About we works toxic phone booth. Jason and a special summit on security. They have got a new exhibit called revealed the hunt for bin laden. 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. Your is billy house in d. C. What we saw was concern on the part of state Department Officials about back channel diplomacy by rudy giuliani, and evidence, hearsay evidence, secondhand evidence of what they were hearing trump was up to. Kailey how long can all of this really go on . 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 is 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 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. After 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 impeachment. Jason staying with politics and atopic we cannot stay away from, and that is trade. Thatts widely anticipating President Trump would use his speech to the Economic Club to new york to announce progress on a trade deal with china. Kailey Kailey Kailey instead, all he said was an agreement could come soon. Here is Shaun Donovan with his economics story on how the trade war went from method to madness. What we tried to do, my colleague and i, is to step back and really look at the arc of this thing. It is worth remembering, we have gone from a carefully crafted plan to take on china and force some really fundamental structure changes in chinas economic architecture to what is now shaping up as a pretty narrow deal and more talks to come. We really have gotten there as a result of donald trump and his unpredictability. Some would say his impetuous this. And all of those terrorists all those tariffs he has thrown on the table. They have really changed the game, and they will have lasting consequences for what is the most wharton economic relationship in the world 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. 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. Or eight u. S. Administration, whoever was in the white house, had to take on china and had to renegotiate the rules of the relationship. On thisrump went all in with brutal tactics when it came to international diplomacy. Aere is nothing blunter than 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. 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 this voltt to archive code in a in the swedish on in a vault in the swedish arctic. Maybe you have heard about the worst case scenario, the world as we know it comes to an end, at least there are seeds you can plant. Right next to the seed volt is a code vault. Kailey talk about why this is important. Joel earlier this year, microsoft bought gethub. 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 rags 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 safe and a lot of industries. Jason and nike. That is another thing we take for granted as well. A very powerful story in many ways going on there. Also some power in those shoes. Jason joel there has joel been controversy with 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 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 established a dominant advantage that a lot of runners can use to its advantage. Jason joel weber, thank you so much. Coming up, Goldman Sachs hits the target of a wall street probe into its credit algorithms, specifically the new apple card. Kailey does nikes sneaker go one step too far . Jason this is the big businessweek. Kailey welcome back to Bloomberg Businessweek. Jason join us for Bloomberg Businessweek every day on the radio starting at 2 00 wall street time. Catch up on our daily shows by catching our podcast. And you can find us online at businessweek. Com, and through our mobile app. Kailey bloomberg learned this week that a wall street regular regular is looking into Goldman Sachs is practices. That after claims that algorithms discriminated. 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. Reporter this started with a series of tweets from a tech entrepreneur. He applied to the apple card and started complaining that his quite it 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. Yet, there was a huge disparity. It immediately gained traction online. Appleinsult to industry, cofounder Steve Wozniak said 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 marquees in the world of finance, they have become lightning rods over an issue that has been growing for a while. They are trying to figure out 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. But 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 she was abused after joining the companys now disbanded oregon project running program. Kailey it is not the companys only challenge. Sneakerstech has some worried. Jason evan novy williams. Reporter 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, but it became a bigger deal for professional circles, where you know the difference can be seconds over an entire marathon. 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 . Question. Is a major every other shoe company right now is working to reproduce what nike has. There is a carbon fiber in the shoes. The four foot is steeper the forefoot is steeper. I have spoken to a number of companies. Everyone is working on replicating what nike did. 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 smaller. Nike may be able to keep getting 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, then ultimately got banned. Eben 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 governing body for swimming came out and said, 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 iaa of 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 . 