♪ >> welcome to bloomberg businessweek. i am carol massar. carol: i'm jason kelly. carol: -- let's not forget that this issue is all about heists. jason: jason: we jason: go digital and look at something happening all around the world. cash getting stalling.

and robinson has more. >> this was a big break in a case that has been legendary. since at least 2013. a whole network of banks in russia, other eastern european countries, germany, the event and taiwan had been mysteriously spitting out cash from atm's. these mysterious characters have been collecting the cash and making off with it. the authorities in all of these countries had been chasing these cyber thieves for a long time. they got a really big break in taipei. one of the thieves dropped a bank card. for the first time, the cops could get something on their hands that was a lead to the gang that have been running.

jason: i want to take you back to something you mentioned. it feels almost cinematic. you can like the opening of a movie when you read this. unsuspecting people are walking up to people. in front of them, they see people go up to a machine and as you say, it is literally spitting money out. they are just collecting and taking off with it. how were they able to do that in >> first place russian mark there was real skill and art. banks infiltrating networks. what this game did that was different was they used the tools of cyber espionage to penetrate banks. that downloaded malware into the bank networks and then, it is almost like a ghost in the machine. these thieves would take control of pcs and a bank.

they would take control of the cameras on the pcs. they would take control of screenshots and log all the keystrokes. in thecame the ghost machine. by doing that they were able to monitor and then control the flow of money. this was through a bank network. became aoint it relatively simple matter of sending a command that would say at 2:00 a.m., at these atm's in atm's willwan, these also fit out 40 banknotes all at once. they would text or code to the money meals. they would text a code and say here it comes. the money would spit out, they did not even have to touch the machines. you can imagine the shock of anybody standing around the machine.

inwas like being at a casino the slot machine. carol: over a. of years we are talking about 1.2 million dollars. -- billion dollars. >> my colleagues and friends in london who cover law enforcement all ofelf, we talked to the various police agencies that were involved. the thing that busted this open was cyber thieves and hackers all network. they all talk to one another. confederacy on the dark web. the cops have been separate for a long time. they finally said we have to act like the hackers and start networking and sharing data.

a datat up clearinghouse. they became an air traffic control system for law enforcement around the world. we talked to police detectives in spain who eventually arrested the alleged masterminds. we also talked with the taiwanese police as well and stitched together how they network to fight the hacker network. jason: you use a term of art in advancede called persistent threat. i found that intriguing. to use aguys seemed little bit of espionage jiu-jitsu and turned it on the bad guys. how did they infiltrate? this is loads of jargon in the cybersecurity. i comes out of cyber espionage. where theberattack

goal is not to steal something -- still money. it is to do digital reconnaissance. what was different about this case was it was turned to still money. and set up a malware lap basically all of the malware that cops around the world were finding and thought maybe link case -- you have these tech guys and his office filled with computers. they would dissect the code and look for commonalities with other pieces of code they're finding around the world. then they could distribute their findings to police officers. they sent some of that malware to these guys in spain. that leaves led to the arrest of

the alleged mastermind. this is the centerpiece of the highest issue. heist issue. >> we decided to do something about the heist special. there were a lot of great stores for the package. carol: you see that european cover and it is up to the side. >> you can see the two of them split off. we came up with the idea of the stolen cover first. it was joe's idea. we had the feeling that the european cover would work for the nice. carol: it is really bold and brave. there isn't a lot on the cover. we were tweaking it and

adding things and nudging it a little bit. the more you leave this undisturbed space, the better it got. nice little trick. these guys are spread throughout the print issue. jason: goldman sachs gets into subprime lending. billionairestreet bail on harvard. jason: this is bloomberg businessweek.

carol: welcome back to bloomberg businessweek. i am carol massar area jason: i am jason kelly. section, the finance we look at the new online bank. this is surprising some analysts. jason: goldman is a famous name on wall street, not so familiar to consumers but marcus is providing lots and lots of loans

to people with not so great credit. been going right to direct to consumer banking. they neighbor this product markets after the founder to give it a softer image. they have savings accounts that are paying 1.8% right now, a lot more than others. it is still not that much. on product i wrote about unsecured loans -- goldman has been sending out tones and tons of direct mail. it is to regular people say do you have a lot of credit card debt russian mark we can help you refinance it with these loans at a lower rate. the business has gotten to a decent now. they went out a couple of billion dollars.

