Latest / Bloomberg Intelligence / Florida Nuclear Plants Say They're Not at Risk From Irma

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

• 0:05
  Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm pim Fox.
• 0:08
  Speaker 1: Along with my co host Lisa Abramowitz. Each day we
• 0:11
  Speaker 1: bring you the most important, noteworthy, and useful interviews for
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  Speaker 1: you and your money, whether you're at the grocery store
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  Speaker 1: or the trading floor. Find the Bloomberg P M L
• 0:20
  Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot com. Let
• 0:32
  Speaker 1: us turn our attentions to really damage that the hurricane
• 0:36
  Speaker 1: could cause. Brian Sullivan covers energy and commodities for Bloomberg
• 0:41
  Speaker 1: and all things weather related. Jack Caskey, Chemical Companies reporter
• 0:46
  Speaker 1: for US based in Houston. Let's start with with you. Brian.
• 0:50
  Speaker 1: I'm watching a minute by minute the latest forecasts for
• 0:54
  Speaker 1: the hurricane, and much will depend on exactly when it
• 0:59
  Speaker 1: turns north. The low pressure over the Mississippi Valley may
• 1:04
  Speaker 1: will pull it north, but the current forecast track is
• 1:08
  Speaker 1: about as bad a scenario as you could come up with. Yeah,
• 1:12
  Speaker 1: one analyst this morning told me it was the nightmare
• 1:15
  Speaker 1: scenario for insurance companies. UM. So, the current thinking is
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  Speaker 1: it's going to go straight up the Florida Peninsula, whether
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  Speaker 1: it goes up a little to the west or a
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  Speaker 1: little to the East. I think at this point doesn't
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  Speaker 1: matter just simply because um Irma is getting large. I mean,
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  Speaker 1: it underwent what they call it eyewall replacement UM this
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  Speaker 1: morning and that actually makes the physical size of the
• 1:36
  Speaker 1: storm get larger than the physical windfield of the most
• 1:39
  Speaker 1: damaging winds get larger. And this is this is where
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  Speaker 1: the damage is going to happen UM, and it's going
• 1:45
  Speaker 1: to be different from Harvey. With Harvey, you had a
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  Speaker 1: lot of flooding, which insurance companies aren't necessarily on the
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  Speaker 1: hook for. But with um IRMA, you may see every
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  Speaker 1: county in Florida having some kind of damage and these
• 1:58
  Speaker 1: are gonna this is gonna be roof damage and trees
• 2:00
  Speaker 1: through windows and houses and on cars, and UM the
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  Speaker 1: insurance companies around the hook for this. So this UM
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  Speaker 1: you're talking about a price tag maybe in a hundred
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  Speaker 1: and thirty billion dollar range, and then with secondary economic
• 2:13
  Speaker 1: impact spreading that out to about two and of course
• 2:15
  Speaker 1: that's the worst case scenario. The latest forecast also suggesting
• 2:20
  Speaker 1: that the eyewall replacement cycle nearly complete, which means it
• 2:23
  Speaker 1: could go back up to a five uh as as
• 2:26
  Speaker 1: its strengthens. Jack Caskey, one of the stories that caught
• 2:29
  Speaker 1: everybody's attention obviously was uh the chemical plants in Houston
• 2:33
  Speaker 1: and the toxic stew that went into the floodwaters, and
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  Speaker 1: of course the one plant that had the chemicals explode.
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  Speaker 1: And the bad news from you is that this could
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  Speaker 1: it could be worse in Florida. UM. Well, I mean
• 2:48
  Speaker 1: there's potentially, Yeah, there's Um there's not the heavy uh
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  Speaker 1: petrochemical industry in Florida that there isn't in Texas and Louisiana.
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  Speaker 1: But there is a nuclear plant that's from the seventh
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  Speaker 1: early seven and the use that's right in the path
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  Speaker 1: um at the tip of Florida. Um. Uh. Now there
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  Speaker 1: the plant is, you know, twenty ft above sea level.
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  Speaker 1: They tell me, so storms it should be stayed safe
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  Speaker 1: from storm surge. Um. There's facilities. Um, there's a large
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  Speaker 1: fast state mining facilities with slightly radioactive waste piles that
• 3:24
  Speaker 1: need to be protected from wind and and water uh
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  Speaker 1: owned by the company mosaic Um that that polluted water
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  Speaker 1: and killed marine mammals in the past. Um. And there's
• 3:37
  Speaker 1: you know, there's a whole in every state has got
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  Speaker 1: its uh chemical uh distribution Uh facilities that need to
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  Speaker 1: be protected from storm search. I mean one of the
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  Speaker 1: lessons from UH UH from a party was that uh
• 3:53
  Speaker 1: some chemical operators just didn't expect the amount of water
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  Speaker 1: that they were deluged with. So the case of Crosby
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  Speaker 1: text is the company Arkhama out of France UH had
• 4:03
  Speaker 1: its generators fail, causing UM a fire of of the
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  Speaker 1: organic peroxides that were stored there. Um. There was no
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  Speaker 1: serious injuries, although actually the first responders are now suing
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  Speaker 1: the company over their exposure to the smoke at the fire.
