Florida Nuclear Plants Say They're Not at Risk From Irma

and all things weather related. Jack Caskey, Chemical Companies reporter for US based in Houston. Let's start with with you. Brian. I'm watching a minute by minute the latest forecasts for the hurricane, and much will depend on exactly when it turns north. The low pressure over the Mississippi Valley may will pull it north, but the current forecast track is about as bad a scenario as you could come up with. Yeah, one analyst this morning told me it was the nightmare

scenario for insurance companies. UM. So, the current thinking is it's going to go straight up the Florida Peninsula, whether it goes up a little to the west or a little to the East. I think at this point doesn't matter just simply because um Irma is getting large. I mean, it underwent what they call it eyewall replacement UM this morning and that actually makes the physical size of the storm get larger than the physical windfield of the most

damaging winds get larger. And this is this is where the damage is going to happen UM, and it's going to be different from Harvey. With Harvey, you had a lot of flooding, which insurance companies aren't necessarily on the hook for. But with um IRMA, you may see every county in Florida having some kind of damage and these are gonna this is gonna be roof damage and trees through windows and houses and on cars, and UM the

insurance companies around the hook for this. So this UM you're talking about a price tag maybe in a hundred and thirty billion dollar range, and then with secondary economic impact spreading that out to about two and of course that's the worst case scenario. The latest forecast also suggesting that the eyewall replacement cycle nearly complete, which means it could go back up to a five uh as as

its strengthens. Jack Caskey, one of the stories that caught everybody's attention obviously was uh the chemical plants in Houston and the toxic stew that went into the floodwaters, and of course the one plant that had the chemicals explode. And the bad news from you is that this could it could be worse in Florida. UM. Well, I mean there's potentially, Yeah, there's Um there's not the heavy uh petrochemical industry in Florida that there isn't in Texas and Louisiana.

But there is a nuclear plant that's from the seventh early seven and the use that's right in the path um at the tip of Florida. Um. Uh. Now there the plant is, you know, twenty ft above sea level. They tell me, so storms it should be stayed safe from storm surge. Um. There's facilities. Um, there's a large fast state mining facilities with slightly radioactive waste piles that need to be protected from wind and and water uh owned by the company mosaic Um that that polluted water

and killed marine mammals in the past. Um. And there's you know, there's a whole in every state has got its uh chemical uh distribution Uh facilities that need to be protected from storm search. I mean one of the lessons from UH UH from a party was that uh some chemical operators just didn't expect the amount of water that they were deluged with. So the case of Crosby text is the company Arkhama out of France UH had its generators fail, causing UM a fire of of the

organic peroxides that were stored there. Um. There was no serious injuries, although actually the first responders are now suing the company over their exposure to the smoke at the fire. Let me, um, let let me ask you something here, UM, nuclear plants shut down as the storm approaches. We're going to have, according to all the meteorologists, storm search, big storm search from this hurricane. And that's what happened hurts the nuclear plants in Japan after the earthquake. So how

much danger is there from that? They say, it's not a fair comparison that they that the that Fukushima. Um, you know that meltdown was caused by a tsunami which hit the plant rather quickly. They have a lot more warning here to shut down this plant. Um, they've learned from Fukushima. They have more flooding anti flooding mechanisms in place. They've got backup systems upon backup systems to keep The issue is keeping the cooling waters around the nuclear rods

UH from from getting too hot and molding down. They say that's not going to happen. That plant is elevated well above sea level, so you know we'll see the Like I said, the lesson from from UH the Arkhama plant explosion is that they just didn't expect that much water and that's why the plant burned up. Brian Sullivan, I got thirty seconds left. What's the best damage estimate you're hearing right now from the companies you talked to in the thirty five billion dollar range um, and that

isn't counting what happened in the Caribbean. There's already some early estimates coming out of the Caribbean that you have five billion dollars damage there, and that's certainly going to go up, all right. Brian Sullivan coming to us from our Boston bureau. He is the weather guy for US and covers energy and commodities. Jack Caskey in Houston Chemical Companies reporter, Obviously, this is UH a potentially catastrophic storm. We don't have a lot of good information about uh,

