Talk about the special focus on cities and this weeks is this week. I love it and you guys love it. There is so much great work here. Why the focus on cities . Megan cities are a microcosm of the demographic changes that are happening. We see this entrenchment at the National Political level and not just in the u. S. , but in countries around the world, cities are becoming the petri dish for innovation, the driving force of this reurbanization for many areas. Or coming back to dilapidated areas. Connected megacities, you see that in various areas. These hotbeds of innovation. Also some of the Biggest Challenges that we are confronting environmentally as well. We want to dive deeper look at these ideas and look at the Success Stories and some places that are struggling to deal with change and use this issue to bring that out. Oliver i will play devils advocate because cities will always be progressive hotbeds the place where ideas and forward thinking is or is it more so now with globalization . More so now and focus because we are talking about infrastructure with new World Leaders taking the helm . What is it about the current . Is it the nowness of it . Megan i think we would say that being a mayor, you have to get things done. If it doesnt work you wont get reelected. The infrastructure isnt there in a city you will get tossed out. That is different than a National Level where policies work. We have been talking about infrastructure bill in america for decades and havent seen anything. With a mayor and in cities, it is a different story. People have to get it done. It is unfortunately now the targets of terrorist activity, london, paris, on the frontlines of so many issues and they have to be solution oriented. You cannot afford to let your city not keep up or not respond or not be dynamic. That is different than the calcification we see on a national and political level. Oliver my favorite quote to that, i think it was a mayor you interviewed, said that problems on a National Level take a couple years to manifest themselves, problems on a city level and a mayors level manifest themselves within months. Megan within a day in some cases. Whether it is a trend or crisis. It is fascinating. It is always pretty much the same issues. Traffic, congestion, sustainability, development, jobs how i my empowering my city to attract highpaying jobs . Upscaling people and making sure repairs work. You are always going to see the very wealthy and very poor and they smash up against each other all the time. Part of being a successful city is a Technology Matt and making it a livable place for all. Oliver talking about those ideas, one of the cities you profile is moscow. There is a big effort to modernize their infrastructure and move their city in a progressive direction well there is still a coulter that is very much not following those western progressive values. How do you approach looking at moscow is a city . Megan there are really two means. They think of it as 1980s bread lines and dilapidated buildings. And huge housing buildings which are empty. The second view, is corruption. Everyone is backhanded, there are big armored range rovers driving the streets and it is unsafe and everywhere you go someone is looking for a handout. There is no real visible city life in the city. Neither of those are true. We wanted to look at the moscow of today. Under the mayor of moscow today, it has taken a forward look at revitalizing sustainability and livability of the city. As well as the problem of traffic. Oliver it was a personal look at the city. The story came out of the writers own experience of going back to moscow after not being there for several years. She lived there during various periods of her life and her husband is russian so she is familiar with the city. She went back recently. She was blown away by how much it seemed it was comparable to being in london or manhattan. Everyone was on wifi, the parks were beautiful and green, there was an incredible lavishing of detail on historical buildings. That had been in the past, quite ruthlessly torn down. Oliver this is an interesting story. I was thinking about the city and the world cup, a lot of people i know are interested in going. This is a city that feels a lot different than what your average american pictures moscow and a post soviet breakup visual image that comes to their mind. Right. I think the population themselves, i think they are surprised. They have just had this moscow urban for him which is a gathering supported by the city of urban planners from all over the world. Architects, food culture people, to discuss the future of big cities. Vladimir putin himself, he said that we need to be in order to be competitive you have to have a competitive megacity. If people dont want to live in your city, you cannot compete. Oliver it is a conscious decision by russia to let us make moscow something that will draw people in a make a conscious effort to change it . Yes. The talk of the city is how everything is being torn up, the sidewalks are being widen, bike lanes introduced, there are new beautiful park benches everywhere, historically accurate trees lining boulevards so they look like they did in the 1800s. These elaborate street festivals. That people actually come tourists are coming in because it is less expensive to stay there than it has been in the past but theyre also doing this so people who dont live in moscow but our russian, come to the city. Oliver turning this into a cover image was the job of our photo editor. I love this weeks focus which is on cities. How did you choose through the different stories and articles, an image to represent everything . We looked for covers from all the photos we had. We knew with a subject like this you want to lead with great photography. We needed something that would encapsulate