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tv   Bloomberg Business Week  Bloomberg  December 3, 2016 3:00pm-4:01pm EST

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carol: welcome to "bloomberg businessweek." >> we will talk about what the future holds for those just starting out. we got about capitalism camp for kindergartners. nest eggs build your by tweaking your social media persona. >> all that ahead on bloomberg businessweek. we are here with the editor and of bloomberg businessweek. welcome. good to have this whole issue,
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all that new money. what were this special tensions underlying this? guest: it is about where they see opportunities, where they see risks, how they are planning it out. we try to look behind people that span every experience of life, from transgender to new couples and babies and kids. all of her: it is making new waves, taking new steps. oliver: it is making waves, taking new steps. >> it looks at what millennials are doing and people in their teens trying to get business. we have people taking their children as young as five and 62 class --nd six two a and six to a class where they can learn how to improve their credit rating. oliver: you have one story that's youngish ceos. >>theranos is one company we talked to. it was the implosion there and how they did the testing and
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jack dorsey and twitter about , they questions about how they are going to do their business model moving forward and monetize that user base. you took one of your reporters and you deployed him to a social media marketing agency just to see what would happen. guest: it is definitely a must read. oliver: you spoke about what it's like to be a social media influencer. let's do the basics. tell us what an influencer is. guest: if you are under the age of 25, if you open up your , you will notice between your friends there are attractive people wearing
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beautiful outfits with beautiful vacation shots and pictures of beautiful meals. these people are professionals. they are the equivalent of models. what they are producing our miniature lifestyle magazines , especially young people, will follow for style tips and advertisers will pay money to get into those. it is that new media ecosystem. for business week i decided to dive in and become one of these people. are having fun and laughing a little bit but these guys can make a fair amount of money. guest: over 1000 people are making more than $100,000 per year selling advertisements on instagram, where they are talking directly to an advertiser, either a fashion brand or a lot of nutrition and
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fitness stuff. sponsors --these sponsored posts. and they will usually take you that usually tag you -- they usually tag you. if you not a sophisticated user you might miss it. there are norms, there are money, it is a real business. oliver: we're going to get into be anou did to influencer. i want to delineate right now the difference between instagram and stuff like snapchat. you call instagram the perfectly .esigned self-esteem version a draw line between what instagram does, what snapchat does. guest: this is interesting
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because it relates to why there is more money in instagram. encourages people to create these tossed off selfies. that as you think about an advertising platform, it is not super great. if you are an advertiser you want the airbrushed perfect shot. you have these filters that encourage you to basically smooth all the wrinkles out of your life. is what makes the platform attractive to people, that we can make their own lives look like they are part of a magazine, and it has created this whole world of influencer marketing. mission was to become one of these influencers. how did you do that? guest: i met a few agents who worked with influencers and help them become who they are. agents, daniel saint, he and i were having a
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column -- having a conversation. thisre saying can any of he taught? can anyone become an influencer? he said, "yes." he introduced me to all the right people and told me what to wear and who i should hire for my photographs. carol: this was really a controlled environment. thing that was most eye-opening to me, you see these people on instagram and think they are using the platform like i do. havenswer is no, they professional photographers, connections with brands that get the new call -- new clothes all the time. i spoke with somebody who runs the instagram account for a dog. it is a sheila e. new -- it is a
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shiba inu that wears clothing. all of the people who work on it, you have to have the photo shoots, you have your professional photographer. i asked her about her agent end she said i got a new agent. it's like an animal agent. it's an agent for instagram pets. the punch line is it is actually owned by the new york times which sounds crazy but it is actually kind of working its way into the mainstream of the media world. oliver: choosing the right image to encapsulate the new money is to test money issue -- -- new money issue -- guest: there are a lot of different stories and we sort of need to bring them together for the cover. address everyy to
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single story within the issue, we sort of be to the idea of new money. new money, kind of the opposite of old money, the opposite of old is young. so we went with a baby. oliver: it does speak to the article because you talk about young people, millennials. this one is particularly young but i love the money coming out of the back. guest: there are no babies in the issue, but there are elementary aged kids. without the baby was the most fun symbol of the issue. carol: >> the gold -- >> the gold -- >> with the gold? guest: we wanted to get across wealth. oliver: what is the idea behind the money placement? guest: there are not a lot of places you put money on a baby. carol: i'm always curious when
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there is an issue and you do a deep dive into something, there has to be a lot of people with a lot of different ideas. was there a fair amount of debate? guest: the issue had fairmont a photography and you could play around with different versions that incorporated some of the foot of grasping a lot of it is portraiture -- photographs. a lot of it is portraiture. you arep next if struggling to figure out how to market your product to the americas most fickle demographic, we have the consultants for you. oliver: and the business boot camp and bolts of supply and demand. ♪
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carol: welcome back to "bloomberg businessweek." americans born after 1996 make up almost a quarter of the u.s. population and have $44 billion in purging power. oliver: unlocking their purchasing power can feel daunting. carol: unless you speak their language. ian, you take a look at generation z. we talk about millennials, generation y. michael: it is anyone born after 19 -- bm: it is anyone born : it is anyoneian born after 1996. in the marketplace they have $44 billion of buying power.
