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> morgan, thank you very much. good morning. it is 8:00 a.m. at snap headquarters in venice beach, 11:00 a.m. on wall street, an" property="og:description">
> morgan, thank you very much. good morning. it is 8:00 a.m. at snap headquarters in venice beach, 11:00 a.m. on wall street, an">
"squawk alley." >> morgan, thank you very much. good morning. it is 8:00 a.m. at snap headquarters in venice beach, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ starting from the bottom, now we're here ♪ ♪ starting from the bottom, now my whole team here ♪ ♪ startied from the bottom, now we're here ♪ ♪ started from the bottom, now the whole team here ♪ ♪ good thursday morning. welcome to "squawk alley." jon fortt, sara eisen with me here at post 9 along with business insider ceo henry blodget. good to see you this morning. >> good to see you. >> eight years in and still going strong. the s&p rallying nearly 250% since hitting that closing low of just over 676 on this day in 2009. this is the second longest bull market ever. oil, on the other hand, falling below $50 for the first time this year. of course, had the worst day yesterday in about 11 months. just to put the rally into perspective, henry, would you have been skeptical of for a long time, more now than ever? >> yes. the higher we go on valuation basis, the scareyer it becomes. valuation tells you nothing about what stocks will do next, and clearly that's played out over the last three years, where i've been cautious. but it usually, unless something is fundamentally different, tells you about your returns in the long term. and today, based on today's level, if you look at the market on a cyclically adjusted basis on many measures, not just the schiller pe, many other measures, it basically says we're not going to have any return from here for another ten years. that means we could double from here and then crash, we could move sideways, go down and up, but basically, stocks will be about here in ten years, according to traditional valuation m valuation metrics. >> don't things like deregulation, rising rates weigh on you, things that are pro business, pro friendly? >> well, rising rates absolutely do. and back in history, usually when the fed's raising rates, that's a break on the stock market. >> after a while. >> after a while, absolutely. hard to time. again, none of these things tell you what's going to happen next. regulation. if we reduce the right regulations and do it in a way that doesn't have everything suddenly overheat, absolutely! i think taxes -- everyone's talking about, oh, going to cut the rate, profits are going to explode. the effective tax rate is already way below the statutory tax rate. so, unless we actually cut the effective tax rate, that's not going to be a big difference. >> let's talk tech. second longest bull market ever. snap can't seem to get much of a tailwind. alibaba is up, what, 10% maybe in 2 1/2 years, well off the highs, well off the lows also. what does this say about where tech's going? hard to argue that, say, apple is trading at a really rich valuation, but you could argue that about amazon. how should investors think about it? >> very interesting. i've been at conference this week with institutional investors. one of them said look, when i look at the market, i have to say, companies that are not growing, serial companies trading at 20 times earnings -- you look at facebook, google, apple and others -- a little bit more expensive but growing 20%, 25% per year. he said those are my favorite stocks. apple's the same way. so a lot to say that pop snapchat, it's interesting. talking to the same institution because that, a lot of sensitivity around valuation. david tepper on cnbc, i think yesterday, said i look it at the ipo price, not at $30, and that is the way a lot of folks on the institutional side are looking at it. they're saying, look, even if you think this could be a $100 billion company in four or five years, at $30, you're only getting a 2x return. at 16, you're getting 3, 4 or 5x, so it's much more compelling. >> the other thing investors track is sentiment when it comes to the rally, and it does feel like a consistent feature of this bull market over the last few years is it's been heated and not embraced, and there have been plenty of worries out there. how exuberant does it feel to you, versus, say, the number one longest bull market in history, 90 for 2000? >> it is nothing like that. >> right. >> and that really is the missing ingredient. and i think a lot of people do say, look, when you're really at a blow-off peak, you've got everybody, uber drivers and others, recommending stocks to each other, that's what it was like in the 1990s. we definitely don't have that. but still, on a valuation basis, numbers are closing in on that peak on the cyclically adjusted basis. >> we'll talk about that all day long. meanwhile, the president's meeting with the ceos of small and community banks at the white house. yesterday sat down with infrastructure ceos, including tesla's elon musk. our eamon javers is watching developments at the white house. eamon? >> reporter: yeah, hi, carl. the community bankers are here. they just walked in behind me here a few moments ago. a few of them had never been to the white house before, so this is a big meeting for them. a couple told me that they have some legislative and some regulatory ideas they're going to pitch to the trump white house, and the expectation that they might be able to get some change that could help community banks ramp up their lending. they're also curious to hear what the president himself has to say about all this. they don't know what his message to them today is going to be. i can tell you that the secretary of the treasury's expected at this meeting. reince priebus, the chief of staff, is expected there. ga gary kohn of the national economic council and jared kushner all expected to be in this meeting, which should get under way here momentarily. >> eamon javers, thank you very much for that. your thoughts on this? again, more white house optics at play, working. >> this is an area where i do think there's a real opportunity to roll back regulation, and applauding the white house on this. i think community banks in particular, small business lending is incredibly important. this is a case where you can actually let the banks figure out their own risk profile. if they get too crazy and they go out of business, it's not going to harm the system. and