12/07/04:
Congress May Have To Rewrite The Prescription For Medicaid
SUSIE
GHARIB:. It looks like the nation`s Medicaid system is in
need of first aid itself. A new investigation by the House subcommittee
found the government is paying too much for prescription drugs in the
program. In some cases, pharmacies are making huge profits off of Uncle
Sam, as much as 300 percent. As Stephanie Woods reports, lawmakers want to
re-script the rules when it comes to prescriptions.
STEPHANIE WOODS, NIGHTLY BUSINESS REPORT CORRESPONDENT: Congressional
investigators say the Medicare program is paying inflated prices for
prescription drugs due to layers of artificially high reimbursements to
pharmacies. In fact, Medicare may be overpaying by much as a $1.5 billion
a year.
REP. EDWARD MARKEY, (D) MASSACHUSETTS: The current reimbursement system
practically begs to be exploited.
WOODS: Most states reimburse pharmacies based on the average wholesale
price of a drug, called the AWP. In one example found by the committee, a
drug maker`s sales price for 2000 capsules of fluoxetine, the Prozac
generic, was $82.62, while the AWP was more than $5,300.
REP. GREG WALDEN (R) OREGON: We`ve allowed a system to develop where AWP,
a number not defined by statute or regulation, has become the reimbursement
standard for the vast majority of Medicaid prescription drug programs.
WOODS: Information supplied by five large retail pharmacy chains showed
that drugstores paid an average of $0.22 for each dose of seven widely
prescribed generic medicines, but received $0.56 in reimbursements from
Medicaid. Drug makers often set the AWP, but they say they must keep that
price in line with competitors or pharmacies will stop buying.
PAMELA MARRS, CFO, DEY: Given the system that now exists, our customers
won`t buy from us if we lower our AWP. This was confirmed about a year and
a half ago, when the reporting service lowered their published AWP for our
drugs without consulting us. Our customers told us they would stop buying
from us with the lower AWP.
WOODS: Pharmacies say the AWP is only one factor in their purchasing
decisions. But lawmakers were doubtful, questioning one case of a reported
60 percent spread between what one of the nation`s largest pharmacy chains,
CVS would be reimbursed from Medicaid versus the price CVS paid to the drug
maker. CVS defended its actions.
DAVID MARSHALL, GENERICS DIRECTOR, CVS: To the extent that a manufacturer
provides me with a published AWP or their AWP and references that AWP in a
conversation or in a proposal, very often I will use that AWP value as a
point of negotiation.
WOODS: Lawmakers promised to fix the Medicaid reimbursement problems, but
that won`t happen until Congress returns next year. Stephanie Woods,
NIGHTLY BUSINESS REPORT, Washington.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2003 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/07/04:
One on One With Carl Pascarella, CEO of Visa U.S.A.
SUSIE GHARIB: A new survey by Visa U.S.A. shows that spending by consumers and
businesses on Visa credit cards totaled more than $26 billion during the
past week. That`s an increase of 19 percent compared to the same period
last year. Joining us to talk more about today`s data is Carl Pascarella,
CEO of Visa U.S.A. Mr. Pascarella, nice to see you on our program again.
CARL PASCARELLA, PRESIDENT & CEO, VISA U.S.A.: Susie, it`s good to see
you.
GHARIB: Let me ask you your take on retail sales this season. You look at
these surveys every year, what would you say how retailers are doing this
go around?
PASCARELLA: I think they got off to a relatively slow start coming out of
the blocks on black Friday. The gains weren`t what they had been in the
past but we`ve seen marked momentum since then, actually as you mentioned,
19 percent growth this year. The first week that we were tracking it until
right after Thanksgiving, it was up around 17 percent or so. So we`re
seeing some good trends as we go through the Christmas season.
GHARIB: How much of those gains do you think is really because of increased
retail sales or is it because there are new merchants who are using Visa
cards this season or maybe some consumers are using plastic instead of
cash?
PASCARELLA: Well, I think clearly it has two things. We look at the trends,
which we think are very, very important in terms of where people are
spending their disposable income and their discretionary spending seems to
be in a number of areas. The home furnishings area was up 22 percent,
travel and entertainment, which is very good for the entire economy is
about 18 percent. And so when we look at that, part of it`s expansion,
because we`re continuing to gain market share and take money away from cash
and checks, but there is an awful lot of just growth in terms of the trends
and where consumers are going.
