Is Silicon Valley Too Arrogant?

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Aug. 7 (Bloomberg) -- Second Avenue Partners Co-Founder Nick Hanauer discusses the positive disruption of Silicon Valley, the benefits of capitalism and libertarianism on “Market Makers.” (Source: Bloomberg)

This is "market makers." one biotech company is making big strides in the hunt for a cancer cure.

Juno's therapeutics has made its second investment around for a total of $300 million in 12 months, making it the largest early stage health-care funding in years.

Dr.

jensen, good morning to you.

Will you tell us how juno's technology works?

Yes, it has been a long sought after goal in cancer therapy to convince the immune system of the body to eradicate cancer in the same way that it protects us from the common cold.

Juno therapy technology is one in which a small number of infection-fighting white cells called t cells are isolated from the patient.

While they are outside of the body, they are genetically reprogrammed to have in incense -- in a sense an app to go back into the body and hunt down cancer cells and destroy them.

How successful have the treatments been?

You have made a lot of people in the venture capital never hood excited.

Is it based on results or promise?

This has been decades in the making come understanding how the immune system works and using the tools to tweak the immune system.

At the present time, as juno is emerging, we are in human clinical trials with the first iteration of this technology.

In oncology therapeutics development, you look for a signal that it is having an effect on the cancer.

The trials thus far with acute mental blasted leukemia in children sends a subtle symbol -- sell signal.

About eight out of 10 are going into remission.

That is not a subtle signal.

Complete remission after treatment.

What made you such a believer in this company?

My wife and i were lucky enough to end up funding some of dr.

Jensen's work at children's hospital.

Me being me, i thought, well, surely, there is a company connected to this technology and there was and we made an investment.

That company turned into juneau therapeutics -- juno therapeutics.

The other scientific cofounders have trials going on all over the country and there are dozens of people who have been treated who are essentially inches from death and were given this treatment.

Two weeks after getting a fever and a headache walk out with what the call molecularly clear, which is completely cancer free.

Do they have to go back for more treatment?

Thus far, these patients are given a simple the -- a single dose of the therapy and results are achieved in 10 to 14 days after that treatment.

These are early days for these trials so we don't know to what extent the remissions will stick.

But some are over a year now and are still in her mission.

You are part of the medical establishment in addition to being the manitoba center of a start up like juno.

Why is a company the right vehicle to conduct this research as opposed to a university or hospital laboratory environment?

The academic research environment in which we go out and try to secure grant funding is incremental in its fiscal support for this work.

We have been moving at a snail's pace in essence by having those fiscal restraints.

What a company like juno does through its large amount of funding is to be able to accelerate the trajectory of getting this therapy ready for prime time, that is mass production and having many patients be able to benefit from a revolutionary new form of cancer therapy.

Neck, you are an investor this company.

At some point, you will want to make money.

How do you do that?

Being the socially conscious individual that you are and an investor at the same time, how do you strike the right balance?

As we have seen recently with gilead and the debate over the $1000 pill treatment to fight hepatitis c, there is a line that one can cross at which profit becomes excessive process -- excessive profit becomes a little unseemly in the world of health care.

But as an investor, you want to make maximum returns.

We will see where the pricing for this product ends up.

But here's what i can guarantee you.

Whatever we charge for this therapy will be some de minimis fraction of what people are currently spending and what the health-care system is currently spending on treating cancer.

No matter how much we charge for this transfusion, it's not going to be 10 years in a hospital bed.

And multiple bone marrow transplants and radiation therapy.

. we misunderstand how economies work by achieving growth to gdp.

If juno is successful end of trivets are successful, hundreds of billions -- if juno is successful and other treatments are successful, hundreds of billions in spending will go away.

Dr.

jensen, would that the the hallmark of success for you, wiping out oncology wards?

You don't have to say it, mike.

[laughter] i will give you an answer from the pediatric oncologist perspective.

The way we treat children with cancer today utilizing radiation and chemotherapy, we are not curing all patients and the therapy itself is converting children with cancer into the chronically ill adults of tomorrow.

Patients need curative therapy that leave the body unharmed and i think this therapeutic platform gives patients hope for that.

Thank you very much for spending time with us this morning.

Dr.

michael jensen is the cofounder of juneau therapeutics.

They call it they brogrammer culture.

