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
DJIA 16167.23 À 282.01 1.8%
What’s
News
Business & Finance
s the Fed prepares to
A issue guidance on rates,
investors are bracing for the
dollar to renew its rise and
intensify unrest throughout
world financial markets. A1
 Apple said iPhone sales
grew at their slowest pace
ever and forecast that reve-
nue this quarter will fall for
the first time in 13 years. B1
 AIG laid out plans that
could significantly slim down
the insurer but stopped
well short of the breakup that
activist investors want. C1
 Oil and stock markets
have moved in lockstep
this year, a rare coupling
that highlights fears about
global economic growth. C1
 U.S. stocks rose, aided
by a rally in oil prices, as in-
vestors looked past a slide
in Chinese shares. The Dow
climbed 282.01 to 16167.23. C4
 Iran is seeking new ways
to extract and export natural
gas, including facilities to liq-
uefy and ship it to Europe. B1
 The FCC plans to propose
overhauling rules for TV set-
top boxes, likely giving con-
sumers more choices. B1
 Kentucky’s governor is
preparing a fresh overhaul of
the state’s pension plans. C1
 Christie’s art sales fell
11% in 2015 from the mar-
ket’s peak a year earlier. B3
 China’s antigraft agency
said it was investigating
the chief of the govern-
ment’s statistics bureau. A8
World-Wide
 Malaysia’s top prosecutor
said a nearly $700 million
transfer to the premier’s
bank account was a legal do-
nation from the Saudi royal
family, but the announcement
was met with skepticism. A1
 The leader of an armed
group occupying a wildlife
refuge in Oregon was arrested
along with six followers after
a confrontation with the FBI
that left one person dead. A3
 Trump plans to skip
Thursday’s Fox News debate,
the latest turn in a dispute
with the TV network. A4
 Denmark passed a law
that lets authorities seize a
migrant’s assets to help
cover the cost of care, in an
effort to deter refugees. A6
 The EU said that a grow-
ing percentage of people
seeking asylum in Europe
are economic migrants. A6
 Iran’s president met
with the pope for talks that
focused on human rights
and Mideast conflicts. A7
 U.S. colleges and univer-
sities raised a record $40.31
billion last year, led by gifts
to Stanford and Harvard. A3
 The U.S. eased rules for
financing certain exports
to Cuba, in another step to
build ties with Havana. A2
 A U.N. envoy invited par-
ticipants to Syria peace talks,
but uncertainty continued
to surround the effort. A7
CONTENTS
Arts in Review...... D5
Business News.. B1-8
Crossword................. B8
Election 2016..... S1-8
Global Finance........ C3
Heard on Street. C10
s Copyright 2016 Dow Jones &
Company. All Rights Reserved
Path to the White House
* * * * * *
NASDAQ 4567.67 À 1.1%
Violence in Oregon as FBI Arrests Occupation Leader
DAVE KILLEN/THE OREGONIAN/ASSOCIATED PRESS
ARMED: A police officer guards a highway roadblock in Oregon Tuesday night after Ammon Bundy, leader of an armed group that had occupied
a federal wildlife refuge, was arrested along with several others in a confrontation with the FBI that left another member of the group dead. A3
Anxiety Fuels Trump’s Fans
White working-class
voters resentful over
economy, Washington
flock to billionaire
BY MICHAEL M. PHILLIPS
ELBERTA, Ala.—The past
decade has left Joey and Tina
Ellis with a tenuous grip on
middle-class life. They have
endured layoffs, volatile
wages, rising health-care
MUTUAL-FUND FEES
TUMBLE TOWARD ZERO
‘Loss leaders’ boost returns but come with new risks; gasps at Goldman
Gravity
Annual cost per $10,000 invested
at actively and passively managed
U.S. stock funds
$100
Active: $81
80
60
40
20
Passive: $14
0
2005 ’07
Source: Morningstar
’09 ’11
THE WALL STREET JOURNAL.
In Hong Kong, Frost Chasers Seek Thrill of the Chill
Cold snap draws crowds to peaks; taking photos, pitching tents
BY ISABELLA STEGER
As blizzards and ice storms
pummel cities from New York
to Hangzhou, Hong Kong—a
In the Markets....... C4 place where residents rarely
Opinion............... A11-13
Property Report C6,8
need to break out the fleece—
Sports.......................... D6 is thrilling over its own ex-
U.S. News.............. A2,3 treme-weather phenomenon:
Weather..................... B8 frost.
World News....... A6-8
A cold front across east Asia
has brought thousands of Hong
> Kong frost-hunters to the city’s
peaks during recent nights.
The chill-seekers are hoping to
see ice-rimmed leaves, sleet or
even snow—many for the first
time ever.
So large were the crowds
H ELECTION 2016 H
SPECIAL REPORT
WEDNESDAY, JANUARY 27, 2016 ~ VOL. CCLXVII NO. 21
STOXX 600 339.20 À 0.9% 10-YR. TREAS. À 8/32 , yield 1.996%
costs and a country they be-
lieve has turned its back on
working-class white people
like them.
Their salvation: Donald
Trump.
“We’ve fought too hard for
what we have, and we’re not
going to let it go,” said Mr. El-
lis, 46 years old.
The Ellises aren’t cut-my-
taxes, country-club Republi-
cans, or don’t-tread-on-me tea
partiers. They, like many in
the crowds swarming to Mr.
BY JASON ZWEIG
AND SARAH KROUSE
In November, asset man-
ager BlackRock Inc. said it
would slash by more than
50% the annual expenses
charged to investors in an
exchange-traded fund that
aims to mimic the perfor-
mance of the entire U.S.
stock market.
By the end of the day, ex-
ecutives at rival Charles
Schwab Corp. had matched
the price cut. In December,
Vanguard Group announced
fee cuts of as much as 25%
at dozens of its funds.
’13 ’15
The cost of investing is
tumbling toward zero for
some basic portfolios of
stocks and bonds as firms
i i i private bank account was an
one recent night
that hikers lined
up to frost-gaze
from Hong Kong
Island’s famous
Victoria Peak, and
police closed off
access to 3,140-
foot Tai Mo Shan,
the city’s tallest
mountain, after
the congestion on Mr. Fong’s snowman
the road got so
bad that emergency vehicles mit. “Look at my jacket, it’s
couldn’t get through.
“This was totally worth it!”
said high-school student Jack la Hong Kong, where the most
Wong, 17 years old, who was frigid weather is usually found
huddled by a gas stove eating
OIL $31.45 À $1.11
Trump, are worried about los-
ing economic ground; angry
at politicians who they be-
lieve put personal above na-
tional interests; convinced the
Obama administration wants
to take their guns and leave
them defenseless in an unsafe
world; and uneasy in an
America they see as slipping
away from its roots.
At a Trump rally the Ellises
attended this month in Pensa-
cola, Fla., the arena floor was
a mosh pit of resentments.
duel for customers. The
slide has been under way for
years but is accelerating as
the industry’s biggest com-
panies target increasingly
cost-obsessed investors.
More than 100 mutual
funds and exchange-traded
funds now cost $10 or less
per $10,000 invested, up
from 40 in 2010, according
to Morningstar Inc.
BlackRock’s move left its
ETF with annual expenses of
0.03% and sharply reduced
fees at six other funds.
Schwab has responded with
cuts nearly a dozen times in
the past three years.
“That’s pretty much the
first and only thing I look at:
the expenses,” says Brolin
Please see FEES page A10
instant noodles in
the freezing rain
around 5 a.m. Sun-
day, not far from
the Tai Mo Shan
peak. Mr. Wong,
who says he has
never seen snow,
had hiked with five
friends for two
hours to experi-
ence the maximum
chill at the sum-
covered in ice,” he said.
Welcome to polar vortex a
Please see FROST page A10
WSJ.com
GOLD $1,121.70 À $15.50
The crowd waved Trump plac-
ards and roared as the candi-
date lambasted the “very stu-
pid people” who run the
country. “We don’t win any-
more,” Mr. Trump told the
crowd of 12,500.
“I want to win again,” Mrs.
Ellis, 44, said afterward. “I
want a president who cares
about his people, who knows
how to make money for the
Please see TRUMP page A4
 Trump to skip debate........... A4
At Apple, Omen of Slower Growth
Apple’s major product unit sales, change from a year earlier
50%
40
30
20
10
0
–10
–20
–30 Fiscal 2014
*Ended Dec. 26, 2015
WEAKER SIGNAL: Apple said sales of iPhones rose in the latest
quarter at the slowest pace since their introduction; the company
forecast a decline in overall revenue in the current quarter. B1
Questions Linger After
Malaysian Fund Probe
Malaysia’s top prosecutor,
attempting to extinguish a
monthslong scandal, said a
nearly $700 million transfer to
Prime Minister Najib Razak’s
entirely legal “personal dona-
tion” from Saudi Arabia’s royal
family.
By Bradley Hope in
New York, Tom Wright
in Hong Kong and
Yantoultra Ngui
in Kuala Lumpur
Attorney General Mohamed
Apandi Ali’s announcement
was greeted with skepticism. A
Saudi government official,
while declining to comment
specifically on the prosecutor’s
statement, said the Saudi min-
istries of foreign affairs and fi-
nance had no information
about such a gift and that a
royal donation to the personal
bank account of a foreign
leader would be unprece-
HHHH $3.00
EURO $1.0871 YEN 118.42
Dollar’s
Rise Poses
Risk for
Fed Plans
BY BEN EISEN
AND MIN ZENG
As Federal Reserve offi-
cials prepare to release inter-
est-rate guidance Wednesday,
investors are bracing for the
dollar to renew its rise
against America’s major trad-
ing partners and intensify
unrest throughout the
world’s financial markets.
Unlike stocks and bonds,
the dollar has had a rela-
tively muted start to 2016,
and investors worry that any
resumption of its gains could
weigh further on global
growth.
While the Fed is expected
to stand pat on rates this
month, after raising them for
the first time in nine years at
its December meeting, trad-
ers and economists are be-
coming increasingly anxious
about how the Fed will com-
municate its reading on the
economy, and how currency
markets will react.
In effect, a rising dollar
has the same impact on mar-
kets as a Fed rate increase,
analysts said.
The strong currency—the
WSJ Dollar Index is up 23%
over the past two years—has
run ahead of the Fed’s plans
to raise interest rates, com-
plicating the central bank’s
efforts to slowly move rates
higher while having little
negative effect on the econ-
Please see DOLLAR page A2
 Fed figures to remain flexible
on its policy path.................... A2
1Q 2016*
iPhone
74.8M
▲0.4%
Mac
5.3M
▼3.8%
iPad
16.1M
’15 ’16 ▼24.7%
Source: the company
dented. Representatives of the
royal family couldn’t be
reached for comment. Critics
of the Malaysian prime minis-
ter said it was implausible the
money had come as a personal
donation.
Mr. Apandi said Tuesday all
but $61 million of $681 million
transferred in March 2013 was
returned to the Saudis five
months later. He said the Sau-
dis asked for nothing in return
for the gift.
Mr. Apandi, who was ap-
pointed to the position by Mr.
Najib when his predecessor
stepped down soon after the
scandal broke, said he ordered
Malaysia’s anticorruption body
to close its probe into the
transfers, which sparked mass
street protests against the
prime minister after they be-
came public last summer.
The U.S. Federal Bureau of
Investigation and other gov-
ernment agencies from outside
Please see NAJIB page A8
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, January 27, 2016 * *** THE WALL STREET JOURNAL.

U.S. Eases Rules on Cuba Trade Financing
BY WILLIAM MAULDIN
The U.S. on Tuesday loos-
ened rules for financing certain
exports to Cuba, part of the
Obama administration’s step-
by-step measures to build ties
with Havana after decades of
sanctions.
The relaxed financing rules
are accompanied by other pro-
U.S. NEWS
lar Inc., for example, will be Tuesday declined to elaborate Cuba further empower the re-
able to provide financing for on his plans for a visit. Secre- gime and enable it with an eco-
approved shipments of agricul- tary of State John Kerry, Com- nomic windfall,” Mr. Rubio said
tural machinery after the rules merce Secretary Penny Pritz- Tuesday.
take effect on Wednesday, law- ker and Agriculture Secretary Mr. Obama launched a ma-
yers said. Exports of construc- Tom Vilsack recently visited jor effort to re-establish ties
tion materials, as well as many the island. with Havana in December 2014.
other permitted products, “Everything is focused upon Since then, Washington has re-
could also benefit from the creating a landscape that is newed official diplomatic rela-
new rules. difficult for a successor to dis- tions with Cuba, removed the
But farm products, which mantle and which will permit country from a list of state
ALEXANDRE MENEGHINI/REUTERS

visions aimed at facilitating
trade, travel and cultural ex-
changes with Cuba. Still, offi-
cials signaled that major
changes to relations would de-
pend on steps taken by the Cu-
ban government or on action
in Congress to dismantle the
U.S. trade embargo.
The altered rules will allow
some industries to arrange
competitive export packages
from the U.S. Before the new
provisions, financing had to be
routed through a third country.
A company such as Caterpil-
are traditionally the biggest better optics when creating an sponsors of terrorism, and re-
Cuban import from the U.S., itinerary for the president to laxed the rules regarding cer-
are excluded from the new pro- visit Cuba,” said John Kavu- tain forms of travel and trade.
visions, as such lending would lich, the president of the U.S.- U.S. officials say they are
violate the U.S. embargo. Cuba Trade and Economic working to boost entrepre-
The Treasury Department Council. neurship and the private sector
and Commerce Department Many Republicans have re- in Cuba, a communist country
also extended previous rules sisted changes to U.S.-Cuba re- dominated by state-controlled
that allowed for air and marine Tourists rode in vintage cars in old Havana earlier this month. lations. Sen. Marco Rubio (R., enterprises.
travel to Cuba, and issued Fla.), a son of Cuban immi- “We think that our steps
guidelines to facilitate musical terms of musical festivals, arts workshops, athletic exhibitions grants and a candidate for the have significant impact, but
performances, film, journalism festivals, etc.,” said Augusto in Cuba,” he said. 2016 GOP presidential nomina- they would have much greater
and professional conferences Maxwell, a partner in the Aker- President Barack Obama in tion, has spoken out against impact if Cuba would match
undertaken on the island. man law firm’s Miami of- December signaled he may new ties with Havana. those steps as well,” a senior
“You’re going to probably fice. The new rules would “en- visit Cuba during his remaining “The Obama administra- administration official said
see a lot more movement in courage more concerts, months in office. Officials on tion’s one-sided concessions to Tuesday.

DOLLAR time when earnings have been

softening, investors said.
The root of recent market
5 THINGS ON…

Continued from Page One

omy.
A strong U.S. currency tends
to exacerbate some of the
challenges that have been most
visible in the global economy
in recent years, such as falling
oil prices and soft developed-
world inflation, while intensi-
fying financial strains in vul-
nerable emerging markets.
The U.S. currency’s gains
have been muted so far in
2016. The WSJ Dollar Index
has risen 1.3%, contrasting
with the dramatic moves in
global stock indexes and the
rally in government-bond
volatility “is that the U.S. dol-
lar rose very, very fast and it’s
Fed Figures
having an impact,“ said Binky
Chadha, chief global strategist To Remain
at Deutsche Bank AG. “If I’m a
company that has earnings in
the U.S. and Europe, when the
Flexible on
euro goes down, the dollar
value of my earnings that I re-
Its Policy Path
port also goes down.”
One trigger for further dol- The Federal Reserve on Wednes-
lar gains could come with day will update its assessment
Wednesday’s policy statement of the U.S. economy and could
from the Fed, due out early in take note of recent volatility in
the afternoon New York time, global financial markets. But any
analysts and traders said. If in- move or definite signal on inter-
vestors read the statement as est rates is extremely unlikely.
showing Fed resolve to see Here are five things to watch:
through a series of interest-

1
SUSAN WALSH/ASSOCIATED PRESS

prices. rate increases this year even FLEXIBLE MESSAGING

But many traders expect the
dollar’s appreciation to accel-
erate.
The dollar is down 0.1%
against the euro and 1.6%
against the Japanese yen this
year but has gained 9.6%
against the Russian ruble and
2.3% against the Brazilian real.
Money managers said the
center of the dollar’s likely ap-
preciation is now shifting to
Asia amid scrutiny of trading
in yuan. Some Asian currencies
have retained more strength
against the dollar in the past
few years than currencies else-
where.
Ray Uy, senior portfolio
manager at Invesco, which has
$775.6 billion assets under
management, is betting the
dollar will rise against the cur-
rencies of Taiwan, Singapore,
Malaysia and South Korea. He
called it “a new leg” of stron-
ger dollar trade.
Dollar strength hits U.S. ex-
ports and weighs on U.S. cor-
porate earnings by making U.S.
goods costlier overseas. U.S.
stocks are particularly vulnera-
ble to these pressures at a
as the market expects the cen- The Fed won’t raise its
tral bank to largely remain on benchmark federal-funds rate on
hold, the dollar could surge Wednesday, just six weeks after
against other currencies, they it raised it for the first time in
said. nearly a decade. It’ll also be
At the same time, if the Fed loath to abandon the guidance
decides the economy isn’t from its last policy statement
strong enough to continue lift- that it “expects that economic
ing interest rates this year, the Strong currency is complicating the Fed’s efforts to slowly raise rates. Above, Fed Chairwoman Janet Yellen. conditions will evolve in a man-
dollar’s gains in the past two ner that will warrant only grad-
years are likely to be a key impact on global markets. The early 2015 but still a sign of what you see is earnings run ual increases in the federal-funds
part of that decision, analysts dollar tends to rise faster be- continued dollar-gain expecta- at a pretty high level,” he said. rate” but that “the actual path
said. fore the Fed lifts rates than tions. U.S. core-goods inflation of the federal-funds rate will de-
The debate over the dollar’s during the actual tightening The greenback took off in would have run a half percent- pend on the economic outlook as
direction underscores the vul- cycle, said Scott Mather, chief mid-2014, as investors braced age point higher without the informed by incoming data.”
nerability of markets to unpre- investment officer, U.S. core for higher U.S. interest rates impact of the dollar, in effect
dictable ripple effects at a time
when expansive central-bank
policy is widely viewed as nec-
strategies, at money manager
Pacific Investment Manage-
ment Co., in Newport Beach,
and commodity prices led by
oil entered a sharp new down-
turn.
meeting the Fed’s 2% annual
target, he said.
The dollar’s rise has also
2 MENTIONING MARKETS?
The Fed in December said
it judged that risks to the out-
essary to maintaining condi- Calif. Mr. Chadha said it is possi- boosted the value of the Chi- look for the economy and labor
tions for global growth. “I think the Fed is going to ble to filter much of the recent nese yuan, which in recent market were “balanced” when
“Uncertainty around cur- take some comfort in the fact market turbulence through the years has maintained a dollar “taking into account domestic
rency markets around the that [the dollar] is not stron- moves in the dollar since peg and been a factor in nega- and international develop-
world is driving policy deci- ger versus the yen and the mid-2014. He said earnings for tive economic readings in the ments.” It also dropped lan-
sions in a way that we haven’t euro,” he said. “It’s much dif- S&P 500 companies would world’s second-largest econ- guage that had appeared in the
really seen in decades,” said ferent than a year ago when have risen about 10% to 12% in omy. September and October state-
Daniel Tenengauzer, head of there was a big movement.” the third quarter if not for the When China allowed the ments about “global economic
emerging markets and global Still, hedge funds and effects of the dollar. The actual yuan to weaken against the and financial developments.”
FX strategy at RBC Capital money managers have made earnings of such companies dollar in August, it spurred in- Watch to see if officials restore
Markets. $27 billion in bets that the dol- dropped 1.5% in the period, ac- tense concerns about the coun- some version of that warning in
Still, not everyone thinks lar will rise, according to data cording to FactSet. try’s growth prospects that a nod to renewed financial-mar-
the dollar is poised for large from Scotiabank. That is down “If you purge U.S. earnings helped fuel the Aug. 24 U.S. ket volatility and concerns
gains that would have a major from the record wagers of for the impact of the currency, market rout, investors said. about overseas growth.

Task Force said the new recom- ILLINOIS 3 GROWTH SLOWDOWN

U.S. mendation updates one from
2009, when it last visited the is-
Watch sue. At that time, the task force
had concluded there wasn’t
enough evidence of a net benefit
to recommend pregnancy and
postpartum screening.
The group said antidepres-
DEPRESSION sants and psychotherapy, either
alone or in combination, are ap-
Screen Pregnant propriate to treat people with
Women, Panel Says clinical depression.
All adults, including pregnant In an analysis published Tues-
women and those who have re- day in the Journal of the Ameri-
cently given birth, should be can Medical Association, the
screened for depression as part panel concluded that depression
of their routine medical care, a is a leading cause of disability.
federal task force said Tuesday. The “magnitude of harms of
The U.S. Preventive Services screening for depression in
adults is small to none,” the task
THE WALL STREET JOURNAL force concluded. It specifically
Chicago Ex-Official
Guilty of Bribery
A former Chicago official was
found guilty Tuesday in a bribery
scheme tied to the city's red-
light camera program.
A jury found John Bills, for-
mer assistant transportation
commissioner, guilty of fraud,
bribery and extortion charges.
The verdict comes less than a
year after former Redflex Traffic
Systems Inc. Chief Executive
Karen Finley pleaded guilty to
conspiracy to commit bribery.
Prosecutors said Redflex
turned to Mr. Bills for help in
winning contracts; he got more
than $600,000 in cash, meals,
trips and a condo in Arizona. A
The biggest changes to the
policy statement will likely
come in the first paragraph,
which describes current eco-
nomic conditions. The Fed in
December characterized growth
as moderate, hailed further im-
provement in the labor market
and said consumer and business
spending had been increasing at
solid rates. Since then, data
have been mixed. Hiring has re-
mained robust but the broader
U.S. economy has appeared to
slow. The Commerce Depart-
ment’s first official estimate of
fourth-quarter gross domestic
product is due out on Friday.
Economists expect an anemic
0.8% growth rate in the final
three months of 2015.

(USPS 664-880)
(Eastern Edition ISSN 0099-9660)
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(Western Edition ISSN 0193-2241)
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cited one study concluding that
about 10% of new mothers ex-
perience clinical depression that
can be lasting and serious.
—Thomas M. Burton
CORRECTIONS  AMPLIFICATIONS
The name of Italian ship
builder Fincantieri SpA was
misspelled as Fancantieri in a
list of deals between Iran and
European firms that accompa-
nied a Page One article Tuesday
about Tehran’s efforts to revive
trade ties with Europe.
The 2016 Olympic Games
in Brazil would be the fifth
Olympics for U.S. swimmer
Michael Phelps. A Year Ahead
article Jan. 4 about the event
Readers can alert The Wall Street Journal to any errors in news articles by
emailing wsjcontact@wsj.com or by calling 888-410-2667.
lawyer for Mr. Bills said his cli-
ent wasn’t in a position to have
such influence over contracts
and would fight the verdict.
—Mark Peters
incorrectly said it would be his
fourth Olympics.
The rate for a new-car loan
at Hickory Point Bank and
Trust in Decatur, Ill., on Jan.
15 was 2.35%. A table of Con-
sumer Rates published in the
Money & Investing section on
Jan. 19 incorrectly said the
rate was 1.99%. The table also
incorrectly gave the bank’s
name as Hickory Point Bank
and Trust FSB.
4
EXPECTING INFLATION
The December policy
statement said officials would
“carefully monitor actual and
expected progress” toward the
Fed’s 2% annual inflation goal
in judging when to raise rates
again. Oil prices have dropped
since then, and various mea-
sures of inflation expectations
have shown signs of erosion.
Watch the first and second
paragraphs of the statement to
see if the Fed flags any fresh
concern on the inflation front.
5
NEW VOTERS
The first policy meeting of
2016 means a new slate of re-
gional bank presidents rotating
into voting seats on the Federal
Open Market Committee. One
potential dissenter is Kansas City
Fed President Esther George, a
frequent dissenter during her
last stint as a voter in 2013.
—Ben Leubsdorf
 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.
Occupiers in Oregon Arrested, One Dead
Confrontation with
the FBI follows
lengthy standoff at
federal refuge
BY DEVLIN BARRETT
AND JIM CARLTON
Ammon Bundy, the leader
of an armed group occupying
a federal wildlife refuge in Or-
egon to protest federal land-
management policies, was ar-
rested along with six followers
on Tuesday following a violent
confrontation with the Federal
Bureau of Investigation that
left another member of the
group dead, authorities said.
The FBI and the Oregon
SANDY HUFFAKER FOR THE WALL STREET JOURNAL
Drought-tolerant landscaping can be seen at a home in Mission Hills Country Club in the desert town of Rancho Mirage, Calif.
Desert Towns Struggle With Thirst
BY JIM CARLTON
PALM SPRINGS, Calif.—Cali-
fornia’s drought-ridden cities
are on track to collectively meet
Gov. Jerry Brown’s call for a 25%
reduction in water usage. But
there is a notable laggard: the
state’s desert resort areas.
Many desert water agencies
continue to miss their targets,
even after some have been
slapped with fines. Officials in
desert communities—which as
heavy water users were given
tougher goals then many other
municipalities—say they face
unique challenges, such as irri-
gating grass in the extreme
summer heat.
The gap illuminates a
broader problem for California’s
desert resorts: Unlike some
other parts of the South-
west, which use more native
landscaping, Palm Springs and
other cities in the Coachella Val-
ley were designed as green oa-
ses. Hotels, residential commu-
nities and golf courses sprang
up out of the sand with predom-
inantly turf landscaping. Letting
Universities Brought In Record Donations
BY MELISSA KORN
U.S. colleges and universi-
ties raised a record $40.31 bil-
lion last year, buoyed by mega-
gifts to Stanford University,
Harvard University and other
wealthy institutions.
The 7.6% increase in chari-
table donations was fueled by
more gifts from individuals,
rather than from foundations,
and benefited from soaring
valuations of gifts of art, ac-
cording to an annual survey
set to be released Wednes-
day by the nonprofit Council
for Aid to Education.
Stanford led the pack with a
record $1.63 billion raised in
its fiscal year ended Aug. 31,
followed by Harvard, which
brought in $1.05 billion in its
fiscal year ended June 30.
Stanford’s haul included the
donation of a major post-
World War II art collection,
valued at more than $600 mil-
lion and announced in 2011.
The new money pouring
into higher education contin-
ues to be concentrated at just
a handful of schools, further
stretching a gap between insti-
tutions that can afford to offer
free tuition for upper-middle-
class students, such as Stan-
ford, and those struggling to
make payroll and considering
mergers or even closure.
The top 10 fundraising re-
* * * * * *
State Police said five members
of the occupation group were
initially arrested around 4:30
p.m. local time, including Mr.
Bundy, 40 years old, and his
brother, Ryan Bundy, 43.
A sixth suspect was ar-
rested by Oregon State Police
about an hour later in Burns,
Ore. Later Tuesday, the FBI
announced it had arrested a
seventh member of the group,
who was apprehended in
Burns without incident.
Harney County Judge Steve
Grasty said law-enforcement of-
ficers stopped a vehicle contain-
ing Mr. Bundy about 70 miles
north of Burns. Mr. Bundy had
led the occupation of the Mal-
heur National Wildlife Refuge,
which started on Jan. 2 and had
that grass die without water
would hurt the resort-based
economy, local officials fear.
“It took decades to create an
oasis out here and it will take
time to change that to a more
desert-wise program,” said
Craig Ewing, a director at the
Desert Water Agency in Palm
Springs, whose 29% cut in usage
through November missed its
state target of 36%.
Officials at the State Wa-
ter Resources Control Board say
California’s urban agencies
likely will still meet the gover-
nor’s call in April last year to
reduce water use by a fourth be-
tween June 2015 and February
this year from a 2013 base year,
because most other water dis-
tricts have met or exceeded
their targets.
That would equate to savings
of 1.2 million acre feet, or
enough annual water for five
million people. While rains
fueled by El Niño have helped
replenish reservoirs in recent
weeks, Mr. Brown has asked
that the mandates be extended
through October if drought con-
Top of the Class
U.S. colleges brought in a record $40.31 billion in charitable gifts in fiscal
2015, up 7.6% from the prior year, driven by donations to wealthy schools.
Top 10 schools by amounts raised brought in a total of $7.27 billion
Stanford University
Harvard University
University of Southern
California
University of California-
San Francisco
Cornell University
Johns Hopkins University
Columbia University
Princeton University
Northwestern University
University of Pennsylvania
Note: Schools have different calendars; their fiscal years generally end in the summer.
Source: Council for Aid to Education
cipients accounted for 18% of
gifts in the latest year, or $7.27
billion, up from 17.5% the pre-
ceding year and 16.1% a decade
earlier, said Ann E. Kaplan,
who directs the survey.
The richest schools are en-
couraging an arms race among
donors as they seek funds to
build sprawling health-care
U.S. NEWS
entered its fourth week.
Law-enforcement officials
familiar with the matter said
the incident took place as Mr.
Bundy and a handful of other
leaders were driving to a pub-
lic event nearby. Agents with
the FBI stopped the vehicle, at
which point one of the individ-
uals in the vehicle pulled out a
weapon, the people familiar
with the incident said.
At that point, FBI agents
fired. The individual who was
brandishing the weapon suf-
fered fatal injuries, officials said.
The man killed was identi-
fied by supporters of Mr.
Bundy on a Facebook page
they maintained as LaVoy Fin-
icum, a rancher who had acted
a spokesman for the armed oc-
ditions persist.
Heavy rain and snow in the
past several weeks have helped
ease drought conditions, but
likely not enough to end the
curbs. Lake Shasta, an impor-
tant reservoir, rose to 46% of its
capacity as of Jan. 24, from 29%
on Dec. 1, but that is well below
the historical average for this
date of 69%, according to state
Department of Water Resources
data
Desert agencies, however, are
asking the state to ease its tar-
gets to reflect issues such as the
fact that many had taken con-
servation steps before the Dem-
ocratic governor’s mandate.
Mr. Brown said in a recent in-
terview it will take more action
to bring desert water use in line
with the rest of California, not-
ing humans didn’t live perma-
nently in the Coachella Valley
until modern times. “It’s going
to have to be massive [water]
recycling and very careful and
wise use,” he said.
The Coachella Valley Wa-
ter District cut its use 29% be-
tween 2007 and 2015 through
$1.63 BILLION
1.05
0.65
0.61
0.59
0.58
0.55
0.55
0.54
0.52
THE WALL STREET JOURNAL.
and academic complexes or to
launch interdisciplinary pro-
grams. Successful alumni do-
nors are eager to preserve
their legacies by backing insti-
tutes that take on pressing
challenges like global poverty
and climate change.
The survey didn’t address
whether the donors were
cupation group. A law-enforce-
ment official also identified
the man killed as Mr. Finicum.
Another suspect suffered
non-life-threatening injuries,
these people said. No FBI
agents were injured, according
to these people.
The seven suspects were ar-
rested on suspicion of conspir-
acy to impede officers of the
U.S. from discharging their of-
ficial duties through the use of
force, intimidation or
threats—a felony.
Mr. Bundy is the son of
Cliven Bundy, a Nevada
rancher who was involved in a
similar armed standoff with
federal officials in 2014 over
grazing fees. That confronta-
tion ended peacefully.
increased recycling and other
measures when it was hit with
the additional mandate. But the
district, which serves over
100,000 homes in tony commu-
nities like Rancho Mirage and
Palm Desert, still got fined
$61,000 in October. It had cut its
use 27% through October in-
stead of the 36% state target.
Jim Barrett, the district’s
general manager, said some res-
idents have been unwilling to
give up their green lawns. The
district put drought penalties in
effect in July that can more than
quadruple rates for excess use,
but officials say water is still in-
expensive as much of it locally is
pumped out of the ground.
“It’s our customers who actu-
ally have to conserve water,” he
said. “There’s only so much we
can do.”
The state water board, whose
staff has recommended a maxi-
mum 4% lowering of current
water-reduction targets for the
desert agencies, is expected to
consider the request for more
lenient goals there and else-
where in February.
based in the U.S. or abroad.
Eight gifts of $100 million
or more were recorded in the
latest year. Valued at a com-
bined $1.44 billion, the dona-
tions went to four schools.
There were five such nine-fig-
ure gifts the prior year, total-
ing $698.6 million.
Schools continue to wel-
come much smaller donations,
too. Stanford said it received
contributions from nearly
83,000 people; nearly half of
all donors gave $100 or less.
“We spend a lot of time
talking about how all gifts
matter, about the power of col-
lective giving,” said Martin
Shell, vice president for devel-
opment at Stanford. “That $50
gift, when combined with
other $50 gifts, can make a
fundamental difference.” He
said such gifts can cover schol-
arships or research grants, and
noted that some million-dollar
donors start with modest do-
nations.
Ms. Kaplan predicted that
charitable support for U.S.
higher education would increase
again this year, but at a more
moderate pace. “It’s going to be
tempered,” she said, citing weak
stock-market performance at
the end of the calendar year, a
popular time for donations, and
poor results so far in 2016,
which will affect the value of
any securities donated.
Wednesday, January 27, 2016 | A3
Local media reports in Ore-
gon said Mr. Bundy was travel-
ing to a community meeting at
the John Day Senior Center in
neighboring Grant County,
where he had been invited to
speak, when the arrest and
confrontation took place.
A reporter for the East Ore-
gonian newspaper reported
that the meeting devolved into
a shouting match between
supporters and detractors of
Mr. Bundy when those inside
learned of his arrest.
On a Facebook page the
group has been using to post
updates on its occupation, a
message was posted at 6:40
p.m. saying that the wildlife
refuge, which protesters had
renamed the Harney County
Antiabortion Group
Faces Legal Woes
BY STEPHANIE ARMOUR
AND DAN FROSCH
The antiabortion group be-
hind undercover videos that
roiled Planned Parenthood
Federation of America is fac-
ing multiple legal challenges
over its own practices, compli-
cating its campaign to portray
the health organization as a
lawbreaker.
A Texas grand jury’s decision
Monday to clear Planned Par-
enthood of any wrongdoing and
instead indict two activists with
the Center for Medical Progress
is only the latest legal risk for
the group, which made and re-
leased the undercover videos in
which Planned Parenthood offi-
cials discuss providing fetal tis-
sue from abortions for medical
use.
Other issues the Irvine, Ca-
lif.-based group faces include a
complaint to the Internal Reve-
nue Service by a left-leaning le-
gal watchdog organization, Citi-
zens for Responsibility and
Ethics in Washington, and liti-
gation by Planned Parenthood
and the National Abortion Fed-
eration. In addition, the Califor-
nia attorney general’s office has
said it was reviewing whether
the group broke any laws.
In Texas, the founder of the
Center for Medical Progress,
David Daleiden, and another ac-
tivist with the group face felony
charges of tampering with a
governmental record. Mr. Dale-
iden was also indicted on a mis-
demeanor charge related to the
purchase and sale of human or-
gans.
The group sparked a na-
tional controversy when it be-
gan releasing undercover vid-
eos last summer of Planned
Parenthood officials discussing
the provision of fetal tissue.
It is legal to be compen-
sated for the cost of procuring,
TIFFANY ENGAGEMENT
800 843 3269 | TIFFANY.COM
Resource Center, was “at a
heightened state of alert.”
On the Bundy Ranch Face-
book page Tuesday evening,
supporters of Ammon Bundy
reacted angrily to the news,
with some vowing to go join
the fight in Oregon.
State and local officials had
grown increasingly frustrated
in recent days with what ap-
peared to be a strategy by fed-
eral law-enforcement officials
not to confront the armed
group.
Federal authorities gener-
ally have been reluctant to en-
gage with armed protesters
like the Oregon group, mindful
of past violent outcomes like
those at Ruby Ridge, Idaho, in
1992 and Waco, Texas, in 1993.
storing and transporting fetal
tissue, but the footage angered
abortion opponents, spurred
Republicans in Congress to
push to defund Planned Parent-
hood and prompted some states
to cut off financial support.
The legal challenges are
turning the focus from Planned
Parenthood to the relatively un-
known antiabortion group. But
they also are galvanizing some
abortion opponents and thrust-
ing Planned Parenthood back
into the presidential campaign.
GOP candidate Marco Rubio
told CNN he was disturbed by
the indictment. Republican con-
tender Carly Fiorina said on a
radio show that “Planned Par-
enthood has been trafficking in
body parts.”
Abortion opponents said the
videos showed Planned Parent-
hood illegally profited and
changed abortion procedures to
obtain better medical speci-
mens. Planned Parenthood said
it broke no laws, that the vid-
eos were edited to be mislead-
ing, and that its clinics legally
received money to cover ex-
penses.
A lawsuit filed by Planned
Parenthood this month in San
Francisco against the Center for
Medical Progress mirrored
some of the allegations in the
Texas indictment, alleging the
group made the videos through
misleading means.
Activists established a fake
nonprofit tissue procurement
company and used pseudonyms
to make fake California drivers’
licenses, according to the law-
suit. They used those licenses
and stole a woman’s identity to
get into closed medical confer-
ences, the suit alleges. It also
alleges that activists broke non-
disclosure agreements by se-
cretly videotaping conversa-
tions with Planned Parenthood
staff.
©T&CO. 2016
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, January 27, 2016 P W L C 10 11 12 H T G K B F A M 1 2 3 4 5 6 7 8 9 O I X X ****** THE WALL STREET JOURNAL.

Christie Takes a Hit Over Storm Trump to

Skip Next
New Jersey residents
fault the governor for
being on campaign
Debate
trail in New Hampshire Amid Spat
BY HEATHER HADDON BY AARON ZITNER
AND KATE KING AND REBECCA BALLHAUS

SEA ISLE CITY, N.J.—New MARSHALLTOWN, Iowa—

Jersey Gov. Chris Christie is Donald Trump’s presidential
facing criticism for how he has campaign said the GOP front-
responded to damage from last runner plans to skip the Fox
weekend’s historic snowstorm News debate Thursday in Des
and comments he made after- Moines, the final one before
ward that residents and local the Iowa caucuses, in the lat-
officials perceived as callous. est turn in its long-running
On the campaign trail in dispute with the TV network.
New Hampshire Monday, Mr. Mr. Trump told reporters
Christie responded to a ques- Tuesday he would likely skip
tion about his handling of the the televised event. Shortly af-
storm aftermath with one of terward, his campaign man-
his own: Did New Jersey resi- ager, Corey Lewandowski, said
dents want him to return the candidate had decided to
MATT ROURKE/ASSOCIATED PRESS

home with “a mop” to help bypass the debate.

clean up floodwaters? That re- “He is definitely not partici-
mark has drawn particular pating in the Fox News debate
scorn. on Thursday,” Mr. Lewan-
“Tell him to come down and dowski said.
mop,” Mike Boyle, 61 years old, The announcement came
said here on Tuesday. “The amid a long-running public
tide came in and he went back spat between Mr. Trump and
out to New Hampshire.” the network. The billionaire
The criticism comes at a GOP candidate Chris Christie meets with diners in Greenland, N.H., on Monday, two days after a snowstorm pummeled his home state. businessman had threatened
sensitive time for Mr. Chris- to boycott the debate if Fox’s
tie’s Republican presidential ernment functions in the 12% earlier this month, accord- Sen. Marco Rubio for joking was tackling concerns. “I’m the Megyn Kelly served as a mod-
bid, and coincides with the re- troubled gambling resort. ing to an average of surveys by that the storm was a blessing governor, not chief engineer.” erator, calling her “biased.”
surfacing of issues that have Mr. Christie and his cam- Real Clear Politics. for closing down the federal Mr. Christie went on to call A Fox News spokesman
shadowed his campaign from paign have dismissed issues As the storm threatened to government. a local Republican who had criticized Mr. Trump’s decision
the outset. surrounding his record as break snow records last Friday, News reports of wide-scale criticized his response a “crazy not to participate in the de-
Next week, court hearings broadsides dug up by his rivals Mr. Christie was faulted for flooding in stretches of South mayor.” bate, calling it “near unprece-
on the George Washington as his place in the polls has not abandoning the campaign Jersey, however, highlighted That mayor, Patrick dented.”
Bridge lane-closure scandal improved. He hasn’t been im- trail to help the state cope. He the fact that the state hadn’t Rosenello of North Wildwood, “We’re not sure how Iowans
that has ensnared some of Mr. plicated in the bridge scandal, later reversed course and re- fully bounced back. When N.J., said Mr. Christie called are going to feel about him
Christie’s former aides are set and has pointed to New Jer- turned to New Jersey Saturday asked about criticisms of his him to apologize Tuesday. Still, walking away from them at the
to begin. sey’s falling unemployment and traveled the state to as- quick return to the campaign the Republican said that Mr. last minute, but it should be
New Jersey’s fiscal situation rate as a sign of his capable sess conditions. He also made trail, Mr. Christie told Christie’s presence in his town clear to the American public
statewide and in Atlantic City handling of the state’s affairs. numerous media appearances MSNBC’s “Morning Joe” that would help assure residents. by now that this is rooted in
has also received renewed “I don’t govern for approval detailing his response. he wasn’t aware of any con- New Jersey officials on one thing—Megyn Kelly, whom
scrutiny. Last week, Moody’s ratings. I govern for results,” By Sunday, Mr. Christie was cerns and there was no re- Tuesday were assessing the he has viciously attacked since
Investors Service said the state Mr. Christie said when asked back in New Hampshire and maining flooding. damage done by the storm. August and has now spent four
faces “extraordinary decisions about his low approval ratings pointing to his storm response During a campaign event Floodwaters had receded and days demanding be removed
and challenges” over how to on CNN’s “State of the Union” as a sign of the leadership later Monday, Mr. Christie was all of the roughly 270,000 cus- from the debate stage,” the
fund its pension system for Sunday. “When the chips are skills. “When I have a job to asked about why he was in tomers who lost power have spokesman said. “Capitulating
public workers and transporta- down, I deliver.” do, I do it,” he told supporters New Hampshire by a young had service restored, an ad- to politicians’ ultimatums
tion projects. But the questions surround- gathered for a football party woman who said she had fam- ministration spokesman said. about a debate moderator vio-
And last week, Standard & ing Mr. Christie’s New Jersey Sunday. “We make it look easy ily in New Jersey who had sent Mr. Christie was scheduled lates all journalistic stan-
Poor’s downgraded Atlantic performance come as attack because we handled it the her photos of flooding. to rejoin the campaign in Iowa dards.”
City’s debt by four notches. ads funded by his opponents right way, but people were at “I don’t know what you ex- Wednesday and was set to stay 21st Century Fox, of which
Back in New Jersey Tuesday, appear to be doing damage. risk,” Mr. Christie said. pected me to do. Do you want there through Iowa’s caucuses Fox is a unit, and News Corp,
Mr. Christie announced his ad- In New Hampshire, his sup- Mr. Christie chided folks me to go back there with a next Monday. owner of The Wall Street Jour-
ministration is drawing up leg- port stands at 7% among GOP who “make jokes about this mop?” Mr. Christie asked, add- —Beth Reinhard nal, were until mid-2013 part
islation to take over most gov- primary voters, down from stuff,” a veiled swipe at Florida ing that his administration contributed to this article. of the same company.

Criticism of Democratic Party’s Chairwoman Builds

BY COLLEEN MCCAIN NELSON tional sanctioned debates be- ident and some officials who cause of her incompetence,” Wasserman Schultz’s use of
AND LAURA MECKLER fore the New Hampshire pri- represent key interest groups. said Boyd Brown, a DNC mem- DNC fundraising events to also
mary on Feb. 9. Sen. Bernie “Debbie Wasserman Schultz ber and former South Carolina raise money for her congres-
Rep. Debbie Wasserman Sanders’s view wasn’t clear. has been a dedicated leader,” state legislator. sional campaign account and
Schultz is facing withering Many Democrats are also White House spokesman Eric During the 2012 campaign, leadership political-action
criticism from many fellow unhappy with Ms. Wasserman Schultz said. the DNC was largely run by its committee.
Democrats, with progressive Schultz’s handling of a DNC Randi Weingarten, presi- executive director, Patrick Ms. Wasserman Schultz, 49
groups and some party loyal- computer glitch that allowed dent of the American Federa- Gaspard, who is close to the years old, said the PAC helps
ists calling for her ouster as the Sanders campaign to ex- tion of Teachers, said the president. After the election, elect other Democrats. “It’s a
ANDREW BURTON/GETTY IMAGES

chairwoman of the Democratic amine Clinton voter files. chairwoman has ensured that some wanted her removed bad thing that the national
National Committee. In a recent interview, Ms. all voices in the party are from the post, but she wanted party chair uses another tool
The Florida congresswoman Wasserman Schultz said the heard. “Even when she dis- to stay, and the White House at her disposal to help elect
has come under scrutiny for debate schedule was never go- agrees with you, you can have agreed, according to multiple Democrats?” she said.
her decision to limit the num- ing to please everybody and a very tough conversation people in the party. Ed Rendell, a former DNC
ber of Democratic presidential that she doesn’t favor any one with her and she hears you Alan Clendenin, a DNC chairman, said a lot of the
debates this cycle, and in a re- candidate. She also said she out,” Ms. Weingarten said. member and first vice chair of criticism about Ms. Wasser-
volt on Tuesday, a New Hamp- has strong support within the Still, on Monday, Campaign the Florida Democratic Party, man Schultz’s leadership is
shire newspaper and MSNBC Debbie Wasserman Schultz party and has worked to bol- for America’s Future became said he urged Mr. Obama to “much ado about nothing.” But
said they would host an un- ster the party’s interests. the latest liberal group to seek replace the chairwoman last he said the length of her ten-
sanctioned debate next week. Clinton and Martin O’Malley “If I were only interested in her resignation via a petition; year. “The president gave me a ure—nearly five years, longer
The original decision to limit signaled they would partici- advancing myself, I would only one by the liberal group Credo smile, and that’s all he gave than anyone else in recent de-
the candidates to six debates pate, even though the DNC has be a member of Congress, and has nearly 80,000 signatures. me,” said Mr. Clendenin. Ms. cades—may have contributed
was seen by some as an effort said taking part in unsanc- I could focus on myself 100% Two of Ms. Wasserman Wasserman Schultz supported to discontent.
to smooth the path for Hillary tioned debates would bar can- of the time,” she said. Schultz’s vice chairpeople Mr. Clendenin’s opponent “The best way to do this job
Clinton, whom Ms. Wasserman didates from official ones. Ms. The chairwoman has the have pushed back against her when he sought the chairman- is the way I did it: 14 months
Schultz supported in 2008. Wasserman Schultz held firm, backing of a number of top handling of the debates. ship of his state party. and out,” he said. “Eventually,
Democratic contenders Mrs. saying there would be no addi- Democrats, including the pres- “This is snowballing be- Others have criticized Ms. there will be grousing.”

TRUMP ers, according to recent Wall

Street Journal/NBC News poll-
ing. They say they believe in
God but rarely attend church;
ment Agency replaced for free
after the flood.
The financial trade-offs—
and the fact that Mr. Ellis’s
“Trump is going to send our
troops over there and say, ‘Kick
butt and take names,’ whereas
Obama wants our troops to
Continued from Page One Trump backers are less reli- company laid off some workers come home in body bags,” Mrs.
country.” gious than other Republicans. last fall—makes the prospects Ellis said.
MICHAEL PHILLIPS/THE WALL STREET JOURNAL

The enduring candidacy of The couple has a live-and-let- of a lost job and strained ac- They feel threats at home,
Mr. Trump, a businessman and live view on contentious social counts never seem distant. “Ev- too, from “the people Obama
reality-television star, is one of issues; Trump supporters are erybody’s afraid to go out and supports,” Mrs. Ellis said. She
the biggest surprises of the less concerned about abortion buy anything because we don’t is taking a gun-safety course
2016 GOP primary, and his le- than social conservatives back- know what the future holds,” and plans to get a pistol and a
gions of followers have been ing Sen. Ted Cruz. Mr. Ellis said. permit to carry it concealed.
equally striking. They have re- Some 62% of Trump sup- His job depends heavily on The Ellises say their objections
vealed a seething slice of porters, including Mr. and Mrs. international trade: His com- to Mr. Obama aren’t racially
mostly white America, unteth- Ellis, have no college degree, pany refurbishes engines for motivated.
ered from either political party, compared with 45% of those military planes the U.S. sells In Florida, Mr. Trump
in search of a voice in the na- backing Jeb Bush or Sen. Marco overseas. warned of illegal immigrants
tional debate. Rubio. More than 80% of But Mr. Ellis, who said he taking American jobs and com-
Mr. Trump “cuts right to it,” Trump backers think immigra- Tina and Joey Ellis, shown at a Donald Trump rally in Pensacola, voted for Bill Clinton in the pared Syrian refugees to “vi-
said John Pohlmann, 37, a Pen- tion hurts the U.S. more than it Fla., earlier this month, say Mr. Trump says what they feel. 1990s, remains distrustful of cious snakes” preparing to at-
sacola musical-equipment helps, compared with 45% of foreign commerce. “We’re get- tack their generous hosts. He
salesman, who says he has Bush/Rubio supporters. And Last summer, he landed a bedroom house. It has porches ting everything from everybody said recent terror attacks in
never voted in a presidential 55% of Trump supporters be- job running the shipping de- in front and back, an above- else, but nobody’s getting any- Paris and San Bernardino, Ca-
election. “He gives you a one- lieve free trade—a GOP staple— partment at an international ground pool and a trampoline thing from us,” he said. lif., would have been less
sentence answer. By the time a is bad for the U.S., 27 percent- company for $14 an hour. Mrs. for their children, Jade, an The Ellises relish Mr. deadly had civilians been
career politician gets to his age points higher than the Ellis earns less than that as as- eighth-grade soccer player, and Trump’s willingness to shout armed. He promised to bring
third sentence, I’ve forgotten Bush/Rubio wing. sistant director of a day-care Zach, a high-school senior who the things that others may only the “best people” into his ad-
what the question was.” The Ellises, both registered center. plans to enlist in the Army. whisper, whether it is about de- ministration.
Mr. Pohlmann lined up early Republicans who consider Mr. Ellis’s parents had never Still, the Ellises haven’t been porting immigrants or putting The Ellises left the arena un-
for the Pensacola rally but was themselves independent, have owned a house, but Joey and able to relax into the middle a hold on Muslims entering the sure what exactly Mr. Trump
behind Rick Snowden, a 64- survived hard times. In 2010, Tina always wanted their own class. country. would do to make America—
year-old former restaurant and Mr. Ellis, was laid off after 19 home. In 1995, they bought 3 They had to raid their retire- “He just says everything I and them—winners. But they
nightclub owner from Tennes- years at a billboard company. A acres of land in tiny Elberta, ment fund when floodwaters feel,” said Mrs. Ellis. were confident he had a plan.
see who was at his 17th Trump job working logistics during the across a red-dirt road from destroyed their furniture in The Ellises see threats “If I didn’t love him before,”
event. “We all believe he’s the Gulf of Mexico oil-spill cleanup fields of cotton and peanuts. 2014. Eggs from their chickens around the world, and they ex- Mrs. Ellis said on the drive
type of dynamic leader we need paid well but lasted just a few For six years, they lived in a help cut down on the grocery pect Mr. Trump to rebuild a back to Alabama, “I love him
at this time,” Mr. Snowden said. years. He soon was servicing double-wide mobile home, bill; a fireplace cuts electricity military they say President Ba- now.”
The Ellises, for their part, vending machines for barely while they scrimped and bor- use from a heating system the rack Obama has intentionally —Aaron Zitner
are typical of Trump support- above minimum wage. rowed to build a small, three- Federal Emergency Manage- undermined. contributed to this article.
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THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | A5

