A crime . Jason all of that and more. But first, our top story this week. Natos 70th turned out to be less like a Birthday Party and more like a thanksgiving dinner for a big, dysfunctional family. Carol thats right. Not all of them got along, a few snide remarks were made, but in the end, everyone seemed to accept that theyre stuck with each other. Thats according to marc champion, who covered the summit outside london. He joins us now. Lets talk about nato. What a week it was. Marc it was. I mean, the buildup was pretty extraordinary. This was supposed to be just a celebration. It wasnt a real summit. It wasnt a full summit. They do that every two to three years. This one they felt they had to do because it was the 70th. They kept it really short because they specifically didnt want to create a big target for unscripted problems with president trump, which theyve had before. So, and then all of a sudden, in the weeks before, you had the french president , macron, coming out and talking about whether he how he wasnt so sure whether the rest of nato allies would go to the defense of turkey under the article five collective defense clause, which is at the core of nato. It caused a huge blow up. And then, of course, you had turkey itself, which had begun a military operation in syria against the will of most of the other allies. People were very apprehensive going in about this thing could just blow up. Instead of being a celebration, a demonstration of the union of the unity of this alliance, it would be the opposite. Jason it ended up more awkward and uncomfortable than anything. You had hot mic issues, extended press conferences, the president of the united states, as he seems to like, right at the center of it. Marc absolutely. And really, the key question going in, and what everyone was wondering to themselves when he landed, what was he going to do . He had a binary choice. He could either decide, you know, i will throw in with macron hes raising a lot of questions about nato. Ive raised questions about nato, not just on spending, but various times the president called nato obsolete. And, you know, he could have done that. He chose instead to present himself as a savior of nato, and its protector. And its an unlikely role, given all thats gone before. But the bottom line there was that hes had some success in getting the other nato allies to spend more on defense. Hes been banging on that particular drum for the three years hes been in office. And defense spending has increased pretty sharply among the allies. It actually began before he came into office, but hes very happy to take the credit. The other leaders are very happy to give it to him. Carol i think its safe to say theres been a fair amount of conversation that all the members of nato have to contribute their fair share. I want to ask you about boris johnson. He was at the summit. He is also the subject of remarks in the magazine this week, more specifically his character and temperament. His anger, who knew . Tell us a little bit about that and how that might impact his campaign and possibly his election. Marc yes, so this has been a really extraordinary campaign. Theyre very short in the u. K. One has to remember that, especially if you are familiar with american ones that go on for more than a year. Theyre basically a monthlong, a month to six weeks in effect. Theyre extremely short, really packed in. All the debates and everything it happens very fast. We are already towards the last week. This particular campaign is extraordinary because you have both parties making big plays in terms of changes in public spending, budgeting, fiscal policy, and all these sort of things. In the end, it really comes down to trust in the two main candidates. One of them is boris johnson, and he has always always had a big issue with trust. And the anger is a piece of that. And we have this article in this issue of businessweek, which runs through it, very carefully reminds you of the times when he has flown off the handle. And people already dont quite trust him because he has a record. He was fired once for not telling the truth while he was a cabinet minister. He was fired as a journalist for not telling the truth. Theres already a trust issue for him. He has a pretty colorful personal life, which has raised some trust questions. If you add on top of that the possibility of a blowup because he doesnt keep his temper, which has happened before, then that is one of the things the people running his campaign are very concerned about. They kept the campaign on a very tight leash and him on a very tight leash and theyve kept his exposure quite limited. Jason marc champion, were going to leave it there. Thank you for joining us from london, a busy time between hosting nato and this big election. For more on this magazine, here he is, businessweek editor joel weber. Its theg 50 most wonderful time of the year. Joel this is our favorite issue of the year. We recognize the 50 people who defined 2019. We look specifically for things that are measurable because this is bloomberg. Carol all industries. Joel we try to look across everything and thats what makes this one special. You can have a list of people that are expected names. Like Warren Buffett could be on that list every year. But were looking for measurable contributions in 2019. We go back to january through now to find out who really sparkled. Jason even a chicken sandwich. Joel it broke the internet, the popeyes chicken sandwich. It sold out in a matter of days. People got stabbed over it. Really, it speaks to the ability for brands to harness things. Thingsen sandwich of all can really break the internet. Carol we reach out around the bloomberg organization. Is there a name that surprised you . Joel this is a team sport. We pull from bureaus around the world. We look for leaders and Business People and ceos. One of my favorite ones was the black hole, if you forget all the things that happened, this is a huge deal, the team that discovered a black hole. That was one of my favorite ones because its a