tv Bloomberg Business Week Bloomberg February 9, 2019 8:00am-9:00am EST
and get 15% off your mattress - and free shipping too. just go to buyleesa.com today. you need this bed. ♪ >> we are at bloomberg headquarters. >> this week's issue, how to fix capitalism and build prosperity. >> the magazine investigates what happened to president's four and half billion dollar deal. >> we begin with the international cover story, a report that sheds new light on huawei and allegations of trying to steal trade secrets.
our editor is with us, and this is a story that reminds us why officials have some new problem. >> it is a special story because it provides a rare glimpse of something only has understood. they claim they are bad actors, yet there has been no tangible proof. erik schatzker pulls off an incredible story. from the moment he came to us with it, we said stop talking and start writing. jason: go wherever you need to go, in a case in the vegas. there's a sorbet stand involved. schatzker undercover. >> where this really began was an american company that has a glass it thinks will make better smartphones. you know how your smartphone shatters? he thinks he has that
technology. he sends a sample to quality -- huawei and it comes back broken. carol: sitting down with eric, he tells the story so well we do get more from erik schatzker on this great story. >> there was an investigation underway involving a small start up taste outside of chicago in the advanced materials industry. they are trying to develop a diamond coating that would go on top of your smartphone display, making it harder, more scratch resistant, and ideally of great appeal to the likes of apple, samsung, lg, the major smartphone manufacturers, including quality -- huawei. the reason this was happening was because their interactions with huawei. they had been sending samples of
their dark glass product to a bunch of different smartphone makers. carol: which is what a supply will do. >> standard in the industry. once you have summoned to show prospective customers, you sent to them. carol: and there are rules, correct? >> yes, and in this case, it was you can have the sample for 60 days and the tests you perform have to be nondestructive. so this company sent to rounds of samples to huawei and we assume they did the same thing with other companies. after the second round went out, 60 days past and the sample did not come back. they demanded the sample be returned immediately, as you would, and the first thing they got back was an email with a picture in. the picture was, under magnification of the sample, and had a big scratch. we talk about this diamond glass
is being scratch resistant or unbreakable. it is come up to a certain point. it is very thin, it is not like it is a chunk of diamond. it also was not in its final form, this was still a prototype. so they saw the scratch, and they thought, my goodness, they have violated the terms of our agreement, damaged the sample. again, they persisted in asking for the sample back. it was finally returned last august 2018. when the chief operating officer opened up the cardboard box -- carol: tons of safety packaging right? >> it is delicate equipment. threw away the airbags, opened up the case, he rise the sample was not just damaged, it had been broken into two pieces and three shards of this glass were missing.
it was at that point that he and the ceo and founder of this company realized that something very bad was going up. this is not what companies do when they are engaging in good faith business. huawei destroyed the sample for reasons they did not understand, but that they could surmise and they feared the worst. jason: the worst being that their intellectual property was being stolen. >> that is among the range of worst possible outcome, yes. that huawei had damaged the sample in an effort to reverse engineer the process and figure out how to put the diamond coating on the glass themselves and get to market that much faster, and in doing so, potentially destroy the commercial opportunity for a crime; after -- for the semi-d
-- semi-conductor. they got into this business because, in theory, there are a lot of potential applications. electronics and defense. if you want to get into the business of laser weaponry, either on an offense of basis or a defense of basis, you need a diamond. i'm not going to go to the details, but diamond is a very good heat dissipating material. it has particular use in defense applications, as opposed to offensive applications. so they worried that maybe it was not just huawei trying to get a jump, but the chinese military trying to get a jump. carol: enter the fbi. >> two weeks later, the coo, this gentleman was at an fbi seminar. the field office was holding regular seminars on corporate
espionage and he had been going to these in a bizarre coincidence, a special agent at the fbi field office was delivering a seminar on corporate espionage and the case study something that is now become a little more famous, huawei's attempt to steal intellectual property from the t-mobile lab. the coincidence was just too powerful, he decided right then and there without ceo or board approval he had to talk to the fbi. he approached her during the break and briefer on what had happened. he says the fbi took an immediate interest and things began to move very quickly. jason: that is an important thing to point out. any of us in our businesses, if we approach the fbi and
especially as a small company, we think the fbi is going to proverbially pass on the head and say we will get back to you. stick it in a file somewhere. >> that is not what happened here. we have also been led to believe that because the fbi has been dragged over the mud politically, but in this particular case, they were on it. carol: up next, we hear from the ceo of akon semi=conductors. jason: plus, a play-by-play of the fbi sting operation. carol: absolutely fascinating. this is bloomberg. ♪
♪ carol: welcome back. jason: joined carol and me for businessweek every day on the radio or are -- our daily show. carol: and you can find us online and on our mobile app. jason: we are going to stay on this international cover story. carol: erik schatzker followed an fbi investigation into huawei's dealings. jason: akon ceo explains us what he expects to have the next. >> worst-case scenario and what we have been publicly discussing some of the work we are doing. it could potentially put them in the right direction in terms of what to optimize, i would say that is the worst case in a weapon standpoint. in the context of weapons espionage, simply wanting something to differentiate them from the apples and google's of the world. they are setting up to bring out some sort of finality to the investigation. akhan is looking to file civil litigation concurrent to it. our main purpose is making sure the fbi gets their investigation right.
