Ecurity. They have got a new exhibit called revealed the hunt for in laden. Kailey we have much more ahead on that. We begin with our top stories. In the politics section, it is lights, camera, impeachment. Jason House Democrats count on public hearings to bring to life testimony that has already been given behind closed doors. Here is billy house in d. C. Billy what we saw was some real concern on the part of state Department Officials bout back channel diplomacy by rudy giuliani, and evidence, hearsay evidence, secondhand evidence of what they were hearing trump was up to. Kailey billy, whats next, and how long can all of this really go on . Billy well, what is directly next is this upcoming week of four hearings, four separate hearings, including what could be the biggest one, that of Eu Ambassador gordon sondland, who s the one who may have had the most direct contact with President Trump on whether or not he wanted to withhold aid in return for investigations. The House Intelligence Committee is hoping to wrap up its investigative part of this inquiry by the end of the month and give the Judiciary Committee a recommendation. They will decide on articles of impeachment, and when or where you to vote on those. By the end of the year, they hope. Jason one of the things we are all talking about is, how is this time different in some ways . This is not something we have seen a lot, impeachment inquiries and public hearings. What are your observations in terms of what it is like in the room and in the capital . Billy it is highly polarized, obviously. Fter the first week of hearings, both democrats and republicans held vastly different takes, you might say. Republicans basically said yawn, nothing dramatic was revealed, nothing directly linking trump to the efforts to withhold aid in return for investigations. Democrats, though, are pointing out this is a process, and adam schiff is setting the groundwork for a case that would allow democrats, and hopefully some republicans, to vote for articles of impeachment. Jason staying with politics and topics we cannot stay away from, and that is trade. Markets widely anticipating that President Trump would use his speech to the Economic Club to new york to announce progress on a trade deal with china. Kailey but instead, all he said was an agreement could come soon. Here is shawn donnan in d. C. With his economics story on how trumps trade war went from method to madness. Shawn what we tried to do, my colleague, jenny, and i, is to step back and really look at the arc of this thing. And we have gone, it is worth remembering, from a carefully crafted plan to take on china and force some really fundamental structure changes in chinas economic architecture to what is now haping up as a pretty narrow deal and some more talks to come. We really have gotten there as a result of donald trump and his unpredictabilities, what some would say his impetuousness, and all those tariffs he has thrown on the table. They have really changed the game here, and they will have lasting consequences for what is the most important economic relationship in the world. Kailey it kind of looks like we are going to get back to where we were at the start of all this, rather than somewhere fundamentally different. Shawn i think there are two big consequences. One is the economic consequence, the disruption we have had from this trade war. There are now tariffs from the u. S. Side on 360 billion in imports from china. That is about 70 or so on those imports. That is a big drag on a lot of businesses who rely on components from china or do manufacturing in china. It also has hit, more broadly, business sentiment, and the risk is also Consumer Sentiment down the line. There is a reason we were talking about fears of recession here in the u. S. In august. One of the big reasons was the trade war. The second big consequence is everyone agrees that the u. S. R a u. S. Administration, whoever was in the white house, had to take on china and really had to kind of renegotiate the rules of the relationship. Donald trump went all in on that in some pretty brutal tactics when it came to international diplomacy. There is nothing blunter than a tariff when it comes to negotiating these things. He raised the stakes, and the question is, has he delivered . Will he have delivered . And what does that mean for the future . Can another american president come in and repair the relationship or have another go at it . That is really going to define the relationship going forward. We have a new level of hostility between washington and beijing we did not have three or four years ago. Kailey for more on this weeks issue jason joel weber is here. Talk to us about the cover. Joel the story is about ashlee vance and this effort to archive code in a vault in the swedish arctic. It is sort of an incredible one, because maybe you have heard about this seed vault, about the worstcase scenario, the world as we know it comes to an end, at least there are seeds you can plant. Right next to the seed vault is a code vault. Kailey talk about why this is important. Joel earlier this year, microsoft bought github. They are based on this idea of open source. Open source has been around for years, and it is ultimately this thing that powers a lot of the things we use, even from little parts in your car are built on open source code. The thinking is that stuff is maybe the most powerful code in the world. Lets make sure there is a backup for it. Jason ive got to ask you