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 the company has had to deal with this year. This is bloomberg. Jason welcome back to Bloomberg Businessweek. Kailey 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. Less than one year, we went from having a 47 billion valuation wework went from having a 47 billion valuation to needing a rescue package to avoid collapse. Kailey this weeks tech section looks at yet another problem, toxic phone booths. Here is our reporter in san francisco. Reporter basically, wework designed the phone booths and gets manufacturers to make the phone booth. One of their manufacturers, may be the only one in the u. S. And canada, was a Company Called premier exd. They make commercial fixers fixtures. They were making these phone booths. But was not publicly known, something we talked about with former employees. They were making the phone booth, everything seemed fine until early summer, when one of weworks biggest companies, which used wework to reason design to redesign one of its headquarters, s some of the employees noticed the phone booths smell funny. Maybe i have some eye irritation. They alerted their managers. The company did a test and found elevated levels of formaldehyde. This is early summer. They did not announce until midoctober. There are several months where ubs had told wework of the issue, wework starts talking to vendors in august about replacing future phone booths with new ones, and in september, the maker of the phone booth suddenly shuts down without warning. Some of its workers are left stranded with no severance. There are around, 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 story of wework, we turn from phone booths to a phone guy, who could be the next ceo of this company. Rumored to havings now discussions for the top job. Tell us how that came about and what it may mean for the future of wework . Work ist seems like we continuing on the ceo search. John legere is one of many names under consideration. Put its like wework, to in context, is still struggling to find who will be the leader that will take them forward out of this mulcher was time. To take josh out of this tumultuous time. They still had the cofounder and ceo at the head of the company. When he stepped down, they replaced him with coceos who were existing executives. Over. Tepped up to take they were quickly overshadowed by a man who was placed as executive chairman of the company by softbank. You may remember him as the former head of sprint. Marcelo is the one who has been sending out memos, saying if you have concerns, talk to me. 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. They didnt 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. That may be the reason his name is in circulation. Jason we also spoke at the cofounder and ceo of Ecommerce Company berrer shop. They talked about the ipl, as well as his outlook for the Online Shopping market. Carol massar and i sat down with him in brookland. There is no place for consumers to go find and discover new brands. Brand creating a 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. Convenience,r quality, and discovery. Carol whats 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. The interesting thing is that consumers dont like putting their credit card number into 500 different sites. 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 went wrong a with wework . Imran 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. 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 about the new exhibit for the hunt for Osama Bin Laden. Kailey this is Bloomberg Businessweek. Welcome back to Bloomberg Businessweek. Ceo of from the Intercontinental Hotels. First, a Security Summit at the 9 11 newseum and memorial. It is a gathering of Public Officials and Cyber Security experts to discuss matters including privacy, risk mitigation, a town invention, and attack prevention collaboration. Is also the chairman of the 9 11 memorial and museum. Let us start with my conversation with the 9 11 museum and memorial ceo. It has been about cybersecurity, a threat at every level of our lives. What struck me most is that the conversation has bridged the cognitive, practical, what you do, how you deal with it, what are the ways you know you have a problem, but also the heart. It has been head and heart. There has been a lot of conversation today, including this morning, that has been about the motivation for this awareness of the need for security coming out of personal 9 11 experience. Frank, pick up on that. Note, yourersonal own remembrances of 9 11, but also everything that has happened in between. The work you are doing now, both professionally and in your day job as well as your work here. For us. The tone it is about preparedness. It is about partnership. If you are in a sacred place on nine 12 that year, you have seen partnership at its highest possible level. People across america coming together to bond. When you take that thought and say, we can protect ourselves by sharing, by partnering, we will be better prepared. One thing that was a clear theme at this years summit was the importance of people in security. There is nowhere that is more true than wall street. It something i talked about with the head of Morgan Stanleys cybersecurity fusion center. She is a west point graduate. Bush and obamahe administrations in security and intelligence capacities. Mission, it is an extension of my career in national security. Defending our economic security. Given that a big bank is so fundamental to national security. I think you are right. The Banking Sector is ahead of this problem. We had to be because we were attacked pretty significantly in the 2012, 2014 time crazed, identified with the iranian government did a distributed denial of service attack, launching massive data websites so people could not get to them. Vulnerability the of our critical financial infrastructure, but off the back of that, banking really got ahead of us. Processes, the right technologies, started really investing in that so we could strengthen the sector. Some of the things we have done very importantly to share information, i was incredibly encouraged to come from the white house to the banking, to the financial sector, to see how much sharing there is, both within the financial sectors. Big banks are super competitive about talent and super competitive about business. Aboutre not competitive sharing information thats going to keep the sector safe. There is good sharing between the government as well as the private sector. That will continue to grow and strengthen. You heard jen talk about cybersecurity. That was a big theme. It is important as we head into the 2020 elections. One of the most important voices there might be one you would not expect. Here is my conversation