i thought it would be interesting to look at who was taking these loans. jason: this is not a business that people would associate goldman sachs with. people on wall street, they associate goldman , very austere, high-end wealth. not the sort of business. >> if you have a couple million dollars, they won't manager money for you. as doing of goldman deals with warren buffett. this was a big departure for them. the mass public pushback against wall street and wind wall street for what happened in terms of the meltdown. is this their way of approaching the broader public? >> that was a challenge on their mind. of what theat polls

public thinks about the companies -- in the last few years, goldman has scored very low. just above bp or volkswagen. it was an opportunity because in the wake of the financial crisis, they have become a bank. they started taking deposits. they built up a lot of deposits. companies were starting to lend money out to consumers.

there all of these money clubs that were doing it. they thought that this could have been a way to put some of these deposits to work. carol: you talk about some of the people that goldman is lending to. talk to us about some of the situations. some of them seem a little sketchy. >> i was surprised. the only way to look at who their customers are is to look at who file for bankruptcy and does that money. it worked out. i found more people heavily indebted than i would have expected. it was people working regular at a cell phone store -- maybe a teacher. they would have five or 10 credit cards, sometimes loans from other startups like lending club. now, goldman has presented the product as being for prime customers, people with high able tocores area i was talk to people that i would not have thought of as being particularly good credit risks. jason: they were demonstrably subprime. 10 were twices present of their portfolio is people with subprime credit scores. what i thought was interesting

people would say a lot of loans. it help me cut my payments. in the end, something bad happened or i just couldn't handle my bills and i had to fight back seat. >> staying in the finance section, one of the biggest stories in the world of big money has been harvard's endowment. also, it's poor performance. what: that doesn't stop has always made them a fundraising powerhouse. jason: billionaires showing up with lots and lots of honey. >> $9 billion is how much harvard raised. keep in mind, their long-term returns. 4.4% over the last decade. compare that with the average of what the other ivy league schools did.

>> they essentially left billions of dollars on the table by not performing as well as they could have. >> they left about $6 billion on the table had the want to the average of the ivy league schools. had it performed at the best, they would have had even more. the good news for them is they hired colombia's endowment manager to run the show. having said this, harvard is the be-all and end-all. >> as the largest one that is out there. >> be $7.1 billion. that is a lot of money. >> even though it is underperforming its peers over the years it is still attracting some really big gifts. it was a very transformative experience.

people are very devoted, they realize that harvard given that chance and they want to return it. >> talk to us about this, give us the big gifts? >> it was poor hundred million dollars. it is quite a lot of money. >> this is all owing to drew faust who is about to step down. what was her gift in terms of raising so much money. ? >> she had a lot of people to ask. a lot of people who have done well went to harvard. not everyone is a billionaire

but there were a lot of people over the years. what is interesting is there going to go to the people, good men and women who gave a really got -- really large gift. less alumni are given to the universities. we have a statistic in the story. of all the universities that giftsast year, one dozen made up a third of all of the gifts. put that into perspective. are people given less to their alma mater? >> maybe they don't think they needed. they didn't think there are other organizations in the world that need their help or than a wealthy university. >> this was a criticism leveled by malcolm gladwell.

essentially, you could help the poor, feed the poor and yet, you are giving to a superrich university. >> absolutely. he had the same criticism when stanford got a make a gift of that size. there was a lawyer that used to give big amounts of money and then became disenchanted by the knot of money that has been paid to the guys to manage the endowment at harvard. >> that was a huge issue more than a decade ago. itvard has to tell how much pays to the people making the most money. distasteful that they were giving large bonuses to people. but they are making large returns. if you work in the private sector, that is how it works. if you contrast that with the yale model, neil has -- yale has outside managers.

those don't come up on the public records like it does at harvard. harvard used to have employees that work for the management company. a populist wave hits the ultimate nanny state, sweden. jason: this is bloomberg.

