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tv   Bloomberg Markets  Bloomberg  June 25, 2015 2:00pm-3:01pm EDT

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the prime minister says he is still optimistic but his creditors do not agree. >> a big win for the white house. about cassettes is are upheld by the supreme court, allowing minds of men at -- millions of americans to keep their tax credits to pay for health insurance. mark: aetna is closing in on a deal with humana. we will look at what the combined company would look like. ♪ mark: from bloomberg world headquarters in new york, this is market great -- market day p or die mark crumpton with betty liu. heading toward the closing bell, you can see stocks are mixed right now and we are dominated by health care shares. a rally immediately after the decision came down from the supreme court to support obama
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tax subsidies. you can see the s&p is now gaining slightly. really, we are marginally flat here on the equity market. consumerite a bit on spending, numbers came in better than what economists estimates did -- estimated. are we top stories crossing the bloomberg terminal at this hour, the u.s. supreme court upheld the nationwide tax subsidies that were a core component of president obama passes health care law. by a vote of 6-3, justices rejected a challenge to got the measure and undercut his legacy. the rule is the high court's second in three years to reserve in the face of government-backed legal attacks. mt. sunabung -- president obama: today after a based uponl election
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preserving or repealing this law, the affordable care act is here tuesday. -- to stay. mark: it lets a millions of americans to continue to use federal tax credits designed to make policies affordable. health care was not the obama administration has his only victory today. do not it discrimination have to show they were victims of intentional bias. it is a blow to lenders and insurers. the court said plaintiffs can base their case in part on whether the policy would have a disparate impact. million work existence measure goes to president obama as part of a trade package. the trade adjustment assistance thatre continues a program
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helps u.s. workers lose their jobs from trade fax. betty: consumer spending up last month by the most in almost six years, up nine -- up .9%. benomists say americans may -- cheaper gas prices. below 300,000 for the 16th straight week, that signals a tighter labor market that may help propel growth in the second half of the year. mark: aetna is close to buy humana. severalaccording to people familiar. at nut is the second-largest u.s. health insurer by market value. discussions have intensified during recent days after it emerged that satan had talks of their own. aetna made a former -- formal bid in cash and stock. exact offer details were not available but any proposal would
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probably value humana above its $28 billion market capitalization. taylor swift is putting her 1989 album on itunes music. to reverse a controversial move and pay royalties for softly on its new streaming music service during its three-month trial. songs on june 30. it is apple's big gamble to gain as the leader of spotify. the largest u.s. supermarket chain also announced 13.5% dividend increase. become an he said it reflects the board's confidence. new five pointa one lane dollars stock buyback program. the company has made $11.7 billion in share repurchases since the start of 2000. betty: americans are expected to
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travel in big numbers thanks to a stronger economy, rising consumer confidence, and consumer gas prices. aaa says an estimated 40 to many people plan to travel 50 miles during the home holiday weekend. that is the most since 2007 right before the -- the recession hit. mark: canceling the telecast of pageant after comments from donald trump. he derided -- immigrants last week. the spanish-language broadcaster said it is ending its relationship with the miss universe organization, part owned by trump. airpageant was scheduled to july 12. those are some of your top stories at this hour. betty: donald trump is making news any which way. coming up in the next half hour, former treasury secretary larry summers weighs in on a never-ending greek debt crisis and whether they will even say in the euro. mark: we go inside kraft rumor
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goose island to find out what it takes to make one of their most popular bruise. the supreme court upheld that key provision of the a formal care act. let's get more details on humana and aetna. the deal could be reached as soon as this weekend. betty: ed hammond is covering this story for us. yet another merger. how close are they? ed: we think they're close. the deal could be a sin as this weekend. humana has been in play now for a few weeks. there have been talks of it going even longer than that. i think they do not want to be the ones left out in the cold. the talks taking place, was that the impetus for this? >> it was not but it definitely informed what was going on. i think it makes aetna a much
