Chief megan murphy. Lets talk about the business theion, looking at some of effects happening between qutar looking at some of the effect happening between caps on qatar and its arab neighbors. Megan a continuing fallout that keeps unfolding in the middle east between qatar and some of its neighbors. This is what has happened with bahrain, saudi arabia, the uae they are accusing them of , harboring islamists and not cracking down on terror. It has been a longrunning incident between them, and it has no really included in terms of imposing bans. Is now imploding in terms of imposing bans. One of the biggest businesses affected is qatar airways. Oliver a company doing very well. Megan doing very well, voted a favorite of Luxury Travelers in particular. As people know, whether it is emirates or qatar airways, they are brands that have carved a global footprint out of the last two or three decades, moved into competing directly on longhaul flights in particular with some of the american carriers. There has been a big concerted effort by the american carriers, american, delta, united, to push back on that growth. Whether or not it is through slots at american airports, saying they are getting unfair competitive advantage through the offense the advanced sovereign wealth. The American Airlines would argue it props up the businesses. And now they are facing this much closer to home, having to redraw routes, having to skirt borders. Oliver big borders. Canadian very, very big borders. It will have a big effect on the business. Oliver is this something they view that they can wait out and resolve the sort of political hurdles that are there . And does not seem like it will be resolved anytime soon. Megan it is an incredibly murky diplomatic incident. There are very different viewpoints, including between the president and his administration. Some people in the department itself is the socalled cause of say the same old socalled cause of this are factors that led to it and is not quite clear who is behind it, what actually happened, and whether or not it can be resolved immediately. Frankly, it is not getting enough attention because so much of the American Media and foreign media is focused on the Trump Administration writ large. Never underestimate these airlines in terms of their willingness to push forward. We would not be in the situation where we had really strong carriers, beloved carriers if they had not put so much resources into establishing these brands. It establishes these brands. They have overcome this. Whether this is a temporary blip or longterm thing that will force him to take much bigger costcutting measures to the brand is going to play out in the next few months. Oliver in the features section, also the u. S. Cover story, a great examination by Felix Gillette on a Big Media Company and perhaps a growing one. What was the most interesting part of the story to you . There is politics, media, there is interesting characters. Megan Sinclair Broadcasting is probably the most interesting and powerful Media Company that many i think businessweek readers and others locally will not have heard of. It really points to a company that has 173 stations, mostly in smaller markets. Some mediumsized markets, some bigger washington, d. C. Is an , idiot example. D. C. Is an example. Trying to get this deal which are being to purchase more stations has put them in the big markets like l. A. , new york, etc. What is interesting is yes, they have a chairman who is very conservative and has pushed conservative political views and does so in these news broadcasts that they do in these stations, but also is someone who has done it with an almost bizarre focus on costcutting. This is not glamorous broadcasting standards, a lot of shine and razzmatazz. This is really barebones media really pushing these views, pushing their idiosyncratic view word viewf a better , of things the way they deal with paid placement. We cover a story where someone went to the mcdonalds drivethrough, a reporter it is a media takeover by someone you would never really expect to handle this kind of thing. Oliver it is a fascinating story about a company that has lesseaching but perhaps name recognition. We have more from our reporter. You have to acknowledge the Sinclair Broadcast Group is one of the big winners in the Media Business in terms of the current milieu in washington with the Trump Administration. This company for years has been run by a family. It is a big supporter of republican politicians and causes. During the president ial campaign, after initially supporting ben carson, they kind of their weight behind donald trump. Having won the election, trump has now created a Regulatory Environment that is very good to Sinclair Broadcast Group. Oliver ok, so in the sense that the election of donald trump has been good for media because it brought in a lot of views, and has a get for this particular media group because their vision is somewhat aligned with trumps . Because they have for years been running into regulations in terms of limiting ownership of local media in the United States, which is limited to 39 of the viewership for the United States for broadcast tv stations. And they were really right at the limit. And then what happened oliver any single regional market . Felix no, the whole country. When trump won, his appointment to lead the federal Communications Committee voted to restore an arcane rule that allows broadcasters like sinclair to discount essentially half of the audience from the uhf station. What this did