a start up aims to level the playing field when it comes to college admissions. >> i love this cover. we love this c.e.o.. >> this is a timely one. in the wake of the college admissions scandal. this is a story we had written for a while. because instead of talking about the scandal, let's talk about how we can fix things going forward. rebecca had this idea that could totally reframe how education works in schools. >> she is brilliant first of all. we're lucky we have her in our extended podcast this week. she wants to figure out how people think, how students think. >> it is bigger than video games. the problem is the admissions scandal comes back to the s.a.t. that is the north star. when you program schools around that, you end up with standardsized testing that goes all the way down through middle schools and almostry schools. she said what if we just resought what the north star is. that's how it came about. and then talk to kids about a language they might understand better. >> we spoke with the founder, rebecca can't even. meritocrasy. ve a oftentimes kids at the top 30 colleges are smart, high atcheevers. i'll give you an example of two things we can do to make things more mericratic that make people uncomfortable. one is based on a growth metric. if your floor started lower, your expectations are lower. the bar for what you have to do to get into college is that much higher. that makes people squirmy in all angles. shouldn't all kids have the same hopes and dreams and potential? thinking about a relative metric, some college admissions officers are doing this in their head. they are looking at your zip code and race and gender and making a decision about what you have overcome art, not science. another thing is to make it more fair is to think about what we're measuring. it is interesting because the s.a.t.'s started as basically an i.q. test invented by the same folks who worked on the i.q. test in the 20th century. the name literally changed from the standardsized aptitude test to the student achievement test. when you think about that shift, it means more money and prarkses and generally -- preparation and better scores. were you born into a good school district or did you go to a good private school? you're paying for that advantage through your childhood. we're trying to undo some inequality in the system, have it not cut across one affluent area. you would look at testing skills that could be picked up at a number of schools. maybe during the summer. maybe something that kids practice. still their progress shows up. building that kind of test is something we have chosen to tackle. america has to decide. unfortunately it kind of makes it a zero sum game. there is a limited number of spots. it is uncomfortable to think, especially as someone who is progressive and enjoyed my upbringing and was fortunate to be able to go to a place like harvard and see them in the cards. you have to think maybe i wasn't the most deserving person to go. it is a hard spot. whether or not we're at an inflection point depends on how honest our country wants to be. >> are you seeing any elements of people wanting to change their mind at all? >> first and foremost, there is some inertia in the system that is there for good reason. you don't want anyone to come in and wipe out tests that have been validated as a fair assessment of merritt. it doesn't mean that everyone agrees. that is how they have been used. you don't want the bar to be this new testing arena. that said said, there are some problems that standardsized testing has been lambasted for that technology can help solve. in my mind it is kind of unexcusable that it is not at least being attempted by the major testing to use that technology whether it is removing proctors or authenticating that you are indeed who you are. part of the problem is these tests are still paper-baste based. if they are not, they are making it on to an ipod where they are loaded and how hard is it to distract the proctor? kids are smart. not using state of the art technology to think about how to keep a system fair is the first challenge that they are going need to take on. >> tell us about what responses you're hearing and what inroads you're making? >> i think the -- to this argument resonates when they hear the approach of relinking education to employment as employers. 40% of students feel they are prepared for work when they leave the education system. 40% of employers feel they are ready for work. 72% of college providers feel they are ready. there is a difference in terms of where per semmingses are. -- perceptions are. there probably are some colleges that prepare them for work and life. employers have to take the lead on saying here are the skills that are becoming more important in an age where human intelligence is involving higher order thinking skills and machines are doing the lower ones. we have to see people who can imagine and create and have to see that people with sipt size quickly with new information and data and they can build and cogent argument. there is some of that in testing today. it is kind of a myopic view. the challenge is how often for all of us are we dealing with a static system where everything is written down for us. never. you need technology that can bring forward the employer's desire into the education market as a reality and tried and tested tool as an educational standard and that's