there is in part a national security portion of a corporate espionage, a market value portion. carol: now we get to some of my favorite parts about the story. we talked to eric about the lead up to the fbi sting operation. it happened at the consumer electronics show in las vegas. >> to keep the investigation running, the fbi did not want them to break off contact with huawei. at a certain point, they asked them to reinitiate contact so that the fbi could listen into a conference call, affectively bug the conference call, and have these executives asked questions. what happened to the sample, where to go? and the course of this call, they learned the sample had actually gone to china.
that is a very important point to make coming because diamond coating with its applicability to military applications is on a restricted list. it is not allowed to leave the country, regulated by a regime called the international traffic in arms regulations. if it had gone to china, and they believed it did, that would have been breaking american loss -- law. carol: take us to the consumer electronics show in vegas. >> that to ubaldo the conference call, the same conference call a quality representative admitted it had gone to china. she indicated that while it wanted to continue conversations. it was very difficult to figure out who is playing who. we, as an akhan is trying to lead them down a path. at the same time, huawei is trying to play akhan to learn more about the process. so they set of this meeting at
the consumer electronics show, where i happen to be. they wired up the cheap -- chief operation officer with covert surveillance devices. initially, they were going to have this meeting in a room at the consumer electronics show. an hour before it happened, they suddenly and suspiciously change the location of the meeting to the food court at the venetian casino. that is where the sting went down. carol: and you saw it? >> i watched the groups and executives meet. i watched them move towards the food court, they'll walk into a fast casual restaurant called prime burger. that is where the sting went down, trying to look inconspicuous by a gelato stand. the fbi, thanks to the surveillance agreement, recorded
both audio and video of this interaction. there were discussions they are again about what the sample had been. huawei representatives claimed ignorance about the damage and how it got to china and all of that. but they kept pressing for more detail about the operations, try to get a little further along up
not even a couple of weeks later, this was about 20 days later, on january 9. on the 28th, the fbi conducted a raid. executed a search warrant on huawei operations in san diego, where the sample had originally gone. gathered further evidence, and now we are waiting to find out what the government does. jason: one of the tricky things about huawei is that it is privately held. we have taylor riggs to help us understand this market. taylor: we know huawei is so closely held, we do have a lot of information. we have an etf the tracks the chinese tech sector and gives us a good gauge of where we all stand, relative to the u.s.. it looks like they actually track pretty closely together, except what caught my eye was at the end. looking at the forward p/e ratio, this tech sector has had a bit of a run-up in price because some are saying with the 5g rollout. we heard that a lot of analysts and investors boost the tech sector. there have been some complications and storied history about that, wait and see.
london, and on our app. in the business section, jay powell and his predecessor janet yellen turned out to be remarkably similar policymakers. carol: we spoke with a federal reserve reporter of what could be the final result of the era. >> she is doing he's aptly what janet yellen did still in the fact that they are still pursuing a patient, gradual rate path. the labor market to make as much progress as possible while restraining inflation. we heard him signal at the committee meeting that the fed might be taking a cause for the foreseeable future. still very much taking this kind of cautious approach. i think it is a real story of continuity. jason: let's remind folks that, back in december, if we were heavens conversation six weeks ago, it would be very different.