exactly what's gonna happen. But we have some guesses and they are not good. So stay tuned to Bluemberg RADI all weekend. We'll keep you on top of the latest from Hurricane Ran. Here's an idea. Uh. You want to get a car, but you don't want to have a car. You just want to use it when you want it, Uh, for as long as you want, but and drive the car you want. Uh. Scott Painter is the former CEO and founder of True Car. He's got a new startup car as a service. Uh. It's called Fair. Uh tell

us about how this works. I mean, I'm a guy who lives in New York City. I don't own a car, but I go skiing in the winter, or I go out to the beach in the summer, and so maybe for a while I want a car. Well. Fair is a pretty simple concept. It really is an app that

represents a totally new way to get a car. So you simply download the app, scan your driver's license, it shows you all the cars you can afford, and then and it gives you a single all in, low cost of ownership that's designed to be sort of an iTunes account for your car. But this isn't like renting, though you know, it's all the benefits of renting. So one of the great parts about renting a car is that you can turn it in and be done with it

anytime you want. The problem is it's quite expensive. So this is about half the cost of a rental, which is important. But at the savings of a lease. We are actually the owner of the car and we actually leased the vehicle to you, all simultaneously inside the app. But more importantly, you're not picking a car all of a rental lot. You're picking the car you want that's for sale at any dealer. What's the minimum and maximum times for your what do you call? You? Don do

you call it at least what? It's effectively a used vehicle lease, but we're not calling it at lease. Um. Actually, the fair contract has no term in it, which is really one of the things we found that young buyers, millennials, the modern sort of car buyer really doesn't want a long contract or a long commitment. A car represents a big commitment. So the fair contract gives you the ability to walk away or turn in the car at any time without penalty. You can keep it for six days,

six months, six years. Where do you get the cars? So you pick the car using the app, But those cars are at at local dealers all around you, and those are the cars that are traditionally for sales. Fair is simply a different way to get that car. So you look at their inventory and you can say I want a Ford X whatever. Um, you go to a local Ford dealer and what they have an inventory is what you can get that's correct. And instead of the prices of the car being what you're shopping on, you're

looking at monthly payments. So everything in the inventory that you see is giving to you with a monthly payment that includes maintenance, warranty and roadside assistance standard. That that brings up the question. You said you could get it as long as six days. You know six days? Do you pro rent the monthly payment debt? We don't, So it is a month to month pay as you go. So if I have it for six days, I'm still

gonna pay for a month. You are, Okay, that sounds sound too bad though, Um, and uh, who you I assume with this you've got to carry your own insurance for the car in order to drive a car on the road, you do need to have insurance, but Fair also offers a month to month insurance for collision and liability, and you can also buy excess wear and tear insurance if you feel you need it. Um, and what do you do with cars when you When I give it back to you, those cars go back to the dealership.

So the lifeblood of the modern car dealership is a late model used car. So that car coming back into their inventory and being sold to another customer is really the goal. Now I've been reading that, Um, there is a glut of late model used cars coming out of the markets these days, but we've been at peak production in terms of manufacturing. We're approaching eighteen million cars being produced in this country, which creates an over supply of

used cars to three years down the road. And we've been at peak production for a couple of years now. So you've got five or six million late model used cars that are one, two and three years old coming back to the market in the next year to eighteen months. That represents a huge opportunity for the consumer to not only save money, but get a great value in a great vehicle. So you're are you are you selling renting to me UH used cars or new cars. These are

pre owned cars. And all of the vehicles that you're going to see on fair represent a vehicle that has gone through our inspection process, that has a warranty, roadside assistance and standard maintenance, so you can actually get the car with peace of mind. So these are going to be UH. This is gonna be useful for the dealer who can make some money off a vehicle rather than have it just sitting inventory. That's correct for the dealer.

This is a transaction. They're selling the car, you're buying it, so they don't care who's buying right fair Fair operates under all the necessary licenses and depending on the jurisdiction, we are a dealer and we actually buy the car, put it on our balance sheet, and simultaneously give you a contract to use that vehicle. What's the difference between

you and and Tesla in in your sales model? In that UH dealers have gone to court saying if you don't have a lot and you don't have cars on that lot, you're not a dealer and you can't be selling this stuff. We're not actually selling the car, We're just giving you access to the vehicle to use it as you want, when you want, but we take all of the risk around depreciation and managing and owning that vehicle. So it's our capital that's being used to buy the car.

