Technology has always been a franchise in bloomberg businessweek. We pride ourselves on the coverage. When we were thinking about redesigning a magazine, we wanted to keep global tech as fragile and make it more global than it was. Companiesome of the and developments and people and innovators you may not have heard of. Also, the future is closer than you think, whether that fish skin is used to treat wounds things that we thought were science fiction, not so much. We wanted to bring that to readers. This has to be one of because the stories uis you guys have had in one magazine. It is fun to read because the stuff is so exciting. About thatou heard really has you jazzed up . I think what is going on with satellites. I am 43 years old, i think a satellite are these huge things that are out there. We are talking about satellites that are the size of a boombox. They are not going up into space. You can carry them into a briefcase and wants them. It is just Startup Technology around space. There is a little bit that talks about how you can monitor what is going on in ukraine from a satellite the size of a trackback,nd really the visibility, we are being watched from everywhere. Whether you take that is a good thing or a bad thing, it is happening. This really gets the heart of that race for space. How fundamentally it has changed and how chief it is. Was cool about the issue is up, andl round it hundred 40 million active users on tencent. It has the we chat app. In china, people spend an average of four hours on we chat. Whethererything you do you order on a restaurant or talk with your friends, buy a new shirt, it is almost impossible to get into any aspect of commerce without having we chat now. You go to the two guys who moved it forward and you focus on martin lab who is the Operation Force behind tencent, this is the guy who when he was going on ake a presentation video, he played it so much that he got the seventh highest score on it. It took him two job offers to get there. That isf the things behind us, leave equity of . 10, to expandare attempts beyond that world and find out what they are going to do. Brad if youre not familiar with . 10 and you are interested in business and the internet, you need to learn about this company. It is sidebyside with alibaba. One of the Technology Giant of asia. Prominently for the service we chat. What is we chat . I can draw parallels to whatsapp and Facebook Messenger but it is really so much more. In the u. S. , we tend to have one app where everything we do online to buy movie tickets, we chat is the dominant way that people in china spend their time online, it is the internet bundled into a messaging service, you can get your news, you can search the web, you can talk to friends and contacts. You can orders up online, themmerce, it has become largest planet in the chinese internet solar system. , think 900 million daily users two thirds of they are spending about two hours a day each on it. It is a tremendous asset for the company. You talk about two individuals specifically were tied. You talk about the founder and then you also talk about the company, the president , these are two individuals who are not out there that much but they are crucial to this company. One of the five original founders, one of the wealthiest people in china, very quiet, does not do a lot of interviews, we jokingly referred to this photo with the chinese president of all the was technology execs lined up, this is about two years ago, this is a photo shoot, everybody is looking for the camera and smiling. Down, they came at a bad moment. Theres something are characteristic about it. He doesnt do a lot of interviews. We got this tremendous opportunity to talk to the secondincommand colleague and cocommander martin lab. We described him as the Sheryl Sandberg of . 10, he joined in 2004, before that, he was working at goldman sachs. He is someone who has really guided this strategy, guided the iternational expansion, helped steer we chat to what it is today. I want you to tell me a little bit more about this guy. This is a guy who was offered a job by 10 sent initially after the ipo and he said it was the second job offering. Works we have a lot of fun talking to him, lu chen, one of the Asian Correspondent and i went to visit him in hong kong. This is a unique opportunity. He rarely talks. He reviewed his trajectory and journey into tencent. When he was first given this they tooky back when 10 sent public, they turned down the job, everybody was worried about this thing, could it overcome all of the pessimism and the market, it was a one trick pony, no pun. They were beginning to do deals with the mobilephone operators to get some subscription revenue. Later, also why, a year martin lab accepted. With the covers, putting ever to be too specific, rocket lab was mentioned in one of the stories. Abstract, its not too specific but it also immediately get two to the point that this is a tech issue. I thought that we read so many of the stories and i had no idea what this is about. A lot of the rockets in this facility were a work in progress. They opened up and the axa got inside. It is interesting, it is not a lot of other stories around it. It is very clean. It is global technology. We have because of this cover flat. That gives you a limb more of what is inside and then when you open in magazines, you can see the shot of this man standing inside of these tubes. That is also what is here. Up next, the middlemen between macrons plannuel to reform french labor laws. This is bloomberg businessweek. To boomerwelcome back business week. Oliver in the business section, the way it has worked in the u. S. , pbms negotiate drug practices with pharmaceutical companies. Consumerked to pallbearer. , cemented managers work on behalf of health plans, unions, anyone who was providing a health plan to employees. Pharmacy benefit manager is to represent the health plan and its dealings with drug manufacturers and to negotiate discounts which are referred to as rebates from the drug manufacturers. Less than plan pays the publicly advertised list price. That is the first that in understanding what to do. It is a lot more