Transcripts For BLOOMBERG Bloomberg BusinessWeek 20171119

Lets begin with the european cover story. Perhaps the safest woman in european politics right now simply because no one wants to replace her and voters dont know who they want to replace her with, theresa may. Megan this is the story that keeps on giving. You really do have some sympathy for a woman who has not only faced an extreme series of internal political challenges, including a sexualharassment scandal in parliament, ministers leaving, but also overshadowing all of this is not only her own inability to lurch from crisis to crisis to crisis, but this fixed timetable on brexit and all the challenges they face over that in terms of securing a deal with the eu that is refusing to budge on so many core issues about single market, timing, compensation. It is the worst of all worlds for her right now. Julia some people dont have sympathy for her. They say, why did you call for an election . Why did you squander the lead you had over that period when you went into this election . Some of the comparison being made are john major in 1997 and the catastrophic loss we saw in that election. Megan you and i are both british citizens and so watching it has been unbelievable to watch. When she first called the election, it is hard for us to go back to where we were. People thought she was going to win an overwhelming majority. What happened to theresa may is she was revealed to be a spectacularly incapable candidate. She had no real message for voters. She seems to be robotic which gave her the nickname maybot. She lacks a common touch, very different to john major in terms of how he has emerged as a man of the people. Which is odd to me as well. She has proven herself to be unable to really get in the consciousness of the british voter. Every time she turns to her same wornout phrases of taking britain forward, forward together, and the thing people dont spend enough time talking about and which this piece really talks about is theresa may was a remainer. We forget about this. She was a remainer, the leading voice on the remain campaign. What i have found baffling and perplexing is to be this full throated advocate for brexit is not how she felt, is not what she ran on. The british people simply do not believe her and a lot of what she is saying about the benefits that brexit will bring. We have to look at the u. K. The economy is starting to suffer. It is growing at a slower rate than european rivals. The pound is continuing to stay weak. Inflation is hitting home on food prices. People look forward to brexit, lack of a plan, how they are going to compete, how they are going to remain investment, let alone attracted businesses back to britain. Julia from a manmade or woman made crisis, the impact of Hurricane Harvey in houston and some questioning whether or not to what extent that was a natural catastrophe and contributed by the actions of man or woman. Megan this is our domestic cover. This story is powerful and deeply reported. We are so proud to publish it this week because when you look at Hurricane Harvey versus katrina in new orleans, there has been so much talked about how the response was very prepared, planned, we perhaps saved many lives and how immediate the planning was. How firm they were about forcing people to evacuate as floodwaters rose, but there was an area around houston that was intentionally flooded, where a reservoir they were concerned would flood and cause immense destruction was actually intentionally flooded and the waters released. It was a relatively wealthy area. This goes into the detail of what happened to those people, their homes, their lives and was it the right choice to make for everyone and where do we go from here. Julia the legal consequences. Here is reporter shannon sims with that story. Shannon a lot of people think harvey was just a hurricane, it rained and the water subsided. Actually what happened is that large portions of houston had a secondary disaster happened to them. That is that the federal government had two reservoirs blocking the water from west houston and central houston from flooding even more catastrophically than it did. However, the water was so immense. 51 inches fell across houston. Normally 60 fall in a year. The army corps of engineers had to make a tough call in opening the floodgates and actually flood neighborhoods near the floodgates, including my parents neighborhood. The results are thousands of homes flooded, and as a result, the litigation is beginning now. That is the next chapter of the story. Julia they sacrificed a piece of houston to save everyone else. Or seemingly . Shannon i would say factually. It is a tough call to make. It is a disaster, and nobody really knows the right thing. It is unprecedented. The potential damage the Houston Chronicle ran a chilling article about a week afterwards, and they said that if the reservoir walls had broken, it wouldve left west houston with corpses by the miles or Something Like that. So we were talking about the risks were huge, totally unprecedented. It was a tough call. Now it is going into litigation to see exactly what happens after you make a tough call. Julia talk about some of the individuals and families involved. One of them, angie and josh moore, a couple