Editorinchief, macon murphy. Carol you guys take a look at something, that is paypal for india. Megan this is a story that goes to the scramble in india. They extinguished their two largest bank notes to combat corruption and fraud in that market, but what it has really led to in this country and developing countries, the push for digital payments. What kind of space this is . The story captures that it is still wild west. We described it as a lot of people now pushing into digital payments. People dont even have cell phones. They are moving up the rung and theyre going straight from not even having a bank account or cell phone to processing all their payments online digitally. It is a multitrillion dollar market and shows how for people who are brave and innovative, who are willing to take risks, how they get that technology, there is huge opportunity. Oliver there is a big point of conversation, the advent of fake news. There are people combating it. It has become a big deal and played a central role in the election. Megan it cuts to the heart of what we still continues to be seen reverberating as we see president elect trump getting ready to take office. As you said, its not clear whether this has all been around, a new phenomenon, or whether we are capturing this phenomenon because of facebook and social, which allows you to self select the news you are getting. It is something that everyone is trying to combat, but it is trying to figure out are people out there inquisitive for stories beyond their general reach or they want a tailored list of stories their friends have sent them. It is limiting those circles. One of the most fascinating things when you look at 2016, you can map out where trump did better, and where Hillary Clinton did better, whether you map social media or what kind of stories they read. That was some of the best indicators in some of the states where we saw the biggest surprises. Carol which is what is interesting in this section. It is looking to ferret those stories out. Megan this is the thing you have to be careful of, how you determine what is fake and what is not. This is what people are grappling with. Will we say that is wrong or right, or how do we do the metrics, a fact that is wrong, totally made up . Exactly, whats the motivation, the algorithm, the perspective . It is the defining challenge for our news industry because people have shown a willingness, aptitude, and desire to tailor their news based on what they want to read. Carol lets move to the cover story, great story, great deep dive into netflix. They are expanding and it is crucial to their market cap. Megan it is a great story because what you learn in this story is that it focuses on brazil. What is great is that it gives you that flavor in terms of brazil and its media is run like a 1940s hollywoodstyle studio system, the number of people who watch, how they are cast, a familyrun industry and so incredibly dominant. It shows that people who are brave, innovative, that is a market that you think would be difficult for a company like netflix to crack, and they are cracking it and peeling open a market that is dominant and traditional in a way, and it is a story about what disruptive Business Models can do. Oliver we had to send somebody to brazil. Netflix was a Domestic Company for the first three quarters of its existence, then in 2010, it made its first expansion outside the u. S. With a streaming service in canada. It doesnt really count because our cultures are so similar. Then in 2011, it made its first big splash in latin america. They introduced the service to 43 Different Countries at the same time, so that is a good place to start to get a sense of where netflix is going. The key to their future is replicating that success in the u. S. All around the world. If you listen to reed hastings, he stresses international and talks about Companies Like google and facebook. He is an entrepreneur and started a bunch of companies, and his belief is that netflix can use the internet to build the most Popular Network in the world, much like facebook changed the way people interact online. Google used the internet to change the way people search. Netflix has the same opportunity in television because most of the existing companies arent viewing the internet as transformational as he thinks it will be, and to get a sense of how netflix is approaching that international marketplace, i went to latin america, and the Biggest Country was brazil, where netflix struggled at first for the first couple of years, then it has become a huge success story, their biggest market after the u. S. , the u. K. , and canada. It became successful by hiring a big brazilian star and created content there in brazil, not shipping it in from elsewhere. Right, if you have seen narcos about Pablo Escobar, the guy who plays Pablo Escobar is one of the biggest stars in brazil. He was in a program called killer elite. I can remember a friend of mine went down and lived in rio and came back and all he could talk about was this movie, so that was a huge hit in the brazilian market. When i was in a cab in san paolo, i was explaining to my driver that i was there to report on netflixs first series, but she thought i was talking about narcos. Now netflix has made a show filmed in brazil, starring only brazilian actors, called 3 . What they are doing in brazil, is it working for netflix . Are they adding subscribers and seeing the growth they need to grow into a 55 billion valuation on the company . Netflix does not break out its performance in individual territories, but there are analysts who track this, and my sense is that looking from reports and talking to people is that it has been successful to a point. Netflix has 4 million or 5 million customers in brazil, which is bigger than a lot of Internet Tv Services in the u. S. , but it is ultimately a small fraction of the potential market in brazil. They have the strong