about the rag story. Joel one of my favorites. We love these stories that are often about things hidden in plain sight that we take for granted. Take the rag, the humble rag. There is a modest industry behind making those rags. There is a book that came out, and this is one of the excerpts we bought from the book. It is a celebration of this Little Company in ohio that is making rags out of your throwaway hooded sweatshirts or tshirts. And it turns out there is an amazing amount of Quality Control required to get you a rag that is actually safe in a lot of industries. Jason and nike. I feel like that is almost another thing we take for granted as well. A very powerful story, in many ways, going on there. Also some power in those shoes. Joel there has been controversy at nike of late. This is a slightly different controversy, because there is technology in shoes. This technology has proven to make running 4 easier. That is for you, if you put it on and go for a run, and it is also true at the highest level of sport. A lot of marathon runners who can actually run up to two minutes faster because of wearing these shoes. It reminds me a little bit of the olympic conversation that took place a decade ago, where swimmers were able to wear swimsuits and have an unfair advantage. Rules change. We are not sure what will happen on this side, but nike has clearly established a really dominant advantage that a lot of its runners can use to its advantage. Jason all right, joel weber, thank you so much. Great issue. Coming up, Goldman Sachs hits the target of a wall street probe into its credit algorithms, specifically the new apple card. Kailey plus, does nikes sneaker go one step too far . Jason this is Bloomberg Businessweek. Kailey welcome back to Bloomberg Businessweek. Im kailey leinz. Jason and im jason kelly. Join us for Bloomberg Businessweek every day on the radio starting at 2 00 p. M. Wall street time. You can also catch up on our daily shows by catching our podcast. Get that on bloomberg. Com or wherever you get your podcasts. And you can find us online at businessweek. Com, and through our mobile app. Kailey bloomberg learned this week that a wall street regulator is looking into Goldman Sachs credit card practices. That, after a programmer claimed that algorithms discriminated against his wife. Jason the card is the joint venture between apple and goldman. Goldman says it is possible for two family members to receive significantly different credit decisions. Here is Bloomberg Finance reporter sridhar natarajan. Sridhar this started with a series of tweets from a tech entrepreneur, david hansson. He applied to the apple card and started complaining that his credit limit was 20 times the size of his wifes credit limit, even though they both share the same finances, have the same spending power, had the same income when apple card was trying to determine the limit. And yet, there was a huge disparity. It immediately gained traction online. To add insult to industry, apple cofounder Steve Wozniak said, wait a minute, i have faced the same issue. The regulators are saying, we want to figure out how these credit Risk Assessment tools work. We are going to probe goldman and this apple card issue to see if there are biases. Kailey how much blame does goldman have to take here . Is it just the algo, or is there something goldman can do to fix it . Sridhar i truly believe that apple and goldman, two marquee names in the world of tech and finance, they have become lightning rods over an issue that has been growing for a while. They are trying to figure out, as has the Mission Creep of tech, the important regulatory factors to make sure it does not come with its own set of biases. Computers are supposed to stamp out those errors. Ut in other ways, are they reinforcing issues we have faced for a long time . That is what folks are trying to figure out. It is not limited to goldman. It probably affects the credit industry. Remember, they have not done this for long. This is new for them. That is why maybe they are facing a unique challenge. Jason now to a different sort of investigation. Nike announced plans to look into an athletes claim that she was abused after joining the companys now disbanded oregon project running program. Ailey it is not the companys only challenge. Its hightech sneakers has some critics worried that nike may have tipped the competitive balance. Jason here is eben novywilliams. Eben a couple years ago, nike released shoes that was significantly better than any other running shoe on the market, from a speed and recovery standpoint. It became a big deal for average joe runners, like you and me, but it became a bigger deal for professional circles, where you know the difference can be seconds over an entire marathon. A 4 advantage, you know, that is a huge gap. The shoes became a huge deal in the professional world where the people who were wearing them were setting records and winning races, and a lot of people who were not wearing them were not having the same success. Kailey the question is, is that fair . Eben that is a major question. Every other shoe company right now is working to reproduce what nike has. There is a carbon fiber in the shoes. The forefoot is steeper. It kind of rocks you forward. It is a new, lightweight foam. I have spoken to a number of companies. Everyone is working on replicating what nike did. But as they do that, nike is working on whatever is faster and faster. I think the fear in the industry is nike is