Bloomberg Businessweek Weekend - December 16th, 2022

edition of Bloomberg Business Week. Carol Master is off the head on the program will examine the state of the U. S. Trucking business with carriers in the midst of the holiday deluge. We'll talk restaurants with the CEO of Open Table, and we'll hear from a newly minted Bloomberg fifty honoree who's rewriting the labor story at Starbucks. All that to come. We begin, though, with a story that everyone keeps talking about.

A No, we are not talking about the Fed's latest interest rate hike, but f t X. Bloomberg Business Week columnist Max Chafkin has a story online and on the terminal that focuses on the relationship between Sam Bateman, Freed and Finances. Chang Peng Jao, better known as c z c Z, as you may recall, helped last month to blow the whistle on his longtime rivals failures. Carolin I asked Max about the implications of that with Bankman Freed, who's now in custody in the Bahamas. Congress continues to

probe what happened. I think it's pretty clear, you know, he's got some tough legal sledding ahead. It's who else gets roped into this? So there are other figures um connected obviously to f t x uh Carolyn Ellison of course, um uh, from a girlfriend, Yeah, ex girlfriend's CEO of

of Alameda um. And and also kind of the person that Sam Bankman Fried was sort of it kind of felt like was trying to pin this all on um uh, perhaps unfairly um to talk about a messy breakup, No, just kidding, Yeah, and UM And then you have the other crypto exchanges, and you know, we've seen this play out before over the last uh a few months, where we're off one exchange go down, one major player in crypto go down, and it's starting to suck everybody else down.

We people have been talking about, you know, this this sort of unfolding credit crisis, and I think it remains to be seen, you know, kind of who else does Sam Banquin freed, uh, you know bring down with him? And and I think it's it's very possible because as we've seen in sort of the details of this case, these guys were all pretty tightly you know and meshed. And UM. One of the interesting things, uh that in the testimony that that Sam Bankman freed, which you know

we and others have been talking about. Uh, you know, he's got these text messages from other CEOs of exchanges. Um. The the the title of this text message group is Exchange Coordination. UM. There you know, it's it's it's all very weird and and and it makes you wonder, um whether ever anybody else is potentially vulnerable either to like legal um issues or potentially just asset price it's falling

and then hurting other companies. Right, makes me wonder like how systemic all of this is and who else comes down beyond the f t X kind of universe. At the same time, it also makes me wonder about collusion and I'm not maybe using it in a legal way. Um. And and also kind of you know, HARKing back to like Robert Barons, where you know, anything could happen and people would get rid of their other competitors or smaller competitors,

because they wanted to own the marketplace. And I feel like that's where potentially yeah, and well, and you look at like why was Gary Gainsler, Why were people in the US resistant to this, to to these companies, And one reason was potential manipulation. You have all of these very small number of players, um lightly changed like traded currencies, and they're going around trying to pull in money from

from normal people. Um, which of course raises questions. Um, you bring up Jao c z so Chang Peng Jao uh CEO of Finance, which is the other major exchange basically Sam Bankman Fried's main competitor. And over the years these two had a serious rivalry where it's kind of happening, as I write in the column today, this is all kind of happening behind the scenes. But they were both and in binance this case, are both operating in regulatory

gray areas. So as we know, Sam Bankman Freed based on the Bahamas was operating this kind of quote unquote offshoring exchange Finance kind of same situation operating. UM. No one really knows where that's that's the main difference there as far as we're concerned. We don't know where where Binances headquarters is, but it's the same thing where um they're trading these alt coins um s coins are sometimes

called as well as crypto derivatives. Much of that is not allowed in the US, and as a result, they're in this kind of regulatory gray area and and that has left them kind of vulnerable to you know, potential sec sanction, CFTC, potentially even criminal investigation. What we saw behind the scenes is that Jao and Sam bankmun freed, we're kind of vying to find a way to sort of legalize their business, to take this business from the

gray area and bring it into the light. And I think that's part of what led to the conflict and maybe even part of what led to the to the run on withdrawals that ultimately, um, you know, exposed the f t X, the alleged fraud at f t X. Well go back to this idea of fud if you're uncertainty and doubt, because a big portion of your column today is about that, And I don't know if you've you know, found yourself at the center of this at all, Max, But if you talk about crypto online, and you you

express any skepticism about it, you are accused of spreading fud, as you write in column. So where does fud come into this conflict? So everybody who's anybody in crypto has like thrown around the suggestion of fud um Uh Chang Pang Jao has a huge Twitter following. He's got like eight million or seven million followers. I haven't I'm not exactly which um, but he's he's constantly anytime anyone writes

anything negative, you know, he's he's calling fud um. We saw about a month ago, it was kind of his tweet in response to these coin desk reports. The coin desk reports were about you know, this shaky balance sheet um Sam Bankman Freed and his colleagues are denying it. Jaw comes in and says, hey, this looks really concerned. We're gonna sell our you know FTX tokens called f t T And that sets off this run and and in you know, in some sense, right, Jao is spreading

what a crypto person would call fud. On another sense, he's acting as a whistleblower. He's exposing a actual flaw now and and and so I think it's important, you know, we've got to make that distinction. But since then, Jao has kind of seemed to do the same thing to a couple of other exchanges, which is interesting and and and perhaps telling. Um, you know, he a couple of weeks ago he sort of went after coin Base, suggesting the coin base was shaky. Um coin based courses based

in the US has audited financial statements. Um uh, you know, s serious charge. He deleted the tweet. Same thing with Cracking, another um reputable exchange, and he also deleted that tweet. And I think what's going on is you have the ft X collapse, and that's creating a sense of panic

in the market, potential legal vulnerability. It's also it's also shrinking the market, and it's creating an opportunity for somebody like Finance or coin based or Cracking or any of these people to can solidate and to and to get customers in that sense, an opportunity, but it's also shrinking the market dramatically. So you kind of a sense the lights just came on and there aren't enough chairs. They're

all trying to find a chair. That was Bloomberg business, We call him this Max Chafkin will continue to monitor all of the latest developments with FTX and bringing the news as it breaks. Now, we want to also bring your attention to a great piece from Business Week National correspondent Josh Green, writing for Bloomberg Opinion. This week, Josh says that Elon Musk is ruining former President Donald Trump's

latest presidential bid. Bloomberg News senior market supporter Katie Greifeld and I spoke with Josh a about the irony of Musk inviting the former president back to Twitter, which would, of course detract from Trump's current social media home truth Social The whole rationale for having an alternative right wing social media platform was to get kind of people to go over there and be able to turn that into a business that makes a lot of money. And chunk

has Trump has a chunk of that? Uh, the minute everybody starts gravitating back to Twitter, and certainly if the if the biggest power user of the mall and Donald Trump or to go back, it would really obviate any sort of a need for a right wing social platforms. I think that's about the only thing that's kept him

from going back. But in his absence, a new Twitter overlord has emerged, and that is Elon Musk And as I say in the columns, he's essentially overshadowing and eclipsing uh, Donald Trump, who's whose political superpower always has been to be able to dominate the political conversation, largely through the use of Twitter. So I'm hearing you talk, I'm reading your column, and it brings me to a natural question, which is, how does this end? Are we gonna be

watching Musk's campaign in however many years? I don't think that. I don't think that Elon Musk is has any real interest in politics besides just kind of weighing in with his takes, which he seems to be doing about every every thirty minutes on Twitter from what I can tell, um, and I would I would never hazard a guest to predict, you know, how Trump's campaign is going to go. But