complicated. Hows that working out in terms of reducing cost . Cost to someduce degree for the health plans. The seeking of the rebates has the prefers perverse side effect of causing drug manufacturers to raise their list prices so that the price is higher and they can take from that higher list price. It is bigger rebates to the pbms and they keep a slice of that rebate. They are basically they have an incentive to see the list price go higher. That would all be fine if nobody actually paid list price but that is not the way the world works. A lot of people do pay list price. There may be nice more if the not if obamacare replaces the bill. Those on shortf people, you pay list price, similarly, if you are a medicare recipient. There is a coverage gap in medicare where the recipient basically has to pay for their own drugs. You hit a certain amount in terms of cost for your own drugs. If you go about that, you pay list price. Price, at first, it seems ok, here is the price that it takes to distribute this drug. I find it similar to when you go by phone. Bones are very high at this price, they come from manufacturers but most people dont end up paying that. They get a plan at a discount. You really feel it when you say well, thats what they charge. Who ends up paying that . The Biggest Group is the people that are uninsured. There is still 27 million americans who pay full price. Moreover, remember that under obamacare, there is a provision of insurance but also, very high decibels. Deductible,t your you are paying list price. But a lot ofe does people. What i love about your story is you given a personal edge. Tell us a little bit about the story, quincy is diabetic. He is a restaurant worker in new jersey, he does not make a lot of money and for a. Of years, about six or seven years ago, he had no insurance whatsoever, during that time, he had to skip on insulin. This had horrific effects on him, he went up he ended up going blind in one eye and needing a kidney transplant. Under a newvered jersey public plan for the disabled but his coverage will expire at the beginning of next year and then his costs will be Something Like 300 per month for insulin. That is a very big burden for someone who is not making much more than minimum wage. Emmanuel macron is wasting no time in tackling the most loathsome item on his economic home. Editoralked to christina. You promise that it was a central part of his campaign. Got thrown inly this week. Two weeks since the second round of the election and he presented his proposal on tuesday. The 3000 page labor code, this is not an easy thing to undo, is it . Theyll have to redo the whole thing, they need to make significant changes. It is not easy. We have seen three previous president s in france attempt and fail. Impactre issues that workers. Down to the size of windows and offices, length of bathroom breaks, also, if you you know i French Worker on the weekend, he does not have to reply to you, it is in his contract. What will he go after specifically . Severance, it is the highest in europe. Employees can easily drag companies into court and the court are very employee friendly. Long asprocess that is well as expensive. The other big important issue is to allow companies to negotiate directly with workers. Therance, that is 10 of workforce being unionized, still, they are bound by the sector wide agreements negotiated by the unions. Life one of the first quarters of business for macron . The date was not so much centered on this. It is very much about Foreign Policy and immigration. Thiswe are, attacking thing that is welded within society for decades. Why is he choosing to go after this . France has unemployment that has hovered around 10 for five. Ears for young people, it is even worse, it is 21 or 22 . What has happened in the absence of reform, more people have been relying on these temporary contracts. It is really hard as a young person, you cannot go and rent an apartment. You can show a landlord a temporary contract. Jeff sessionsat has been up to since recusing himself since the russia from the Russian Investigation. This is bloomberg businessweek. Welcome back to bloomberg businessweek. You can listen to us on sirius xm. Oliver you can also listen to us on the radio plus at and asia. Section, jeffs sessions may not be involved in the Russian Investigation but he has been being himself busy trying to roll back a lot of obama era policies. It has been business as usual. Times been using this where everybody is focused on the Russian Investigation to remake the Justice Department and move them in a direction that he wants them to move toward which is a focus on Violent Crime and a large part of this has been stripping back a lot of obama era initiatives and legal legacy. Thealk to me about specifics of what he has been undoing in terms of the obama legacy. He has been rolling back charging policies, they have taken a softer approach to nonviolent drug offenders and ordering all prosecutors to penalty inharshest cases that they bring, this is a counter to the way prosecutions have been handled over time. He also has been taking a harder these settlements that we entered into with various cities over Problematic Police departments saying that he wanted to review all of those settlements, his view is that he doesnt want defense meddling and handcuffing police officials. Wei think it is interesting, watched this trade going into the election based on what we heard in the campaign trail, specifically, to do a private prison. We have been moving away from that, Jeff Sessions moving relationships, the u. S. Government having a relationship with private prisons. He has done this with a private prison memo last august by then Deputy Attorney sally h and it was to try and phase out the government must use of private prisons for a number of reasons. He has been able to come right in and issued his own memo and said that is gone. With the number of these issues, he has been able to quickly dismantle a lot of items that some veryin place, recently, others in place for several years. Also in the politics section with 6 billion in debt, illinois is on its way to another credit downgrade. Illinois is