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  Speaker 1: Let me, um, let let me ask you something here, UM,
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  Speaker 1: nuclear plants shut down as the storm approaches. We're going
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  Speaker 1: to have, according to all the meteorologists, storm search, big
• 4:31
  Speaker 1: storm search from this hurricane. And that's what happened hurts
• 4:35
  Speaker 1: the nuclear plants in Japan after the earthquake. So how
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  Speaker 1: much danger is there from that? They say, it's not
• 4:41
  Speaker 1: a fair comparison that they that the that Fukushima. Um,
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  Speaker 1: you know that meltdown was caused by a tsunami which
• 4:52
  Speaker 1: hit the plant rather quickly. They have a lot more
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  Speaker 1: warning here to shut down this plant. Um, they've learned
• 4:57
  Speaker 1: from Fukushima. They have more flooding anti flooding mechanisms in place.
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  Speaker 1: They've got backup systems upon backup systems to keep The
• 5:05
  Speaker 1: issue is keeping the cooling waters around the nuclear rods
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  Speaker 1: UH from from getting too hot and molding down. They
• 5:13
  Speaker 1: say that's not going to happen. That plant is elevated
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  Speaker 1: well above sea level, so you know we'll see the
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  Speaker 1: Like I said, the lesson from from UH the Arkhama
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  Speaker 1: plant explosion is that they just didn't expect that much
• 5:26
  Speaker 1: water and that's why the plant burned up. Brian Sullivan,
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  Speaker 1: I got thirty seconds left. What's the best damage estimate
• 5:34
  Speaker 1: you're hearing right now from the companies you talked to
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  Speaker 1: in the thirty five billion dollar range um, and that
• 5:44
  Speaker 1: isn't counting what happened in the Caribbean. There's already some
• 5:47
  Speaker 1: early estimates coming out of the Caribbean that you have
• 5:49
  Speaker 1: five billion dollars damage there, and that's certainly going to
• 5:52
  Speaker 1: go up, all right. Brian Sullivan coming to us from
• 5:56
  Speaker 1: our Boston bureau. He is the weather guy for US
• 5:59
  Speaker 1: and covers energy and commodities. Jack Caskey in Houston Chemical
• 6:03
  Speaker 1: Companies reporter, Obviously, this is UH a potentially catastrophic storm.
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  Speaker 1: We don't have a lot of good information about uh,
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  Speaker 1: exactly what's gonna happen. But we have some guesses and
• 6:16
  Speaker 1: they are not good. So stay tuned to Bluemberg RADI
• 6:19
  Speaker 1: all weekend. We'll keep you on top of the latest
• 6:22
  Speaker 1: from Hurricane Ran. Here's an idea. Uh. You want to
• 6:38
  Speaker 1: get a car, but you don't want to have a car.
• 6:41
  Speaker 1: You just want to use it when you want it, Uh,
• 6:44
  Speaker 1: for as long as you want, but and drive the
• 6:46
  Speaker 1: car you want. Uh. Scott Painter is the former CEO
• 6:51
  Speaker 1: and founder of True Car. He's got a new startup
• 6:55
  Speaker 1: car as a service. Uh. It's called Fair. Uh tell
• 6:59
  Speaker 1: us about how this works. I mean, I'm a guy
• 7:02
  Speaker 1: who lives in New York City. I don't own a car,
• 7:04
  Speaker 1: but I go skiing in the winter, or I go
• 7:07
  Speaker 1: out to the beach in the summer, and so maybe
• 7:09
  Speaker 1: for a while I want a car. Well. Fair is
• 7:12
  Speaker 1: a pretty simple concept. It really is an app that
• 7:16
  Speaker 1: represents a totally new way to get a car. So
• 7:18
  Speaker 1: you simply download the app, scan your driver's license, it
• 7:22
  Speaker 1: shows you all the cars you can afford, and then
• 7:27
  Speaker 1: and it gives you a single all in, low cost
• 7:30
  Speaker 1: of ownership that's designed to be sort of an iTunes
• 7:33
  Speaker 1: account for your car. But this isn't like renting, though
• 7:37
  Speaker 1: you know, it's all the benefits of renting. So one
• 7:39
  Speaker 1: of the great parts about renting a car is that
• 7:41
  Speaker 1: you can turn it in and be done with it
• 7:42
  Speaker 1: anytime you want. The problem is it's quite expensive. So
• 7:45
  Speaker 1: this is about half the cost of a rental, which
• 7:47
  Speaker 1: is important. But at the savings of a lease. We
• 7:51
  Speaker 1: are actually the owner of the car and we actually
• 7:53
  Speaker 1: leased the vehicle to you, all simultaneously inside the app.
