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WEDNESDAY, DECEMBER 28, 2016 ~ VOL. XLI NO. 84 WSJ.com ASIA EDITION
As of 12 p.m. ET DJIA 19952.45 0.09% NIKKEI 19403.06 0.03% STOXX 600 360.48 0.14% BRENT 55.92 1.38% GOLD 1138.10 0.55% EURO 1.0458 0.04% DLR 117.51 0.37%

Soldiers Stand Guard as Ex-Police Are Tried in Turkey Frontier


Whats Markets
News Turn In
Business & Finance
A Bad Year
T oshibas turnaround
plan is clouded by cost
overruns at U.S. nuclear
BY CAROLYN CUI

reactors it is building that A stock index tracking


are likely to force a write- some of the worlds riskiest,
down of as much as sev- potentially fastest-growing
eral billion dollars. A1 investments has missed this
years global rally, the latest
 Irelands data-protection
sign of the upheaval reorder-
chief is setting the pace
ing financial markets.
for EU monitoring of
AFP PHOTO/OZAN KOSEOZAN KOSE/AFP/GETTY IMAGES

The MSCI Frontier Mar-


global tech giants, includ-
kets Index of 22 small stock
ing Facebook and its
markets including Pakistan
WhatsApp chat service. B1
and Nigeria had risen 1.1%
 Southeast Asia has this year as of Dec. 22, in-
emerged as a new battle- cluding price changes and
ground for Chinas inter- dividend payments. That lags
net companies. B1 far behind the Dow Jones In-
dustrial Averages 17.4% total
 Monte dei Paschi faces
return for 2016 to date, and
a larger-than-expected
the 8.4% gain in the MSCI
capital shortfall of $9.19
Emerging Markets index of
billion, the ECB says. B1
larger developing nations.
 Some Chinese firms are Though investors are
moving headquarters to CRACKDOWN CONTINUES: Twenty-nine Turkish former police officers went on trial accused of aiding a failed military coup in July. It warned that it is subject to
poorer parts of the coun- was the first trial in Istanbul over the attempt. More than 40,000 people have been arrested for alleged involvement. considerable volatility, the
try, taking advantage of a frontier-markets index hasnt
new rule on IPOs. B1 gained or lost 1% in a day

Trump Picks Contrarians


since June 28, the longest
 Global turbulence and
such streak since the second
uncertainty will likely
half of 2012.
make life tougher than
The poor performance and
ever for CEOs in 2017. B5
placid trading underscore the
 Chinese institutional tough environment that fron-
investors are shunning His cabinet choices and istration as he tries to mold tions backed a trade deal ne- with contrarian viewpoints. In tier markets face at a time of
U.S. trophy properties in his own sweeping campaign gotiated by President Barack 2008, Mr. Obama selected two slowing global trade, tepid
favor of midtier ones. B9 advisers hold divergent themes into specific policies Obama with Asian nations, of his rivals for the Demo- economic growth and in-
 Big banks could find views; policy clashes for governing. which Mr. Trump opposed and cratic nominationHillary creasingly nationalist politics
The president-elects pick has vowed to abandon. Clinton as secretary of state that could limit capital
U.S. deregulation comes could be the result for budget director, Rep. Mick His choice for the State De- and Tom Vilsack as agriculture movement.
with stricter borrowing lim-
Mulvaney (R., S.C.), has op- partment, Rex Tillerson, has secretarydespite differences Gains in the Dow and the
its as conservatives push
BY DAMIAN PALETTA posed raising the debt ceiling, said he believes science proves displayed on the campaign MSCI Emerging Markets in-
for tougher capital rules. B7
but Mr. Trump has proposed climate change is being caused trail. Mr. Obama already had dex after sharp early 2016
Donald Trump has assem- steep tax cuts and large in- in part by human behavior, tapped another rival, Joe Bi- declines suggest investors
World-Wide bled a cabinet and senior staff creases in defense and infra- something Mr. Trump in the den, as his running mate. have recovered their appetite
with divergent views on such structure spending that many past has called a hoax. However, Mr. Trump will be for risk. But the lagging per-
issues as the deficit, trade, cli- economists believe will cause Former White House offi- surrounded by a plethora of formance of the frontier in-
 Public outrage in China mate change and Russia, pos- the deficit to grow. cials said incoming adminis- divergent voices from the out- dex shows that tolerance
flared up over prosecu- ing a challenge for his admin- Several of his cabinet selec- trations often have to grapple Please see CABINET page A7 Please see INDEX page A2
tors decision to drop
criminal charges over the
death of a researcher in
A Memorial on the Black Sea
police custody in May. A3
 Xi Jinping is moving to
XIS POWER GRAB PUTS
block a potential succes-
sor, showing he intends to
remain in power after his
term ends in 2022. A1
HIM AT CHINAS APEX
 Trump picked Thomas
Bossert as chief adviser on
VASILY MAXIMOV/AFP/GETTY IMAGES

homeland security, giving


The president appears to be seeking to extend his rule beyond 2022
him elevated status with
the White House. A7 BY JEREMY PAGE AND LINGLING WEI charge of the economy, the armed forces and
 The president-elects most other levers of power, overturning a col-
cabinet and senior staff BEIJINGChinas Communist Party elite lective-leadership system introduced to protect
hold divergent views on was craving a firm hand on the tiller when it against one-man rule after the death of Mao
the deficit, trade, climate chose Xi Jinping for the nations top job in Zedong in 1976.
change and Russia. A1 2012. Over the previous decade, President Hu Shattering old taboos, Mr. Xi has targeted
Jintaos power-sharing approach had led to party elders and their kin in an antigraft cru-
 Russian divers recov-
A woman lights a candle next to a portrait of Elizaveta Glinka, a policy drift, factional strife and corruption. sade, demanded fealty from all 89 million
ered the flight-data re-
charity activist who died in Sundays Russian plane crash. A4 The partys power brokers got what they party members, and honed a paternalistic pub-
corder from Sundays
wantedand then some. lic image as Xi Dada, or Big Papa Xi.
plane crash in the Black
Four years on, Mr. Xi has taken personal Please see CHINA page A8
Sea that killed 92. A4
 Mexican legislators are
taking small steps to de-
criminalize marijuana, fol-
Holidays and Horror Films INSIDE Toshiba Anticipates
lowing the U.S. lead. A5
Have Something in Common
 More Americans are re-
tiring to foreign lands as
they look to stretch their
i i i Nuclear Write-down
retirement income. A6
Tales of Terror and Tales of Tinsel BY TAKASHI MOCHIZUKI of the write-down.
Toshiba Chief Executive Sa-
 Colombian aviation offi- Share Writers. Producers, Actors TOKYOToshiba Corp. said toshi Tsunakawa became the
cials blamed human error in cost overruns at U.S. nuclear latest boss of the company to
the November crash that reactors it is building were bow before the cameras after
killed 71, including most of a
Brazilian soccer team. A5
BY ERICH SCHWARTZEL old Hollywood screenwriters
other credits include The Sins
CHINESE TRY likely to force a write-down of
as much as several billion dol-
the 2015 scandal, which led to
a clean sweep of top manage-
LOS ANGELESFlesh for of Dracula, Broadcasting PLAIN-VANILLA lars, clouding its turnaround ment after the company ac-
CONTENTS
Business & Fin.. B1-5
Markets Digest..... B8
Opinion.............. A10-11
the Inferno, a cinematic goref- Christmas, They Stole the
est about a pack of demonic Popes Blood! and A Christ-
U.S. ASSETS plan after a 2015 accounting
scandal.
knowledged it had padded its
financial results for years.
Crossword.............. A12 Property Report... B9
Finance & Mkts..... B6-10 Technology............... B3 nuns, has little in common with mas in Vermont. The warning, which sent I apologize to sharehold-
Heard on Street. B10 U.S. News............. A6-7 A Christmas Reunion, a Yule- The work makes him par- PROPERTY REPORT, B9 the companys stock down 12% ers, business partners and all
Life & Arts......... A9,12 Weather................... A12 tide romance about a Madison ticularly busy during two spe- in Tokyo trading, came just as stakeholders for the trouble
Management.......... B5 World News........ A2-5
Avenue executive who inherits a cific windowsthe run-up to the Japanese conglomerate we have caused, Mr. Tsu-
China: RMB28.00; Hong Kong: HK$23.00;
Indonesia: Rp25,000 (incl PPN);
small-town bakery. The one ex- Halloween and the Christmas seemed to have turned a cor- nakawa said in a news confer-
Japan: Yen620 (incl JCT); Korea: Won4,000; ception is the season. ner, thanks to an upswing in ence at the companys Tokyo
Malaysia: RM7.50; Singapore: S$5.00 (incl GST)
movies writer, Im only its semiconductor business. headquarters.
KDN PP 9315/10/2012 (031275); MCI (P)
NO. 073/10/2016; SK. MENPEN R.I. NO: 01/ Michael Varrati, popular in Octo- Toshiba executives said Westinghouse is working on
SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998 who specializes in ber and Decem- Tuesday the company was several nuclear-reactor proj-
two very different ber, he said. looking at emergency steps to ects, including two in Georgia
kinds of cult Behind the raise funds, including bor- for power utility Southern Co.
filmshorror
movies and
dozens of feel-
good holiday
A TALE rowing from its main banks.
They said they couldnt rule
Westinghouse said in January
that it had completed the ac-
Christmas movies. movies that OF TWO out the possibility that quisition of CB&I Stone &

s Copyright 2016 Dow Jones &


Tales of ter-
ror and tales of
spring up on ca-
ble each winter
TOLKIENS Toshibas U.S. nuclear-power
subsidiary, Westinghouse
Webster Inc., a U.S. company
that had been working with
Company. All Rights Reserved
tinsel, he said. Silent Night, Deadly Please see Electric Co., would fall into Westinghouse on the projects,
The 34-year- Night is a cult classic. SCARY page A8 LIFE & ARTS, A9 negative net worth as a result Please see TOSHIBA page A2
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

WORLD NEWS

As China Pivots, Trump Risks Fighting Old War


By contrast, countering
techno-nationalism is far
more complex, not least be-
cause so much of it is clan-
destine, says Scott Kennedy,
an expert on Chinese indus-
trial policy at the Center for
CHINAS WORLD Strategic and International
ANDREW BROWNE Studies. It features hidden
Buy China procurement
practices by Chinese state-
SHANGHAITo see the owned enterprises and state-
potential pitfalls in Donald backed funds masquerading
Trumps emerging policy on as private equity to buy for-
Beijing, look no further eign technology companies.
than Death by China, a Mr. Kennedy thinks the
book by the president- U.S. and Europe should for-
elects pick to help revive tify their investment review
U.S. manufacturing. procedures on Chinaand
Peter Navarro, the Har- coordinate their efforts.
vard-trained economist des- Derek Scissors, the chief
ignated to economist of the China Beige
head the new Book, advocates more tar-
White House geted measures to change
National Chinese behavior, such as
Trade Coun- blacklisting Chinese compa-

KIM KYUNG-HOON/REUTERS
cil, calls it a nies that have stolen U.S. in-
survival tellectual property. He
guide against the planets doubts that banning Chinese
most efficient assassin. state firms from acquiring
He cites Chinas perils: U.S. companiesan idea Mr.
faulty products from toxic Navarro supportswould
toddler overalls and flam- help much. The government
ing pajamas to arsenic- Beijing is trying to shift to cleaner, smarter manufacturing, such as making electric vehicles, shown above in Beijing. could simply order private
laden vitamins and self-im- companies that acquire U.S.
molating boom boxes. And truth; Chinese mercantilism China is fixed on the fu- Studies found them in semi- tional corporations. technology to hand it over.
China, he writes, is killing undoubtedly fueled surging ture. It is already shedding official documents else- The key choice is not what

I
millions of U.S. jobs with exports that were partly re- sunset industries it captured where: 80% of renewable en- nstead of trying to turn firms to ban, but what tech-
products mass produced in sponsible for devastating U.S. from the U.S. and promoting ergy equipment, 70% of back the tide of Chinese nologies to seal off, he says.
pollution-spewing sweatshops Rust Belt communities. Yet it cleaner, smarter manufactur- industrial robots, 40% of mo- exports, the Trump team These are tough dilem-
using slave labor. is also hyperbolic and out-of- ing from 3-D printing to avi- bile phone chips. would be better off moving mas. Starting a trade war
Mr. Navarro also issues a date, reflecting a way of ation and electric vehicles. And Beijing is backing the to reverse this latest itera- will complicate them further.
call to arms. To counter this thinking about China that in- Under a plan called Made in program with abundant fi- tion of techno-nationalism, Most likely, it would trigger
onslaught, Washington must creases the likelihood for China 2025, China aims to nancing, much of it ear- which is already squeezing retaliation and encourage
punish China for manipulating backward-looking and over- replace foreign products in marked for Chinese pur- Western information tech- even higher barriers to U.S.
its currencyBeijings prime blown remedies like the 45% these and other high-tech chases of U.S. and European nology companies out of investment.
weapon of job destruction tariffs on Chinese exports Mr. fields with locally produced technology companies. China. Its fixation with clos- China isnt the Dickensian
and the reason for massive Trump has threatened. onesand then export them To be sure, state-led in- ing the trade gap as a way of sweatshop portrayed in
U.S. trade deficits. Consumers to the world. dustrial plans have a long restoring the jobs of a by- Death by China. Rather, its

W
must shun Chinese products orse, such protec- The playbook is familiar: history of failure. Innovation gone era is quixotic; some a key engine of global growth
to weaken Beijing commer- tionist measures China first welcomes foreign works bottom-up not top- economists think that Mr. whose middle classes and
cially and militarily, he writes. will do little to ad- companies to build manufac- down. But the Mercator Trumps stimulus measures businesses increasingly de-
Every Wal-Mart dollar dress the next China shock: turing ecosystems, and once study concludes that Beijing may actually end up expand- mand high-tech products and
spent on Chinese imports Beijings efforts to seize the it has forced them to dis- will succeed in nurturing a ing the deficit by boosting sophisticated services that
represents a down payment technologies that will drive gorge their technology, vanguard of internationally the dollar, making U.S. ex- Western industrial economies
on our own unemployment as American prosperity in the squeezes them out. The blue- competitive companies and ports more expensive. are so adept at supplying.
well as additional financing 21st century and provide fu- print doesnt set explicit that Made in China 2025 Erecting tariff barriers In the long run, the solu-
for a rapidly arming China. ture jobs. 2025 localization targets, but will challenge the economic might play well with Mr. tion is to insist on more
Like most caricatures, the Chances are they will ex- a recent study by Germanys primacy of the current lead- Trumps blue-collar base open Chinese markets, not to
book contains elements of acerbate the problem. Mercator Institute for China ing economies and interna- looking for easy wins. close American ones.

TOSHIBA the company, which makes ev-


erything from elevators to
electronic devices. Already,
Toshiba took a 260 billion
lion in net profit for the year
ending March 2017.
The chip business is volatile
and requires continuous large
Continued from Page One ($2.2 billion) impairment investments to keep up with
from Netherlands-based Chi- charge in its last fiscal year industry leader Samsung Elec-
cago Bridge & Iron Co. when it downgraded the book tronics Co. Tuesdays disclo-
Mamoru Hatazawa, who value of Westinghouse. sure is likely to raise discus-
heads Toshibas nuclear-plant sion among investors about
operating unit, said Toshiba and whether it makes sense to
Westinghouse discovered unex- have two volatile and capital-
pected inefficiencies in the labor
The stock fell by 12% intensive unitssemiconduc-
KAZUHIRO NOGI/AGENCE FRANCE-PRESSE/GETTY IMAGES

force of the acquired company. as news from the firm tors and nuclear reactorsin
That and other factors are driv- the same company.
ing up costs, he said.
raised doubts about Toshiba executives have of-
Mr. Tsunakawa, the chief its turnaround plan. ten said the nuclear business
executive, said write-downs has a bright future and will re-
would reach hundreds of bil- main a core unit despite the
lions of yen, or a few billion global trend away from nuclear
dollars. Toshiba said it would Recently, demand from cus- power after the Fukushima Dai-
report the exact amount in tomers including Chinese ichi accident in Japan in 2011.
February when it releases its smartphone makers has The company is pursuing proj-
latest quarterly results. helped Toshibas core semi- ects in India and elsewhere.
Analysts said further write- conductor unit boost profits. Asked whether the big
downs were possible and ex- Before news of the nuclear write-down had changed his
pressed fears about the nu- write-down, the company said view of the nuclear business,
clear business weighing down it anticipated earning 145 bil- Mr. Tsunakawa said no. Chief Executive Satoshi Tsunakawa bowed at the beginning of a Toshiba news conference Tuesday.

INDEX developing markets.


At a time when the dollar
is rallying and commodities
are booming, frontier mar-
through Dec. 21, according to
EPFR Global.
Dramatic currency swings
in 2016 in Nigeria and Egypt
emerging counterparts. Over
the past year, frontier equi-
ties traded at around a
20% discount to emerging
Partners, which has posted
an annualized return of 8.9%
as of mid-December, accord-
ing to an investor in the
Global Advisors chief execu-
tive. Once the dollar weak-
ens, itll be a quick move in
those markets, she said.
Continued from Page One kets are held back by their also caused foreign investors stocks based on valuations, fund.
goes only so far, reflecting heavy weighting in banks and to shudder. The Global X the largest gap since 2009, The Harding Loevner THE WALL STREET JOURNAL.
the idiosyncratic risks of de- other financial shares. MSCI Nigeria ETF is down according to MSCI. Frontier Emerging Markets Dow Jones Publishing Company (Asia)
veloping nations as well as Among the top five countries 39% so far this year. The Af- Many frontier economies Fund has 4.4% of its assets 25/F, Central Plaza, 18 Harbour Road,
Hong Kong
individual countries eco- in the frontier index, econo- rican nations decision to de- are still expected to grow invested in Safaricom, Tel: 852 2573 7121 Fax 852 2834 5291
nomic challenges. mies in Argentina and Nige- value its currency by nearly much faster than their coun- Kenyas largest mobile net-
Paul Beckett, Asia Editor
Right now, youre at the ria are expected to contract 40% and adopt restrictions terparts in the developed or work operator, according to Troy McCullough, Senior News Editor, Asia
nascent stage of potentially a in 2016, while Pakistan, Ku- on dollar exports left inves- emerging worlds. Demo- portfolio manager Pradipta David Holland, News Editor, Asia
Darren Everson, International Editions Editor
recovery of the globe, and wait and Morocco are ex- tors with hefty losses. graphics in places like Ban- Chakrabortty. Backed by a
those countries wont re- pected to post subpar growth Some managers say the gladesh, Vietnam and Mo- 40% investment and the Hugo Restall, Editorial Page Editor
cover until late in the cycle, relative to the past decade. frontier indexs underperfor- rocco are favorable, likely management team from Mark Rogers, Advertising Sales
said Laura Geritz, chief exec- Disappointed by the mar- mance has created a buying pointing to growth in many Vodafone Group PLC, the Jacky Lo, Circulation Sales
Jacquelyn Drozdoff, Communications
utive of Rondure Global Advi- kets performance, investors opportunity in many stocks. consumer-driven sectors. At company has built the widest Simon Wan, Technology
sors, a boutique asset man- pulled $840 million in 2016 Frontier stocks are relatively the same time, energy-ex- network coverage and the Jonathan Wright,
ager with a focus on from frontier-market funds cheap compared with their porting countries such as Ni- widest distribution reach in Managing Director Asia & Publisher
geria and Kuwait are under Kenya, helping it generate Advertising through Dow Jones Advertising
pressure to reform their 46% growth in its mobile Sales: Hong Kong: 852-2831 2504; Singapore:
economies in the face of oil data revenue in the first half 65-6415 4300; Tokyo: 81-3 6269-2701;
Frankfurt: 49 69 29725390; London: 44 207
prices that are expected to of the current fiscal year. 842 9600; Paris: 33 1 40 17 17 01; New York:
stay low. When you have these 1-212 659 2176.
Or email: Mark.Rogers@wsj.com
Dubai-based Duet FIM markets where valuations
Partners Ltd., one of the have been cheap and under- Printers: Hong Kong: Euron Limited, 2/F., Block 1,
Tai Ping Industrial Centre, 57 Ting Kok Road, Tai
largest frontier-market man- lying fundamentals havent Po, Hong Kong; Indonesia: PT Gramedia Printing
Group, Jalan Palmerah Selatan 22-28, Jakarta
agers with $1.35 billion of as- changed, its easier for you to 10270; Japan: The Mainichi Newspapers Co., Ltd.,
sets, likes companies that buy them, he said. The fund 1-1-1 Hitotsubashi, Chiyoda-ku, Tokyo, 100-8051;
Korea: JoongAng Ilbo. 100 Seosomun-ro, Jung-gu,
can establish themselves as is up 1.2% year to date. Seoul, 100-814. Publisher/ Printer: Song, Pil-Ho;
local retail industries mod- Yet many investors expect Malaysia:Dasar Cetak (M) Sdn Bhd, Lot 2, Jalan
Sepana 15/3, Off Persiaran Selangor, Seksyen 15,
ernize. One of their picks is frontier markets to rebound 40200 Shah Alam, Selangor. (ROC No: 048885)6;
Singapore: Singapore Press Holdings Limited, 82
Olympic Industries Ltd., the only after a long and steady Genting Lane Media Centre Singapore 349567
largest biscuit maker in Ban- recovery in developed and
Trademarks appearing herein are used under
gladesh. The company has emerging countries. license from Dow Jones & Co.
been rapidly expanding its Its just a patience game, 2015 Dow Jones & Company. All rights reserved.
USPS 337-350; ISSN 0377-9920
production lines to churn out said Ms. Geritz, the Rondure
SUNDAY ALAMBA/ASSOCIATED PRESS

premium cookies for which NEED ASSISTANCE WITH


locals are willing to pay top YOUR SUBSCRIPTION?
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Currency swings in Nigeria and Egypt have concerned investors. Above, shoppers in Lagos. Vogel, chief strategist at FIM
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THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | A3

WORLD NEWS
Death in China Spurs Furor Tata Power Struggle
Public criticism builds
over decision to drop
Splits Indias Parsis
charges after man BY ERIC BELLMAN tan Tata, who had picked Mr.
Mistry to succeed him, came
dies in police custody MUMBAIA battle to con- out of retirement to serve as
trol Indias largest global con- interim chairman until a suc-
BY CHUN HAN WONG glomerate, the Tata Group, is cessor could be found.
convulsing the powerful ethnic But Mr. Mistry has refused
BEIJINGChinese prosecu- Parsi community, whose club to go quietly, claiming the old
torss decision to drop crimi- of billionaires has played an guard kicked him out because
nal charges over the death of a outsize role in the nations it worried about his moves to
researcher in police custody economic evolution. cut costs and improve gover-
has sparked public outrage The Tata Groupwhich nance. At first he refused to
an unusual display of middle- sells more than $100 billion a step down from his positions
class anger over perceived year of everything from Jag- at group companies. Last
lack of official accountability. uar Land Rovers to Tetley Tea week, he quit six of the largest
Criticism has been building to rooms at the famed Pierre Tata company boards and has
since Beijing prosecutors an- Hotel in New Yorkis engaged taken his fight to the courts.
KIM KYUNG-HOON/REUTERS

nounced Friday that they in an unusual public spat be- The Tata battle involves
wouldnt pursue negligence tween its ousted chairman and three of the Parsi communitys
charges against five police of- his retired predecessor. biggest families. Mr. Tata is
ficers despite finding that Both men hail from Indias the great-grandson of the Tata
their actions had contributed Parsi communitya group of Group founder. Mr. Mistry is
to the death of 29-year-old Lei about 60,000 people de- the son of Pallonji Mistry, In-
Yang in early May. scended from a non-Muslim dias richest Parsi with assets
A number of prominent ac- Protests among the middle class, like this one staged in Tianjin in August, are rare in China. minority who fled Iran centu- valued at more than $13 bil-
ademics, lawyers and busi- ries ago. The Tata Group was lion, according to Forbes mag-
nessmen have publicly taken Neither the prosecutors during a prostitution raid at a In Mr. Leis case, they said, the founded by a Parsi and run by azine. And Nusli Wadia, a for-
the prosecutors to task, say- office nor the Beijing police foot-massage parlor and sud- findings appeared tailored to his heirs for more than a cen- mer Tata director and pillar of
ing the decision undermines responded to queries. The five denly became unconscious af- avoid antagonizing the police, tury. the Parsi community, was
the rule of law. A petition officers couldnt be reached ter failed attempts to resist the partys front-line enforcers The stakes are big not only squeezed out of his long rela-
started by alumni from the to comment. Weibo Corp. arrest and escape. of social stability. for the ethnic group, but also tionship with the Tata Group
university Mr. Lei attended didnt respond to a request to His death set off a social- While prosecutors in many for the country at large. Parsi after he sided with Mr. Mistry.
has attracted more than 1,500 comment. media firestorm. Prosecutors democratic jurisdictions typi- business familiesTata Group Members of the community
signatures decrying the out- The barrage of criticism later launched an investigation cally bring similar cases to in particularhave long been also are worried over the pos-
come. Some high-profile law- amounts to a rare sustained into police conduct and said trial and leave the ultimate at the forefront of Indian in- sible appointment of a non-
yers expressed willingness to burst of public anger by Mr. Lei choked to death on his decision of guilt or innocence dustry and innovation. Parsi to lead the group, which
represent Mr. Leis family in Chinas burgeoning middle vomit, citing an autopsy re- to the court, the police in The community embraces would mark the end of an era.
potential lawsuits against the class. Though avid users of so- port. In their decision, prose- China often exercise influence Tatas global charity network Tata is revered in the commu-
five officers. cial media, white-collar pro- cutors said the officers ex- over judicial processes in sen- work, its generous treatment nity. When Ratan Tata ap-
Though discussions of the fessionals seldom respond col- ceeded reasonable limits in sitive cases, said Jerome Co- of employees and its interna- peared at a recent event cele-
decision were heavily censored lectively to government trying to subdue Mr. Lei and hen, a China legal scholar at tional outlook as embodying brating Parsi culture, he got a
on social mediaand searches missteps or social problems. that their actions contributed New York University. their values and identity. The 10-minute standing ovation.
for Mr. Leis name blocked In recent years they have to his death and amounted to A number of prominent boardroom battle has pained Parsis arrived in India in
two censorship-tracking web- shied away from criticizing criminal negligence. Chinese lawyers have ex- and embarrassed some Parsi the 10th century after Islamic
sites, Weiboscope and Free crackdowns on civil liberties Even so, the prosecutors pressed disquiet. Some have leaders. rulers persecuted them in Per-
Weibo, logged hundreds of de- lawyers and activists. declined to press charges. agreed to represent Mr. Leis This kind of dragging the sia, modern-day Iran. Rather
leted posts on the Weibo mi- The death of Mr. Lei, a re- They also faulted Mr. Lei for family should they decide to community through the mud, than trying to win converts or
croblogging platform. Accord- searcher at a state-backed en- resisting arrest. file suits against the five po- just wasnt done in Parsi assimilating, Parsis formed
ing to Weiboscope, censorship vironmental group with a de- More than 1,500 of Mr. Leis lice officers, according to two companies said Jehangir Patel, self-contained communities
on Weibo rose to a three- gree from the prestigious fellow alumni from Renmin of the lawyers, Li Xiaolin and editor of Parsiana, a commu- that effectively barred inter-
month high in the two days af- Renmin University in Beijing, University have signed an Duan Wanjin. nity magazine. It is becoming marriage. During British rule,
ter the decision. however, has reinforced mid- open letter criticizing the Bei- Mr. Leis family didnt re- more corporate like any global they showed a knack for com-
If this case allows the dle-class concerns that higher jing prosecutors for suicidally spond to a query sent to their company. merce, some prospering from
powerful to tighten their bind incomes and better education besmirching the rule of law verified Weibo account. Chen The fight began in October the opium trade with China.
on the masses, then everyone offer little protection from a and damaging public trust in Youxi, a lawyer assisting Mr. when the group holding com- Today, they are well repre-
will be bound, not just Lei justice system that often ig- the course of justice. Leis family, said Mr. Leis fam- panyTata Sons Ltd.pushed sented among the rich and fa-
Yang himself, Zhao Yu, a nores its laws. Legal experts said decisions ily would continue seeking le- out Cyrus Mistry as chairman mous. The conductor Zubin
Chinese writer, wrote in a In its account, police said in publicly or politically diffi- gal redress. after the board said it had lost Mehta and Freddie Mercury of
Weibo post that has since Mr. Lei, a Beijing resident, was cult cases are usually made by Kersten Zhang confidence in his ability to the rock band Queen were also
been censored. caught by plainclothes officers Communist Party committees. contributed to this article. lead. The prior chairman, Ra- Parsis.
CHINATOPIX/ASSOCIATED PRESS

President Xi Jinping addressed an internet conference in Chinas Zhejiang province in November.

Chinas Internet Strategy


Puts Emphasis on Security
BY EVA DOU tion, medicine and scientific foreign suppliers equally; its
research as among the fields strategy document vowed to
BEIJINGChinas internet subject to the reviews. protect internet security
regulator issued the countrys The strategy is likely to re- while maintaining openness
first cyber strategy, empha- new concern among Western to foreign parties.
sizing the necessity of secur- governments and businesses The strategic framework
ing critical infrastructure and about Chinas censorship and said China would use eco-
the governments right to industrial policies that use se- nomic, legal, diplomatic and
control cyberspace in Chinese curity concerns to favor local military means to protect its
territory. companies. information security, though it
The strategic framework re- The proposed security re- didn't elaborate. Cyberspace
leased Tuesday by the Cyber- views have been particularly is the new territory of a coun-
space Administration of China controversial in recent years, trys sovereignty, the docu-
offers few fresh initiatives but as Beijing has moved to ment said.
summarizes goals enumerated tighten control over informa- Unlike the U.S. national cy-
in a cybersecurity law and tion networks. Western trade berspace strategy in 2011
other regulations adopted over which reserved the right to re-
the past year. spond to cyberattacks with
A guiding concept is inter-
net sovereigntywhich the
Beijings cyber plan traditional military force,
Chinas strategy is more fo-
document defines as Chinas is likely to stoke cused on domestic political
right to police the internet
within its borders and partici-
censorship concerns priorities, said Fang Xingdong,
founder of internet think tank
pate in managing international in the West. ChinaLabs. He cited political
cyberspace. security and cultural security,
Under the cyber plan, a catchphrase for domestic
equipment suppliers for a criticisms of the government.
range of industries will be groups said China may use These challenges are ac-
subject to security reviews to the security reviews to dis- tually different from the ones
ensure adequate defenses criminate against foreign facing the U.S., so Americans
against hackers. In addition to companies and force them to have trouble understanding
the finance, energy, telecoms transfer proprietary technol- it or finding it acceptable,
and other critical sectors men- ogy. Chinas Cyberspace Ad- said Mr. Fang.
tioned in the cybersecurity ministration has said they Yang Jie
law, the document lists educa- would apply to domestic and contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Wednesday, December 28, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.