in crisis right now, we are on the verge of entering our Third Straight fiscal year without a budget. Start fiscalto year 18 without a spending plan, billions of dollars in the red we are actually headed for another credit downgrade which has put us in junk territory. Put a number on how much they are in debt. Right now, because of the ongoing budget impasse, we are looking at about 15 billion of unpaid bills, that is a record, at the same time, our deficit is about 6 billion. If things keep going, this is effectively hemorrhaging cash. We would have to cut into things like core services. The debtmphasize that service is a priority and will continue to be paid regardless. These costs are going to keep adding up because if and when that denver does happen, suddenly, borrowing costs are even higher than they are ready cost will thatof put on us . It and went illinois goes to the bond market, they have a junk rating. Illinois party has the highest spread. Bloomberg checks about 22 states in illinois. In terms of those unpaid bills, we are looking at 800 million in insurance and late fees alone, that comes on top of any future bonding costs. They cannot fire for bankruptcy, this is in detroit which could file for bankruptcy. How did they get to this day . How are they constantly in the red . Illinois has been running deficits since about 2002, at the start of 2015, tax increases started with about four or 5 billion. At that same time, the first republican to lead the state since 2310 office and he was trying to see how they could fill that deficit. He has pushed for structural reform in things like changes in acting term limits, are pretty tax reasons and the democrats have resisted. They havent been able to come to an agreement or have a spending plan for about two years now. Just ahead, we speak to best selling officers authors. Every production about the future made by elon musk. This is bloomberg businessweek. Oliver welcome back to bloomberg businessweek. Rol what elon musk has gotten wrong, right and what he has for the future. Iiver we have an interview in this weeks bloomberg businessweek. Oliver were with megan murphy to talk about this awesome issue. Analysisted input and from michael. He lived through asian crises and is getting worried. Megan the 1997 Asian Financial their was triggered by parents at the time spiraling. The point he made in this article which is a very good and important one is that it was predicated on an escorted her rise inextraordinary debt level. Link is whats that is going on in china right now. Is triggering the same kind of alarm about the intervention by the state, it should be an alarming sign that people forget the lessons of the 1997 crisis. Wants shame ony you, pull me twice, shame on me. There is no question. What is always fascinating is the reported covered it. Says the next crisis isnt going to be similar to the first. It may not be triggered by the same thing, it could be a shadow banking thing. The actual Tipping Point may not be something that we have seen before but there are signals that you can trace in the mortgage market. There are really alarming signs. If we look at those, we could prevent some of the chaos we have seen. Everybody tries to explain it away. Similar to election forecasting. Oliver he starts by putting the 1997 asian crisis into perspective. China is the second biggest omy in the world, this will have a more cataclysmic and systemic effects. Whether or not they can retain the type of growth that howrest of the world dependent other economies are on chinas continuing growth. We saw the commodities market grow up. We cant underestimate the importance of china. I think he is talking about domestic is actual not there something that they focus on so closely. Is this the reality . That is the issue with china, it is a less transparent economy. It is a must read, also must read, you can do an issue without talking about elon musk. We saw is something that for the first time and it is unbelievable. It is everything elon musk is doing, how successful he has isn, human intelligence, it a map of everything he is doing, how his predictions have been right or wrong and we call it the future according to elon musk, this guy has done a lot of things in a lot of different areas. Wife i love the analysis of where all have his promises were completed or fell short. We talked to reporter tom randall. Elon musk is hard to keep track of, that is not because he is involved in summary desperate industries but also his communication style. He will make announcements about products. He doesnt have a company where you put out press releases. You under this is a new corporate mission. Exactly. From what i have heard, they often throw employees for a loop saying that we do know that was coming. What we wanted to do was rigorously tracked some of the goals and pronouncement he has made for his various companies. Tell me how you guys set up a coding system on how you were tracking all of these businesses. By now, we are tracking about 70 goals and this will expand over time to his for companies. He has tesla, spacex, he now has the boeing company. He also has narrow link a medical device company. Im assuming you guys will continue this process . Every time he makes any pronouncement, we track when he made pronouncement and when he set the goal for and then his progress along the way and when those goals move backward move forward. One of the Amazing Things that you discover going through all of these things is that these goals to two categories. But thenoutlandish there is a category of things he has already accomplished. It wants seems outlandish. Yet the sense that he is a competition pushing forward this vision and making it happen. He has had a lot of success there. If you look at his goals from early on, it has been slow going. From the beginning, he wanted to make reusable rockets. The falcon one was a single engine rocket that he wants to get up. A lot of these things have already happened but not at the timeline that he predicted he could do. Culus whenever he is always moving behind his own schedule but way had everybody elses. Works he has also talked about space tourism. He pla