I will say this, you know, tru Umps. What first elevated Trump, um, you know, in national politics was his ability to draw all the attention to himself, to just be this constant, churning story that you couldn't look away from, that eclipsed everybody else, and that drove the news cycle on Twitter on cable media on newspaper headlines. And the one thing that Trump has really lost since January six, since he was the platform, was his ability to do that.

He just doesn't have the outlet he once did. Uh And as we can see him, he launched his presidential campaign three weeks ago and it's pretty much been crickets ever since then. He really the only real topic of conversation was his dining with with white nationalists, and that's sorta of not the kind of press that you want

when you're trying to launch a white house bit. But what has replaced that the guy who was driving the news cycle all day and all night is now Elon Musk, And if that lane is occupied by Musk, it's gonna make it awfully difficult for Trump to to become what he it was. Well, what if that lane is occupied by Elon Musk and then Elon Musk then goes and decides to get behind someone like Rhonda Santis for example. Well, I think it's problematic for Trump. And you can see

this in all sorts of ways. I mean in the column. You know, I looked at Twitter followers, Musk has fifty million more. I looked at Google search mentions. Uh, Elon Musk is easily eclipsing Donald Trump. But I think what's even more important from political standpoint is if you go to a place like bright Barton News, the hard right

news site to help launch Donald Trump. Uh, they now have a vertical on Elon Musk and they're writing about his Twitter stuff every day, and Trump is almost an afterthought. You know, it's buried at the bottom of the page. That was Business Week National correspondent Josh Green with Katie Gradfeld and me. Check out Josh's full piece online or on the terminal by typing O P I N go.

You're listening to Bloomberg business Week. Coming up next, the president of shipping payments platform Triumph Pay breaks down the massive volume of packages on the move this holiday season. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim Stinovan from Bloomberg Radio.

American ship more than fifty million packages last holiday season with the US Postal Service, and with package volumes continuing to increase, thanks in large part to the rise of online shopping, the agency is preparing for an even higher volume of parcels this year. The trucking industry helps move many of those around the country, but driver shortages are creating doubts that everything can get to its intended destination and on time. Melissa Foreman is the president at Triumph Pay.

This is a payment platform and what it does is it connects brokers, shippers and carriers. It's a division of t b K Bank, member of the f d i C, and part of the publicly traded Triumph Financial. It's got about a one point three billion dollar market cap. We asked Melissa for her assessment. Were uniquely positioned, given where we sit within the transaction flow of payments, to really have a good understanding of what drivers and carriers and

carriers are experiencing in the industry. And so Try and Pay makes about twenty four billion dollars annalyzed payments um two carriers per year, and that's the most of anybody in the industry. And so in doing that, it gives us that unique view. And we recently did a survey of our drivers that we're paying, and what's happening right

now is is truly unprecedented. You know, when you look at the full truckload market, consumer spending and shifting from products to services, and so what does that mean on the transportation industry. It means that the trucks you know aren't aren't getting full, the inventories are high, and in all of the retail chains that are out there, and

so they're just not re stalking all of that. Um. When we talked to our drivers out there, they said of them indicated that their revenues in twenty two were down from one And while twenty two started strong in the freight market, we've seen, you know, on the spot side of that in the last you know, two quarters, a significant cliff where it's where it's fallen off. UM. And those guys out there are saying, guys and gales that spot rates are their number one concern, and you

have to ask yourself, why why does that matter? You know, spot rates aren't lower than they were a few years ago. There still would seem healthy in comparison to previous years. But what's changed over the pandemic and COVID in the supply chain issues that we've had over the last couple of years is that the you know, inflation has increased

the cost of their equipment. Fuel prices are at record highs for diesel, and so when you compound that with the rising interest rates, their cost to operate has skyrocketed. And so what would have been a healthy level a couple of years ago is now in many cases where carriers are taking on freight where they're they're hauling that

load at a loss. What's even more pressing about that is that they have to do that in front all the expenses to be able to pay for the fuel, pay for the drivers, you know, settlements, pay for the equipment, insurance, and they're doing that up front, but yet they have to wait thirty to sixty days to get paid, and so it just further compresses them and puts in a position where they're just being squeezed out of the market.

It's really hard for them to operate. Right now, we listen, help me understand what goes on in the trucking market. I know people who have owned their own cabs, right, and they, I guess, do their own thing. But is it largely kind of like individual owners of trucks or is it a lot a lot of larger companies that have their trucker base. Yeah, if you could explain some of the dynamics of the industry, sure, care. That's that's

a great question. And if you look at the truckload over the road market for higher about eight five cent to of trucking companies are five trucks are less. So they are small businesses live in the American dream, trying to build you know, their their businesses, and you they have all this this upfront expense and and these pressures that are that are squeezing out their margins. Well, is it any different though, from anyone else who either has to get in a car to head to work or

has to buy clothes to go to work? Like, tell me, is it not just kind of the same that everybody's facing right now? And it's companies are trying to figure out the balance between raising wages right to meet what's going on with the inflation pressures. And we talk a lot about wage in flash and flash and wages have gotten up a lot, but you know what's the balance Because if you raise the costs the wages too much and everything gets too expensive, you do wonder if people

are going to slow down on demand. For those in the trucking industry, it is quite similar. However, it trails um what what consumers do a little bit longer. And so because of the cost to acquire that equipment, you have these assets, and you know, these carriers are fighting hard to keep them on the road and to keep them profitable. You can't just say one day, I'm going to take a different job where i make more money. You've got an expense that you have to handle UM

and either offload or take a loss. And and so they are working as hard as they can to be able to stay in the business, stay on the road, keep their trucks moving, but but doing so in a profitable way. Because you can only take a loss for so long before you either get bought right you sell out your company UM or you've lost everything that you've built. And so UM they tend to stay in a little bit longer, and those that make it through survive because

we know that transportation is cyclical. And what happens is, you know, you you have this pressure and and this happens you know every few years where you start seeing your capacities start to come out of the market, which will rebalance UM. But again it's lagging, and so to get that capacity back in the market is also lagging. And so as you know, we look forward to probably end up twenty three or even beyond, when things start to stabilize a little bit and consumer um spending shifts