I would like you to take a look at the latest issue of louisburg business week.

"in defense of silicon valley, tech bro and -- what do you make of the backlash against silicon valley?

I think it's understandable because disruption, even positive disruption, is very unsettling to people.

And people living their lives have a right to expect a little bit of continuity and so on and so forth.

I think that we do create a lot of value in society but we can be excessively arrogant.

What justifies the arrogance?

What justifies the attitude?

You are not emanating that kind of attitude but we know what it's all about.

I don't think you can ever justify arrogance but it doesn't of same -- so why should we forgive it?

I am not advocating that you forgive the arrogance but i don't think that we will ever be rid of it.

Because it does take a certain kind of personality to do the things that people in silicon valley do.

The only important things that change a society are things that most people disagree with or think are insane.

And it takes a certain personality type to be comfortable doing it.

Most people like to just go along.

Is it also the fact that a lot of these entrepreneurs are in their 20's and probably dropped out of college and our young kids and at the same time are making all this money?

Yeah, it feeds the ego.

Is that part of the irony, that a lot of these kids have not made that much money but happen to work for people who made a lot of money?

The attitude is infectious, unfortunately.

Again, you take a group of young guys -- you are going to have these characteristics.

I don't care what group of young guys you grab in general.

If they all went to stanford and princeton, it will be more than usual because these are pretty entitled and desolate -- pretty entitled.

Is it worse than wall street?

For different reasons.

I am more sympathetic to the silicon valley culture because i think we do do different things.

I am in new york city and i don't want to deride your people but there is something different about making products that transform people's lives and rubbing money together to make more money.

There is a difference between those two things.

It isn't all about wall street.

There are a few companies that create the concept -- [laughter] i am not disrespecting it.

There are artists, too, who need all the funding they can get.

What about those who liken the pursuit or the persecution, as he called it, the number 1%? that is just nutty.

People like you are charged with the same thing.

In any large group of people there will always be people who don't care about other people and there will be all sorts of ways to justify their narrow self-interest.

And anyone who challenges that narrow self-interest they will try to position as a nazi or whatever it is.

Ordinary citizens in san francisco have a legitimate concern about skyrocketing rent, about the transformation that is happening in their city.

If you don't make $1 million a year, it is getting very difficult to live in that city.

That happened very quickly.

It all happened very quickly.

The people in silicon valley, if they have any sense -- how do we start those inequities?

We started this conversation with your interest in raising the minimum wage and your concerns about inequality.

Those are inequities, too.

And raising the minimum wage ain't going to fix housing in separate cisco.

At -- in san francisco.

How we split up the benefits that capitalism creates is an open question and i think one of the great challenges of our society in the present moment is how to have more capitalism that generates more prosperity and yet find a way to split the value it creates in a way that makes the society grow together, not just a few people get rich and everyone else left behind.

And splitting it differently as a mean we will have less capitalism.

In fact, more as more people are enabled to participate.

You think silicon people are there to help make things better but not everything is like that.

Right.

There is the arrogance that comes with products that aren't that amazing.

Of course, there is a huge amount of junk that is created, useless, corrosive junk that is created in this process.

But all technology is, editorial -- is commonatorial.

It is the assembly of other things.

Sometimes you need that stupid, useless thing to tack onto something and then you have something brilliant.

But isn't it better to make the people in san francisco better first?

This is why i advocate for rich people paying higher taxes.

If you have a higher tax base, you can support a bunch of things that make ordinary people's lives better and that is good for everyone.

It's not just good for the people whose lives are being made better.

Idiot ashley comes back you the plutocrats like me.

What about the politics of the valley?

We often talk about whether the tea party fits inside the gop, the american phenomenon of the departed -- the tea party not feeling at home.

It seems the democratic problem -- the democratic party has a similar partproblem in california.

Libertarians self-interest and a free market while having something akin to more liberal social values.

Where does that person belong?

Our politics isn't functioning at a very high level today and partially the reason for that is that there isn't a spot for a lot of people to fit.

You raise a very interesting point and that is a really important challenge.

I know a lot of my silicon valley rather in our libertarian and i think libertarianism is nonsense.

If there was a shredder chewed to it, there would be a libertarian paradise.

So you don't want to make silicon valley its own state?

No.

silicon valley people like to talk about making it their own state but who were they sell their stuff to?