is basically they restored this rule and weeks later sinclair announced the biggest deal in the companys history, announcing they were acquiring Tribune Media for close to 4 billion. Stage, ok, so to set the this company owns different weas of broadcast stations, are talking local news, not talking cable. You turn on the tv and here is what happened around you. They want to essentially extend that to basically more cities and more areas . Felix yeah. They are already the largest owner of broadcast stations in the country. They own 173 stations currently. After the tribune acquisition, which is currently under review most people think it will go through. Oliver is that going to be dead before the Trump Administration felix under Hillary Clinton it just would not have happened. The their regulation, now this acquisition will give them another 42 stations, including stations in a lot of big markets where they traditionally have not operated. New york, los angeles, chicago. Oliver big major cities. Felix big major cities. They want to have essentially a nationwide network of broadcast stations. Ultimately their goal, which they have been working on behind the scenes, is pushing the fcc to adopt a new broadcasting standard. Some people call it next gen tv. When that is approved by the fcc, which could happen later this year on a voluntary basis, Companies Like sinclair will be able to start broadcasting in these new standards which will free up a lot of bandwidth to do other things. Sinclairs vision is instead of just having one channel from the broadcast stations they on own locally they will start , broadcasting a bundle of 25 to 30 channels. Leslie also think they will be a will to sell various Data Services from those stations. But it is sort of a nationwide network, and it is mobile, it is something you could get on your telephone or your tablet without having to pay for cellular data charges without you can watch it in your living room tv without having to pay a cable or satellite provider. Oliver up next are facebook, google, amazon, and apple too big for their own good . Carol plus alibaba wants to dominate commerce. Where the company is setting its start. Oliver this is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Im carol massar. Oliver i am oliver renick. You can also find us online at businessweek. Com. Carol and our mobile app. Oliver a growing number of scholars and regulators want to stop facebook, amazon, google, and apple from getting any bigger. Carol but that may be easier said than done. Here is the reporter. Almost without noticing, these companies have gotten huge not just in the united , states for globally. Let me just throw out a few numbers because i think it really hits home. Google has 77 of the search advertising revenue. Facebook has 75 of mobile social traffic. Amazon has 70 of the ebook market. So those are monopoliessized figures. There are no doubt that these are monopolies. There is no court ruling, but this is what a traditional antitrust theory says is a monopoly. So almost without looking they have gotten so big, and so well, who cares . Big is not bad. We have gotten over that issue a long time ago. There are now some studies showing their bigness may have some bad repercussions. Because these are academic studies, and they are positing this. It is not proven, but there is enough of this research to show there is reason to worry. Oliver that brings us to the why now . As a stock market reporter, we write time again about how they have really been the major contributors to a lot of the bull market rally. The facebook, the googles, the amazons paula we love them. Oliver exactly. The size question has not really come under scrutiny until now. It feels like something that maybe people should be talking about. How come it has gone overlooked . Paula it has been bubbling below the surface for quite a few years now. There is a gentleman named kaplan who wrote a book called move fast and break things. And he is the one who is strongly pushing this idea that these are these companies are too big. And he comes from the perspective of the creators of content, musicians, photographers, journalists like us, book authors. Of that they have been robbed or cheated out of their revenue because google, facebook, amazon have cornered that market. Now he used to be the manager of a rock n roll band, for bob dylan and the band and things like that. Then he went on to run the annenberg innovation lab. And so he has a very interesting perspective. He was an m a investment banker for merrill lynch. Sophie has a very interesting perspective from all of these angles. And he is one of the major pushers of this idea that they are too big. But academics have also started looking at this. There are several studies showing that it is not that the issue is not that consumers are not benefiting. The issue is that this bigness is leading to things like inequality in wages, low productivity, the lack of startups. Oliver perhaps some of the answers to a lot of economic questions people have. Paula these are questions economists are asking all the time. What is the matter with our economy . Why are we growing faster . Arent we growing faster . What is productivity growth so slow . Whats the matter with our economy . All of those roads are leading to amazon, facebook and google. Carol speaking of ambitious technology companies, alibaba wants to build chinas Sports Industry. Oliver we talked to our editor. We are making a stronger flavor than anyone in the Chinese Market has to develop a Sports