January 23 — January 29, 2017 | bloomberg.com DECEPTION, DENIAL, AND DEUTSCHE An Italian scandal haunts the most important bank in Europe p36 “WE ARE THOSE PEOPLE CLINGING TO THEIR GUNS AND RELIGION. YOU HAVE ARRIVED AT THE VERY PLACE!” p42 1 “I am certain many in “One might expect a successful “Mr. Trump is negotiating strategy to have 100 percent opposed the Saudi leadership ambitious objectives and a credible to what you do for have sleepless nights fallback position. May certainly has the former, but we doubt the prime a living, and we can’t on Yemen” minister has the latter” help you” PHOTOGRAPH BY ROSS MANTLE FOR BLOOMBERG BUSINESSWEEK BLOOMBERG FOR MANTLE ROSS BY PHOTOGRAPH p12 p15 p22 Cover Trail January 23 — January 29, 2017 How the cover gets made ① Opening Remarks Technology is opening up opportunities for the disabled 6 “The story’s on Deutsche Bank. They’re wrapped up in a scandal Bloomberg View Trump’s reckless trade talk • Another way to curb “black money” in India 8 involving an attempt to hide hundreds of millions of euros in losses at an Italian bank.” Movers Trump and Brexit lift Goldman and Morgan Stanley Bye-bye, big top 11 “Do you mean to tell me that a bank Global Economics may have acted deceptively and that corruption may even have been The limits of Saudi Arabia’s power are exposed in Yemen 12 at an institutional level?” Fed-up Brazilians look for someone to Make Brazil Great Again 14 “Yes.” No one’s calling the U.K.’s prime minister “Theresa Maybe” anymore 15 “A bank? The type of company that, since the founding of the The good times roll in Quebec’s job market 16 very first bank, has always behaved with honesty and wisdom, and with Companies/Industries the best interests of the public in mind? A bank, that shining beacon The next president could give Big Pharma a huge headache 18 of light in a dark world full of nastiness and cruelty?” Amazon sees a prime opportunity in non-Prime shoppers 19 “Are you done?” Brazil’s brewers find they need to sell more than sexism 20 Politics/Policy “Yes.” A completely different kind of lobbying firm for a completely different kind of president 22 A little-known ethics official picks a high-profile fight with Trump 24 Scott Pruitt has spent years attacking the EPA in court and out. Now he’s been tapped to run it 25 2 Technology To hire more women and minorities, tech turns to ... well, let’s just call it Diversity 2.0 27 The face of Facebook’s carefully managed Facebook page 28 Hey, you, cut the cost of my cloud 29 Mobile-gaming company Lightneer wants to teach kids about quarks 30 Innovation: An ultrahigh-resolution DSLR camera that will fit in your pocket 31 Markets/Finance Startup Behavox is using AI to build a sort of Minority Report for rogue traders 32 Low-cost-fund giant Vanguard keeps quiet about its own executives’ pay 33 Homebuilders are confident they’ll see a Trump bump 35 Features Italian Job How Deutsche Bank helped the world’s oldest bank hide a €367 million loss 36 Capital Carp The VC kid who went to Kentucky to turn