WEBVTT - Wheels Up Now Public, Trading On NYSE 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.560 --> 0:00:15.560 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.479 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.360 at Bloomberg dot com slash podcast. Let's talk private aviation 0:00:23.440 --> 0:00:26.160 only something I can aspire to um in the t 0:00:26.360 --> 0:00:28.920 s A lines like the rest of you. Um. Kenny Dickter, 0:00:29.160 --> 0:00:31.440 founder and CEO of Wheels up there, based in New 0:00:31.520 --> 0:00:34.120 York City. They went public today. Vas back. I'm looking 0:00:34.120 --> 0:00:36.680 at that stock. It's got a great ticker symbol up, 0:00:36.960 --> 0:00:39.240 up and a stock is trading up about eight point 0:00:39.280 --> 0:00:42.159 nine percent in early in trading this morning. Kenny, thanks 0:00:42.200 --> 0:00:45.720 so much for joining us. Congratulations again on your listing. 0:00:46.200 --> 0:00:50.199 Talk to us about the private aviation business. How has 0:00:50.240 --> 0:00:52.240 it changed over the years and particularly in the last 0:00:52.280 --> 0:00:56.360 eighteen months. Give us a sense of that business. Well, 0:00:56.360 --> 0:00:59.160 I would say, like our ticker symbol, it's up and uh, 0:00:59.400 --> 0:01:02.480 I would say, we're in the business of democratizing private aviation. 0:01:02.600 --> 0:01:04.959 So while I think that you're going to continue to 0:01:05.000 --> 0:01:07.880 travel commercially with you and your family. I think there 0:01:07.920 --> 0:01:11.840 will be parts, places and times where we can actually 0:01:11.880 --> 0:01:14.520 swing an airplane for a guy like you. So again, 0:01:14.520 --> 0:01:17.840 we're bringing this to more people, bigger addressable market. We're 0:01:17.920 --> 0:01:21.800 uberizing the space where Airbnb eising the space, and just 0:01:21.840 --> 0:01:24.319 making this more accessible to more people. Part of that 0:01:24.440 --> 0:01:27.480 is you talk about a strategic partnership with Delta Airlines. 0:01:27.520 --> 0:01:32.920 What can members then benefit from the Delta Airline strategic partnership. Well, 0:01:32.959 --> 0:01:35.240 the great news about the Delta partnership and we were 0:01:35.240 --> 0:01:37.680 able to do that deal off market with Ed Bastion 0:01:38.200 --> 0:01:40.080 eighteen months ago, and by the way, in that deal 0:01:40.160 --> 0:01:43.280 that contributed his private jet business and they became our 0:01:43.360 --> 0:01:46.720 largest shareholder. Um So, a couple of things about the 0:01:46.720 --> 0:01:51.120 Delta deal. One is it made Delta easily and seamlessly 0:01:51.200 --> 0:01:54.800 accessible to our client base, which, by the way, travels 0:01:54.800 --> 0:01:57.920 commercially on long haul most of our clients most of 0:01:57.920 --> 0:02:00.760 the time. So you can put a Hunter thousand dollars 0:02:00.760 --> 0:02:03.280 down on wheels up and you can use that capital 0:02:03.840 --> 0:02:08.320 to fly Delta. Conversely, Delta's first class business class and 0:02:08.400 --> 0:02:11.680 Bob Summers and their business customers over at Delta now 0:02:11.720 --> 0:02:15.280 have access to last mile. So if you're a business 0:02:15.280 --> 0:02:17.639 and you're traveling with a couple of people from l 0:02:17.720 --> 0:02:20.839 A X to JFK, you can jump on your Porsche, 0:02:20.919 --> 0:02:23.120 which again is a partnership that we just announced. It 0:02:23.160 --> 0:02:27.040 will take you wing to wing to the private terminal 0:02:27.320 --> 0:02:30.200 and will fly to your your last mile destination, whether 0:02:30.240 --> 0:02:33.359 that's Schenectady, New York, or whether that's you know, Vermont 0:02:33.639 --> 0:02:36.600 or a tough to get to place in Rhode Island. Uh. 0:02:36.600 --> 0:02:39.239 That's that's really the magic of the Delta deal. Can 0:02:39.240 --> 0:02:43.440 he tell us about the typical Wheels Up customer? Give 0:02:43.520 --> 0:02:48.280 us a profile. The profile is anybody that's worked very hard. 0:02:48.360 --> 0:02:50.200 I like to say that we appeal to the working 0:02:50.200 --> 0:02:53.280 wealthy top one to three, which by the way, could 0:02:53.280 --> 0:02:57.440 be ten, fifteen or twenty million people deep. Uh. Any 0:02:57.480 --> 0:03:01.200 business that's doing ten to twenty million dollars and a revenue, Uh, 0:03:01.240 --> 0:03:03.640 they need to It's an essential for them to have 0:03:03.639 --> 0:03:05.840 a Wheels Up membership and have access to our fleet 0:03:06.320 --> 0:03:09.359 of thousands of airplanes. And uh, you know, we did 0:03:09.360 --> 0:03:12.560 this fact merger with Robbie Tochran and Scott Dank and 0:03:12.600 --> 0:03:15.560 his crew over at El Cadaton Robbie had twenty years 0:03:15.600 --> 0:03:20.440 experience with LVMH, so luxury brand lifestyle person. But more 0:03:20.480 --> 0:03:24.760 important he was based in Asia, uh chairman of LVMH 0:03:24.880 --> 0:03:29.800 Asia Scott. You know El Cataton uh, the finest private 0:03:29.800 --> 0:03:33.600 equity firm on a global basis out there. So we 0:03:33.680 --> 0:03:36.440 picked the perfect partner in this back and then we 0:03:36.520 --> 0:03:39.240 got to with our cap table. We had t Row Fidelity, 0:03:39.680 --> 0:03:43.240 Franklin Templeton. We got to choose our equity partners here 0:03:43.480 --> 0:03:46.320 almost by appointment. We did a zoom road show in 0:03:46.840 --> 0:03:51.360 late January. We ended up seeing thirty five companies, twenty 0:03:51.400 --> 0:03:54.920 seven of them invested, including folks like Third Point, Henry 0:03:54.920 --> 0:03:58.960 ellen Bogan and his crew with durable capital, longtime supporters, 0:03:59.080 --> 0:04:02.200 and some other great equity firms that are in this 0:04:02.360 --> 0:04:04.760 for the long haul with us. What does the industry 0:04:04.880 --> 0:04:07.560 look like in a post COVID world where I might 0:04:07.600 --> 0:04:11.080 actually finally be comfortable having someone sitting next to me 0:04:11.120 --> 0:04:14.280 in that middle seat. Well, I think that that the 0:04:14.320 --> 0:04:16.719 first off, I think that the commercial airlines ED was 0:04:16.760 --> 0:04:19.960 on and at great earnings this quarter. I think that look, 0:04:20.000 --> 0:04:23.200 you're gonna see a roaring twenties trade. People humans want 0:04:23.200 --> 0:04:26.400 to travel, So I think that the good news is uh, 0:04:26.440 --> 0:04:29.200 the high tide, As Warren Buffett said, my old boss 0:04:29.520 --> 0:04:33.400 lifts all boats. I think that our industry, the hospitality industry, 0:04:33.440 --> 0:04:35.919 I can't wait till the cruise industry gets back to 0:04:36.279 --> 0:04:39.520 where it was. I think that, you know, people post COVID, 0:04:39.560 --> 0:04:42.120 I think are going to value experience more than they 0:04:42.200 --> 0:04:43.880 value what they have. So I think we're in the 0:04:43.920 --> 0:04:48.320 experience economy. I think that's it's it's a very hot space, 0:04:48.400 --> 0:04:49.719 and I think it's going to be there for a 0:04:49.760 --> 0:04:54.360 long time. Miss Traveling, Miss Traveling, and call we were 0:04:54.400 --> 0:04:56.760 just joking, we'd be willing to sell our house. I 0:04:56.880 --> 0:04:58.960 drive a Honda just for a chance to get on 0:04:59.000 --> 0:05:02.360 that private jet. Actually right, exactly, real quick, Um, can 0:05:02.440 --> 0:05:04.279 you just give a sense of the competitive landscape for 0:05:04.320 --> 0:05:07.440 you thirty seconds? Yeah, I would say, Look, the only 0:05:07.640 --> 0:05:10.440 thing standing between wheels up and greatness is wheels up. 0:05:10.520 --> 0:05:13.479 I think that we're in a very unique space. Again, 0:05:13.520 --> 0:05:16.960 we're looking to Uber Eyes and airbnbies the space where 0:05:17.000 --> 0:05:20.800 others that we compete with the traditional legacy competitors are 0:05:20.800 --> 0:05:23.960 in the ownership space, which again, you know, does Uber 0:05:23.960 --> 0:05:26.480 compete with Hurts. I'd rather be Uber and that's really 0:05:26.480 --> 0:05:29.320 where wheels up this position fascinating. All right, that's really cool. 0:05:29.520 --> 0:05:32.919 Uh analogy there, Kenny Dictor. We really appreciate you taking 0:05:32.920 --> 0:05:34.240 the time. I know you guys are having a busy 0:05:34.320 --> 0:05:37.120 day today with your listing. Kenny