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more viable by now. cigna really trying to get this one done. shareholders could vote against it. i think it probably accelerated things slightly and probably made aetna and mark celebrated winner. i think the fact that you have five companies, all of whom have a sickly voiced a likeness to do a deal and all of whom are eager to do a deal means whatever doesn't up at greece will always be a risk that someone else tried to jump in and either stop buys in this case. there is no certainty that a salesman deal that gets done. humana has 3.2 million medicaid -- it has a huge exposure to medicare more than anyone else
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except united. certainly aetna lacks that. they do not have -- they are much more dependent on private companies and private text -- private insurers. i think at some point -- they wanted to see what the formal care act would mean and how that would play out. i think they're happy to move ahead and try to get that here light of what we heard today in the spring court, do you think this had any impact at all on this? ed+++
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not it was blow straight through. i think it has impacted inasmuch as it confirmed why humana is a target. it may have given pause for thought but the logic there is we would have seen a deal done either way. mark: aetna is said to be closing in on acquisition of humana. thank you so much. we appreciate it. betty: greece has five days to secure a deal to avoid a default. different tones from euro area leaders are causing confusion and a lot of frustration. >> the last hours have been critical. we have not made necessary progress. points, -- to some >> agreement negotiations. start -- currently still have to verging opinions. >> we do not have agreement from the greeks on that. >> the responsibility for the decision is exclusively up to greece.
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>> i am confident we will reach a compromise that will help eurozone and greece to overcome the crisis. >> i have good hands. this greekragedies, story will have a happy ending. a key meeting in brussels and do today without a meeting and greece, making mistakes pretty high. withnichols is in brussels more. what is the latest? the leaders summit has broken up. there will not be another finance minister gathering until saturday morning. abouting interesting prime minister greece, wanted to have a negotiation in the leadership level.
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so many details and technical matters did not want to dirty themselves for that. back your to brussels and a quick note, there are no other scheduled leaders meetings either tonight or tomorrow. it looks like saturday. betty: they need a break. they need a little break before they reconvene again. biggest outstanding issue ?ight now to getting a deal >> they are not there on defense spending. there are still 200 million euros apart on defense spending. and not revenues. those are the three main issues. monday and onism
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monday night, a good basis toward heading toward a deal. it seemed like everyone makes acting a deal might be happening. the numbers do not quite add up in the program's greeks submitted was a little heavy on the taxation side of things. the imf did not like the idea you would have that much taxation because acted clampdown any sort of nascent greek recovery. all right. our chief international correspondent is joining us live from brussels. still ahead, the former u.s. treasury secretary larry summers weighs in on greek negotiations and whether creditors are demanding too much austerity. we will be right back. ♪
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mark: welcome back. betty: let's get straight to julie hyman with a look at how stocks are moving particularly in health care. i wanted to put a fine point on the movement we are seeing on this news that the talks between at net and humana have appeared to have accelerated. upward. dramatic move shares are up 7.25%. that is one talks about it -- a potential consolidation began. let's look at other potential players in this whole consolidation game. rising not asall much as we have seen humana rise, which makes sense. both aetnaoteworthy
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and cigna are trading at records. that is something to highlight in today's session. moving monster and greenmount and coffee, being downgraded, the shares are down, being upgraded their shares are up. in the case of monster, the outlook for international long.ion is coffee, it has come out with the next generation, hot beverage system. as muchnot meeting with demand as anticipated. questions about its new cold system and -- when that will move out. a little hot and cold. that is right. what is it, 100 degrees outside? julie: it is not quite that bad. betty: all right. thank you. mark: let's turn back to greece.
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brendan asked a harvard professor and former u.s. treasury secretary larry summers what he thinks he is to be done in order to see a successful and to negotiations increase. iswhat i think is reasonable the negotiation has to this arts and one part is greece estimate policy adjustments, some of which are painful. is there needs to be a recognition of reality with debt or whether that reality takes the form of putting the problem out to another generation, or whether it takes the form of a formal something youis can debate and it is something that will play out over time. the idea that the current schedule of death is unrealistic, and greece needs to policy reforms.