the whole idea which is about the future of cities and gets that cities will be more important over the next 25 years. More population will move there. We wanted something that had a human element, a strong urban element, and that was recognizably a great world city. Oliver you have red square in the background but you have a symbolic imagery as well which is scaffolding in the foreground. It represents the future in the development but also the familiarity of the city we know. In a way, this is classical with a strong foreground, middle ground, and background. It has more depth than some covers. It also helps tell the story. Again how we relate to cities. And how we are going to do so moving forward. Oliver its peace to the power of a good photograph when the Editorial Team has to combine an edit and put cool graphics on the cover, this is a photo that tells a story. This photographer, lives in america but is russian by birth and has spent a great deal of time there. She shot this on film and she was going back to look at a city that she knew well and specifically see the changes that the story was talking about. Oliver up next, russia braces for permanent sanctions from the u. S. As venezuela spirals even more out of control, u. S. Oil confronts a 10 million debt and stop this is Bloomberg Businessweek. Welcome back to Bloomberg Businessweek. Im oliver renick. You can find us online at bloomberg. Com and the mobile app. Exclusively on the mobile app, russia is being prepared to be walled off from foreign capital and technology for the foreseeable future. We were trying to look at how the sanctions are different than before. The reality is, the measures are the same pretty much, they have tightened them slightly but the real Important Development here is that the president no longer has the authority to remove the sanctions without congress approval. What that means is any hope russia had that these punitive measures against it would be temporary has evaporated. The reality has sunken now in moscow that they are looking at years or possibly decades. Does this essentially adjust the point of the potential shift in relationships between the u. S. And moscow that people speculated could potential he happen or to the sanctions put that to rest or is there still potential here for a potential reset of how washington, d. C. Deals with moscow . I would argue no, the sanctions bill has buried those hopes. Hopes which were strong after Donald Trumps election that the government in russia thought that after the terrible relationship they had with the obama administration, we all know why that happened. The russian intervention in ukraine. Donald trump was seen as a great help for turning a new page in relations with what had happened since his election. We have seen the reverse. Things have gotten worse. Oliver walk us through the potential effects of the sanctions. We know there is a direct focus here on energy. Tell us about how the sanctions could affect the russian economy this is a moment where they are trying to come out of a serious slump in terms of Economic Activity . The sanctions at one point threatened to impact Pipeline Projects involving outside countries. European countries. That will probably not happen because the language was softened. Those measures would only happen in consultation with allies. Europe has a major Energy Dependence on russia. The worstcase scenario has not happened. Nevertheless, the sanctions keep in place very tight restrictions on financing for major stateowned banks and they also restrict transfer of energy technology. It stops russia from getting the technology it needs to develop difficult reserves offshore, shale, arctic reserves. They were the major relationship between exxon mobil and the state oil company, which is headed by a close associate of vladimir putin, that stopped in 2014. It will not restart. Oliver i want to bring in numbers. Russian officials had previously estimated the cost of sanctions at 30 billion in 2014 and 2015. The International Monetary fund estimated the curves could accumulate losses as much as 9 of gdp in the median term. What opportunity is there for russia to make that up elsewhere or is this going to be an economic hit that they have to deal with . What is the potential recourse that they can take . Russia has to hope that oil prices go up. Sanctions there is not much they can do about that. That is going to act as a continuing break on investment. This is a problem, for foreign businesses looking to whether to put money into russia, obviously they will still be investing but it will be below what it used to be. Unless they failed to do over so many years, it is essentially dependent on raw materials. Oliver in the economic sector, u. S. Oil producers are growing more wary about potential all out in venezuela. Venezuela has the Worlds Biggest Oil reserves so it is a major player in the industry. For the u. S. , it is the third biggest outside supplier of crude, one of every 10 barrels we imported last year came from venezuela. 