the markets, the president, was a little grumpy with the jay powell. >> they were impatient with them. but one of the things i think is so interesting about looking at legacies and comparing them is that, at the end of the day, they followed a similar reaction function. they both moved rates up when the economy was looking stronger and inflation like it might be headed up. they both took causes when it seemed like there were risks on the horizon or immediate signs that global growth is showing some tracks -- cracks. janet yellen repeatedly took fire from every side because she was going to slow on rate hikes and those this concern she would let inflation get out of the way jay powell to criticism for the exact opposite reason, there was his idea that he would hike right in the recession and the
fed be the cause and that he is positive, it is funny because he is taking heat for capitulating. you cannot win. carol: it is a tricky time. here we are, the few months away from being the longest u.s. expansion on record. we keep talking over the last couple years about a goldilocks economy. it is a tricky time for jay powell in terms of what he does next. >> yeah, absolutely. this is the moment where jay powell's legacy beverages. -- divergence. what he will have to do is create some sort of playbook. we have already seen him decide what will be with the balance sheet. they decided that there were
going to stick with their current operating framework and have a slightly bigger downstream. we've got even bigger decisions down the road, they're going to have to talk about things like is the inflation target the right one to be using. what you do in a world where interest rates are lower? you have less information about a financial crisis because they know it is cutting that fund. it is their most potent peace of ammunition in their toolkit. so there are these real questions and there are not resolved, and jay powell is monday the person in charge of the committee may have to think through those questions and come up with answers that could be politically difficult. carol: also in the finance section, what happens when hedge funds are built around one great manager. jason: and what happens when they leave? carol: we profile the investment brains behind fir tree. >> it was founded by a name -- man named jeff tannenbaum and it
did not take off until he tapped one of his former classmates, this guy named andrew fredman. fredman comes along in 2000 and takes this firm from being $300 million to $13 billion. carol: that's huge. >> it is big. we were comping his returns relative to other firms or hedge funds at large and he really did beat. he annualized 7.5% over his tenure, including bad months when he wasn't even there your he builds it, but he is not the personality that you see often in investing. he stays in miami florida, even though headquarters are here in new york. he kind of has got this child of
the 60's personality. he is assessed with every trade that is put on, he is on around-the-clock, dialing up analysts. he is involved in the culture in a very important way. even though jeff tannenbaum was the founder, fredman was the heart and soul of the firm. fredman steps away at his prime, which is never see. 50 three years old. he has his lottery ticket of throws away. he still got very rich, he was just kind of done in. >> we rarely see that, and it shocked everyone. you know they had a succession plan in place, a top lieutenant of his who was the natural successor, he said over and we have a whole group of managing directors that would support the successor.
things still fell apart, and that is what is so interesting about the story. you can have a plan, but to execute and see how it comes together when the time comes, that is what is really interesting about the hedge fund. carol: and that is the underlying theme of your story. we talk about him being the heart and soul, when i goes away, it all comes undone. >> you don't appreciate has someone is the glue until they are gone. and you can try really hard to stick to your plan, but at the end of the day, the firm has lost $8 billion. the performance has not gone well. it has been bad, year after back here. last year, they lost 8.2%. they were mired in a lot of bad traits that came about starting he said that.
jason: one of the things that came out, and you mentioned these funds earlier, that is locked up for a longer amount of time. just to a certain point and people start pulling money out. it spiraled downward very quickly. >> they have their capital locked up for two years because they do take more private equity style positions. investors patience is wearing thin. now it has been basically five years of mediocre performance. even of the capital is locked up, you can see that redemptions are happening. carol: obviously, investors are not pleased. jason: still ahead, a lifeline for the industry. carol: and $8 million nothing burger for wisconsin. jason: this is "bloomberg businessweek". ♪
left from the 2011 arab spring uprising. carol: we start with the cover story. jason: takes us inside wisconsin's disastrous deal with foxconn. carol: it was meant to create a manufacturing paradise, but in reality, is a different story. we are back with our editor. joel, this is a story about promises versus reality. >> $4.5 billion tax break that would create a manufacturing paradise. 13,000 high-tech manufacturing jobs in wisconsin, and it is already looking like a total bust. jason: and was not so long ago president trump was there was -- was there with the most senior members of his administration. >> and it was wisconsin, where scott walker put his political reputation on the line. jason: and important people in business. foxconn is the biggest contract manufacturer in the world. >> yeah. this is a story about job creation and a state that will do anything to jumpstart its economy. nobody is holding anybody accountable anymore. that is where this gets tragic. there have been a lot of headlines about lcds made here,
not made here, but nobody is talking to people with boots on the ground. we talked to almost 50 people to get the inside story on this one. jason: and got into the documents underlying this. it is really and amazing peace of reporting. here is more. deal, promise big and subsidies to this taiwanese manufacturer foxconn. there was supposed to be 13,000 factory jobs, transformative for the state. but so far, things are not going so well where the facility is based in mount pleasant wisconsin. , jason: take us back to the scene. you have president trump, a plethora of big political names. president trump, his chief of staff, from wisconsin, paul ryan. former speaker of the house also from wisconsin. wilbur ross, steve mnuchin.