photo of nothingness. Effectively, what we all looked at for the first time. And it really just marked an incredible scientific achievement. Im honored to have them on the list. Jason 2019 feels like a black hole kind of year in many ways. Joel weber, thank you so much. Carol coming up, a pushback on swiss re. Jason soros, yes, that soros, george soros, gets a little conservative. Carol they are indeed. This is Bloomberg Businessweek. Carol welcome back. Im carol massar. Jason im jason kelly. Catch up on our daily show through our podcast. You can get that on apple podcast, soundcloud, or bloomberg. Com. Carol you can find us online. Who wins when Companies Buy their own shares . Its a good question. One argument is that it is the companys executives that come out on top. Jason thats the case our economics editor is making, here with his story and this weeks businessweek explainer. Last year, s p 500 companies it hundred a record 806 billion with of shares, 55 more than the year before. This year, on track for 740 billion, the secondmost ever. One commissioner had his staff study 385 recent buybacks. They found shares rose 2. 5 more than the days after buyback than otherwise expected. They also found twice as Many Companies had executives selling in the eight days after buyback announcement as they do on an ordinary day. The value of those sales is more than five times higher. When a company buys back shares, it signals confidence in the future. When its executives sell shares, it seems like a legal version of illegal pump and dump stock manipulation. The sec wants the agency to rewrite the rules. He wants to bar insider sales for a length of time after buyback is announced. A sec chairman has not agreed. Although he says hes happy to continue the conversation. Carol lets get more on rewriting the rules. Jason you heard from him and here he is again, peter mccoy. Peter it focuses on other thing which has gotten less attention, which is what executives do. Robert jackson is one of the commissioners of the sec, not the chairman. He has commissioned his own staff to look into this. What he found is stocks tend to go up when a buyback is announced. It is an expression of confidence by management in the future of a company. No wonder the stock goes up a bit. But, what do executives do . They are more likely to sell their shares in the immediate aftermath of this buyback announcement, taking advantage of that pop in the stock. If youre a cynic, you would say this is a legal version of an illegal pump and dump stock manipulation. Carol right, so this is insiders taking advantage. Theres been Research Showing the insiders are selling right after the announcement of a buyback. Peter theres always a steady dribble of selling by executives. They are cashing in on stock options. Likeyou see is a big jump, fivefold increase on the dollar value of stock sales right after a buyback announcement versus before. The number of executives doing so is also up. Jason what does jackson want to do about this . Peter you can think of a wide solution. He has a narrow, tailored solution, which it seems unobjectable. It bars directors and other insiders from selling any int the immediate aftermath. As he says, who thinks its a good idea for executives to be doing this right after buybacks announced . Who benefits except for those people . Jason there are already restrictions on when insiders can buy and sell shares. Peter yeah, so this would be a new thing they would not be allowed to do. Carol how likely is this change to be implemented . Peter what hes betting on is articles like this one will start to generate some interest in this in the general public. So far, the chairman of the sec, jay clayton, has not gone along with this. He was asked about it last year and kind of demurred. Still willing to talk about this, i dont want to have a big roundtable about it, but hes susceptible to political pressures like anybody else. If the pressure mounts, the road could change. Jason lets talk about a story thats one of my favorites. Its about one of finances most legendary names, george soros. Theres a new era for his money. Carol thats so true, jason. Its a different fund and investment operation, in part because it has to be. Thats made dawn fitzpatricks job especially tough. Shes of the legendary shop. Jason a reporter has covered him for years. She wrote the book. All about the industry and its top managers, including mr. Soros. Here she is with her story. They struggled mightily with performance the past three years since dawn started. Jason remind us who she is, where she came from. She came from ubs. She ran the hedge fund business, as well as the equity business and other businesses at the management part of ubs. And she was chosen to run this new soros fund management, managing money for the foundation, not for george and his family. Carol take a step back because i feel like there was a long period where george soros could only do really smart things. If you could work there, it was a really cool thing. Remind us of his past. Sure. So, as you said, it used to be the major best performing hedge fund in the world and george sat on top of it. He had great traders, they made tons of money. And then in 2017, he transferred most of his wealth to his foundation. That meant the foundation was no longer managing money for george, whipping it around. They had to be much more conservative because they didnt want to lose money, they just had to ensure they could find all their projects every year. Jason that such a key point because if you go back to the culture and ethos of the original soros, it was big, big bets, i mean huge bets that paid off in many cases unbelievably. But swinging for the fences in a lot of ways, right . Kathy absolutely. They made so many big bets. The biggest one was george betting against the pound. Betting against the pound in 1992, they made 1 billion and they bet 10 billion. 