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A6 | Wednesday, January 27, 2016
Two Train Stations, Two Migrant Policies
Germany holds the
door open; just down
the track Danish police
try to deter arrivals
BY ANTON TROIANOVSKI
AND CHARLES DUXBURY
FLENSBURG, Germany—Vol-
unteers and authorities have
turned one end of the train sta-
tion here into a migrant-aid
point, complete with a chil-
dren’s play area, free food and
clothes.
At the next stop, 10 minutes
north, refugee-friendly Ger-
many gives way to a country
that has gone further than any
other in Western Europe to
keep migrants out: Denmark.
Danish police walk through
arriving trains, ordering people
without valid travel documents
off. A new law, passed Tuesday,
allows authorities to confiscate
a migrant’s assets over 10,000
Danish kroner (about $1,500) to
help cover the cost of care and
mandates a three-year wait, in-
stead of just one, before refu-
gees can send for family mem-
bers.
In few places is the rift cre-
ated by Europe’s migrant crisis
as deep as here on the German-
Danish border, a region where
European integration and easy
travel had flourished.
The two wealthy, Northern
European welfare states with
deep economic and social ties
have suddenly found them-
selves drifting apart again, un-
derscoring the threat the crisis
poses to European Union amity.
German politicians have
slammed Denmark for lacking
solidarity as Germany bears the
brunt of dealing with masses of
people, while many Danes say
Berlin itself is to blame for
drawing so many to Europe
with pro-refugee talk and rela-
tively generous benefits.
“We’re recognizing more
clearly that we’re not just a
bunch of Europeans,” says
Flensburg Mayor Simon Faber,
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Refugees from Syria hoping for asylum in Denmark waiting for a train at the station in Flensburg, Germany, early this month.
whose party represents the
Danish minority in the border
region. “We think differently,
we speak differently, and we
reach different conclusions.”
Denmark started balking
early in the crisis, even as other
countries echoed Germany’s
welcome last fall. In recent
weeks, Austria and Sweden,
long some of the most accept-
ing nations, have taken steps to
keep newcomers out, while Ger-
many is still wide open, taking
in sometimes thousands a day.
Denmark received 21,000
asylum applications last year.
Germany took in some 1.1 mil-
lion migrants, most of whom
have applied for asylum or are
expected to. The contrasting
policies highlight Germany’s
*SOURCE: INTERNATIONAL TRADE UNION CONFEDERATION
NY
WORLD NEWS
uniqueness, in part because of
its Nazi past.
Like other European coun-
tries, Denmark has seen an
anti-immigrant party enter par-
liament and the political de-
bate. Germany’s equivalent has
recently hit 10% in opinion
polls, its support having risen
along with the tide of migrants.
Sweden to Increase Security After Fatal Attack
STOCKHOLM—Prime Minis-
ter Stefan Lofven pledged to
give police more resources
to maintain security at Swe-
den’s asylum centers after a
teenage migrant was detained
on suspicion of killing an em-
ployee at a shelter on Monday.
The victim, a female staff
*
But the party remains a pariah.
While Denmark intensely de-
bates the social impact of Mus-
lim immigration, public conver-
sation in Germany often tiptoes
around the issue. Instead, many
focus on a moral responsibility
to take in refugees, rooted in
the memory of Nazi crimes and
of millions of ethnic Germans
member at a home for young
immigrants in Molndal, near
Gothenburg, died from stab
wounds. The 15-year-old suspect
was overpowered by other resi-
dents, police said.
On a visit to Molndal, Mr.
Lofven vowed to do more to
help with security but warned
More People Flock to EU
For Economy, Not Safety
BY LAURENCE NORMAN
BRUSSELS—A growing per-
centage of the people arriving
in the European Union seeking
asylum are economic mi-
grants, rather than those flee-
ing war or persecution, the
European Commission said.
“What I can tell you is that
of course there are more and
more economic migrants now
reaching Europe—obviously
using the momentum...of
the refugee flows,” Margaritis
Schinas, the commission’s
chief spokesman, said on
Tuesday.
European Commission Vice
President Frans Timmermans
was quoted in Dutch media on
Tuesday as saying around 60%
of the migrants arriving in the
bloc are now economic mi-
grants, meaning those who are
coming from countries
deemed relatively safe and
whose citizens are typically
denied asylum in the EU. For
much of 2015, Syrians made
up the majority of asylum
seekers coming to the bloc as
the conflict in their country
entered its fifth year.
A spokeswoman for Mr.
Timmermans, Natasha Ber-
taud, said that number came
from not-yet-published figures
from the bloc’s border guard
agency Frontex for December.
She noted, however, that the
Macri Names Crime-Unit Chief
BY TAOS TURNER
BUENOS AIRES—President
Mauricio Macri on Tuesday
appointed a former Interna-
tional Monetary Fund official
to head Argentina’s financial
crimes agency, in a move that
aims to bolster the country’s
contribution to the global
fight against money launder-
ing and drug trafficking and to
improve the agency’s relations
with its counterpart in the U.S.
Mariano Federici, the
agency’s new head, said a pri-
ority for the agency is to re-
store full ties with the U.S.
* ***** THE WALL STREET JOURNAL.
gained more attention this year
in Germany, especially after
hundreds of women complained
that they were sexually as-
saulted or robbed outside Co-
logne’s main train station on
New Year’s Eve. Officials have
said the suspects were mainly
from North Africa.
Denmark’s new controls, in-
troduced Jan. 4, entail police
checks of the travel documents
of all rail and ferry passengers
from Germany and some road
travelers. The controls were
prompted by an even tougher
move the same day by Sweden.
Danny Mortensen, a 20-year-
old in Padborg, a Danish border
town, calls the new controls a
good idea. “It will help us stop
too many immigrants coming
into this country and taking
over our culture,” he said.
The far-right Danish People’s
Party recorded its best-ever re-
sult in parliamentary elections
last year, coming in second na-
tionally with roughly 21%.
After last year’s election,
SEAN GALLUP/GETTY IMAGES
center-right Prime Minister
Lars Lokke Rasmussen formed a
government with the support of
the People’s Party, which
pushed for the confiscation law.
The final version passed eas-
ily Tuesday, setting the mini-
mum value of items to be con-
fiscated at about $1,500,
expelled from eastern and cen- excluding sentimental posses-
tral Europe by the Soviet Union. sions such as wedding rings.
Across the border, there is The government has explic-
less talk of historical burdens. itly said the change is aimed at
In interviews, many Danes high- deterring migrants.
lighted fears that the migrant In Germany, a similar law
flow would bring more crime, dates from the 1990s. But au-
and that their country would be thorities have said they rarely
overwhelmed culturally. make use of it, partly because
To be sure, such fears have the assets rarely top the thresh-
old. Switzerland says it col-
lected 210,000 Swiss francs
(about $207,000) from 112 ap-
that Sweden faced a challenge plicants last year.
in dealing with the thousands of And while Berlin has also
unaccompanied minors from taken steps to toughen the asy-
Syria and Afghanistan. lum process, cracking down in
“Many of them have been particular on economic mi-
through traumatic experiences grants from the Balkans, Ms.
and there are no easy answers Merkel has continued to wel-
to how this should be handled,” come refugees from Syria and
he said. —Charles Duxbury other war-torn places.
BORIS GRDANOSKI/ASSOCIATED PRESS
Migrants in Macedonia resumed their northbound trek Tuesday.
trend may have reversed in the bloc—such as Pakistan—
January. have in some instances re-
The EU is struggling to fused to take back migrants.
grapple with the biggest influx Ms. Bertaud said in those
of migrants since the after- cases, the commission is
math of World War II. More “looking at possible incen-
than one million asylum seek- tives—both positive and nega-
ers entered the bloc in 2015 tive—to ensure that the agree-
and thousands more continue ment is applied.”
to arrive each week. The commission, which is
One of the difficulties the
EU faces has been in persuad-
ing countries to take back peo-
the EU’s executive arm, also
said officials were making
preparations for the possibil-
ple whose asylum claims are
rejected. The EU, for instance,
has been negotiating a so-
ity that member states may
seek to extend emergency bor-
der controls for longer than
called readmissions agreement
with Morocco for years.
Even countries that do have
the six months currently al-
lowed under the rules of the
bloc’s open-border Schengen
readmission agreements with area.
Treasury Department, which ganizations that transport co-
has its own financial crimes caine and other drugs into the
agency, the Financial Crimes country. Authorities say the
Enforcement Network, or Fin- groups are setting up drug-
CEN. The U.S. stopped provid- processing labs and fighting
ing Argentina with financial for control of the trade.
intelligence last year, Argen- “We are going to put a very
tine officials said, amid con- strong emphasis on fighting
cerns that authorities in the drug trafficking,” Mr. Federici
government of then President said in an interview last week.
Cristina Kirchner had used “We think this is one of the
confidential information from most serious threats facing
FinCEN for political purposes the country.”
in a court case here.
In recent years, law-en-
Mr. Federici was a top anti-
money-laundering official at
forcement officials here say, the IMF and worked with
Argentina has become a desti- Latin American countries to
nation for narco-trafficking or- combat it.
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.
Pope, Iran Leader Discuss Nation’s Role
BY DEBORAH BALL
AND FRANCIS X. ROCCA
ROME—Iranian President
Hassan Rouhani’s campaign to
reintroduce Tehran to the
West took a step forward with
a high-profile audience with
Pope Francis that focused on
human rights and Iran’s role in
Middle East conflicts.
The meeting—the first be-
tween a pontiff and an Iranian
leader since 1999—came Tues-
day on the second day of a
four-day visit by Mr. Rouhani
to Italy and France that is
meant to cement the country’s
ties with the West. The trip is
the first by the Iranian presi-
dent since sanctions on Iran
were loosened this month in
the wake of an agreement to
implement key restrictions on
its nuclear program.
Most of Mr. Rouhani’s visit,
including meetings with Italian
Prime Minister Matteo Renzi
and French President François
Hollande, is focused on jump-
starting Iran’s economic rela-
tions with Europe.
But the meeting with Pope
Francis is particularly signifi-
cant because of the close ties
the Vatican and Iran have en-
joyed for decades and Iran’s
desire to project an image of a
tolerant country.
The pontiff and Mr. Rouhani
met for 40 minutes—extraor-
dinarily long compared with
typical state meetings held by
the pope. Mr. Rouhani was ac-
companied by a 12-person en-
tourage, including Iran’s for-
eign minister.
U.N. Tries to Set Syria Talks Amid Boycott Threat
The United Nations’ special
envoy to Syria on Tuesday in-
vited participants to the latest
round of talks aimed at ending
By Nathan Hodge
in Moscow
and Dion Nissenbaum
in Istanbul
the country’s nearly five-year
war, as continued tensions
over who should be on the list
added to uncertainty over the
sputtering effort.
A U.N. statement didn’t say
who was being invited to the
talks set to begin on Friday in
Geneva. But Russia insisted
that American-backed Kurdish
fighters be included, while
Turkey said it would boycott if
they were asked to take part.
U.N. envoy Staffan de Mistura
Israeli Dies
In Latest
West Bank
Stabbing
BY RORY JONES
TEL AVIV—An Israeli
woman died on Tuesday from
wounds suffered in a Palestin-
ian stabbing attack in the West
Bank, as the four-month wave
of Palestinian-Israeli violence
extended further to Jewish
settlements in the Israeli-occu-
pied territory.
Two Palestinians on Mon-
day scaled the fence encircling
the settlement of Beit Horon,
20 miles north of Jerusalem,
and attacked two women with
knives. On Tuesday, one of the
woman, Shlomit Kriegman, 23
years old, died in a hospital
near Jerusalem. The other,
Adina Cohen, 58, remained in
stable condition.
The two Palestinian attack-
ers were shot and killed by a
security guard after they tried
to enter a grocery store in the
settlement carrying homemade
bombs, Israeli police said.
Monday’s attack was the
fourth such stabbing within a
settlement in just over a week.
The apparently new focus of
Palestinian violence on the
West Bank communities led Is-
raeli Prime Minister Benjamin
Netanyahu to order a new plan
for protecting those communi-
ties, a spokesman for the pre-
mier said on Tuesday.
Until recently, the escala-
tion of Palestinian-Israeli tur-
moil, which began in October
with unrest in Jerusalem’s Old
City, has centered on Israeli
and Palestinian cities in the
West Bank and Israeli check-
points.
Hassan Rouhani, center, and Pope Francis exchanged gifts at the Vatican on Tuesday, the second day of the Iranian president’s European visit.
The Vatican said the two
discussed Iran’s role in finding
political solutions to the con-
flict in the Middle East and
stopping the spread of terror-
ism. The pope also raised the
question of the “promotion of
human dignity and freedom of
religion”—sensitive topics for
Iran, which has been under fire
for its human-rights record.
Earlier in the day, in a
speech to the Italian business
community, Mr. Rouhani
will reveal participants’ names
only after they return the invi-
tations, a representative said.
The negotiations are ex-
pected to last for six months,
Mr. de Mistura said at a news
conference Monday, the same
day the talks had originally
been scheduled to start. He
has struggled to get rival fac-
tions and world leaders to set
aside their differences and
come together to work on a
plan to resolve the conflict.
Some opposition groups
have said they would boycott
the talks as long as regime
forces maintain sieges on
towns across Syria and con-
tinue to hold large numbers of
political detainees.
Violence continued across
Syria as at least 20 people
were killed in a double explo-
Former Syrian Rebel Mourns Uprising’s Failure
Teacher took up arms against regime but was pushed out by Islamist factions; fled to Lebanon
BY RAJA ABDULRAHIM
TRIPOLI, Lebanon—In
Muhammad Harba’s used-
clothing shop here, the tele-
vision is tuned to Arabic
soap operas to fill the void
between customers. The for-
mer Syrian rebel rarely
watches the news as he ekes
out a living and tries to
drown out the din of war.
For three years, he fought
in what would become a mul-
tisided conflict that would
kill more than 250,000 Syri-
ans and create a fragmented
nation that proved fertile
terrain for Islamic State.
Many grass-roots oppo-
nents, like Mr. Harba, are
now penniless and disillu-
sioned about a peaceful up-
rising gone awry.
Squeezed out by extrem-
ist groups and foreign-power
proxies, they inhabit a
limbo—no longer part of the
conflict but not fully re-
moved from it.
“We have a lot of guilt on
us,” said the 37-year-old, as
he took another drag on his
cigarette. “We who came out
in the beginning of the pro-
tests and led these people
who are now exiled and who
have lost husbands,” he said.
“Definitely those who said
they were our friends and
abandoned us bear responsi-
bility, but we also bear the
responsibility.”
In his rural hometown of
Qusayr, in the province of
Homs, Mr. Harba worked as
an elementary-school teacher
and administrator.
When the town’s first an-
tigovernment protest oc-
curred at Qusayr’s clock
tower in April 2011, Mr.
Harba hesitated.
WORLD NEWS
quoted the Quran, saying “the
church, the synagogue and the
mosque must live side by
side.” He added that “it lists
them in that order—with the
church first and the mosque
last. This is no coincidence.”
At the end of his meeting
with Pope Francis, Mr. Rouhani
asked the pontiff to pray for
him. In turn, the pope said he
“hope(d) for peace.”
Diplomatic relations be-
tween the Holy See and pre-
sion claimed by Islamic State
in the central province of
Homs, according to state news
and a monitoring group.
Russian Foreign Minister
Sergei Lavrov said it was es-
sential to invite to the talks
the Kurdish Democratic Union
Party, the U.S.-backed Kurdish
group in Syria that has de-
clared autonomy in the north-
eastern corner of Syria after
pushing Islamic State out of
large parts of the region.
But Turkish Foreign Minis-
ter Mevlut Cavusoglu told Tur-
key’s NTV television station
that Ankara wouldn’t join the
talks if Syria’s leading Kurdish
group was included.
Turkey considers the group,
known as the PYD, a terrorist
organization that answers to
the Kurdistan Workers’ Party,
Muhammad Harba, a former Syrian rebel, stands in his shop with his son in Tripoli, Lebanon.
He thought back to 2005
when he was arrested by se-
cret police and tortured. Mr.
Harba was accused of being
a member of al Qaeda, but
during his detention investi-
gators discovered that Mr.
Harba liked to drink arrack,
an anise-flavored spirit. Al-
cohol is shunned by most ob-
servant Muslims.
He was released from
prison, and by the third wave
of protests calling for the
ouster of President Bashar
al-Assad, Mr. Harba, a slight
man with narrow shoulders,
mustered the courage to join
the demonstration.
As the regime’s security
forces and soldiers sup-
pressed protests in Qusayr
and across Syria, men like
Mr. Harba fought back. He
bought a rifle for $450 and
joined a local militia. Qusayr,
dominantly Shiite Muslim na-
tion predate the 1979 Islamic
revolution in Iran. They have
long been cordial, based on
mutual religious and geopoliti-
cal interests. But the countries
have grown closer under the
current pontificate, as the Vat-
ican regards Tehran as playing
an important role in stabilizing
the Middle East.
Some serious differences
between the Vatican and Iran
remain. Pope Francis has
or PKK, which is embroiled in
a decadeslong war with Tur-
key that has claimed more
than 40,000 lives.
“How is it possible to talk
about political reforms in
Syria while ignoring the lead-
Turkey says it won’t
join the discussions
if a Kurdish group is
asked to take part.
ing Kurdish party—a quite
powerful force that is actively
resisting terrorism on the
ground?” Mr. Lavrov said at
his annual news conference.
The U.S., European Union
and Turkey all classify the
PKK as a terrorist organiza-
which sits on the Lebanese
border, served as a waypoint
for rebels smuggling weap-
ons into Syria.
As the battles spread, Mr.
Harba began seeing that de-
cisions weren’t always being
made on the local level.
At first, he said, it was
the Salafists from Gulf na-
tions—ultraconservative pro-
ponents of Islam—and the
Muslim Brotherhood in Tur-
key. Individuals would send
money to certain groups and
then orchestrate attacks
from afar, he said.
He remembers sitting
with rebels in the orchards
rimming Qusayr in the sum-
mer of 2011 when an Egyp-
tian man came to preach
about jihad and al Qaeda.
In May 2013, the poorly
armed rebels were ousted by
Syrian regime forces backed
Wednesday, January 27, 2016 | A7
Tehran Blocks
Most Candidates
For Clerical Body
Iranian authorities have ap-
proved only a fraction of the
candidates who registered to
run in elections for a powerful
clerical body whose duties in-
clude selecting the country’s
next supreme leader.
The 12-member Guardian
Council, which vets political
candidates, approved just 166
of the 800 candidates to vie in
February’s elections for the As-
sembly of Experts, a spokes-
man said on Tuesday, the offi-
cial Islamic Republic News
Agency reported.
ANDREW MEDICHINI/PRESS POOL
The number of qualified
candidates was similar in the
latest election in 2006, when
around 160 ran for office. But
only 493 candidates applied to
run in that election.
The political leanings of the
disqualified candidates weren’t
immediately clear, and those
excluded have a three-day win-
strongly denounced the death dow to appeal.
penalty, which is practiced While candidates are clerics
widely in Iran. who must pass an Islamic law
Laws in Iran make provi- exam to run, they also act as
sions for some religious mi- politicians.
norities, but the United Na- Iran’s hard-liners have
tions, the U.S. and others have sought to limit the political
been sharply critical of its re- gains of moderate and reform-
cord on religious freedom. ist candidates since last sum-
While Christians are a recog- mer’s historic nuclear deal. Re-
nized minority in Iran and formers have vowed to appeal
largely enjoy freedom of wor- the disqualifications.
ship, they live under certain —Asa Fitch
limitations. and Aresu Eqbali
tion, but American officials political party in Rojava,” said
leading the fight against Is- Idres Nassan, a high-ranking
lamic State argue that the PYD Kurdish official, using a name
and its militant wing, known for Kurdish-dominated en-
as the YPG, are distinct claves in northern Syria.
groups. Turkey has grown in- Asked whether Russia had
creasingly alarmed by the rise suggested Syrian President
of the YPG in Syria and has re- Bashar al-Assad step down,
peatedly asked the U.S. to con- and whether it might offer
strain the militants’ opera- him asylum, Mr. Lavrov said:
tions in northern Syria. “These questions have already
Mr. Lavrov said that without been answered. In both cases,
the Kurdish Democratic Union the answer is ‘no.’ ”
Party it would be impossible to If the Geneva meeting goes
have talks on a cease-fire, po- forward as planned, there
litical reforms and fight would likely be several groups
against terrorism in Syria, as of opposition representatives
Kurds account for around 15% meeting separately, U.S. offi-
of Syria’s population. cials have said, adding that
The group said Tuesday it the talks could be delayed be-
is hoping for and expecting an yond this week.
invitation but so far hasn’t re- —Dana Ballout in Beirut
ceived one. “The PYD should and Karen Leigh in Dubai
be represented as the biggest contributed to this article.
into Lebanon.
The windows of Mr.
Harba’s shop are decorated
by rows of knockoff Nikes
and Adidas sneakers made in
Turkey. They are the only
new merchandise he stocks;
everything else is used.
This past summer he
bought the used-clothing
shop from his cousin for
$2,500—using all his $600 in
LORENZO TUGNOLI FOR THE WALL STREET JOURNAL
savings and borrowing the
rest, a debt he is paying off.
Many of the merchants
and workers Mr. Harba inter-
acts with are Syrians who
have fled the war. They
rarely discuss the conflict;
everyone has his own reason
for wanting to forget.
He now spends most of
his time either in his shop or
at home where he, his wife
and three children live with
11 other family members in a
four-bedroom apartment. His
by Shiite Hezbollah militants. wife’s three brothers died in
Mr. Harba fled to a border Syrian regime prisons.
town where he joined local In Syria’s battle-scarred
rebels. But he quickly streets young boys play war
clashed with al Qaeda’s Syr- with wooden guns, emulating
ian affiliate Nusra Front, their fathers on the front
which, like Islamic State, was lines. But in Lebanon, Mr.
growing in strength and in- Harba’s 6-year-old son,
fluence, luring increasingly Younes—who tightens his
down-and-out rebels with belt on the last hole around
the promise of weapons and his tiny frame—has taken to
salaries. simulating his father’s mun-
A year later, a heated con- dane existence, playing shop
frontation with a militant with his cousins and pre-
over Nusra Front’s clout tending to haggle.
ended with the Lebanese Having lost so much, Mr.
fighter threatening to blow Harba doesn’t know whether
them both up. he will return to Syria.
“Leave before I do away “In the end I don’t know
with you,” Mr. Harba recalls even if we returned if it
him saying, as he raised his would have any meaning,” he
right arm and revealed a det- said, his voice catching.
onator in his sleeve. “We’ll just remember every-
Mr. Harba left without an- thing and see the graves of a
other word. Soon after he thousand young men. Graves
slipped over the mountains everywhere.”
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, January 27, 2016
China Shoots for Foreign Soccer Talent
Beijing considers
offering citizenship in
a bid to boost men’s
82nd-ranked team
BY CHUN HAN WONG
BEIJING—After trying un-
successfully for years to forge
a world-class national men’s
soccer team, China signaled it
was considering a surprising
new tack: offering citizenship
to foreign players.
The proposal has sparked
debate in an ethnocentric
country with strict immigra-
tion policies whose leaders
have moved to curb foreign in-
fluence in its culture and na-
tional discourse.
“I’d rather see yellow-
skinned players lose than see
people of other skin color play
for the national team,” one
person wrote on the Weibo
microblogging service.
The tempest followed com-
ments on Saturday by a senior
Chinese soccer official that
government agencies have
been studying the possibility
of letting foreign soccer play-
ers become naturalized citi-
zens, paving the way for them
to don China’s crimson colors
on the field.
The official, Zhang Jian,
vice chairman of the Chinese
Football Association, didn’t
give details about the discus-
sions, but said that naturaliza-
tion is a “sensitive topic” with
Currency Turmoil Reflects Beijing’s Deeper Troubles
CHINA’S WORLD
ANDREW BROWNE
SHANGHAI—When finan-
cier George Soros attacked
the British pound in 1992
and famously “broke the
Bank of England,” he was
trading on a conviction that
the currency
was mis-
aligned. Brit-
ain devalued
after squan-
dering its re-
serves in a
vain defense. Mr. Soros
walked off with $1 billion or
more. To the surprise of
many, though, the U.K. econ-
omy soon picked up once the
pound found its proper level.
China’s raging battles
with currency speculators
are unlikely to end as happily
for the country. That’s be-
NAJIB
Continued from Page One
Malaysia continue to investi-
gate the transfer. Some inter-
national investigators don’t be-
lieve the nearly $700 million
came from Saudi Arabia, ac-
cording to a person familiar
with the inquiries.
“The notion that the Saudi
‘royals’ would ‘donate’ hun-
dreds of millions of dollars to a
foreign leader, as opposed to a
government institution, struck
me as suspect, to say the
least,” Fahad Nazer, a senior
political analyst at consultancy
firm JTG, said in an email. Mr.
Nazer previously worked as a
political analyst at the Saudi
Embassy in Washington. The
alleged donation occurred in
2013, during the reign of the
now-deceased King Abdullah.
The nearly $700 million
transfer is the most explosive
element of a wide-ranging
scandal involving a Malaysian
government investment fund,
1Malaysia Development Bhd.,
or 1MDB. The fund amassed
billions of debt it has struggled
to repay and is now selling off
assets.
The Wall Street Journal re-
ported in July that an earlier
Malaysian government investi-
gation found almost $700 mil-
lion had entered Mr. Najib’s ac-
counts via banks, companies
and entities linked to 1MDB,
which Mr. Najib set up in 2009
to foster economic develop-
ment.
That earlier investigation
didn’t name the funds’ source
or how they were used. Malay-
China’s team posed for a photo before the start of their Asian Cup soccer match against North Korea in Canberra on Jan. 18, 2015.
implications for Chinese law
and population policies, ac-
cording to a China Central
Television video of his com-
ments.
China, where soccer is the
top spectator sport, already
allows foreign players into its
professional leagues. Pros
from Europe and South Amer-
ica have restored some credi-
bility to the Chinese game,
once marred by corruption
cause turmoil in the currency
markets reflects a much
more perilous imbalance
than an overvalued yuan:
China is lopsidedly depen-
dent on ever larger inputs of
local bank credit to keep
sputtering growth from de-
clining further.
The country is littered
with “zombie” factories,
empty apartment blocks,
mothballed power stations
and other infrastructure that
nobody needs. But yet more
wasteful projects are in the
pipeline, even as the govern-
ment talks about cutting in-
dustrial overcapacity.
“That’s the misalign-
ment—everything else is
noise,” said Rodney Jones,
the Beijing-based principal
of Wigram Capital Advisors,
who was a partner at Soros
Fund Management during
the 1990s.
I
f debt keeps piling up at
the current rate, China
faces an eventual finan-
cial crisis, perhaps leading
to years of subpar growth,
mirroring the fate of Japan
sia’s central bank, the nation’s
antigraft body, a parliamentary
committee and the auditor
general went on to probe
1MDB and the transfers.
The scandal has led to calls
for the resignation of Mr. Na-
jib, who ran 1MDB. The Wall
Street Journal reported in De-
cember that money from 1MDB
was used to fund Mr. Najib’s
party in a tight 2013 election.
Mr. Najib didn’t respond to
questions about the transfer or
the use of 1MDB money for the
election. He has denied any
wrongdoing or taking the
money for personal gain.
The attorney general’s four-
page statement didn’t address
several questions Malaysian
opposition figures have sought
answers to, including: Who
specifically donated the
money? Why was it donated?
Why did it take more than six
months for the government to
say where the money came
from? And what happened to
the money that wasn’t re-
turned?
The statement also didn’t
address why the money flowed
to Mr. Najib’s account through
an anonymous British Virgin
Islands company and a Swiss
private bank wholly owned by
an Abu Dhabi sovereign-wealth
fund that is deeply intertwined
with 1MDB.
Mr. Najib, who came to
power in 2009, has sought to
strengthen Malaysia’s diplo-
matic and business ties with
Gulf nations, including Saudi
Arabia. Kuala Lumpur is a cen-
ter for Islamic finance, and
Malaysia was one of the first
non-Arab countries to join the
Saudi-led coalition fighting
* ***** THE WALL STREET JOURNAL.
WORLD NEWS
be filled by naturalized for-
eigners,” he said, referring to
China’s top-tier soccer league.
Experts say the debate un-
derscores Beijing’s divided at-
titudes and contradictory poli-
cies on immigration.
China’s 1980 nationality law
lets foreigners apply for Chi-
nese citizenship if they have
close relatives who are Chi-
nese nationals; are living in
China; or have “other legiti-
mate reasons” for applying.
Authorities have long said
they want to attract high-cali-
ber foreigners, albeit mainly
through a permanent-resi-
dency program.
Beijing hasn’t issued de-
tailed criteria for citizenship
applications. Gary Chodorow, a
China-based immigration law-
yer, said he wasn’t aware of
TIM WIMBORNE/REUTERS
any recent examples of for-
eigners attaining Chinese citi-
zenship, while approvals for
permanent residency are
highly selective.
As of 2013, only about 7,300
foreigners have received so-
called green cards, the state-
and poor play. Allowing such with six appearances in the state China’s in right now, this run China Daily reported.
players to become citizens World Cup, including a run- is the only way for us to qual- “The system is too opaque,”
would mark a significant shift ner-up finish in the 1999 edi- ify for the World Cup,” a sec- Mr. Chodorow said.
in Chinese immigration policy. tion held in the U.S. ond Weibo user wrote. State media has acknowl-
Some fans favor the ap- But others warn that natu- “If China opens the door to edged as much. “We can say
proach as a way to buoy a na- ralizing foreign players would naturalizing foreign players, it with certainty that it is very,
tional men’s team that has harm China’s fledging efforts would deal a ruinous blow to very rare for” foreigners to
qualified only once for the to develop the sport. Backed the national team,” Luo Ming, gain Chinese citizenship, ac-
World Cup, in 2002, and has by President Xi Jinping, a self- deputy editor of China’s Titan cording to an immigration
languished in the middle tiers professed soccer fan, the gov- Sports newspaper, wrote. “A guide published by the Com-
of international soccer, now ernment launched a campaign foreseeable consequence is munist Party-controlled Global
ranked 82nd. The Chinese last year to revamp the game. this: All 11 positions in a Chi- Times. “You’ll have to go
women’s team has fared better “To be honest, given the nese Super League team could through bureaucratic hell.”
“basic stability,” although nese market regulators,
many traders think it has rather than a symptom of
nowhere else to go except deeper malaise.
down.
B
To be accurate, part of ut the problem stems
the yuan’s weakness is due from higher up. Presi-
to the central bank’s new dent Xi Jinping has
method of managing its centralized economic policy
KIM KYUNG HOON/REUTERS
value against a basket of making in his own hands,
currencies. It’s no longer a and he doesn’t take criticism
one-way bet, and so inves- well. Late last year, as eco-
tors are diversifying. nomic uncertainty climbed,
The smart Chinese money the Communist Party issued
is nervous; the central bank disciplinary instructions out-
is struggling against a tide lawing “improper discus-
Apartments on the outskirts of China’s capital, Beijing. of capital heading for the ex- sion” in its ranks.
its. Individuals are shipping As is often the case when
after its bubble burst in the partners. An alternative— out portions of their wealth. the leadership feels be-
early 1990s. Mr. Jones ar- further clamping cross-bor- Some corporations that bor- sieged, state media is lash-
gues that global equity mar- der currency controls— rowed offshore in dollars are ing out at foreigners. Last
kets haven’t properly ad- would be a humiliating repaying the money early, week, Xinhua News Agency
justed to this risk, even after retreat from Beijing’s policy adding to the outflow. blamed “reckless specula-
a 16% decline in U.S. dollar of making the yuan more in- And China is hemorrhag- tions” and “vicious shorting
terms from their May peak. ternational. ing reserves to try to pre- activities” from overseas for
“The world will have to Or Beijing could allow a vent the yuan from falling the turmoil, and warned of
learn to live without demand free float of its currency. But even more sharply. unspecified “severe legal
from China,” he said. “It’ll financial authorities don’t International financial consequences” for those re-
come as a shock.” intend to allow markets to leaders are growing increas- sponsible.
A sharp devaluation pass judgment on an out-of- ingly worried that currency Such threats, if carried
won’t fix these distortions, whack yuan and, more fun- chaos in China could tip the out, will only exacerbate the
and might even make mat- damentally, the govern- already fragile global econ- crisis of confidence. Specula-
ters worse if, as likely, it ment’s fumbling of the omy into recession. Some tors aren’t just shorting the
were to trigger financial economy. They have pledged blame the mess on the poor currency; they’re selling
mayhem in China’s trading to maintain the currency’s communication skills of Chi- China itself.
Malaysian investigations into
1MDB and the transfers, an al-
legation Mr. Najib hasn’t spe-
World
at a checkpoint in Chinarto dis-
trict, according to Dost Moham-
mad Nayab, the spokesman for
cifically addressed.
Mr. Apandi “has provided Watch the governor of Uruzgan prov-
ince. Mr. Nayab said the shooter
no new or convincing informa- fled the scene late Monday, tak-
tion or arguments” to show ing all the weapons and ammu-
the fund transfers were bona nition from the checkpoint.
fide and not used for corrup- Taliban spokesman Qari
tion, said Tony Pua, an opposi- ITALY Yousaf Ahmadi said the attacker
tion lawmaker. was now with the Taliban. In-
Police Open Tax Probe
OLIVIA HARRIS/REUTERS
Malaysia’s former attorney sider attacks have been com-
general, who was coordinating Of Italian Soccer mon, especially in remote areas
investigations into 1MDB, Prosecutors in Naples said where the Taliban have a strong
stepped down in July. The gov- they are investigating an alleged presence. —Associated Press
ernment cited health reasons €12 million ($13 million) tax eva-
for his departure and Mr. Najib sion scheme involving soccer CHINA
Malaysia Prime Minister Najib named Mr. Apandi as his suc- players, their agents and a num-
Razak in Kuala Lumpur Tuesday. cessor. Mr. Najib fired a deputy ber of soccer clubs.
Statistics Chief
prime minister who had been In a statement, prosecutors Under Investigation
Houthi rebels in Yemen. The calling for stepped-up investi- said police Tuesday raided the China’s antigraft agency said
two nations are also majority gations into 1MDB’s activities offices and houses of 58 people it was investigating the chief of
Sunni Muslim though Saudi and promoted the head of the allegedly involved in the scheme. the government’s statistics bu-
Arabia practices a more aus- parliamentary committee into The statement didn’t identify reau for alleged serious viola-
tere version than Malaysia. his cabinet, delaying the com- the people or teams involved, tions of discipline, a term typi-
“This is a no-win situation mittee’s probe into the fund. but a person familiar with the cally used by investigators for
for Najib. Despite the AG deci- That probe, and an investi- probe said Adriano Galliani, chief corruption charges.
sion, public perception will not gation of 1MDB by the auditor executive of AC Milan, Aurelio The Communist Party’s Cen-
be on his side,” said Wan Saiful general, are continuing. De Laurentiis, head of SSC Na- tral Commission for Discipline In-
Wan Jan, chief executive of Malaysia’s central bank in poli and Claudio Lotito, president spection said on its website
Malaysia-based think tank In- October said it had recom- of SS Lazio, are among those Tuesday that National Bureau of
stitute for Democracy and Eco- mended that Mr. Apandi begin under investigation. Statistics head Wang Baoan had
nomic Affairs. criminal proceedings against —Giovanni Legorano been placed under investigation.
Mr. Najib, in a statement, 1MDB’s management for alleg- No further information was
welcomed the attorney gen- edly breaking foreign-exchange AFGHANISTAN given about the probe. Mr. Wang
eral’s decision but didn’t give rules. But Mr. Apandi declined couldn’t be reached to comment,
any further details on the to take action, saying there
Policeman Kills and it wasn’t clear whether he
transfers or acknowledge they was insufficient evidence to 10 Colleagues was represented by a lawyer.
came from Saudi Arabia. proceed. An Afghan policeman turned Hours before the agency’s an-
“This issue has been an un- Attempts to reach 1MDB for his weapon on fellow officers as nouncement, Mr. Wang appeared
necessary distraction for the comment weren’t successful. they were sleeping in their quar- at a media briefing in Beijing
country,” Mr. Najib said. “Now The fund has denied wrongdo- ters near a checkpoint in the during which he talked about
that the matter has been com- ing and said it was cooperating country’s south, killing 10, a pro- the state of the world’s second-
prehensively put to rest, it is with probes being conducted vincial spokesman said Tuesday. largest economy. Mr. Wang, 52,
time for us to unite and move by the central bank and other The Taliban quickly claimed was assigned to lead the statis-
on.” investigating bodies. responsibility for the incident, tics bureau in April.
Critics of Mr. Najib weren’t —Margherita Stancati, Celine the latest so-called insider at- The government has waged a
satisfied by the attorney gen- Fernandez tack involving a soldier or a po- wide-ranging campaign to root
eral’s conclusions. They say the and Ahmed Al Omran liceman. out official corruption over the
prime minister has stymied contributed to this article. The bodies were discovered past three years. —Grace Zhu
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, January 27, 2016 | A9

CIONETWORK

ANNUAL MEETING
FEBRUARY 1–2, 2016 | HALF MOON BAY, CA

This year’s meeting will tackle the critical enterprise computing issues affecting business today. Technology is
radically changing the business landscape. How can chief information officers and other top executives managing
data deploy the best technology to address competition, strategy, analytics and network vulnerability?

Also this year: We take you into the world of Virtual Reality with one of the foremost visionaries on the medium.
He’ll explain why VR is the new standard in training – from factory floors to how to manage a strategy meeting.
Attendees will experience first hand what it’s like to quarterback an NFL team and protect a hockey goal –
training programs already in use in professional sports.

As always, the Journal is pleased to present speakers at the forefront of managing change.
They will share insights on maximizing new technologies and the cost of falling behind.

FEATURED SPEAKERS INCLUDE:

BEN GOLUB AARON LEVIE

CEO / Docker CEO, Co-Founder and Chairman / Box

Containment Policy: What does the Organizing the Business: Where is

innovation of container technology the future of enterprise cloud
mean for business? And when should computing headed?
a company make the leap?

HILARY MASON GEN. MICHAEL HAYDEN

CEO and Founder / Fast Forward Labs Principal / The Chertoff Group
Director / CIA (2006-2009)
Bring on the Data: Big data has launched Director / NSA (1999-2005)
a boom industry in data analytics and
science. Where’s this revolution headed Cybersecurity: A report from the
and how can companies turn all this data front lines.
to competitive advantage?

AND ALSO FEATURING:

STEWART BUTTERFIELD ANDY OZMENT

Co-Founder and CEO / Slack Assistant Secretary, Office of Cybersecurity and
Communications / U.S. Department of Homeland Security

ANDY D. BRYANT
Chairman / Intel Corporation TOM REILLY
CEO / Cloudera
DAWN LEPORE
CEO / Drugstore.com, Inc (2004-2011) PETER SONDERGAARD
CIO / Charles Schwab (1994-1999) SVP, Research / Gartner, Inc

PROUDLY SUPPORTED BY:

To view the complete program or learn more about membership in the CIO Network,
visit CIONetwork.wsj.com
© 2015 Dow Jones & Co., Inc. All rights reserved. 6C8312
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A10 | Wednesday, January 27, 2016
FEES
Continued from Page One
Walters, a credit-risk analyst
at a financial-services firm in
Virginia who manages his own
investments and recently put
more money in BlackRock’s
iShares Core S&P Total U.S.
Stock Market ETF.
He pays 0.03%. “If you can
do it cheaper than the next
guy, then yours is the one I
want,” says Mr. Walters.
Overall, the average fund
tracked by Morningstar
charges 1.07%, down from
1.22% in 2005. The steepest
slide has been at passively
managed mutual funds and
ETFs that try to track broad
indexes at a fraction of the
cost of human money manag-
ers who handpick investments.
The consequences are more
complicated than they might
seem at first. While lower ex-
penses leave people with more
money to amass for retirement
and other uses, nearly free
funds are equivalent to the
loss leaders sold by supermar-
kets as come-ons, some money
managers and analysts say.
They say bargain-basement
funds help get investors in the
door, where they can be
pitched pricier portfolios that
often are riskier, too.
The strategy is “taste the
honey and come in so we can
show you all our other prod-
ucts,” says Rick Ferri, founder
of Portfolio Solutions LLC, an
independent financial-advisory
firm in Troy, Mich.
Fund companies say the
slide toward zero is a huge
benefit for investors, many of
whom can benefit from a com-
bination of low-cost, plain-va-
nilla funds and more-compli-
cated ones that offer exposure
to niche markets.
But declining costs are
pressuring the industry’s
profit margin, which slipped to
22% in last year’s third quarter
from 25% a year earlier, ac-
cording to consulting firm DST
Kasina, part of DST Systems
Inc.
Fund expenses cover the
sponsoring company’s costs of
investment research, sales and
marketing, and other services.
Eke out a profit
Only the largest asset man-
agers have the operating effi-
ciencies needed to eke out a
profit on funds that charge
0.03% or less, so the pressure
to get even bigger has become
more intense than ever. Firms
that use portfolio managers to
choose stocks and bonds face
an especially brutal squeeze.
Even though actively man-
aged mutual funds did better
overall last year than market-
cloning competitors for the
first time since 2012, clients
pulled about $200 billion from
actively managed stock and
bond funds in 2015, according
to Morningstar data. Passively
run funds attracted roughly
$400 billion.
Actively managed U.S. stock
funds suffered their worst an-
nual outflow ever. As costs
keep declining, traditional
money managers “aren’t going
to be able to compete” unless
they are able to outperform
passive funds, says Mark
Wiedman, global head of
BlackRock’s iShares business.
The race to zero has been
accelerated by several forces.
The Federal Reserve’s low-in-
terest-rate policy slashed the
income on bonds and cash,
FROST
Continued from Page One
in over-chilled shopping malls
in the summer. Temperatures
in the subtropical city average
77 degrees Fahrenheit or
higher from May to October,
and generally stay above 59
degrees in January, according
to the Hong Kong Observatory.
That means native Hong
Kongers rarely get a chance to
see frost, which forms only
when the temperature on the
ground goes below freezing.
Snow, which requires moist air
at near- or freezing tempera-
tures, is even rarer, having last
occurred in 1975, according to
the observatory.
A dip in the mercury that
would barely register in colder
climes can cause a flurry of ex-
citement in Hong Kong. The
Hong Kong Observatory issued
a cold-weather warning—
which includes an admonition
not to light fires indoors—
when temperatures hit the low
50s at the end of last week,
and a frost warning on Satur-
Brolin Walters recently put more money in an exchange-traded fund that charges him just $3 a year for every $10,000 invested.
Market Clones Gain Clout
Passively managed mutual funds and
exchange-traded funds are growing faster than
those where humans choose the investments...
Total assets
$10 trillion
8 stock ETF also costs about
6 hold broad baskets of assets
4 market value alone, according
2 lion in assets so far.
0 –200
2000 ’05
Source: Morningstar
making high fees stick out like
sore thumbs, analysts say.
Young investors are acutely fo-
cused on costs and skeptical of
advice. And even older inves-
tors who were accustomed to
putting money into traditional
funds felt burned by devastat-
ing losses in 2008 and 2009.
Steve Deschenes, head of
client analytics and research at
the Capital Group Cos., says
human stock and bond pickers
suffered from an “asymmetry
of blame” during the financial
crisis. Capital Group is the par-
ent of American Funds, where
investors withdrew about $250
billion from 2008 to 2013. Its
mutual funds have about $1.1
trillion in assets.
“If you held index funds,
you said: ‘I held the market, so
I expected to lose money in a
decline,’ ” he says. “But if you
held money in an active fund,
you said: ‘My manager didn’t
sidestep the decline.’ ”
Some money managers that
get much of their revenue
from actively managed funds
are fighting back, partly by
getting more vocal about the
potential risks of index invest-
ing. They say the strategy
forces investors into risky
bonds or pricey stocks just be-
cause they are part of a bench-
mark.
AllianceBernstein LP has in-
creased its marketing of ac-
tively managed strategies for
assets such as high-yield
bonds. The firm hasn’t cut its
fees. “We’re not surprised at
all to see passive managers
compete on fees because that’s
day. Amateur weather-watcher
group Hong Kong Weather In-
formation Center posted on its
Facebook page even colder
forecasts for Hong Kong from
a bevy of global meteorological
sites. The city’s biggest Eng-
lish-language newspaper, the
South China Morning Post,
speculated on the possibility of
an “ice storm” hitting the city.
At Tai Mo Shan, literally
“big foggy mountain” in Can-
tonese, a line of cars inched up
the winding road to the peak,
bumper to bumper, in the wee
hours of Sunday morning. Nor-
mally the journey takes about
15 minutes from base to peak,
but many drivers gave up and
turned back after hours of
idling, while groups of bun-
dled-up frost-chasers trudged
past armed with walking poles,
reflective blankets and photog-
raphy equipment.
Not everyone came pre-
pared for cold and ice: Some
hikers were making the trek in
Nike running shoes, while oth-
ers tried to ride bicycles up
the frozen slope. The road was
so slick that people unused to
walking on icy streets fell flat
FROM PAGE ONE
...and investors are pouring more money into
passive funds, lured by their declining fees, low
interest rates and other factors.
Actively managed Passively managed
Net flow
$400 billion
200
0 to the firm. The ETF has at-
’10 ’15 2000
their only differentiator,” said
Chris Thompson, AllianceBern-
stein’s head of distribution for
the Americas.
For investors, small savings
on fees can make a big differ-
ence in the long run.
Securities and Exchange
Commission economist Timo-
thy Riley calculated in a study
released in September that in-
vestors could save $25 billion
a year—or more than $200 per
household in the U.S.—by
switching from actively man-
aged mutual funds to passive
ones seeking to replicate an in-
dex like the Dow Jones Indus-
trial Average, S&P 500 or Bar-
clays Aggregate Bond Index.
A decade ago, a $10,000 in-
vestment in the average ac-
tively managed U.S. stock fund
cost $97 a year. The stake
would grow to $43,591 after 30
years, assuming an average an-
nual return of 6% in the stock
market. In the past decade, the
stock market had a 7.3% aver-
age annual return.
The same $10,000 invest-
ment in a fund with annual
costs of 0.03% would swell to
$59,949 in 30 years.
Samuel Lee, founder of
Severian Asset Management
LLC, a financial-advisory firm
in Chicago, says the biggest as-
set managers are trying to
promote a few dirt-cheap ETFs
that establish “a reputational
halo of low cost.” Costs on
other ETFs and mutual funds
are being held steady or even
climbing, say some industry
analysts and executives.
Last year, fund firms
on their backs. At one particu-
larly slippery uphill stretch,
several hikers resorted to
crawling forward on all fours.
Many descending the moun-
tain slid down the hill on their
bottoms, cheered on by
friends.
Crowds thinned toward the
top, as the winds strengthened
and the road became icier.
Near the summit, the head-
lamps and flashlights of hikers
shone against a panorama of
orange city lights. Some frost
hounds had pitched tents to
spend the night.
Though there was no snow,
freezing rain meant large
amounts of slushy ice—as well
as plenty of frost, enveloping
everything from tree branches
to road signs and car license
plates.
Frankie Fong, a 27-year-old
electronic technician, drew a
crowd by building a tiny snow-
man with the ice on the road,
using mini M&Ms for eyes.
“I am so excited right now,
I never thought in my lifetime
I would be able to build a
snowman in Hong Kong,” said
Mr. Fong, lying on his side
’05 ’10 ’15
THE WALL STREET JOURNAL.
launched 117 ETFs that cost
more than 0.5% but only 21
with expenses of 0.1% or less,
according to Morningstar.
ETF providers say higher-
cost funds typically offer expo-
sure to markets or strategies
that are specialized, complex
and otherwise would be even
more expensive for individual
investors.
Still, there is no doubt that
dirt-cheap funds are sending
Vanguard’s unusual
structure limits its
ability to lower fees,
says Mr. McNabb.
shock waves through the fi-
nancial industry. Some execu-
tives at Goldman Sachs Group
Inc. gasped at a meeting last
fall when the company’s asset-
management unit introduced a
new ETF with annual fees of
just 0.09%, according to a per-
son familiar with the matter.
The Goldman Sachs Active-
Beta U.S. Large Cap Equity ETF
relies on computer models to
form a relatively static portfo-
lio of stocks and is designed to
beat the market by using such
factors as “value,” or stocks
trading at cheap prices, and
high profitability.
Hikers covered in ice at Tai Mo Shan, Hong Kong’s highest mountain.
next to his frozen creation as
passersby snapped photos.
Ming Wong, 30, a real-es-
tate worker who was climbing
with five other members of
Hong Kong Weather Informa-
tion Center, said he was only
“half-half” in terms of satis-
faction, because he had hoped
to see snow or sleet, which is
made when raindrops freeze
before hitting the ground.
The lack of sleet was par-
tially alleviated by Mr. Wong’s
first experience of freezing
THE WALL STREET JOURNAL.
For example, the iShares
Core S&P Total U.S. Stock Mar-
ket fund would bring in annual
revenue of roughly $800,000,
based on expenses of 0.03%
LEXEY SWALL FOR THE WALL STREET JOURNAL; KRIS TRIPPLAAR/SIPA USA/ASSOCIATED PRESS (BELOW)
and recent assets of $2.7 bil-
lion. The equivalent fund at
Vanguard has about $400 bil-
lion in assets.
BlackRock’s fund got $302
million in new investor money
from Nov. 10 to Jan. 26. The
average net monthly inflow
since the fee-cut announce-
ment jumped nearly 50% com-
pared with the first 10 months
of 2015. Some of the increase
reflects seasonal factors such
as portfolio rebalancing and
trading for tax reasons, a
spokesman says.
Meanwhile, higher expenses
on other BlackRock funds are
helping to subsidize funds that
have cut investor fees. The
iShares MSCI Japan ETF,
which aims to track an index
of Japanese stocks, has nearly
$20 billion in assets and
charges investors 0.48%,
meaning it pulls in close to
$100 million a year.
The new fund aims for re- Relentless pressure
turns that beat the S&P 500. Fee-cutting pressure is
Its rock-bottom fees undercut likely to remain relentless.
one of the world’s largest Vanguard automatically lowers
ETFs, SPDR S&P 500 ETF fees as its funds grow. The
Trust, which charges 0.0945% firm manages about $3 trillion
a year. That fund is managed in assets.
by a unit of State Street Corp. Chairman and Chief Execu-
State Street says it hasn’t tive F. William McNabb III says
changed the fund’s fees. Vanguard’s unusual ownership
Goldman’s U.S. large-cap structure limits its ability to
offer loss leaders with fees
one-fourth as much as some ri- that are lower than their oper-
val “smart beta” funds that ating costs.
Instead, the firm has spent
selected by criteria other than much of the last year looking
for savings in technology,
back-office infrastructure and
tracted more than $250 mil- other areas. It recently encour-
aged holders of brokerage and
Like many other investment mutual-fund accounts to con-
firms, Goldman also is compet- solidate them.
ing against itself. Its asset- The only escape from the
how-low-can-you-go strategy
management unit is best
known for hands-on attention is by tempting investors with
to pension funds, wealthy indi- higher-fee funds that offer at
viduals and advisory firms that least the potential to be worth
cater to rich investors. it.
“Clients have asked for this Since the start of 2014,
product and we are agnostic nearly 200 “liquid alternative”
about whether its growth mutual funds have been
comes from new or existing launched to package commodi-
clients,” a Goldman spokesman ties, currencies and hedge-
says. fund-like strategies into in-
Goldman’s launch “got a lot vestments for the masses.
of their competitors fretting Morningstar says the aver-
over the direction things are age annual fee on such funds is
headed,” says Ben Johnson, di- 1.67%, compared with 1.22% for
rector of global ETF research the average active fund and
at Morningstar. 0.68% for index funds.
Marie Chandoha, chief exec- The First Trust Dorsey
utive of Schwab’s investment- Wright Focus 5 ETF holds five
management unit, says the other specialized funds at a
company was late to the game time and can juggle those
when it launched its first ETF holdings as short-term indica-
in 2009. It decided to compete tors recommend changes. The
on price. fund, run by First Trust Advi-
She says ultralow fees make sors LP, is less than two years
ETFs more attractive as “port- old and charges 0.94% a year.
folio building blocks” for the The ETF outperformed the
financial advisers who keep S&P 500 by more than five
more than $1 trillion in client percentage points in 2015 and
assets at Schwab. had nearly $5 billion in assets
The seven funds that Black- at its peak late last year. Since
Rock cut fees on in November Jan. 1, it has declined along
provide basic exposure to with the overall stock market
broad swaths of the stock and and now has $3.8 billion in as-
bond markets. Such funds hold sets.
22% of the firm’s ETF assets. Ryan Issakainen, ETF strat-
Overall, BlackRock has $4.65 egist at First Trust, says the
trillion in assets, ranking it the fund offers a sophisticated
largest asset manager in the strategy at lower cost than
world. most mutual funds provide.
Mr. Wiedman of BlackRock While investors often are
says ETFs can be profitable paying less than ever for some
even when their fees are low mutual funds and ETFs, they
because of immense asset size. need to be careful, says Matt
“We are in the business of in- Hougan, chief executive of re-
creasing earnings,” he says. search firm ETF.com. “It’s go-
“Over time, the revenue ing to be like trying to eat
growth from volume will out- healthy in a junk-food restau-
strip the price cuts in these rant,” he says. “There’s going
products.” to be a lot of temptation.”
Wong.
The Hong Kong Observatory
said it recorded a temperature
of 3.3 degrees Celsius, or 38
degrees Fahrenheit, at its
headquarters early Sunday, the
lowest in 59 years. By Sunday
afternoon, Hong Kong officials
were begging frost-watchers to
stay home, after logging doz-
ens of cases of hypothermia on
Tai Mo Shan, and more than
BOBBY YIP/REUTERS
100 people stranded on vari-
ous peaks.
“I want to use this chance
to ask Hong Kong people not
to go up to the mountains,”
said Wong Ka-wing, an acting
division commander in the
rain, which is made when rain Hong Kong fire department, in
freezes upon impact with the a televised interview.
cold ground. Mr. Wong said Still, snow remained elu-
the group found the tempera- sive, though videos showing
ture “unexpectedly low,” with specks floating in the air in lo-
a reading on their thermome- cations around Hong Kong
ter of minus 4.9 degrees Cel- proliferated online. The Hong
sius, or 23 degrees Fahrenheit, Kong Observatory said that the
at 4:43 a.m. most residents could expect
“We all felt very excited, be- from the skies are “small ice
cause the seasonal forecast pellets,” though that, too,
told us this winter is warmer seemed elusive as the sun
than normal, and suddenly this came out and warmed temper-
intensive cold surge formed atures by a few degrees on
around east Asia,” said Mr. Monday and Tuesday.
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.
Why Vote for Trump?
Can Republi-
cans
conserva-
and
tives bring
themselves
to maybe
support Don-
BUSINESS
ald Trump
WORLD
after all?
By Holman W.
The ques-
Jenkins, Jr.
tion has
come up as
people like Bob Dole and Rudy
Giuliani have begun to express
themselves on the preferability
of Mr. Trump to Ted Cruz,
though it’s far from obvious
that the choice comes down to
those two. At the other end
are the conservative writers at
National Review who’ve tried
to excommunicate Trump from
themselves, or vice versa.
Mr. Trump calls himself a
conservative because it is con-
venient to do so when stump-
ing for GOP primary votes. He
has adopted positions on
abortion and guns that no-
body believes.
He’s an avatar of New York
values, goes the slur, but that’s
a way of saying he fits the
mold that umpty-million up-
scale voters say they want; a
socially liberal, fiscally conser-
vative candidate.
Indeed, if Mr. Trump both-
ered to know what he really
thinks, as a lifelong New
Yorker, business person and
multiple divorcee, he probably
slots right in with GOPers who
aren’t social conservatives or
evangelicals. And yet his
success so far has been almost
entirely with the social conser-
The Data Breach You Haven’t Heard About
By Will Hurd
A
security breach recently
discovered at software
developer Juniper Net-
works has U.S. officials wor-
ried that foreign hackers have
been reading the encrypted
communications of U.S. gov-
ernment agencies for the past
three years. Yet compared
with the uproar over the
Office of Personnel Manage-
ment breach, first disclosed
last June, this recent breach
has gone largely unnoticed.
On Dec. 17 the California-
based Juniper Networks an-
nounced that an unauthorized
backdoor had been placed in
its ScreenOS software, and a
breach was possible since
2013. This allowed an outside
actor to monitor network traf-
fic, potentially decrypt infor-
mation, and even take control
of firewalls. Days later the
company provided its clients—
which include various U.S.
intelligence entities—with an
“emergency security patch” to
close the backdoor.
The federal government has
A Myopic Shift Toward Trump
Fired by antip-
athy to Sen.
Ted Cruz,
which is easy
to understand,
the Washing-
POLITICS ton Republican
establishment
& IDEAS
is stampeding
By William
into the arms
A. Galston
of Donald
Trump. Promi-
nent former members of Con-
gress who have publicly sig-
naled their preference for Mr.
Trump include Bob Dole, Trent
Lott and Newt Gingrich. A
greater act of self-defeating
myopia is hard to imagine.
It’s not exactly a secret that
I’m a Democrat. But I’m also a
citizen, and as a citizen, I’m
risk-averse. I don’t want to
take a chance on the future of
my country. That’s why I want
both parties to nominate can-
didates who are clearly quali-
fied by virtue of knowledge,
temperament and experience
to serve as president.
Can anyone say with a
straight face that Mr. Trump is
such a candidate?
A much-debated issue of the
National Review makes the full-
est case yet that he is not, and
the bill of particulars is impres-
sive. The editors and 31 contrib-
utors demonstrate beyond a
reasonable doubt that Mr.
Trump is no conservative and
that his recent claims to the
contrary are the political equiv-
alent of a deathbed conversion.
He backed the Obama adminis-
tration’s economic stimulus and
the bailouts for the banks and
vatives and evangelicals.
If angry white populists
can make the unlikely Mr.
Trump a vessel for their
hopes, why not economic con-
servatives with NYC values?
Coalition building!
Immigration has been cen-
tral to his campaign but try to
figure out what he’s saying. A
respected social scientist like
Christopher Jencks can admit
that low-skill migrants may
undermine the earnings of
low-skill workers. The phrase
downward assimilation has
Part of the electorate
thinks it has nothing
to lose. Most of us do.
been adopted for the fact that
not all second- and third-gen-
eration immigrant kids climb
the educational and income
ladder; some expand the ranks
of the underclass.
The Donald, though, does
not seem to take a position on
immigration policy. His com-
plaint is with the system itself.
It doesn’t work. Too many
people get around it.
Is it a kind of anti-dog whis-
tle for the liberal media when
he also says he hopes that hard-
working illegals, after being
deported, will return legally?
Who knows? Every campaign
is partly about signaling, let-
ting voters know you’re on
their side without committing
definitively to their views. And
Mr. Trump’s campaign has
yet to determine which agen-
cies are using the affected soft-
ware or if any agencies have
used the patch to close the
backdoor. Without a complete
inventory of compromised sys-
tems, lawmakers are unable to
determine what adversaries
stole or could have stolen.
If government systems have
yet to be fixed then adversaries
could still be stealing sensitive
information crucial to national
security. The Department of
Homeland Security is furiously
working to determine the ex-
tent to which the federal gov-
ernment used ScreenOS. But
Congress still doesn’t know the
basic details of the breach.
Yet this vital information
should not be difficult to
obtain. After all, U.S. banks
that use this software for en-
cryption were forced to share
the extent of their use to the
Securities and Exchange Com-
mission only hours after the
compromise was disclosed. It
is government agencies that
are dragging their feet.
This is why I and my col-
leagues on the House Commit-
the automobile industry. He
supports higher taxes on the
wealthy and the aggressive use
of eminent domain. He has
spoken approvingly of single-
payer health insurance, tougher
gun-control legislation and
Planned Parenthood.
As Russell Moore, the presi-
dent of the Ethics and Liberty
Commission of the Southern
Baptist Convention points out,
Mr. Trump has backed partial-
birth abortion; he has aban-
doned one wife after another
for a younger women while
denying that he has any need to
seek forgiveness; and his com-
ments about Muslims show that
his commitment to religious lib-
erty is at best skin-deep.
If I were a conservative, this
litany would be enough to
make me run screaming in the
opposite direction. But as the
late-night ads proclaim: Wait,
there’s more!
A president’s first duty is to
serve as commander in chief.
During the Republican presi-
dential debates, Mark Helprin
observes, Mr. Trump revealed
that he was clueless about the
cornerstone of America’s deter-
rence policy, the nuclear triad.
In an interview with Hugh
Hewitt months into the pri-
mary campaign, he showed his
unfamiliarity with the heads of
Hezbollah, al Qaeda and Islamic
State, and he didn’t know the
difference between the Kurds
and Iran’s Quds Force. As
former U.S. Attorney General
Michael Mukasey points out,
Mr. Trump’s anti-Muslim state-
ments would ensure the enmity
OPINION
only been about signaling.
Since they don’t really
know what he’s for, how can
Republicans and conservatives
know whether they are
against him?
Next question: Can he do
the job? The federal govern-
ment already exists and is
staffed by hundreds of thou-
sands who keep coming to
work when a new administra-
tion takes office. Presidents
are surrounded by advisers
who help them decide what
realistically can be enacted.
On a regular basis, the country
survives a year or two or eight
with a president who has no
idea what the hell he’s doing.
Mr. Trump, in his business
life, has been a can-do guy,
though so have lots of others.
Still, you might like having
Trump as your president if
you like his particular can-do
agenda. He talks about deals.
Deals is what you want if
you’re a pro-business, free-
market conservative who
wants tax reform, who wants
Keystone XL approved, etc.
The problem is, you don’t
have the foggiest idea what
Mr. Trump might really do as
president. Where would he
put his deal-making chips? To
those conservatives who fret
at length in the National
Review that Trump is not all
the things a conservative
should be, the answer might
be, So what? If he could de-
liver one or two things (hint:
tax reform), that would be 10
times more than they get from
most Republicans.
tee on Oversight and Govern-
ment Reform recently wrote a
letter to the heads of 24 fed-
eral agencies demanding an
inventory of their systems
running the affected software,
and whether or not they have
installed the patch. If they fail
to respond they will be called
before Congress to explain
why they couldn’t produce
this basic information—even
though the 2002 Federal In-
formation Security Manage-
ment Act requires government
bodies to monitor and protect
the data they possess.
Once we learn which agen-
cies were using the faulty
software, finish patching all
the systems and conduct a
damage assessment, we need
to examine why this older ver-
sion of ScreenOS, last updated
in 2011, was being used in the
first place. This product is
considered a legacy system
that many users have replaced
with better technology, yet
the U.S. government hadn’t
bothered to update to a
newer, more-secure system.
Sadly, this isn’t surprising.
of the Muslims whose support
we need to prevail, and his
declared intention of ordering
the military to kill the families
of terrorists would subject
those who followed his orders
to prosecution for war crimes.
His admiration for Vladimir
Putin is revealing and disquali-
fying.
Mr. Trump’s character also
comes in for a beating at the
hands of the National Review
contributors. He is, they say, an
opportunist, a huckster, and a
demagogue; heedless and crude;
Loathing for Ted Cruz
fuels a cynical GOP
embrace of an utterly
unsuitable candidate.
brawling, blustery and mean-
spirited; emotionally insecure,
and needless to say, narcissis-
tic. The redoubtable Mona
Charen challenges his attitude
toward women in terms that
make Megyn Kelly’s questions
as a debate moderator seem
mild by comparison.
As for Mr. Trump’s overall
political orientation, the writ-
ers charge, he is not interested
in limited government or in
constitutional restraints. He is
obsessed with winning, re-
gardless of the means. He
believes in one-man rule. For
every problem, he insists,
there is a single, simple solu-
tion: He’s so smart that he can
fix it—details to come, and
We come to the “f” word—
fascist. Mr. Trump has no pol-
icy anchor; his political strat-
egy is to rile up the ignorami.
Well, yes. Just as possibly,
though, behind closed doors
he would be a cautious ad-
ministrator who cares about
keeping the economy ticking
over and placating major in-
terest groups.
Again, the problem is, no-
body knows. Nowhere have we
seen even a thoughtful com-
mentary committing itself to a
theory of what a Trump ad-
ministration would be like.
Can he temper his ridiculous
tongue? And just because cer-
tain conservatives suddenly
find it useful to ride the Don-
ald wave doesn’t mean they
actually believe he should be
president.
Obviously part of the elec-
torate thinks it has nothing to
lose, but most of us have
something to lose. And Donald
has a long, long way to go to
demonstrate that he’s pre-
pared to be or even interested
in being a responsible chief
executive.
A place to start would be
lodging a security with the
public in the form of reputable
advisers and credible endors-
ers prepared to risk their own
standing by backing him. We
don’t see any—which tells us
his campaign is still a lark, not
a serious endeavor. One day
this GOP primary season will
stop being about the freak
show and become about beat-
ing Hillary Clinton: then our
money is on Rubio.
Last year, according to the
U.S. Government Accountabil-
ity Office, the federal govern-
ment spent over $80 billion
on IT procurement and 80% of
those funds were for legacy
systems—outdated technology
or software similar to
ScreenOS. This practice of not
keeping up with the times
renders our nation’s IT infra-
structure less efficient and ex-
ponentially more vulnerable.
Finally, this incident shows
that backdoors to bypass en-
cryption—even those requested
by law enforcement or man-
dated by lawmakers—are ex-
tremely dangerous. There is
no way to create a backdoor
that is not vulnerable to this
kind of breach. Encryption is
essential to our national secu-
rity and economy; we should
be focused on strengthening it
not weakening it.
Rep. Hurd, a Republican
from Texas, sits on the House
Homeland Security Committee
and is chairman of the IT Sub-
committee on Oversight and
Government Reform.
conservatism be damned.
In a hopelessly old-fashioned
gesture, the National Review
editors have the temerity to re-
mind us that Mr. Trump has
never held public office. This is,
they state, “not a recommenda-
tion.” The burdens and intrica-
cies of political leadership are
special, and experience in other
fields is “not transferable.”
The response of the Wash-
ington political establishment
is a cynical shrug: Because Mr.
Trump is a man without princi-
ples, we can do business with
him. And besides, he’s so clue-
less that he’ll need us.
Most Washington Republi-
cans loathe Ted Cruz and be-
lieve that his candidacy would
be a disaster for their party.
They are probably right. But
the first votes in this already
endless primary campaign
have yet to be cast. A number
of Republican presidential
hopefuls have reasonable qual-
ifications for the office. In the
aggregate, they may well com-
mand a plurality of the party.
Yet the establishment is run-
ning up the white flag without
even trying to unify around
someone who could provide a
credible alternative to both
Mr. Trump and Mr. Cruz.
These are the people Mr.
Trump has castigated as “stu-
pid.” He may have a point. They
are certainly shortsighted. And
unless they can look the Ameri-
can people in the eye and make
an honest case that it is safe to
entrust the Oval Office to this
man, they are acting dishonor-
ably as well.
Wednesday, January 27, 2016 | A11
BOOKSHELF | BY Laura J. Snyder
Science, Sorcery
And Sons
The Astronomer and the Witch
By Ulinka Rublack
(Oxford, 359 pages, $29.95)
M
ore than 300 years after Salem’s famous trials, Amer-
ican popular culture remains preoccupied with the
supposed witches of 17th-century Massachusetts. But
we do not hear much about the women accused of witchcraft
across the ocean during the same period in Württemberg,
Germany. In “The Astronomer and the Witch: Johannes Kep-
ler’s Fight for his Mother,” Ulinka Rublack, a professor of
early modern history at the University of Cambridge, intro-
duces us to one of these witches, Katharina Kepler, who was
tried in Württemberg in 1615-21.
Katharina was the mother of Johannes Kepler, a key figure
in the Scientific Revolution that had begun to sweep Europe.
In 1609, as court astronomer to Emperor Rudolph II of
Prague, Johannes used the
remarkable naked-eye ob-
servations of his predeces-
sor Tycho Brahe to discover
that the planets orbit the
sun in paths that are ellipti-
cal—overthrowing the belief
in circular orbits that had
held since Aristotle’s time
and strengthening the argu-
ments for a heliocentric uni-
verse. Johannes was a deeply
religious Lutheran whose sci-
entific work was imbued with
spiritual beliefs. He cast horo-
scopes, listened to the “music
of the spheres” and under-
stood the cosmos to be a living or-
ganism possessed of a soul. Like most people of his time, he
believed in the existence of witches.
Witchcraft trials in Germany were family affairs. A woman
prosecuted as a witch had to rely for her legal defense on her
husband, if she had one, and on her brothers and sons, if she
did not. Widows were frequent targets of such accusations,
because their right to engage in commercial activities—de-
nied to other women—gave them an independence that went
against the social order. Many widows, including Katharina,
earned money as healers, using strange herbs and incanta-
tions. People feared the power of these women.
Katharina’s first accuser was her own son Heinrich, a
ne’er-do-well who had returned home after 25 years of fight-
ing as a mercenary throughout Europe. Angered that she did
not have enough food on hand to satisfy him, he “publicly
slandered her as a witch,” as Ms. Rublack recounts, and died
soon afterward. His comment would come to haunt the trial,
which was prompted by a persistent neighbor of Katharina,
who claimed that she had become lame after drinking one of
Katharina’s potions. Once Katharina was charged, other dis-
turbing facts came to light, such as her request that a grave-
digger exhume her father’s head so that she could fashion the
skull into a drinking vessel. Hearing this, even Johannes won-
dered if there was something to the allegations.
Kepler believed in witches. He probably even
wondered about the potions his mother brewed.
But when she was accused, he came to her aid.
By quoting liberally from the documents written by Jo-
hannes and his other brother, Christoph, in defense of their
mother, Ms. Rublack opens a window onto the workings of
witchcraft trials in 17th-century Germany. We see Christoph
impugning the reputation of Katharina’s main accuser by re-
ferring to her past imprisonment for “illicit sex” and Jo-
hannes blaming the growing number of accusations against
Katharina on the fact that people generally disliked old
women—especially disagreeable ones like his mother.
Ms. Rublack asserts that Johannes’s skill and status as a
scholar uniquely qualified him to save his mother. This is an
appealing conclusion, given our knowledge of the crucial role
he played in the Scientific Revolution. But her account re-
veals that, for all his brilliance and stature, Johannes Kepler
was just another son scrambling to prevent his mother from
being burned at the stake. He had no special status in the
proceedings, and the part he played simply underscores the
utter unpredictability—and the terror—of witchcraft accusa-
tions. No one’s mother was safe, not even a court astronomer.
Around the same time 14 other women in Württemberg
were accused of witchcraft, and six of them were also freed.
The ones found guilty met miserable fates, including torture
and being burnt at the stake. But the others who were freed
didn’t have—and apparently didn’t need—a brilliant astrono-
mer on their team. Johannes’s interventions seem to have
been met with no more favor by the authorities than those of
his brother Christoph, a pewter worker, who prevailed in
moving the trial to a more advantageous location, or even
those of their sister Margaretha, the wife of a pastor, who
successfully advocated for Katharina’s transfer to a somewhat
more comfortable prison.
It was, however, Johannes’s persistence in the face of in-
terminable delays and obfuscations that won the day. In the
final stage of the 6-year action, he wrote a lengthy document
arguing that his mother should not be tortured. His plea
failed to convince the ducal court’s advocate. Johannes had
one more chance to save her, with a plea sent to the law fac-
ulty of Tübingen. Luckily, the six professors were more com-
passionate, concluding that, at 75, Katharina was too old to
be tortured. Instead she would be shown the tools of torture
in the hopes that it would “scare the truth out of her.” In the
torture chamber, Katharina impressed the witnesses with her
pious behavior. Within days she was released from her iron
shackles and allowed to go home. She died six months later.
Katharina Kepler’s story is fascinating, but Ms. Rublack’s
book will disappoint some. It is written in a shorthand style
that might be appreciated by scholars familiar enough with
the period to understand passing references to, say, “Baco-
nian men.” Other readers may prefer James Connor’s 2004
book, “Kepler’s Witch,” which provides a livelier narrative
redolent with details of life in 17th-century Germany.
What happened to Katharina Kepler is a morality tale
about the dangers faced by independent, strong-willed and
sometimes disagreeable women in Germany in early modern
Europe. It is also a valuable reminder that the Scientific Rev-
olution was made by men with deeply held spiritual, religious
and metaphysical views, including the belief that there were
witches all around them—even, perhaps, at home.
Ms. Snyder is the author, most recently, of “Eye of the
Beholder: Johannes Vermeer, Antoni van Leeuwenhoek, and
the Reinvention of Seeing.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A12 | Wednesday, January 27, 2016 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