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these tedious principles have to come together to reach an agreement. classwide don't we look at the policy reforms? what surplusbout is required on a year basis. problems are like cultural. greece is not good at collecting -- collecting taxes. are we powerless as negotiators to actually create cultural change? >> you could coach me or pressure me or incentivize me. all you want. and i will not be high jumping seven feet. it will just not happen. certain things that have more naturally in one country are less like to have been at least immediately in another country. on the other hand, i think it is very much a mistake to engage in cultural determinism and cultural fatalism. people believed 50 years ago
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that south korea could never prosper because of its culture. in an earlier time, people believed in the confucian culture which meant that china to slowver doomed economic growth. statements of, this is the way culture is and it cannot succeed economically. i do not inc. that is with the right kind of leadership, people ago as a sick man of europe. so much attention to this and so much need for protection that germany could not become competitive and prosper. i think obviously every country's historical context is
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different. but it is a matter of putting in place systems, a matter of a matter of incentive spirit i do not think there is any reason why greece cannot overtime prosper and converge with the rest of europe. it needs to be the objective. mark: i was brendan and larry summers. coming up, much more ahead including how the american beer craze came to be. and why craft breweries are not going anywhere anytime soon. next. ♪
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mark: craft beer is in and mass-produce beer is out. shipments fall more than 3%. beer fell by 18%, hoping to join them rather than beat them. buying four craft breweries since 2011. in this week's bloomberg businessweek, they take it in-depth look at the growing consolidation in the industry. betty: one of the most well-known craft beer companies putting up a good fight at staying independent, chicago-based goose island. let's look at what goes into the making of the cult favorite. >> it is that imperial stout that has age for 10 or 11 months.
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there is a visceral feeling when you drink the beer. in some ways, it is like drinking bourbon. it has flavors and it that are not typically found in beer. people cannot get enough of it. ♪ bourbon county stout starts off like all beers. it is a very big beer. it needs a lot of malt. orboil the beer for three four hours. it makes for a high alcohol beer. from there, it goes down to the seller and ferments for a couple of weeks before it gets sent over to the warehouse. we want to beer in the barrel for a minimum of eight months. quite cold in winter time and
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quite warm in the summertime. what happens with the temperature change is a very gentle movement that will let the fear very gently get in and deep -- from the the barrel. this is about a six-month-old barrel. it is on the young side. it has not developed a lot of food character we are looking for. another few months in the barrel. never -- i remember a day ahead and take 72 in a row. i had to be escorted back to my desk. so many things about beer. it is a lifelong pursuit and i there is noll find other job, there is no other they will work in.