♪ jason: welcome back to bloomberg businessweek. i am jason kelly. carol: i am carol massar. jason: in the economic section, we go to sweden where high taxation led to record surpluses. >> those surpluses are under pressure because of the welfare

needs of hundreds of thousands of refugees. they are facing a lot of challenges because they are taken into many refugees relative to their population. over 600,000 for a population of 10 million people. at the same time, there are other factors. people are living longer. the birth rate is very high. network that we all know about, everybody thinks and talks about it. there are these amazing services. it is really being strained. is creating a lot of interesting and troubling problems. carol: that is a really good point. this is a place that has incredible amounts of taxes but they have great medical care, free education. you have all of these great services. jason: paid parental leave, everything we all talk about.

rest your head on that notion, to live in sweden and be taken care of. but this is the fabric of society being questioned. it is percolating a little bit right now. there are concerns as we move forward politically. people are saying called on a second. we were paying all of these crazy rates of taxes. it applies to some people. we were guaranteed these benefits. now we are in a more remote and the revolution of the country. we start this off with the maternity ward at the hospital. basically they had to close it down. mothersd to expectant that they have two options.

there are two of the maternity wards. think about being in labor and midwives have trained to start doing courses in how to deal with giving birth in a car. if you have to pull over to the side of the road and the victory will be delivered in your car. jason: my college roommate delivered his own baby in rural vermont. there has been a lot of protest over this one. there has been a contingent of people in the sponsor that actually have taken over the maternity ward. this happened in january of 2017. this is in terms of the word in closed and then over the past year and a half, various ways this planet with respect to the hospital.

some were money has been gained about it. it has been really challenging. >> it is a stark example. swedish life to everything being taken care of. there is nothing that says not being taken care of. >> because of the services that we have talked about, the maternity leave that you get, the support you get for various other -- i think it is really fascinating. a lot of people are focusing on the refugee piece of this and what is important to notice is part ofle that is a big it, there are all these other factors as well.

>> you do have more immigrants that are coming in that have to be taken care of, that is a cost to society and the government. it talks about rising crime in this anecdote. there isn't a lot of -- enough law enforcement to oversee that. >> they do back that off. i don't think we are seeing crime. is extremely it violent crime. it is different. patrick goes out. i think that is what is changing the sentiment of some portions of the population. they are looking around and saying we have the safety net, you are taking services away. maybe some are more focused on the refugee piece. keeping a pretty close eye on what will be happening over that. up next, what is at stake

for germany and angela merkel as nationalism sweeps across europe. carol: this is bloomberg businessweek.

♪ jason: welcome back to bloomberg businessweek. and jason kelly. carol: i am carol massar. up next is the real value of missing art. jason: we go to the case of the stolen bourbon. carol: we start in germany and the threats facing angela merkel. jason: populism and nationalism are sweeping across the continent. what are the applications for chancellor merkel? carol: what

are the implications for the european union? >> she is on the back foot at the moment. this is over her liberal policy. specifically on migration. angela merkel has a coalition government. this is kicking up against her party. this is on the front line of the migrants who traveled north from the mediterranean sea up through europe and into the richer countries, mainly germany and sweden. they say that she is essentially opening the border to too many people. they want to send them back. carol: we are saying this wave of nativism in terms of people pushing back and wanted to those of borders. what is interesting about your story is you talk about the

important role of germany area especially when it comes to european unification. we have all been worried about italy but maybe the real got -- black swan is germany. >> germany is the biggest economy in europe. it is the most populous country. under the chancellor merkel, it has been the driver of europe for the past decade or more. germany starts taking unilateral action and rejecting would pushen it these people back into other european countries. secondly, it would threaten to unravel the whole system of asylum that exists in europe. that system is broken, yes and leaders are trying to forge some kind of compromise. if the biggest country starts then itpeople back

could cause absolute chaos in europe. jason: one of the things you point out a sigh the migration issue that has become so associated with angela merkel, her role, economically and politically within europe over the past 12 or so years has been critical not just of germany but the entire union area -- in germany but of the entire union. angela merkel gets a very mixed press across the continent. she will arguably be forever remembered in the southern european countries, notably greece and italy and parts of spain as the champion of austerity policies. during the debt crisis that from 2009 alleece years until 2016,

germany was at the forefront of demanding budget consolidation rather than just a grain to give these countries money. that is primarily because germany is the biggest economy. it was the biggest donor for bailouts to these countries. that made people extremely angry and arguably rightfully so. time, the area, if you agree with her policies and you see that economically it is starting to recover, that could be part of her legacy. time, she was also pushing for alliances with france throughout this whole time to try to make a european