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amount isat dollar what makes them a pretty big target with companies and advertisers. ian: a lot of people looking at at millennials and what they can do. they seem to have an eye for the future in that respect. to somehich leads us teenagers that got together and created a consulting firm. an: these three kids met about this cornell business camp for high school kids. the two boys are from jersey and they kind of clicked. maybe we could do something together. that was the starting point for this whole journey. called jouv, con of like
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rejuvenate, juvenile -- kind of , juvenile.nate oliver: i'm going to go on some complex logic, but there have always been teenagers. how about right now? social mediaent of that companies are having a tough time targeting where this start of can provide some value? ian: you have teenagers with different up ringing due to the advent of technology. social media is like oxygen. they communicate through these platforms more often than anything else. tomarketing executives look target kids of this age. they have a tough time understanding the nuances of social media or the internet in general because a lot of changes are coming from teenagers specifically. carol: what i found fascinating, this consulting firm targeting
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generation z, they created something. a talk to us about that. ian: when you have kids saying that you can speak for our generation, there is holes in that. you can't speak unilaterally for means of kids around the country and the world. the vine is basically a focus group for hire. sourced -- d oliver: they are not paid. ian: they are not paid. these three kids, they have a lot of human capital around the world. their connections through other endeavors they have done, social media, they have put on the blast that we are three kids representing generation z in the business fear. -- in theiness fear business sphere. it is a collection of 200 plus kids around the world, 100 20's
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represented, every single continent. a company can submit an idea, kind of like an incubator, and the kids can bounce around their views on it. they can focus on east asia or whatever. >> teenage consultants are one thing, but what about preteens or toddlers? carol: we spoke to peter robinson about a camp for the k-12 set. i love this story. tell me about the spark business academy. what exactly does it do? peter: this is something my colleague ran across in a flyer of washington dc summer camps. the flyer had pictures of the boys inds, young suits talking on cell phones. teach kids about
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budgeting and investing and entrepreneurship. i was fascinated by this idea that kindergartners would need to attend a future millionaires boot camp, as it was called. i'm thinking summer, i'm thinking of running around. this seems like a buzz kill. but people are doing it. tell us about the parents are kids that are doing this. meet occupy their kids in the summer so they need to find things to do, so parents will -- i talked to several who will schedule him using camp. when they saw this finance camp, it struck a chord with them, because it was something they wanted to talk to with their kids but the time never seem to write and they never felt confident enough in their own skills he did this was a chance for someone who is an expert talking to them about finance. were momentse where the kids looked a little sleepy.
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greate instructor did a job of bringing things back to things that were relevant to kids, like facebook and apple. do love the line in the story where you say, "as the day went on i began to inventory the various ways it is possible for a team to slouch." -- 418 to for a teen to slouch." peter: -- he began teaching their trading courses -- they're training courses. he developed this interest in teaching people. he began to wonder why in this country addicted to credit is there not a more basic structure about finance. up next, the good, the bad, and ugly ways to split a
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check with a loved one. and a transgender's guide to -- ♪
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♪ carol: welcome back to bloomberg businessweek. oliver: you can catch us on sirius xm channel 119, 1200 and boston, 91 fm in washington dc and a.m. 960 in the bay area. in the new money section, how loved ones to finances. spoke toreporter several couples about splitting the check. you spoke about their specific money issues or lack of issues, tell us about how you find these people, what you found about them and the general
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approach. to a dozenke couples, found them through friends of friends of friends and other organizations. otherwise people were not willing to put their personal lives and money under the microscope. and founde net people, whether they started the conversation or ended it at way, had pretty revealing things to say about that intersection of your money and your life, your economic situation, who you are as a self and who you are as a couple. what drew us to do this is the sense that these are the things that people are not supposed to talk about. that can be hard for a couple to talk about together. here is an invitation to talk with one million subscribers.