WORLD NEWS

Berlin Reflects on Tragedy

RUSSIAN EMERGENCY SITUATIONS MINISTRY/ASSOCIATED PRESS


Following attack on nial president, Joachim Gauck, charity and individual human to her migrant and security
said in a Christmas speech dignity should translate into policy.
Christmas market, that migration policy must be policy. Ms. Merkels stance, and the
Germans reconsider debated, as well as whether Germany allows most peo- considerable support it has re-
we need to do more in the fu- ple who have reached the bor- ceived from mainstream reli-
the limits of charity ture to provide for the security der to enter and apply for asy- gious leaders, has drawn criti-
of citizens. But he cautioned: lum. Even if they lack papers, cism from opponents. Frauke
BY ANTON TROIANOVSKI One does not need to reject they are provided food and Petry, co-head of the upstart
AND CHRISTOPHER ALESSI and expel others in order to pocket money and allowed to and increasingly popular Alter-
preserve and live ones own come and go from their shelter native for Germany party, said
BERLINGermanys Chris- way of life. while the monthslong applica- this year that some church lead-
tian tradition emphasizes The Catholic archbishop of tion process drags on. ers appear to be speaking out
Nchstenliebe: loving thy Berlin, Heiner Koch, also Chancellor Angela Merkel more for Muslims than their
neighbor. But as the country sounded a cautionary note. Per- has promised to speed depor- own fellow believers.
celebrated a somber Christmas haps we focused too much on tations of those whose asylum In the wealthy port city of
after the shock of last weeks the radiant image of humanity, pleas are denied and has nego- Hamburg, elementary-school
terror attack in Berlin, some on the good, he said in an inter- tiated with governments in the teacher Sabine Weber, 60, said Workers move a plane part pulled from the Black Sea near Sochi.
were considering the limits of view broadcast Sunday. Now in Middle East and Africa to pre- she has had good experiences
German compassion in a dan-
gerous world.
Police say a Tunisian man
the last year, or perhaps also in
recent years, we have seen: No,
there is also evil.
vent migrants from heading to
Europe in the first place.
But her policy that every
with refugee children in her
classroom. But she described
the German churches position
Russian Divers Recover
who arrived amid a flood of
migrants into Germany in 2015
drove a truck into a crowd at a
Catholic and Protestant reli-
gious organizations have been
some of the most outspoken
asylum claim should be pro-
cessed individually, and that
there should be no limit to the
on refugees as hypocritical.
God doesnt want me to be a
hypocrite, she said. God wants
Crashed Jets Black Box
Christmas market in the capi- supporters of a generous ap- number of asylum-seekers Ger- me to tell the truth. Germany BY OLGA RAZUMOVSKAYA they are looking into whether it
tal on Dec. 19, leaving 12 peo- proach to accepting refugees, a many takes in, hasnt changed. cant take in 80 million people. was related to the condition of
ple dead. The suspected assail- view shaped by the countrys On Friday, Ms. Merkel, fac- Many Germans, however, MOSCOWRescue workers the plane or the quality of the
ant was killed by Italian police own history of war and dis- ing a re-election battle next say that they are undaunted by recovered the flight-data re- fuel, or whether there was a pi-
near Milan after an interna- placement. year, promised to analyze what the attack and that their coun- corder from the Russian mili- lot error or foreign objects were
tional manhunt. Terror is prompting soul- went wrong leading up to the try still has an obligation to tary aircraft that crashed into caught in the engine.
Germanys mainly ceremo- searching about how values of attack and to consider changes take in refugees. the Black Sea, Russias Defense Russias main investigative
Ministry said. body has obtained video tapes
The ministry said one of the of the landing and taxiing of the
planes so-called black boxes Tu-154 plane in Sochi before its
was found early Tuesday a mile departure for Syria, and others
from the shore. The data re- showing the passengers clearing
corder was transported to a border control, spokeswoman
military research facility near Svetlana Petrenko told Interfax
Moscow, where experts started news agency. The committee
to decipher it, Transportation has questioned witnesses of the
Minister Maxim Sokolov said in crash and taken fuel samples
televised comments. from the tanker truck that
The Tu-154 passenger plane fueled the plane, she said.
belonging to the Russian mili- Official pronouncements ap-
tary crashed minutes after take- pear in part to have been di-
off from the southern Russian rected to assuage public con-
city of Sochi, killing all 92 peo- cern about the possibility of a
ple on board. terrorist attack similar to the
More than 60 members of one that downed a Russian pas-
the Alexandrov Ensemble, a senger jet in October 2015 over
popular army performing group Egypt, killing all 224 on board.
that was flying to Syria to en- Islamic States Egyptian branch,
tertain Russian troops, were Sinai Province, claimed respon-
killed in the crash. Journalists, sibility for that crash, and re-
military personnel and a re- leased a photo showing an im-
nowned Russian doctor and phi- provised explosive device it said
lanthropist were also on board. it smuggled onto the plane.
Along with the a cockpit As of Tuesday, 12 bodies had
voice recorder, the flight-data been recovered, with the body
recorder could offer the best of one passenger being identi-
chance of determining why the fied by relatives, the Defense
MAURIZIO GAMBARINI/DPA/ZUMA PRESS

plane crashed. On Monday, both Ministry said. The military said


the transportation minister and 45 ships, 12 planes, five helicop-
the Federal Security Service, ters and drones, and 192 divers
the FSB, ruled out a terrorist were taking part in the recovery
attack as the likely cause. effort.
The FSB said the plane was Divers have found parts of
under strict military control the fuselage, fragments of the
during a refueling stop in Sochi engine and other parts, the De-
before takeoff. fense Ministry said.
While officials havent deter- Nathan Hodge
Concrete barriers set up by the police on Pariser Platz in front of the Brandenburg Gate in Berlin as security concerns have grown. mined the cause of the crash, contributed to this article.

Crime and Terror: Familiar Mix for Europe Jihadists


BY VALENTINA POP It is a pattern that has be- They are just as at ease with armed robbery and carjacking. fire to a refugee shelter. His extremists involved in the at-
come increasingly common. selling drugs, petty crime and Islamic State in its propa- family said the experience tacks had been previously
BERLIN The 24-year-old Two brothers involved in the dabbling in extremism. ganda magazine said the two made him more religious. Af- flagged to authoritiessome
Tunisian migrant suspected of November 2015 attacks in Part of the problem is a rel- brothers were key logisti- ter his release and arrival in with prior convictions, others
killing 12 people in an attack Paris sold hashish from a bar atively lax attitude toward cians of the Paris and Brus- Germany, authorities discov- under judicial surveillance.
in Berlin last week typified a in the Belgian capital, Brus- regular criminals who in Eu- sels attacks, and became radi- ered links between him and a But a series of communica-
new wave of young jihadists in sels. OneSalah Abdeslam, rope often serve reduced sen- calized in jail. radical cleric. But German po- tion blunders between frag-
Europe who mix drug dealing the main surviving suspect in tences as authorities seek to Amri also spent four years lice and intelligence services mented intelligence, police and
and other illegal activities that assaultserved time in unclog overcrowded prisons behind bars in Italy for setting were stretched too thin and prison authorities allowed the
with Islamist terror. prison for breaking into a ga- that can become breeding failed to gather enough evi- suspects to slip under the ra-
Anis Amri, who was killed rage. The other had repeated grounds for future jihadists. dence to keep Amri in custody dar and conceal their plot. A
in a shootout with Italian po- brushes with the law for Two of the suicide bombers and prevent the attack. The legislative probe in Belgium is
lice in Milan on Friday after theft, drugs and weapons in attacks at a Brussels metro
Suspect in Berlin story of perpetrators in the gathering testimonies pointing
days on the run, peddled co- possession. stop and at the citys main air- attack had peddled Brussels and Paris attacks is to similar conclusions.
caine in a hip neighborhood of You have a crossover be- port this yearKhalid el- similar. Germanys federal system,
the German capital, while be- tween criminals and extrem- Bakraoui and his elder brother,
cocaine in a hip In France, a parliamentary with fragmented police and
coming increasingly radical- ists, said Magnus Ranstorp, a Ibrahimhad been released neighborhood. inquiry into the terrorist at- intelligence forces, also
ized and declaring his alle- counterterrorism expert at the from prison after serving just tacks in January and Novem- showed its limitations in the
giance to Islamic State. Swedish Defense University. half of their sentences for ber 2015 concluded that all the Amri case.

WORLD WATCH
ARGENTINA the IMF said. Luis Caputo, who budget. Nicolas Dujovne, an CHINA charged time for the countrys JAPAN
worked under Mr. Prat-Gay as fi- economist at the Buenos Aires- leadership.
Finance Minister nance secretary and was in- based think tank Fundacin Pen- Central Bank Names The move on Tuesday fol- Consumer Prices Fall
Removed in Shake-Up volved in talks to end a credit sar, will lead the Treasury Minis- New Deputy Chief lowed recent shuffling at Chinas For Ninth Month
dispute with U.S. hedge funds try, where he will focus on micro regulatory bodies, including the
Argentinas Finance Minister this year, will take over as fi- and macroeconomic policies, aim- China named Yin Yong to be November ouster of its reformist Japanese consumer prices fell
Alfonso Prat-Gay was forced out nance minister, Mr. Pea said. ing to increase consumption and deputy governor of the Peoples finance minister, who was suc- for a ninth consecutive month in
of his post on Monday as the Mr. Caputo will oversee the pub- reduce the fiscal deficit. Bank of China, promoting him ceeded by a low-profile bureaucrat. November, reflecting the still-
economy struggles to rebound a lic debt, state financing and the Ryan Dube from assistant governor at a Chinas State Council, or the fragile state of the economy.
year after President Mauricio cabinet, revealed Mr. Yins promo- The core consumer-price in-
Macri took office and introduced a tion in a statement posted to its dex fell 0.4% from a year earlier
series of market-friendly reforms. website. in November, after slipping at
Mr. Macri asked his finance The central bank lists six dep- the same rate in the previous
minister to resign after deciding uty governors and three assistant month, according to data re-
to restructure the ministry, split- governors on its website. Mr. Yin leased Tuesday by the Ministry
ting it into a Finance Ministry had a nearly two-decade stint at of Internal Affairs and Communi-
and a Treasury Ministry, Cabinet the State Administration of For- cations.
Chief Marcos Pea said in a eign Exchange, Chinas forex regu- The index excludes fresh
news conference.The surprise lator, before being selected to be food prices. The reading com-
resignation of Mr. Prat-Gay, a an assistant governor at the cen- pared with a 0.4% fall forecast
former J.P. Morgan Chase & Co tral bank in August 2015, accord- by economists polled by the
executive who is well-respected ing to the PBOC website. Nikkei. The core index has been
on Wall Street, comes as the Policy analysts say Mr. Yins ex- in negative territory since
NARAYAN MAHARJAN/PACIFIC PRESS/ZUMA PRESS

governments policies have failed perience in helping manage Chinas March. Household spending fell
to boost economic activity, re- foreign-exchange reserves could 1.5% on year in November, ad-
sulting in growing pressure on serve him well in his stepped-up justed for price changes, accord-
Mr. Macri over stubbornly high role at the central bank. The PBOC ing to other data released Tues-
inflation and unemployment. is facing various challenges, includ- day by the Internal Affairs
Some union leaders have called ing a depreciating yuan and U.S. Ministry.
for policy changes and have President-elect Donald Trumps It marked the ninth consecu-
threatened to call strikes. threats that he will label China a tive monthly decline. Consump-
Inflation is forecast to rise to currency manipulator. tion accounts for 60% of Japans
around 40% in 2016, while the He will succeed Guo Qingping, economy. The unemployment
economy is expected to contract who became vice central governor rate rose to 3.1% in November
by 2%, according to the Interna- at the central bank in February from the previous months 3.0%,
tional Monetary Fund. In 2015, 2015 according to the ministry.
Argentinas economy grew 1.2%, PLAY SHOWER: Young men were sprayed by an elephant in Sauhara, Chitwan, Nepal on Tuesday, Pei Li Takashi Nakamichi
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | A5

WORLD NEWS

Mexico Moves Toward Legal Marijuana


Votes in several U.S.
Up in Smoke
states to allow use of As marijuana legalization and
the drug spur similar cultivation spreads in the U.S.,
seizures at the U.S. border are
efforts in Mexico steadily declining
BY DUDLEY ALTHAUS 2.5 million pounds
AND SANTIAGO PREZ
2.0
MEXICO CITYAs legal 1.5
marijuana use spreads rapidly
across the U.S., Mexican legis- 1.0
lators are taking small steps to
decriminalize pot in a country 0.5
where the war on drugs has
0
killed more than 100,000 peo-
ple over the past decade. FY 2011 12 13 14 15
The rising disparity in drug Note: Fiscal year ends Sept. 30
legislation is stoking a debate Source: U.S. Customs and Border Protection
in Mexico over the effective- THE WALL STREET JOURNAL.
ness of its governments pro-
tracted battle against powerful western Mexicos so-called
drug cartels when an ever- Golden Triangle, rugged
spreading sweep of the U.S. is mountains home to the power-
giving up the fight. ful Sinaloa Cartel, led by
Voters in California, Massa- Joaqun El Chapo Guzmn

GREGORY BULL/ASSOCIATED PRESS


chusetts, Nevada and Maine until his latest arrest early
approved legal recreational this year.
marijuana on Nov. 8. Medicinal Mexican troops and police
use of cannabis was also ap- seized more than 450 tons of
proved in Arkansas, Florida pot in the past year and eradi-
and North Dakota. In all, some cated some 6,000 acres of the
21% of the U.S. population can crop, according to the govern-
have legal access to recre- ment. Farther north, the U.S.
ational or medical marijuana. Border Patrol confiscated
Mexicos Senate on Dec. 13 U.S. Border Patrol agents, shown near the Mexico border in April, confiscated more than 750 tons of Mexican cannabis in fiscal 2015. more than 750 tons of Mexi-
legalized the cultivation of can cannabis across the border
marijuana for pharmaceutical controlled substances. The amphetamines, marijuana con- use could eventually shut out Marijuana legalization cre- in the fiscal year 2015, accord-
and scientific purposes, but it agency said Dec. 16 that it tinues to provide a steady rev- Mexicos pot exports. As prices ates an invisible wall for Mex- ing to official statistics.
didnt address calls to allow wont approve any applica- enue stream, according to U.S. decrease, what you are earn- icos drug exporters, Sen. Gil While medical use of mari-
recreational use. tions for recreational use. and Mexican law enforcement. ing per kilo is not worth the Zuarth said. Facing rising juana has gained support
We are going backwards One problem, experts say, is Rather than drive the gangs risk, said Alejandro Hope, a stocks, they could dump the among a majority of Mexi-
compared to California and the resilience of organized from the business, the legal- public-security expert who product in domestic markets cans, opinion polls show that
other places, said Armando crime groups. Even as cultiva- ization of marijuana cultiva- was previously a senior ana- or diversify into other crimi- decriminalized recreational
Santacruz, a Mexico City busi- tion booms in California and tion and use could hand them lyst at Cisen, Mexicos civilian nal activities. use remains widely unpopular.
nessman who was one of four elsewhere across the U.S., the keys to a lucrative and le- intelligence agency. At the A gradual legalization in Broader legalization proposals
plaintiffs to win a Supreme Mexican criminal gangs con- gitimate market for the drug. moment that it becomes un- Mexico would reflect policies are unlikely to advance in
Court judgment last year for tinue to be the primary for- Mexican drug gangs are ex- profitable, there will be a col- elsewhere, he added, and Congress anytime soon, says
permission to grow and con- eign suppliers of the drug to pected to maintain a dominant lapse. We are not far away would provide time for institu- Ral Benitez Manaut, a na-
sume marijuana. American consumers. influence over the wholesale from that. tions to adapt and the impact tional-security expert at Mex-
The courts ruling was lim- Though less potent than import and distribution of Under such a scenario, to be assessed. icos National Autonomous
ited to just Mr. Santacruz and U.S. pot, the Mexican variety marijuana and other narcotics Mexico could be vulnerable to Marijuana cultivation, along University.
his fellow plaintiffs. Since maintains its consumer appeal in the U.S. in the near term, collateral damage, said Ro- with fields of opium poppies You might see that debate
then, more than 350 people because of its far lower price. the DEA said in its annual Na- berto Gil Zuarth, a senator and laboratories to produce taking place in two or three
have submitted petitions to While gangs have long since tional Drug Threat Assessment from the conservative National methamphetamine, sustains years, but its likely to be on a
cultivate or consume mari- diversified into more-lucrative in November. Action Party who led legisla- communities throughout state-by-state basis and in ar-
juana for personal use to the South American cocaine and But legal U.S. cultivation tive discussions over mari- swaths of Mexico. Prime pro- eas with a liberal electorate,
federal agency that regulates Mexican-produced heroin and growing apace with legalized juana regulations. ducing areas include north- like Mexico City, he added.

Colombia Plane Crash Report Details Fatal Miscues


BY KEJAL VYAS said. The flight crew was con- was arrested this month in Bo- and they tell me about an
scious of the fuel limits and livia on manslaughter charges. emergency, Ms. Molina said.
BOGOT, ColombiaPilots that they did not adequately The pilot and his co-pilot There were 71 victims, but it
of the doomed LaMia charter have what was needed, Mr. Bo- discussed the possibility of was too close. They were prac-
LEONARDO MUNOZ/EUROPEAN PRESSPHOTO AGENCY

plane knew its engines were nilla said, adding that head- landing to refuel in the Colom- tically on top of the other air-
shutting down several minutes winds may have caused the bian capital or in Leticia but de- craft. It could have been
before the crash that killed 71 plane to use more fuel. cided to continue 45 minutes worse, she said.
people, but failed to notify air- Bolivian officials shouldnt northwest toward Medelln, Mr. Colombian civil aviation of-
traffic controllers until it was have allowed the flight to take Bonilla said, citing audio re- ficials declined to speculate
too late, officials said. off, Mr. Bonilla said. cordings of the crews commu- why the pilots decided not to
Investigators from Colom- There was no response from nications recovered from the make a stop or report their
bias Civil Aviation Authority Bolivia, whose investigators last planes black box. low-fuel status earlier. Investi-
said the pilots didnt report a week blamed the accident on Yaneth Molina, the air-traffic gators say a potential refuel-
total electric failure without miscues by the airline and the controller in Jose Maria Cor- ing stop for the jet, which was
fuel until two minutes before pilot. The airport authority had dova International Airport, de- crossing over Colombia at
the plane crashed at 145 miles earlier filed a criminal com- scribed the harrowing final night, could have been Cobija.
an hour into a hill outside Me- plaint against one of its officials minutes in an interview Mon- However, that airport lacks
delln, Colombia, on Nov. 28. There was no technical failure, only human and managerial error, for allowing the plane to depart day with Colombias Caracol runway lights after dark and
While the crew had asked for Freddy Bonilla, head of the investigation, said Monday. despite the incomplete flight Radio. The LaMia flight, she the flight was already behind
priority landing, they didnt in- plan. The official, Celia Castedo, said, never alerted them of any schedule.
dicate imminent danger, and in- head of the investigation for overweight and flew above is seeking asylum in Brazil. major problems before sud- The flights operators also
vestigators said the pilots spoke Colombias Civil Aviation Au- 30,000 feet, though the plane Bolivia and Colombia have denly beginning an unauthor- had a strong incentive not to
with controllers in a com- thority, said in the first official isnt designed to travel above suspended LaMias operating li- ized descent for landing, look- declare a fuel emergency be-
pletely normal manner. report since the accident. 28,000 feet, Mr. Bonilla said. censes. Pilot Miguel Quiroga, ing to cut in front of three cause it would have led to
There was no technical The 28-day investigation In addition, the 1,839-mile who died in the crash, was a co- other planes that were sched- sanctions that could have
failure, only human and mana- found the Avro RJ85 aircraft trip was near the aircrafts limit owner of the airline along with uled to land before. grounded the company, poten-
gerial error, Freddy Bonilla, left Bolivia nearly 1,000 pounds for a tank of fuel, the official Gustavo Vargas Gamboa, who Thats when I called them tially putting it out of business.

Brazils Cash-Strapped Governments Sell Off Assets


BY MARLA DICKERSON Brazils recent political shift nances, charges she denied.
AND LUCIANA MAGALHAES has rebooted that process after A vast corruption scandal
a 13-year hiatus in which the centered on Petrobras has
SO PAULOBrazils reces- Workers Party ran the coun- spooked some foreign inves-
sion, having decimated tax try. The August ouster of left- tors on Brazil. Pricing will also
revenue, is now fueling one of ist President Dilma Rousseff be key, said Thomaz Favaro,
the biggest privatization and recent municipal elections a So Paulo analyst with the
binges in years. brought a number of right- Control Risks consulting firm.
Federal concessions for leaning officials to power. He said some of his multina-
highways, power plants, air- Leading the charge is Presi- tional clients are eyeing up-
ports and railways are on the dent Michel Temer, who is coming concessions for air-
block. Officials are selling off touting private investment to ports in the cities of Porto
public gimcracks acquired in jump-start the economy. Alegre, Salvador, Florianpolis
YASUYOSHI CHIBA/AGENCE FRANCE-PRESSE-GETTY IMAGES

happier times as they struggle and Fortaleza. Mr. Favaro said


to cover basics like pensions. they have shown little interest
In So Paulo, the nations in the railways, considering
biggest city, the new mayor
Concessions for power them not lucrative enough.
wants to unload the An- plants, highways, Critics of Brazils privatiza-
hembi Sambadrome, site of tion, meanwhile, say the pub-
the Carnival parade. A city-
airports and railways lic is getting shortchanged,
owned raceway and a cavern- are on the block. with many assets fetching
ous convention center are also pennies on the dollar.
expected to go up for sale. Still, even places with a
The southern state of Rio history of government-led de-
Grande do Sul is seeking pri- In addition to infrastructure velopment are embracing pri-
vate-sector managers to take concessions, his administra- vatization out of necessity.
over its public zoo in its capi- tion backed recent legislation Bahia state, in the impover-
tal, Porte Alegre, whose at- opening Brazils oil sector ished northeast, is trying to
tractions include giant rodents wider to foreign players, as sell an unprofitable food com- The incoming So Paulo mayor wants to sell the Anhembi Sambadrome, site of the Carnival parade.
known as capybaras and a lion well as an asset divestment pany whose major holding is a
named Jernimo. plan at debt-burdened Petr- supermarket chain called
Privatization isnt new to leo Brasileiro SA, the state-run Cesto do Povo, or the Peoples Budget Deficit the end of November, compared GDP in the period, from 2.23%
Latin America. Deals surged in oil giant known as Petrobras. Basket. with 8.83% through the end of in October.
the 1980s and 1990s with the The government cant do [It] never profited, said Grew in November October, the countrys central Brazils gross debt rose to
rise of economic liberalism. everything, Mr. Temer said in Marco Cohim, the companys bank said Tuesday. 70.5% of GDP in the 12 months
Those years saw Brazil bust September, shortly after as- president, who pegs losses at The primary budget balance, through the end of November,
up its government telecom suming the presidency from one billion reais ($306 million) SO PAULOBrazils gov- which excludes interest pay- compared with 70.3% of GDP in
monopoly, privatize mining gi- his impeached predecessor since 2007. It was kind of il- ernment deficit widened to ments and is a measure of the the period through the end of
ant Vale and turn aircraft Ms. Rousseff. She was ousted logical for the state to provide 9.28% of gross domestic prod- governments ability to reduce October.
maker Embraer into a publicly for trying to hide the disas- resources to a network of su- uct in the 12 months through its debt, increased to 2.50% of Jeffrey T. Lewis
traded company. trous state of the nations fi- permarkets.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A6 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

U.S. NEWS
Bankruptcy an Option for Student Debt
Some borrowers find more people and bankruptcy ucational benefit in this case
lawyers get informed there are because she couldnt have a li-
way to get around provisions in the bankruptcy cense that she could use, said
rules that have made code to manage student loans. Darren Aronow, Ms. Decenas
The argument worked for lawyer.
this route difficult Lesley Campbell, 37, who in St. Christopher referred re-
2014 filed for bankruptcy and quests for comment to a New
BY SARAH CHANEY later was able to discharge the York lawyer, who didnt re-
unpaid portion of a $15,000 spond to multiple requests for
Borrowers are beginning to loan she took out from Citi- comment.
win battles to erase some stu- bank to study for a bar exam. Citizens Bank appealed
dent loans in bankruptcy court, Judge Carla Craig of the Judge Grossmans ruling, and a

CLAUDIO PAPAPIETRO FOR THE WALL STREET JOURNAL


overcoming stiff obstacles that U.S. Bankruptcy Court in district court recently sent the
have generally blocked that Brooklyn, N.Y., ruled that loan case back to bankruptcy court,
path except in extreme cases of debt for bar exams is akin to finding that the bank wasnt
financial hardship. consumer debt and doesnt fall properly notified of the law-
Since March, several bank- into the category of a student suit. A spokeswoman for Citi-
ruptcy courts have allowed loan that sticks with a bor- zens Bank declined to com-
borrowers to cancel private rower in bankruptcy. ment.
student loans with a new legal In April, Judge Robert E. Lauren Baez, 31 years old,
argument that relies on vague Grossman ruled in favor of Lo- who took out private and fed-
wording about the legal defini- relei Decena, who borrowed eral loans to attend a visual-
tion of a student loan. $161,592 to attend St. Christo- arts school in 2008, also ar-
Bankruptcy law says that, pher Iba Mar Diop College of gued that she should be able to
without proving extreme hard- Medicine in Senegal. cancel her private debt without
ship, a borrower cant dis- The school falsely repre- needing to prove extreme fi-
charge a loan made for an ed- Some who owe on student loans are arguing that their debt wasnt made for an education benefit. sented to her that it was li- nancial hardship. Her gross
ucational benefit. This censed and accredited, pro- salary of $45,000 as a retail
language has opened a window dent-loan market, which makes to get help with student-loan arise, bankruptcy experts say viding her with a loan employee wont cover the re-
to cancel loans for students up less than 10% of the more debt. Now, lawsuits that offer a they expect the number of stu- application from Citizens Bank payment costs, she says.
who argue their loans fall out- than $1.3 trillion in outstand- gateway to debt cancellation dent-loan-related lawsuits to that reflected a code for an ac- If I was forced to pay back
side this category of debt. Such ing student debt. The federal are popping up all over the climb as the amount of stu- credited institution, court pa- all my student loans at this
reasoning has been applied to government dominates the stu- country, said Austin Smith, a dent-loan debt increases. pers state. Because the school moment in time, I wouldnt
loans obtained to attend dent-loan market and isnt as consumer-bankruptcy lawyer Bankruptcies in and of was in fact unaccredited, ac- have enough money to pay my
schools without accreditation vulnerable in bankruptcy pro- who has led the charge in themselves are on the decline, cording to court papers, Ms. rent, Ms. Baez said. Im mak-
or to study for a bar exam. ceedings. courts. said D.J. Rausa, a San Diego Decena, 43, was ineligible to ing more money than I ever
The argument applies only For years bankruptcy wasnt Although no one keeps sta- consumer-bankruptcy lawyer. sit for medical-board exams in have before, but I still cant af-
to a slice of the private stu- a realistic way for Americans tistics on how often such cases That may change if more and multiple states. Theres no ed- ford to make these payments.

U.S. WATCH
ECONOMY The outlook for the labor makes up most of the U.S. econ- The number of American retir- WEATHER by Tuesday, although the Na-
market also rose, with 21% say- omy. ees living abroad rose 17% be- tional Weather Service warned
Survey: Consumers ing they expected more jobs in A separate confidence mea- tween 2010 and 2015. The Social Digging Out After that drifting snow still blocked
Are More Confident the months ahead, up from 16.1% sure, released by the University Security Administration says there Christmas Day Storm some roads.
a month earlier. Consumers also of Michigan on Dec. 23, found are just under 400,000 American Interstate 94, which had been
Americans grew more opti- said they expected to see their that Americans are more confi- retirees living elsewhere. Countries The furious winter storm that closed for days in North Dakota,
mistic about the economy in De- incomes increase. dent in the economy than at any chosen most often: Canada, Japan, swept into the northern Great reopened Tuesday, as did Inter-
cember, a sign that the postelec- But consumers assessment point in nearly 13 years. Mexico, Germany and the United Plains on Christmas Day weak- state 90 in South Dakota.
tion bump in confidence of current economic conditions David Harrison Kingdom. ened Tuesday, but thousands re- The Minot International Air-
continues. weakened over the month. The Not speaking the language or mained without power in the Da- port, which was closed due to
The Conference Board said share of those saying business DEMOGRAPHICS knowing the culture may be a kotas and Michigan. whiteout conditions, reopened
Tuesday its index of consumer conditions were good dipped hurdle for retirees moving to an- High winds and drifting snow Tuesday. Winds gusting 40 mph
confidence rose to 113.7 in De- slightly to 29.2% while the share More Americans other country. Accessing health continued to make travel hazard- to 50 mph also led to delays and
cember up from a revised 109.4 of those saying they were bad Retiring Outside U.S. care also can be a challenge. ous in the Dakotas, even as vast cancellations at Minneapolis-St.
in November. Lynn Franco, direc- rose to 17.3% from 15.2%. Olivia S. Mitchell, director of stretches of highways that had Paul International Airport on
tor of economic indicators at the Economists follow confidence More Americans, looking for a the Pension Research Council, been closed reopened to traffic. Monday, but the airport returned
Conference Board said the surge indicators because upbeat con- way to stretch their retirement says Medicare isnt available to The no-travel warnings issued to full operations Tuesday with
in optimism was most pro- sumers are more likely to in- income. are retiring outside the those outside the U.S. Christmas Day for much of just a handful of delays.
nounced in older consumers. crease personal spending, which U.S. Associated Press North Dakota had largely expired Associated Press

T H E I N N O VAT I O N PA R A D O X

Reinventing
the big idea.

A puzzling slump in innovation is slowing global


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and looks at new efforts to push the frontiers of
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Sponsored by
Read it in print, on the WSJ app
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2016 Dow Jones & Co., Inc. All rights reserved. 6DJ4295
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THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | A7

U.S. NEWS

Cybersecurity Pick Named Home Prices Surged


Again Before Election
Thomas Bossert also lished in the Washington
Times last year, Mr. Bossert BY LAURA KUSISTO election in November.
to be Trumps adviser wrote that the use of military Higher mortgage rates tend
on homeland security force by the Bush administra- Home prices went up to put a damper on price
tion in Iraq and Afghanistan sharply in October, as the mar- growth because they drive up
and counterterrorism was and remains just, ket showed no signs of slow- the monthly cost of a mort-
though he added that, How ing after setting a record a gage. That combined with the
BY PETER NICHOLAS the war in Iraq was prose- month earlier. fact prices have risen faster
cuted is clearly ripe for review The S&P CoreLogic Case- than incomes could pose chal-
WASHINGTONPresident- and regret. Shiller Indices, which covers lenges to the market next year.
elect Donald Trump said he is It wasnt clear how much the entire nation, rose 5.6% in Mortgage interest rates
naming Thomas P. Bossert, a the structure of the presi- the 12 months ended in Octo- rose in November and are ex-
veteran of Republican Presi- dents National Security Coun- ber, up from the 5.4% increase pected to rise further as home
dent George W. Bushs admin- cil will change. reported in September. prices continue to outpace

ANDREW HARNIK/ASSOCIATED PRESS


istration, as his chief adviser An Obama administration The 10-city index gained gains in wages and personal
on homeland security, coun- official said in the current 4.3%, up from 4.2% in Septem- income, said David Blitzer,
terterrorism and cybersecurity configuration of the NSC, ber. The 20-city index gained managing director at S&P Dow
matters and is giving him ele- Homeland Security adviser 5.1% year over year, up Jones Indices. Home prices
vated status within the White Lisa Monaco is chairwoman of slightly from a 5% increase in cannot rise faster than in-
House bureaucracy. the Homeland Security Council September. comes and inflation indefi-
In a statement Tuesday, Mr. Principals Committee, while The hottest markets in the nitely.
Trumps transition team said national-security adviser Su- country remain concentrated Month-over-month prices
Mr. Bossert will be an assis- san Rice is chairwoman of the in the Northwest, as many the U.S. Index rose 0.2% in Oc-
tant to the president on a par Donald Trump praised Thomas Bosserts depth of knowledge. National Security Council buyers priced out of the Sili- tober before seasonal adjust-
with the incoming national-se- Principals Committee. It con Valley area flee to second- ment. The 10-city remained
curity adviser, Michael Flynn. cause of the awesomeness of tecting the homeland to sounds like they have a similar ary tech hubs. Seattle reported unchanged, and the 20-city in-
In the role carved out by the jobI mean that in an our senior White House team, setup, the official said. a 10.7% increase, Portland re- dex increased 0.1% in October
the Trump transition team, awe-filled way. Mr. Trump said in the transi- Ms. Monacos title is assis- ported a 10.3% year-over-year from September.
Mr. Bossert will enjoy inde- Mr. Bossert, 41 years old, tion teams statement. He has tant to the president for home- gain, and Denver had an 8.3% After seasonal adjustment,
pendent status, reflecting the served as a deputy homeland a handle on the complexity of land security and counterter- increase in home prices. the national index rose 0.9%
importance of a mission so security adviser to Mr. Bush. homeland security, counterter- rorism and deputy national- Case-Shiller offers a lagging month over month. The 10-city
closely tied to the nations se- He now runs a private consult- rorism, and cybersecurity security adviser. Ms. Rices is indicator of the housing mar- index and the 20-city index
curity, the statement said. ing business. challenges. He will be an in- assistant to the president and ket. Octobers numbers dont each rose 0.6%.
Mr. Bossert, in a brief in- Tom brings enormous valuable asset to our adminis- national-security adviser. reflect the sharp increase in After seasonal adjustment,
terview Tuesday morning, depth and breadth of knowl- tration. Felicia Schwartz mortgage rates that began fol- all 20 cities saw prices rise in
said: Its a humbling thing be- edge and experience to pro- In an opinion piece pub- contributed to this article. lowing the U.S. presidential October.