Dictor, founder and CEO 0:05:37.279 --> 0:05:40.280 of Wheels Up. It's a fascinating a part of the 0:05:40.400 --> 0:05:45.240 travel market that's again allah similar to an uber uh 0:05:45.400 --> 0:05:48.320 an Airbnb um. And so the question is, you know, 0:05:48.480 --> 0:05:51.680 how broad can that market be. But as Kenny was 0:05:51.720 --> 0:05:54.760 just mentioning, you know, it feels like people are just 0:05:54.880 --> 0:05:58.520 yearning for those experiences in a post pandemic world, as 0:05:58.520 --> 0:06:01.159 opposed to maybe you know, at sets they're looking more 0:06:01.320 --> 0:06:05.480 for experiences, and that would play certainly in two Wheels Up. 0:06:08.920 --> 0:06:11.240 Let's talk jobs right now. You know, we spend every 0:06:11.240 --> 0:06:13.520 Thursday talking about looking at the jobs claims and once 0:06:13.520 --> 0:06:16.679 a month talking at you know, just the unemployment in general. 0:06:16.720 --> 0:06:19.479 And what we've seen is generally a pretty solid improvement 0:06:19.800 --> 0:06:23.839 coming off those just dramatic job losses of the pandemic 0:06:23.920 --> 0:06:26.560 really hit. But what we've also seen is that women 0:06:26.760 --> 0:06:30.240 have been and continue to be disproportionately hit by the 0:06:30.320 --> 0:06:32.560 labor market and the challenges in the labor market. Let's 0:06:32.600 --> 0:06:35.840 get the latest with Neila Richardson, Chief Economists for a DP, 0:06:36.040 --> 0:06:39.440 cohead of the ADP Research Institute, and she was also 0:06:39.520 --> 0:06:41.839 a senior economist at Bloomberg. Neila, thanks so much for 0:06:41.880 --> 0:06:45.160 joining us here. Help us think about our framemat for us, 0:06:45.640 --> 0:06:48.960 what happened to women in the labor force during the 0:06:49.040 --> 0:06:53.480 pandemic and now during the recovery. Well, first of all, 0:06:53.520 --> 0:06:57.719 it's fantastic to join you on the job topics because 0:06:57.720 --> 0:07:00.720 it's so important right now. But what we've seen with 0:07:00.800 --> 0:07:05.240 women during the pandemic is this complation of work and 0:07:05.360 --> 0:07:08.960 home and that's caused many women to exit the workforce. 0:07:08.960 --> 0:07:12.440 So this has been widely reported. Going into the pandemic, 0:07:12.560 --> 0:07:16.400 women's labor market participation was at an eight year high 0:07:16.440 --> 0:07:20.960 of fifty seven upwards. Off it dropped like a like 0:07:21.040 --> 0:07:25.000 a stone to fifty four percent. Is still starting to recover. 0:07:25.080 --> 0:07:28.600 It's but it's not quite there. And that's just women 0:07:28.600 --> 0:07:31.320 getting in, getting in the door of the workplace, the 0:07:31.400 --> 0:07:33.920 virtual door as it may be. So we wanted to 0:07:33.960 --> 0:07:37.000 look at the actual experience of the women who stayed 0:07:37.040 --> 0:07:39.760 in the workforce. We wanted to look at this kind 0:07:39.800 --> 0:07:43.320 of mass excit due to health concern and layoffs, and 0:07:43.400 --> 0:07:46.400 complate that with what we know is gender pay gaps 0:07:46.480 --> 0:07:51.080 in the workplace. Previous research had told us that women 0:07:51.080 --> 0:07:56.480 made about of what men made overall across industries. We 0:07:56.520 --> 0:08:00.880 saw that that pay gap narrowed to but it's mostly 0:08:00.960 --> 0:08:04.720 because low pay women were forced to leave or dropped 0:08:04.960 --> 0:08:08.480 out of the workforce. These are not real wage games. Now, 0:08:08.640 --> 0:08:12.160 what is the prescription then to fix this? Is it 0:08:12.360 --> 0:08:17.000 having a workforce and companies and employers that indeed are 0:08:17.040 --> 0:08:21.240 more flexible with the return to office. I think that's 0:08:21.240 --> 0:08:23.400 a good start tailor. I mean, if you look at 0:08:23.680 --> 0:08:26.720 women in the workplace, this is you know, it's not 0:08:26.800 --> 0:08:29.160 like we were in a place of rainbows and puppies 0:08:29.200 --> 0:08:33.480 before the pandemic. But things have definitely accelerated in terms 0:08:33.480 --> 0:08:37.040 of challenges after the pandemic. One of those barriers has 0:08:37.080 --> 0:08:41.040 