this seemed to embody and a lot of promises of the trump campaign. >> trump on stage said that this is going to return america's industrial might. he said that this was central to his trade war deal with china bring factory to jobs back, blue-collar jobs back to places like wisconsin. revive what we have lost in the last couple of decades. but a lot of the sources that we have who are watching in the audience, they could not have been further from the truth. trump was talk about had everything would be made at the usa, but it turns out the tv's there, or manufactured, they are only assembled. a lot of the parts imported from mexico. indeed, the display still said "made in mexico."
he talks about how there would be good paying jobs coming. it turns out the production workers were just temps, hourly interns getting paid $13 an hour without benefits. it did not live up to any of the president was making. carol: i turned to jason and said, remember year ago we had the president at different companies saying i will bring back manufacturing jobs? it is just shortly after that that internships, people were realizing, i am not going to have my job anymore. things were starting to become undone. >> just a couple of weeks after the president visited mount pleasant, wisconsin for the groundbreaking ceremony, a manager called a group of 15 interns into a room and told them that they're not going to hire those people full-time , because there was not not enough work for them to be doing to be hired full-time. in fact, two of the sources in that room recalled the manager say there was external pressures changing the wisconsin project,
which seemed pretty cryptic, but foreshadowing what we have seen recently. carol: were there ever 13,000 jobs created? >> no, no, no. those were long-term projections. the company projected to create 13,000 as early as it staggered 2022. hiring commitments, and they have already missed their first year of hiring. they were supposed to have 1040, their maximum target, and they missed it by about 82%. jason: now to the economics section and a broader focus on , the american economy. very close to the headlines with the state of the union. carol: our editor compiled a wide range of ideas of how to breathe new life into american capitalism. >> modern monetary theory is a way to pay for things. the idea that countries with their own currency have greater
control over their debt if they are borrowing in their own currency. they can manage deficits and debt better than a country like maybe mexico or egypt, which depend on international capital markets. carol: so the u.s., for instance. >> right. it says, basically, if you look at our recent experience like the aftermath of the financial crisis, we were able to spend a big on rescue programs that were a priority at that time and we haven't fallen off a cliff. mmt is the way that people who endorsed this idea are thinking about paying for something like the new green deal. -- green new deal. jason: we talk about tariffs all the time, and the conventional wisdom is tariffs are bad. yet, you have people, that are
like hold on a second. , >> there is a camp on the fringe of economics, because there is a consensus tariffs are bad, that goes all the way back to alexander hamilton's research on manufacturing to look at how tariffs can be applied in a way that benefits the economy. looking at trump's tariffs which now exceed something like $300 billion worth of goods and may it actually say revved up manufacturing. they claim they have created something like 280,000 jobs. jason: some people are skeptical of those numbers. >> yes, they are. theyhe idea being that have created, they have improved, business confidence in certain sectors, allowing companies to invest more.
