Before lawmakers this month on the social networks controversial cryptocurrency. We have details. And whistleblower speaks. Center he people at the of the Cambridge Analytica scandal oins me. Highlevel trade talks picked up this week in washington after tapering off in july with no clear breakthroughs. Chinas vice premier was greeted by treasury secretary Steven Mnuchin and trade representative Robert Lighthizer before talks resumed thursday. The stakes were extremely high as President Donald Trump threatened to raise tariffs on 215 billion worth of chinese goods on october 15 if there was no progress. The Technology Sector paying close attention to those sessions as intellectual property is playing a prominent role in the negotiations. I spoke to someone from a firm who helps u. S. Firms protect intellectual property. Eric a fairly Large Company in china, just saw 100 million in evenue that files and protects intellectual property for clients that have previously mostly been in china and is now expanding into the u. S. Thats what we are doing here based out of boston. Taylor what kind of ip theft language do you need to see to get a deal . Eric regardless of the status of the trade talks, the importance of securing ip protection for u. S. Companies that are operating in china should not get lost anywhere. U. S. Companies should not be missing out on that opportunity if there going to work in the chinese market. Many things are manufactured in china and they are in that market already. Taylor who is stealing whose ip . Eric good question. Theres a fair amount of confusion when we talk about ip theft. It really needs to be defined a bit better. We hear that routinely and the question is, what are we talking about specifically . We dont hear a lot of specific examples that are at all recent. I think most people think of ip theft as counterfeit goods and that is a very real problem that exists in china and it is a problem for any manufacturer outside of china. Where we tend to be thinking about ip is in the patent world, where you are disclosing, when you get a patent, getting the protection not only in the u. S. But in china, where china is fairly open to protecting their markets for anyone operating inside china, by filing and protecting it with patents. Taylor do you trust the protections in beijing given the relationship between the u. S. And china not being the best right now . Eric if we just abstract ourselves from the battle and put that aside for a moment, when you get a patent in the United States, you are telling the world how to practice your invention in exchange for the rights to do that. You have the right to exclude others, but only in the United States and you have made your invention public and anyone from anywhere in the world can look at the u. S. , look at your patent, see how to practice it and go ahead and do it. If youre not protecting it in the country were someone is doing it, you dont have any protection. It is largely a situation where you want to file for protection in china if youre going to be filing for protection at all. It is almost crazy not to be doing that if youre going to be operating anywhere in the world besides the United States. Taylor that was eric giler. As for companies affected by the ongoing trade war, one company manufactures a significant portion of its product in china. It added to his lineup of tracking devices that helps customers keep track of keys and other things viewed the company may be considering future manufacturing hubs outside of china. Because we manufacture products and do a lot of that in china, the trade wars and policies there are impacting us. We are subject to tariffs, they went in effect on september 1. We support the policy, but one of the challenging things for Companies Like ours is we did not have a lot of notice that tariffs were going into place. I think we had four weeks notice. While we support the policy when you think about Building Product leading up to the holiday, we didnt have a chance to react. Taylor there needs to be a less tacit he of the supply chain, you need to have two quarters. What is your leeway . What is your legroom . It does take time to shift a supply chain. If you think of a businesslike tile, we started in the u. S. And now we are global. We are selling in well over 40 countries, our community has expands across the world. When you have complexity like that, 40,000 retail, growing like crazy in japan, last quarter we sell 106 growth. You need a supply chain that meets the needs of retail customers, distribution customers, and we have a big direct business as well, so selling to the direct customers. There is a lot of complexity. So making moves takes time. Taylor have you started moving manufacturing in those places . Cj we are basically viewing this as an opportunity. As i said, we support the policy, so now we are taking a chance to reshape our supply chain in a way that serves our customers best. Both, again, direct customers nd retail customers. Taylor you are talking about a new hardware lunch which is great, and there is a Software Component as well. You were here a year ago and you said sometimes you dont need the hardware because the software is bluetooth enabled and in connected devices like google home and amazons alexa. How is that interaction between hardware and software . Cj it is a great question. A few things that are not super wellknown about tile, one is we have a community platform. Its basically the largest lost and Found Network in the world and if you leave your tiled item at a starbucks, a train, it gets found by the community. We have an app mesh network of users helping you locate your things. The second thing is our big focus is around embedding the tile capability into thirdparty projects. We have announced about six or seven different audio headset partners and we have launched products with Companies Like bose and skullcandy. We are looking at big