back to products. We've got to make sure that those carriers are there and that the drivers are there and able to haul that freight for us, or will be in a similar situation that we ran into at the beginning of COVID where there just was no capacity UM and back in in a significant driver shortage situation. For a decade, we've been hearing about automation in the context of driverless trucks. Good question, you're laughing, you're laughing, and

it's it's interesting. I mean, I remember being at a dinner with a Silicon Valley friend who was early at one of the Silicon Valley firms, and he said, we are going to see a revolution in trucking and and this was more than five years ago because of driverless trucks. We haven't seen them yet. Are we going to see them on a large scale anytime soon? There is certainly some some efficiencies you can gain, and there's some applications

for it. Um. But you know, if we haven't mastered how to get a car to to be driverless on the road, UM, it's really hard to to do that with with a long haul truck, right Amy, Lissa, What do truckers get paid? Oh, it depends so so right now, if you look at spot rates, Um, it's around a dollar eighty six per mile, and that is you know, that's all in there, two dollars a mile, that's all in.

They have to pay for their their truck, their fuel. Um. Most trucks are are running around you know, five to eight maybe nine if they're if they're brand new, miles per gallon and so they're not the most efficient vehicles out there. So um, they it's it's their margins are are you know, anywhere from eight to twelve maybe fift on the high end in a good market. Um, and that's without the you know, the higher inflation and costs of their equipment and their financing to get that equipment

that has gone up recently. What are the rules in place to prevent drivers from driving long hours so they don't get too tired if if this incentive system is in place that actually you know pays people per Miley, Yeah, absolutely so. FMCSA has hours of service regulations that are in place all drivers, certainly those that at that cross border and run outside of a hunter mile radius, adhere to standards, and they have electronic logs that keep track

of every minute of their day. So they have to log when they're resting, they have to log when they're sleeping, they have to log when they're on duty, off duty, not driving. Every part of their day is tracked and the formulas will tell them how much they can drive today. And so when you think about, you know, the driver shortage, a big part of that came from, you know, implementing the electronic log you know, those which which held drivers accountable to not being able to go over their hours.

That was Melissa Foreman, she's the president at Triumph Bay. Still ahead on Bloomberg Business Week, we go from the shipping economy to the local economy for an in depth conversation with the mayor of Tulsa, Oklahoma, GT Bind them.

The big concern is inflation UH and the challenges that presents with keeping up with cost UH costs as a city government where we have to have a balanced budget every year and providing the level of service that people expect when the cost of doing everything, whether that's fixing a street or hiring a police officer is dramatically more

expensive than it was just two years ago. This is Bloomberg Broadcasting from the financial capital of the World, Bloomberg Eleve in Rio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one, O six one to San Francisco, Bloomberg nine to the Country Sirius XM Chamber one nine and around the globe the Bloomberg Business and Bloomberg Radio dot Com. This is Bloomberg Business Week with Carol Messer

and Bloomberg Quick Takes Tim Stinovan on Bloomberg Radio. From time to time, we like to check in with mayors from some of America's great cities. It really helps us get a feel for life on the ground and gain insight into growth, labor markets, investment, innovation and more. Today we're focusing on Tulsa, Oklahoma. Back in the fall, Bloomberg News reported that a consortium including Devon Energy, Williams Companies, and more is partnering with a Tulsa nonprofit founded by

the George Kaiser Family Foundation. The hope here is to bring as many as two thousand energy tech jobs to Oklahoma over the next five to ten years. Carol and I recently had the opportunity to welcome Tulsa Mayo GT bin Um into our studios and despite a rather gloomy economic outlook for the US heading into mayor, Bynum is not buying in. Everything in in Tulsa right now is very strong. I mean, we're seeing probably the greatest moment of investment in the history of the city is occurring

right now, both across the public and private sectors. Um Our core industries in Tulsa course are energy, aeros and aerospace, but we're also seeing a tremendous level of interest and investment around advanced mobility. That's something that we just secured. We're one of twenty one cities out of six hundred that applied that secured a Build Back Better Regional Challenge grant from U S Department of Commerce, and we're using

that to build the advanced mobility industry and Tulsa. That's expected to develop thirty to forty thousand new jobs over the next few years with a projected economic impact between

three and a half and five billion dollars. So right now, I mean, the economy is very strong for US, I think, and as a mayor, the big concern is inflation UH and the challenges that presents with keeping up with costs as a city government where we have to have a balanced budget every year and providing the level of service that people expect when the cost of doing everything, whether that's fixing a street or hiring a police officer, is dramatically more expensive than it was just two years ago.

We also want to mention that Mr Mayor has participated in the Bloomberg Harvard City Leadership Initiative and also the Bloomberg Philanthropist City Data Alliance. Of course, these have been founded by Michael R. Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies. Um herepinum, What would you like your economy to be? Energy has been a blessing right, but it can be a curse in terms of overexposure. Where do

you want your economy to be? And let's say five years Well, I think the key for us is that we want our economy to be diversified and be one where it's creating equality of opportunity in our city. We have consolidated all of our economic development efforts in Tulsa behind that goal of using economic development to drive equality of opportunity in our city. We think that the advanced mobility industry presents a really great opportunity right now in

the history of that industry, we see advanced mobility. You mean specifically for us what I'm talking about there would be drones, electric vehicles, autonomous vehicles. The funding that we received from US to prominent commerce, we're using to build a hundred and ten mile drone testing corridor through the O s Age Nation. UH that that they are going to build. We're building an autonomous benefit correct, the O s Age Nation. We Tulsa is at the intersection of

three tribal nations their Sage, Cherokee, and Muskogee Creek. We work with all three of them on our economic development efforts, but we think that that one is a big one. The other key one for us UH Tulsa. Actually we get no attention for this, but it's kind of by design. The University of Tulsa is probably the leading university in the nation when it comes to graduating cybersecurity graduates. And it's not going to go away. It's not a fad.