a 36 billion revenue a year company. Most of these companies are much, much, much smaller. Nike may be able to keep innovating ahead of the pack and consistently have the fastest shoes on the market. Jason you make an important comparison in your story, going back to something we remember about the olympics, those sleek swimsuits that led to a bunch of records being broken, and hen ultimately got banned. Eben exactly. Back in the late 2000s, before 2010, those long speedo swimsuits that Michael Phelps was wearing, over 100 World Records were broken in those suits. The big governing body for swimming came out and said, listen, we cant do this anymore. The swimsuits cannot cover this amount of your body. Some of the materials were helping with buoyancy. Cannot do that anymore. The reason why the shoe story is interesting is because the iaaf tracks the governing body, and it is looking at the success thing. They have convened athletes and scientists, and they are getting together and saying, do we do anything to clarify our rules . Because right now, the rules are opaque. Jason coming up, another problem for wework. We are talking about toxic phone booths. Kailey just to add onto Everything Else the company has had to deal with this year. This is bloomberg. Jason welcome back to Bloomberg Businessweek. Im jason kelly. Kailey and im kailey leinz. You can also listen to businessweek on the radio on siriux xm, channel 119. Also on a. M. 1130 in new york, 106. 1 in boston, 99. 1 f. M. In washington, d. C. Jason a. M. 960 in the bay area. In london on dab digital, and the Bloomberg Business app. In less than one year, wework went from having a 47 billion valuation to needing a rescue package to avoid collapse. Kailey and if that is not enough, this weeks tech section looks at yet another problem, toxic phone booths. Here is bloomberg reporter ellen huet in san francisco. Ellen basically, wework designed the phone booths and gets manufacturers to make the phone booth. And one of their manufacturers, or maybe the only one in the u. S. And canada, was a Company Called premiere xd. It is a company that makes commercial fixtures for starbucks and other companies. They were making these phone booths. This was not publicly known, but something we talked about with former employees, that kind of thing. They were making these phone booths, and everything seemed fine until early summer, when one of weworks biggest companies, which used wework to redesign one of its headquarters, some of the employees noticed the phone booths smell funny. There is a weird smell when i am in them. Maybe i have some eye irritation. They alerted their managers. The company did a test and found these elevated levels of formaldehyde. Keep in mind, this is early summer. They did not announce until midoctober. There are several months where ubs had told wework of the issue, wework actually starts talking to vendors in august about replacing future phone booths with new ones, and actually in september, premiere, the maker of the phone booth, suddenly shuts down without warning. Some of its workers are left stranded with no severance. In the background, there are a series of events that lead up to the announcement of the phone booth. That is what we get into in this story. Jason in the saga of wework, we turn from phone booths to a phone guy, who could be the next ceo of this company. John legere is now rumored or confirmed to be at least having discussions for the top job. Tell us how that came about and what it may mean for the future of wework. Ellen right. It seems like wework is continuing on the ceo search. John legere is one of many names that they are having under consideration. It seems like wework, to put it in context, is still struggling to find who will be the leader that is going to take them forward out of this really tumultuous time. To take you back a mere two months, they still had the cofounder and ceo adam neumann at the head of the company. When he stepped down, they replaced him with coceos, Sebastian Gunningham and chief Financial Officer artie minson, who were existing executives. These two men stepped up to take over. They were quickly overshadowed by marcelo claure, who was placed as executive chairman of the company by softbank. You may remember him as the former head of sprint. So now marcelo is the one who has been sending out memos, saying, if you have concerns, talk to me. Email me. My email is marcelo wework. Com. I am here for you. He has taken internally this Public Safety role away from the coceos, who are still technically there, but do not seem to be running the show. Now it seems like the outside ceo search is continuing. This was something we originally had backandforth on, whether they would do an outside ceo search. There is a funny twist, which is marcello colore and john legere have a history of going after each other as telecom ceo jason yeah. Ellen and did not always get along and have publicly sparred on twitter. Many people were digging up those old tweets on monday when the news was announced. It is unclear if they would be able to work together, but it seems like that is a possibility. They both have very strong ties to softbank, which may be the reason his name is in circulation. Jason we also spoke with imran khan, the cofounder and ceo of an ecommerce company, verishop. We talked about the ipl, as well as his outlook for the Online Shopping market. My cohost, carol massar, and i sat down with him in brooklyn. Imran there is no place for