980's, he was obsessed with the shuttle launches. >> since he was a kid? clinton: he got himself credentialed to photograph many of these launches. he brought a medium format camera, which makes a larger negative than most news cameras did.
he found his position and devoted himself to doing pictures of the shuttle launches. he was there at the challenger launch and that was a devastating day for many people and for him, too. he put all the pictures up in his attic. they stayed there for 30 years. in the last year, he started to revisit them. carol: he had not planned on taking pictures. clinton: right. jason: reading about this was very moving. in the intervening time period, we have all forgotten how much national pride there was in the space shuttle endeavor. you think about sally ride and all of these monumental moments, and then the national tragedy in 1986. i remember president reagan, and it was such a seminal moment in
history. these photos take us back to that time. clinton: they are a little bit out of our wheelhouse, but when i saw them, i felt they were a perfect time capsule of the last great space-age. what an interesting way to interact with this more commercial era of space travel. carol: the camera gets close to the action of the launches, but the photographer is several miles away. you had to create technology to make it work. clinton: john uses a lot of ingenuity, in his fine artwork as well. it is a great combination of wanting to make it happen, and what you get out of the devotion to the shuttle launches. people go crazy for this stuff and he absolutely did. carol: up next, the trump twitter war with iran.
jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: you can also listen to us on the radio. jason: and in london on dab digital. so much news coming out of washington this week. carol: from tweets to tariffs. he jason: we turn to our go-to will guy to walk us through the latest and greatest, matthew. >> is one of what is going on in washington centered around tweets from president trump about his former lawyer. let's start there. let's get into this tape that the lawyer released.
>> his lawyer, lanny davis, who helped clinton on the monica lewinsky stuff. what we got was less than a minute of audio. it is muffled at times, but we do get a clear sense of trump's knowledge of the payments the lawyer says he was making to quiet down the playboy playmate stories who allegedly said she was having an affair with trump. trump tweeted the next day, saying, has a lawyer ever recorded a client before, the legal implications of this are murky, given the relationship between a attorney-client privilege. the biggest takeaway is that this undercuts the trump administration and the trump
then campaign because this happened in 2016. he the things they were saying is had no knowledge of these and payments and did not know you what they were talking about. and about. this undercuts that. you will jason: from domestic politics to geopolitics, the president also tweeted in all caps about iran. i am quoting -- never, ever threaten the united states again or you will suffer consequences the likes of which few throughout history have ever suffered before. and it goes on. what did you make of that? matthew: we paid attention to it for about a few hours, and then something else happened. like it has been for the past year and a half. it was as aggressive as a stance as he has taken relative to
iran. it reminds us of some of the things he was tweeting last year about north korea, with the fire and fury, the likes of which he has never seen. the indication is that maybe this was coming out of the mind of john bolton, the nsa, but we quickly moved on to things around tariffs and all the things that are happening in the trade front right now. carol: speaking of trade, on tuesday morning, president trump tweeted, tariff wars are the greatest. that was the tweet. as a result, he got into some of the implications for farmers and is now providing aid for farmers in the united states as a result of this. matthew: farmers are on the front lines of these retaliatory tariffs in china, eu, mexico, and ag exports. for the agricultural sector, they like the current situation with trade. it is one of the few parts of the economy that has a surplus. we got a $12 billion aid package
that came out of the usda, aimed at farmers, direct transfer payments, the government is going to try to buy some commodities to put them into food banks. they say they will try to extend relationships with other countries. i am not sure how that will work. these tariffs are already costing the economy. it is early, but the indications that it is. to fix this, we are putting more money into this. one of the numbers i thought was interesting to compare to the $12 billion they are given to ag states, the estimates are that the steel and aluminum tariffs are going to put $9 billion of money into the general fund, paid out by american companies that are going to have to buy imported steel and aluminum. so we are getting $9 billion on one hand in the general fund and we are putting $12 billion into the pockets of farmers. republicans, this is not free trade. they were griping about this. no one on capitol hill seems to
