I want to start with finance, first of all, the Digital Currency world. While we spend time talking about bitcoin, theres another that you guys have been looking into. Reporter part of this is the crypto boom and maybe the receding of said boom that has created a lot of confusion. It seems like bitcoin is a hot thing, and then ethereum and ether. Where i supposed to get into am this . Another one that has caught a lot of attention recently is ripple, so we wanted to take a hard look at ripple. One of the things we did is, in talking to the Banking Community because ripple says it is a banking solution they say you dont know what this is for. Xrp, the Digital Currency affiliated with ripple, the thing is sort of like, what is this going to be for . Theres still reason to be really skeptical. Carol it makes you scratch your head a little bit because we know the Financial Community says we are new to digital currencies, doing collaborations or looking at blockchains. We know theres activity, momentum, yet thats interesting. Reporter what is going to stick and what is going to be real, and what is the application for it . With ripple, they say one thing the company is very enthused about is the potential thing the company says they are very enthused about it but the potential client base is not. Another finance story this week. Its doing with climate change. Its taking a look at the rating organizations and how theyre starting to incorporate disaster scenarios. Its big business in all this. What this really boils down to, the rating agencies come as we have known for history, i have been on both sides of it. This is a chance for them to step up to the table and maybe reevaluate some of the things i have been doing. Carol it makes sense. If you look at some of the weather situations we have had, hurricanes, floods, fires, this is adding up to a lot of costs impacting cities in the country. Reporter and it could potentially get worse. It shows productivity on their part to address some thing that could be snowballing. Carol they missed enron, they did miss the subprime mortgage meltdown. You wonder where they are in this curve. Reporter and this is maybe showing that theyve recognized some errors of their past ways and they are actually trying to chart a new course. Carol speaking of new course, the cover story this week takes a look at the new world energy order. Who would have thought that the u. S. Might be a leader when it comes to oil domination . Reporter this is a story i was really excited to get in the magazine, and the moment i heard about it i was like, lets do it. Theres a stat we found out that the u. S. Is almost on the brink of passing and Million Barrels of oil a day. Carol give us some perspective on that. Reporter weve not had that number since the nixon administration. Carol the long time. Reporter we are talking decades, and it shows how dominant the u. S. Has become in producing oil, not really challenges the geopolitical order of things. Opec and russia are less relevant, and as the price of oil has climbed up to 65ish, we are talking 10 Million Barrels of oil a day. Thats a disruptive element. At the same time, this is oil. Should we be doing this . This is good for the world . Carol you have an administration and president talking into expanding and offshore drilling, going into the Arctic National wildlife refuge. Theres implications of that. Reporter theres a job element to this, the Economic Growth that comes with it, which is why we boiled it down to our cover line, good for the u. S. , bad for the world. Carol want to go back to what you say about geopolitical considerations. We have kind of been tiptoeing around being in oil supplying nation, which has put us at a disadvantage when it comes to dealing with other parts of the world, particularly the middle east or russia. Reporter it really shows American Ingenuity as well. Fracking and this is largely via fracking this is a technology that has been around for a bit, but we have perfected it and moved it into a place that kind of makes us the envy of the world. And it is true, it is the driving force behind all of this. Carol what is it going to mean for the middle east specifically . Theres another story this week that takes place in saudi arabia, the corruption crackdown, and that is a country that is trying to evolve and dig about the past and think about the path forward because theyve been hurt by declining oil revenues and other situations. What does it mean potentially for relations with the middle east . Reporter i think for the u. S. It just shows we are inching towards energy independence. We are not there yet, but between the growth and renewal growth in riddles and everything, this is a viable diversification in renewables and everything, this is a viable diversification. Keep in mind saudi aramco ipo, we dont know if it will be this year or next year, it will be the biggest ipo ever. They are not going away anytime soon. Carol making oil a cover star was the job of creative director. Oil stories are particularly challenging because every business magazine has done in many kinds of the past. We wanted to get at what made this story different. It is not only the fact that theres an oil boom in america, but the repercussions in the rest of the world, which are not great. Carol exactly. Theres a good and bad side to this. Guest exactly. We didnt want to make it this big celebratory thing or just show a shining oil barrel as a new hope for the american economy. We wanted to show both sides that, and we did that mostly by making the headline large, was fairly clearly get that that. Carol but if you look at the magazine one way and then flip it the other way, is the whole idea that theres two sides to the story. Guest exactly. It is obviously very intentional that the boom for the u. S. Is just a puff, and at the bottom in the murky oil in red type is a little more sinister, that it is actually better bad for the world. Carol coming up, a look inside saudi arabias