Interview: Health and Human Services---Leavitt, Sec. Michael---Politician / Govt Official
>> the threat of bird flu has some americans stockpiling roche’s tamiflu drug. but the drug may not be a sure-fire, are guarding against bird flu. health and human services secretary michael leavitt kicked off a series of planning meetings today with state officials concerning the disease. michael mckee is here to speak with michael leavitt.
>> thank you, mr. secretary, for joining us. i’d like to start with a question i have asked a lot of people about this issue. you want people to prepare. how serious is the danger that we might have a bird flu epidemic in this country?
>> there is not any way to quantify that. it’s a frustratingingly elusive question. it all revolves around whether or not the h5n1 virus that is currently plaguing hundreds of millions of birds actually makes the transition to a virus that’s able to efficiently pass from person-to-person. it has crossed the species barrier at least 130 times we know of because that’s how many people have confirmed that they have it but it is not happening efficiently. if that happens, it’s a big problem. but we have no idea how certain it is. it isn’t zero but at this point most scientists say it’s not high.
>> given that, congress has yet to act on the president’s request for funds to seek a vaccine. is it irresponsible for them to have done so or are they acting responsibly given the fact that it’s not possible to quantify the danger?
>> here’s what we do know with some certainty. pandemics happen. we’ve had 10 in the last 300 years, three in the last 100. we will have another pandemic and we are not prepared. we are―listen, we’re behind schedule for pandemics and we’re under prepared.
>> almost all the deaths associated with the bird flu so far have been in vietnam. china is undertaking a massive inoculation program for chickens and birds but very few cases of bird flu reported in humans there. do you think the chinese might be hiding something?
>> we’re pleased that the chinese have been willing to talk about the ones they have. it’s possible there are others there. it’s possible that they don’t know about them. china is a big place, 1.3 billion people and in vast areas of open rural areas where there’s lots of farms so we hope the chinese are being straightforward with us. we are appreciative of the transparency and the fant that they’ll called the world health organization in to help them. that’s a new level of openness and transparency compared to what we saw with sars.
>> the president talked about aid to countries to help them stop the virus at its source. how’s it going with the chinese and other countries getting cooperation in terms of tracking the virus as it develops?
>> if you think of this situation, think of the world as though it’s a vast forest, that is susceptible to fire. the world is currently susceptible to this virus. if there’s a spark that begins to spread among people, it’s like a forest fire. if you see when the spark happens, you can put it out with your foot and damage is averted. but if you miss it and don’t know what happened and it’s allowed to spread without constraint, very quickly, it’s uncontainable and the only option you have at that point is to begin moving people and assets out of its way to limit its damage. that’s exactly where we are with the avian flu. we are trying to put a surveillance system into place so we know when it happens so the world can go there with the right public health approach to limit its spread.
>> in case we don’t, effectively do that, you are holding these conferences around the country to get states and localities geared up. what should they be doing?
>> first of all, pandemic preparedness needs to go through every aspect of a community . it needs to be at the state level, local level. every school needs a plan, every business needs a plan. we are all so interconnected here that if we don’t all have some plan, ultimately the network breaks down. so the first thing we’re asking the states to do is to hold a 50-state pandemic summit where we bring the business community together with education and community and religious leaders and helping them gain a knowledge of how to deal with this.
>> are you afraid of either apathy because it’s not i major threat right now or panic? >> this is a time for us to inform, but not inflame, to inspire preparation, not panic. we do have time to become perhaps the most prepared civilization ever to experience a pandemic.
>> thank you very much, h.h.s. secretary michael leavitt, thank you for joining us. >> large caps or midcaps? u.s. equities or international stocks? the strategy session for investing next year with the co-head of global equities at julius baer investments, stay with us.
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sending stocks, including retail stocks, lower today. weak sectors today, transports, semiconductors and retail. members of the new york stock exchange tomorrow are expected to approve the big board’s purchase of archipelago holdings. surveys indicate about 90% of the members will vote in favor of the deal. for the exchange members, completing the deal means a big pay day, but also the end of two centuries of being the sole owner of the world’s largest stock exchange. greg miles reports.
>> a vote to approve the nyse’s takeover of archipelago holdings means the 213-year-old exchange will become a for-profit, publicly traded company in 2006. the big board’s 1,366 members would give up ownership of their seats for a piece of the new company, called nyse group inc.
>> there is a tinge of sadness there. we’re no longer owners, we’re stockholders. we’re―we no longer have the identity of an owner. it’s kind of anonymous. it’s like being a stockholder of at&t.
>> each member will receive about ability,000 -- 80,000 shares of the combined company and $300,000 in cash. the package is worth an estimated $5 million. acquiring archipelago, an electronic marketplace, worries some members about their livelihoods this is clearly a big change. conceptually, i think it makes sense for the institution and it should be a terrific combination going forward. but from a practitioner’s viewpoint, from a member who is still active on the trading floor, clearly, you know, it raises some concerns about the immediate future and what role we as floor brokers will or will not be playing as everything unfolds.