like this. trump's tweets seem to be more leveled at fellow republicans. carol: that was the news out of washington about the subsidies to farmers. taylor riggs is here. we wanted to take a bigger look at what is going on in the agricultural sector. taylor: i am your girl. we are coming into the bloomberg. carol, this is such a lousy time for a trade war. even before the tariffs were announced, you have the agricultural industry really in a slump, with prices falling and supply rising. i charted and blue the u.s. net farm income, now down to below $60 billion. in white, the bloomberg agricultural sub index, now down to near decades low, almost a record low. as you can see, even before these trade tariffs started to heat up, a really tough time for the farmers. carroll: i always think it is smart to get a longer term. taylor riggs, thank you. up next, we go to a state space,
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jason: welcome back to "bloomberg businessweek." i am jason kelly. carol: i am carol massar. in this week's addition a deep dive into the final frontier economy. jason: we are talking about drugs in space, medical breakthroughs happening up there. carol: balloons in the stratosphere -- jason: we are also going to russia to look at space junk. carol: first, we start with peter, who has interviewed a
world leading expert on unconventional orbit. jason: there may be a new way to travel in space. peter: kathleen howell is a professor who is a specialist in exotic orbits -- this is a very narrow speciality, but important. when we think of orbits, we think, it is kind of easy, the earth goes around the sun and so on. there are many other orbits and far more complex. nasa is planning to use one of these for the spacecraft that is going to be positioned on the far side of the moon eventually used for human exploration. carol: we are talking about -- peter: it used to be called the deep space gateway. they have a new name the lunar orbital platform gateway.
they are probably going to change it. it had to have special features. the spacecraft had to stay on the other side of the moon but be visible from the earth. they had to make a halo around the moon from the perspective of the earth. if it went behind the moon it would lose contact. they wanted to have it be moving with the moon and the only way to do that is to use the combination of gravitational forces of the earth and the moon. carol: a sweet spot? peter: this is where it gets really technical. kathleen howell was building on work that goes back to the 18th century, the famous mathematician found three of these sweet spots, another one found five more. they are called la grange points. a parking spot in space. it is likea parking spot in
space. you will stay right where you are because of the combination of the gravitational force and centrifugal forces acting on the spacecraft. nasa wants to use the sweet spot. kathleen howell advanced the idea by saying you can orbit around one of these sweet spot. jason: put this in context. we have all of this enthusiasm, all of this money going toward not just getting into space, but space exploration. how does this work? propel that forward. peter: propulsion is a key point.
if you have to constantly be using your thrusters to stay at a certain vantage point from the moon, you're going to run out of propellant pretty soon. kathleen howell's orbit was a near-retro halo orbit. because it is in the orbit near one of these sweet-spots, it requires very little station-keeping. it does not take much to stay in place. they have these xenon thrusters which are totally cool. carol: you doing ok? jason: i am barely hanging on. peter: you use it up after awhile. but if you are in the sweet spot, the spacecraft can stay where it is longer and you save money. jason: up next, making tiny engines in boston. carol: why the world economy
jason: welcome back to "bloomberg businessweek." i'm jason kelly. carol: i'm carol massar. you can also find us online. jason: and on our mobile app. we have a rocket scientist. carol: her company is helping to move around things in space and manage the congestion in the atmosphere. jason: kyle went to boston and hung out with her. let's hear what he had to say. >> a 31-year-old rocket scientist has a very cool
startup that is possibly going to change the economics of space exploration entirely. carol: that is a big statement. explain that. kyle: there is a space race 2.0 right now. with personal computers, everything got smaller and more efficient, cheaper. that is happening in space. rockets and satellites, we are sending tons of this stuff up there. a lot of this stuff is going up there. a lot of it is tiny and a lot of it cannot move around up there. jason: these are things that go up in the rocket and are dispersed into orbit. carol: like satellites. kyle: they are doing a lot of the weather studies and climate change studies, data for investors.
carol: is it just a goes up randomly and then they fine-tune it? kyle: whatever they want. what is being created is a tiny, super efficient engine that stick to the side of these things and can scoot them around space. it is dangerous up there. some of these things are going to hit each other. you want to avoid that. they can get to different places and be more versatile. it makes this competition around the earth more valuable. jason: how did she come up with this? kyle: she was an aerospace engineer and went to m.i.t. rocket school. she is a very subtle thinker, and this is an idea that was overlooked by nasa and boeing.