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it just tastes fabulous. mark: you can read all about it in the issue of bloomberg this this week. i did not know they made beer like that. .etty: it is like fine wine just here to not people. it is an art form. betty: not like our generation. we are like, what, rolling rock and bud light, is that is what you are doing? mark: i'm considerably older than you. you for saying that. mark: i am leaving. theuch more, including decision by the supreme court. ♪
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perks are nice. but the best thing you can give your business is comcast business. comcast business. built for business. ♪ ♪ ♪ get excited for the 1989 world tour with exclusive behind the scenes footage, all of taylor swift's music videos, interviews, and more. xfinity is the destination for all things taylor swift. ♪ betty: welcome back. now to top stories crossing our terminal at this hour. the president of to cut it is
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apologizing for hundreds of injuries in the country's's airbags. to cut about and apologized in the news breaking in tokyo after the company's annual shareholder meeting. he accepted the responsibility and said he has no plans to step aside. taconic: i feel responsible for what our products have called -- cost or what i should be focusing on now is resolving the issue quickly and providing safety to our customers. i strongly feel i should continue to spearhead the mission going forward. resigningintention of going forward. betty: another 3 million vehicles were recalled with those airbags. entry on thenother ever-expanding field of republican presidential candidates. new jersey governor chris christie will officially join of the republican 2016
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roster. tuesday, the announcement will be in his hometown of livingston, new jersey. not far from me. whethern is recalling 300,000 women that east. elastic cords used in the hood and neck area can snap back if they are told or caught onto something. seven consumers have reported injuries. lululemon will provide a nonelastic replacement. and, racial and ethnic minorities now surpassed non-hispanic whites as the largest group of american children under the age of five according to the census bureau. a report earlier this year forecast by the engine 2000 and four, the majority white population will be the minority. those are your top stories at this hour. the supreme court upheld the course -- core component of obama care today. the6-3 ruling eliminates
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most phone challenge to a law designed to cover 30 million uninsured evil. -- uninsured people. a lot of reaction, including from the commander-in-chief himself. 50 votes obama: after in congress to repeal the law, preserving and appealing this law, after multiple challenges to this law before the supreme court, the affordable care act is here to stay. sensea victory for common and all american families. john boehner: the problem is it is still fundamentally the same, it is broken. >> rules of statutory interpretations essentially allows the irs, the very statute that congress enacted. today's's decision has
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monumental significance. it means he affordable care act is not just the law of the land. it will remain the law of the land. john boehner: it is raising costs for american families and small businesses. president obama: what business owners pay out in wages and salaries is now finally growing faster than what they spend on health insurance. that has not happened in 17 years. >> it is fundamentally broken. president obama: the law is working exactly as it is supposed to. continuener: we will our efforts to do everything we can to put american people back in charge of their own health care and not the federal government. president obama: i can work with republicans and democrats to move forward. let's join together and make health care in america even better. you have ar: president who fundamentally disagrees with us and it is very difficult to deal with it. is a goodobama: this
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day for america fear let's get back to work. hillary clinton tweeted out, yes, scotus confirms what we know is true in our hearts and under the law, insurance should be available and affordable to all. marco rubio tweeted out he dedicated to repealing the law. rick perry also tweeted out that americans deserve better than what we are getting with obama care. it is time we repeal it and replace it. we will have more on this decision and the effect on the health care industry. much more ahead in the next hour. also coming up, should a driverless car decide who lives or dies in an accident? we will look at the ethical questions raised by the new technology. ♪
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betty: welcome back. i want to start with the energy sector. oil prices lower. supplier concerns that we are not bringing down inventory. that is bringing down the energy index 4.4%.
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for nymex crude as well, which gets hit the most by the u.s. inventory or the supply dynamics. i want to bring in alix steel now. what has the recent rally meant for oil companies? alix: overall this quarter, they jumped 15%. remember when oil was $40 per barrel? for energyhat mean companies? how about $2.8 million? that is not bad. to $350makes about 325 million in cash for every one dollar move in oil. barclays pointed out in a note that it actually does better than its peers, like exxon, because it has much more crude in its pipeline than natural gas . 67% of its total output is crude. only four days left in the
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quarter. how about that 2.8 million dollars in cash? the stock really has not reflected that and to some extent, it is down more than 5% since the end of march. betty: that is the view of the quarter. as i mentioned, we're seeing inventory dynamics really dominating. is that the only thing right now? alix: pretty much. to $70.lysts, 60 at $70, you will get shale coming in and restarting production as completing the wells that were drilled and not filled. at $60, it they will turn off the spec it. arange of oil prices versus boom or bust situation like we have seen in the past year. we still just have too much production and demand is still a big wild card it does not see mike analyst's can figure out what is happening nowadays. how strong is it in china? are all of the oil going to inventories?