Industry that has been unrepresented in china and in other places. Oliver alibaba does not seem like they need to seek out new Revenue Sources yet. I mean i guess it never hurts to keep expanding. I wonder why they are doing this now, why they are taking the measures to really break off teams and money and give it support. Jeff they just reported earnings that were well beyond most analysts expectations. It is projected for the fiscal year ending in march they will see Revenue Growth between 45 and 49 . So it does seem like they are saying now is a good time to start thinking about a five to 10 year window to finance this relatively tiny sports arm. A lot of runway to figure out how to build a sports market there. Oliver it does not seem like it is something that is terribly urgent or the need to get it. It seems like from your justters writing, lets get the ball rolling. Jeff the quotes in the story just a matter are really saying what about financial Revenue Growth as a Financial Strategy overseas. Oliver if im reading this, as an investor this sounds , pretty good. My company is, why not . Lets explore more. Jeff right, so they are exploring a bunch of Different Things that are not necessarily even alibabas bread and butter. Let alone ecommerce or sports merchandising beyond trying to use the companys troves of data on 500 million shoppers to figure out who should we target as to certain merchandise based on their purchasing histories or whatever based on where they live or whatever. They are going far enough down to the local level to say, well if you bought a tennis racket , somewhere in northern china, that we can send you data on all the stuff you can sign up for online, all the way down to the local level online court times, or coaching, or that kind of thing. Oliver it seems like alibaba has a lot of tools at its disposal to figure this out, but they are battling on uphill sort of an uphill game in which the Chinese Market does not spend a lot on Sporting Goods. It seems like their project is fansrtually sell to sports but that also kind of create sports fans and get people excited about what is happening around them. Jeff it is relative. I mean, the company sold or moved about 76 billion yuan worth of Sporting Goods related merchandise on his platforms worth about 11 billion u. S. So it is not like its nothing but thats about 1 10 the size of the u. S. Market which is a lot smaller people wise. Carol up next President Trump , rethinks his nafta strategy. Oliver and why House Republicans dont like the sanctions bill that is meant to punish the kremlin for hacking the u. S. Election. Carol this is Bloomberg Businessweek. Oliver welcome back to Bloomberg Businessweek. I am oliver renick. Carol i am carla carol massar. You can listen to us on the radio on sirius xm channel 119, 99. 1 fm in washington, d. C. , and am 960 in the bay area. Oliver and in london and in asia on the Bloomberg Radio plus app. Carol in the economics section President Trump is entirely debt , is toning down his antinafta rhetoric. Oliver the white house now thinks tuneup might be the next move. It turns out his plan for nafta is much more moderate than you might expect given what he was saying on the campaign trail, calling it the worst deal ever. Oliver many, many times. Reporter yeah. Heis not just something threw it out once. He kept hammering on the campaign trail. Even after he became president he came within a hairs breadth of just pulling out. He was persuaded not to. So that was a positive sign for people who believed in free trade with canada and mexico. But then the next stage was just this past week when the office of the u. S. Trade representative came out with the objectives the u. S. Will have in talks on renegotiating the pact. And that was something it was required to do. They had to get congress 30 days notice before the talks begin. They will begin midaugust. The plan is kind of modernizing nafta, not gutting it. Carol what happened with your happened . What happened between the campaign trail, and push back, terrible deal, build a wall, whatever to more moderate stance . I have a feeling a lot of people in the Business Community said in open hearings there were like 12,000 comments made on this plan actually free trade benefits the United States. It benefits the people, it benefits the companys, and it would be a shame to throw that away. Oliver any idea what the input has been from our peers in this agreement on what they want . Is there a similar line of sight anywhere . It does look from the reaction to what the Trump Administration put out there are the makings of a deal. There are certain things they are just kind of old and need to be updated. We heard from the converse economy ministers of both canada and mexico that this is a good blueprint for beginning the process of modernization. Oliver House Republicans are voicing objections to a sanctions bill meant to punishing moscow for interfering in the u. S. Election. Carol and it would make it harder for u. S. Companies to do business in russia. Here is editor matthew philip. This is a bill that passed the senate in june 982, the rare bipartisan bill we have seen these days. It basically calls to tighten up existing sanctions regimes on iran but most importantly on russia. Also its an attempt by congress to basically keep the president from being able to ease sanctions on the russian government, either from their meddling in the election or from their incursion into crimea. This is a regime that was put in place in 2014 by the Obama