carol: it is an ion engine? >> it is a liquid salt. she figured out to make a charge liquid rather than charged particles. it is really stable and safe. someone is sending up a $60 million rocket isn't too worried about one of these being on board. nasa move satellites but they do it with chemicals. this is a simple solution. jason: you start to have this intersection -- there's a scene in the story where she is making this presentation, jeff bezos in the front row. part of it is about her dry presentation style. more importantly, she is literally and figuratively in the room with these guys. this could be one of the killer
apps. >> and presenting an idea that a lot of these guys overlooked. carol: zillionaire cowboys. >> she is a different style of person and that was a huge moment for her. carol: what she is doing makes a satellite more valuable. it can stay there longer. >> bezos's customers, they're going to be more of them and the same with musk. >> networks needed to keep computer systems running are shockingly vulnerable. jason: the world needs a gps backup plan. carol: we got more on this story from our editor. >> these days, there are about 2 billion gps receivers in use. by 2022, it will be more than 7 billion.
all of this since the u.s. military that runs the satellite network opened it up to the public in 2000. jason: what has happened since then? they am locked the system and people go when and start developing? >> the most critical part of gps is not the fact you can use it to find the best area at 4:00 in the morning. the most mission-critical part of the satellite network according to the department of homeland security is that the timing signals it sends out are checked by most of the gps receivers in the world
help keep the world computer systems running. they are checked up against one another to make share they are precisely, to the nanosecond, lining up. when they don't, the computer systems can go haywire. carol: it is like this space clock. everything pings off of it. jason: what happens when someone with a bad intention do something to this system on purpose? >> tier four say the system is tough to mess with. -- the air force say the system is tough to mess with. hostile powers can destroy satellites with icbms from earth. another round of problems, if you accept the system out of colorado is relatively secure, once the signal leaves the satellite, they can be messed with in all kinds of ways. carol: what happens with jamming and spoofing? >> you are sending false signals
to the satellite receivers. they think they are somewhere they are not. it has been shown very capable as recently as 2012 and according to sources over the black sea in syria, it has proven capable of sending drones or other aircraft in the wrong direction. jason: some of the most optimistic folks about space are big pharma companies. carol: this is a great story. we caught up with cynthia who told us why the big companies here on earth like doing research in space. >> this is incredible science. drugmakers like amgen and novartis have been doing experiments in microgravity that exists on the international space station.
they have been doing this back to the shuttle era and the 1990's. what they can do up there is take out the variable in the equation which is gravity and that can impact different processes, play with extreme temperatures, other differences like radiation. there are certain things going on that they are trying to harness to see if this is doing this, maybe we can replicate this. carol: help me get my head around this. is it just kind of cool? what is it about that environment that makes it ideal for testing medication? jason: why does gravity matter? >> in gravity, on earth, sedimentation forms. things in experiments might drift to the bottom. without gravity, the particles might be more evenly distributed.
carol: kind of more pure and it holds its form. >> things move more slowly in space. scientists that are astronauts on the space station actively manage these experiments. what they can do is see him purity's along the way that happen more slowly in space and make a cleaner experiment. it is about early-stage research and through this, they're able to maybe design things better. i am writing about small biotech using this to run safety studies on their drugs. it is about using these extreme conditions to modify the early stages in the science. carol: tell us about this harvard researcher.