solution that would drive the whole continent. mentioned italy earlier. but italy may be a help to germany in the immigration crisis. we have a lot of immigrants crossing the mediterranean and coming into italy. maybe germany and italy were together and have been pushing back on this immigration. if germany moves away from the european union in any way, italy is left to fight the battle on its own. >> that is undoubtedly true. a lot of people in germany would like to leave italy to fight on its own. again, merkel is pushing for european solution rather than individual countries taking national solutions which are short-term solutions because you can't keep pushing people back in smaller countries are continental europe. you can't keep doing that in the

long term. differences with the popular government. they do share desire to find a common european solution to this problem. >> we're here with the editor in chief, joe weber. she and germany could be the real blacks one of the european union. >> is is one that we are fixated on. it is wondering if she can maintain this delicate grasp of power. all of europe is in the balance. which way will it swing? >> merkel has been in the headlines around the world. you think of that iconic image of her standing over donald trump at the g7 meeting. there is a lot of global application for what happens in germany. i think the most political

global story that we are watching right now. sure, there is trump but the delicate balance between russia, china, the rest of europe, the u.k. is kind of like everything is on a string right now, watch it to find out if she can preserve this balance of power she has or something gives way. and what happens with germany after that? we know the history of germany and the delicate balance that it plays, not only within europe but within itself. >> are really important story, globally. >> you think of the fabric of the way the world has been constructed. that seems to be receiving. here is one of the last people with the hands on that wheel. jason: a lot more to come in this week. this is the summit with putin. great ruler for what is going to transpire in europe. >> up next, a failed coup in

venezuela. and a threat to nicolas maduro after five years in office. carol: this is bloomberg businessweek.

♪ jason: welcome back to bloomberg businessweek. i'm jason kelce. carol: i am carol massar. this is a story that has been taught until now.

bloomberg news uncovering a military coup in venezuela. toon: this was an attempt get nicholas maduro captured at on file. >> this happened inmate. -- in may. this was to stop the election of nicholas maduro. is anelieve he illegitimate ruler. they had been planning for more than a year. the idea was to get him and put him on trial and start over with a new democratic system. it is a little unclear how many. we think it may have been several hundred. the number of people arrested was over 30. >> arrested before they could execute. >> the plan was either they arrested a participant who spilled the beans and the second

was that one of the people was a cuban infiltrated. -- infiltrater. >> how many countries outside to about it -- knew about it? >> both colombian, american and u.s. officials were aware of it. i think the people who were carrying out the coup, were hoping they would get money and support. they got a nod and a wink. no real support. jason: you have been following this story for a long time. put this in context. where is venezuela right now? especially given where it was. venezuela was probably the

20th richest country in the world. it has more oil than saudi arabia. it has never been a deeply democratic society but it was relatively so. chavez was elected on a very populist platform. they became more and more authoritarian. oil was skyrocketing in price and they take people happy and so forth. he got sick and died and he designated nicolas maduro to be his successor. in 2013 and has been president for five years. now the country has descended into a horror show,. actual institutions and hunger. well,st things are going

people are pouring out of the country by the millions. he has been very -- chavez came to power with the military and he was his successor. the military has been an important backer. disillusionment within the military is happening. carol: there is military that is backing him and then there is military that is not. >> that is correct. i don't think he is going to be overthrown. carol: he knows people are trying. >> he is carrying out purges internally. this does tell us that he was more in jeopardy than we had known. one of the things that the people involved take pride in is that it involved all for.

-- four. they were going to stop an earlier political process. this was going to take power away from the elected congress. they pulled the plug on it because they suddenly realized there was an independent smaller rebellion going on that caused them to go back. about the people you have been talking to. >> one of the key interviews for us was a participant, someone who was a coordinator of this plot who escaped arrest and is on the lam now. bywere in touch with both secure phone and by text message. out of venezuela? >> yes, he is not in venezuela.

jason: in this particular story with venezuela, that is a great scoop by our colleagues about the failed coup. there is a lot of interesting economic data points. oil is one of them. carol: let me break down what we are looking at. , 95%conomy has been tied of the foreign currency earnings, they get through oil sales. in the yellow line i have charted the venezuelan crude exports. this is dropping down to less than 1.2 million barrels. the economy is falling, they are going hand-in-hand. jason: this is the largest exporter of crude oil and that really ripples through the entire global economy. >> up next, we attempted to find the sticky fingers. jason: we map the worlds --

world's missing masterpieces and mementos. carol: this is bloomberg businessweek.