10 billion worth. It is a major factor in the u. S. Oil industry. Especially for refiners on the gulf coast. You talk about Valero Energy and chevron, pbf, phillips 66, their major facilities that depend on that for a large part of supply and it will be a big headache for them if we see sanctions on venezuelan crude. Oliver what is been going on with the exporting of crude oil and the overall oil trade with venezuela since things have blown up . Production has gone down in the u. S. We are at a quarter century low in terms of imports. Still a large portion but it has been trending down. They are producing less oil because of the economic crisis down there. United states importers have been turning to other sources slowly to try and hedge their bets. Oliver going to the story and the numbers you were talking about, 270 million barrels, 10 billion, i was surprised of some of these numbers and how big they are. Especially given the Energy Independence that the u. S. Has been trying to achieve with shale. Why is it just about the exporters, even though the u. S. Has been producing its own oil, these importers and refiners say, that does not change much for us because we are still bringing in oil how does that dynamic still at this point where 10 billion is coming in . These refineries on the gulf coast have been built to take the thick, high density oil from venezuela and other countries. They were calibrated over decades, well before we saw the u. S. Oil boom to take foreign oil because the u. S. Didnt supply enough for a long time. They cant really handle right now, or be much less efficient, to take crude of a lighter variety. Oliver did actually gets down to the difference in terms of the actual material and crude that is coming in. Right. Oil is not just oil. There are different grades and varieties. These gulf coast refineries have evolved to take venezuela and other heavy crude. Oliver i imagine that if you are a refiner and you are used to getting a certain import number, high numbers from venezuela, you have to think about the potential downside if the turmoil doesnt come to a conclusion. What have these companies been doing, valero, and major u. S. Refiners, to hedge or have they . Theyve been taking less and less venezuelan crude. To a certain extent, they have no choice. Venezuelan production has been dropping. There are other adult other alternatives, from canada or other places, that could work for these refineries so they have been moving. Venezuela is still a big supplier. Theyve also been lobbying in washington to say, sanctions may not be the best answer. Venezuela would still be able to sell crude in other parts of the world and you would have this effect in the u. S. They are pressuring you Trump Administration to be cautious about its next steps. Oliver up next why President Trump is looking quite unprepared to deal with special counsel Robert Mueller. This is Bloomberg Businessweek. Oliver welcome back to Bloomberg Businessweek. Im oliver renick. You can catch us on the radio at sirius xm radio. And london, and asia. In the politics section, as President Trump fails to put together a legal team, we talk more. Right now their legal team is still in flux. In some ways a bit unfocused compared to Robert Mueller who has now hired up his 16th lawyer. Jumps legal team is trying to get centered, bringing on a couple of washington veteran lawyers. Seeming to lack one key resource that they may need to face off against bob mueller. That is a private law firm. Oliver when you look at the list of folks on Robert Muellers team, it is extensive. Folks on the other side defending trump and his team, it seems lopsided. Why do the white house and those under investigation, why they not undergone assembling a team quicker . Turning to personal counsel, he turns to his personal law firm which is more about bankruptcy and litigation. It was quickly clear that mark casowitz was not working well with the Trump Administration and he was sidelined. Theyve reached out to a number of highpowered firms such as sullivan cromwell, but were rebuffed in part due to conflicts or a sense that the president doesnt want to listen to legal counsel. Which could be a Reputational Risk for the law firm. Oliver for the votes were at so right now, who are the folks who are at the helm for trumps defense . The team is been centered around three people. John dowd who is trumps personal turning to personal counsel, he turns to his personal law firm which is more about bankruptcy and litigation. It was quickly clear that mark casowitz was not working well with the Trump Administration and he was sidelined. Theyve reached out to a number of highpowered firms such as sullivan cromwell, but were rebuffed in part due to conflicts or a sense that the president doesnt want to listen to legal counsel. Which could be a Reputational Risk for the law firm. Oliver for the votes were at so right now, who are the folks who are at the helm for trumps defense . The team is been centered around three people. John dowd who is trumps personal counsel. He took over the lead role in july. He is a longtime criminal defense lawyer. A firm called akin gump. Does criminal defense work as well as congressional investigations. He is very experienced. The face of the team at the moment is jay sekulow, a christian rights lawyer. And the third individual, just came on last week and that is ty cobb. He also hails from a longtime washington firm, and is well experienced in congressional investigations. Criminal investigations. He did a lot of corporate work in private practice. He had to leave his law firm in order to take the position. Oliver up next the tangled web of limited Liability Companies for President Trump. A refugee crisis in the amazon. This is Bloomberg Businessweek. Oliver welcome back to Bloomberg Businessweek. Still ahead, the amazonian port city that has become a haven for indigenous refugees from venezuela. We will talk to mayors about how they are tackling issues from poverty to pollution. How clones may be involved in the 2020 olympics. Still ahead on Bloomberg Businessweek. Oliver we are back with Bloomberg Businessweek editorinchief megan murphy. One of the stories that is interesting is a look at limited Liability Companies. Why did you focus on this . Megan we have been focusing on the president administrations tax issues and the way he structures has sprawling Business Organization. As hard as we push to get more transparency, as the president has moved to separate himself, not from his family, but from the business, we really want to see how that is working . How he is paying his taxes . How the