a trash fish into a cash cow 42 Cyber Screw-Up Mauritania hired an upstart to tap its cell networks. It did not go well 48 Etc. Executive health programs are the right prescription for busy CEOs 55 Fashion: Personalize your lapel with a pin 58 The Critic: Sallie Krawcheck says women should consider opting out of mainstream corporate America 59 Travel: Get away from it all without getting away from it all 60 Food: McDonald’s beefs up its Big Mac menu 62 What I Wear to Work: Andrew Herman got himself a custom-made sport coat 63 COVER: ULRICH BAUMGARTEN/GETTY IMAGES BAUMGARTEN/GETTY ULRICH COVER: How Did I Get Here? Lululemon Athletica CEO Laurent Potdevin found a creative way to avoid the French army 64 Index People/Companies Ross, Wilbur 8, 24 A Rousseff, Dilma 15 Accenture (ACN) 27 Rovio Entertainment 30 Adylov, Erkin 32 12 Al-Assad, Bashar 12 Saudi border Aldi 19 guards S Altitude Aerospace 16 Safeway 19 Amazon.com (AMZN) 19, 28, 29 Sandberg, Sheryl 28, 59 Ambev (ABEV3:BZ) 20 Sanders, Bernie 25 America Rising 24 Shake Shack (SHAK) 62 American Electric Shaub, Walter Jr. 24 Power (AEP) 25 Shinola 44 Apple (AAPL) 11, 27, 29 ShopRite 19 Avenue Strategies 22 Slack 27 Slice Intelligence 29 Snowden, Edward 50 B Sotheby’s (BID) 11 Bain & Co. 32 SecondHouse 60 Baird, Ross 44 State Street (STT) 33 Bank of America Merrill Surf Office 60 Lynch (BAC) 34 Synergy Consultants 18 Barnier, Michel 14 Behavox 32 Bennett, Barry 22 T Bessemer Venture Partners 31 Taco Bell (YUM) 62 Bezos, Jeff 28 TaskRabbit 27 Bidwell, Clinton III 32 Temer, Michel 15 Bin Salman, Prince Tiffany (TIF) 11 Mohammed 12 TP ICAP (TCAP:LN) 32 BlackRock (BLK) 33 TPG 44 Bogle, John 33 Trefis 29 Bolsonaro, Jair Messias 15 Trudeau, Justin 12 Bombardier (BBD/B:CN) 16 Trump, Donald 8, 11, 18, 22, Bono 44 24, 25, 32, 34, 35, 44 Bose 29 Twitter (TWTR) 27, 34 BP (BP) 44 Branson, Richard 44 Brasil Kirin (2503:JP) 20 Deutsche Bank (DB) 11, 37 Hsieh, Ed 60 Price, Tom 18 U Breather 16 DeVos, Betsy 24 M Proofpoint (PFPT) 29 Ubisoft Entertainment (UBI:FP) 4 DigitalOutposts 60 MacInnis, Matt 62 Protiviti 32 16 Doria, João Jr. 15 I Madsen, Nikolaj Astrup 61 Pruitt, Scott 25, 35 Ubl, Stephen 18 Downey, Robert Jr. 28 IBM (IBM) 50 Manning, Chelsea 11 United Airlines (UAL) 56 D.R. Horton (DHI) 35 IDC 29 MarketWatch (NWSA) 18 In-N-Out Burger 62 Marshall Wace 32 Q Infosys (INFY) 29 Marvel (DIS) 28 Qualcomm (QCOM) 11 V BUSINESSWEEK. OOMBERG Inhofe, James 25 Mattel (MAT) 11 Quazzo, Deborah 30 Vanguard Group 33 E Inkling 62 May, Theresa 14 Venneman, Nancy 16 E! (CMCSA) 15 Intesa Sanpaolo (ISP:IM) 37 McDonald’s (MCD) 62 Vesterbacka, Peter 30 27 Eclipse Ventures 31 McKinsey 18 R Village Capital 44 Stacy Edward Jones 19 McNabb, Bill 33 Raytheon (RTN) 12, 50 Brown-Philpot Eisenberg, Jesse 28 J Meltwater 63 Refuga 61 Ellevest 59 Jain, Anshu 37 Merkel, Angela 37 Revolution LLC 44 WXZ British American Ellis, Mat 29 Jaunt VR 29 Merrill Lynch (BAC) 37, 59 Rey, Roberto Miguel 15 Walmart (WMT) 19 Tobacco (BATS:LN) 11 Essilor (EI:FP) 11 JCPenney (JCP) 11 Microsoft (MSFT) 