consumers to go find and discover new brands. We are creating a brand discovery platform, where you can find brands for your everyday life with the convenience of amazon. We now have the fastest free online shipping in the marketplace. Free oneday shipping. We put our Customer Support number at the top, so you can talk to our customers. I read every Customer Support email. So we really stand for convenience, we stand for quality, and discovery. Carol what is to prevent somebody from going to your site, then going to the homesite of that brand in the future . Imran some people will do that. You know. The interesting thing is that consumers dont like putting their credit card number into 500 different sites. Right . So if you have a relationship with one retailer, that is a great place. Jason you have been watching this market as a banker, as an executive, as an entrepreneur. What happened . What went wrong with ework . Imran the challenge is the public market, you know, the market is so volatile. Investors are softer. I understand the excitement in private markets. But saying that, a lot of Great Companies were built in the public market. Netflix went public very early. I think it is getting more challenging. They are not interested anymore. Jason coming up, we will take you to the Second Annual securities summit at the 9 11 memorial and museum. Also, a preview of the new exhibit there about the hunt for Osama Bin Laden. Kailey this is Bloomberg Businessweek. Jason welcome back to Bloomberg Businessweek. Kailey the saga is almost over. Jason we hear from the ceo of intercontinental hotels. Kailey the Security Summit was in new york. Jason it was cybersecurity exports talking about attack prevention and collaboration between the public and the private sectors. We should point out that Michael Bloomberg is also the chairman of the 9 11 memorial and museum. Lets start with my conversation. The theme has been about cybersecurity which is a threat at every level of our lives. What has struck me most is the conversation has bridged both the cognitive, practical, what do you do, what do you do with it, who do you partner with, but also the heart. There has been a lot of conversation today including this morning that is been about the motivation for this awareness of the need for security coming out of personal 9 11 experiences. Jason frank, pick up on that. You so well this morning on a very personal note, your own remembrances, and talk about everything that happened between and the work you are doing now both professionally and in your day job as well as your work here. Set the tone in that regard. Frank it is about preparedness and partnership. If you are in a safer place on 912 in that year, you have seen partnership at its highest possible level. People all across america coming together, the bond. When you take that thought and say, we can protect ourselves by sharing and partnering, we will be much better prepared. Jason one thing that was a clear theme was the importance of people in the security. My next guest is a west point graduate and former Army Intelligence officer and served in both the bush and obama administrations in security and intelligence capacities. I see this as a National Extension of my career which is defending our Economic Security given that banks are so fundamental to national security. The Banking Sector is ahead of this problem. We had to be because we were attacked significantly in the 20 12 to 2014 timeframe, where a group known and identified with the iranian government were doing what was called distributive denial attacks, launching massive data website so people couldnt get to them and it caused a panic. I was incredibly encouraged to come from the white house to the banking and Financial Sector to see how much sharing there is, both within the Financial Sector, so big banks are super competitive about talent and business. They are not competitive about sharing business that will keep the sector safe. There is good sharing between the government and the private sector, and that will continue to grow and strengthen hopefully in the coming years. Jason you heard her talk about cybersecurity which was a big theme. Kailey especially heading into the 2020 elections. Jason what are the most important voices . Here is my conversation with the cofounder and chairman of craigslist. I figured out how to gain the rest, meaning they figure out how to introduce disinformation and generally phony news, such that american citizens dont get the information they need to make smart decisions. Meanwhile, they are using cybersecurity techniques to attack our voting systems, possibly in subtle ways for example, they are working with there two mystic allies to purge voters who should be purged. We fear they may do things like taking a legitimate Voter Registration record and tinkering with it such that when the person goes to vote they have to file a provisional ballot and if a bunch of people have to do that, it goes down the line a lot. That is the thing that can be prevented. People like me work with the people who do the actual operations. My contributions are small. I get people to talk to each other and help out. That is not a big thing in itself but a nerd has to do what a nerd has to do. Jason coming up, more from the 9 11 Memorial Museum and a look at an exhibition opening this weekend, all about the hunt for Osama Bin Laden. And part of that is the conversation i had with a man involved in that. Kailey this is Bloomberg