Something's growing in. So the great challenge for US is to have that intellectual capital at our university and how do we translate that into new companies and job creation. How do you get those students who graduate to stay in Tulsa and work for companies that are there, right, you know, educate them, but you want that younger generation to stick around. Oh no, I mean that's the challenges

federal agencies. Historically, I've just vacuumed up all these graduates and they've gone all over the world rather than staying in Tulsa. You mentioned that George splies you said that, not me go on that. You mentioned that George Kaiser Family Foundation. They're actually working with the University of Tulsa to lead an initiative that that spurs the growth of companies by graduates coming out of the University of tulsas

cybersecurity programs. So that it has two arms, has one where it's preparing graduates for public service and then it has spying you can say, for public service, which might be a public service, and then uh an arm that's there for business growth and entrepreneurship. What's the trickiest part of your job right now in terms of as you

look at the economy, there's a lot of uncertainty. Tim kicked it off the conversation about we're trying to figure out what next year holds for us, even in a downturn because of the energy pad and the energy crunch that we've seen. Does that give you guys a lot of room? I mean, the trickiest part of my job right now is that there is so much growth UH that we don't want to get out too far over

our skis where we find ourselves in a position. I started as a city councilor UH two months before the Great Recession began, and I saw what happens to a local government that builds in costs that all of a sudden you wake up one day and realize you can't cover anymore and you have to start looking at laying up police officers and firefighters. And no, no mayor, and

no city ever wants to be in that position. So how do you maximize the growth of our city and move with the opportunities we have before us right now? But to the point you're raising earlier about what these CEOs are saying, we don't know what's waiting for us in three or twenty four, and the economy always comes down at some point, and so when will that be? And how are we being very secure and being prepared

for that while trying to maximize growth. We had Mayor Mattie Parker from Dallas Fort Worth here it Yeah, it's just a few weeks ago. Um. I asked for this question too, because both of you are young, politically moderate Republicans, and I'm wondering if it's tough to be a moderate Republican when you see what's happening in the Republican Party on a national level, Like, how does that make your job more difficult? Oh, I think it's tough to be

a moderate anybody right now. I mean, I think that the greatest threat to our country right now is the political polarization that occurs. It's one of the reasons I'm so thankful that I work in local government where Republicans and Democrats and independence still do work together to solve practical problems. I mean, you mentioned the Bloomberg City Data Alliance. That's one of the things I love about as a

mayor being able to utilize data. It's a tool where you can bring people of different political philosophies together and solve problems that they don't have to be philosophical debates. They can be practical problems that you solve how do we build a better street, how do we hire more

police officers? Does it make a difference, because you know, we're very data, you know, centric, and I feel like data tells our numbers or information tells a certain story or tells the truth, but doesn't resonate no matter what the political leanings might be of a party that you're talking to. One does And I say, this is somebody who worked as an aid in Congress for six years before I moved home and reigned for the city council. Uh are all of our street projects are selected based

on analytics. The numbers that we determine on how many police officers we need, that's based on analytics. We're trying to build out more and more utilizations of data into the work we do as a city, so that we're taking that that partisan polarization that you see so much at the federal level and boil it down in a more practical problem solving that people can get around. And by the way, my mayoral administration it's equally divided between Republicans, Democrats,

and independence. Our city council is the same way. At the local level, you still see that collaboration that is non existent at the federal level, we'd be mass We've only got about thirty seconds. But the legacy of Black Wall Street. Um, how does that factor in? Well, I mean, that's driving so much of what we do right now.

I ran for mayor Uh. I decided to run from mayor the day that I realized that there was an eleven year life expectancy gap between kids growing up in the predominantly African American part of tuls and the rest of the city. As a dad of two kids, I wanted the kids growing up in that part of the

city have the same opportunities that my kids do. And so everything that we're doing is a city right now around economic development and city services, is around creating that quality of opportunity so that Tulsa really can be a city where every kids an equal opportunity for a great life, regardless of the part of town they're growing up in.

That was Tulsa, Oklahoma, Mayor. GT. Binum. You're listening to Bloomberg Business Week, and coming up next, we're gonna check in with one of the honorees from this year's Bloomberg fifty. How Michelle Eisen went head to head with coffee Giant Starbucks and helped galvanize a pro labor movement among its

hourly workers. Billions of dollars are made off of the backs of the labor of that is in the floor of these cafes every single day, and yet you've got workers who can't pay their rent and put groceries in their fridge. There's just there's an imbalance there and something needs to be done about it. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg

Quick Takes Tim Stinovik from Bloomberg Radio. This past week, Bloomberg Business Week released its sixth annual Bloomberg Fifty list. It pays homage to those in business, politics, science and technology, finance, and entertainment whose accomplishments over the past year deserve recognition and well. World leaders, celebrities, and top executives are included. You don't have to be a household name to make the cut. One example of that is Michelle Eisen, the

lead organizer of Starbucks Workers United. Her efforts to create better conditions for hourly workers have brought unionization to more than two seventy Starbucks stores and seven thousand people across the country. Just over a year earlier, the company had none. Carol and I asked Michelle about what's next when it comes to her fight for workers rights, and I do expect it to continue, because the momentum really hasn't slowed. What we've seen as an increased interests from Starbucks workers

to unionize their stores because things are hard. Things are even harder now than they were, you know, a few years ago, to be a service worker, to be anyone of the working class, and the reality of the situation is that the billionaires are not looking out for the working man, and so we need to join together and raise our voices and fight for what we believe is fair in our workplaces. Starbucks, i think, to a certain extent, has always preded itself on providing a at least publicly

a good place for people to work. So I'm curious you know what your experience has been and also what specifically you and other union organizers and people who join the union are looking for from the company right now.

I think that you're correct, I think, and that's what has become so apparently disappointing to me in the last year is that I came to this company back in two thousand and ten because of who they prided themselves to be, because they were this progressive company that you know, claimed to care about the environment and the community and most of all their workers. And I think that that

was true when I started. But we've seen a very clear decline in how workers are treated within the company in the last few years, and the pandemic really shined a spotlight on just how how they actually feel about us. We were called essential. Starbucks stayed open through the entirety of the pandemic. Um These are not remote jobs. We have to go in in person and customer phasing positions to perform these job duties. And they kept saying, you know,

you're essential, You're essential to keep the world running. But we were continually treated like we were disposable, and we'd had enough. It was time to, you know, hold the company accountable. These are billion dollar corporations. Billions of dollars are made off of the backs of the labor that is in the floor of these cafes every single day, and yet you've got workers who can't pay their rent. There's an imbalance there and something needs to be done

about it. What do you make of the wider unionization drive that's taking place across the United States right now, and I should know it is a far cry from what we saw, you know, at the peak of labor unions decades ago. But today we are seeing drives at places like app full are E, I and more. What do you make of that, well, I think you're seeing. I mean, the wealth gap is significantly higher than it was even at the peak of the labor movement decades ago.

So I think that's part of the catalyst, certainly, the pandemic and the fact that the working class was put in a position where their health and their family's health

was at risk daily. If you were a service worker, if you were a worker, and you know, one of these shops that continue to stay open and provide what they were calling these essential services, and you had, you know, ceo s on these financial shows boasting not only about profits but record breaking profits in the middle of this pandemic, and workers are starting to question what they're worth actually is. And there's a realization that, you know, we are the

people who bring in these billions of dollars. If the working class just walked out of all of these businesses. Right now, these businesses would essentially cease to exist. And so I think you're starting to see people stand up and demand, you know, fair wages and at the very least safe working conditions, because these companies don't exist without us. That's Michelle Eyes and she's the lead organizer of Starbucks Workers United, and she's part of this year's Bloomberg fifty.