27, 29 Reynolds American (RAI) 11 Wolf Intelligence 50 Brown-Philpot, Stacy 27 ExxonMobil (XOM) 11 JPMorgan Chase (JPM) 14 Mondelēz International (MDLZ) Ringling Bros. and Barnum & Woo, David 34 Justus, Roberto 15 16, 19 Bailey Circus 11 Xi Jinping Järvilehto, Lauri 30 Morgan Stanley (MS) 11 Rolls-Royce Holdings Zappos 44 C F Morningstar (MORN) 33 (RR/:LN) 11 Zuckerberg, Mark 28, 44 Cameron, David 14 F.A.B. Partners 37 Munoz, Oscar 56 Canon (7751:JP) 31 Fabor, Peter 60 K My.Suit 63 Capito, Shelley Moore 25 Facebook (FB) 27, 28 Kenyatta, Uhuru 11 Carson, Ben 22 Faissola, Michele 37 Kerry, John 12 How to Contact Case, Steve 44 Fin Gourmet Foods 44 Konttori, Lauri 30 N CBBP 20 Fink, Laurence 33 Krawcheck, Sallie 59 Netflix (NFLX) 11 Bloomberg Businessweek Chaffetz, Jason 24 Ford (F) 11 Kumar, Manish 48 Nike (NKE) 11 Chan, Priscilla 28 Forrester Research (FORR) 29 Nomad House 61 Editorial 212 617-8120 Ad Sales 212 617-2900 Charles River Ventures 31 Founders Factory 30 Northrop Grumman (NOC) 50 Address 731 Lexington Ave., New York, NY 10022 China Grand Pharmaceutical & Fox News (FOXA) 24 NPD Group 62 Healthcare (512:HK) 18 Freeman, Morgan 28 NSO Group 50 E-mail [email protected] Fax 212 617-9065 Cisco Systems (CSCO) 50 Fresh Direct 19 Subscription Customer Service URL Citigroup (C) 37, 59 businessweekmag.com/service Clinton, Hillary 18, 44 O Reprints/Permissions 800 290-5460 x100 or Cloud Cruiser 29 G Obama, Barack 11, 24, 25, Cloudability 29 Gartner (IT) 50 28, 35 e-mail [email protected] CloudHealth Technologies 29 Georgiadis, Margaret 11 Oklahoma Gas & Electric 25 Cloudyn 29 GitHub 27 48 Omidyar, Pierre 44 Letters to the Editor can be sent by e-mail, fax or CNN (TWX) 22 Glock 50 Manish Ommanney, Charles 28 Kumar regular mail. They should include address, phone Community Choice Financial 22 Goldman Sachs (GS) 11 Orvoine, Cédric 16 number(s), and the e-mail address if available. Consumer Intelligence Google (GOOG) 11, 27, 29, 31 Outsite 61 Research Partners 19 Grupo Petrópolis 20 Connections with the subject of the letter should Conway, Kellyanne 24 GSoft 16 be disclosed, and we reserve the right to edit for Costco (COST) 19 GSV Acceleration 30 L P sense, style, and space. Cowen Group (COWN) 19 Guisset, Emmanuel 61 Laroia, Rajiv 31 Panera Bread (PNRA) 62 Crilly, John 44 Lee, Mitchell 27 Pearson (PSO) 11 Cryan, John 37 Lennar (LEN) 35 Penguin Random House 11 Corrections & Clarifications Cummings, Elijah 24 H Lewandowski, Corey 22 Penny 27 “A Scandal at Korea’s Retirement Giant” (Markets/ Hed, Niklas 30 Light 31 PepsiCo (PEP) 11 Finance, Jan. 16-Jan. 22, 2017) should have cited Heineken (HEINY) 20 Lightneer 30 Petroleo Brasileiro (PBR) 15 Grosvenor Capital Management, not Grosvenor D Herman, Andrew 63 Lululemon Athletica (LULU) 64 Pinterest 27 Da Silva, Luiz Inácio Lula 15 Hines, Stephanie 56 Luu, Lula 44 Potdevin, Laurent 64 Group, as being picked to help manage the National De Baene, Simon 16 Hooley, Joseph 33 Luxottica (LUX:IM) 11 Powell Jobs, Laurene 44 Pension Service’s hedge fund investments.