been full time, full capacity employment. And so the concern 0:08:41.200 --> 0:08:44.840 is as companies make this transition, some of them from 0:08:44.880 --> 0:08:51.079 a completely remote environment to a virtual or office environment, 0:08:51.480 --> 0:08:55.240 women will be particularly affected, even if they have a choice, 0:08:55.600 --> 0:09:00.480 because our survey evidence shows that women often feeling comfortable 0:09:00.600 --> 0:09:04.160 taking advantage of remote opportunities even if they have them, 0:09:04.480 --> 0:09:07.920 and so there's still this issue of companies being very 0:09:07.960 --> 0:09:12.760 responsive to women right now, especially considering the takeaups no. 0:09:13.000 --> 0:09:14.720 I mean, one of the big issues obviously is the 0:09:14.760 --> 0:09:19.400 women and home healthcare, and um, we're hearing a lot 0:09:19.440 --> 0:09:23.239 of good rhetoric out of companies about really being sensitive 0:09:23.480 --> 0:09:26.840 to that. Are you seeing any concrete examples that might 0:09:26.880 --> 0:09:30.680 give you hope that, in fact, corporate America is becoming 0:09:30.720 --> 0:09:33.840 more sensitive to these issues as they try to attract 0:09:33.840 --> 0:09:37.839 and retain women. You know that that is the silver 0:09:38.000 --> 0:09:42.840 lining of this whole experience about women in the workplace 0:09:42.960 --> 0:09:47.520 during a very challenging year, companies in corporate America are 0:09:47.600 --> 0:09:51.480 paying more attention to worker health in general more than 0:09:51.520 --> 0:09:55.959 ever before, but also the soft infrastructure that women need 0:09:56.040 --> 0:09:58.960 to actually get to work and be productives, whether that's 0:09:59.040 --> 0:10:04.040 childcare for safe public transportation. So you're seeing companies the 0:10:04.080 --> 0:10:07.240 one more flexible in their work from home prop uh 0:10:07.480 --> 0:10:11.760 prop uh processes, but also having an ear to the 0:10:11.880 --> 0:10:15.680 other things in work life that are meaningful in terms 0:10:15.720 --> 0:10:19.040 of production for women especially. You know, now we only 0:10:19.040 --> 0:10:21.160 have about thirty seconds left. We're not just hearing this 0:10:21.240 --> 0:10:24.040 from companies, We're hearing it from J. Powell himself saying 0:10:24.080 --> 0:10:28.080 that despite substantial improvements for racial and ethnic groups, the 0:10:28.120 --> 0:10:32.000 hardest hit groups still have the most ground left to gain. 0:10:32.400 --> 0:10:34.920 Is the Federal Reserve doing the right thing by focusing 0:10:34.960 --> 0:10:40.120 on this issue and and adjusting monetary policy appropriately. Yes, uh, 0:10:40.200 --> 0:10:43.640 this is these These issues are not new, These historical 0:10:43.679 --> 0:10:45.520 pay gaps are not new, and I think the said 0:10:45.600 --> 0:10:48.000 has been ahead of the curve and recognizing that through 0:10:48.080 --> 0:10:51.640 monetary policy they can lift all boats and those boats 0:10:51.679 --> 0:10:54.800 that are that are lagging behind the rest of the 0:10:54.840 --> 0:10:57.480 economy in terms of the recovery because they've been the 0:10:57.559 --> 0:11:00.040 hardest hit by the pandemic, that the most challenged and 0:11:00.440 --> 0:11:04.360 going into that pandemic. So that policy directed to hard 0:11:04.480 --> 0:11:07.800 hit groups makes sense if you want a full labor 0:11:07.840 --> 0:11:13.200 market recovery where you have the most participation across different demographics, 0:11:13.200 --> 0:11:15.760 including women. Nila, thank you so much for joining us. 0:11:15.800 --> 0:11:18.760 We really appreciate your thoughts and insights are very important topic. 