Check out the full list online or on the Bloomberg terminal. It'll be the cover story of next week's issue of the magazine. That wraps up the first hour of the weekend edition of Bloomberg Business Week from Bloomberg Radio, I'm Tim Stanovic. Coming up in our next hour, we're gonna hear from the CEO of Open Table on the restaurant industry's big comeback, and the CEO of Impossible Foods explains why reports of the death of the faux meat industry

are greatly exaggerated. Plus, a new book goes inside the lucrative criminal enterprise of ransomware and details the band of so called misfits out to stop it. This is Bloomberg. This is Bloomberg Business Week, inside from the reporters and editors who bring you America's most trusted business magazine, plus global business finance in tech News as it Happened, Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim

Stinovik on Bloomberg Radio. Planning ahead in our second hour of the weekend edition of Bloomberg Business Week, including a report from the magazine about how American Express got its mojo back. We'll also look at one of cyber criminals favorite weapons, ransomware, and the loose network of tech nerds out to put a dent in a billion dollar enterprise. Plus a conversation with the Open Table CEO Debbie Sue

on a long awaited resurgence for the restaurant business. First up this hour, we're talking food with another industry executive, Impossible Food CEO Peter McGinnis. He recently joined my co host Carol Masser from the Bloomberg Life Sustainable Business Summit, and they kicked off the conversation talking about what some see as a plateau in the plant based food industry.

It's a very dynamic category industry um with huge potential um and it's in its infancy and I think people say, oh, the plant based category is a declining Is the demise of it. It makes a great headline, it's a sensational story. And I would just say that it hasn't been established and created yet, so a big part of what I want to do it in part been established. No, it's been around in earnest for you know, probably less than five years. There's been vegan burgers and things out for

ten or twelve years. But in terms of all protein that's going, you know, trying to displace the animal product, that's a three to five year phenomenon. And um we just launched in retail two years ago in the middle of COVID, so if you discount, we've probably been available retail for a year. And uh So I think it's in its infancy and I think it's yet to be created, yet to be established, and uh I think it's our

job to really create this category. It's three billion dollar category and at one point for trillion dollar addressable market, so it is very very small, right, and it's our job to mold it and shape it and grow it. And that that work hasn't done yet. Here, someone who knows the food industry really well, you're reminding me you're ten years of Chabani and you're doing this, you understand

kind of reaching consumers and what they want. I want to go to a recent Bloomberg opinion piece that talked about plant based product sales in the US and they said they've been flagging the categories meteoric growth in flattening, and since less September, a key portion of its retail sales has dropped more than ten pc. It's reputation has also been badly bruised by the stock performance of Beyond Meat, which is down with from a peak back in tween.

The column does go on to say still it's a mistake for investors to write off the value and potential of the sector as a whole, which will be a keystone among climate solutions going forward. So first up, I'm going to get to the climate solutions in a moment. The first part, though, unpack it for me, what is though wrong with plant based industry today and the sales and and then we get into kind of So the category is down and that is a fact, right, you

can redire our data Nielsen data. It was plus now it's hovering it minus five to minus seven depending on the week. And there's a lot of reasons for that. There was a COVID bump probably in there somewhere along the lines, there was a novelty bump when it really you know, first became available. So some of it's a correction, some of it's um some noise in the data, and then some of it are there are players in the category who will remain nameless because I'm a proponent of

the category that are not doing well. And so you know, the category is a composition of companies, and so if there's some companies in a category that don't do well, they can bring the whole category down. And so, um, we're doing well. I mean we're growing six at retail. Um, we're in top line sales and m and so we have our own playbook and we have our own you know approach here. I think it's lazy to look at

comparables and try to project that on a category. Each company has their own own issues and challenges and playbook and some work, some don't work. But that doesn't mean that you should cloud the whole category, right, And I think the category also is confusing because some of the players in the category are old vegan burgers that are veggie burgers, and some of them are all meat, which I don't like the name of that, but those are

those products that are displacing it. Never good, never good. UM. And then look, I think the animal industry has done

quite a good job. They're highly coordinated and pretty loud in trying to confuse this plant based meat category with calling it processed or foe or and they have a lot of money, and they're highly coordinated, like I said, and I think where the mistake of the plant based meat is it's young, it's restless, it's very fragmented with a lot of different players, and we have not been coordinated in our messaging, and we have not been loud

in support of our products. And so combination of big meat kind of being loud and coordinated and plant based meat being shy and uncoordinated has not helped the situation. So let's talk messaging, um, And let's get to the second part of the Bloomberg opinion column, which said, it's a mistake for investors to write off the value and potential of the sector as a whole, which will be a keystone among climate solutions going forward. So why is

plant based food a keystone among future climate solutions? Yeah, it is. The scale of food because this would be great for the narrative. Yes, it would be great for the narrative. And it's it's a it's a it's a complicated message to get out there from a consumer perspective, and I think a lot of the issue around um, Look,

the food is now come a long way. So the food now stands up against the animal products, and most people that try it say it's much better than I thought and taste, texture, flavor, and especially when you build a burger and you have cheese and you know, put let us in tomato on it. It's very difficult, right, And we hear that with whoppers, and we hear that whether our impossible Sauce's sandwich of Starbucks. So the food is in a really good place. We have not got

the health credentials across. Right, it's zero cholesterol meat, right, that has less saturated fat and less calories. That has not been communicated. And then the climate piece of it, There is no other alternative to reverse climate change other than food. Food systems account for third of emissions. Third

of emissions. Also, if you think about of the usable Earth's land mass is animal agriculture related, and all of that land has been cleared fifty three percent or towns and cities of the entire Earth's so the so the scale is huge. And as a result, six of all wild animals have been killed and animal products. And I want to sit here and go on and on about how bad the animal industry is. We'll talk about your climate imprit when you guys do so our plant based meat.

If you look at fifty million pounds of our plant based meat versus fifty million pounds of animal meat, right direct comparison, we'll use four point five billion less gallons of water, we would save thirty seven million trees, and we would avoid one point five billion pounds of c O two. That's fifty million pounds. That's a small amount, right, That's a fraction of what we will make um this year.