GHARIB: Mr. Pascarella, I want to get your response to the American Express
lawsuit that it filed recently against Visa U.S.A. What are your thoughts
on that?
PASCARELLA: Well I naturally can`t talk about the lawsuit per se but
suffice to say we`re always ready to compete in the marketplace. And we`re
very, very proud of our signature product, which is tagged to the affluent
market households of $125,000 or more. We`re the market leader there where
that used to be a bastion of American Express strength. Our small business
is growing at 35 percent year over year and we`re going to become the
market leader there the first quarter of next year. So we`re really taking
the market head on and we`re focusing on continuing to grow our market
share, continuing to look at cash and checks.
GHARIB: But what American Express is saying here is that they lost a lot of
business because U.S. banks were prohibited issuing Amex cards. What do you
think that Amex is going to have to prove to win its case?
PASCARELLA: I think they`re going to have to prove first of all that there
was a market definition where they could fit in and we have always said
that basically it`s not that they have an access problem. They`ve had a
product and an infrastructural problem and we`ll stick by our guns there
and I think the market has proven that. We`re the market leader in areas
where they used to hold forth.
GHARIB: Now that Amex is going to be on an equal playing field here, what
is your strategy to compete against them?
PASCARELLA: We`re continuing just to keep our eye on the ball. As I have
mentioned before, the fact that our small business area is growing at 35
percent. Our affluent market products are growing in the high 30s as well.
And we`re continuing to fight a tremendous incursion into the cash and
check market. Our debit market is growing roughly 35 percent year over
year. You saw yesterday the Fed noted that there are more plastic usage
now than checks and that`s predominantly because that`s been our strategy.
We have moved from 7 percent of our total volume being our debit products
about five years ago to today where it`s over 45 percent.
GHARIB: We`re going to have to leave it there. Sounds like you`re getting
a lot of growth at Visa. Thank you so much for coming on to our program.
We really appreciate it.
PASCARELLA: Susie, it`s always good to talk to you.
GHARIB: We`ve been speaking with Carl Pascarella, CEO of Visa U.S.A.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2003 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/07/04:
Real Estate Meets Irrational Exuberance
PAUL KANGAS: Part of the reason consumers have been in the mood to spend this
year is a strong housing market. Home prices have continued to soar,
despite rising mortgage rates. But now some experts say American`s passion
for real estate is becoming irrationally exuberant. Erika Miller reports.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: Imagine a situation
where home prices plunge 10 to 20 percent over a few years, where houses
languish on the market for months, even as sellers desperately slash their
asking prices. Some economists say that`s not out of the realm of
possibility. They warn the U.S. residential housing market is a bubble
ready to burst.
IAN MORRIS, CHIEF US ECONOMIST, HSBC SECURITIES: There are warning signs
flashing. Firstly, prices have nearly doubled in many states right across
the U.S. over the past five years. Also, valuations are extremely rich,
particularly if you look at prices relative to income or prices relative to
rent.
MILLER: Morris is also troubled by what he sees as a bubble psychology
among homebuyers. He says many assume that because real estate prices have
skyrocketed the past few years, they will continue to do so. Another
concern is rising interest rates, because they make borrowing more
expensive. The Federal Reserve began nudging up rates over the summer and
is expected to keep raising rates next year.
MORRIS: It typically takes more than just one or two rate hikes as well.
You need usually a good series of them, say, over a year, before people see
the monetary tightening having an influence on their asset price
expectations for the future. So, difficult to say, but we suspect that by
the middle of next year, the party will be over.
MILLER: But not everyone buys those arguments. The housing bulls point out
that although interest rates are rising, they are still at historically low
levels.
DOUG NAIDUS, CEO, MORTGAGEIT: Notional interest rates are still relatively
low. If they rise by a percent or 2 percent over the next couple of years,
they`ll still be relatively low. And if they continue to rise in a
manageable way, the way they have in the past year -- most particularly the
last six months -- that is something that will be absorbed into the market.
MILLER: Plus, optimists say the popularity of adjustable rate mortgages has
made borrowing more affordable for many Americans. And some say the longer
there`s talk of a bubble, the less likely it is to actually happen.