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oliver: nobody broke up during the interview? get a message from one of the couples after the fact, saying, "thank you, this has been so help will." -- so helpful." carol: let's go through one of the couples. they seem to have come into the relationship with different approaches to the money. josh: when it started i was he alreadyving and had his spreadsheets and financial plan and savings figured out. and they converged. it converged on the one hand where rebecca became more conscientious of money but rebecca helped re: -- helped ari --
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this is a couple that now gives away 20% of their income, something that they went through a process to figure out how to do and it was important for them to do. that doesn't mean they don't have any conflict. they still disagree about how to handle inheritance, what the progressive approaches to being to get a chunk of money from a family member. carol: trans persons are meeting some challenges when it comes to retiring and benefits. let's talk about transitioning from a man to a woman or a woman to a man. there are economic and financial consequences. you write about that. guest: i talked to a lot of transgendered people about the experience, not only the medical experience but emotional experience of transitioning and what are the economic
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consequences of all that. there are two things going on. employment issues be there is still a lot of discrimination against trans people in the workplace and on the job market. so that's one aspect of it. people from a lot of there are a lot of issues with your name change or your insurance or your taxes, things like that that get confiscated. -- get complicated. was i help -- what i wrote -- i think it will be an thatting read for people want to be inclusive to trans people in their workplaces. oliver: let's talk about how you started the story. one subject transition from male to female. tell us about the problems she encountered along the way, the difficulties she encountered financially and what is unique about that experience. guest: basically her transition
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wiped out her retirement account. she was in her mid-50's. she had a long career in tv and radio and then she could not get a job. she ended up getting a job -- she also ended up getting divorced, which is also a common thing that happens. your [indiscernible] she lost herid house in the suburbs, she lost her career, she lost her car. she also said she has never been happier. she was also very positive about the rest of her life and where she is now. herhe had to wipe out retirement account for the living expenses and the medical care she needed. there was no insurance to cover all of these procedures that cost a lot of money. the detailsk about of the health care, it is not just the final surgery that everyone talks about.
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there are a lot of things that trans people need to look and feel like their gender. in -- feminize a show facial feminization surgery. it's very expensive and can cost as much as a hyundai and hurts like help. carol: but it's a real cost to her. guest: she made the full transition. the good thing there is more insurance available for trans people. an insuranceot for company to offer trans health care. 60% of the largest companies now do it. there is another problem i found, which is that trans theye, companies may think are buying these policies, but when trans people actually try to navigate the bureaucracy of getting those coverages it is really difficult. carol: up next, the mixed
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emotions running across the university of pennsylvania's campus, president trump's all more moderate. mater.p's alma ♪
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show me house of cards. finally, you can now find all of netflix in the same place as all your other entertainment. on xfinity x1. carol: still ahead in this issue, why future ceos at the university of pennsylvania are afraid, thrilled, or both. areer: and why judges trying to prevent civil suits against gawker. carol: all of that ahead on bloomberg businessweek. we are back with megan murphy and there are so many must reads. you take a deep dive into the french election. megan: this has attracted scrutiny worldwide. we see this populist theme
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playing out in the u.s. and the u.k.. the center-right candidate -- people know her for her nationalist policies, picking up the stuff trump was talking about it in terms of the economic policy, she is trying to tap into the working class, talking about proving labor policy, making sure the 35 hour work week sticks. at smaller government is cutting the corporate tax rate, trying to boost investment. that goes against a lot of the social tendencies. it is a fascinating race to see how this economic populaces pet that is playing out. is playing out. oliver: we're going to figure out how to send money home if remittances are held back or in
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some way taxed by the trump administration. megan: is is a great way of looking at the underground economy. donald trump made it one of his centerpieces that he was going of thesely stop a lot and put it procedures to vet the legality of people. for we found our people are charging $50 per suitcase. matter what policies are put in place, they're going to get that money back to their relatives and how much this is going to unravel, what has been the policy for american administration for more than a decade to have them be transparent, to have them be available. >> you guys take a look at president-elect donald trump. he seemed very critical of janet yellen prior to winning the election. >> he was quite critical.
