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What banks repaying bailout means
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TEXT OF INTERVIEW
STEVE CHIOTAKIS: Let’s speak with Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia. Bill, good morning.
BILL STONE: Good morning.
CHIOTAKIS: All right, so we have four banks planning to raise capital to repay bailout money — U.S. Bank, Capital One and BB&T and KeyCorp, according to the Associated Press and Reuters. What does this tell us?
STONE: Well, I think this tells us that investors are continuing to gain confidence in the financial sector so that actual private parties, as opposed to just the government, are finally providing some capital to the sector.
CHIOTAKIS: Just a few moments ago, Bill, Assistant Attorney General Christine Varney announced a more robust policy concerning anti-trust action, more in line with the Clinton administration. Is it wise to do something like that in this fallout?
STONE: You know, I think the administration has come under some criticism in recent on just coming out with far-ranging items as opposed to just concentrating on the crisis. I think it remains to be seen. As long as confidence continues to build, I don’t think it makes much of a difference.
CHIOTAKIS: And we talk about health care Bill. I want to put you on hold for a moment.
President Obama is meeting with industry leaders today. Doctors and hospitals and drugmakers vowing to cut spending growth by a lot of money. Sincere gesture or getting ahead of the what’s to come? Here’s Marketplace’s Jeremy Hobson.
JEREMY HOBSON: The voluntary cost cutting will be achieved by streamlining paperwork and changing the way patients are billed for service. The Obama administration says the move could save Americans $2 trillion over 10 years. Health policy expert Joseph Antos at the American Enterprise Institute says the industry sees reform on the horizon And wants to help shape it.
JOSEPH ANTOS: They’re trying to show publicly good faith, so that when the details that matter to them individually come up, that they have a shot at getting the legislation to lean a little more in their direction.
HOBSON: Antos says the industry would have made these cost-cutting moves anyway. Still, it sets the stage nicely for President Obama, who says he wants healt hcare reform legislation from Congress by the end of the year. Likely a government health insurance plan that would compete with private insurers.
In New York, I’m Jeremy Hobson for Marketplace.
CHIOTAKIS: All right Bill Stone, health care reform is likely. How does it change the way these companies do business?
STONE: Well I think one is they want to be seen as part of the solution. But second is I think you’ve already seen some portion of adapting to it. For instance, the pharmaceutical companies for years have had no interest in really marketing generic versions of their drugs. Many of them have already moved back into that business, so I think you’re seeing some of it already.
CHIOTAKIS: All right, Bill Stone, chief investment strategist at PNC Wealth Management in Philadelphia. Thanks for being with us.
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