Administration to crack down on russia after their invasion of ukraine. They are trying to tighten those sanctions, but it has run into some problems in the house. On the sanctions and sort of the motivation behind them, sanctions in reaction to the kremlin and russias actions whether it is in crimea, or involvement in the u. S. Elections, i wonder with the idea of keeping the sanctions to prevent the donald Trump Administration from easing those, what kind of language out there about what could potentially happen to sanctions . Did the white house discuss lessening those . What sort of was the other option . Matt congress wanted to send a message to russia. Once the Intelligence Community kind of came out with the report last december that said clearly they meddled in our elections, this is congress trying to take a hawkish approach toward russia. Also perhaps knowing the white house feels differently. They were trying to constrain president Donald Trumps ability to in the future negotiate oneonone, bilaterally with the russians and offer them something on the table for them in return for who knows what. This as i said passed on a bipartisan basis in the senate. It has run into a lot of problems in the house because Energy Companies and other Manufacturing Companies in the United States caught up to this kind of late. They realize this could, the way it is written, the way a few provisions in the bill are written, this could basically that outm out ring of lots of lucrative foreign oil and gas deals. Not just in russia, but all over the world. Carol all right, so we are talking tens of billions of dollars . 100 billion over the next decade or so that u. S. Companies, oil and Gas Companies may have missed out on . Matt here is what you need to understand. Current sanctions that apply to russia limit u. S. Firms ability to invest in projects in the russian federation, inside russia. What this new bill attempts to do is say, if there is a Russian Company with any stake, a 1 stake even in any project and in any place in the world, you cant be there. That all of a sudden expands greatly the sanctions regime and would ensnare lots of oil and gas projects all over the world where Companies Like exxon, Companies Like chevron, and u. S. Operators of foreign comedies like b. P. Would have to divest and probably lose a lot of money. The estimate is that it would cost oil and gas firms in the u. S. Approximately 100 billion in the next 10 years. Carol up next, the new subprime debt bomb in the bank to watch for signs of trouble. Oliver a car chief is doubling down on his globalist view of the future. Carol this is Bloomberg Businessweek. Oliver welcome back to Bloomberg Businessweek. I am oliver renick. Carol i am carol massar. Still ahead, what to expect from pimco. The chief scientist fighting to save the dairy industry. Oliver all of that ahead on Bloomberg Businessweek. Oliver were back with Bloomberg Businessweek editor in chief megan murphy. Talking about the more must reads in the magazine this week. Lets go to the finance section and look at santander, a big bank but also connected to something nobody likes to hear, subprime loans. This is a story that is going to make a lot of people angry. Eight years on, nine years from some respects, we have a bubble forming not in the prime Housing Loans which were the start of that crisis, but in the auto market. He talks about santander, a spanish banking giant and its relationship with chrysler, but more in the broader spectrum it shows how the risk is migrating at an incredibly low rate environment where investors are looking for returns. Banks are packaging and selling bundles of these auto loans given out, and in many cases, very similar to the housing crisis, not checking underlying credit worthiness of the borrowers. It is exactly the same, and that is where the parallels lie. To be fair, this is not going to be the same thing where the level of overall broad market exposure is so big it could lead to a spiral. But what it is important is how we really learn the lessons of the crisis. How much does this show about consumers and their level of risk they are taking . Are we seeing the first signs of a level of consumers pulling back from not enough credit worthiness . So that is what is interesting about this story. Oliver that rings true with a lot of the conversations that we have had with investors as well. There are people who look at these and are very concerned about it, perhaps not from the standpoint of Systemic Risk as the housing crisis, but the same type of negligence is happening. To pull some stuff from the story fewer than one out of , every 10 bonds have been vetted by moodys. You have got this search for yield. Some of the same principles are still there. Megan one of the biggest statistics that really stand out, we went from under 3 billion in this kind of lending in 2009 after the crisis to 26 billion in 2016. That is a huge jump. Whenever you see that jump, that is something that should make red flags perk up. The other thing i think is some of the outright tactics that we see, in this case we talk about people basically lending the same car out, repossessing it, pushing it out again to people they know cannot afford it, is the exact same thing, where the people in the Housing Market self certified with income. These are all really things that should not be going on anymore. If regulators cannot tackle this, this is potentially potentially another mini disaster waiting to happen. The subprime auto lending industry. Oliver there is a lot of