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we may be entering a new phase of the janet yellen-donald trump. oliver: obviously the question of what did trump -- peter, you cover a lot of ground on the fed, president-elect trump, and everything that can happen with rates, yellen, and all this stuff. let's talk about what had happened since donald trump has won the election for it how has this changed the way economists and market participants are thinking about interest rates? peter: for those that aren't first in bond yields, bond prices are going down, so it has been a bad time if you are an investor in bonds. the it is signaling is expectation and commendation of higher inflation -- expectation
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of a combination of higher inflammation and higher growth spurred by tax cuts and spending increases. oliver: one thing we have coming up is a fed decision on december 14, which up until a couple of months ago was up in the air. the election, markets are now saying it is 100% going to happen. what are they looking at in terms of a trump policy to determine the rate in 2017? on wheree indication economist are going to go over the next year? peter: that is the key question that i try to address in my article. we have donald trump about to become the most important man in the world. janet yellen may be the most important woman in the world,
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possibly ruffled by chancellor angela merkel. they were born two months apart, trump and yellen. summer 1946 in new york city. and they have taken very different paths since then, of course. now they are coming together through a strange confluence of events. they are very different. yellen, still the academic soft-spoken, prefers to be behind the scenes. -- and yet she has to stand to donald trump. as soon as markets get the sense that the president is dictating
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interest rates and start to lose trust in the institution. oliver: here is where the story gets interesting. trump has been vocal that yellen's interest-rate policy for so long had inflated the equity market. now that he is in a position where the economic results are going to be attributed to him, is he going to go back to what he said? peter: this is the $2 trillion question. everybody wants to know that. it is pretty common for incumbent presidents to dislike high interest rates and tight monetary policy because it tends to slow growth.
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costsncreases the boring when paying higher interest rates on bonds. been general understanding that you don't want to name a bunch of dubs to your federal reserve board because that will send a new long single -- wrong signal to the markets. they will say you don't carrier about that she don't care about say you don't care about the value of the dollar. that is where we stand now. there is one camp of people that says trump is going to continue to do what he said during the campaign and name a bunch of hawkish people. has two openings, there are two vacancies on the board of governors. since 2015 they have been vacant because the republican senate has refused to act on obama's nominees. oliver: while she will likely be
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there until the end of her term the surroundings may likely change. peter: she has said she is not leaving. carol: speaking of mixed emotions, -- oliver: a reporter travel to his alma mater in pennsylvania and was surprised by what she found. most schools are generally liberal. especially ivy league campuses. the election of donald trump is especially poignant for them. graduateddonald trump in 1968 and the original idea was, let's go back to wharton undergrad. undergraduates, let's go talk to them and see how the election is impacting them, kind for better or for worse. as their outlook on life they become the next generation of business leaders.
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this is a bit of a different experiment for you going to talking to kids. what was the first thing you took away when you stepped onto campus and started talking to people about politics. katia: i wouldn't say was a fragile, but sensitive time of the campus. several members of the freshman class had been harassed with .acist messages it is still being investigated but still extremely fresh. app where they add people to a group text. obtainedne had somehow the phone numbers for a large portion of the black freshman, , completelyo this
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against their will, and started harassing them with racist messages. such as invitations to a daily lynching. horrific messages. all of the students were affected by it. that was a very sensitive time. and in addition that was all in the wake of the election. the election had been linked to those messages because they were wasp's comments in them it a sensitive time to be on campus. buildinghere's tension around the campus, tension about the issues here that have been at the forefront of the election. one thing you do a good job of whaticling in the story is it is like to be a conservative on campus as well. you talked to a few students there, part of the college republicans. and you have documented the things they have run into, in terms of their displays getting destroyed or what they feel to be intolerant.
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tell us how that breaks down on both sides of the equation. bank -- kacopy a tia: that was a surprise. the surprise was the conservatives were feeling out of place and put down. that is what was interesting. make it judge want to so billionaires can't fund civil suits. oliver: and how hailing a scooter in rome can lead to romance. a scooter in rome can lead to romance. ♪
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carol: welcome back to bloomberg businessweek. in the politics and section, --
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oliver: your team wrote about litigation, funding, and bankrolling court cases, i think this has been in the news because of peter thiel and gawker. the first line of your story is that this has been going on since the dark ages. guest: peter bloomberg spoke to our story, and said litigation funding is nothing new under the sun. it goes back to the dark ages when nobility, who wanted to mess with their enemies, would underwrite petty lawsuits against people so that they could just cause trouble. oliver: a not so petty lawsuits taking up attention is peter thiel and gawker. is that what spurred this article? tell us why you chose to examine this business? teeter teels not versus gawker, it was hulk hogan
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versus gawker. -- not peter thiel versus gawker, it was hulk hogan versus gawker. suitd filed a privacy against the website after they published a sex tape involving him, and it became clear he was not paying for his own legal costs. it was peter thiel paying for the legal costs. famously the jury award was so large it bankrupted the site, which was later sold. that was sort of in the background. on ahas happened completely unrelated and parallel track is judges around the country have gotten fed up with this whole practice. it is not clear if that case, whether that case fed into this at all. but federal judges around the come out against this practice because, as you can imagine, they don't like to be unaware of anything coming into their court room.