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once analysts figure that out, we could have a clear idea of where oil is headed. betty: what about tin? that is declining. alix: we never talk about it. it is the most -- worst-performing metal. the biggest decline in at least a quarter of a century. who knew? this is the same issue we have been dealing with in terms of supply and demand. production will actually rise but demand will only grow by about 2.5%. it is used in electronics, packaging. very leveraged to the growth and global economy. there had a one point been a question but that seems to be cleared up. they are shipping a lot to china. the global uncertainty is not really kind to these types of metals. and who knew. thank you so much, alix steel on the commodities.
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look at top stories we're following today news survey indicates a bigger share of millennials are likely to buy a home this year. according to, 65% of those toy 5-34 years old say they intend to buy a house in the next three months. it backs up other evidence that first-time buyers are entering the market. subway restaurant has named susanne to take over the role of president. the move comes as her brother and company cofounder fred battled leukemia. report directly to him. the chain is getting more competition from restaurants like the nara bread and jimmy johnstone are subway sales dropped 3.3% last year. the national hockey league, will it bet on las vegas? is opening a leak formal expansion review process to consider adding new franchises to its 30 team league. the second team in toronto we
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just leave the list. also in the running, formal applications are due july 6 in the process closes august 10. those are your top stories. automakers are hard at work developing driverless cars. challenges go deeper than years and sensors. earlier today, pimm fox and olivia sterns spoke to bloomberg news auto reporter keith about scientists who think they could teach robots to make ethical decisions when there is an accident. >> they cannot figure out philosophical questions like the one you just described. that is something they're working literally with four offers and at on to try to determine, what do you do when a crash is unavoidable and the car has to decide between the lesser may do not have all
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the answers yet. there is a lawke set in stone that tells you how to drive. but what other industries or historical precedent are they using to deal with the issue? science-fiction played a role here. it all sounds exciting fiction. ofcomes from the author 1950's, they say the robot should do no harm to a human. that is the first rule. there are other things. morality map here at you try to determine how many lives will be saved or how few will be harmed. but then you are putting low value on those. each of these rules they might come up with have downsides. they are still very much working through them. >> some people say there has to be a prince but only humans can make a decision between life and death and there needs to be a hybrid of functionality going on
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whereby you can buy the decision-making of humans and robots. it is so hard to get my brain around this, but how would that work? collects the automakers say this with liability concerns probably. the human is ultimately responsible for the car. in those situations where a crash is unavoidable, they will ask the human to step back in and grab the wheel and swerving out of the way themselves paired it all sounds good in theory, but if you have an inattentive, you are reading a book and doing you e-mail, then how can come back into the situation and make a snap decision and make a good one? tough questions on driverless cars. much more is ahead on market day. we hear from richard branson on why he is backing a company planning to build a constellation of satellites to provide broadband services to
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the world. ♪
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betty: another fashion faux pas for lululemon. it is the draw stick -- drawstring used in hoodies. consumers reported injuries to their eyes and faces. bloomberg intelligence senior retail analyst joins us now with more. i remember the whole infamous see-through pants not too long ago. is this as bad as this question -- this? bad. is not as the see-through issue a couple of years ago was more pronounced
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and it is a bigger part of their business. how big is it? : i do not know, but it was much more important and more pronounced than it is today. i think they will move past it. betty: how did they find this? i guess people started complaining. you were tying your hoodies and i snapped off and hurt your eye. a lot of things could have happened. could that happen with any other, sure. it is not a big deal in my opinion. of course, we all remember the pants saga. i know at that time, lululemon said they would talk to their suppliers and said there were a lot of issues there. it came to light more problems about their supply chain. could this be part of the issue? probably but the supply chain is tightly managed. they do have multiple suppliers across the board here in a very -- board.
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a very small percent of them, they do have control and this is something they could probably more easily fix than the pants. it is a string so you change the string and they are done. has anyone said anything so far about how they are handling this? poonam: i am assuming they will ask all of their customers to bring them back and get them a new pair. betty: thank you so much. joining airbus and coca-cola in a new investment out of this world. together, they are backing to the tune of $500 million in an effort to build the largest internet satellite network ever. aboutn spoke in london how he got involved. branson: it has combined the best of both worlds.