Adults Without Degrees Are Lured Back to College


BY MELISSA KORN U.S. have some college credits estimating that three-quarters
but no associate or bachelors of his colleagues with the same
Adults across Tennessee are degree, according to a George- title have degrees.
being blasted with a message town University Center on Edu- Mr. McBride says giving up
on television, radio and high- cation and the Workforce analy- his nights and weekends hasnt
way billboards: Finish what you sis of census data. Yet by 2020, been easy. But free education?
started. the center projects, 35% of job I cant believe anyone would
State education officials have openings will require at least a turn that down, he said.
spent $1 million in the past year bachelors degree, up from 32% Yet many are, especially
to advertise their Tennessee Re- in 2010. States are desperate to as nontraditional educational
connect program, an initiative lure those employers that need programs gain steam.
aimed at bringing college high-skilledand well-paid Since February, the Indiana
dropouts back to school. Public workers. Commission for Higher Educa-
and private institutions are A 2013 report from the left- tion has sent 270,000 emails
mining student records and leaning Economic Policy Insti- and 125,000 postcardsand
reaching out to people who tute found that median wages made 30,000 phone callsto
have made it more than halfway hovered around $15 an hour in adults who left school without a
to graduation. Churches and job states where 30% or less of degree in the past 10 years and
centers are also promoting the working adults had bachelors now reside in the state. It aims
program. degrees. For states where more for 60% of adult residents to
NICOLE CRAINE FOR THE WALL STREET JOURNAL

Were doing everything, all than 40% had bachelors de- have postsecondary credentials
at once, said Mike Krause, ex- grees, median hourly wages by 2025.
ecutive director of the Tennes- were $19 to $20, an annual dif- By early December, 9,000 of
see Higher Education Commis- ference of $10,000 for full-time those targeted by Indianas You
sion, which aims to boost the employees. Can. Go Back. campaign have
share of Tennessee adults with re-enrolled in school, and about
college degrees to 55% by 2025 22,000 people10 times the
from 38% today. It takes a very typical numberhave applied
diverse approach to move the
State programs offer for a $1,000 grant earmarked
needle. Mr. Krause added that financial and other for adult students. The state
the state should start seeing en- hopes to get 200,000
rollment results in the spring.
aid to encourage adults back to college through
Tennessee is among a num- dropouts to finish the $300,000 campaign. Bryan McBride, from the Nashville area, took the college plunge again with help from a state
ber of states seeking to boost There is a chance that state program called Tennessee Reconnect.
the ranks of college graduates officials arent factoring in the
and improve local economies. large numbers of adults who
After enticing more people Bryan McBride, a 39-year- hold vocational certificates or Why People Dont never followed through to actu- South Bend, Ind., knows he has
through the high-school-to-col- old insurance-account manager alternative credentials, which ally get the degree. They tracked hit a career ceiling without a de-
lege pipeline with better coun- from the Nashville area, took often lead to jobs that pay bet- Return for Degrees down and awarded sheepskins gree.
seling and financial aid, theyre the college plunge again with ter than those for associate-de- to about 4,500 individuals. Mr. Dixon, 43 years old,
now turning to former students help from Tennessee Reconnect gree holders, earnings data But once adults are asked to spent two years in college in the
as the best bet for prospective after finding information about show. As state officials try to lure crack open books or spend early 1990s. He dropped out af-
students. the program online. Caleb Francis left Indiana adults with some academic money on tuition, completion ter landing on academic proba-
Last month, Mississippis Guided by phone calls with University-Purdue University credits but no degree back to rates plummet. Of the 20,105 in- tion at Indiana State University
public universities announced an adviser, he signed up for on- Indianapolis after three semes- college, theyre getting a lesson dividuals Project Win-Win identi- and jobs in the manufacturing
plans for Complete 2 Compete, line classes at Columbia State ters. Now 23 and working as a on what works and what fied as being nearly done with sector were plentiful enough
a program encouraging adults Community College this fall and software developer at a startup doesnt. their degrees, just about 1,700 that he didnt feel any urgency
to return to school for a de- is close to earning an associate in Indianapolis, he isnt sure re- Programs that require drop- had returned to school by late to return.
gree. Iowa, North and South degree in business administra- turning to campus would help outs to simply sign a form or 2013. Adults who were still Though his salary is solid for
Dakota and cities including Al- tion. His tuition costs are fully his career. pay a nominal graduation fee short on math credits were the the area, in the $60,000 range,
buquerque, N.M., and Louisville, covered by state grants and Mr. Francis landed a job soon have had the most success, say least likely to return. Mr. Dixon says he is extremely
Ky., also have been pursuing scholarships. after completing a three-month individuals who run and fund Life gets in the way for a concerned about his prospects
so-called comeback programs, Mr. McBride spent about two coding boot camp at Iron Yard, the efforts. lot of these individuals, says Ja- 10 or 20 years down the line,
and often include financial in- years at Middle Tennessee State a chain of coding schools, earn- Project Win-Win, a founda- mie Merisotis, president and with most peers holding degrees.
centives like grants and credit University in the mid-1990s, ing a starting salary in the tion-backed experiment that ran CEO of Lumina Foundation, But for now, he says, he
for work experience to mini- had a family, switched from $40,000-to-$50,000 range. from 2009 to 2013, helped 61 which supports increased educa- would rather spend time with
mize the financial sting. working part time to full time Thats definitely something schools in nine states mine their tional attainment. It is challeng- his familyincluding one child
The stakes for failing to pro- at an insurance office, and you can live on here, he said, student data to find 6,733 peo- ing to re-engage people. currently in collegethan study
duce an educated workforce are never found time to go back, he adding that he was employed ple who had accumulated Jon Dixon, director of quality for himself.
getting higher. Nearly 37 mil- says. But now Ive tapped out six months before his original enough credits for a degree but for a manufacturing company in Melissa Korn
lion working adults around the what I can do at work, he says, college graduation date.

CABINET nounced views on specific pol- trade rules. cessful, whether its in govern-
BILL CLARK/CONGRESSIONAL QUARTERLY/NEWSCOM/ZUMA PRESS

icy issues. His pick to lead the Envi- ment, business, academics, or
It is the other advisers, par- ronmental Protection Agency, other facets of society, to im-
ticularly members of his cabi- Oklahoma Attorney General plement his agenda, incoming
Continued from Page One net, where Mr. Trump could Scott Pruitt, has called a fed- White House press secretary
set. Thomas Barrack, a long- see the biggest differences of eral policy that forces in- Sean Spicer told reporters
time Trump friend and chair- opinions. creased use of ethanol and during a recent briefing call.
man of the inaugural This is a great, unan- other biofuels into the U.S. And its his agenda thats be-
committee, said the president- swered question, said David fuel supply unworkable and ing implemented, not some-
elect manages with an open Axelrod, who was a top ad- backed a 2013 lawsuit chal- body elses.
door policy, where aides de- viser to Mr. Obama. It seems lenging the measure. That approach, however, is
bate the merits of proposals that Trump does not come to But, before the first cau- already being tested.
while Mr. Trump curates the this with a well-developed phi- cuses during his early Republi- On the campaign trail, Mr.
information and makes a final losophy so much as a well- can primary fights, Mr. Trump Trump focused on toughening
decision. conceived marketing strategy. told Iowans supporting the the militarys treatment of
Yet many decisions made Many of his incoming advis- ethanol mandate he was with suspected terrorists, and he
by the federal government ers who have the most diver- you 100%. Trump transition said he would bring back wa-
dont reach the presidential Rep. Mick Mulvaney has opposed raising the U.S. debt ceiling. gent opinions are those with officials and senior aides have terboarding and implement
level, providing vast, indepen- government or corporate ex- suggested that the president- tactics that he said were even
dent powers to the far-flung ticularly given the horizontal When a president has firm perience. Wilbur Ross, his se- elects viewpoint on the etha- more extreme.
bureaucracies run by the cabi- structure of senior staff ap- ideas, such as build a wall, cre- lection for commerce secre- nol mandate hasnt changed. But he recently told the
net secretaries and their depu- pointments he has put in place ate jobs in America through en- tary; Iowa Gov. Terry Senior Trump transition of- New York Times that he
ties. Monitoring one poten- so far. ergy independence and cut Branstad, who has been ficials have said the incoming broached these issues with
tially rogue agency could be No one is a carbon copy of taxes, its a lot easier for the tapped to become ambassador cabinet and White House team Gen. Mattis, and Mr. Trumps
challenging for any new ad- the commander-in-chief, said advisers to salute and carry out to China; and his selection for will set aside their differences pick to head the Pentagon said
ministration, and Mr. Trump Ari Fleischer, who served as the presidents orders. defense secretary, retired Gen. and work to implement Mr. he never found it useful. The
may need to keep an eye on press secretary in the George Mr. Trumps senior White James Mattis, have all spoken Trumps agenda. Gen. Mattis president-elect said he was
several of them to ensure they W. Bush administration. The House staff includes several of favorably of the Obama admin- and Mr. Tillerson declined to surprised by the answer,
promote policies in line with key in the dynamic is the his campaign aides, such as istrations proposed trade deal comment. Mr. Mulvaney and though he didnt say whether
his promises and not the pref- strength of the president and strategist Steve Bannon and with Asian countries, called Mr. Pruitt didnt respond to he had changed his mind on
erences of his appointees. his ability to lead. If a president counselor Kellyanne Conway, the Trans-Pacific Partnership. requests to comment. how he would address the
Much could depend on how doesnt have strong ideas about both of whom are tapped into Mr. Trump has promised to What President-elect subject as president.
the president-elect can estab- what to do, the advisers play a his base of populist supporters end this trade deal as part of Trump is looking for, are peo- Peter Nicholas
lish a chain of command, par- much more influential role. but have taken less pro- his initiative to redraw U.S. ple that have been very suc- contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A8 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

FROM PAGE ONE

SCARY crown.
Theres a comfort factor
with horror and Christmas,
he said. You know what
flash-forward that alludes to a
happy relationship. That re-
ally teases the audience. In
another 2016 feature of his,
of cable channels airing
Christmas movies are posting
record ratings this year. Since
launching its Countdown to
Has a Story, his character, Dr.
Kenny Kwan, is an expert in
Christmas-tree ornaments who
helps a Scrooge-like news an-
Christmas.
Another cardinal rule has
emerged. The channels want
snow, snow, snow, said Sam
Continued from Page One youre going to get. Its kind of Sorority Slaughterhouse, he Christmas programming on chor find a new appreciation Irvin, a veteran of both genres.
is a fraternity of writers, pro- like McDonalds. opened with the suicide of an Oct. 28, the Hallmark Channel for the holiday. While directing Im Not
ducers, directors and actors Bob Clark, who directed the adulterous university dean, said it has been the most- Im usually either the side- Ready for Christmas, about a
who moonlight in skin-crawl- 1983 classic A Christmas whose blood splatter causes a watched cable network among kick or the evil minion, he young girl who asks Santa
ing scares. Frightening takes Story, about a boy who toy to become a killer clown women ages 25 to 54. said. Claus to make her Scrooge-like
on the Christmas season such yearns for a Red Ryder BB gun doll that murders coeds. Its Thats been a boon to ac- Both genres are supported aunt tell the truth, Mr. Irvin
as Silent Night, Deadly Night under the tree, had previously a taste of whats to come, he tors such as Nelson Wong, a by audiences who track each covered a Salt Lake City set in
have become cult classics. The helmed the fan-favorite Black said. Vancouver thespian who ap- release, whether in Fangoria September with white foam
Christmastime schmaltz, Christmas, about a group of A Husband for Christmas peared in seven Christmas magazine, a periodical pro- also used at airports to soften
nonetheless, comes naturally, sorority sisters terrorized by a and Sorority Slaughterhouse claiming to be the first in a planes hard landing. The
they say, since both genres ad- serial killer. both star Eric Roberts as a de- fright since 1979, or on a foam looks the part, but tends
here to strict narrative formu- When he began working on sign-firm executive and the website called Its a Wonder- to melt after 15 minutes in the
las, are produced on slim bud- Christmas movies about a de- homicidal college administra-
Audiences of both ful Movie, which calls itself heat.
gets and carry the support of cade ago, Mr. Oliver found tor, respectively. Hes very genres are discerning, your ticket to Christmas Its much easier to shoot a
obsessive fans seeking a ca- writing in ways that would de- versatile, said Mr. DeCoteau. movies on TV! Fans feel an grisly horror scene these days
thartic endingwhether thats light audiences wasnt much For companies that produce
said director David intense kinship with their pre- because most of the blood is
salvation or survival. different from terrorizing both kinds of movies, there is DeCoteau. ferred genre, establishing now computer generated. Its
Theyre flip sides of the them. To build tension, every little difference when it comes rules they dont like to see been very freeing to say,
same coin, writer and direc- scene should end with a ques- to the balance sheet. Produc- broken, say writers who hop Were going to add the blood
tor Ron Oliver said of the two tion mark, he said. Except tions for each are made inex- between the two. later, he said.
genres. the final scene, which ends pensively, and the genres movies over the past few Horror-movie rulesknow- Soon after finishing another
Fans of Mr. Olivers recent with a kiss or a murder. travel well, Hollywood par- years, lightening up a rsum ing a character is doomed the holiday feature, Christmas
My Christmas Dream, about Audiences of both genres lance that means they can be that had featured thrillers and minute he says, Ill be right Land, Mr. Irvin directed The
a department-store manager are discerning, said director sold relatively easily for over- horror gigs. backwere subverted by Wrong House, a Lifetime
determined to build a mind- David DeCoteau, and must be seas distribution. He recently portrayed a 1996s Scream, which toyed movie about a family that
blowing holiday display, may pulled in by the first two min- Production companies are doctor in both genres. In the with audience expectations of moves into a new home and
be surprised to learn he got utes. working overtime to keep up bloodfest American Mary, he the genre. Christmas-movie finds theyre being stalked by
his start in 1987 with Hello In his 2016 feature A Hus- with demand. Horror has al- played Dr. Black, a medical viewers have little tolerance a homicidal maniac.
Mary Lou: Prom Night II, band for Christmas, about a ways filled the catalogs of professional who enjoys prac- for such irony, said Mr. It premiered the day after
about an undead prom queen graphic designer who finds streaming services and on-de- ticing macabre experiments on Varrati. Movie Christmas has Christmas. Counter-program-
who returns to claim her love at work, he opened with a mand providers, and the bevy patients. In Every Christmas to be the best version of ming, said Mr. Irvin.

IN DEPTJ

CHINA ging. Labor costs, social unrest,


local-government debt and en-
vironmental problems were ris-
ing, undermining the partys
Continued from Page One main claim to legitimacythat
Now, as he nears the end of it delivered political stability
his first five-year term, many and ever increasing prosperity.
party insiders say Mr. Xi is try- Some in the party felt the
ing to block promotion of a po- diffusion of power had gone too
tential successor next year, sug- far.
gesting he wants to remain in Mr. Xi, the son of a revolu-
office after his second term ex- tionary hero purged by Mao but
pires in 2022, when he would later rehabilitated, had no cohe-
be 69 years old. sive power base. His appoint-
Mr. Xi, who is president, ment was largely engineered by
party chief and military com- former President Jiang Zemin.
mander, wants to keep going Premier Li was known to have
after 2022 and to explore a been Mr. Hus first choice as his
leadership structure just like successor.
the Putin model, says one Still, Mr. Xi had a powerful
party official who meets regu- ally in Mr. Wang, a friend for
larly with top leaders. Several several decades who was now
ED JONES/AFP/GETTY IMAGES

others with access to party anticorruption chief. Together,


leaders and their relatives say they used the Bo scandal as jus-
similar things. The govern- tification to launch an anticor-
ments main press office de- ruption campaign that targeted
clined to comment for this arti- potential threats to Mr. Xis au-
cle, and Mr. Xi couldnt be thority as well as a real problem
reached for comment. for the party.
Mr. Xis efforts to secure Chinas President Xi Jinping waits in the Great Hall of the People to greet a visiting foreign dignitary. President Hus chief of staff,
greater authority may help en- one of his most senior generals
sure political stability in the pletes his second term. port on his family life and at- and his domestic security chief,
short run, as an era-defining Shortly before China began The Great Reshufe tend political meetings at which Zhou Yongkang, as well as many
economic boom starts to falter. formal preparations for the con- China is preparing for a shake-up of its top leadership at a ve-yearly superiors would read out offi- lower-level officials associated
But they risk upending conven- gress, senior party official Deng Communist Party congress in late 2017 that will mark the beginning cial documents, already pub- with them were convicted of
tions developed since Maos Maosheng cast those conven- of Xi Jinpings second term in ofce. lished in state media, often for corruption. That curbed the in-
death to allow flexibility in gov- tions into doubt by saying at a two hours at a time. fluence of networks centered
ernment and ensure a regular news conference that the idea Expected to retire Purged for corruption Expected to remain Uncertain around Mr. Xis two predeces-
and orderly transition of power. of an age limit for top leaders POLITBURO STANDING COMMITTEE TOTAL MEMBERS: 7 sors.
Concern is rising among was a popular saying that Stifling debate He antagonized many people
Expected to retire: 4 to 5
Chinas elite that the nation is isnt trustworthy. A campaign against dissent along the way. So many groups
shifting toward a rigid form of Some party insiders say they and Western influence in media, have been targeted now, it could
autocracy ill-suited to managing believe Mr. Xi is trying to pack arts, education and law is sti- be dangerous for him to retire
a complex economy. Chinas ar- the new Standing Committee fling creative thought and open in 2022, says Zhang Lifan, a
ray of challenges includes wean- with allies and to hinder others Xi Li Wang Zhang Yu Liu Zhang debate, according to some peo- Beijing-based political commen-
ing the economy off debt-fueled from elevating favorites. They Jinping, Keqiang, Qishan, Dejiang, Zhengsheng, Yunshan, Gaoli, ple working in those areas. tator. Thats also why he wants
stimulus spending, breaking up say he wants his anticorruption age 63 61 68 70 71 69 70 Liberal economist Mao Yushi, Wang Qishan to stay.
state monopolies and cleaning chief, Wang Qishan, to keep his 88, who advocates scrapping Fear of corruption investiga-
up the environment. seat despite already being 68, the state sector, says he re- tors prevents overt challenges,
His dilemma is that he cant and possibly to take over as POLITBURO TOTAL MEMBERS: 25 cently was warned by a party but passive resistance within
get things done without power, premier. Messrs. Wang and Li Includes Standing Committee plus top two generals, heads of major party official to resign from the inde- the party is widespread, and as
says Huang Jing, an expert on couldnt be reached for com- departments and leaders of major provinces and cities pendent Unirule Institute of Mr. Xi accumulates power he
Chinese politics at the National ment. Expected to retire: 10 to 11 Economics that he co-founded assumes more responsibility for
University of Singapore. He There is even talk within the in 1993. He says the institutes failure, party insiders say. He
feels the need to centralize, but party of shrinking, downgrading Chinese donors fear official ret- has limited numbers of people
then he risks undermining these or scrapping the Standing Com- CENTRAL COMMITTEE TOTAL MEMBERS: 376 ribution and its foreign spon- he can truly trust, these people
institutions designed to prevent mittee and adopting a more sors face a new law restricting say. His power is undisputed,
Includes Politburo plus state
a very powerful leader becom- presidential system like Rus- foreign funding. yet fragile, they say.
industry chiefs, provincial leaders
ing a dictator. sias, in which Vladimir Putin, He says he is still optimistic The anticorruption campaign
and senior generals
Mr. Xis supporters say he now in his third term, has broad for China, but only after Xi Jin- has morphed into a drive to en-
still faces resistance within the executive authority and could Expected to retire: about 208 ping. force discipline, increasingly de-
party, and needs to modernize serve until 2024. Purged for corruption: about 20 China has vacillated between fined as implementing Mr. Xis
leadership structures to con- one-man and collective rule for decisions.
front the slowing economy and a century. Even Mao Zedong ini- At a meeting in October, the
a hostile West. Succession talk Source: staff reports tially shared control with other Central Committee approved
THE WALL STREET JOURNAL.
At a meeting of 348 party Recent internal discussions revolutionaries after the 1949 Mr. Xis status as core
leaders in October that granted suggest that no successor will Communist takeover, before en- leadera title never conferred
Mr. Xi another titlecore be appointed to the Standing lieves in top-down decision- year he began advocating a forcing his dominance and on Mr. Hu. The takeaway for
leaderhe railed against indis- Committee next year, says the making by a small circle of ad- stronger role for the state in the plunging China into two de- party members who discussed
cipline and warned of senior of- party official who meets regu- visers, who now govern through economy, directly contradicting cades of chaos that killed tens the development at subsequent
ficials who lusted for power, larly with top leaders. Mr. Xi is a dozen or so committees Mr. Xi signals from Premier Li. of millions. Deng Xiaoping, his meetings was that Mr. Xi had
feigned compliance and formed very forceful about preventing heads, party insiders say. Efforts to curb state spend- successor who launched Chinas the final say on all issues, in-
factions and gangs. the elders from interfering too His reputation within the ing and high debt levels appear economic liberalization, devel- cluding next years reshuffle.
Since then, many party mem- much, he says. party is as a micromanager who to many economists to have oped rules for sharing and ced- Li Zhanshu, head of the
bers have signed written Some of those ideas may be frequently makes notes on the been trumped by Mr. Xis goal ing power. partys powerful General Office,
pledges of absolute loyalty. In bargaining positions to bolster many documents crossing his of doubling gross domestic There is a limit to anyones urged officials in a November
a speech in October, the party Mr. Xis hand in the negotia- desk. One of his committees, the product between 2010 and knowledge, experience and en- newspaper editorial to rally
chief of Henan province, Xie Fu- tions that precede the congress. Central Leading Group for Com- 2020. ergy, Mr. Deng said in a 1980 around Mr. Xi as the most
zhan, hailed Mr. Xi as a great Some believe that his rivals prehensively Deepening Re- With property prices and speech often cited by critics of prestigious, the most influential
leaderwords usually reserved may yet thwart his ambitions, forms, has issued 96 edicts this capital outflows ballooning, the Mr. Xi, who now has at least 12 and the most experienced
for Mao. or that he could change direc- year, up from 65 last year and prospect of bolder overhauls titles. Mr. Deng tried to remove party leader.
Hours before Donald Trumps tion in his second term. With no 37 the year before. dimmed in November with the the party from day-to-day gov- Some party members expect
election victory, China officially overt signs of resistance, how- Mr. Xi has won popular sup- dismissal of reformist finance ernment, delegating power to Mr. Li, one of Mr. Xis closest al-
launched its own convoluted ever, there is a sense among port by fighting corruption and minister Lou Jiwei. ministries and local authorities. lies, to take the anticorruption
process for selecting a new na- many who meet or monitor mobilizing the military to en- Mr. Xis emphasis on obedi- job on the Standing Committee
tional leadership team, to be Chinas leaders that it could be force territorial claims and pro- ence and austerity has next year, with Mr. Wang be-
unveiled at a twice-a-decade the start of a new era of hard tect Chinese interests world- prompted many officials to Hus Example coming premier instead of retir-
party congress next fall. Up to authoritarianism. wide, while boosting his global leave government while others Hu Jintao, who ruled begin- ing. That would tighten Mr. Xis
five of the seven members of Chinas strongest leaders stature with a One Belt One simply pass along orders or ning in 2002, was Chinas first hold on power until 2022 and
the Politburo Standing Commit- needed at least 20 years to Road plan for infrastructure avoid taking initiative, accord- leader to give up all of his set a precedent for him staying
tee, Chinas top leadership body, achieve results. Xi Jinping will links between East and West. ing to many who work in or postsparty head, president on after that.
are due to retire. be the same, says one retired He is using big data to estab- deal with the government. and military chiefafter 10 There is a constitutional two-
Only Mr. Xi and Premier Li senior official who has regular lish new means of control, in- Bureaucrats are inundated years in office. term limit on the presidency.
Keqiang would remain if the access to party leaders. Mao cluding a social credit system with official documents and By 2012, the party was in cri- There also are party rules say-
party observes the precedent, built the nation. Deng Xiaoping to monitor and rate citizens fi- study sessions related to Mr. sis. Corruption and party in- ing no leading official can stay
established in 2002, that lead- made it rich. Were now in the nancial and other activities by Xis many campaigns, including fighting had been exposed by a in the same post longer than 10
ers over age 67 step down. Xi era, which will make it 2020. a recent one directing them to scandal involving Bo Xilai, a Po- years, or at the same level of
Replacements usually are strong. In other areas, recentralizing read, deliver presentations and litburo member ultimately jailed the party for more than 15.
chosen by outgoing and retired Mr. Xis goal appears to be to power hasnt helped. After do written tests on a book of his for abusing power after his wife Some party insiders say the
Standing Committee members. remodel the party as a disci- pledging to allow the market a speeches. was convicted of murdering a latter rules don't apply to the
The custom since 2007 has plined organization, loyal to decisive role in 2013, his gov- A judge in a large Chinese British businessman. Standing Committee. Others be-
been that two of those selected him personally, and to reassert ernment mishandled a stock- city says he resigned this year An economic growth model lieve Mr. Xi could change the
are young enough to succeed its role as the dominant force in market crash and currency de- because of rules that required driven by exports and infra- rules, or switch roles, as Mr. Pu-
the party chief when he com- society and the economy. He be- valuation last year, and this him to hand in his passport, re- structure investment was flag- tin did in 2008.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | A9

LIFE&ARTS

MY RIDE | A.J. Baime

The Most
Memorable
Vehicles
Of 2016

FROM TOP: DHANRAJ EMANUEL FOR THE WALL STREET JOURNAL (3); JASON TRACY FOR THE WALL STREET JOURNAL
EVERY WEEK, The Wall Street Journal car, Gerard Pfeffer can educate you. A sheet
publishes a column that shines a spotlight metal worker from St. Louis, Mr. Pfeffer and a
on a love affair between a human being and now-deceased partner took a humble 1989 Geo
a vehicle of some kind. This years columns Metro and turned it into a drag racing machine
have highlighted no shortage of passion and for the street. Since Mr. Pfeffers story appeared,
eccentricity, from a Corvette-powered su- he has been fine-tuning the car, prepping the Geo
percar constructed out of wood and glue to for actual drag strip runs.
Babe Ruths old Lincoln:
A Second Chance at Speed
Racing fans know the name Wayne Rainey. The
Woodwork Wonder on Wheels  Carmel Valley, Calif. resident is a three-time Grand
Ive wanted to design and build my own car since Prix motorcycling world champion, who became par-
I was a kid, Joe Harmon said. The Mooresville, alyzed following a racing accident in Italy in 1993.
N.C., industrial designer did exactly that, only he Mr. Rainey showed off the 140-mph super kart that
built the Harmon Splinters extraordinary body out put his racing ambitions back on track. Competi-
of wood and glue. He estimates that it took tively, the kart gave me my life back, he said.
20,000 hours, over many years. The worlds only
wooden supercar, as Mr. Harmon calls it, is pow- The Who Scooter
ered by a modified Corvette engine. Nightclub impresario Tony Cochrane collects
movie memorabilia. In 2008, he spent 36,000
A Living Classic  pounds (about $45,000) on his piece de resis-
The 1955 Mercedes-Benz Gullwing is one of the tance: the actual 1967 Lambretta scooter used in
most prized collector cars of them all. Cooper the filming of The Whos screen version of the
Weeks, a retired TWA airline captain from Kansas rock opera Quadrophenia. Fans still make pil-
City, Mo., bought his for $6,000 over 50 years grimages to Cochranes home in Dundee, Scotland, his first hit in 1970 about a car: Vehicle. Success Home in the Ranger
ago. Mr. Weeks still takes the car out every to see the thing. has enabled him to buy his dream machines: a Claire Hummel, a jewelry designer from Half
month, to get the RPM up, he says. Just like 1955 Chevrolet Bel Air and a 1958 Chevy Cor- Moon Bay, Calif., inherited a humble 2000 Ford
for old people. Keeps it running. Pride of the Babe vette. Mr. Peterik hasn't purchased any new cars Ranger pickup from her grandfather and turned it
Back in 1947, Ford Motor Company gave Babe since his column ran. Just taking care of the old into her own traveling home and workshop, with
The Happiest Teardrop Ruth a luxurious new Lincoln Continental painted ones, he says. jewelry-making and repair equipment, textiles she
Las Vegas-based Victoria Hogan has put her pas- New York Yankee blue. Today, Lonnie Shelton, a has collected, memorabilia from her childhood and
sion on wheels, literally. Her pop-up wedding com- semi-retired maker of gas compressors from So Much Cadillac more. I create a lot of statement pieces, she
pany, Flora Pop, employs a trailer she built with all Pampa, Tex., owns this Lincoln. Now Shelton uses I love these cars, said Heidi Lynn Ferguson, a said, and my truck is its own statement piece.
the fixings for actual weddings, and she is licensed the car to raise money for charity. The Babe corporate flight attendant from West Palm
to officiate. The trailerbased on a classic 1950s would approve. Beach, Fla., of her two Cadillacs. Ms. Ferguson Contact A.J. Baime at facebook.com/ajbaime.
Teardrop traileris a traveling altar. So far, Ms. Ho- bought these two Caddysa 1969 DeVille and a
gan estimates, it has hosted over 325 weddings. Chevy Survivors 1976 Eldoradofor a total of $1,500. (She has
Singer/songwriter Jim Peterik of Burr Ridge, Ill., since sold the black one.) Theyre great expres- More Online
Dont Mess With This Geo who co-wrote the Rocky III theme song Eye of sions of my personality: Im a little bit country, a  To see more images of the most memorable
If you have never heard the term outlaw street- the Tiger while in the band Survivor, dreamed up little rock n roll. vehicles of 2016, go to WSJ.com/Life

NEW FICTION

A TALE OF TWO TOLKIENS


The grandson of the writer of The Lord of the Rings recognizes his famous relative
I needed to talk about my grand- desolate domains in The Lord of
BY ELLEN GAMERMAN
father and I needed to tie things the Ringsand the no mans land
into that. At the same time, in a on the Western Front.
THE HERO in Simon Tolkiens certain sense, I was using him in Marketers of the book are target-
new novel bears some resemblance order to get away from him. ing readers rarely grouped together.
to the authors grandfather, J.R.R. The authors fifth novel, due out Publisher Nan A. Talese/Doubleday
Tolkien. Both were orphaned, won in the U.S. on Jan. 24, follows Lon- is positioning the book, with its
scholarships to the University of doner Adam Raine from the city rags-to-riches back story, as a
Oxford, fell in love before leaving slums to a coal-mining town to a choice for fans of Downton Ab-
Britain to fight in World War I and lush country house to the trenches bey. In fact, Mr. Tolkien said he
bore witness to the horrors of the in France. After his mother is watched the series while writing
Battle of the Somme. killed in a labor protest, young the novel and used it for period de-
JEFF CLARK FOR THE WALL STREET JOURNAL

No Mans Land marks the first Adam moves north, where he is tail. At the same time, the publisher
time Mr. Tolkien has acknowledged taken in by a wealthy mine owner is tapping into J.R.R. Tolkiens base
the creator of The Hobbit and before war breaks out. with a giveaway of No Mans
The Lord of the Rings in his fic- When J.R.R. Tolkien enlisted in Land and The Hobbit tied to the
tion. J.R.R. Tolkiens presence has the British Army, he took his gas 80th anniversary of the novels
hovered over his grandsons life, mask, tin hat and rifle and headed original publication. The book re-
delaying his belief in himself as a to France. His poem The Lonely ceived generally warm reviews after
writer but helping promote what Isle, about the boat trip from Eng- it came out this summer in the U.K.
he produced. land to Calais as a new soldier, hints Simon Tolkien was 14 years old
Mr. Tolkien, a 57-year-old former at his initial isolation (O lonely, when J.R.R. Tolkien died. He re-
London-based criminal justice bar- sparkling isle, farewell!). In 1916, called visiting his grandparents of-
rister who began writing courtroom the British Army lieutenant served ten after his parents divorced, as Writer Simon Tolkien, seen this month in Santa Barbara, Calif, where he lives.
dramas and thrillers in his 40s, said as a battalion signal officer on the an only child traveling alone by
with this novel he feels a more Somme. He left the front after a few train to their favorite seaside ho- rector Peter Jackson turned J.R.R. father of two, who emigrated to the
comfortable literary connection to months, sick with trench fever, an tel. His affectionate grandfather Tolkien into a big-screen phenome- U.S. about eight years ago, is mar-
his grandfather. The book allowed illness transmitted by lice. Over the walked along the beach and non. Suddenly, he said, he felt a ried to an American. The at-times
him to address his world-famous course of the war, poor health re- skipped stones with him, or the drive to create something meaning- paralyzing spell cast by Mr. Tol-
ancestor but still tell his own story. peatedly kept him from combat. two played word games in the ho- ful of his own. He wrote two books kiens genius relative does not
Lets just be brutally honest, I Some see echoes of World War I tel sitting room. in the U.K. and another three in the seem to extend to his own children,
think its been a mixed bag of in J.R.R. Tolkiens fantasy novels. Like his grandfather, Simon Tol- U.S. I feel vastly more free as a ages 14 and 26. I think its less vis-
emotions that I carried with me Simon Tolkien described similarities kien attended Oxford. He didnt person and more comfortable in my ceral to them, he said. They live
through my life, Mr. Tolkien said. between Mordor and Isengard write a word of fiction until film di- own skin in America, he said. The in a different world.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK Obamas Fitting Finish
Barack Obamas deci- clear negotiations with Iran. It was de-
A Friend for Trump in Asia sion to abstain from,
and therefore allow,
ceptive about the terms of the deal. It
continues to be deceptive about the

