Julia we are here with the editorinchief megan murphy joining us from london this week. In remarks this week, you take a look at what is going to be in important week for the chinese politically. We are looking at what the legacy will be going forward. Megan it is a huge week. They have the congress were they are going to lay out the platform but really his legacy is the question that they are going to look at. He has carved out, you do not want to so unique but a special place in china right now. He has embarked on a huge crusade against corruption. He is really focused on the economy. One thing that the piece focuses on, when you look at this legacy, is the initiative which is, by any measure, the largest Infrastructure Project in the world in history in terms of expansion away from china to all corners of the globe, ports and let th railroads, making china and integral part of everywhere outside of china. It is a massive Infrastructure Project that has a lot of risks as well. Julia he is not the first person to come up with this concept. The europeans flirted with it in the past. What is different with what president xi wants to accomplish and what makes us think that the corruption drives will help them drive this forward. Megan you are exactly right. An unprecedented consolidation of power, almost a cold figure cult figure in china internally as well as externally. Russian is to connect ambition is to connect parts of china that are so cut off from the western parts of the country. What makes the argument is the economic case for one road is not a fatal complete. There are fait accompli. They frankly do not have a lot of industry that you can develop on so the ambition involved is massive and without that economic case to be made for it, president xi will face questions as to whether you can actually deliver. And then there is what is the point. Is there a need for this type of infrastructure in china right now . It is a massive undertaking, one that will be fined him going define him going forward. Carol a lot of things have to fall into place and there are Key Countries that have to buy a in for it to ultimately work. Russia and india. Right next door, china has these relationships. China is not the most stable economically and they need to invest. The partnership can be very tight on an economic level. India one of the fastestgrowing economies. Africa, australia, even into latin america and places like cuba. This is potentially a globally Disruptive Initiative with a lot of risks. Julia i am glad you mentioned latin america because i want to take us to the cover story which looks at a border town in mexico, juarez, and empire which is potentially under threat. Megan this is what were calling the manufacturing hub of mexico, the center of arguments over free trade am after in the u. S. And canada and mexico. Everything from bmws to other seats, almost leather seats, almost everything you can imagine comes from mexico. 300 billion goods were imported, that is a staggering number. This town provides for 325,000 jobs. This is a look at how one family was the godfather of this industry, becoming the manufacturing wheelhouse for the world, something that President Trump constantly threatens to unwind, famously calling math of nafta the worst deal of the there are talks this weekend into the next. The godfather of the industry in juarez, he created this industry 30 years ago, longer than 30 years ago. He built the first macquiadora, assembling Television Parts for rca. It has attracted firms from all over the world, primarily the United States but increasingly other areas. This is where companies cant come of a parts, they have them assembled and they end up being a part of whatever you are purchasing at the store. Back a couple of decades, to the 1960s. How does one guy make a Global Manufacturing mecca of the world . What is important to understand about bermudez is that he is a very plugged in person. He comes from a family that had a lot of land in the desert before juarez was a major city, it was essentially a copper town. There was not a lot of industry. At the time, there was a lot of discontent in juarez about what did they want their city to be, this was during prohibition. This was before the 60s. People were coming to juarez to do activities they may not be proud of. Drinking when it was illegal, express divorces. Cabarets and that type of thing. They decided that they wanted to remake the town of juarez and they started thinking about industrialization. Julia what is he saying today in light of President Donald Trump and all of the talk about the mexican wall being built . The threats, certainly, to his empire is acute. When i went down there, i was expecting to hear a lot of anxiety and fear about what was happening in the United States and the Trump Administration, and i asked him, are you concerned about the wall . Are you concerned about the border adjustment tax that the administration is proposing . Are you concerned that the nafta renegotiations will push wages higher . He was very unconcerned. Maybe unconcerned is not the right word. He was very sanguine. He said we have been here since the 1960s, before nafta. I have seen 10 president s in the white