we do have a problem in lending to smaller businesses. so, this is a great opportunity to roll back. >> you think banks should make their own regulatory rules? >> not completely, but with regard to lending, that's what a bank used to do is figure out what risks are worth taking, what aren't worth taking. >> but what about mortgages, for instance? they make a lot of mortgage loans and there's been more regulation and some would say it's a good thing. >> what happened in the past bust is banks would make the local mortgages and package them and sell them, they didn't have to hold the loan and that changes everything. but that is what a bank is supposed to do. you have loan officers who evaluate each credit and decide whether to take it or not. and if they're too aggressive and go out of business, fine! that is capitalism. you just have to be able to absorb the shock, and we can absorb community banks. it gets tougher when you've got a massive, global institution. then it's hard for even the government to take over. but even then i think that's the answer, let them fail. >> you're in the camp of arguing that we overregulated -- >> absolutely. >> post -- >> on lending. on lending. >> lending specifically. >> we went through a heart attack, near death of the economy. obviously, we erected a lot of systems to make sure it never happens again, but now we have swung way too far the other way, and you've got to let -- again, that is what a loan officer at a bank does. that's their job. they figure out the credit. if they do it badly, they go out of business, tough. >> that's certainly what you hope they do, that's for sure. it's been one week since snap's ipo. >> doesn't feel like that long. >> a wild ride for shareholders. stock's up better than 30%. now fbn has this note out initiating coverage at sector perform with a $23 target. tepper, of course, had comments yesterday. part of fbn's thesis is that facebook would love to buy them and there's protection in there on that. do you buy that? >> yeah, i think so. >> really? >> facebook has wanted to buy them for a while. i still don't think they're for sale. facebook could afford to buy them. snapchat's $25 billion, $30 billion, but they could certainly do that. >> this morning jim said he thought these guys would rather die than sell, and they have the voting rights. they will decide. >> they have everything. it's amazing the control the snapchat management team has. at some point, if the market is working correctly, that should actually be factored into the price. there should be a discount as a result of that, because investors just don't have the same kind of control. >> here's what i think about snap that's interesting and different from say facebook or twitter. i think snap and snapchat by extension, is far from fully formed at the point of its ipo. when facebook was ipo'ing, they had the facebook platform, they had the like button, they had already at least begun to sketch out their blueprint for global domination. we just didn't know about mobile yet. twitter, i mean, twitter is twitter is twitter. it hasn't changed that much since. but snapchat, get the feeling if they're going to have a platform, if they're going to have this advertising strategy writ large that capitalized on the popularity among millenials on the smarts that they have around content, we haven't necessarily seen all the tricks in the bag yet. and if you believe that much in evan spiegel, then perhaps there's up side. >> that's right. and they are a communications network more than a media company, so they have a network effect. in our household, the devoted snapchat user -- you know, i hear people are dumping snapchat! wouldn't know it from her. she says, no, absolutely not, back and forth because of communications, and they're doing a lot of cool stuff on the story-telling side. there's no question that a lot of millennial and younger focus is on that. and the bull story on snapchat wi, what the smarter investors believe is that they'll be able to go from a few dollars per average u.s. user to $20, $30, $40, $50 over the next few years per year, driving huge economics. >> going in, the big question was, if this did well, would it open the floodgates for more ipos? it's been so quiet, especially with technology ipos. was it a success? what's the verdict? >> so far, a tremendous success. so, hopefully, we do see a lot more. the thing that's definitely happened in the ipo market for ten years now is companies are waiting so long to go public and they have to be so mature or they get hammered. it's too bad. we're missing out on a lot of very cool younger -- >> just reported that airbnb raised another $1 million. >> do you believe if facebook were to truly pose an existential threat to snap, they would have done it by now, and that's what that early offer was about? >> no, i think -- >> or they exited some sort of window where they could quickly be either destroyed or bought? >> i do not think snapchat has permanent protection by any means. people abandon networks very quickly, especially a network like this. it's a communications network. if your friends leave, you're gone. and facebook has created a lot of the same functionality on instagram. there's a lot of popularity there. and some people think that folks are moving. so, no. in this business, it can change incredibly rapidly. but snapchat has what it needs to build a very good business if they continue to iterate -- >> you're betting on the rich kids if you're betting on snapchat. unlike twitter, which is just sort of globally everybody loosely connected, facebook, which has tried to expand in india, in southeast asia and places like that, and actually done it in africa with whatsapp especially -- snap's not interested in any of that. they're saying developed markets, the places where big brands want to advertise. that's all we care about. there are some potential weaknesses in that strategy, are there not? >> absolutely, starting with -- that is the story that you would tell when your growth slows in all of the other markets. well, it's intentional and we just want to focus on this market. yes, that limits it. on the other hand, if they do what they want to do, there will be a huge opportunity in this market. the big warning side for snap is if the user growth in the u.s. and europe slows, it is over. they will have huge revenue growth for a little while, then they'll platt eau and fall. >> that is the bear case we've been getting some analysts, total addressable market is