verticals like laptops and cameras and wearables. And anything with a bluetooth device, and there are 30 billion of those shipping in the next five years, can be a tile with a software update. Taylor how do you respond to some reports that apple could be coming out with a competitor product . Do you see apple as a colleague or competitor . What do you do if thats the case . Cj apple has been a great partner for tile. The way we think about the rumors around the competitive product is that it is really validation. We have been building this category for six years and it basically illustrates this is a real pain point. Of those 30 billion devices shipping with bluetooth, only about 4 are apple devices. Its a big opportunity for the rest of the market. Taylor that was the tile ceo. Protests in hong kong ticked off again this week following months of demonstrations demanding universal suffrage and the right to choose hong kongs leadership. The level of violence has grown in recent weeks and police have responded with mostly tear gas and batons. Apple joins other Foreign Companies struggling to navigate the prodemocracy movement. Apple pulled a popular app from the app store that shows Police Activity in hong kong and was said to be used by protesters for demonstrations. Bloombergs selina wang filled us in from beijing. Selena so this is a crowdsourcing app that allows users to see were protests and Police Activity is happening. Apple is reversing course again after saying it spoke to local authorities that said it was threatening public and police safety. The app creators have said there is no evidence of this and critics have scorched the company for saying it is basically capitulating to chinas demands at the expense of free speech, but to be clear, this is not the first time apple has made a move like this. A few years ago, they removed vpn apps on the app store in china, more recently it removed a taiwan flag emoji app. Greater china is apples largest market after the u. S. So there is a lot at stake for the company. And it just underscores the increasing challenges when it comes to balancing political risks at home and abroad for International Companies operating in china. Taylor and within that balance you talk about, was this really harming police or is it seen as caving to beijing . Selina we did hear from me hong kong legislator say he was deeply disappointed in this decision and that in his view, this is actually hurting individual, innocent passersbys who would use the app to avoid violence. There is no evidence of the app being used to threaten public safety, but apple says it did in investigation showing it was used to potentially target individual police and individuals in areas where police are not around. I think the broader significance of this also points to what we have seen happen other companies caught in the fray, not just apple. You have seen companies from vans, starbucks, zara, blizzard having toe a delicate line and get scorched when it comes to taking a side, either side when it comes to the hong kong protests. I think this is a significant example. A single tweet has threatened the entire business of a company that in china, has spent decades building its business there. They have more than 800 million fans. With a single tweet seeming to be sympathetic to the hong kong protests, you have firms, the state broadcaster refusing to broadcast their games, all distancing themselves and cutting ties to this company. We have seen beijing take a very hard line, zerotolerance policy approach when it comes to companies seeming to meddle in what they say are internal affairs. Taylor that was bloombergs selina wang from beijing. Taylor and coming up, Mark Zuckerberg summoned back to washington for another out of hearings on the Libra Cryptocurrency this month. We will have details. And if you like bloomberg news, check us out on the radio. You can listen on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor Mark Zuckerberg will get a firsthand look at the growing opposition to facebooks plan to create a cryptocurrency. We learned this week the social network ceo will testify before the House Financial Services committee october 23. The hearing will examine facebooks impact on the Financial Services and housing industries. For more, i spoke with Bloomberg Technologys kurt wagner. Kurt anytime the ceo testifies it is a big deal, but Mark Zuckerberg is a huge deal. I was there when he last testified and it was a total zoo. It was just Everyone Wants to see mark and ask him questions, and i imagine this will be the same. I know they had been trying to get sheryl sandberg, they were talking to her, we wrote about that a couple of weeks ago. It looks like they got someone even better in theory, her boss. Taylor what do we know about the content of the hearing . Kurt we know the committee focuses on Financial Services, so libra, the Cryptocurrency Facebook is spearheading, will probably be a large portion of it. They also do housing stuff. You mentioned housing in the intro. Facebook has been accused of issues around its advertising business where people are discriminating or being discriminated against, im sorry, for housing related issues. And so i imagine that will come up as well, but the thing about these hearings i have learned, once you get executives in front of these committee, pretty much everything goes. So with Mark Zuckerberg in particular being there, i imagine we will hear questions that spanned the gamut. Taylor i think ive asked you this before and i continue to be perplexed, did facebook realize the amount of opposition would be coming their way about cryptocurrency . Kurt its hard to imagine they would have foreseen this level of pushback. Because if they had, i think they wouldve done more work before announcing the currency. That being said, it is a tough chicken and egg situation. If they had gone out and started having these conversations with