what makes our job so hard. it is not a quick process to go out and find those definitions of skills that matter. i would say that argument of bringing the employers into the conversation about how their work is changing, what the future is going to require and bringing that back, many parents care. >> what is your goal? >> my goal is definitely to set a higher floor for high schools. know that some schools are going to do a crappy job teaching differently. there are all sorts of systemic problems that make it hard to teach. perhaps if you can relieve some of the pressure around content and so many different moll yule s of a.p. biology, not get rid of it but focus on a few concepts. maybe some schools choose to bring that to life with solar powered go-cart races and others with j. plmbings for a couple of weeks. whatever the scenario is best for those kids, i want a test that we deliver to be general enough to their progress shows up. they recognize what they have. not all kids that do well on the s.a. thrmbingsdoo poorly on our tests but maybe some kids who are diamonds in the rough out there slogging through a lot of content that doesn't land for them, maybe there is a way to recognize some of the skills they have going on behind the scenes. whether they got that in a job after school or watching a sibling over summer, i hope our tests are able to set a new north star for the system. >> for more on our chat check our out bloomberg podcast and at bloomberg.com. >> up next where on the globe you're likely to be a master of your own fate and where you're likely to stay poor if you're born that way. > we'll tell you about the harassing men of the london insurance market. ♪ >> in the equality issue a study on how enequality leads to slower economic growth. >> check out this chart because basically it shows very clearly that economic mobility as we describe it as we would like to think about it here in the united states is not happening so much. here is the u.s. right there in the middle. you have to go way up to finish land, sweden and canada, our neighbor to the north to really see a situation where depolings really rise beyond where their parents were. it all comes back to education. they are likely to be locked into their income levels. there is a cor layinglation. -- there is a correlation. >> one of the things that stuck named me was about a girl terry collins. she had this classic story of growing up in a situation that might have been opportunity restricting. she was born in flatbush in the 90's. it wasn't the worst place in the world but she remembered hearing gurkts and having crime in her neighborhood. she wanted to get out of there. her mom was unemployed a lot when she was younger. they lived on her grandma's pension. her mom encouraged her to make more of herself and move up the income ladder. she excelled in school and got a scholarship and studied at union college in upstate new york. while she was in college her mom died and she ended up being alone. graduated, had a degree in english. it was 2011. the economy was bad and she had to settle for whatever she could ake. at 22 she found herself working in sales. did that for nine years. now she is enrolled in an i.t. training education program learning how the do some basic technology skills and hoping to get on to the ladder that way. i think her story really speaks to even when you do the right thing. even when you are trying really hard, you this situation behind you where you don't have a lot of the support that people in more affluent and stable households might have. it can be hard. >> you talk about this bigger, broader thing that is going on. folks from likely to earn the same incomes as their parents in places where income inequality. something we are facing in the united states and around the world. i think that call that the gatsby curve. >> alan kruger came up with that at the council for economic advisors. do see much greater intergenerational stickiness, the inability to progress. at means this lottery of births, where you're born affects how your life plays out is so much more important in these places. if you're born at the bottom of the income ladder, there is a good chance you're more likely to stick there and not likely to climb up. >> what do you take away in terms of what needs to happen structurely, systematically. >> one thing that is really interesting comes out of the international monetary fund. they find in they see places we're talking about with low economic mobility and high economic inequality you see higher growth. those things paired together seem to hurt a country's potential. the idea is that if you have a lot of kids that might be talented but are born at the bottom of the income scale and they don't have access to opportunity, you might see a real loss of talent. you're not tapping all of your potential einsteins and this plays out down the road and you see your growth get mired in the mud. >> also the old boy bios of lloyds. >> we're talking about lloyds of london. >> the story made me a little angry. there they still do business the old-fashioned way. face-to-face deal making pen and paper. >> but a bloomberg "businessweek" investigation uncovered a deep seeded culture of sexual misconduct and atmosphere of relentless harassment. >> the last several months i have spoken to more than 18 women who worked a lloyds in the wider insurance industry and