Go ahead, make your own state and then you can sell snapchat to the 15 people in your state.

Good luck with that, but he.

-- buddy.

It is all good having your own world until you need the market that includes everyone else that you don't want to include in your own world.

This is the idiotic arrogance of some of these people.

It's just stupid.

Surely you've got a lot to [indiscernible] it has changed.

When i first heard a talking a lot economic inequality, people got -- when i first started talking about economic inequality, people got really angry.

That has changed remarkably in the last five years as people, as smart people, smart and thoughtful people have started to grapple with the reality that this is truly a threat to the country, to the democracy, and ultimately to business.

Does this mean you will run for office?

No, no.

I have a great life.

I am not going to mess it up.

When it comes to people who are part of the giving pledge, someone with a lot of influence who are giving up for the benefit of others.

My idea is to change the debate that will lead to policies that will make the country better for everybody.

My goal is to change the frame of the debate so that even lonnie will agree that we should tax rich people at a higher rate so that we can fund all the programs that he rightly believes generate prosperity in the long-term.

Wouldn't you have more success if you were able to recruit more rich people to agree with you?

I would and slowly, by little, it is coming.

You would be surprised how many people actually agree.

What changed?

Why not start a movement?

In this day and age, the super pac is the way to go.

I don't want a super pac.

I want to write books and change the frame of the debate.

Being political without being political.

Is that possible?

Sure, i think it is.

We raise the minimum wage to seattle -- in seattle to $15 an hour.

If i told you we were going to do that a year ago, you would have laughed at me and yet here we are.

In one year, the minimum wage fight has gone from nothing to now 35 different states and municipalities negating minimum wage.

-- litigating minimum wage.

Redid that by changing the frame of the debate, by reminding people that when workers earn better wages, businesses have more customers and need more workers.

So it is happening and it is changing.

So great to have you here this hour.

Thank you so much.

Thanks for having me.

It was very brave of you.

[laughter] he is the cohost of the venture capital from 2nd avenue partners doing his part to and inequality -- end inequality.

That was a really fantastic hour.

It was a little friday.

Yeah.

Hearing someone talk about taxing people at 50% is staggering.

And a lot of people have different views on the inequality debate, which parts of it they like and which parts of it they don't. it is good to have somebody who has stretched wrong -- such strong views from that position.

Someone who has hundreds of millions of dollars in wealth as a venture capital investor for years to fix what he perceives is an inequality problem.

For now, it is: 56 pass the art which means bloomberg markets -- bloomberg television is on the markets.

Stocks give back their gains this morning as geopolitical tensions overshadowed corporate earnings.

Joining me now is james rmb l.a. -- james rimelli.

Tell us what you are seeing in the options market and which way equities are headed from here.

. it has been a little bit thin and it has been that way all week.

We have seen some choppy price action, especially after we got the news about the situation in ukraine escalating a little bit.

The selloff on that news was exacerbated by sell programs.

We have a pretty strong open this morning.

To me, that is not panic selling.

It looks like sell programs.

We see a big trade around 16.5, which is not a panic level by any means.

Show me a vix over 25 and i will tell you we are in a panic mode but we haven't seen that action yet.

Two stocks in the news today making a lot of waves in the options market are fox and time warner.

Traders who are will -- are betting that we will see a merger will see their bets vanish.

What does the hangover trade look like on fox and time warner?

We see a lot bullish flow and stocks.

Investors are liking that this deal fell through.

I think the consensus was that rupert wanted this deal to get done and that there would be a higher bid coming in.

Fox also reported a really good quarter.

Investors really like it.

Stocks are up another 7% on this report.

Money calls expire in a day so a lot of traders will lose a lot of money in those.

Yes, but interesting to hear that there is also a segment out there of options traders betting that murdoch will come back with a higher back -- higher bet.

Cbs reports after the bell.

What is your strategy on cbs?

Like you said, a very strong stock on earnings.

It has rallied six times in the last eight quarters.

Market makers are implying a move higher by two dollars.

I think the stock can move every bit of that, especially since we saw such a strong quarter from fox.

I can double my money overnight if the stock gets they pop on earnings and trade above $60. how about further out?

How are you playing cbs?

I am still thinking cbs will head higher.

It is a week chart at these levels.

Even if they do miss on earnings

This text has been automatically generated. It may not be 100% accurate.

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