WEBVTT - P&L: Apple Could Bundle New Original Content Business 0:00:04.760 --> 0:00:08.080 Welcome to the Bloomberg P and L Podcast. I'm pim Fox. 0:00:08.119 --> 0:00:11.200 Along with my co host Lisa Abramowitz. Each day we 0:00:11.280 --> 0:00:14.480 bring you the most important, noteworthy, and useful interviews for 0:00:14.520 --> 0:00:16.560 you and your money, whether you're at the grocery store 0:00:16.800 --> 0:00:19.960 or the trading floor. Find the Bloomberg pm L podcast 0:00:20.000 --> 0:00:28.240 on iTunes, SoundCloud and at Bloomberg dot com. Here to 0:00:28.320 --> 0:00:31.040 tell us what's going to happen in seventeen, or at 0:00:31.120 --> 0:00:34.080 least what might happen is liz Ane Saunders, chief investment 0:00:34.080 --> 0:00:38.520 strategist for Charles Schwab and Company, joining us from San Francisco. 0:00:38.920 --> 0:00:41.360 Lizen always a pleasure tell us your outlook for the 0:00:41.440 --> 0:00:43.760 SMP five harder. Let's start with earnings and then we 0:00:43.800 --> 0:00:47.800 can talk about valuations. So um well, both in earnings 0:00:47.840 --> 0:00:51.479 and in terms of market performance, we don't publish targets. 0:00:51.520 --> 0:00:53.720 I actually think that that's a bit of a silly exercise. 0:00:53.800 --> 0:00:56.400 But if you look at the consensus right now for 0:00:56.480 --> 0:01:01.160 corporate earnings, it's about growth every year for calendar year seventeen. 0:01:01.520 --> 0:01:04.319 What's interesting about that number is most analysts that do 0:01:04.360 --> 0:01:08.560 publish forecasts have it yet incorporated in the potential benefit 0:01:08.680 --> 0:01:12.320 either from regulatory reform or tax reform, infrastructure spending, or 0:01:12.360 --> 0:01:14.480 maybe the combin combination of all of those. So I 0:01:14.480 --> 0:01:18.759 think there's potentially upside um. There's also some downside because 0:01:18.800 --> 0:01:21.560 analysts naturally get a little bit too too optimistic, But 0:01:21.600 --> 0:01:24.120 I think the net is going to be fairly positive 0:01:24.120 --> 0:01:26.640 in terms of economic growth. Clearly, we saw a lift 0:01:26.680 --> 0:01:29.399 up and economic activity in the second half of ten, 0:01:29.480 --> 0:01:31.400 so I actually think the rally that we got in 0:01:31.440 --> 0:01:34.160 the stock market had as much to do with that, 0:01:34.280 --> 0:01:36.520 and much of that predated the election, so I don't 0:01:36.520 --> 0:01:39.280 think it's pure election related, and I think we are 0:01:39.319 --> 0:01:41.880 looking at a pro growth administration. My concern, and I 0:01:41.959 --> 0:01:44.959 think it was exacerbated by the press conference yesterday, is 0:01:45.000 --> 0:01:49.160 that the protectionist part of the policy platform is starting 0:01:49.160 --> 0:01:52.320 to move up the spectrum in terms of likely action 0:01:52.360 --> 0:01:54.680 in seen, and I think that would be an offset 0:01:54.720 --> 0:01:57.560 to some of the more positive components of the of 0:01:57.600 --> 0:01:59.840 the plan. You know, we hear a lot about the 0:02:00.040 --> 0:02:03.600 rotation out of bonds and into stocks. Do you believe 0:02:03.640 --> 0:02:05.640 that this is happening and what are you looking for 0:02:05.920 --> 0:02:09.239 to sort of indicate whether there is sort of more 0:02:09.360 --> 0:02:13.280 upside in stocks at the behest or at the detriment 0:02:13.360 --> 0:02:16.720 to the detriment of bonds. I think it's it's too 0:02:16.720 --> 0:02:19.560 soon to suggest that a new trend is in place. 0:02:19.639 --> 0:02:22.880 I e. The great rotation has kicked in. Uh you 0:02:23.200 --> 0:02:26.079 shaw about three weeks of pretty steady and flows into 0:02:26.120 --> 0:02:29.200 the US equity market, combining both neutral funds and exchange 0:02:29.200 --> 0:02:32.000 traded funds. But in the last week that's actually falter 0:02:32.080 --> 0:02:34.280 and you've gone back into negative territory. So it's a 0:02:34.520 --> 0:02:36.600 you know, it's a nascent shift, and I think too 0:02:36.600 --> 0:02:38.200 soon to suggest that this is going to be a 0:02:38.200 --> 0:02:41.120 big story in two seen. The good news is is 0:02:41.160 --> 0:02:42.960 that if you look further back, if you look through 0:02:43.000 --> 0:02:47.000 that this entireble market, not a single net new dollar 0:02:47.080 --> 0:02:49.560 of money has come into the US equity market, even 0:02:49.560 --> 0:02:53.240 if you include e t f s into the funds category. 