a fraction of what it is for some of its larger rivals. >> that's right. although again, as they move into video and television, and if they can continue to control this particular audience, there is a huge market in just these markets in that audience. >> you could argue they're netflix and facebook is network tv, you could argue, right? because they're premium, they're focused, they understand content at this deeper level, they're willing to invest in it, other people are copying them. i mean, hey. >> absolutely. and that's why when you come back to valuation on this, reasonable scenarios for the future give you a massive difference in the stock price today, and it's hard to know. and that's what the market is doing right now is arguing back and forth. we'll get new idea at the quarter, obviously. and each quarter for the next several years, there will be a massive recalculation of what that long-term -- >> got to see if they've got a "game of thrones" up their sleeves. >> you were with us on ipo day, right? and has the past week played out essentially as you thought it would? >> i think it's settling down, and we hit a peak where, again, david tepper came out, seller here, bottom of the ipo seller, but if it gets back down to the ipo price, i'm a buyer. that is good. that is people thinking, analyzing the future. that's what you want. >> do they have to turn a profit where -- i mean, do they have to become profitable? >> eventually. look, every stock eventually is going to trade at 20 times earnings, something like that. that's where facebook and google over many, many, many years -- >> i just want to know what the patience level is for that. >> so, the smarter investors, as they analyze snapchat, they're going out five to ten years and saying, look, what can this company earn? let's put a reasonable multiple on that, in this case, 20-25 times earnings. what does that get you in terms of market cap? and there are reasonable scenarios that get you to $100 billion in market care. farthest thing from gauxted, but that's how they're thinked about it. >> i would argue the biggest thing this news cycle, airbnb, looking mature compared to uber and profitable compared to snapchat. >> absolutely right. the only pushback i got from a smart institution on airbnb over the last couple days is total address ybl market. they say how big can this company get versus an uber? interesting question. >> everybody needs shelter. >> yeah. a lot of people travel. >> it's big, no question about that, it's just how big. >> henry, thanks. henry blodget. >> thanks. when we come back, why the house plan to repeal and replace obamacare may be hanging the president's most loyal supporters out to dry. a first on cnbc interview with the head of athena health, jonathan bush, an outspoken voice on the health care system. and later, speaker ryan live on his pitch to the gop plan. that's coming up later this hour. "squawk alley's" back in a moment. moment. uh, yeah. it's over, larry. what is? the whole wheelie thing. what do you mean? i just got this baby to get around the plant floor. right, but now ge technology monitors every machine. yeah, it brings massive amounts of information right to you. so you don't need that. well, it makes me look young and uh..."with it." time to move on. oh i'll move on... right into the future. ...backwards. you're going backwards. the future's all around us! not just on your little tablet, my friend. i'm ricardo, a sales and service consultant here at the xfinity store in bellevue, washington. here at the store, we offer internet, tv, phone, customer service, home security. every situation is a little different. it could be about billing, simple questions like changing the phone number. sometimes, they want to upgrade, downgrade, but at the end of the day, you want to take care of the customer. one of the great things about comcast, there's always room to move up. of course, it depends on you, how hard you work. ♪ the house plan to repeal and replace obamacare clearing its first hurdle late last night, but the new plan could come at the expense of president trump's most loyal supporters. our john harwood is back in washington with the details. john? >> jon, the old political saying is to the victor belong the spoils. donald trump himself repeated that during the 2016 campaign. but for the largest group of his supporters, this bill turns that maxim on its head. first of all, let's take a look at where the trump votes came from. only 10% of them came from people earning more than $200,000 a year. 48% came from whites who did not have college degrees. 51% came from people 50 years old or older. now let's look at the tax cut winners in the obamacare rollback. by rolling back those obamacare taxes, you get an average tax break of $33,000 for the top 1%, $179,000 for the top 0.1%. let's look at the losers in terms of health benefits for people who enroll in those affordable care act exchanges. the average aca enrollee would lose $2,409 in benefits in the year 2020, because the tax credits in the republican bill are less than the subsidies they get under obamacare. the average 55 or older enrollee would lose almost $7,000 in subsidies through the shift from obamacare to that bill. there would be further cuts from medicaid reductions. those would hit especially hard to trump supporters in states like arkansas, kentucky, ohio, west virginia. senators from all of those states are opposing this bill right now. the bill is not dead by any means, but it's got big political problems, guys. >> john, you mentioned arkansas. of course, we all paid attention to cotton's tweet this morning. does that mean that you expect big elements of this draft to bend in the coming days? >> well, they're going to have to bend. the challenge is how can you bend them and preserve 218 votes in the house and 50 votes in the senate? if they respond to the objections that the benefits should be greater, if they respond to shelly moore capital, will that further drive away people in the freedom caucus who don't like entitlements and had complained that this bill creates a new federal entitlement? so, you push on one end and you have to pull on the other. it's not an easy situation they're in. >> it's a great story, john, and it's not the first time we've heard something like this. same analysis goes for the republicans' tax plan and president trump's tax plan. but his base is so loyal. you just wonder whether it's really going to impact it. >> well, that is the question. it is possible