S
hinzo Abes visit Tuesday to Pearl Harbor clines. The 1.4% increase announced last week, last weeks vote to cen- fundamental aim of the agreement,
is a symbol of reconciliation, and the Jap- to a record 5.1 trillion yen ($44 billion), will sure Israel at the U.N. which has less to do with curbing Irans
Security Council is a nuclear ambitions than with aligning
anese Prime Ministers gesture was made fund new missile defenses developed with the
fitting capstone for Washingtons interests with Tehrans.
especially dramatic by the U.S. and help Japan meet its GLOBAL
whats left of his for- Now the administration is likely being
stakes of U.S.-Japan relations Shinzo Abes Japan is goal of fielding 22 submarines VIEW
eign policy. Strategic deceptive about last weeks U.N. vote,
today. Seventy-five years after by 2021, from 17 today. Tokyo By Bret
Pearl Harbor, as North Koreas
Americas most vital also increased its separate Stephens
half-measures, under- claiming it did not promote, craft or or-
handed tactics and chestrate a resolution that treats the
nuclear arsenal and Chinas re- security partner. coast guard budget by 12%, to moralizing gestures Jewish Quarter of Jerusalems Old City as
visionist ambitions threaten nearly $2 billion. have been the presidents style from the a settlement in illegally occupied terri-
the Pacific, Japan is Americas Tokyo spends another $1.7 beginning. Israelis arent the only peo- tory. Yet in November, John Kerry had a
most important security partner. billion annually on the 54,000 U.S. troops ple to feel betrayed by the results. long talk on the subject with the foreign
Of the five U.S. treaty allies in the Asia-Pa- based in Japan. Thats about half the local cost, Also betrayed: Iranians, whose 2009 minister of New Zealand, one of the reso-
cific, Japan has by far the largest economy, the and it would cost the U.S. more to bring the Green Revolution in heroic protest of a lutions sponsors.
stolen election Mr. Obama conspicu- One of the closed-door discussions
most capable military and the most strategic- troops home. Then theres the nearly $18 bil-
ously failed to endorse for fear of of- between United States Secretary of
minded political leadership. By going to Pearl lion Tokyo has committed toward some of the fending the ruling theocracy. State John Kerry and the New Zealand
Harbor, Mr. Abe is able to bookend President largest U.S. military construction projects in Iraqis, who were assured of a diplo- government today was a potential reso-
Obamas recent visit to Hiroshima and highlight the Pacific, including new facilities in southern matic surge to consolidate the gains of lution by the United Nations Security
Japans value to Donald Trump, who as a candi- Japan (near the Senkaku Islands and Taiwan), the military surge, but who ceased to be Council on a two-state solution for the
date sometimes talked as if Japan is a free-rider and even on the U.S. island of Guam. of any interest to Mr. Obama the mo-
on U.S. security guarantees. The Japanese Augmenting all this is Mr. Abes energetic re- ment U.S. troops were withdrawn, and
leader knows he has a good story to tell. gional diplomacy. His friendship with Indian only concerned him again when ISIS In the list of low points in
Since taking office in 2012 Mr. Abe has Prime Minister Narendra Modi has deepened neared the gates of Baghdad. U.S. foreign policy, the
steadily strengthened Japans ability to defend strategic ties between Asias strongest demo- Syrians, whose initially peaceful up-
itself and help the U.S. advance shared interests. cratic powers. His agreement to settle World rising against anti-American dictator betrayal of Israel ranks high.
Bashar Assad Mr. Obama refused to em-
Last year he braved raucous street protests and War II disputes with South Korea paved the way brace, and whose initially moderate-led
tussles on the Diet floor to deliver a constitu- for unprecedented cooperation among the U.S., uprising Mr. Obama failed to support, Israel-Palestine conflict, the New Zea-
tional reinterpretation allowing Japan to engage Japan and South Korea on missile defense and and whose sarin- and chlorine-gassed land Herald reported last month. It is
in collective self-defense. This means the Jap- other issues. His outreach to Southeast Asia has children Mr. Obama refused to rescue, a conversation we are engaged in
anese military can use force to protect the U.S. aided economic and military modernization in his own red lines notwithstanding. deeply and weve spent some time talk-
and other friendly nations from attack, even if states vulnerable to Chinese coercion, and he Ukrainians, who gave up their nu- ing to Secretary Kerry about where the
Japan itself isnt targeted. even maintains good relations with firebrand clear weapons in 1994 with formal U.S. U.S. might go on this, the paper
Thus its no longer true that Japan could sit Philippine leader Rodrigo Duterte. assurances that their existing borders added, quoting Foreign Minister Murray
home and watch Sony television if the U.S. Theres more, from Mr. Abes affection for Tai- would be guaranteed, only to see Mr. McCully.
were attacked, as Mr. Trump charged on the wan to his willingness to open Japans long-pro- Obama refuse to supply them with de- The Israelis claim to have more evi-
fensive weapons when Vladimir Putin dence along these lines. If so, it means
campaign trail. Japanese forces can now shoot tected industries to foreign competition. Wher-
invaded their territory 20 years later. the administration no longer bothers to
down North Korean missiles heading for U.S. ever the U.S. has strategic goals in Asia, Japan Pro-American Arab leaders, who ex- lie convincingly.
targets. Japans navy, which is larger than Brit- is increasingly willing and able to help. pected better than to be given ultima- Even this might be excusable, if Mr.
ains, now backs up any U.S. ship that may face Kudos to Mr. Abe for highlighting this in dra- tums from Washington to step down, Obama at least had the courage of his
Chinese mischief in Asian waters. matic fashion, as with last years address to and who didnt anticipate the adminis- mistaken convictions, or if his decep-
Japan still spends too little on defense Congress and now at Pearl Harbor. The apparent trations tilt toward the Muslim Broth- tion were in the service of a worthier
about 1% of gross domestic product, as it has warmth of his meeting with President-elect erhood as a legitimate political opposi- end. Instead, we have the spectacle of
for decadesbut Mr. Abe has delivered five Trump last month was an encouraging sign for tion, and toward Tehran as a the U.S. government hiding behind the
straight annual increases after a decade of de- peace and prosperity in Asia. responsible negotiating partner. skirts of the foreign minister of New
Most betrayed: Americans. Zealandalong with eminent co-spon-
Mr. Obama promised a responsible sors, Venezuela, Malaysia and Senegal
Indonesias Bad Political Turn end to the war in Iraq. We are again
fighting in Iraq. He promised victory in
in order to embarrass and endanger a
democratic ally in a forum where that

T
Afghanistan. The Taliban are winning. ally is already isolated and bullied. In
he conviction rate for blasphemy in In- Purnama attracted 500,000. He promised a reset with Russia. We are the catalog of low points in American
donesia is 100%, and thats bad news for That shift in public opinion led to a political enemies again. He promised the contain- diplomacy, this one ranks high.
Basuki Tjahaja Purnama. The talented realignment. Mr. Widodo stood on stage with Is- ment of Iran. We are witnessing its as- After the Carter administration
Jakarta Governor faces up to lamic Defenders Front leader cendancy in Iraq, Syria, Lebanon and Ye- pulled a similar stunt against Israel at
five years in prison after a The opposition enlists Rizieq Shihab to thank the men. He promised a world free of the Security Council in December 1980,
court decided Tuesday that crowd for remaining peaceful. nuclear weapons. We are stumbling into the Washington Post published an edi-
prosecutors have a credible
Islamists against a The signal was unmistakable: another age of nuclear proliferation. He torial that does the paper honor today.
case against him for making reformist President. The President was throwing his promised al Qaeda on a path to defeat. It cannot be denied, the editors
lighthearted comments about former deputy under the bus to Jihad has never been so rampant and wrote, that there is a pack and that it
deadly. hounds Israel shamelessly and that this
the Quran. A conviction will ensure his own survival. These are the results. They would be makes it very serious when the United
deprive Jakarta of an able administrator and re- Mr. Widodo accuses political actors of or- easier to forgive if they hadnt so often States joins it. The editorial was titled
former, but the bigger damage is to Indonesias chestrating the rallies and media campaigns, been reached by disingenuous and dis- Joining the Jackals.
religious and ethnic harmony. which were beyond the capabilities of the rela- honorable means. Unlike Mr. Carter, Mr. Obama hasnt
After Mr. Purnama made his supposedly of- tively small Islamist groups. Its clear he meant The administration was deceptive joined the jackals. He has merely
fending comments in September, Islamist former President Susil Bambang Yudhoyono about the motives for the 2012 Beng- opened the door wide to them, whether
groups misquoted him to stoke outrage against and failed presidential candidate Prabowo Sub- hazi attack. It was deceptive about Sgt. at the U.N. or in the skies over Syria or
the Governor, who is Christian and ethnic Chi- ianto, both retired generals. They deny being Bowe Bergdahls service record, and the in the killing fields in Ukraine. The
nese. They held a 150,000-person hate rally on involved. considerations that led it to exchange United States abstains: What a fitting
Nov. 4 after which rioters burned cars and But the two leaders have a strong interest in five Taliban leaders for his freedom. It finish to this ruinous presidency.
was deceptive about when it began nu- Write bstephens@wsj.com.
looted shops. defeating Mr. Purnama, since their parties are
President Joko Widodo, Mr. Purnamas ally, fielding candidates in the gubernatorial race, in-
bowed to the Islamist pressure and opened a cluding Mr. Yudhoyonos son. If one of them
blasphemy investigation. At that point it wins, he will be in a good position to challenge
looked like Mr. Purnama would still be Mr. Widodo for the Presidency in 2019.
The Only Way to Drain
cleared. Most religious experts consulted by Mr. Widodo is a skilled politician, and public
the police said there was no case against him. support for democracy remains strong. But even
But then the Islamic Defenders Front (FPI) if he survives and wins re-election, the powerful
The Swamp for Good
and other extremist groups used traditional sectarian forces his enemies are unleashing will By George Ball half right: The mosquitoes that thrive in

D
and online media to convince moderate and live on. This poses a threat to Indonesias secu- standing water spread malaria and yel-
middle-class Muslims that their faith was un- lar political system and to the open economy the onald Trumps pledge to drain low fever.
the swamp in Washington has So how do you drain a swamp? Start
der attack. A Dec. 2 prayer rally against Mr. President is trying to build.
led observers into the weeds. by digging deep trenches through it.
Some say Mr. Trumps methods will These should be graded outward and

Baracks Last Bank Bash only deepen the muck. We certainly


cannot drain the swamp by feeding pork
downward from the swamps wettest ar-
eas. Then lay drainage tilesnowa-

T
to the alligators, wrote one GOP sena- days large sections of plastic pipe are
he Obama Justice Department is pull- have to present other banks as victims. torapparently not realizing that alli- usedin the trenches.
ing up to the ATM for one last with- For the purposes of extracting cash from gators mostly live in marshes, not Done correctly, the fix is permanent.
drawal from banks. Having blamed U.S. Barclays, guess who the government is now swamps. Buildings stop sinking. The dry land
financial firms for the 2008 calling a victim? Yes, Citi- Others suggest the whole effort is a changes the types of plants that grow
mortgage crisis and squeezed Former villains are now bank. waste of time. When you drain the no more roots being drowned in water. In
them for more than $100 bil- swamp, tweeted John Podhoretz of Washington, D.C., many quaint channels
victims in a final round ciate For those who dont appre-
Commentary, doesnt it just rain and still direct water from congested areas
lion in settlements, the feds the humor in this Belt- then theres another swamp? No, the into rivers. So do the ditches all across
are now gashing foreign of official larceny. way scam, recall that two swamp doesnt come backat least not the country along rural roads next to
banks. Cases against such un- years ago the feds used Firrea if you drain it right. farmers corn, soybean or vegetable
sympathetic targets are sure to claim that during the run- America used to be literally swamped fields.
to please progressives, but dont expect the up to the same financial crisis the banks par- with swamps, which covered large areas If President-elect Trump wants to
feds to prove any of these cases in court. ent Citigroup was the villain that had misled that are now occupied by cities and dispel the miasma hanging about, he
Last week Credit Suisse agreed to fork over investors in mortgage-backed securities. Jus- towns. Much of the Midwest was shallow needs, more than anything, a strategic
more than $5 billion and Deutsche Bank agreed tice extracted a $7 billion settlement from Citi. swampland, left by the recession of the plan. What to drain and how to do it?
to pay more than $7 billion. Barclays refused In announcing that deal, then Attorney Gen- glaciers thousands of years ago. Swamps What needs are most essential and
to settle and was sued by Justice on Thursday. eral Eric Holder called Citis conduct egre- were everywhere, especially near rivers, which solutions most virtuous? Any
lakes and oceans. farmer or gardener facing a swampy
Good for Barclays. gious. Mr. Holder said the bank had contrib-
Early Americans drained these property knows that without a good
Heres hoping the British bank takes its case uted mightily to the financial crisis that swamps to acquire civilizations most es- plan, you are, in a word, sunk.
to trial, because Justices complaint is a 198- devastated our economy and spoke of shat- sential resource: tillable land with friable
page flight from logic. The governments law- tered lives allegedly caused by the villainous soil. Without it, settlers were condemned Mr. Ball, the chairman and CEO of W.
suit accuses Barclays of defrauding investors firm. But that was so 2014. to eke out a subsistence living. But by Atlee Burpee Company, is a past presi-
who bought its mortgage-backed securities in Now we are asked to believe that this mas- draining swamps, they could uncover dent of the American Horticultural Soci-
the years leading up to the financial crisis. The termind of an international plot to defraud land soaked for thousands of years by ety.
allegation is that the bank didnt disclose how investors was simultaneously taken in by a deposits of minerals and organic debris.
bad the underlying loans were. But the govern- nearly identical plot cooked up by a rival Once opened to sun and air, it provided
ment acknowledges in its complaint that Bar- rogue organization. Amazing. Will Citi now some of the worlds richest farmland. Pepper ...
Hello to agriculture, to a sound rural
clays was also an investor in most of the secu- get some of its $7 billion back to reflect its
economy, to well-fed towns and cities.
And Salt
rities at issue, and that it was often buying new victim status?
Soviet Premier Nikita Khrushchev ad- THE WALL STREET JOURNAL
some of the riskiest slices of the deal. Was Bar- Theres more. The government says Bar- mired my native Midwestern soil when
clays defrauding itself? clays had many other institutional victims, he visited Iowa in 1959, likening it to the
The suit goes downhill from there. The stat- such as Fannie Mae and Freddie Mac. Even the earth in Soviet Russia. Because both
ute of limitations has run out for bringing a partisan Financial Crisis Inquiry Commission, continents were covered in glaciers for
typical case under securities law. But the gov- created by the 2009 Pelosi Congress and millions of years, the land is still trying
ernment is still able to sue Barclays under the chaired by a former state Democratic Party to work out where to put all the melted
Financial Institutions Reform, Recovery, and chairman, had to acknowledge the destruction water. Meanwhile, it has produced in-
Enforcement Act of 1989 (Firrea). caused by these reckless kings of leverage. credible soil fertility. Notwithstanding
Prosecutors like this law because it requires But lately the government finds them more trite dismissals from the chattering
class, it is hard to find a more powerful,
a low burden of proof and can result in huge useful as alleged victims when suing other
life-giving injunction than, Drain the
penalties. The catch, since Firrea was created firms. swamp!
to punish savings-and-loan executives, is that The worst financial abuses are these last- The other problem with swamps is
it can only be used against those who have al- minute bank raids by the Obama Department that they breed death. Our ancestors
legedly harmed a federally insured financial in- of Justice. Repairing this agency and its repu- thought that miasmathe misty, va- Well, Im not completely vegan,
stitution. So instead of presenting mom-and- tation begins with an end to evidence-free porous stenches that waft from swamp- but I dont eat anything that was
pop investors who lost money, prosecutors money grabs against unpopular defendants. landcaused fatal diseases. They were cute when it was alive.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | A11

OPINION

The Politics Behind Abes Pearl Harbor Visit


By Michael Auslin for what happened three-quarters of Japans role in the Pacific is likely

P
a century ago. Since returning to to increase as Mr. Trump finds that
rime Minister Shinzo Abe power at the end of 2012, Mr. Abe Americas traditional allies in Asia
is not the first Japanese has steadily transformed Japans se- are less reliable. South Koreas new
leader to go to Pearl Har- curity policies, shedding some of the president will probably come from
bor since Dec. 7, 1941. But restrictions imposed on Tokyo by the countrys far left; Australia has
during his visit there Tues- Gen. Douglas MacArthur during the bowed out of freedom-of-navigation
day with President Obama, he will do U.S. occupation. These controversial operations in the South China Sea.
what none of his predecessors has moves, which allow Japan to engage Meanwhile, Philippine President Ro-
contemplated: publicly acknowledge in collective self-defense with other drigo Duterte remains an unpredict-
Japans past aggression. This is part nations, have been paralleled by able wild card who is drawing closer
of a larger strategy to ensure his steady, if modest, increases in the to China. Mr. Abe is sure to stress
countrys future security in a more countrys defense budget, and by the that Japan remains the one partner
dangerous Asia. Mr. Abes trip is forging of new security relationships Mr. Trump can rely on.
aimed as much at President-elect in Asia and beyond. Such reliance will be needed as
Donald Trump as it is a valedictory Just as dramatically, to ensure that Mr. Trump decides how far to chal-

ASSOCIATED PRESS
to his relationship with Mr. Obama. he carries through his plans, Mr. Abes lenge China. The president-elects
ruling Liberal Democratic Party phone call with Taiwans leader, his
changed longstanding rules to allow hard line on trade, and his linking of
The Japanese leader knows him to stand for a third term. This economic and security issues pres-
means that, barring unforeseen cir- ages a rockier period ahead for U.S.-
he will need the U.S. to help cumstances, hell be in office through Japanese Prime Minister Shinzo Abe arriving in Honolulu. China ties. Mr. Trump may well be
restrain China, as other 2021. He will likely be the only Japa- asking Japan for more support, such
nese leader whom Mr. Trump encoun- Their working relationship al- leader Mr. Obama meets while in as increased maritime operations in
traditional allies go wobbly. ters during his first term. Mr. Abe lowed Mr. Obama to visit Hiroshima office. Asia.
hopes to have as strong relations with earlier this year, the first sitting More important, Mr. Abe is now Mr. Abe knows this, and even as
Americas new president as he has had U.S. president to do so. While offer- bridging to the Trump administration. he offers prayers in Pearl Harbor for
No one should underestimate the with the current one. ing no apology, Mr. Obama stressed He was the first foreign leader to meet those who died on that Sunday morn-
symbolism of Mr. Abes pilgrimage. After suffering through three one- the importance of the U.S.-Japan re- Mr. Trump, flying to New York City ing in 1941, he will be saying one for
Japans first major postwar premier, year Japanese premiers in a row, Mr. lationship and the necessity of only a week after the election. He the future strength of his relation-
Shigeru Yoshida, made a private visit Obama has now had four years of avoiding the mistakes of the past. hopes to convince Mr. Trump to re- ship with Americas new leader.
to Pearl Harbor in 1951 on his way working with Mr. Abe. Despite differ- Mr. Abes visit to Pearl Harbor book- main engaged in the Pacific and to ac-
back from signing the San Francisco ent political ideologies, they deep- ends the Hiroshima visit, formally cept that the only way to deal with Mr. Auslin is the author of The
Peace Treaty. Now, Mr. Abe will pay ened an alliance that already was be- closing the books on the events that common challenges is to work more End of the Asian Century: War, Stag-
his official respects in the global coming more important due to began and ended World War II in closely together. Economic issues, nation, and the Risks to the Worlds
spotlight. worsening relations with China and the Pacific. It is a mark of their rela- such as a bilateral trade pact in place Most Dynamic Region, forthcoming
The visit is as much about dealing the continuing North Korean nuclear tionship and Mr. Abes media savvy of the Trans-Pacific Partnership, will in January from Yale University
with looming challenges as atoning challenge. that he will likely be the last foreign come up at some point. Press.

Obamas Parting Betrayal of Israel


By John Bolton war of independence. central tactic since 1967, trying to system, exposing it and its citizens Second, Mr. Trump should unam-

L
Resolution 2334 implicitly repeals create facts on the ground in the to incalculable personal and finan- biguously reject Mr. Obamas view
ast Friday, on the eve of Ha- the iconic Resolution 242, which af- U.N.s corridors rather than by actu- cial risk. that Resolution 2334 is justified to
nukkah and Christmas, Barack firmed, in the wake of the 1967 Six- ally negotiating with Israel. Mr. Once in office, President Trump save the two-state solution. That
Obama stabbed Israel in the Day War, that all affected nations, Obama has given them an indefinite should act urgently to mitigate or goal, at best, has been on life-sup-
front. The departing president re- obviously including Israel, had a hall pass. reverse Resolution 2334s conse- port for years. After Mr. Obamas
fused to veto United Nations Secu- right to live in peace within secure The Trump administration could quences. Mr. Obama has made this provocation, its life expectancy
rity Council Resolution 2334a and recognized boundaries free from veto future Security Council mea- significantly harder by rendering might now be only until Jan. 20.
measure ostensibly about Israeli threats or acts of force. It provided sures that extend Resolution 2334 America complicit in assaulting Is- And good riddance. This dead-end
settlement policy, but clearly in- further that Israel should withdraw (e.g., purportedly recognizing a Pal- rael. Nonetheless, handled properly, vision, by conjuring an imaginary
tended to tip the peace process to- from territories occupied in the re- estinian state). Mr. Trump could also there is an escape from both the cur- state with zero economic viability,
ward the Palestinians. Its adoption cent conflictbut did not require veto efforts to implement Resolution rent danger zone and the wasteland has harmed not only Israel but also
wasnt pretty. But, sadly, it was pre- withdrawal from the or all terri- in which the search for Middle East the Palestinians, the principal in-
dictable. tories, thereby countenancing less- peace has long wandered. tended beneficiaries.
Mr. Obamas refusal to use Wash- than-total withdrawal. In this way Trump must ensure there First, there must be consequences Far better to essay a three-state
ingtons veto was more than a Resolution 242 embodied the land for the adoption of Resolution 2334. solution, returning Gaza to Egypt
graceless parting gesture. Its conse- for peace theory central to Amer- are consequences for The Trump administration should and giving those parts of the West
quences pose major challenges for icas policy in the Middle East ever supporting U.N. Security move to repeal the resolution, giving Bank that Israel is prepared to cede
American interests. President-elect since. the 14 countries that supported it a to Jordan. By attaching Palestinian
Donald Trump should echo Ambas- By contrast, Resolution 2334 re- Council Resolution 2334. chance to correct their error. Na- lands to real economies (not a make-
sador Daniel Patrick Moynihans de- fuses to recognize any changes to tions that affirm their votes should believe one), average Palestinians
fiant and ringing 1975 response to the [1967] lines, including those have their relations with Washing- (not their political elite), will have a
the U.N.s Zionism is racism reso- with regard to Jerusalem, other than 2334 (e.g., the sanctions for what it ton adjusted accordingly. In some true chance for a better future.
lution: that America does not ac- those agreed by the parties through calls Israels blatant violation under cases this might involve vigorous Other alternatives to the two-state
knowledge, it will not abide by, it negotiations. This language effec- international law). Still, there are diplomatic protests. But the main approach should also be considered.
will never acquiesce in this infa- tively defines Israels borders, even significant dangers. Other U.N. bod- perpetrators in particular should Mr. Obama loves using the word
mous act. while superficially affirming direct ies, such as the General Assembly face more tangible consequences. pivot for his ever-changing priori-
Mr. Obama argues that Resolution talks. Chatter about Israeli-Palestin- and the numerous specialized agen- As for the United Nations itself, if ties. It is now up to Mr. Trump to
2334 continues a bipartisan Ameri- ian negotiations is nothing but a cies where America has no veto, can this mistake is not fixed the U.S. pivot away from his predecessors
can policy toward the Middle East. It truism, equally applicable to the U.S. carry Resolution 2334 forward. should withhold at least its assessed disastrous policies on Israel. Taking
does precisely the opposite. The and Canada, or to any nations re- Even more perilous is that indi- contributions to the U.N.which up the challenge will be difficult, but
White House has abandoned any solving trivial border disputes. vidual nations or the European amount to about $3 billion annually well worth the effort for America
pretense that the actual parties to There can be no land for Union can legislate their own sanc- or 22%-25% of its total regular and and its friends world-wide.
the conflict must resolve their dif- peacewith Israel retroceding ter- tions under Resolution 2334s provi- peacekeeping budgets. Meanwhile,
ferences. Instead, the president has ritory in exchange for peace, as in sion that all States should distin- Washington should continue funding Mr. Bolton is a senior fellow at the
essentially endorsed the Palestinian the 1979 Camp David agreement guish in their relevant dealings specialized agencies such as the American Enterprise Institute and au-
politico-legal narrative about terri- with Egyptif the land is not legiti- between Israels territory and the World Health Organization and the thor of Surrender Is Not an Option:
tory formerly under League of Na- mately Israels to give up in the first territories occupied since 1967. This International Atomic Energy Agency, Defending America at the United Na-
tions mandate, but not already un- place. Anti-Israel imagineers have is a hunting license to ostracize Is- if only to dissuade them from enter- tions and Abroad (Simon & Schuster,
der Israeli control after the 1948-49 used this linguistic jujitsu as their rael from the international economic ing the Resolution 2334 swamp. 2007).

The Midnight Push to Empty Out Guantanamo


By Ed Royce edly promised Congress that it bility to keep the detainees from re- associate of Osama bin Laden who poor health. Even if he could manage

W
transfers detainees to foreign coun- turning to terrorism. had knowledge of the 9/11 attacks in to find legitimate employment, he
ith less than a month re- tries only after securing specific as- The results have been deadly. At a the U.S. does not have legal status in Bosnia
maining in office, President surances about how those countries March hearing, the administrations After receiving a tip that the to take it. The family member he was
Obama is racing to free 19 will reduce threats. Meanwhile, the special envoys for Guantanamo Bay Obama administration was trying to released to is also unemployed and
more detainees from the terrorist administration wrote Uruguays presi- closure admitted for the first time pay Al-Sawah $100,000, I sent two struggling to make ends meet. Why
prison at Guantanamo Bay. If history dent that none of the detainees had that as many as 12 former Gitmo de- staffers to Sarajevo in August and wouldnt he sell his terrorist skills?
is any guide, this means that danger- ever been involved in facilitating or tainees have returned to the terror- As to the money, Bosnian officials
ous jihadists will be released to conducting terrorism. Both Congress ist battlefield and killed Americans. say that the State Department dis-
countries ill-equipped to handle and the Uruguayan government were The list of countries to which they Nearly a third of the 693 cussed, in multiple meetings, making
them. misled. had been released is classified. a direct payment to Al-Sawah of
While many wondered whether Uruguay proved to be a terrorist In July the State Department detainees who have been $100,000. U.S. embassy staff deny
Mr. Obama would fulfill his 2008 haven. Under Uruguayan law, its gov- named a former detainee a specially released are believed to there was ever any agreement to pay
campaign promise to close Gitmo by ernment was prohibited from moni- designated global terrorist after re- Al-Sawah, and maintain that no
breaking a bipartisan law barring toring, surveilling or imposing travel ports of his involvement in the June have returned to terrorism. funds have been sent to him directly
him from bringing detainees to the restrictions on the former detainees terror attack at Istanbuls Atatrk or indirectly. U.S. staff notes from
U.S., the House Foreign Affairs Com- because of the refugee status it Airport. He had been released to the meetings in question were con-
mittee has remained focused on the gave them. Not surprisingly, one of Russia. October to look into this report. veniently shredded.
presidents push to empty out the these individualsa trained al Qaeda According to the office of the di- They found that Bosnias limited se- Administration stonewalling on
prison through reckless transfers to document forgersoon went miss- rector of National Intelligence, curity services are already being Gitmo releases is hardly new. The
other countries. ing, fleeing abroad. nearly one-third of the detainees overwhelmed as scores of Bosnian White House refuses to provide the
We began our investigation two The case in Uruguay was not iso- freed from Gitmo208 of the 693 fighters return from the war in transfer agreements that would de-
years ago, after the White House re- lated. The White House has repeat- detainees who were released under Syria, and mosques with radical for- tail whatif anypromises and as-
leased six hardened terrorists to Uru- edly released detainees to countries Presidents Bush or Obamaare con- eign supporters grow in influence. sistance are being provided to coun-
guay. The administration had repeat- it knew lacked the intent and capa- firmed or suspected of returning to Making matters worse, the country tries accepting detainees. The
terrorism. also has the worlds highest youth administration has routinely used
Consider Tariq Al-Sawah, released unemployment rate. such classified notices to shield in-
to Bosnia in January. Al-Sawah liter- This is the place where Al-Sawah formation about detainee releases
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY ally wrote the book on bomb-making the bomb-maker was dropped in the from public scrutiny. The American
for al Qaeda. He reportedly was an dead of January, with no coat, and in people are often the last to learn
Rupert Murdoch Robert Thomson
Executive Chairman, News Corp Chief Executive Officer, News Corp when these dangerous terrorists are
Gerard Baker William Lewis released.

Notable & Quotable


Editor in Chief Chief Executive Officer and Publisher On Jan. 20, we have an opportu-
Rebecca Blumenstein, Matthew J. Murray DOW JONES MANAGEMENT:
nity to chart a better way. The
Deputy Editors in Chief Ashley Huston, Chief Communications Officer; prison at Guantanamo Bay should
DEPUTY MANAGING EDITORS: Paul Meller, Chief Technology Officer; From Simon Napier-Bells 2005 facilities would be provided for the continue to serve as a secure, hu-
Mark Musgrave, Chief People Officer;
Michael W. Miller, Senior Deputy;
Edward Roussel, Chief Innovation Officer;
memoir Im Coming to Take You to worlds press. The Chinese would de- mane location for holding dangerous
Thorold Barker, Europe; Paul Beckett, Asia;
Christine Glancey, Operations; Jennifer J. Hicks, Anna Sedgley, Chief Financial Officer; Lunch: A Fantastic Tale of Boys, cide how much to spend on all these terrorists. And it is an appropriate
Digital; Neal Lipschutz, Standards; Katie Vanneck-Smith, Chief Customer Officer Booze, and How Wham! Were Sold to things but it was Wham! who would location at which to detain and ques-
Alex Martin, News; Ann Podd, Initiatives;
OPERATING EXECUTIVES:
China on the groups 1985 concert in foot the bill. On top of this there tion new high-value individuals cap-
Andrew Regal, Video; Matthew Rose, Enterprise;
Stephen Wisnefski, Professional News; Jason P. Conti, General Counsel; Beijing: would be the normal cost of taking a tured in our continuing fight against
Jessica Yu, Visuals Nancy McNeill, Corporate Sales; major rock group and its equipment radical Islamist terrorism.
Steve Grycuk, Customer Service;
Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International;
The concert was confirmed but to a country on the other side of the Mr. Obamas midnight push to
Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: wed forgotten about the cost. world where nothing could be hired empty out Gitmo will not make
WALL STREET JOURNAL MANAGEMENT: Almar Latour, Publisher; Kenneth Breen, To do this concert we had to pay locally. The entire trip had to be fi- America safer. His administration
Trevor Fellows, Head of Global Sales; Commercial; Edwin A. Finn, Jr., Barrons;
Suzi Watford, Marketing and Circulation; Professional Information Business:
for everythingfrom the hire of the nanced by Wham! themselves. . . . ought to use these final weeks to fix
Joseph B. Vincent, Operations; Christopher Lloyd, Head; concert hall to the cost of printing So we called Paul Russell, the new its Al-Sawah mess in Bosnia respon-
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head the ticketsyet we had to donate the managing director of CBS, Can we sibly and quickly.
EDITORIAL AND CORPORATE HEADQUARTERS: income from ticket sales to a Chinese borrow five hundred thousand dol-
1211 Avenue of the Americas, New York, N.Y., 10036 charity. There would be diplomatic lars, please? We need it by tomorrow Mr. Royce is chairman of the
Telephone 1-800-DOWJONES
banquets to welcome the group and morning. House Foreign Affairs Committee.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

LIFE & ARTS


WORK & FAMILY | Sue Shellenbarger

Facing Up to the Worst Job Market


THE UNLUCKY COLLEGE class of ments in maternity leave and
2009 graduated into the worst job scheduling flexibility. Mr. Di-
market in decades. Many of its Napoli says the presentation
members have never caught up, changed Ms. Foxs trajectory in
and remain stuck in low-paying, the organization, positioning her
dead-end jobs. for advancement.
Katlin Fox, 29, represents a ray
of hope for people her age. A mem- The Implementation
ber of the University of Rhode Is- When Mr. DiNapoli was promoted
lands Class of 09, shed wanted to in 2014 to corporate chief operat-
join a marketing team doing cre- ing officer and general manager of
ative projects. Suffolks fast-growing Western op-
Instead, she took the only job erations, he says, I wanted my
she was offeredas an executive wing man with me for the move
assistant. to Los Angeles.
By taking on projects no one But when he offered Ms. Fox a
wanted and even turning down a promotion, to office manager
promotion, she has since skipped there, she turned it down.
two rungs on the career ladder and That was a huge moment for
landed a job in middle manage- me, Ms. Fox says. She had to have
ment. Heres how she did it: another bathroom-mirror chat
with herself to work up the cour-
The Problem age to say no.
Ms. Fox was swamped by tactical When she told Mr. DiNapoli her
details in her job as an executive new goal, to work in human re-
assistant, managing email and sources, he says, I recognized this
scheduling for Mark DiNapoli, a re- was the day wed been talking
gional executive at Boston-based about for several years, when she
Suffolk Construction Co. would move on.
She knew nothing about con- The company offered Ms. Fox a
struction. Her first visits to build- new West Coast human-resources
ing sites were daunting, she says. management job and she soon ac-
She often attended meetings with After college, Katlin Fox took on jobs cepted, netting a 13% raise and a
Mr. DiNapoli to help manage fol- at a construction company that no berth in middle management.
low-up tasks, but hesitated to one else wanted before landing a
speak. position as an HR specialist. Right, Ms. The Outcome
She knew shed need new skills Fox with her first boss, Mark DiNapoli. Ms. Fox calls her first months on
to move up. the new job a rude awakening. She
Mr. DiNapoli began inviting her realized she lacked needed skills
The Solution to share her insights in meetings. and took professional courses to

EMILY BERL FOR THE WALL STREET JOURNAL


Mr. DiNapoli knew Ms. Fox had He also asked her to run meetings fill the gap.
aspirations for something bigger, of a 20-member committee on She has grown comfortable on
he says. employee work-life benefits when construction sites, donning steel-
With Mr. DiNapolis help, she he wasnt able to attend. Mr. Di- toed boots and a hard hat to work
asked for new projects and took Napoli says he and his committee at field offices when needed. Her
whatever came her wayincluding co-chair, Chief People Officer Kim manager, Ed Cunningham, says,
some no one else wanted. She led Steimle Vaughan, decided to let Employees feel comfortable shar-
Suffolks drive to make the office Katlin run with it a little bit and ing things with her, and thats
more environmentally friendly, re- help them present the recommen- something you cant really coach
vised the companys operations dations to Suffolks executive someone to learn.
manuals and ran an employee-well- committee, including CEO John And she has started a womens
ness program. In the process, she Fish. network for Suffolks Los Angeles
set a new goal, to work in human When Ms. Fox arrived at the of- looked in the mirror in the presentation, Ms. Fox gave em- employees.
resources. fice early on the day of the presen- womens restroom and gave her- ployee focus-group and survey re- The company supports women
Noticing that Ms. Fox had re- tation to brief Mr. DiNapoli, he self a pep talk, saying, I can do sults and asked senior executives, who want to advance, she tells
ally high emotional intelli- broke the news. this. This is not the time to be What could you do to make colleagues, but you have to take
gencea keen sensitivity to oth- It was very, very intimidating, scared. things better? she says. The the initiative to find new opportu-
ers body language and emotions Ms. Fox says. As she prepared, she After Mr. DiNapoli opened the committees work led to improve- nities for yourself, too.