Washington’s Corporate Purge What Detroit Schools Need Is Better Teachers

H
ere we go again. A major U.S. company now competing as presidential candidates to It’s true that “the collapse of De- best school systems in the world that
merges with a foreign firm in part to see who can demagogue more ferociously troit’s schools has been decades in the key to excellent schooling is rig-
the making” (“Detroit’s Public School orous, intensive, career-long training
avoid America’s punishing corporate against American employers. Mrs. Clinton Plague,” Review & Outlook, Jan. 23). and support for teachers. Everyone—
tax code, and the politicians called the merger “outra- But I know from working with teach- charter operators and unions in-
who refuse to reform the code Bernie and Hillary geous” and Mr. Sanders is ers in both Detroit public and charter cluded—will have to set ideologies
denounce the company for compete to drive more calling the executives “corpo- schools that it’s neither the unions aside and take part in this effort.
trying to stay competitive. rate deserters.” nor the “lack of accountability for JENNIFER LEWIS, PH.D.
The gullible in the media then U.S. companies overseas. Neither one wants to re- failure” that are responsible for the Director, TeachDetroit
dutifully play along. Sigh. form the tax code to make U.S. decline of Detroit schools. It is rather Wayne State University
Let’s try to explain one tax rates more competitive the profound lack of investment in Detroit
more time why it makes perfect business—and with the rest of the world. Instead they want teaching: the abysmal salaries that
moral—sense for Johnson Controls to merge to raise the costs of doing business even fur- fail to attract the best and the bright- The racist charges hurled in De-
est to join and remain in the teaching troit defy common sense. Apart from
with Tyco, as it announced Monday it would do. ther. Mrs. Clinton’s solution is to raise taxes on
profession; the reduced standards for a relatively small number of bigots
Tyco has a U.S. headquarters in New Jersey but investors with higher capital-gains taxes, block entry into the profession; the provi- (who come in all skin colors), the ma-
is legally domiciled in Cork, Ireland. Johnson inversion deals, and apply an “exit tax” to busi- sion of substandard professional de- jority of whites in Michigan and in
Controls will own roughly 56% of the combined nesses that manage to escape. velopment. No accountability systems the U.S. have no rational reason to
company and its legal headquarters will move Mr. Sanders would go further and perform or right-to-work arrangements can take delight in the failure of urban
to Cork from Milwaukee, Wisconsin, where it an immediate $620 billion cashectomy on U.S. overcome those limitations. school districts. High-school dropouts
has been based for more than a century. companies. The Vermonter would tax the High-quality teachers trump every or graduates who lack basic skills are
To simplify for Democratic presidential can- money U.S. firms have earned overseas, even other malleable factor in education, much more likely to end up as depen-
didates: The U.S. federal corporate income tax though that income has already been taxed in yet we repeatedly fail to provide the dents on the state or in the criminal
rate is 35%. The Irish rate is 12.5%. Johnson foreign jurisdictions and even if the companies vigorous monetary and professional justice system. There are compelling
Controls says the tax savings from its move to aren’t bringing it into the U.S. investments needed to produce high- pocketbook reasons for all races to
quality teachers and retain them. It’s favor better urban schools and re-
Cork will be roughly $150 million a year. Mr. Sanders’s campaign website says that af-
tempting to blame unions and hope sults, in addition to the obvious moral
A CEO obliged to act in the best interests of ter the big revenue grab in year one, his change that charter schools will be the salva- reasons. But tossing more money into
shareholders cannot ignore this competitive re- would increase federal revenue by perhaps $90 tion, but unfortunately this ideologi- physical plant without addressing the
ality. The merger means that Johnson Controls billion a year thereafter. And he would limit fu- cal reflex occludes the realities of stifling and costly effects of teacher
will have more money to invest back in the U.S. ture corporate inversions by taxing many in- schooling in Detroit. It is patently unions and rules is a placebo that
because the income it earns overseas would not verting companies as if they never left. His rev- false that as a whole charters are do- won’t restore health. Charges of rac-
be subject to the U.S. tax rate. Only if Johnson enue goal is a fantasy, because the practical ing better than public schools in De- ism at work in Detroit are as offen-
kept its headquarters in the U.S. would its for- effect would be to encourage many more com- troit. Detroit’s public-school teachers sive as they are politically potent.
eign earnings be double-taxed upon repatria- panies to flee American shores. don’t leave the district for charters; However, major surgery that opens
tion. If Johnson Controls refuses to do such a Never mind the lost tax revenue, this kind overwhelmingly they leave for other school choice is needed, not another
deal now, a foreign competitor might end up of punishing tax policy is immoral. Multina- public-school systems where they are cosmetic procedure that pleases
paid more and have better working vested teacher-union interests.
buying Johnson Controls anyway to achieve the tional corporations with global customers can conditions. DAVID ANDERSON
same savings. always relocate to wherever it makes the most We know from the examples of the Laurel, Md.
As with other such tax “inversions,” there are business sense. Their American employees
also non-tax strategic reasons for the merger. aren’t so lucky because their livelihoods de-
The new company will have under one roof pend on thriving and competitive U.S. compa-
much of the equipment and services desired by nies. If the employees can’t move, or their
Taking Time to Get the Wrong Project Right
the owners of large commercial buildings, from companies can’t compete, they’re the ones Cori O’Connor’s “Trying to Build a rainfall in the state, the potential for
air conditioning to fire suppression. who lose their jobs or don’t get raises. Has the Catskill Resort Despite Mountains of runoff and flooding during the lengthy
But none of this business logic impresses Democratic Party moved so far left that it Regulation” (Cross Country, Jan. 16) construction phase and the obvious
Hillary Clinton or Bernie Sanders, who helped doesn’t understand even this most basic of fails to explain facts essential to un- waste disposal issues after build-out
derstanding the Belleayre Resort de- justly raised many concerns among
to write the U.S. tax code as Senators but are business realities?
velopment issue—that the resort is lo- many groups.
cated within the boundaries of the As a resident of the area, I can’t

Hope for Chinese Stocks environmentally protected Catskill

State Park, designated as “forever
deny the crying need for more jobs in
the Catskill Mountain region, and I ap-

C
wild” by the state of New York. plaud the developer’s willingness to
hinese stocks fell 6.4% Tuesday to a 13- Margaret Thatcher as his heroes, to become The peak of Belleayre Mountain in wade through the State Environmental
month low, sounding further alarms secretary-general of the State Council and guide the Catskill State Park, where the re- Quality Review Act and reduce the
about the country’s economy. Yet Bei- the reform of banking and financial-market reg- sort is to be located, is the headwater scope of the proposal in the process.
jing’s decision to stop prop- ulators. source of two critical upstate water- Sixteen years of environmental review
ping up stock prices is a posi- Letting prices find a Mr. Huang was involved in sheds—the Ashokan and Pepacton is an appropriate time frame to make
tive sign that leaders are developing Shanghai’s Pudong Reservoirs—that supply New York sure we get this right. A healthy envi-
getting serious about reform-
natural bottom may be area, and he was largely re- City with up to 65% of its water sup- ronment and a healthy economy aren’t
ply. The proposed resort project will incompatible goals. Clean water is tan-
ing its markets. The expected a sign of coming reform. sponsible for Chongqing’s eco- occupy land at the absolute apex tamount to a healthy economy. If you
appointment of Chongqing nomic success over the past 15 source of 65% of that water. The ex- don’t believe that, ask the people who
Mayor Huang Qifan, one of years. Many of the reforms he treme verticality of this fragile moun- live in Flint, Mich.
China’s most prominent free-marketeers, to initiated in that city are now on the national taintop terrain, the fact that the area MARK LOETE
oversee regulators would restore confidence agenda. That record helped him survive the receives the second highest annual Shandaken, N.Y.
once the market finds its real floor. 2012 downfall of Chongqing’s top leader, Party
When the stock bubble began to burst in Secretary Bo Xilai.
June, China’s regulators directed government- China set up its stock market in 1990 to pro-
connected institutions to buy and hold stocks. vide capital for state-owned companies rather Gov. Rauner Is Not Negotiating in Good Faith
The companies that shirked these orders were than entrepreneurs, and it quickly became a ca-
The tenor of your editorial Jan. 21 Now, in keeping with his campaign
punished, a move China’s leaders now seem to sino where the politically well-connected (“Illinois Union Showdown”) com- vow to force public-service workers
realize was a mistake. The “national team” has fleeced small investors. The main job of regula- pletely ignores the good-faith efforts to bow to his demands by causing a
been conspicuously absent from the market in tors became propping up prices rather than ref- public-service workers have made to strike instead of negotiating a com-
recent days. As China Securities Regulatory ereeing the market. reach an agreement and Gov. Bruce promise, the governor has walked
Commission Vice Chairman Fang Xinghai ad- Mr. Huang could bring the right convictions Rauner’s continued recalcitrance. away from the bargaining table, de-
mitted at Davos, “We are learning.” and necessary political clout to change that Please allow me to set the record claring an impasse when none exists.
There are other good signs. Xi Jinping has mentality. His appointment would signal that straight for your readers, many of The American Federation of State
adopted “supply side structural reform” as his Mr. Xi is serious about his reform promises and whom understand the importance of County and Municipal Employees has
latest slogan, suggesting the Communist Party working in concert with Premier Li Keqiang. A unions and collective bargaining in made clear its willingness to con-
General Secretary is willing to endure short- working market for entrepreneurial capital is providing wages and benefits that tinue to negotiate seeking common
can sustain working families, boost ground. Instead, the governor seems
term pain to give the economy a more market- a long overdue step toward the innovation-led
consumer spending and grow the determined to seek the kind of con-
oriented foundation. Reuters reported earlier growth that the two men have championed. In middle class. flict he promised, threatening dis-
this month that he has selected Mayor Huang, that context, falling stock prices are a welcome It is Gov. Rauner, not our union, ruptions in services that Illinois citi-
who is famous for citing Ronald Reagan and sign that change is afoot. who has chosen confrontation over zens depend on.
compromise at every turn. More than ROBERTA LYNCH

ObamaCare in Arrears six months into the fiscal year, state

government has no budget because
the governor won’t sign one unless
Executive Director
Afscme Council 31
Chicago

I
n her confrontation with Bernie Sanders, this prevents “discrimination.” But the natural legislators first enact his agenda that
Hillary Clinton always promises to “build result is that young people who should be cheap includes stripping collective bargain-
on the successes” of ObamaCare, so allow to insure don’t sign up to avoid artificially in- ing rights, cutting help for people in- May God Save the National
jured on the job and reducing con-
us to recommend a follow-up flated prices, and the risk pool struction workers’ wages. He’s taking
Anthem, but Which One?
question: What would those The losses keep piling skews older and more expen- the same my-way-or-no-way approach Joseph Sternberg’s objections to
be, precisely? The entitlement up for private insurers sive. Insurers that charge av- in union contract negotiations, de- “Jerusalem” as the English national
is becoming less stable and erage premiums thus lose manding that public-service workers anthem don’t withstand scrutiny
less entrenched, not more, as on the exchanges. money on every customer. pay double their current costs to keep (“Sing a Song of England,” op-ed,
it gets older. UnitedHealth estimates it their health coverage while getting no Jan. 16). Sir Hubert Parry com-
The latest jolt is the $475 loses 15 or 16 cents for every pay increase for four years. posed a readily singable, unison
million loss UnitedHealth Group booked on the dollar of revenue on the exchanges. hymn for the four stanzas (of only
insurance exchanges in 2015, which the largest ObamaCare’s rules also make it economically 97 words) of William Blake’s poem.
U.S. mega-insurer by membership expects to rational for patients to wait until they are about Experience With Proved While the first two stanzas do con-
sist of four questions, the last two
rise this year to another $500 million. Only to incur major medical expenses to get covered, Incompetence vs. the Untried stanzas consist of four imperatives
three months ago the company projected losses which the company says contributed to losses. An William Galston (a not-so-closeted followed by the singer’s pledge to
of $400 million to $425 million. Every other annual enrollment period from November to Jan- Clintonite) cites numerous statistics build “Jerusalem / In England’s
line of UnitedHealth’s business is thriving, but uary is supposed to deter such gaming, but the showing that Americans are as much, green and pleasant land.” “Jerusa-
the ObamaCare money-pit sunk its year-over- Health and Human Services Department turned if not more, worried about national lem” in the hymn doesn’t refer to a
year profit margin to 3.7% from 4.3%. it into Swiss cheese by creating “special enroll- security as they are the economy foreign city, but rather to an ideal,
The explanation for this underperformance: ment periods” for virtually all life events. (“No National-Security Novices, what President Reagan referred to
Too many people bought UnitedHealth’s A lost job or divorce qualifies—but so does Please,” Politics & Ideas, Jan. 20). as “a city on a hill.”
ObamaCare products—despite what CFO Dave unspecified “confusion” about the health-care The last paragraph is a not-so-veiled It is illuminating to compare it to
Wichmann told analysts was “a comprehensive system, HHS’s own incompetence and, incredi- statement that former Secretary of our own national anthem “The Star-
set of actions to contain membership.” These bly, failing to meet the normal enrollment dead- State Hillary Clinton is the only non- Spangled Banner,” which is an adap-
novice candidate in the race. Evi- tation of a notoriously unsingable
include raising premiums, eliminating advertis- line for any reason and lost coverage due to be-
dently, using a private email server drinking song. The only stanza com-
ing and insurance broker commissions, narrow- ing a premium deadbeat. HHS has no process for Special Access Program email monly sung (80 words) ends on a
ing the provider network, cutting the customer to validate the claims people make when claim- isn’t a disqualifier. Isn’t it time for question that we would do well to
service budget and “intensified clinical engage- ing one of these exemptions. everyone to be held accountable for ask ourselves, not so much as to the
ment and medical management.” Another term HHS responded last week by modestly tight- her actions, with no free passes for continued existence of the flag but
for that last one is bureaucratic nuisance. ening the qualifying events for a special enroll- politicians? No wonder Bernie Sand- rather as to the nature of the land
Despite UnitedHealth’s labors to seek fewer ment to 35 from 41. “The Marketplace must also ers is surging. it flies over.
customers, enrollment has risen to 700,000 be attractive to insurers, so that they make GREG MOYLE JUAN RODRIGUEZ
from about a half-million. The only recourse left quality plans available at affordable prices,” St. Petersburg, Fla. Louisville, Colo.
would be to exit ObamaCare altogether, as the Kevin Counihan, who runs the exchanges at
Let’s put it this way: two outs in
company is threatening to do in 2017. Humana HHS, wrote in a blog post. You don’t say. Letters intended for publication should
the ninth inning with the tying run be addressed to: The Editor, 1211 Avenue
has also warned investors that it is taking The truth is that liberals can either adapt to on second. Would you rather bring to of the Americas, New York, NY 10036,
losses on the Affordable Care Act exchanges, the same economic reality that businesses con- the plate a promising rookie or a vet- or emailed to wsj.ltrs@wsj.com. Please
though it hasn’t released a number. front or they can keep their regulations in the eran whose ineptitude has already include your city and state. All letters
ObamaCare mandates that commercial in- name of fairness and social justice. If they con- been proven? are subject to editing, and unpublished
surers cover anyone who applies and to charge tinue to do the latter, they may find the system ARTHUR COPELAND letters can be neither acknowledged nor
returned.
more or less the same premiums. Supposedly is so fair that no one can afford to participate. Stamford, Conn.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Where Have All the Oil ‘Speculators’ Gone?
By Brad Schaeffer
W
ith crude-oil prices
scraping along at
about $30 a barrel—
down from about
$100 in January
2014—the impact of this free fall on
the global economy is still to be de-
termined, but there is no doubt
about the short-term winners: con-
sumers. The national average for a
gallon of regular gasoline has fallen
to $1.85 from $3.94 in April 2012. For
the typical American who drives an
average 15,000 miles a year, that
means an annual windfall of roughly
$1,200.
Funny how the market
worked fine without
government intervention
to stop price ‘gouging.’
One interesting aspect of this
major correction is that the politi-
cians and media commentators who
a few years ago were outraged over
rising gas prices, denouncing
“gouging” and “speculators,” are
now curiously quiet. Don’t expect a
follow-up for the May 2011 Senate
Finance Committee hearing when
oil-company executives were called
in and excoriated for the sin of re-
turning a profit to shareholders.
Democratic members of the com-
mittee, including Chuck Schumer of
New York and Bob Menendez of
New Jersey, set the tone by issuing
a letter to the five CEOs who were
When Holocaust Refugees Almost Found a Caribbean Haven
By Richard Hurowitz
W
ith immigration matters of
all kinds in the news, Inter-
national Holocaust Remem-
brance Day on Jan. 27 brings to mind
the plight of Jewish refugees during
World War II, when the world offered
too little help. America’s record on
this subject is often considered
marred by the Roosevelt administra-
tion’s indifference, if not outright hos-
tility, to the refugees, but some mem-
bers of the American government
stand out for efforts that could have
put them in the company of Oskar
Schindler, Raoul Wallenberg and oth-
ers who saved many innocent lives.
Efforts to aid Jews fleeing
Europe with shelter in the
U.S. Virgin Islands ran
into bureaucratic hostility.
The honor-roll-that-might-have-
been includes then-Interior Secre-
tary Harold Ickes, whose wartime
humanitarian efforts are fairly well
known, and—less familiarly—Law-
rence W. Cramer, the Columbia-edu-
cated academic who served as gover-
nor of the U.S. Virgin Islands before
the 1941 attack on Pearl Harbor. The
members of the archipelago’s legisla-
ture also deserve mention.
On Nov. 18, 1938, nine days after
the attacks on Jews throughout Ger-
many in what became known as
Kristallnacht, Cramer proclaimed the
bucolic island chain a refuge for those
fleeing Hitler. The territory’s legisla-
ture in St. Thomas unanimously
declared that refugee peoples “shall
find surcease from misfortune in the
Virgin Islands of the United States.”
The idea had originated in the late
1930s with Interior Secretary Ickes as
a way to circumvent the notoriously
anti-Semitic State Department’s op-
position to accepting the refugees.
Ickes resolved to provide a haven in
the territories under his jurisdiction.
The U.S. Virgin Islands—home to
25,000 people but covering more
than 130 square miles—could easily
accommodate tens of thousands of
refugees.
As Europe burned, qualified appli-
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY
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going to testify: “We urge you to
take this opportunity to publicly
admit that, given your companies’
prodigious profits, you no longer
need taxpayer subsidies” (“subsi-
dies,” meaning incentives).
A few months later, Sen. Bernie
Sanders took to the Washington
Post, saying: “When working families
need an end to excessive oil specula-
tion and real relief at the gas pump,
the government has failed to act.”
But the usual free-market bashers
aren’t the only ones with egg on
their faces. Fox News host Bill
O’Reilly pounces on “speculators”
whenever the price of gas strikes
him as unreasonable—as in 2008,
when he said: “Speculators gamble
on credit, driving the paper price of
oil up and down. And we get hosed.”
He promoted a bill from Rep. John
Larson (D., Conn.) that would have
required market participants classi-
fied as speculators to take full physi-
cal delivery of the oil on whose price
they were betting.
Bernie Sanders was back at it in
June 2014, proposing a bill that
would give federal regulators emer-
gency powers to stop “Wall Street
speculators.” With almost comedic
timing, oil prices began their long
decline the same month. The price
drop occurred without any new regu-
lations because market forces were
left to work unfettered, and supply
overwhelmed demand.
Why were the alarmists so wrong
about the need for government inter-
vention to provide consumer relief?
Partly because they don’t seem to
understand futures trading. Taking
their cue from the equities markets,
those in Congress and media saw
cations for immigration visas to the
U.S. from victims of Nazi persecution
dwarfed the existing quotas (which
were based in part on nationality and
in any case were not reached because
of limited U.S. approvals). Refugees
would have to wait years until their
number came up, living in great peril
if they were in Axis-occupied coun-
tries. Ickes and Cramer proposed
temporary visas that would let people
wait out the immigration-application
process in the islands.
The State Department opposed the
temporary-visa plan, citing consular
regulations and what Secretary of
State Cordell Hull called the plan’s
incompatibility with existing law. Yet
the Labor Department, which over-
saw immigration, declared the plan
legal. A bureaucratic standoff ensued.
As months went by with no resolu-
tion, Ickes’s team found another
route: an existing FDR executive or-
der that would allow Cramer to waive
passport requirements in emergen-
cies.
On Nov. 7, 1940, Cramer signed a
proclamation offering temporary
haven in the U.S. Virgin Islands to
those who could meet certain finan-
cial and security safeguards, includ-
ing prior vetting by the State and
Labor departments and by the White
House. Ickes issued a 22-page report
declaring the decree “legally unas-
sailable.” With momentum building,
meetings were scheduled with phil-
anthropic organizations to support
the refugees and with relevant gov-
ernment officials.
But then Cramer’s decree caught
the attention of Assistant Secretary of
State Breckinridge Long, scion of a
prominent political family and a viru-
lent anti-Semite. In 1938 he wrote in
his diary that Hitler’s “Mein Kampf”
was “eloquent in opposition to Jewry
and to Jews as exponents of Commu-
nism and chaos.” From his senior post
overseeing consular issues, Long
blocked fulfillment of even the small
extant quotas for Jewish refugees.
On learning of the Virgin Islands
proclamation, Long went into over-
drive. He telephoned Roosevelt to
complain, and an irritated FDR sent a
memo to Ickes, who recorded in his
diary that the president had “rather
slapped my ears back by telling me
that refugee matters were for him and
the State Department to decide.”
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OPINION
higher commodities futures prices as
tantamount to profits for traders.
But unlike stocks, which are invest-
ments, futures are mere contracts to
buy or sell at a set price in the future
regardless of the going rate at the
time they come due.
This hedging activity takes place
every day across many commodities,
with participants ranging from banks,
grain elevators, airlines, auto manu-
facturers and utilities to pipeline com-
panies and miners, etc. In commodi-
ties there is no bull side or bear side,
just the right side. Speculators who
land on the wrong side get burned,
but you don’t hear about that.
To be sure, speculative activity
can exaggerate price fluctuations. But
these investors don’t create the big
moves. Market conditions do that. In
oil’s case, fear of a weakening dollar
from factors such as federal stimulus
Roosevelt declared his “sympathy” for
the refugees in the memo, but con-
cluded that he could “not do anything
which would conceivably hurt the
future of present American citizens.”
Undaunted, Ickes went to see the
president to plead his case. Long had
neglected to explain the various
financial and procedural protections
built into the temporary-visa plan
and the lengthy interdepartmental
negotiations. Ickes laid out those
points, noting that the plan had the
virtue of both serving a humanitar-
ian purpose and aiding the islands’
economy. Ickes came away thinking
FDR might approve the plan if the
Justice Department confirmed its
legality.
Democracy Takes a Global Hit
By Mark P. Lagon
And Arch Puddington
G
lobal democracy has endured a
battering over the past decade,
and those who hoped for a
brighter century may be wondering
when to expect relief. Every year
since 2006 more democracies have
experienced erosion in political
rights and civil liberties than have
registered gains, as we find in our
annual Freedom in the World report.
In all, 110 countries, more than half
the world’s total, have suffered some
loss in freedom during the past 10
years.
Authoritarian states have ratch-
eted up internal repression, and the
most powerful dictatorships—China,
Russia, Iran, Saudi Arabia—have
extended their antidemocratic influ-
ence abroad. Especially disturbing is
the way indirect effects of oppression
and misrule have seeped into estab-
lished democracies in North America,
Europe and elsewhere. A surge in ter-
rorism has not only brought death
and mayhem to millions in the
Middle East. It also has empowered
nativist and extreme nationalist poli-
ticians in major democracies such as
France, and reignited demands for
more surveillance and less tolerant
policies toward immigrants.
However, some events from 2015
offer cause for optimism. First,
Latin American anti-democratic pop-
ulists retreated. Elections in Argentina
and Venezuela appeared to interrupt
a regional pattern in which bombas-
tic, polarizing rulers cowed indepen-
dent judges and legislatures, attacked
the media, and created economic
chaos for the underprivileged citizens
Notable & Quotable
From Donald Trump’s Jan. 26 Fox
Business appearance on “Mornings
with Maria,” discussing with host
Maria Bartiromo the 2006 poisoning
murder of Russian dissident Alexander
Litvinenko, which a British inquiry on
Jan. 21 said was “probably” ordered
by Russian President Vladimir Putin:
Has Putin said it? Have they
found him guilty? I don’t think
they’ve found him guilty. They say a
lot of things about me that are un-
true too . . . If he did it, fine. But I
Wednesday, January 27, 2016 | A13
GETTY IMAGES
spending and the perceived rising
energy demands from emerging
economies in Asia fueled the bull
market. With or without speculators,
oil prices were heading higher.
As for the claims that oil markets
are “rigged” or otherwise in need of
regulation because oil traders don’t
have to take physical delivery of
barrels, that’s misinformation at
best. Even cursory research shows
that a mere 2% of all commodities
futures go to delivery. That’s be-
cause the futures market is not a
procurement vehicle but more a sur-
rogate price until actual delivery is
made. Unlike a stock, the entire
investment is not at risk but rather
the difference between the price
now and at futures expiration.
Futures margins and position limits
are diligently adjusted by exchanges
more expert than critics sniping
Long was furious. “I antagonized
Ickes irreparably by opposing his
Virgin Islands scheme,” he noted in
his diaries (wartime selections were
published in 1966, and his papers are
in the Library of Congress). A master
bureaucratic manipulator, Long de-
cided to act before a Justice Depart-
ment legal analysis could be issued:
Raising spurious national-security
concerns about enemy spies possibly
lurking among the refugees that
would be hard to dismiss with the
country on a war footing.
He zeroed in on Alan G. Kirk, then
the chief of naval intelligence. Long
proposed that the Navy declare the
Virgin Islands a restricted area for
military use, effectively eliminating
they ostensibly championed.
In Argentina, Mauricio Macri’s
presidential victory over the nominee
of incumbent Cristina Fernández de
Kirchner, who with her late husband
dominated the country’s politics for
12 years, could prove a major step
forward for honest and open govern-
ment. In Venezuela, the triumph in
December parliamentary elections of
the anti-Chavista opposition may save
the country from economic collapse.
The world-wide slide
of political rights and civil
liberties continued in 2015,
with a few promising signs.
Elections also delivered much-
needed course corrections in some
parts of Africa and Asia. Voters in
Nigeria, Africa’s most populous coun-
try and largest economy, replaced
incumbent president Goodluck Jona-
than with Muhammadu Buhari, who
has since begun to fulfill campaign
pledges to defeat the Islamist mili-
tants of Boko Haram and address
Nigeria’s corruption problem.
In Myanmar, a huge turnout pro-
duced a landslide victory for long-
time opposition leader Aung San Suu
Kyi and her National League for
Democracy, a remarkable turnaround
in a country that until recently
ranked among the world’s most
repressive. In Sri Lanka, authoritar-
ian president Mahinda Rajapaksa
was ousted at the ballot box, then
rejected again months later as a can-
didate in parliamentary elections.
don’t know that he did it. You know,
people are saying they think it was
him, it might have been him, it could
have been him. But Maria, in all fair-
ness to Putin—I don’t know. You
know, and I’m not saying this be-
cause he says, “Trump is brilliant
and leading everybody”—the fact is
that, you know, he hasn’t been con-
victed of anything. You know, some
people say he absolutely didn’t do it.
First of all, he says he didn’t do it.
But many people say it wasn’t him.
So who knows who did it.
from the sidelines. To ban or other-
wise interfere with these time-
tested hedging tools would drasti-
cally limit liquidity and price
discovery, increasing the cost of doing
business. That hurts all participants,
including consumers.
Today’s low oil prices are the
result of the dollar strengthening as
the end of cheap Fed money was
nigh, China’s economy slowing and
Saudi Arabia’s decision to keep
vigorously pumping oil instead of
cutting back. For the moment, sup-
ply is swamping demand. So much
for all the clamor to get oil prices
down by piling another stack of
regulations on the marketplace—as if
that would somehow change the
dynamics of global trade.
The best cure for high prices is
high prices. As Mark P. Mills pointed
out on these pages recently, the
price of oil will eventually rebound.
Commodities prices are cyclical (only
regulations last forever). Reflexive
demands from both the left and the
right for government activism to
address temporary price shocks
simply reflect the statist urge so
prevalent among public servants and
those who offer themselves up as
consumer advocates.
If private-sector speculators were
to blame for bidding crude oil prices
up, then those same angels are
responsible for the massive selloff
and should be lauded for providing
relief at the pump. The applause is
hard to detect.
Mr. Schaeffer, former principal
of Occam Commodity Brokers LLC,
is an energy broker at Black Barrel
Energy LP.
Interior Department control and
removing, as Long wrote in his diary
on April 22, 1941, any “political
questions involved in this refugee
and undesirable citizen traffic.” Kirk
agreed. And with that power play,
Ickes and Cramer had been outma-
neuvered. The U.S. Virgin Islands
would remain as lightly populated as
before and thousands of Jewish fam-
ilies would be left to a grim fate.
The efforts of Ickes, Cramer and
the members of the Virgin Islands
legislature may have failed, but their
example remains a powerful one for
people of goodwill.
Mr. Hurowitz is an investor and
the publisher of the Octavian Report.
In each of these cases, voters over-
came tilted electoral playing fields,
histories of political violence against
the opposition, or fears about what
lies ahead when dictatorships give
way to normal politics. Some voters
were also rebuffing political figures
who had publicly disdained the
world’s leading democracies and
drawn closer to authoritarian powers
like Russia, China and Iran.
Also, China’s political and economic
model began to break down. The coun-
try’s slowing growth was punctuated
by a stock-market plunge and abrupt
devaluations of the currency, threaten-
ing the unelected regime’s legitimacy.
The government of President Xi Jin-
ping responded with aggressive inter-
ventions in the stock market, en-
hanced censorship and propaganda
efforts, and an intensified crackdown
on civil society.
Targets included financial journal-
ists, public-health advocates, labor-
rights activists, and defenders of
women’s rights. This panicky reaction
betrays the anxiety behind the lead-
ership’s self-assured exterior, and
further tarnishes Beijing’s reputation
for blending political control and
economic prosperity.
Finally, the slowdown in China com-
bined with other factors to push down
the global prices of oil and other com-
modities, which slashed the export
revenues and undermined the political
stability of repressive petro-states
from Angola to Azerbaijan. A number
of these regimes cracked down hard
on critics and the opposition during
2015, but how long can brittle regimes
that fear their own people survive?
The phenomena listed here reflect
two drivers of change: citizen activism
and global economic pressures on
dictatorships. Notably absent was soli-
darity or action from the U.S. or Eu-
rope. Whether the subject is refugees,
the Syrian conflict, or international
leadership broadly, the prevailing re-
sponses on both sides of the Atlantic
were an evasion of responsibility and
an ugly streak of xenophobia.
Current trends suggest that au-
thoritarianism is not the future. The
question is whether the world’s
democracies are prepared to encour-
age and build on the opportunities
for freedom that are now emerging.
Mr. Lagon is the president of Free-
dom House, where Mr. Puddington is
the senior vice president for research.
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
A14 | Wednesday, January 27, 2016 THE WALL STREET JOURNAL.
 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

URBAN GARDNER A16 | FOOD & DRINK A18 | HEARD & SCENE A19 | SPORTS A20

The Big Thaw

ADRIENNE GRUNWALD FOR WSJ

Carnegie Hall’s
Coming Season

GETTY IMAGES
Machines that melt snow CITY NEWS | A17 ARTS | A19

WSJ.com/NY * * * * THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | A15

Takeover Plan Stirs Debate

Move on Atlantic City President Steve Sweeney, a
Democrat, said they had
angers some residents; reached an agreement to give
mayor says he wants the state control over the fi-
nances of Atlantic City for five
partnership with state years.
Messrs. Christie and
BY KATE KING Sweeney defended the pro-
posal as the best way to shore
ATLANTIC CITY—New Jer- up the city’s finances after
tended the Trenton news con-
ference. But Mr. Guardian and
other city officials disputed
that the plan constituted a
takeover; instead, they de-
scribed it as a “partnership”
between local and state gov-
ernment.
“We’re not going to go for a
state takeover,” said Atlantic
Messrs. Guardian and Sweeney,
who drove from Trenton to at-
tend the meeting. The council
unanimously passed a resolu-
tion authorizing the council
president and the mayor to
work with the governor’s office
and state lawmakers to craft
the legislation.
Assembly Speaker Vincent

SHANNON STAPLETON/REUTERS
sey Gov. Chris Christie’s pro- years of trouble. City Council President Marty Prieto, a Democrat who was
posed state takeover of Atlan- The legislation hadn’t been Small. “However, let’s not be notably absent at the Trenton
tic City drew a mix of anger drafted as of Tuesday, and naive. We do need money.” news conference, pointed out
and frustration Tuesday from state officials said they would Aides to Mr. Christie said in a statement that any legis-
residents in the struggling re- work with Atlantic City offi- the plan amounted to a take- Please see FUNDS page A16
sort city. cials on the details. over of city government.
At a news conference in The plan won the backing On Tuesday night, the coun-  Christie proposes takeover of
Trenton, Mr. Christie, a Re- of the city’s mayor, Republican cil discussed the proposal in Atlantic City............................... A4
publican, and state Senate Don Guardian, who also at- private for several hours with  Governor takes storm hit ... A4 A pedicab driver bided his time Tuesday on Atlantic City’s boardwalk.

A First Look
The Museum of Modern Art's latest plan focuses less on architectural flourishes than on making the building work better for visitors and curators. Lawmakers Urge
De Blasio to Cap
Total project cost
$400 million for new construction plus $40 million or more for renovation 54th St.

Collections
galleries
(floors above)
Coat
check
Sculpture garden City’s Tax Rate
BY JOSH DAWSEY from the law.
AND MIKE VILENSKY “Are you looking at your
East connector
East
spending?” Sen. Cathy Young,
Ticketing
lounge ALBANY—New York Mayor an upstate Republican, asked
Gallery/projects West
Ground floor Bill de Blasio traveled to Albany the mayor, adding the city was
room lobby Entry ‘Bauhaus
on Tuesday to ask for money. “awash” with money while
lobby Stair’ He instead faced five hours of many upstate towns and cities
Retail (below) questions that focused on his were struggling.
administration’s spending and The state Senate, run by Re-
the city’s property-tax rate, publicans, passed legislation
Phase 3 Phase 2: Starting late 2016/early 2017 Phase 1: Starting next week
which some state lawmakers Tuesday imposing a property-
Changes include: new galleries, including a free Changes include: moving retail store below Changes include: expanding public space, 53rd St. urged him to cap. tax cap on New York City, but
ground-floor gallery and projects room, in the void ground, expanding main lobby, raising opening a view to the garden, making a
left by the folk-art museum; new galleries in an height of entrance on West 53rd Street, direct connection to main museum lobby, In testimony before a joint the measure wasn’t expected to
82-story tower being built by Hines at 53 W. 53rd St. redesigning coat check. replacing a 1939 staircase that was removed. legislative budget hearing, Mr. pass the Assembly, which is
Source: Museum of Modern Art THE WALL STREET JOURNAL. de Blasio argued New York City controlled by Democrats, who
contributed about 60% of the are generally allied with Mr. de
state’s revenue and shouldn’t Blasio.

MoMA Redraws Its Expansion Plan

have to take on more costs as- While the city’s tax rates ha-
sociated with Medicaid and the ven’t risen in years, assessed
City University of New York as values have steadily climbed.
Gov. Andrew Cuomo has sug- Total city property values re-
BY JENNIFER MALONEY gested in his proposed state cently crossed the $1 trillion
budget.
The Museum of Modern Art “I don’t think it’s right to
has decided to forgo the re- take state obligations and in-
A tax cap could cost
tractable glass wall. And it no creasingly put them on the city the city billions in
longer plans to install a floor of New York,” the mayor said.
that moves up and down, or a Lawmakers noted, however,
revenue every year, a
new entrance to its sculpture that New York City was flush spokeswoman said.
garden. with cash, was spending bil-
Responding to criticism, the lions more every year and pro-
museum and its architecture jections of property values mark. Property-tax revenue for
firm, Diller Scofidio + Renfro, were at all-time highs. The city the city government was ex-
AGATON STROM FOR THE WALL STREET JOURNAL

have dropped the splashiest el- budget has risen to about $80 pected to climb from about
ements of the expansion plan billion from $72 billion when $22.5 billion to almost $28 bil-
they revealed two years ago. Mr. de Blasio took office. lion in four years.
Instead, the design now gets “People are being blud- A city spokeswoman said a
to the business of making the geoned by rising property cap could cost New York City
museum work better for visi- taxes,” said Sen. Tony Avella, a billions in revenue every year.
tors and curators: more and Queens Democrat. Sen. Andrew While Mr. de Blasio said he
varied gallery spaces, a less- Lanza, a Staten Island Republi- didn’t want to raise property
congested lobby, a faster coat- can, said many in his district taxes, the mayor said the city
check line. move to other states because wanted to reserve the option of
And the plan now has a the cost of living in New York setting its own tax rate when it
price tag: an estimated $400 has climbed while wages ha- needed to—as when the city
million for new construction The Museum of Modern Art’s lobby will be enlarged in the second phase of the new renovation plan. ven’t. had financial setbacks after the
and soft costs, plus $40 million Some lawmakers offered to Sept. 11, 2001, terror attacks.
to $45 million for renovations ground to make room for an ex- “The trustees made a very or 2020—would increase the restore proposed cuts to the The Real Estate Board of
to the museum’s existing struc- panded lobby. Museum officials bold decision to say the quality museum’s gallery space by 30%, city’s Medicaid program in ex- New York, a New York City in-
tures, set to begin next week. are prepared for a drop in reve- of the experience as you enter or more than 40,000 square change for Mr. de Blasio agree- dustry group, signaled support
One of the most radical nue, partially offset by a new, the building is so important feet, for a total of 174,000 ing to a property-tax cap. He for a tax cap. “We applaud the
changes in the new design additional retail space that that we’re willing to take what- square feet. said he wouldn’t make such a Senate for raising this impor-
would affect the museum’s on- would be built adjacent to the ever impact that may have on Mr. Lowry said the museum deal. tant issue,” said John H. Banks
site retail shop. museum’s second-floor cafe. retail and live with it,” said the is now in the quiet phase of a Annual property-tax in- III, the group’s president.
Currently at street level with The below-ground store would museum’s director, Glenn capital campaign to fund the creases are capped elsewhere Members of REBNY were big
windows facing the sidewalk on have a cut-away ceiling, so peo- Lowry. expansion and increase the in- across the state at 2% or the donors to the re-election cam-
West 53rd Street, the MoMA ple could peer down into it The expansion project—ex- stitution’s endowment to cover rate of inflation, whichever is paigns of the state’s Republican
Store would be moved below from the lobby and the street. pected to be complete in 2019 Please see MOMA page A19 lower. New York City is exempt Please see MAYOR page A16

41°
TODAY’S
Weather
Real Feel
A Foodie’s Meat Market Alternative
9 a.m. 31° BY SOPHIA HOLLANDER eating are increasingly fair people to stray outside their
HIGH
5 p.m. 33° game at home. comfort zone, said David McIn-
On the hunt for a lean Specialty farms and super- erney, the online grocery’s co-
Record High
source of protein to fuel his markets in the New York City founder.
69° (1916)
workouts, Ari Ludzki from Fair area have taken notice, report- Future possibilities include
PARTLY Sunrise/Sunset Lawn, N.J., wanted a healthy ing an uptick in reindeer. “It’s on the list,” he
SUNNY 7:11 a.m./5:07 p.m. alternative to hamburgers. FOOD & sales of bison, ven- said.
His solution? Ostrich. DRINK ison and wild boar When Lance Appelbaum and
Thursday’s High Since he first tried it a de- to consumers. his brother decided to begin
cade ago, Mr. Ludzki has tasted “It’s a category farming ostriches in New Jer-
39° wild boar, kangaroo, alligator, that we see as growth,” said sey in 1997, “everybody
venison, rattlesnake and yak. Dennis Bland, the vice presi- laughed at me,” Mr. Appel-
PETER FOLEY FOR THE WALL STREET JOURNAL

All of it, said the 41-year-old,
N.Y. Sports Lineup who works in commercial con-
struction sales, “tastes like
7 p.m. chicken.”
Wednesday Just kidding, he said,
Rutgers though he added, “alligator ac-
@ Michigan tually does.”
Mr. Ludzki isn’t the only
7 p.m. home cook venturing beyond
Wednesday chicken, beef and pork these
St. John’s days. Motivated by exotic
@ Seton Hall cooking shows and envelope-
pushing restaurants, meats
For N.Y. sports coverage, see A20 once considered adventurous
dent for meat and seafood at
Fairway Market, which oper-
ates 15 stores in the New York
City region. In the past year, it
has required stores to carry a
new line of bison products, he
said, including ground meat
for burgers. “It’s something
that earns its space.”
In October, FreshDirect in-
troduced new venison prod-
ucts, along with recipes and
cooking tips. That kind of edu-
cation is crucial for persuading
baum said.
Today, Fossil Farms sells
those animals, along with
game such as elk, emu, kanga-
roo, venison and wild boar,
which it sources from about 50
farms around the world. Mr.
Appelbaum’s brother raises
about 250 ostriches and 35 bi-
son on his 182-acre New Jersey
farm. Overall, Fossil Farms has
experienced double-digit
growth the past five years, Mr. Meat purveyors have seen an uptick in sales of alternatives like
Please see MEAT page A18 ostrich, which are raised for Fossil Farms in Lafayette, N.J.
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
A16 | Wednesday, January 27, 2016
Panel Tightens In the Bronx, a Font of Good Works
Lobbying Rules
BY ERICA ORDEN
New York political consul-
tants’ contact with the media
will be treated as lobbying
that requires public disclosure
under measures approved by
the state ethics commission
on Tuesday, prompting an im-
mediate backlash centered on
First Amendment concerns.
The Joint Commission on
Public Ethics approved the
proposal by a 10-3 vote, dic-
tating in its ruling, known as
an “advisory opinion,” that a
consultant or public-relations
official’s contact with the me-
dia on behalf of a client for a
“grass-roots campaign” be re-
ported to the commission.
“Any attempt by a consul-
tant to induce a third party—
whether the public or the
press—to deliver the client’s
lobbying message to a public
official would constitute lob-
bying under these rules,” the
advisory opinion reads.
The measure “is in no way
intended to restrict a re-
porter’s ability to gather in-
formation,” it adds, but rather
is “intended to generate
transparency in the activities
of paid media consultants.”
The threat of such action,
however, had prompted con-
cerns about free-speech rights
Zuckerman Creates
Science Scholarships
BY LESLIE BRODY
Mortimer Zuckerman, the
media and real estate mogul,
says he got the idea for his
new $100 million science schol-
arship program at 5 one morn-
ing last summer when he
couldn’t sleep.
Mortimer
Zuckerman’s
$100 million
initiative will
bring together
U.S. and Israeli
researchers.
He was considering how he
could give back to America,
where he made his mark after
arriving as a young immigrant
from Canada. “I got started in
this country with a few friends
and virtually no family but was
able to find acceptance, oppor-
tunity and success beyond any-
thing I ever imagined,” he said
in an interview. “This is one
way to give back.”
Mr. Zuckerman, the 78-year-
old owner and publisher of the
New York Daily News, said he
envisions helping talented sci-
entists with leadership skills
pursue advanced research
ANNUAL
WATCH & JEWELRY
SALE
January 29th through
February 13th
from consultants, civil-rights
groups and members of the
media, and on Tuesday many
voiced complaints about its
potential chilling effect on
communication.
“It should be obvious that
requiring someone to report
every conversation with an
editorial writer is intimidat-
ing to both journalists and ad-
vocates,” said Donna Lieber-
man, executive director of the
New York Civil Liberties
Union.
Risa B. Heller, chief execu-
tive of a communications firm
who previously worked for
elected officials including for-
mer Gov. David A. Paterson,
said the commission is over-
reaching.
“There isn’t a credible re-
porter or editorial-board
member in New York who
fails to ask who the client is
when you pitch them an idea,”
Ms. Heller said. “JCOPE is
supposed to clean up Albany,
not create solutions to prob-
lems that don’t exist.”
On Tuesday evening, a
spokesman for Gov. Andrew
Cuomo, Rich Azzopardi, said
the governor’s office would
examine the ruling. “This
raises some real questions,”
he said, “and we’ll be review-
ing it very closely.”
abroad in a program resem-
bling the Rhodes scholarships.
This version will bring together
American and Israeli research-
ers in hopes that collaboration
will spark new discoveries.
The Zuckerman STEM Lead-
ership Program will give grants
to American postdoctoral re-
searchers and graduate stu-
dents in the fields of science,
technology, engineering and
math who want to study with
faculty at four Israeli institu-
tions. That includes Hebrew
University of Jerusalem, the
Technion-Israel Institute of
Technology, Tel Aviv University
and the Weizmann Institute of
Science.
Grants will also go to those
schools to help them develop
laboratories and compete for
top Israeli scholars in North
America.
Program officials said it
would provide $100 million in
grants over the next 20 years,
with the first recipients getting
scholarships in the 2016-17 ac-
ademic year.
Mr. Zuckerman, a longtime
supporter of Israel, said he
hoped the project would serve
as a catalyst for the exchange
of scientific ideas between two
innovative democracies with
advanced high-tech sectors.
CITY NEWS
The society photos one
sees in the newspaper, filled
with people having more fun
than you or I, at least I, ever
will, are typically redeemed
by the good cause they’re cel-
ebrating—conquering a dis-
ease, supporting a favorite
dance company, or saving an
endangered species.
But putting aside my per-
haps unjustifiably jaundiced
attitude toward the charity
circuit, I paid
a visit last
week to East
Side House
Settlement,
the benefi-
ciary of pro-
URBAN ceeds from
GARDNER the Winter
RALPH Antiques
GARDNER JR. Show and its
opening-
night gala. It
runs at the Park Avenue Ar-
mory through Jan. 31.
As its name suggests, East
Side House Settlement, a
nonprofit social-service and
educational organization
marking its 125th anniversary
this year, started on the Up-
per East Side when the area
east of Third Avenue was a
poor neighborhood. Its tene-
ments were filled with immi-
grants from Germany, Ire-
land, Italy, Poland and
Czechoslovakia.
Sensing that the need for
its good work had diminished
as the area grew increasingly
wealthy, in the early 1960s
East Side House moved to the
Mott Haven neighborhood of
the South Bronx. Its mission,
however, remains much the
same: to help people gain a
foothold in society.
These days it accom-
plishes that through pro-
grams that support individu-
als and families from early
childhood through old age. It
serves 10,000 people a year
in 28 locations in the South
Bronx and surrounding com-
munities—Head Start/day-
care centers, schools and
community centers for se-
niors.
The headquarters, next
door to a mosque and within
easy walking distance of the
6 train, is where the organi-
zation’s Youth and Adult Edu-
cation Services Program is
based. In its classrooms, col-
lege-age and even older stu-
dents learn such basics as
how to read.
“A lot come from families
that are illiterate them-
selves,” said Daniel Diaz, the
organization’s associate exec-
utive director. “I challenge
MAYOR
Continued from page A15
senators. Many of them were
recently dismayed by the disso-
lution of 421-a, a tax abatement
for some developments. “The
city’s property-tax system is se-
riously flawed,” Mr. Banks said.
“An improved system…would
promote the creation and main-
tenance of rental housing.”
But Kathy Wylde, president
of the Partnership For New
York City, a business trade
group, said a cap alone
wouldn’t help. “There is no evi-
dence that a cap will have any
benefit in the absence of com-
FUNDS
Continued from page A15
lation to take over Atlantic
City would need Assembly ap-
proval.
“If the Assembly is not in-
volved, then there is no agree-
ment,” said Mr. Prieto, who
met with Mr. Guardian last
week. “I will review any pro-
posal to help Atlantic City, but
I will be especially concerned
about any effort to unilaterally
alter collective bargaining
agreements.”
The governor’s announce-
ment drew the ire of dozens of
residents who attended the
council meeting Tuesday night.
Barbara Gillian, a former el-
ementary school teacher who
has lived in the city for more
than 50 years, said a takeover
would disenfranchise residents
who voted to elect their local
officials.
“I think the state was very
discourteous to the local mu-
nicipality and its council and
its mayor,” Ms. Gillian, 77
years old, said. “This is a free
country, and it is our constitu-
tional rights, and I would think
civil rights, that people have
Top, Eric Thomas teaches a literacy class in the Youth and Adult
Education Services classroom at the East Side House Settlement in
the Bronx. Bottom, the Bronx home of the 125-year-old nonprofit.
you to walk this neighbor-
hood and get a book. It’s very
difficult to see literacy as a
priority.”
“When they get to our
place it’s usually because
they’ve fallen through the
cracks because of attendance
issues,” explained Caitlin
Dooley, the department di-
rector for adult education
and workforce development.
“Because they’re young par-
ents, or supporting a parent.”
We visited one of the
classrooms where Eric
prehensive reform of our prop-
erty-tax classes and assessment
criteria,” she said.
Maria Doulis, vice president
of the Citizens Budget Commis-
sion, a fiscal watchdog, said
capping one tax might only put
pressure on another tax stream
to th e city. “They should be
cautious about limiting New
York City’s ability to control its
revenue when it has very large
obligations and services to sup-
port,” she said
In his testimony, the mayor
sought to dissuade lawmakers
from shifting more Medicaid
and CUNY costs to the city, and
to get more state support for
schools and housing.
He later met for an hour with
A Slow Descent
 2006: Gambling revenues
peak at $5.2 billion, then begin
to fall
 2011: Christie task force
pitches five-year plan to turn
around city finances
 2014: Four of city’s 12
casinos close; thousands of
workers laid off
 2015: City gets state
emergency management team
to address finances
 2016: Christie announces
state takeover of most city
functions
some say in government.”
The agreement, which will
be introduced in the Legisla-
ture, would give the state
power over the city’s municipal
debt restructuring and union
negotiations as well as the abil-
ity to sell city-owned assets.
Atlantic City Municipal Util-
ities Authority, which provides
drinking water for the city, is
one of the assets that could be
put up for sale under the pro-
posal. One of the company’s
* *** THE WALL STREET JOURNAL.
Thomas, the literacy instruc-
tor, was helping students
grapple with the difference
between fact and opinion.
“The Steelers are the
greatest team in NFL his-
tory,” Mr. Thomas said, shar-
ing what is ostensibly an
opinion. He was inspired by
the sight of Mr. Diaz, a New
York Giants fan, standing in
his doorway. “If I say, ‘This
team has the most Super
Bowl championships,’ ” again
referring to the Steelers, that
would be a fact.
New York City Mayor Bill de
Blasio testified Tuesday in Albany. taxes were too high, Demo-
State Senate President John O’Donnell of Manhattan de-
Flanagan, a Long Island Repub- fended the city. “We do pay
lican who had canceled previous high taxes, and we get a lot of
meetings with the mayor. Mr. benefits from that,” he said.
Flanagan and many in his cau- “We live in the greatest city in
cus are angry because they be- the world, and they don’t.”
employees, Dale Archie, said
he and other workers are wor-
ried about losing their jobs.
“The burden that the em-
ployees are under right now as
far as the thought of losing
their job, it isn’t fair,” Mr. Ar-
chie, 57, said. “You have a
whole city under an umbrella
of not knowing.”
Mr. Guardian has publicly
feuded with Mr. Christie in re-
cent months over state aid for
the cash-strapped city, but he
said he is willing to work with
the state.
“We look at the options: Do
nothing, have a state takeover,
file bankruptcy or form a part-
nership,” the mayor said.
The legislation is expected
to include state aid for Atlan-
tic City, which is facing a more
than $30 million deficit this
year and is scheduled to run
out of cash by April 1, Mr.
Guardian said.
Mr. Sweeney said the city
needed serious fiscal reform.
“We can’t ask the taxpayers
of Atlantic City any further—
and how can you ask the peo-
ple of New Jersey—to step up
to the plate when we’re not
running as efficient a govern-
ment as we can possibly can,”
Mr. Sweeney said.
SHARP COMMUNICATIONS (2)
But deciphering the dif-
ference between fact and
opinion is relatively simple
compared with some of the
obstacles the students face.
Psychological support is of-
ten as important a compo-
nent of East Side House’s
portfolio as classroom in-
struction, and eventually, if
all goes well, of college
guidance counseling.
LeAnn Wright, a 25-year-
old mother of two living in
a shelter with her children,
said she came to East Side
House Settlement when she
failed to get promoted at re-
tail jobs because she didn’t
have a high-school diploma,
among other reasons.
“East Side House was my
last resort,” she explained.
“I wasn’t holding myself ac-
countable for my actions.”
She recalled the time Mia
Montanez, East Side’s col-
lege-retention adviser,
called her at home after
she’d been absent for sev-
eral days. “I said, ‘I’m about
to go swimming,’ and I’d
turn the water on” at her
faucet.
Her counselor wasn’t
buying it. “If I was not there
in 30 minutes it was a prob-
lem,” Ms. Wright recalled. “I
got used to that kind of en-
couragement.”
Ms. Wright expects to
graduate in Spring 2017
from CUNY Borough of Man-
hattan Community College.
She also has a steady job.
“She’s become a peer coach
here,” Ms. Dooley boasted.
lieve Mr. de Blasio will again get
involved in elections to flip the
State Senate to Democrats, as
he did in 2014. Mr. de Blasio
MIKE GROLL/ASSOCIATED PRESS
said Tuesday the two men had a
“productive conversation.”
Mr. de Blasio then went to
Mr. Cuomo’s office for about
five minutes. He declined to
characterize the meeting,
chuckling when asked.
Asked about upstate legisla-
tors saying New York City’s
cratic Assemblyman Danny
While Messrs. Sweeney and
Christie said their proposal is
aimed at helping Atlantic City,
some residents said the state
has treated the city unfairly
for years. They called for the
state to redirect the luxury
and hotel tax it collects from
within the city’s borders back
to its coffers.
“The governor has had a
heavy hand in Atlantic City
since coming into office” in
2010, said Linda Steel, a for-
mer city employee.
“And now that we are in
need, those funds need to
come back to Atlantic City and
we should not be held hostage,
blackmailed or treated like the
prostitute and the pimp,” she
said.
We Want to Hear
From You
Have something to say about
an article in Greater New
York? Email us, along with
your contact information, at
gnyltrs@wsj.com. Your letter
could be published in our
weekly Feedback column on
Friday. Letters will be edited
for brevity and clarity. Please
include your city and state.
 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.
ADRIENNE GRUNWALD FOR THE WALL STREET JOURNAL
A front-end loader dumped snow into a giant melter at the intersection of Water and Broad streets in lower Manhattan on Tuesday.
Melters Join Battle Against Snow
BY ZOLAN KANNO-YOUNGS
After weathering criticism
that some New York City
streets weren’t plowed quickly
enough, the New York City De-
partment of Sanitation has
turned to another challenge:
melting all that snow.
The department said it has
rolled out 12 snow melters to
make a dent in the towering
piles of snow left behind by
one of the biggest blizzards in
city history.
“They’re making great
progress,” Sanitation Commis-
sioner Kathryn Garcia said
Tuesday in Queens while
standing in front of one of the
melters, which she described
as a “giant hot tub.”
“These are going up all over
the city to make sure that we
* * * * *
are taking the snow away and
really getting rid of it,” Ms.
Garcia said.
The melters, resembling gi-
ant, bright orange dumpsters
on wheels, are generally de-
ployed after major snow-
storms, according to a sanita-
tion spokesman. Ms. Garcia
said there was some melting
done last year but not to this
extent.
She said the melters can
travel up to 10 miles an hour,
and their locations are deter-
mined ahead of time based on
what sewers can handle large
quantities of water.
Sanitation workers first
pump water from fire hydrants
into the melters, which heat
up like stovetops, said a sani-
tation spokesman.
Workers then use front-end
CITY NEWS
loaders to remove snow from
large piles and put it into the
machinery. Ms. Garcia said the
melters can liquefy 60 tons of
snow an hour.
Before the melted snow is
dumped in the sewer, it goes
through two debris filters—
one in the melter and one cov-
ering the manhole.
‘We’re going to keep
doing this until we
feel people can move
freely.’
The city has faced criticism
from politicians and residents
of Queens, who said some
streets hadn’t been adequately
cleared. The sanitation
spokesman said the melters
had been used since Monday,
with two stationed in Queens.
Ms. Garcia said there were
also 200 front-end loaders in
Queens on Tuesday to assist in
the snow removal.
“We’re going to keep doing
this until we feel people can
move freely,” Ms. Garcia said.
Jim Corcoran, 56 years old,
of Orange County, said he was
“amazed” as two front-end
loaders dumped snow into a
steaming melter in downtown
Manhattan on Tuesday.
“Years ago, when I was a
kid, the sanitation used to
dump the snow right into the
river. Now it’s going to the
sewers where it will be treated
and come out like pure water,”
Mr. Corcoran said. “It’s good
to see that.”
Wednesday, January 27, 2016 | A17
De Blasio to Campaign
For Clinton in Iowa
BY JOSH DAWSEY
New York City Mayor Bill
de Blasio is heading to Iowa
on Friday for four days to
campaign for Democratic pres-
idential candidate Hillary Clin-
ton, a person familiar with the
matter said Tuesday.
Mr. de Blasio is traveling
with his wife, Chirlane McCray,
and is paying for their travel,
this person said, although a
portion may be reimbursed by
the Clinton campaign.
The mayor, who was Mrs.
Clinton’s campaign manager for
her successful 2000 U.S. Senate
run, was criticized for not en-
dorsing her for six months as
he weighed options. He planned
a presidential forum in Iowa
Greater
New York
Watch
NEW JERSEY
After Storm, Newark
Schools to Reopen
Newark officials said all public
schools will open Wednesday af-
ter being shut for two days due
to the weekend blizzard that
pummeled the city.
City officials said state trucks
and private contractors had re-
moved 2,552 tons of snow by
Tuesday afternoon, dumping it in
parks and other sites, and re-
moved 161 disabled vehicles.
Mayor Ras Baraka said snow
removal would continue over-
night, and the city had no fatali-
ties due to the storm.
—Leslie Brody
BROADWAY
Box Office Suffers
From Big Snowstorm
The weekend blizzard hit
Broadway hard: With Saturday’s
but was forced to cancel after
no candidate agreed to attend.
Mr. de Blasio has shied away
from national travel in recent
months, and polls have shown
New Yorkers think his time
away was distracting from his
agenda at home.
However, Mr. de Blasio has
praised Mrs. Clinton in recent
public appearances, defending
her from attacks that she is
too cozy with Wall Street.
“Chirlane and I are proud to
head to Iowa, roll up our
sleeves and work to get out
the vote for Hillary,” he said.
An aide to the mayor said
the trip is contingent on
cleanup from last weekend’s
storm being competed and no
unexpected events surfacing.
matinee and evening shows can-
celed, box-office grosses for the
week ending Sunday were down
$5.3 million compared with the
same week last season, accord-
ing to data provided by the
Broadway League, the industry
trade group.
In total, 61 individual perfor-
mances were canceled on Satur-
day, one of the most lucrative
days of the week for theater.
The total gross for the 31 pro-
ductions running last week was
$15.9 million.
—Pia Catton
NEW YORK CITY
Building Congress
Head to Step Down
The head of the New York
Building Congress will step down
from his post at the end of the
year after 22 years at the helm,
the organization said Tuesday.
Richard T. Anderson, 75 years
old, who has served as president
of the organization since 1994,
will assume the title of presi-
dent emeritus and will continue
to serve as a consultant to the
Building Congress. The organiza-
tion, a coalition of business, la-
bor and government members,
promotes the design, construc-
tion and real-estate industry.
—Keiko Morris
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
A18 | Wednesday, January 27, 2016 * * THE WALL STREET JOURNAL.