• 7:56
  Speaker 1: But more importantly, you're not picking a car all of
• 8:00
  Speaker 1: a rental lot. You're picking the car you want that's
• 8:03
  Speaker 1: for sale at any dealer. What's the minimum and maximum
• 8:08
  Speaker 1: times for your what do you call? You? Don do
• 8:11
  Speaker 1: you call it at least what? It's effectively a used
• 8:14
  Speaker 1: vehicle lease, but we're not calling it at lease. Um. Actually,
• 8:18
  Speaker 1: the fair contract has no term in it, which is
• 8:21
  Speaker 1: really one of the things we found that young buyers, millennials,
• 8:24
  Speaker 1: the modern sort of car buyer really doesn't want a
• 8:27
  Speaker 1: long contract or a long commitment. A car represents a
• 8:30
  Speaker 1: big commitment. So the fair contract gives you the ability
• 8:33
  Speaker 1: to walk away or turn in the car at any
• 8:36
  Speaker 1: time without penalty. You can keep it for six days,
• 8:38
  Speaker 1: six months, six years. Where do you get the cars?
• 8:42
  Speaker 1: So you pick the car using the app, But those
• 8:45
  Speaker 1: cars are at at local dealers all around you, and
• 8:49
  Speaker 1: those are the cars that are traditionally for sales. Fair
• 8:51
  Speaker 1: is simply a different way to get that car. So
• 8:54
  Speaker 1: you look at their inventory and you can say I
• 8:57
  Speaker 1: want a Ford X whatever. Um, you go to a
• 9:01
  Speaker 1: local Ford dealer and what they have an inventory is
• 9:04
  Speaker 1: what you can get that's correct. And instead of the
• 9:07
  Speaker 1: prices of the car being what you're shopping on, you're
• 9:09
  Speaker 1: looking at monthly payments. So everything in the inventory that
• 9:12
  Speaker 1: you see is giving to you with a monthly payment
• 9:16
  Speaker 1: that includes maintenance, warranty and roadside assistance standard. That that
• 9:22
  Speaker 1: brings up the question. You said you could get it
• 9:23
  Speaker 1: as long as six days. You know six days? Do
• 9:27
  Speaker 1: you pro rent the monthly payment debt? We don't, So
• 9:31
  Speaker 1: it is a month to month pay as you go.
• 9:33
  Speaker 1: So if I have it for six days, I'm still
• 9:34
  Speaker 1: gonna pay for a month. You are, Okay, that sounds
• 9:37
  Speaker 1: sound too bad though, Um, and uh, who you I
• 9:41
  Speaker 1: assume with this you've got to carry your own insurance
• 9:44
  Speaker 1: for the car in order to drive a car on
• 9:46
  Speaker 1: the road, you do need to have insurance, but Fair
• 9:48
  Speaker 1: also offers a month to month insurance for collision and liability,
• 9:51
  Speaker 1: and you can also buy excess wear and tear insurance
• 9:54
  Speaker 1: if you feel you need it. Um, and what do
• 9:57
  Speaker 1: you do with cars when you When I give it
• 9:58
  Speaker 1: back to you, those cars go back to the dealership.
• 10:01
  Speaker 1: So the lifeblood of the modern car dealership is a
• 10:04
  Speaker 1: late model used car. So that car coming back into
• 10:07
  Speaker 1: their inventory and being sold to another customer is really
• 10:09
  Speaker 1: the goal. Now I've been reading that, Um, there is
• 10:14
  Speaker 1: a glut of late model used cars coming out of
• 10:17
  Speaker 1: the markets these days, but we've been at peak production
• 10:21
  Speaker 1: in terms of manufacturing. We're approaching eighteen million cars being
• 10:24
  Speaker 1: produced in this country, which creates an over supply of
• 10:27
  Speaker 1: used cars to three years down the road. And we've
• 10:30
  Speaker 1: been at peak production for a couple of years now.
• 10:32
  Speaker 1: So you've got five or six million late model used
• 10:36
  Speaker 1: cars that are one, two and three years old coming
• 10:38
  Speaker 1: back to the market in the next year to eighteen months.
• 10:41
  Speaker 1: That represents a huge opportunity for the consumer to not
• 10:44
  Speaker 1: only save money, but get a great value in a
• 10:46
  Speaker 1: great vehicle. So you're are you are you selling renting
• 10:50
  Speaker 1: to me UH used cars or new cars. These are
• 10:53
  Speaker 1: pre owned cars. And all of the vehicles that you're
• 10:56
  Speaker 1: going to see on fair represent a vehicle that has
• 10:59
  Speaker 1: gone through our inspection process, that has a warranty, roadside
• 11:02
  Speaker 1: assistance and standard maintenance, so you can actually get the
• 11:05
  Speaker 1: car with peace of mind. So these are going to
• 11:07
  Speaker 1: be UH. This is gonna be useful for the dealer
• 11:10
  Speaker 1: who can make some money off a vehicle rather than
• 11:13
  Speaker 1: have it just sitting inventory. That's correct for the dealer.