0:02:53.440 --> 0:02:55.760 So there's still a lot of runway ahead of us 0:02:56.040 --> 0:02:59.080 for that to be a lift for the market. I I. 0:02:59.240 --> 0:03:01.360 You know, the fact we got three weeks of infloz 0:03:01.440 --> 0:03:03.360 is a good thing, but it also shows you how 0:03:03.400 --> 0:03:06.480 quickly sentiment can shift. Given that in just the last week, 0:03:06.919 --> 0:03:10.160 during this period of consolidation for equities, kind of investors 0:03:10.160 --> 0:03:13.160 turntail again. So it has the potential to be a 0:03:13.200 --> 0:03:16.440 positive story. It's I think it's a little early. Well, 0:03:16.440 --> 0:03:19.239 how attractive do equities have to be in order to 0:03:19.280 --> 0:03:21.240 attract that money. I was just taking a look at 0:03:21.280 --> 0:03:24.200 the price to earnings ratio for the SMP five D. 0:03:24.360 --> 0:03:28.040 If you bought it today, you're paying a twenty one multiple. Well, 0:03:28.040 --> 0:03:30.800 that's on trailing earnings. And nothing wrong with looking at 0:03:30.800 --> 0:03:32.639 trailing yeah, because you don't know what's going to happen 0:03:32.680 --> 0:03:35.600 in the future. But when you are at an inflection 0:03:35.640 --> 0:03:38.960 point in earnings and your trailing earnings incorporates a couple 0:03:39.000 --> 0:03:42.440 of quarters of an earnings recession, I think that artificially 0:03:42.560 --> 0:03:45.440 deflates the E and the PE equation, and I think 0:03:45.480 --> 0:03:49.360 it is important to look in conjunction with trailing valuations, 0:03:49.400 --> 0:03:52.240 look at forward valuations, and on a forward PE basis, 0:03:52.520 --> 0:03:55.640 you're more like seventeen. That's a little bit north of 0:03:55.720 --> 0:03:59.080 the long term median. But in the current inflation environment 0:03:59.080 --> 0:04:01.800 we're in, assuming it doesn't really kick in from here, 0:04:02.400 --> 0:04:05.800 multiples have actually typically traded above where we are right now. 0:04:05.880 --> 0:04:09.200 So I also think valuation is the eye of the beholder. 0:04:09.200 --> 0:04:12.520 We're talking about traditional PE ratios. You can look at 0:04:12.600 --> 0:04:15.440 price to book. You can look at inflation adjusted measures 0:04:15.440 --> 0:04:17.440 like the rule of twenty two FED model. You can 0:04:17.480 --> 0:04:21.080 look at even further trailing numbers like Schiller Cape, and 0:04:21.480 --> 0:04:23.680 I promise you that no matter what your view is 0:04:23.720 --> 0:04:26.120 on the market, I can find you a valuation metric 0:04:26.200 --> 0:04:28.840 that perfectly supports that view. And that view could be 0:04:28.880 --> 0:04:32.920 anything from extreme embarishness to extreme abolishness. Liz, you know 0:04:33.320 --> 0:04:35.800 the flip side of where what's a good entry point 0:04:35.839 --> 0:04:38.240 for stocks is at what point is it does it 0:04:38.279 --> 0:04:40.359 make sense to get back into bonds. I'm looking at 0:04:40.400 --> 0:04:43.599 a ten ure yield at two point uh. Some asset 0:04:43.640 --> 0:04:47.479 managers have called for three ten yurared yields by the 0:04:47.520 --> 0:04:49.719 end of this year. I mean at that level, do 0:04:49.760 --> 0:04:51.360 you think that that would be a buy? I don't 0:04:51.360 --> 0:04:53.320 think it should ever be a level. I don't think 0:04:53.360 --> 0:04:56.039 investing should ever be about get in and get out. 0:04:56.080 --> 0:04:58.960 That those are those are gambling on a moment in time, 0:04:58.960 --> 0:05:01.360 and investing should always be a process over time. So 0:05:01.680 --> 0:05:04.640 I would use the tried and true rules around rebalancing. 