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connectinga picture 3 billion people who are not connected. he also said, you have got galactic, you could help us put them. you could replenish that is something virgin galactic could do. it seemed like a win-win all around. i am delighted to say yes, and then we became the founding shareholders. >> was in the room, it was, everybody said -- this is both about profit, return on equity, and about connecting. the benchmark will be schools. there is a certain amount of, it is about giving back at a certain level, as well as profit.
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richard branson: absolutely. a lot of them are in ruler -- rural communities and other places. if they can be connected, they could be educated, they could get jobs and create their own businesses. it is tremendously exciting in many ways. >> one of the first words jumped delivering broadband access. it struck me because that is very different than getting facebook right in your face. this is about being upfront and honest for companies like mine, galactica. i have got spaceships, i want to make money. everybody participates. who do you think in this business relationship would benefit the most? richard branson: i think everybody sitting on that buildrm, airbus will help
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a satellite or we will help virgin galactic put them up. everybody is contributing something. everybody makes a little bit out of it. beneficiarye real of this will be indian village who would never have had any chance of getting internet access or even a mobile phone. all know how that transforms people's lives. betty: that was richard branson speaking with bloomberg. and turning from one wealthy entrepreneur doing good to another, you may know sean parker is the cofounder of napster, the president of facebook, and an early backer of spotify. now the tech entrepreneur is looking to make his mark by committing $600 million to launch the parker foundation. stephanie ruhle sat down to find out how he plans to put the money to work.
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sean: we are focused on life sciences, in particular in the emerging field, cancer immunotherapy, leveraging the immune system to fight cancer. it is the case that, in order to maximize impact, i need to work on problems where, because of some novel insight, the problem is essentially hackable. there is a relatively short-term way of having a large impact that may not have been tried. cancer is an interesting one in lackense that there is no of resources since nixon declare the war on cancer. the u.s. government has spent hundreds of billions of dollars in this fight, over $4 billion per year just on funding. countless billions of dollars spent by private donors. it is not a resource issue. it is a resource allocation issue. it is a philosophy of science issue.
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it has to do with how those resources are utilized. largek there are a lot of private foundations that stay away from cancer because they feel they have nothing to offer. my involvement in the field started from a kind of insight that the immune system could play a role in both preventing and fighting cancer. we now have two fda approved drugs, both of which have been incredibly successful in treating melanoma. we are on the road to having a number of cell-based therapies that utilize your body's his own t cells to fight cancer. stephanie: as an investor, do you try to keep involved with medical technology? sean: we try to keep them as separate as possible. adventure of philanthropy is exciting and important. any investing we did in this space would have been through the foundation and not
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individually. feel you are you filling a void in terms of philanthropy, specifically in medical research, in part because nih has lost so much funding? question there has been a huge historical hit to research and develop me in hasu.s. because nih funding not been restored and has not continued at the pace of inflation over the last decade or so. there is an organization i'm involved with that is working specifically on this issue. there is a bill in front of congress which hopefully will funding to his previous levels. those are important things. cancer fundamentally, research is extremely well-funded. there is a question about how effectively those funds are
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being utilized. i think that is the more important question in the case of cancer research. absolutely. i would sean parker with stephanie ruhle. still ahead, former aig chairman hank greenberg insists his company still has value when the u.s. government stepped in with that bailout. and aig shareholders should be compensated. we will have more in my exclusive interview with hank greenberg. ♪
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betty: it is noon in san francisco. courttoday's supreme ruling, the health care law is
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here to stay. we look at the reactions. prospect of a deal for greece but leaders have their doubts. we wait for down as the final word from europe. hank greenberg continues his push for financial damages tied to the bailout of aig back in 2008. betty: good afternoon. alix: so good to have you here. look at the a markets. a lower day here across the order. the dow off by 57 points. if you take a look at the smp, you can see where o


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