house and there is not one person who was going to erase the industry. Juarez is so deeprooted that it is going to be difficult for the industry to go away. And if it does go away it will go somewhere else, that the probably not the United States. Carol one thing that is interesting is that because why juarez is so close to the United States, if it starts to come on back, that will impact the United States. Lauren that is the unintended consequence of people are not thinking of. The border region already has this confluence of migrants and cartels and Global Manufacturing companies. It is just a stew of so many different types of people and entities that really, it serves almost as a buffer against the United States. It is almost a curtain of industry in a border area that is very fragile. And if there were to be every kind of largescale disruption to the industry, the concern is that people who are working in factories, people who have gone there and come from all over Central America and interior mexico to juarez, will be unemployed and will start looking for work. Where would be the natural place . Across the border in the United States. There is this idea that the border is a part of a very dynamic, a very dynamic place in the world that is insensitive to immigration policy, that is sensitive to manufacturing and trade policy. And if the Trump Administration is trying to solve a problem, bring jobs back to american workers, there could be the unintended consequence of having more unemployment, more chaos and disjointedness on the border. Julia up next, the man who invented the bump stocks used in the Las Vegas Massacre. What will become of his multimillion dollar empire . This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. You can also find us online on businessweek. Com and on the mobile app. In the politics section this week, the Las Vegas Massacre highlighted the danger of socalled bump stocks, the legal method of taking a semi automatic rifle and converting it into a machine gun. The inventor spoke to business week. Here is our editor. He is a 35yearold native of texas, at a smalltown the couple of hundred miles west of dallas, population of 200 people. He is a veteran of the air force and several years ago, he got the idea of basically creating a device that turns so my automatic rifles into an automatic rifle. He called his company slidefire, and in his condo of shared on kind of shed on his family ranch, he built a prototype. He started to file for patents. He got it approved by the atf and he built a multimillion dollar empire. It is in the center of the Las Vegas Massacre. Stephen paddock used it to turn and ar15 into something that could fire 800 rounds a minute. Matt, take us back a second. You just talked about taking a semi automatic weapon and turning it into a machine gun. Why is that legal . Is that legal in the United States . Matt it is right now but it has raised a lot of questions about whether it should be. When he was trying to get approval through the atf, he claimed that his product was an accessory, not a weapon itself, and that it was going to be used for people with disabilities were trouble pulling the trigger on a semi automatic ar15. Because the atf regulates weapons and saw this is not an integral component to the firing of a gun, they approved it. It is labeled as an accessory. Hundreds of thousands of these things have been sold in the past several years and effectively turned the legal semi automatic rifle into, by all intents and purposes, an illegal machine gun. Carol i did not realize this , but machine guns are not outlawed in the United States but it is an expensive process, a lot of red tape to get one. The bump stock opened up the market and they were a lot less expensive. Matt they were retailing for 100 or 200 or so. It is a cheap addon to turn your ar15 into a machine gun. And he patented a lot of the designs around it and has been liturgist in going after competitors who have litigious and going after competitors who have come up with cheaper knockoffs and has been successful in keeping them out of the market. During above and beyond to protect his market share in that industry. Carol what blew my mind is that in his first year of business he sold 10 million worth. Out of the gate, have a huge market. Today, hundreds of thousands of stocks in civilian hands. That is staggering. Matt it is. Slidefire is the market leader. They have not reported financials since 2011 but in that year, 200,000 units. Assume the market has grown from that. If you extrapolate six years of sales at a relative comparable rate, something on the order of a quarter of a million of these things floating around. The thing is, most people have not heard of a bump stock. Julia we hadnt. Matt and yet they are very popular among niche gun enthusiasts. , a look at how the u. S. Government tried to manage response to hurricane maria. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. You can also listen to us on the radio on sirius fm channel 119 and in new york, a. M. , 91 fm in washington dc. In the politics area, pentagon officials on the internal distribution lists on hurricane maria. We talk about what those you emails suggested about the washington response to the disaster in puerto rico. Noticing the emails in my box from the department of defense officials that are using jargon you do not normally see. Understandingot what the language means you means. After a few more days, there was a pattern, that i was on internal lists and the recipients were me, with my bloomberg email address, and a large number of military addresses. So i responded to the person sending these emails and said, i am not sure i should be on this list. Julia what was the content of these emails . You said you do not understand the language. What message were they sending to internal sources and you . A few things, Media Monitoring from fema forwarded to dod officials, how they understood the coverage of the response, what they thought the media was focused on, and talking points. How they wanted staff to discuss these issues and how they fried tried to spin them, which is not surprising. You tend not to see that. Tend to see what they present to the world. It is a fascinating look at trying to stay on top of the message. Carol were they struggling internally based on what you are reading . Matt i saw five days worth of emails. I kept responding to them. It took five days for them to remove me. Things were getting worse. The jones act have just been waived and the notices that i got said that the jones act was waived, that is a good news story, we are still struggling. Things got bad after that when the mayor of san juan got into a public spat with donald trump. You could see anxiety inside as people in the dod and fema wondered how to respond to this. They thought it was taking focus away from their efforts. Julia you say that you tried to let them know that you are not supposed to be on this. How many times did you say to them, i am not sure i should be on this list . Matt three times after the first email. Some emails did not get a response, others got a breezy response, we will look into it. And then they stopped altogether. My editors and i sat down and thought, what should we do with this interrupted tranche of information . Carol everybody was trying to get a grasp of stories we were hearing from people on the ground and the government response. Based on these emails, do you feel like the public was being told everything . Matt yeah, i think in the governments defense, i see an indication in the internal talking points that they were trying to represent anything that was untrue or misleading. They were certainly selective. They were focusing on the good news stories, the rate of responses, the activity that dod officials were involved in. It seemed like they were struggling to find a way to talk about the scale of the destruction, and the scale of the effort that was required. And that it was not hopeless. Julia staying focused on hurricanes and the finance section, investors flocked to houston to buy real estate from desperate homeowners. We speak to a reporter. Talk to us about Real Estate Investor brian child and the opportunity of a lifetime that he is looking at at potentially other peoples expense. Brian, he has purchased 34 homes so far. These are homes that were flooded in harvey. He has paid 175,000 each. The way that he sees it, he is paying . 40 on the dollar. He thinks that values will rebound. In the meantime, he is going to collect rents. He thinks that he can at least double his money in that time. Carol what about the homeowners . . 40 on the dollar, that does not sound good for them. Brian is more generous than some of his competitors. In one case, he offered . 48 on the dollar. Ice oak with the homeowner and he said that someone else was offering . 20 on the dollar. For the homeowners, it is a tough situation because they do not have a lot of room to negotiate. They are desperate and scared. Carol some of these people do not have Flood Insurance. They are in a sticky place. Break it down for us, tell us about their side. Many people in houston do not have Flood Insurance because they are in areas that were not high risk. But turned out to be. They did not have what insurance and cannot afford to rebuild in many cases. They do not have the cash. The cannot afford to wait to find out how much they get him assistance from fema because they need a place to stay over a long period of time, they have mortgages going unpaid. They will take whatever they can get. Of course, if they have a mortgage, they have to show the lender that they have extinguished that mortgage. So there are some complications. Julia lets talk about paul matlock and his life because he was quite descriptive about how he felt being approached by real estate lenders like this. Paul compared them to vultures sitting on his back fence waiting for the dead body to fall over. He is talking about himself as the dead body. It is a very tough situation because he actually rescued his wife on his driveway during harvey when there was almost six feet of water. And he, his wife is disabled with ms. She almost died. So they are desperate. They just want to go to higher ground. The have the advantage of having Flood Insurance, but he does not know how much you will get. He does not want to wait. Julia why tyson got the Cold Shoulder from one kansas town. Julia