FOOD & DRINK WEDNESDAY

The Feed Sharing Stories From 93 Years of Living
Vintner. Prisoner. Soldier.
Spy.
It sounds like the title of
Chili for Chilly Days a John le Carré novel, but it
Now that winter has arrived, is the true story of the life
chili is taking center stage on of Peter Sichel. The 93-year-
restaurant menus. A case in old New Yorker has been
point: Hill Country Barbecue each of these things in his
Market (hillcountry.com), with lifetime.
locations in Manhattan (30 W. The four
26th St.) and Brooklyn (345 Ad- words are
ams St.), is holding a “chili ex- also the sub-
travaganza” through February. title of Mr.
Also on tap for chili fans: the Sichel’s new
NYChiliFest, slated for Sunday at memoir,
7 p.m. at the Chelsea Market (75 UNCORKING “The Secrets
Ninth Ave., nychilifest2016.com). THE CITY of My Life.”
More than 20 restaurants will LETTIE At lunch
compete for the 2016 Chili Champ TEAGUE late last
title, as determined by a panel of week, I ad-
chili-loving food professionals. But mitted to Mr.
the public can join in the sam- Sichel that I preferred the
pling: Admission, which starts at subtitle to the title. Mr. Si-
$50, features unlimited servings. chel laughed. “I can always

KEVIN HAGEN FOR THE WALL STREET JOURNAL

—Charles Passy
A New Lounge
LeGrande, a cocktail lounge
on the second floor of the Time
New York hotel in Midtown
Manhattan, officially opens
Wednesday.
The drinks menu, created by
the Metric creative consultant
Christian Sanders, features twists
on cocktails once popular in the
1980s. The Harvey Dent ($14),
for example, is an updated take
on the classic Harvey Wallbanger
cocktail. Mr. Sanders’s version
features Galliano and Earl Grey-
infused vodka with orange juice,
yuzu, honey and orange bitters.
LeGrande at the Time New
York hotel, 224 W. 49th St., the-
timehotels.com
—Elva Ramirez
Best in Baguette
Who makes the best ba-
guette in New York? Eric Kayser,
founder of the French bakery
chain Maison Kayser, can claim
the honor, at least according to
a panel of culinary experts.
Mr. Keyser bested more than
a dozen other competitors in a
Jan. 21 competition at the Sofi-
tel New York hotel.
—Charles Passy
change the title,” he replied.
How was that possible? I’d
never heard of an author
who was able to alter the ti-
tle of a just-published book.
It wasn’t a problem be-
cause the book was self-pub-
lished, explained Mr. Sichel.
He had sought a publisher
but to no avail. Apparently,
it was a problem that his life
was “three books in one” he
said, adding that “publishers
didn’t know how to market
it.”
Was it a story about a
prisoner of war and refugee
from Nazi Germany—or a
story about a senior official
in the CIA? Or was it a wine-
focused memoir of the man
who masterminded the Blue
Nun brand?
In any case, the publishers
all told him, the book had to
sell at least 20,000 copies to
be a success.
The master marketer de-
cided to tackle the job him-
self. He spent three years, on
and off, writing his story. He
couldn’t wait for publishers
to change their minds—not at
his age, he said with a laugh.
If Mr. Sichel could take
German wine with a nun on
the label and turn it into a
Peter Sichel, at Morrell Wine Bar & Cafe in Midtown Manhattan. The New Yorker has a new memoir titled ‘The Secrets of My Life.’
global phenomenon, then
selling some books sounded
like a bit of cakewalk to me.
Even if there wasn’t going to
be an author tour. “Not at my
age,” he said.
And yet even at 93, Mr. Si-
chel’s powers of recollection
are clearly prodigious. Each
section of the memoir is full
of details. Many friends and
colleagues are recollected—
some famous such as former
CIA chief William Casey and
Ernest Gallo and many much
less so.
Mr. Sichel seems to have
met just about everyone of
consequence and liked just
about everyone he encoun-
tered. He is relentlessly styl-
ish as well. When making his
escape from the Nazis, on his
way to freedom in Portugal,
he bribed a Spanish official
with a little gold pillbox and
a Montblanc pen.
Mr. Sichel had a great ad-
vantage with an extensive
family network all over the
world. His family wine busi-
ness was founded in 1857 in
Germany and there were
family wine businesses in
New York, London and Bor-
deaux. In fact, upon Mr. Si-
chel’s return to New York in
the 1960s, after he quit the
CIA, he took over the fam-
ily’s import business.
Why did Mr. Sichel leave
the CIA? I asked. “I wanted
to “work in the real world,”
he replied. As a CIA official,
much of his life was neces-
sarily concealed. The wine
business in New York was
exciting albeit corrupt. Back
then, everyone seemed to be
on the take including—as it
turned out—some of Mr. Si-
chel’s business partners.
But Mr. Sichel played
clean and paid attention to
the marketing side of the
business, especially Blue
Nun, which was a faltering
brand when Mr. Sichel joined
the company. It was Mr. Si-
chel’s idea to market Blue
Nun as “the wine that would
go with everything.”
At its peak in the ’80s,
Blue Nun was selling more
than 2 million cases a year;
by the time Mr. Sichel sold it
some 20 years ago, “it was
dying a slow death,” he said.
But Mr. Sichel was philo-
sophic about its decline.
“Wine like Blue Nun are like
comets—they go up and they
come down,” he said.
If Mr. Sichel was launch-
ing a brand today, where
would he look for the wine?
I asked. “Australia,” he re-
plied. “They are the best
people on the agriculture
side and they produce a
large amount of grapes.” But
Australians did have their
shortcomings, he added.
“They’re good winemakers
but not great marketers,”
observed Mr. Sichel.
Perhaps the Australians
could benefit from his help,
thereby adding one more
chapter to Mr. Sichel’s book.
lettie.teague@wsj.com

THE STORY IS
JUST THE START
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Continued from page A15
Appelbaum said.
While restaurants were the
first to purchase the products,
“we’re seeing more and more
of the home cooks really get
involved,” Mr. Appelbaum said.
“It’s always been our education
model to say treat this the
same way you do anything
else: Just do it rare or me-
dium-rare.”
For Mr. Ludzki, it took some
experimentation to perfect the
more exotic meats. While he
typically prefers his steaks
well-done, other meats “start
to taste gamy or a little tough”
when cooked that way, he said.
Even so, his family and
other dining guests don’t al-
ways take to his choice of pro-
tein.
“When you eat a hamburger,
you don’t think of the cow.
When somebody says you’re
about to eat rabbit, you think
of this little furry thing jump-
ing around,” Mr. Ludzki said. “I
get it. It’s kind of tough to get
over that, but it’s good food
and it’s good for you.”
His wife still prefers regular
burgers. As for his children?
“It doesn’t usually go over
well,” he said. “ ‘No dad, I’ll
have the mac and cheese in-
stead of the yak.’ ”
Many of the less-traditional
meats cost more than their ev-
eryday counterparts. Ostrich
© 2016 Dow Jones & Co., Inc. All rights reserved. 3DJ3063
steaks can go for $35 a pound,
or about $20 a pound for
ground ostrich meat. Emu is
about half the price, and 98%
fat free, leading to a recent
spike in sales, Mr. Appelbaum
said.
While chefs buy meats like
wild boar in bulk, “there’s no
way you can sell a whole rack
to a consumer,” said Ariane
Daguin, chief executive and
owner of D’Artagnan, a luxury-
game company founded in
1985. “You would need 15 days
to eat one boar.”
Still, after trying it in res-
taurants, people started re-
questing cuts to cook on their
own, she said. Four years ago,
D’Artagnan started offering
wild boar in smaller packages
that could be seasoned and
shoved in the oven. “All of a
sudden that convenience
makes it easier for the con-
sumer to be more adventur-
ous,” she said.
There are still some lines.
She won’t sell lion, zebra and
elephant, despite some re-
quests from hunting associa-
tions, Ms. Daguin said. “We’re
not going to go there.”
Jeremy Schaller, president
of Schaller & Weber, said he
too has seen a shift among his
customers. He is working with
Mr. Appelbaum on creating a
line of elk salami, as well as
varieties using pheasant and
wild boar.
A few years ago, the Upper
East Side butcher shop was
considering dropping items
like blood sausage. “Nobody
under 40 would ever, ever try
head cheese, or tongue,” Mr.
Schaller said.
“Now it’s worth it,” he said.
“I’m seeing younger people in
their 20s diving into trying
things and just not being
afraid, whereas honestly three
years ago, four years ago, peo-
ple would have had that ‘Ew,
what is that?’ kind of mental-
ity.”
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.
Theater All-Stars Celebrate Arthur Miller’s Centennial
After a low-key weekend
stuck at home, it seemed like
the last thing anyone wanted
to do on Monday night was
go to a benefit at the Ly-
ceum Theatre on West 45th
Street. But it turned out to
be a pretty smashing, can’t-
miss evening.
It celebrated the centen-
nial of Arthur
Miller and the
official launch
of the Arthur
Miller Founda-
tion for The-
MARSHALL ater and Film
HEYMAN Education,
which will help
provide teach-
ers of theater in many of the
city’s public schools. The
foundation is spearheaded
by Mr. Miller’s daughter, Re-
becca Miller, and the play-
wright Sandi Farkas.
“Theater education should
be a right, not a privilege,”
said Ms. Miller. “It belongs
in a well-rounded education
inside the school day.”
The Lyceum stage is cur-
rently home to Ivo van
Hove’s acclaimed revival of
Mr. Miller’s “A View From
the Bridge.” Playwrights like
Katori Hall, A.R. Gurney,
Tony Kushner and Ayad
Akhtar read from Mr.
Miller’s 1987 autobiography
“Timebends,” with scenes
from a handful of Mr.
Miller’s better-known plays
interspersed throughout the
evening.
Carnegie to Showcase
Steve Reich and Venice
BY JENNIFER SMITH
The coming season at Car-
negie Hall will span centu-
ries and continents, from a
citywide festival celebrating
Venetian music and culture
to a residency by the Pulit-
zer Prize-winning American
composer Steve Reich.
The 2016-17 season, an-
nounced Tuesday, will open
on Oct. 6 with an all-Stravin-
sky program by the Simón
Bolívar Symphony Orchestra
of Venezuela. Gustavo Du-
damel, music director for
both that orchestra and the
Los Angeles Philharmonic, is
to conduct.
Simon Rattle conducts the
Berlin Philharmonic in No-
vember, in what Carnegie
Hall officials say will be
their final New York City ap-
pearances together before he
steps down as the ensem-
ble’s music director in 2018.
The programs are to include
MOMA
Continued from page A15
higher operating costs. Naming
opportunities for donors in-
clude new galleries and possi-
bly a new, expanded section of
the lobby.
In January 2014, MoMA re-
affirmed its decision to raze the
former home of the American
Folk Art Museum next door to
make room for the expansion.
At the same time, Diller Scofi-
dio + Renfro revealed its pre-
liminary design for the project.
That design prompted sharp
criticism, particularly for a
planned retractable, glass wall
at street level that critics
dubbed a “garage door.”
“When this was revealed
back then, we hadn’t started
working together,” architect
Elizabeth Diller said in an inter-
view Monday, referring to her
collaboration with museum ex-
ecutives and curators. “Some
* * Wednesday, January 27, 2016 | A19
HEARD & SCENE
DIMITRIOS KAMBOURIS/GETTY IMAGES
Clockwise from far left: Ellen Barkin and LaTanya Richardson
Jackson; Daniel Day-Lewis and Rebecca Miller; Bradley Cooper
and Nina Arianda; Katori Hall and Alan Tumusiime; Carmen
Fariña; Ron Leibman and Jessica Walter; and Sandi Farkas.
SYLVAIN GABOURY/PMC (6)
was carving a whole pig. by Ms. Horovitz, showed at
Ms. Miller, who is married last fall’s New York Film Fes-
to the actor Daniel Day- tival and will be released
Lewis, said she wasn’t sure if this May.
this kind of an event would As for her father’s plays,
be an annual occurrence. “I only get tired of seeing
“We’re all just making it them if the production is
up as we go along,” she said. disappointing,” she said. “I
Each was performed with Salesman,” opposite Peter plained, “writing plays was “But I’m willing to work un- always kind of find I’m able
gusto. Bradley Cooper and Sarsgaard, while, to close like breathing.” til my ears bleed. The more I to see them in a new way.
Nina Arianda (stepping in for out the night, LaTanya Rich- Many of the guests and work, the better I work.” Being a filmmaker trains you
Greta Gerwig) took on “After ardson Jackson performed a performers, including Juli- Despite her pedigree, Ms. for endless repetition.”
the Fall.” Alec Baldwin, Ellen climactic scene as Linda Lo- anne Moore and Bart Freun- Miller said she has never The play of her dad’s Ms.
Barkin and Jake Gyllenhaal man. dlich; Brian Dennehy; Gov. written for the theater. “I Miller has seen the most is
tackled “All My Sons.” (Mr. Despite these star turns— Andrew Cuomo and Sandra think it’s because I came “probably ‘The Crucible,’”
Baldwin played the same role it wouldn’t be hard to sell Lee; Nick Rohatyn; Ms. Far- from being a painter,” she she said. And she will get to
this summer in East Hamp- tickets to a revival with any kas’s husband Andrew; and said. “And so I’m very visual, see it again very soon, since
ton.) John Turturro and Ron of the aforementioned film producer Rachael Horo- actually.” Instead, she works a new Broadway revival, di-
Leibman (there with wife casts—it was Mr. Miller’s sis- vitz headed five blocks up- as a filmmaker. rected by Mr. van Hove, be-
Jessica Walter) did a scene ter, the 93-year-old actress town to the Palm for a re- “I had to find my own gins previews next month.
from “The Price.” Joan Copeland, who really ception following the way,” she explained. “I’ve only seen a tiny bit,”
At the top of the evening, stole the show. performance. There were Her new film, “Maggie’s said Ms. Miller of the pro-
Laurence Fishburne was For “my big brother,” as mini crab cakes and chicken Plan,” starring Ms. Gerwig duction. “I’m excited to be
Willy Loman in “Death of a she called Mr. Miller, she ex- parm sandwiches, and a chef and Ms. Moore and produced surprised.”
ARTS & ENTERTAINMENT
Forgery-Trial Witness:
Paintings ‘Had No Soul’
BY THOMAS MACMILLAN In opening defense state-
Mahler’s “Symphony No. 7” ments Tuesday, attorneys for
and Brahms’s “Symphony No. Art dealer Ann Freedman Ms. Freedman and Knoedler
2.” was no scheming fraudster, argued that their clients be-
In January 2017 Carnegie knowingly selling forged ab- lieved the artworks were genu-
Hall will mount a cycle of stract masterpieces; she fell ine, and were victims of Glafira
Anton Bruckner’s nine num- victim to a clever con that Rosales, the Long Island art
bered symphonies in a single fooled her and the rest of the dealer who has pleaded guilty
HIROYUKI ITO/GETTY IMAGES
season—a first for the con- art world, her lawyer told a to selling forgeries to Knoe-
cert hall. The cycle will un- federal jury Tuesday. dler.
fold over 11 days in nine con- Defense attorney Luke Nikas Mr. Nikas recounted a list of
certs by the Staatskapelle made those statements in experts who vouched for the
Berlin and its Music Director Manhattan federal court, paintings. “She believed what
Daniel Barenboim, who will where Ms. Freedman faces a the experts told her,” he said.
be marking the 60th anni- civil suit brought by two Two art-world experts—
versary of his Carnegie Hall The Chamber Music Society of Lincoln Center performed Steve wealthy art collectors who John Elderfield, a former top
debut. Reich’s ‘Drumming’ last February at Alice Tully Hall. purchased a fake Rothko paint- curator at the Museum of
The Venetian festival, “La ing from her former gallery, Modern Art, and Gretchen Die-
Serenissima: Music and Arts public will be held at “Pulse,” which was co-com- the now-defunct Knoedler & benkorn Grant, daughter of the
from the Venetian Republic,” institutions including the missioned by Carnegie Hall. Co., in 2004. late painter Richard Dieben-
is scheduled for next Febru- Frick Collection, the Metro- In the spring of 2017, Mr. Domenico and Eleanore De korn—testified Tuesday that
ary. politan Museum of Art and Reich, the 2016-17 holder of Sole allege that Knoedler and they weren’t fooled by the
Timed to coincide with the Juilliard School. the hall’s composer’s chair, its president, Ms. Freedman, phony Diebenkorn paintings
Venice’s Carnevale, it will On a more contemporary will curate a four-concert se- spent years purchasing coun- they saw at Knoedler in 1994.
feature performances of note, Mr. Reich will celebrate ries charting the develop- terfeit midcentury artworks “They had no soul. They
early music and works by Vi- his 80th birthday this No- ment of new music since the purportedly painted by artists didn’t breathe,” said Ms. Die-
valdi and other baroque vember with a performance mid-20th century. Perform- like Jackson Pollock and Rob- benkorn Grant.
composers. Lectures, art ex- of the video opera “Three ers will include Bang on a ert Motherwell, and passing Both witnesses said they
hibits and other events fo- Tales” and the world pre- Can All-Stars and JACK them off as real to unwitting brought their concerns to Ms.
cused on the Venetian Re- miere of his new work, Quartet. buyers. Freedman.
things were a little bit impul-
sive.”
Some architects and muse-
umgoers also pushed back
re-hang the museum’s collec-
tion.
The first phase, scheduled to
begin next week and finish by
lobby.
In phase two, beginning in
late 2016 or early 2017, the
main lobby would be made
against the museum’s plan to the end of the year, will nearly brighter and broader, thanks to
open the sculpture garden to double the public space on the an engineering trick allowing
the public, arguing that a rare ground floor of the Lauder the relocation of a vertical core
oasis of calm in Midtown would building, which is east of the containing building infrastruc-
AGATON STROM FOR THE WALL STREET JOURNAL
lose its tranquility. museum’s main lobby and ture. The reconfigured lobby
The museum subsequently houses MoMA’s cinema. would have new ticket-taking
did open the garden to the pub- and seating areas where the
lic, but has controlled foot traf- store is now located and more
fic by opening its gate on West
The coat check sunlight from a double-height
54th Street for only 45 minutes would be faster and entrance on West 53rd Street.
before the museum opens. “That tunnel-like effect is
When the museum is open, vis-
have greater capacity going to be gone,” Ms. Diller
itors can enter the garden after the renovations. said.
through the museum without The museum’s dreaded coat
purchasing a ticket. The plan to check, from which long lines
build a new garden entrance This renovation will bring snake through the lobby, would
has been scrapped. back a staircase in the style of be redesigned with new tech- The state of MoMA’s construction on West 53rd Street on Tuesday.
“We heard our critics,” Mr. the original 1939 black terrazzo nology to increase both its ca-
Lowry said. Bauhaus Stair, part of which pacity and its speed. the overall museum experi- west on West 53rd Street. The
The expansion project is ex- was removed in an earlier reno- If you have to wait 40 min- ence.” revised plan for the former
pected to have three phases. vation. Other phase-one utes to check your coat, “what Phase three would involve folk-art space calls for a collec-
The museum would remain changes include reconfigured are my chances of your enjoy- construction in the narrow void tion of one- and two-story gal-
open through all three, officials galleries, a new lounge, the re- ing my show?” said Ann Tem- left by the folk-art building, and leries, including a black-box
said, but could close for several moval of a wall blocking a view kin, chief curator of painting new gallery space in an 82- theater, which in the architect’s
months when construction is of the garden and a straighter and sculpture. “One can’t sepa- story tower being built by real- renderings fit together like the
complete, to allow curators to path to the museum’s main rate the art experience from estate developer Hines farther shapes in a game of Tetris.
 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
A20 | Wednesday, January 27, 2016 * * THE WALL STREET JOURNAL.

SPORTS
Reading a Blitz Is Easy. LinkedIn, Not So Much
With an average career
span of less than four
years, NFL players try
social networking
BY STU WOO

Being a professional football

player requires incredible
sharpness. Imagine trying to
sniff out a screen pass or figur-
ing out whether the defense is
in zone coverage while dodging
300-pound linemen.
Despite all the intricate
blocking schemes and blitz
packages NFL players must
memorize, though, one thing
still vexes many of them off
the field: how best to utilize
their LinkedIn accounts.
“I don’t really know how
LinkedIn fully works,” said
Jets safety Dion Bailey, who
started a profile on the profes-
sional networking site with
the idea of propelling his real-
estate career. “My girlfriend’s
real familiar with it. I’m going
to ask her to help me figure it
out.”
It makes sense that dozens
of NFL players have LinkedIn
profiles. They have college ex-
perience, long off-seasons and
careers that average just over NFL players who have started LinkedIn accounts include, clockwise from above, Jets wide receiver
three years, according to the Brandon Marshall, Colts quarterback Matt Hasselbeck and Giants lineman Dallas Reynolds.
players’ union.
“You can only do this for so had that much time. I’ll play League, and added that he had lawn-mowing service he inher- Inc., who uses his profile to with a deluge of fans request-
long,” said Jets receiver Bran- around with it.” worked there as an “All Pro ited from his older brother stay connected with prospec- ing to connect with them on
don Marshall, who created a Julie Inouye, a spokes- Wide Receiver” since 2006. In- when he was a teenager. tive real-estate clients. LinkedIn, but Brown, for ex-
profile before the 2015 season woman for LinkedIn Corp., said dianapolis Colts quarterback “Provided all lawn care ser- For networking, it’s hard ample, has used a feature that
to help promote his non-Jets even professional athletes can Matt Hasselbeck was more spe- vices for Orem Community. enough just to figure out who’s requires people to know his
endeavors, which include transfer their skills to profes- cific, saying he had played the Provided the manual labor, who. Unlike Facebook or Twit- email address to do so.
broadcasting, training pro- sional settings by emphasizing position of “Quarterback” at billing, and collection of ac- ter, LinkedIn doesn’t verify ce- Bailey, a Jets safety who
spective NFL draftees and run- skills in leadership, strategy four different companies: the counts,” Reynolds wrote. lebrity accounts. As of Tuesday has used LinkedIn to search
ning a nonprofit focused on and team building. Colts, the Tennessee Titans, the Reynolds said he didn’t evening, there were profiles for for fellow University of South-
mental illness. After an NFL player enters Seattle Seahawks and the know why he chose to list that Jets quarterback Ryan Fitzpat- ern California alums in real es-
But while LinkedIn has been a name, password and ZIP Green Bay Packers. work experience. In fact, until rick, who is listed as a “Side- tate and broadcasting, hasn’t
indispensable to job recruiters Code to sign up for a LinkedIn Then there’s the question of he was recently reminded of his line towel waver” for the Hous- used that feature. Instead, he
and office workers, its benefits account, the network asks for which non-football work expe- profile, he had forgotten that ton Texans, and for Kansas has been amused by fans who
to NFL players, whose work a “job title” and “company.” riences to list. Taylor included he had created it. City passer Alex Smith, whose have written him LinkedIn en-
experiences tend to be more “They asked for a job title, an internship he held with the Players typically don't list company was the Chiefs, but dorsements.
unique and limited than those so I put down ‘safety,’ ” said security firm Stroz Friedberg. their football statistics on whose job title was “Awful “People who don’t even
of the typical college graduate, Giants safety Cooper Taylor. Giants offensive lineman Dallas LinkedIn. “That doesn’t help Quarterback.” know me are endorsing me for
are murkier. When choosing a “company,” Reynolds went back even fur- someone grow their business,” Inouye said the social net- different stuff, like marketing,”
“I’m still learning,” Mar- players often take one of two ther, listing on his account his said Giants kicker Josh Brown, work makes regular efforts to Bailey said. “I don’t really
shall said. “I haven’t done approaches. Marshall opted to experience as “Lawn Care Man- an off-season intern with prop- scan for fake profiles. know what it does for me, but

alexa
much on it because I haven’t list his as the National Football ager” at Reynolds Lawn, a Utah erty giant Jones Lang LaSalle Celebrities might also deal I appreciate it, I guess.”

Knicks Score With Draft ‘Bust’ OUT TODAY

The Knicks hit the jackpot
this summer when they
signed free-agent forward Der-
rick Williams, who had been a
disappointment in four sea-
sons with Minnesota and Sac-
ramento.
Williams, the No. 2 overall
pick in 2011 NBA Draft, ALL
seemed destined to become NEW
Take a Number LOOK!
one of the biggest draft busts
in history, but instead he has
emerged as a key reserve for
the Knicks on both ends of
the floor. In fact, according to
advanced basketball analytics,
he leads the Knicks in produc-
ing wins for every minute he’s
on the court.
Even better, Williams is
just 24 years old despite play-
ing in his fifth NBA season.

LUXURY
But there’s one drawback to
his startling career reversal: It
may end up speeding his exit
out of town.
The 6-foot-8, 240 pound

REAL ESTATE
forward has a player option to
forgo next year’s scheduled
$4.4 million salary, according
to Spotrac.com, and opt for Knicks forward Derrick Williams
free agency in an off-season
when the NBA salary cap is

set to explode.
Would Williams, who has
yet to start a game this sea-
son, be content to continue as
one of the NBA’s best sixth
men? Perhaps not. His com-
SECTION
Rising Stock
Here are the top 10 Knicks ranked by estimated offensive and defensive
win shares per 48 minutes. Win shares measure offensive performance
based on points produced per possession relative to league average, as
well as defensive performance based on points allowed to the player

MEET THE MAN

bined offensive and defensive being guarded. (League average is 0.100.)
FEATURE (CLOCKWISE FROM TOP LEFT): ZUMA PRESS (2); GETTY IMAGES; TAN: GETTY IMAGES

value is estimated to be worth OFF. WIN DEF. WIN TOTAL WIN WIN SHARES/
a team-best 0.140 wins per
48 minutes of court time. In
PLAYER
Derrick Williams
SHARES
1.5
SHARES
0.7
SHARES
2.2
48 MINUTES
.140 WHO BOUGHT A TOWN
other words, a team of five Carmelo Anthony 2.5 1.3 3.8 .126

alexa
players exactly as efficient as Kristaps Porzingis 1.3 1.9 3.1 .116
Williams would be expected to Kyle O’Quinn 0.4 0.6 1.0 .114
have a winning percentage of Jose Calderon 2.1 0.8 2.9 .110
.700, or about 57 wins. Robin Lopez 1.4 0.9 2.3 .096
This is what was expected The Best of Everything
Langston Galloway 1.4 0.8 2.2 .096
from Williams when he entered
2015
JANUARY 27,

the NBA after a second-team Lance Thomas 1.3 0.3 1.6 .084
All-American season at Ari- Arron Afflalo 1.7 0.4 2.1 .080
zona. But his overall efficiency Lou Amundson 0.1 0.2 0.2 .079
prior to joining the Knicks was Source: Basketball-Reference.com The Wall Street Journal.
only about half of what it’s
been this season. That’s why
the Knicks are Williams’s third free-throw line with much he’s on the court for his 16.7
team in five years. greater frequency (about three minutes a game, running an
This season, Williams is times more per 36 minutes estimated 24.4% of their plays
shooting above his career rate than he averaged before). As a through him, versus the 17.4% FREE INSIDE THE
(.441, up from .431), but most result, the Knicks are using he received with the Kings.
important, he’s getting to the Williams more frequently when —Michael Salfino
3NYP101
 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

WSJ.D B4-B5 | CAREERS B6 | EARNINGS B7 | CROSSWORD B8

BUSINESS & TECH.

Christie’s Reflects When Too Much Grit
A Cooler Art Market Just Gets in the Way
ART | B3 CAREERS | B6
© 2016 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | B1

Apple Sales Growth Slows

Newer iPhones fail to
ignite as much frenzy;
revenue forecast to fall
for first time in 13 years
RAHEB HOMAVANDI//TIMA/REUTERS
iPhones incorporate fewer no-
ticeable changes and haven’t
ignited as much enthusiasm
among consumers.
Apple also said its results
suffered from the effects of
the strong dollar and slowing
two-thirds of Apple’s revenue,
raises questions about Apple’s Dropped Call
growth. Sales of the iPad have Apple’s revenue, change from a
been declining for two years, year earlier
and sales of Mac computers, a 1Q 2016*
recent area of strength, fell in 35% $75.9B
the most recent quarter. s2%

BY DAISUKE WAKABAYASHI
Apple Inc. said iPhone sales
grew at the slowest pace since
its introduction in 2007 and
forecast that revenue in the
current quarter will decline
for the first time in 13 years,
signaling an end to its recent
Iran hopes to export natural gas from fields such as South Pars. period of hypergrowth.
IPhone sales boomed last
global economic growth. It
warned that China, its biggest
overseas market, began to ex-
hibit “signs of economic soft-
ness” this month.
Apple shares fell about 2%
in after-hours trading, sug-
gesting that investors largely
had braced for bad news. Ap-
ple shares have fallen 16%
since the end of October, clos-
30
Apple has struggled to
launch a highly anticipated 25
streaming TV service. It is
working on an electric car, but 20
that project is years away, and
15
its leader is leaving the com-
pany. 10
Kevin Kelly, chief invest-
ment officer and managing 5
partner of Recon Capital Part-
0
ners, said Apple may need to

Iran Seeks Ways

year after the introduction of ing Tuesday at $99.99. lower prices, and sacrifice FY 2014 ’15 ’16
larger-screen models in late The slowdown in iPhone profitability, to reignite growth. *Ended Dec. 26, 2015 Source: the company
2014, but Apple’s newest sales, which account for roughly Please see APPLE page B5 THE WALL STREET JOURNAL.

To Ship Out Gas Repercussions of a Wal-Mart Exit

As Sanctions Ease Winnsboro, S.C., hopes for a Main Street revival as Supercenter closes
BY BENOÎT FAUCON to build the pipeline within
two years. Omani officials
TEHRAN—Iran is pushing didn’t respond to requests for
to find new ways to extract comment.
and export its vast natural-gas Mr. Kameli said his com-
reserves, including developing pany is also in talks with Eu-
facilities to liquefy the com- ropean companies, including
modity and ship it to Europe Oslo- and Nasdaq-listed Golar
in two years, now that West- LNG Ltd., to build floating
ern sanctions have lifted, ac- LNG facilities—offshore ves-
cording to a top Iranian offi- sels on which the gas would
cial. be liquefied. Such a project
Iran holds the world’s larg- would take “less than two
est reserves of natural gas, years,” he said. Golar declined
but has long lacked the export to comment.
infrastructure of competitors Once LNG facilities are in
such Russia and Qatar. They place, Mr. Kameli said, exports JASON E. MICZEK FOR THE WALL STREET JOURNAL
have networks of international to “Europe definitely could be
pipelines as well as liquefied- considered.”
natural-gas facilities that en- Last week, Hellenic Petro-
able them to export gas by leum, Greece’s largest refinery,
ship. agreed to buy oil from Na-
tional Iranian Oil Co., mark-

40%
ing the first sale of Iranian
crude to a European country
since the lifting of trade sanc-
Completion of the Iran LNG tions against the Middle East-
project when sanctions forced ern nation. Other European
work to be abandoned in 2012. companies are promising bil-
lions in new deals in Iran as
Iranian President Hassan Rou-
Tehran is exploring several hani visits Europe this week to
options to help the country revive trade and political ties.
“join the international LNG European Union officials
club,” said Alireza Kameli, have said Iran could be a key
managing director of National supplier of natural gas and
Iranian Gas Export Co., in an help the bloc reduce its reli-
interview. ance on Russia.
One project would involve But the two-year horizon
restarting work on the coun- “doesn’t sound very realistic,”
try’s most advanced LNG proj- one EU official said, citing in-
ect, Iran LNG, which was 40% ternal assessments from the
complete when tightened European Commission, the
Western sanctions forced bloc’s executive arm. The
work to be abandoned in 2012. commission has been working
It could take another three to to rebuild energy ties with
four years to complete the Iran over the past year, once
project, Mr. Kameli said. it became clear that sanctions
Another option would be would likely be lifted. It plans
building a pipeline beneath to send an assessment mission
the Persian Gulf to Oman, to Iran in February to scope
which has LNG facilities that out possibilities.
Iran could potentially use. Mr. Iran exports small quanti-
Kameli said Oman has agreed Please see IRAN page B2
Some residents collected petitions on Saturday urging Wal-Mart to reconsider the closing of the town’s Supercenter that opened in 1998.
BY SARAH NASSAUER
When the Wal-Mart Su-
percenter in Winnsboro, S.C.,
closes its doors on Thursday
after 17 years as the town’s
retail linchpin, a handful of
locals are hoping there could
be a silver lining for the
community.
Vacant buildings that
once housed a Food Lion
grocery store and Goody’s
department store may now
find tenants, said David
Stuck, a commercial real es-
tate broker in Columbia, S.C.,
who has been trying to fill
the buildings for years.
The arrival of a Wal-Mart
Supercenter in small towns
often drove out smaller
stores. “Now that the big go-
business owners and resi-
Charlotte
dents. It was one of the
N.C. town’s biggest employers
Greenville
Winnsboro and around two-thirds of the
Columbia town’s sales tax came from
S.C. Wal-Mart purchases, which
GA.
allowed residents to avoid
Charleston paying property tax.
The Winnsboro location is
Atlantic
100 miles
O cean
one of 154 U.S. outlets Wal-
Mart Stores Inc. will shut by
THE WALL STREET JOURNAL. Thursday, the first time the
retail behemoth has closed
rilla is out of the yard maybe more than a handful of do-
we will have some luck,” said mestic stores at once. It is a
Mr. Stuck. “No one wanted sign that Wal-Mart will slow
to compete with it.” store growth as it fights a
Wal-Mart’s presence in battle for market share
the town of about 3,500 peo- against more nimble dis-
ple influenced almost every count stores or grocers and
wrinkle of local business online behemoth Ama-
since opening in 1998, ac- zon.com Inc.
cording to local officials, Most of those closing are
Walmart Express stores,
smaller outlets the company
started opening in 2011 to be
nearer shoppers’ homes and
to better compete with dol-
lar and convenience stores.
The Winnsboro location is
one of 12 Supercenters, the
roughly 180,000 square-foot
discount outlets that fueled
Wal-Mart’s growth for de-
cades, that are closing. Wal-
Mart operates about 4,500
U.S. stores.
When Wal-Mart opened
the store in Winnsboro, it
fell in line with the com-
pany’s long-time real-estate
strategy of opening in rural,
often overlooked areas out-
side of city centers. Winns-
boro sits about 30 miles
Please see RETAIL page B2

U.S.StudioTries‘Panda’Diplomacy Pay-TV Moneymaker

DreamWorks Animation
SKG Inc. head Jeffrey Katzen-
Targeted in FCC Plan
berg has spent years attempting BY JOHN D. MCKINNON cates regard as inflated. Crit-
to create a Chinese sequel to his ics also say those set-top
Hollywood studio, and a key Federal regulators soon are boxes tend to favor content
test of that effort is coming this expected to propose overhaul- from the cable company that
week, when “Kung Fu Panda 3” ing rules for television set-top provides them.
opens in the U.S. and China. boxes, a move aimed at lower- The service providers are
The Hollywood veteran says ing bills for cable viewers and planning to resist the initia-
providing more access to In- tive. More than 40 telecommu-
By Erich Schwartzel ternet-based programming. nications, media and other
20TH CENTURY FOX/EVERETT COLLECTION

in Los Angeles The proposal by Tom groups are expected to an-

and Laurie Burkitt Wheeler, chairman of the Fed- nounce a coalition as soon as
in Beijing eral Communications Commis- Wednesday to oppose Mr.
sion, likely would involve giv- Wheeler’s anticipated plan.
he flew to China at least once ing cable and satellite Cable and media compa-
a month for the past five customers more choice in nies, which face a potential
years, passing out bilingual whether to use their service loss of billions of dollars in
business cards to theater com- provider’s set-top box and ca- rental fees for set-top boxes,
panies, cultural ministers, ble app, or instead choose are concerned that a plan to
movie producers and politi- competing devices and apps, open up that market could dis-
cians—a massive undertaking A scene from DreamWorks Animation’s ‘Kung Fu Panda 3,’ which opens this week in the U.S. and China. according to consumer advo- rupt their business.
to establish a foothold for his cates pushing for the change. At a minimum, they say, it
family-entertainment company layoffs. Now Mr. Katzenberg is to release new movies each “They want to have their own That could open more of could upend the way the chan-
and its Chinese joint venture, trying to turn those frequent- year, some of them aimed at successes,” said Mr. Katzenberg the market to alternative set- nel positioning they have care-
Oriental DreamWorks. flier miles and countless meet- Chinese audiences and others in an interview. His company’s top-box providers, such as fully negotiated, providing
DreamWorks Animation has ings into long-term returns in intended for world-wide release. smaller-budgeted films will TiVo Inc. and Alphabet Inc.’s certain programmers premium
weathered significant storms one of the world’s most unpre- That puts the studio in competi- compete with local productions Google unit. spots in their lineup in ex-
in the past year, following a dictable markets. tion with new homegrown ani- like “Monster Hunt,” a live-ac- Pay-TV customers now gen- change for higher payments.
series of flops that have The U.S. studio is hoping its mation houses that also want to tion and animation film with erally rent devices from their They also warn that tech
weighed on the company’s fi- newest release will pave the capitalize on the nation’s rap- Chinese actors and cartoon service providers, often at companies could gain unfair
nancial results and spurred way for Oriental DreamWorks idly growing movie market. Please see CHINA page B2 prices that consumer advo- Please see SET-TOP page 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, January 27, 2016
INDEX TO BUSINESSES
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
A
Alfa Energy.................B2
AllianceBernstein.....A10
Alphabet......................B1
American Express.......B6
American International
Group.............C1,C2,C10
Anglo American..........B2
Apple...............B1,C4,C10
Arctic Cat....................D4
B Hickory Point Bank and
Banca Popolare di
Vicenza......................C1
BlackRock....................A1
Bon-Ton Stores...........C4
C Sotheby's....................B3
Calpine.........................B8
Capital Group............A10
Charles Schwab..........A1
Charming Charlie ........ C4
Christie's International
.....................................B3
Coty.............................B7
D Twitter ........................ B6
Discovery.....................B6
Dow Chemical.............B7
DreamWorks Animation
.....................................B1
DST Systems............A10
DuPont ........................ B7
Dynegy ........................ B8
E N-O
Element Electronics ... B2
F Z
Fairchild Semiconductor
International.............B3
Fincantieri...................A2
INDEX TO PEOPLE
B Hougan, Matt ........... A10
Bailey, Andrew............C3
Bailey, Jason...............C2
Berland, Leslie............B6
Breen, Edward ............ B7
Busch, D.J....................C6
C
Chandoha, Marie ...... A10
Colas, Nicholas............C1
Cook, Tim....................B5
Crane, David................B8
D-F
Deschenes, Steve.....A10
Duckworth, Angela.....B6
Fanandakis, Nick.........B7
Fang Xinghai ............... C3
Ferri, Rick..................A10
Flexon, Robert ............ B8
G during the holiday season
Gibb, Gregory..............C3
Golub, Jonathan..........C2
Gorsky, Alex.........B7,C10
H Paul, Rand...................S3
Hamamura, Hirokazu..B5
Hancock, PeterC1,C2,C10
Hill, Thad.....................B8
Gas Giant
Iran holds the world's largest reserves of natural gas. Top countries
by proven natural-gas reserves
Iran
Russia
Qatar
Turkmenistan
U.S.
Saudi Arabia
Venezuela
Nigeria
Source: BP Statistical Review of World Energy
IRAN
Continued from the prior page
ties of gas to Azerbaijan, Ar-
menia and Turkey, typically
about 9 billion cubic meters
a year. Another Iranian gas
official said last year that
Iran could export about 30
billion cubic meters to the
EU in the long term. That es-
timate is consistent with one
EU assessment, which put EU
imports at between 25 bil-
lion and 35 billion cubic
Iran exports small
quantities of gas to
Azerbaijan, Armenia
and Turkey.
meters of gas a year from
Iran by 2030, if LNG facili-
ties are developed.
It is a difficult time to
launch new LNG projects,
which generally cost billions
of dollars and take years to
build. The slump in oil prices
has hit LNG hard, as consum-
ers typically pay for the prod-
uct on oil-linked contracts.
On top of that, plenty of
new LNG supplies are ex-
pected to come into produc-
tion by the end of the decade.
The price for LNG in Asia—the
fuel’s main market—has col-
lapsed.
Low prices could stimulate
new LNG demand from indus-
trial users, said John Hall,
chairman of U.K. consultancy
Alfa Energy. “In two years,
there will be room for another
player in Europe,” he said.
* *** THE WALL STREET JOURNAL.
BUSINESS NEWS
First Trust Advisors.A10
Freeport-McMoRan.....B8
G
PepsiCo........................B6
Ping An Insurance
(Group) of China.......C3
CHINA
Portfolio Solutions...A10 Continued from the prior page
General Electric...........C2
Procter & Gamble.......B7 monsters that grossed a record
Golar LNG....................B1
Prudential Financial....C2 $381.8 million in China last year.
Goldman Sachs Group
............................. A10,C3 R China’s overall box office
RLJ Entertainment.....B5 climbed to 44 billion yuan
Gruppo Campari..........D2
Russell Reynolds ($6.7 billion) in 2015, up nearly
H
ADRIENNE GRUNWALD FOR THE WALL STREET JOURNAL
Associates ................ B6 49% from a year earlier, and is
S expected to surpass the U.S. as
Trust ......................... A2
Severian Asset
the world’s largest film market
Hua Capital
Management.............B3 Management .......... A10 in 2017, according to film con-
Simon Property GroupC6 sultancy Artisan Gateway.
I-J
Sony.............................B5 Hollywood has been scram-
International Business bling to get more films into
Machines...................B6
State Street..............A10 the country. There is a strict
Janus Capital Group ... C3
T
cap on foreign films and rules
JD.com.........................C3
that bar the backers of those
Johnson & Johnson Taubman Centers........C6
imports from taking more than
................... B6,B7,C4,C10 Technip ........................ C1
25% of ticket sales. Release
K-L Terex............................B3 dates are hard to secure, mak-
Konecranes Oyj...........B3 3M................................C4 ing marketing a challenge, and
Lufax............................C3 TiVo ............................. B1 Solid jewelry sales during the holiday season helped reduce polished-diamond inventories. local productions have become
M more competitive with Holly-
De Beers Results Shine
U
Macerich......................C6 wood releases.
Macy's ......................... C6 Uber Technologies ...... B4 After Chinese audiences
MetLife........................C2 V flocked to the first two install-
ments of “Kung Fu Panda,”
In Tough Time for Miners
Microsoft.....................B5 Vanguard Group..........A1
Morgan Stanley .......... C3 DreamWorks realized the films
Verso ........................... B3
Morningstar................A1 had surefire appeal in the grow-
W ing market. The third install-
Wal-Mart Stores.........B1 ment is now an opening step in
Nintendo......................B5
Wynn Macau.............C10 BY SCOTT PATTERSON Anglo American’s biggest carats in 2016. Anglo Ameri- launching Oriental DreamWorks,
NRG Energy.................B8
AND ALEX MACDONALD earnings drivers. can and its subsidiaries, in- whose releases, as Chinese pro-
ON Semiconductor......B3
Zoomlion Heavy Anglo American shares cluding De Beers, plan to pro- ductions, stand to earn millions
P Industry Science & LONDON—A strong start to have tumbled 78% in the past vide updated production more in China than movies pro-
Paulson........................C2 Technology................B3 2016 by Anglo American year because of a protracted figures on Thursday. duced by the original, Califor-
PLC’s diamond unit, De Beers commodity-prices slump that Analysts cautioned that nia-based DreamWorks.
Group, gave a jolt to the Lon-
don mining company, which
has suffered as the prices for
has forced a restructuring at
the company.
Tuesday was the first time
Tuesday’s report doesn’t mean
diamonds—and diamond-min-
ing companies—have turned
“Kung Fu Panda 3,” which
cost around $145 million to
make, is the first-ever animated
R nearly all the commodities it De Beers disclosed rough-dia- the corner. Sales at the start of co-production between the U.S.
House, Andrew...........B5 Radjy, Shahnaz...........B6 mines and sells have plunged mond sales, in what the com- the year are typically stronger and China. Preview screenings
I Riley, Timothy .......... A10 to multiyear lows. pany said was a bid to reduce than year-end results, as retail- Saturday broke records for do-
De Beers said sales of rough some of the industry’s notori- ers stock up after the holidays. mestic animated films by tak-
Icahn, Carl............C1,C10 S
Issakainen, Ryan ...... A10
diamonds—the raw stones it ous lack of transparency. In Still, amid seemingly end- ing in 42 million yuan, accord-
Sakwa, Steve..............C6 mines that are later cut and pol- the past, reports of sales re- less bad news for mining com- ing to Artisan Gateway.
J Samson, Steven..........C3 ished into glistening gems—gen- sults were based on rumors, panies, the results provided a The film was co-financed by
Johnson, Ben............A10 Sanders, Bernie .......... S3 erated $540 million during its leaks from buyers and indus- ray of hope for Anglo Ameri- multiple Chinese companies and
Johnson, Robert L......B5 Steenland, Douglas.....C2 first sales cycle of 2016, which try analysts’ best guesses. can, which is one of the most Oriental DreamWorks, a Shang-
K Stirling, Josh...............C2 ended on Monday. The results Sales of rough diamonds diversified large mining com- hai-based entity created in 2012
Kameli, Alireza ........... B1 T more than doubled the $248 suffered last year amid weak- panies in the world, with oper- in which DreamWorks is a mi-
Katzenberg, Jeffrey....B1
million in sales that De Beers ening demand for polished ations including manganese, nority partner. Thanks to the
Taylor, David...............B7
Kelly, Kevin.................B1
posted in the last sales cycle of stones, analysts said. Rough- coal and copper. Diamonds ac- film’s co-production status,
Thompson, Chris.......A10
2015, the company said Tuesday. diamond prices at De Beers counted for about one-third of DreamWorks and its partners
L W De Beers said rough-dia- and Russia’s Alrosa Group— earnings before interest and can market the film in China, get
Lee, Samuel..............A10 Walters, Brolin...........A1 mond sales rose across the the world’s second-largest taxes at the company in the a higher percentage of ticket
Li Ruigang...................B2 Wenyuan, Deng...........C4 company’s product range, due producer of diamonds by first half of last year. sales out of the country and se-
M Wheeler, Tom..............B1 to higher demand for polished value, behind De Beers—fell On Monday, Anglo Ameri- cure a prime release date ahead
Maestri, Luca..............B5 Wiedman, Mark........A10 stones. Solid jewelry sales 15% in 2015, according to Ra- can Platinum Ltd., Anglo of the Lunar New Year, on Feb.
paport USA Inc., which tracks American’s majority-owned 8, a popular time to see movies.
McGee, Tom ................ C6 X
McNabb, F. William..A10
helped reduce polished-dia- diamond trends. Those weak Johannesburg-listed unit, The release of the third
Xin, Zhang...................C4 mond inventories and boost results caused De Beers to cut warned that it planned to re- “Panda” film coincides with
P demand for rough stones, the 2015 production to 29 million port significantly lower-than- China’s imminent ascension to
Y
Paterson, David J. ...... B3
Yach, Derek.................B6
company said. carats from initial targets of expected earnings after incur- the top of the global box-office
Traders cheered the results, 34 million, De Beers said. ring higher impairment ranks. “If you went to Vegas
Paulson, John..............C1 Z with shares in Anglo American The company said in De- charges related to its restruc- and tried to place a bet on all
Peden, David...............C2 Zinn, Matt...................B5 closing up 12% in London on cember that it plans to churn turing and the continued plati- of these things actually inter-
Powell, Michael .......... B5 Zonin, Gianni...............C1 Tuesday. Diamonds are one of out 26 million to 28 million num price rout. secting and coming together at
a moment in time, nobody
would take the bet,” Mr.
RETAIL Katzenberg said.
China, which began building
its own animation houses after
seeing the success of the initial
Continued from the prior page “Panda” and other features,
1,201 trillion cubic feet north of Columbia, S.C., the views animated productions as
largest city in the state. part of a campaign to soften
1,152
“We never planned on ac- its image across the world
866 tually going into the cities. with cartoon characters. Car-
617
What we did instead was toon characters travel easily
build our stores in a ring across borders, said Rance
JASON E. MICZEK FOR THE WALL STREET JOURNAL
345 around a city—pretty far Pow, head of Artisan Gateway.
288 out—and wait for the growth While many expect “Panda”
to come to us,” wrote Wal- to be a hit, Mr. Katzenberg’s
197 Mart founder Sam Walton in larger ambitions in China are a
180 his 1992 autobiography. riskier undertaking. Later this
But population growth year, Oriental DreamWorks
THE WALL STREET JOURNAL. flowed east and west of Co- will announce a slate of films
lumbia, not north to Winns- produced in China for a global
National Iranian Gas Export
Co. also plans to invest in gas
infrastructure such as distri-
bution networks, plants or
boro. “Younger people are
moving to more urban areas
that have more things to of-
fer than we have in Winns-
audience, with the first one—
full of Chinese themes—com-
ing in 2018.
Beginning next year, the com-
pipelines, Mr. Kameli said. boro,” said Roger Gaddy, a pany will also roll out Mandarin-
Sending Iranian gas by physician and Winnsboro’s Anne Stephenson Broom: ‘Saturday used to be our big day.’ language films annually for dis-
pipeline through Turkey is mayor. A Mack Trucks fac- tribution only in China, each
generally considered the tory that employed around bring manufacturing jobs to In 2015 Winnsboro’s gross with a production budget that is
shortest route to Europe, but 1,000 closed in 2002, leaving the area. Element Electron- sales tax of $94 million fell a fraction of a normal Dream-
building the infrastructure Wal-Mart as one of the larg- ics Corp., a television maker 37% compared with 2012, ac- Works film, said Li Ruigang,
enough to increase exports est employers in town with that counts Wal-Mart as one cording to state tax figures. chairman of the private-equity
“doesn’t seem feasible” eco- 160 workers. of its top customers, moved Wal-Mart accounts for fund China Media Capital, a
nomically, Mr. Kameli said Wal-Mart’s arrival in workers into a former shirt around 65% of the town’s partner in Oriental Dream-
Iran is also talking about Winnsboro in 1998 triggered factory here in 2013. A small sales tax, said Mr. Gaddy, the Works. DreamWorks proper
supplying gas to its neighbors big changes in the former U.S. toy producer for Wal- mayor. The 1% county sales spends $120 million to $145 mil-
in the Persian Gulf, notably cotton mill town, say resi- Mart also moved production tax is used to erase resi- lion for most of its films.
Kuwait and the U.A.E., which dents. A Belk department to the town from China, dent’s property taxes, lead- Many in China were wary of
don’t have sizable gas re- store on main thoroughfare though it recently filed for ing to fear “that we have to the Oriental DreamWorks ven-
serves and could be supplied closed later the same year. protection from creditors. reinstitute property tax in ture, Mr. Li said. Part of his sales
with short pipelines. After Wal-Mart opened on Winnsboro is the seat of the city,” he added. pitch to regulators: Foreign tal-
One possible regional mar- the outskirts of town, Satur- Fairfield County, whose un- A Wal-Mart spokesman ent like DreamWorks could help
ket is Saudi Arabia, Iran’s day shoppers thinned at employment rate was 7.4% in said the company considered China enter the global film and
main political rival in the Mid- Belk, said Anne Stephenson December, compared with each store’s financial perfor- animation market one day, send-
dle East, which is trying to Broom, whose family ran the 5.3% for the state. The mance as part of the clo- ing Chinese stories overseas.
shift away from using crude store for 69 years. “Saturday county has a population that sures, but won’t comment on DreamWorks Animation’s
oil for power generation. The used to be our big day,” said is 59% African American, specific locations. More than most recent movie, “Home,”
kingdom has gas reserves that the 57-year-old state em- compared with 27% for the 75 of the Winnsboro store’s performed well, and “Panda” is
are too expensive to produce ployee who lives in Winns- entire state. 160 employees have already seen as an important step as
at today’s prices. boro. “When Wal-Mart came Local residents and politi- been assigned jobs in nearby the company rebuilds itself in
“Saudi Arabia is a big po- that was kind of the last cians say the Wal-Mart clo- stores and the company is the wake of last year’s layoffs.
tential customer. They don’t straw.” sure will leave the town with working to find jobs for That explains in part why
have the choice but to ap- While many local busi- one grocery store. “People those who want them, the DreamWorks is also taking ex-
proach Iran,” Mr. Kameli said. nesses struggled after the are legitimately concerned spokesman said. treme measures to ensure a
Saudi officials weren’t reach- arrival of Wal-Mart, “it actu- about their ability to get Some locals say they hope hit. The studios made a sepa-
able for comment. ally helped our business,” their needs met,” said Wal-Mart’s exit will leave rate, Mandarin-language ver-
Relations between Saudi said John McMeekin, owner Creighton Coleman, who room for smaller businesses sion of the film, hiring Chinese
Arabia and Iran have deterio- of Winnsboro Furniture Co. grew up in town and is a to thrive again. Town offi- stars for voice-overs and even
rated in the past year as the until closing in 2012. state senator. “We have el- cials are already soliciting reanimating characters’ lips
two countries have sided with Wal-Mart “kept my cus- derly… these people, they grocery store companies and and facial expressions.
different interests in wars in tomer from leaving town on can’t drive 20 miles on the encouraging the few remain- About 60% of the movie’s
Syria and Yemen. Saudi Arabia their days off to shop in Co- interstate,” to the nearest ing downtown businesses to shots required reanimating to
cut off diplomatic ties to Iran lumbia,” he added. Also, his Wal-Mart, he said. stock a wider variety of sync up the new voice-overs,
after its embassy in Tehran store differed from Wal-Mart The store manager told products like hunting and said Melissa Cobb, a producer
was set on fire following Ri- by offering shoppers financ- employees of the closure, fishing gear, said Terry Vick- on all three “Panda” movies.
yadh’s execution of a promi- ing for purchases, about 85% said Mary Craig, a 65-year- ers, president of the Fairfield About 400 people in the
nent Shiite cleric. of the store’s business. Mr. old who started working County Chamber of Com- U.S. and 125 in Shanghai
Mr. Kameli said renewed McMeekin, 61 years old, said there in 1997. “We were all merce. worked on “Kung Fu Panda 3,”
trading ties could help soothe he wanted to retire so closed in shock,” said Ms. Craig. “Winnsboro survived be- said Mr. Katzenberg. The cost
tensions. “Piped gas can help his store. The manager told employees fore the big box came,” she to Oriental DreamWorks of re-
political relations between Wal-Mart’s headquarters the store “wasn’t making any said, “and Winnsboro will animating the Mandarin-lan-
countries,” he said. in Arkansas also helped money,” she said. survive without the big box.” guage version wasn’t disclosed.
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, January 27, 2016 | B3

BUSINESS NEWS

Art Market Loses a Little Heat Paper Firm

Verso Seeks
Trophy masterworks
weren’t enough to
bolster Christie’s
Bankruptcy
overall tally last year Protection
BY KELLY CROW BY PEG BRICKLEY

In the latest sign that the Paper manufacturer Verso

art market is cooling, London- Corp. filed for chapter 11 bank-
based auction house Christie’s ruptcy protection on Tuesday,
International PLC said Tues- its business battered by the
day that it sold £4.8 billion, or shift online that drove down
$7.4 billion, of art last year, an demand for its products.
11% drop from the market’s Memphis, Tenn.,-based Verso
peak a year earlier. has been trying to work out a
Christie’s total included $6.5 restructuring of its overloaded
billion in auction sales, down balance sheet. The maker of
4% from a year ago. Its $851.2 coated paper used in magazines
million total in privately bro- and catalogs is carrying more
kered art sales represents a than $2.8 billion in debt and
43% drop from $1.5 billion the paying interest of more than
year before—a slowdown that $270 million annually.
began gradually last spring as Verso Chief Executive David
collectors expressed increasing J. Paterson said the company
sticker shock over skyrocketing has worked “to develop a re-
art prices. structuring plan to eliminate
Rival Sotheby’s, based in $2.4 billion of our outstanding
New York, reported last week debt” and exit bankruptcy pro-
KATHY WILLENS/ASSOCIATED PRESS

that it auctioned $6 billion last ceedings “in a short time

year, down 2%, and privately frame.”
sold $673 million in art, up 8% Verso said it expects to
from a year earlier. reach an agreement with cer-
The year was dominated by tain creditors and obtain a
a handful of trophy master- bankruptcy-financing package
works that soared to record- of up to $600 million to sup-
high prices, such as Christie’s port continued day-to-day oper-
nearly $180 million Pablo Pi- ations.
casso, “Women of Algiers One of Pablo Picasso’s masterworks, ‘Women of Algiers (Version O),’ sold for nearly $180 million in New York last May. The size of the bankruptcy
(Version O),” and its $170.4 financing prompted Fitch Rat-
million Amedeo Modigliani, gle with its luxury segment, several seasons of runaway the U.S.—explains why Chris- ings director Sharon Bonelli to
“Reclining Nude.” which includes wine, watches growth as collectors who had tie’s sales in the U.S. grew 11% Measuring Sales warn bondholders not to expect
These sales helped Chris- and jewelry. It sold $757 million gone on shopping sprees take to $3.6 billion last year, while Annual sales at two of the major substantial recoveries from
tie’s achieve its second-highest of these high-end goods last stock of their holdings. its sales in Europe fell 23% to auction houses Verso’s chapter 11 proceedings.
totals in company history last year, down 19% from a year ear- Mr. Brooks dismissed sim- $2.1 billion, Mr. Brooks said. Bankruptcy loans generally
Sotheby's Christie’s
year, but trophies alone lier. Sales of American art also mering fears of a market Asian art enjoyed a modest get priority in payment
$8 billion
weren’t enough to bolster the fell 16% to $103.6 million. standstill. “Who knows what bump last year, with sales schemes because they are nec-
house in other categories As market tremors started will happen this year, but right climbing 2% to $734.2 million. essary to fund a company’s bid
where collectors proved less to spread last spring, collec- now I don’t get a sense of any- Asian buyers exerted greater to survive. That means lower-
willing to splurge. tors retrenched to categories thing dramatic,” he said. purchasing power, spending 6 ranking creditors are pushed
Christie’s sales of contem- they considered safe bets. Younger collectors, he said, 15% more at Christie’s than beneath another layer of senior
porary art fell 20% to $2.2 bil- That is partly why the house continued to bid online in they did the previous year. debt that must be paid off first.
lion, a surprising turnabout fared better with impression- greater numbers. Looking ahead, Mr. Brooks 4 Verso’s court papers outlined
for a house that has staked its ist and modern art, selling $1.8 Artworks culled from Euro- said the house plans to create a set of three bankruptcy loans,
reputation on its ability to at- billion, up 57% from the year pean collections tended to sell more themed sales including which could run as high as $775
tract new global collectors to before. Latin-American art, better when offered for auc- 20th Century Week and Classic 2 million.
bid up works by living artists. which has had a few roller- tion in New York because U.S. Week. This would allow collec- Once the reorganization
Sales for old-master paint- coaster seasons, also surged collectors remain the world’s tors to bid on several art cate- terms are completed, Verso
ings, 19th century paintings 35% last year, to $55.5 million. biggest art buyers, Mr. Brooks gories simultaneously rather 0 said, debtholders will swap
and Russian art also dropped Stephen Brooks, deputy chief noted. than sticking to one style or 2010 ’11 ’12 ’13 ’14 ’15 their claims for equity in a re-
41% to $237.6 million. executive of Christie’s, said the This migratory pattern—art era, he said, adding, “expect Source: the companies organized company.
Christie’s continued to strug- market looks “sanguine” after sourced in Europe but sold in more consolidation.” THE WALL STREET JOURNAL. “The alternative to a restruc-
turing is a sale of assets, either
mill by mill or in packages,”

Chinese Firm Makes Rival Offer for Terex

BY BOB TITA machinery manufacturers have
AND JAMES R. HAGERTY had limited success penetrat-
ing the U.S. market with their
Zoomlion Heavy Industry own brands. China’s equip-
Science & Technology Co. of- ment market—the world’s
fered to buy U.S. crane-maker largest—is mired in a pro-
Terex Corp. for about $3.3 longed slump.
billion, an attempt by the Chi- Chinese companies have be-
nese company to override an come more aggressive lately
existing deal between Terex about pursuing deals amid
and Finland’s Konecranes Oyj. concerns about China’s weak-
Zoomlion’s unsolicited of- ening economic growth, in-
fer, which sent Terex shares vestment bankers say. Last
soaring Tuesday, appears to be month, for example, an inves-
the first time a Chinese con- tor group including China Re-
struction-machinery company sources Microelectronics Ltd.
has openly tried to buy a U.S. and Hua Capital Management
rival, analysts said. Chinese Co. made an unsolicited bid
for Fairchild Semiconductor
International Inc., which al-
ready had a deal to sell itself
to fellow U.S. company ON
Semiconductor Corp.
Corporate bond research
firm Gimme Credit reports
that Zoomlion has signifi-
cantly lower operating mar-
gins than Terex. The company
reported a loss of 391 million
yuan ($59.4 million) in the
third quarter ended Sept. 30,
2015.
Zoomlion couldn’t be
reached for comment.
Terex said Tuesday that
Zoomlion offered $30 in cash
for each Terex share, making
the deal worth about $3.3
billion. Terex stock surged
37% to close at $20.50 a
share after the offer was dis-
closed.
Under the all-stock deal
with Konecranes, announced
in August, the Finnish com-
pany would exchange 0.8 share
for each Terex share. Based on
Konecranes’s closing stock
price in Finland on Tues-
day and on current exchange
rates, each Terex share would
be valued around $18. Terex
shareholders would get 60% of
a new company to be called
said Chief Financial Officer Al-
len J. Campbell, in a filing in
the U.S. Bankruptcy Court in
Wilmington, Del.
Konecranes Terex and based in Either type of sale, he said,
Finland. “will yield less value for credi-
Terex said its board hasn’t tors and portend negative rami-
backed away from an earlier fications for employees.” Verso
endorsement of the employs 5,200 people.
Konecranes merger, but that The chapter 11 filing came
Terex has entered discussions after Verso exercised grace pe-
with Zoomlion regarding the riods on payments due on ma-
proposal. Terex declined to jor issues of bonds to engage in
comment further until its talks about its “cash flow and
board finishes reviewing the liquidity concerns.”
new offer. Verso has been selling assets
Konecranes said Tuesday it after closing large swaths of its
“will continue to pursue the operations in Maine and Ken-
merger of equals with Terex,” tucky as demand for its prod-
calling the deal “a highly com- ucts continues to decline.
pelling opportunity for both —Patrick Fitzgerald
companies.” contributed to this article

Lockheed Sheds IT Unit MAKE RELAXATION YOUR RESOLUTION NOW &

BY DOUG CAMERON

Lockheed Martin Corp. an-

BEAT THE PRICE INCREASE
PAUL J. RICHARDS/AFP/GETTY IMAGES

nounced plans to carve out its

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The announcement Tuesday 14% to $181 billion in the re- expanded company, fended off
came even as Lockheed’s most cently enacted fiscal 2016 bud- competition from rival IT spe-
recent big deal—last year’s $9 get, and while growth in later cialists and private-equity
billion purchase of helicopter years is expected to be in the firms to snare Lockheed’s busi-
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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
B4 | Wednesday, January 27, 2016 * *** THE WALL STREET JOURNAL.