So the scale is massive. Right when it comes to food, So, food choice and climate change is a very very powerful thing. It's misunderstood. It's many people are not aware of it, right, They just don't equate food choice with climate change. So the more we can educate people, I think it can

be quite powerful. And there is no other tool out there that has the power to reverse climate change like food choice, right, which is interesting because we focused so much on E V S. And I get the importance of it, which is, by the way, the good thing, right, But if all cars went to electric, it would not have the impact of food choice. So good business. And you and I talked about on the phone. I care, I turn over, I look at my food. I want to know what it is. My ninete daughter does the

same thing. Help me out because part of the reason I'm not your customer, and I probably should be because I care about my health. And I even brought it up in the newsroom and in our makeup room. I'm like, who's eating this stuff? And like sodium sodium? Like you talk about the healthy part of it. I mean, have we can it be better? It can be better. So one of the big things we want to do it impossible. I think we have a really good product. And I

know you've done some formula. Sure you know we're on beef two point five. We're not going to go iPhone. How far do we go? But we're gonna go probably beef four point oh. I can see probably a three point three point five and a four point to perfect it taste, texture, flavor, nutrition, And every time we reformulate that food, and I think this is a big part

of it. Right, we have to continue saying prove those products, and these products have only been around three or four years, so it's not unusual to continue through technology and new ingredients to try to perfect the product. And in doing that, I think will chip away more Etceterated fat, sodium, will simplify the ingredient list. The ingredient list is long. It's all plant based, but it's long because you're trying to mimic the texture of animal meat. It's very hard to

be complicated, very complicated. So people say it's processed. I think Twinkies are processed, right, it's artificial. It's not processed because the process but but our food is not processed because the ingredient list is long. We're using a lot of different things to mimic the texture to get people to have it instead of the animal product. But it's all plant based, so much rather ingest that than something highly artificial. Look processed is food that doesn't con pain

a lot of minerals and vitamins and protein. Right, our food contains vitamins, minerals and has more protein than the animal product, so it's nutrient dense. It's nutrient rich. And yes, the ingredient list is long, and we'll work on simplifying that. But these are all the misconceptions and myths out there that have been and affected people like you. That's Impossible Food CEO Peter McGinnis with Carol Master from the Bloomberg Live Sustainable Business Summit earlier this month. To here and

watch the entire conversation. Head on over to Bloomberg Live dot com. You're listening to Bloomberg Business Week. Coming up, we stay in the food space and get some good news on the restaurant business at an all important time of year. We are continuing to see that that dining deman remains really strong. If you look at the year end for this entire year, we are approaching nationwide pre pandemic levels. Open Table CEO Debbie su joins us on

the other side. This is Bloomberg. This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovin from Bloomberg Radio. In our last segment, we heard from the CEO of Impossible Foods on the health of the still nascent fake meat industry. Now let's zoom out for a look at America's restaurant business. This past week, Bloomberg New Senior Markets reporter Katie Greifeld and I had a

chance to reconnect with Debbie Sue. She's the CEO of the online restaurant reservation service Open Table, and while she's based in San Francisco, Debbie says things are looking up for the entire sector from coast to coast. We are continuing to see that that dining demand remains really strong. If you look at the year end, so for this entire year, we are approaching on nationwide UM pre pandemic levels.

We're up versus last year, so we can say that dining is back UM or that dining has held strong. The holiday season is looking great. Thanksgiving UM is usually good, you know, a sign of what things are to come during the holiday season, and demand was really strong then. So people were just seeing that. People are continuing to

prioritize that dining out at at a restaurant experience. Despite all the news we're hearing, and we're feeling it as well, right about inflation, rising costs, um, all that economic turbulence, people are continuing to you know, allocate pieces of their household Piano to the dining out experience. How do you explain that because those things are at odds. Yeah, I know, and I think, you know, um, we're we're still seeing

some pent up revenge dining. I think as a result of the pandemic when many of us were cooped up in our houses or apartments for um a long time. So I think that is still playing here. Um. I also think it's because from many of us, the nature of work has changed. Um. Many people work remotely, some people are in a hybrid situation where they go into the office you know, twice a week as opposed to

five times a week. And I think people are really craving that in person, you know, experience that they're not getting when they're just working from home. Um. And so I think, you know, dining out at a restaurant is one of those ways they can get that. And we're seeing that in the data too. We're seeing, for example, uh, pre pandemic days, bar seating was the least favorable type of the seat that one could book, and right now we're seeing people are actually requesting those seats and wanting

to be in the thick of it all. So I think because work is changing for many of us that that has trickled down effects, you know, into dining and our behavior as consumers. Um, you know what what it means now to to go out to a restaurant, Deffy. Let's unpack some of those trends. If if the shifting nature of work is changing how people are dining out, what does that mean in terms of what days that

people are coming to restaurants, what times? Thinks of those natures? Yes, so we're seeing that Monday's, UM, to your point, are so historically Mondays were very slow time for restaurants pre pandemic. Right now, what we're seeing Monday's are the weekend after party. It's kind of an extension of the weekend. So we're seeing really big increases in dining compared to last year up on Monday's. UM. The time is also different in terms of the time that people are going to reservations.

You had said forty five or ten, we're actually seeing um a lot of people dining between four and five. UM that that time period increased a very large increase uh compared to pre pandemic time. So happy hour is the new dinner. I think it's because oftentimes, like if you are working remotely or hybrid um, you're commute, you don't have a commute time, right, so you could be done with work and you can shut down, you know, your computer and just literally, you know, leave your home

and go to a restaurant. Debbie, does that change? So I've talked about this a bit. I don't have any data on this, and I'm hoping you can help with this because it's all anecdotal for me. But in my neighborhood in Brooklyn, you know, I come into work every

day because I can't work remotely. But if I'm off a day and I'm at at home and I'm walking around the neighborhood, it is like packed, you know, Sandwich shops that are usually packed on a week day on a weekend only are packed during the week because people are working from home. Do you have any data that shows sort of the the epicenter of of these areas is kind of shifting a little bit because of people's work patterns. Yes, so we in that the Brooklyn story

or your experience is very similar to what we're seeing. Um. You know, during the pandemic, I think a lot of people moved out of the city proper. Uh and and in areas around a big city. UM, Brooklyn here could be an example of that, and UM a lot of so we're seeing a lot of dining activity happening, you know in Brooklyn versus you know in the middle of midtown or Manhattan. UM. We're seeing that in the Bay