that the loyalty to the republican party, loyalties to donald trump, will overcome some of those direct impacts on voters. but you do have to wonder, as paul ryan said yesterday, we're transitioning from being an opposition party to a governing party. when you're the governing party, you're the one who's handing out benefits or taking them away. that is a different circumstance than when you're trying to rally voters against someone like president obama. we'll see whether they can complete that adjustment, get this bill over the finish line. >> maybe that's why they don't like branding it trumpcare at this point. john, thank you. >> that's right. >> john harwood in washington. when we come back, etna health's chairman and ceo. the always outspoken jonathan bush. his take on the house plan to repeal and replace obamacare. but first, rick santelli, what are you watching this hour? >> well, of course, i'm watching the calendar and thinking about the eight-year anniversary of the haynes bottom. but not all bottoms are created equal. as a matter of fact, the bottom in '09 has a lot to do with commodity bottoms and tops. we'll talk about that after the break. break. online u.s. equity trades... ♪ ...you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪ president trump is currently meeting with community bankers inside the white house. we're just getting some headlines as the president welcomes some of the bankers to the white house. he said "they are crucial to my jobs agenda and to the american people. they provide half of loans of small loans to people and they're dwindling. we money ensure access to capital." president trump says "we are going to support our community banks to create jobs and create business." he was asked about the document dumped from wikileaks. no response there. we'll monitor this, bring you headlines or comments if we get them from the bankers outside this meeting. taking a look at markets, dow and s&p hanging in there in positive territory just barely. the nasdaq also. but wti crude is a weight, down more than 2% on top of yesterday's more than 5% decline. energy stocks, no surprise, are the worst performers on the s&p. and speaking of the bankers, financials, again, the outperformers on the s&p 500. let's see if our gains stick. this would be four days in a row of losses, if stocks do turn negative, something we haven't seen all year. let's get out to the cme group, check in with rick santelli, "the santelli exchange." rick. >> thanks, sara. you know, we all fondly remember our peer and fellow co-worker mark haines. eight years ago, of course, he called the bottom. the haines bottom. there's a lot of important things, though, about bottoms. like many traders on this trading floor, i started out trading commodities -- gold, pork bellies. and what we learned about commodities is that there was a lot of vs, okay? and there was a lot of upside down vs, meaning that commodity prices could move in very fast ways and they can correct in very fast ways, creating "v" bottoms and upside down "v" tops. but what's really fascinating is how that word now describes so many markets. how many times have you heard the commodityization of the stock market, of the bond market? because now many of these markets kind of move like commodities. now, let's go to the whiteboard here, and i'm going to actually start out with nasdaq. and mark santoli did a wonderful job on this earlier in the day. we all know the 5,000-plus top was made in 2000 and how long it took to get back to that point, okay? now, this isn't necessarily a "v," but it really underscores the cross-the-canyon mentality. our economy's resilient, and the main reason so many people care about trying to handicap exactly when, how, where, length of recoveries is because they want to peg it to a certain president or a certain congress. i don't really care about any of that. i'm a market guy. when you usually get things like this, usually markets kind of correct on their own. so, basically, talking about the return or the length of a normal recovery or a bull market or a business cycle, distorted not only for these reasons in the crisis, because many of the men talents that tried to address it. you even heard the likes of mohamed el erian talk about manipulated rates. there's a lot of things that have been managed and manipulated. these distort these cycles! now, let's go to the king here, the dow jones industrial average. this is what i'm talking about, you know, these vs, whether it's this way or this way. they're not supposed to happen in stocks, but sometimes they do. but the notion of why this recovery occurred, trying to measure it. a lot of times you will come back. so, whether it's the length of time or the continuity of these charts, by taking out certain segments, you can actually come up with better technicals. quickly, let's look at that chart from september of 2014. you see it on your screen right now for 10-year note rates. this is super critical. you've heard me talk about 2.60 to 2.62. the far left of that screen is september 17th, 2014. right now we're very close. these are huge levels for a variety of reasons i don't have time to go into, versus where the next move is. the next move's probably a test of 3.03, but how do you deal with this? tomorrow's your last hurdle. many times in front of big reports like the jobs report or fed meetings or ecb meetings, markets go to tops or bottom arranges. that's why the auction went so well. many people think you're going to see a chance for price to bounce and rates to come down. will it be true? i'm not sure. but if you get tomorrow's close, which will also be a weekly close, above 2.62, yellow lights should be flashing if you're looking for lower rates. jon fortt, it's all yours. >> all right. thank you, rick santelli. we continue to wait on more news out of washington. and guys, it's an interesting setup. president trump has met with so many different groups, ceos of technology companies, he's been through manufacturing. now with these community banks, especially at a time when we're focused so much on the local impact of these changes coming to obamacare, it will be interesting to see what we get. but we'll see, especially what the president has to say around these issues that hit close to home. >> yeah. we know that the community banks don't want to be regulated like the big banks. they don't want to be regulated like the big, complex, bold bracket firms and that's been their right throughout the post financial crisis era of