Weather The WSJ Daily Crossword | Edited by Mike Shenk


Shown are todays noon positions of weather systems and precipitation. Temperature bands are highs for the day.
-15 1 2 3 4 5 6 7 8 9 10 11 12 65 Gallic girlfriend 26 Group of wise
-10 guys?
-5 13 14 15 66 Corp. honchos
0 29 Baseballer
16 17 18 67 Instrument for
5 Bando
Beijing Orpheus
10 19 20 21 30 1963 role for Liz
Seoul 68 Quibbles
T ky
Tokyo 15
22 23 24 25 26 33 Dimwit
20 Down
New D
Delhi
h h gh
Shanghai 25 35 Hardly relaxed
Taipei
Ta p
27 28 29 30 31 1 Gallivant
Riyadh
y dh 30
Karachi
h
lk
Kolkata
32 33 34 35 2 Theyre not 37 Bud
35
Hong Kong
ong Kon company men
Hanoi 38 Liberates
Bangkok
Ban k k 36 37 38
Warm 3 Right away 39 Calls
Manila
NOCK-TEN 39 40 41 42 43 44 45 46 counterpart
Cold 4 Turn on the
Kuala
la LLumpur
p
Stationary 47 48 49 50 waterworks 40 Monotonous
Singapore
p
51 52 53 54 5 Like the Arctic 41 Fezs place
Showers
JJakarta
k 6 Big klutz
55 56 57 58 59 44 Crane-creating
Rain art
60 61 62
7 Play portions
T-storms 8 Breaking Bad 45 Two thumbs
63 64 65
product up!
Snow
66 67 68 9 The King of Pop, 46 Those to keep
Sydney
yd eyy Flurries in tabloids closer
b
Melbourne
Ice CRIME WAVE | By Debbie Ellerin 10 Welcomed at 48 Turn over
Global Forecasts City
Today
Hi Lo W
Tomorrow
Hi Lo W City
Today
Hi Lo W
Tomorrow
Hi Lo W
Across 22 Go to bat for 43 Builder of a the door 49 Veiled dancer
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 First of two somebody hanging nest 11 Cabbys query 52 Guru Granth
Geneva 6 -2 s 5 -2 pc Ottawa -7 -11 c -2 -5 sn
t...tstorms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 22 12 s 23 13 s Paris 8 -2 pc 6 -3 pc choices 25 Surfing 47 Game akin to 12 Finalized Sahib followers
Havana 30 17 s 29 16 s Philadelphia 6 -1 pc 6 1 r equipment Crazy Eights
Today Tomorrow Hong Kong 17 13 c 16 15 c Phoenix 21 9 pc 23 12 pc
5 Porters head 14 Dull as 54 Gorilla skilled in
City Hi Lo W Hi Lo W Honolulu 27 21 sh 26 19 c Pittsburgh 4 0 pc 4 -3 c 9 Youre gonna 27 Yellow 48 Middling mark dishwater sign language
Amsterdam 7 -1 c 5 -1 pc Houston 26 19 c 19 6 pc Port-au-Prince 34 20 s 33 20 s Submarine
Portland, Ore. 7 1 c 7 3 r
need a bigger 50 Zac of 18 Brand sold at 56 And others,
Anchorage -2 -15 pc -5 -10 pc Istanbul 6 2 r 5 1 sn singer
Athens 10 1 s 7 3 c Jakarta 30 25 t 31 25 t Rio de Janeiro 36 25 s 35 26 s boat movie Neighbors PetSmart briefly
Atlanta 19 14 c 15 1 sh Johannesburg 24 15 t 24 14 t Riyadh 26 9 pc 24 11 s 13 Biggest Little 28 Deejays
Rome 14 3 s 12 0 s 51 Far from windy 20 Intentionally 57 With skill
Baghdad 16 4 s 16 7 pc Kansas City 9 -1 s 6 -5 s collection
Baltimore 7 -1 s 7 -1 r Las Vegas 13 5 s 15 6 s Salt Lake City 1 -8 c 0 -7 s City in the
53 Break lost 60 Chest muscle,
Bangkok 30 19 s 30 22 s Lima 26 20 c 27 20 pc San Diego 22 10 s 23 13 pc World 31 Skater Midori
23 Like Gala apples for short
Beijing 3 -13 s 1 -12 s London 7 1 s 8 1 pc San Francisco 14 7 s 15 7 s 55 Havent the
Berlin 6 2 c 5 -2 pc Los Angeles 24 11 s 24 13 pc San Juan 30 24 s 30 24 s
14 Shore up 32 Gets a glimpse
foggiest 24 Toddlers 61 Trireme tool
Bogota 20 8 r 20 8 pc Madrid 14 0 s 13 -1 pc Santiago 32 14 s 29 14 s 15 U.S. Open of
Boise -2 -11 pc -3 -13 pc Manila 32 25 pc 32 25 pc Santo Domingo 31 21 s 30 21 s
stadium name 58 ___ Gatos punishment 62 Solo in space
Boston 5 -1 s 5 0 sn Melbourne 30 23 t 29 20 sh Sao Paulo 33 21 t 33 21 s 34 Bad start?
Brussels 5 -1 c 5 -1 pc Mexico City 23 8 s 23 10 s Seattle 7 4 c 8 2 r 16 Oman man, 59 Rock in a band Previous Puzzles Solution
Buenos Aires 28 17 pc 29 18 s Miami 28 20 pc 29 18 pc Seoul 0 -6 pc 0 -9 s 35 Pretentious
most likely person 60 Compact A P E G T S A S H E S S
Cairo 18 11 s 18 9 pc Milan 9 0 s 7 -1 s Shanghai 8 0 c 8 2 pc M E N O R A H L E A F L E T
Calgary -1 -10 pc -2 -7 pc Minneapolis 1 -4 pc -1 -7 sf Singapore 31 24 c 31 24 c 17 Mountain pass container I N S MO K E L A J O L L A
Caracas 30 24 pc 30 24 pc Monterrey 26 14 pc 24 9 c Stockholm 1 -3 pc 5 3 c 36 Reject nowadays, AWE M E N L I L Y
Charlotte 17 8 pc 17 2 r Montreal -4 -10 pc -1 -3 sn Sydney 30 23 pc 37 24 pc 19 Precursors to and a hint to the 62 ___ but known... B I R T H D A Y C A K E S
B I C H E E D E L S
Chicago 6 -1 pc 2 -3 c Moscow -2 -5 c -3 -8 c Taipei 18 16 r 18 16 c texts puzzles theme
Dallas 25 8 c 14 2 pc Mumbai 33 16 pc 33 17 pc Tehran 11 1 r 13 4 s
63 Make a fine A J A R A C E A O R T A
R OMA N T I C D I N N E R S
Denver 7 -6 pc 7 -2 s Nashville 15 7 r 10 1 pc Tel Aviv 17 10 pc 17 10 pc 20 Identify on 39 Showy pageantry impression S U E D E L O G G R I P
Detroit 3 0 pc 3 -3 sf New Delhi 23 9 pc 23 10 pc Tokyo 9 3 s 12 3 pc Instagram, say 42 Andy Warhol 64 San Antonio
I C Y EW E S U P S
J A C K O L A N T E R N S
Dubai 27 19 s 27 19 s New Orleans 24 18 c 18 6 c Toronto 0 -3 pc 2 -4 sn J A V A MA R T R E
Dublin 9 4 s 9 7 s New York City 6 0 s 7 1 r Vancouver 5 2 r 6 1 r 21 Bartenders tool portrait subject landmark AMA L G AM T H E N I L E
Edinburgh 9 3 c 9 7 s Omaha 7 -2 pc 5 -6 s Washington, D.C. 9 2 s 9 1 r W I N S OM E C A N D L E S
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Frankfurt 7 1 c 6 -2 pc Orlando 28 17 pc 27 8 pc Zurich 4 -4 c 2 -4 pc S E T P A R U T A L O P


2016 Dow Jones & Co. Inc. All rights reserved. 6DJ4575

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TECHNOLOGY: IN AFRICA, A HOMEGROWN RIVAL TAKES ON NETFLIX B3

BUSINESS & FINANCE


2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | B1

Yen vs. Dollar 117.5140 0.37% Hang Seng (21574.76) Closed Gold 1138.10 0.55% WTI crude 53.85 1.57% 10-Year JGB yield 0.065% 10-Year Treasury yield 2.568%

MPSs Financial Plight Worsens


BY DEBORAH BALL banks financial health during capital position would be se- the bank because any public nior bonds would take losses
Bigger Guns
Ireland is increasing spending on
its data-protection regulator, as
it takes on an outsized role in
Europe policing privacy issues.
the months in which Monte verely compromised in an eco- bailout requires private inves- in line with new European
MILANMonte dei Paschi dei Paschi and the Italian gov- nomic downturn. The ECB or- torsincluding tens of thou- Union rules covering bank res- 8 million
di Siena has a far bigger hole ernment have struggled to dered Monte dei Paschi to sands of mom-and-pop inves- cues, which require that inves-
in its balance sheet than previ- find a solution to its problems. raise that amount as part of a tors who bought Monte dei tors take at least some impact.
ously calculated, according to Indeed, Monte dei Paschi broader operation aimed at Paschis bondsto suffer Now, given the larger capital 6
the European Central Bank, said the central bank warned unloading nearly 30 billion in losses. shortfall, the fund will likely
significantly raising the of a rapid deterioration of bad loans. Last week, the government have to use 6.5 billion to help
amount the Italian govern- its liquidity position over just However, those stress tests finally approved the creation Monte dei Paschi. 4
ment has to deploy to rescue the past month. The bank has were based on the banks fi- of a new 20 billion fund to Early Tuesday, Italian regu-
the troubled lender. seen large outflows of depos- nancial situation at the end of help support Italys struggling lator Consob ordered Monte
The ECB told Monte dei its as it struggled in recent 2015. Since then, Monte dei banks, with the largest portion dei Paschis shares to be sus-
2
Paschi that its capital shortfall months to raise capital to Paschis financial health has set aside for Monte dei Paschi. pended until further notice in
was 8.8 billion ($9.19 billion), meet an end-of-year deadline deteriorated further, as the Si- The new fund was expected light of the greater shortfall.
far higher than the 5 billion set by the ECB to shore up its ena-based bank attempted to to cover about 3 billion of The shares were also sus-
expected when the Italian gov- balance sheet. find a way to raise the neces- the money Monte dei Paschi pended on Friday after news 0
ernment organized a rescue of The need to raise 5 billion sary capital from private in- needed, following 2 billion in of the planned government 2011 12 13 14 15 16* 17*
the countrys No. 3 lender last emerged from European stress vestors. Meanwhile, the Italian losses on the face value of bailout. *Budgeted
week. The higher amount re- tests, released last summer, government was extremely re- some junior bonds held by in- Tom Fairless Source: Ireland's Data Protection Commissioner
flects a serious decline in the which found that the banks luctant to launch a rescue of stitutional investors. The ju- contributed to this article. THE WALL STREET JOURNAL.

Japans A New Front in Chinas Tech Wars Ireland


Struggle to Chinese web firms
go head-to-head
China's Internet Giants Battle in Southeast Asia
Privacy
Lift Wages in neighboring region;
challenges await
As growth slows at home, Chinese tech companies are ramping up their investments in the region.
CopSets
Despite a slew of mone-
tary and fiscal maneuvers to
boost growth, Japanese pol-
icy makers are still caught in
BY LIZA LIN NewBeat
a bind: The labor market is SINGAPOREA new battle-
tight but pay isnt growing. ground is emerging for Chinas BY SAM SCHECHNER
The ultimate measure of internet companies: a fast-
whether Japans efforts to growing market with almost TENCENT ALIBABA DIDI CHUXING DUBLINWhen chat service
restart sus- double the U.S. population. WhatsApp last summer did an
HEARD ON tainable As Beijing grapples with a Tencent invested in Garena Alibaba bought Singapore-based Didi, a ride-hailing rm that about-face and started sharing
THE STREET growth is slowing economy, the coun- Interactive Holding, e-commerce rm Lazada Group this year acquired Uber users personal information
ANJANI whether trys top technology companies a Singapore-based startup in April, expanding its regional Technologies' China unit, with parent company Face-
TRIVEDI workers are are spending aggressively to valued at $3.75 billion. reach and gaining access to an invested in Singapore-based book Inc., Irelands top pri-
earning expand in Southeast Asia, Tencent says it is looking to extensive logistics network to Grab, another ride-hailing app. vacy cop jumped into action.
moreand home to 620 million people. broaden its payment deliver parcels across Southeast Grab is valued at roughly Helen Dixon, Irelands data-
spending more. Yet despite The region is becoming an im- network in Malaysia and Asia. Alibaba also invested in $3 billion. protection commissioner, acti-
three years of unorthodox portant growth area for Ali- Indonesia. Thailand's Ascend Money. vated a 10-person investiga-
stimulus, Japans wage baba Group Holding Ltd., Source: staff reports Photos: Bloomberg News (Tencent); Reuters THE WALL STREET JOURNAL.
tive unit she had created to
growth remains slow. Tencent Holdings Ltd., ride- probe multinational tech
Intricacies of Japans hailing firm Didi Chuxing firms, and she pushed to coor-
economy continue to con- Technology Co. and e-com- dinate multiple probes across
found policy makers. Condi- merce company JD.com Inc., Europe. She has since put both
tions for higher wages are as they expand in online retail- Facebook and WhatsApp
ripe: The labor market is at ing and mobile payments. through rounds of questioning
its tightest in years, meaning Alibaba and Tencent have at her agencys new offices in
each worker effectively has led deals with a combined Dublin.
almost two job offers and value of more than $1 billion The case is one of the most
higher bargaining power that to advance their e-commerce, high-profile tests since the Eu-
comes with it. The unem- logistics and social-network ropean Union agreed on a new
ployment rate is at its lowest businesses. Southeast Asia is law for regulating data-protec-
in two decades, and a the third-largest region for tion and privacy matters
Trump-induced weak yen Chinas outbound tech mergers across the continent, which
should bolster corporate and acquisitions this year, be- has long tilted toward stricter
earnings and bonuses. hind Europe and North Amer- rules than in the U.S.
Yet wage growth isnt ica, with $1.9 billion in deals, While the law doesnt take
budging. Despite talk of an compared with $193 million effect until 2018, it will even-
DARREN WHITESIDE/REUTERS

aging population and shrink- last year, according to Dea- tually give tiny Ireland the au-
ing workforce, Japan has logic. Industry executives say thority to hit companies with
managed to bring more Chinese tech investments are big finesup to 4% of global
workers into its labor force. likely to accelerate. revenuefor violations. Other
This was long seen as a solu- What we have learned in EU countries will share the
tion to Japans problems, but China, we can apply the fastest same power, but Ms. Dixon
may be complicating efforts. in Southeast Asia, Poshu Ye- stands to take an outsize role
Credit to Prime Minister ung, vice president of Ten- A Lazada warehouse in Jakarta, Indonesia. Chinas Alibaba acquired the online retailer in April. in the global debate over data-
Shinzo Abe, female labor- cents international business, protection and privacy issues
force participation has risen said in an interview. Every- largest regional economies will gave Alibaba access to a wide ing expeditions, said Maximil- given the prominence of the
to 67%, the portion of non- thing in Southeast Asia, partic- exceed 257 million by 2020, logistics network to deliver ian Bittner, its chief executive. companies that have their Eu-
regular or part-time employ- ularly in Indonesia, you will more than the 241.5 million us- parcels ordered by Southeast Lazada also attracted several ropean headquarters in Ire-
ees has climbed and older experience a pretty good ers projected for the U.S. Asian consumers on Alibabas international brands, such as landincluding giants like
people are slowly coming growth rate. Alibabas $1 billion acquisi- Chinese platforms. Unilever PLC and Mattel Inc., Facebook, Apple Inc., Alphabet
back to work, according to Southeast Asias $2.5 tril- tion of online retailer Lazada Singapore-based Lazada im- to open retail storefronts on Inc.s Google and Airbnb Inc.
Oxford Economics. These lion economy is attractive for Group in April gave the com- proved its technology and lo- its website after introductions We are effectively regulat-
workers, though, all have be- its growing incomes and rates pany instant access to six mar- gistics operations after send- by Alibaba. ing the global rollout of the
low-average wages. of smartphone ownership. Re- kets: Indonesia, Thailand, ing at least 100 of its Shenzhen-based Tencent products these companies pro-
Japans economy has hit a search firm eMarketer projects Singapore, Malaysia, the Phil- employees to Alibabas head- jumped in by investing in pose, Ms. Dixon said in an in-
base paywall effectively, as smartphone users in the six ippines and Vietnam. Lazada quarters for knowledge-shar- Please see WEB page B3 terview. The standards that
Nomura analysts call it. With we set in Europe will influence
low economic growth, com- how data privacy is done

Chinese Firms Travel for Faster IPOs


panies arent sure they can around the world.
keep paying workers more That puts Ireland and its
and trade unions would data-protection chief in the
rather keep low pay and sta- global spotlight. Ms. Dixon
ble jobs than have their com- BY CHAO DENG nies have had to get creative. two years ago took over an
panies profits hit. Workers Offerings From Poorer Parts Many have pursued backdoor agency that faced frequent ac-
arent trading up when it BEIJINGInternet finance Coastal provinces Guangdong, Zhejiang and Jiangsu had listings through already-public cusations of industry bias. Ire-
comes to salaries in Japans company Jiayuan Network more than 100 IPO applicants each as of Dec. 22, firms that are heading over- land, after all, drew the
heavily regulated job market. Co. recently moved its legal while 16 Chinese provinces have ve or fewer. seas for IPOs. worlds tech darlings in part
Meanwhile, policy incen- domicile from the city of The China Securities Regu- because of its business-
tives remain muddled. While Qingdao on Chinas east coast latory Commission declined to friendly tax and governance
more women are in the nearly 1,860 miles west to Number of IPOs comment and didnt respond environment. Its tax treatment
workforce, a special spousal Lhasa on the Tibetan plateau. 150 to questions on how many of Apple is now the subject of
tax deduction means women One big reason: a chance at a 50 companies have benefited a policy tug of war between
predominantlycontinue quicker stock listing. 5 from the fast-track rule since Dublin and the EU.
to be incentivized to work Chinese companies often Beijing it went into effect. The drug- Before Ms. Dixon took over,
fewer hours, so that they can have to wait several years for maker that got its IPO ap- Please see DIXON page B2
be eligible for the deduction. their initial public offerings. proved, Tibet AIM Pharma
A social-security policy But after the September intro- Inc., has a project in Lhasa,
forces pension contributions
for workers putting in more
than 20 hours a week but has
duction of a new rule to fast-
track IPOs in poor parts of the
country, some applications are
J IAN G SU where it is legally registered
but keeps its production cen-
ter in Sichuan, a province al-
INSIDE
deterred workers from put- starting to speed through. In ZHEJIANG most 1,300 miles away.
ting in more hours and has struggling Lhasa, where dis- Lawyers and analysts say
lowered pay. But Japans la- posable income is roughly half the rule, which is part of the
bor law makes concessions that of Shanghai, two compa- central governments broader
for trade unions and employ- niesa drugmaker and a CHINA GUAN G DO N G
poverty-alleviation efforts,
ers to circumvent the legal state-owned producer of ex- Source: WSJ analysis of
may not be very effective. It
cap on working hours. plosiveshad their listings ap- China Securities Regulatory Commission data uses a list of 832 counties that
The Bank of Japan, in its proved in a matter of months. THE WALL STREET JOURNAL. the government labels as poor,
latest assessment, said the Now a number of Chinese based on criteria like income
economy is seeing a moder- companies like Jiayuan Net- few hours drive away, in the Regulatory Commission has per capita. The list was com-
ate expansion, but consumer
price growth is likely to be
work are moving their legal
headquarters to take advan-
remote and sparsely populated
province of Ningxia.
accelerated approvals since
the summer, but as of Dec. 22,
piled in the 1980s and has
been updated just a few times
UNCERTAINTY
negative or zero. Until Japa- tage of the rule. For example, Securities regulators in there were still 676 companies since. AHEAD FOR
nese policy makers take to
disentangling the labor mar-
cashmere maker Dehong In-
ternational Cashmere Co.
China keep tight control over
the IPO market, which has led
waiting to have their IPO plans
approved, according to data
The way the list was com-
piled has left some locations
CEOS
ket, the everyday Japanese said in October that it moved to a yearslong logjam of appli- from the regulator. out of play. Lanzhou, the capi-
wont be spending much. its legal home to a county a cations. The China Securities As a result, Chinese compa- Please see IPO page B2 MANAGEMENT, B5
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS NEWS


These indexes cite notable references to most parent companies and businesspeople
in todays edition. Articles on regional page inserts arent cited in these indexes.

A
Abercrombie & Fitch...B4
Alibaba Group.............B1
F
Facebook......................B1
FedEx...........................B4
Neiman Marcus Group
.....................................B4
Netflix.........................B3
Nomura Holdings........B7
Sing Hits Box-Office High Notes
AlixPartners................B4 Fisher Custom HomesB9 BY ERICH SCHWARTZEL
Amazon.com ............... B4 Nordstrom...................B4
G
Amicus Therapeutics..B5 P Several new arrivals
Gansu Guofang Industry
AMN Healthcare Panasonic....................B4
Services.....................B5
& Trade (Group)........B2 couldnt knock Rogue One: A
Garena Interactive Pioneer Natural Star Wars Story out of orbit
Apache.........................B4 Resources..................B4
Holding......................B3 at the holiday box office.
Apple...........................B3
Gilt Groupe Holdings..B4 R The Walt Disney Co. spinoff
B

ILLUMINATION ENTERTAINMENT/UNIVERSAL PICTURES/ASSOCIATED PRESS


Goldman Sachs Group Rakuten.......................B3 collected an estimated $96 mil-
Banco Bilbao Vizcaya ............................. B7,B10
Argentaria...............B10
S lion in the U.S. and Canada
GreenNovo
Banco Santander ...... B10 Six Flags Entertainment over the four-day weekend,
Environmental
Bank of America.......B10 Technology................B2 .....................................B5 bringing its two-week total to a
Barclays.......................B7 Skechers USA.............B5 hit $318 million. International
H SLM.............................B6
BB&T............................B7 grosses take the movies world-
Hudson's Bay..............B4 SolarCity......................B4
Boeing ....................... B10 wide total to $523.8 million.
C I Suffolk Construction A12 The strength of Rogue One
Chesapeake Energy .... B4 Illumination T helped the North American box
Chicago Bridge & Iron A2 Entertainment..........B2 Tencent Holdings...B1,B3 office pass the $11 billion mark
China Vanke................B9 J Tesla Motors...............B4 for 2016 on Monday, according
Citigroup..............B7,B10 J.C. Penney..................B4 Toshiba........................A1 to comScore, which is project-
Credit Suisse Group ... B7 J. Crew Group.............B4 U ing the industry to end the year
D JD.com.........................B1 Unilever.......................B1 at a record-setting $11.3 billion,
Dehong International Jiayuan Network ........ B1 United Parcel Service.B4 a 1.5% increase from 2015.
Cashmere..................B1 J.P. Morgan Chase W Of the new arrivals aimed at
Didi Chuxing Technology ........................ B6,B7,B10 Christmastime moviegoers, the
Walt Disney................B2
.....................................B1 JPMorgan Chase ............. animated comedy Sing per-
Westfield.....................B4
E N Westinghouse Electric formed the best. The latest fea-
Equilar.........................B5 Naspers.......................B3 .....................................A1 ture from Minions producer Sing, from Illumination Entertainment, stood out among new arrivals over the holiday weekend.
Illumination Entertainment

INDEX TO PEOPLE collected $56.1 million over the


four-day weekend, and had a
six-day total of $76.7 million.
low expectations with a six-
day gross of $30.4 million. But
the movie saw a surge in at-
end often perform much
stronger in subsequent weeks
than summer releases, which
Century Fox, and News Corp,
owner of The Wall Street Jour-
nal, share common ownership.
A Flammer, Caroline.......B5 P Illumination has another tendance from Christmas Eve can arrive with big numbers Fences, a film adaptation of
Allison, John...............B7 Fox, Katlin.................A12 Peron, Matthew........B10 potential hit on its hands, to Christmas Day of about before attendance falls. the August Wilson play starring
B G Pigott, Jason...............B4 coming five months after its 164%, said Josh Greenstein, Were just getting started, Denzel Washington and Viola
Gero, Malli .................. B5 R previous release, The Secret Sonys president of world-wide said Mr. Greenstein. Davis and released by Viacom
Baer, Greg...................B7
Goldberg, Jason..........B7 Life of Pets, collected $368 marketing and distribution. It Two new arrivals from Inc.s Paramount Pictures, col-
Bannon, Steve ............ B7 Reeves, Martin ........... B5 million in the U.S. and Canada.
Greenstein, Josh.........B2 was an increase he attributed Twentieth Century Fox didnt lected a soft $11.4 million over
Bansal, Pratima..........B5 Rissmiller, Don..........B10 Sing had a budget of about to adults who spent the previ- fare as well. Why Him?, a the four-day weekend. The
Bo, Li...........................B2 H
S $75 million. ous week preparing for the family-relations comedy star- drama is generating awards
C Hackland, Chloe..........B3 Its an excellent start, holidays finally having the ring Bryan Cranston and James buzz for its lead performers.
Sobie, David................B4
Hatazawa, Mamoru....A2 said Nick Carpou, president of time to head to the movies. Franco, collected a healthy $16.7 Several other awards con-
Calabria, Mark.............B7 Stevens, Alan ............. B4
Hensarling, Jeb...........B7 domestic distribution at Com- The Passengers opening million since opening Friday. tenders hit theaters in limited
Carpou, Nick................B2 T
Hoenig, Thomas..........B7 cast Corp.s Universal Pictures, would normally be low given The studios videogame ad- release, while one of the front-
Chenyang, Nie.............B2
Chew, James...............B7
L Thummel, Robert........B4 which distributes Illumination its net budget of $110 million, aptation Assassins Creed runners for the Academy
Chubak, Steven...........B7 Liu, Richard.................B3 V features. but the week between Christ- disappointed with $22.5 mil- Award for best picture, La La
Clarke, Gary ................ B4 M van Dijk, Bob...............B3 Passengers, a space mas and New Years often sees lion over the six days, a paltry Land, expanded to about 730
VanErdewyk, Michael.B6
drama released by Sony grosses come in like a typical showing for a movie that cost locations. The musical starring
Cohn, Gary...................B7 Mnuchin, Steven.........B7
Corp.s Columbia Pictures and weekend, thanks to vacations $125 million to produce and ar- Ryan Gosling and Emma Stone
D-F N Y starring Chris Pratt and Jenni- from school and work. Movies rived with a built-in fan base. has collected $17.6 million so
Dixon, Helen................B1 Nash, Nick...................B3 Yeo, Michael................B3 fer Lawrence, came in a bit be- released over Christmas week- Foxs parent company, 21st far.
Ervin, Wilson..............B7 Nooyi, Indra.................B5 Yeung, Poshu..............B1

Cancer Drugs Trials DIXON


cross-border cases, and the Facebook in Europe pending said Johannes Caspar, privacy
leader can be overruled. But the outcome of the investiga- commissioner in Hamburg,
for now, in cases like Whats- tions opened in several coun- Germany.
App, there is no formal lead tries. Ms. Dixon, who spent
Continued from the prior page authority, and cross-border There are skeptics of Ire- nearly 11 years working for

On Hold After Deaths the privacy commissioner had


a single tiny office above a
small-town supermarket. She
collaboration is ad hoc.
For the moment, Ireland is
one among many, said Isa-
lands policing of corporate
practices. Irish data-protection
officials have long promoted
American corporations before
moving to the public sector in
2007, rejects the notion that
BY AUSTEN HUFFORD sulting in four deaths. has since doubled staff to 60 belle Falque-Pierrotin, Frances what they call an engaged ap- the agency has been a push-
Shares of Seattle Genetics with plans to reach nearly 100 privacy chief and the head of a proach to regulation. over through the years. She
Seattle Genetics Inc. said dropped 16% to $52.15 in mid- next year. Ireland boosted her pan-European advisory group Through frequent conversa- said that striking deals with
the U.S. Food and Drug Admin- day trading in New York. 2017 budget to 7.5 million comprising the blocs 28 data- tions with companies, they say companies to change practices
istration had placed several of The clinical holds were ini- ($7.8 million), up 58% from protection regulators. they foster compliance before sometimes does more to pro-
its early-stage cancer-drug tri- tiated to evaluate potential this year. In August, she The EU recently accused there is a violation that needs tect citizens than ending up in
als on hold after four patients risk of hepatotoxicity in pa- opened a new office in a reno- Facebook of making mislead- punishing. years of enforcement litiga-
died during treatment. tients who were treated with vated four-story townhouse in ing statements in 2014 when While corporate lawyers ap- tion.
The drug, vadastuximab ta- the drug and received stem- Dublinbut expects the team seeking approval to buy plaud the approach, some pri- Dara Murphy, Irelands
lirine, is being tested to treat cell transplants. Seattle Genet- to outgrow the space as early WhatsApp, which could lead to vacy activists have said it is data-protection minister, who
acute myeloid leukemia, a type ics said it was working dili- as next year. a fine of up to $179 million. still too cozy. When Facebook helps oversee the regulator,
of blood and bone-marrow gently with the FDA to Meanwhile, Ms. Dixon is in But in the privacy case under launched a new privacy policy says Ireland will prove un-
cancer. More than 300 pa- determine if there is a link. a wrestling match with other Ms. Dixons purview, any fines in 2015, several data-protec- flinching in applying the EUs
tients have been treated with One study has been halted, national data-protection agen- would be minimal under cur- tion authorities opened paral- new privacy law: It will be in
the drug so far. and two other studies have cies in the EU, many of which rent Irish law. She can send lel investigations into itbut the interest of our regulator
But the company said Tues- stopped new enrollment. want a say over the multina- cases directly to court with not Irish regulators. It is no here is that it become clear
day that six patients taking Seattle Genetics said other tionals squarely in her sights. the ceiling on fines set at secret that in the past we have quite quickly that the Irish in-
the drug have been identified ongoing trials of the drug, in- Under the new EU privacy law, 3,000far less than the 4% had different views on legal terpretation is as robust as
with hepatotoxicity, or chemi- cluding a late-stage, phase 3 a lead authority must consult of world-wide revenue that topics concerning Facebook, anyone elses.
cal-driven liver damage, re- trial, are continuing. with EU counterparts on major will become possible under EU
law in 2018.
ADVERTISEMENT More immediately, however,
Ireland could order Facebook
Legal Notices to change its behavior, which
combined with possible action
and fines by other EU regula-
NOTICE OF SALE BANKRUPTCIES tors would point to a tougher
enforcement ahead for compa-
JEAN CURRAN FOR THE WALL STREET JOURNAL

 
   
 !"# !  $! # %&&#  ' nies. We arent look to hang a
  
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 are doing when it comes to
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2016 Dow Jones & Company, Inc. " 9 70 0 // , 3  3 %H)' 2 + 1
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 +7 +  production and corporate-reg- Executives at Dehong, the Pei Li contributed
All Rights Reserved. #@
  : (73/2 ***
istration locations should be cashmere maker, declined to to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | B3

TECHNOLOGY WSJ.com/Tech

In Africa, Challenger to Netflix Ascends


ShowMax, a creation The scuffle for video-on-de- The company transformed
mand customers here spotlights from a local publisher to a me-
of the South African the increasingly competitive dia juggernaut valued at $60.9
media giant Naspers, environment in which compa- billion after buying a stake in
nies are attempting to lure Afri- Chinas Tencent Holdings Ltd.
caters to local viewers can consumers who have been in 2001.
enriched and empowered by in- Naspers still owns 34% of
BY ALEXANDRA WEXLER ternet infrastructure upgrades the internet giant.
and higher wages. Netflix doesnt break out its
JOHANNESBURGAfricas ShowMax advertises heav- subscription figures for Africa,
biggest company is challenging ily, with billboards touting the though it beat expectations for
the worlds largest video-on-de- service lining the busiest com- subscriber additions in the Sep-
mand service in the race to lure muter streets in Johannesburg. tember quarter thanks in large
African eyeballsand wallets. Meanwhile, Netflixs African part to better-than-expected
South African media giant service is pared down, with performance in international

WALDO SWIEGERS/BLOOMBERG NEWS


Naspers Ltd. launched stream- popular shows such as The markets.
ing service ShowMax across Walking Dead unavailable and Netflix, which is available in
Africa last year, while sector only seasons one and two of more than 190 countries, had
giant Netflix Inc. introduced its original series Orange is more than 86 million subscrib-
an African service in January. the New Black available, as ers globally as of Sept. 30. A
Netflix may have blockbuster the rights were previously li- Netflix spokesman said the
original content such as Nar- censed to other television streaming service carries a
cos and Unbreakable Kimmy channels in South Africa, in- wide range of global content,
Schmidt, but ShowMax, which cluding Naspers-owned M-Net. but declined to comment fur-
is available in 45 African coun- Netflix said last month it ther on its African business.
tries and territories and 28 oth- would allow subscribers to Signs touting ShowMax at a Johannesburg shopping mall. The streaming service advertises heavily. Naspers says its knowledge
ers to serve the continents download shows and movies of the African consumer has
diaspora, is hoping its more lo- to Apple and Android phones in Johannesburg. She binge- can rand ($7.07) a month, ended Sept. 30, Nasperss allowed it to tailor its services
cal flavor will give it an edge. and tablet computers, though watched three seasons of while Netflix costs between video-entertainment business for local viewers.
Some of its popular local ti- many of the streaming ser- Brooklyn Nine-Nine in one $7.99 and $11.99 a month. reversed a decline in subscrib- The company has also de-
tles include: The Real vices popular shows arent week, and enjoys ShowMaxs Once we watched Show- ers, with its direct-to-home veloped a way to mitigate the
Househelps of Kawangware, available for offline viewing. Afrikaans romantic comedy Max, we realized we hadnt business adding 591,968 sub- high cost of data in Africa,
Auntie Boss! and Boer Soek Subscribers to Show- films: [Netflix], they dont watched [TV] for like a scribers, compared with a whichin contrast to the
n Vrou, (Afrikaans for Max have had the option to have downloads on everything. month, she said. drop of 164,300 in the same U.S.is almost always capped
Farmer Looks for a Woman). download content rather than With ShowMax, you can down- It isnt clear whether period last year as the conti- and paid for per mega-
Africans watch different stream it since last year. That load everything. Naspers can triumph over the nents consumers reeled from byte. ShowMax subscribers
things, said Bob van Dijk, allows users to tap networks at Ms. Hackland, 35 years old, Netflix juggernaut, though Mr. the commodities crisis. can choose the quality of their
chief executive of Naspers, places such as the office and also likes that she can pur- van Dijk concedes that the size Naspers, which is secretive downloads to eke out more
adding that many Africans then enjoy shows later at home. chase vouchers for subscrip- of the African middle class about its more than 40 busi- content at a lower resolution,
dont have credit cards and The ability to download is tions to ShowMax through her limits the scale that a video- nesses performance and something Netflix also intro-
they dont have bandwidth, the most important thing I bank, and has given them to on-demand service can plans, has yet to release any duced last month with a simi-
[so] we should be able to do think, said Chloe Hackland, friends as birthday gifts. achieve here. subscription figures lar two-tiered download op-
this better ourselves. who works in communications ShowMax costs 99 South Afri- For the six months for ShowMax. tion.