Businessweek. Jason welcome back. Kailey join us every day on radio. You can catch up on our daily show by listening to our podcast. Jason you can find us online at businessweek. Com and through our mobile app. Kailey the raid that brought him andkailey the raid that brought the death to the leader brought back memories of a one back in 2011. Jason here in new york, the 9 11 memorial and museum just open an exhibition on the hunt for bin laden. For more than a decade, he was americas most wanted, the mastermind of the 9 11 attacks. Even before the twin towers fell, the u. S. Was after Osama Bin Laden and his terror network. It was the greatest manhunt in american history. The 9 11 memorial got unprecedented access to president obama and the navy seals who took him down. It was very clear that we would probably do taking him down. Jason then narratives are told in a multimedia format. Visitors will see more than 60 artifacts from the equipment used by the seals to a vest worn by one of the dogs. It is a story filled with frustration. They came close several times finally intelligence was able to pinpoint his location, which resulted in his death. We were waiting until finally we heard it. They constructed the exhibit using tall pieces of plywood. They made a military field office and residential compound. Throughout the images of redacted and classified memos, the reminders of one of the most important man hats in history. Manhunts in history. A man central to that mission was admiral mike mullen who was the head of the chief of staff from 2007 until 2011 and was in with president obama in the situation room when Seal Team Six killed the world most wanted terrorist. Here is part of the conversation. People asked me about that famous picture, and one of the reasons i think it was a famous is that it really does capture the moment and it was very tense. That said, it was a decision and a courageous decision on the part of president obama because we didnt actually know he was there. We had lots of circumstantial evidence. It was a decision the president made and the night itself, the actual night of the killing was, we were in that operation for a couple of days at that point. It had been going for some time and there had been rehearsals and lots of preparation going on for literally four months in the event we could pin him down. We had plans down to a level of detail that would in the end allow us to kill him. But one of the things i like to remind people is that same night in afghanistan, there were 14 other missions similar to that that were carried out. And while strategically this one had the highest risk, we had done thousands and thousands of these missions over the course of the years that we have been fighting. I had every expectation that if he was there we would be able to capture or kill him. That said, it was tense. It wasnt over until it was over. Not just the killing and getting him out and back into afghanistan, and taking his dna and positively identifying him, and flying him through pakistani airspace to a carrier at sea, where he could be buried consistent with his religious beliefs which is what we did. Jason when you think about that moment and fastforward to today, what has it ultimately meant for the war on terror, which has not ended in many ways and has only become in some ways more complicated . In terms of having a huge impact on the al qaeda organization, when you take out a leader like that, just as the very recent killing of baghdadi has had a big impact on the isis organization. It doesnt make the ideas or the aspiration go away, and it hasnt with al qaeda nor has baghdadis death done that with isis. So i think we have two stay at this. We still are in a situation where we are seen as the evil empire, if you will, from the terrorists perspective and they continue to come after us. There is a debate if we should stay there. We know that 20 plus terrorist organization who aspire to do us ill live in that border between pakistan and afghanistan. Leaving them unattended would be highrisk and very dangerous. Jason i do wonder, because i know it is an issue important to you, the role of the military and the view of the military in society in a lot of ways. Certainly, it changed over your career and where do you see it in 2019 . It is a Precious Organization and its reputation which is a political throughout our history is absolutely critical. To your point about i have seen it in a different place coming out of vietnam, which is the first war i bought in and where the military was held in very low esteem, and that has changed over the course of many decades. The institution is held in high regard throughout the country. We need to preserve that. We are going through a difficult time in the country. Certainly, in my life i have never seen us so divided and washington so dysfunctional with political leaders on both sides of the aisle unable to deliver for the American People. But it is a system i believe in and dont want to walk away and dont walk away from the principles and we need to make sure the governance is correct for us in the future and that the military is in general, certainly the activeduty side, and support of those that the American People elect. Even those that retire often times need to be reminded that it is not our position to take a stand against a president or a policy because i think that confuses the American People because we are seen as military experts. In ways we always speak for the military. So