if you are being shielded from competition at least for a , moment, will theoretically embolden you to invest more, in theory. [laughter] the question is the belief over how long those berries would stay in place. as soon as it comes down, we will see that some of these jobs will evaporate as soon as they come down. jason: american workers finding new ways to organize. carol: plus, how tunisia was able to forge ahead with democracy while so many of its neighbors are struggling. jason: this is "bloomberg businessweek." ♪
businessweek.com, and on our mobile app. take that american workers have less leverage with their employers. carol: we heard how workers and activists are finding new ways to get exactly what they want. >> when i set out to write this, i wanted to know what was going on. how come if unions were dead and the american labor movement was dead, why all of a sudden did we have workers speaking up and getting what they were asking for? carol: what did you find out? >> the labor market is tight, which gives workers a little bit more moxie than they might otherwise have. social media has made a huge difference, because it gives workers a way to find each other. facebook, co-worker.org, deep in the threads of reddit. they can talk to one another. they can share information may
be in a way they wouldn't have been able to before. it also allows them to make their case to the public, which companies have become sensitive to. jason: an interesting thing is you talk about different generations having different approaches, but ultimately very similar approaches to just wanting a fair workplace. increasingly, it is younger people who are driving this. people who may have grown up in the labor union families, or may not have, but they're finding a voice? >> that's right. i think one of the things that was interesting to me was i talked to a young woman who was part of the union at huff post, who recently went through a round of layoffs, right around the time that buzzfeed did as well. this woman an immigrant, said , she grew up with a lot of financialness in her
situation. so when they unionized, it made sense, because she wanted a lot of ways in an unstable industry to shore up her financial situation. and then we saw the difference between what happened when huff post had the layoffs and then buzzfeed did recently. buzzfeed was a non-union workplace. you really saw a lot of those workers, current and now former, on twitter advocating that they should be paid for vacation days that they had accrued. jason: one of the things to point out near the top of the story is that it was not expected to be this way, especially given what the supreme court has said about labor unions of late? >> yes, and i don't want to overstate what is happening here. union activity historically is way, way down. the supreme court rulings have been really damaging to the protections of workers who are speaking up.
carol: remind us of those rulings. >> there were two. one made it harder for public-sector unions to fund themselves, and the other made it harder for them to bring class actions. the legal challenges are real , and the formal protections have really been eroded. companies have a lot of legal power. but sometimes, power is not manifest in a legalistic way. carol: and the international remarks, tunisia is the only democracy left from the 2011 uprising. jason: we talk about what holds forunisia the rest of the region. >> i went back to tunisia after several years, having covered extensively in the arab spring. i remember one person, a young woman who was an activist blogger. she was the one who brought international attention to the
protests taking place in a small town in tunisia, which eventually exploded to become the arab spring. i remember meeting her that and she was optimistic about the future of her country. i wanted to go back and find out where she was. i also took the opportunity to meet a new class of people in tunisia, free politicians. people who are elected to parliament in free and fair elections. this did not exist in tunisia eight years ago, this does not exist almost anywhere in their world. just one of two places where that is absolutely true. this was a chance to take soundings of people i already knew and a whole new category. trying to understand where democracy is in the one country that somehow survived the arab spring with its democracy intact. with a new democracy. that was the purpose of my trip. jason: it is such an interesting point. because as you say, tunisia kicked all of this off.
demonstrative way, that is where it all began. and yet, so many things, especially here in the west, people think about egypt and other places as much more dramatic examples, and yet, as you say, democracy has taken root. why there and not elsewhere? >> several different reasons. one is perhaps because tunisia went first, they had institutions that worked very hard to protect the democracy once they had it. in a bunch of civil groups were 2015, given the nobel peace prize for doing exactly that. the largest labor union in the country at civil groups got together to protect the democracy after the dictator was thrown out. that did not happen in some other countries.
tunisia has also had a large proportion of the middle class. a robust tourism industry and exposure to international, particularly european, affairs. to be honest, it also helped that tunisia is small. we are so small, foreign countries did not feel like they had to interfere. they managed to skate under the radar a little bit. whatever the reasons, it is working. it is messy, cluttered, it is confusing. not all tunisians understand in theirg may have got hands, but they value it. they're glad to see it and they would not have it any other way. carol: up next, what facebook's data collection practices are like irl. jason: you are so hip. irl means in real life. this is "bloomberg businessweek." ♪
carol: welcome back to "bloomberg businessweek." i am carol massar. jason: i am jason kelly. you can also listen to us on the radio, on sirius xm, in new york, boston, in washington, d.c. carol: in the bay area, in london, and of course, on the bloomberg business app. in the technology section, facebook has increased limits on the outside use of data. jason: but the company is ratcheting up their own data collection practices. carol: interesting story. >> for the past year, we have heard this over and over, the argument from facebook that they do not sell your data. pundits, out and say technically you do. it is just semantic arguments. you collect the data, and then you rent it to advertisers, you rent the targeting of us to advertisers.