0:05:04.640 --> 0:05:07.720 And what rebalancing does is it let your portfolio tell 0:05:07.720 --> 0:05:10.320 you when it's time to do something. If your bond 0:05:10.360 --> 0:05:12.640 allocation has gotten out of whack relative to what your 0:05:12.680 --> 0:05:14.800 normal targets should be. And that's a function of your 0:05:14.880 --> 0:05:17.760 risk tolerance and time arizing a need for income, etcetera, etcetera. 0:05:18.279 --> 0:05:20.680 Then your portfolio tells you want to make that adjustment 0:05:21.000 --> 0:05:24.200 to pick some arbitrary level on the yield to say 0:05:24.240 --> 0:05:26.960 time to get back in and bonds. Again, that's gambling 0:05:26.960 --> 0:05:28.839 on a moment in time, and investing should never be 0:05:28.880 --> 0:05:31.800 about that. Where is this money going to come from 0:05:31.839 --> 0:05:35.440 central banks or from actual investors? Oh? I think from 0:05:35.480 --> 0:05:38.400 from actual investors. Keep in mind that if you look 0:05:38.440 --> 0:05:41.720 over this entire Bowl market, retail investors have not been 0:05:42.200 --> 0:05:44.159 very active. We talked about that as it relates to 0:05:44.200 --> 0:05:48.120 fund flows. Hedge funds net long exposure never got much 0:05:48.160 --> 0:05:50.960 above the low fifties in this entire Bowl market and 0:05:51.000 --> 0:05:52.919 pass Bowl markets. You would expect that to get up 0:05:52.920 --> 0:05:56.320 into the mid sixties. Pension funds have not Traditional pension 0:05:56.360 --> 0:05:58.920 funds have not been big buyers. So really the only 0:05:58.960 --> 0:06:00.760 game in town has been come. He's buying back their 0:06:00.760 --> 0:06:02.640 own stock. In an environment where you haven't had a 0:06:02.760 --> 0:06:05.919 robust I p O market, it's a simple supply demand. 0:06:06.240 --> 0:06:09.600 So I think there's a lot of room for investors 0:06:09.680 --> 0:06:13.600 of every variety of different cohorts of investors two up 0:06:13.640 --> 0:06:16.839 their equity exposure. I wouldn't expect in a straight line, 0:06:16.880 --> 0:06:18.840 nor what I wanted to be. I think, you know, 0:06:18.880 --> 0:06:21.320 we started to get a sense of a melt up 0:06:21.680 --> 0:06:25.000 until this recent consolidation phase, and is as lovely as 0:06:25.000 --> 0:06:28.400 melt ups feel while they're happening, assuming you're long, they 0:06:28.440 --> 0:06:30.240 don't tend to end well. So this kind of two 0:06:30.279 --> 0:06:32.920 steps forward half a step back is actually a pattern 0:06:32.920 --> 0:06:36.159 I would love to see continue in As you mentioned 0:06:36.200 --> 0:06:39.600 petch funds and what they may do. Yesterday, Cowper's c 0:06:39.839 --> 0:06:42.239 I O. Is on Bloomberg Television and he was talking 0:06:42.279 --> 0:06:46.160 about how he was hoping to rotate about thirty billion 0:06:46.200 --> 0:06:49.799 dollars of money that's currently managed by external managers private 0:06:49.800 --> 0:06:53.480 equity firms, hedge funds, and make it internally managed. Do 0:06:53.520 --> 0:06:55.800 you think that that's a good idea or and also 0:06:55.839 --> 0:06:57.119 do you think that that's going to be a trend 0:06:57.240 --> 0:07:00.440 that takes hold? Well, Yeah, I think it's a trend 0:07:00.520 --> 0:07:02.440 that that has already occurred. I think you already hit 0:07:02.480 --> 0:07:07.839 the inflection point for endowments, foundations, institutions, pension funds, that 0:07:08.279 --> 0:07:11.880 um shifted uh for for many years over the past 0:07:12.320 --> 0:07:15.960 decade or so, shifted significantly away from the public markets 0:07:15.960 --> 0:07:18.600 towards the private markets, whether it was you know, hedge 0:07:18.600 --> 0:07:22.880 funds or venture capito a private equity or or real 0:07:23.000 --> 0:07:26.320 estate funds. But that pendulum has already started to swing back. 0:07:26.320 --> 0:07:28.280 And in the case of hedge funds. The interesting thing 0:07:28.280 --> 0:07:30.400 about hedge funds, there is a lot of people put 0:07:30.400 --> 0:07:33.760 them in a category of alternative investments. Yet if if 0:07:33.760 --> 0:07:36.000 you have an investment in a hedge fund and that 0:07:36.080 --> 0:07:40.560 hedge fund is buying equities either on the longer short side, 0:07:40.960 --> 0:07:44.800 that's your exposure. That's not an alternative asset. It's a 0:07:44.800 --> 0:07:48.880 an alternative way to get exposure to the equity asset class. 