NAIDUS: The mere fact that we`ve been talking about a bubble now for a
year and a half has added duration to what people would call a soft
landing.
MILLER: A downturn in housing-- if it comes-- could have serious
implications for the overall economy. Some economists predict that if home
prices fall 5 to 10 percent nationwide, the economy`s growth rate could be
cut in half. Erika Miller, NIGHTLY BUSINESS REPORT, New York.
To Learn More about this topic,
click here.
Nightly Business Report
transcripts are available on-line post broadcast. The program
is transcribed by eMediaMillWorks. Updates may be posted at
a later date. The views of our guests and commentators are
their own and do not necessarily represent the views of Community
Television Foundation of South Florida, Inc. Nightly Business
Report, or WPBT. Information presented on Nightly Business
Report is not and should not be considered as investment advice.
Copyright (c) 2003 Community Television Foundation of South
Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/07/04:
One On One With Craig Callahan, CIO, Icon Energy Fund
PAUL KANGAS:
Energy has been perhaps this year`s hottest sector and among energy
mutual funds, among the hottest of all is Icon Energy Fund. For the year to
date, it`s up 38.6 percent and since its inception seven years ago, it`s up
an analyzed 14.2 percent, almost double the average for funds in the
natural resources sector. The chief investment officer of Icon funds,
including Icon Energy is Craig Callahan who joins us from Washington, our
studios there and Craig, welcome back to NIGHTLY BUSINESS REPORT.
CRAIG CALLAHAN, CHIEF INVESTMENT OFFICER, ICON ENERGY FUND: Thank you.
KANGAS: First as we pointed out, your fund is outpacing other non leveraged
energy funds even though it`s one of the few not run by a energy
specialist. How do you explain that?
CALLAHAN: At Icon, we perform value-based., bottom up industry rotation and
well over a year ago, we locked into our favorite industries and that
included oil and gas exploration and production. We`re also heavily
weighted toward oil refining, marketing and transportation and
underweighted in the large integrated.
KANGAS: OK, now you`re a value investor and that basically means that
you`re looking for bargains in the sector but after the run up that we`ve
had in the energy stocks this year, are you still finding company stocks
that are worth buying?
CALLAHAN: Yes we are. Across the board on average energy stocks are at
about fair value but we still find bargains over in that oil and gas
refining, marketing and transportation industries.
KANGAS: OK, what individual stocks from your portfolio would you recommend
right now?
CALLAHAN: TK Industries, General Maritime, those are in the transportation
portion.
KANGAS: OK and we have another one up on the graphics here, oil states
international.
CALLAHAN: That`s in exploration and production, also still under priced
relative to our estimate of fair value.
KANGAS: And they`re all listed on, I think General Maritime is on the
American exchange, is it not?
CALLAHAN: I think it is.
KANGAS: Yeah, OK. Now Craig, we know those stocks are held by the fund,
but do you own any of them personally?
CALLAHAN: No, I do not own any of those, nor do I have a position in the
Icon Energy Fund.
KANGAS: OK. Well, it`s interesting that you seem to avoid the big refining
and distributing names that we usually associate with energy. Is there a
reason for that?
CALLAHAN: Generally valuation. There seems to be a large cap love affair
left over from the `90s and the large caps just aren`t as cheap and aren`t
as attractive as the smaller and mid cap names.
KANGAS: OK. Now, $50 a barrel oil has come and gone at least for the
moment. The question is, what will happen to the sector if oil slides back
to the $30 to $35 a barrel range? In that case, do you think we`ll see a
major fall back in energy stocks?
CALLAHAN: Perhaps not. The correlation between oil prices and oil stocks
isn`t as high as your viewers might think. There is plenty of movement in
oil stocks that are unrelated to where the price of oil goes.
KANGAS: All right. Craig, I want to thank you very much for your insights
and also want to congratulate you on your fund`s success this year.
CALLAHAN: Thank you.
KANGAS: My guest, Craig Callahan, chief investment officer of Icon Energy
Fund.
Nightly Business Report
transcripts are available on-line post broadcast. The program
is transcribed by eMediaMillWorks. Updates may be posted at
a later date. The views of our guests and commentators are
their own and do not necessarily represent the views of Community
Television Foundation of South Florida, Inc. Nightly Business
Report, or WPBT. Information presented on Nightly Business
Report is not and should not be considered as investment advice.