carol: welcome back to bloomberg businessweek. i am carol massar. jason: you can listen to us on the radio. in1 in boston, 91 fm washington dc and a.m. 960 in the bay area. david: and in london and asia. carol: we have a big question to ask. whatever happened on that happy then wiggled 11? vanwinkle bourbon? jason: a lot of it went missing. >> in 2013, you may have seen

the headlines. there was the great pappy van winkle heist. carol: this is now a legendary and pre-famous bourbon. >> it is definitely considered a very high and bourbon -- high end bourbon. most places can't even get pappy van winkle. aboutne was worth $126,000. if you were to go to a bar that carried this, their 23-year-old vintage was getting $100 per port. not per bottle. if you wanted one poor, it was 100 talks. a very premiumd bourbon and might be the target for theft. this rocks the world of bourbon drinkers everywhere from bars in brooklyn to front

porches down south. >> that is what happens. what is amazing is this happens in 2013. about a year and a half goes by. there is no news or movement on this. local authorities in frankfort, e, that is where the buffalo trace distillery is. that is where they make pappy van winkle. they get a tip. local authorities traced this to a guy named tony. they were poking around in his premises. they see these huge barrels of bourbon in his backyard. they look on his phone and he has pictures of bottles of pappy seat.nkle on his truck he is arrested and is actually jail forg 15 years in

the stolen bourbon. what he says in his backyard was wild turkey. i doesn't make it ok to have five barrels of this stuff. but wild turkey is nothing along the lines of pappy van winkle in terms of value. >> he happened to work at buffalo trace facility in a warehouse where they kept the .ourbon they could not sell unless you have a very refined palate, you wouldn't know it had not met standards. he was able to sell the stock off. his argument is he told his up. that this is calling of the warehouse, if you want me to get rid of it, i will. the superior says go ahead, take it. what winds up happening is they are unable to ever pin these 200 bottles on the sky. they do get him for bootlegging

and theft and organized crime. he is now facing 15 years. is he the mastermind of an organized crime ring russian mark -- ring? >> he would say no. he had friends who knew that he could unload bourbon. they were sometimes bringing him pappy and he was acting as a middleman. guy was at this mastermind of a criminal enterprise is a stretch. >> this always put me in the mindset of masterpieces making headlines. >> most of this lost art, not so much. over 7000ed at the works in the fbi database. it was pretty comprehensive for the united states. it has some international entries as well.

they narrowed it down to the 3000 artworks and cultural objects that have dimensions and dates and so far and then charted it out. james: they were seeing what was stolen and what it was made out of and where it was from to try to determine various patterns. that nothingwer is is like the thomas crown affair. the thing is that there are a few really spectacular examples of people learning from movies -- steel to still art art. -- steal art. the whole ofhrough a los angeles gallery to get into the space to roll up a bunch of murals. we can literally name those on one hand. everything else is a family

portrait going missing during a or someone breaks in and steals some things and takes the painting off of the wall in the process. they are hoping that it might be worth something. one of the most prominent examples is someone taking a renoir off-the-wall. when they broke into this houston area home, they took a bunch of jewels. they grabbed it and tucked it under their arm and made up with it. >> the other thing to know about stealing art is that it is incredibly easy. you can take it off the walls and most museums with very little issue. it is incredibly difficult to sell that are. people imagine that there is this vast criminal underworld of people will pay millions for a painting that they can admire in their basement.

the fact is that it is not that easy. if it were, everyone who is an art dealer would be rich. but me tell you, there are a lot of evil that will look to sell you a painting for a million dollars. jason: why is it so hard? is it because our dealers know that this happens? what prevents that from happening russian mark james: there is a very small market of people willing to spend a million dollars for a painting,. . they will never be able to resell this again. instances ofe paintings and are being used as collateral within the italian mafia. those are really from the 60's. we don't have many other examples of it. carol: bloomberg businessweek is available on newsstands now. jason: you must read this thi

s week. carol: i would go with sweden. you would think that wave of populism is not having them but it is because of immigration. jason: such a smart story. here is what is happening in germany with merkel as well. mine was pappy van winkle. there was a scandal around it being lifted but maybe it wasn't? more bloomberg television starts right now.

♪ >> i am brad stone. this is the best of bloomberg technology. we bring all of our top and it is from this week in technology. hour, we in the next just became a real card company. -- car company. those were the words of elon musk. plus, dell is going public again. offering