0:07:48.920 --> 0:07:51.560 So I think there's also a rethinking of how we 0:07:52.160 --> 0:07:55.440 categorize hedge funds, and if they're purely equity, that's how 0:07:55.480 --> 0:07:57.720 you you have to incorporate that into your equity exposure. 0:07:57.760 --> 0:08:01.280 I think it's the fee problem, limited performance, higher fees. 0:08:01.360 --> 0:08:03.600 That's been the real rub. Thank you so much, We're 0:08:03.600 --> 0:08:05.840 gonna have to leave it there, unfortunately. Liz Ane Saunders, 0:08:05.960 --> 0:08:10.800 chief investment strategies strategist at Charles Schwab and Company talking 0:08:10.840 --> 0:08:24.760 about her outlook for this year. Well, another sort of 0:08:24.800 --> 0:08:28.200 sad stories in the biotech industry. There's a story on 0:08:28.200 --> 0:08:31.240 the Bloomber terminal this morning talking about the mood of 0:08:31.360 --> 0:08:34.360 shock and disbelief at the JP Morgan Healthcare conference in 0:08:34.400 --> 0:08:38.079 San Francisco as they listened to President elect Trump talk 0:08:38.280 --> 0:08:40.480 about how he's going to take a hard line with 0:08:40.520 --> 0:08:43.199 his negotiations with the pharmaceutical companies. I want to bring 0:08:43.200 --> 0:08:46.240 in Max Neeson bloombergad Fly columnists to sort of shed 0:08:46.280 --> 0:08:49.520 some light on why perhaps this shouldn't have come as 0:08:49.559 --> 0:08:52.600 a surprise to these pharmaceutical executives. Max, I mean, this 0:08:52.720 --> 0:08:56.800 is not unexpected, right, I mean you're to calumn about this, uh, 0:08:57.000 --> 0:09:00.319 several of them in fact, Uh, it really it does 0:09:00.360 --> 0:09:04.239 bewilder me the extent of the surprise. During the campaign, 0:09:04.440 --> 0:09:08.360 Trump repeatedly mentioned that he wanted Medicare to be able 0:09:08.400 --> 0:09:12.240 to negotiate drug prices and push them down. Back in December, 0:09:12.280 --> 0:09:15.920 he made another comment about how he didn't like the 0:09:15.920 --> 0:09:18.680 way that drug prices were going. What's really worrying for 0:09:18.720 --> 0:09:20.800 the sector. I think I think that kind of explained 0:09:20.840 --> 0:09:22.840 some of the extent of the reaction is the fact 0:09:22.840 --> 0:09:25.520 that he really seems to be escalating both his rhetoric 0:09:25.960 --> 0:09:29.400 and um to some degree, the specificity going from just 0:09:29.520 --> 0:09:32.120 I don't like drug prices to we're gonna change the 0:09:32.160 --> 0:09:35.320 bidding process a policy than in fact many fear that 0:09:35.400 --> 0:09:38.240 Hillary Clinton would actually try to bring about it if 0:09:38.280 --> 0:09:40.440 she had been elected. We're just looking at some of 0:09:40.440 --> 0:09:42.880 the stocks today other than Mark, and we're gonna get 0:09:42.880 --> 0:09:45.840 to that in a in a second. But Fires are 0:09:45.880 --> 0:09:49.400 down one percent, Bristol Maris Squib down about three quarters 0:09:49.440 --> 0:09:51.920 of a percent, Abvy is down about a quarter of 0:09:51.960 --> 0:09:54.800 although yesterday the clients were much more severe with so 0:09:54.920 --> 0:09:56.880 much deed, I would just like to see whether anyone said, oh, 0:09:56.920 --> 0:10:01.080 these are bargains. Johnson and Johnson down about half, right, 0:10:01.240 --> 0:10:03.680 of course, the Nazac Biotechnology and that's which I'm looking 0:10:03.679 --> 0:10:06.640 at right now, down six tents of repercent, which considering 0:10:06.679 --> 0:10:09.480 how much stocks are down today and basically in line 0:10:09.480 --> 0:10:12.360 with the market. And that's after a three percent decline yesterday. 