You're not borrowing money when you get a car from Fair, You're paying for access to that vehicle. And so this notion that the car is becoming a service is really a subscription. That you have the car you want at any dealership as long as you want it, when you want it, and then you can leave it and be done with it. So I don't take title to it. You don't. Uh. If I have an app and I decide I want to get a ferrari Um, how do you know I am? I am credit worthy for a

car like that? How do you how do you know whether you can trust somebody to make their payments? The goal of the app is to really understand what you can afford. The average American today spends about four of their gross income on mobility, which breaks down to the car, insurance, maintenance, repair, fuel,

and in many cases accessories. We're actually beginning there, and the first thing that the app does by scanning your driver's license, we're looking for your income and your disposable income, so we can understand what you can genuinely afford. But the two things we need the driver's license and a form of digital payment, and in most cases that's the bank account or a credit card. So, uh, do you

care about whether my credit is good? I mean, do you run a credit check on me through say an Equifax? Maybe you don't want to do that, right right, Well, we do do a soft credit bull but it does not affect your credit, and we're not underwriting you in the same way that a bank would have for a car loan. So you can have actually bad credit. You can, in fit many cases, have no credit. What we're we're

looking really looking for is ability to pay. However, if for whatever reason, you go through a change in work where you don't have a consistent source of income, you simply return the car. Where does this? Uh? When do we see this? When? When can I start downloading the app and getting the car? So the app is live today in the app Store if you go to fair and type in either auto or financial financial. So Fair is an app that you can download today. But it

is currently live and working in southern California. We've got seventy three franchise dealers over a thousand cars in inventory because nobody drives in southern California. It's the car capital. Well, I mean yeah, but I'm kidding. But people they're like to have cars. What about in a place when does it come to New York City or Boston, places where people don't necessarily want a to wear house a car,

but you know, want cars on a regular basis. Sure, So it's going to be throughout the state of California before the end of the year, and we'll roll out nationally in about a dozen cities in two thousand and eighteen. But from an ownership point of view, the benefits of ownership are really focused on security. Well, we'll talk about that, but fair is the is the app. Thank you very much for joining us. We're time, unfortunately, but it sounds like a great idea Scott paid fair Well. News out

of Dada today Canadian marijuana producers shares are rising. Reports Ontario is going to open government controlled storefronts for legalized recreational sales. Uh. That should make it a lot easier for people once Canada legalizes marijuana next year to purchase the product. Because the Canadian government probably recognizing it needs a way to safely handle the financial transactions. Created may make it easier for people in Canada to um use banks and the banking system to pay for their pot.

That is not the case in the United States, especially in the states where we have seen legalization, like in Colorado, banks don't really want to deal with people who do business, even though those businesses can take in an awful lot of cash. Banks worry about money laundering bills, UH, legislation rather, and they also it sounds silly, but it's true. UM, they don't want a lot of cash coming into the

bank that smells like marijuana. Company that has been founded to try to deal with that is called Token and the CEO and founder is Lea means Aarad and he joins us now from Denver. Uh. Basically, what you're doing is using the concept of a cryptocurrency to become the middleman between the cash and the pot shop. Correct. Well, thanks for having me, Mike. UM. To clarify, we use

the blockchain that's divorced from its cryptocurrency. The blockchain the way we employ it is a secondary redundancy ledger for us, and it ensures indelibility of all data in our system and as a consequence, makes far financial institution partners and by extension, the regulators feel comfortable with extending services to

the industry. How does it work? Yeah? Absolutely. Before I tell you how it works, uh, I think it's important for me to explain the context and UH in kind of my own personal background in the genesis of Token, I'm an immigrant came to the United States from former USS are and where my family spent uh potentially approximately six years as refugees, which impacted my view on banking and unbanked. So that's very personal to me. Expending services

to what to those who who deserve it? Uh. I later spend time in the military and intelligence community in the United States, and then Wall Street will Mary Will Mary Lynch, and later with US Treasuries off to the control occurrency as a bank regulator. So I I you know, Token is an amalgam of all those experiences, and what Token is essentially is as an intelligence platform. It creates accountability transparency. Uh. The way it works, consumers download the