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judges want to have all the information and be in control. california, the federal judges in the northern district of california have a rules committee, so they put forward this rule that anyone coming into the court with a third-party backer to disclose that they have that backing. >> there are a few firms mentioned that specialize in funding litigation. genesis for litigation funding from an ideological perspective, is it an actual business with a sadist money to be made here, we're going to award?percentage of the guest: it is a business. the u.s. court system gives out these enormous awards. here the sky is the limit. it is not the case of the defendant can always pay it for the jury awards are insane. firms, there is a
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huge upside and you get cases where maybe they can't put together a class action, which we normally saw in the 90's with tobacco cases, that is how this got off the ground. you have a class-action so you can get very high-powered lawyers. in the smaller case where you have a single plaintiff, you cannot count a enormous awards and they can't necessarily pay for the litigation, so these firms will come in and say in exchange for a cut of the settlement or the award, we will pay for your legal expenses. it is a real business that has grown dramatically in the last decade or so. oliver: jeff, we have a story that is the love child of uber and tender. it sounds too good to be true. tell us what it is.
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guest: it is a startup founded in rome. the founder was looking for a way to shortcut the public transit system there. she looked around at the scooters driving around rome and decided to try to make what would look familiar to any user of uber, an app that would connect drivers to writers. oliver: is it a lack of competition in the car sharing space? why is their niche -- why is there this niche he was able to fill? guest: the streets in rome are and narrower line than you are used to coming from america. it seems like the traffic in the
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city center is so jampacked that the scooters can navigate in and around the public cars and buses that he was using before. that is an natural advantage. oliver: there is this element of flirtation, you can't sound more european riding around on scooters. app is going to look familiar to anybody who has clicked through uber before. you put in your destination enter departure location. and that is all there is to it. her, thelike with driver and the writer have to match, -- with uber, the driver rider have to match.
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>> people do choose the right is based on who they want to bring along. pretty upfront on how they choose who to ride with. carol: the awards for the best banknote.
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oliver: welcome back to bloomberg businessweek. carol: you can listen to us on radio, on sirius xm channel 119, in new york,11 30
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91 fm in washington dc. oliver: and in london and in asia on the bloomberg radio plus app. carol: in the special new money section, how former inmates are getting a fresh start. out to discover how released inmates are finding ways to become entrepreneurs as a way to prevent going back to prison. tell us about where your investigation led you. guest: one creative solution to finding employment with a criminal record, which is a huge challenge because of stigma and formal barriers to employment that people get when they have a some peopleord, were choosing to become their own boss and start their own businesses. and i went to hartford where there was an interesting young incubator who is training young
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drug dealers to transfer their skills to the market. this: talk about individual, how he came to this idea that drug makers could make a good entrepreneurs. >> he has always had his foot in multiple worlds. some -- has done some time in university before becoming a rug dealer. he is clearly very intelligent .nd had a knack for business while he was incarcerated he spoke to others about what they are going to do when they are released. he found people have very interesting business ideas. joe: also in the money section, there is an award for the best -- paperrrency currency.
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>> it was found in 1961 and it is this loose group of around 2000 people around the globe, who loves paper and now polymer currency. carol: who are these people? these people are hobbyists. it turns out many people collect banknotes for anesthetic or historical reasons. then there are also dealers who are interested intriguing on these and making money from them , because they are like coins and are a collecting category. such they have grown in popularity immensely over the last few decades. oliver: what portion of the members are central bankers? guest: if only i knew. treasuriesbanks and around the world are interested in what these people have to say.
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they have a newsletter and aim -- and a catalog. they have this thing called the banknote of the year award. it is this phenomenon where it is totally subjective. with ae writes in submission and there is only a finite number of new banknotes released every year. it has to be released in the year of 2015 or 2016. it has to be a new note. what is amazing is that the president to this society, this a doctor andy is buy everything else is this devoted collector. he said within the first few who are going to
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be in the top three. everybody in this community has this baselevel knowledge that allows them to appreciate the finer subtleties of few bills that are clearly the best. everyone votes and they tally them up. the winners are absolutely gorgeous. oliver: bloomberg is this week is available on newsstands. what was your favorite story? carol: i love the story where he went undercover to become a social media influencer. willnk we think things happen naturally, but involves money, a lot of effort, a professional photographer, professional haircut. priceless.are what about you? oliver: as much as i want to say the scooter in love story in rome, i'm going to have to go trump versus yellen, which is going to be a big story going forward, figuring out what happens to interest rate and in the markets right now. carol: we will see if he keeps what he was saying prior to being elected.
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