preserving that apolitical aspect of the United States is at the top of my list and retaining that is my priority. Jason make it a memorable season with an approach to giftgiving this year. We have your guide. Kailey plus, more than a decade after it began, the saga of bernie made off may be coming to a close. Jason this is Bloomberg Businessweek. Kailey welcome back. Jason you can also listen to us on the radio. Kailey it is our annual Holiday Gift Guide and this year it is all about handmade for the holidays. Here is our editor. Every year we try to think of a theme and this year it is things that are handmade. Its nice to give someone something that you know a lot of time went into it, so on the first page of the section we have this amazing poker set. The box has like 800 pieces and cards and its all made with little slivers of wood inlaid into the box. Its 1200 pounds, not cheap, but it is one of 15 so you know not many people will have it. Kailey how do you get one of these if there is only 15 out there . You reach out to the artist, and she also makes backgammon sets, so you see what shes got and then you can give it to a friend. Jason another favorite was the cloth for crustaceans. It is the pick of the creditor. So if you are a person that was born in maine, you have grown up eating lobster. You have probably used many different pix. Him a lot of them are not well designed. You can get them plastic when they are in a restaurant. This woman came by the office and was showing us these and they were silver handcarved lobster picks, which are so ingenious. They have a little clamshell carved into them so you can put your thumb into it. They dont become slippery when they become covered in butter, and they have a little hook, which most lobster picks dont have, so the meat comes out really easily. I know it sounds crazy, but this item does not exist anywhere else. Kailey so it makes a difference . It is a special occasion item. Jason that is a table setting that will set you back before you even go get your lobster . Yes, and those are the kind of things that go missing after a party. Jason my cohost spoke with an international ceo at a bloomberg wreck way conference. We cant do everything organically, so in this luxury space, we acquired a leading Boutique Company and so we have luxury brands, ones that have taken decades to build. I was acquiring that brand equity because it would take me a long time to build a lot of capital. Then i launched a few where i could build them quickly and just grow the business accelerated, so i combination. Growth sometimes means taking the underperforming assets out as well. Yes, thats probably one of the hardest things in this job because you can really convince yourself to keep bad hotels because they are paying you money. When you are under pressure to show growth and revenue, cash generation, you think should i take these out . But you have to remind yourself, you are the stewards of this business for the longterm and it takes a long time to screw up a brand, but once you have done it, it takes a long time to fix it. We are consciously taking out about two and half percent of the system globally every year. Reevaluating every year . Every year. If it is the wrong location, to keep moving quality up, you have to do it. If companies do not, they pay for in the long term because customers begin to lose faith. On the back page, the saga of earning made off may be coming to a close. Jason it is a tale filled with billions of dollars. Heres the story. In 2008 Bernie Madoff admitted running the biggest ponzi scheme ever. He bilked investors out of 17. 5 billion and he was sentenced to 150 years in prison. The trustee in the case filed hundreds of lawsuits to recover investments. So far he has been able to clawback over 14 billion per there is still one source of money he has not been able to get to, about 3. 2 billion held by foreign banks. In 2014 a judge ruled that the Bankruptcy Code did not allow him to go after that money. Naturally he appealed but the wheels of justice turn slowly. It was not until last february that a court of appeals overturned the Lower Court Decision and so now the banks are appealing at the high court is expected to decide next month whether to hear the case. One way or another, he has been a big winner. In most schemes the trustee recovers no more than 30 of the funds. He is at 80 now. If he gets back the 3. 2 billion he would be close to 100 . Jason Bloomberg Businessweek is available on newsstands now. Kailey and also online and our mobile app. We are here at 70 Degrees North latitude for the future arctic code for vault is. Open the vault. This is how it works, the dated the data is stored in the information can be read by a computer or if need be, with a magnifying glass. How long will this last . Maybe 2000 years. Jason and check out our weekly podcast. Kailey more Bloomberg Television starts right now. David you went to Harvard Business school. Steve yes. David did you enjoy it . Steve no. David did you want to drop out . Steve yes. David you went out to raise a fund, was that easy to do . Steve i sort of looked at that and went omg, we are going to fail. David in 2007, you thought maybe i should take the firm public. Steve i took it public for a lot of different reasons. I had a sixth sense that something terrible was going to happen in the environment. Would you fix your tie . David people would not recognize me if my tie was fixed. But, ok. Just leave it this way. All right