0:10:12.440 --> 0:10:14.920 Although Max, how much does that due to Mark? Because 0:10:14.960 --> 0:10:18.200 Mark shares are up. Um. Yeah, Murk is kind of 0:10:18.200 --> 0:10:20.560 the soul out performer on the kind of a specific 0:10:20.559 --> 0:10:23.280 piece of drug data that was so good that it 0:10:23.320 --> 0:10:27.200 seemed to overweigh the kind of broader industry. Yeah, lung cancer, 0:10:27.200 --> 0:10:30.160 it's actually a really huge deal for them. Um. They 0:10:30.160 --> 0:10:33.800 have a so called immune oncology drug sort of unlawshed, unleaked, 0:10:33.880 --> 0:10:38.200 unleashes the immune system against lung cancer. And the news 0:10:38.280 --> 0:10:40.679 they got is that it might be approved in combination 0:10:40.720 --> 0:10:44.360 with chemotherapy in a far broader subset of patients. Right now, 0:10:44.360 --> 0:10:47.199 it can only be used in about of them whose 0:10:47.200 --> 0:10:50.760 tumor as a specific mutation. If they get disapproval by May, 0:10:50.840 --> 0:10:52.880 which is well ahead of anything competitors can hope for, 0:10:53.520 --> 0:10:56.199 it'll be about a year ahead of expectations and massively 0:10:56.240 --> 0:10:59.000 increase their market size. Can I just ask you a 0:10:59.040 --> 0:11:01.440 little bit about this because you mentioned the approval process 0:11:01.559 --> 0:11:04.079 and we have yet to hear who is going to 0:11:04.200 --> 0:11:07.280 be the head of the Food and Drug Administration? Does 0:11:07.400 --> 0:11:09.959 anybody that you talk to expect big changes in the 0:11:10.000 --> 0:11:12.280 way that drugs are approved now that there's going to 0:11:12.360 --> 0:11:15.120 be a new president. Um, there there can be a 0:11:15.360 --> 0:11:17.559 kind of a really big swing on that depending on 0:11:17.640 --> 0:11:19.600 who gets put in charge. There have been sort of 0:11:19.600 --> 0:11:23.040 two names, two very different names put up. One of 0:11:23.080 --> 0:11:26.320 whom is a former kind of Peter Theeal associate who 0:11:26.360 --> 0:11:28.439 has some pretty I mean, I would describe them as 0:11:28.480 --> 0:11:30.960 just wacky ideas that he's dispoused in the past on 0:11:31.280 --> 0:11:34.600 drug development, that you should approve drugs just based on safety. 0:11:34.640 --> 0:11:36.480 If they're saying if they don't hurt people, if they 0:11:36.480 --> 0:11:39.120 don't hurt people, you know, is this um, you know, 0:11:40.000 --> 0:11:43.120 we'll find that before the second who is also being concerned. Um, 0:11:43.240 --> 0:11:46.240 it's kind of a more doctrinaire x f DA official 0:11:46.320 --> 0:11:48.959 who just you know, he's he's a little bit more conservative, 0:11:49.080 --> 0:11:52.520 but he's not going to dramatically shake up the kind 0:11:52.559 --> 0:11:54.560 of way things are done. I'd imagine if he replaces 0:11:55.000 --> 0:11:57.760 Mr Califf. How much do you think that there are 0:11:57.800 --> 0:12:01.079 conversations going on in the back office is of pharmaceutical 0:12:01.120 --> 0:12:04.559 companies right now about how to take back the news 0:12:04.559 --> 0:12:07.880 cycle from President elect Trump. I mean, it seems like 0:12:07.920 --> 0:12:09.920 all he has to say is we're going to negotiate 0:12:10.040 --> 0:12:12.920 really hard, and and their their share is just plummet. 0:12:12.960 --> 0:12:16.080 I mean, can they do anything to kind of take charge? 0:12:16.440 --> 0:12:18.960 I think they absolutely can. I think you've already seen 0:12:19.040 --> 0:12:21.640 some of these moves from a couple of companies kind 0:12:21.640 --> 0:12:25.920 of advocating self policing self restriction on drug price increases, 0:12:26.200 --> 0:12:30.760 notably Novo nordisk Al organ and then just yesterday ABVY 0:12:30.880 --> 0:12:34.040 pledge to not take take only a single drug price 0:12:34.120 --> 0:12:36.560 set of drug price increase this year and limited to 0:12:36.720 --> 0:12:39.600 less than ten percent, which is kind of, you know, 0:12:39.679 --> 0:12:43.440 not exactly altruistic, but definitely a step down from what 0:12:43.520 --> 0:12:45.960 had become the industry, or of kind of bi annual 0:12:46.080 --> 0:12:48.880 price increases in excess of ten percent. The name you're 0:12:49.160 --> 0:12:52.240 the name you're looking for was Jim O'Neill. Jim O'Neill, 0:12:52.600 --> 0:12:57.199 who is at the event at the capital management firm 0:12:57.240 --> 0:13:00.880 a Mithral Capital, which was founded by, as you said, 0:13:00.880 --> 0:13:04.719 Peter