with the cofounder and chairman of craigslist. Foreign adversaries and their demise to gallis figured out how to game the risk and their domestic allies figure out how to game the risk. American citizens dont get the information they need to make smart decisions. Meanwhile they are also using cybersecurity to attack our voting systems, possibly in subtle ways. For example, they are working allies to domestic purge voters who should not be purged. What is worse is we fear that they might do things like taking a legitimate election registration record, tinkering with it, so when the person goes to vote, they have to file a provisional ballot and if a bunch of people do that, that slows down the line a lot. The thing is, we know that is a thing and that is a thing that can be prevented. People like me work with people who do the actual operations. My contribution, i get people to talk to each other and help out. That is not a big thing in itself, but a nerd has got to do what a nerd has got to do. Coming up, more from the 9 11 memorial and museum and an inside first look at an exhibition opening about the hunt for Osama Bin Laden. Part of that is a conversation i had with a man involved in that mission, admiral mike mullen. Looking back to Bloomberg Businessweek. Stream Bloomberg Businessweek every day on the radio. You can catch up with our daily show on our podcast and twitter. Com. You can find it online at businessweek. Com and through our mobile app. Months raid brought back memories of a similar mission in 2011. The target then, Osama Bin Laden. 9 11 memorialhe and museum just opened an exhibition on the hunt for bin laden. 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 and museum got unprecedented access to those involved, ranging from former president obama to members of the Navy Seal Team that finally took down bin laden in 2011. Their firstperson narratives are told in multimedia format. Visitors will see more than 60 artifacts from equipment used by the seals to a vest word by one of their dogs. It is a story filled with frustration. The u. S. Came close on several occasions. Finally, intelligence was able to pinpoint his location in pakistan. That led to the navy seal raid that took just 40 minutes and resulted in bin ladens death area death. Constructed the exhibit using angled pieces of plywood. They said it allowed them to evoke mountain canyons or a residential compound. Throughout, images of redacted classified memos, reminders of the secretive nature of one of the most important manhunt in american history. And a man central to that mission was admiral mike mullens peer he served as the head of the joint chiefs of 2011 and was07 to with president obama in the situation room when Seal Team Six killed the worlds most wanted terrorist. Weeks extra podcast. Here is that conversation. People asked me about that picture. One of the reasons i think it is famous is because it does capture the moment. It was very tense. That said, it was a courageous decision from my perspective on the part of president obama. We did not know he was there. We had lots of circumstantial evidence. I viewed it as about the that the president made. The night itself, the actual night of the killing was we were into that operation for two, a couple days by then. It had been going for some time. Ande had been rehearsals lots of preparation for literary forbing months literary literally four months. We had planned this down to a level of detail that would in the end allow us to kill him. 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. While strategically this had the highest risk, we had done thousands and thousands and thousands of these missions over the course of the years we had been fighting. I had every expectation if he was there we were going to be able to capture or kill him. That said, it was tense and it was not over until it was over. By that i mean literally not just the killing, getting him out, getting him back into afghanistan, taking his dna and positively identifying him, getting him on a helicopter, flying him through pakistani airspace, getting him out to a carrier at sea where he could be. Consistent with his beliefs, his religious beliefs, which is what we did. Thaten you think about moment, you fastforward to today, what has it ultimately meant for the war on terror, which has not ended in many ways , and has only become more complicated. In terms of having a huge impact on the al qaeda organization, it did. When you take out a leader like that. Just as the very recent killing a bigbaghdadi has had impact on the isis organization. It does not make the ideas go away. It does not make the aspiration go away. , nors not with al qaeda has baghdadis death done that with isis. We have to stay at this. We still are in a situation where we are seeing we are seen as the evil empire from the terrorists perspective, and they continued to come after us. There is a debate now about whether not we should stay in afghanistan. We in fact know that some 20 plus terrorist organizations who there to do us ill live in border between pakistan and afghanistan. I think leaving them unattended would be high risk and very dangerous. I do wonder because it is an issue that has been important to you, the role of the military and the view of the military in society in a lot of ways. Certainly over the course of your career, where do you see it right now in 2019 . It is a precious institution and its reputation, which is a historyl throughout our , in the ebbs and flows, is critical. To your point about, i have seen it in a different place coming out of vietnam, the first war i fought in come where the military was so much it was held in very low esteem. 