welcome back to Bloomberg Businessweek. Still ahead, how the tyson chicken plant became a turkey. Dollar general it will mind in rural america. Cbs takes a page out of the netflix bible. All of that ahead on Bloomberg Businessweek. Julia we are back was editorinchief megan murphy. In the business section this week, i love the story. We spend a lot of time talking about big business going into Rural Communities and the balance between the jobs and the downsides that they bring. Lets talk about the Kansas Community tonganoxia and they are saying no thanks tyson food. Megan these are supposed to be the kinds of jobs that these towns want. It was going to be a Huge Investment by tyson, a 300 Million Investment and they were 1700 jobs. The head of tyson came down and said that i have never heard of tonganoxia and it is going to be the head of the expansion. The residents pushed back and pushed back hard. They say that they do not want these kinds of jobs. We have a community that has access to higher income, higherpaying, more friendly jobs in terms of the environment. It is systematic of an issue that we see across the u. S. And other parts of the world, people are pushing back against industrial plants and industrial processing, not just in the food and Agricultural Industry but in other areas as well. Carol they talked about another company that was successful in building plants. How come they were successful and tyson wasnt . Megan they had a Public Relations strategy, talking to people and workers. Lets use an apple. It example. Leavenworth, kansas, where this point was going to be close to, as an average income of 63,000 a year. That is a lot of money. These jobs were going to pay 11 an hour. That is a big disparity. What these people are saying is we want jobs, there is no question. But we want higher paying jobs that are more sustainable and to do that and glad that you need to have a long dialogue, you have to have the pr, find a community where you are welcome. There was frankly a miscalculation about the most kinds of jobs for the community in this instance. Carol i want to talk about another Company Moving into areas around the country, Dollar General. Targeting smaller, Rural Communities. Tell us about this story. Megan this is one of my favorite stories in a while. We get a lot of criticism in the press for not covering real america, going between the coasts. This is a community, decatur, arkansas, population 1080 people. Really showing how the economics of these poor our old hounds rural towns are driving this expansion of dollar stores. We should be clear, a lot of these stores are not even selling dollar things anymore. Places that even walmart has left. Average income of 18,000 a year, on a modern variation of food stamps, look to these stores to buy their everyday supplies. Dollar general, it is a Good Business story but it is reflective of the times that we live in, reflective of the haves and havenots. They have been hollowed out by the loss of jobs. It is really a comment on how america has been so disrupted in terms of its workforce and its manufacturing, the lifeblood for these kinds of communities. Julia what is an interesting angle in this story is that walmart express opened a store. It opened for a year. And then Dollar General came in. What is so different about these Business Models that allows Dollar General to succeed when walmart could not . Megan this is exactly the point, where walmart, the fiercest protector of the smallest of margins, Dollar General thinks they can compete with that. They think they can still make a profit on even the narrowest of margins. What they are betting on is that this situation is not going to change. These jobs are not going to come back and these rural areas are not going to see a dramatic improvement in income. Walmart pushes up the income sale, in terms of getting people in and the consumption they target. Dollar general, there are more Dollar General stores in america than starbucks. Carol crazy. Megan a lot of people do not realize that. It is a reality check for where we are in terms of the different bifurcation of what we see and how these towns are coping and how residents are coping. It is a really important story to read. Carol i agree with you, megan. It is interesting to get your head around. Dollar general, they are targeting was the u. S. Government calls these food deserts. For the People Living in these communities, they do not have other choices and they are paying more and the choices that they get at the Dollar General are not the healthiest. Megan there is a really poignant part of the story were we talked about the customer at Dollar General who is making a choice about whether to spend a dollar for a frozen entry versus 1. 