Tildy, once a founder of PayPal and one of 0:13:04.760 --> 0:13:07.760 the backers of Facebook. Yeah, that's the name. And and 0:13:07.840 --> 0:13:11.600 also another tick on his resumes he's a member of 0:13:11.640 --> 0:13:15.000 the board of the C Studying Institute, which are libertarians 0:13:15.040 --> 0:13:18.160 C platforms, which kind of dovetails with his view on 0:13:18.240 --> 0:13:21.920 the approvability of drugs and liberty libertarian fashion. And just 0:13:22.000 --> 0:13:24.959 to close the loop on Murk and their lung cancer drug. 0:13:25.400 --> 0:13:28.840 Lung cancer is the leading cause of cancer death in 0:13:28.920 --> 0:13:33.080 both men and women in the United States and worldwide 0:13:33.320 --> 0:13:35.760 specifically China. China has got a very big problem well 0:13:35.760 --> 0:13:37.800 and in the United In the United States, lung cancer 0:13:37.840 --> 0:13:41.000 is responsible for thirty percent of cancer deaths. This is 0:13:41.080 --> 0:13:45.199 more than breast cancer, colon cancer, and prostact cancer combined. 0:13:45.720 --> 0:13:48.400 About a hundred and fifty five thousand people die each 0:13:48.480 --> 0:13:49.960 year from lung cancer, So that would be a big 0:13:50.000 --> 0:13:54.080 breakthrough from Mark really well be huge market. Thanks very much, mcknean, 0:13:54.520 --> 0:14:08.920 gad Fly expert in pharma. We've been hearing a lot 0:14:08.960 --> 0:14:12.160 about how the Senate is currently talking about repealing and 0:14:12.240 --> 0:14:16.600 voting to repeal Obamacare, but what exactly is going to 0:14:17.000 --> 0:14:19.240 replace it? I want to bring in. Brian Ry, senior 0:14:19.280 --> 0:14:23.320 healthcare policy analyst for Bloomberg Intelligence, has been closely following 0:14:23.800 --> 0:14:27.760 the proceedings in Congress. Brian, I hear a lot about 0:14:27.800 --> 0:14:32.760 the repeal of Obamacare. What exactly is Congress can replace 0:14:32.760 --> 0:14:35.840 it with. I guess that's the key question that everyone's 0:14:35.840 --> 0:14:37.880 grappling with, and the fact that they haven't come forward 0:14:37.920 --> 0:14:41.400 with a single plan that everyone supported underscores how difficult 0:14:41.400 --> 0:14:43.680 the question that is. I think you know, broadly speaking, 0:14:43.680 --> 0:14:45.600 what Republicans want to do is what a lot of 0:14:45.600 --> 0:14:48.000 politicians want to do, and that's keep the parts of 0:14:48.000 --> 0:14:50.720 the plan that are popular and eliminate those that aren't. 0:14:50.840 --> 0:14:52.560 Of course, that's easier said than done. So what I 0:14:52.560 --> 0:14:55.120 think they want to replace it with is a system 0:14:55.200 --> 0:14:58.000 that allows for more choice. I think they want to 0:14:58.040 --> 0:15:00.840 combine a combination of uh, some plans that are have 0:15:01.280 --> 0:15:04.800 lower premiums but higher deductible, sort of the catastrophic plans 0:15:04.800 --> 0:15:06.640 that right now don't meet a lot of the essential 0:15:06.640 --> 0:15:10.920 benefit requirements under the c A or under Obamacare, but 0:15:10.960 --> 0:15:12.880 are lower premium And they want to do that to 0:15:12.920 --> 0:15:14.720 try and draw in a lot of the younger, healthier 0:15:14.760 --> 0:15:18.360 people that right now are aren't enrolling in sufficient numbers 0:15:18.560 --> 0:15:21.280 to make the risk pools profitable for insurers. You've seen 0:15:21.320 --> 0:15:22.800 a lot of insurers they're going to pull out of 0:15:22.800 --> 0:15:26.119 the exchanges. I think that's the trend that the Republicans 0:15:26.120 --> 0:15:29.320 are trying to reverse. Brian, I'm gonna ask you about 0:15:29.320 --> 0:15:32.480 something much more sort of day to day. You know 0:15:32.560 --> 0:15:36.280 those signs that are posted in restaurants showing the calorie count. 