dodd/frank. so, it will be interesting to hear from them and the president. also steve mnuchin and gary kohn in the meeting as well. >> on a busy day for the president. of course, later on, he has a working lunch with regards to the budget. he'll later on meet with secretary kelly, pompeo, and the vice president before making some remarks tonight to senate youth. so, we'll watch all of that, but it is all about the financials for now. let's take a listen to what the president and kohn -- >> still 45 seconds. >> -- and mnuchin said about the banks. and i wonder, too, what sort of promises or guarantees they can make in return regarding lending practices in exchange for some looser regulations. >> also keep in mind, treasury secretary steven mnuchin has a lot of experience in this area. he ran the west coast bank one west, of course. so, he's talked about in his confirmation hearing getting banks to lend. let's listen. >> thank you very much. good morning, and greatly appreciate you being here. we have some real experts with us and we have some great bankers with us. today's discussion is crucial to my jobs agenda and to the american people. community banks play a vital role in helping create jobs by providing approximately half of all loans to small businesses, and that's been dwindling because the community banks have been in big trouble. nearly half of all private sector workers are employed by small businesses. we must ensure access to capital. small businesses, and for small businesses to grow, community banks is the backbone of small business in america. we are going to preserve our community banks. you probably noticed i signed an executive order on regulation on february 3rd, i believe it was, and that's a big executive order and a very powerful executive order. it's taking a lot of the regulation away. you'll be able to loan. you'll be able to be safe, but you'll be able to provide the jobs that we want and also create great businesses. so, it's an honor to have you with us today, and perhaps we could go around the room and we'll start with dorothy and say who you are and who you represent. >> thank you, mr. president. i'm dorothy savarese. i'm from cape cod five mutual company on cape cod, massachusetts. >> and i'm leslie anderson with the bank of beneton. >> standard bank, suburbs of pittsburgh, pennsylvania. >> great. >> rebecca romero from sentinel bank in beautiful new mexico. >> i'm luann cundiff of first state bank of st. charles. [ inaudible ] >> nice guy. >> lorraine stewart from the other -- [ inaudible ] seattle. [ inaudible ] >> good, thank you. >> and i'm ken burgess with first capital bank of texas in midland, texas. >> great. thank you. okay, thank you very much. thank you. >> thank you. >> talking about the dump from wikilea wikileaks, any thoughts? >> wheels of the white house continue to turn as we are there for the roll call and not much else, eamon javers. i guess we'll wait for the potential readout on this meeting later on. >> reporter: yeah, i'm going to talk to some of these community bankers as soon as they come out here and ask them what the president said in the part that we weren't allowed to have cameras in on, because that's often the most interesting part of these meetings, so we'll wait for that. this one was short and sweet. i stalk etalked to the white house before the meeting today and they said their goal is to get ideas from the community bankers. they want to hear from the ground up how to move on regulation, move on legislation. really what they're looking for is increasing lending from these community banks because they think that's the key to small business success and that's the key to driving this economy. so, they're in listening mode here at the white house, carl. >> i wonder how much, eamon, the consumer financial protection bureau will come up in this conversation. that's a target of republicans, and it has made life difficult for some of these banks as far as an added regulatory agency. >> reporter: yeah, that's an interesting one. my sense of this meeting is that it's sort of wide open for any ideas that these bankers want to present. i know that some of the bankers have specific ideas that they wanted to pitch in here, so we'll see what those are when they come out after the fact. but a lot of these folks, as i said earlier, this is their first visit to the white house and here they are meeting with the president of the united states. so, it can be a little daunting, a little intimidating, but they know they have their agenda and want to get to it so they've got to take advantage of this time. >> eamon, know you're hard at work. we'll come back to you in a little while. market remains in a bit of a range here. when we come back, we'll talk to jonathan bush of athenahealth about the mark-up with the new american health care act in a moment. moment. good morning, once again, everybody. i'm sue herera. here's your "cnbc news update" at this hour. a federal judge in hawaii agreeing to hear the first legal challenge to president trump's new travel ban. hawaii's attorney general commenting on his state's lawsuit. >> there is a significant muslim population that lives here in hawaii. i've met them. they're amazing people. so, they are people who live amongst us, who are great, who shouldn't be discriminated or treated as second-class citizens just because they're muslim or from a certain country. russia is rejecting u.s. accusations that it violated an arms control treaty. a kremlin spokesman said russia will always abide by all international obligations. yesterday the u.s. accused russia of deploying a land-based cruise missile that violated, they say, the spirit of that treaty. and breaking a 70-year tradition. harvard law school will now allow students to submit scores for admission from either the lsat or the graduate record exam. the pilot program is an effort to expand access to the school because the gre is more commonly used globally. and that is the "cnbc news update" this hour. back downtown to you, carl. >> all right, sue. thank you. sue herera. we are awaiting some comments from house speaker ryan, holding a news conference in about ten minutes, of course, on the gop plan to repeal and replace obamacare. that's going to be front and center. when that happens, we'll bring it to you live. in the meantime, the american health care act dividing members like the aarp, the american hospital association and the american medical association against the proposal. what do insurers think of the new