politicians, it would have leaked, people would say, what is facebook doing . Do they even have a plan . So they took the other approach and announce the plan and now they are having conversations and everyone is freaking out. I feel like it was loselose for them, but at the same time, did they anticipate Mark Zuckerberg would be testifying before congress four months after this was announced . I have a hard time thinking that was the case. Taylor facebook skeptics now have derivatives to bet on whether libra will meet its target launch date. A Crypto Futures Exchange is offering derivatives that pay out based on the likelihood libra will be operational by the end of 2020. The initial price equates to a 0 chance they in that timeline. The coinflex ceo spoke to bloomberg on monday. Mark we are excited about this futures contract because it gets the market to price the odds of the event occurring. It is obviously physically delivered libra, and in nondelivery by facebook, it settles at zero and gives the market away to say, well, this is likely, it is unlikely, respond to news events, and give clarity to facebook and Libra Partners in this project. Why so bearish and so pessimistic . Why only a 30 chance of hitting the december 2020 date, already a day later than libra planned . Mark were going to let the market decide this one. That is the opening price, but from there on after, it is just determined by anyone who wants to make a market. Is this garnering a lot of attention for you . Are you going to get highvolume when these contracts open . Mark no, we dont actually xpect very high volumes from these contracts. We do, however, expect them to be something people are fascinated by trading, something that ends up trading a lot in terms of number of users. And ultimately it brings interest in the exchange and provides a signal to the market of where libra actually will end up being. We have a pretty active betting market in this country. Why is it better to use your product than walk into a betting office and say i would like to put a bet on this particular outcome for this libra product . They specialize in making markets in all kinds of seeming offthewall stuff. Why do you need this product . Mark sure. Coinflex is a physically delivered futures exchange. Our main products are futures on bitcoin physically delivered. And if you want a physically delivered libra at the time of expiry, this is the place for you. If you want to make a sports bet or Something Like that, if libra gets traded on those platforms, then the is a great place to do that, but we are trying to offer futures on libra and that is basically what people come to us for. Taylor that was coinflex ceo mark lamb. Coming up, he saw a struggling nasdaq and turned it around. We hear from a former chairman and ceo of the change and about how he did it. That is next. Later, whistleblower is the word of the day in washington. But before then, there was Cambridge Analytica. We speak to christopher wiley. On why he spilled the secrets of the data mining property. This is bloomberg. Taylor when bob greifeld took the reins of nasdaq in 2003, he knew he had his work cut out for him, as did the board. He got off to a running start and made key personnel changes, trimmed costs, and landed big deals. In the process, he made nasdaq into a very different institution. Thursday, he spoke to david westin about his new book, market mover. Lestons from a deck a id of change at nasdaq. Bob the most important move we made was to buy inet, we got the best technology on the street. A lot of the highfrequency firms use some version of inet today. We gained market share. Hen i think about the 47 acquisitions we did, the only one we had to do independent the price was inet, we were institutional risk. We were losing market share and money every day and we didnt have any technology on the shelf that had proven great faith. The rest of the acquisitions were optional and we were using that to build upon further trength. David then 2008 happened. Stress on everybody, including you to clear the trades coming through. But there were reforms afterward and in your book, you said that jamie dimon called you up and not a friendly way. Bob there were some four letter words there, but i would say our systems worked well through the great credit crisis. We were hitting volumes we only saw in the lab, that was nerveracking. We bent but did not break. There was a professional disagreement in terms of how things would play out. One thing i have to say with jamie dimon, we lived through difficult times with facebook, and to his credit, he gave me a call and said, bob, you will get through it and it will work out. I appreciate that. David the facebook problem was pretty well known and treated directly in the book. Bob it is a really big oop. I came there and we had a certain culture. We changed it, and we made thee engineers the kings of the ship. The organization was not balanced. I created a culture where the engineers could over develop systems without any check from the people running the businesses. We had to evolve, we learned from it and became a more balanced organization and a better organization. David right now, there is a big dispute, discussion going on about ipos, which are terribly important to nasdaq, as well as direct listing. But nasdaq, as i understand it, had both expenses, didnt you start with a direct listing before you got there . Bob we did it when i was there. David so what are the pluses and minuses of direct listing versus ipo . Bob the direct listing will have a niche. It is not going to go away but it is not going to take over the market. So if you have zero need for capital and a brand in the investment community, direct listing comes into the frame and you have to make a decision. The advantage is you dont have to get involved in what is the right price, right . If i go public and the prices up 40 or down 40 , i am the ceo and i dont