with a child in the area. They had to make a judgment call on the flooding and whether or not to evacuate. Shannon a lot of people my family is from there. It rains all the time. We are from houston. We are used to hurricanes. Nobody was freaking out. This was different because we did not know they would open the reservoir gates. That has never happened before. They opened them in the middle of the night when everybody was sleeping. Julia they said they would do it later in the day. They made a snap decision earlier than perhaps planned. Shannon right. When i spoke with residents, that is what a lot of them were upset about. They did not have enough warning. Angie, for example, told me her Wedding Dress was ruined. She said i would have put my Wedding Dress somewhere else. All these things you dont think of because you would never imagine your home with six feet of water in it. Some people said they could tell there was a difference in the water coming in versus the water that was coming down, rainfall versus the water released from the dam. Shannon right. The water released from the dams had been accumulated in the dams and then was released into buffalo bayou, a stinky bayou in the best of days. All of that funk was overflowing into peoples homes. It was not clear rainwater. It was something else. They could tell a difference. Shannon on top of that, it was mixing with sewage, whatever chemicals people had in their garages that were now flooding out. Play devils advocate. Would these homes have flooded anyway if the dams had not been released . Shannon that is exactly what a lot of the litigation is about. This is an unprecedented rainfall. How did we know who was going to flood . Nobody knows the answer. Storm in 100 years or more. Shannon right. We only have so many forms of guidance. A lot of these homes are in the 500 year floodplain, which means they should flood once every 500 years, or they have a 1 chance of flooding every year. Or a. 5 chance of flooding every year. What happens with climate change, more severe storms julia what about insurance in this case . This is one of the things we discussed. I was shocked at how few people actually had Home Insurance protection. Shannon from the outside, how can you not have insurance . You live in houston, you have hurricanes all the time. But this area never flooded. You pay hundreds and hundreds of dollars for 30 years in your home never floods and you wonder why you have it. Lets go to the litigation. There are similarities between this and katrina in new orleans. I dont know it is apples to apples, but nonetheless, what you have is the government willing to sacrifice the federal government releasing the dams, sacrificing property. You think about, legally, is this Eminent Domain . What is the legal or the law behind this . Shannon what happened in katrina is that the government was not maintaining their infrastructure properly. This was not that case. The government was maintaining infrastructure properly, they will argue they were using the infrastructure properly. Opening the floodgates is part of the reason you have the reservoir, to control. Keep in mind that at this time there were other hurricanes churning in the gulf. They did not know how much water was going to be coming. They chose to sacrifice some land. Did they take those lands away . Shannon this is the legal argument. What is fascinating is this gets to the constitution. In the constitution, in the fifth amendment, there is a clause that says the government cannot take your property. If they do, they have to pay you back. That is the argument that people are making. Whether this was the right call or the wrong call, it was an extreme situation. It was unprecedented. That is not what we are arguing about. We are just saying these peoples property were taken from them, and that means it was damaged or destroyed. That is a taking. Julia creative director rob vargas put houstons flood on the cover of Bloomberg Businessweek. The United States has had more than its fair share of natural catastrophes this year. Never more so than with the flooding we saw in houston. This week, we turn the spotlight on the u. S. Cover on a different angle in this story. We report when it first happens. We had a photographer down there shooting some of the scenes, which were incredible. We are revisiting it because something i wasnt aware of was part of the flooding, the u. S. Government making the decision to flood certain areas to save others. Julia you have two powerful quotes on the front cover. Point out what you chose. This actually gave me goosebumps. This is one of the people affected by this, quoted in the story saying this isnt an act of god, this is an act of man. Pointing at the fact that even though it was a natural catastrophe, the flooding in certain neighborhoods was an act of man. Julia next, the Health Insurance company that sees opportunity in the uncertainty surrounding obamacare. And the fight over who gets to mine your data and sell it to your boss. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. I am julia chatterley. You can find us online at businessweek. Com and on our mobile app. In the features section, Health Insurance Company Centene is taking its carefully crafted Business Plan national. That could mean fewer choices for customers. Here is reporter brian. Talk to us about it. It is a publicly held company. If you look at the stock, it has shot up this year. Littleknown company but it is helping out the folks in georgia when it comes to Health Insurance. Brian they go back to 1984 when it was founded in the basement of a hospital in milwaukee. In 1996, the ceo who is now ceo came in. He had 40 million in revenue, 40,000 customers in a couple of counties in wisconsin and part of one in indiana. Now he is over 40 billion in revenue. Their stock price tripled in the last five years or since obamacare effectively came in. They are doing quite well, but they are not terribly wellknown, in part because when they sell their medicaid and their obamacare plans in various states, they frequently sell them by different brands. For instance, in georgia it is ambetter. In florida, it is Sunshine State health plan. That is how most customers recognize them. Julia explain why centene can go into all these marketplaces and offer options to people when everyone else is retrenching and saying we cant offer this anymore. Bryan centene has been doing this for a long time. Centene is a longtime provider primarily of medicaid coverage. When you are offering medicaid coverage, you dont have the luxury of saying, our population is really sick. We will just raise premiums or raise copays or deductibles. You cant do any of that. They dont have those. You are at the mercy of the federal and state governments. You really need to focus on how much your population costs. They have been focused on this for a long time. They have gotten really good at keeping those costs down. Carol what is fascinating is you put this statistic. Research has shown 5 of insurers population can account for 50 of the cost. What 17 is doing, they are centene is collecting a lot of data to understand the population they are insuring, and they are trying to make sure they are doing health care or suggesting health care to their subscribers before they get really sick. Bryan thats right. They use publicly available data as well as their own claims data to figure out who are the people who have small problems that could quickly become big problems, expensive problems for centene. Then they focus on these people. They have algorithms that churn through data. Every 24 hours, a Software Program delivers a patient to do list to one of centenes 3000 case managers for these particular people. The case manager says, i see this small problem could get big. They reach out to the people and say, you need to go to the doctor, take your meds, do a and b in hopes of heading off major surgery or major problems with their heart, kidneys, etc. Julia staying in the featured section, a look at some of the Smaller Technology companies that are feeding off the information we put on social networks and the fight that is brewing over the control of that data. We speak to reporter drake bennett. Drake hiqs whole Business Model is they take data and crunch it to make these predictions about peoples behavior. Linkedin data. Drake linkedin data. The vast majority of data they use is linkedin data. That is because linkedin is the only game in town for this kind of workplace information. Linkedin is saying they sent them a ceaseanddesist letter in may saying you cant do this. You are not allowed to use our data. Stop visiting our website and copying the data, which wouldve meant going out of business. They have sued. Their argument is this is public data. You guys are probably on linkedin. Im on linkedin. You can decide the information, who it is available to, how widely it is disseminated. Hiq is only taking the most public data. They are saying, if you selectively say this person can see this and this person cant, it is like putting a billboard on your office and saying you cant look at this billboard. Linkedins response is its on our servers, and you are trespassing by coming in and copying it. More fundamentally, this is the kind of thing our members might not be comfortable with. You are basically using this information to discover things about them they might not want their employers to know. It is kind of incumbent on us to prevent you from doing it. Julia those people can make that information private. I know that it basically defeats the purpose of linkedin, but there is a choice. Drake this is part of the issue. Hiq says if they dont want us to be delving into the stuff, they can julia control it. But that cuts to the big issue of why there is a legal battle. It is about speech and competition on the internet. It has attracted some pretty big legal names who have views on the subject. Drake lawrence tribe, a constitutional scholar, is arguing for hiq. His interest is he sees it as a free speech issue. He really sees when youre talking about public data and who gets control, and especially in an environment where we have a smaller and smaller number of Big Companies controlling the collection and analysis of that data, he is uncomfortable with there being more restrictions put on who gets to do stuff with that information. Julia up next, the company the pentagon uses to stop cyberattacks from spreading. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. Im julia chatterley. You can listen to us on the radio at sirius xm channel 119, and on am 103. 