Area here in San Francisco. UM. So we're seeing like emergence of kind of these UM areas outside of cities really gained and prominence. And I think Brooklyn also, like it's a trends, tends to have a younger demographic, if I were to guess, like a very cool demographics. I don't know if I'm either of those things. But thank you, Debby. But you know, it's not surprising. It's not surprising to

hear that we have. You know, there's a big remote workforce out there that you know, during lunchtime can go to the sandwich shop down the street. So I've been thinking about what you said about people actually in some cases requesting to sit at the bar, because I've never done that in my life. But I don't want to sit at the bar. I don't want to sit next to people. Okay, that's what I mean. But in any case, are you seeing that in that sort of drive to

be in the thick of it in the action. Are you seeing that in the dining choices that people are making in terms of the types of restaurants that they're booking. Absolutely, so we're seeing diners really crave that connectivity. So cuisines like Korean barbecue, hibachi grill, Brazilian steakhouse, um, those types of food venues are doing very very well because again, unlike you, a lot of people want to be in

the thick of it. They want to be sharing a table with folks they don't know and and being in that kind of communal environment that's so interesting. Does this hold we're seeing it hold? Um? It's it started up last year and it's continued to persist um this year. I really think a lot of it is related to the pandemic um and kind of a new post pandemic life with again work changing for so many of us um that right like it, it impacts other other facets

of our life. And so I mean, if theoretically we're here a year from now talking about the trends that we saw in what do you think what what kind of conversation we're gonna be having well, I hope we're going to have a similar one in terms of dining demand remaining very strong. Um, you know. And we watched the data very carefully across the board, just because there is so much noise regarding the economy, and we hear from restaurant partners how hard it is to be running

their restaurants. But the hero of the day and the story is that consumers continue to prioritize going out and dining at restaurants. I really hope does that change though in a softening economy. I mean, everyone we've spoken to today is planning on session. Yes, um. And we're we remain bullish about mining. We think that maybe the check size will change, but we think that people will continue to prioritize connecting with others, whether that be family or

friends at a meal at a restaurant. That's Debbi Sue. She's the CEO of the restaurant booking platform Open Table. She spoke with me in Bloomberg New Senior Markets reporter Katie Greifeld still to come on Bloomberg Business Week. The magazine team explores how credit card giant American Express was staring into the abyss at the onset of the COVID

pandemic and has since come back stronger than ever. Consumers haven't stopped spending, and if anything, am X was like, you know what, we have this really good thing going, let's double down instead of killing it. UM. The pandemic actually gave it a glimpse into how irrelevant it's brand could become if it didn't start spoiling cardholders who could no longer use a lot of the benefits that made it so famous. You know, it's travel, it's dining perks um.

So you know, in that process it revamped its platinum card um. As you said, it upped the price, which was kind of a surprising thing to This is Bloomberg Broadcasting from the financial capital of the World, Bloomberg eleven Frio in New York to Washington, d C. Bloomberg to Boston, Bloomberg one oh six one to San Francisco, Bloomberg nine to the country Sirius XM M one nine and around the globe the Bloomberg Business and Bloomberg Radio dot Com.

This is Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovan on Bloomberg Radio. You'll find our next story in the Finance section of the latest edition of Bloomberg Business Week magazine. It's out now on news stands, online, and on the terminal. Just over two years ago, American Express faced an existential crisis, losing customers and staring into a pandemic that heard it more than others because of

its focus on traveling and dining out. What Amex did next, according to our colleague Jenny Seraine, quote, maybe the marketing coup of the century. We get more from Bloomberg News Finance team leader Sally bake Well and the editor of Bloomberg Business Week, Joel Weber. It wasn't looking so great

for a second. UM. And that is sort of what got me initially interested in the story, was because it was like, oh, is there an existential moment here that Amex, UM, you know, might not come out of the pandemic looking as good as as it went in. UM. People were suddenly not in in the early days of the of the pandemic, we weren't spending quite as much. UM. They ended up doubling down and spending a lot more and

have continued to spend. And you know, the economy keeps jugging because of it, and that actually is part of what became this Amex story, because consumers haven't stopped spending, and if anything, Amex was like, you know what, we have this really good thing going, let's double down and make it even more interesting. And that's basically what they did. They have an amazing loyalty program, they made it a little bit more expensive, and people just kept doing it.

And what so it's incredible to me is like, there are very few business models that can look like this when other people come for it. You know, JP Morgan Sapphire Card once a Business Week cover story. They did a really amazing job of creating a business out of nothing, and yet Amex's mode seems like it keeps getting deeper and wider. So Jenny and Thomas Buckley did a great job telling this story. Sally Bakewell leads the finance team. Sally, what stands out to you about how amex has has

doubled down and yet UM found uh new potential? Yeah. I think the really surprising thing here is that instead of killing it, UM, the pandemic actually gave it a glimpse into how irrelevant it's brand could become if it didn't start spoiling cardholders who could no longer use a lot of the benefits that made it so famous. You know, it's travel, it's dining perks UM so you know, in that process it revamped its Platinum card. UM as you said, it up the price, which was kind of a surprising

thing to UM. It's now more expensive than the Chase Sapphire card at six dollars a year. Add all these new suggest to carry the super basically ahead, we'll think of the Centurion card, which is five thousand, and of course we all have one of those. About my ga garade, I think that maybe I'm the only one who doesn't

have You have to be invited to that. Even even the CEO didn't initially get but sally this I'm thinking about, like Amex going after like they certainly had the establishment, I feel like, but going after younger folks, whether it's jen z x Y whatever, millennials like that to me seems to be a big part of this strategy. And it worked, It really did. It was a huge part

of the strategy um. Amex said that it signed up more Platinum card holders this year than ever, and gen Z and UM millennial customers made up about sixty of all of that consumer card holder growth. But of course with that maybe brings an added challenge because this is an untested cohort of the population in an economic downturn. Now AMEX says they're not too worried about it because these people are keeping up with their bills. Um. But they have already set aside hundreds of millions of dollars

for potential SURD loans. In fact, they they did that in in October and actually set aside more than analysts and expected. So they're very bullish, but at the same time they're definitely shoring up for some kind of crisis. Okay, So Tago was about the CEO, Steve Squerry, because for a long time there was going to be a succession challenge at m X and a boy they found their guy. Yeah, that's right. I mean, he kind of came to the job and he jokes that he was someone who never

was expected to be CEO. Whether that's absolutely the case, we don't know, but he story though. Yeah, yeah, indeed, perhaps he just wasn't earmarked quite so um clearly as um as the person who unfortunately passed away on a in a plane accident and so it was Squary who took over at that time. UM, and I think you know, he's credited with a lot of keeping AMEX going through

the pandemic. Um. He sort of hold himself up. Um he you know, he says he took him he took his daughters to lunch um on you know, a day in early March and the pandemic saw how the city had emptied out, he just he sent all his employees home. Um, he holding himself up and his and his key deputies up in his office and they kind of figured out

this plan, this strategy um to revamp the card. And you know, again, they might not quite have done it in the same way had the pandemic nod had happened, and they might therefore not have been able to regain the sort of cool that they did. Um. You know, as you noted, they were kind of this credit card storewart. They were sort of more known for capturing the middle aged customer. And they've gone really hard after the gen