TECHNOLOGY @wsjd | wsjd.com

Car Apps Test Tracking of Drivers

Ride-sharing services driver tracking beyond Houston.
mull use of telematics
as way to monitor and
The spokeswoman said that
while Uber didn’t notify the
Houston drivers it was track-
ing them, its driver agreement
enhance rider safety always has explained that the
company was monitoring loca-
BY DOUGLAS MACMILLAN tion data.
Uber and its ride-hailing
Eva Nunez recently was peers also must contend with
driving for Shuddle Inc., a the software’s technical limita-
ride-hailing service for fami- tions. A Shuddle spokeswoman
lies, when she says she said drivers can explain why
slammed on the brakes to incidents occurred and would
avoid a dog. only face consequences if
The dog was unharmed, but problems arise frequently or
Ms. Nunez later was repri- there is “egregious or danger-
manded by Shuddle, which de- ous behavior,” she said.
tected the sudden stop using Shuddle’s system for identi-
the accelerometer sensor in fying bad driving was devel-
her smartphone. In an emailed oped by Zendrive Inc., a San
report that details her driving Francisco startup whose soft-
performance each week, the ware is used by dozens of
company noted the incident’s companies that manage fleets
location and warned her to of drivers. Zendrive provides
brake more gradually. these companies with code to
The same smartphones insert into their own apps,
used by more than a million which their drivers then
drivers of ride-hailing services download and run on their
to pick up passengers and col- phones while working.
lect fares are now tracking The technology tracks each
when they speed, cut corners, trip and constantly rates driv-
brake suddenly or send texts ers on a scale of 1 to 100. If
while at the wheel. Several they brake suddenly, they
companies including Uber could lose a point.
Technologies Inc. are testing Carly Lutz, Shuddle’s senior
BRYAN SMITH/ZUMA PRESS
Taxi Strike
SnarlsParis
Roadways
BY SAM SCHECHNER
AND INTI LANDAURO
PARIS—Taxi drivers Tues-
day blocked access to main
roads in the French capital and
clashed with riot police, as
they went on strike to demand
further restrictions on the
business of car-hailing apps
such as Uber Technologies Inc.
Hundreds of cabdrivers
blocked access to the city’s
two main airports and burned
tires on its ring road, not far
from the Arc de Triomphe, un-
til riot police intervened. Oth-
ers clogged up the streets
around the finance ministry.
Police detained 20 protest-
ers in Paris and one was run
over near Orly airport, Paris
authorities said. French Prime
Minister Manuel Valls met rep-
resentatives of the taxi drivers
and promised a crackdown on
illegal practices and said he
would appoint a mediator to
address their complaints.
Some cabdrivers said they
would protest for a second day
on Wednesday.

ways to collect this data by
uniting sensor readings in
phones with geolocation data
and traffic patterns.
Technology to track the
safety of drivers in commer-
cial fleets has existed for de-
cades, primarily in the truck-
ing industry, in which
vehicles contain a box re-
cording things such as brak-
ing and speeding.
But this field of technology,
known as telematics, may fi-
nally be on the verge of wide-
spread adoption due to smart-
phones and ride-sharing apps.
San Francisco companies
Uber and Lyft Inc., the two
largest ride-hailing services in
the U.S., each have held dis-
cussions with companies that
make telematics software, and
are considering implementing
it widely in the future, execu-
Detailed records could help lower insurance costs and settle accident disputes, but parsing a driver’s
every move also brings legal questions and privacy concerns. Above, a Lyft driver in New York in 2014.
tives at the companies said.
The firms aim to improve
safety, extending beyond back-
ground checks and passenger
feedback. Detailed driving re-
cords could help flag reckless
behavior, lower insurance costs
and settle accident disputes.
But parsing a driver’s every
move also dredges up long-
standing legal questions and
privacy concerns.
For one, Uber and its com-
petitors risk overreaching into
the lives of workers they clas-
sify as independent contrac-
tors, and not employees. That
could weaken these companies’
legal arguments that their mar-
ketplaces afford workers flexi-
bility and freedom, and hence
shouldn’t have to pay health
benefits or other expenses cov-
ered by an employer.
In November, Uber began
quietly tracking the speed,
acceleration and braking pat-
terns of drivers in the Hous-
ton area. When passengers
complained about incompe-
vice president of family expe-
rience, said giving those
scores to drivers in a weekly
report has improved driving.
The company issues warnings
to drivers who get dinged for
poor driving too often, and in
a few instances deactivated
drivers for a low Zendrive rat-
ing combined with other
tent drivers, Uber used this warnings signs.
data to check for erratic driv- Lyft’s chief technology offi-
ing relative to the overall av- cer, Chris Lambert, said his
erage for Houston motorists. company has held discussions
If they found evidence of with telematics technology
this, the company warned the providers but decided the
driver by email to drive more software is still too early in its
carefully. development to roll out to its
An Uber spokeswoman said thousands of drivers.
the company has developed “There is a lot of work to
some of its own telemetric tech- be done to make the technol-
nology and tested software ogy perfect in terms of identi-
made by third parties, but de- fying the events and determin-
clined to specify names or ing what accurately leads to
whether Uber plans to expand safer drivers,” he said.
The strike marks the sec-
ond major protest against car-
hailing applications in less
than a year, underscoring the
bitter feud between tradi-
tional taxi drivers and their
newer rivals.
Taxi drivers want the gov-
ernment to broaden a crack-
down on car-hailing firms, such
as Uber, arguing the services
violate a strict new transport
law passed in 2014 that, for in-
stance, obliges car services to
return to a garage between
each fare.
“We just want a level play-
ing field, we have more taxes
and cost and regulations, we
want to have the same weap-
ons to compete,” said Eric
Arabo, a 54-year-old taxi
driver who came up from Nice,
on the French Riviera, to par-
ticipate in the protest.

THE PLEDGE

What is mobile? If you are ever trapped under a

Is it the latest communications device? The health ton of rubble, I promise to sniff you out.
monitor on our wrist? The key to our digital I promise to be worth every cent of the $10,000
Photo by Deborah Samuel from PUP, published by Chronicle Books www.chroniclebooks.com

security? Is it the means to connect the

that it took to train me.
unconnected or is it the screen that entertains us?
Mobile is all of this. But it's also so much more. I promise to ignore all other more fascinating smells
Mobile powers our lives. It’s an extension of who and concentrate on the scent of live humans.
we are. Mobile is connectivity. Mobile is identity. I promise to go about my work with a wagging tail,
Mobile is commerce. Mobile is inclusive. There is
even if my paws get sore.
no clearer way to say it. Everything is mobile,
but more importantly: Mobile Is Everything. I promise never to give up.
See the phenomenon for yourself in Barcelona
at Mobile World Congress 2016.

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most highly trained dogs with firefighters to save lives.
AN EVENT OF To donate, call (888) 459-4376 or visit
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BE PART OF THE SEARCH®
 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, January 27, 2016 | B5

TECHNOLOGY

Sprint and AT&T Plot

Different Strategies
BY RYAN KNUTSON
AND THOMAS GRYTA
Struggling wireless carrier
Sprint Corp. showed signs of a
turnaround in its latest quar-
terly results, while growing
pains at telecom AT&T Inc.
were on display after its $49
billion acquisition of DirecTV.
Sprint, which continues to
churn through cash, on Tues-
day reported healthy sub-
scriber gains and a smaller
loss in its latest quarter, calm-
ing investor fears about the
wireless company’s difficult
turnaround.
501,000 of the most lucrative
type of subscriber plans,
known as postpaid, 366,000 of
which were for phones. That is
an improvement from the
year-earlier period when it
lost 205,000 postpaid phone
customers.
Phone additions are consid-
ered important because they
provide more in service reve-
nue than tablets, and custom-
ers with postpaid phone ac-
counts tend to stick around
longer. To achieve those sub-
scriber gains, Sprint launched
one of its most aggressive
price promotions ever: In No-

TOMOHIRO OHSUMI/BLOOMBERG NEWS

Meanwhile, AT&T reported
adding fewer mainstream
wireless customers compared
to a year ago while a shift in
its video strategy led to a de-
cline in television subscribers.
Both carriers are fighting in
an increasingly competitive
and highly promotional wire-
less market, but they are on
different paths with AT&T di-
versifying away from con-
vember, it offered 50% off
monthly wireless prices
charged by rivals.
Sprint Chief Executive Mar-
celo Claure said the carrier
will continue to be aggressive
on pricing and would consider
extending the discount offer
beyond its February end.
Sprint’s latest phone sub-
scriber additions fell short of The Japanese market for videogame consoles is shrinking. Above, attendees try out the PlayStation Vita at the Tokyo Game Show last year.
those of Verizon Communica-

Sony PlayStation Unit Heads to U.S.

sumer wireless and deeper
into video and bundled offers
to get more customers on its
networks. After slipping into
fourth place by total sub-
scriber count, Sprint is trying
to keep its business afloat.
Sprint said it has added
DAVID PAUL MORRIS/BLOOMBERG NEWS
tions Inc. and T-Mobile US
Inc. for the quarter ended Dec.
31. Verizon added 449,000
postpaid phone customers and
T-Mobile added 917,000. AT&T
lost 256,000 mainstream
phone connections during the
period.
Videogame operations
to move headquarters
from Japan to boost
ties to crucial market
BY TAKASHI MOCHIZUKI
TOKYO—Sony Corp. said
Tuesday that it will move the
headquarters of its PlayStation
videogame unit to California, a
move that reflects the indus-
try’s view of the U.S. as offer-
ing the best growth potential.
As part of the move, Tokyo-
As free smartphone games
have proliferated, the Japanese
market for videogame consoles
such as the PlayStation has
shrunk, while the U.S. market
has continued to expand.
Sony said relocating to the
U.S. would enable it to respond
more quickly to industry
trends.
“It makes sense for us to
put headquarters functions in
the U.S. because we have a lot
of important business partners
in the U.S. and a lot of changes
in the industry we need to
deal with promptly tend to ap-
partners, Sony said.
No job cuts or large person-
nel shuffles were planned in
Japan, Sony said.
Sony said that it also hoped
moving the PlayStation head-
quarters to the U.S. would en-
hance its relationship with cus-
tomers there.
Sony Computer Entertain-
ment was established in Japan
as a joint venture of Sony Corp.
and Sony Music Entertainment
Inc. in 1993, when Japan was at
the forefront of the videogame
industry. Sony released the
first PlayStation console in
tendo Co. have struggled on
their home turf. Japan was the
first location where Sony cut
the price of its PlayStation 4
console last year.
Meanwhile, the U.S. console
market has topped $10.4 bil-
lion, making it the world’s larg-
est. Sony has sold more than
30 million PlayStation 4 units
since the launch in November
2013. Analysts say Sony is lead-
ing its rivals in the console
market, including Nintendo and
Microsoft Corp.
Industry veteran Hirokazu
Hamamura, a director at Ka-

based Sony Computer Enter-
tainment, the videogame unit,
will merge with San Mateo,
Calif.-based Sony Network En-
tertainment International LLC,
which provides PlayStation’s
network services.
The change will take effect
in April, and the new company
will be called Sony Interactive
Sprint gained new subscribers from a discounting campaign. Entertainment LLC.
pear there first,” a spokes-
woman for Sony Computer En-
tertainment said.
Andrew House, chief execu-
tive of the PlayStation unit, will
retain the same position at the
new company. Other executives
working from Tokyo will also
have offices in California, en-
abling them to spend more
time meeting local business
Japan the following year, be-
fore expanding distribution to
other countries.
The size of the console-
based videogame market in
Japan has halved in seven
years, according to a Japanese
industry body, the Computer
Entertainment Supplier’s Asso-
ciation. Sony and fellow Japa-
nese videogame giant Nin-
dokawa Dwango Corp., said
earlier that the U.S. market is
crucial for Sony to stay ahead
of the competition because, in
addition to its size, the latest
trends usually originate there.
The U.S. has served as a
testing ground for new PlaySta-
tion services, including a video-
game subscription service
called PlayStation Now.

SET-TOP
Continued from page B1
access to valuable consumer
data—such as which channels
they watch and when—and sell
their own ads against the pro-
gramming. Cable companies
say they operate under
stricter privacy standards.
Mr. Wheeler’s plan faces a
tight timetable if it is to be
enacted by the end of the year,
before an expected change of
leadership at the FCC as a new
president takes office.
For years, consumer advo-
cates have complained that
the market for set-top devices
has been effectively controlled
by the cable companies, de-
spite congressional efforts to
boost competition.
Customers could be overpay-
ing for these devices by $6 bil-
lion to $14 billion a year, accord-
ing to the Consumer Federation
of America. Critics argue that
other technologies have plum-
meted in price while cable-box
rental fees have soared.
Some minority-oriented
firms have been particularly
outspoken. In an opinion piece
in the Hill newspaper, Black
Entertainment Television
founder Robert L. Johnson
urged the FCC to give viewers
more access to alternatives.
“If you have a good pro-
gram idea, some financing,
and access to the Internet, you
can find your audience,” wrote
Mr. Johnson, chairman of RLJ
Entertainment Inc. “But your
audience can find you only if
they have a modem or a set-
top box or software that lets
them know you are there and
gives them access to your pro-
grams unconstrained by the
network gatekeeper.”
Access now varies consider-
ably, depending on the pay-TV
provider, experts say. And
some cable companies say
they are eager to get out of
the set-top-box business.
Google, in a recent filing,
said the FCC “should com-
mence a rule making quickly to
unleash competition in the re-
tail navigation device market.”
“We see great consumer
benefits in choice, including
lower cost [and] increasing
desirability of cable service,”
said Matt Zinn, TiVo’s senior
vice president and general
counsel, on Tuesday
But foes of the FCC plan
have drawn support from
more than two dozen mem-
bers of the Congressional
Black Caucus, who say that the
overhaul could raise costs and
complexity, requiring some
customers to acquire another
device.
Pay-TV industry officials
said the plan would be more
far-reaching than it seemed.
“They say it’s just a box, [but]
it’s allowing another company
to build an entirely different of-
fering” in addition to the tradi-
tional cable service, said Mi-
chael Powell, a former FCC
chairman and now president
of the National Cable & Tele-
communications Association.

APPLE
Continued from page B1
“There is going to be a day
when Apple needs to compro-
mise its margins or its peak
sales,” said Mr. Kelly, who
oversees an investment of
about 40,000 shares of Apple.
In an interview with The
Wall Street Journal, Apple
Chief Executive Tim Cook said
he remains optimistic, noting
that he sees future gains for
iPad and continued growth
from services such as Apple
Music and other projects.
“We don’t live in 90-day
quarters, and we don’t invest
in 90-day quarters,” said Mr.
Cook. “I’m so convinced that
the things we are doing are
right and the assets we have
are enormous.”
The company said it sold
74.77 million iPhones in its fis-
cal first quarter ended Dec. 26,
surpassing sales of 74.5 mil-
lion units a year earlier. The
less-than-1% increase fell short
of analysts’ estimates of 76.54
million units in the quarter.
For the current quarter
ending March, Apple said it
sees revenue of $50 billion to
$53 billion, well below esti-
mated revenue of $55.47 bil-
lion from analysts polled by
Thomson Reuters. At the mid-
point of $51.5 billion, that
would mark an 11% decline
from the same quarter a year
earlier, the first decline since
March 2003.
Profitability will suffer, too:
Apple projected its gross mar-
gin, the portion of revenue af-
ter production costs, would be
between 39% and 39.5%, com-
pared with consensus esti-
mates of 39.97%.
Apple Chief Financial Offi-
cer Luca Maestri said the cur-
rent quarter has the toughest
comparisons from the year-
earlier period this fiscal year.
He also noted that Apple had
raised prices in certain mar-
kets to offset the strong dollar,
which may hurt demand.
To be sure, Apple remains
one of the most profitable
companies of all time.
For the three months ended
Dec. 26, Apple said net income
rose 1.9% to $18.36 billion
from $18.02 billion in the year-
ago period. Earnings per share
rose more sharply, to $3.28
from $3.06, reflecting Apple’s
active share-buyback program.
Revenue rose 1.7% to $75.87
billion from $74.6 billion in
the same period a year earlier.
That was the slowest rate of
growth since June 2013—just
before the introduction of the
iPhone 5S—when Apple’s reve-
nue rose 0.9%.
Analysts polled by Thomson
Reuters estimated that Apple
would post earnings of $3.23 a
share on revenue of $76.6 bil-
lion.
Excluding the impact of the
rising U.S. dollar, Apple said
revenue would have risen 8%
compared with a year earlier.
Two-thirds of Apple’s revenue
comes from overseas.
With its shares down and
concerns about iPhone sales,
Apple on Tuesday sought to
change how investors see the
company.
For the first time, Apple dis-
closed that users had “engaged”
with more than one billion Ap-
ple devices, including iPhones,
iPads, Macs and Apple TV, in
the past 90 days, by download-
ing an app, song or movie.
The company said those de-
vices generated $5.5 billion in
services revenue in the quarter
ended December, up 15% from
the same period a year earlier.
A bright spot for the iPhone
has been China, but the coun-
try’s rapid growth is cooling.
Apple’s sales to greater
China, which includes Hong
Kong and Taiwan, rose 14% to
$18.37 billion, in the December
quarter. But that was down
from the fiscal year ended in
September, when sales to
greater China grew 84%.
B6 | Wednesday, January 27, 2016
Having Too Much Grit Can Lead to Burnout
BY JOANN S. LUBLIN
Grit is great, most of the
time. But some leaders may be
too gritty for their own good.
Long a hallmark of over-
achievers, grit
YOUR is trendy nowa-
EXECUTIVE days—largely
CAREER due to research
by Angela Duck-
worth, a psy-
chology professor at University
of Pennsylvania. She finds that
grit, defined as passion and per-
severance toward long-term
goals, better predicts success
than talent or intelligence. Her
2013 TED talk about building grit
has been watched nearly eight
million times.
“Gritty executives excel at
their jobs and have the greatest
potential to be promoted,” says
Dean Stamoulis, head of the Cen-
ter for Leadership Insight at re-
cruiters Russell Reynolds Asso-
ciates Inc. The search firm has
conducted in-depth assessments
of more than 7,000 executives
since 2005, finding that “those
with grit exhibit drive, emotional
resilience and focused planning,”
Mr. Stamoulis adds. CEOs have
higher levels of grit than other
executives, the analysis showed.
On the other hand, some
driven senior managers “are
getting burned out over being
gritty,” often because they don’t
know when to give up, says
Richard Chaifetz, head of Com-
Workers’ Health Could Be Included in Annual Reports
BY RACHEL EMMA SILVERMAN
Companies might add
something new to their annual
reports: a rating of their work-
ers’ health.
A group of employers, in-
cluding International Busi-
ness Machines Corp., PepsiCo
Inc. and Johnson & Johnson
are weighing how to publicly
report—and measure—the
health of their workforce. Such
ratings would give sharehold-
ers, corporate directors, man-
agers and consumers insight
into a company’s commitment
to improving employee health,
ADVERTISEMENT
Career Opportunities
To advertise: 800-366-3975 or WSJ.com/classifieds
CAREERS

  
Psych Corp., a major provider of
employee-assistance programs.
ComPsych has seen an increase
in calls from such stressed exec-
utives in the past year or so.
“Excess grittiness can derail
your career,” warns Mary
Herrmann, managing director
of executive coaching for BPI
Group, a global consultancy.
She estimates that about 35%
of BPI’s coaching assignments
involve grit, with many execu-
tives acting “too passionate
toward their goal” following a
and whether such efforts are
getting results. Chronic illness,
tobacco use and obesity can
drive up a company’s medical
costs, but a growing body of
research suggests they can
also affect productivity and
performance.
A coalition of employers
and insurers, dubbed the
Health Metrics Working
Group, has been meeting for
more than a year to figure out
how to collect, interpret and
report this data for annual re-
ports or other financial state-
ments.
Derek Yach, the chairman of
CAREERS
NY THE WALL STREET JOURNAL.
CAREERS
grily to suggestions about how Bancorp, worries about being
she should manage a challeng- overly gritty. He publicly com-
ing assignment. mitted himself to avoiding lay-
In February 2015, the com- offs at the Minneapolis-based
pany retained executive coach bank, but fears that prolonged
Donna Stoneham to advise the low interest rates might force
vice president. Among other him to change course. “I am in
things, the woman says she the middle of my grittiest mo-
learned to spot her body’s re- ment in my career,” Mr. Davis
sponse to excess stress, such as says. “We’re about to find out if
tightened thigh muscles, and to that was too gritty.”
breathe slowly to calm down. Grit is prized among startup
The executive’s boss be- founders, even though Andrew
lieves that she now works more Weinreich, operator of a boot
effectively, says Dr. Stoneham, camp for entrepreneurs, en-
president of Positive Impact counters many who refuse to
LLC, a coaching and transfor- abandon their ailing ventures.
mational leadership firm. It is something Mr. Weinre-
Experts recommend that ich, a serial entrepreneur, knows
overly gritty types also seek a lot about. He launched sixde-
frank feedback about their be- grees.inc., which he says was
havior from internal mentors, the first social-media network
STEVE DININNO
business acquaintances or to let users create a profile, af-
knowledgeable relatives. ter 200 potential investors re-
“The true risk for gritty ex- jected a concept that Facebook
ecutives is that they don’t later popularized. He sold sixde-
consider alternative means to grees for $125 million in 1999.
new job or big promotion. pany recognized that her grit the goal,’’ says Gale M. Lucas, “You have to figure out when
These individuals keep try- was grating on others. Hired lead author of the USC study. to pivot,” Mr. Weinreich says.
ing to win losing battles, even into a pivotal role as a depart- “Just because you started He always asks smart critics to
when their persistence costs ment head in a research organ- down this path doesn’t mean challenge his central assump-
them the chance to earn a bo- ization, she gradually realized it’s the right one.” tions before he launches a busi-
nus, according to a recent that her approach was alienat- Another expert disagrees, ness. He also has shifted direc-
study of grit’s downsides by ing team members because viewing adaptability as an in- tion hundreds of times at the
the USC Institute for Creative they resisted her vision for re- herent element of grit. “Resil- seven firms he established.
Technologies, an affiliate of vamping their organization. iency is all about when to zig Mr. Weinreich believes that
University of Southern Califor- “So I pushed harder,” the and when to zag, but not give the trick is knowing when to
nia. “There is also value in executive recalls. “Everyone up,” says Robin Koval, co-author passionately pursue your vision
knowing when to quit,” the was angry or annoyed.” of the new book “Grit to Great” and when to accept that you
study concluded. Dealings with colleagues and CEO of Truth Initiative, a lost the battle. “You’re not a
It took months before a vice outside her department deteri- public-health foundation. genius for persevering against
president of a health-care com- orated, too. She reacted an- Richard K. Davis, CEO of U.S. all costs for a failed vision.”
the working group and the could be verified by outside “We want this to be a serious if and how that gets imple-
chief health officer of the Vi- auditors, similar to financial management tool that goes mented will vary quite widely,”
tality Group, a unit of South accounting standards, says Dr. alongside financial management says Shahnaz Radjy, lead proj-
African insurer Discovery Yach. Another model is corpo- tools,” says Dr. Yach. “The level ect manager on the initiative
Ltd., says rating workforce rate environmental impact re- of obesity in the workforce, and senior communications
health gives investors and con- ports, which have grown in- stress and depression I consider specialist at the Vitality Insti-
sumers another way to assess creasingly common, he adds. material to the business perfor- tute.
a given company’s productiv- Dr. Yach released a report mance of a company.” Allegacy Federal Credit
ity, management and commit- and sample scorecards of cor- Any health information Union, a not-for-profit Win-
ment to employees’ well being. porate-health metrics at the would be presented in the ag- ston-Salem, N.C. credit union
Vitality offers health and well- World Economic Forum in Da- gregate, to conform with and member of the working
ness programs to employers vos, Switzerland. Some of the health-privacy laws. group, issued its first em-
and could stand to gain if sample questions include, “Is Few companies systemati- ployee health scorecard to its
more companies adopt health- there a person responsible for cally and publicly report their roughly 125,000 credit-union
reporting metrics. employee health and well-be- health metrics. “All the work- members last spring. Allegacy
The working group aims to ing in your company?” and, ing group members support rated itself a 49 on a 55-point
develop a standard measure of “Does your company maintain the concept of reporting on scale—suggesting that well-
employee health, one which a smoke-free workplace?” employee-health metrics, but ness efforts were working.
Twitter Hires First CMO
CAREERS
As Shake-Up Continues
BY YOREE KOH growth rut in recent years, en-


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THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | B7

EARNINGS

DuPont P&G Receives Boost

StepsUp From Higher Prices
CostCuts BY CHELSEY DULANEY
AND PAUL ZIOBRO

BY JACOB BUNGE Procter & Gamble Co.’s

sales trends turned positive in
DuPont Co. stepped up its the latest quarter as improved
cost-cutting efforts as slowing U.S. results and higher prices
growth in developing coun- offset volume declines in most
tries and the strengthening of the consumer-goods com-

GARY CAMERON /REUTERS

U.S. dollar continued to chal- pany’s businesses.
lenge the maker of seeds and A 2% gain in organic sales,

ANDREW HARRER/BLOOMBERG NEWS

chemicals, underlining forces
driving its merger with rival
Dow Chemical Co.
Wilmington, Del.-based Du-
Pont said it now plans to cut
$730 million in expenses this
year after announcing a broad
restructuring plan in December
that will eliminate about 5,000
jobs in an effort to improve
profits and hasten integration
which strips out the effects of
currency moves, acquisitions
and divestments, was a wel-
come rebound after P&G in the
previous quarter reported a rare
decline in the closely watched Better U.S. results bolstered P&G.
metric. It also came in the pe-
riod that Chief Executive David In a conference call, P&G Chief
Taylor began his tenure atop the Financial Officer Jon Moeller
Alex Gorsky, CEO of Johnson & Johnson, says he is optimistic about the company’s core business. world’s largest consumer-prod- said the sales-volume decline
ucts seller, which has struggled primarily came from develop-

J&J Hit by Strong Dollar

with Dow, executives said. That
is up from a December projec-
tion of $700 million in 2016
cost reductions.
“We are obviously moving
as rapidly as we can,” DuPont
Chief Executive Edward Breen
said on a conference call Tues-
day. DuPont, which makes
products including pesticides
and building materials, swung
to a loss in its latest quarter as
revenue fell across all seg-
ments. Sales were particularly
hard-hit abroad due to a rising
dollar. Slowing sales in emerg-
ing markets also meant that
more of DuPont’s profits were
generated in countries with
higher tax rates, further pres-
suring earnings, Chief Financial
Officer Nick Fanandakis said.
Under Mr. Breen, who assumed
leadership at DuPont in Octo-
ber 2015, DuPont has acceler-
ated cost cuts to cope with a
slumping agriculture sector.
For the quarter ended Dec.
31, DuPont swung to a loss of
$253 million, or 29 cents a
share, from a profit of $683
million, or 74 cents a share, a
year earlier.
BY JONATHAN D. ROCKOFF
AND CHELSEY DULANEY
Johnson & Johnson said
Tuesday that a strong dollar
contributed heavily to a 2.4%
drop in fourth-quarter sales to
$17.8 billion world-wide, but
the company expressed opti-
mism that both its underlying
business and the global
health-care market generally
would grow this year.
J&J said relatively new
drugs such as Xarelto and Im-
bruvica were driving increased
sales in its pharmaceuticals di-
vision, while nearly all of the
company’s recalled consumer-
health products such as chil-
dren’s Tylenol were back on
store shelves and helping turn
around that business after
years of manufacturing issues.
Executives said they ex-
pected a similar revival of the
company’s struggling medical-
device business, due partly to
3,000 layoffs that are pegged
to save as much as $1 billion
in costs and the launches of
several new products, includ-
ing knee-replacement parts
and contact lenses.
“We’re optimistic about the
opportunities in health care
and frankly, the underlying
strength of our core business,”
J&J Chief Executive Alex Gor-
sky told investors and analysts
during a conference call.
J&J, of New Brunswick,
N.J., is considered an industry
bellwether because it is one of
the world’s biggest health-
products companies with a
portfolio that spans across
markets. The company expects
the world-wide health-care
market to grow 3% to 5% an-
nually over the next few years,
while coping with pricing
pressures. At the same time,
J&J executives sought to ease
Wall Street concerns that one
emerging tool for cutting
spending on drugs, the intro-
duction of lower-priced ver-
to boost sales for years.
Mr. Taylor’s stint, which be-
gan Nov. 1, comes as Cincinnati-
based P&G grapples with a
sions of biotech drugs, posed a strong U.S. dollar and significant
an imminent threat to sales of economic instability in many de-
one of the company’s top-sell- veloping markets where the
ing therapies, Remicade. The company is looking for further
executives said they aren’t ex- growth. With a larger-than-ex-
pecting so-called biosimilar pected impact from currency
competition for the rheuma- swings, P&G on Tuesday low-
toid-arthritis agent in the U.S. ered its outlook for “core” earn-
this year, because the drug’s ings this fiscal year, now ex-
patent expires in September pected to fall by between 3%
2018 and the company will de- and 8%, compared with a prior
fend it. When the biosimilar forecast of flat to down slightly.
competition comes, J&J execu- Currency fluctuations are
tives said they expect most expected to take a seven-per-
Remicade patients will stay on centage-point bite out of P&G’s
the drug, because they are sat- annual sales growth; the previ-
isfied with the results. ous forecast was six percent-
Earnings in the fourth quar- age points. The company now
ter rose to $3.22 billion, or expects foreign exchange to
$1.15 a share, from $2.52 bil- lower its adjusted earnings by
lion, or 89 cents a share. Ex- 37 cents a share, compared
cluding a charge for restruc- with its earlier forecast for an
turing the medical-devices impact of 11 cents a share.
business and other items, J&J P&G’s sales were primarily
reported earnings of $1.44 in bolstered by price increases,
the latest fourth quarter. which were up 3% across its
Shares of the company rose business lines. Those price in-
nearly 5% Tuesday in New creases offset a 2% decline in
York Stock Exchange. the amount of products sold.
ing markets dealing with cur-
rency devaluation, where P&G
has had to raise prices to pro-
tect its profit margins, thereby
denting demand.
P&G logged a 3% volume de-
cline in its beauty segment, a
1% drop in its grooming seg-
ment and 3% declines in both
its health-care and baby, femi-
nine and family-care segments.
Overall, P&G on Tuesday re-
ported a fiscal second-quarter
profit of $3.21 billion, or $1.12
a share, up from $2.37 billion,
or 82 cents a share, a year ear-
lier. Excluding special items,
per-share earnings were $1.04
a share. Revenue fell 8.5% to
$16.92 billion. Foreign ex-
change represented a nine-per-
centage-point headwind. P&G
shares rose 2.6% to $78.81 in 4
p.m. trading on Tuesday.
The previous-year results
were adjusted to exclude
beauty brands and fragrance
businesses that P&G has
agreed to sell to Coty Inc.
Analysts polled by Thomson
Reuters had forecast 98 cents
a share in adjusted earnings
on $16.94 billion in revenue.

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B8 | Wednesday, January 27, 2016 THE WALL STREET JOURNAL.

BUSINESS NEWS

Cheap Gas Pinches Power Sector Freeport

To Boost
The plunging cost to fuel its power plants even

of fuel has driven

wholesale electricity
Energy Bargains
Change from a year earlier in natural gas and electricity prices in late January, by region
REGION NATURAL GAS ELECTRICITY
though U.S. benchmark price
of gas was more than double
that amount. The cheap gas
Debt Cuts
was pumped in the northeast, BY TESS STYNES
to rock-bottom prices Mid-Atlantic where the Marcellus and Utica
shale formations in Pennsylva- Freeport-McMoRan Inc.
New England
BY REBECCA SMITH nia and Ohio are located. But said it would step up its debt-
Northwest no change the company didn’t reap huge reduction efforts in response to
The lowest electricity prices Southwest profits from cheap fuel costs further weakening in commodi-
in more than a decade are because inexpensive natural ties markets and that it is in
New York City
testing the whole business gas only served to drag down talks with third parties regard-
model of independent power- Louisiana the price of electric power ing a potential transaction.
generation companies. Midwest than Dynegy got. The Phoenix company, which
While most companies are Low power prices aren’t the is a major copper producer, also
Southern Calif.
thrilled when their fuel costs only force weighing on inde- reported that its fourth-quarter
drop, plunging natural-gas Northern Calif. pendent power companies. De- loss widened amid another big
prices have pushed wholesale Houston mand for electricity is sluggish write-down of its oil-and-gas
electricity prices down to at best as more Americans in- business and slumping revenue.
rock-bottom levels. That trend –40% –30% –20% –10% 0% 10% stall energy-efficient appli- Freeport said it would con-
is pressuring the sales and Source: Energy Department THE WALL STREET JOURNAL. ances and U.S. companies em- tinue to focus on controlling
stock prices of some of the brace conservation efforts to costs and is considering asset
biggest power-plant owners in reduce their bills. sales and joint ventures, includ-
the U.S. The forecast for summer ing the continuing review of
Shares in Dynegy Inc., electricity demand in the mid- options for its oil-and-gas busi-
Calpine Corp. and NRG En- dle of the U.S. has weakened, ness, as well as potential deals
ergy Inc. slid more than 55% according to PJM Interconnec- including certain mining assets
last year. So far this year, they tion LLC, which operates the as it aims to focus on copper.
are down between 4% and 19%. nation’s biggest power market Freeport has been cutting
Last month NRG’s board of di- across 13 states in the Mid- costs in response to declining
rectors replaced longtime chief west and mid-Atlantic. PJM metals prices and as falling en-
executive David Crane, hoping projects electricity sales in its ergy prices have exposed an in-
change at the top would re- region will grow slightly over vestment in oil and gas drilling.
verse the company’s slippage, each of the next three years, Freeport, early last month,
but there is no relief in sight. but by smaller percentages suspended its dividend and

DANIEL ACKER/BLOOMBERG
A U.S. Supreme Court deci- than it forecast just last said it would further reduce
sion this week put additional spring. its capital spending by $1 bil-
pressure on generators’ stocks In Texas, which operates as lion during the next two years.
with a ruling that allows big an electric island of sorts be- Later in December, James
consumers to receive pay- cause its grid isn’t connected R. Moffett, a wildcatter who
ments for cutting their elec- to the rest of the country’s, built an empire from one of
tricity use that are equivalent the state’s ability to generate the world’s biggest copper
to what generators are paid to A Dynegy power station in Illinois. Dynegy and some of its peers lost over half their value last year. electricity is creeping up. The mines, said he was stepping
make electricity. excess power generation ca- down as the company’s execu-
“It’s a tough time for mer- east. That is because the cember, as gas prices hit a 14- natural gas-burning power pacity is expected to swell tive chairman. The move came
chant power companies,” said country’s fleet of power plants year low, the price in some plants that have low costs, from 17% this year to 26% by months after billionaire Carl
SunTrust energy analyst Ali has dramatically changed over regions was even lower. In the putting the squeeze on rival 2018. That is good news for Icahn took an 8.5% stake in
Agha. the last 20 years to run on mid-Atlantic power sold for a plants that aren’t as efficient. consumers but bad news for Freeport. The activist investor
Independent power compa- more gas as coal plants have little as 2.7 cents per kilowatt- The cost to consumers is electricity sellers, because it recently had a stake of roughly
nies came to the fore in the shut down due to old age and hour, according to federal significantly more than what guarantees a robust market 8.7%, according to FactSet.
1990s when many states de- new pollution regulations. To- data. That compares with an wholesale power generation with fierce competition, driv- Freeport said Tuesday that
regulated their electricity mar- day nearly 30% of U.S. power average wholesale price of companies charge, because ing down power prices. although concerns about the
kets. Merchant generators own is generated from gas, up from about 7.6 cents a kilowatt hour utilities tack on fees to fund “It’s a very tough macro en- global economy—particularly
power plants and sell the elec- less than 20% two decades for 2008, when gas prices spending on power grid main- vironment,” said Thad Hill, China—have hurt commodity
tricity they make to big indus- ago. were much higher. tenance and other big ticket chief executive of Calpine in prices, the company believes
trial users and utilities. The average U.S. electricity In the most populated parts items. Houston. But he remains opti- the market for copper essen-
The companies mostly burn price last year fell by about a of the U.S., electricity is sold Robert Flexon, chief execu- mistic: As coal-burning power tially is balanced.
coal and natural gas to gener- third to 3.5 cents a kilowatt- through daily auctions de- tive of Dynegy in Houston, plants shut down, highly effi- Overall, Freeport-McMoRan
ate electricity, but it is gas hour, according to a Wall signed to tap the cheapest said at least 20 times during cient natural gas-fired power reported a loss of $4.09 billion,
prices that often dictate elec- Street Journal analysis of sta- sources of power. That means 2015 the company paid less plants—the kind Calpine or $3.47 a share, compared
tricity prices in places like Cal- tistics compiled by Interconti- daily electricity prices often than $1 per million British owns—will pick up more busi- with a year-earlier loss of
ifornia, Texas and the north- nental Exchange Inc. In De- get set by the most efficient thermal units for natural gas ness. $2.86 billion, or $2.75 a share.

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
30s d t
Edmonton -0s <0 1 2 3 4 5 6 7 8 9 10 11 12 13 62 Cloister resident 28 Canada’s
50s Stephen Harper,
V
Vancouver algary
Calgary 0s 0s 14 15 16 63 Forgiveness
20s for one
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Seattle p
Winnipeg 17 18 19 30 One saluted by
30s 10s 20s 65 Quick to learn
30s 20s a Capt.
l
Helena Montreal 30s 20 21 22 Down
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Bismarckk Ottawa 40s 31 •Excluding
50s 30s A g t
Augusta 40s 23 24 25 26 1 “Did you forget
Eugene Billings 32 “Hands off!
Boise 20s Mpls./St.. Paul
Pau T
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Boston
27 28 29 That’s mine!”
40s Buffalo Ab
Albany tford
Hartford 60s 2 For real
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Milwaukee t
30s New 40s 34 Sensei’s
60s ew YYorkk 70s 30 31 32 33 34 35 3 Barrio visitor
Reno 30s Deses Moines
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Chicago Pittsburgh workplace
Cleveland
Sacramento Salt Lake City
Cheyenne Omaha h Ph
hil d lph
h hi
Philadelphia 80s 36 37 38 39 4 •Chirp from 35 Only even prime
Springfield
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Washington on D.C.
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DC 90s R2-D2, e.g.
San
an Francisco Colorad
C l d
Colorado Topeka Kansas Indianap li
Indianapolis
40 41 42 43 38 Fodder for the
Las p g
Springs City Charles
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Charleston h
Richmond d 100+ 5 Game with scandal sheets
Vegas
V 20s h
Wichita St.. Louis
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h ill 41 Subj. of some
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47 48 49 50 51 WikiLeaks
70s Phoenix
Ph Alb q q
Albuquerque Oklahoma City C b
Columbia holdings
San Diego i gh
LLittlee Rockk Birmingham
50s Warm Rain documents
T c
Tucson 50s A t
Atlanta 52 53 54 55 7 “Schicksalslied”
Ft. Worth Dallas
D ll Jack
Jackson 45 Beer-and-
60s Cold T-storms composer
El P
Paso
Mobile
b
bil Jacksonville
Jack 56 57 58 59 lemonade drink
0s A ti
Austin
Stationary Snow 8 Untroubled 46 Reverse, e.g.
t
Houston
10s e Orleans
New Orlando
l d 60 61 62
9 Worker in a
20s 80s an Antonio
San A t i Tampa
Ta p 50 Skybox site
60s 70s Showers Flurries 63 64 65 colony
30s Honolulu
l l Miami 51 At one’s limit,
Anchorage
Anc
A h g 40s 70s 10 Pitch’s kin and a hint to this
50s Ice
AT THE LIMIT | By Greg Johnson 11 Reject, to Tinder puzzle’s starred
users answers
U.S. Forecasts City
Today
Hi Lo W
Tomorrow
Hi Lo W City
Today
Hi Lo W
Tomorrow
Hi Lo W
Across 24 Radial nerve 45 Wrapped 12 •Did some 52 Wilson or
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 According to setting garment mugging Coolidge
Omaha 39 28 pc 40 28 s Frankfurt 53 48 sh 50 35 sh
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice 25 Pan handler 47 Nouveau-
Orlando 73 62 t 69 47 t Geneva 54 40 pc 52 40 sh 4 Music from Toots 13 Studied closely 53 Begin a
Today Tomorrow Philadelphia 40 21 pc 39 26 pc Havana 79 70 t 79 62 sh Mexique, par
and the Maytals 27 Fish named for relationship, say
City Hi Lo W Hi Lo W Phoenix 68 44 s 72 46 s Hong Kong 62 61 r 66 59 r exemple 18 Company
Anchorage 35 29 i 35 28 sh Pittsburgh 33 22 c 36 25 pc Istanbul 42 40 pc 50 43 c 7 Shrugging their four-sided command 54 Chilly chunk
Atlanta 50 39 r 56 37 pc Portland, Maine 42 19 pc 38 25 pc Jakarta 89 76 t 89 76 t admission fins 48 Good news for
Austin 58 29 pc 68 34 s Portland, Ore. 58 51 c 56 46 sh Jerusalem 41 25 pc 44 29 c a Battleships 21 •Expo 55 Parental warning
14 Miss Prissy of 29 Hippy
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Boise 43 29 pc 45 38 sh St. Louis 43 32 pc 49 28 s London 57 37 r 49 46 pc of education between a pair
Boston 43 26 pc 41 30 pc Salt Lake City 35 24 pc 40 27 pc Madrid 56 43 s 54 42 sh for one 30 Figure with a 49 Like some
Burlington 34 17 sf 33 26 c San Francisco 61 48 pc 60 54 pc Manila 87 80 s 88 78 s signers Duncan of surnames
15 “And ___ his scale
Charlotte 51 33 r 52 31 c Santa Fe 46 21 s 50 23 s Melbourne 77 64 t 77 56 t
heart a shadow 52 Letters on some 25 •Card game 58 Title acquired in
Chicago 31 27 pc 37 22 c Seattle 60 51 r 55 43 sh Mexico City 69 38 pc 63 39 pc 33 Affectionate that’s French for a ceremony
Cleveland 33 26 c 36 25 sf Sioux Falls 38 25 c 35 22 pc Milan 53 40 c 52 40 c fell” farm mail
34 Pick up “railroad” 59 Mozzarella sticks,
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Denver 51 28 s 54 34 s Mumbai 88 61 pc 93 61 pc 36 Sun Devils’ sch. 26 Hiking call maybe
17 Activity that may 54 Eliciting alarm
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Honolulu
36 27 pc 38 24 sf
81 68 s 82 67 s
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53 46 sh
93 76 pc
49 35 sh
88 76 c follow dyeing 37 You’ve got that
56 Endurance
Today Tomorrow right Previous Puzzle’s Solution
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Indianapolis 33 26 pc 39 27 pc City Hi Lo W Hi Lo W Rome 59 44 pc 58 43 s 39 Not many A L O T N O R E S E A R P
Kansas City 47 29 s 46 28 s Amsterdam 53 42 r 48 42 s San Juan 83 75 pc 83 73 pc 20 Site of the Borsa 59 Parmesan-based T O F U R I A T
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Las Vegas 61 42 pc 65 43 s Athens 55 44 s 62 46 s Seoul 36 18 pc 39 25 pc Italiana stock 40 Low-fare bus sauce T H U N D E R B I
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I T E L D R R U T H
Nashville 42 24 pc 51 28 s Calgary 44 32 pc 49 27 c Toronto 32 26 sf 35 24 sn S I L E N T N I G H T I E
New Orleans 54 41 r 59 43 s Dubai 78 65 pc 75 60 s Vancouver 55 49 r 52 40 r 23 Related 44 Frisbee, e.g. 15-Across O H I O T A B O O Y U L E
New York City 41 29 pc 40 31 pc Dublin 51 35 sh 50 48 r Warsaw 45 42 sh 49 31 sh N U N N O P A R T M R E D
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Oklahoma City 57 32 s 61 37 s Edinburgh 45 37 r 47 43 c Zurich 52 36 pc 51 40 sh E G G S P E R M S E N D S

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AGENCE FRANCE-PRESSE/GETTY IMAGES
OPEC Gets Defensive
Leaders say strategy ‘working as planned’ FINANCE | C3
© 2016 Dow Jones & Company. All Rights Reserved.
DJIA 16167.23 À 282.01 1.78% S&P 1903.63 À 1.41% NASDAQ 4567.67 À 1.09% 10–YR. TREAS. À 8/32, yield 1.996%
Oil, Stocks Marching in Lockstep
Worries about global
growth have S&P 500
and Brent crude
moving in tandem
BY TOMMY STUBBINGTON
AND GEORGI KANTCHEV
Oil and stock markets have
moved in lockstep this year, a
rare coupling that highlights
fears about global economic
growth.
AIG Aims
To Shrink
In Broad
Overhaul
BY LESLIE SCISM
AND DAVID BENOIT
American International
Group Inc. executives laid out
plans that could significantly
slim down the insurer over
time but stopped well short of
giving activist investors the
immediate breakup they want.
In a strategy update Tues-
day, Chief Executive Peter
Hancock said AIG would reor-
ganize its core property-casu-
alty and life-insurance opera-
tions into nine units. AIG said
those units would be “more
nimble, stand-alone” busi-
nesses that can either expand
within AIG or be spun off or
sold over time, depending on
their performance and poten-
tial offers.
The move comes as billion-
aire investors Carl Icahn and
John Paulson have pushed for
a three-way split to improve
the insurer’s flagging financial
results, as well as avoid being
labeled a systemically impor-
tant financial institution, or
SIFI, by regulators, which car-
ries heightened scrutiny and
requirements to hold robust
capital buffers against losses.
AIG is one of four nonbank fi-
nancial firms to be labeled
systemically important.
“There are no sacred cows,”
Mr. Hancock said Tuesday.
“We look at all our businesses
through the lens of, would
Please see SHRINK page C2
 Heard on the Street: At AIG,
trust but verify....................... C10
GAVIN HELLIER/CORBIS
At its peak last year, one-fifth of all U.S. office space under
construction was located in energy-rich Houston.
New Gusher Comes to
Houston: Office Space
BY ELIOT BROWN
In 2014, when Houston was
swelling with growth from the
energy sector, the French oil-
field-services company Technip
SA expanded its presence in the
city with a lease
PROPERTY for four floors in
REPORT an under-con-
struction office
building in
Houston’s so-called Energy Cor-
ridor.
Now the company wants out
and is trying to sublease its
space, adding to the market
100,000 square feet of space in
the brand-new 17-story building
IN THE MARKETS C4 | MARKETS DIGEST C5 | PROPERTY REPORT C6, C8
As oil prices tumbled early
in 2016, global equities re-
corded one of their worst-
ever starts for a new year. On
Tuesday, oil was back up
again and stocks rebounded
along with it. The S&P 500
index rose 1.4%, and Brent
crude futures, the global
benchmark, gained $1.30 a
barrel, or 4.3%, to $31.80.
According to one measure,
the correlation between Brent
and the S&P 500 stock index
is at levels rarely seen in the
125%
Part of the Ohio River in Kentucky
2001 ’02 ’03
Note: Data are for fiscal years ended June 30; funded levels are for nonhazardous workers’ plan
Sources: National Association of State Retirement Administrators Public Fund Survey; Kentucky Retirement Systems
Despite Cuts, More Pension Woes
BY TIMOTHY W. MARTIN
Kentucky’s new governor is
preparing a fresh overhaul of
the state’s pension plans, a
sign of greater pain coming in
states that already imple-
mented rounds of cutbacks af-
ter the financial crisis.
Three years after trimming
named Energy Tower IV.
A Technip spokeswoman
said the company is subleasing
because “savings must be
achieved” and it has ample
space in neighboring buildings.
Houston is gushing with
empty offices as the price of
oil hovers around $30 a barrel.
Companies that once added
office space aggressively are
eager to unload it now.
In the fourth quarter of
2015, the amount of sublease
space on the market in the
Houston area hit 7.6 million
square feet, or the size of more
than two Empire State Build-
Please see ENERGY page C6
* * * *
past 26 years. January isn’t
over yet, but the correlation
between price moves in the
two over the past 20 trading
days—an average month—is
0.95, higher than any calen-
dar month except for two
since 1990, according to data
from both benchmarks exam-
ined by The Wall Street Jour-
nal.
A correlation of 1 would
mean oil and stock prices
move by the same proportion
in the same direction, while a
Pension Blues
Kentucky’s public-employees’ plan has less money
available to fund future retirements following years
of low state contributions to that plan.
100%
75%
’04 ’05
benefits to head off a looming
funding gap, the Bluegrass
State has less than half of the
money it needs to fund future
obligations for about 345,000
public employees and retirees.
One of its plans has just 17.7%,
making it the worst-funded U.S.
pension of the past 15 years.
Standard & Poor’s Ratings Ser-
Markets Threaten Fed Credibility
BY STEVEN RUSSOLILLO
The jarring moves in fi-
nancial markets to kick off
the year have made the Fed-
eral Reserve’s job a lot harder.
At this week’s policy meet-
ing, most ex-
AHEAD pect the central
OF THE bank to keep
TAPE rates unchanged
following last
month’s historic
rate increase. What happens
in March and beyond, how-
ever, is far from clear.
In addition to the strong
U.S. dollar and tepid infla-
tion, the central bank now
must contend with anxiety
over China, oil’s tailspin and
even a potential recession
throwing markets for a loop.
Changing its tune would
come at a cost, though.
In its statement Wednes-
day, should the Fed walk
back last month’s expecta-
tion for four rate increases
this year, it risks suggesting
the economy is in worse
shape than thought. But if it
maintains the status quo, it
risks inflicting more pain on
INDEX
Cash Prices................................................. C3 Credit Markets................................................ C9 Exchange-Traded Funds......................... C3 Heard on the Street................................. C10 New Highs & Lows............................... C9
CD Rates.................................................... C10 Currency Trading.......................................... C5 Finance Watch................................................ C3 Money Rates................................................. C10 Stock Listings....................................... C8,9
The Risks of
An All-In Bet
BLOOMBERG NEWS
HEARD ON
THE STREET | C10
THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | C1
OIL $31.45 À $1.11 EURO $1.0871 YEN 118.42 See more at WSJMarkets.com
correlation of minus-1 would as traders and investors in
mean they move proportion- each market look at the other
ally in opposite directions. for clues as to how bad things
Looking at daily returns in are, they have exacerbated
the two markets shows a the overall bearish mood.
looser correlation, but still a The recent pattern marks a
CESAREO/FOTOGRAMMA/ROPI/ZUMAPRESS
tight relationship by histori- shift in the dynamics of
cal standards. oil’s 19-month collapse. Trad-
The unusually strong link ers who long worried that the
between the two markets oil market was suffering from
partly reflects a common oversupply now are growing
theme driving both: fears concerned that demand may
that a slowing Chinese econ- be weakening as well.
omy could tip the global “There is a vicious-cycle
economy into recession. But Please see MARKET page C2
Italian banker Gianni Zonin
Banking
Troubles
Simmer
Percentage of required
contributions paid
In Italy
BY GIOVANNI LEGORANO
AND MAX COLCHESTER
VICENZA, Italy—To mark
the 150th anniversary of
Banca Popolare di Vicenza
SpA, Executive Chairman Gi-
50% anni Zonin rented out a local
convention center to host a
high-profile conference that
would be attended by Italy’s
top finance executives.
It never happened. Mr.
Zonin resigned in November,
his bank dogged by bad loans,
25%
thin capital and questions
about the legality of some
business practices. The bank,
Percentage on hand which had planned to open its
of assets needed 1,000th branch this year, in-
to fund future benefits stead will close 150 and is
likely to be swallowed up by a
0 stronger competitor.
’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15*
The afflictions of a midsize
bank in this ancient northeast-
*Funded level dropped from 19% after decision to lower investment target in December ern Italian town are emblem-
Photo: Luke Sharrett/Bloomberg THE WALL STREET JOURNAL. atic of the banking crisis that
still plagues the eurozone’s
third-largest economy—as well
as other spots across the Con-
vices cut the state’s bond rat- States that pushed through
One banker has gone
ing to the nation’s third-lowest benefit cuts after 2008 finan- from respected
in September, citing mounting cial crisis are planning a sec-
retirement liabilities. ond wave of reductions after
leader to pariah,
Kentucky represents a pain- the initial moves failed to alle- heckled at church.
ful reality across the U.S. as viate funding woes.
public retirement plans try to In Pennsylvania, state offi-
close a $1 trillion funding gap cials are considering an in- tinent. In a move to clean up
made worse by the recent crease in worker contributions the sector, Italy struck a deal
downswing in the markets. Please see PENSION page C2 with the European Commis-
sion late Tuesday that will
help its banks bundle up their
bad loans and sell them off via
new securities with govern-
ment guarantees.
The agreement with the Eu-
what should have been fu- ropean Union’s executive arm
Wearing Off ture gains. The S&P 500 lost is aimed at restoring the bank-
S&P 500 annual total return 9.5% from last month’s meet- ing sector’s health and giving a
ing through Monday’s close, boost to Italy’s economic re-
40%
the market’s seventh-worst covery. But it will be a big job
performance between Fed for a government that has
20 meetings, according to Be- been trying without much suc-
spoke Investment Group. In cess to defuse the problem.
0 early December, the S&P 500 One question is the affordabil-
fetched nearly 17 times for- ity of the government guaran-
ward earnings, up about 17% tees, which according to the
–20
Through Monday from its 10-year average. deal have to be priced at mar-
After the market’s latest ket rates.
–40
2006 ’08
Sources: FactSet;
’10 ’12 ’14 ’16
drawdown, the S&P 500
sports a still-above-average
multiple of 15 times. And
Six years after the sover-
eign-debt crisis first gripped
the eurozone, Italy’s banking
Federal Reserve Bank of St. Louis
already fragile markets.
bubbly pockets persist in
biotech and some tech stocks.
Taking away the Fed’s lar-
system is choking. An index of
Italian bank shares slumped
nearly 25% at the start of this
While the Fed’s credibility gess puts the onus back on year, during a period when Eu-
could suffer, so might faith in fundamentals. In the midst of ropean bank stocks were down
financial markets’ resilience. earnings season, companies 17%, although it partly re-
The onslaught of volatility are exhibiting high operating bounded last week.
that followed such a well- margins, low revenue growth Italian banks are among the
telegraphed 0.25 percentage- and expensive stock valua- Continent’s least profitable,
point rate increase shows tions. “That’s the U.S. market and their books are clogged
how difficult it is for inves- in a nutshell,” quips Nicholas with €276 billion ($299 billion)
tors to adjust to life without Colas of brokerage Convergex. of bad loans, more than any
the Fed’s constant stimulus. Even though the Fed’s other European country, ac-
After seven years of ultra- choices are limited, this isn’t cording to the European Bank-
accommodative monetary a time to crack under market ing Authority. Many banks
policy, the concern is that pressure. don’t make enough money to
the equity market’s Fed- write off the poor loans, so
driven rally pulled forward Email: tape@wsj.com they fester—prolonging the
mess and making it harder for
Commodities.................................................... C4 Dividend News............................................... C4 Global Finance................................................. C3 Mutual Funds........................................ C10 banks to make loans.
Italy’s struggles underscore
Please see ITALY page C2
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C2 | Wednesday, January 27, 2016
Crushing Debt
Italy's stock of bad loans is the highest in Europe
Italy has a vast pile of
nonperforming loans (NPLs)...
Percent of total loans, June 2015
Italy
16.7%
Spain
7.1
All EU banks
5.6
France
4.3
Germany
3.4
U.K.
2.9
€1=$1.08 Source: European Banking Authority
ITALY
Continued from the prior page
the glacial pace of banking
overhaul across Europe. De-
spite years of restructuring,
bankers and investors still
point to pockets of undercapi-
talized European banks, which
could need to raise up to $35
billion of equity this year, ac-
cording to Citigroup analysts.
But the problems are most
pronounced in Italy, which suf-
fers from a highly fragmented
and overextended banking sys-
tem. And Banca Popolare di Vi-
cenza is an object lesson in
how those problems have
played out. Prosecutors have
opened a criminal investiga-
tion. Hundreds of workers are
losing their jobs.
Mr. Zonin, a 78-year-old
wine producer, has gone from
respected leader to pariah,
banned from a half-dozen res-
taurants and heckled at his
church, residents say.
“If I see Mr. Zonin on the
street, I take a side
street,” said Luigi Ugone, a
bank shareholder who was re-
cently part of a protest against
the bank in the center of Vi-
cenza. “I don’t even want to
see him.”
Through a lawyer, Mr. Zonin
declined to comment. A Popo-
lare di Vicenza spokeswoman
declined to comment.
Like other Italian banks,
Banca Popolare di Vicenza
came through the financial cri-
sis largely unscathed, touting
its ties to local businesses in
the rich Veneto region.
Under Mr. Zonin, it contin-
ued to snap up local competi-
tors. The bank was a key part
of the local fabric, sponsoring
the city’s soccer team and
helping pay for a theater. A Vi-
cenza taxi driver said he and
his colleagues used to pick up
flowers and other gifts from
shops in the town center and
PENSION
Continued from the prior page
and placing some employees
into a 401(k)-style plan, just
several years after cuts to
cost-of-living-adjustment in-
creases to retirees and higher
retirement ages didn’t soothe
matters. In Oregon, a key com-
ponent of its 2013 pension
overhaul was struck down by
state courts, meaning lawmak-
ers must again find another
path to saving billions.
Kentucky Republican Matt
Bevin won the race for gover-
nor in November after signal-
ing he wanted to reshape the
state pension systems again.
During a Tuesday budget
speech in Frankfort, Ky., he
proposed a special fund to pay
down pension debt.
The governor in a separate
interview said he wants to
complete an audit of the
state’s pension plans by sum-
mer and then propose deeper
pension cuts by early 2017. He
said he believes new hires
should be placed onto 401(k)-
style accounts instead of de-
fined-benefit pension plans
that offer guaranteed payouts.
“We have to deal with real-
ity,” Mr. Bevin said. “Everything
is on the table, absolutely.”
Pensions across the U.S. ran
into problems because benefits
were sweetened in fat times, in-
vestments soured or lawmakers
skirted requisite payments. Ken-
tucky suffered from all three.
Some of the state’s current
woes can be traced to 1996,
when lawmakers buoyed by
years of double-digit returns
agreed to give retirees an an-
...representing over a quarter of
BY RYAN TRACY
all NPLs across Europe...
€994.26 billion All EU banks
276.38 Italy
164.99 Spain
149.54 France
98.42 U.K.
76.26 Germany
...and Banca Popolare di
Vicenza outstripping the
national average in NPLs.
EU Italy
Dec. 6.1%
2014 16.9 BPV: 20
June 5.6
16.7
2015 24.1
THE WALL STREET JOURNAL.
bring them to Mr. Zonin’s
house.
But as Italy’s economy
slowed, the bank struggled to
raise funds to pass a 2014 fi-
nancial-health exam. As a mu-
tual, it didn’t have publicly
traded shares that it could sell
to drum up cash. Instead,
Popolare di Vicenza sold its
unlisted shares to retail cus-
tomers, sometimes as a condi-
tion for getting a loan, accord-
ing to customers and their
lawyers. The bank declined to
comment.
At first, Popolare di Vicenza
appeared to have scraped by
the test. But the European
Central Bank probed its num-
bers. The bank previously dis-
closed that it had issued €975
million of loans linked to the
purchase of its shares. The
regulator ordered it to deduct
the amount raised from its
capital base, arguing that
those shares represented
lower-quality capital. As a re-
sult, its capital buffers fell be-
low the required minimum lev-
els, it said.
Shareholders sued, claiming
they were duped into buying
the shares. Mr. Zonin started
using a side entrance to access
the bank’s headquarters to
avoid angry locals. Police
raided its offices, according to
Popolare di Vicenza.
“This is the bank which
worked most with local com-
panies and households,” said
Antonino Cappelleri, head of
the Vicenza prosecutors’ of-
fice. “If shares are bound to
lose two-thirds of their value,
it will be a disaster for the lo-
cal economy.”
Mr. Zonin stepped down in
November. He and three other
former executives are under
investigation over alleged
stock manipulation, obstruct-
ing regulators and extortion,
according to a person familiar
with the investigation. Mr.
Zonin and the three former ex-
ecutives declined to comment.
nual cost-of-living increase.
Two years later, some state
workers were offered a 10%
boost to benefits if they re-
tired early, lowering the an-
nual payroll but inflating long-
term costs.
But lawmakers didn’t pro-
vide an additional way to fund
that benefit boost, such as in-
creasing annual worker or em-
ployer contributions or levying
new taxes. Instead they banked
on robust investment profits.
Then, Kentucky lawmakers
tightened the flow of money
into the state’s pension plans
’We have to deal with
reality,’ Mr. Bevin
says. ‘Everything is
on the table….’
starting in 2004. The most se-
vere underfunding occurred
with the public-employees plan,
where lawmakers withheld
more than $2.5 billion in con-
tributions over the past decade.
A decline in the state’s coal
industry plus a slowdown in
certain manufacturing jobs
motivated lawmakers to redi-
rect funds elsewhere, said Ja-
son Bailey, executive director
of the nonprofit Kentucky Cen-
ter for Economic Policy.
Over the next nine years,
the situation worsened for the
public-employees’ plan. Law-
makers never once made a full
payment. In 2008, they paid
just 22 cents for every $1 the
public-employees’ plan should
have received. Teachers and
county-worker pension plans,
the other two large funds, also
MONEY & INVESTING
As MetLife Zigs, AIG Zags
American International
Group Inc.’s move to pare
down its operations looked
like a baby step compared
with recent moves by other
nonbank financial institutions
branded systemically impor-
tant by regulators.
While MetLife Inc. this
month cited the new regula-
tory burden as a central rea-
son for it to seek to divest one
of its core businesses, AIG
made the case that even with
the stricter rules that come
with its size, its whole is
greater than the sum of its
parts. AIG is one of four non-
bank financial firms labeled as
systemically important finan-
cial institutions, or SIFI.
“Near-term breakup of AIG
would detract from share-
SHRINK
Continued from the prior page
they create more value if they
were in the hands of some-
body other than ourselves?”
The breadth of the reorga-
nization and comments sur-
prised some analysts who had
anticipated moderate cost-cut-
ting moves and small divesti-
tures. Still, some analysts pre-
dicted Mr. Icahn would
proceed with a proxy battle to
replace management and in-
crease pressure on AIG’s
board.
Mr. Icahn in an interview
reiterated his call for more
change at AIG. “Most large
shareholders understand that
a simple truth is this com-
pany…should be split and you
should get somebody that un-
derstands the [property-and-
casualty] business to run
that,” he said.
A spokeswoman for Mr.
Paulson’s Paulson & Co. hedge
fund declined to comment.
Pushes to break up compa-
nies are common from activist
investors against firms of all
stripes, and while they have
found success in some sectors
such as industrial conglomer-
ates, activists have had a
harder time splitting up finan-
cial institutions.
Mr. Icahn, who last year
called AIG “too big to suc-
ceed,” in November disclosed
a stake of $2.61 billion, or
roughly 3% of the company.
Paulson & Co. bought its AIG
stake last year, according to
regulatory filings. It held just
over 1% of AIG shares, as of its
most recent filing.
“It may not be enough to
satisfy shareholders but it is
an incremental and positive
move by the company,” said
Josh Stirling, a stock analyst
with Sanford C. Bernstein.
AIG announced several
other steps Tuesday that it
received less.
The state’s investment
choices widened the funding
gap as officials moved aggres-
sively into nontraditional as-
sets such as private equity and
hedge funds around the
mid-2000s and deemphasized
stocks and bonds. They missed
out on big years in the public
markets following the 2008
crisis and returns have trailed
pension-industry benchmarks.
The Kentucky Retirement
System’s five pension plans
have a 10-year annualized re-
turn of 6.05% through June 30,
2015. The median return for
public pensions was 6.6%, ac-
cording to Callan Associates.
The 2013 changes champi-
oned by then-Gov. Steve
Beshear, a Democrat, included
permanently halting pension
rises for retirees and cycling
some public workers onto a
“cash-balance” plan that pro-
vides a retirement benefit
more tied to financial markets.
But the gap between the
state’s pension assets and lia-
bilities rose to $30 billion in
2015, up $4 billion from 2012.
“The goal is just to not run
out of money,” said David
Peden, a 39-year-old lifelong
Kentuckian who manages in-
vestments for five of the
state’s eight pension plans.
Mr. Peden oversees $11.5 bil-
lion in assets and the retire-
ments of about 230,000 public
workers and retirees. His biggest
headache is the public-employ-
ees plan, which covers correc-
tions officers, bridge engineers
and other state workers. In
2001, its assets covered over
120% of what it owed to retir-
ees. Now they cover just 17.7%.
holder value,” the company
said in its investor presenta-
tion Tuesday.
AIG also said it “has a
lower risk profile than other
nonbank SIFIs across key met-
rics,” citing data showing that
it has fewer assets and funds
itself with less borrowing
compared with Prudential Fi-
nancial Inc. and MetLife, two
other firms that have received
the SIFI tag.
That suggests that AIG may
believe it won’t face as high a
regulatory burden as those
firms. Federal regulations are
generally tailored to a firm’s
riskiness, but regulations for
insurance companies labeled
as systemically important ha-
ven’t been written yet.
Douglas Steenland, AIG’s
nonexecutive chairman, said
the board has “full support for
AIG says it wants to return at least $25 billion to investors over the next two years.
said would lead to a “leaner,
more profitable and focused”
company.
The insurer said it would
conduct an initial public offer-
ing of its mortgage-insurance
unit and sell a financial-advi-
sory business. It raised its
cost-cutting target to $1.6 bil-
lion within two years, includ-
ing through staff reductions
and moving operations to
lower-cost locations.
It also committed to return-
ing to investors at least $25
billion over the next two years
through share buybacks and
dividends. In addition, it in-
creased reserves by $3.6 bil-
lion before taxes.
Some of those moves had
been anticipated by analysts,
though the capital-return fig-
ure was higher than even Mr.
Icahn’s call for $20 billion that
people familiar with the mat-
ter had said Mr. Icahn saw as
possible.
MARKET
Continued from the prior page
mentality among investors,”
said François Savary, chief in-
vestment officer at Prime
Partners, a Swiss investment
firm managing $2.6 billion of
assets. “It has become self-
sustaining.”
Even in the oil-rich Middle
East, the mood has changed.
In Dubai, businessman
Ramesh Manglani never used
to look at the oil price when
investing in equity, despite
the influence of energy in the
region and its companies.
“First thing in the morning
we now check oil prices and
Asian markets,” Mr. Manglani
said.
Historically, the correla-
tion between oil and stocks
has been tighter during re-
cessions. As the financial cri-
sis spread in 2008, it spiked
above 0.8.
That could reflect inves-
tors’ tendency to dump all
risky assets when times get
tough. During the financial
crisis, whole swaths of mar-
kets moved in unison, as “risk
on” and “risk off” trades
dominated.
Currently, big swings in oil
prices may be forcing some
investors to sell stocks simply
because they measure risk in
their portfolios by looking at
volatility across a range of
assets. So crude’s recent gy-
rations are forcing them to
trim their holdings of risky
assets such as stocks, accord-
ing to Jonathan Golub, chief
equities strategist at RBC
* ***
the plans that [CEO] Peter
Hancock and his management
team have put forward.”
Some of AIG’s shareholders
have been arguing that the
company would be worth
more if it was split into parts,
each of which could shed the
stricter regulations that come
with being big.
Indeed, other institutions
have reached that conclusion,
and their reactions to being
labeled systemically important
have been more drastic.
General Electric Co.’s fi-
nance arm, GE Capital, is
shrinking its assets even more
significantly and has said it
would seek to get the systemi-
cally important label repealed
this year.
No company has yet suc-
ceeded in having the label re-
moved, although MetLife is
On Tuesday, AIG’s shares
rose 1%, to $55.91.
Mr. Icahn said in an open
letter to AIG’s board last week
that he wouldn’t be satisfied
with “small-scale asset sales
and incremental cost-cutting.”
Douglas Steenland, AIG’s
nonexecutive chairman, said
“being a nonbank SIFI is not
currently a binding constraint
on return of capital.”
Some analysts said the
company’s move to create the
nine businesses is smart in
that it allows AIG to better use
its deferred tax assets. During
the financial crisis, AIG posted
huge quarterly losses, and tax
law allows companies to use
those losses to offset future
gains. AIG has said it would
forgo billions of dollars of tax
benefits in an immediate
three-way split.
Analysts also said stocks
and interest rates have fallen
since Mr. Icahn launched his
Lockstep
Oil and stocks have moved in close alignment this year.
Correlation between the S&P 500 and Brent crude oil, monthly
1.0
0.5
0
–0.5
–1.0
2014
Note: Correlation for calendar months, except for final data point,
which is for the 20 trading days that ended Jan. 26.
Source: WSJ Market Data Group
Capital Markets.
“As long as oil stays vola-
tile and in the headlines and
under pressure, it’s going to
be the most important
driver” for equity markets, he
said.
Stocks aren’t the only as-
set class showing a tighter
relationship with oil during
the current turmoil.
Copper prices and corpo-
rate bonds have taken similar
paths to crude in recent
months, driven by fears about
global growth. Correlations
between oil and credit in-
dexes have moved close to 1
in recent weeks, according to
strategists at Citigroup.
Most economists aren’t
forecasting a global reces-
sion. Still, the growing corre-
lation is another signal com-
THE WALL STREET JOURNAL.
fighting it in court. AIG might
have a harder time succeeding
in that task, given the central
role that AIG played in the fi-
nancial crisis.
For now, AIG’s management
appears focused on restructur-
ing itself. The company also
appeared to position itself to
shrink further in the future if
results don’t meet expecta-
tions, namely by reorganizing
into nine separate business
units.
That could make those divi-
sions easier to divest, and it
could also help AIG with cer-
tain regulatory demands. For
instance, it might have an eas-
ier time demonstrating that it
has a credible “living will”
bankruptcy plan with regula-
tors if it could easily sell cer-
tain businesses to raise cash in
a pinch.
MICHAEL NAGLE/BLOOMBERG NEWS
campaign in late October, put-
ting valuations of life insurers
near postcrisis lows. Insurers
generate a substantial portion
of their earnings from interest
income on big bond portfolios,
making it an inopportune time
for AIG to be pursuing divesti-
tures, some analysts said.
Mr. Hancock wrote in a
memo to employees Tuesday
that AIG’s latest plans have
been in the works since he be-
came CEO in September 2014.
Asked in an interview Tues-
day whether the reorganiza-
tion plan sets the stage for a
breakup in the next couple of
years, Mr. Hancock said: “The
simple answer is no.”
He added that the creation
of nine units would provide
flexibility “to reshape the
company. We recognize we can
make this company more valu-
able through divestitures of
certain pieces.…I don’t see the
possibility of a breakup.”
Proportional
movement in
the same
direction ...
... and in the
opposite
direction
’15 ’16
THE WALL STREET JOURNAL.
ing out of markets that
growth could slow rapidly.
Brent crude is down 15%
during 2016 as of Tuesday.
That rout is hurting oil-de-
pendent nations from the
Middle East to Central Asia,
whose sovereign-wealth
funds are huge holders of
global stocks.
“On average, cheaper oil
should be a good thing for
the economy,” said Valentijn
van Nieuwenhuijzen, head of
multiasset strategy at Dutch
asset manager NN Investment
Partners.
“But in this type of mar-
ket, it isn’t about the average,
it is the fear of unknown,” he
said.
—Nikhil Lohade in Dubai
and Ben Eisen in New York
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
THE WALL STREET JOURNAL. * * * * Wednesday, January 27, 2016 | C3

GLOBAL FINANCE
Online Lender Weighs IPO
China’s Lufax The Shanghai-based com- board later this year. ment banks to arrange the
pany, backed by insurer Ping Financial-technology com- company’s IPO plans last
considers listing in An Insurance (Group) Co. of panies such as Lufax and fi- week, according to people fa-
Hong Kong or on new China Ltd., is gearing up for nancial-services affiliates of miliar with the situation. Mr.