0 in new york, 106. 1 in boston, am 960 in the bay area, and in london on mux 3, and in asia on the Bloomberg Radio plus app. In the technology section, endgame might not be the biggest Cyber Security firm in the market, but it is the pentagons favorite. I spoke to the ceo of endgame, nate fick. Nate endgame builds a protection platform. We protect our customers data from attack by preventing breaches on the endpoint and by detecting and responding to breaches and automating the hunt for attackers that may already be inside our customers networks. Julia how do you stop it spreading . Nate it is an enormous amount of math behind it. A lot of data science and algorithms involved in the detection process. This is a crowded market. We have to put a lot of emphasis on independent thirdparty validation. Not us saying how good our stuff is, but others who are seen as credible and independent verifiers in a market where there are Many Companies claiming to be the same thing. Julia what about your model is making you different . The thing about hackers is they change. They know you are on to them, and they learn and do something different, and they adapt. Can you adapt quick enough for the changes that hackers make in order to attack something slightly differently . Nate i think that is the key insight to cybersecurity. This is not a machine on machine problem. It is people on people. You put your finger right on it. We started by taking the best attackers from places like the nsa and the air force and other parts of the government and gathered them together and said, ok, lets build the defense you never wanted to run into when you were on the attacker side. That is what we have done. We have to continually replenish that talent with people who are uptodate on the latest hacker techniques and procedures from around the world. And then marry them up to people who build and ship scalable enterprise software, and then a University Math department of data scientists. Julia the problem is the person operating this, while trying to work out what went wrong equifax was a great system. One unnamed person did not do an i. T. Update. This needs to be simple. How do you make the application of the search and the identification of a hack simple to operate . Nate that is one of the hallmarks of what we do, build a product that is incredibly easy to use. We cut our teeth in the u. S. Government where our endusers are often operating under pressure. They are pretty young generally. They might be changing jobs every 18 to 24 months. They are incredible capable but operating under difficult conditions. The central challenge for us was building a product that is easy to use. That means a user interface that is intuitive and simple and some other innovations. We have an ai powered chatbot, a natural language chatbot that allows very junior analysts to use natural language in order to stop very advanced attacks. Julia make that simple for me. If i say to the system, find exploited software and shut it down, would it react to that . Nate it would do exactly what you just asked. Julia wow. Is that unique to your system . You have big competitors out there. Nate we have many large and wellfunded competitors. Introducing that natural language interface to our product is unique. We are the first and so far only ones to do it. Julia talk to me about this sphere. We have seen a lot of headlines written about the breaches at the nsa and the shadow brokers and the comments they have made effectively auctioning off the information they allegedly hacked and stolen from the nsa. What do you think when you look at this . What do you think is going on . Nate we all live in a world where it is increasingly hard to keep secrets. There are secrets that for reasons of National Security are very much worth keeping, but technology is going to make it harder and harder to keep those secrets. The shadow brokers attacks and other attacks over the last year have ushered in a new era in cybersecurity where now we all live in a world, all of us individuals, all of us as companies, live in a world where Cyber Weapons that were developed with nationstate resources have been released into the wild. It is as if there are a million boomerangs spinning and all coming back, we just dont know when or where. Julia how californias housing policy is holding back its climate policy. And what is next for zimbabwe after its military seizes power. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. I am julia chatterley. Still ahead in this weeks issue, zimbabwe after mugabe. The eu goes from lost decade to potential golden years. And the best Business Schools for landing the highest paid jobs. All of that still to come on Bloomberg Businessweek. Julia plenty more must reads in the magazine this week. We are back with megan murphy, editor in chief, and in the politics section this week we are talking about the climate. Megan this is fascinating. As someone who used to live in san francisco, this is talking about something that we really dont think of a lot with climate. This is on the knockon effect of housing prices and inaccessibility of housing in california. It is a state that is really grappling with that. What is shown is that as people are pushed out of the main