health care plan? jonathan bush is co-founder and ceo of athenahealth, joining us again. great to see you. good morning. >> good morning, carl, not an insurer. that's aetna on a different day. athenahealth certainly has an opinion. thanks for having me. >> good to have you, jonathan. what's your opinion? >> one of the things that's worth noting is a lot of this debate uses the word affordability. and by and large, most of it doesn't actually apply to affordability in terms of cost. none of this is going to make -- none of obamacare did anything to make the cost of care, the amount that a consumer pays per each thing they consume cheaper, and the ahca does a little bit there, but not much. there is one aspect that says health plans are allow to create cheaper products than the minimum acceptable definition that was in obamacare. so now you can invent a low-end product to try to get low-end consumers who don't have as much money to buy something less expensive. now the people selling expensive stuff have got to consider reducing their price to bring in consumers. that's called a market. you've seen them before. they tend to work. and so, i like that aspect of ahca, because the first time i've heard discussion of actual cost as part of affordability, as opposed to who gets subsidized for what by the government. >> right. so, all the criticism and worry about the comprehensiveness of the coverage, right, or the number of people covered, does that come secondary? >> obviously, that comes secondary. if you want a market to work, you've got to have people not in market. so, the notion is we as americans probably don't want to have people completely left out of health care, but if they were allowed to have cheaper products so that the expensive product people were incented to get cheaper -- this is the reason, by the way, why you go into the doctor's office and the experience is identical to 40 years ago, is that there's been no market force driving innovation cheapness because everybody is already in market. remember, all of this is about the individual market, which is 6% of americans. so, pretend half are, you know, price-impaired, cost-impaired, talk being 3% of americans. the rest are in employer-based or government-based plans. so, it doesn't really move a giant social safety net needle in the grand scheme. obviously, that 3% of americans matters, but the ability to get a wider range of products at the low end of the product marketing continuum is definitely going to afavorably affect cost for everyone. >> jonathan it seems like we're still dealing, of course, with the legacy of obamacare, which set the bar at a different place as far as people's expectations of how many people are going to get covered, levels of coverage what happens with pre-existing conditions. politically, is it even viable to expect that the gop can walk too far away from that immediately with the ahca? >> this is the birth of social science, right? the patron client interdependency problem. once you create a group of people, you know, that are in receipt of a government dollar, it's very hard to come in and vote that out, and this is why i think the government -- the republicans were so panicked about obamacare, is it creating a huge, new entitlement group with no new cost controls, no particular cost controls on them, and it's a real dilemma. i mean, i don't know how it hands. it must be good for ratings, because we all want to know how it ends! you know, can the republicans actually roll a bunch of people out of government entitlement only three or four years after they were rolled into it? >> as you know, some of the loudest critics of this new plan have been republicans themselves, jonathan. would you go so far as to say that this is obamacare 2.0, that it's just a cheap knock-off of obamacare? >> what's that song? you know -- ♪ to the left, to the left everybody's shifting. now it's republican. oh, no, now it's democrat. these are little, tiny movements. and the rand pauls are going, hold on! when did we think it was okay for all health services to be wrapped under a number called a premium? every visit to the doctor. you look inside athena net at the kinds of things doctors are doing because it's the only place patients can go to get them, it's kind of appalling, really, the kind of things that doctors have to do, that any technician or a social worker or a nutritionist could be doing better, and the markets would be healthier. but it's not allowed because we've built this box. and the rand pauls of the world are saying, why is this box here at all, you know? why can't we unwind the whole concept of an entirely shrink-wrapped, subsidized box with everything in it? >> yeah. >> and it's intellectually completely viable. i completely sympathize. and i don't know how you get the, you know, genie that far back in the bottle, the toothpaste that far back in the tube. i think what ryan's doing is trying to cheat his way over there a tiny little bit and see how he does there. meanwhile, athena and the marketplace will create some shopping power within the rules that exist. we're creating a national calendar asset. >> that's my next question. the last time you were with us on set, we talked about the number of man hours your software engineers had spent trying to prepare for what was then reality. so, how does athena play this calculus now with we have no clue where this is all going? >> sorry, i just swallowed a little puke. it's done now. [ laughter ] yeah, up to 100 r&d years per year complying with programs to generate data that then the government actually never consumed! so, remember the meaningful use program as part of the high-tech act? none of the data that we generated did the government -- even though they paid our clients still $39 billion for it -- none of it did they collect and use. what we're doing with the time that we used to spend doing that is so much more interesting. we're tracking what's going on clinically in the chart. you know, if charts could speak could be a whole new blog by athena. my favorite tidbit, by the way, which is just such a laugh -- iud insertions since the election of donald trump up 21%! >> what? >> just saying! i know that's not the thing we should be doing with our r&d time -- >> no, it's not. >> but isn't that interesting? america is speaking through its charts, at least a female america. but there's so much more. >> i just want to ask about your stock price, which we always talk about. >> oh -- >> it is still down double digits -- >> i