the picture they paint is of the market is hostile to women. where they face sexual harm. -- harassment. across the whole range from unwants comments about their appearance or bodies or you know, even their sex lives to unwanted touching, groping and serious sexual assault. >> one of the things the outgoing c. ombings set to do is ban drinking on the job because that was an element that seemed to be contributing to this environment. that didn't go over so well. during theon alcohol working day was only for the corporation staff. only for the lloyd's staff. the vast majority of people who work at lloyd's are not employed by the corporation but by bigger insurance companies who basically go in there to do their work. but it is fair to say that the majority of the issues that were raised to me by the women i spoke to, the root cause of most of them were alcohol. the last corner of finance. the last corner of the city where you can get away with it by drinking. it is not just condoned. it is almost expected. encouraged. sociablemarket. people are making deals, going back to pubs and going back to the office and then going back to the pubs and going back to lloyd's. >> the c.e.o. who took it up as a big cause is on her way out. >> yeah, she is actually gone now. the concern is amongst women who their in market that great champion has left. the diversity and equality issues that she was pushing will kind of fall back down the order of importance. we have a the same from the new c.e.o. who said to bloomberg, it was very distressing this kind of behavior is still going on. lloyd's takes it extremely seriously. he would be talking to the market to ensure these types of behavior are stamped out. >> is it maybe more pervasive than most people know across the city or how isolated is this? >> it seems to be a problem pretty much at lloyd's. not across the wider city. of course there is sexual harassment everywhere but it seems to be particularly acute at lloyd's. we spoke to a number of women who had international experience and experience working in banking and other professions who had moved to london to work in insurance. they all said no, this is a particular problem for london, a particular problem to insurance. >> up next, hedge fund billionaire and basketball team owner tells us where h sees investment opportunities thanks to that coming maybe economic slowdown. >> we had a fun conversation with him. this is bloomberg businessweek. >> welcome back to bloomberg sbizz week. >> you can listen to us on the radio on sirius xm channel 19 and 106.1 in boston. >> a.m. 960 in the bay area. in london and through the bloomberg business app. >> this week mark spobbed by the sports summit. >> i asked him about market stress and where he may find a silver lining during an economic slowdown. >> there is a lot of stress in the market. what i mean by that is last year the economy grew at greater than 3%. today where is it going to grow? is it 1.5 or 2? either way that is going to be a 20% or 30% reduction in growth. you don't have a recession but what we really have a slowdown. for us on the credit side a slowdown is great. there is a lot of different opportunities that are out there that we can take advantage of today. >> let's dig down a elle deeper. are you rs are interested in? what are do you see there? >> i think you have opportunities on the retail side and definitely on the energy side. you're seeing that continue. and then you have a lot of idiosyncratic type of opportunities. specific situations that we're able to come in on where we have been able to buy the debt. you have one situation today, i won't mention names but bonds are due in 2023. the secured debt is due in 2021. head to bonds are trading at 75. i think they are going to get paid off. you have a lot of that here in the u.s. you have a ton of that in europe and you have much more action in as i gentleman. so for us demsh asia. for us, still lots of opportunities. >> you were pretty erm on a relative basis to this asset class. yet it feels like more people coming in, the demand for this type of investment enough to sort of absorb all of these new managers that feels like are going after this? >> there are. there is more and more people doing what we're doing. i think that is fine. i think competition is fine. really what it means is if we see things earlier than other people, we'll come in and start buying what we bought and we can get out. i actually like competition. i think we're usually ahead of the curve. the more people there they usually take us out and are taking more risk. >> we talked about politics before. you have always been interested if that side of the equation as well. as we go into 2020, a lot of the rhetoric, especially from the democratic side which you have supported, is talking about a lot more scrutiny of wall street and questions about income inequality and how much do you worry about additional scrutiny i guess on your business and on broader wall street? >> i think it is fine to have scrutiny. i think at times we get a little bit of a bad rap but if you look at it, the vast majority on wall street is actually constantly doing right thing. i think you should absolutely have the discussions because at the end of the day you want to talk about these things but to be perfectly honest, i don't really think it is an issue. >> let's continue to conversation. we have another look