ritzcarlton jailhouse. This is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. You can also find us online at at bloomberg. Com. Since november, some of saudi arabias richest and most prominent citizens where held captive at a ritzcarlton as part of an anticorruption purge. Bloomberg news was among the very few invited to tour the hotel. Here is matthew philips. Reporter it was unannounced and happen overnight. Hundreds of people were rounded up, some of the most prominent, richest members of saudi arabias princes and billionaires and cabinet officials, and put in the ritzcarlton in riyadh, one of the worlds nicest hotels. It is a fivestar prison, and theyve been there since then. No access has been granted to anybody since then. They are slowly making their way through this group of people and coming up with settlement terms, and they let our reporter in over the weekend, who wrote this, who is based in dubai. They said, we want to bring you in and talk to you. He quickly flew to riyadh, went on a sunday night around midnight. He describes the scene. It is kind of eerily empty and there are saudi officials around the lobby with arabic music being piped in. They are kind of going through a headcount. The attorney general of the country is sitting on a couch by himself, and basically looking at who has been released, who remains, and how much they actually expect to net from this. The number is pretty shocking, about 100 billion a settlement deals that theyve been able to negotiate with these people. Carol huge question i have when i was reading the story. Now youve told me how he got access to the hotel, why did they let him in . Reporter thats a great question. He is one of the few journalists whos actually been granted access to this. The whole hotel has been a lockdown compound. They are winding this thing down, and their story is that this is great for investor confidence, a clearly long overdue anticorruption crackdown, although there are those who think that its a little bit of that, but also this naked political purge that the crown prince mohammad bin salman, the young prince, organized behind the scenes. Carol he has really been embracing change, bringing about modernization to saudi arabia, allowing women to drive. Hes really been trying to move the country forward. At the same time there was so much secrecy in this crackdown, and it doesnt seem like a lot of transparency since november about what was going on. Reporter thats right. Thats the big question, how the markets and investors feel about this . Right now as davos is going on, the ceo of saudi aramco, the ipo of which is a big part of the kingdoms economic revitalization, is they are talking about how this is great for investor confidence. See, the country is cracking down on corruption. However, theres another undercurrent of this that is a little more and if areas. There is no transparency here. We were unable to meet any of the detainees. In fact, one of the most prominent of the detainees, the richest saudi, we dont know where he is. There are a lot of conflicting reports about where he is. We have sources telling us he is still at the ritz, and sources telling us that hes been taken to another site and is still in negotiations, and that he balked essentially at the kingdoms plans to take control over his 9 billion holding company. Carol in the economic section, cows are considered sacred by many in indias hindu majority, but that is causing issues with the countrys plans to expand its milk industry. Reporter groups have had much more activity around the dissipation of bovines. Carol talk about the stuff that has come out of the government that has ramped up the protection of cows. Reporter in may, the government issued a ban on the transport and sale of cows at animal markets because they said the treatment was particularly bad in those settings. The India Supreme Court stopped the ban from taking effect, but the message that seems to go out to people who support protecting cows was that this is a priority for the government. In effect, it is being enforced by vigilante groups have been targeting cattle traders and sometimes transporting a cow from one village to the next can get people to become targets for these attacks. Carol people have been killed over this. Reporter yes. Last year there were i think almost 200 attacks, and 11 of them were deadly. It is gruesome. But modi has come out against the vigilante groups, but theres still the feeling that theres this sentiment that is taking root. Carol what is happening and you guys write about this in the story for farmers in india, a lot of them are actually abandoning their cows and opting for water buffaloes to produce milk. Reporter 20 million cows are being abandoned in india right now because if you are a dairy farmer and we are talking about india having the Largest Dairy industry, 53 billion industry a lot of it is very small farms and small herds. If you are a farmer and that cow is no longer producing milk, you would send it to get slaughtered and recover the cost of raising it. Certainly you really cant afford to pastor it forever. Most of them to pasture it forever. Most of them cant, so they are letting them loose. That creates problems for other farmers because they eat crops. That is why we are seeing these rescue shelters like the one in new delhi. Theres about 5000 new ones that have cropped up since 2011 to take care of this growing population of stray cows. Carol up next, the deal that bought u. S. Lawmakers time to keep the lights on. Plus, how hedge funds secretly manipulate the government to make investments go their way. This is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Im carol massar. You can also listen to us on Bloomberg Radio on sirius xm channel 119. In the featured section the futures section, dci group and how it helps hedge funds influence lawmakers. Reporter this is a Health Subcommittee of the house of foreign affairs. What can we do to try to build prosperity and