was just in the middle of talking about calendar assets and you -- yeah, it's too low. >> do you think your business is being affected by all of this? it's peaked out and not gone anywhere in the last four years. >> well, in the period since the end of the high-tech act rush of the obamacare, which created a big sugar high, where everybody felt like they had to buy something and they were grabbing at whatever sort of emr definition they could find, and we punched above our weight class -- there's a little bit of a kind of post sugar low now in the world of people calling themselves ehrs. athena is the only network-based medical record. it's the only national single-based instance medical cloud in the country. we believe that was too hard to differentiate when everybody was racing, panicked, at the tip of the government's gun to buy medical record technology. now, the fact that ours generates cash for you and costs no capex, and everyone else's uses more staff and incurs big capex, we think we're going to start to separate from the pack in a much more material way. just the idea of being able to reach out to yelp and google and amazon and be out on the cloud pulling patients to our clients when the guy's stuck on isolated copies of software can't do it, that's going to start to really help us separate from the pack, we believe, and i think we're going to have a renaissance, another renaissance as a result of the backing off of the government and the opportunity for us to do our own unique product management. >> so, thread the needle for us, jonathan, back to the ahca. we know that there's some concern in the senate about what the house has put forth thus far. how do you get it better so that it's palatable to the senate, maybe has a chance of passing? >> i mean, that's horse trading. i think the net-net is they're trying to figure out how to pull back on the minimum required benefit design so that the sort of inevitability of price increases doesn't sort of go off into the future. that's hard for the cbo to calculate because how does the cbo calculate the emergence of market forces in a place where there haven't been any for years? i don't know what they end up, you know, trimming here and there to get it to be palatable. obviously, the provider community has just gotten used to the idea that the government's going to pull money from elsewhere in the economy and into subsidy of patients. they like that. they don't want to see that go away. so, they're going to lobby like hell against this, you know, but -- >> but to jon's question, people want to know whether, at least in this case, is there any -- is any legislation really doa this early on, or is everyone just taking hard stances so they can get their input and get something resembling what they want down the road? >> of course, legislation is not doa this early. of course, the guys to the right of ryan are making sure that they point that out, which is actually probably helping ryan with his left wing that's going to be, you know, trying to trim the whole thing to the middle. and of course, a lot of that is, you know, blather. i know there's not typically blather in washington, but maybe now there is. so i don't see anything that's doa about any of this. it's a tiny, little trim. it's stick an "h" in the aca, you know, create a little more room for the market, a little less guaranteed safety net, a little less role of the feds in every dollar. eh, you know, what's the difference really? >> can you go back to iuds for a moment? do you think if command is soaring because this bill includes defunding for planned parenthood? >> it soared before the bill. they may continue, but i think one of the factors is a genuine, you know, gee, is planned parenthood going to be there? athenahealth proudly serves a lot of planned parenthood chapters around the country, so that is one of the things is, gee, i want to get into my planned parenthood place. and of course, you can make your own opinions about the desire to relax and reproduce in the general emotional climate today. i don't know. >> that was not where i was expecting you to go with the next question, sara, but -- >> any chart. i like a good chart. >> no, as we prepare -- >> 21% increase. >> it's amazing! >> that's significant. as hear from house speaker paul ryan, i wonder, do you think we end up with something that's different enough from obamacare that the repeople and replace promise ends up ringing true? most people seem not to have understood what obamacare was to begin with. is this going feel like something brand-new? >> we'll build a bonfire and pound their chest and say repeal it? you know, that's what this is. >> you know, this is a fairy dancing on the head of a pin, in general. as, was obamacare itself. i mean, many more dollars for those 20 million and the size of those subsidies and the forced constraint of managed payment ms. that was a little more impactful. but generally, still, you still had employer-based health coverage for most people. still had medicare and medicaid for most of the rest. and you're talking about what are you going to do with this little tiny pile. one thing that remains in the obamacare to ahca transition is that straight medicare payment to doctors is carefully designed to kind of shrink. it's harder and harder and harder over the years to make as much as you made last year. and that's designed to chase doctors off of straight medicare and ton to risk contracts. either get into an aco, a care organization, or move your medicare patients on to medicare advantage plans. these are vastly more efficient with expensive resources than straight medicare. better for life expectancy, better for patient satisfaction, and that stays in place, that's very, kind of, market friendly. if that keeps going, that's actually good news. that everyone's quietly ducking that piece. >> jonathan, that's really good insight. and a big, broad macro view. we look forward to talking to you again. thanks, as always. >> looking forward to beyonce. >> got to be done. >> jonathan bush of athenahealth. dow is up in the mid-20s as we await the speaker. we're back in just a moment. in. so let me get this straight. you're a rabbit? in. im vern, the orange money retirement rabbit, from voya. riiight. and that means...? i'm the money you save for retirement. i help you get organized so your money could multiply. see? got it. who's he? he's green money for spending today. you know, paying bills, maybe a little online shopping... makes it easy to tell