eyes on it. In the features section, you take an interesting look at a person. It is about a trend happening around the world and you focus on carlos ghosn. Tell us why. Megan carlos, the subtitle is davos man lives. He is the ceo and chairman of vichy Revenue Group mitsubishi group. What this is really talking about is how he believes so much in globalism still. It is an era where we see a pushing back on free trade in the u. K. And the u. S. Under a Trump Administration, where we some broader and global concern about immigration and its impact, where we see people moving forward to more America First as we know it here, britain first in britain,and britain under brexit. That he is still ruthlessly and relentlessly still pushing against this and touting the merits of the global workspace, touting the merits of almost trickledown in what is best for a global workforce, global companies, Global Business is still what is better for the world. That is a message that has largely lost a lot of its zing in this sort of populist it is really a fantastic profile \ it is really a fantastic profile, populist driven ideology. Populist backlash. Oliver given his background that is so well described in the story you can see why he is a , critical global davos man whose reports of his demise have been exaggerated. We talked to our reporter monte reel. Monte carlos ghosn is the head of an alliance of Car Companies including nissan, renault, a and mitsubishi as well as other Car Companies in china and russia. He kind of has a reputation as a guy who Takes Companies that are on the brink of collapse or are struggling and brings them back to life. He did it first with nissan and renault. And now he is trying to do the same thing with mitsubishi, which his alliance acquired last year. Oliver ok, so he is right now at the very least, his career is a sort of car czar, if you will. He is acquiring, demonstrating the ability to sort of turn these businesses around. We are talking from a bit of a larger macro perspective, his sort of persona and what he represents is very interesting. Tell us about sort of his image and what he represents. Yeah, he is sort of the ultimate davos man. And davos man is a term for those show up at the davos conference each year, the postnational elite group of businessmen. And he really represents that species in its purest form. He was born in brazil, not just in rio or sao paulo, he was born in the amazon basin in a state called krondonia which was very remote. But he spent most of his childhood in lebanon in beirut. His parents are of lebanese origin. And he was educated in france. Later became the first foreign ceo of a major japanese company, nissan. So we had this kind of reputation as somebody who crosses borders very easily. And he takes that unique ability to sort of blend into cultures , and he has kind of adopted a philosophy where he applies that to his companies. For example, he thinks that, you know, these days with brexit in and with the election of trump, a lot of people criticize that sort of postnational ethos. And they say that if you consider yourself a citizen of the world, youre really a citizen of nowhere. He stands up and goes against that. He thinks that a cultural identity is something that he calls additive, not substitutive. That is if you are like him and born brazilian and absorb the french culture, it does not make you less brazilian, it makes you something more. Oliver also this week, bloomberg is this week launches a special version of the magazine for mexico. Carol we spoke to editor in chief jonathan rees. Jonathan we are writing about the story regarding how airbnb is working in mexico. Actually it is an extraordinary Success Story here in mexico. To know that the growth rate of airbnb here is actually above the international average for this new company. Carol airbnb is your cover this week. I just came back from mexico. Tourism obviously a big part of the mexican economy. There is a lot more going on. What are the stories you think you guys will be covering on a regular basis . Jonathan some of the stories are stories that you already know because you published them in the last two weeks. But because we are going to be publishing this magazine every two weeks, but we are going to include some stories regarding specifically mexico. Were talking about airbnb and the success it has in mexico city particularly, but it has a lot of success in cancun as well and some other places like los cabos. What we are seeing is in order seeing is mexican kind of approach this offer that the Company Offers to them in order to get some extra money for their daily basis expenses. Carol up next, what needs to be done to defeat isis off of the battlefield. Oliver and are Tech Companies winning the fight over legislating biometric privacy . We are talking facial recognition next on Bloomberg Businessweek. Oliver welcome back to Bloomberg Businessweek. I am oliver renick. Carol i am carol massar. You can also find us online on businessweek. Com. Oliver and on our mobile app. Carol in the politics section, the u. S. Led military campaign against isis might be nearing a climax. Oliver but defeating the groups ideology is going to take more than guns. The question is if the u. S. Is ready. We talked to a reporter. Ramesh we have made significant progress on the military campaign, so that is chasing isis out of its strongholds in iraq and syria, taking out its leadership, removing some of the foreign fighters who went to iraq and syria to fight with isis, removing them from the