WEB Garena President Nick Nash


said Shopee is on track to ex-
ceed $2 billion in gross mer-
chandise volumea closely
agothe population is big, the
e-commerce industry there is
not very mature yet and inter-
net users are growing rapidly,
itability.
Not all foreign competitors
have enjoyed smooth sailing.
Japanese e-commerce firm Ra-
which has an app that allows
Chinese tourists to make pay-
ments using Alipay at 20,000
merchants in cities such as
Didi, which counts Alibaba,
Tencent and Apple Inc. as in-
vestors, indirectly entered the
payments race through its in-
Continued from page B1 watched metric for e-com- said CEO Richard Liu. kuten Inc. shut its online mar- Bangkok and Chiang Mai. Ten- vestment in Grab, a Singapore-
Garena Interactive Holding merce companiesthis calen- Expansion in Southeast Asia ketplaces in Southeast Asia centoperator of the WeChat based ride-sharing app. Grab
Ltd., a Singapore-based dar year and counts Indonesia, nonetheless comes with chal- this year. Chinese companies social-networking app, which raised money from investors
startup valued this year at Thailand and Vietnam among lenges. The region consists of also have had to navigate po- has more than 800 million us- including Didi in a $350 mil-
$3.75 billion. Garena entered e- its largest markets. Lazada fragmented markets, each with litical tension, and counter an ersis looking to broaden its lion round of funding last year,
commerce last year through a doesnt disclose its figure. unique customer needs and impression here that made-in- payment network in Malaysia and started a mobile wallet.
peer-to-peer marketplace app JD.comChinas second- regulations. In Indonesia, for China products are inferior. and Indonesia, Mr. Yeung said. Southeast Asia is one of
called Shopee, whose built-in largest e-commerce provider, example, competition is rife, With the boom in e-com- There isnt a dominant local the markets offering low
payment, chat and delivery behind Alibabaentered Indo- with strong local players such merce, Alibaba and Tencent mobile-payment competitor in prices and high growth poten-
services smooth transactions. nesias online sales market last as online marketplace Tokope- are also competing to expand Southeast Asia and consumers tial, said Michael Yeo, re-
Shopee is going head-to-head year and intends to use it as a dia. Intense local competition their payment platformsAli- typically prefer to pay with search manager at IDC Finan-
with Lazada in the same six launchpad for the rest of the has led JD.com, Lazada and pay and WeChat Payin cash. Ascend, Lazada and cial Insights, adding that it is
markets by allowing consum- region, its chief executive said Shopee to dangle promotions Southeast Asia. Alibaba has an Garena have said they want to becoming more expensive to
ers and small merchants to sell in an interview. Indonesia is and coupons to attract more investment in Thai internet fi- fill the gap, and each offers a make acquisitions in China as
products online. like Chinas market five years buyers at the expense of prof- nance company Ascend Money, digital wallet. competition intensifies there.

For millennials
who want to
be millionaires

To learn more, visit


barronsnext.com

2016 Dow Jones & Company. All Rights Reserved. 6E023 Exclusive Launch Partner
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B4 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

BUSINESS NEWS

Key Metric Probably


Wont Reflect Oil Rally
BY TATYANA SHUMSKY mating confirmed, yet unde-
AND ERIN AILWORTH veloped reserves, which can
result in vast differences.
The recent run-up in crude By contrast, the SECs
oil prices may offer a brighter standardized measure pro-
outlook for energy companies, vides an annual snapshot that
but a key accounting metric is is consistent across the in-
likely to show the sector isnt dustry. The metric requires
out of the woods just yet. companies to estimate ex-
As energy companies prepare pected oil and gas sales from
their annual reports, they will their properties using historic
be calculating a prices, subtract expected op-

PETER J. SMITH FOR THE WALL STREET JOURNAL


CFO so-called stan- erating and development
JOURNAL dardized measure costs and taxes, and discount
of reserve value. those figures by 10%.
This dollar figure Its gospel because its the
acts as a basis for direct com- SEC-required reporting num-
parison among companies. ber, but its not a complete
Oil prices have rallied 43% surprise when it comes out,
this year, but oil-and-gas pro- said Gary Clark, vice president
ducers including Apache Corp., of investor relations at
Chesapeake Energy Corp. and Apache. Institutional investors
Pioneer Natural Resources and analysts often seek guid-
Co. are expected to report a ance on the direction of the
lower standardized measure in standardized measure Extra foot traffic is prompting retailers to add sales employees for January and provide coupons to tempt shoppers to keep buying.
2016 than 2015. That is be- throughout the year, he said.

Stores Brace for Returns,


cause the Securities and Ex- After the numbers are out,
change Commission requires investors sift for any outliers,
companies to use historic such as higher future develop-
prices in the calculation. ment costs at a time when the
The SEC price is the average company had said those costs

And Even More Shopping


of physical oil prices on the were falling, he said. They
first day of the month of the will look at what you pro-
past 12 months. That average duced and what you sold, and
for 2016 is down 15% from the if at the end of the year youre
2015 figure. Theres going to left with not as much as was
be a mismatch there between there, they will start to ask Opportunity is seized purchase when they make an
accounting and reality, said questions. Retail Return Rates in-store return.
Robert Thummel, managing di- Cost is the one input that to make further sales; Shoppers return items bought online at a far higher rate*. For online-only retailers,
rector and portfolio manager varies from company to com- some merchants offer such as Amazon.com Inc., re-
at Tortoise Capital Advisors. pany when calculating the Online purchases About 30% turns tend to eat away at al-
The disconnect comes at a standardized measure. Devel- spring goods early ready-thin margins. Many
vulnerable time for the sector. opment costs and the success Return rates by category (Both online and in-store) promise free return shipping
Oil prices plunged to a low of of exploration efforts differ BY SUZANNE KAPNER Auto parts 21.0% and then divert items to spe-
$26.21 in February after ex- substantially by region and cial logistics companies that
ceeding more than $100 a bar- type of operation. As shoppers flock to stores Housewares 12.3% collect, process and often re-
rel in 2014. Depressed prices Chesapeake has seen its com- this week to return unwanted Apparel 10.5% sell the unwanted gifts. Both
triggered asset impairments, pletion cost for wells in South holiday gifts, department FedEx Corp. and United Par-
losses and bankruptcies across Texas cut nearly in half during stores and other traditional Footwear 9.6% cel Service Inc. shift gears af-
the energy industry. the past year or so. In the third retailers have an opportunity Sporting goods 9.3% ter Christmas and help retail-
Standardized-measure fig- quarter, it cost the company that pure e-commerce players ers with the surge in
ures slumped in step with oil $246 per lateral foot to complete dont: Make another sale. Beauty 5.2% postholiday returns.
prices. Apaches standardized a well, compared with $478 in About 10% of holiday pur- *October-November 2015 survey data. The online flash sale site
measure, for example, was the second quarter of 2015. chases are returned, according Source: AlixPartners THE WALL STREET JOURNAL. Gilt Groupe implemented a
$10.6 billion in 2015, compared The company is also doing to the National Retail Federa- new policy in February that al-
with $31.7 billion in 2014, ac- more work with fewer drilling tion, although the rate can be a surge in returns brought on ber and December, meaning lows shoppers to return goods
cording to company filings. rigs. Today 10 rigs at Chesa- triple for online orders. And the by a shift to online shopping, that nearly $66 billion in to Saks Off Fifth stores follow-
While prospects for the in- peake drill as much lateral vast majority of those goods providing retailers with a rare goods will come back to retail- ing its acquisition by Saks par-
dustry have recovered as footage as 35 rigs did in 2013, come back to brick-and-mortar opportunity for higher foot ers. ent Hudsons Bay Co. More
prices climbed back above $50 Jason Pigott, Chesapeakes ex- stores, regardless of where they traffic at a time that it has January had typically been than one-quarter of shoppers
a barrel in recent months, in- ecutive vice president of oper- were purchased. At J.C. Penney been on the decline. a slow month in retailing, returning Gilt merchandise to
vestors remain cautious. The ations and technical services, Co., for instance, more than More chains, including Ab- said David Bassuk, a managing a Saks Off Fifth store choose
profitability of reserves is a said at the companys analyst 90% of online returns are ercrombie & Fitch Inc.s Hol- director at the consulting firm to receive a Saks merchandise
primary concern. This disclo- day in October. brought to a physical store. lister chain and Neiman Mar- AlixPartners. With the credit, according to Jonathan
sure is going to be lower than Drilling and completion That gives retailers with a cus Group Inc., are bringing in heightened level of returns, Greller, president of Gilt and
what they would like to por- costs for wells fell by 35% brick-and-mortar footprint the spring goods early so they retailers are planning for sales Saks Off Fifth.
tray if they were using more since the end of 2014 for Pio- chance to sell shoppers new have fresh merchandise with they never could before. As a In an attempt to get shop-
recent prices, said Alan Ste- neer in some areas of the merchandise, which can offset which to tempt shoppers, ac- result, Mr. Bassuk said retail- pers who buy online to return
vens, assurance partner at Permian Shale in West Texas. the high cost of returns and cording to Craig Johnson, the ers are adding more staff to goods at the mall, Westfield
BDOs energy practice. Such improvements have help clear unsold inventory. president of consulting firm the sales floor in January and Corp. has joined with a com-
Finance executives in the helped break-even costs de- On average, retailers spend Customer Growth Partners. offering coupons and other in- pany called Happy Returns.
energy sector can choose be- crease in shale basins across about 8% of sales processing Mr. Johnson estimates the centives to get shoppers to The Venice, Calif., startup has
tween different accounting the U.S. by as much as $22 a returns, according to Inbound week after Christmas will ac- keep buying. installed return bars at two
methods to value their proved barrel, according to research Logistics, a trade publication. count for about 14% of this About one-third of shop- Westfield malls in California
developed reserves, as well as from energy-consulting firm In the past, shoppers typi- years holiday sales, roughly pers who visit a Penney store as well as four other U.S. malls
different variables when esti- Wood Mackenzie. cally visited stores after on par with last year. to make a return spend an ad- run by other operators.
Christmas to redeem gift cards The NRF estimates that hol- ditional $60, according to the The malls who host our re-
or hunt for even deeper dis- iday sales, excluding autos, company. A spokeswoman for turn bars get a steady stream
counts. But the after-Christ- gasoline and restaurants, will Kohls Corp. said about half of of traffic, said David Sobie, a
mas rush is now also fueled by total $655.8 billion in Novem- customers make an additional Happy Returns co-founder.
RYAN DEZEMBER/THE WALL STREET JOURNAL

Tips for Returning Online Gifts


BY NATHAN OLIVAREZ-GILES quire a gifts order number for boxed software. Best Buy also cipient. Instead, recipients get
a return. Overstock requires accepts returns with opened store credit in the form of gift
Online shopping is expected an invoice number or ship- packaging, but it will deduct cards.
to set records this holiday sea- ment tracking number. the cost of the packaging or While stores wont ex-
son, with more people opting Apple and Best Buy require any missing items from your change gift cards for cash,
to buy gifts from websites and either gift receipts or pur- exchange. there are other options be-
apps than ever before. But chase receipts. yond using them or regifting.
Pumpjacks operating near homes in Midland, Texas, in the while buying online is more No paper trail means no re- Shipping could cost you If your nearby grocery store
Permian Basin. Crude oil prices have rallied by 43% this year. convenient, returning gifts of- turns almost everywhere. Amazon and Apple offer has a Coinstar kiosk (normally
ten isnt. Those who wish to free shipping labels for re- used for turning loose change

BUSINESS WATCH
return a present face a confus- Rules for packaging turns via mail, but many re- into cash), you can trade in
ing web of varying rules over If, as soon as you open your tailers dont. Overstock will that gift card for cash, as long
receipts, shipping costs and gift, you know you dont want deduct the cost of shipping as the gift card is worth at
even confidentialitycould it, keep the present in the box from the amount of the item, least $20. Coinstar accepts gift
PANASONIC CHINA your online return inadver- and dont remove any tags. and give you what is left in cards from more than 150 re-
tently break the heart of a Resist the calls to try it on the form of a gift card. If you tailersbut not Amazon.
Investment Set Industrial Profits loved one? or show it off. If the item is mail a gift back to Best Buy, Keep in mind that Coinstar
For Solar-Cell Plant Rose in November Fortunately, when it comes in its original packaging, you you will have to pay shipping takes a percentage ranging
time to return a dud gift that will face less resistance during yourselfthough you can al- from 15% to 40% depending on
Panasonic Corp. expects to Earnings growth accelerated came from a major online re- the return process because the ways take it back to a store. the gift card.
invest more than 30 billion, or in Chinas industrial sector in No- tailereven ones with nation- item can essentially go back For Wal-Mart, that is your
over $250 million, in a Buffalo, vember, indicating that Beijing wide brick-and-mortar pres- into the store or on a ware- only option: It doesnt accept It might be awkward
N.Y., plant that will make photo- could reach its annual economic encethere are some tips to house shelf. returns by mail. Jet.com, recently acquired
voltaic cells and modules for growth target, official data follow that help make things As with every aspect of re- by Wal-Mart, only accepts re-
Tesla Motors Inc., Panasonic said showed Tuesday. less hectic. turns, retailers vary on their Expect credit, not cash turns that are initiated by
Tuesday. Industrial profits grew 14.5% rules for packaging. Amazon, If the gift you received was the person who bought the
Tesla said in October that it in November from a year ago, Wait until next year the worlds largest online re- bought online, getting cash in item. That means you would
would work with Panasonic in faster than the 9.8% increase Most major retailers offer tailer, doesnt accept returns if exchange for your returned have to ask whoever gave you
completing the Buffalo plant, posted in October, according to return windows ranging from items are taken out of their gift is unlikely. Apple, Micro- the gift to return it on your
which originally was to be a So- the National Bureau of Statistics. two weeks to a month. Over original packaging. soft Corp. and Best Buy will all behalf.
larCity Corp. manufacturing The acceleration of industrial the holidays, though, online Apple accepts returns with offer money back to the pur- (Jet.com will pay the cost
plant. Tesla completed its acquisi- production and sales growth and retailers have extended return opened packaging, unless it is chaser, but not to the gift re- of shipping on returns, how-
tion of SolarCity in November. a surge in factory-gate prices times for gifts. Apple Inc., ever, unless the gift giver
Tesla said Tuesday that it is were the main drivers of the which normally has a 14-day opted into a continuing
reaffirming its commitment to growth, He Ping, an economist, return policy, is accepting re- Jet.com promotion that lets
create more than 1,400 jobs in said in a statement accompany- turns through Jan. 8 for items the purchaser forgo the free-
Buffalo, including over 500 man- ing the data release. He also said bought as far back as Novem- return policy in exchange for a
ufacturing jobs. Teslas agree- that contributions from the tele- ber. Best Buy Co. is accepting lower price.)
ment with Panasonic calls for the communication and petroleum- purchases made in November In the case of Amazon-
Japanese company to cover capi- refining sectors helped buoy and December through Jan. 15. owned Zappos, there is a
tal costs in Buffalo, while Tesla overall growth. Amazon.com Inc., Jet.com Inc. slightly better scenario: If you
will make a long-term purchase However, the economist and Overstock.com Inc. are all call the retailer and provide
JUSTIN SULLIVAN/GETTY IMAGES

commitment from Panasonic. pointed out that the year-ago pe- accepting gift returns through the gift givers info, you can
In presentation materials, Pa- riods low base helped fuel last Jan. 31. Wal-Mart Stores Inc. return the gift yourself, but
nasonic said it expects its total months gain and that there was has a 90-day return policy. Zappos will provide the refund
investment in the Buffalo plant still too much reliance on re- to the gift givers credit or
to exceed 30 billion. It said it bounding prices in refining and Keep those receipts debit card.
expected the plant to open in the steel industrials. He also said As usual, documentation The only way around this,
summer of 2017 and ramp up to most companies were struggling matters, whether you end up besides keeping the gift, is
1 gigawatt of module production with customers making late pay- mailing your gift back or tak- swapping it out for something
by 2019. ments. ing it to a physical store. A U.S. post-office distribution center in California this month. of identical value. You cant
Peter Landers Pei Li Amazon and Wal-Mart re- Some retailers offer to cover the cost of shipping for returns. just get store credit.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | B5

MANAGEMENT
WORKAROUND
2017: A Year of Uncertainty for CEOs
Business leaders face daunting challenges amid turbulence world-wide: How much can they trust projections?
MICHAEL NAGLE/BLOOMBERG NEWS

BY JOANN S. LUBLIN the United States.


AND JOHN SIMONS E.V. Rick Goings, CEO of
Tupperware Brands Corp.
Heres a prediction for since 1997, said his employer
2017: The job of chief execu- tries to find opportunity in
tive is about to get tougher upheaval. For example, he
than ever. wants Tupperwarea busi-
Uncertainty has been a ness long known for its color-
way of life for business lead- ful food-storage containers
PepsiCo CEO Indra Nooyi. ers since the last financial to further sharpen its focus
crisis. But as U.S. president- on making products that
elect Donald J. Trump moves dont come from petroleum or
CEOs Should Take into the White House pow- other commodities tied to the
Long-Term View ered by a largely unforeseen U.S. dollar. The company,
Should corporate leaders fo- wave of global revolt against which pays dividends in dol-
cus on short-term gains or take political elites, 2017 is go- lars, has been hurt by the rise
the long view? ing to be more volatile and of that currency.
Adherents of long-term man- more complex than previous Some chiefs are hitting
agement will find potent ammu- years, predicted Michael D. pause on big projects. Bloom
nition in a new study from a pair Watkins, a professor of lead- Energy Inc., a maker of com-
of management researchers who ership and organizational mercial electric-power genera-
conclude that myopic leaders are change at IMD Business tors, had planned to create at

BRYAN ANSELM FOR THE WALL STREET JOURNAL


hampering businesses by failing School in Switzerland. least a thousand jobs in 2017,
to invest in innovation and risky The unprecedented turbu- mostly in project construction
projects. lence is seen in deep politi- and manufacturing, said its
Whats more, they say that cal divisions in the U.S. and CEO, KR Sridhar.
switching to a long-term outlook abroad, uncertainty over the Unknowns about a Trump
can improve a companys operat- strengthened U.S. dollar, the presidency prompted Mr.
ing performance by several mea- faster pace of technological Sridhar to put the Sunny-
suresreturn on assets, operat- change and looming global vale, Calif., firms job plans
ing profits, and sales growth problems such as mass im- on hold until he learns more
within two years. migration, terrorism and cli- about the new administra-
Simply put, an increased long- mate change. tions interpretation of exist-
term orientation fosters innova- In such a setting, chief ex- ing energy regulations.
tion and enhances market value, ecutives often must decide John Crowley, CEO of Amicus Therapeutics, is concerned about possible changes in regulatory policy. Deferring plans is a clas-
said authors Caroline Flammer how much they trust projec- sic way to react to an am-
of Boston Universitys Questrom tions. AMN Healthcare Ser- remained vacant for too long. months launching offices in The global rise of local biguous environment, said
School of Business and Pratima vices Inc. CEO Susan Salka This has quickly become France, the Netherlands, It- populism, as evident by the Martin Reeves, senior part-
Bansal of the University of said she doesnt pay atten- an important service for aly, Germany and Spain. It Brexit vote, is a concern for ner and managing director at
Western Ontarios Ivey Business tion to public policy predic- us.We are making more established European head- Kennametal Inc. chief Ronald Boston Consulting Group.
School. Their paper, Does a tions coming out of Wash- swift decisions and being quarters in the U.K.and DeFeo. The company makes Youll see a lot of post-
Long-Term Orientation Create ington these days. Demand comfortable with the fact then the Brexit vote took cutting and drilling tools poned commitments, in the
Value?, is slated to publish in a for health services, she that we may not get every- Amicuss leaders by surprise. used in oil-and-gas explora- coming year, he said. But he
coming issue of the Strategic noted, will continue to grow thing exactly right, she said. After conferring with con- tion and other industries. warns his executive clients
Management Journal. regardless of whether the John Crowley, CEO of Am- sultants, Mr. Crowley ulti- Mr. DeFeo, hired in Febru- that too much caution can
To determine whether execu- new Trump administration icus Therapeutics Inc., is mately decided not to ary, said he has revamped lead to paralysis.
tives with a long view logged moves to repeal the Afford- also trying to embrace the change plans for marketing Kennametals management Other leaders are speed-
better performance, researchers able Care Act. uncertainty, which he likens the drug, which treats Fabry structure partly to create ing up, making decisions on
identified 808 shareholder pro- Ms. Salka said she has to drug discovery, where al- disease, across Europe. But much stronger regional a shorter time frame.
posals on long-term executive stepped up the pace at which most everything we do the CEO said he worries leaders to better serve local At Danone SA, CEO Em-
compensation between 1997 and she and her team at the medi- doesnt work, he said. Fail- about changes in regulatory markets. manuel Faber recently created
2012, and examined the mea- cal staffing and recruiting ure happens a lot. policyespecially as it re- The face of what we mar- a beyond budget initiative
sures that passed by a small firm make major strategic de- The biotech company, lates to the U.S. presidential kethas to be less about our that replaces annual spending
margin of votes. cisions. In the past 18 which specializes in treat- campaign rhetoric around global capability and more plans with flexible quarterly
The executive compensation months, for instance, AMN ments for rare diseases, had drug pricing. Like other cor- about our local abilities to budgets. The system, informed
proposals included awards of re- expanded into executive its first drug approved by porate chiefs, he said hes meet their needs, he said. by a five-quarter forecast, al-
stricted stock, restricted stock search and acquired three European regulators in May. apprehensive about an envi- We have to be more French lows the food conglomerate
options, and long-term incentive search companiesafter In anticipation of the ap- ronment in which a tweet in France, more German in to constantly adjust.
plans. The researchers measured hearing from clients whose proval, the company had can wipe out hundreds of Germany, more Chinese in Nick Kostov
the effects of approved propos- high-level interim positions spent the previous 17 millions in market cap. China and more American in contributed to this article.
als during the year of passage,
one year later, and then three

Dozens of Boards Excluded Women for Years


years after passage.
The authors set out to study
companies whose leaders had
made a clear break with short-
termism. So they zeroed in on BY JOANN S. LUBLIN A survey of directors sug- companies up, said Malli on-pay votes about executive
chief executives who may not gests that ignorance about the Women Directors Gero, its president. The group compensation since 2011. But a
have seen the changes coming Glass ceilings are shattering financial impact of board Share of Fortune 1000 board lobbies firms without female woman may soon join the
in the form of narrowly passed all overexcept in the board- women may explain their ab- seats lled by women. directorsincluding 12 on board of the oil drilling com-
long-term incentive proposals. rooms of 76 U.S. public com- sence from so many businesses Equilars list. pany. With one of its seven
The compensation adjust- panies that have had no fe- for years. About 24% of men 20% 19.7% Among them is Weis Mar- members retiring next year, the
ments led chief executives to male directors for the entire compared with 89% of women kets Inc., a food-store chain board has set a goal of identi-
pursue longer-term strategies. past decade. very much believe board di- with a five-man board. Judg- fying a qualified female direc-
Following the passage of long- The protracted persistence versity leads to improved 15 ing our company based on the tor, said Julia Wright, Naborss
term incentives, the researchers of all-male boards emerges business performance, con- composition of our board general counsel.
found that companies boosted from an exclusive analysis for cluded a survey of 884 public overlooks the bigger picture, Six Flags offered a different
their efforts to innovate and The Wall Street Journal by company directors by PwC U.S., 10 a Weis spokesman said. The rationale for its long dearth of
pursue riskier forward-looking Equilar Inc. The governance re- a professional-services firm. chain has promoted and hired female directors. The theme-
projects. More specifically, busi- searchers tracked the 1,500 Over the past five years, an increased number of park operator replaced its en-
nesses increased their research largest Russell 3000 concerns U.S. companies that had at 5 women since 2006, the tire board upon emerging
and development spending, without female board members least three female directors in spokesman added. from bankruptcy in 2010. Add-
which led to surges in the num- in any of the past 10 years. 2011 have financially outper- Several companies without ing a woman will be the high-
ber of patents they garnered. Mostly small, these firms formed those that had no 0
women directors since 2006 est priority when its seven di-
The long-term view is exem- often operate in male-domi- board women in 2011, accord- have faced criticism. At Skech- rectors choose their next
2011 12 13 14 15 16
plified by PepsiCo Inc. CEO Indra nated industries such as en- ing to MSCI, an investment re- ers, which has nine male di- independent member, said
Source: 2020 Women on Boards, based on
Nooyi. Ms. Nooyi identified ergy. Some serve individual search firm. Its study, released 810 companies in the Fortune 1000 between rectors, investors this year de- Nancy Krejsa, senior vice pres-
health and wellness as one of consumers, including Skech- this month, looked at return 2011 and 2016. feated a shareholder proposal ident of investor relations.
the companys biggest growth ers USA Inc. and Six Flags on equity and per-share earn- THE WALL STREET JOURNAL. about board diversity. The Another 13 companies with-
opportunities when she became Entertainment Corp. ings for 580 such concerns be- measure sought multiple out female directors as of
chief executive in 2006. I expected to see fewer com- tween 2011 and 2016. nies this year, but just 16.7% of moves, including mandatory their 2016 annual meeting
She has boosted R&D spend- panies with no female directors As advocacy groups and seats at the rest of Fortune consideration of gender and subsequently ended their
ing and vowed to turn the since 2006, given the focus and public pension funds have 1000 firms, reports 2020 racial diversity in identifying drought, Equilar found. On
maker of sugary soft drinks into high level of scrutiny on gender prodded boards to pick more Women on Boards. The group director candidates. Dec. 12, for instance, Inte-
a company where sales growth diversity in corporate board- women, bigger businesses aims to raise womens board Skechers didn't return calls grated Device Technology Inc.
of healthy products outpaces the rooms over the past few years, have made the most progress. representation by 2020. for comment. announced the board appoint-
rest of the portfolio by 2025. said Belen Gomez, Equilars di- Women held 20.6% of director- The campaign will now fo- Nabors Industries Ltd. has ment of executive recruiter
John Simons rector of research. ships at Fortune 500 compa- cus on getting those bottom lost five investor advisory say- Selena Loh LaCroix.

BREXIT
& BEYOND
EUROPE IN FLUX
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2016 Dow Jones & Co. Inc. All rights reserved. 6DJ3377
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B6 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

FINANCE & MARKETS

CFPB Chief Is Under Fire The Student-Loan


In U.S., head of
financial oversight
Market Warms Up
agency faces BY ANNAMARIA ANDRIOTIS
Back to School
Republican pressure The nearly $1.4 trillion stu- The U.S. government's share of
dent-loan market in the U.S. is outstanding student debt has
BY YUKA HAYASHI expected to be far more hospi- moved higher.
table to private lenders under
WASHINGTONA battle is a Donald Trump administra- 93%
intensifying over the future of tion than during the past eight
92
Richard Cordray, the head of years.
MICHAEL REYNOLDS/EUROPEAN PRESSPHOTO AGENCY

the Consumer Financial Pro- Under President Barack 91


tection Bureau, as Republicans Obama, banks such as J.P.
search for past transgressions Morgan Chase & Co. and U.S. 90
that would allow President- Bancorpstudent-loan lenders
elect Donald Trump to fire until a few years agowere 89
him. largely sidelined. Origination
88
Mr. Cordray, a former Ohio of federally backed student
attorney general, is admired loans was transferred entirely 87
by consumer groups and dis- to the U.S. government, al-
liked by many GOP lawmakers ready the dominant force in 08 09 10 11 12 13 14 15 16
and financial-industry players the market. Note: 2016 data as of June 30. Prior years
as of Sept. 30.
for helping build the five-year- The move was designed to Source: MeasureOne (private loans);
old agency into an aggressive lower lending costs for the Education Department (federal loans)
financial regulator. government, which wanted to THE WALL STREET JOURNAL.
Republicans want Mr. Richard Cordray helped to make the Consumer Financial Protection Bureau an aggressive regulator. redirect savings to student
Cordray ousted and replaced grants and to offset costs asso- yet clear. But a lighter regula-
with someone who reflects ment that Mr. Cordray was Cordray for cause. through putting people in ciated with the Affordable tory touch could allow for
their views, but the 2010 confirmed by a bipartisan Republicans who believe he place who have a more free- Care Act. Regulatory scrutiny more private student lending,
Dodd-Frank financial-overhaul group of 66 senators to serve cant be fired point to a court market, less-regulatory per- of private lenders also intensi- or there could be a return of
law that created the CFPB a term until July 2018 and has case on the bureaus single-di- spective, said Thomas Pahl, a fied after the Consumer Finan- the lending program wiped out
states that the president may no plans to step down. Mr. rector structure. The case is former regulations attorney at cial Protection Bureau opened by the Obama administration.
only remove its director for Cordray declined to comment pending at the U.S. Court of the CFPB and Federal Trade in 2011. Another possibility: The fed-
inefficiency, neglect of duty for this article. Appeals for the District of Co- Commission who is now a Investors are betting this eral government could begin
or malfeasance in office. Mr. Trump and members of lumbia Circuit as the CFPB has partner at Arnall Golden Greg- will change. Shares of the larg- unloading student debt on its
The agencys critics are his transition team have said challenged an October deci- ory. Far less likely is some- est private student lender by balance sheet either by selling
now openly calling for Mr. they want to roll back postcri- sion by judges there who thing that would be done leg- origination volume, SLM loans to private lenders or en-
Cordrays removal and dis- sis financial regulations, but ruled the structure unconsti- islatively. Corp., or Sallie Mae, have led couraging the emergence of a
cussing potential faults he have been silent about the fu- tutional and granted the presi- The CFPBs proponents the charge since the Nov. 8, bond market for such debt.
may have committed during ture of the CFPB and its chief. dent the power to fire the di- have stepped up their counter- election, rising about 55%, Any of these opportunities
his tenure at the CFPBs Rep. Randy Neugebauer (R., rector at will. attack in recent days. compared with a 24% rise in could be a boon for student
helmso the incoming presi- Texas), who has led the attack Republican lawmakers have National civil-rights-group the KBW Nasdaq Bank index lending businesses at Sallie
dent can fire him for cause. on the CFPB at the House Fi- a long list of steps aimed at leaders last week applauded through Friday. Mae, Wells Fargo & Co., and
President Trump, its time nancial Services Committee, overhauling the CFPB, includ- Mr. Cordrays efforts to make Political risk has now been Discover Financial Services,
to say youre fired to Mr. said Mr. Trumps transition ing turning it into a commis- the CFPB an inclusive and di- removed, Sallie Mae CEO Ray- the three biggest private stu-
Cordray, wrote Thaya Brook team would study Mr. sion, giving Congress control verse place to work for agency mond Quinlan said at an in- dent lenders. They could also
Knight, associate director of Cordrays performance. over its budget and reducing staff. They said that any at- vestment conference Nov. 30. create an opening for more
financial-regulation studies at It hasnt been a real employee compensation by tempt to weaken the bureau We can now deal with the lenders to enter the market.
the libertarian Cato Institute. smooth ride over there, said changing its pay scale. Such and undermine its leadership facts as opposed to a night- Lenders began exiting the
One of the issues Mr. Mr. Neugebauer, who is seen steps are included in a broad would risk severe impacts on mare. private student-loan sector
Cordrays opponents are fo- as a candidate to succeed Mr. deregulation bill introduced our communitiesincluding The expectation is for some during the recession as delin-
cusing on: past allegations of Cordray as the next CFPB this year by Rep. Jeb Hensar- communities of color and low- change. The Republican Partys quencies spiked and the secu-
pay discrimination against chief, citing issues such as the ling (R., Texas), which the Re- income families who are most platform called for a return of ritization market for these
women and minority employ- alleged pay discrimination and publicans plan to repropose vulnerable to financial abuse. private lenders. The federal loans dried up. Others exited
ees at the CFPB and his al- the costs of renovating the next year in some form. Such Legal experts for Americans government should not be in after the federal lending pro-
leged failure to take appropri- agencys headquarters. steps would take time and for Financial Reform, a con- the business of originat- gram for private lenders
ate action. Republican The bureaus handling of al- would likely face tough oppo- sumer advocacy group that ing student loans, it said. In ended and regulatory scrutiny
lawmakers had criticized the leged racial discrimination in sition from Senate Democrats, calls for tougher Wall Street order to bring down college amped up. Several banks, in-
CFPB over the allegations in auto lending is another poten- including Sen. Elizabeth War- rules, warned against looking costs and give students access cluding Bank of America Corp.,
2014 and 2015. The agency has tial area of inquiry, Mr. Neuge- ren (D., Mass.) who helped to for causes to fire the CFPB to a multitude of financing op- Citigroup Inc., J.P. Morgan and
said it has taken steps to ad- bauer said. Someone is going create the CFPB. chief, saying courts have in tions, private-sector participa- U.S. Bank, have left since 2009,
dress employee complaints. to have to make a determina- Its more likely that the the past used their authority tion in student financing leaving a handful of large play-
Jen Howard, a CFPB tionif those are factors that new agenda and new approach to stop illegal removals of gov- should be restored. ers fighting over a small mar-
spokeswoman, said in a state- could be used to relieve Mr. are going to be effectuated ernment officials. How things will change isnt ket.