>> buying archipelago will make the nyse the world’s second largest publicly traded stock exchange. with the projected market value of $9.3 billion, the big board will rank second behind the deutsche boerse. the deal will give nyse c.e.o. john thain more control. he will not longer need a consensus among the big board’s members. greg miles, bloomberg news.
>> and members will meet at the exchange at 4:30 tomorrow to complete the vote. archipelago shareholders will also vote tomorrow in chicago. separately, two seats on the nyse sold for $4 million today, matching record price set last week. while oil prices were up, that brought back concerns in the stock market . for more on the trading action, here’s a report from deborah kostroun at the big board.
>> when we started out this week, everyone was talking about the dow hitting 11,000. we didn’t see it this week, however, we did get very close and many traders will continue to watch to see if we reach that level next week. closing out this week, the dow and s&p 500 did break their five-week winning streak.
>> we do apologize for that dated piece. let’s move on, here. the bidding war over defibrillator maker guidant has gotten pricier. boston scientific offered $25 billion for guidant, topping an earlier and reduced offer from johnson & johnson by 14%. june grasso has more detail.
>> the c.e.o. of boston scientific says the company sees growth potential in acquiring guidant’s lineup of heart rhythm products. boston scientific said it would pay $72 a share. the bid is 14% higher than the $63.08 that j&j agreed to pay last month for its biggest compet norheart stents. the latest j&j offer was lower than the original offer made a year ago.
>> we thought johnson & johnson had low-balled guidant and that the bid should have been higher for guidant. the $72 is somewhat in line with where we think it ought to be so we think it’s a fair price.
>> guidant is the world’s second biggest maker of implantable defibrillators and pacemakers after medtronic. according to merrill lynch, global demand for defibrillators will reach $5.6 billion this year. guidant recalled more than 100,000 defibrillators in june, leading to federal and state investigations and lawsuits. five months later, grand- j&j cut its takeover price by $4 billion.
>> if you look at medical device companies in the past, they’ve always been able to get back their market share after recalls.
>> neither boston scientific nor j&j have cardiac rhythm management business so both would be entering that market . the question analysts cannot answer is whether j&j will come back with a counter bid. kos chief executive tobin said in a conference call that his company’s revenue would reach more than $9 billion if it bought guidant. shares of medical device makers surged on speculation that all companies are worth more after the fight for guidant. shares of boston scientific and j&j closed lower. guidant, based in indianapolis, says its board will consider the latest offer. back to you.
>> thank you very much. four of the five top u.s. brokers closed their books on 2005 last week and it was the most likely a record year but m&a bankers say 2006 will top it. margaret popper has the story.
>> thank you. brokerage stocks are near record highs as hot markets for mergers and stock sales boost earnings. the amex broker/dealer index includes 12 securities firms and the index has climbed this year. four of the top five independent brokers have november year-ends. bear stearns, goldman, lehman and morgan stanley. analysts estimate their earnings will rise to a record $14.8 billion for fiscal 2005. the boom was fueled by almost $2 trillion of completed mergers this year, that’s the most since 2001 and bankers like morgan stanley’s global head of m&a say merger volume in 2006 could top the $3.3 trillion record set in 2000. sanford bernstien analyst says investment banking businesses across the board bouyed 2005 earnings.
>> m&a is a great business. then we have equity underwriting. we had equity underwriting on the secondary side doing great in 2004 and i.p.o.’s picking up in 2005. so the two high margin businesses were picking up and the business everyone thought would roll over, which was fixed income, didn’t.
>> so far this year, wall street has completed 20% more mergers than in all of 2004. brokers have already underwritten 10% more initial public offerings than last year while bond underwriting so far has beaten last year’s total by 2%. analyst jeff harte of sandler o’neill says that merger activity and stock underwriting and trading will create another record year of earnings for wall street in 2006.
>> we’ll look forward to seeing those numbers. thank you. crude oil rose to a one-month high. heating oil futures rallied as the first major snowstorm blanketed the northeast. colder weather in the midwest and europe also helped push nymex crude futures 1% higher, closing just under $60 a barrel. heating oil futures ended the session 1% higher and while natural gas futures fell, earlier in the session they rallied to near record prices. the first nationwide blast of winter weather boosted demand for heating fuels. a.g. edwards’ bill o’grady says early cold snaps are significant in that they’re more likely to create a scramble on the part of distributors to increase supply. market watchers say last week’s greater-than-expected drop in the nation’s crude stockpiles raises concerns.
>> i think they built seven out of eight weeks in a row and last week was the first significant draw and our first cold snap on the east coast with bone chilling temperatures over the weekend have brought us to near $60. so going forward, is the question of how it reacts in the next day or two, if we settle around $60 or if this is just a reaction and we go below $60.
>> futures rallied 20% in the last five days for natural gas. 133 confirmed cases of avian flu, some americans stocking up on the drug, tamiflu. michael mckee will speak with michael leavitt, u.s. health and human services secretary, on the latest bird flu plan as bloomberg’s “after the bell” continues.