application to create an account. Under a second we identify who they are, so if it's John Smith, we know that it's John Smith before they tie a payment. Source to that application, the mobile app, but the experience is somewhats your Apple Pay for instance, they're walking a participating retailer, press pay and walk away with the product. It's as simple. On the other hand, retailers have access to their portal that looks just like an online banking portal. They can

see a transaction as it happens. They can also move the funds now they can move the funds token to token thinks PayPal, or they can move the funds using a cate or traditional payments rails that sort of provided to them through our partner institutions. So that solves both the banking problem and the payments problem on both ends.

And then of course there are regulators and law enforcement UH and UH and as you mentioned, in the United States, we have a very interesting, if not convoluted system where cannabis is illegal federally and legal and certain jurisdictions. So as a consequence of federal government took a unique stance that took an agnostic stance through issuing several guidances. There

are three memorandums from Department of Justice. There's a guidance from a Financial Crimes Enforcement network part of yours Treasury and and essentially there's a legal framework called the Bank Secrecy Act and the federal governments. If you took a position by stating that we are agnostic as long as you follow the rules and comply with these items and these regulatory guidance, UH, there was there was issue. And what what happens that it creates uh an incredible burden

on small financial institutions. They're willing to provide services to cannabis industry, and that's what we help them with. We help them with creating transparency, tracking every transaction and and ensuring that everything that happens in that system is indelible. And that's where blockchain FETs and blockchain is the first ledger UH known to UH humanity so to speak. But it's cryptographically and mathematically indelible. What's your kind of this?

How do you make money? Right now? It's very simple. We charge per transaction fees to merchants the same way UH say First Data would or Navisa master cards. And how has it been accepted so far? What's what's your growth rate? Yeah? So we we had a control pilot in Denver and it was done on purpose with with cannabis and non cannabis relationships, to to establish a control

group and to really observe behaviors and the industry. Uh. In that pilot, Uh, surprisingly, our wallet had incredible adoption. Thirty five percent of old transactions at each locations were converted without any marketing. That's uh, that's some precedented because Apple failed and Google failed with their wallets. But I think it's demonstrative to the need in the industry and to the fact that consumers don't want to pay in cash. Uh.

There's some really interesting statistics. For instance, over over six of our users in our system made three or more purchases, So it's sticky and pun intended here and uh, and we've increased average ticket sized by eighteen percent. I mean, it's it's incredible value add to a business. What do you think the growth possibilities for you are? You know, you've got states that are doing medical marijuana, but the states have just totally legalized it. Uh, there aren't that many,

Um do you have? Do you do you need to grow or can you maintain a successful business with just a smaller operation that focuses on those states. Now, we absolutely not only want to grow, but need to grow. And the reason is the bigger our ecosystem. More visibility we have into the familio of the transaction world. Right, so we know, for instance, if you engage in what's called dispensary hopping. If you're a consumer and you want to make a purchase and multiple dispensaries that an exceeding

your daily amounts, that's a lot of to you. By stay called out a law. For us to have that visibility, we need to have a multiple dispensaries, a multiple retail locations. We also need to have access to the entire vertical to streamline and experience. So if you are a retail facility and you want to purchase from a cultivator or a manufacturer, if there are on a system, then onboarded.

Not only do they have access to banking at this point, but they're also you can also transact and incredibly low rates in our system token to token so to speak. So yes, we are growing. We're going to be growing nationally, so you know, keep an eye on it out. That means thank you very much to see you know of token an interesting new business, uh combining the marijuana industry and technology. Well, a big story in financial world that is getting a lot of attention, even with the hurricane coming.

Is this security breach at Equifax? A lot of people wondering how the heck this could have happened. Am and Barlav is the president of Checkpoints Software. He's based in Tel Aviv. Michael Riley is Bloomberg News cybersecurity reporter in Washington, d C. They're joining us now and uh, Michael, Uh, is there anything new that we that hasn't been reported yet?