at the credit market. >> this is interesting. this is my first love going into credit. c we have is the triple credits. the worst rated credits. we haven't seen those outperform which is a move down. that is countersbute i. you would expect to see that white line compress lower. credit could still perform well in a sloge economy. it makes sense. you could see that white line as long as the economy does ok start to come press and move down which is good. that means prices are rising and yields are falling. who he is playing alongside. some of the people he is playing alongside. you know these names. >> david einhorn, ken griffin. talk about the money that is being raised. >> we have been doing the for five years. we are going to raise in excess of half a million this year. the winner gets 50% of their profits directed toward charity. i love this contest. i'm deeply involved in it. i can't get enough. >> you have been talking about it for weeks. we'll have highlights on bloomberg.com throughout the month. the first company with an openly gay c.e.o.. >> this is bloomberg businessweek. want more from your entertainment experience? just say teach me more. into your xfinity voice remote to discover all sorts of tips and tricks in x1. can i find my wifi password? just ask. 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[ ding ] oh, it won't do that. welp, someone should. just say "teach me more" into your voice remote and see how you can have an even better x1 experience. simple. easy. awesome. let's welcome back. equality issue, a dating at helping chinese men have kids. >> the struggles of transgender workers across the country. >> by the end of this year, all public companies based in california will have to have at least one woman on their boards. we have a chart, this great visual that people can check out. >> i call this the room for improvement chart. california, the state passed a law that public companies by 2021 will have to have a significant number of women on boards. there are very few women that are on boards. what we tried to do was show you the gap, and where you will see the displacements start to happen as more companies put women on boards. >> there is a lot to be done. >> we did a longer story to accompany this graphic, what would it look like if this went to a national movement, how many more seats might become occupied by women? it's an important topic. when you look at the makeup of boards, we are talking about male and older. if can dramatically transform what corporate boards look like. >> we get into that deeper dive at bloomberg.com. magazine,g of the this caught our attention, a story about dow chemical, not the company you would expect to be on the forefront. ways. chemical is parting dow chemical is another thing to look at. it has a gay ceo. , it's not just there is the top. it permeates throughout the company. this is a company in michigan, not a bastion for a rights. embracedre has really a more forward way. title.ve the >> i think of this as an important culture story. when we think about the places where quality plays out, culture is the thing that is most difficult to change. it's a case study in how a company has been able to that. >> you assign this to someone who was a beat reporter covering midland, michigan. we've got more from him. hiring have a history of women and minorities. if they were a chemist, they did not care what you look like if you could do chemistry. that was sort of this thing. the othercare about social mores of the day. foundation of the company was disruptive. backdrop, people start to come into the company who had previously been in the closet, they come out and nobody cares. this goes back 20 years. we talked to some people, they met at somebody's house in 2000 and said we should go to the company and asked them for same-sex benefits. it seems like a good thing to do. they weren't sure what was going to happen. glad.ormed a group called they said we think we should have same-sex benefits. the company said ok. >> tell us about the significance in the process. >> he came out before tim cook. there was much less publicity. he basically knew he was gay in college. he stayed in the closet through most of his career at dow. in 2008, he started to tell people close to him. company, hen the decided he needed to broaden this. he realizes it sending the wrong message to other workers that this high level is probably gay is not openly gay. in 2014, he goes on an employee webcasts and comes out. company 30ith the years, with his partner for 20 years. this should be part of my work identity. he is not ceo at this time. he is to jobs below ceo. could infer that at some companies that's where he ended his career at that point. that's not what happened. >> there is more to be done with the company, he talks about adding in an inclusion: the bonus structure. so their bonuses contingent on making sure there is diversity and inclusion in whatever territory they oversee at the company. >> it's part of the conversation now. it's an evolving conversation because it's new. they also have right before he took the job hired their first inclusion executive. they have a focus on making this a broader mandate across the company. there is still work to do. thee are only 27% women and minority population is about 21%. as you go up and management, the numbers go down. >> we heard a lot about the culture of the