base of fanatics and early adopters, much like the u. S. And before house of cards, they had 25 million subscribers by that point, and now netflix wants to supercharge it and take it into the mainstream. Netflix was popular in san paolo and rio. There are fans in other areas, but if you ventured into the center of the country, you would find fewer people who are using it because they cant access it or because some of the marketing has not gotten to them. Oliver turning netflix grand plan into a cover image was the job of rob vargas. Carol netflix is expanding its business around the globe, so what went into making its cover . They are using brazil as this testing ground. We ended up with this option because it gets at the Global Nature of their plan. It takes the netflix logo, which is very recognizable, but we translated it into 12 different languages. Oliver the story focuses on brazil as a market to expand in, and what you have done is taken that one point and said this is exemplary of what they will do across the world. Their plans are huge. They want to be in markets like india, where it is difficult for a company like them to thrive, and they are sort of pushing themselves in brazil. Carol if we do translate these, they dont Say Something else . We had an International Team of fact checkers. It is out in the world now, so im sure we will hear about it. Oliver the english netflix is not on there. You find it that recognizable. Exactly, we do mention them. Carol any other ideas you were playing around with . We had one idea which the Art Department loved. The phrase netflix and chill is popular in the u. S. I, frankly, have no idea what it means. It is something that people carol i had to google it. We had one version, it had a brazilian flag and chill. It almost made it, but because certain people did not understand the context, they were not necessarily thrilled about it. Oliver how blockbuster movies and hollywood could spell trouble for Donald Trumps pick for treasury secretary. Carol those stories are next. This is bloomberg. Carol welcome back to Bloomberg Businessweek. I am carol massar. Oliver i am oliver renick. Donald trumps pick for treasury secretary facing scrutiny over his ties to a hollywood production studio. We wrote a story about his entanglement with this Company Called relativity media, this highflying movie studio run by this charismatic, jetsetting guy. Steven mnuchin got involved with this company in a bunch of different ways at the same time, and it all went south and the company went bankrupt. Oliver lets start with the relationships. Tell us about the relative timeline in terms of when he started, when he was with onewest, which lent the company money, and when he got out of each one . Steven mnuchin is a Goldman Sachs guy by background. He became a hollywood financier and produced movies like avatar, 40 of avatar, a huge home run for him. At the same time, he was a budding banker and bought this bank in Southern California that had failed, turned it around, and turned it into a commercial lender. Formerly indymac. He renamed it onewest. Because he had a background in movie finance, he got onewest into the business of loaning money to hollywood. It made a big loan for this company relatively media, and after that, their relationship became closer with the ceo of this company, ryan cavanaugh. Carol talk about the particulars. Steven mnuchin was also cochairman of relatively media. Eventually. As far as we know, the loan from the bank in 2012 was one of the first connections, but subsequently a friend, jim wyatt, formerly ran one of the biggest talent agencies in town, goes on the board of relativity and onewest at the same time, then Steven Mnuchin goes in, buying a Corporate Jet with ryan cavanaugh, so they personally owned this company that owns this three engine jet together, and it is zooming around from aspen, to cabo san lucas, to maui. Oliver he basically blends money to the company through the bank, so inside lending if you will. Nothing illegal in terms of doing that, but actually having a degree of ownership in the company is where things get hazy. Thats right. When they made their first loan in 2012. It was not an inside loan. Just a third party borrower. Oliver until he went on the board. That is something that federal regulators look carefully on. If a bank is using depositors money to make a sweetheart deal for the benefit of the people who run the bank, so they look closely at this. As far as we can tell, this never ran afoul of any regulations, and regulators never took any action against onewest over this. Fast forward they get the jet together, onewest make some more loans, and all of a sudden Steven Mnuchin shows up as cochairman of relativity and takes a stake in the company that at one point amounted to 14 , personally, plus he has a Hedge Fund Company where he is representing other investors, and they take a stake in relativity, so at one point he is wearing four hats in the relationship. Carol headhunters, paid vacations, bonus checks, these are no longer the perks of wall street in silicon valley. Oliver fast food chains are fighting over workers instead. Carol you kickoff your story talking about lisa, who is she . She is a restaurant manager at a wendys in albuquerque, new mexico. She is being heavily recruited to run a gas station because worker demand for these type of workers, restaurant, retail, is so high right now. Oliver obviously the demand is there, but is it being exacerbated by a lack of supply. What is the need to approach people from other places . This industry in general before this labor crunch, it is a high churn type of industry. Workers come and go. Especially the hourly workers. This is being exacerbated by the low Unemployment Rate and increasing minimum wage across the u. S. Too. Carol the fast food industry, the restaurant industry, finding their labor pool is tight, so what are they doing to bring