battlefield. So there is slow but steady progress taking back mosul, a , big breakthrough for the coalition against isis. What we are still maybe not as far along as we should we, or that the problem i think is still going to present itself Going Forward is Going Forward what to do with the ability of , isis and other organizations to recruit, to reach, and connect with potential recruits through online means, through the internet and social media, but also offline, through mosques and schools and gyms and prisons and all the other ways people become radicalized. Oliver that is really at the heart of the story which is in many respects the sort of ground fight could be potentially coming to an end, maybe not the total victory the iraqi Prime Minister declared not the total declared after the mosul victory, but at the end of the day, the numbers are dwindling. The cash flows are twiddling. What does that pressure isis to do . How do they need to rethink, and how do we expect them to rethink what they have been doing in terms of outreach and reaching beyond the middle east . Romesh well you know, we have already seen them shift their rhetoric from trying to recruit people to come to the caliphate, the state that they had created in iraq and syria, they have propagandain their to encourage people to stay in their home countries and to commit acts of violence wherever and using whatever means possible. We have seen examples of that in europe over the last several months. And, you know, what is interesting and what is difficult for counterterrorism officials to deal with is that in many cases, the people who are acting on these messages do not have any firm connection to the islamic state. They are being inspired to carry out these attacks, but they are not necessarily receiving direction from any central organization. Carol speaking of technology, in the focus on section, how biometric recognition such as facial recognition is being legislated. Actually it has been what, almost nine years since the first biometric privacy act was passed by one of the 50 states , it was illinois. And the thought at that time was this law is not perfect, but it is a good start and will lead to a flurry of regulation around the country. Since then, eight states have proposed similar or related legislation. We have only gotten just this year in may the second state to successfully pass it into law. It is the state of washington. Its law goes into effect later this year. And there are serious doubts from privacy experts as to whether there is any meat to this law at all. If we go back to illinois very briefly, what they did was they created a law that required consent quite broadly from consumers, from you as a facebook user, as they Linkedin User to say yes, you can use my my face for biometric purposes. And as the company rolled out new technology they would ideally inform you. It also allowed private users to sue the state. If we go to washington now the , consent rules are a little broader. Privacy advocates will say that there are exemptions. The Tech Industry will say that it is more nuanced. So how that plays out is a question mark, there is a gray area. It would be cause potentially for litigation, however you as a user in the state of washington do not have the right to sue under the washington law. Only the attorney general does. That is modeled after the other law that passed, is texas law. Privacy advocates say, what is the point . If there is unlikely to be any teeth, and he likely action to question if these companies are doing what they say they do in a court of law, then why are we going down this road . It is setting a precident for other states to pass legislation that could mean there wont be a ton of legal oversight for how these facial recognition technologies and Biometric Technologies are imposed Going Forward. Carol it sounds like the facebooks of this world, the googles of this world, and many others, you know, they see the value of some of this biometric information Going Forward, and it sounds like they have stepped up in terms of their lobbying efforts to push back on rules and regulations they are starting to see come down the road. Kartikay absolutely. I mean there is so much data at stake here. Each persons iris scans, their fingerprint scan, scan of your face, the way you walk can be monetized. You can be marketed based on all of these data points. One thing that would get in the way of success would be litigation. Oliver up next, dan iversens plans to fill the bond kings shoes. Carol and the illuminati of cheese. We will tell you about the people joining the fast Food Industry dealing items. Oliver this is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. I am carol massar. Oliver i am oliver renick. You can catch us on the radio on sirius fm. And in new york on am 1330 and 1331 06. 1 fm in boston. 99. 