company. massive company. help us understand what's going on. >> it's about to change. when i have done here is ranked it by the percent of revenue contributions. down to pot gets 20% from packaging, industrials, 5% comes from electronics. , they areave seen growing anywhere from 6% to 20% of sales. sometimes it's good if you can get size and scope. this might help them target their individual niche. >> that happens a lot around corporate america. they are focusing on those businesses that make sense. thank you so much. next, looking to break out big tech. this is bloomberg businessweek. ♪ >> welcome back. >> join us for bloomberg businessweek on the radio from 2:00 until 5:00, wall street time. you can check out our podcast. line.u can find us on an effort to break apart the big tech companies. the fight about screen in california and washington. >> there are a number of attorneys general who think there are a problem with the companies having too much market power, too much control over consumer data. what my colleague and i wanted to do was check in. there had not been much talk about what the attorneys general are doing set september -- since september. they had met with jeff sessions. he called them and because he was concerned that the platforms were suppressing conservative views. a number steered the conversation toward the market dominance and the privacy issues. a group of those states have taken a further step in investigating antitrust action against google, which had not been disclosed. we are doing a broad kind of overview or revision of our own view as a society of what these role -- role these companies should have. >> the election happened. that starkly make people realize that there is a dark side of technology, just in terms of it having the capability to affect the perception of reality. lines,e across partisan conservatives are concerned about suppression of the speech and on the other side people are concerned about the market dominance and the privacy issues. cruz sent a tweet and retweeted elizabeth warren. he agrees with her on the market power. >> this is the first time people have rallied against big technology. is this kin to that or is this something different? >> there is a precedent for this . that antitrust case the was brought by 20 states against microsoft that led to the rise of google. microsoft hadse, a freer hand to bundle its own search engine with its operating system. that case did not result in them been broken up, it forced them to change the savior. a lot of people are poor net the parallels today. change its behavior. section, finance european banks have yet to recover from the financial commerce. >> this could be a long process. >> this is a reporter in london. basically, they have been painfully reorganizing. they are not able to tackle the longer-term supply of revenue. over the last six months or so, there has been speculation this would happen. observers whot of point to the fact that putting these institutions together isn't really going to help tackle the individual and combined weaknesses, which are , it ise bank significantly inefficient. they would still be extremely exposed to the interest rate cycle, which is in negative territory right now. >> i felt like it was one thing after another pushing back against the european financial sector. you talked about low rates at the banks, there is competition. brexit is having an impact. there is a failure to create a banking union across the region. it is so fragmented. >> you have the bigger institutions in germany with a fraction of the market. potentially a 50% market share if they get together. that leaves behind the hundreds of savings and lenders they compete against. companies don't actually need to make as much profit as privately owned institutions. the combination of these two institutions would do very little to change that. this is part of the remnants of the banking union, which hasn't really happened. there are distinct markets and regulators that still have a say in how they are run and how the market can compete. >> what happens from here? >> i don't think there is a sense there will be a massive appetite given the structural inefficiencies that remain and the unfinished project, the bank union in the eurozone. they don't have a deposit insurance guarantee scheme. countries don't trust each other fully. that requires banks to have funds locally in the event something happens. week at thehis summit in berlin, angela merkel spoke to us about the potential for the merger between commerce bank and deutsche bank. this has challenges and opportunities and risks, only they can evaluate that. have government and banking sector investment, that is not something. i'm waiting for the stakeholders to give their final say on this. herheck out more of conversation on bloomberg.com. the fight for transgender employees rights and the decision facing the supreme court. helping gay couples have children. >> this is bloomberg. ♪ >> welcome back. quach you can listen to us on the radio, on sirius xm. >> widespread discrimination facing transgender people in the were place. >> the decision on whether not to extend protections to trans americans. >> amy stephens is nearly 60. for most of her life, she was known to coworkers, including her boss at the funeral home that fired her, as mail. from hera decision wife and therapist after decades of wrestling with this