YASSER AL-ZAYYAT/AGENCE FRANCE-PRESSE/GETTY IMAGES

an offering to raise as much as Chinese e-commerce compa- Gibb said Lufax hasn’t ap-
Shanghai tech board $5 billion that could be one of nies Alibaba Group Holding pointed any bank to lead the
the largest Chinese IPOs this Ltd. and JD.com Inc. are deal.
BY KANE WU year, said people familiar with among the top candidates to Morgan Stanley and Gold-
the deal. list on the new Shanghai man Sachs Group Inc. advised
HONG KONG—Chinese on- Its valuation makes it one board. Lufax on its latest funding
line lender Lufax, with a valu- of the world’s most valuable round, he said.
ation of $18.5 billion, is con- Internet finance companies. Lufax, short for Shanghai
sidering a Hong Kong or Chinese regulators want to
Lufax is one of the Lujiazui International Finan-
Shanghai initial public offering lure many of the country’s top world’s most cial Asset Exchange Co.,
as early as this year, its chair- technology companies to its started as a fixed-income trad-
man said in an interview. domestic exchanges.
valuable Internet ing platform and has partner-
Gregory Gibb said Lufax They are seeking to ease finance companies. ships with more than 500 in-
aims to go public as early as listing rules to accommodate stitutions offering online
the second half but could wait these fast-expanding and lending, wealth-management
until 2017, depending on mar- sometimes unprofitable tech- Several U.S.-listed Chinese and fund services. It has more Anas al-Saleh, Kuwait’s finance minister and acting oil minister
ket conditions. nology companies by creating companies that are going pri- than three million active users

OPEC Members
He said Lufax will decide in
the next couple of months
whether to launch the IPO in
Hong Kong or opt to list on a
the new Shanghai board, vate, including Internet secu- with a total transaction value
called the Strategic Emerging rity firm Qihoo 360 Technol- of more than 1.6 trillion yuan
Industries board. Senior Chi- ogy Co., also could be among ($243 billion). Market condi-
nese regulator Fang Xinghai the companies listing on the tions haven’t been promising

Defend Strategy
technology-focused board be- said last month that regula- new board, bankers said. in either Hong Kong or China’s
ing set up in Shanghai. tors planned to launch the Lufax interviewed invest- mainland stock markets.

SEC Chief Stresses Board Diversity On Oil Output

BY ANDREW ACKERMAN information about the racial or such rules would have to be Audit Trail, a market-monitor- BY SUMMER SAID It maintains that OPEC
gender composition of their proposed and subject to public ing project launched in 2010, alone can’t support prices, and
Securities and Exchange boards, these people said. comment before they could be these people said. KUWAIT CITY—Some of the kingdom isn’t willing to
Commission Chairman Mary Jo Rules adopted in 2009 re- adopted. That could be tough to CAT, originally conceived of OPEC’s major players defended sacrifice its own global market
White outlined on Tuesday a quire companies to disclose complete in less than one year. as a way to let regulators moni- their strategy of keeping the share to other producers un-
busy agenda for what is likely whether diversity is considered Ms. White didn’t provide a tor stock and options orders in taps wide open, saying Tues- willing to cut.
to be her final full year at the for management-backed direc- timetable for proposing the real time and quickly zero in on day that they are bracing for Oil traders drew some
helm of the SEC, with a range tor candidates who appear on new requirements. manipulators, has faced red low oil prices to continue— cheer Tuesday from remarks
of initiatives focusing on board- corporate ballots. Some inves- Separately, Ms. White said tape and bureaucratic delays perhaps until the end of the by Iraq’s oil minister, who said
room diversity and executive tor advocates say companies she aims to complete a suite of that have caused the system to decade, by one estimate. there are signs that Saudi Ara-
compensation. executive compensation rules fall years behind schedule. At At an oil conference here, bia and Russia are becoming
One new priority: possibly the agency proposed last year, the current pace, it is expected Kuwait’s acting oil minister, more flexible in considering
requiring companies to provide
The SEC chairman including requirements that to get off the ground by 2019 or Anas al-Saleh, told reporters production cuts to help stabi-
more details about the diversity aims to complete a companies claw back, or re- 2020. that the Organization of the lize crude prices.
of their directors. Ms. White, voke, some of their top officials’ The SEC recently hired a Petroleum Exporting Coun- “We have seen some flexi-
speaking at a securities confer-
suite of executive- incentive pay if they have to re- technology expert to help over- tries’ “strategy is working as bility from the brothers in
ence in Coronado, Calif., said compensation rules. state the financial results, con- see the development of the planned, and we believe it is Saudi and a change in tone
she is concerned that existing ference attendees said. Those project, after failing to hire its so far working well.” He from Russia,” Iraqi Oil Minis-
disclosures may not provide in- rules, required by the 2010 top pick for the position last brushed off calls by other ter Adel Abdul Mahdi told re-
vestors with enough informa- haven’t provided shareholders Dodd-Frank law, go beyond ex- summer. Steven Samson, who OPEC members for an emer- porters on the sidelines of the
tion, people who attended the with sufficient information isting clawback requirements, previously managed an existing, gency meeting to consider conference.
session said. about the makeup of their which generally can be invoked more limited SEC system called changing tack amid oil prices He said that Iraq was will-
Ms. White said she has in- boards, partly because the rules only after misconduct is uncov- Midas, which collects public that have fallen to depths un- ing to cooperate on production
structed staff to review existing leave it up to the companies to ered at public companies. trading data from each U.S. seen in more than a decade. cuts but stressed that other
company disclosures and give define “diversity.” Ms. White also said the stock exchange, will serve as Amid the sharply falling producers, including those
her recommendations on The SEC is down to just agency would sign off on a program manager for CAT, prices, divisions inside OPEC outside OPEC, needed to do
whether it should require com- three members—two less than blueprint for a huge computer people familiar with the matter have become more public. Sev- the same.
panies to provide more specific its full complement—and any system called the Consolidated said. eral cash-strapped members “We can see some flexibility
highly dependent on oil reve- but this should be finalized
nue—such as Nigeria and Ven- and we should hear some solid
tation with the financial industry JANUS CAPITAL $267.8 million from a year prior, ezuela—have pushed for the suggestions coming from all
Finance as a tough but fair regulator. It
comes as the FCA has struggled
Investment Fees while investment-management
fees rose 4.3%
group to take more action. Ni-
geria issued its clearest call
parts,” he said.
The remarks helped push
Watch to preserve the confidence of
the firms it oversees and the
Bolster Revenue
Janus Capital Group Inc.
Analysts polled by Thomson
Reuters expected a per-share
last week for an emergency
meeting.
oil prices above $30 a barrel
Tuesday as traders speculated
public it serves and marks a posted higher fourth-quarter rev- profit of 24 cents and revenue But the group’s most im- that large producers might be
new chapter for the still-nascent enue, helped by an increase in of $270 million. Total operating portant members, Saudi Ara- more willing to cut produc-
agency. investment-management fees, expenses increased 7.3%. bia and its Arab allies along tion, which could alleviate the
In the five-year role, Mr. Bai- while profit remained largely In November, The Wall Street the Persian Gulf, have resisted global glut of crude.
REGULATION ley, a career central banker, will steady. Journal reported that George any move without broader co- Light, sweet crude for
shift into consumer protection, The asset manager said as- Soros’s Soros Fund Management operation from non-OPEC March delivery settled up
Central Banker in charge of setting and enforc- sets totaled $192.3 billion as of pulled its $500 million invest- members, especially Russia. $1.11, or 3.7%, at $31.45 a bar-
Named to U.K. Post ing rules for financial firms and Dec. 31, up from $185 billion as ment from an account managed Saudi Arabia in late 2014 per- rel on the New York Mercan-
Bank of England Deputy Gov. policing the U.K.’s financial mar- of Sept. 30, an increase that in- by Mr. Gross at Janus Capital suaded OPEC to forgo its tra- tile Exchange. Brent, the
Andrew Bailey will become the kets. He will be in the cross cluded net market appreciation because of poor returns, people ditional role of ratcheting global benchmark, settled up
next head of the Financial Con- hairs of politicians, consumers of $7.2 billion and long-term net familiar with the matter said. down production to bolster 4.3% at $31.80 a barrel on ICE
duct Authority after being and the financial industry, tasked outflows of about $600 million. —Austen Hufford prices. Futures Europe.
tapped by the U.K. Treasury to with striking a balance between The latest period also in-
succeed departed Chief Execu- fatiguing firms with ever-grow- cluded net investment losses of
tive Martin Wheatley. ing volumes of new rules and $2.3 million, versus losses of $3 Exchange-Traded Portfolios | WSJ.com/ETFresearch
Mr. Bailey, who oversees the serving a public still distrustful million a year earlier. Largest 100 exchange-traded funds, latest session Closing Chg YTD Closing Chg YTD
soundness and stability of banks of the sector after attempted The Denver-based asset man- Tuesday, January 26, 2016
ETF Symbol Price (%) (%) ETF Symbol Price (%) (%)
and insurers as head of the market rigging, mis-sold prod- ager, home to bond investor Bill SchwIntlEqty SCHF 25.63 1.83 –7.0 VangdGrowth VUG 99.10 1.03 –6.9
Closing Chg YTD
SchwUS BrdMkt SCHB 45.43 1.45 –7.4 VangdHiDivYld VYM 63.23 1.67 –5.3
BOE’s Prudential Regulation Au- ucts and other scandals. Gross who joined the firm after ETF Symbol Price (%) (%)
SchwUS LrgCap SCHX 45.14 1.42 –7.1 VngdInter-Term BIV 84.10 0.11 1.3
thority, was asked to take the “Although it had not been my departing Pacific Investment AlerianMLPETF AMLP 9.92 3.66–17.7 SPDR DJIA Tr DIA 161.54 1.79 –7.2 VangIntrCorpBd VCIT 83.89 –0.17 –0.2
CnsmrDiscSelSector XLY 73.53 1.46 –5.9
new job this month by Chancel- intention to leave the PRA dur- Management Co. in 2014, re- SPDR GldTr GLD 107.29 1.14 5.7 VangdLgCap VV 86.96 1.41 –7.0
CnsStapleSelSector XLP 49.29 0.90 –2.4 SPDR S&PMdCpTr MDY 234.62 2.24 –7.6 VangdMdCap VO 109.57 1.79 –8.8
lor of the Exchequer George Os- ing my term as chief executive, ported a profit of $46.6 million, DBGoldDoubleLgETN DGP 20.27 2.32 11.7 SPDR S&P 500 SPY 190.20 1.36 –6.7 VangdReit VNQ 77.52 2.09 –2.8
borne. He will take up the role a job that I enjoy enormously, it or 25 cents a share, compared DBGoldDoubleShrt DZZ 7.85 –2.73–11.5 SPDR S&P Div SDY 70.31 1.98 –4.4 VanguardS&P500 VOO 174.40 1.35 –6.7
DeutscheXMSCIEAFE DBEF 25.49 1.59 –6.1
around July once a successor is is a great honor to have been with $46.7 million, or 24 cents a EnSelectSectorSPDR XLE 55.15 3.78 –8.6
TechSelectSector XLK 40.30 0.98 –5.9 VangdShrtTrm BSV 80.04 0.11 0.6
UtilitiesSelSector XLU 43.73 0.69 1.0 VangShrtCorpBd VCSH 79.05 0.06 0.1
found for him at the PRA. asked by the chancellor to take share, a year earlier. The com- FinSelSectorSPDR XLF 21.20 1.68–11.0 VGT 99.84
VangdInfoTch 1.03 –7.8 VangdSmCap VB 100.48 2.18 –9.2
Regulatory experts said the on the job of FCA chief execu- pany’s share count decreased FTDorseyWrightFoc5 FV 20.85 0.58–11.2 VangdHlthCr VHT 123.12 0.66 –7.3 VangdTtlBndMkt BND 81.43 0.15 0.8
FstTrDJIntrnt FDN 65.62 0.72–12.0
hire is a coup for the FCA be- tive,” Mr. Bailey said. 1.3% year over year. RSP 70.88
VangdSmCapValue VBR 90.16 2.47 –8.7 VanguardTtlIntlStk VXUS 41.75 1.93 –7.4
GuggenheimSP500EqW 1.84 –7.5 VangdDivApp VIG 73.94 1.45 –4.9 VangdTtlStock VTI 96.67 1.52 –7.3
cause of Mr. Bailey’s solid repu- —Margot Patrick Revenue increased 5.1% to HealthCareSelSect XLV 67.73 0.76 –6.0 VanguardFTSEDevMk VEA 34.19 1.82 –6.9 VangdTotlWrld VT 53.32 1.68 –7.5
IndSelSectorSPDR XLI 48.95 1.89 –7.7 VWO 29.50
VanguardFTSEEmgMk 1.44 –9.8 VangdValue VTV 75.72 1.72 –7.1
iShIntermCredBd CIU 107.46 0.06 0.2 VGK 46.66
VanguardFTSEEurope 2.17 –6.5 WisdomTreeEurope HEDJ 51.40 2.29 –4.5
Cash Prices | WSJ.com/commodities Tuesday, January 26, 2016
iSh1-3YCreditBond
iSharesTIPSBondETF
CSJ 104.66
TIP 110.44
0.02 0.1
0.25 0.7
VangdAllWldxUS VEU 40.12 1.80 –7.6 WisdomTreeJapanHdg DXJ 45.62 1.22 –8.9

These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace— iSh3-7YTreasuryBd IEI 124.59 0.09 1.6
iShCoreMSCIEAFEETF IEFA 50.53 1.77 –7.1
separate from the futures price on an exchange, which reflects what the commodity might be worth in future iShCoreMSCIEmgMk IEMG 35.83 1.33 –9.0
months. iShCoreS&P500ETF IVV 191.13 1.36 –6.7
iShCoreS&PMdCp IJH 128.65 2.20 –7.7
Tuesday Tuesday Tuesday
iShCoreS&PSmCpETF IJR 101.32 2.38 –8.0
Platinum,Engelhard industrial 869.0 SoybeanMeal,Cent IL,rail,ton48%-u 278.90 iShCoreUSAggBd AGG 108.92 0.13 0.8
Energy Platinum,Engelhard fabricated 969.0 Soybeans,No.1 yllw IL-bp,u 8.7350 iShSelectDividend DVY 72.28 1.55 –3.8
Propane,tet,Mont Belvieu-g 0.3166 Palladium,Engelhard industrial 503.0 Wheat,Spring14%-pro Mnpls-u 5.9850 IAU 10.83
iSharesGold 1.12 5.9
Butane,normal,Mont Belvieu-g 0.4795 Palladium,Engelhard fabricated 603.0 Wheat,No.2 soft red,St.Louis-bp,u 4.4750 iShiBoxx$InvGrCpBd LQD 113.74 0.28 –0.2
NaturalGas,HenryHub-i 2.230 Aluminum, LME, $ per metric ton *1480.0 Wheat - Hard - KC (USDA) $ per bu-u 4.5675 iShiBoxx$HYCpBd HYG 78.75 0.90 –2.3
NaturalGas,TranscoZone3-i 2.230
Antimony-d 2.6000 Wheat,No.1soft white,Portld,OR-u 5.3988 iShMBSETF MBB 108.88 0.12 1.1
NaturalGas,TranscoZone6NY-i 2.520
NaturalGas,PanhandleEast-i 2.070
Copper,Comex spot 2.0340 iShMSCIACWIETF ACWI 51.90 1.67 –7.0
Lead,NA solder-d 102.101 Food iSharesMSCIEAFESC SCZ 46.06 1.48 –7.8
NaturalGas,Opal-i 2.110
Iron Ore, 62% Fe CFR China-s 40.8 Beef,carcass equiv. index iSharesMSCIEAFEETF EFA 54.71 1.79 –6.8
NaturalGas,MarcellusNE PA-i 1.440
NaturalGas,HaynesvilleN.LA-i 2.140 Shredded Scrap, US Midwest-s,w 189 choice 1-3,600-900 lbs.-u 205.36 iShMSCIEmgMarkets EEM 29.25 1.47 –9.1
Coal,C.Aplc.,12500Btu,1.2SO2-r,w 42.250 Stainless steel scrap,US-d 1560 select 1-3,600-900 lbs.-u 198.96 iShMSCIEurozoneETF EZU 33.04 2.20 –5.7
Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w 9.700 Steel, HRC USA, FOB Midwest Mill-s 400 Broilers,dressed 'A'-u 1.1190 iShMSCIGermanyETF EWG 24.43 1.92 –6.7
Tin,NA solder-d 863.214 Broilers, National comp wghtd-u,w 0.8764 iShMSCIJapanETF EWJ 11.20 1.36 –7.6
Metals Butter,AA Chicago 2.1900 iShMSCIUSAMinVol USMV 40.46 1.30 –3.3
Zinc,NA-d 78.398
Gold, per troy oz Cheddar cheese,bbl,Chicago 143.00 iShNasdaqBiotech IBB 282.08 –0.40–16.6
Engelhard industrial 1116.54 Cheddar cheese,blk,Chicago 146.00 iShNatlAMTFrMuniBd MUB 111.33 –0.03 0.6
Fibers and Textiles iShRussell1000Gwth IWF 92.87 1.01 –6.6
Engelhard fabricated 1200.28 Milk,Nonfat dry,Chicago lb. 71
Handy & Harman base 1113.60 Burlap,10-oz,40-inch NY yd-n,w 0.5400 Cocoa,Ivory Coast-w 3173 iShRussell1000ETF IWB 105.31 1.45 –7.1
Handy & Harman fabricated 1236.10 Cotton,1 1/16 std lw-mdMphs-u 0.6166 Coffee,Brazilian,Comp 1.2142 iShRussell1000Val IWD 90.39 1.88 –7.6
LBMA Gold Price AM *1103.76 Cotlook 'A' Index-t *69.20 Coffee,Colombian, NY 1.3487 iShRussell2000Gwth IWO 123.84 1.37–11.1
LBMA Gold Price PM *1106.60 Hides,hvy native steers piece fob-u 71.000 iShRussell2000ETF IWM 101.10 2.00–10.2
Eggs,large white,Chicago-u 1.3850
Krugerrand,wholesale-e 1164.80 Wool,64s,staple,Terr del-u,w n.a. iShRussell2000Val IWN 83.44 2.58 –9.2
Flour,hard winter KC 13.50
Maple Leaf-e 1176.00 iShRussell3000ETF IWV 111.49 1.52 –7.3
Hams,17-20 lbs,Mid-US fob-u 0.67
American Eagle-e 1176.00 Grains and Feeds iShRussellMid-Cap IWR 147.36 1.81 –8.0
Hogs,Iowa-So. Minnesota-u 61.52
Mexican peso-e 1358.38 Barley,top-quality Mnpls-u n.a. iShRussellMCValue IWS 63.32 2.26 –7.8
1100.82
Pork bellies,12-14 lb MidUS-u n.a. IJK 149.42
Austria crown-e
Bran,wheat middlings, KC-u 108
iShS&PMC400Growth 1.78 –7.2
Austria phil-e 1176.00 Pork loins,13-19 lb MidUS-u 1.0492 iShS&P500Growth IVW 108.42 0.99 –6.4
Corn,No. 2 yellow,Cent IL-bp,u 3.6400 Steers,Tex.-Okla. Choice-u n.a.
Silver, troy oz. iShS&P500ValueETF IVE 82.19 1.82 –7.2
Corn gluten feed,Midwest-u,w 105.9 Steers,feeder,Okla. City-u,w 180.67 PFF 38.08
Engelhard industrial 14.4500 iSharesUSPreferred 0.11 –2.0
Corn gluten meal,Midwest-u,w 460.3
Engelhard fabricated 17.3400 iSh1-3YTreasuryBd SHY 84.79 0.05 0.5
Handy & Harman base 14.5100 Cottonseed meal-u,w 243 Fats and Oils iSh7-10YTreasuryBd IEF 108.31 0.07 2.6
Handy & Harman fabricated 18.1380 Hominy feed,Cent IL-u,w 95 Corn oil,crude wet/dry mill-u 40.0000 iSh20+YTreasuryBd TLT 126.08 0.05 4.6
LBMA spot price £10.0674 Meat-bonemeal,50% pro Mnpls-u,w n.a. Grease,choice white,Chicago-u 0.2275 iShChinaLarge-Cap FXI 30.20 0.72–14.4
(U.S.$ equivalent) 14.3300 Oats,No.2 milling,Mnpls-u 2.5650 Lard,Chicago-u n.a. iShRussellMCGrowth IWP 84.35 1.49 –8.2
Coins,wholesale $1,000 face-a 13069 Rice, 5% Broken White, Thailand-l,w 357.00 Soybean oil,crude;Centl IL-u 0.2962 MktVectorsBiotech BBH 107.60 –0.41–15.2
Other metals Rice, Long Grain Milled, No. 2 AR-u,w 23.00 Tallow,bleach;Chicago-u 0.2375 MktVectorsOilSvcs OIH 22.22 2.92–16.0
LBMA Platinum Price PM *862.0 Sorghum,(Milo) No.2 Gulf-u 7.6200 Tallow,edible,Chicago-u n.a. MktVectorsPharm PPH 61.96 1.14 –5.1
MktVectorsRetail RTH 72.88 0.79 –6.2
KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; D=Ryan's Notes; E=Manfra,Tordella & Brooks; G=ICE; I=Natural Gas Intelligence; MktVectorsSemi SMH 48.55 0.85 –8.9
L=livericeindex.com; M=midday; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=The Steel Index; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. PwrShrs QQQ QQQ 103.15 0.90 –7.8
*Data as of 1/25 PS SP500LoVoltlPrt SPLV 36.96 1.23 –4.2
Source: WSJ Market Data Group SPDRBarclaysHiYdBd JNK 32.96 0.86 –2.8
 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
C4 | Wednesday, January 27, 2016 * ***** THE WALL STREET JOURNAL.

IN THE MARKETS
China Shares Sink
With Beijing Idle
BY SHEN HONG
Round Trip
SHANGHAI—Chinese Shanghai Composite Index
shares plunged to their lowest
level in more than a year 6000
JIN LEE/BLOOMBERG NEWS

amid signs that Beijing has—

at least for now—given up
trying to stem the market’s 5000
slide.
The benchmark Shanghai
Composite Index 4000
WORLD on Tuesday
Barclays sold its floor-trading business to GTS, marking the end of big-bank dominance at the NYSE. STOCKS tumbled 6.4% to
3000

Dow Gains Over 200 Points

2749.79, leaving
it down 22% this Tuesday: 2749.79
month. The fall came after down 6.4%
U.S. shares dropped on Mon- 2000
day and global oil prices ex- 2015 ’16
tended declines, spooking al- Source: WSJ Market Data Group

A rally in crude oil
prices helps U.S.
stocks shake off an
earlier decline in Asia
BY DAN STRUMPF
AND MICHAEL WURSTHORN
A rally in oil prices and a
clutch of better-than-expected
earnings reports lifted stocks,
as investors looked past an-
other steep fall in Chinese
shares.
The Dow Jones Industrial
Average rose 282.01, or 1.8%,
to 16167.23.
TUESDAY’S The S&P 500
MARKETS gained 26.55,
or 1.4%, to
1903.63, while
the Nasdaq Composite added
49.18, or 1.1%, to 4567.67.
The gains in stocks came on
the back of a rally in oil prices.
Crude futures in New York
gained 3.7% to $31.45 a barrel.
Johnson & Johnson and
3M notched the biggest gains
in the Dow following their
fourth-quarter earnings re-
ports, contributing 82 points
to the blue-chip rally.
However, U.S. stocks remain
firmly in negative territory for
the year following deep losses
earlier this month. The S&P
500 is down 6.9%, while the
Dow is down 7.2%.
A steep slide in crude
prices has pummeled shares of
energy companies and fueled
worries of slowing economic
growth globally. Meantime,
the stronger dollar has curbed
the revenues of large U.S. mul-
tinationals.
“Today’s a little bit of a
bounce back day for crude oil
and it seems like we’re still
following energy,” said Bill
Nichols, head of U.S. equities
at Cantor Fitzgerald. “The real
question is at what point does
the correlation [between oil
and stocks] start to mitigate a
bit.”
Companies in the S&P 500
are on course to report a 5.9%
decline in fourth-quarter earn-
ings, according to FactSet. On
Dec. 31, before earning reports
started rolling in, analysts
were expecting a more modest
4.7% decline.
The expected contraction in
earnings would mark the third
quarter in a row of declining
year-on-year profits for S&P
500 companies, the longest
stretch of weaker earnings
since the financial crisis.
J.P. Morgan Chase & Co. on
Tuesday joined a growing list
of investment banks to down-
grade their outlook for stocks.
Strategists there cut their S&P
500 price target to 2000 from
2200 and cited weakening cor-
porate earnings. The predic-
tion would mean a decline of
2.2% for the index in 2016.
Still, investors welcomed
the earnings reports from
some companies Tuesday. 3M
shares gained $7.21, or 5.2%, to
$144.78 after the conglomer-
ate reported profit and sales
for the quarter that topped
analysts’ expectations and
confirmed its profit outlook
for the year.
Johnson & Johnson shares
gained 4.78, or 5%, to 101.18
after optimism over its under-
lying business and the global
health-care market generally
offset a drop in quarterly
sales.
Shares of Apple fell 2% in
after-hours trading after re-
porting slowing growth in
iPhone sales. The shares had
gained 55 cents, or 0.6%, to
$99.99 in the regular session.
Elsewhere, Barclays PLC is
selling its trading business on
the floor of the New York
Stock Exchange to high-fre-
quency trading firm GTS,
marking the end of big-bank
dominance of equity market
making. ready-nervous investors. THE WALL STREET JOURNAL.
After falling 2% early in the Other Asian markets also
session, European shares re- slid Tuesday. Japan’s Nikkei pace and became more panic-
bounded, helped by a recovery Stock Average fell 2.3%, and driven on late-day indications
in oil and base metal prices. Hong Kong’s Hang Seng Index that authorities weren’t plan-
The Stoxx Europe 600 index declined 2.5%. ning to use the national team
gained 0.9%. After the lunch break to prop up the market, ac-
The yield on the 10-year Wednesday, the Shanghai in- cording to Zhang Xin, an ana-
Treasury note eased to 1.996% dex was down a further 3.6%, lyst at Guotai Junan Securi-
from 2.022% on Monday as but the Nikkei and Hang Seng ties. Mr. Zhang was alluding
prices rose. gauges were both up. to the so-called two o’clock
The recovery in stocks in The Shanghai market now phenomenon—the perception
the U.S. and Europe bucked has lost nearly half its value in Chinese markets that state-
another steep decline in Chi- since last summer. The swift backed funds typically enter
nese shares. descent has more than wiped heavy buying orders in the
—Riva Gold out an equally sharp rise in last trading hour of the day to
contributed to this article. the first half of 2015 that was give shares a late lift before
fueled by Chinese investors the markets close at 3 p.m.
AUCTION RESULTS who, with government en- The selloff also came a
Here are the results of Tuesday's Treasury auctions.
All bids are awarded at a single price at the market- couragement, piled up debt to week after China reported
clearing yield. Rates are determined by the difference
between that price and the face value.
buy shares at that time. that its economic growth
Share-price declines have moderated to its slowest pace
FOUR-WEEK BILLS
Applications $203,148,393,400 persisted despite a series of in a quarter century in 2015,
Accepted bids $55,000,423,900 regulatory measures aimed at at 6.9%. A weakening econ-
" noncompetitively $269,465,500
" foreign noncompetitively $0
stemming the market’s slide omy and a depreciating yuan
Auction price (rate) 99.977056 since last summer. Last year, have led to rapid capital flight
(0.295%)
Coupon equivalent 0.300%
government-backed invest- from China, with fund out-
Bids at clearing yield accepted 5.17% ment funds, which became flows hitting $500 billion last
Cusip number 912796HD4
known as the “national team,” year, equivalent to 13% of the
The bills, dated Jan. 28, 2016, mature on Feb. 25, 2016.
also spent billions of dollars country’s foreign-exchange re-
TWO-YEAR NOTES
buying up Chinese shares pe- serves.
Applications $75,820,693,500
Accepted bids $26,473,356,800 riodically, moves that offered “The backdrop of all this is
" noncompetitively $172,235,600 the market some respite. the fact that economic funda-
" foreign noncompetitively $0
Auction price (rate) 99.782632 Investors now see little mentals remain pretty weak
(0.860%) sign of such intervention and and the overall downward
Interest rate 0.750%
Bids at clearing yield accepted 97.03% few encouraging signs from trend of the market looks in-
Cusip number 912828P20 China’s economy. tact,” said Deng Wenyuan, an-
The notes, dated Feb. 1, 2016, mature on Jan. 31, 2018. Tuesday’s selloff gathered alyst at Soochow Securities.

A Few Worrying Numbers About the Bond Market From Raters

BY MIKE CHERNEY
While U.S. stocks, com-
modities and corporate debt
were rallying Tuesday, rat-
ings firms were reminding
investors of some troubling
trends in the bond market:
More companies have ul-
tralow credit ratings, more
bonds trade
MONEYBEAT at low dol-
lar prices
and more
firms are expected to default.
Corporate bonds have been
in focus in recent weeks after
a December selloff in the
lower-rated junk-bond market.
A prolonged slump in com-
modity prices is raising ques-
tions about how many highly
indebted oil and gas produc-
ers can stay in business, and
whether those concerns will
make investors more jittery
about buying bonds from all
low-rated companies.
Big moves in the bond
market have presaged shifts
in stocks in the past. But if
there is a silver lining to the
ratings-firm comments, it is
that much of the doom and
gloom stems from the energy
sector, suggesting prospects
are better for other indus-
tries. And many of the met-
rics of distress remain below
financial-crisis levels. Here is
a breakdown of some figures
making the rounds Tuesday:
Very Low Ratings
A tally from Moody’s In-
vestors Service, which tracks
how many companies have
“probability-of-default” rat-
ings of B3 with a negative
outlook or lower, hit 248
firms as of Jan. 1, which
Moody’s says is the highest
in six years and 36% higher
than the previous year.
Much of the increase came
from oil and natural-gas
companies, which make up
the biggest of roughly two
dozen sectors on the list,
Moody’s says. Of the 174
companies added last year,
more than a third were oil
and gas firms. As of now,
about 25% of companies on
the list are oil and gas firms, 2009, at 35.6%, S&P says. “The higher rate is antici-
more than the 9% historical S&P also attributes the pated primarily from con-
average for this sector. spike to oil and gas firms, tinuing fallout from low
Aside from energy firms, which accounted for 156 of commodity prices challeng-
retailers such as Bon-Ton the 524 bonds considered to ing the energy and metals/
Stores Inc. and Charming be trading at distressed lev- mining sectors and company-
Charlie LLC were recently els. The metals-and-mining specific issues bleeding into
put on the list. But the list sector, which also has been other sectors,” Fitch said.
remains 43 companies shy of hit hard by the commodities Some good news: Last
its all-time high during the slump, was second with 65. year’s rate and this year’s
financial crisis. forecast are well below the
Rising Defaults 13.7% rate in the financial
Distressed Levels Fitch Ratings expects the crisis.
A distress ratio calculated trailing 12-month U.S. junk-
by Standard & Poor’s, which bond default rate to hit 4.5% ONLINE
measures the amount of junk at the end of 2016, up from
debt trading with very high 3.4% at the end of 2015, For more
yields relative to the broader
market, rose to 29.6% as of
Jan. 15. The last time the ra-
which was the highest rate
since 2009. In all, 74 issuers
defaulted on $48 billion of
WSJ
.COM
MoneyBeat blog
posts, go to
blogs.wsj.com/
tio was higher was in July bonds in 2015, Fitch said. MoneyBeat

Futures Contracts | WSJ.com/commodities Open

Contract
High hilo Low Settle Chg
Open
interest Open
Contract
High hilo Low Settle Chg
Open
interest

Contract Open 5 Yr. Treasury Notes (CBT)-$100,000; pts 32nds of 100% Australian Dollar (CME)-AUD 100,000; $ per AUD
Metal & Petroleum Futures Open High hilo Low Settle Chg interest March 120-037 120-110 120-002 120-060 4.7 2,624,359 March .6930 .7006 .6903 .7000 .0047 125,991
Contract Open June 119-280 119-287 119-235 119-287 5.0 23,271 June .6901 .6976 .6877 .6972 .0047 548
Open High hi lo Low Settle Chg interest Soybean Oil (CBT)-60,000 lbs.; cents per lb. Mexican Peso (CME)-MXN 500,000; $ per MXN
March 30.37 30.85 s 30.21 30.74 .30 162,475 2 Yr. Treasury Notes (CBT)-$200,000; pts 32nds of 100%
Copper-High (CMX)-25,000 lbs.; $ per lb. March 109-037 109-057 109-032 109-050 1.7 1,049,485 March .05349 .05418 .05333 .05399 .00039 114,590
May 30.58 31.02 s 30.41 30.93 .30 90,717 June .05324 .05374 .05312 .05364 .00039 53,789
Jan 2.0320 2.0405 2.0225 2.0340 0.0385 633 30 Day Federal Funds (CBT)-$5,000,000; 100 - daily avg.
March 1.9930 2.0495 1.9810 2.0375 0.0395 133,517 Rough Rice (CBT)-2,000 cwt.; $ per cwt. Euro (CME)-€125,000; $ per €
March 1100.00 1110.00 1092.00 1107.50 6.50 9,782 Jan 99.660 99.660 t 99.658 99.660 … 163,371
Gold (CMX)-100 troy oz.; $ per troy oz. March 1.0863 1.0887 1.0831 1.0865 .0016 393,958
May 1124.00 1132.50 1120.00 1135.50 6.50 2,699 April 99.570 99.575 99.565 99.570 … 126,009
Jan 1115.10 1115.90 1114.30 1121.70 15.50 183 June 1.0893 1.0919 1.0863 1.0898 .0016 3,498
Wheat (CBT)-5,000 bu.; cents per bu. 10 Yr. Del. Int. Rate Swaps (CBT)-$100,000; pts 32nds of 100%
Feb 1108.20 1123.20 s 1107.20 1120.20 14.90 114,219 March 105.359 105.516 105.125 105.484 .344 31,572
April 1109.40 1123.60 s 1107.70 1120.60 15.00 182,867 March 481.50 488.50 s 478.00 484.75 3.25 206,883 Index Futures
June 1108.00 1124.00 s 1108.00 1121.10 15.00 54,096 July 491.75 499.00 s 488.50 495.50 3.25 71,118 1 Month Libor (CME)-$3,000,000; pts of 100% Mini DJ Industrial Average (CBT)-$5 x index
Aug 1109.20 1123.80 s 1109.20 1121.70 15.00 9,755 Wheat (KC)-5,000 bu.; cents per bu. Feb ... ... s ... 99.5700 .0050 1,620 March 15810 16101 t 15640 16066 255 59,595
Dec 1111.50 1125.60 s 1111.50 1123.10 14.90 15,858 March 474.00 479.50 471.00 476.75 2.75 107,205 Eurodollar (CME)-$1,000,000; pts of 100% June 15700 16020 t 15584 15992 256 646
Palladium (NYM) - 50 troy oz.; $ per troy oz. July 495.00 500.00 491.25 497.50 2.75 48,528 Feb 99.3700 99.3700 99.3675 99.3650 … 127,500 S&P 500 Index (CME)-$250 x index
Jan 497.20 497.85 497.20 491.75 2.05 4 Wheat (MPLS)-5,000 bu.; cents per bu. March 99.3350 99.3400 99.3250 99.3350 .0050 1,276,807 March 1872.00 1900.00 1851.40 1895.90 25.70 105,569
Feb 495.60 495.60 495.60 492.25 2.05 25 March 499.00 505.00 498.50 503.50 3.75 32,324 June 99.2650 99.2750 99.2500 99.2700 .0100 1,226,518 Mini S&P 500 (CME)-$50 x index
March 490.00 501.85 487.95 492.75 1.60 24,536 May 504.50 510.00 503.75 508.75 3.75 15,811 Dec 99.0950 99.1250 99.0750 99.1100 .0300 1,286,156 March 1871.75 1899.75 1851.25 1896.00 25.75 2,862,213
June 496.05 500.10 492.85 493.25 1.40 1,236 Cattle-Feeder (CME)-50,000 lbs.; cents per lb. June 1863.75 1891.50 1843.50 1887.75 25.75 21,934
Platinum (NYM)-50 troy oz.; $ per troy oz. Jan 160.250 161.325 160.100 161.100 .875 2,523 Currency Futures Mini S&P Midcap 400 (CME)-$100 x index
Jan 867.20 877.30 867.20 875.20 15.50 9 March 157.300 160.000 157.025 159.250 1.475 16,040 March 1256.90 1286.80 1245.20 1285.20 28.50 102,822
Japanese Yen (CME)-¥12,500,000; $ per 100¥
April 862.10 880.50 855.30 876.90 15.40 63,459 Cattle-Live (CME)-40,000 lbs.; cents per lb. March .8459 .8506 .8437 .8449 .0001 247,308 Mini Nasdaq 100 (CME)-$20 x index
Silver (CMX)-5,000 troy oz.; $ per troy oz. Feb 131.550 133.350 131.500 133.025 1.600 46,221 June .8485 .8527 .8459 .8470 .0001 1,171 March 4190.0 4243.8 4133.0 4226.8 40.0 270,756
Jan 14.385 14.385 14.385 14.544 0.304 23 April 132.175 133.725 131.950 133.400 1.175 111,306 June 4181.0 4238.0 4131.0 4221.3 40.0 385
Hogs-Lean (CME)-40,000 lbs.; cents per lb. Canadian Dollar (CME)-CAD 100,000; $ per CAD Mini Russell 2000 (ICE-US)-$100 x index
March 14.255 14.580 s 14.220 14.564 0.310 107,627 March .6999 .7120 .6981 .7101 .0074 159,153
Feb 63.800 64.625 s 63.225 64.325 .800 29,675 March 992.40 1017.90 t 983.30 1014.10 19.50 414,608
Crude Oil, Light Sweet (NYM)-1,000 bbls.; $ per bbl. April 69.000 69.850 s 68.500 69.600 .825 66,903 June .7007 .7121 .6984 .7103 .0074 3,682
March 29.81 32.41 29.25 31.45 1.11 595,758 Mini Russell 1000 (ICE-US)-$100 x index
Lumber (CME)-110,000 bd. ft., $ per 1,000 bd. ft. British Pound (CME)-£62,500; $ per £ March 1029.80 1047.50 1019.90 1047.40 16.70 7,342
April 31.34 33.84 30.70 32.90 1.10 193,130
March 236.50 239.60 234.30 236.20 2.90 4,085 March 1.4242 1.4367 1.4173 1.4359 .0103 273,134 U.S. Dollar Index (ICE-US)-$1,000 x index
May 32.70 35.13 32.05 34.22 1.11 110,181
May 235.90 238.80 234.60 235.60 2.60 891 June 1.4220 1.4370 1.4179 1.4364 .0103 747 March 99.39 99.51 99.07 99.13 –.27 72,902
June 33.90 36.15 33.18 35.27 1.06 165,606
Dec 37.22 39.50 36.66 38.69 1.00 181,686 Milk (CME)-200,000 lbs., cents per lb. Swiss Franc (CME)-CHF 125,000; $ per CHF June 99.42 99.58 99.18 99.23 –.28 1,990
Dec'17 41.03 42.96 40.31 42.22 0.90 83,474 Jan 13.74 13.74 13.72 13.72 … 3,406 March .9891 .9902 t .9823 .9846 –.0021 53,699
Feb 13.71 13.76 13.65 13.73 .05 4,852 June .9912 .9944 t .9869 .9891 –.0021 208 Source: SIX Financial Information
NY Harbor ULSD (NYM)-42,000 gal.; $ per gal.
Feb .9253 .9903 .9026 .9677 .0324 26,712 Cocoa (ICE-US)-10 metric tons; $ per ton.
March .9427 1.0044 .9176 .9813 .0312 95,280 March 2,790 2,851 2,785 2,829 10 78,728
2,796 2,855 2,791 2,834 11 59,470
Gasoline-NY RBOB (NYM)-42,000 gal.; $ per gal.
Feb 1.0260 1.0650 1.0030 1.0472 .0172 26,484
May
Coffee (ICE-US)-37,500 lbs.; cents per lb. Dividend Changes
March 1.0458 1.0874 t 1.0220 1.0685 .0160 117,798 March 116.15 117.20 114.65 116.70 .25 92,769
May 118.50 119.40 116.95 118.85 .15 44,407 Dividend announcements from January 26.
Natural Gas (NYM)-10,000 MMBtu.; $ per MMBtu.
Feb 2.144 2.219 2.128 2.180 .022 17,917 Sugar-World (ICE-US)-112,000 lbs.; cents per lb. Amount Payable / Amount Payable /
March 2.144 2.216 2.115 2.158 .003 274,165 March 14.10 14.38 13.96 14.02 –.08 328,081 Company Symbol Yld % New/Old Frq Record Company Symbol Yld % New/Old Frq Record
April 2.227 2.291 2.202 2.241 … 121,726 May 13.96 14.15 13.81 13.87 –.07 193,011 AllianceBernstein Glbl AWF 9.1 .081 M Feb19 /Feb05
Sugar-Domestic (ICE-US)-112,000 lbs.; cents per lb. Increased
May 2.290 2.351 2.269 2.303 –.006 93,682 AllianceBrnstn IncoFd ACG 5.0 .03189 M Feb19 /Feb05
July 2.417 2.458 2.390 2.417 –.017 47,492 March 25.50 25.50 t 25.30 25.33 –.22 2,851 AO Smith AOS 1.1 .24 /.19 Q Feb16 /Feb05
AllianceBrnstn NtlMun AFB 5.3 .06238 M Feb19 /Feb05
Oct 2.487 2.512 2.446 2.466 –.018 61,111 May 25.50 25.50 t 25.40 25.45 –.17 2,568 Bank Of Marin Bancorp BMRC 1.8 .25 /.24 Q Feb12 /Feb05
ClearBridge Engy MLP Fd CEM 14.4 .355 Q Feb26 /Feb19
Cotton (ICE-US)-50,000 lbs.; cents per lb. Berkshire Hills Bancorp BHLB 2.9 .20 /.19 Q Feb25 /Feb11
Clearbridge Engy MLP Opp EMO 16.8 .32 Q Feb26 /Feb19
61.45 61.75 t 60.96 61.41 –.19 114,772 Chicopee Bancorp CBNK 1.8 .09 /.08 Q Feb20 /Feb06
Agriculture Futures March
CONE Midstream Partners CNNX 9.6 .2362 /.228 Q Feb12 /Feb04
Clearbridge Engy MLP TR CTR 16.0 .29 Q Feb26 /Feb19
Corn (CBT)-5,000 bu.; cents per bu. May 62.10 62.25 t 61.55 62.01 –.09 37,825 Direxion Val Line M & LC VLML 3.3 .05333 M Feb02 /Jan28
Orange Juice (ICE-US)-15,000 lbs.; cents per lb. CSS Industries CSS 2.7 .20 /.18 Q Mar15 /Mar01
March 369.25 372.00 367.00 369.25 –.50 638,491 Direxion Val Line S & MC VLSM 4.3 .06903 M Feb02 /Jan28
124.25 125.30 122.25 124.20 .25 8,859
Home Bancorp HBCP 1.2 .09 /.08 Q Feb19 /Feb08
May 374.00 377.00 s 372.00 374.50 –.25 229,075 March Direxion Value Line Cons VLLV 2.6 .05113 M Feb02 /Jan28
May 124.80 125.00 122.40 124.10 … 2,700 MPLX MPLX 6.5 .50 /.47 Q Feb12 /Feb04
Oats (CBT)-5,000 bu.; cents per bu. YieldShares Hi Incm YYY 11.7 .16 M Jan29 /Jan28
National Security Group NSEC 1.0 .045 /.04 Q Feb29 /Feb08
March 204.50 205.00 200.00 201.50 –3.75 6,493 Northwest Bancshares 4.5 .15 /.14 Q Feb18 /Feb04
May 210.50 210.50 207.00 207.75 –3.75 1,884 Interest Rate Futures
NWBI Foreign
Valero Energy Partners VLP 2.7 .32 /.3075 Q Feb11 /Feb04 Aon PLC AON 1.4 .30 Q Feb16 /Feb01
Soybeans (CBT)-5,000 bu.; cents per bu. Treasury Bonds (CBT)-$100,000; pts 32nds of 100%
160-020 160-280 159-150 160-050 17.0 532,494 Reduced CGG ADR CGG .3434 Feb09 /Feb02
March 879.75 882.50 875.50 876.50 –4.00 297,831 March
159-030 159-030 158-100 158-260 17.0 886 Crp Ast Bkd Tr JCP 7.675% PFH 12.0 .95313 SA Mar01 /Feb15
May 881.00 883.75 877.00 878.50 –3.25 140,284 June EV Energy Partners EVEP 86.2 .075 /.50 Q Feb12 /Feb05
Nordic American Offshore NAO 14.9 .12 Q Feb22 /Feb05
Soybean Meal (CBT)-100 tons; $ per ton. Treasury Notes (CBT)-$100,000; pts 32nds of 100%
March 272.80 273.40 269.60 269.90 –2.60 178,149 March 128-220 129-025 128-160 128-260 8.5 2,818,527 Funds and investment companies KEY: A: annual; c: corrected; M: monthly; Q: quarterly; r: revised; SA:
May 274.90 275.30 271.90 272.20 –2.40 80,715 June 128-060 128-105 128-010 128-100 8.5 29,170 Alliance CA Municipal AKP 4.9 .05839 M Feb19 /Feb05 semiannual; S2:1: stock split and ratio; SO: spin-off.
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, January 27, 2016 | C5

MARKETS DIGEST
Dow Jones Industrial Average S&P 500 Index Nasdaq Composite Index
Last Year ago Last Year ago Last Year ago
16167.23 s 282.01, or 1.78% Trailing P/E ratio * 15.69 16.42 1903.63 s 26.55, or 1.41% Trailing P/E ratio * 20.69 19.71 4567.67 s 49.18, or 1.09% Trailing P/E ratio * 20.95 24.25
High, low, open and close for each P/E estimate * 14.65 15.58 High, low, open and close for each P/E estimate * 15.38 17.01 High, low, open and close for each P/E estimate * 16.92 18.05
trading day of the past three months. Dividend yield 2.76 2.50 trading day of the past three months. Dividend yield 2.36 1.97 trading day of the past three months. Dividend yield 1.28 1.27
All-time high 18312.39, 05/19/15 All-time high: 2130.82, 05/21/15 All-time high: 5218.86, 07/20/15

Current divisor 0.14602128057775

18000 2100 5170

17500 2050 5020

17000 2000 4870

Session high 65-day moving average

DOWN UP 16500 1950 4720
t

Session open Close

65-day moving average 65-day moving average
Close Open 4570
t

16000 1900

Session low
15500 1850 4420

Bars measure the point change from session's open

15000 1800 4270
Oct. Nov. Dec. Jan. Oct. Nov. Dec. Jan. Oct. Nov. Dec. Jan.

Major U.S. Stock-Market Indexes Late Trading Trading Diary

Latest 52-Week Range % chg Most-active and biggest movers among NYSE, NYSE Arca, NYSE MKT Volume, Advancers, Decliners
High Low Close Net chg % chg High Low % chg YTD 3-yr. ann. and Nasdaq issues from 4 p.m. to 6:30 p.m. ET as reported by electronic NYSE NYSE MKT
Dow Jones trading services, securities dealers and regional exchanges. Minimum Total volume* 1,044,395,828 7,171,707
Industrial Average 16185.79 15893.16 16167.23 282.01 1.78 18312.39 15666.44 -7.0 -7.2 5.2 share price of $2 and minimum after-hours volume of 5,000 shares. Adv. volume* 943,587,976 5,251,759
Transportation Avg 6819.90 6666.03 6815.76 163.98 2.47 9178.48 6625.53 -23.7 -9.2 5.1 Most-active issues in late trading Decl. volume* 98,851,718 1,723,698
Utility Average 593.99 584.68 588.47 4.43 0.76 652.11 541.97 -9.4 1.8 7.8 Volume After Hours Issues traded 3,218 376
Company Symbol (000) Last Net chg % chg High Low Advances 2,618 255
Total Stock Market 19552.27 19258.14 19525.24 293.71 1.53 22287.78 19071.84 -7.8 -7.5 7.6
Mkt Vectors Gold Miners GDX 15,850.2 13.89 -0.080 -0.573 13.99 13.31 Declines 543 104
Barron's 400 471.16 462.44 470.90 9.79 2.12 586.75 460.46 -12.4 -8.8 6.4
Apple AAPL 11,744.2 98.00 -1.990 -1.990 109.96 94.01 Unchanged 57 17
Nasdaq Stock Market SPDR S&P 500 SPY 8,941.3 189.05 -1.150 -0.60 207.75 183.79 New highs 20 1
Nasdaq Composite 4583.21 4503.53 4567.67 49.18 1.09 5218.86 4471.69 -2.4 -8.8 13.2 iShares MSCI Emg Markets EEM 6,274.6 29.00 -0.250 -0.85 31.45 27.97 New lows 74 1
Nasdaq 100 4250.97 4177.85 37.32 4719.05 4016.32 -7.8 Closing tick 124 1
4233.85 0.89 1.6 15.7 Energy Transfer Eqty ETE 6,044.0 9.73 -0.170 -1.72 9.91 9.18
Closing Arms† 0.45 0.82
Regions Financial RF 4,978.4 7.77 -0.050 -0.64 7.83 7.71
Standard & Poor's Block trades* 5,765 65
BioMed Realty Trust BMR 4,884.7 23.78 0.01 0.042 23.83 23.77
500 Index 1906.73 1878.79 1903.63 26.55 1.41 2130.82 1859.33 -6.2 -6.9 8.2 Nasdaq NYSE Arca
Mkt Vectors Russia Tr SBI RSX 3,942.4 13.12 -0.150 -1.13 13.40 12.18
MidCap 400 1289.80 1266.92 1289.78 28.40 2.25 1549.44 1254.93 -11.8 -7.8 5.6 Total volume* 1,954,319,364 335,697,843
SmallCap 600 618.21 604.89 617.76 14.67 2.43 742.13 601.59 -10.0 -8.0 6.7 Percentage gainers… Adv. volume* 1,493,977,392 294,288,808
Decl. volume* 448,959,390 41,267,306
Other Indexes Fate Therapeutics FATE 72.1 3.09 0.61 24.60 3.28 2.70
Issues traded 2,951 1,409
Russell 2000 1019.51 998.19 1017.97 20.60 2.07 1295.80 994.87 -14.8 -10.4 4.0 Inovio Pharmaceuticals INO 138.7 5.88 0.64 12.21 5.88 5.24
Advances 2,037 1,140
NYSE Composite 9436.54 9295.34 9429.11 166.12 1.79 11239.66 9156.84 -12.5 -7.0 1.9 Ethan Allen ETH 16.2 28.50 2.29 8.74 28.50 26.21 Declines 842 258
Value Line 405.69 395.92 405.36 9.44 2.38 522.42 392.58 -18.4 -9.1 1.1 Raptor Pharmaceutical RPTP 12.2 4.30 0.33 8.31 4.46 3.97 Unchanged 72 11
NYSE Arca Biotech 3153.76 3053.56 3116.26 -30.92 -0.98 4431.87 3108.08 -17.1 -18.3 22.9
VelocityShares 3x Inv DWTI 156.9 327.00 19.32 6.28 459.00 280.00 New highs 6 1
New lows 81 11
NYSE Arca Pharma 518.48 510.45 518.18 6.91 1.35 605.94 502.66 -6.4 -4.3 9.5 ...And losers
Closing tick 74 187
KBW Bank 61.60 60.21 61.41 1.31 2.17 80.41 60.10 -10.2 -16.0 4.3 Cobalt Intl Energy CIE 231.5 3.12 -0.48 -13.21 3.60 3.12 Closing Arms† 0.73 0.67
PHLX§ Gold/Silver 44.78 42.63 44.44 2.35 5.58 81.92 38.84 -45.8 -1.9 -33.5 Argos Therapeutics ARGS 24.9 2.93 -0.40 -12.01 3.35 2.76 Block trades* 6,960 1,386
PHLX§ Oil Service 136.01 131.39 135.68 3.82 2.89 224.32 128.61 -31.3 -14.0 -17.9 Lannett Co LCI 27.4 31.83 -3.06 -8.77 34.90 30.98 * Primary market NYSE, NYSE MKT NYSE Arca only.
PHLX§ Semiconductor 600.27 589.45 595.86 6.05 1.03 746.08 559.59 -11.0 -10.2 12.8 US Steel X 356.6 7.09 -0.68 -8.75 7.80 6.92 †(TRIN) A comparison of the number of advancing and declining
CBOE Volatility 24.02 22.33 -1.65 -6.83 40.74 11.95 23.6 issues with the volume of shares rising and falling. An
22.50 30.7 20.4 Dynegy DYN 254.2 9.93 -0.86 -7.95 10.79 9.93 Arms of less than 1 indicates buying demand; above 1

Philadelphia Stock Exchange Sources: SIX Financial Information; WSJ Market Data Group indicates selling pressure.