0:11:18.920 --> 0:11:21.600 Neila Richardson, Chief Economists for ADP CO, Head of the 0:11:21.640 --> 0:11:29.240 ADP Research Institute. All right, let's talk ransomware, thank Colonial pipeline, 0:11:29.600 --> 0:11:33.760 JBS meat supplier. I mean, the list is getting longer 0:11:33.840 --> 0:11:37.320 as we speak. It's becoming a big issue. Companies and 0:11:37.440 --> 0:11:40.560 individuals have to protect themselves. UH. To figure out how 0:11:40.600 --> 0:11:43.240 we do that, let's welcome Jason Crabtree. He's co founder 0:11:43.280 --> 0:11:46.400 and CEO of Complex that's spelled with a Q, and 0:11:46.400 --> 0:11:49.120 he's also a former Special Advisor to Commanding General of 0:11:49.160 --> 0:11:51.319 the U. S. Army Cyber Command. Jason, thanks so much 0:11:51.320 --> 0:11:54.679 for joining us here. UM, give us a sense of 0:11:55.480 --> 0:11:59.840 how big and how concerned should we be about ransom 0:12:00.120 --> 0:12:02.000 and I guess just cybersecurity in general. How do you 0:12:02.000 --> 0:12:06.320 guys think about it? Sure? Well, ransomware is just frankly 0:12:06.440 --> 0:12:09.800 continuing to gain steam as we see organizations that are 0:12:09.840 --> 0:12:14.160 far too vulnerable being taken advantage of by really sophisticated 0:12:14.280 --> 0:12:18.199 and sizable transnational criminal organizations that have created a really 0:12:18.200 --> 0:12:20.920 great affiliate network model. I have an awesome business model, 0:12:21.240 --> 0:12:23.760 and they've been able to reap in tens of millions 0:12:23.760 --> 0:12:27.200 of dollars of fees this year alone by exploiting and 0:12:27.240 --> 0:12:30.880 then actually ransoming and effectively holding hostage a bunch of 0:12:30.920 --> 0:12:34.160 companies and governments all over the world. Jason, we should 0:12:34.200 --> 0:12:36.840 note that you are the real deal. As a graduate 0:12:36.880 --> 0:12:40.400 of West Point, your licensed professional engineer looking at the 0:12:40.400 --> 0:12:45.960 power grid, the broader energy system. Um, so you're the 0:12:46.040 --> 0:12:50.360 perfect person to asked sort of big picture? Am I 0:12:51.800 --> 0:12:54.480 making out to be too big of a deal by 0:12:54.480 --> 0:12:57.400 saying that ransomware and cyber security is effectively the new 0:12:57.480 --> 0:13:01.280 way in which some of these states sponsored countries are 0:13:01.280 --> 0:13:05.040 waging war on us, and and how should our companies 0:13:05.120 --> 0:13:07.800 be forced to respond given that this seems to be 0:13:07.840 --> 0:13:11.200 the new frontier. Well, I think there's a couple of 0:13:11.240 --> 0:13:14.000 aspects in this, the first of which is that criminals 0:13:14.000 --> 0:13:16.880 go where the money is right, and they've realized that 0:13:16.960 --> 0:13:20.040 it's quite efficient and effective to go ahead and either 0:13:20.160 --> 0:13:23.679 take over companies like Cassea. Right, so, a US company 0:13:23.720 --> 0:13:27.079 based in Miami, a critical software provider, compromise their customers 0:13:27.160 --> 0:13:31.000 using vulnerabilities and their software just like the Microsoft software vulnerabilities, 0:13:31.080 --> 0:13:33.439 used that to take over their networks and then hold 0:13:33.480 --> 0:13:36.480 all their customers costas. So you saw trains in Sweden, 0:13:36.600 --> 0:13:40.679 pharmacies in Sweden, the largest grocer in Sweden, co Op, 0:13:41.120 --> 0:13:44.720 not able to operate for days as a result of 0:13:44.880 --> 0:13:48.960 a Miami based software and you know vulnerability here at home. 0:13:49.080 --> 0:13:51.520 So this is this is a great way to sit 0:13:51.760 --> 0:13:54.720 you know, anywhere in the world and get paid. I 0:13:54.760 --> 0:13:57.160 think the challenge for us is a society, is our 0:13:57.679 --> 0:14:01.280 companies in our country very digitally dependent. Risk is a 0:14:01.320 --> 0:14:03.880 consequence of dependence. So we've got to do two things. 0:14:04.760 --> 0:14:07.760 We have to increase costing consequence for criminal organizations and 0:14:07.760 --> 0:14:10.120 pursue them around the world. And we also have to 0:14:10.160 --> 0:14:13.440 acknowledge that we are not defending our networks adequately and 0:14:13.440 --> 0:14:15.920 that many of these breaches, including things like GPS and 0:14:15.960 --> 0:14:19.200 colonial we're sort of predictable based on how sort of 0:14:19.200 --> 0:14:21.880 shoddy a lot of the external security posture and other 0:14:21.920 --> 0:14:24.480 capabilities were. And that's not victim blaming. It's the reality 0:14:24.480 --> 0:14:28.000 of under investing in security and having very vulnerable assets 0:14:28.040 --> 0:14:30.360 connected to the Internet. You look like a target. You're 0:14:30.360 --> 0:14:32.320 going to be one. Jason, I'm not sure if this 0:14:32.400 --> 0:14:35.600 is coincidence or not, but the rise of cryptocurrency seems 0:14:35.640 --> 0:14:39.160 to have mirrored somewhat the rise of these ransomware attacks. 