• 11:16
  Speaker 1: This is a transaction. They're selling the car, you're buying it,
• 11:19
  Speaker 1: so they don't care who's buying right fair Fair operates
• 11:23
  Speaker 1: under all the necessary licenses and depending on the jurisdiction,
• 11:26
  Speaker 1: we are a dealer and we actually buy the car,
• 11:29
  Speaker 1: put it on our balance sheet, and simultaneously give you
• 11:32
  Speaker 1: a contract to use that vehicle. What's the difference between
• 11:34
  Speaker 1: you and and Tesla in in your sales model? In
• 11:38
  Speaker 1: that UH dealers have gone to court saying if you
• 11:41
  Speaker 1: don't have a lot and you don't have cars on
• 11:43
  Speaker 1: that lot, you're not a dealer and you can't be
• 11:45
  Speaker 1: selling this stuff. We're not actually selling the car, We're
• 11:48
  Speaker 1: just giving you access to the vehicle to use it
• 11:50
  Speaker 1: as you want, when you want, but we take all
• 11:52
  Speaker 1: of the risk around depreciation and managing and owning that vehicle.
• 11:55
  Speaker 1: So it's our capital that's being used to buy the car.
• 11:59
  Speaker 1: You're not borrowing money when you get a car from Fair,
• 12:02
  Speaker 1: You're paying for access to that vehicle. And so this
• 12:04
  Speaker 1: notion that the car is becoming a service is really
• 12:07
  Speaker 1: a subscription. That you have the car you want at
• 12:10
  Speaker 1: any dealership as long as you want it, when you
• 12:12
  Speaker 1: want it, and then you can leave it and be
• 12:15
  Speaker 1: done with it. So I don't take title to it.
• 12:17
  Speaker 1: You don't. Uh. If I have an app and I
• 12:21
  Speaker 1: decide I want to get a ferrari Um, how do
• 12:25
  Speaker 1: you know I am? I am credit worthy for a
• 12:29
  Speaker 1: car like that? How do you how do you know
• 12:32
  Speaker 1: whether you can trust somebody to make their payments? The
• 12:36
  Speaker 1: goal of the app is to really understand what you
• 12:38
  Speaker 1: can afford. The average American today spends about four of
• 12:42
  Speaker 1: their gross income on mobility, which breaks down to the car, insurance, maintenance, repair, fuel,
• 12:48
  Speaker 1: and in many cases accessories. We're actually beginning there, and
• 12:51
  Speaker 1: the first thing that the app does by scanning your
• 12:54
  Speaker 1: driver's license, we're looking for your income and your disposable income,
• 12:57
  Speaker 1: so we can understand what you can genuinely afford. But
• 13:00
  Speaker 1: the two things we need the driver's license and a
• 13:03
  Speaker 1: form of digital payment, and in most cases that's the
• 13:06
  Speaker 1: bank account or a credit card. So, uh, do you
• 13:09
  Speaker 1: care about whether my credit is good? I mean, do
• 13:12
  Speaker 1: you run a credit check on me through say an Equifax?
• 13:16
  Speaker 1: Maybe you don't want to do that, right right, Well,
• 13:19
  Speaker 1: we do do a soft credit bull but it does
• 13:21
  Speaker 1: not affect your credit, and we're not underwriting you in
• 13:24
  Speaker 1: the same way that a bank would have for a
• 13:25
  Speaker 1: car loan. So you can have actually bad credit. You can,
• 13:29
  Speaker 1: in fit many cases, have no credit. What we're we're
• 13:32
  Speaker 1: looking really looking for is ability to pay. However, if
• 13:35
  Speaker 1: for whatever reason, you go through a change in work
• 13:37
  Speaker 1: where you don't have a consistent source of income, you
• 13:40
  Speaker 1: simply return the car. Where does this? Uh? When do
• 13:44
  Speaker 1: we see this? When? When can I start downloading the
• 13:46
  Speaker 1: app and getting the car? So the app is live
• 13:48
  Speaker 1: today in the app Store if you go to fair
• 13:50
  Speaker 1: and type in either auto or financial financial. So Fair
• 13:56
  Speaker 1: is an app that you can download today. But it
• 13:58
  Speaker 1: is currently live and working in southern California. We've got
• 14:01
  Speaker 1: seventy three franchise dealers over a thousand cars in inventory
• 14:04
  Speaker 1: because nobody drives in southern California. It's the car capital. Well,
• 14:08
  Speaker 1: I mean yeah, but I'm kidding. But people they're like
• 14:11
  Speaker 1: to have cars. What about in a place when does
• 14:14
  Speaker 1: it come to New York City or Boston, places where
• 14:17
  Speaker 1: people don't necessarily want a to wear house a car,
• 14:20
  Speaker 1: but you know, want cars on a regular basis. Sure,
• 14:22
  Speaker 1: So it's going to be throughout the state of California
• 14:25
  Speaker 1: before the end of the year, and we'll roll out
• 14:26
  Speaker 1: nationally in about a dozen cities in two thousand and eighteen.