International Stock Indexes Percentage Gainers... Percentage Losers

Latest YTD Latest Session 52-Week Latest Session 52-Week
Region/Country Index Close Net chg % chg % chg Company Symbol Close Net chg % chg High Low % chg Company Symbol Close Net chg % chg High Low % chg

World The Global Dow 2136.57 17.32 0.82 –8.6 Terex Corp TEX 20.50 5.49 36.58 29.32 13.62 -8.7 Direxion Natl Gas Bear 3x GASX 55.94 -31.70 -36.17 158.95 37.50 ...
The Global Dow Euro 1854.44 12.32 0.67 –8.4 Argos Therapeutics ARGS 3.33 0.88 35.92 9.64 1.61 -58.6 Direxion S&P Oil Gas Br DRIP 108.47 -25.17 -18.84 192.93 38.00 ...
DJ Global Index 282.99 2.05 0.73 –8.1 DXN Dly NatGas 3X Bl GASL 2.99 0.74 32.89 247.00 1.53 -98.2 Cellular Biomedicine Grp CBMG 11.95 -2.25 -15.85 49.00 11.56 -26.0
World DJ Global ex U.S. 191.36 –0.13 –0.07 –9.0 Swift Transportation SWFT 16.56 2.89 21.14 28.90 11.74 -40.1 EnerNOC ENOC 6.00 -1.05 -14.89 19.04 2.92 -64.6
Alliance Holdings GP AHGP 16.75 2.90 20.94 60.86 12.43 -71.0 VelocityShares 3x Inv DWTI 307.68 -50.73 -14.15 484.23 56.32 78.9
Americas DJ Americas 451.41 6.83 1.54 –7.4
–13.5 SITO Mobile SITO 2.49 0.42 20.29 6.15 1.55 -17.1 Ovascience OVAS 6.26 -0.99 -13.66 55.69 5.76 -87.3
Brazil Sao Paulo Bovespa 37497.48 –533.74 –1.40
1.55 –5.2
Alliance Resource Ptrs ARLP 13.73 2.26 19.70 41.07 10.02 -65.9 Direxion Jr Gold Bear 3X JDST 29.81 -4.57 -13.29 73.00 20.08 2.7
Canada S&P/TSX Comp 12331.32 188.16
1.10 Weight Watchers WTW 13.29 2.17 19.51 28.05 3.67 -25.0 DXN DLY GLDMNR 3x BR DUST 14.47 -2.17 -13.04 40.00 11.10 26.4
Mexico IPC All-Share 41932.39 456.04 –2.4
0.24 Corium International CORI 6.60 1.07 19.35 16.29 5.00 -0.5 Aemetis AMTX 2.01 -0.30 -12.99 5.59 1.80 -50.0
Chile Santiago IPSA 2824.44 6.68 –4.1
Direxion S&P Oil Gas GUSH 3.88 0.62 19.02 41.06 2.43 ... Tessco Techs TESS 17.41 -2.39 -12.07 27.56 17.40 -25.2
Europe Stoxx Europe 600 339.20 2.93 0.87 –7.3
Vince Holding VNCE 4.84 0.77 18.92 25.30 3.31 -79.6 Sajan SAJA 3.20 -0.41 -11.35 6.56 3.02 -46.2
Euro zone Euro Stoxx 320.88 3.21 1.01 –7.0
Sprint Corp. S 2.99 0.47 18.65 5.45 2.18 -31.7 Direxion Daily En Bear 3x ERY 35.28 -4.44 -11.18 48.66 15.75 64.2
Belgium Bel-20 3475.05 38.90 1.13 –6.1
FirstMerit FMER 18.19 2.82 18.35 21.49 15.33 5.1 Direxion Rg Banks Bear 3X WDRW 56.62 -6.70 -10.57 63.35 31.26 ...
France CAC 40 4356.81 45.48 1.05 –6.0 AcelRx Pharmaceuticals ACRX 3.69 0.56 17.89 9.32 2.59 -48.1 BrasilAgro ADR LND 2.41 -0.27 -10.08 3.93 2.35 -19.1
Germany DAX 9822.75 86.60 0.89 –8.6 Cobalt Intl Energy CIE 3.60 0.54 17.65 11.20 2.68 -59.0 Mimecast MIME 6.91 -0.76 -9.91 11.99 6.77 ...
Israel Tel Aviv 1455.80 2.87 0.20 –4.8
Italy FTSE MIB 18923.83 282.36 1.51 –11.6
Netherlands AEX 421.97 3.90 0.93 –4.5 Most Active Stocks Volume Movers Ranked by change from 65-day average*
Spain IBEX 35 8692.50 124.80 1.46 –8.9 Volume % chg from Latest Session 52-Week Volume % chg from Latest Session 52-Week
Company Symbol (000) 65-day avg Close % chg High Low Company Symbol (000) 65-day avg Close % chg High Low
Sweden SX All Share 473.87 6.05 1.29 –6.2
Switzerland Swiss Market 8314.47 61.13 0.74 –5.7 SPDR S&P 500 SPY 131,689 -2.8 190.20 1.36 213.78 181.02 FirstMerit FMER 42,295 3099 18.19 18.35 21.49 15.33
0.59 –5.3 Bank Of America BAC 122,964 32.9 13.31 2.70 18.48 12.94 iShares MSCI Intl Dev Val IVLU 340 2535 20.13 1.69 24.96 19.10
U.K. FTSE 100 5911.46 34.46
VelocityShares 3x Lg UWTI 120,313 158.3 1.99 15.02 43.20 1.41 WisTree Jpn Real Estate DXJR 1,402 2414 24.28 3.14 29.60 22.53
Asia-Pacific DJ Asia-Pacific TSM 1244.54 –19.92 –1.58 –10.4 Freeport-McMoRan FCX 91,870 98.2 4.20 6.60 23.97 3.52 WisdomTree US Agg Bd AGGY 393 2079 49.40 -0.02 50.26 49.00
Australia S&P/ASX 200 5006.60 … Closed –5.5 Huntington Bancshares HBAN 88,298 689.3 8.05 -8.52 11.90 7.83 FlexShares Curr Hdg EM TLEH 190 1684 21.62 0.34 27.56 20.35
China Shanghai Composite 2749.79 –188.73 –6.42 –22.3
iPath SP 500 VIX Sht Tm VXX 69,522 -3.2 24.99 -4.76 37.35 15.48 Evogene EVGN 115 1534 6.89 2.68 10.54 6.20
Hong Kong Hang Seng 18860.80 –479.34 –2.48 –13.9
Apple AAPL 62,390 31.6 99.99 0.55 134.54 92.00 Pool POOL 4,362 1365 77.36 -0.78 84.43 61.83
India S&P BSE Sensex 24485.95 … Closed –6.2
Mkt Vectors Gold Miners GDX 60,285 13.6 13.97 4.41 22.93 12.40 Terex Corp TEX 19,415 1339 20.50 36.58 29.32 13.62
Japan Nikkei Stock Avg 16708.90 –402.01 –2.35 –12.2
Sprint Corp. S 59,123 210.4 2.99 18.65 5.45 2.18 FlexShs Quality Dividend QDF 1,878 1309 32.76 1.74 37.63 29.23
Singapore Straits Times 2545.61 –37.03 –1.43 –11.7 iShares MSCI Emg Markets EEM 53,745 -18.1 29.25 1.47 44.19 27.61 MV Fallen Angel ETF ANGL 597 1022 23.91 0.80 29.14 23.24
South Korea Kospi 1871.69 –21.74 –1.15 –4.6 * Common stocks priced at $5 a share or more with an average volume over 65 trading days of at least
* Volumes of 100,000 shares or more are rounded to the nearest thousand
Taiwan Weighted 7828.67 –65.48 –0.83 –6.1 5,000 shares =Has traded fewer than 65 days
Sources: SIX Financial Information; WSJ Market Data Group

Consumer Rates and Returns to Investor Benchmark

Treasury Yields
yield curve Forex Race Currencies
and
Yield toRates
maturity of current bills, Yen, euro vs. dollar; dollar vs.
U.S.-dollar foreign-exchange rates in late New York trading
U.S. consumer rates Selected rates notes and bonds major U.S. trading partners
Five-year ARM, Rate US$vs, US$vs,
A consumer rate against its Tues YTDchg Tues YTDchg
benchmark over the past year 5.00% 10% Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%)
Bankrate.com avg†: 3.27%
WSJ Dollar
s index Americas Thailand baht .02791 35.830 –0.6
Standard Bank, PaSB 2.50% 4.00 5 Vietnam dong .00004479 22328 0.8
4.00% Murrysville, PA Argentina peso .0724 13.8215 6.8
724-327-0010 3.00 Europe
0 Brazil real .2467 4.0536 2.3
t Third Federal Savings and Loan 2.59% Canada dollar .7082 1.4121 2.0 Czech Rep. koruna .04023 24.860 –0.1
5-year adjustable- 3.00 2.00
Cleveland, OH 855-369-0996 –5 Chile peso .001392 718.30 1.4 Denmark krone .1457 6.8655 –0.1
rate mortgage s s Colombia peso .0002971 3365.75 6.0 Euro area euro 1.0871 .9199 –0.1
2.00 Arundel Federal Savings Bank 2.63% Tuesday 1.00
t

(ARM) –10 Yen Euro

One year ago Ecuador US dollar 1 1 unch Hungary forint .003483 287.15 –1.1
t

Glen Burnie, MD 410-768-7800

0.00 Mexico peso .0542 18.4610 7.3 Iceland krona .007657 130.60 0.3
t
5-year Treasury 1.00 The Mortgage Concierge 2.63% –15
Peru new sol .2882 3.469 1.6 Norway krone .1149 8.6997 –1.6
note yield 1 3 6 1 2 3 5 710 30 2015 ‘16
Columbus, OH 866-654-5363 Uruguay peso .03224 31.0200 3.7 Poland zloty .2443 4.0939 4.3
0.00 month(s) years Venezuela b. fuerte .158603 6.3051 unch Russia ruble .01269 78.818 9.6
FMAM J J A S O N D J The Mortgage Marketplace Inc. 2.63%
maturity Asia-Pacific Sweden krona .1171 8.5369 1.1
2015 Glenview, IL 847-737-4747 Switzerland franc .9835 1.0168 1.5
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group Australian dollar .7006 1.4273 4.0
Turkey lira .3324 3.0088 3.1
China yuan .1520 6.5796 1.3
Yield/Rate (%) 52-Week Range (%) 3-yr chg Ukraine hryvnia .0404 24.7285 3.1
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Hong Kong dollar .1283 7.7953 0.6
UK pound 1.4351 .6968 2.7
India rupee .01476 67.739 2.3
Federal-funds rate target 0.25-0.5 0.25-0.5 0.00 l 0.50 0.25 Corporate Borrowing Rates and Yields Indonesia rupiah .0000721 13870 0.2 Middle East/Africa
Prime rate* 3.50 3.50 3.25 l 3.50 0.25 Yield (%) 52-Week Total Return (%) Japan yen .008445 118.42 –1.6 Bahrain dinar 2.6544 .3767 –0.1
Bond total return index Close Last Week ago High Low 52-wk 3-yr Kazakhstan tenge .002661 375.76 10.9 Egypt pound .1278 7.8246 –0.1
Libor, 3-month 0.62 0.62 0.25 l 0.62 0.32
Macau pataca .1246 8.0280 0.3 Israel shekel .2523 3.9635 1.8
Money market, annual yield 0.24 0.27 0.24 l 0.42 -0.26 Treasury, Ryan ALM 1438.423 1.645 1.682 1.957 1.305 0.307 2.459
Malaysia ringgit .2347 4.2602 –1.0 Kuwait dinar 3.2941 .3036 unch
Five-year CD, annual yield 1.34 1.35 1.33 l 1.53 0.02 10-yr Treasury, Ryan ALM 1731.750 1.996 2.038 2.480 1.669 –1.490 2.704 New Zealand dollar .6498 1.5389 5.2 Oman sul rial 2.5970 .3851 unch
30-year mortgage, fixed† 3.77 3.77 3.72 l 4.22 0.08 DJ Corporate 342.277 3.402 3.381 3.462 2.633 –1.855 2.262 Pakistan rupee .00954 104.855 unch Qatar rial .2746 3.641 unch
15-year mortgage, fixed† 3.01 3.02 2.94 l 3.42 -0.03 Aggregate, Barclays Capital 1845.640 2.420 2.440 2.630 1.920 0.167 2.005 Philippines peso .0209 47.940 2.3 Saudi Arabia riyal .2666 3.7509 –0.1
Jumbo mortgages, $417,000-plus† 4.40 4.36 4.00 l 4.97 0.22 Singapore dollar .7010 1.4266 0.6 South Africa rand .0610 16.3886 5.9
High Yield 100, Merrill Lynch 2330.871 8.199 8.320 8.696 5.016 –6.837 0.193 South Korea won .0008346 1198.20 1.9
Five-year adj mortgage (ARM)† 3.27 3.24 3.14 l 4.00 0.28 Close Net Chg % Chg YTD%Chg
Fixed-Rate MBS, Barclays 1926.380 2.590 2.610 2.900 2.280 2.057 2.544 Sri Lanka rupee .0069411 144.07 –0.1
New-car loan, 48-month 3.20 3.19 2.71 l 3.33 0.55 Taiwan dollar .02984 33.510 1.8 WSJ Dollar Index 91.33 –0.32–0.35 1.29
Muni Master, Merrill 503.944 1.609 1.618 2.099 1.475 2.481 2.829
HELOC, $30,000 4.98 4.98 4.24 l 4.98 0.38
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest EMBI Global, J.P. Morgan 662.384 6.971 7.045 7.128 5.679 –0.192 –0.450 Sources: Tullett Prebon, WSJ Market Data Group
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Commodities Tuesday 52-Week YTD
Pricing trends on someClose
raw materials, or commodities
Net chg % Chg High Low % Chg % chg

DJ Commodity 437.61 6.68 1.55 584.70 420.23 -18.68 -3.57

ONLINE
WSJ
Reuters-Jefferies CRB 162.68 2.22 1.38 231.77 156.32 -25.35 -7.71
Crude oil, $ per barrel 31.45 1.11 3.66 61.43 26.55 -31.97 -15.09
Real-time U.S. stock quotes are available on WSJ.com. Track most-active stocks, new highs/lows, mutual funds and
.COM Natural gas, $/MMBtu 2.180 0.022 1.02 3.02 1.76 -26.87 -6.72
ETFs. Plus, get deeper money-flows data and email delivery of key stock-market data. All are available free at
Gold, $ per troy oz. 1121.70 15.50 1.40 1291.70 1050.80 -13.16 5.79
WSJMarkets.com
 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
C6 | Wednesday, January 27, 2016
Mall Owners Get Set for Tougher Times
Researcher cuts
forecasts for rents,
occupancy as more
shoppers go online
BY LIAM PLEVEN
As mall owners prepare to
report fourth-quarter earnings
results, investors already are
bracing for a tougher road
ahead.
Real-estate researcher
Green Street Advisors is low-
ering its forecasts for the rent
that large U.S. mall owners
will be able to charge and the
amount of space that will be
occupied by tenants for years
to come.
Rents will grow at a paltry
1.5% annually for existing
nonanchor tenants through
2019, Green Street now pre-
dicts, down from the 2.5%
growth it anticipated a year
ago for the same four-year pe-
riod.
Last January, the Newport
Beach, Calif.-based researcher
predicted that the occupancy
rate for nonanchor tenants
would rise above 96% in 2019.
Now it expects that rate to
drop to just over 94% by then.
The occupancy rate in 2015
was nearly 95%.
Others are predicting a slog
for landlords as well.
“I can’t find a clear catalyst
that’s going to get people ex-
cited about the retail land-
scape,” said Steve Sakwa, an
analyst at Evercore ISI. Ever-
core downgraded shares of
three mall real-estate invest-
ment trusts in November, and
currently doesn’t list any of
the mall REITs it follows as a
stock to buy.
SPENCER PLATT/GETTY IMAGES
Oil’s rout has hit property demand in downtown Houston, above.
ENERGY
Continued from page C1
ings, up from 4.5 million square
feet a year earlier, according to
real-estate services firm Savills
Studley.
In all, 23.2% of Houston of-
fices were vacant or otherwise
available for lease in the fourth
quarter, up from 17.8% a year
earlier and well above the na-
tional rate of 16.2%, according
to Savills Studley.
Leasing has slowed mark-
edly, plans for new office build-
ings have been put on the shelf
and many analysts expect the
office market will get worse be-
fore it gets better, given that
the office market typically lags
behind the economy.
“There is a great deal of
concern about the Houston
economy right now,” said Drew
Morris, a senior managing di-
rector at Savills Studley’s Hous-
ton office.
The situation is far less dire
than the oil bust of the 1980s,
when Houston became famous
for its “see-through buildings,”
so named because glassy new
towers were so empty they
were transparent. Today the
economy is far more diversi-
fied, aided by a strong medical
sector.
Still, it isn’t a great time to
own an office building in Hous-
ton. Despite fast-falling de-
mand, supply is rising.
At its peak last year, one-
fifth of all U.S. office space un-
der construction was located in
Houston, as $100-a-barrel oil
caused builders to rush for
their shovels.
Because of the lag inherent
to construction, those buildings
THE PROPERTY REPORT
Mall owners still see strong prospects for the most desirable properties. Two companies this month agreed to purchase Country Club
Plaza, a landmark mall in Kansas City, Mo.
The downgrades underscore
the challenges facing the
American shopping center as
consumers alter their buying
habits and retailers scramble
to adjust.
The rapid growth of e-com-
merce sparked the revision to
Green Street’s outlook, accord-
ing to D.J. Busch, a senior ana-
lyst at the firm and lead au-
thor of a new report that
features the lower forecasts.
The forecasts apply to REITs,
which own most U.S. malls.
The impact of lower rent
still are getting completed to-
day, with about 7.9 million
square feet of Houston-area of-
fice buildings scheduled for de-
livery in 2016, according to
real-estate research firm Co-
Star Group Inc. That is down
from 12.8 million square feet in
2014, but well above the more
typical levels of two million to
three million square feet a year.
“What you’ve had in that
market is really a double-
whammy,” said Jed Reagan, an
analyst who tracks the market
for Green Street Advisors. “De-
mand has fallen off the table at
the same time that you’ve had
a big glut of new supply.”
For landlords in need of ten-
ants, there appear to be few
takers.
Georgia-based Piedmont Of-
fice Realty Trust last year
opened a glassy 11-story build-
ing in the Energy Corridor dis-
trict without any tenants.
“I can’t tell you that I’m very
optimistic things are going to
happen there,” said Don Miller,
Piedmont Office Realty Trust’s
chief executive, on the com-
pany’s earnings call in Novem-
ber. “There’s no real genuine
activity in the marketplace.”
That lack of activity has led
to a silver lining for landlords:
Rents haven’t fallen much, stay-
ing about $29 a square foot, ac-
cording to Savills Studley.
Few observers expect that to
continue, however, and owners
like Mr. Miller say there is little
need to reduce rents when
there is so little leasing going
on overall.
“There’s no motivation for
the landlord to drop their ask-
ing rent when there aren’t a lot
of users out there,” he said in
an interview. “Why negotiate
against yourself?”
growth and declining occu-
pancy will fall hardest on
weaker malls, which already
may see less foot traffic or
lower sales, Mr. Busch said in
an interview. The most desir-
able malls will remain in de-
mand even for retailers that
close stores elsewhere, and
those landlords will be able to
command larger rent in-
creases, he said.
“The ‘A’ properties are still
going to do quite well,” Mr.
Busch said. “If you’re the No. 2
or 3 [mall] in a small market,
It’s About Options in REIT Spinoff
BY LIAM PLEVEN
Congress has slammed a
door on companies trying to
spin off their property hold-
ings into real-estate invest-
ment trusts. But there is more
than one way to make extra
money from land holdings.
Late last year, lawmakers
tucked a rule into a tax-ex-
tenders bill that essentially
eliminates the tax advantages
of REIT spinoffs for the parent
company.
The maneuvers had become
popular with activist inves-
tors, who favored separating
valuable real estate from the
main businesses of retailers
and other companies in hopes
that the market would value
the property more highly
when it was held by a distinct
entity.
The change makes such
moves more difficult—but
leaves untouched other meth-
ods of extracting value from
corporate real estate, accord-
ing to experts.
Among the options are en-
tering into various types of
joint ventures with outside in-
vestors who want to share in
the revenue. Companies also
can sell buildings to other
landlords and lease them back.
And firms still can spin off
their real estate into a REIT if
they are willing to pay taxes
Macy’s Herald Square store in New York. The retailer is considering real-estate partnerships or joint ventures for some of its properties.
I’m not excited.”
Mall owners are jockeying
to adapt to the shifting land-
scape. This month, Taubman
Centers Inc. and Macerich
Co., two of the nation’s largest
mall landlords, agreed to
spend $660 million to buy
Country Club Plaza, a land-
mark property in Kansas City,
Mo., that includes more than
800,000 square feet of retail
space.
A week later, Taubman said
it was abandoning plans to
build an enclosed mall in Mi-
on the transaction.
As a result, companies that
own valuable property in
highly desirable locations still
may be able to strike profit-
able deals, particularly as long
as interest among yield-hun-
gry investors in U.S. real es-
tate remains high.
“Other than tax-free REIT
spinoffs, many, many interest-
ing and viable strategies con-
tinue to exist,” said Adam Em-
merich, a partner at law firm
Wachtell, Lipton, Rosen & Katz
who specializes in real-estate
transactions.
On the other hand, strug-
gling retailers and other com-
panies that had come under
pressure from activist inves-
tors to spin off their real es-
tate might not get much of a
reprieve from the new rules.
Hedge fund Starboard Value
LP earlier this month pro-
posed that Macy’s Inc. form
two real-estate joint ventures,
one for its mall properties and
another for some of its most-
visible and valuable urban lo-
cations, such as Herald Square
in New York and Union Square
in San Francisco.
“We believe there are will-
ing partners that would be ex-
cited to own Macy’s real es-
tate,” Starboard said in a
presentation. This month,
Macy’s said it had hired a firm
“to approach potential inter-
THE WALL STREET JOURNAL.
ALAMY
ami. Taubman says it will go
ahead with plans to lease out
street-level retail stores at the
site.
Stock-market investors are
treating some mall landlords
as a relative haven amid con-
cern about the global econ-
omy. Shares in Simon Prop-
erty Group, which owns some
of the nation’s most produc-
tive malls, rose 6.8% in 2015,
when the S&P 500 was slightly
down, and the firm’s stock is
down less than the broader
market so far in 2016.
ested parties” about forming
real-estate partnerships or
joint ventures.
MGM Resorts International
is pursuing another type of
deal for some of its real es-
tate. The company has said it
expects in the first quarter of
this year to form a new REIT
subsidiary called MGM Growth
Properties LLC. The company
Congress blocked
one avenue, but
other strategies are
still viable.
will contribute seven of its Las
Vegas resorts, including Man-
dalay Bay and Mirage, as well
as three other properties to an
operating partnership that will
own the real estate, according
to a person familiar with the
matter.
MGM Resorts will have a
roughly 70% stake in the part-
nership, and the REIT will get
the remainder. Shares in the
REIT will be sold to the public.
Because the deal doesn’t in-
volve spinning off the REIT, it
wouldn’t run afoul of the new
rules, said Sarah Ralph, a part-
ner at Skadden, Arps, Slate,
Meagher & Flom LLP who has
worked on REIT transactions
but wasn’t involved in the
Yet shares of U.S. mall
REITs generally trade at a
nearly 30% discount to the es-
timated value of their real es-
tate, according to Mr. Busch.
The shift to online shopping
is an important part of the
challenge facing malls, accord-
ing to Mr. Busch. In the third
quarter of last year, the most
recent period for which gov-
ernment figures are available,
e-commerce grew 15% com-
pared with a year prior, while
total retail sales grew 1.6%.
Retailers are adjusting by
integrating technology, said
Tom McGee, chief executive of
the International Council of
Shopping Centers, a trade
group. He cited a recent ICSC
survey which found that about
a third of holiday shoppers
bought at least one item on-
line that they picked up at a
physical store. Of those con-
sumers, 69% bought some-
thing else while they were at
the store.
Internet retailers, mean-
while, are scrambling to figure
out how to get goods to cus-
tomers more efficiently—a job
traditional stores excel at, he
said. “People are investing in
physical retail,” Mr. McGee
said. “They have the last
mile.”
Nonetheless, industry giant
Macy’s Inc. recently detailed
plans to close some stores,
mostly at malls.
Retailers still benefit from
having a physical store in a
market, which underscores the
advantages of brick-and-mor-
tar, Mr. Busch said.
But, he said, retailers may
pare back. Instead of having
five stores in a market, he
said, retailers may conclude “I
only need three.”
MGM deal.
MGM Resorts will pay taxes
on the transfer of the proper-
ties, according to a person fa-
miliar with the matter.
When the company an-
nounced the plans in October,
Chief Executive James Murren
told investors that the deal
“was designed to minimize
friction costs” and said other
options, including a spinoff or
asset sales, would have been
less beneficial to MGM Re-
sorts.
Spinoffs had been consid-
ered appealing because they
held out the prospect of shin-
ing a spotlight on a company’s
hard assets, which might oth-
erwise escape the attention of
investors, and avoiding paying
taxes in the process. The new
REIT also has the potential to
grow on its own.
Yet even companies that
pursued spinoffs have consid-
ered other options, as well.
Last year, Darden Restaurants
Inc. spun off more than 400 of
its properties into a REIT,
Four Corners Property Trust
Inc.
But Darden has also sold off
62 other restaurant properties
and leased them back. Late
last year, the company even
sold off and leased back its
headquarters in Orlando, Fla.
After paying taxes on the deal,
Darden pocketed $117 million.
RICHARD B. LEVINE/ZUMA PRESS
THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | C7

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 C8 | Wednesday, January 27, 2016 THE WALL STREET JOURNAL.

THE PROPERTY REPORT BIGGEST 1,000 STOCKS

How to Read the Stock Tables Net Net Net
The following explanations apply to NYSE, NYSE Arca, NYSE MKT and Nasdaq Stock Market listed Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg

U.K. Offices Find securities. Prices are composite quotations that include primary market trades as well as trades
reported by Nasdaq OMX BXSM (formerly Boston), Chicago Stock Exchange, CBOE, National Stock
Exchange, ISE and BATS.
The list comprises the 1,000 largest companies based on market capitalization.
Underlined quotations are those stocks with large changes in volume compared with the issue’s
ColgatePalmolive CL 64.33
ColumbiaPipeline CPGX 17.75
Comerica CMA 32.97
ConAgraFoods CAG 39.50
0.40 ExxonMobil XOM 76.70
0.50 FMC FMC 34.83
0.93 FMCTechnologies FTI 23.93
0.42 FactSetResearchSys FDS 146.84
2.72 ICICIBankADR IBN 7.06 0.14
1.18 t IHSClA IHS 97.53 0.97
0.55 IMSHealthHoldings IMS 23.12 0.06
2.13 INGGroepADR ING 11.66 0.19

Fewer Foreign Buyers average trading volume.

Boldfaced quotations highlight those issues whose price changed by 5% or more if their previous
closing price was $2 or higher.
Footnotes: listing standards vj-In bankruptcy or
ConchoResources CXO 88.15
ConocoPhillips COP 35.35
ConEd ED 67.99
7.47 FedRlty
1.15 FedEx
0.18 Ferrari
FRT 150.15
FDX 127.28
RACE 41.45
1.29 Invesco

1.21 IDEX
IVZ 29.18 0.53
1.24 ITCHoldings ITC 38.46 -0.58
IEX 70.25 1.92
BY ART PATNAUDE better compared with other s-New 52-week high. lf-Late filing receivership or being ConstBrands A STZ 148.38 0.13 FiatChryslerAutos FCAU 7.61 0.51 IllinoisToolWorks ITW 84.31 3.26
t-New 52-week low. q-Temporary exemption from reorganized under the ConstBrands B STZ/B 150.17 0.19 FibriaCelulose ADR FBR 10.59 0.01 InfosysADR INFY 17.52 -0.29
assets such as bonds. dd-Indicates loss in the most Nasdaq requirements. Bankruptcy Code, or securities ContinentalRscs CLR 18.84 1.80 FidNtlFnl FNF 32.14 0.57 Ingersoll-Rand IR 50.59 1.77
Overseas investors have London, which attracted recent four quarters. t-NYSE bankruptcy assumed by such companies. Cooper COO 128.91 3.40 FNFVGroup FNFV 8.98 0.08 Ingredion INGR 90.25 1.74
FD-First day of trading. v-Trading halted on primary
pulled back from the U.K. major investors from Asia h-Does not meet continued market. Corning GLW 17.71 0.95 FidelityNtlInfo FIS 60.04 1.19 ICE ICE 251.64 2.87
CotyClA COTY 23.16 0.71 58.comADR WUBA 55.43 -1.31 InterContinentlADR IHG 33.17 0.72
commercial-real-estate mar- and the Mideast, has been a Credicorp BAP 91.57 IBM 122.59 0.51
Wall Street Journal stock tables reflect composite regular trading as of 4 p.m. and 1.30 FirstRepublicBank FRC 66.48 3.34 IBM
ket, a signal weak oil prices particular focus. Last year, changes in the closing prices from 4 p.m. the previous day. CreditSuisseADR CS 17.56 0.23 FirstEnergy FE 32.08 0.26 IntFlavor IFF 111.87 1.47
and volatile stock markets $40.5 billion of commercial- Tuesday, January 26, 2016 Net Net CrescentPntEnrg CPG 9.43 0.46 FleetCorTechs FLT 120.14 1.13 InternationalPaper IP 32.87 0.29
continue to bite, according to real-estate transactions were Net Stock Sym Close Chg Stock Sym Close Chg CrestwoodEquity CEQP 14.36 2.05 FlwrsFoods FLO 20.00 0.08 Interpublic IPG 22.35 0.62
Stock Sym Close Chg CrownCastl CCI 83.61 2.42 Flowserve FLS 37.36 1.44 IronMountain IRM 25.81 0.54
a survey of property agents. sealed in London, over half of Aptargroup ATR 70.49 3.63 BrownFormanClA BF/A 102.10 0.51 CrownHoldings CCK 45.74 0.74 Fluor FLR 43.99 1.64 IsraelChemicals ICL 3.90 ...
Demand for U.K. commer- the U.K. total of $72.7 billion, NYSE AquaAmerica WTR 29.96 0.38 BrownFormanClB BF/B 93.74 1.60 CubeSmart CUBE 31.42 1.21 FomentoEconMexADR FMX 89.16 1.25 ItauUnibancoADR ITUB 5.76 0.14
Aramark ARMK 32.00 0.82 BuckeyePartners BPL 55.14 1.34 Cummins CMI 85.38 1.33 FootLocker FL 66.13 1.66 JPMorganChase JPM 57.08 1.42
cial real estate from foreign according to data provider ABBADR ABB 16.67 0.35 BG 59.32 0.29
ArcelorMittalADR MT 3.94 0.40 Bunge DDR Corp DDR 16.69 0.32 FordMotor F 12.26 0.28 JacobsEngineering JEC 37.46 0.74
investors slowed in the last Real Capital Analytics. ADTCorp. ADT 29.16 0.33 ArcherDan ADM 33.63 1.20 CBRE Group CBG 28.00 0.70 DTEEnergy DTE 81.70 0.94 ForestCityRealtyA FCE/A 19.85 0.41 JamesHardieADR JHX 11.36 0.18
three months of 2015 for a AES AES 9.04 0.30 ArrowElec ARW 49.86 1.20 CBSClA CBS/A 51.88 0.85 t Danaher DHR 84.68 0.30 ForestCityRealtyB FCE/B 19.78 0.34 Jarden JAH 52.03 1.23
second consecutive quarter, Aflac AFL 57.52 0.97 t Ashland ASH 95.81 0.13 CBSClB CBS 47.51 1.22 Darden DRI 62.66 1.19 FortBrandsHomeSec FBHS 47.83 0.29 JohnsJohns JNJ 101.18 4.78
according to the Royal Insti-
Strong demand has AGLResources GAS 63.49 0.05 Assurant AIZ 79.21 1.10 CFIndustries CF 29.49 0.89 DaVitaHlthcrPtrs DVA 66.52 0.57 Franco-Nevada FNV 43.53 0.98 JohnsonControls JCI 35.21 1.00
AT&T T 35.40 0.40 AstraZenecaADR AZN 31.82 0.27 CGI Gp A GIB 39.45 0.82 Deere DE 73.57 1.79 FranklinResources BEN 33.37 0.84 JonesLangLaSalle JLL 137.98 3.14
tute of Chartered Survey- pushed up prices in AbbottLabs ABT 40.16 0.50 AtmosEnergy ATO 65.41 1.57 t CIT Grp CIT 29.56 0.21 DelhaizeGroupADR DEG 24.91 0.28 Freeport-McMoRan FCX 4.20 0.26 JoyGlobal JOY 9.72 0.84
ors. The retreat comes as AbbVie ABBV 58.26 -0.39 Autoliv ALV 115.27 2.97 CMSEnergy CMS 36.88 0.50 DelphiAutomotive DLPH 66.37 2.09 FreseniusMedADR FMS 42.37 0.41 JuniperNetworks JNPR 26.65 0.46
overall buyer interest in U.K.
cities around the AccentureClA ACN 102.53 0.78 AutoNation AN 45.49 0.31 t CNAFinancial CNA 32.33 0.48 DeltaAir DAL 46.11 0.17 Gallagr AJG 37.35 0.47 KARAuctionServices KAR 33.60 0.53
AcuityBrands AYI 194.72 2.34 AutoZone AZO 743.59 15.07 CNOOCADR CEO 91.83 1.17 DeutscheBank DB 18.66 0.79 Gap GPS 23.89 0.83 KBFinancialGrpADR KB 24.35 0.16
property markets grew at its world. AdvanceAuto AAP 151.47 6.75 Avalonbay AVB 178.00 3.73 CRHADR CRH 26.43 0.35 DevonEnergy DVN 24.56 1.79 Gartner IT 84.97 1.69 KKR KKR 13.74 0.34
slowest pace in more than AdvSemiEnggADR ASX 5.24 0.11 Avangrid AGR 37.41 0.36 t CSRA CSRA 26.81 0.31 DiageoADR DEO 107.58 2.77 Gazit-Globe GZT 7.94 0.04 KTADR KT 11.50 0.05
two years. AegonADR AEG 5.68 0.13 AveryDennison AVY 59.61 1.45 CVSHealth CVS 94.04 -0.03 DigitalRealtyTrust DLR 78.53 2.81 GenDynam GD 127.38 2.78 KSCitySo KSU 67.47 2.27
AerCapHoldings AER 31.76 0.96 Aviva ADR AV 13.41 0.21 Cablevision CVC 31.27 0.17 DiscoverFinSvcs DFS 48.39 0.80 GenElec GE 28.31 0.27 Kellogg K 71.20 0.69
Still, values of U.K. com- Even with fewer foreign Aetna AET 104.98 -0.45 AVT 39.86 1.02 CabotO&G COG 19.43 1.03 DIS 96.27 KEY 10.94 0.09
Avnet Disney 0.98 GeneralGrowthProp GGP 27.35 0.43 KeyCp
mercial property—such as of- buyers, demand among other AffiliatedManagers AMG 131.40 3.22 AxaltaCoatingSys AXTA 24.03 0.52 Calpine CPN 13.86 0.51 DollarGeneral DG 73.69 1.51 GeneralMills GIS 55.13 0.33 KilroyRealty KRC 57.89 1.61
fices, shops and ware- investors, limited supply and AgilentTechs A 37.51 -0.10 AxisCapital AXS 52.66 0.04 CamdenPropertyTr CPT 73.78 2.13 DominionResources D 69.72 0.16 GeneralMotors GM 29.65 0.42 KimberlyClark KMB 124.89 2.20
AgnicoEagleMines AEM 28.75 0.85 t BB&T BBT 31.47 0.36 Cameco CCJ 11.57 0.39 Dominos DPZ 112.17 1.44 Genpact 24.19 0.45 KimcoRealty KIM 26.74 0.55
houses—are broadly expected a growing economy will con- AGU 85.89 1.12 CameronIntl CAM 60.74 1.63
G
Agrium BCE BCE 39.46 0.82 DouglasEmmett DEI 29.21 0.74 GenuineParts GPC 82.05 2.75 KinderMorgan KMI 14.97 0.78
to keep rising due to robust tinue to underpin values. AirProducts&Chems APD 118.41 2.10 BHPBillitonADR BHP 22.01 1.26 s CampbellSoup CPB 55.15 0.54 Dover DOV 56.06 3.00 Gildan GIL 25.19 -0.53 KingDigitalEnt KING 17.91 -0.01
demand for a limited number “For the time being, the Airgas ARG 138.59 0.68 BHPBillitonADR BBL 19.37 1.05 CIBC CM 61.73 1.76 DowChemical DOW 42.46 0.28 GlaxoSmithKlineADR GSK 40.83 1.15 Kohl's KSS 48.59 1.23
AlaskaAirGroup ALK 71.33 1.54 BP 30.74 1.27 CanNtlRlwy CNI 50.57 1.44 DrPepperSnap DPS 91.42 0.41 GlblPymts GPN 58.66 1.00 KoninklijkePhilADR PHG 26.28 1.65
of assets, RICS said. real-estate sector seems Albemarle ALB 51.88 1.90
BPADR
KEP 21.49 0.33
BRFADR BRFS 11.36 -0.02 CndNatRes CNQ 18.76 1.31 DrReddysLabADR RDY 42.99 0.95 GoDaddyClA GDDY 29.32 -0.10 KoreaElcPwrADR
In London, commercial real largely insulated from the AlcatelLucentADR ALU 3.99 0.08 BTGroupADR BT 33.97 0.31 CanPacRlwy CP 116.07 2.27 DuPont DD 53.46 0.47 Goldcp GG 10.73 0.46 Kroger KR 36.78 0.11
estate in the fourth quarter turmoil affecting financial Alcoa AA 7.14 0.34 BakerHughes BHI 39.97 0.79 CanonADR CAJ 28.01 0.31 DukeEnergy DUK 72.22 0.42 GoldmanSachs GS 154.45 3.33 KyoceraADR KYO 42.39 0.35
appeared “overpriced to some markets,” Simon Rubinsohn, AlexREEq ARE 78.67 1.20 Ball BLL 67.83 1.20 CapOneFnl COF 60.38 1.72 DukeRealty DRE 19.94 0.55 t GraceWR GRA 82.06 -2.99 LBrands LB 95.66 0.39
extent” to 81% of agents sur- chief economist at RICS, said
AlibabaGroupADR BABA 69.77 0.05 BancoBilbaoVizADR BBVA 6.48 0.22 CardinalHealth CAH 82.71 1.51 EMC EMC 24.30 0.32 Grainger GWW 186.00 0.47 LGDisplayADR LPL 9.11 0.17
Alleghany Y 455.13 4.19 BancodeChileADR BCH 58.80 0.88 Carlisle CSL 80.13 0.66 ENIADR E 28.48 0.84 GpoAeroportuarADR PAC 81.08 2.29 L-3Communications LLL 111.92 1.65
veyed, up from 77% in the in a statement. Allegion ALLE 59.94 0.75 BcoSantChileADR BSAC 16.76 0.22 CarMax KMX 45.99 1.01 EOG Res EOG 66.03 4.44 GpoAvalAccionesADR AVAL 6.37 0.22 LabCpAm LH 112.70 1.71
third quarter, RICS said. A low interest-rate envi- Allergan AGN 294.60 -1.35 BancoSantanderADR SAN 4.29 0.17 Carnival CCL 49.82 1.02 EQT EQT 61.26 4.98 GpFinSantandMexADR BSMX 7.36 0.10 LasVegasSands LVS 40.87 1.76
AllianceData ADS249.60 4.21 BanColombiaADR CIB 27.15 0.54 Carnival ADR CUK 52.16 1.01 EQTMidstreamPtrs EQM 64.27 1.59 GrupoTelevisaADR TV 26.48 0.58 Lazard LAZ 35.40 0.27
Strong demand for com- ronment “provides further AllncBrnstnHldg AB 19.07 0.03 BankAm BAC 13.31 0.35 Carters CRI 95.43 2.79 EastmanChemical EMN 62.67 1.91 HCAHoldings HCA 66.96 1.38 LearCorp LEA 102.15 2.07
mercial real estate has comfort for those parts of the AlliantEnergy LNT 62.90 0.54 BkMntrl BMO 51.67 1.42 Caterpillar CAT 59.16 1.25 EatonCorp.PLC ETN 49.02 1.75 HCP HCP 37.05 0.41 Leggett&Platt LEG 39.87 0.52
pushed up prices in cities property market where val- Allstate ALL 58.18 0.48 BankNY Mellon BK 35.56 0.89 Celanese A CE 61.49 1.85 Ecolab ECL 104.13 0.87 HDFCBankADR HDB 56.45 0.94 LennarClA LEN 42.49 1.93
around the world. After the ues are looking a little AllyFinancial ALLY 15.65 0.32 BkNovaScotia BNS 37.82 0.74 CemexADR CX 4.17 0.20 EcopetrolADR EC 5.81 0.23 HP HPQ 9.64 0.15 LennarClB LEN/B 34.80 1.53
AltriaGroup MO 58.96 0.56 BarclaysADR BCS 10.67 0.28 CencosudADR CNCO 5.90 0.34 EdgewellPersonal EPC 72.15 0.27 HSBCHoldingsADR HSBC 34.09 0.56 LennoxIntl LII 120.44 4.41
2008 financial crisis, inves- stretched and arguably more AlumofChinaADR ACH 7.40 0.02 Bard CR BCR 183.16 -0.94 CenovusEnergy CVE 12.20 0.06 EdisonInt EIX 60.70 0.78 Halliburton HAL 28.94 -0.34 LeucadiaNational LUK 16.34 -0.14
tors increasingly saw prop- vulnerable to a material shift AmbevADR ABEV 4.16 0.07 BarrickGold ABX 9.53 0.26 Centene CNC 59.99 -1.39 EdwardsLife EW 80.16 -0.04 Hanesbrands HBI 30.24 1.16 Level3Comm LVLT 47.81 1.06
erty as a haven from financial in monetary policy,” Mr. Ru- Ameren AEE 42.76 0.09 Baxalta BXLT 41.05 -0.57 CenterPointEnergy CNP 17.37 0.27 Embraer ADR ERJ 27.10 0.43 t HarleyDavidson HOG 38.55 -1.54 LibertyPropertyTr LPT 28.96 0.69
AmericaMovilADR AMX 13.11 0.51 BaxterIntl BAX 36.54 0.49 CenturyLink CTL 24.56 0.80 EmersonElectric EMR 43.10 0.81 HarmanIntlInds HAR 80.63 2.78 EliLilly LLY 81.96 0.25
shocks, while returns looked binsohn said. AmCampus ACC 41.33 1.09 BectonDickinson BDX 145.51 0.61 Chevron CVX 84.12 3.23 EmpresaNacADR EOC 36.37 0.84 Harris HRS 85.62 1.49 LincolnNational LNC 39.13 0.60
AEP AEP 58.20 0.45 Berkley WRB 48.58 0.63 ChinaEasternAirADR CEA 25.55 0.22 EnbridgePtnr EEP 16.57 0.84 HrtfrdFnl HIG 38.60 0.97 LinkedInA LNKD 196.14 2.60
AmericanExpress AXP 55.09 0.07 BerkHathwy A BRK/A 1896402639.00 t ChinaLifeInsADR LFC 11.97 -0.23 Enbridge ENB 32.59 1.04 HealthNet HNT 64.98 -0.81 LiveNationEnt LYV 22.35 0.54
AmericanFinancial AFG 68.29 1.15 BerkHathwy B BRK/B 125.89 1.76 ChinaMobileADR CHL 53.80 0.52 Encana ECA 3.77 0.16 Helmerich&Payne HP 45.84 1.91 LloydsBankingADR LYG 3.82 0.16
AmericanIntl AIG 55.91 0.55 BestBuy BBY 28.04 0.97 ChinaPetroleumADR SNP 54.50 1.11 EngyTrnsfrEqty ETE 9.90 0.73 Herbalife HLF 46.05 0.80 LockheedMartin LMT209.93 -1.08
ATHANASIOS GIOUMPASIS/GETTY IMAGES

AmericanTowerREIT AMT 92.47 1.35 BioMedRealtyTrust BMR 23.77 -0.04 ChinaSoAirlinesADR ZNH 29.68 -0.20 EnergyTransfer ETP 28.12 1.60 Hershey HSY 85.08 1.31 Loews L 34.63 0.42
AmericanWaterWorks AWK 62.35 0.91 BlackKnightFinSvcs BKFS 29.77 -0.13 ChinaTelecomADR CHA 43.75 0.55 Enerplus ERF 2.76 0.31 Hess HES 34.81 0.43 Lowe's LOW 70.00 0.10
Amerigas APU 37.17 0.54 BlackRock BLK 299.26 9.54 ChinaUnicomADR CHU 10.73 0.17 EnersisADR ENI 11.13 0.03 HewlettPackardEnt HPE 13.60 0.26 LuxotticaGroupADR LUX 61.62 0.80
AmerprsFncl AMP 92.36 2.04 BlackstoneGroup BX 26.29 1.26 ChipotleMex CMG 448.15 5.98 EnLinkMidstream ENLK 12.36 -0.31 HiltonWorldwide HLT 18.49 1.07 LyondellBasell LYB 77.62 1.78
AmeriSrcBrg ABC 91.26 -0.01 BlockHR HRB 32.83 0.36 Chubb CB 108.58 0.58 Entergy ETR 68.70 1.12 HollyFrontier HFC 34.52 0.68 M&T Bnk MTB105.68 3.89
Ametek AME 46.62 0.72 BdwlkPipePtnr BWP 10.46 0.24 ChunghwaTelecomADR CHT 30.52 0.21 EntPdtsPtnr EPD 22.21 0.84 HomeDepot HD 122.20 0.49 MGMResortsIntl MGM 19.11 0.22
AmphenolClA APH 48.58 0.40 Boeing BA 128.01 4.00 Church&Dwight CHD 80.31 0.86 EnvisionHealthcare EVHC 23.58 0.43 HondaMotorADR HMC 27.87 -0.01 MPLX MPLX 28.99 1.46
AnadarkoPetroleum APC 34.59 2.28 BoozAllenHamilton BAH 29.55 0.59 Cigna CI 135.42 -0.43 Equifax EFX 104.85 0.71 Honeywell HON 98.51 2.03 MSCI MSCI 66.08 -0.23
AnheuserBuschADR BUD 122.62 1.33 BorgWarner BWA 28.75 0.52 CimarexEngy XEC 81.37 5.77 EquityLife ELS 65.87 -1.40 HormelFoods HRL 76.83 1.31 Macerich MAC 78.36 0.62
AnnalyCap NLY 9.21 0.32 BostonProperties BXP 120.35 2.54 Citigroup C 40.50 0.95 EqResdntl EQR 79.74 1.54 DR Horton DHI 27.34 0.94 MacquarieInfr MIC 64.77 1.65
AnteroResources AR 24.96 1.90 BosSci BSX 17.38 -0.15 CitizensFinancial CFG 20.29 0.50 EssexProp ESS 226.32 3.21 HostHotels&Resorts HST 13.87 0.30 Macys M 40.18 0.86
Anthem ANTM 137.76 -0.91 BristolMyers BMY 62.69 -0.23 Clorox CLX 125.55 0.51 EsteeLaudr A EL 83.59 0.12 HuanengPowerADR HNP 31.05 0.12 MagelnPtnrs MMP 62.23 3.35
Aon AON 86.03 0.29 BrixmorPropertyGrp BRX 26.13 0.61 Coach COH 33.33 2.98 EvrstReGrp RE 173.01 2.65 Hubbell HUBB 87.76 1.02 MagnaInt MGA 35.16 1.07
Apache APA 38.03 0.60 BdridgeFnlSol BR 52.09 0.56 CocaCola KO 42.08 -0.08 EversourceEnergy ES 52.15 0.51 Humana HUM 164.66 1.37 Mallinckrodt MNK 64.31 0.84
Demand for U.K. commercial real estate from foreign investors ApartmtInv AIV 38.73 1.06 BrookfieldMgt BAM 28.86 0.50 Coca-ColaFemsaADR KOF 65.92 0.83 Exelon EXC 27.84 0.68 HuntingtonIngalls HII 124.78 2.92 ManpowerGroup MAN 74.44 1.81
has slowed for two quarters in a row. Above, the London skyline. ApolloGlobalMgmtA APO 13.73 0.49 BrookfieldInfr BIP 33.31 0.49 CocaColaEnt CCE 45.89 0.27 ExtraSpaceStorage EXR 90.46 2.86 HyattHotels H 38.13 1.00 Continued on Page C9

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THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | C9

BIGGEST 1,000 STOCKS

Continued From Page C8 Net Net Net Net Net Net Net Net
Net Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg Stock Sym Close Chg
Stock Sym Close Chg
OccidentalPetrol OXY 63.23 1.44 RangeResources RRC 27.38 2.48 SpectraEnergyPtrs SEP 41.49 0.55 Twitter TWTR 17.01 -0.01 WiproADR WIT 11.42 0.16 CadenceDesign CDNS 19.30 0.43 IonisPharma IONS 46.39 0.20 Qorvo QRVO 39.76 ...
ManulifeFinancial MFC 13.09 0.31 Och-ZiffCapMgmt OZM 5.16 0.20 RayJamFnl RJF 43.17 0.37 SpectrumBrndsHldgs SPB 91.66 2.06 TycoInternational TYC 33.98 -0.17 WooriBankADR WF 21.17 0.01 Carlyle CG 13.26 0.35 JD.comADR JD 27.00 -0.03 Qualcomm QCOM 48.52 0.94
MarathonOil MRO 8.45 0.31 OldRepublic ORI 18.16 0.49 Raytheon RTN 119.53 0.96 SpiritAeroSystemsA SPR 45.99 1.64 TylerTechnologies TYL 158.41 0.23 Workday WDAY 66.65 -0.72 CaseysGenStores CASY 117.98 2.43 JackHenry JKHY 77.98 0.60 QunarCaymanIslADR QUNR 43.28 -0.91
MarathonPetroleum MPC 41.56 0.79 OmegaHealthcare OHI 34.04 0.09 RealogyHoldings RLGY 32.96 0.48 SpiritRealtyCap SRC 9.91 0.28 TysonFoodsClA TSN 52.50 1.21 WyndhamWorldwide WYN 65.37 1.59 Celgene CELG 105.99 -0.71 JazzPharma JAZZ 132.65 1.25 RandgoldRscsADR GOLD 68.97 3.36
MarineHarvestADR MHG 13.35 0.27 OmnicomGroup OMC 71.99 2.11 RealtyIncome O 55.20 1.31 Sprint S 2.99 0.47 t UBSGroup UBS 16.39 0.24 XL Group XL 34.92 0.18 Cerner CERN 56.52 0.34 JetBlue JBLU 21.58 0.01 RegenPharm REGN 463.56 -9.56
Markel MKL 839.57 -2.02 OpkoHealth OPK 8.01 0.05 RedHat RHT 70.96 -0.78 StJudeMedical STJ 54.45 0.29 UDR UDR 36.55 1.14 XcelEnergy XEL 36.77 0.24 CharterComms CHTR 172.17 -0.17 KLA Tencor KLAC 65.14 0.49 RossStores ROST 54.33 0.71
Marsh&McLennan MMC 51.93 0.36 Oracle ORCL 35.23 0.89 s RegencyCtrs REG 71.38 1.82 StanCorpFinancial SFG 114.49 0.16 UGI UGI 32.75 0.46 Xerox XRX 9.28 0.18 CheckPointSoftware CHKP 76.05 0.60 KeurigGreenMtn GMCR 89.48 0.57 RyanairHoldingsADR RYAAY 81.94 1.52
MrtnMarMat MLM 119.63 2.27 OrangeADR ORAN 17.15 0.23 RegionsFinancial RF 7.82 0.25 StanleyBlDck SWK 96.22 2.61 UltraparPartADR UGP 13.71 -0.04 Xylem Inc. XYL 34.55 0.81 CincinnatiFin CINF 54.92 0.76 KraftHeinz KHC 75.98 1.95 SBACommunications SBAC 97.04 3.33
Masco MAS 25.67 0.30 OrbitalATK OA 89.37 0.25 ReinsuranceGrp RGA 81.07 1.21 StarwoodHotels HOT 62.29 1.78 UnderArmour A UA 67.36 -0.80 YPFADR YPF 15.00 0.72 Cintas CTAS 82.86 1.01 LKQ LKQ 26.79 0.73 SEIInvestments SEIC 45.00 1.24
MasterCard MA 87.00 0.23 OrixADR IX 65.99 0.53 RenaissanceRe RNR 112.14 2.26 StarwoodPrTr STWD 18.61 0.88 UnileverADR UN 43.02 0.36 YanzhouCoalADR YZC 3.83 -0.09 CiscoSystems CSCO 23.72 0.55 LamResearch LRCX 68.74 0.74 SS&CTechs SSNC 60.34 0.30
McCormick MKC 82.77 1.83 OwensCorning OC 45.52 1.18 RepublicServices RSG 42.55 0.14 StateSt STT 55.93 1.71 UnileverADR UL 42.63 0.52 YoukuTudouADR YOKU 27.26 0.05 CitrixSystems CTXS 68.19 2.14 LamarAdvertisingA LAMR 55.71 0.84 SVBFinancialGroup SIVB 98.46 3.37
McCormickVtg MKC/V 82.31 1.32 PG&E PCG 52.14 0.53 ResMed RMD 59.02 0.36 StatoilADR STO 12.54 0.64 UnionPacific UNP 70.04 1.25 YumBrands YUM 69.87 2.48 CognizantTechSolns CTSH 61.94 1.02 LibertyBroadbandA LBRDA 47.32 -0.03 Sabre SABR 25.82 0.51
McDonalds MCD 120.43 1.23 PNC FnlSvcs PNC 84.45 1.72 RestaurantBrands QSR 34.18 0.59 Steris STE 69.35 -0.06 UnitedContlHldgs UAL 47.23 0.79 ZayoGroupHoldings ZAYO 24.32 -0.12 Comcast A CMCSA 54.84 0.63 LibertyBroadbandC LBRDK 47.23 0.01 SanDisk SNDK 64.09 2.35
McGrawHillFin MHFI 84.36 0.49 POSCOADR PKX 36.58 1.69 ReynoldsAmer RAI 47.11 0.22 STMicroelectronics STM 6.47 0.19 UnitedMicroADR UMC 1.75 0.04 ZimmerBiomet ZBH 101.74 2.68 CoStarGroup CSGP 170.69 -0.28 LibertyGlobalClA LBTYA 34.68 0.84 SeagateTechnology STX 27.74 1.34
McKesson MCK 170.99 0.82 PPG Ind PPG 92.58 1.47 RioTinto ADR RIO 24.39 1.56 Stryker SYK 96.02 1.61 UtdParcel B UPS 90.93 1.51 Zoetis ZTS 43.87 0.67 CostcoWholesale COST 148.50 -2.28 LibertyGlobalClC LBTYK 33.57 0.87 SeattleGenetics SGEN 37.22 -0.43
MeadJohnNutr MJN 70.13 1.22 PPL PPL 33.83 0.07 RiteAid RAD 7.78 0.07 SumitomoMitsADR SMFG 6.78 0.16 UnitedRentals URI 56.89 2.25 Ctrip.comIntlADR CTRP 42.83 -0.09 LibertyGlbLiLACAWi LILA 34.25 0.41 ShireADR SHPG 175.88 -4.93
Mednax MD 69.47 0.93 PVH Corp. PVH 69.57 1.99 RobHalfIntl RHI 43.77 0.92 SunLifeFinancial SLF 27.25 0.50 US Bcp USB 39.02 0.73 NASDAQ DISHNetworkClA DISH 48.36 1.30 LibertyGlbLiLACClC LILAK 36.01 0.21 SignatureBank SBNY 133.18 4.52
Dentsply XRAY 59.22 1.79 LibertyInteractQVC QVCA 25.28 0.57
Medtronic MDT 75.59 -0.11 t PackCpAm PKG 49.70 -0.49 Rockwell ROK 94.47 3.81 SuncorEnergy SU 22.04 1.06 US Steel X 7.77 0.85 AMCNetworks A AMCX 73.22 0.62 SiliconwareADR SPIL 7.68 -0.01
Merck MRK 51.45 0.53 SunocoLogistics SXL 20.75 -0.03 UnitedTech UTX 85.65 0.75 Dexcom DXCM 73.21 0.55 LibertyVenturesA LVNTA 39.03 0.53 SiriusXMHoldings SIRI 3.73 0.08
PaloAltoNetworks PANW 148.27 1.70 RockwellCollins COL 82.44 1.96 Ansys ANSS 86.57 1.77
MetLife MET 43.51 0.51 ParkerHannifin PH 91.77 SunTrustBanks STI 35.02 0.90 UnitedHealthGroup UNH 113.96 0.58 DiamondbackEnergy FANG 66.53 4.45 LibertyMediaA LMCA 36.18 0.85 SironaDental SIRO 106.98 3.17
3.65 RogerComm B RCI 36.12 1.28 ARMHoldingsADR ARMH 43.45 0.56 DiscoveryCommsA DISCA 27.42 1.17 LibertyMediaC LMCK 35.11 1.11
MettlerToledo MTD 315.23 -0.79 PartnerRe PRE 140.37 0.48 RollinsInc ROL 26.45 0.59 SynchronyFinancial SYF 28.66 0.18 UniversalHealthB UHS 111.90 3.44 ARRISInternational ARRS 27.42 0.65 SkyworksSolutions SWKS 65.80 0.21
MichaelKorsHldgs KORS 37.79 1.06 SyngentaADR SYT 71.21 0.81 UnumGroup UNM 27.81 0.44 DiscoveryCommsC DISCK 27.12 1.20 LinearTechnology LLTC 41.08 0.24 Splunk SPLK 48.62 -0.04
PearsonADR PSO 11.06 0.42 RoperTechnologies ROP 169.28 3.19 ASMLHolding ASML 90.19 0.47
s MidAmApt MAA 94.80 2.27 Sysco SYY 39.25 0.15 VEREIT VER 7.55 0.24 DollarTree DLTR 77.69 1.09 LinnEnergy LINE 1.15 0.17 Staples SPLS 8.81 0.13
PembinaPipeline PBA 21.37 0.77 RoyalBkCanada RY 48.01 1.04 AcadiaHealthcare ACHC 60.73 1.29
MindrayMedADR MR 26.85 ... TEConnectivity TEL 57.02 0.65 VF VFC 58.75 0.90 DunkinBrands DNKN 38.56 0.65 lululemonathletica LULU 58.59 0.96 Starbucks SBUX 58.61 0.90
Pentair PNR 45.31 1.73 RoyalBkScotlandADR RBS 7.56 0.32 ActivisionBliz ATVI 35.30 0.57
MitsubishiUFJADR MTU 5.23 0.03 TEGNA TGNA 23.48 0.21 VISAClA 71.88 0.14 E Trade ETFC 23.68 0.25 Markit MRKT 28.41 0.44 Stericycle SRCL 118.17 1.26
PepcoHoldings POM 26.50 0.16 RoyalCaribbean RCL 84.52 1.15 V AdobeSystems ADBE 86.89 0.12
MizuhoFinancialADR MFG 3.50 0.03 TELUS TU 26.75 0.84 VailResorts MTN 124.62 1.44 EastWestBancorp EWBC 33.83 0.88 MarriottInt A MAR 61.94 1.82 Symantec SYMC 19.23 0.41
PepsiCo PEP 96.32 0.38 RoyalDutchADRA RDS/A 41.25 1.74 AkamaiTechnologies AKAM 46.20 0.50
MobileTeleSysADR MBT 6.24 0.22 TERNIUMADR TX 11.17 0.47 t ValeADR VALE 2.22 0.07 eBay EBAY 26.65 0.51 MarvellTch MRVL 8.32 0.14 Synopsys SNPS 41.78 0.66
PerkinElmer PKI 48.93 0.54 RoyalDutchADRB RDS/B 41.18 1.63 AlexionPharm ALXN 152.64 -1.90
MohawkIndustries MHK 166.37 1.94 TJX TJX 69.69 0.93 ElectroArts EA 70.83 0.91 Mattel MAT 27.11 0.37 TDAmeritrade AMTD 28.81 0.35
Perrigo PRGO 148.94 -0.12 SAPADR SAP 78.94 0.63 ValeantPharmIntl VRX 98.57 5.94 AlignTechnology ALGN 62.21 1.82
MolsonCoors B TAP 87.76 0.16 TableauSoftware DATA 77.99 0.24 EndoInternational ENDP 60.06 2.22 MaximIntProducts MXIM 32.37 0.74 TFSFinancial TFSL 16.91 0.12
PetroChinaADR PTR 58.46 1.14 SINOPECShanghaiADR SHI 39.73 0.78 ValeroEnergy VLO 67.71 2.57 Alkermes ALKS 34.76 -1.18
Monsanto MON 88.50 1.18 TaiwanSemiconADR TSM 21.59 -0.20 Equinix EQIX 303.64 3.71 t Medivation MDVN 34.90 -1.67 T-MobileUS TMUS 39.43 1.54
PetroleoBrasilADR PBR 2.93 0.01 SKTelecomADR SKM 18.76 0.31 Valspar VAL 75.22 0.94 AlnylamPharm ALNY 75.17 -0.35
Moodys MCO 88.33 1.58 Target TGT 70.44 1.52 EricssonADR ERIC 9.61 0.28 MelcoCrownEntADR MPEL 13.67 0.27 TRowePrice TROW 66.65 1.24
PetroleoBrasilADRA PBR/A 2.04 0.05 SLGreenRealty SLG 103.18 1.52 TaroPharm TARO Vantiv VNTV 45.14 1.47 AlphabetClA GOOGL 733.79 0.17
MorganStanley MS 25.49 0.51 146.91 -2.10 ErieIndemnityClA ERIE 93.63 1.25 MercadoLibre MELI 99.00 -1.37 TeslaMotors TSLA 193.56 -2.82
Pfizer PFE 30.67 0.17 Salesforce.com CRM 69.87 -0.05 TataMotorsADR TTM VarianMed VAR 77.06 1.51 AlphabetClC GOOG 713.04 1.37
Mosaic MOS 22.85 0.45 25.22 0.73 Expedia EXPE 104.93 -0.28 MichaelsCos. MIK 21.55 0.20 TexasInstruments TXN 50.70
PhilipMorrisIntl PM 87.31 0.63 SanofiADR SNY 41.75 0.66 TaubmanCtr TCO 72.00 1.37 Ventas VTR 55.94 0.96 Amazon.com AMZN 601.25 4.72 0.62
MotorolaSolutions MSI 63.16 0.74 ExpeditorsIntl EXPD 44.19 1.09 MicrochipTech MCHP 44.25 1.05 TractorSupply TSCO 85.69
PhilippineLgDisADR PHI 43.10 0.55 SantanderCnsmrUSA SC 13.40 0.20 TecoEnergy TE 27.05 0.07 Verizon VZ 48.25 1.22 Amdocs DOX 53.20 1.05 2.17
NTTDoCoMoADR DCM 19.90 0.07 ExpressScriptsHldg ESRX 72.98 0.67 MicronTechnology MU 10.55 0.07 TrimbleNavigation TRMB 19.20
Phillips66 PSX 77.76 1.53 SasolADR SSL 24.91 1.77 TelecomItaliaADR TI/A 9.03 -0.03 VipshopHldgsADR VIPS 13.23 -0.39 Amerco UHAL 351.30 1.30 0.41
NVR NVR1630.00 68.91 F5Networks FFIV 96.41 2.49 Microsoft MSFT 52.17 0.38
PiedmontNaturalGas PNY 58.43 0.48 SCANA SCG 60.65 0.11 TelecomItaliaADR TI VMware VMW 49.28 0.52 AmericaMovilClAADR AMOV 13.05 0.47 TripAdvisor TRIP 69.69 0.20
NationalGridADR NGG 68.82 0.69 11.19 0.21 FacebookClA FB 97.34 0.33 Middleby MIDD 84.73 0.99
21stCenturyFoxClA FOXA 26.91 0.91
NtlOilwellVarco NOV 30.43 0.74 PinnacleFoods PF 41.75 0.44 Schlumberger SLB 65.33 2.03 Teleflex TFX 137.19 2.43 VornadoRealtyTrust VNO 92.06 1.90 AmerAirlinesGrp AAL 39.64 0.76 Fastenal FAST 38.02 1.20 MondelezIntlClA MDLZ 41.35 1.15
21stCenturyFoxClB FOX 26.96
PinnacleWestCap PNW 64.00 0.25 SchwabC SCHW 25.45 0.28 TelefonicaBrasADR VIV 8.31 0.10 VoyaFinancial VOYA 30.27 0.43 AmeriCapAg AGNC 16.76 0.47 0.96
NtlRetailProp NNN 42.75 0.99 FifthThirdBancorp FITB 15.23 0.22 MonsterBeverage MNST 139.05 -1.04
PioneerNaturalRscs PXD 113.54 5.79 ScrippsNetA SNI 60.60 1.99 TelefonicaADR TEF 10.33 0.22 VulcanMaterials VMC 84.23 1.34 Amgen AMGN 153.78 0.35 UltaSalon ULTA 179.13 3.47
t NetSuite N 66.92 -1.00 FirstSolar FSLR 67.40 3.26 Mylan MYL 53.93 1.31
PlainsAllAmPipe PAA 20.58 0.82 SealedAir SEE 39.97 1.00 s TelekmIndonesiaADR TLK 47.24 1.18 WABCO Hldg WBC 87.09 1.44 AmTrustFinSvcs AFSI 55.95 1.46 UltimateSoftware ULTI 172.20 0.14
NewOrientalEducADR EDU 29.67 0.27 Fiserv FISV 91.40 1.24 NXP Semi NXPI 71.66 -0.72
PlainsGPHldgsClA PAGP 8.40 0.25 SempraEnergy SRE 92.22 0.15 TenarisADR TS 20.32 0.94 WECEnergyGroup WEC 53.86 0.65 AnalogDevices ADI 51.29 0.24 UnitedTherapeutics UTHR 127.64 0.70
NY CmntyBcp NYCB 14.87 0.36 FlextronInt FLEX 9.79 0.43 Nasdaq NDAQ 58.53 1.93
VeriSign VRSN 75.15 0.53
Newell NWL 38.18 1.05 PlumCrk PCL 39.42 0.30 ServiceCp SCI 23.91 0.66 Tesoro TSO 86.50 0.78 W.P.Carey WPC 58.15 1.82 Apple AAPL 99.99 0.55 Fortinet FTNT 26.87 -0.34 NetApp NTAP 22.03 0.81
t PolarisIndustries PII 72.99 -7.35 s ServiceMasterGlb SERV 40.10 0.45 TesoroLogistics TLLP 45.73 3.27 Wabtec WAB 63.20 0.62 AppliedMaterials AMAT 17.35 0.44 VeriskAnalytics VRSK 71.20 1.25
NewMarket NEU 371.91 11.97 FrontierComms FTR 4.42 0.23 NeteaseADR NTES 152.40 -6.08
VertxPharm VRTX 92.20 0.08
NewmontMining NEM 18.50 0.83 PotashCp POT 15.06 0.22 ServiceNow NOW 77.96 1.86 TevaPharmADR TEVA 64.06 0.89 WalMart WMT 64.00 0.55 ArchCapitalGroup ACGL 66.25 0.21 Garmin GRMN 33.84 0.64 Netflix NFLX 97.83 -1.29
Viacom A VIA 46.77 1.84
NextEraEnergy NEE 106.56 0.14 t Praxair PX 98.14 2.01 ShawCom B SJR 16.87 0.33 Textron TXT 37.73 0.90 WasteConnections WCN 59.60 1.07 AthenaHealth ATHN 141.98 -1.56 GileadSciences GILD 92.21 1.60 Neurocrine NBIX 46.82 -1.77
s PrecisionCastparts PCP 234.84 3.63 SherwinWilliams SHW 249.42 5.28 ThermoFisherSci TMO 134.10 -0.63 WasteMgt WM 52.29 0.05 AtlassianClA TEAM 24.01 0.34 Viacom B VIAB 43.86 1.83
Nidec ADR NJ 16.70 0.12 Goodyear GT 28.79 0.98 NewsCorpClA NWSA 12.80 0.30
PrincipalFinancial PFG 37.94 0.71 ShinhanFinADR SHG 31.22 0.42 ThomsonReuters TRI 36.68 0.84 Waters WAT122.55 -5.07 Autodesk ADSK 48.42 0.45 VimpelComADR VIP 3.12 0.12
NielsenHoldings NLSN 45.57 0.84 Grifols ADR GRFS 14.96 -0.05 NewsCorpClB NWS 13.16 0.34
VodafoneGroupADR VOD 31.65 0.66
NikeClB NKE 61.11 0.41 Procter&Gamble PG 78.81 1.96 SignetJewelers SIG 118.60 -0.11 3M MMM 144.78 7.21 WeatherfordIntl WFT 5.78 0.13 ADP ADP 80.89 0.80 HDSupplyHoldings HDS 25.57 0.73 NorthernTrust NTRS 59.85 1.06
WPPADR WPPGY 105.59 1.81
NipponTelegraphADR NTT 39.70 0.27 ProgressiveCorp PGR 29.49 -0.01 SilverWheaton SLW 11.21 0.60 Tiffany TIF 62.48 1.55 WellsFargo WFC 48.26 0.60 AvagoTech AVGO124.39 -0.10 Hasbro HAS 72.33 1.42 NorwegianCruise NCLH 48.61 1.29
s NiSource ProgressWasteSol BIN 28.07 0.44 SimonPropertyGroup SPG 190.14 4.99 TimeWarnerCable TWC 179.17 -0.63 Welltower HCN 66.00 -0.75 B/EAerospace BEAV 40.90 0.95 WalgreensBootsAll WBA 79.44 0.73
NI 20.31 -0.07 HenrySchein HSIC 148.86 4.16 NuanceComms NUAN 18.11 0.45
Prologis PLD 39.85 1.63 SixFlagsEnt SIX 49.40 1.45 TimeWarner TWX 71.99 2.24 WestarEnergy WR 41.37 0.35 BaiduADR BIDU 167.08 -0.46 HOLX 36.44 0.75 NVIDIA NVDA 28.70 0.28 WesternDigital WDC 45.34 2.87
NobleEnergy NBL 28.76 1.49 Hologic
WholeFoods WFM 29.11 0.26
NokiaADR NOK 7.28 0.12 PrudentialFin PRU 69.11 1.23 SkechersUSAClA SKX 27.81 0.57 t Toll Bros TOL 27.56 0.61 WesternGasEquity WGP 28.40 0.38 BedBath BBBY 44.06 0.67 JBHunt JBHT 71.39 2.56 OReillyAuto ORLY 249.85 5.96
NomuraHoldingsADR NMR 5.12 0.06 PrudentialADR PUK 38.10 1.06 SmithAO AOS 68.48 4.32 Torchmark TMK 52.90 0.68 WesternGasPartners WES 33.46 0.59 Biogen BIIB 259.87 -2.23 t HuntingtonBcshs HBAN 8.05 -0.75 OldDominionFreight ODFL 53.24 1.91 WillisTowersWatson WLTW 111.00 0.88
Nordstrom JWN 48.04 1.17 PublicServiceEnt PEG 39.38 0.40 Smith&NephewADR SNN 33.21 0.81 TorontoDominionBk TD 36.12 0.97 WesternUnion WU 17.30 0.36 BioMarinPharm BMRN 86.04 1.03 IACInteractv IAC 51.69 0.43 OpenText OTEX 47.85 1.13 WynnResorts WYNN 63.41 2.41
NorfolkSouthern NSC 68.90 1.17 PublicStorage PSA 253.47 5.96 Smucker SJM 122.93 1.08 TotalADR TOT 43.07 1.73 WestlakeChemical WLK 45.54 1.76 BlackBerry BBRY 7.02 0.20 IdexxLab IDXX 65.79 -0.08 Paccar PCAR 47.55 1.84 Xilinx XLNX 48.35 0.85
NorthropGrumman NOC 182.50 0.67 PulteGroup PHM 16.33 0.42 SnapOn SNA 159.06 5.63 TotalSystemSvcs TSS 46.00 0.77 WestpacBankingADR WBK 21.60 0.46 Broadcom BRCM 54.47 0.42 IPG Photonics IPGP 80.90 0.97 PaneraBreadClA PNRA 187.29 2.91 Yahoo YHOO 29.98 0.20
Novartis ADR NVS 82.64 1.02 Qihoo360Technology QIHU 71.27 -0.16 SOQUIMICH ADR SQM 15.18 -0.05 ToyotaMotorADR TM 114.35 0.94 WestRock WRK 32.08 -0.03 CA CA 26.85 0.60 IcahnEnterprises IEP 52.56 -0.34 Paychex PAYX 47.71 0.30 Zynga ZNGA 2.41 0.03
NovoNordiskADR NVO 55.19 -0.07 QuestDiag DGX 66.23 0.66 SonyADR SNE 21.23 0.10 TransCanada TRP 33.48 1.31 Weyerhaeuser WY 24.75 0.24 CBOE Holdings CBOE 63.89 0.54 Illumina ILMN 172.90 -1.58 PayPalHoldings PYPL 31.97 0.50
Nucor NUE 36.54 1.68 QuintilesTransnat Q 63.50 0.50 Southern SO 47.58 0.19 TransdigmGrp TDG 225.50 5.37 Whirlpool WHR 134.25 1.03 CDKGlobal CDK 43.68 0.74 Incyte INCY 76.04 -2.27 People'sUnitedFin PBCT 14.11 0.47
NYSE MKT
NuSTAREnergy NS 30.37 0.17 RELXADR RENX 16.00 ... SoCopper SCCO 24.99 1.50 TransUnion TRU 24.37 -0.11 WhiteWaveFoods WWAV 37.57 1.19 CDW CDW 38.42 0.47 Intel INTC 29.94 0.34 PilgrimPride PPC 21.65 0.20 BritishAmTobADR BTI 105.39 1.98
OGEEnergy OGE 25.09 0.55 RELXADR RELX 17.11 ... SowestAir LUV 38.37 0.17 TravelersCos TRV 103.25 1.17 Williams WMB 20.42 2.11 CH Robinson CHRW 64.07 1.35 InteractiveBrokers IBKR 31.67 -0.13 Premier PINC 31.99 0.08 CheniereEnergy LNG 29.07 -0.32
ONEOK OKE 24.30 0.68 RPM RPM 39.00 0.53 SovranSelfStorage SSS 111.53 2.93 TurkcellIletismADR TKC 8.48 0.22 WilliamsPartners WPZ 22.21 0.07 CMEGroupClA CME 86.37 1.73 Intuit INTU 92.64 0.91 PricelineGroup PCLN 1111.54 13.61 CheniereEngyPtnr CQP 23.04 0.33
ONEOKPartners OKS 26.09 -0.07 RalphLaurenA RL 109.12 2.59 SpectraEnergy SE 26.69 0.33 TurquoiseHillRscs TRQ 1.88 0.10 WilliamsSonoma WSM 51.59 0.28 CSX CSX 22.27 0.30 IntuitiveSurgical ISRG 545.24-12.98 Qiagen QGEN 22.76 -0.07 ImpOil IMO 28.93 1.29