0:14:39.160 --> 0:14:42.320 Talk to us about the role that cryptocurrencies play play 0:14:42.320 --> 0:14:47.000 in this whole situation. Well, certainly, people like Putin have 0:14:47.320 --> 0:14:52.360 strongly encouraged alternatives to international monetary transfer right, so things 0:14:52.400 --> 0:14:55.760 like swift that are actually much more both monitored and secure, 0:14:56.200 --> 0:15:00.320 so you know, non fungible tokens. Cryptocurrencies are certainly part 0:15:00.320 --> 0:15:04.480 of the story, but fundamentally, ransomware has been going on 0:15:04.680 --> 0:15:08.280 before crypto is mainstream in this context, and frankly they'll 0:15:08.280 --> 0:15:10.960 continue afterwards. But it's it's a contributing factor, but it's 0:15:11.000 --> 0:15:14.320 not the cause of the rampant vulnerability or the tremendous 0:15:14.360 --> 0:15:16.560 leverage you can get over a company when you shut 0:15:16.600 --> 0:15:19.640 down its operations. It's not just companies. Remember the city 0:15:19.680 --> 0:15:22.680 of Atlanta, right, tens of millions of dollars in recovery 0:15:22.680 --> 0:15:25.280 costs school districts in Baltimore. I mean, this is something 0:15:25.280 --> 0:15:28.400 that's affecting you know, state discor organizations, just like it's 0:15:28.400 --> 0:15:32.400 affecting big businesses. I am curious what types of companies 0:15:32.440 --> 0:15:34.520 are coming to you and saying that they are in 0:15:34.640 --> 0:15:40.320 most need for your services. Yes, so, our business services 0:15:40.400 --> 0:15:45.120 some of the most prestigious banks technology companies around the world. Um, 0:15:45.320 --> 0:15:48.000 so we work you know, in dozens of countries with 0:15:48.240 --> 0:15:50.720 very very large organizations where we you know, many of 0:15:50.760 --> 0:15:54.120 our clients have tens of thousands of employees or hundreds 0:15:54.120 --> 0:15:56.760 of thousands in some cases, so we really help them 0:15:56.760 --> 0:16:00.280 make sure that the catastrophic breach risks aren't there. We're 0:16:00.400 --> 0:16:02.080 a bit of an air bag in the car crash, right, 0:16:02.080 --> 0:16:04.240 we help you walk away. Um. I think one of 0:16:04.280 --> 0:16:06.680 the challenges for people, and you're seeing this actually this 0:16:06.760 --> 0:16:11.680 week with another deadly vulnerability and Microsoft software related to 0:16:11.760 --> 0:16:14.760 print spoolers, which is very geeky, but fundamentally it allows 0:16:14.760 --> 0:16:17.080 people to take over the identity infrastructure. And we saw 0:16:17.080 --> 0:16:20.160 assists of the Cyber Security Infrastructure Security Agency here in 0:16:20.160 --> 0:16:23.360 the United States just issue a really urgent alert yesterday 0:16:23.360 --> 0:16:26.480 because people were taking over identity infrastructure. Remember that's exactly 0:16:26.520 --> 0:16:28.680 what Russia did in the midst of the solar wind 0:16:28.720 --> 0:16:32.640 pack to take over major important organizations like Department of Justice, 0:16:32.640 --> 0:16:36.280 Department of Treasury. Uh Jason just about thirty seconds. How 0:16:36.360 --> 0:16:39.400 much of this ransomware and cyber issues cyber crime is 0:16:39.440 --> 0:16:42.680 state sponsored? Do you think versus just some guy in 0:16:42.760 --> 0:16:46.920 a garage. Well, so, the reality of these are sophisticated 0:16:46.920 --> 0:16:50.360 criminal organizations. And remember most of them do operate out 0:16:50.360 --> 0:16:54.320 of places that are strongly influenced or controlled by Putin 0:16:54.840 --> 0:17:00.120 Iran North Korea, so it's certainly been actively tolerated. Are 0:17:00.160 --> 0:17:02.640 known about and I think been quite useful to undermine 0:17:02.640 --> 0:17:06.120 the last. But we've seen less evidence or no evidence 0:17:06.160 --> 0:17:09.040 