0:15:37.280 --> 0:15:40.040 I believe restaurants that have more than twenty locations they 0:15:40.040 --> 0:15:42.280 were required under the A c I to post this 0:15:42.440 --> 0:15:47.280 nutritional information. Are things like that going to go away? Uh? 0:15:47.760 --> 0:15:49.400 If they are, it's probably not going to be as 0:15:49.400 --> 0:15:52.200 part of this process, um and uh. And so that 0:15:52.200 --> 0:15:55.160 that's something that again, you know, they may direct uh 0:15:55.280 --> 0:15:58.280 there the new administration under the FDA, for example, to 0:15:58.400 --> 0:16:01.480 either withdraw that guid insto issue updated guidance that that 0:16:01.600 --> 0:16:03.640 does that. But that's probably not going to be part 0:16:03.640 --> 0:16:05.880 of what Congress is doing right now. And that's simply 0:16:05.920 --> 0:16:10.320 because to avoid a Senate filibuster, recognizing the math problem 0:16:10.360 --> 0:16:14.160 that Republicans have fifty two votes and not sixty. Um, 0:16:14.320 --> 0:16:17.520 they're using this budget reconciliation process, and that restricts the 0:16:17.560 --> 0:16:20.200 things that they can really target under this repeal effort, 0:16:20.440 --> 0:16:23.840 the things that are only budget related, so taxes, penalties, 0:16:23.880 --> 0:16:27.040 and medicaid expansion, anything involving federal funding. But a lot 0:16:27.080 --> 0:16:29.240 of those regulations, such as the one you just referenced, 0:16:29.320 --> 0:16:32.640 uh with the menu menus and calories, that's something that 0:16:32.680 --> 0:16:36.000 would have to be addressed separately. Brian. Let's say this 0:16:36.520 --> 0:16:41.240 repeal of Obamacare does pass the Senate. What happens then, 0:16:42.400 --> 0:16:44.400 So where we are now is they've last night they 0:16:44.440 --> 0:16:48.000 Senate essentially passed UM. What would be a blueprint that 0:16:48.040 --> 0:16:51.360 would authorize various committees to then come up and craft 0:16:51.680 --> 0:16:54.320 a repeal bill that has to go to the House. Now, 0:16:54.360 --> 0:16:57.160 they're going to probably address that either tomorrow or over 0:16:57.200 --> 0:16:59.640 the weekend, and then a couple of committees in each 0:16:59.680 --> 0:17:01.200 the sent it in the House would then go to 0:17:01.200 --> 0:17:04.119 work and craft language saying, Okay, we're going to repeal 0:17:04.520 --> 0:17:07.399 these taxes, were going to repeal these mandates, repeal the 0:17:07.400 --> 0:17:10.840 penalties for not buying A c A compliant insurance, those things, 0:17:10.840 --> 0:17:12.760 and then in a matter of weeks come back with that. 0:17:12.880 --> 0:17:15.679 But back to the original question. At the same time, 0:17:15.800 --> 0:17:18.440 you know, President elect Trump and a growing number of 0:17:18.440 --> 0:17:21.120 Republicans said, what, we also want to have a bill 0:17:21.200 --> 0:17:24.080 specifying what we would replace it with in place at 0:17:24.080 --> 0:17:26.679 the same time to make this simultaneous. If they're going 0:17:26.680 --> 0:17:28.760 to try and do that, then this process will probably 0:17:28.800 --> 0:17:31.320 bog down and they'll have to delay the repeal effort 0:17:31.320 --> 0:17:33.520 while they wait for the replace effort to catch up. 0:17:34.320 --> 0:17:37.159 This is maybe tangential to the issue of the A 0:17:37.320 --> 0:17:42.440 c A. But haven't the lawmakers in Washington taken aim 0:17:42.480 --> 0:17:49.240 at the use of human fetal tissue cells for scientific research? 0:17:50.359 --> 0:17:52.120 They have, and you know there there are a few 0:17:52.160 --> 0:17:55.560 different things and sort of tangential to that is part 0:17:55.560 --> 0:17:58.920 of this repeal process. Speaker Paul Ryan has said that, UM, 0:17:59.040 --> 0:18:01.520 they'd like to include, you know, removing federal funding for 0:18:01.560 --> 0:18:05.120 planned parenthood for example, and UM and that could potentially 0:18:05.119 --> 0:18:08.800 complicates their efforts to pass the repeal BI Also, you know, 0:18:08.920 --> 0:18:10.640 lots of moving parts. But you're right, and I think 0:18:10.640 --> 0:18:13.560 Republicans who have been targeting UH those type of provisions 0:18:13.600 --> 0:18:15.600 for a while feel like that would say Republican in 0:18:15.640 --> 0:18:18.800 the White House and Republicans retain a control of both chambers, 0:18:18.800 --> 0:18:21.359 that this is their best chance to advance provisions