metro every as, los angeles, san francisco, and have these extraordinarily long commutes because they need to live in areas where they can afford to rent or buy a home, that is causing climate problems to get worse because people are driving cars further. Gas prices still remain low. So you are seeing emissions having a direct effect in the housing crisis, Housing Affordability in these metro areas that have seen extraordinary wealth, whether it is in san francisco, from tech, from l. A. , a bigger section of tech, and just more wealth pouring into that city. People who have middleclass, workingclass jobs cannot afford to live in those areas, and the only way many of them can get to work, given americas low penetration of high density commuter, either through shared commuting or train travel, is not just their. So we see the problem where california of all places are seeing emissions not drop as fast as they need to drop. Julia some of the numbers are quite shocking. 635,000 people commute 90 plus minutes or more in 2015. That is a 40 jump in five years. Megan what is so interesting is that it is so normal. It is so normal for people to look at these epic commutes, to spend as many as three or four hours in their car every day to get to these places. That is because, again, there was not the foresight and planning in place to really address how people are going to move from homes to jobs. Also there are just not enough houses. Julia the supply. Megan this is not uncommon throughout the western world. Where people have jobs, there are not enough affordable houses to support them. Rents have driven up incredibly high. It is not just whether you can afford to own a home, it is whether or not you can afford to rent a home. It is a serious problem. Jerry brown has been one of the fiercest advocates, governor of california, to really change this, to really bring down he has made climate a huge priority of his. He has been a leader. He was in germany this week talking about it. Again, it is an interesting fact that we dont really connect sometimes. Low gas prices, unaffordable housing, and climate change. Julia they are simply not building enough houses. The numbers on this are astonishing. 180,000 homes per year needed, 100,000 being built. This is an increasingly painful problem. They are not tackling it. Megan you need to incentivize house builders, whether through tax reform or whether or not you can promise some sort of subsidy to developers. That is politically unpopular right now. It is seen as a transfer of wealth into the housing Manufacturing Sector and into the corporate sector. Julia from the californian climate to the story that opens up the magazine in the remarks section this week, and that is what is going on in zimbabwe. Megan we have seen pretty Extraordinary Events this week in zimbabwe with what looks like the end of power for robert mugabe. Transition, military control right now having taken over and under gabi mugabe house arrest. What we are seeing what seems like a dramatic shift in terms of who is going to be in charge of that government. Julia lets take a step back and set the scene. President mugabe has been dominant in the political scene in zimbabwe since 1980. He is 93 years old. We cannot underestimate the power and influence this man has had for decades. Megan 37 years of rule, many people in zimbabwe only associate him with. You are exactly right, and there are so many people who have thought that events in zimbabwe the extreme decimation of that economy, hyperinflation to a level we have never seen, becoming a True International pariah, watching his people starve in front of him, watching what was at one time sort of a breadbasket of africa are reduced into this date it is of true economic decimation and thought he would be forced out at some point. He has proven to be someone who stands, his resiliency. But this is part of a wider political machinations. He has essentially anointed his wife as his successor, the leader of the use fraction of his political party, and that has caused tremendous consternation with both his rivals. And his fiercest rival is supported by the military, which has now actually rolled tanks into the streets this week. Julia are we calling this a coup . At this stage, it is very difficult to see what is going on. The military has suggested that they are tackling corruption and corrupt individuals surrounding the president , but as you pointed out, according to the south african president , we do see the mugabe under house arrest at this point. Megan they are not calling it a coup right now. I think pictures of what is going on on the ground are very typical of military actions and seizing control of a government. There is no question that what we are seeing right now is a transition of power. It looks like as we speak at this time. We should also and i think what this piece is so eloquent in describing is, do not mistake this for a popular political uprising where the people have taken up arms and forest the transition themselves. This is part of a political machinations, and who we will see that eventually takes up the role of leader in zimbabwe, it is not as if this was forced by the will of the people. Again, this piece points out this is not a country that has democracy, Democratic