And I asked that question sort of not and it's not really tongue in cheek, But they sat on this information as many companies do for a while, and there's this story about the executive selling stock in between and everything. But um, do we know everything we need to know about this at this point? Uh? No. In fact, this is going to be the start of a very long process. If you take other examples like this, say Target, for example, where consumers got really angry because of a set of

of uh circumstances. In this case, you have a consumer credit agency, which consumers don't tend to like to begin with, because they're the ones who tell them whether or not their credit it's good, and whether or not to get a credit card or mortgage and then you add to that what looks like a loss of massive amounts of of consumer data for a company that's supposed to know

how to protect our data. And then you add to that this uh, you know, potential branding problem where three executives sell sell offs shares in an unscheduled way just a few days after the breach is discovered. You're gonna get a lot of anger. And with a lot of consumer anger usually comes soil lawsuits. Those lawsuits will demand a lot more in form nation that we have now, including an exact timeline. Who was informed about the breach? When,

what did how? They definitely defining when they discovered the breach, for example, is it when they discovered malware on their systems? Is it when they discovered data left the network? Or is it when the US government came to them and told them about the bridge, which happens a lot. We don't know exactly how the discovery worked in this case because we don't know a lot and how, how does this?

How does something like this happened? A company that their whole goal should be to protect the most sensitive data that they have, and yet this can happen. So I was in Bloomer gradual like a week ago. And what I said that there is that every system, every system and the work can be hacked. I just didn't have a lot of code inside, and system can be hacked, you know, and a saving hacked like a year ago, and other very confidential system can be happy to complex environment.

So that's the bad news. I think the good news is that to do a couple of very basic things, if you use existing technology correctly, you can prevent most of the other attacks if you do it correctly. Did they do it correctly in this case? So I really don't know, as it's just stated before, we don't We don't have all this knowledge right now. We don't know the exact system that was breacher and stardents a website

that contain confidential data. We don't know if it was segmented, We don't know if it was protected correctly or not. So we don't have specific information for that systems. But as you as as you know, many other systems that contain private information for consumer like targets and other been hacked before. What is the danger to people whose data may have been taken and what at this point can you do about it? So it's it's most about identity tests.

People actually can pretend to be you and and the transaction on your behalf from credit cards and other things. Think UM, and it is complex to know, and it is complex to identify, but you need to be It's a bit cautious to look at your bank records and any other records gets to you. We tend not to look at our credit card line by line, but maybe

it's a good time to do so, Brian, I mean bright, Michael. Uh, this is obviously not going to go down well with people who have been critics of the credit reporting agencies, like an Elizabeth Warren on the Banking Committee and Capitol Hill. What happens, Uh, what's the reaction going to be in

Washington to all this? Well? Almost certainly this is gonna get the UM lawmakers involved more directly in this debate because it raises a fundamental question about whether the system as it exists now is the right one, which goes to the fundamental business model of these companies. They store a huge amount of consumer data, and very important consumer data.

They have divisions that do lots of different things, and equifaxes case, for example, they have a service that that stores the kind of security questions and answers that people give to validate their identity to credit card companies, into others online, and so they have Basically they are storehouse that kind of fort knocks of all the sorts of digital data that a cyber thief would want to get

their hands on. That means that they ought to have um uh that's the strongest protections possible so that they don't lose that data. Equifaxes this is not the first problem they've had recently. They've they've uh this is in fact the third problem they've had in the last year, but by far the largest. But it does suggest that as much money as they're making doing this, they're not

um doing enough to secure that data. And I think that there will be questions about their uh particular UH appropriate their safeguards and whether they're appropriate, But there'll be a set of larger questions that the lawmakers will get to ask about whether the model is the right one

in the first place. And that's going to be a major problem if UH Congress begins to think that there needs to be either regulation in this sector or a different model, or if companies who provide their data to Aquifax and the other company, the other credit rating agencies, if they decide to to to stop giving them as much data or access to the broad range of data that they have now, all right, thank you very much.

Michael Riley, cybersecurity reporter for Bloomberg News and and On bar lev the president of Checkpoints Software, thanks for joining us today. Thanks for listening to the Bloomberg P and L podcast. You can subscribe and listen to interviews at Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm pim Fox. I'm on Twitter at pim Fox. I'm on Twitter at Lisa Abramo wits one. Before the podcast, you can always catch us worldwide on Bloomberg Radio