• 14:30
  Speaker 1: But from an ownership point of view, the benefits of
• 14:32
  Speaker 1: ownership are really focused on security. Well, we'll talk about that,
• 14:38
  Speaker 1: but fair is the is the app. Thank you very
• 14:40
  Speaker 1: much for joining us. We're time, unfortunately, but it sounds
• 14:43
  Speaker 1: like a great idea Scott paid fair Well. News out
• 14:59
  Speaker 1: of Dada today Canadian marijuana producers shares are rising. Reports
• 15:04
  Speaker 1: Ontario is going to open government controlled storefronts for legalized
• 15:07
  Speaker 1: recreational sales. Uh. That should make it a lot easier
• 15:13
  Speaker 1: for people once Canada legalizes marijuana next year to purchase
• 15:18
  Speaker 1: the product. Because the Canadian government probably recognizing it needs
• 15:23
  Speaker 1: a way to safely handle the financial transactions. Created may
• 15:30
  Speaker 1: make it easier for people in Canada to um use
• 15:33
  Speaker 1: banks and the banking system to pay for their pot.
• 15:36
  Speaker 1: That is not the case in the United States, especially
• 15:40
  Speaker 1: in the states where we have seen legalization, like in Colorado,
• 15:44
  Speaker 1: banks don't really want to deal with people who do business,
• 15:49
  Speaker 1: even though those businesses can take in an awful lot
• 15:52
  Speaker 1: of cash. Banks worry about money laundering bills, UH, legislation rather,
• 15:58
  Speaker 1: and they also it sounds silly, but it's true. UM,
• 16:02
  Speaker 1: they don't want a lot of cash coming into the
• 16:05
  Speaker 1: bank that smells like marijuana. Company that has been founded
• 16:10
  Speaker 1: to try to deal with that is called Token and
• 16:13
  Speaker 1: the CEO and founder is Lea means Aarad and he
• 16:16
  Speaker 1: joins us now from Denver. Uh. Basically, what you're doing
• 16:21
  Speaker 1: is using the concept of a cryptocurrency to become the
• 16:26
  Speaker 1: middleman between the cash and the pot shop. Correct. Well,
• 16:32
  Speaker 1: thanks for having me, Mike. UM. To clarify, we use
• 16:35
  Speaker 1: the blockchain that's divorced from its cryptocurrency. The blockchain the
• 16:40
  Speaker 1: way we employ it is a secondary redundancy ledger for us,
• 16:44
  Speaker 1: and it ensures indelibility of all data in our system
• 16:47
  Speaker 1: and as a consequence, makes far financial institution partners and
• 16:50
  Speaker 1: by extension, the regulators feel comfortable with extending services to
• 16:54
  Speaker 1: the industry. How does it work? Yeah? Absolutely. Before I
• 16:58
  Speaker 1: tell you how it works, uh, I think it's important
• 17:00
  Speaker 1: for me to explain the context and UH in kind
• 17:02
  Speaker 1: of my own personal background in the genesis of Token,
• 17:05
  Speaker 1: I'm an immigrant came to the United States from former
• 17:08
  Speaker 1: USS are and where my family spent uh potentially approximately
• 17:12
  Speaker 1: six years as refugees, which impacted my view on banking
• 17:15
  Speaker 1: and unbanked. So that's very personal to me. Expending services
• 17:18
  Speaker 1: to what to those who who deserve it? Uh. I
• 17:21
  Speaker 1: later spend time in the military and intelligence community in
• 17:23
  Speaker 1: the United States, and then Wall Street will Mary Will
• 17:26
  Speaker 1: Mary Lynch, and later with US Treasuries off to the
• 17:28
  Speaker 1: control occurrency as a bank regulator. So I I you know,
• 17:32
  Speaker 1: Token is an amalgam of all those experiences, and what
• 17:35
  Speaker 1: Token is essentially is as an intelligence platform. It creates
• 17:39
  Speaker 1: accountability transparency. Uh. The way it works, consumers download the
• 17:43
  Speaker 1: application to create an account. Under a second we identify
• 17:46
  Speaker 1: who they are, so if it's John Smith, we know
• 17:48
  Speaker 1: that it's John Smith before they tie a payment. Source
• 17:50
  Speaker 1: to that application, the mobile app, but the experience is
• 17:53
  Speaker 1: somewhats your Apple Pay for instance, they're walking a participating retailer,
• 17:57
  Speaker 1: press pay and walk away with the product. It's as simple.
• 18:00
  Speaker 1: On the other hand, retailers have access to their portal
• 18:04
  Speaker 1: that looks just like an online banking portal. They can
• 18:06
  Speaker 1: see a transaction as it happens. They can also move
• 18:09
  Speaker 1: the funds now they can move the funds token to
• 18:11
  Speaker 1: token thinks PayPal, or they can move the funds using
• 18:14
  Speaker 1: a cate or traditional payments rails that sort of provided
• 18:17
  Speaker 1: to them through our partner institutions. So that solves both
• 18:21
  Speaker 1: the banking problem and the payments problem on both ends.