you apart. that, and i am better looking. i heard that. when it's time to get organized for retirement, it's time to get voya. oh...ncome on...och method! what's going on here? you know how ge technology allows us to fix problems before they... they slow production, yeah. well, no more catchy business acronyms. wait, we don't need to smooch? i'm sure we can smooch a solution! we just need to "hover" over the candice, problem until... just let it go... hey, sorry i'm late for team building. smoooooooch! that felt right. what's wrong with you!? he's so trusting... amid opposition from hospitals, doctors, seniors and members of his own party, you are looking at house speaker paul ryan who's on capitol hill right now, making somewhat of a presentation and a case for his rewrite of obamacare. let's listen. >> the key thing that a lot of people want to know, when i do my listening sessions, when i talk to people with various disease, advocaciy groups, is they just want to know when we pass this, the next day they're not going to lose their health insurance. that's not going to happen. we pass this law and the day after, americans who have insurance aren't going to lose it the day after. we need to have a stable transition to conservative health care reform. and that's what we're doing, so that we do not pull the rug out from anybody who is enjoying some kind of coverage they have today. so we want to have a stable transition. and a few of the points that i think are really important, to just bring peace of mind to americans who are concerned about all that's going on here, is we want to protect people with pre-existing conditions. we think that's very important. that has actually been a cornerstone of republican health care proposals all along. in 2009, i along with congressman devon nunez, senator tom coburn and richard burr offered the patient's choice act. it was one of our alternatives to obamacare. again, like many other republican alternatives, we had an answer for people with pre-existing conditions and we have one here. all of our republican health care alternatives have always agreed with the idea of letting yuck people stay on their parents' plans until they're 26. we can retain that. what our goal is to do is to provide universal access to quality, affordable health care. here's another issue with obamacare. obamacare is not just the individual market that you think of the obamacare subsidies. it was also taking over the medicaid problem -- program. here's the problem with medicaid. medicaid is a program that is washington controlled and it is done in such a way that it stops innovation and experimentation at the state level. it makes it harder for states to customize the medicaid program to work for their popular states. as a result, more and more doctors don't take medicaid. what good is your coverage if you can't get a doctor? and that is a huge growing problem with medicaid. medicaid is as growing at an unsustainable rate, so its ballooning costs are threatening the very availability of the program and our fiscal future. so what we propose is to modernize the medicaid program. modernize the medicaid program along the lines that we as republicans have been talking about for years. i think it was ronald reagan in the '70s when he was governor who said, the states should the take over control of medicaid. every budget we have had as republicans, when i budget chair, writing my road maps or the path to prosperity, every one of our republican conservative budgets said, let's get medicaid control back to the states. and in honor to the principle of federalism, give the states and governors the freedom and flexibility to customize the care for their low-income populations how they think needs to occur. our problems in wisconsin are a whole lot different than the problems they have in new york or in nevada or in utah or california. so we propose more efficient spending, bring the spending on medicaid to something that is sustainable, so it doesn't go bankrupt. and have a safety net for the most vulnerable. give local control to our states and our governors, so that they can craft and customize medicaid to work for their populations. how do you protect people with pre-existing conditions? i think this is probably one of the most important issues of them all. here is basically what happens today. under the current system, we have costs driving up. in the current system, options are going away. as i just described, choices are fleeting, prices are going up, and under the current system, the fatal conceit of obamacare is that we're just going to make everybody buy our health insurance at the federal government level. young and healthy people are going to go into the market and pay for the older, sicker people. so the young, healthy person is going to be made to buy health care and they're going to pay for the person, you know, who gets breast cancer in her 40s or who gets heart disease in his 50s. so take a look at this chart. the red slice here are what i would call people with efr pre-existing conditions. people who have real health care problems. the blue is the rest of the people in the individual market. that's the market where people don't get health insurance at their jobs or they buy it themselves. >> that is speaker ryan, a power point this time as he's walking us through the draft bill to replace the affordable care act. of course, the congressman well versed in the sbrix intricacies legislation, with all of his experience on ways and means and the like. so he's no stranger to this. >> looks like he's teaching a class. >> trying to reassure the american people that they're not doing away with people's coverage, pre-existing conditions, they're concerned about, keeping 26-year-olds and younger on their parents' plan. >> but making more the case that obamacare is a failure and this is the alternative. >> we'll see how this plays with senators later in the day. let's get to headquarter's and swapner and the half. >> and welcome to "the halftime report." i'm scott wapner. our top trade this hour, crude crush. what oils drops means to your money and the state of the trump rally. could stocks be next? with us for the hour today, joe terranova, steven wise, jim leventhal, john najarian. let's begin with oil breaking below $50 a barrel. may go below $49 while we're having this conversation. there's the picture right now. it is down significantly, more than 5% on the week. is that a warning sign for the markets, joe? >> well, all right, first of all,