>> i was down to cape canaveral for the launch. she started her own company with her husband. they are studying endothelial cells. these cells in a healthy body would normally not be growing. in the case of a cancer, they are going to see cancer in the blood. what she is studying is that the cells don't grow in space. if her hypothesis is true, she can test your drug against them to make sure her drug does not impact the healthy cells. she won this contest in massachusetts and her work is being supported. there are all kinds of other things going on from that in terms of creating that environment in the space station for her to do the work. jason: up next, the company that claims to have unraveled all the mysteries of the stratosphere. carol: and the second life of fallen space metals in russia. jason: this is "bloomberg
carol: welcome back to "bloomberg businessweek." i'm carol massar. jason: i'm jason kelly. you can also listen to us on the radio. carol: and in london on dab digital. we have a profile on worldview enterprises. a pretty cool story. jason: this is a high-altitude balloon company. they think their balloons can predict the weather and maybe even take tourists into space. carol: we caught up with the cofounders. >> we are able to send all kinds of things to the edge of space, for things like remote sensing, for communications, really
awesome weather applications. in the future, we want to take people. we are focused on the whole remote-sensing communications aspect of the company right now. carol: what is interesting because our producer is going to want to show the video. what was interesting about that, that was your first payload you guys sent up into the atmosphere. as a result, i think it gave you money to do a lot more research and development and to fine-tune what you are doing. >> we have been able to have paying customers on all of our r&d flights. they kicked that up with a great sponsorship. it helps to have that support. >> it was fun, too. jason: i can only imagine. there is so much talk about the billionaire space race and rocket launches in spacex.
this is a different approach both in terms of the science behind it but also in terms of the experience for the people who are going to do this. why this format? carol: and we are talking about balloons that have been around for hundreds of thousands of years. >> that is right. they were the original flight vehicle for humanity. we are talking about 21st century balloons that can flow to the very top of the atmosphere. that is completely underutilized right now, so underutilized they are able to develop a whole new economy in the stratosphere, which is really exciting for us. we are really launching into this new business with being able to stay over an area of interest. if our customers want to stay over a specific location our
technology can do that. when you think about a rocket flight, it is the opposite. it has lots of energy and you are fighting gravity. this uses gravity. it is gentle. it is the most efficient way of getting up to the upper reaches of our atmosphere. >> as the daughter of a rocket scientist, how do you navigate with them? don't the winds toss them around? you talk about solar energy. get into some of the details about how they work. >> one of the things we found early on doing research is that those wind layers in the stratosphere are stratefied.
they tend to go in different directions. by navigating between these layers of wind and in between the layers, we find we are able to stay in one place or go from one place to another in a way no one thought possible. these large balloons that hang out in the stratosphere use that -- use solar energy to compress air into a tank to go down. we take care out to go up. it is a melding of different technologies to make this happen, which is why it has not happened before. jason: russia has always been a powerful force in the space race, but now there is an unexpected industry. carol: listen to this. you have got people living near launch pads and who are turning space junk into everyday necessities. jason: our reporter brings us more. >> this photographer said in northern russia, a lot of space
junk falls out of the sky and into the ocean. he found a community of people, sort of remaking this trash into whatever fits their needs. all kinds of crazy stuff. jason: or just garden ornaments. carol: that is what is wild. you show these pictures. some of this scrap metal, rocket rubbish, there are valuable components. is it titanium? >> i think that is right. it is surprising they do not get cleaned up. it is a very remote location, hard to find. jason: as we enter into this accelerated era of commercial travel this is what is happening now, in a remote part of the world. are we headed for a world in which we have rocket mementos in
our own backyard? carol: the other thing that is interesting, too. from what i understand, they have done swapping of the material. it is this weird economy that had been created. >> this whole space ecosystem is fascinating. it is illicit. he made two trips a little over a year. he stayed with people who gave him their time. they are not officially allowed to be trafficking in this stuff. he had to sneak into private zones to get to it. it is determination. carol: "bloomberg businessweek."
is available on newsstands now. jason: and on our mobile app. the whole issue is a must-read. carol: my dad was involved in early space exploration. i will say, that story was fun. this is about a possible mission to grab a piece of a comet and analyze that material that will tell us more about life on earth, and civilization. jason: i love that we got to talk to one of the guys involved in that. he was amazing. and he really got to some of the emotion embedded in this project. carol: he said there's so much going on when it comes to space exploration. jason: i loved the story of the balloons. that part of space, under space, in some ways it is a different final frontier. hearing them talk about their own story and where it is going, amazing. more bloomberg television starts right now. ?
emily: i am emily chang. this is the "best of bloomberg technology." coming up, $120 billion wiped off facebook's market cap in the blink of an eye after earnings disappoint. what has investors nervous, ahead. plus, how the rest of tech faired. we will dig into amazon and alphabet as well. president trump's fight with china