Z and they've been pretty successful. And they have a signature sent um the card is dropped in you know Jay z Ariana Grande songs that sort of cool. You can't that's like real cred Also, if you're the CEO. We talked about the Centurion card earlier, what what is the Centurion card? And it turns out if you have to ask, you can't afford it. Well, I was like, you know, wait, you have to pay for credit card? How does his work? Right? Um? So five thousand dollars

a year. You can only get it by being invited to get it. And that's the kind of big joke from Square is that, Um, he hadn't been asked to apply for the card when he took over. Um, and you know it's extremely selective and he has to he had to Beck, he said, I think like he could knows that knows the right person to call to say, get me that card. I also will just say that that Warren Buffett has a little came in with the story talking about you know you could he has obviously

an impressive portfolio businesses. He could build any of them from scratch, except for am X, right, Like, you can't build AMEX from from scratch. That was Bloomberg Business Week editor Joe Weber and Bloomberg News Finance team leader Sally Bake while on a resurgent American Express. Now, let's turn to a kind of payment that you don't want to

be making, that is ransomware. According to a Bloomberg News story back in October, a senior White House official said the pace and sophistication of ransomware attacks is increasing faster than the nation's ability to keep up with disruption and recovery efforts. Thankfully, the US government is not alone in trying to slow this pervasive form of cyber crime. Dan Golden is a senior editor at pro public and a

former Bloomberg colleague. His new book, The Ransomware Hunting Team, A Band of misfits and probable Crusade to save the World from cybercrime, shines a light on a ragtag group of computer experts trying to slow down the bad guys. Carol and I began by asking Dan about the impetus for writing the book. What happened was we had done a piece Renee, my co author, and I had done a piece uh in Pro PUBLICA about a guy named

Michael Gillespie who was unknown to the world. He was a headhead, a tough life, poverty, cancer, never didn't go to college, and yet he was the world's greatest breaker of ransomware. Codes, saving many many people, hundreds of thousands at least, from paying hundreds of millions of billions of

dollars in ransom. And then when we realized he was one member of this elite society, this group called the ransomware Hunting Team, that was essentially the world's most effective force against ransomware, UH, finding keys for victims they didn't have to pay, and yet not charging them a penny,

we realized we had a great saga to tell. All right, So tell us a bit more, dig a little bit deeper, and tell us about this group of individuals, who they are, and you know what they are typically working on, because it sounds like we know we often report on ransomware cases kind of non stuff, and this has become a growing concern, growing problem, as TOI mentioned earlier. So take

us a little deeper into the story. Well, this is a group of about a dozen uh brilliant, largely elf taught tech and coding experts across seven countries in the US and and and several European countries. And what they do is, UH, they crack ransomware code. So when ransomware is done properly, UH, it can't be broken and the victim either has to pay the ransom or have their

systems disabled while they try and recover. But often the hackers make mistakes that they cut corners, they leave vulnerabilities, and the team is expert at finding these vulnerabilities, and when they do that, they can then uncover the key to unlock the files without paying the ransom. As you know, normally the hacker will demand millions or tens of millions of dollars and say without that, you won't get the key,

but the hunting team provides it for free. More from our interview with Pro public A senior editor Dan Golden. Is straight ahead. He's gonna explain the motivation for a tech savvy volunteer group known as the Ransomware Hunters. When we come back. This is Bloomberg. You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes. Tim

Stinovik from Bloomberg Radio. More now from our conversation with Dan Golden, the Pro public A senior editor and one time Bloomberg journalist has co authored a new book called The Ransomware Hunting Team, A Band of misfits and probable crusade to save the world from cybercrime. It centers on a group of volunteer computer experts trying to slow down what the Treasury Department says has evolved into a billion

dollar Internet racket. Carol and I were curious why they're so dedicated to a cause without a direct financial incentive. They're very skilled at what they do. Their lives are on computer. They many of them have not met each other. They're very shy, retiring ilities, but they're they're brilliant, selfless people. What motivates them. I think that they regard the Internet as their world and computers as their world, and they

want to protect and protect people. Gillespie, our main character, the fellow in Illinois that I described, he has come from a law enforcement background, and when he was a kid, his parents used to take him to the Superman statue there in Metropolis, Illinois, and he grew up with this just desire to protect people, protect the Internet. And uh and I think then also it's kind of an intellectual challenge. The bantering back and forth, the tactical interplay with the hackers.

They love that kind of you know, cryptographic challenge. How did they all kind of get together, if you will, how did they become this band of individuals pursuing cybersecurity and fighting against ransomware. Well that one of them is

named Lawrence Abrahams. He lives on Long Island, and he's the founder and main spirit behind a site called Bleeping Computer, which is kind of like the salon of the ransomware movement, you know, the ransomware world when everybody goes there, victims, hackers, law enforcement, insurance companies, and his his site predated ransomware, and when it started to become big, Lawrence recognized that it was a potential threat, and he had a lot of contacts in a lot of places, and he began

organizing some of his friends and contacts to help fight it. And then now they take new members, you know, they had they have to have a unanimous vote, and if there's somebody they consider worthy, they'll bring that person in. But Lawrence was really the motivating spirit behind it. But so interesting to me is that this team is not law enforcement. Are the criminals two steps ahead of us? One step ahead of us? I mean, this has got to be something that concerns you. Yeah, the criminals are

always one step ahead. It's a bit of a whack a mole situation, and in fact, in a strange way, the hunting team, who as you say, are just volunteers doing the best they can in a in an odd way, they kind of contribute to ransomware getting better because what happens is this, Let's say a victim is attacked, they upload the files that have been disabled to the hunting team. It looks at them, it discovers a mistake in the coding, It finds the key, it gives it to the victim.

That victim and other victims then don't pay the ransom. So the hackers then discover, oh, you know, we're no money is coming in. Somebody must have cracked our code. There must be a flaw, and they go through and

they fix that vulnerability, and the ransomware gets even better. So, you know, the hunting team has had all these wonderful short term successes, but in the long term they're they're almost like a product tester for the for the hackers, and so the ransomware gangs, the quality of their ransomware keeps getting better and better, and also their tactics keep getting more and more ominous. They're attacking bigger targets, they're

demanding more money, and they're getting increasingly dangerous. That was Dan Golden. He's a senior editor at pro Public and the co author of a new book, The Ransomware Hunting Team, A band of misfits and probable you say, to save the world from cybercrime. It's out now, And that wraps up the weekend edition of Bloomberg Business Week from Bloomberg Radio. Thanks so much for joining us. For Carol Master and Katie Greifeld, I'm Tim Stanovic. Be sure to tune into

Bloomberg Business Week Monday through Friday. It starts at two pm Wall Street Time on Bloomberg Radio. You can also watch our daily broadcast on YouTube. Just search Bloomberg Global News and check out our Bloomberg Business Week podcast. You can find that at Bloomberg dot com, Apple, or wherever you get your podcasts. Bloomberg Business Week available on newsstands now at Bloomberg dot com and on the Bloomberg Terminal.

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