Institutions that have been bred by robert mugabe. This is going to be perhaps a series of leaders before it settles. A series of transitions before the International Community knows what to expect. So we could be in for a rocky ride in determining who eventually wins what looks like is going to be a power struggle. Julia as you have alluded to here in the days leading up to this move by the military, we saw the Vice President , the man beneath mugabe, actually fired from his role. Just weave that into the story as we look ahead to what may happen. And i appreciate it is very unclear at this stage. Megan this is what happened, he was essentially deposed, forced out, and he is a close ally of the general who is in charge right now, who is on the airwaves. He is also a fierce rival of grace mugabe, who looks to be the next likely successor. People are going to compare this to the arab spring, to what we have seen. We have to remember what happened when those things happened. You and i both remember what happened with the arab spring and the disasters in egypt with the Muslim Brotherhood and how eventually that led to a military takeover in egypt. So these transitions, when they happen in this fashion, are rarely simple. They are rarely one chess piece. It is usually several. Zimbabwe is a country that so many have looked at for so long and is seen as a true tragedy, given its Natural Resources and place in the world and history. Is this a new opportunity . Perhaps. Is there also pessimistic outlook as to what possibly could happen, and it could descend into more chaos and tumult . Yes as well. Julia what role does the International Community play, if any, at this stage . Megan that is such a great question. I think the International Community has rounded so strongly against mugabe for human rights abuses and, again, economic decimation. It is really going to be china, which is hugely important in terms of investment, and how they settle on this. I am sure that the Trump Administration and germany, england will be watching very carefully to see whether this is going to descend into any type of violence. It does not look like that right now, but we will be keeping very close tabs on what is happening with this transition if it is going to be this true transition of power. Julia where do we go from here . Do we just have to wait and see what happens, wait for comments, as you say, from the International Community, or just how this plays out . As you mentioned at the beginning, this is early days, and we do not have clarity or information from any places on specifically what is going on. Megan i think in the next few days you will see so many obituaries of Robert Mugabes political life being written, and there will be tremendous consternation and thought about what this means for this country and what this means for whether or not it is going to get finally an opportunity to rebuild itself in a way that makes sense. But lets not forget the people in that country, and lets not forget who they are going to cast their allegiance behind. And where they are going to go. These are people who have suffered to a degree under this rule that is extraordinary and that we really cant even imagine the kind of deprivation that has been in that country. There will be many people who look at his removal of power as something to celebrate, and i think there are people who will be cautiously optimistic. But we would mourn people, look, the examples that are similar to this are not great. The International Community should be forceful and have a voice in the future of zimbabwe. Julia up next, we throw the spotlight on europes incredible economic turnaround. Julia welcome back to Bloomberg Businessweek. I am julia chatterley. You can find us online at businessweek. Com and on our mobile app. In the economics section, posting its strongest growth in a decade, europe is no longer the sick man of the world economy. Carol massar and i caught up with reporter simon kennedy. Simon europe for a long time has had a Bad Reputation in the world economy. But there are signs now that it is not just recovering from the Global Financial crisis and subsequent recession, but actually doing pretty well. We have seen data showing this week how strong germany is. That is really driving it. We are looking at the best growth this year for the euro area in a decade. So it is turning pretty much from recovery to expansion. At the same time, a lot of economists are lining up to say that this is the start of a golden period, which is something we have never heard really discussed in the context of the euro area. Carol if somebody is just tuning in and has been asleep for the last 1015 years, they missed so much. Including the Global Financial crisis and the sovereign debt crisis in europe. They had to recover the euro zone from a lot. Simon absolutely. While some economies, america among them, rebounded perhaps did not create the jobs some would have hoped in the early days and subsequently the wages, but have had a pretty standard recovery from that financial crisis and recession europe belly flopped into the debt crisis. Obviously with greece at the center, had a bit of a flirtation with deflation. It is very much the work of mario draghi at the European Central bank in providing a lot