• 18:24
  Speaker 1: And then of course there are regulators and law enforcement
• 18:27
  Speaker 1: UH and UH and as you mentioned, in the United States,
• 18:29
  Speaker 1: we have a very interesting, if not convoluted system where
• 18:33
  Speaker 1: cannabis is illegal federally and legal and certain jurisdictions. So
• 18:37
  Speaker 1: as a consequence of federal government took a unique stance
• 18:40
  Speaker 1: that took an agnostic stance through issuing several guidances. There
• 18:44
  Speaker 1: are three memorandums from Department of Justice. There's a guidance
• 18:48
  Speaker 1: from a Financial Crimes Enforcement network part of yours Treasury
• 18:51
  Speaker 1: and and essentially there's a legal framework called the Bank
• 18:54
  Speaker 1: Secrecy Act and the federal governments. If you took a
• 18:57
  Speaker 1: position by stating that we are agnostic as long as
• 19:00
  Speaker 1: you follow the rules and comply with these items and
• 19:02
  Speaker 1: these regulatory guidance, UH, there was there was issue. And
• 19:06
  Speaker 1: what what happens that it creates uh an incredible burden
• 19:09
  Speaker 1: on small financial institutions. They're willing to provide services to
• 19:12
  Speaker 1: cannabis industry, and that's what we help them with. We
• 19:15
  Speaker 1: help them with creating transparency, tracking every transaction and and
• 19:20
  Speaker 1: ensuring that everything that happens in that system is indelible.
• 19:23
  Speaker 1: And that's where blockchain FETs and blockchain is the first
• 19:26
  Speaker 1: ledger UH known to UH humanity so to speak. But
• 19:29
  Speaker 1: it's cryptographically and mathematically indelible. What's your kind of this?
• 19:33
  Speaker 1: How do you make money? Right now? It's very simple.
• 19:36
  Speaker 1: We charge per transaction fees to merchants the same way
• 19:39
  Speaker 1: UH say First Data would or Navisa master cards. And
• 19:44
  Speaker 1: how has it been accepted so far? What's what's your
• 19:47
  Speaker 1: growth rate? Yeah? So we we had a control pilot
• 19:51
  Speaker 1: in Denver and it was done on purpose with with
• 19:54
  Speaker 1: cannabis and non cannabis relationships, to to establish a control
• 19:57
  Speaker 1: group and to really observe behaviors and the industry. Uh.
• 20:01
  Speaker 1: In that pilot, Uh, surprisingly, our wallet had incredible adoption.
• 20:05
  Speaker 1: Thirty five percent of old transactions at each locations were
• 20:09
  Speaker 1: converted without any marketing. That's uh, that's some precedented because
• 20:13
  Speaker 1: Apple failed and Google failed with their wallets. But I
• 20:16
  Speaker 1: think it's demonstrative to the need in the industry and
• 20:20
  Speaker 1: to the fact that consumers don't want to pay in cash. Uh.
• 20:22
  Speaker 1: There's some really interesting statistics. For instance, over over six
• 20:26
  Speaker 1: of our users in our system made three or more purchases,
• 20:29
  Speaker 1: So it's sticky and pun intended here and uh, and
• 20:33
  Speaker 1: we've increased average ticket sized by eighteen percent. I mean,
• 20:36
  Speaker 1: it's it's incredible value add to a business. What do
• 20:39
  Speaker 1: you think the growth possibilities for you are? You know,
• 20:43
  Speaker 1: you've got states that are doing medical marijuana, but the
• 20:47
  Speaker 1: states have just totally legalized it. Uh, there aren't that many,
• 20:51
  Speaker 1: Um do you have? Do you do you need to
• 20:54
  Speaker 1: grow or can you maintain a successful business with just
• 20:58
  Speaker 1: a smaller operation that focuses on those states. Now, we
• 21:04
  Speaker 1: absolutely not only want to grow, but need to grow.
• 21:07
  Speaker 1: And the reason is the bigger our ecosystem. More visibility
• 21:10
  Speaker 1: we have into the familio of the transaction world. Right,
• 21:14
  Speaker 1: so we know, for instance, if you engage in what's
• 21:17
  Speaker 1: called dispensary hopping. If you're a consumer and you want
• 21:19
  Speaker 1: to make a purchase and multiple dispensaries that an exceeding
• 21:23
  Speaker 1: your daily amounts, that's a lot of to you. By
• 21:25
  Speaker 1: stay called out a law. For us to have that visibility,
• 21:28
  Speaker 1: we need to have a multiple dispensaries, a multiple retail locations.
• 21:32
  Speaker 1: We also need to have access to the entire vertical
• 21:34
  Speaker 1: to streamline and experience. So if you are a retail
• 21:37
  Speaker 1: facility and you want to purchase from a cultivator or
• 21:40
  Speaker 1: a manufacturer, if there are on a system, then onboarded.