workers to their places . They are doing everything from quarterly bonuses to bonuses for training different people, other employees, things you would not think of maybe like free meals, paid days off, even having the managers around more, making sure they know people by face and name and recognize them for doing a good job. Oliver is this happening at the fast food chains, wendys, mcdonalds, stuff like that . Is it also happening at the fast casual places . We are seeing it at fast casual places and all the way up to full Service Restaurants like an olive garden or Something Like that, where you require different servers to bring the the food to you. It is tight across the whole industry. Carol when we look at the Economic Data and labor market, we have been waiting for wages to be higher. Oliver we got a big boost with the most recent number. Carol exactly, that is a good thing for workers, but i think about the flipside for companies is not so good because it raises their labor costs. Exactly, a lot of them are having to eat that cost, seeing profit go down, because it is so competitive. The consumer is still uncertain because of the election last year and with a lot of competition from prepared food places like grocery stores, so a lot of the restaurants cant even raise prices. Carol brexit claims another victim in u. K. Diplomacy. Oliver the pipeline that may run afoul of one of trumps biggest promises, the wall between the u. S. And mexico. This is bloomberg. Oliver welcome back to Bloomberg Businessweek. I am oliver renick. Carol i am carol massar. You can also listen to us on sirius xm channel 119, a. M. 1200 in boston, a. M. 960 in the bay area. Oliver in london on dmb mux 3, and in asia on Bloomberg Radio plus app. Carol in the Global Economic section, the resignation of a diplomat reveals divisions over brexit and theresa mays cabinet. Tim barrow is the uks new man in the european union, the permanent representative of the u. K. To the european union, the footsoldier on the front line in Theresa Mays Brexit battle, working behind the scenes, trying to sound out other diplomats from member countries to identify how these negotiations can go, trying to cut the deal, doing a lot of the legwork that the government needs him to do to get that deal signed. Carol his predecessor just quit unexpectedly. Thats right. Sir ivan rogers was doing the job before tim barrow, he completely shocked theresa may, not expecting him to go, so this created a sudden vacancy. That is not the hole in your team you want with 10 or 11 weeks left before the formal start of negotiations. Oliver mr. Barrow, his background, and does he have the tools to wade into unprecedented waters . He is an experienced diplomat. He is 52 years old. He cut his teeth working in the u. K. Embassy in moscow around the time of the fall of the ussr, so he has seen some Interesting Times as a diplomat and has experience working in brussels, so that will be useful for him in his job ahead. He is described by colleagues as a real professional, someone who will work well with ministers while gaining them good, independent advice, and critically the real thing he will need will be clear direction from london about the kind of aims that he has to have in those negotiations, what sort of deal is it that the u. K. Government wants to get. Carol well, good luck with that, right . Theresa may is not quite sure what she wants. This could be hinting at one of the biggest problems for tim barrow. May has been reluctant to give any indication of the deal she wants. Her view is if she gives away too much, that will reveal her hand. She will tell her opponents and negotiations exactly what she wants, making it less likely she will get it. That is theresa mays argument, but tim barrow, unfortunately his predecessor made the point as he resigned. Oliver obviously there is a ton of diplomacy that has to be done. There is a lot of politics involved, but at the same time the rest of the world is paying attention because of the economic stakes. Does mr. Barrow have the background or people advising him where he can keep those results in mind going through this process . He will have a big team of people to work with and be plugged into the u. K. Treasury and draw on resources there that will be crucial for him to have any chance of succeeding, but there is no question that he has an enormous steep learning curve. Carol up next, a scandal at south koreas giant retirement fund. This is bloomberg. Oliver welcome back to Bloomberg Businessweek. Carol still ahead, did the liberal atmosphere at davos create the environment for donald trump to come to power . Oliver plus, West Virginias new can bring back the coal industry. Carol and a former drug addicts idea turned multimillion dollar pillow empire. Oliver all that ahead on Bloomberg Businessweek. Oliver we are back with megan murphy. Lots of must reads. Lets talk about one with a bit of scandal in south korea. Tell us about their pension problem. Megan this is fascinating. It is a glimpse into a country wracked by this scandal and crisis over its pension fund, and whether or not there was collusion about directing money in this pension fund. This has been a longrunning issue there. There has been a tremendous political and economic headwinds there, but it gives us a glimpse into, you dont get a lot of that impact you see with this and how unusual this is, how public it has been, and how serious it is for that country. The country has been wracked by crisis over the last several months. Carol all these relationships. Megan very cozy. Carol talk about cozy, in politics and policy, you look at another border issue for donald trump that has to do with the natural gas pipeline that snakes its way to west texas into mexico. Group of is a very odd characters from carlos slim to donald trump. And what it is looking at is this window into what we will be focused on for the next four years. When someb