Copyright (c) 2003 Community Television Foundation of South
Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/07/04:
Paul Kangas' "Stocks In The News"
PAUL KANGAS: Wall Street opened slightly higher on the prospect of two possible
deals: Johnson & Johnson in talks to buy Guidant and IBM reportedly selling
its PC unit to Chinese computer maker Lenovo (ph). But the Dow and the
NASDAQ Composite rose only single digits at best this morning. That
lackluster upturn convinced investors a market pullback was overdue, and
indeed stocks sold off across the board. The Dow Industrial Average
tumbled 106 1/2 points to 10,440.58. NASDAQ Composite plummeted 36.59 to
2114.66. Standard & Poor`s 500 lost just over 13 points to 1177.07. Over
in the bond market, the 10-year note rose 1/32, putting the yield at 4.23
percent.
New York exchange volume leader on 26.8 million shares, Lucent Technologies
(LU) down $0.09.
Pfizer (PFE) dropped a penny.
But Guidant (GDT) was up $3.60. "New York Times" reported Johnson & Johnson
is in advanced talks to acquire Guidant for as much as $24 billion. Johnson
& Johnson stock fell $1.42 and that hurt the Dow Industrial Average by
about 10 points.
General Electric (GE) fell $0.36.
Advanced Micro Devices (AMD) losing $1.35 after Deutsche securities and
Wells Fargo both downgraded it from "buy" to "hold" on valuation concerns.
NorTel Networks (NT) gained $0.06.
Followed by Motorola (MOT) $0.30 loss there.
Time Warner (TWX) edged up $0.02.
EMC Corporation (EMC) a $0.30 loss.
And there you see Colgate-Palmolive (CL) moving up $30.78, $3.78, as you
heard cutting its workforce by 12 percent. But also Standard & Poor`s
issued a "strong buy" on Colgate today and boosted its target price by $10,
all the way up to $59 a share.
IBM (IBM) fell $1.57, but did trade as high as $98.23 in the morning on
news that China`s largest PC maker Lenovo, might announce that it`s buying
control of IBM`s PC making business and might pay as much as $2 billion for
it.
Georgia Gulf (GGC), the big specialty chemicals maker down nearly $7 a
share. It was downgraded by Fulcrum Global Partners from "buy" to just a
"neutral" rating.
Pre-Paid Legal Services (PPD) up $2.10. The company declared a year end
dividend of $0.50 a share. That`s its first cash dividend ever and it will
consider quarterly cash dividends next year.
Gerber Scientific (GRB) down $1.25, big percentage loss. The company had a
second quarter loss of $0.05 a share versus earnings of $0.12 last year.
Company cited restructuring charges at its Spandex unit.
And DreamWorks Animation (DWA) down $2.35. JPMorgan, Merrill Lynch and Bank
of America brokerages all started covering the stock with a "neutral"
rating saying it looks expensive since its $28 a share IPO late last
October.
Biovail Corporation (BVF) moved up $0.55. Smith Barney began covering it
with a "buy" recommendation and a $20 a share target.
On the downside, Alliance Imaging (AIQ) fell $1.25. The company sees lower
than expected 2005 earnings in the range of $0.44 to $0.51 whereas Wall
Street`s estimate was $0.52 a share.
NASDAQ-100 (QQQ) topped the active list again, $0.69 loss today.
Then Sirius Satellite Radio (SIRI) moving $0.92 higher. Toyota will offer
the company`s radio service in nine of its models beginning in early next
year.
Microsoft (MSFT) $0.26 loss.
Cisco Systems (CSCO) dropped $0.09.
Intel (INTC) a $0.53 loss. The company met with analysts in New York today
and said it will not meet cost cut targets because of production delays.
Apple Computer (AAPL) down $2.89 with some profit taking.
Same story with Google (GGOG) off $4.86.
eBay (EBAY) a $2.42 loss.
And Research In Motion (RIMM) fell $0.21.
Yahoo! (YHOO), tenth in volume fell $1.76.
NVIDIA (NVDA) moving up $1.09. That`s a 5 percent move. The company will
supply graphic chips for Sony`s next generation video play station games.
And those are the stocks in the news tonight.