• 21:43
  Speaker 1: Not only do they have access to banking at this point,
• 21:45
  Speaker 1: but they're also you can also transact and incredibly low
• 21:48
  Speaker 1: rates in our system token to token so to speak.
• 21:51
  Speaker 1: So yes, we are growing. We're going to be growing nationally,
• 21:56
  Speaker 1: so you know, keep an eye on it out. That
• 21:58
  Speaker 1: means thank you very much to see you know of
• 22:00
  Speaker 1: token an interesting new business, uh combining the marijuana industry
• 22:05
  Speaker 1: and technology. Well, a big story in financial world that
• 22:23
  Speaker 1: is getting a lot of attention, even with the hurricane coming.
• 22:26
  Speaker 1: Is this security breach at Equifax? A lot of people
• 22:30
  Speaker 1: wondering how the heck this could have happened. Am and
• 22:34
  Speaker 1: Barlav is the president of Checkpoints Software. He's based in
• 22:37
  Speaker 1: Tel Aviv. Michael Riley is Bloomberg News cybersecurity reporter in Washington,
• 22:42
  Speaker 1: d C. They're joining us now and uh, Michael, Uh,
• 22:47
  Speaker 1: is there anything new that we that hasn't been reported yet?
• 22:52
  Speaker 1: And I asked that question sort of not and it's
• 22:55
  Speaker 1: not really tongue in cheek, But they sat on this
• 22:58
  Speaker 1: information as many companies do for a while, and there's
• 23:01
  Speaker 1: this story about the executive selling stock in between and everything.
• 23:04
  Speaker 1: But um, do we know everything we need to know
• 23:06
  Speaker 1: about this at this point? Uh? No. In fact, this
• 23:09
  Speaker 1: is going to be the start of a very long process.
• 23:11
  Speaker 1: If you take other examples like this, say Target, for example,
• 23:14
  Speaker 1: where consumers got really angry because of a set of
• 23:19
  Speaker 1: of uh circumstances. In this case, you have a consumer
• 23:22
  Speaker 1: credit agency, which consumers don't tend to like to begin with,
• 23:25
  Speaker 1: because they're the ones who tell them whether or not
• 23:27
  Speaker 1: their credit it's good, and whether or not to get
• 23:29
  Speaker 1: a credit card or mortgage and then you add to
• 23:32
  Speaker 1: that what looks like a loss of massive amounts of
• 23:35
  Speaker 1: of consumer data for a company that's supposed to know
• 23:38
  Speaker 1: how to protect our data. And then you add to
• 23:41
  Speaker 1: that this uh, you know, potential branding problem where three
• 23:45
  Speaker 1: executives sell sell offs shares in an unscheduled way just
• 23:50
  Speaker 1: a few days after the breach is discovered. You're gonna
• 23:54
  Speaker 1: get a lot of anger. And with a lot of
• 23:55
  Speaker 1: consumer anger usually comes soil lawsuits. Those lawsuits will demand
• 23:59
  Speaker 1: a lot more in form nation that we have now,
• 24:01
  Speaker 1: including an exact timeline. Who was informed about the breach? When,
• 24:06
  Speaker 1: what did how? They definitely defining when they discovered the breach,
• 24:10
  Speaker 1: for example, is it when they discovered malware on their systems?
• 24:14
  Speaker 1: Is it when they discovered data left the network? Or
• 24:18
  Speaker 1: is it when the US government came to them and
• 24:21
  Speaker 1: told them about the bridge, which happens a lot. We
• 24:23
  Speaker 1: don't know exactly how the discovery worked in this case
• 24:26
  Speaker 1: because we don't know a lot and how, how does this?
• 24:30
  Speaker 1: How does something like this happened? A company that their
• 24:34
  Speaker 1: whole goal should be to protect the most sensitive data
• 24:38
  Speaker 1: that they have, and yet this can happen. So I
• 24:43
  Speaker 1: was in Bloomer gradual like a week ago. And what
• 24:46
  Speaker 1: I said that there is that every system, every system
• 24:49
  Speaker 1: and the work can be hacked. I just didn't have
• 24:51
  Speaker 1: a lot of code inside, and system can be hacked,
• 24:54
  Speaker 1: you know, and a saving hacked like a year ago,
• 24:56
  Speaker 1: and other very confidential system can be happy to complex environment.
• 25:01
  Speaker 1: So that's the bad news. I think the good news
• 25:03
  Speaker 1: is that to do a couple of very basic things,
• 25:06
  Speaker 1: if you use existing technology correctly, you can prevent most
• 25:10
  Speaker 1: of the other attacks if you do it correctly. Did
• 25:14
  Speaker 1: they do it correctly in this case? So I really
• 25:18
  Speaker 1: don't know, as it's just stated before, we don't We
• 25:21
  Speaker 1: don't have all this knowledge right now. We don't know
• 25:25
  Speaker 1: the exact system that was breacher and stardents a website
• 25:29
  Speaker 1: that contain confidential data. We don't know if it was segmented,
• 25:32
  Speaker 1: We don't know if it was protected correctly or not.