1 fm in washington, d. C. And am 960 in the bay area. Dab buxnd in london on three and in asia on the Bloomberg Radio plus app. Oliver in the pursuit section the profile of the megamoney manager dan iversen. Carol his new plan on how it plans on killing the competition. Oliver here is reporter john gittelsohn. John he came into this very challenging situation. Bill gross had built pimco. Pimco was synonymous with growth. He was like the bond king. Then there was this generational power struggle at pimco, gross got pushed out, and iversen inherits this firm that is hemorrhaging money because all of these investors are like, what is going on with pimco . We put our money in a bond firm like pimco to make sure they protect our money not lose it. ,it is their number one mission. So iversen moves in, it is like an airplane that is in a nosedive. He has to take over the helm. And he has managed to basically stabilize this spiraling plane and now it is getting an upward glide path. Oliver now that upward glide path to be clear is some consistent with what you want from a bond manager, not necessarily that things went terribly under mr. Gross, but again in the later stages the returns were subpar relative to peers. It was a very different style that, what i take from your story here, is that iversen essentially wants to eliminate the personality and the big Portfolio Managers that have a large brand. What he wants is just a company that is going to generate a solid return that you expect from a bond market. John exactly. Is we, the new party line do not want stars here. Because they saw what happened when their king their bond king , left. There was 350 billion that followed him out the door. You do not want that to happen to your firm. You also want your investors to have enough confidence that, you know, the rock of gibraltar, to use another firms emblem, is going to be there with your money. And so what he has done is basically a lot of it is personality. Bill gross is a very charismatic guy, he is a mediagenic guy. He has a way of describing and coming up with great terms. Oliver anybody who has read his reports knows that he is not afraid to use some color. Yeah, he likes analogies. He has used wiley coyote falling off a cliff for an analogy for where we are in the economy. Dan is the numbers guy, he is a nerdy guy. When he was a little kid, he used to Bruce Williams on the used to listen to Bruce Williams on the radio before he went to bed. Most kids, if they are listening to the radio, they are listening to music or sports or whatever. He was a sports fan, but he confessed that it was a little weird that he was turning into Bruce Williams talking before going to sleep at night and hearing what to do with your money. Carol in the features section, a look at a littleknown governmentsponsored marketing group, dairy management, inc. Oliver whose job it is to squeeze as much milk, butter and more into products as they can. Carol we spoke to editor jillian gutman. Jillian the good people at dairy management, inc. , which is an industry kickoff program. So all Dairy Farmers are required to pay . 15 per hundred pounds of cheese they produce. And to this program that market their product basically. It is an interesting wide marketing agency. What they have done in the last five or so years is they have embedded their representatives in big food chains like pizza hut, taco bell, dominos to use more cheese in their products. Carol is this a government group, if this an Industry Group or who is this . Jillian it is a government. It was started by the National Dairy board started by the usda. Oliver so you have got this Industry Group that is governmentsponsored, is basically working with people, they are taking a cut from dairy and helping get product elsewhere. I love how you guys describe it, the cheese illuminati. Jillian exactly. It is the guiding hand. The secret Organization Behind everything you eat. Wayer it is kind of a good you described it because i did not know it existed. At the end of the day when you think about the products that emerged recently we talked about the case of the quesolupa, which you may of heard about at the super bowl, they debuted it with a huge ad Campaign Featuring george takei. They sold 75 million of them in four months. These are chalupas with a full ounce of cheese. Oliver we could do a whole show on etymology of the word. Jillian there is a lot to unpack. It is interesting, and it took some time, energy, and know how to figure out how to pack so much cheese in this. Exactly, and this was something taco bell has been working on for 10 years before they came in and helped them figure out how to mass produce it. Oliver why now, why are we talking about cheese and why the push into cheese products and getting cheese into various and dairy into various things . Jillian the dairy industry is experiencing a massive supply glut. You have got 1. 3 billion pounds of cheese in cold storage and milk consumption is way down over the last 30 years. So you have got farmers who need to keep producing more milk but because prices are going down and they need to sell more but the more milk they produce, the farther down prices go. It is a vicious cycle. Oliver just to be clear, this is the people behind the got milk campaign. Hitsfore the big restaurant products, that was their best Success Story. Carol Bloomberg Businessweek is available on newsstands now. Oliver a lot of great stories, what is your favorite . Carol the story we just heard about the mad cheese scientist, what is not to love . Who knew that there was this governmentsponsored industry that was really helping out the dairy industry going into Companies Like mcdonalds and taco bell . Capitalism with a helping hand. Oliver i like the idea of the illuminati of dairy. Carol you like talking about that. How about you . Oliver i really like the cover story about sinclair media. A media behemoth that is not one big channels that we all know but rather a collection of local stations. I have to split mine with carlos ghosn and the davos man and what means for him, taking a backseat to other backseat popular politics. Carol a lot of good stuff in this issue. 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