of monetary stimulus, as did the fed, but even more so in the euro area. That is finally starting to take effect. Carol i felt like the greek crisis was the crisis that kept on giving for so long. Julia kept coming back again. We never moved on. But for me, quite interestingly, the ecb saying that this is the best the eurozone has been since the formation back in 1999. That is a pretty bold call, simon. To go to your point, how much is this recovery and how much is stimulus driven, even now . Simon there are signs companies and consumers are taking that stimulus and putting it to work. A lot of what is happening here is a boost from trade. Europe obviously a big trader , betting fitting benefiting from previous weakness in the euro. When you look at the region politically as well, look at macron in france, spain, putting catalonias issues aside. Countries that were stuck in the financial crisis and the debt crisis are picking up quite smartly. Even italy is performing better than its longterm trend. There are a lot of weaknesses, a lot of to be sures in this story whining out the weaknesses of the argument, but it does seem that there is a more robust economic backdrop for the euro area. Julia also in the economics section, it is not all rosy in europe on the doorstep of the eus eastern border. Belarus is building a Nuclear Reactor without international oversight. Here is our editor, christina lindblad. Christina lithuania is the first soviet republic to break away in 1990, and it proceeded to orient its whole economy and its politics towards western europe. Now 30 miles from the capital, this gigantic twin tower Nuclear Plant is going up on the other side of belarus. Basically, it has completely made them crazy on several fronts. Carol is this fear of just the russian influence, being reminded for that region, and it is in their face . Cristina lithuanians say this is a symbol of the past. Then there is all of the legacy of chernobyl. Carol terrible disaster. Cristina back in the late 1980s. All of these countries were actually called. People were recruited to help with the cleanup. We spoke to somebody in lithuania who recalls one of his neighbors was taken away to help, and when he came back died shortly thereafter. Julia just to be clear here, the russians are financing this powerplant. It is russian built. Cristina and building it. The stateowned company is building it. Carol what is interesting is how close it is to lithuania. There is not a lot of people in belarus. Cristina there are more lithuanians near the plant than people from belarus. That is one of the main objections. In belarus, they have said that the reason to site the plant there was made because of considerations of topography. You cannot have Water Supplies too close to a plant because in the event of a disaster, it sparks an explosion. Julia talk about why they see this as such a threat. Is it the russian influence . Is it the fact that they have been working so hard to remove themselves from being so independent from an energy perspective, on russia in particular . Because this is a factor for the whole of europe, not just the east countries. Cristina russia has a history of using energy as a geopolitical tool. They did it in the ukraine, where they basically threatened to freeze people in the winter. In belarus, 95 of electricity is generated from russian gas. So lithuania has been trying to sort of ease gaston cost ease gas pumps grip on the region, at least for itself. 26 of electricity in lithuania is generated from renewables. But more importantly also, they have built this lng terminal that began this summer to take shipments from the u. S. From a plant in texas. They took their first shipment in august, and that is seen as an important milestone for the region. Julia a bridge to the west. Cristina so those lng terminals that are being built in parts of the baltic are basically countering the historic lng and Gas Pipelines that go through from russia to the region. Julia up next, the venture capitalist Justin Caldbeck tries for a comeback after his harassment scandal. And how Business Schools are tailoring programs based on a new type of job market. This is Bloomberg Businessweek. Julia welcome back to Bloomberg Businessweek. I am julia chatterley. You can listen to us on the radio on sirius xm channel 119, and also on a. M. In new york, 11 30 106. 1 in boston, 99. 1 in washington, d. C. , and am 960 in the bay area, and in london on dab mux 3, and in asia on the Bloomberg Radio plus app. In the technology section, venture capitalist Justin Caldbeck resigned in disgrace from Binary Capital after six women accused him of making unwanted sexual advances. Now, he is working to end the socalled bro code in silicon valley. Here is our reporter ellen hewitt. Ellen Justin Caldbeck is a venture capitalist who used to run Binary Capital, and he resigned in june after a story came out in the information that said he had six women, three of them named, who came forward and said that he had made unwanted sexual advances toward them while they were pursuing business relationships with him. This was any combination of making suggestive latenight texts. In one case, he groped the leg of a Woman Entrepreneur under the table at a business meeting. Things that really i think