in some cases of overt sponsorship. But remember these Folkstentis 0:17:09.160 --> 0:17:13.000 permit tremendously. Yeah. Absolutely, Jason Crabtree, thank you so much 0:17:13.000 --> 0:17:15.760 for joining us. Really fascinating discussion. Jason Crabtree. He's a 0:17:15.760 --> 0:17:19.440 co founder and CEO of Complex, former special advisor to 0:17:19.560 --> 0:17:22.240 the Commanding General the U. S. Army Cyber Command, so 0:17:22.280 --> 0:17:25.040 he certainly knows what he's talking about. And again, as 0:17:25.240 --> 0:17:28.200 um uh, you know we were talking about it seems 0:17:28.200 --> 0:17:31.200 like this is an issue cybersecurity broadly defined as teller's 0:17:31.240 --> 0:17:33.920 mentioning is a big issue. It's it seems like it's 0:17:33.920 --> 0:17:36.240 in its early innings and it's something that corporate America 0:17:36.280 --> 0:17:38.000 and individuals need to pay more attention to. Well, the 0:17:38.080 --> 0:17:44.000 more coming up this is Bloomberg Taylor. You know, it's 0:17:44.000 --> 0:17:47.400 a busy bank earnings day when Shannali Bossik, Wall Street 0:17:47.400 --> 0:17:50.639 reporter for Bloomberg News literally is running from the TV 0:17:50.840 --> 0:17:54.800 studio to our radio studio because she has so many 0:17:54.920 --> 0:17:58.800 different obligations to do. She is running around for us 0:17:58.840 --> 0:18:01.840 covering not only the Gray m Live t Live blog 0:18:01.920 --> 0:18:04.360 that we have on the Bloomberg terminal. But joining us 0:18:04.359 --> 0:18:06.679 for radio and TV. What a slew of earnings And 0:18:06.760 --> 0:18:09.760 you know this from your days, Paul of Uh, just 0:18:09.800 --> 0:18:12.480 what crazy days these are listening to both the analysts 0:18:12.520 --> 0:18:14.639 and the media call and of course the earnings report, 0:18:14.680 --> 0:18:16.920 and I just think it's so silly for these big, 0:18:16.920 --> 0:18:19.640 big banks all to report on one day. It's just ridiculous. 0:18:19.640 --> 0:18:21.440 Spread it out a little bit. But anyway, Shanali, thanks 0:18:21.440 --> 0:18:23.160 so much for joining us here again we get Bank 0:18:23.160 --> 0:18:26.040 of America, City Group, Wells Fargo. When I think of 0:18:26.160 --> 0:18:29.520 these institutions as opposed to the Goldman's and JP Morgan's 0:18:29.520 --> 0:18:34.200 and Morgan Stanley's, I think of corporate banking, consumer banking, 0:18:34.359 --> 0:18:37.280 making loans net interest margin, and I think one of 0:18:37.320 --> 0:18:40.920 the takeaways was the loan growth really isn't there? Is it? 0:18:41.040 --> 0:18:43.200 You know, it's so funny because on these conference calls 0:18:43.240 --> 0:18:46.000 this morning, Bank of America with journalists and analysts, same 0:18:46.040 --> 0:18:48.280 with City Group, they're trying to convince people that this 0:18:48.400 --> 0:18:50.640 loan growth will come back, that it will be there. 0:18:50.640 --> 0:18:53.800 But you can see from the investor reaction that they'll 0:18:53.840 --> 0:18:56.399 believe it when they'll see it right, that they're just 0:18:56.520 --> 0:18:59.000 not buying this, Yet how much of this can be 0:18:59.280 --> 0:19:02.920 one offs? I in everyone was really working on sort 0:19:02.920 --> 0:19:06.520 of wrapping up our balance sheets right, making sure that 0:19:06.560 --> 0:19:08.000 if you were laid off or what you do with 0:19:08.040 --> 0:19:10.520 the stimulus checks was paying off some of your dead 0:19:10.960 --> 0:19:13.280 is their appetite for people to want to take on 0:19:13.480 --> 0:19:17.240 new loan. It's self fascinating because from this you're seeing 0:19:17.359 --> 0:19:22.359 wealthier individuals expand their loan on average, with the biggest 0:19:22.359 --> 0:19:25.080 banks Bank of America, JP, Morgan Goldman sacts sometimes at 0:19:25.160 --> 0:19:27.560 very fast paces. Will be very interesting, by the way, 0:19:27.560 --> 0:19:29.399 to see what that looks like in Morgan Stanley Tomorrow, 0:19:29.440 --> 0:19:33.000 which really excels in this space. But the average consumer 0:19:33.080 --> 0:19:35.400 is not borrowing. So you've got to wonder why there's 0:19:35.440 --> 0:19:38.600 such a