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 as a country. In my life i have never seen us so politically divided. I have never seen washington so dysfunctional with political leaders on both sides of the aisle unable to deliver for the American People. It is a system i believe in. We need to make sure the democracy continues to function and that we dont walk away from its principals. It is a responsibility of the American People to make sure that governance is correct for us in the future and that the military is in general certainly the activeduty side, in support of those the American People elect and that even those who are retired often times from my point of view 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 and in ways we always speak for the military. Preserving that a political aspect of the United States thetary is absolutely at top of my list in terms of priorities for the country. Next, the holidays are coming. Make it a memorable season with a more personal approach to giftgiving. Weve got your guide. Get out your wallet for that one. Or than a decade after it began, the saga of bernie made off may be coming to an end. Welcome back to Bloomberg Businessweek. You can listen to us on sirius xm channel 119. 91 point nine fm in washington dc. It is our annual holiday gift guide. This year it is all about handmade for the holidays. Try to think of a theme for our gift guide. This years theme is things that are handmade. Its nice to give somebody something you know a lot of time went into. Maybe a master craftsman worked on it. Set, a boxs amazing with a bunch of pieces, cards and stuff, it is all made with little slivers of wood inlaid into the box. You know, it is 1200 pounds, not cheap, but it is one of 15. Not many people will have it. How you go about acquiring one of these if there are only 15 out there . You reach out to the artist. She is in the u. K. She is making 15 of these, but she makes other versions. She also makes backgammon sets. See what shes got. Give it to a friend. A favorite apparently down on the pursuits desk was the coffered crustaceans. The pick of the creditor. What is this . Mainer like me, you have grown up eating lobster. Narrow forks go into the shell to pull out meet. A lot of them are not will that that welldesigned. They are plastic in a restaurant. This jeweler who works out of the Upper Eastside came by the office and was showing us her wares. She had these silver handcarved lobster picks, which are so ingenious and also expensive. They have a little clamshell carved into them so you can put your thumb in it. They are textured so they dont become slippery when they get covered in butter. At the end of the fork they have a harpoon hook, which most lobster picks dont have. Crazy, but ifunds you are a lobster person, this item does not exist anywhere else and it is perfect. You have had the chance to eat lobster with that item . Yes. And it is different. Yes. They are 225 dollars each. You dont want to lose them. Setting thattable is going to set you back before you even go by your lobster. Those are the kind of things that go missing after a dinner party. My cohost spoke with Intercontinental Hotels ceo keith bar. They were at a bloomberg conference in london. We cant do everything organically. We recognize in the luxury space we are going to have to do mende. M a. Regent,out and acquired uber luxury brands. Lifestyle boutique. Once that ive taken decades to build. I was acquiring that ipo, acquiring that brand equity, because it would take a long time to build it. A lot of capital. I launched a few brand spry could build those quickly, get them out there, and grow the business. The combination of the two. Taking the underperforming, nonperforming assets out as well. You were shutting properties. That is one of the hardest things in this job. Why . Rex you can really convince hotelsf to keep bad because they are paying you money. When you are under pressure to perform, to show growth, to show revenue and cash generation, to say, should i take these hotels . You have to remind yourself. It takes a long time to screw up a brand, but once you have done it, it takes a long time to fix it. 2. 5 ofaking out about our system globally. Reevaluating every year . Every year we are taking 2 to 3 of our hotels. ,f it is a poor Quality Asset we keep moving, moving quality up and Customer Perception up. When companies dont, they are profitable in the shortterm. They pay for it in the long term. Customers lose faith. On the back page, more than a decade after it began, the saga of Bernie Madoff may be coming to a close. It is a tale of lawyers, courts, and billions of dollars. Madoff008, bernie admitted running the biggest ponzi scheme ever. Build investors out of 17. 5 billion and he was sentenced to a hundred years in prison. Hundreds of lawsuits were filed to recover victims investments. So far he has been able to clawback 14. 2 billion. There is one source of money he has not been able to get to. About 3. 2 billion held by foreign banks. Ruled4, a federal judge the Bankruptcy Code did not allow picard to go after the banks money. Naturally he appealed, but the wheels of justice turn slowly. It was not until last february, five years later, a court of appeals overturned the lower courts decision. Now the banks have appealed to the supreme court. The high court is expected to decide next month whether to hear the case. One way or the other, picard has been a big winner. In most ponzi schemes, the trustee recovers no more than 30 of lost funds. Picard is at 80 now. If he gets back the 3. 2 billion, he would be close to 100 . Bloomberg businessweek is available on news and now. Also online and on our mobile app. Including this weeks cover story. A team in the arctic holds the worlds most important code. Inside the get hub ceo. Latitude ats north the site of the future github code fault. 600 of the most popular opensource projects in this archive. Want to come in . The data is stored on film coated with iron oxide powder. Information can be read by a computer, or if need be, a human with a magnifying glass. How long will this last . We are confident 1000. We are aiming to do research for 2000 years. 2000 years. Check out our daily businessweek podcast available at apple podcasts, soundcloud, and bloomberg. Com. More Bloomberg Television starts now. This is the best of bloomberg technology, where we bring you all of our top interviews from this week in tech. Disney plus sores. The company is said to surpass 10 million signups in its first day. Goldman sachs apple cart controversy. We will hear from Steve Wozniak on how he got caught up in gender bias accusations against goldman