Nightly Business Report
transcripts are available on-line post broadcast. The program
is transcribed by eMediaMillWorks. Updates may be posted at
a later date. The views of our guests and commentators are
their own and do not necessarily represent the views of Community
Television Foundation of South Florida, Inc. Nightly Business
Report, or WPBT. Information presented on Nightly Business
Report is not and should not be considered as investment advice.
Copyright (c) 2003 Community Television Foundation of South
Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
12/07/04:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10440.58 -106.48 - 1.0
HIGH 10567.16
LOW 10440.36
NASDAQ COMP. 2114.66 -36.59 -1.7
HIGH 2161.30
LOW 2114.65
VOLUME 1,530.0
PREVIOUS 1,352.8
UP VOLUME 258.1
DOWN VOLUME 1,259.9
DOW TRANSPORTS 3669.66 -37.59 - 1.0
DOW UTILITIES 319.07 -3.14 - 1.0
CLOSING TICK -115
S&P 500 1177.07 -13.18 - 1.1
S&P 100 560.94 -5.65 - 1.0
MIDCAP 400 633.92 -9.04 - 1.4
REUTERS/CRB 281.21 -3.63 - 1.3
NYSE COMPOSITE 7014.72 -67.86 - 1.0
VALUE LINE 388.23 -6.10 - 1.6
RUSSELL 2000 625.50 -13.53 - 2.1
DJW 5000 11582.00 -139.95 - 1.2
U.S. TREASURIES
5-YEAR NOTE 3.50%
Nov. 15,2009 99 19/32 -1/32 + 3.59
10-YEAR NOTE 4.25%
Nov. 15,2014 100 6/32 +1/32 + 4.23
30-YEAR NOTE 5.375%
Feb. 15, 2031 107 3/32 +1/32 + 4.89
LEHMAN BROS.
LONG BOND INDEX 1751.15 +11.10
DOW CLOSE 10440.58 -106.48 - 1.0
ADVANCES 785
DECLINES 2526
NEW HIGHS 147
NEW LOWS 37
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
LU Lucent Tech 3.78 -.09 -2.3
PFE Pfizer 27.20 -.01 -.0
GDT Guidant 72.35 +3.60 +5.2
GE GE 35.31 -.36 -1.0
AMD Advanced Micro 23.50 -1.35 -5.4
NT Nortel Networks 3.73 +.06 +1.6
MOT Motorola 18.00 -.30 -1.6
TWX Time Warner 18.21 +.02 +.1
EMC EMC Corp 14.50 -.30 -2.0
CL Colgate Palmolive 50.07 +3.78 +8.2
NASDAQ CLOSE 2114.66 - 36.59 - 1.7
VOLUME 2,689.4
PREVIOUS 2,150.8
ADVANCES 798
DECLINES 2364
NASDAQ ACTIVES
QQQQ Nasdaq 100 39.58 -.69 -1.7
SIRI Sirius Satellite 9.01 +.92 +11.4
MSFT Microsoft 27.07 -.26 -1.0
CSCO Cisco Systems 19.73 -.09 -.5
INTC Intel 23.48 -.53 -2.2
AAPL Apple Computer 62.89 -2.89 -4.4
GOOG Google 171.43 -4.86 -2.8
EBAY eBay 113.92 -2.42 -2.1
RIMM Rsch In Motion 89.61 -.21 -.2
YHOO Yahoo! 37.08 -1.76 -4.5
AMEX CLOSE 1389.61 - 18.93 - 1.3
INDEX SHARES
DIA DIAMONDS TRUST 104.41 -.94 -.9
QQQ NASDAQ 100 39.58 -.69 -1.7
SPY S&P DEP.RECEIPTS 118.10 -1.11 -.9
STOCKS IN THE NEWS
IBM IBM 96.10 -1.57 -1.6
GGC Georgia Gulf 49.53 -6.90 -12.2
PPD Pre-Paid Legal 38.42 +2.10 +5.8
GRB Gerber Scientific 6.66 -1.25 -15.8
DWA DreamWorks Animat 39.60 -2.35 -5.6
BVF Biovail 15.85 +.55 +3.6
AIQ Alliance Imaging 8.58 -1.25 -12.7
NVDA Nvidia 22.81 +1.09 +5.0
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