like that. 0:18:21.520 --> 0:18:23.600 And it'sn't one of the ideas with the repeal of 0:18:23.600 --> 0:18:27.440 Obamacare that states would get less federal funding for medicaid 0:18:27.480 --> 0:18:29.960 as part of this UH and would compel them to 0:18:30.160 --> 0:18:32.760 negotiate take a harder line with drug companies. Is that 0:18:32.760 --> 0:18:34.760 sort of the idea? You know, it could, So there's 0:18:34.760 --> 0:18:37.080 two different things there. You know, they could repeal the 0:18:37.320 --> 0:18:39.800 medicaid expansion that was part of the A C A 0:18:40.240 --> 0:18:42.359 or you know, maybe have a compromise and leave it 0:18:42.440 --> 0:18:43.919 up to the states saying if you want to keep it, 0:18:43.960 --> 0:18:47.000 you can if not you don't necessarily have to, um, 0:18:47.040 --> 0:18:49.639 but what they like to do. I think Paul Ryan's 0:18:49.720 --> 0:18:53.639 vision is to essentially convert medicaid in the block grant program, 0:18:53.640 --> 0:18:56.440 where we the federal government will give each state pool 0:18:56.440 --> 0:18:58.480 of money UM to do with as they see fit 0:18:58.760 --> 0:19:01.720 and uh and designed to own medicaid plans with that. 0:19:01.960 --> 0:19:04.600 That's a harder sell on the drug pricing front. UM. 0:19:04.760 --> 0:19:07.320 You know, we'll see what Trump's pick a for HHS 0:19:07.359 --> 0:19:10.520 Secretary Tom Prices next weekend. We gotta run. Thanks very much, 0:19:10.520 --> 0:19:12.440 Brian Ryan. Are you gonna be following this for us? 0:19:12.520 --> 0:19:28.040 Our senior healthcare policy analyst for the Bloomberg Intelligence Government team. 0:19:28.040 --> 0:19:31.320 Will Apple become the next HBO? Well, it looks like 0:19:31.320 --> 0:19:33.439 they're gonna try. I want to bring in John Petreats, 0:19:33.680 --> 0:19:37.440 managing director and portfolio manager at Point View Wealth Management, 0:19:37.440 --> 0:19:39.920 to give some context to the news that we got 0:19:40.160 --> 0:19:44.080 uh this morning by the Wall Street Journal that Apple 0:19:44.240 --> 0:19:49.760 is planning to create new original television content for its 0:19:49.960 --> 0:19:54.240 music subscribers. So John, Uh, first of all, what's your 0:19:54.240 --> 0:19:56.760 take on what their plan is to do as far 0:19:56.800 --> 0:19:59.639 as creating original content? Well, first of all, thanks for 0:19:59.680 --> 0:20:01.960 having me on. I gives my first point would be, well, 0:20:02.000 --> 0:20:05.080 it's about time. Um, when you're a six hundred and 0:20:05.119 --> 0:20:09.399 fifty billion dollar company, it's really hard to sell a 0:20:09.440 --> 0:20:12.359 lot of cool widgets to grow the top line, you 0:20:12.440 --> 0:20:15.040 have to move into some sort of subscription type of 0:20:15.080 --> 0:20:18.720 business model in order to grow, because it's just, you know, 0:20:18.840 --> 0:20:21.399 you just can't. The margins on the hardware business just 0:20:21.440 --> 0:20:24.400 get compressed, and it's just it's very difficult to reinvent 0:20:24.480 --> 0:20:28.440 and sell new items. So the fact that they're finally 0:20:28.480 --> 0:20:33.200 catching up or going after Amazon, Netflix, Hulu, understanding that 0:20:33.840 --> 0:20:36.520 through the Apple TV, which is a portal for them, 0:20:36.760 --> 0:20:39.680 they can create this original content or with the cash 0:20:39.680 --> 0:20:43.160 where they have buy content and set up some sort 0:20:43.160 --> 0:20:45.960 of scription subscription model where you and I pay Apple 0:20:46.240 --> 0:20:49.280 you know, ten nine a month and get all this content. 0:20:49.680 --> 0:20:52.119 So I think it's it's it's a great move for 0:20:52.280 --> 0:20:55.840 a huge company that needs to change their business model. 0:20:56.080 --> 0:20:58.320 You know, it's interesting that you talked about, you highlighted 0:20:58.359 --> 0:21:00.879 that they might buy content, and I mean the content 0:21:00.960 --> 0:21:03.760 world right now is incredibly crowded. You've got you know, 0:21:03.840 --> 0:21:07.840 you mentioned yourself, Netflix, Hulu, Hbo, itself. I mean everyone 0:21:07.920 --> 0:21:11.199