to calm out as a trans woman. she came to the realization she was a trans woman. this was something she wasn't willing to keep to herself at work anymore. she wasn't willing to just wait to go to the bathroom when she knew no one else was there and where male clothing and be treated as though she were a male. boss throughto her a letter that she wrote. she gave him her therapists business card. a couple of weeks later, she was fired. her case could redefine how the federal laws interpret across the country about whether or not it's legal to fire somebody because they are trans. totell us about her decision launch this series of legal actions. this has gone up and up and up because she didn't have to. she made a conscious decision pretty quickly after her dismissal that she was going to fight it. everybodyd it's about being treated fairly. the samea phone call day she was terminated to the aclu. she was meeting with them by monday. her case lost that the district court level. she wanted the appeals court level. will that six circuit precedent setting ruling in her favor stay in place or will it be taken up and overturned by the supreme court? there is concern among advocates that the current makeup of the supreme court, her kate could casenate protections -- could eliminate protections. she said she would do it again. >> you talk about the unemployment rate among the transgender population, it's higher than most. >> it was 15% at a time when overall unemployment was much lower than that. people say discrimination is pervasive. michiganey for the aclu which has been working with amy told me that when he started the job a decade ago, they mostly got calls from gay and lesbian workers. many people did not think there was a chance of winning on the -- on behalf of a transgender employee. most of the calls they get now are from trans people. helping tolving from people me to helping them find surrogates in the united states. >> beijing is not known for supporting the lgbtq community. >> we get more from our reporter. you've got to write about this company. she works in public health. they do all this work with the government, anti-hiv stuff. they are doing this new program or they help gay guys go overseas and have babies by surrogate in the united states. why is that happening? it turns out it starts with the hender of the company, forded, he created an app gay men. in china, outside of the big cities, it is still not totally cool to be out and proud of. has really made a big difference for communities outside the big cities. 35, he got baby fever. he really wanted a baby. he figured out it was illegal in china. been.n thailand, that had it is illegal in china. he decided to go to california. he had a baby by surrogate. he thoughte back, he's going to start this as a business. >> he had a son. -- was his son ate chinese citizen? -- a chinese citizen? >> the babies are born in the u.s., they automatically have u.s. citizenship. china,ey go back to there is an arcane system that continues to be problematic for regular chinese people. you have a residency permit. you have to get it from your parents'hometown. out routeo clear laid for a parent of a baby born by surrogate to get that. they work it out sometimes. for a lot of these gay men who are having children i surrogate, it's an advantage to have u.s. passport because they are worried about putting them into the chinese system that will be against him. long-term thatng they will move abroad with their child and send them to a national school anyway, just to be in environment that fits them better. and on ournline mobile app. >> who knew how egregious in terms of how difficult it is for a woman to work in the u.k. insurance industry? it is such a well-written story. the me too movement has yet to catch up at lloyd's of london. >> it is really worth the time. i loved the cover. she walked into our studio and we didn't want to let her go. we spent a lot of time with her. i would recommend our extended podcast. she really goes into a theory of how this is a long game. she is 27, she will be added for a long time. >> check that out. podcast ont our itunes, soundcloud, and bloomberg. >> more bloomberg television starts right now. ♪ this isn't just any moving day. this is moving day with the best in-home wifi experience and millions of wifi hotspots to help you stay connected. and this is moving day with reliable service appointments in a two hour window so you're up and running in no time. show me decorating shows. this is staying connected with xfinity to make moving simple. easy. awesome. stay connected with the best wifi experience and two-hour appointment windows. click, call or visit a store today. ♪ david: they said you are now in charge of greece. jean-paul: the people at l'oreal had proposed the job to everyone. and no one wanted to take it. [laughter] david: people are happier when they use your products. jean-paul: by creating beauty products, you make people happy. david: can you tell the difference in brands? jean-paul: not from far away. but -- david: you take a four-week vacation, is that a requirement to be french? jean-paul: mandatory. david: what would you say is the secret to a being a good business leader? jean-paul: the most important thing is to love what you do. >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way. all right. ♪

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