10 billion on that bet. And they wanted to bet 15 billion. They just couldnt get it done. Carol breaking the bank of england. Alright, so thats where george soros is. Fastforward, and lets be fair. The Hedge Fund World has changed dramatically. We see the hedge fund shut down or folks take the money to have Family Offices. The world has changed dramatically. Kathy its harder to make money. And now, this isnt a hedge fund, its been a Family Office for many years now. Now it has to be more conservative. Jason coming up, a different kind of housing crisis that goes to one of the most important issues of our time. Is homelessness a crime . Carol plus, the cost of higher education, another big problem of our time. Jason this is Bloomberg Businessweek. Jason welcome back. Im jason kelly. Carol im carol massar. You can also listen to us on the radio on sirius xm. Jason 960 in the bay area, and london on dab digital and through the Bloomberg Business app. We turn now to a different kind of housing crisis. Carol the u. S. Supreme court may review a lawsuit that changes how cities treat the homeless. We checked in with our reporter on one city is unfortunately home to many homeless, seattle. Its a case that started a decade ago in boise, idaho. Six Homeless People brought a case against the city, basically saying that the local ban on camping in Public Places is unconstitutional. It represented cruel and unusual punishment because basically there was no place for them to go. There werent enough spaces for them in shelters and effectively, they were being penalized for being homeless, which is something you cant do under the law. Carol this is wild. I think it could change dramatically of how we think about housing. It gets to the idea that housing is a basic right. Noah yeah, thats a larger question that looms. The legal issue is much narrower. Just to complete the story, the boise won at the District Court level, but then it was appealed to the ninth circuit, which covers a giant swath of the u. S. West from alaska to arizona. The appellate found in the favor of the homeless folks. So, as a result, you have a ruling out there right now that says that these sorts of bans on Public Camping are unconstitutional. And its a big deal because its a ruling that goes beyond boise now. Its something that matters to cities like los angeles and seattle. And its created a lot of discussion in cities throughout the west about how they can tackle this giant problem of homelessness. Jason in your story, noah, you do talk about some of what various cities have done to try and combat this, especially at a time where if you talk to people in los angeles, san francisco, seattle, they talk about this massive rise in homelessness, which obviously has something to do, large part to do, with the affordability of housing. What have we seen those individual cities do to combat this so far . Noah well, what youve seen broadly is an uptick in laws that criminalize camping or sleeping in public. The ninth Circuit Decision really calls some of those into question. Its made a lot of cities back away from those bans. The question longterm, the bigger question that looms, is how are you going to solve homelessness . A lot of people in the west and across the country recognize its a problem, but theres a robust and active debate on what you do about it. On the one side, the folks who are arguing on behalf of the homeless folks from boise, they say that criminalizing people for sleeping on the streets when they have no alternative is counterproductive. Carol from the high cost of housing to getting an education. Jason the story in this weeks economic section explores one states free college program. Is it a model for the nation . Carol our reporter joins us from washington. The thing about tennessee, they were the first state to implement a statewide Free Tuition Program for every High School Graduating senior. And they could go to Community College or Technical College completely free. That started in 2014. It started as an economic program. The idea was that tennessee took a look around its workforce and realized, with an increasingly skilled economy and advancing economy, they werent going to have enough skilled workers. As a result, they came up with tennessee promise, and a Complementary Program for adults called tennessee reconnect that works to get tennesseans a postsecondary education. So whether thats a technical certificate or Community College degree or whatever it may be. And the results have been promising. You see College Going rates increase, enrollment in Community Colleges increase, Graduation Rates improve. But at the same time, the dropout rates, while improving, still could use a little bit of improvement. Its almost 50 of students are dropping out after three years using the program. So, the idea is that you look at these dropout rates and tuition is not a factor, but the other cost of college that the Financial Aid program doesnt address, like transportation or housing or the cost of books, are really weighing on these low income students. Jason what has been learned in tennessee that can and cannot be applicable to other states . So for tennessee, it has its own program, the first to offer to all students that were graduating from high school. But other states have their own version of programs. Some have residency requirements. New york requires you to live in the state after you receive the aid. Other states offer it for four year education while others offer it for two. I guess the lesson i heard from experts in this area is that a onesizefitsall approach is really challenging, especially in higher education, where each state is different and each state has come up with their own program to serve them. So, looking at it from a onesizefitsall approach is really challenging. But that is different than having a federal framework and giving states more wiggle room to decide whats best for themselves. Carol coming up, the bloomberg 50. From finance, politics, to entertainment. These are the people who changed 2019 in unexpected ways. Jason weve got a chat with one of the names from the list, the ceo joey levin. 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