most people would agree crossed the line. This was all in business settings. They did not tend to work with him, but they tended to be entrepreneurs who were looking for funding or had already received funding from Binary Capital. So when the story came out, it was a huge deal, and he resigned i think a few days later. Julia he admitted it, too, didnt he . He said, look, actually not all of the women that he has hurt in the past have actually come forward, and as you have pointed out, these people may not have worked for him, but they were in positions where they needed something from him and he abused that. He has been open about that fact. Allen we met with him a couple weeks ago at and he really talked about how in the months since he has been time at home, he has not worked very much, and he has been doing a lot of reflecting and he said that his main takeaway was that he was really not aware, and many people agree that this is not an excuse but he says he was not aware of the position of authority and power that he had over these women, who were in many cases looking to him to maybe invest in their companies. That is a huge lifeline for them, their company is looking for money and this man might have the power to give it to them, and he makes a sexual advance that puts them in an uncomfortable situation. He says that he is more aware now and was less aware before, but it is definitely a gray area where it is not an employee, but definitely a place where there is power and money and authority exchange. Julia now he has become so aware of the situation, it seems that he is making a comeback. He wants to educate men about what he calls the bro culture. Just explain what he is doing. There is a big presentation as well about how people should react and behave. Ellen in his thinking, he has now realized, at least he told us, that he thinks the beginning of his behavior that he had in the workplace came from his time in college. He went to duke university, was a basketball player. He says he was taught there that dating a lot of women is a good thing. No one ever told him that if you take that same behavior to the workplace, that could be seen as sexual harassment. He thinks the way he could do the most good for women in the workplace is to educate young men around collegeage as a kind of cautionary tale, like dont do what i did. Be sure to stay really careful, stay very carefully on this side of the line when you are interacting with women in the workplace. A lot of people think that he is not qualified to be giving advice to college students, but he really thinks this is the best way that he can do it. He has prepared a 51 slide powerpoint presentation. He gave the first iteration of it to a finance class at duke last week. He has been preparing a website that is not live yet, but yes, the goal is to, in his words, eradicate bro culture. Julia bloomberg is out with its annual rankings of Business Schools. Our editor about the results. Harvard for a few years in a row has been our number one. You know, it is the oldest Business School program for a masters of business administration. I believe they created that school and program in 1908. Historically, very important name in the world of Business Schools, so i think there is a lot of appeal. As we know, that can carry a lot of weight. Julia reputation. Dimitra the reputation, certainly then. When you are polling students and alums saying, what did they Harvard Business degree do for you, i imagine those rankings are coming in pretty high, and that is what we see over the last couple of years. Consistently in each of the categories, whether we are talking to the employers, the ,tudents, the alarms alums looking at whether it salaries and other factors, it is coming out ahead on all of these. You know, there are small differentials for the rest of the top 10, but there is a solid i think it is a roughly 10 point lead, if not just under that, between number one and number two, university of pennsylvania wharton. So it just has all of that combined in the right place. And it is maintaining that, is what it is doing. Julia talk about number two, penn wharton. They are a full spot riser. Dimitra they got high marks from students. Julia job placement also important in this case. Dimitra indeed, you see this in all kinds of schools, but more and more, job placement is hugely important. The economy is stronger now, but consistently, you are going to these schools to get a degree to come out with an awesome job and a great salary to start that is only going to grow from there. Julia and a lot of debt. Julia you do come out with debt is certainly a factor in maybe holding some people back. One trend that we cover in our story this is not specifica lly part of the ranking you are seeing some dips in applications over the last few years. The economy is contributing to that. Debt loads are somewhat contributing to that because employers that sometimes finance employees who go back for higher degrees are somewhat less willing to contribute to that. Julia Bloomberg Businessweek is available on newsstands now , also online at businessweek. Com and on our mobile app. That is all for this week. Thank you so much for watching. We will see you next time. 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