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THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | B7

FINANCE & MARKETS

U.S. Stocks Climb, Led by Tech Sector


BY NATASCHA DIVAC U.S. nuclear reactors it is cember gains in years. The were among the worst per- it to a 14-year high.
AND AKANE OTANI building were likely to force a Dow Jones Industrial Average formers on an otherwise quiet The dollar has strengthened Unwelcome Surprise
write-down of as much as sev- was up 4.3% for the month, day. The Stoxx Europe 600 in recent weeks on bets of Toshiba shares sank 12% after
U.S. stocks rose Tuesday on eral billion dollars, clouding heading for its best December Banks Index fell 0.2% after the higher inflation and rising the rm said cost overruns in the
gains in technology shares. its turnaround plan after an since 2010. European Central Bank ex- rates, which make it more at- U.S. could cause an impairment
The Dow Jones Industrial accounting scandal last year. Technology companies were pressed new concerns about tractive to yield-seeking inves- charge of several billion dollars.
Average was up 24 points, or South Koreas Kospi gained among the biggest gainers the future of ailing Italian tors.
0.1%, to 19957 by around mid- 0.2%, Singapores FTSE Straits Tuesday. The S&P 500 tech lender Banca Monte dei Paschi On Tuesday, the WSJ Dollar 460 Lunch break
day in New index rose 0.3% and the sector rose 0.7%, led by di Siena. Index, which measures the
TUESDAYS York, led by a Shanghai Composite Index fin- Nvidia, which added 6%. The Monte dei Paschi has a dollar against a basket of 16 440
MARKETS 1% jump in Ap- ished 0.3% lower. chip maker, whose shares are much bigger hole in its bal- currencies, was up 0.2%. Tuesday
420
ple. The S&P Markets in Australia, New on track to rise for a 10th con- ance sheet than previously cal- Bonds, meanwhile, resumed 391.6
500 gained Zealand and Hong Kong were secutive session, is up about culated, the ECB said Monday, their postelection slide. 400
0.3%, and the tech-heavy Nas- closed for holidays. 250% for the year. meaning the Italian govern- The yield on the 10-year
daq Composite rose 0.7%. U.S. trading volumes have Meanwhile, dividend-heavy ment will have to ramp up the U.S. Treasury note edged 380
In Asia, markets were little dwindled and stocks have sectors lagged behind broader amount it will have to deploy higher to 2.567%, near a two-
changed. Japans Nikkei Stock moved in a narrow range indexes. Utilities shares in the to rescue the lender. Trading year high, from 2.542% Friday, 360
Average ended less than 0.1% around the holiday period. S&P 500 fell 0.4%, while tele- in the banks shares continued according to Tradeweb. Yields
higher, snapping a three-ses- Still, indexes have extended com shares fell 0.3%. to be suspended Tuesday. rise as prices fall. 9:30 a.m.* 11 1 p.m. 3
sion losing streak. But Toshiba their postelection rally and are Elsewhere, the Stoxx Eu- In currencies, the dollar Brent crude, the global Note: 400 = $3.41 *Local time
Corp. dropped 12% after the on track to close out the rope 600 rose 0.1%. rose slightly, extending a post- benchmark, was up 1.4% at Source: Thomson Reuters
company said cost overruns at month with their biggest De- In Europe, bank shares election rally that has brought $55.95 a barrel. THE WALL STREET JOURNAL.

Banking Overseers Embrace Walls Treasury Yields


BY JOHN CARNEY

The latest trend in policing


Rise as Investors
banks: Build a wall.
Financial regulators around
the world have increasingly
shied away from developing
Look to Auctions
globe-spanning rules in favor BY MIN ZENG decisions.
of shoring up the financial sys- Government-bond yields in
tems in their local purviews. Prices of U.S. Treasury the developed world have
This fragmentation could ac- bonds pulled back Tuesday as been rising after falling to
celerate when President-elect investors gird for the last their historic lows in the sum-
Donald Trump takes office in round of new government- mer.
January if his deregulatory debt offerings in 2016. The 10-year Treasury yield
agenda combines with his Higher stocks and crude-oil is up more than one percent-
America first approach to in- prices Tuesday reflected in- age point from its record low
ternational relations. vestors preference for riskier set in early July. The yield was
What would that mean for assets, also sapping demand headed for a second consecu-
FRAN COLLIN

big banks? The breakdown of for haven bonds. tive year of gains, up from
regulation by international The yield on the benchmark 2.273% at the end of 2015.
consensus may cause some 10-year Treasury note rose to The shift toward higher
banks to reconsider the value Credit Suisses Wilson Ervin, right, says new requirements could prevent needed shifts in capital. 2.567% late morning in New yields over the past few
of their global footprints, slow York, near the highest level in months reflects rising expecta-
cross-border capital flows, in- increasing willingness of bank- terview. liquidity for subsidiaries in a more than two years, accord- tions among investors of
crease costs of compliance for ing regulators to act indepen- He warned that a frag- period of stress. J.P. Morgan, ing to Tradeweb, compared faster economic growth,
global banks and even make dently of each other to protect mented approach to regulation Bank of America Corp. and with 2.542% Friday. Yields rise higher inflation and poten-
the global financial system the strength of their own fi- could make cross-border fi- Citigroup have each an- as bond prices fall. tially a faster pace of interest-
more fragile, bank executives nancial systems. That is a leap nancing more difficult. nounced plans to create these The bond market was shut rate increases by the Fed.
say. from the years after the finan- Ringfencing started gaining entities. Monday for the Christmas hol-
Last month, the European cial crisis, when regulators val- momentum when Federal Re- Europes regulators are con- iday.
Union proposed rules that ued a unified front as they at- serve governor Daniel Tarullo cerned that the capital may The U.S. Treasury was
would require big foreign
banks like J.P. Morgan Chase
& Co. and Citigroup Inc. to
hold extra capital within EU
tempted to rebuild economies
and prevent the next crisis.
Some bankers express con-
cern that building new re-
first proposed in a 2012
speech that the U.S. should re-
quire large European banks to
hold separate capital and li-
not be available to support the
operations in their territory,
according to people familiar
with the matter. The new rules
scheduled to sell $26 billion of
two-year notes at 1 p.m. Tues-
day, followed by a $34 billion
sale of five-year notes
2.567%
Yield on U.S. 10-year note, near
borders, a step that echoes a gional requirements can be quidity in U.S. units. The Fed from the European Union Wednesday and a $28 billion the highest in two years
recent U.S. rule for some large, costly, and potentially destabi- officially adopted such re- would address these concerns sale of seven-year notes
non-U.S. banks. Rules with lizing, if it prevents banks quirements two years later. by forcing U.S. banks to hold Thursday. A $13 billion sale of
similar aims also have been from moving capital where it The move came after debt cri- at least some of their capital two-year floating-rate notes is
rolled out in Switzerland and is needed in a crisis. ses in Greece and other Euro- in Europe. also scheduled for Wednesday. Selling in the bond market
the U.K. If you dont allow the pean countries pressured the U.S. regulators also have The auctions will be a test had intensified after the U.S.
The regulatory goal on both firetrucks to move more than a Continents banks. pushed European counterparts of demand following the Fed- election in early November.
sides of the Atlantic is to en- block from the fire house, you Deutsche Bank AG, one of to be tougher judges of the as- eral Reserves interest-rate in- The prospect of expansive fis-
sure that if a banks parent dont allow them to effectively the banks most affected by the set quality of their banks. This crease two weeks ago. Yields cal policy from President-elect
runs into trouble, there are do their job, Wilson Ervin, a new U.S. rule, increased its approach has grated on regula- on short-term notes, such as Donald Trump in the coming
enough financial resources on former chief risk officer at capital in the U.S. to $10.12 bil- tors and bankers, including the two- and five-year notes, year has added to expectations
hand to support local opera- Credit Suisse Group AG and lion as of November from neg- Deutsche Bank CEO John are highly sensitive to the of higher growth and inflation.
tions. National regulators now vice chairman at the ative $5.6 billion at the end of Cryan, who called on European Feds interest-rate policy. The Fed raised interest rates
have an interest in maintaining Swiss bank, said at the same 2011. regulators to start imple- Trading was thinner than for the first time this year two
stability in their territory, conference as Mr. Chew. But it has criticized the U.S. menting rules that benefit Eu- normal due to the holiday sea- weeks ago and projected three
HSBC Holdings PLC head of And bankers expect the rule, and along with other Eu- rope rather than some policy son, which may exaggerate rate increases for 2017, boost-
regulatory policy James Chew emerging national trend is ropean banks has scaled back of global harmonization. part of the price moves, ana- ing expectations of higher
said at a recent banking con- likely to grow more pro- parts of its U.S. business. Some believe any new rules lysts said. bond yields.
ference in New York. You nounced. Each country is be- More recently, U.S. regula- from Europe could force U.S. Some traders said this con- All thee factors are not go-
have to assume thats where coming more protective and tors have encouraged the big- banks to retreat to London, dition may also affect demand ing away and are likely to con-
were going. more protectionist, Jordi gest U.S. banks to create their which stands to have more in- for this weeks auctions as tinue to pressure bond yields
The proliferation of the new Gual, chairman of Spains larg- own intermediate holding dependent rules after this some investors may stay on higher in 2017, said Praveen
rules, sometimes referred to as est bank by domestic assets, companies that could provide years U.K. vote to leave the EU the sidelines and wait for the Korapaty, head of interest-rate
ringfencing, demonstrate an CaixaBank, said in a recent in- a flexible source of capital and is implemented. new year to make investment strategy at Credit Suisse.

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VP Classic-C Units AS EQ HKG 12/22 USD 14.34 -4.4 -4.5 -1.4
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VP Classic-C Units CAD H AS EQ HKG 12/22 CAD 11.50 -4.0 -4.2 -1.1
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AS
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Mr. Trumps world insist maintain more capital. Critics crease given it was 7.4% at the
banks should, as a quid pro have said the new capital man- time.
quo for rolling back some reg- dates have been set too high, In his 2012 book on the fi-
ulations, maintain higher capi- constraining lending and eco- nancial crisis, Mr. Allison
talshareholders funds that
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China A-Share Fund Cls A AUD H OT
China A-Share Fund Cls A AUD UnH OT
China A-Share Fund Cls A CAD H OT
OT HKG
OT HKG
OT HKG
12/22 AUD
12/22 AUD
12/22 CAD
11.80
11.00
10.93
-6.9
-9.1
-8.3
-9.7
-12.8
-11.2
3.0
NS
2.1
LIST YOUR
China A-Share Fund Cls A EUR H OT OT HKG 12/22 EUR 11.51 -9.2 -12.4 2.0
Between Trumps populist uity ratio in lieu of regulation. China A-Share Fund Cls A EUR UnH OT OT HKG 12/22 EUR 11.69 NS NS NS

victory and the calls for


greater capital byRepubli-
Some in Trumps
Spokesmen for Citigroup
and Goldman declined to com-
China A-Share Fund Cls A GBP H OT
China A-Share Fund Cls A GBP UnH OT
China A-Share Fund Cls A HKD H OT
China A-Share Fund Cls A HKD UnH OT
OT HKG
OT HKG
OT HKG
OT HKG
12/22 GBP
12/22 GBP
12/22 HKD
12/22 HKD
11.53
13.43
11.68
11.23
-5.9
8.1
-8.2
-10.0
-8.9
5.0
-11.0
-13.1
1.5
14.3
2.2
0.7
FUNDS
cans, it is far from given that ment China A-Share Fund Cls A NZD H OT
China A-Share Fund Cls A NZD UnH OT
OT HKG
OT HKG
12/22 NZD
12/22 NZD
11.61
10.07
-6.8
-11.0
-9.9
-14.6
2.2
NS
the largest Wall Street banks world insist banks Mr. Hensarling has pro- China A-Share Fund Cls A RMB (CNH) OT
China A-Share Fund Cls A USD OT
OT HKG
OT HKG
12/22 CNH
12/22 USD
12.57
11.20
-5.1
-10.2
-7.8
-13.2
5.4
0.9
would benefit from their re- posed giving banks relief from
form efforts, said Mark Ca-
should maintain certain regulations if they
China A-Share Fund Cls A USD H OT
China Greenchip-A Units AS
OT HKG
EQ CYM
12/22 USD
12/22 HKD
11.63
50.33
-7.7
-5.0
-10.5
-5.0
2.1
-8.1
China Greenchip-A Units AUD H AS EQ CYM 12/22 AUD 8.49 -4.5 -4.5 -8.4
labria, a former adviser to higher capital levels. meet a 10% leverage ratio. China Greenchip-A Units CAD H AS
China Greenchip-A Units NZD H AS
EQ CYM
EQ CYM
12/22 CAD
12/22 NZD
8.27
8.72
-5.6
-3.5
-5.6
-3.5
-9.6
-7.3
Senate Banking Committee A higher leverage ratio China Greenchip-A Units USD AS EQ CYM 12/22 USD 8.32 -5.1 -5.1 -8.8
China Greenchip-A2 QDIs Units AS EQ CYM 12/22 HKD 9.17 -5.0 -5.0 -8.0
Chairman Richard Shelby (R. could be costly for banks. For GC Hi Yield Inc - Cls A MDIs GBP H OT OT CYM 12/22 GBP 9.61 15.0 15.4 NS
Ala.), and now a fellow at the the top five Wall Street firms, GC Hi Yield Inc-Cls A MDIs AUD H OT
GC Hi Yield Inc-Cls A MDIs CAD H OT
OT CYM
OT CYM
12/22 AUD
12/22 CAD
9.17
9.22
16.9
15.4
17.4
15.9
12.6
11.0 In print & online. Contact:
free-market Cato Institute. Current rules require banks the extra equity required to GC Hi Yield Inc-Cls A MDIs NZD H OT OT CYM 12/22 NZD 9.48 17.6 18.1 13.6
GC Hi Yield Inc-Cls P HKD Acc sh OT OT CYM 12/22 HKD 14.08 15.9 16.3 11.0
Mr. Trumps picks of two to meet several different capi- meet a 10% leverage ra- GC Hi Yield Inc-Cls P HKD MDIs sh OT OT CYM 12/22 HKD 9.08 16.0 16.3 11.0
GC Hi Yield Inc-Cls P MDIs SGD H OT OT CYM 12/22 SGD 9.96 15.8 16.3 11.4
former Goldman Sachs Group tal requirements. One is a le- tio would reduce their average GC Hi Yield Inc-Cls P USD Acc sh OT OT CYM 12/22 USD 14.18 15.7 16.1 10.9
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GC Hi Yield Inc-ClsA MDIs EUR H OT OT CYM 12/22 EUR 10.03 14.0 14.4 NS
nomic teamGary Cohn, to equity as a proportion of total to roughly 7% by 2018, accord- Hi-Div Stk Cls A RMB H Acc OT OT HKG 12/22 CNH 9.89 0.8 0.9 0.3
Hi-Div Stk Cls A RMB UnH Acc OT OT HKG 12/22 CNH 12.10 3.9 4.2 3.1
head the National Economic assets. It is designed to reduce ing to Steven Chubak, a bank Hi-Div Stk Cls A1 OT OT HKG 12/22 USD 70.85 -1.4 -1.5 -2.2
Council, and Steven Mnuchin, the chances a bank will fail by analyst at Nomura Holdings Hi-Div Stk Cls A2 AUD H MDIs OT
Hi-Div Stk Cls A2 CAD H MDIs OT
OT HKG
OT HKG
12/22 AUD
12/22 CAD
8.71
8.78
-1.1
-2.4
-1.2
-2.5
-1.6
-3.0
for Treasury secretarymight acting as a constraint against Inc. Hi-Div Stk Cls A2 GBP H MDIs OT OT HKG 12/22 GBP 8.23 -3.1 -3.2 NS
Hi-Div Stk Cls A2 HKD MDIs OT OT HKG 12/22 HKD 8.98 -1.3 -1.4 -2.3
give Wall Street a powerful borrowing, or leverage. After Barclays PLC analyst Jason Hi-Div Stk Cls A2 MDIs OT OT HKG 12/22 USD 9.85 -1.5 -1.5 -2.2
Hi-Div Stk Cls A2 NZD H MDIs OT OT HKG 12/22 NZD 8.90 -0.8 -0.8 -0.7
voice at the policy table. But the crisis, U.S. regulators re- Goldberg estimates J.P. Mor- Hi-Div Stk Cls A2 RMB H MDIs OT OT HKG 12/22 CNH 8.50 0.8 0.9 0.2
at least two candidates for the quired that big banks maintain gan Chase & Co. alone would Hi-Div Stk Cls A2 RMB UnH MDIs OT
Intel-China Converg Fund-A AUD H AS
OT HKG
EQ CYM
12/22 CNH
12/22 AUD
9.06
8.60
4.1
-8.5
4.6
-9.9
3.2
NS
job of Federal Reserve vice a leverage ratio of at least 5%. need an extra $107 billion of Intel-China Converg Fund-A CAD H AS EQ CYM 12/22 CAD 9.98 NS NS NS
Intel-China Converg Fund-A NZD H AS EQ CYM 12/22 NZD 10.11 NS NS NS
chairman in charge of bank Some conservatives would equity, which would represent Intel-China Converg Fund-A Units AS EQ CYM 12/22 USD 130.40 -10.8 -11.2 -3.6
oversight, arguably the single go further. Thomas Hoenig, more than a 40% increase Intel-Chinese Mainland Foc Fund AS
VP Classic-A Units AS
EQ CYM
EQ HKG
12/22 USD
12/22 USD
36.54
252.65
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most powerful bank regulatory vice chairman of the Federal from its current level. VP Classic-B Units AS EQ HKG 12/22 USD 113.72 -4.4 -4.5 -1.5
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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B8 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 12 p.m. New York time
Last Year ago
19403.06 s 6.42, or 0.03% Year-to-date s 1.94% 360.48 s 0.50, or 0.14% Year-to-date t 1.46% 2269.48 s 5.69, or 0.25% Trailing P/E ratio * 24.95 22.95
High, low, open and close for each 52-wk high/low 19494.53 14952.02 High, low, open and close for each 52-wk high/low 369.68 303.58 High, low, open and close for each P/E estimate * 19.04 17.47
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 2.07 2.14
All-time high: 2271.72, 12/13/16

* P/E data based on as-reported earnings from Birinyi Associates Inc.

19200 370 2260


Session high
DOWN UP
18600 360 2230
t

Session open Close

Close Open
t

65-day moving average


18000 350 65-day moving average 2200
Session low

17400 340 2170

16800 330 2140

65-day moving average 16200 320 2110

Bars measure the point change from session's open


15600 310 2080
Sept. Oct. Nov. Dec. Sept. Oct. Nov. Dec. Sept. Oct. Nov. Dec.

International Stock Indexes Data as of 12 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 12 p.m. ET
World The Global Dow 2535.71 1.11 0.04 2033.03 2570.92 8.5 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1672.53 0.26 0.02 1471.88 1956.39 2.5 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 844.71 2.26 0.27 691.21 1044.05 6.4 3.250 Australia 2 1.912 68.6 71.2 65.3 103.8 1.918 1.771 2.037
4.750 10 2.885 30.9 33.0 41.1 53.2 2.872 2.770 2.773
Americas DJ Americas 546.56 1.24 0.23 433.38 548.56 12.2
1.250 Belgium 2 -193.2 -191.1 -176.9 -130.3 -0.706 -0.651 -0.305
-0.706
Brazil Sao Paulo Bovespa 58795.71 175.46 0.30 37046.07 65291.06 35.6
1.000 10 0.584 -199.2 -195.7 -169.2 -128.0 0.584 0.667 0.962
Canada S&P/TSX Comp 15328.15 Closed 11531.22 15414.57 17.8
1.000 France 2 -0.691 -191.8 -189.7 -177.6 -128.2 -0.691 -0.657 -0.283
Mexico IPC All-Share 45242.26 252.68 0.56 39924.09 48956.06 5.3
0.250 10 0.730 -184.6 -181.1 -156.7 -125.2 0.730 0.792 0.990
Chile Santiago IPSA 3145.66 2.98 0.09 2730.24 3490.53 6.9
0.000 Germany 2 -0.790 -201.7 -199.6 -185.5 -132.7 -0.790 -0.737 -0.328
U.S. DJIA 19952.45 18.64 0.09 15450.56 19987.63 14.5
0.000 10 0.262 -231.5 -227.9 -211.6 -161.1 0.262 0.243 0.631
Nasdaq Composite 5491.19 28.50 0.52 4209.76 5512.37 9.7
0.250 Italy 2 -0.145 -137.1 -135.0 -101.1 -88.9 -0.145 0.107 0.109
S&P 500 2269.48 5.69 0.25 1810.10 2277.53 11.0
1.250 10 1.851 -72.5 -69.0 -25.8 -57.4 1.851 2.101 1.668
CBOE Volatility 11.95 0.51 4.46 10.93 32.09 34.4
0.100 Japan 2 -0.176 -140.2 -138.2 -126.0 -100.9 -0.176 -0.142 -0.010
EMEA Stoxx Europe 600 360.48 0.50 0.14 303.58 369.68 1.5 0.100 10 0.065 -251.1 -248.2 -232.1 -196.3 0.060 0.038 0.279
Stoxx Europe 50 3000.70 2.37 0.08 2556.96 3139.28 3.2 4.000 Netherlands 2 -0.735 -196.1 -194.0 -182.2 -135.6 -0.735 -0.703 -0.358
France CAC 40 4848.28 8.60 0.18 3892.46 4856.96 4.6 0.500 10 0.399 -217.8 -214.2 -194.2 -144.5 0.399 0.418 0.797
Germany DAX 11472.24 22.31 0.19 8699.29 11481.46 6.8 4.450 Portugal 2 0.172 -105.5 -103.4 -73.7 -86.5 0.172 0.381 0.133
Israel Tel Aviv 1475.53 13.73 0.94 1372.23 1535.96 3.5 2.875 10 3.786 120.9 124.5 123.3 29.3 3.786 3.592 2.535
Italy FTSE MIB 19390.83 45.81 0.24 15017.42 21705.71 9.5 0.250 Spain 2 -0.252 -147.9 -145.8 -122.1 -87.6 -0.252 -0.103 0.123
Netherlands AEX 483.58 0.72 0.15 378.53 484.21 9.5 1.300 10 1.402 -117.4 -113.9 -78.6 -39.3 1.402 1.573 1.849
Russia RTS Index 1135.79 11.14 0.99 607.14 1170.51 50.0 4.250 Sweden 2 -0.610 -183.7 -181.6 -179.9 -144.5 -0.610 -0.680 -0.447
Spain IBEX 35 9376.60 8.90 0.10 7579.80 9724.90 1.8 1.000 10 0.651 -192.6 -189.1 -183.3 -120.6 0.651 0.526 1.036
Switzerland Swiss Market 8259.45 26.81 0.33 7425.05 8908.50 6.3 1.250 U.K. 2 0.073 -115.4 -113.3 -99.3 -38.0 0.073 0.126 0.618
South Africa Johannesburg All Share 49400.56 Closed 45975.78 54704.22 2.6 2.000 10 1.231 -134.6 -133.9 -106.9 -32.0 1.203 1.290 1.922
Turkey BIST 100 76699.41 329.06 0.43 68230.47 86931.34 6.9 1.000 U.S. 2 1.227 ... ... ... ... 1.206 1.119 0.998
U.K. FTSE 100 7068.17 Closed 5499.51 7129.83 13.2 2.000 10 2.576 ... ... ... ... 2.541 2.359 2.242
Asia-Pacific DJ Asia-Pacific TSM 1412.63 0.28 0.02 1188.42 1499.93 1.6
Australia S&P/ASX 200 5627.90 Closed 4765.30 5643.90 6.3 Commodities Prices of futures contracts with the most open interest 12 p.m. New York time
China Shanghai Composite 3114.66 7.90 0.25 2655.66 3572.88 12.0 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
Hong Kong Hang Seng 21574.76 Closed 18319.58 24099.70 1.5 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 12/26/2016
India S&P BSE Sensex 26213.44 406.34 1.57 22951.83 29045.28 0.4 One-Day Change Year Year
Indonesia Jakarta Composite 5102.95 75.25 1.50 4414.13 5472.32 11.1 Commodity Exchange Last price Net Percentage high low
352.75 7.00 2.02% 453.25 325.00
Japan Nikkei Stock Avg 19403.06 6.42 0.03 14952.02 19494.53 1.9 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 1014.25 16.75 1.68 1,135.50 875.75
Malaysia Kuala Lumpur Composite 1619.68 2.53 0.16 1600.92 1727.99 4.3
Wheat (cents/bu.)
CBOT
CBOT 409.25 15.75 4.00 569.00 393.00
New Zealand S&P/NZX 50 6877.00 Closed 5933.96 7571.11 8.7
Live cattle (cents/lb.) CME 115.950 -0.350 -0.30% 124.400 97.800
Pakistan KSE 100 46920.47 230.74 0.49 30564.50 47210.06 43.0
Cocoa ($/ton) ICE-US 2,249 -15 -0.66 3,186 2,144
Philippines PSEi 6658.20 94.53 1.44 6084.28 8102.30 4.2
Coffee (cents/lb.) ICE-US 133.90 -2.25 -1.65 179.55 121.80
Singapore Straits Times 2885.76 14.71 0.51 2532.70 2960.78 0.1
Sugar (cents/lb.) ICE-US 18.70 0.55 3.03 24.10 13.48
South Korea Kospi 2042.17 4.42 0.22 1835.28 2068.72 4.1
Cotton (cents/lb.) ICE-US 69.70 -0.17 -0.24 78.00 55.79
Taiwan Weighted 9109.27 1.27 0.01 7664.01 9392.68 9.2 Robusta coffee ($/ton) ICE-EU 2082.00 18.00 0.87 2,207.00 1,469.00
Thailand SET 1517.08 1.85 0.12 1224.83 1552.64 17.8
Copper ($/lb.) COMEX 2.5205 0.0415 1.67 2.7530 1.9780
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1137.00 3.40 0.30 1,387.10 1,076.60
Silver ($/troy oz.) COMEX 15.880 0.121 0.77 21.065 14.260
Currencies London close on Dec. 27 Aluminum ($/mt)* LME 1,718.50 -2.50 -0.15 1,779.00 1,451.50
Tin ($/mt)* LME 21,050.00 150.00 0.72 21,750.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Tue YTDchg Copper ($/mt)* LME 5,496.00 56.00 1.03 5,950.00 4,320.50
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,110.00 -5.50 -0.26 2,475.00 1,598.00
20%
s Europe Zinc ($/mt)* LME 2,602.00 30.00 1.17 2,911.00 1,467.00
Yen Bulgaria lev 0.5346 1.8705 3.9 Nickel ($/mt)* LME 10,640.00 35.00 0.33 11,770.00 7,750.00
10
s Croatia kuna 0.1385 7.221 3.0 Rubber (Y.01/ton) TCE 257.20 1.70 0.67 n.a. n.a.
Euro Euro zone euro 1.0458 0.9563 3.9
0 Palm oil (MYR/mt) MDEX 3130.00 70.00 2.29 3,202.00 2,204.00
Czech Rep. koruna-b 0.0387 25.843 3.8
Denmark krone 0.1406 7.1101 3.5 Crude oil ($/bbl.) NYMEX 53.96 0.94 1.77 55.44 35.10
10 sWSJ Dollar index
0.003391 294.94 1.5
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.7281 0.0474 2.82 1.7294 1.0860
Iceland krona 0.008813 113.47 12.8 RBOB gasoline ($/gal.) NYMEX 1.6783 0.0384 2.34 1.6788 1.0122
20 Norway krone 0.1148 8.7103 1.5
0.2373 4.2135 7.4
Natural gas ($/mmBtu) NYMEX 3.712 0.080 2.20 3.7410 2.4680
2016 Poland zloty
Russia ruble-d 0.01647 60.721 15.5 Brent crude ($/bbl.) ICE-EU 56.85 0.95 1.70 58.53 35.13
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1084 9.2271 9.2 Gas oil ($/ton) ICE-EU 506.25 18.25 3.74 507.00 325.00
Tue Tue
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 0.9725 1.0283 2.6
Turkey lira 0.2837 3.5247 20.8 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1289 7.7606 0.1
Ukraine hryvnia 0.0376 26.6250 11.0
Argentina peso-a 0.0644 15.5290 20.0
India rupee
Indonesia rupiah
0.0147
0.0000744
67.9960 2.7
13443 2.8
U.K. pound 1.2257 0.8159 20.2 Cross rates London close on Dec 27
Brazil real 0.3052 3.2766 17.3 Middle East/Africa
Japan yen 0.008510 117.51 2.3
Canada dollar 0.7378 1.3554 2.1 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002994 333.99 1.4 Bahrain dinar 2.6522 0.3771 0.01
Chile peso 0.001480 675.60 4.7 Australia 1.3908 1.7046 1.3526 0.0118 0.1792 1.4544 1.0260 ...
Macau pataca 0.1251 7.9934 0.1 Egypt pound-a 0.0532 18.8011 140.1
Colombia peso 0.0003341 2993.20 5.7 Canada 1.3554 1.6611 1.3180 0.0115 0.1746 1.4172 ... 0.9746
Malaysia ringgit-c 0.2233 4.4785 4.1 Israel shekel 0.2604 3.8399 1.4
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.6891 1.4512 0.8 Kuwait dinar 3.2700 0.3058 0.8 Euro 0.9563 1.1722 0.9299 0.0081 0.1232 ... 0.7055 0.6876
Mexico peso-a 0.0483 20.7189 20.5
Pakistan rupee 0.0095 104.825 0.1 Oman sul rial 2.5972 0.3850 0.02 Hong Kong 7.7606 9.5121 7.5470 0.0660 ... 8.1156 5.7259 5.5806
Peru sol 0.2958 3.3810 1.0
Philippines peso 0.0201 49.752 6.2 Qatar rial 0.2746 3.642 0.03 Japan 117.5140 144.0300 114.2700 ... 15.1420 122.8800 86.7100 84.4900
Uruguay peso-e 0.0353 28.360 5.2
Singapore dollar 0.6898 1.4496 2.2 Saudi Arabia riyal 0.2665 3.7521 0.04 1.0283 1.2605 ... 0.0088 0.1325 1.0754 0.7587 0.7393
Venezuela bolivar 0.100050 10.00 58.5 Switzerland
South Korea won 0.0008273 1208.73 2.8 South Africa rand 0.0717 13.9387 9.9
U.K. 0.8159 ... 0.7933 0.0069 0.1051 0.8533 0.6020 0.5867
Asia-Pacific Sri Lanka rupee 0.0066845 149.60 3.7 Close Net Chg % Chg YTD % Chg
0.7190 1.3908 Taiwan dollar 0.03097 32.288 1.9 U.S. ... 1.2257 0.9725 0.0085 0.1289 1.0458 0.7378 0.7190
Australia dollar 1.3 WSJ Dollar Index 93.38 0.15 0.16 3.56
China yuan 0.1438 6.9525 7.1 Thailand baht 0.02776 36.020 0.03 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 12 p.m. New York time


Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.76111% 0.42390% TakedaPharm 4502 4851.00 -0.08 -20.02 RoyDtchShell A RDSA 2213.50 ... 45.05 Last: 140.16 t 0.68, or 0.48% YTD s 2.9%
Three month 0.99706 0.60670 Asia Titans HK$ TencentHoldings 0700 179.70 -0.99 17.68 SAP SAP 82.35 0.41 12.22
Six month 1.31656 0.83340 HK$ AIAGroup 1299 43.95 -0.34 -5.69 TokioMarineHldg 8766 4859.00 -0.08 3.12 Sanofi SAN 76.22 0.47 -3.03 High 155
One year 1.68956 1.15950 65.42 0.41 24.47 50day
AstellasPharma 4503 1635.00 0.06 -5.57 ToyotaMtr 7203 6968.00 -0.33 -6.94 SchneiderElectric SU Close 150
Euro Libor AU$ AustNZBk ANZ 30.73 0.03 10.03 AU$ Wesfarmers WES 42.08 -0.78 1.13 Siemens SIE 115.80 0.48 28.84 Low moving average
145
One month -0.38000% -0.20429% AU$ BHP BHP 24.63 -2.03 37.91 AU$ WestpacBanking WBC 32.64 -0.12 -2.74 CHF Syngenta SYNN 409.10 0.25 4.28 t
Three month -0.33357 -0.12714 HK$ BankofChina 3988 3.35 -0.30 -3.18 AU$ Woolworths WOW 23.85 -0.54 -2.65 Telefonica TEF 8.83 -0.21 -12.88 140
Six month -0.22657 -0.03786 HK$ CKHutchison 0001 88.10 -0.73 -15.61 Total FP 48.38 0.03 21.99 135
One year -0.08557 0.05929 HK$ CNOOC 0883 9.57 -1.24 18.59 Stoxx 50 CHF UBSGroup UBSG 16.18 0.62 -17.11
130
Euribor AU$ CSL CSL 97.80 -0.40 -7.13 Unilever UNA 39.08 -0.15 -2.57
CHF ABB ABBN 21.66 0.05 20.60
One month -0.36900% -0.20200% Canon 7751 3416.00 -0.41 -7.05 Unilever ULVR 3272.50 0.34 11.82 30 7 14 21 28 4 11 18 25 2 9 16 23
ASMLHolding ASML 106.50 0.61 29.01
Three month -0.31800 -0.13200 CentralJapanRwy 9022 19485 -0.23 -9.79 Vinci DG 64.53 0.08 9.11 Oct. Nov. Dec.
AXA CS 24.16 0.48 -4.22
Six month -0.22000 -0.04200 HK$ ChinaConstructnBk 0939 5.62 3.12 5.84 VodafoneGroup VOD 200.55 0.40 -9.25
AirLiquide AI 105.40 0.19 1.69
One year -0.08100 0.05800 HK$ ChinaLifeInsurance 2628 20.05 ... -20.12 CHF ZurichInsurance ZURN 281.30 -0.07 8.86
156.85
Yen Libor HK$ ChinaMobile 0941 80.50 -0.49 -8.00


Allianz
AnheuserBuschInBev
ALV
ABI 99.49
-0.06 -4.10
0.41 -13.03 DJIA Stoxx 50
One month -0.03500% 0.05071% HK$ ChinaPetro&Chem 0386 5.48 -1.79 16.84 AstraZeneca AZN 4407.00 1.49 -4.54 Last: 3000.70 s 2.37, or 0.08% YTD t 3.2%
Three month -0.00979 0.07714 AU$ CmwlthBkAust CBA 82.50 -0.23 -3.54 BASF BAS 87.74 0.33 24.07
$ AmericanExpress AXP 74.97 0.01 7.80
Six month 0.02136 0.11786 EastJapanRailway 9020 10250 -0.10 -10.48 BNP Paribas BNP 60.68 -0.80 16.18
$ Apple AAPL 117.67 0.99 11.79 3000
One year 0.12943 0.22143 Fanuc 6954 20185 0.10 -4.25 BT Group BT.A 370.35 -0.16 -21.49
$ Boeing BA 157.03 -0.50 8.60
$ Caterpillar CAT 94.47 0.16 39.00 2940
Offer Bid Hitachi 6501 636.60 -0.38 -7.94 BancoBilVizAr BBVA 6.44 -0.25 -2.46
TW$ Hon Hai Precisn 2317 83.50 0.24 106.68 $ Chevron CVX 118.71 0.24 31.96 2880
Eurodollars BancoSantander SAN 4.95 -0.40 9.75
HondaMotor 7267 3497.00 0.06 -10.56 $ CiscoSystems CSCO 30.76 0.75 13.28
One month 0.8500% 0.7500% Barclays BARC 224.95 -0.90 2.76 2820
KRW HyundaiMtr 005380 144500 ... -3.02 $ Coca-Cola KO 41.62 0.05 -3.12
Three month 1.1000 1.0000 Bayer BAYN 98.72 0.22 -14.75
2760
HK$ Ind&Comml 1398 4.49 ... -4.06 $ Disney DIS 105.19 0.04 0.10
Six month 1.3000 1.2000 BP BP. 503.00 ... 42.09
$ DuPont DD 75.03 0.13 12.66
One year 1.6500 1.5500 JapanTobacco 2914 3922.00 -0.33 -12.28 BritishAmTob BATS 4558.00 0.25 20.87 2700
KDDI 2974.00 0.80 -5.71
$ ExxonMobil XOM 90.90 0.21 16.61
Latest 52 wks ago 9433 Daimler DAI 70.96 -0.10 -8.53 $ GeneralElec GE 31.96 0.27 2.62 30 7 14 21 28 4 11 18 25 2 9 16 23
Mitsubishi 8058 2521.00 -0.06 24.31 DeutscheTelekom DTE 16.19 0.43 -2.03 $ Oct. Nov. Dec.
Prime rates GoldmanSachs GS 242.35 0.57 34.47
MitsubishiElectric 6503 1609.00 -1.41 25.46 Diageo DGE 2097.00 0.60 12.95 $
U.S. 3.75% 3.50% HomeDepot HD 134.97 -0.06 2.06
MitsubishiUFJFin 8306 738.10 0.26 -2.51 ENI ENI 15.34 ... 11.16 $
Canada 2.70 2.70 Intel INTC 37.20 0.64 8.00
1629.00 0.28 12.69 1549.00
Japan
Hong Kong
1.475
5.00
1.475
5.00


Mitsui
Mizuho Fin
8031
8411 215.70 0.37 -11.42


GlaxoSmithKline
HSBC Hldgs
GSK
HSBA 646.50
0.29 12.82 $
-1.33 20.57 $
IBM
JPMorganChase
IBM
JPM
167.35
86.93
0.38 21.60
-0.14 31.65
Dow Jones Industrial Average P/E: 22
NTTDoCoMo 9437 2660.50 -0.45 7.11 INGGroep INGA 13.54 -0.62 33.46 $ J&J JNJ 115.64 -0.27 12.58 Last: 19952.45 s 18.64, or 0.09% YTD s 14.5%
Policy rates
ECB 0.00% 0.05%
AU$ NatAustBnk NAB 30.65 -0.49 1.49 ImperialBrands IMB 3539.00 1.09 -1.32 $ McDonalds MCD 123.12 -0.02 4.22
Britain 0.25 0.50
NipponTeleg 9432 4927.00 -0.38 1.88 IntesaSanpaolo ISP 2.45 -0.33 -20.60 $ Merck MRK 59.97 0.69 13.54 19800
Switzerland 0.50 0.50
NissanMotor 7201 1198.50 0.33 -6.33 LVMHMoetHennessy MC 179.95 0.36 24.19 $ Microsoft MSFT 63.62 0.60 14.67
Panasonic 6752 1215.00 -0.65 -2.06 LloydsBankingGroup LLOY 63.80 -0.31 -12.69 $ Nike NKE 51.70 -0.41 -17.29
19250
Australia 1.50 2.00
HK$ PingAnInsofChina 2318 38.40 -0.52 -10.49 LOreal OR 172.70 0.09 11.20 $ Pfizer PFE 32.52 0.12 0.74
U.S. discount 1.25 1.00 18700
Fed-funds target 0.50 0.25
$ RelianceIndsGDR RIGD 31.45 0.96 2.78 NationalGrid NG. 951.30 1.91 1.47 $ Procter&Gamble PG 84.52 -0.52 6.43
Call money 2.50 2.25
KRW SamsungElectronics 005930 1799000 0.06 42.78 CHF Nestle NESN 73.25 0.21 -1.74 $ 3M MMM 179.00 0.14 18.83 18150
Seven&I Hldgs 3382 4487.00 -0.55 -19.15 CHF Novartis NOVN 74.15 0.34 -14.57 $ Travelers TRV 121.71 -0.34 7.84
Overnight repurchase rates 17600
U.S. 0.55% 0.38%
SoftBankGroup 9984 7868.00 0.27 28.16 DKK NovoNordiskB NOVO-B 254.80 -0.08 -36.28 $ UnitedTech UTX 110.50 -0.14 15.02
Euro zone n.a. n.a.
Sony 6758 3324.00 -0.27 10.73 Prudential PRU 1605.00 0.06 4.83 $ UnitedHealth UNH 163.10 0.04 38.64 30 7 14 21 28 4 11 18 25 2 9 16 23
Sumitomo Mitsui 8316 4586.00 0.48 -0.43 ReckittBenckiser RB. 6811.00 -0.06 8.44 $ Visa V 78.42 0.35 1.12 Oct. Nov. Dec.
Sources: WSJ Market Data Group, SIX HK$ SunHngKaiPrp 0016 97.25 -0.66 3.73 RioTinto RIO 3064.00 -0.55 54.79 $ Verizon VZ 53.49 -0.35 15.73 Note: Price-to-earnings ratios are for trailing 12 months
Financial Information, Tullett TW$ TaiwanSemiMfg 2330 180.00 0.28 25.87 CHF RocheHldgctf ROG 233.50 0.56 -15.52 $ Wal-Mart WMT 69.61 0.10 13.56 Sources: WSJ Market Data Group; Birinyi Associates
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Wednesday, December 28, 2016 | B9

THE PROPERTY REPORT

Chinese Taste Plain-Vanilla U.S. Assets


Residential properties their assets and are discover-
ing other, less conspicuous
like student housing, ways to make money in real
senior-living centers estate.
Health-care real estate,
gain investors favor which isnt a major cash cow
for property developers in
BY ESTHER FUNG China, is getting some atten-
tion from Chinese private-eq-
Big institutional investors uity players and insurers.
from China have grabbed These investors arent just
headlines with flashy pur- eyeing steady, long-term fi-
chases of luxury hotels and nancial returns from these as-
condominiums in the U.S. in sets given the aging popula-
recent years, sometimes at re- tion in the U.S. They also are
cord prices. looking to gain expertise from
Now they are starting to North America to bring back
shun trophy properties in fa- to China, focusing initially on
vor of plain-vanilla assets that services for seniors.
cater to middle-class consum- Cindat Capital Management
ers. Ltd. and Union Life Insurance
Among their favorites: Co. Ltd. are investing in a
midtier residential properties, $930 million joint venture
student housing, senior-living with health-care real-estate in-
centers and skilled nursing vestment trust Welltower Inc.
homes. Chinese investors also in a portfolio of 11 senior
are looking outside the glam- housing and 28 skilled-nursing
our cities of New York, Los care assets. Cindat and Union
Angeles and San Francisco to Life will own a 75% interest
smaller cities. and Welltower the remaining
The moves show how the 25%.
voracious buying in recent Chinese insurers all be-

GFF ARCHITECTS
years that pushed up prices of lieve there are strong syner-
high-profile assets to record gies between senior care and
levels is now prompting for- their insurance policies, said
eign investors to think more Allan He, senior partner at
strategically about the U.S. Grand China Fund is investing in a joint venture to build a 166-unit student-housing project near the University of Texas-Austin. Cindat Capital Management,
market. adding that getting investment
Nanjing-based developer officer of Landsea Holdings These simple and enduring Investing in student hous- believes this situation is tem- returns and management
Landsea Group is building Corp., the groups U.S. arm. principles have helped us fo- ing is a strategy were taking porary. know-how kills two birds
homes in Dublin, Sunnyvale The firm is building projects cus away from the luxury mar- in response to Americas over- The gateway cities in the with one stone.
and Walnut Creek in California that will be sold primarily to ket and investor-centric proj- heating market. The profit U.S. still draw the biggest in- Toledo, Ohio-based Well-
and in Weehawken, N.J. Ten of the domestic market. ects that carry higher margins may not be especially vestments from Chinese real- tower said Chinese investors
Shenzhen-based China Vanke While Vankes first invest- potential risk, said Kai-yan high, but its very stable, said estate investors. But as air- took notice of its earlier-es-
Co.s 14 U.S. projects are fo- ment in the U.S. in 2013 is a Lee, managing director of Zhang Mingeng, chairman of lines look to offer more direct tablished partnerships with
cused on the middle-tier con- joint venture with Tishman Vanke Holdings USA. Grand China Fund. flights from China to other cit- Canadian pension funds.
dominium market, some of Speyer to build the Lumina, a Grand China Fund is invest- Mr. Zhang said that Austin ies such as Houston, Seattle Chinese investors are also
them with rental units. luxury condominium project in ing in a joint venture to build isnt a big city but has more and Atlanta, the shortened looking abroad for opportuni-
Landseas target markets San Francisco, the firm said it a 166-unit, 464-bed student- than 10 universities and train- routes could propel further in- ties to gain experience in and
are first-time and move-up prefers to focus on building housing project near the Uni- ing institutes, with strong de- vestments. strategic insights about se-
home buyers, to whom it will homes where there is a con- versity of Texas-Austin. The mand for and insufficient sup- After seeing a rapid in- niors housing, with an eye to-
offer single-family and multi- siderable buyer pool whose Beijing-based fund had in- ply of student housing. crease in wealth and insurance ward aging population growth
family homes for various demand is necessity-driven vested in 20 other housing- He said Chinas capital con- premiums in recent years, Chi- and future demand in China,
stages of the customers lives, and less volatile than the lux- rental projects in eight cities trols could prompt the fund to nese investors and insurers said Tom DeRosa, CEO of
said John Ho, chief executive ury segment. around the country. slow its U.S. purchases, but say they need to diversify Welltower.

The Land of a Thousand Teardowns


BY THERESA AGOVINO of vacant lots had stifled new family housing starts, or about cession, builders said. That
construction. 55,000 homes, in the U.S., ac- has drawn more competitors
Seven years ago, Rob Fisher Over the past few years, the cording to the NAHB. Mr. Di- to the market and pushed up
realized there was a huge dis- land beneath older homes has etz said the association housing prices, making it
connect between what home become more valuable than doesnt have historical data tougher to turn a profit. Build-
buyers were looking for in the houses themselves. Build- but that his conversations ers said the number of compa-
Northern Virginia and what ers said it is easier, and not with builders suggest the nies in the teardown segment
was available. much more expensive, to build numbers are growing, espe- has grown from a handful to
Single-story brick homes a new house than to renovate cially in long-established sub- anywhere between 30 and 40.
with 2,000 square feet or less and expand an outdated one. urbs with older housing stock We often find ourselves in
that were more than 50 years Northern Virginia is a around cities such as New bidding wars, said Rob Cap-
old were relatively plentiful. pretty hot area for tear- York, Boston and Washington. pellini, president and founder
The two-story modern resi- In all, there were 8,000 of Evergreene Homes, a sub-
BTW IMAGES

dences with more than 3,500 teardowns in the Northeast re- sidiary of his larger construc-
square feet that young fami- gion last year, only 100 less tion firm, Evergreene Cos.
lies desired were in short sup-
A dearth of vacant than in the much larger Mid- Mr. Cappellini said that
ply. lots had stifled new west and 2,600 less than in having to pay higher prices for The teardown business in Northern Virginia is booming, including
A lot of the homes have the even larger Western re- the homes has cut into profit areas like McLean, Arlington and Vienna.
outlived their usefulness, said
construction in gion of the country. That is margins. He said the company
Mr. Fisher, founder of Fisher Northern Virginia. mainly because of the vast dif- earns higher margins building Likewise, Mr. Fisher of for $1.3 million to $2 million.
Custom Homes, which spe- ference in the age of the hous- planned communities but has Fisher Custom Homes said he Roughly 60% of Mr. Fishers
cializes in razing older houses ing stock. New York state has no plans to abandon the tear- is adjusting his operations to business comes from tear-
and replacing them with new the oldest housing stock with down business. cope with the more competi- downs he purchases while the
dwellings. My current buyer downs, said Robert Dietz, the a median age of 59 years, Its a steady stream of in- tive market. He rarely buys remainder stems from people
wants to live in a convenient chief economist for the Na- while Massachusetts is second come and there is demand, homes in McLean anymore be- who have bought properties
area but they have greater af- tional Association of Home oldest at 56 years, according Mr. Cappellini said. He added cause the costs have become they wanted razed, he said.
fluence and want bigger, more Builders, a Washington-based to the 2015 American Commu- that the company completed prohibitively expensive, with a Right now, he is finishing two
state-of-the-art homes. trade group. There are al- nity Survey by the U.S. Census 28 teardowns this year, up teardown costing as much as homes and is slated to start
The teardown business in ready established, nice neigh- Bureau. Nevada has the youn- from 21 in 2015 and 16 in 2014. $1 million, he said. Most of his three more in the spring. He is
Northern Virginia is booming. borhoods with nice schools, so gest housing stock, with a me- This year, teardowns ac- work is done in Vienna, where still looking around but is be-
Areas like McLean, Arlington theres incentive to replace dian age of 21. Virginia is in counted for about 15% of the he says it is still possible to ing very selective as the mar-
and Vienna are highly coveted homes. the middle at 34 years. companys revenue, a figure he purchase a home for between ket grows more competitive.
because of their proximity to Last year, teardowns repre- Teardowns in Northern Vir- estimates will grow to 20% in $550,000 and $750,000, raze it Im pretty conservative,
Washington, D.C., but a dearth sented almost 8% of single ginia accelerated after the re- 2017. and build another that will sell he said.

Portlands Office Market Moves Beyond Its Industrial Core


BY BRIAN LIBBY front district near downtown. Troy Doss, a senior planner
The redevelopment decision for the city of Portland said,
PORTLAND, Ore.On a re- came partly because the facil- We didnt see it knocking out
cent afternoon at the Swift ad- ity was becoming obsolete industrial uses.
vertising agencys new offices unable to produce todays Today, the city is expanding
in this citys Slabtown district, larger bargesbut also be- allowances for creative office
employees milled about an cause it is more profitable to space in its Central City 2035
open floor plan with cubicle- redevelop the longtime indus- plan, recently approved by
free desks giving way to a spa- trial property, with high-den- Portlands city council.
cious common area boasting a sity office and retail along a Rubbing elbows with indus-
kitchen and sofas. Natural public riverside greenway. trial businesses seems to have
light streamed into the Its living here, working an attraction for new-economy
30,000-square-foot former here, having recreation and companies. Even as Swift has
warehouse via arrays of new having access to the river, grown substantially over its
skylights and glass walls. said Thomas W. Henneberry, nine-year history, adding cli-
The rehabbed building is chief operating officer for the ents like Starbucks Corp., Nike
part of a wave of redevelop- planned Zidell Yards develop- Inc. and Nestl SA while ne-
ment intended to lure tech and ment on the barge site, of the cessitating a series of moves
creative companies to Port- companys vision. to accommodate more employ-
lands gritty industrial core. Even so, City of Portland ees, co-founders Liz Valentine
The citys office market is leaders believe they will be and Alicia McVey always kept
RALPH LAUER/ZUMA PRESS

in transition. With unemploy- able to retain the light-indus- the company in Slabtown.
ment at a 15-year low and the trial businesses located in Its got grit. Its not so
nations third-lowest office va- these enclaves even as they at- manicured, Ms. McVey said,
cancy rate in 2015, landlords tract more tech and creative and that feels welcoming to a
are getting more creative in businesses. fledgling company, which is
hopes of landing higher-pay- In 2006, for example, the how we started.
ing tenants. city amended zoning in the Swifts headquarters, which
Manufacturing still contrib- Manufacturing contributes about 26% to the Portland metropolitan areas gross domestic product. heretofore-industrial Central recently won an American In-
utes a higher percentage to Eastside to allow creative of- stitute of Architects award for
the Portland metropolitan manufacturing businesses sity and leader of the consult- displaced. fice space in a portion of the architects Beebe Skidmore,
areas gross domestic product while diversifying these dis- ing firm Johnson Economics. Earlier this year, one of district. The newly rezoned was intended as a multitenant
than any other major U.S. city, tricts with tech and creative A tech firm may have 175 central city Portlands most land, located just across the speculative office project initi-
about 26%. With industrial va- companies. square feet per employee visible industrial businesses, Willamette River from down- ated by local developer Proj-
cancy at record lows, Portland Its the business side of while a manufacturing firm Zidell Marine Co., announced town Portland, proved so pop- ect. But the building was tai-
is trying to strike a balance gentrification, said Jerry might be 500 square [feet] per it would cease operations at ular that even during the re- lored to the ad agencys needs
many cities have found elu- Johnson, a real-estate profes- employee. People using their its waterfront barge-building cession demand increased by after it signed on early in the
sive: retaining central-city sor at Portland State Univer- spaces less intensively will be facility in the South Water- roughly 5% to 8% annually. redevelopment.
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To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B10 | Wednesday, December 28, 2016 THE WALL STREET JOURNAL.

MARKETS
Surging Buybacks Fuel Stock Boom Financing
Cars May
Trump victory raises 2200
Big Ticket
prospects that tax
revamp will aid share
Repurchases have helped fuel the rise of U.S. stock indexes since the
nancial crisis, reecting the appeal of a practice that can reduce share
counts, boost per-share earnings and appease restive shareholders.
2000

1800
GetEasier
repurchases in 2017 Many rms such as Boeing have emerged as major repurchasers. SHANGHAIChina is con-
S&P 500 1600 sidering lifting the current
BY CORRIE DRIEBUSCH 80% limit on the amount of a
AND AARON KURILOFF 1400 car price that consumers can
Annual $4 trillion 1200
borrow to finance a purchase,
Corporate stock repur- market-value the central bank said Tuesday,
chases are on the upswing change in the in a fresh move by Beijing to
1000
once again, wrong-footing S&P 500 3 support the auto industry.
skeptics who predicted 2016 800 The Peoples Bank of China
would mark the beginning of S&P 500 said on its website that it and
companies' 2 600
the end of a postcrisis spend- the Chinese banking regulator
ing spree. buybacks have moved to revise the auto-
Through Dec. 16, companies 400 finance regulation, including
1
this month have stepped up 200
making the loan-to-value ratio
buybacks by nearly two-thirds more flexible. Exactly how
over the same period last year, 0 0 much a buyer can borrow will
according to Goldman Sachs 2009 10 11 12 13 14 15 16
be set based on broader eco-
Group Inc. Boeing Co. this nomic factors and consulta-
month replaced an existing Boeing stock price Boeing buybacks, by year tions with the automotive in-
buyback program with a new $200 Average repurchase Number of shares dustry, it added.
$14 billion authorization. price by year Under the current policy, in
2007 9,387,168
The outlook for buybacks, 160 place since 2004, consumers
like so much else in financial 2008 7,566,972 can borrow up to 80% of a
markets, has been upended by 2009 0 cars price from banks or other
120
the Nov. 8 election of Donald financial institutions. For used
2010 0
Trump as president. After re- cars, the cap stands at 50% of
purchases hit a record in 2015, 80 2011 0 the car price. The central bank
they had slowed this year. 2012 0 said it will solicit comments
Many analysts predict they 40 about the revised regulation in
2013 7,570,153
will decline next year, reflect- the coming month.
ing soft corporate-earnings 2014 7,822,164 The proposed relaxation
growth and stretched stock 0 comes after China earlier this
2015 5,292,358
valuations. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 month decided to extend a tax
But the election surprise Note: 2016 buyback data through third quarter; Boeing data on 2016 not yet available. incentive for small-engine cars
has raised the prospect that Sources: FactSet (market value); S&P Dow Jones Indices (buybacks); SEC Filings (Boeing); WSJ Market Data Group (S&P) THE WALL STREET JOURNAL. into 2017, albeit at a smaller
tax cuts will put large sums in scale, to ease concerns about
corporate coffers, which in where, said Matthew Peron, practice in some quarters, This year buybacks ap- cording to FactSet. It holds slowing demand in the worlds
turn will be deployed largely head of global equity at North- with skeptics contending that peared to be slowing a bit. In more than $200 billion in cash largest car market.
in repurchases. ern Trust Asset Management. repurchases serve to prop up the first three quarters of the and other liquid investments The Ministry of Finance
That money potentially Its just a question of will the market at a time of year, companies in the S&P offshore. said it will levy a 7.5% pur-
could include the profits that they be dialed up through re- stretched valuations and weak 500 spent just over $400 bil- Apples research-and-devel- chase tax on vehicles with en-
U.S. companies stand to bring patriation. corporate earnings. lion on stock buybacks, down opment spending increased gines up to 1.6 liters from Jan.
back from overseas under a Repurchases have been a Some analysts also worry from the $426 billion in the 25% in fiscal 2016 and 34% in 1, an increase from the current
widely expected repatriation- major contributor to the that firms spending money to same period last year, accord- 2015, according to corporate rate of 5% but below the nor-
tax holiday. nearly eight-year stock rally. boost their share prices are ing to S&P Dow Jones Indices. filings. mal 10%.
Goldman Sachs forecast From the start of 2009 to the shortchanging U.S. economic For all of 2015, $572 billion The company called R&D Chinas auto market has
that S&P 500 companies will end of September 2016, com- growth by scrimping on long- went to buybacks. spending critical to its future significantly rebounded since
repatriate $200 billion of their panies in the S&P 500 spent term investment spending, Apple Inc. is among the big- growth and competitive posi- the last quarter of 2015, when
$1 trillion in cash held over- more than $3.24 trillion repur- such as factories and other gest spenders on buybacks, tion in the marketplace. the government rolled out the
seas in 2017 and that $150 bil- chasing shares, according to capital projects. and it is also one of the com- In November, MetLife Inc. tax break to resuscitate the
lion of those funds will be S&P Dow Jones Indices. The endgame to me is we panies that could benefit the said that its board approved car industry. From January
spent on share repurchases. Both companies and inves- also want to see capital expen- most from updated repatria- $3 billion for share repur- through November this year,
That could provide further tors often applaud share re- ditures and business spend- tion policies. chases, an announcement that Chinas new-car sales were at
support for major U.S. stock purchases because the practice ing, said Don Rissmiller, chief The tech company has came after it put its buyback 21.7 million vehicles, up 16%
indexes that have hit highs drives up earnings per share economist at investment firm bought back $31.1 billion in program on hold in early 2016. from the same period a year
this month. and often boosts stock prices. Strategas. That would help stock over the 12 months that This allocation to buybacks is earlier, when sales registered
Buybacks arent going any- But it is a controversial the real economy. ended in the third quarter, ac- the life insurers largest ever. 5.9% growth. Rose Yu

Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

The Negative-Yield Story of 2016 OVERHEARD Trump Trade


Gives Banks
The end of 2016 has been chase price. The price of the The election of Donald
Nadir
dominated by a sharp rise in
global bond yields. But the
most remarkable develop-
Lowest closing and most
Swiss 2064 bond topped
200% of face value at its
peak. With a coupon of 2%,
Trump as U.S. president last
month led to heightened eco-
nomic fears in Mexico and a
Pain in Spain
recent yields on 10-year
ment of the yearthe wide- government bonds Lowest
investors were asked to pay record decline in the peso. Donald Trumps U.S. elec-
spread emergence of nega- Dec. 27 more up front than the total But American devotion to at tion victory has hurt some
tive bond yields even for value of future coupon pay- least one Mexican export ap- European banks: Spanish
U.S. 1.36%
long-dated securitiesis 2.57% ments and the principal. pears only to have strength- banks in particular have un-
leaving a legacy that will 0.54% The bond market selloff of ened. derperformed due to worries
U.K.
persist. 1.20% the fourth quarter has made Dollar sales of tequila rose about the president-elects
The total amount of global France 0.10% the situation less extreme, by 13.9% year over year in attitude to trade and the
0.73%
fixed-income securities with and higher headline inflation the month of November as pain that will cause Mexico
0.19%
a negative yield has fallen Germany 0.26% in 2017 should mean long- volume grew by 13.2%, ac- and South America.
from its late September peak 0.30% dated yields dont revisit cording to Cowen. That com- Shares of Santander
Japan
of $13.3 trillionmore than 0.06% their lows. While the Federal pares with growth of 7.4% Group and BBVA have trail-
double the level of $5.6 tril- Switzerland 0.63% Reserve is talking of raising and 5.1% for all distilled spir- ed the Stoxx 600 Banks in-
lion at the start of 2016, data 0.09% rates further, sending U.S. its. dex and are way behind in-
European Central Bank
from Bank of America Mer- Sources: FactSet; Bloomberg News (photo) Treasury yields higher, other Indeed, despite the anti- vestment banks that rallied
headquarters in Frankfurt
rill Lynch shows. But there THE WALL STREET JOURNAL. central banks are stuck. The Mexico rhetoric of Mr. Trump on deregulation hopes.
were still more than $10 tril- ECBs deposit rate is at mi- and the risk of a trade war For BBVA, President
lion of negative-yielding But the real oddity of That underlines just how nus-0.4%, while the Bank of and border wall, Mexicans Trump poses potential prob-
bonds globally at the start of 2016 was negative yields for far the bond market went Japan is aiming to keep its can take some comfort from lems. The lender gets its big-
December. German yields are long-dated securities, which into unknown territory in 10-year yield around zero. the rising popularity of their gest chunk of earnings from
still negative out to 2024. turned on their head as- 2016. The lure of fixed in- That means swaths of signature spirit across the Mexico, about 40% in the
Indeed, some yields have sumptions about the behav- come lies in the word bonds will continue to carry border. first nine months of 2016,
only fallen further as the ior of fixed-income markets. fixedit is an asset de- negative yields in 2017. The The only spirit to outpace which is the market most
year has gone on. Two-year Germany and Japan got the signed to provide a known selloff should have curbed tequilas growth was Irish threatened by the president-
German yields started the most attention as their 10- stream of cash flows. The speculative urges to bet on whiskey: Sales of that liquor elects stance against globali-
year at minus-0.35%; they year yields turned negative, rally of the first half of 2016 ever lower yields for bonds. sales climbed 19.4%. zation and immigration.
fell to minus-0.8% in Decem- but that was far from the that took long-dated yields But continued distortions It may be too much of a The peso has slid, making
ber, buoyed by tweaks to the most extreme: The yield on a into negative territory from central-bank policy stretch, however, to call that Mexican earnings worth less,
European Central Bank pur- Swiss government bond ma- turned bonds into a pure ve- means bond investors still outperformance a reaction to while investment and loan
chase program and a hunger turing in 2064 briefly turned hicle for speculation, as fu- face extraordinary chal- President-elect Trumps Scot- growth is expected to suffer
for high-quality liquid collat- negative after the U.K. vote ture cash flows were already lenges. tish roots. immediately. If Mexico loses
eral ahead of year-end. to leave the European Union. accounted for in the pur- Richard Barley industry and exports, bad
loans will rise, too.
Santander relies less on

Biogen Gets a Holiday Gift With Surprise Drug Approval Mexico. Its big South Ameri-
can market is Brazil, which
contributes about one-fifth
Biogen investors got a drug as soon as this week. can be used to expedite the of earnings. The country
much-needed pleasant sur- Other pharma companies application process for a fu- could suffer if trade with the
prise this holiday season. have rival drugs in clinical ture drug, or it can be sold. U.S. declines, but it has been
The company announced development, so extending Selling the voucher could recovering strongly and the
late last week it had received any period of market exclu- fetch $350 million or more. currency has been strength-
approval from the Food and sivity is likely to help Spin- The good news doesnt ening all year.
Drug Administration for razas financial performance. erase the risks that Biogen BBVA has another prob-
Spinraza. The drug is the Analysts at Leerink Part- shareholders face. The com- lem: Its other major market
first treatment for a rare ners boosted their 2017 panys best-selling multiple outside Spain is Turkey,
disease known as spinal Spinraza revenue forecast to sclerosis Tecfidera faces new where a coup attempt and
muscular atrophy, and the $428 million from $92 mil- competition and challenges political crackdown have
FDA approved it for usage in lion. That would likely place to key patents. Meanwhile, spooked investors, leading to
a broad range of patients. Spinraza among Biogens top the outcome for the com- a weak currency and higher
SCOTT EISEN/BLOOMBERG NEWS

The approval is welcome 10 selling drugs. panys highest-reward pipe- interest rates.
news for shareholders and Biogen owes a $60 million line asset, the Alzheimers Pessimism about trade un-
incoming Chief Executive milestone payment to devel- drug aducanumab, wont be der President Trump might
Michel Vounatsos, and the opment partner Ionis Phar- known for some time. prove overdoneas might
good news came early. maceuticals, but Biogen gets But for shareholders, the optimism about investment-
Analysts mostly didnt ex- another sweetener: The FDA early approval for Spinraza bank freedoms to come. But
pect approval until the mid- awarded Biogen a pediatric should make waiting for Santander looks like a safer
dle of next year. Biogen says priority review voucher as a those results a little more bet than BBVA.
it will begin shipping the result of the approval. That palatable. Charley Grant Biogen said last week that it received FDA approval for Spinraza. Paul J. Davies