then we get into this debate over whether facebook should be doing that or not. that is what i am arguing is not the real privacy debate when it comes to facebook. the real debate is how much data are we giving them and how transparent are they being about the collection of that data? and i think some instances over the past year have shown that that is probably a more important discussion to be having. because we really don't know and they really don't talk about the extent to which that occurs. jason: this has really come to the fore more recently as they started to talk about maybe consolidating some of the back end, at least, of their more popular applications. that they are really counting on to grow the business. help us understand how that goes into play. >> you have facebook, who knows who everyone is. if you log into facebook, you have to use your real name. if you use whatsapp and
instagram, you don't. people have been able to have anonymous or semi-anonymous identities on the platform. what facebook is doing is combining the back end of those platforms so that you can send messages to yourself on a different service. this is not something that people have been asking for, but something facebook argues we will want. the ability to send a message through whatsapp or through instagram, or vice versa. what that will do for facebook and what they have not discussed is it will allow them to know you are on the platform. it will collect the identity to the data facebook has about your real identity. it is just another way facebook has been connecting the dots and, get this, their arguments about that combination and why
it is important is encryption. they are saying they are doing this in the name of privacy, but they're actually going to get more data out of this. so we will see that over and over again. facebook say they're doing something for privacy that gives them a lot more information. jason: in the business section, sales of streaming music artists surging. the purple you see, that is the physical. the lps and cassettes, that is has been going down. streaming has been languishing for a while. carol: streaming is in yellow, and for many years, streaming in terms of revenue growth kind of going nowhere. take a look at the last few bars, the last few years. you can see that streaming revenue has really taken off. that goes to the case of content labels and why universal music groups could be valued over $25 million in a sale by vivendi. >> the initial decline in music was because first you have
piracy, and then you had itunes. itunes made it so that somebody could go for spending $20 on a cd to spending $1 on a song. streaming flip the equation, where all of a sudden, people can pay $10 a month, or a little bit less, and that is actually a better deal for record labels than they were getting some cases in the cd era. there's still a lot of tension between the big internet companies and the music companies that is ever present. record companies now like to claim they are responsible for the success of spotify, which i find to be a little bit ridiculous. but there is no question that the streaming services are turning on all over the world. the opportunity a lot of these companies see, and what universal or vivendi will try to tell investors, is that what you are seeing in the u.s. and europe will play out all over the world. you will see streaming services develop in india, china, may
be places like indonesia and saudi arabia. if that happens, there is a chance music as this can get back to where it was before. even though it is growing again, the music business is still a fraction of the size that was in 1999 or 2000, especially when you account for inflation. jason: i want to talk about that potential sale, but before we get there, remind us of the economics of streaming. how everybody gets paid along the way. it is a little different, obviously, than going out and buying a record or cd? varies on the service and country. but for the biggest service, spotify, collects their price from you every month.
nine dollars. the real price is more like six or seven dollars month. they split that amongst the different rights holders space of their share of streaming. if you are warner music, you are getting a cut of every customer and how much your artist gets streamed. you are incentivized to do a really good job developing artists and holding onto new catalogs. this is boost the value of copyrights, because the more you have, the more you get paid. carol: what i love about your story is you dig into the value of music content. that is growing and place in the whole idea of vivendi thinking about a portion sale. -- thinking about a partial sale. >> yeah, music is always able to trade because it is a sexy industry. even in 2011 when the industry was near the bottom, warner music that sold for $3.3 billion to a ukrainian billionaire in large part because he wanted to be close to the music business. he likes being at the parties, with the celebrities.
now it is seen by investors and financial institutions as a real potential or opportunity. you saw with sony atv, a music publishing asset, that a consortium of investors bought at a low value in 2011 in 2012, -- 2011 and 2012, traded it six years later and got a killing on the return. carol: bloomberg businessweek is available on newsstands now. jason: your must-read? carol: the story by austin and foxconn. it is so timely considering the state of the union and president trump reminding him of the initiatives he set out to do. this was supposed to create thousands of manufacturing jobs, and the reality is that it has not lived up to that. jason: that is the u.s. cover, minus the international cover. erik schatzker, what a tour de force of reporting. taking you inside huawei, which has been in the headlines, but from a different angle. carol: and you can find more stories on businessweek.com over
david: if you could be a great athlete or you could be the ceo of an athletic apparel company, what would you rather do? kevin: i would take ceo every day of the week. maybe not every day of the week. [laughter] david: stephen curry, great basketball player, if he comes over your house, does he let you win? a game against evan curry, that's a problem. david: you're in the apparel business. kevin: that jacket lets you recover your muscles faster. david: i'm feeling the blood flowing already. >> would you fix you are tie -- fix your tie, please? david: people wouldn't recognize me if my tie was fixed, but all right.