• 25:35
  Speaker 1: So we don't have specific information for that systems. But
• 25:40
  Speaker 1: as you as as you know, many other systems that
• 25:43
  Speaker 1: contain private information for consumer like targets and other been
• 25:48
  Speaker 1: hacked before. What is the danger to people whose data
• 25:52
  Speaker 1: may have been taken and what at this point can
• 25:57
  Speaker 1: you do about it? So it's it's most about identity tests.
• 26:02
  Speaker 1: People actually can pretend to be you and and the
• 26:05
  Speaker 1: transaction on your behalf from credit cards and other things.
• 26:08
  Speaker 1: Think UM, and it is complex to know, and it
• 26:11
  Speaker 1: is complex to identify, but you need to be It's
• 26:15
  Speaker 1: a bit cautious to look at your bank records and
• 26:17
  Speaker 1: any other records gets to you. We tend not to
• 26:19
  Speaker 1: look at our credit card line by line, but maybe
• 26:21
  Speaker 1: it's a good time to do so, Brian, I mean bright, Michael. Uh,
• 26:27
  Speaker 1: this is obviously not going to go down well with
• 26:29
  Speaker 1: people who have been critics of the credit reporting agencies,
• 26:33
  Speaker 1: like an Elizabeth Warren on the Banking Committee and Capitol Hill.
• 26:37
  Speaker 1: What happens, Uh, what's the reaction going to be in
• 26:41
  Speaker 1: Washington to all this? Well? Almost certainly this is gonna
• 26:45
  Speaker 1: get the UM lawmakers involved more directly in this debate
• 26:51
  Speaker 1: because it raises a fundamental question about whether the system
• 26:54
  Speaker 1: as it exists now is the right one, which goes
• 26:58
  Speaker 1: to the fundamental business model of these companies. They store
• 27:02
  Speaker 1: a huge amount of consumer data, and very important consumer data.
• 27:05
  Speaker 1: They have divisions that do lots of different things, and
• 27:08
  Speaker 1: equifaxes case, for example, they have a service that that
• 27:12
  Speaker 1: stores the kind of security questions and answers that people
• 27:16
  Speaker 1: give to validate their identity to credit card companies, into
• 27:20
  Speaker 1: others online, and so they have Basically they are storehouse
• 27:25
  Speaker 1: that kind of fort knocks of all the sorts of
• 27:27
  Speaker 1: digital data that a cyber thief would want to get
• 27:29
  Speaker 1: their hands on. That means that they ought to have
• 27:32
  Speaker 1: um uh that's the strongest protections possible so that they
• 27:37
  Speaker 1: don't lose that data. Equifaxes this is not the first
• 27:39
  Speaker 1: problem they've had recently. They've they've uh this is in
• 27:42
  Speaker 1: fact the third problem they've had in the last year,
• 27:45
  Speaker 1: but by far the largest. But it does suggest that
• 27:47
  Speaker 1: as much money as they're making doing this, they're not
• 27:50
  Speaker 1: um doing enough to secure that data. And I think
• 27:54
  Speaker 1: that there will be questions about their uh particular UH
• 28:00
  Speaker 1: appropriate their safeguards and whether they're appropriate, But there'll be
• 28:02
  Speaker 1: a set of larger questions that the lawmakers will get
• 28:05
  Speaker 1: to ask about whether the model is the right one
• 28:07
  Speaker 1: in the first place. And that's going to be a
• 28:09
  Speaker 1: major problem if UH Congress begins to think that there
• 28:13
  Speaker 1: needs to be either regulation in this sector or a
• 28:16
  Speaker 1: different model, or if companies who provide their data to
• 28:20
  Speaker 1: Aquifax and the other company, the other credit rating agencies,
• 28:23
  Speaker 1: if they decide to to to stop giving them as
• 28:27
  Speaker 1: much data or access to the broad range of data
• 28:31
  Speaker 1: that they have now, all right, thank you very much.
• 28:33
  Speaker 1: Michael Riley, cybersecurity reporter for Bloomberg News and and On
• 28:36
  Speaker 1: bar lev the president of Checkpoints Software, thanks for joining
• 28:40
  Speaker 1: us today. Thanks for listening to the Bloomberg P and
• 28:46
  Speaker 1: L podcast. You can subscribe and listen to interviews at
• 28:49
  Speaker 1: Apple Podcasts, SoundCloud, or whatever podcast platform you prefer. I'm
• 28:53
  Speaker 1: pim Fox. I'm on Twitter at pim Fox. I'm on
• 28:57
  Speaker 1: Twitter at Lisa Abramo wits one. Before the podcast, you
• 29:00
  Speaker 1: can always catch us worldwide on Bloomberg Radio