Economic Growth in latin america . Their lead witness is this guy, james k glassman, this silver haired washington wise man whos a former top ranking u. S. Diplomat. Founded a think tank. He has this incredible resume. He published in the new republic and the atlantic in the old days, so really incredible guy. He comes in and has these very specific points to make about latin america. He says argentina is mistreating its bondholders and it needs to change. He says now puerto rico is threatening to do the same thing to investors in this public utility that it had. And by the way, theres also this tax dispute with this bank in puerto rico, and the government is wrong there. They need to fix that. Oh, and isnt that what happened to the General Motors bond owners . All these general topics carol but very specific. Reporter yes. And at the same time he is speaking and this doesnt come up at the hearing he is working for this company that is essentially a kind of affiliate or front group almost four a Public Affairs firm that represents people in all four of those cases. Carol this company is called dci. It sounds like somebody we in the media would want to talk to when it comes to latin america because he sounds very informed. Why does he have access . Just because lawmakers reach out to him . Reporter thats a good question about how that hearing up together. I dont know if we will ever know the full story, but James Glassman has been, since about 2000, taking positions, thousands of other beds and of op ads and testimony before congress, and writing studies. During almost all of that time hes been working for one company or another that is affiliated with this one Public Affairs firm that has clients who have interests that line up with the positions hes taking. Carol tell us about this company, dci. Who are they . You say they are Public Relations firm, yet as they say they work as you say they were pretty closely with the hedge fund community. Reporter this kind of covert influence operation has been around washington for a long time. People call it astroturf thing astroturfing sometimes. What is relatively new is a new client base coming in of hedge funds. Rather than, say, tobacco or telecom companies, you have a hedge fund that makes a bet in the market, buy a stock or bond, and government has an opportunity to make a decision that could make the value of that bond or stock go up, and so the goal of these campaigns is to influence government not to benefit a company, but to essentially benefit the price of a security. Carol interesting. Through policies or policy changes. So what is the difference as you said, companies have been sending people to talk to lawmakers, testified before committees, doing lobbying or a long time. It is kind of a way of doing business. What is different about the way Massive Companies would do it and what hedge funds are doing . Reporter the you think about the interests of hedge funds and how they are different from corporations, exxon mobil, theres been certain kind of regulations they disliked. They disliked them in the 1980s, 1990s, and today, and probably 10 years from now. That is just part of being an oil company. Theres a certain kind of regulations that you see as unhelpful. Very different from a hedge fund, which might make a bet in the market, pursue a lobbying campaign to make that thats payoff, and then turn around and sell that security at any point, maybe go short. It kind of makes corporate lobbying seem quite. Carol staying focused on capitol hill, we take a look at how a land made up of immigrants is fighting so much over immigration. This is fairly new for the u. S. To have this kind of partisan divide. You sort of take it for granted on a daytoday basis. Carol so republicans and democrats alike are ok with immigration and immigrants. Guest right. Neither party was all in, strong in favor, but kind of very close. What has happened since then in the past dozen years, democrats have taken a much more favorable, and republicans a little less. Not way less. What has happened is that that has made immigration into a wedge issue for both parties that they can use to try to drive and consolidate the people on their side and try to pull them away from the other side. Carol how did this happen . Guest thats a great question. I think theres a lot of factors that went into it. One is that organized labor, the aflcio, was traditionally a little antiimmigration on the grounds that the incoming workers would be taking jobs away from especially on the low skilled and of things. Around 2000 or so, they reassessed and said actually, a lot of people who are in our unions now are themselves immigrants, and some of them are undocumented. Maybe our interests have shifted and what we should be trying to do is make sure that employers dont discriminate against those people. We dont want huge numbers of them coming in, but that was one big change. Carol it is interesting you talk about the report and party and the business groups that are out there when it comes to issues like taxes. Reporter and the reality and deregulation, for example. The powerful voices in washington are the Business Roundtable and the chamber of commerce, both are quite open to immigration. They see it as a force of, like the japanese said, vitality. They put out the press releases, but they are getting ignored by the republicans on capitol hill and the white house. Carol just ahead, nigeria goes oldschool when it comes to cryptocurrency fraud protection. And a look at the cost of free speech. This is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Still ahead, china defines the laws of economics. In the u. S. , citizen schools there is a cost of protests and counter protests. And the private british club hoping to plant flags in new york. That is all ahead on Bloomberg Businessweek. Carol we are here with the editorinchief of Bloomberg Businessweek, joel webber. There is feature story on china and it talks about how they are maybe getting a