divergence for the wealthiest of America to lever 0:19:38.760 --> 0:19:40.880 up the way they are, and then where are they 0:19:40.920 --> 0:19:45.040 deploying those funds right investments and whatnot. Another interesting thing 0:19:45.080 --> 0:19:47.440 that I can't really get over because it matters so 0:19:47.520 --> 0:19:50.080 much to markets is Bank of America said that they 0:19:50.080 --> 0:19:53.119 are sitting on so much dry powder that they are 0:19:53.160 --> 0:19:56.399 deploying this into securities, So don't worry so much about 0:19:56.440 --> 0:19:59.719 the loans. They're they're putting it to make markets. They 0:19:59.760 --> 0:20:02.879 all so said, we're not a hedge fund, so you 0:20:02.920 --> 0:20:05.800 know clearly there is a limit to how much risk 0:20:05.800 --> 0:20:08.000 they'll take on. I've been watching this over at JP 0:20:08.080 --> 0:20:12.080 Morgan as well. Their value at risk has dropped significantly. However, again, 0:20:12.160 --> 0:20:15.119 this dry powder is so interesting at a time where 0:20:15.200 --> 0:20:18.119 global banking is in an upheaval. It's in a total 0:20:18.200 --> 0:20:22.000 shake up, and the American banks and Frankly City in 0:20:22.040 --> 0:20:24.840 Bank of America, which have less share than their bigger 0:20:24.880 --> 0:20:27.880 three peers, has room to take some of that share 0:20:27.920 --> 0:20:31.119 and markets. How about the credit quality discussion. What are 0:20:31.160 --> 0:20:34.240 the banks saying as to the quality of their loan portfolio. 0:20:34.359 --> 0:20:36.399 I mean, again, we've come through this once in a 0:20:36.440 --> 0:20:40.280 lifetime pandemic and economic disruption, but it seems like, you know, 0:20:40.359 --> 0:20:44.000 individuals and corporations are kind of doing okay. I can't 0:20:44.000 --> 0:20:46.480 get over what it must be like to be a 0:20:46.480 --> 0:20:48.800 banker right now and not get the love from investors. 0:20:48.840 --> 0:20:53.640 When the consumer is in such apparently decent shape. They're 0:20:53.680 --> 0:20:57.560 paying down their balances, which is why loans are pretty 0:20:57.600 --> 0:21:00.840 flat everywhere. I gotta say, the one place that I'm 0:21:00.880 --> 0:21:04.320 concerned about is Holmes, Uh, that is where they're seeing 0:21:04.320 --> 0:21:07.240 lower balances at a lot of these banks, and that 0:21:07.400 --> 0:21:10.440 wasn't the case as we know before. So what are 0:21:10.480 --> 0:21:14.120 people actually lending borrowing for it? That's not clear to me. 0:21:14.400 --> 0:21:17.520 They're spending more, they're just not borrowing more. So much 0:21:17.560 --> 0:21:20.000 of this can be I think about Walls Fargo. What 0:21:20.040 --> 0:21:21.919 do you think of home loans, auto loans, you name it. 0:21:21.920 --> 0:21:25.200 We're gonna speaking with the Walls Fargo CFO Mike Santo 0:21:25.560 --> 0:21:29.080 Massimo just after the closing bell. If you had one 0:21:29.160 --> 0:21:32.760 question you'd want to ask him. What would it be? Oh? Boy? 0:21:32.840 --> 0:21:35.119 How much is the asset cap by the numbers and 0:21:35.320 --> 0:21:38.119 impacting them? Still? Right? How much of it is? What 0:21:38.200 --> 0:21:40.040 do you define with the asset cap? Is? It is 0:21:40.080 --> 0:21:43.119 basically the Federal Reserve saying that you can't get your 0:21:43.119 --> 0:21:45.080 assets over a certain amount, you cannot be lowing you 0:21:45.160 --> 0:21:48.720 in the time out box. Yeah, I mean it is never. 0:21:48.880 --> 0:21:51.120 I mean that is really an unprecedented type of punishment 0:21:51.119 --> 0:21:53.560 that's spooked all of Wall Street when it happened. Right, 0:21:53.920 --> 0:21:58.080 banks are afraid to behave badly? Are they the only 0:21:58.200 --> 0:22:01.400 big bank that has a asset cap? Correct? And remember 0:22:01.440 --> 0:22:04.720 this is still relatively early days for Charlie Sharff, the 0:22:04.760 --> 0:22:07.200 new CEO, who's also treating seeking to keep it lit 0:22:07.200 --> 0:22:10.320 on costs. The bank is becoming more efficient. They and 0:22:10.560 --> 0:22:13.159 Bank of America this morning said headcount has dropped by 0:22:13.200 --> 0:22:16.600