50. Those of the decisions that occupy so many workingclass families in terms of how to spend the food dollars and we should not forget how close the line is. That is what Dollar General trades on for sure and it is what made their business so successful. They are filling a hugely important gap in the food chain for American Families that are struggling to get back in line in a disruptive situation where they do not have highpaying jobs and access is limited. In decatur, a lot of the population is immigrants working in grueling poultry factory jobs. This is a reality for a lot of americans. It is written enough about. Dollar general is filling a void but it is also a political void, and economic void. It is a success story, but also a cautionary tale about what is happening to so many communities. Julia up next, cbs makes a big streaming bet on star trek. And soccer coaches might soon have another way to cut kids from the squad using brain scans. I will explain. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. You can find us online at businessweek. Com and on the mobile app. In the features section, cbs and its ceo of going after the netflix model, hoping viewers will binge watch the new series of star trek. But on the streaming app. Cbs is the most watched network in the u. S. , one of the oldest. Star trek, one of the most Famous Television shows. They made the decision that for all access, star trek was going to be the flashy original show to bring in new viewers. The ceo, he could have sold star trek to netflix or hulu or put it on his network. The company is invested in trying to make all access something that people want to pay six dollars a month for and a realplayer. Carol as you mentioned, it has been around for a few years. Are people signing on . Lucas so far, a little over 2 Million People have paid for it, cbs says. That is bigger than most Subscription Services you find online. Obviously a fraction of the people who pay for netflix or hulu. Investors have been pleased with growth and cbs has set modest expectations for it because they are not ready to give up on that main tv network that they make so much money from. Julia we hear from all of these guys that content is king and they want to produce original content but when you are talking about 120 million, that is one heck of an investment on one item. Lucas it is a lot more than cbs spends on the average drama on its network. Ncis is not costing that much per episode. For the premium shows, shows on hbo and netflix and some on showtime, you has seen a really dramatic escalation in the cost of production because they believe they can justify it and they want to give you a tv show that looks so good that he will stay home on a friday or night instead of going to the movie theater. They start to run 10 or 15 million in episode. Star trek, maybe as much as 9 million, the most expensive star trek series you have ever seen, one of the most expensive shows. Julia if we are talking about netflix, they produce new shows on a monthly, weekly basis sometimes. Is one thing like star trek going to be enough to get people to sign up . Lucas that is one of the great concerns, cbs says they want to make for original shows a year. I assume it will increase over time. What they are banking on his you have a show like star trek, and there is a Company Coming out from will ferrells production company, and those will bring in viewers and they have a lot of on demand viewers and a live feed. If you are a cord cutter and you want to watch football on sunday, one way to do that is to pay for all access. Julia in the technology section, the soccer world is buying into a dutch start up. The goal . To identify the prospects of teenagers. We spoke to editor jeff. Jeff a journalist turned entrepreneur who writes books. While he was writing one about madrid, he tried to figure out for the purposes of the book what makes some soccer stars different from you and me. There is something cognitive that sets them apart. The answer across the board is we are not sure. Until he talked to a rising star in cognitive neuroscience in university of amsterdam. They teamed up to develop this this twoyear old start up which promises customers that it can tell who the soccer superstars are going to be. Carol cognitive neuroscience, what are we talking about . Jeff what the tests are trying to show is that you can handle making complex decisions quickly. Shifting attention is needed. Certainly, as you are clicking through on the website, you are asked to solve puzzles quickly or sort things into the right order. That sort of thing. Again, while they say there is little peerreviewed evidence to back claims they are making about their product, that it is able to tell them, for example, whether a particular midfielder might be suited for another position. Carol but there is no Research Backing it . Jeff the cognitive neuroscience professor says that it is based on well tested cognitive neuroscience precepts and studies, but no, no peerreviewed data to back up these specific tests. Julia reaction times, playing these brain games, as you call them, this is what they are looking at . Jeff can you make decisions quickly, how complex are they. Julia it sounds like a lucrative business because we if we are talking about soccer in the United States of the u. K. , if you put a lot of money into them and they are not the right person, they do not have this thing, it is a costly decision. I guess there is interest from sports agents and smaller clubs. Jeff the big surprise is that while brainsfirst is not submitted data to the association of psychologists carol why is that significant . I have no idea who that is. Jeff it is the organization that would certified that the test is what it is on the psychological level. Carol they have not submitted . Jeff that is correct. Nevertheless, they have 17 european soccer clubs as customers. S each of theset clubs Something Like 17,000 a year. Julia the new trend of crowdsourcing beef and the company trying to bring it to the masses. And how to live like a queen in a house only the rich could afford. We will take you inside. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. You can also listen to was on the radio on sirius fm channel 119 and on a. M. In new york, a. M. 1330, in boston, 90 one fm and washington, d. C. , and i and 60 in the bay area. And in london and in asia on the Bloomberg Radio plus app. You may have heard of the farm to table movement. Get ready for the crowd to table movement. A new company allows you to buy a part of a cow. You can track it right up to the grill. Crowdcow is an example of Companies Paying more attention to food. It is like 250 pounds of meat. Unless you have a gigantic garage with a dedicated freezer, it is too much. These guys said, there has to be a better way. What if we buy a cow and crowd sourced it . They started out slow, bought a single cow and sold out in 24 hours. They have built a business around this model. They crowd sourced cows. Carol wait a minute. Here is cal number a. Everybody takes a piece . They work with about 30 farms. These are small family operations. They say, we are going to buy a cow from you. Email goes out to the list, cottonwood ranch, we have this heifer. You can buy shares of the cow. I want four pounds of ground beef and the new york strip to. You can tailor that. They sell cow by cow. Julia so the cow basically gets cut up. That is right. Julia do you bid for the peace that you want . It is not auction style. They say that things like the tongue and kidneys and liver and heart sells out fast because they are foodies. You cannot get it at kroger, you cannot find it at your local grocery store. Some of the rarest of cells out fast. Otherwise, here are the sirloins. Julia how do you get it . Standard delivery service, ups. They are sending it out. Farms on the east coast, virginia and pennsylvania. The company started, still very small, just expanded to the east coast they primarily serve , the west coast. Send somebody to all of these forms, they look around. Words like organic, we find out that it means less and less. There are different rules. These guys do not have specific criteria. They want to see the farm and see if it meets the criteria. Small, independent, treated right. Putting people in touch with how the cow, how it was raised, how it was fed, we know the farmer. We have a large story with a lot of pictures about the most expensive home on the market today which is called via, in french. It is in the south of france and it is on the market for 410 million. Carol i was going to say that i am in but then i heard the price. This is a massive estate. About 18,000 square feet, 14 bedrooms, as you would need for your small family. The most spectacular thing about the home as the grounds that it is set on. 35 acres of Botanical Gardens that have been cultivated since the home was built in 1830. They say that the Botanical Gardens kind of compete with the top 10 in the world. You would be the owner of a huge botanical garden. It is on the ocean. Julia it has had impressive owners. King leopold the second of belgium was one of the owners. He bought it in 1904. And then the marnia family owned it for the past 80 years. In 2018, compari bought it and they decided to put it on the market because of how much it is worth. Julia this is an opportunity we cannot refuse. Carol interesting neighbors. Emma microsofts paul allen is on one side. Andrew lloyd webber is around re. Ir carol if you have a birthday party, you just knock. It is a fancy area, one of the areas with the highest value of real estate so it is not super surprising that it is going for so much. There was a rumor that it was going to go for a billion dollars. Not true. Some agents say that 410 million is too high, they are not going to get that much. Carol aspirational. What is crazy is that for that money, maybe not crazy, but in the story, it is a renovation job. Emma it is. The interiors have not changed much since the 1920s, 19 times. It looks like you are stepping back in time when you go inside. The library with 300,000 books. You can buy all of the furnishings with the home if you so choose that the agencies that whoever buys the song, which they do not know who it is going to be, will redo the interiors and make them more modern and livable. Julia Bloomberg Businessweek is available on newsstands right now. You can also find us online or on the mobile app. More Bloomberg Television begins right now. Coming up on bloomberg best, the stories that shaped the week in business around the world of it daily drama in a d. C. Twitter, taxes, trade, and turkey. Every vote counts. Almost like a strategy the Trump Administration has put a kibosh. Slow, but systematic attempt to move the nuts and bolts of the Affordable Care act. Earnings season begins with a bang with big banks reporting. Crisis in catalonia continues. D