New Highs and Lows | WSJ.com/stocks Stock

52-Wk %
Sym Hi/Lo Chg Stock
52-Wk %
Sym Hi/Lo Chg Stock
52-Wk %
Sym Hi/Lo Chg Stock
52-Wk %
Sym Hi/Lo Chg Stock
52-Wk %
Sym Hi/Lo Chg Stock
52-Wk %
Sym Hi/Lo Chg
The following explanations apply to the New York Stock Exchange, NYSE Arca, NYSE MKT and Nasdaq Stock CostamarePfdC CMREpC 12.28 5.4 NetSuite N 64.38 -1.5 FirstTrEmgMkLocal FEMB 38.25 -0.6 NabrivaTherapADR NBRV 6.74 -6.7
Market stocks that hit a new 52-week intraday high or low in the latest session. Cubic CUB 39.50 1.0 NewRelic NEWR 27.95 0.1 NYSE Arca lows - 11 Nasdaq lows - 81 FlexPharma FLKS 8.79 -2.9 NationalCommerce NCOM 20.50 2.1
% CHG-Daily percentage change from the previous trading session.
Danaher DHR 81.25 0.4 NimbleStorage NMBL 6.09 3.5 CSOPFTSEChinaA50 AFTY 11.69 -2.3 AccuShSptCBOEVIXUp VXUP 11.91 -2.7 ForwardAir FWRD 36.57 2.1 NortchSys NSYS 3.64 4.2
Tuesday, January 26, 2016 DillrdCapTr DDT 25.36 -0.3 NuveenHiIncmDec18 JHA 9.75 -1.9 DeutschextrkrsCSI300ChinaA-SharesHdgEquity ASHX 19.98 -3.6 AlphaMarkActiveMgd SMCP 18.35 1.9 OxfordLaneCapPfd. OXLCN 23.03 -2.1
FoundationMedicine FMI 13.77 -3.0
52-Wk % 52-Wk % 52-Wk % ENSCO ESV 8.77 3.6 OFGBancorp OFG 4.78 2.9 DeutscheXHarCSI300 ASHR 21.92 -3.5 AmCapSeniorFloat ACSF 8.09 0.9 G&KServicesClA GK 51.94 4.1 PCM PCMI 8.11 -2.3
Stock Sym Hi/Lo Chg Stock Sym Hi/Lo Chg Stock Sym Hi/Lo Chg FNB Cp FNB 11.16 3.4 OMAssetManagement OMAM 10.72 -3.1 ArcticCat ACAT 11.13 -7.3 ParkCityGroup PCYG 8.37 1.1
DeutscheXCSI500ChA ASHS 30.09 -5.0 GuidanceSoftware GUID 4.57 0.6
RegencyCtrs REG 71.39 2.6 AspenInsHldg pfA AHLpA 23.85 0.1 GOLLinhasADR GOL 0.24 -7.4 PackCpAm PKG 48.73 -1.0 DBXInvGradeBd IGIH 22.92 0.5 AscentCapGrpA ASCMA 9.95 -1.6 Handy&Harman HNH 15.61 2.4 PerformantFin PFMT 1.63 ...
NYSE highs - 20 RoyalBkCanadaPfdC2 RYpT 30.02 5.0 AutohomeADR ATHM 24.35 -2.1 GenesisHealthcare GEN 1.55 -9.7 PartyCityHoldco PRTY 8.87 3.8 ETRACSWFBusDev BDCZ 18.26 -2.9 Astrotech ASTC 1.12 8.0 HorseheadHolding ZINC 0.20 15.2 PremierExhibitions PRXI 0.46 -6.3
BlkRkMuniAssets MUA 14.74 1.0 RoyalBkCanadaPfdC1 RYpS 26.00 2.2 BB&T BBT 30.99 1.2 GlblPwrEquipment GLPW 2.59 -1.1 PennyMacFinSvcsClA PFSI 11.27 2.7 GugChRE TAO 16.42 1.0 CBPharmaAcqn CNLM 9.25 -2.1 HuntingtonBcshs HBAN 7.83 -8.5 QIWIADR QIWI 12.69 0.3
CampbellSoup CPB 55.17 1.0 ServiceMasterGlb SERV 40.33 1.1 BancorpSouth BXS 19.20 0.6 GraceWR GRA 79.71 -3.5 PlanetFitnessClA PLNT 13.58 -2.7 iShCurrHdgIntlHY HHYX 23.46 -0.3 CapniaWt CAPNW 0.12 -44.4 IndlSvcsofAmerica IDSA 1.15 -4.2 Rapid7 RPD 12.09 -2.9
CoreSiteRealty COR 63.79 2.5 SymetraFincl SYA 32.00 0.3 Bk Hawaii BOH 54.55 3.3 GranayMonteroADR GRAM 2.20 -4.8 PolarisIndustries PII 69.06 -9.1 KraneBoseraChinaA KBA 27.32 -4.3 Cardtronics CATM 29.66 1.0 InteractiveIntel ININ 21.42 1.2 RenewableEnergy REGI 6.14 -1.0
DRDGOLDADR DRD 3.43 13.8 TelekmIndonesiaADR TLK 47.45 2.6 BitautoHldgsADR BITA 18.77 -2.3 GrphPackHldg GPK 10.83 1.1 Praxair PX 95.94 2.1 CareerEducation CECO 2.56 -2.8 Resonant RESN 1.71 -1.1
MktVtrsChinaAMCA PEK 34.67 -4.1 InterceptPharm ICPT 105.20 -2.1
EDR 39.52 3.2 UMHPropPfdB UMHpB 27.40 3.6 BrasilAgroADR LND 2.35 -10.1 Greatbatch GB 38.99 -1.3 Quantum QTM 0.65 1.1 Chiasma CHMA 8.36 2.8 S&TBancorp STBA 25.40 0.3
EduRltyTr PowerSharesChinaA CHNA 23.50 -3.0 InterDigital IDCC 41.01 2.4
MidAmApt MAA 94.87 2.5 CDI CDI 4.54 3.6
HarleyDavidson HOG 38.14 -3.8 RadianGroup RDN 9.29 1.4 Cnova CNV 2.08 -4.0 Sajan SAJA 3.02 -11.4
KBSFashionGroup KBSF 0.35 -4.8
NewJerseyResources NJR 35.47 3.0 NYSE lows - 74 CIT Grp CIT 29.32 0.7
HealthSouthWt HLS/WS 1.70 -5.8 Regal A RGC 16.50 -0.5 NYSE MKT highs - 1 CombiMatrix CBMX 0.42 4.1
KEYWHolding KEYW 4.35 4.7
SalemMediaGroup SALM 3.75 0.8
IHSClA IHS 96.22 1.0 ResoluteForestProd RFP 5.50 2.0 Conns CONN 13.00 2.1 SinovacBiotech SVA 4.38 -5.1
NiSource NI 20.67 -0.3 ArlingtonAssetNt23 AIW 16.44 -2.7 CNAFinancial CNA 31.74 1.5 PacGE pfC PCGpC 28.00 3.9 LDRHolding LDRH 16.62 1.5
IndustrsBachocoADR IBA 41.86 -0.9 Toll Bros TOL 26.75 2.3 Cowen8.25%Nts2021 COWNL 20.97 -3.4 SkySolarADR SKYS 3.66 -7.2
NuvGA Fd2 NKG 13.85 0.4 ArlingtonAssetNt25 AIC 16.70 2.6 CSRA CSRA 26.06 1.2 MYRGroup MYRG 17.88 2.4
JMPGrpNt2023 JMPB 22.52 -3.6 TrecoraResources TREC 9.23 -0.7 NYSE MKT lows - 1 CryoPort CYRX 1.80 -9.5 Stratasys SSYS 14.88 -4.0
ONEGas OGS 53.57 2.1 ArmstrongWInd AWI 36.48 2.6 Cenveo CVO 0.55 -16.7 MaidenHoldings MHLD 12.12 3.4
JMPGroupNts2021 JMPC 19.54 2.6 UBSGroup UBS 16.07 1.5 DigiInternational DGII 8.43 4.8 SunHydraulics SNHY 24.00 3.6
PPLCapFundingNts PPX 26.70 0.2 Ashland ASH 91.50 0.1 ChinaLifeInsADR LFC 11.74 -1.9 OncoCyte OCX 2.45 -0.7 MarinePetroleumUn MARPS 3.07 -5.8
JanusCapitalGroup JNS 11.33 1.0 USG USG 15.85 -0.7 DscvryLbs DSCO 1.42 ... Tessco Tech TESS 17.40 -12.1
PrecisionCastparts PCP 234.87 1.6 AsiaPacificFund APB 8.90 0.9 ClubCorpHoldings MYCC 11.64 -3.6 Marketo MKTO 20.18 -1.5
JonesEnergyClA JONE 1.73 5.1 ValeADR VALE 2.13 3.3 Nasdaq highs - 6 DragonWaveWt DRWIW 0.00 -35.0 BancpBk TBBK 4.30 -0.9
RLI RLI 64.00 5.4 AspenAerogels ASPN 4.46 -0.2 Corts PECO KTH KTH 30.05 -4.8 VHI 1.08 -4.1 MattressFirmHldg MFRM 37.14 -1.5
JPMChinaRegion JFC 12.35 -0.9 Valhi EchoStar SATS 30.86 2.5 Transgenomic TBIO 0.62 ...
KBR KBR 13.02 8.1 Veritiv VRTV 28.38 AmerIndep AMIC
4.0 20.12 -0.9 ElevenBiotherap EBIO 0.33 -5.0 Medivation MDVN 34.50 -4.6 UraniumResources URRE 0.34 -2.8
Online>> KronosWorldwide KRO
LeggMason LM
3.94 11.0
29.40 0.8
WalterInvMgmt WAC
XeriumTechnologies XRM
8.86
8.35
ConnecticutWater CTWS
-1.2
II-VI
-1.7 IIVI
41.23 1.9
19.76 14.9
EmmComm pfA EMMSP
Endologix ELGX
1.58 -7.1
7.52 1.3
MercerIntl
Mimecast
MERC 7.04 3.2
MIME 6.77 -9.9
VOXXInternational VOXX
Videocond2hADR VDTH
4.44 -0.4
6.10 0.3
During the trading day, 52-week highs and lows are updated hourly MSGNetworksClA MSGN 16.69 -5.4 RMRGroupClA RMR 22.75 3.7 Enteromedics ETRM 1.01 -11.3 Misonix MSON 7.35 -2.1 VoyagerTherapeutic VYGR 10.78 -6.2
at WSJMarkets.com. Lists for each market are available free, along NLIndustries NL 1.92 -4.0 NYSE Arca highs - 1 SGOCO Group SGOC 6.40 15.8 FibrocellScience FCSC 2.67 -3.9 NF EnergySaving NFEC 0.52 25.2 XTLBiopharmADR XTLB 0.82 -2.9
with easy access to charts and headlines. NatuzziADR NTZ 1.38 -2.1 DB3xJapanGovtBdFut JGBT 28.23 -1.6 SparkEnergy SPKE 25.57 5.9 FirstGuarantyBcshs FGBI 14.60 1.1 NMIHoldingsClA NMIH 4.69 3.2 ZillowGroupClA ZG 20.03 2.9

Bonds | WSJ.com/bonds
Tracking Bond Benchmarks
Return on investment and spreads over Treasurys and/or yields paid to investors compared with 52-week highs and lows for different types of bonds
Total return Yield (%), 52-Week Range l Latest Total return Yield (%), 52-Week Range l Latest
close YTD total return (%) Index Latest Low 0 4 8 12 16 20 High close YTD total return (%) Index Latest Low 0 4 8 12 16 20 High
1845.64 1.1 Broad market Barclays Aggregate 2.420 1.920 l 2.630 503.37 1.8 Germany 0.520 0.160 l 1.040
2472.38 0.1 U.S. Corporate Barclays Capital 3.680 2.780 l 3.710 279.70 0.5 Japan 0.610 0.610 l 0.890
0.2 551.50 1.6 Netherlands 0.680 0.240 l 1.130
2422.48 Intermediate 3.090 2.210 l 3.120
847.97 2.8 U.K. 2.060 1.730 l 2.480
3144.89 -0.2 Long term 5.060 4.030 l 5.110
662.38 -1.2 Emerging Markets ** 6.971 5.679 l 7.128
523.30 0.8 Double-A-rated 2.580 1.980 l 2.700
608.98 -0.5 Triple-B-rated 4.400 3.280 l 4.400 *Constrained indexes limit individual issuer concentrations to 2%; the High Yield 100 are the 100 largest bonds In U.S. - dollar terms Euro-zone bonds
** EMBI Global Index Sources: S&P Dow Jones Indices; Merrill Lynch; Barclays Capital; J.P.Morgan
323.02 -2.3 High Yield Constrained Merrill Lynch 9.329 5.853 l 9.771
267.16 -4.3 Triple-C-rated 19.364 10.017 19.774
l

2330.87 -1.8 High Yield 100 8.199 5.016 l 8.696 Corporate Debt
297.02 -2.3 Global High Yield Constrained 8.968 5.894 l 9.295 Price moves by a company’s debt in the credit markets sometimes mirror and sometimes anticipate moves in
257.78 -2.0
that same company’s share price. Here’s a look at both for two companies in the news.
Europe High Yield Constrained 6.154 3.550 l 6.412
Investment-grade spreads that tightened the most…
1598.57 1.1 U.S Agency Barclays 1.440 1.110 l 1.680 Spread*, in basis points Stock Performance
1440.82 0.8 10-20 years 1.240 0.940 l 1.480 Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg

3109.12 3.4 20-plus years 3.040 2.490 l 3.370 Williams WMB 3.700 Jan. 15, ’23 944 –77 1077 20.42 11.52
Williams Partners WPZ 6.125 July 15, ’22 890 –56 n.a. 22.21 0.32
1926.38 1.0 Mortgage-Backed Barclays 2.590 2.280 l 2.900
American Express AXP 6.800 Sept. 1, ’66 621 –44 340 55.09 0.13
1903.96 0.9 Ginnie Mae (GNMA) 2.510 2.170 l 2.860 Anglo American Capital AALLN 3.625 May 14, ’20 1228 –37 1375 ... ...
1126.95 1.1 Fannie mae (FNMA) 2.600 2.320 l 2.910 Freeport–McMoRan FCX 2.375 March 15, ’18 2485 –37 2397 4.20 6.60
1734.41 1.1 Freddie Mac (FHLMC) 2.630 2.320 l 2.930 Bhp Billiton Finance USA BHP 6.250 Oct. 19, ’75 518 –34 563 … …
503.94 0.9 Muni Master Merrill Lynch 1.609 1.475 l 2.099 Continental Resources CLR 4.500 April 15, ’23 1069 –34 1168 18.84 10.56
Bbva Bancomer S.A. de C.V. BBVASM 7.250 April 22, ’20 381 –30 n.a. ... ...
352.68 1.2 7-12 year 1.607 1.498 l 2.144
389.64 0.8 12-22 year 2.031 1.924 l 2.636 …And spreads that widened the most
370.34 0.9 22-plus year 2.719 2.542 l 3.351 Freeport–McMoRan FCX 3.550 March 1, ’22 1832 62 1597 4.20 6.60
2239.34 0.1 Yankee Barclays 3.030 2.390 l 3.110 Devon Energy DVN 6.300 Jan. 15, ’19 791 48 773 24.56 7.86
Noble Holding International NE 4.625 March 1, ’21 1683 46 n.a. … …
529.18 1.5 Global Government J.P. Morgan 1.410 1.240 l 1.780
SESI SPN 7.125 Dec. 15, ’21 1305 41 1069 9.18 6.87
761.67 0.8 Canada 1.570 1.380 l 1.970
Williams Partners WPZ 4.500 Nov. 15, ’23 736 36 n.a. 22.21 0.32
362.16 1.2 EMU 1.081 0.724 l 1.609
Ensco ESV 5.750 Oct. 1, ’44 805 25 755 9.18 3.61
692.59 1.5 France 0.910 0.490 l 1.360
American International AIG 4.800 July 10, ’45 252 23 220 55.91 0.99
ConocoPhillips COP 1.500 May 15, ’18 280 21 n.a. 35.35 3.36
Global Government Bonds: Mapping Yields High-yield issues with the biggest price increases…
Yields and spreads over or under U.S. Treasurys on benchmark two-year and 10-year government bonds in Bond Price as % of face value Stock Perfomance
selected other countries; arrows indicate whether the yield rose(s) or fell (t) in the latest session Issuer Symbol Coupon (%) Maturity Current One-day change Last week Close ($) % chg

Country/ Yield (%) Spread Under/Over U.S. Treasurys, in basis points AK Steel AKS 7.625 May 15, ’20 40.000 4.50 n.a. 2.00 9.29
Coupon (%) Maturity, in years Latest(l) 0 20 40 60 80 100 120 Previous Month ago Year ago Latest Prev Year ago Sprint Capital S 6.900 May 1, ’19 75.750 4.28 79.500 … …
1.000 U.S. 2 0.832 t l 0.861 0.998 0.519 Men's Wearhouse MW 7.000 July 1, ’22 68.250 3.38 64.000 12.61 6.23
2.250 10 1.995 t l 2.005 2.242 1.827 Cleaver–Brooks CLEAVB 8.750 Dec. 15, ’19 94.250 3.25 n.a. ... ...
5.500 Australia 2 1.960 l 1.960 2.037 2.131 112.8 110.0 161.2 Memorial Production Partners MEMP 7.625 May 1, ’21 29.875 3.25 25.750 2.13 9.79
3.250 10 2.690 l 2.690 2.773 2.645 69.5 68.6 81.8 A. M. Castle CAS 12.750 Dec. 15, ’16 71.000 3.00 n.a. 1.55 –0.64
4.250 France 2 -0.378 t l -0.370 -0.283 -0.076 -121.0 -123.0 -59.5 Toys R US TOY 7.375 Oct. 15, ’18 65.000 2.50 60.000 ... ...
1.000 10 0.747 t l 0.789 0.990 0.581 -124.8 -121.6 -124.6 Energy Transfer Equity ETE 5.875 Jan. 15, ’24 74.500 2.25 70.500 9.90 7.96
0.500 Germany 2 -0.452 s l -0.455 -0.328 -0.143 -128.4 -131.5 -66.2 …And with the biggest price decreases
1.000 10 0.376 t l 0.396 0.631 0.358 -161.9 -160.9 -146.9
Telecom Italia Capital S.A. TITIM 6.000 Sept. 30, ’34 89.875 –3.06 91.890 ... ...
4.500 Italy 2 0.003 t l 0.014 0.109 0.347 -82.9 -84.7 -17.2 Peabody Energy BTU 6.000 Nov. 15, ’18 10.200 –3.05 11.000 4.01 7.51
2.000 10 1.511 t l 1.562 1.668 1.478 -48.4 -44.3 -34.9 Chesapeake Energy CHK 6.500 Aug. 15, ’17 50.750 –2.25 52.000 3.19 8.14
0.100 Japan 2 -0.026 t l -0.024 -0.010 -0.017 -85.8 -88.5 -53.5 Midcontinent Express Pipeline MCEXPP 6.700 Sept. 15, ’19 74.750 –2.25 n.a. ... ...
0.300 10 0.219 t l 0.225 0.279 0.225 -177.6 -177.9 -160.2 SemGroup SEMG 7.500 June 15, ’21 79.000 –2.25 n.a. 20.68 6.87
0.500 Spain 2 0.015 s l 0.009 0.123 0.367 -81.7 -85.2 -15.2 Mercer International MERC 7.750 Dec. 1, ’22 94.000 –2.00 101.750 7.40 3.21
Taylor Morrison Communities TAYMON 5.250 April 15, ’21 93.875 –1.63 n.a. ... ...
2.150 10 1.651 t l 1.725 1.849 1.350 -34.4 -27.9 -47.7
Invista Finance INVSTA 4.250 Oct. 15, ’19 96.000 –1.50 n.a. ... ...
1.000 U.K. 2 0.417 t l 0.420 0.618 0.368 -41.5 -44.0 -15.1
2.000 10 1.693 s l 1.690 1.922 1.514 -31.5 -31.3 *Estimated spread over 2-year, 3-year, 5-year, 10-year or 30-year hot-run Treasury; 100 basis points=one percentage pt.; change in spread shown is for Z-spread.
-30.2
Note: Data are for the most active issue of bonds with maturities of two years or more
Source: Tullett Prebon Sources: MarketAxess Corporate BondTicker; WSJ Market Data Group
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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C10 | Wednesday, January 27, 2016 * *** THE WALL STREET JOURNAL.

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

The Risks of Apple: Is Peak iPhone at Hand? OVERHEARD

An All-In Having rushed out to buy there is some value in get- Rabbit season. Duck sea-

Macau Bet last year’s iPhone, Apple’s

customers aren’t in any
hurry this time around.
On Hold
Apple’s iPhone unit shipments,
ting the bad news out of the
way. Investors already have
clipped more than $150 bil-
son. Pharma season?
The value proposition from
big deals is becoming more
change from a year earlier
The gambling mecca of That fear has hung over lion off Apple’s market value attractive to Johnson & John-
Macau didn’t kick off the year Apple’s stock for months. 60% in the last six months—more son. The health-care titan,
with a bang, and that is a prob- And it was confirmed by the than the gross domestic which reported fourth-quarter
lem for Wynn Macau. company’s fiscal first-quar- 40 product of two-thirds of the results Tuesday, indicated the
According to brokers’ esti- ter results reported after the world’s countries. bull market for health-care,

David Paul Morris/Bloomberg News

mates, gross gaming revenue in market’s close Tuesday, as Excluding net cash, Apple pharma and biotech stocks
the Chinese casino hub is set to well as its outlook for the 20 trades at about 7.5 times for- had restrained its interest in
fall nearly 30% year over year current fiscal period that ward earnings. That is still hunting for large transactions.
this month—the 20th consecu- ends in March. 0 0% the cheapest multiple among Now, though, the beating
tive month of decline. The At two-thirds of the com- 2Q projection
its big tech peers. many shares have taken, es-
growing gambling depression pany’s total business, the Even so, a lowly valuation pecially among highflying bio-
–20
is particularly painful for heav- svelte iPhone weighs heavy and getting the bad news out tech names, makes things
ily leveraged Wynn Macau. on Apple’s prospects. Unit FY 2013 ’14 ’15 ’16 of the way won’t drive the look a bit more reasonable.
The Macau offshoot of bil- sales of the iPhone were flat Sources: the company, FactSet (projection) stock back up on their own. “As we reflect back on 2015,
lionaire Steve Wynn’s gambling compared with the same pe- THE WALL STREET JOURNAL. Apple CEO Tim Cook Historically, Apple tends to we realize that the…market
empire has an exorbitant net- riod last year, when the pop- move on product buzz. was premium-priced,” Chief
debt-to-equity ratio of 627%— ular iPhone 6 boosted sales expected to land in the range Again, currency pressure Reports of a new, lower- Executive Alex Gorsky said in
the highest among the six by 46%. Apple’s total reve- of $50 billion to $53 bil- and the iPhone are the main priced iPhone to launch in response to a question asking
Macau operators. The company nue grew just 2% in the most lion—the midpoint of which culprits here. While the com- April could help. The trick why J&J hadn’t been more
has racked up debt to pay for a recent quarter, though the is down 10% from the same pany doesn’t issue forecasts for Apple: Prove that such a aggressive last year.
new megaresort set to open in company says this would period last year. Apple hasn’t for specific products, Wall device will expand the Of course, J&J investors
June. have been 8% if not for ad- posted a quarterly revenue Street already was projecting iPhone’s reach without going aren’t likely to be worried
The $4.1 billion Wynn Palace verse currency impacts. decline since March 2003, an 11% decline in iPhone unit down market. Do that, and about its timidity in what
is the company’s attempt to Notably, Apple projected back when the bulk of its sales for the period, on a Apple could take its stock proved to be a year of record-
win back revenue in a shrink- an actual sales decline for its business still came from Mac year-over-year basis. upmarket once again. breaking deal volume. If any-
ing pool. Historically, the com- March quarter. Revenue is computers. That sounds bleak, but —Dan Gallagher thing, they would probably
pany’s revenue came from high like to see J&J maintain its
rollers—who have taken a big discipline. To that end, Mr.
hit because of China’s anticor-
ruption drive.
The all-in wager, however,
Taking a Closer Look at AIG’s Icahn Defense Gorsky said that the com-
pany would act only “when
we see the right value-creat-
raises balance-sheet concerns. A much more transparent businesses and whether closures. The company needs sures. It took banks years to ing deal, at the right price
Moody’s downgraded the com- AIG would likely be a more keeping them under one roof to make them more than ful- develop theirs—and these and with the right partners.”
pany’s bonds by one notch last valuable AIG. Half measures, creates or destroys value. some. Beyond just revenues, are still too opaque. And Discipline doesn’t have to
week, sending yields over 9%, however, won’t cut it. And better disclosure profitability, assets and lia- even as AIG promised more mean delay, though. And Mr.
compared with less than 6% in The insurance giant said would add significant credi- bilities, AIG needs to dis- transparency on Tuesday, it Gorsky indicated that the
early 2015. The ratings com- Tuesday it plans to reorga- bility to management’s close each unit’s business disclosed a $3.6 billion re- year now underway may be
pany is concerned that the nize into nine separate busi- promises to improve the per- model, key risks that arise serve build that it explained different. “As we look at the
mega resort is going to only in- ness units and provide in- formance of its business from them and how those only in vague terms. environment today, we see a
tensify Macau’s oversupply sit- vestors with individual lines, raise its return on eq- risks are measured. AIG chief Peter Hancock number of opportunities”
uation, with several other new financial metrics for each. uity and shed businesses The more granular, the bet- has said the that firm’s des- across J&J’s business lines, he
casinos being built. The com- Borrowing a page from big that don’t meet financial ter. Investors should be told ignation as a systemically said. Having ended the fourth
pany doesn’t have debt coming banks, it also will create a targets. Investors will be far more about the assets and important financial institu- quarter with $18.5 billion in
due until the end of 2018. But “legacy” portfolio to hold able to “trust but verify.” securities that are on AIG’s tion is a “red herring.” Activ- net cash, Mr. Gorsky and J&J
Wynn Palace will need to gen- “nonstrategic assets.” That has been the case at balance sheet, how they are ist investor Carl Icahn and have more than enough
erate cash quickly once it This may ultimately be the biggest U.S. banks. Im- valued, and where they are others are skeptical, believ- money to go shopping.
opens to relieve the balance- more important than asset proved bank disclosure in re- held in the corporate struc- ing far more capital could be Last year, J&J zagged as
sheet stress. Otherwise, fresh sales and more aggressive cent years has played a role ture. The company also returned if the company the market zigged. That
equity may be required. capital-return plans the com- in encouraging these firms should respond to continuing broke itself up and shed the strategy paid off for inves-
Wynn Macau and its U.S.- pany also announced. Inves- to shed underperforming market developments as too-big-to-fail mantle. tors: J&J’s stock has outper-
listed parent, Wynn Resorts, tors able to observe the per- businesses, improve effi- banks have when, for exam- If investors really can see formed both the NYSE Arca
have seen their stocks fall more formance of individual units ciency and optimize balance ple, they provided far greater how the pieces of AIG are Pharmaceutical index and the
than 60% in the past year. Just will be able to assess inde- sheets around new capital detail about exposures to Eu- performing, it should be- Nasdaq Biotechnology Index
because the ante is getting pendently whether Ameri- and liquidity requirements. ropean sovereign debt. come apparent whether the so far this year and over the
lower, doesn’t mean it is a bet can International Group’s Of course, the benefit to There is reason to doubt Hancock or Icahn plan will past year. Now it may be
worth taking. management is correct in its investors will depend on the AIG will quickly improve the be better at creating value. poised to build on its lead.
—Jacky Wong view of the optimal mix of quality of AIG’s financial dis- quality of its financial disclo- —John Carney

Mutual Funds | WSJ.com/fundresearch Fund

Net YTD
NAV Chg % Ret Fund
Net YTD
NAV Chg % Ret Fund
Net YTD
NAV Chg % Ret
BANKRATE.COM® MMA, Savings and CDs
Net YTD TotBdAdml 10.73 ... 1.0 STAR 22.15 +0.18 -4.9 BalInst 28.05 +0.26 -4.0
Explanatory Notes Data provided by Fund NAV Chg % Ret TotIntBdIdxAdm 21.29 +0.02 0.9 STIGrade DevMktsIndInst 10.96 +0.15 -7.4 Average Yields of Major Banks Tuesday, January 26, 2016
10.58 ... 0.3
Top 250 mutual-funds listings for Nasdaq-published share classes with MFS Funds Class A TotIntlAdmIdx r 22.33 +0.28 -7.9 ExtndInst 57.18 +1.14-10.1
net assets of at least $500 million each. NAV is net asset value. TgtRe2015 13.78 +0.10 -3.2 Type MMA 1-MO 2-MO 3-MO 6-MO 1-YR 2-YR 2.5YR 5YR
ValueA p 30.68 +0.53 -6.4 TotStAdml 47.05 +0.71 -7.4 TgtRe2020 26.06 +0.22 -4.0 GrwthInst 51.01 +0.56 -6.9
Percentage performance figures are total returns, assuming reinvestment
MFS Funds Class I TxMIn r 10.94 +0.14 -7.4 InPrSeIn 10.33 +0.02 0.6 National average
of all distributions and after subtracting annual expenses. Figures don’t TgtRe2025 14.89 +0.14 -4.7
reflect sales charges (“loads”) or redemption fees. NET CHG is change in ValueI 30.85 +0.53 -6.4 ValAdml 29.54 +0.50 -7.2 InstIdx 173.98 +2.43 -6.8 Savings 0.09 0.07 0.07 0.09 0.14 0.23 0.37 0.38 0.80
TgtRe2030 26.24 +0.28 -5.3
NAV from previous trading day. YTD%RET is year-to-date return. 3-YR MFS Funds Instl WdsrllAdml 54.87 +1.01 -7.7 InstPlus 173.99 +2.42 -6.8 Jumbos 0.18 0.07 0.08 0.10 0.15 0.26 0.42 0.41 0.84
%RET is trailing three-year return annualized.
TgtRe2035 15.83 +0.18 -6.0
IntlEq 19.06 +0.23 -7.3 WellsIAdml 58.53 +0.37 -1.5 TgtRe2040 26.57 +0.33 -6.6 InstTStPlus 42.58 +0.64 -7.3 Weekly change
e-Ex-distribution. f-Previous day’s quotation. g-Footnotes x and s apply. Mutual Series WelltnAdml 60.76 +0.59 -4.4 TgtRe2045 16.59 +0.21 -6.7 MidCpInst 29.97 +0.54 -8.8 Savings 0.00 0.00 0.00 0.00 0.00 0.00 -0.01 0.00 -0.01
j-Footnotes e and s apply. k-Recalculated by Lipper, using updated data. GlbDiscA 26.79 +0.30 -7.2 WndsrAdml 57.99 +1.08-10.2 MidCpIstPl 147.83 +2.66 -8.8
p-Distribution costs apply, 12b-1. r-Redemption charge may apply. s-Stock TgtRe2050 26.58 +0.34 -6.7 Jumbos 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -0.01 -0.01
GlbDiscz 27.26 +0.31 -7.1 VANGUARD FDS SmCapInst 48.13 +1.05 -9.3
split or dividend. t-Footnotes p and r apply. v-Footnotes x and e apply. TgtRetInc 12.25 +0.06 -1.6
x-Ex-dividend. z-Footnote x, e and s apply. NA-Not available due to Oakmark Funds Cl I DivdGro 21.28 +0.27 -5.1 STIGradeInst 10.58 ... 0.3
TotIntBdIxInv 10.65 +0.01 0.9
incomplete price, performance or cost data. NE-Not released by Lipper; data
under review. NN-Fund not tracked. NS-Fund didn’t exist at start of period.
EqtyInc 26.89 +0.35 -5.9 GNMA
HlthCare r
10.75
204.04
+0.02
+0.97
1.0
-7.4 WellsI 24.16 +0.15 -1.5
TotBdInst
TotBdInstPl
10.73
10.73
... 1.0
... 1.0
Consumer Savings Rates
Oakmark 56.85 +0.83 -9.6 Welltn 35.18 +0.34 -4.4
OakmrkInt 19.17 +0.20-10.3 IntlVal 28.66 +0.39 -7.8 TotIntBdIdxInst 31.96 +0.04 0.9 Explanation of ratings: Safe Sound SM, (855) 733-0700, evaluates the financial condition of fed-
Tuesday, January 26, 2016 WndsrII 30.92 +0.56 -7.7
Old Westbury Fds INSTTRF2025 18.18 +0.17 -4.7 TotIntlInstIdx r 89.30 +1.11 -7.9 erally insured institutions and assigns a rank of 1,2,3,4 or 5 based on data from the second quarter
Net YTD Net YTD LifeCon 17.41 +0.10 -2.4 VANGUARD INDEX FDS TotItlInstPlId r 89.31 +1.11 -7.9
Fund NAV Chg % Ret Fund NAV Chg % Ret LrgCpStr 11.67 +0.12 -6.4 of 2015 from federal regulators. 5: most desirable performance; NR: institution is too new to rate,
LifeGro 25.67 +0.30 -5.8 500 175.70 +2.45 -6.8 TotStInst 47.06 +0.71 -7.4 not an indication of financial strength or weakness. Information is believed to be reliable, but not
American Century Inv Oppenheimer Y
ContraK 91.42 +0.73 -7.5 LifeMod 22.10 +0.19 -4.2 ExtndIstPl 141.12 +2.83-10.1 VirtusFunds Cl I
DevMktY 27.31 +0.19 -8.9 guaranteed.
Ultra 32.44 +0.25 -7.4 CpInc r 8.78 +0.02 -3.8 Primcp r 91.80 +0.83 -7.9 TotIntl 13.35 +0.17 -7.9 EmMktI 8.43 +0.06 -5.9
IntGrowY 33.66 +0.41 -6.2
American Funds Cl A DivIntl 32.33 +0.32 -7.8
Parnassus Fds PrmcpCor 19.31 +0.21 -7.3 TotSt 47.03 +0.71 -7.4 Western Asset High yield savings
AmcpA p 24.08 +0.32 -7.2 DivIntlK r 32.26 +0.32 -7.8 SelValu r 23.47 +0.53 -9.2 VANGUARD INSTL FDS CorePlusBdI 11.43 +0.02 0.2 Bank/rank Yield Bank/rank Yield
AMutlA p 32.20 +0.43 -4.9 ParnEqFd 34.57 +0.47 -6.5
GroCo 122.31 +0.61-10.4 Phone number Minimum (%) Phone number Minimum (%)
BalA p 22.88 +0.18 -4.0 PIMCO Fds Instl
GrowCoK 122.18 +0.61-10.4
AllAsset NA ... NA
BondA p
CapIBA p
12.66
54.00
+0.01 0.7
+0.71 -3.3
InvGrBd
LowP r
11.06
44.44
+0.01 0.5
+0.59 -6.9
ShortT NA ... NA Borrowing Benchmarks | WSJ.com/bonds Money market and savings account
Silvergate Bank /4 $1,000 1.11
Six-month CD
AloStar Bank of Commerce /5 $1,000 1.01
TotRt 10.07 ... 0.2
CapWGrA 40.50 +0.53 -6.6 LowPriStkK r 44.40 +0.59 -6.9 (877) 391-9381 (877) 751-0294
PIMCO Funds A
EupacA p
FdInvA p
41.97
47.05
+0.48 -7.5
+0.61 -7.2
MagIn
OTC
82.20
72.63
+0.87 -8.1
+0.44-12.9
TotRetA 10.07 ... 0.2 Money Rates January 26, 2016 iGObanking.com /3
(877) 412-1312
$25,000 1.10 EverBank /4
(877) 280-5143
$1,500 1.01

GwthA p 37.76 +0.41 -8.5 PIMCO Funds D

Puritn 19.28 +0.12 -5.2 GE Capital Bank /NR $0 1.05 California First National Bank /5 $5,000 0.90
HI TrA p 9.07 +0.02 -2.6 SrsInvGrdF 11.06 +0.01 0.4
IncomeFd NA ... NA Key annual interest rates paid to borrow or lend money in U.S. and
PIMCO Funds Instl (866) 576-7053 (877) 880-1647
ICAA p 31.39 +0.45 -5.9 StratInc 9.98 +0.01 -1.4
IncomeFd NA ... NA
international markets. Rates below are a guide to general levels but
IncoA p 19.35 +0.20 -4.3 TotalBond 10.25 +0.01 0.1 don’t always represent actual transactions. One-month CD One-year CD
PIMCO Funds P
N PerA p 33.22 +0.32 -7.8 Fidelity Selects Lone Star Bank /3 $1,000 0.15 AloStar Bank of Commerce /5 $1,000 1.26
IncomeP NA ... NA
NEcoA p 32.76 +0.28 -8.9 Biotech r 183.61 -1.72-22.2
Price Funds Inflation Other short-term rates (877) 381-3269 (877) 751-0294
NwWrldA 46.03 +0.32 -7.9 Health r 189.75 +0.20 -8.8 Dec. index Chg From (%) Week 52-Week VirtualBank /4 $10,000 0.15 My e-BAnC by BAC Florida Bank /4 $1,500 1.26
BlChip 66.01 +0.45 -8.8
SmCpA p 39.25 +0.38-10.0 Fidelity Spartan level Nov. '15 Dec. '14 Latest ago high low (877) 344-5618 (877) 878-8048
CapApp 24.06 +0.16 -4.0
TxExA p 13.16 ... 0.8 500IdxInv 66.93 +0.93 -6.8 AloStar Bank of Commerce /5 $1,000 0.10 iGObanking.com /3 $1,000 1.25
EmMktS 25.82 +0.18 -9.4
WshA p 35.88 +0.50 -6.7 500IndInst 66.94 +0.93 -6.8 U.S. consumer price index Call money (877) 751-0294 (877) 412-1312
AMG Managers Funds Fidelity Spartan Adv EqInc 26.27 +0.51 -7.7
EqIndex 51.22 +0.72 -6.8 All items 236.525 –0.34 0.7 2.25 2.25 2.25 2.00 Two-month CD Two-year CD
YacktmanFd 20.10 +0.31 -3.7 500IdxAd 66.94 +0.93 -6.8
AQR Funds ExtMktAd r 45.16 +0.90-10.0 Growth 48.65 +0.35 -9.3 Core 243.779 –0.12 2.1 Commercial paper Lone Star Bank /3 $1,000 0.15 Silvergate Bank /4 $25,000 1.47
MgdFutStrI 10.49 -0.05 3.0 IntAd r 33.27 +0.46 -7.4 HelSci 61.32 ...-10.9 (877) 381-3269 (877) 391-9381
30 to 270 days n.q. ... ... ...
Artisan Funds TotMktAd r 54.34 +0.82 -7.4 HiYield 6.02 +0.01 -2.2 International rates VirtualBank /4 $10,000 0.15 Nationwide Bank /4 $500 1.46
Intl Inv 26.73 +0.30 -6.8 First Eagle Funds InstlCapG 26.11 +0.21 -9.6 Commercial paper (AA financial) (877) 344-5618 (877) 351-8438
Intl G&I 12.15 +0.19 -7.0 Week 52-Week 0.57 0.56 0.64 0.06
BlackRock Funds A GlbA 48.44 +0.49 -5.7
Latest High Low
90 days Applied Bank /5 $0 0.05 AloStar Bank of Commerce /5 $1,000 1.46
GlblAlloc p 17.02 +0.13 -4.6 IntlStk 14.10 +0.18 -7.7 ago
FMI Funds
Euro commercial paper (877) 622-7973 (877) 751-0294
BlackRock Funds C LgCap 17.52 +0.30 -5.9 MCapGro 66.81 +0.96 -8.9
GlblAlloc t 15.50 +0.11 -4.7 FPA Funds MCapVal 23.23 +0.44 -6.9 Prime rates 30 day n.q. n.q. -0.02 -0.12 Three-month CD Five-year CD
BlackRock Funds Inst FPACres 29.01 +0.22 -6.6 N Horiz 38.36 +0.36 -9.7 U.S. 3.50 3.50 3.50 3.25 Two month n.q. n.q. -0.01 -0.09 EverBank /4 $1,500 0.55 Barclays /4 $0 2.25
EqtyDivd 19.52 +0.29 -7.0 FrankTemp/Frank Adv N Inc 9.40 ... 0.6 Canada 2.70 2.70 3.00 2.70 Three month n.q. n.q. 0.01 -0.08 (877) 280-5143 (877) 429-6548
GlblAlloc 17.12 +0.14 -4.5 IncomeAdv 1.97 +0.02 -4.8 OverS SF r 8.33 +0.13 -7.3 Japan 1.475 1.475 1.475 1.475 Four month n.q. n.q. 0.02 0.00 California First National Bank /5 $5,000 0.55 Synchrony Bank /5 $25,000 2.25
HiYldBd 6.96 ... -2.0 FrankTemp/Franklin A R2015 13.13 +0.10 -4.0 Five month n.q. n.q. 0.03 0.01 (877) 880-1647 (877) 412-8426
StratIncOpptyIns 9.68 ... -0.7 CA TF A p 7.56 -0.01 0.8 R2020 18.73 +0.16 -4.9 Policy Rates Six month n.q. n.q. 0.04 0.02 EH National Bank /2 $10,000 0.50 First Internet Bank of Indiana /4 $1,000 2.22
Davis Funds A Fed TF A p 12.44 ... 0.8 R2025 14.12 +0.14 -5.6 Euro zone 0.05 0.05 0.05 0.05 (877) 343-7302 (877) 412-9564
NYVen A 27.68 +0.42-10.4 Growth A p 68.23 +0.71 -7.0 R2030 20.47 +0.22 -6.1 0.50 0.50 0.50
Libor
Switzerland 0.50
Dimensional Fds IncomeA p 1.98 +0.02 -5.3 R2035
R2040
14.74
20.97
+0.17 -6.6
+0.25 -7.1
Britain 0.50 0.50 0.50 0.50 One month 0.43060 0.42600 0.43060 0.16800 High yield jumbos - Minimum is $100,000
5GlbFxdInc 10.99 ... 0.8 RisDv A p 45.32 +0.85 -5.1 Australia 2.00 2.00 2.50 2.00 Three month 0.62110 0.62380 0.62430 0.25210
EmgMktVa 18.39 +0.13 -9.9 FrankTemp/Franklin C SmCapStk 35.10 +0.67 -9.1 Six month 0.86425 0.85325 0.86570 0.35540 Money market and savings account Six-month CD
EmMktCorEq 14.39 +0.07 -8.7 Income C t 2.01 +0.02 -4.8 Value 28.85 +0.42 -7.7 Overnight repurchase One year 1.15120 1.14630 1.17800 0.61790
Schwab Funds Silvergate Bank /4 1.11 AloStar Bank of Commerce /5 1.01
IntlCoreEq 10.48 +0.15 -8.0 FrankTemp/Temp A 0.45 0.45 0.50 0.07 (877) 391-9381 (877) 751-0294
IntSmCo 15.82 +0.17 -8.1 GlBond A p 11.24 +0.06 -2.7 S&P Sel 29.42 +0.41 -6.8 U.S. Euro Libor
TIAA/CREF Funds ableBanking,adivisionofNortheastBank/4 1.00 EverBank /4 1.01
IntSmVa 17.06 +0.21 -8.7 Growth A p 19.88 +0.24 -9.3 One month -0.227 -0.224 -0.003 -0.227
Dimensional Fds FrankTemp/Temp Adv EqIdxInst 13.97 +0.21 -7.3 U.S. government rates Three month -0.169 -0.149 0.034 -0.169
(877) 478-0834 (877) 280-5143
Tweedy Browne Fds EH National Bank /2 0.86 My e-BAnC by BAC Florida Bank /4 0.90
US CoreEq1 15.85 +0.27 -7.7 GlBondAdv p 11.20 +0.06 -2.6 Discount Six month -0.094 -0.064 0.096 -0.094
GblValue 23.06 +0.07 -5.7 (877) 343-7302 (877) 878-8048
US CoreEq2 15.03 +0.29 -8.1 GMO Trust Class IV 1.00 1.00 1.00 0.75 One year 0.015 0.046 0.239 0.015
US Small 25.93 +0.59 -8.6 IntlEq 18.61 +0.26 -7.3 VANGUARD ADMIRAL One-month CD One-year CD
US SmCpVal 27.39 +0.72-10.2 Harbor Funds 500Adml 175.71 +2.45 -6.8 Euro interbank offered rate (Euribor)
Federal funds USAA /5 0.22 My e-BAnC by BAC Florida Bank /4 1.30
USLgVa 28.07 +0.51 -8.9 CapApInst 55.16 +0.23 -9.3 BalAdml 28.05 +0.26 -4.0
Effective rate 0.4000 0.3800 0.4000 0.0600 One month -0.231 -0.222 0.005 -0.231 (877) 344-2397 (877) 878-8048
Dodge & Cox IntlInst r 55.46 +0.75 -6.7 CAITAdml 11.95 ... 1.0
High 0.5600 0.5600 0.5900 0.2500 Three month -0.158 -0.143 0.055 -0.158 VirtualBank /4 0.15 AloStar Bank of Commerce /5 1.26
Balanced 88.65 +0.99 -6.1 Invesco Funds A CapOpAdml r 108.04 +0.99 -8.9
Low 0.3500 0.3300 0.3500 0.0100 Six month -0.082 -0.056 0.138 -0.082 (877) 344-5618 (877) 751-0294
Income 13.25 +0.01 -0.3 EqIncA 8.98 +0.10 -6.7 EMAdmr 24.48 +0.13-10.4
EqIncAdml 58.41 +0.95 -5.7 Bid 0.3800 0.3500 0.5500 0.0000 One year 0.025 0.048 0.277 0.025 AloStar Bank of Commerce /5 0.10 Synchrony Bank /5 1.25
Intl Stk 32.56 +0.51-10.7 John Hancock Class 1 (877) 751-0294 (877) 412-8426
Stock 148.00 +2.51 -9.1 LSBalncd 13.48 +0.11 -5.3 ExplrAdml 67.20 +1.17-10.1 Offer 0.5000 0.5000 0.5600 0.0500 Value 52-Week
DoubleLine Funds LSGwth 13.80 +0.14 -6.9 ExtndAdml 57.19 +1.15-10.1
Treasury bill auction
Latest Traded High Low Two-month CD Two-year CD
TotRetBdI 10.90 +0.01 1.1 John Hancock Instl GNMAAdml 10.75 +0.02 1.0 VirtualBank /4 0.15 Nationwide Bank /4 1.51
TotRetBdN 10.89 +0.01 1.0 DispValMCI 17.32 +0.29 -9.6 GrwthAdml 51.01 +0.56 -6.9 4 weeks 0.295 0.220 0.295 0.000 DTCC GCF Repo Index
(877) 344-5618 (877) 351-8438
Fidelity Advisor A JPMorgan Inst Class HlthCareAdml r 86.07 +0.42 -7.4 13 weeks 0.305 0.255 0.305 0.000 Treasury 0.465 97.714 0.639 0.059 Applied Bank /5 0.05 CIT Bank /4 1.47
NwInsghtA p 24.12 +0.29 -7.8 MdCpVal 31.51 +0.62 -7.2 HYCorAdml r 5.42 +0.01 -1.8 26 weeks 0.415 0.370 0.585 0.065 MBS 0.485 144.800 0.705 0.075 (877) 622-7973 (877) 344-7758
Fidelity Advisor I JPMorgan R Class InfProAd 25.36 +0.04 0.6
Open Implied Citizens Trust Bank /3 0.05 AloStar Bank of Commerce /5 1.46
NwInsghtI 24.57 +0.30 -7.7 CoreBond 11.69 +0.01 1.1 IntlGrAdml 61.36 +0.79 -8.5 Secondary market Settle Change Interest Rate (877) 412-4382 (877) 751-0294
Fidelity Freedom JPMorgan Select Cls ITBondAdml 11.39 +0.01 1.3
FF2020 13.80 +0.11 -5.0 CoreBond 11.67 +0.01 1.1 ITIGradeAdml 9.69 +0.01 0.7 Fannie Mae DTCC GCF Repo Index Futures Three-month CD Five-year CD
FF2025 11.73 +0.10 -5.7 USLgCpCorPls 24.36 +0.31 -9.1 LTGradeAdml 9.96 -0.09 0.9 30-year mortgage yields Treasury Jan 99.510 0.005 7063 0.490 EverBank /4 0.55 Synchrony Bank /5 2.25
FF2030 14.17 +0.15 -6.8 Lazard Instl MidCpAdml 135.69 +2.44 -8.8 (877) 280-5143 (877) 412-8426
30 days 3.335 3.384 3.750 3.052 Treasury Feb 99.535 unch. 6417 0.465
FreedomK2020 12.84 +0.11 -5.0 EmgMktEq 12.42 +0.09 -7.6 MorgAdml 71.42 +0.68 -7.5 First Internet Bank of Indiana /4 0.45 CIT Bank /4 2.25
60 days 3.365 3.418 3.788 3.105 Treasury Mar 99.465 0.005 4458 0.535
FreedomK2025 13.31 +0.12 -5.6 Loomis Sayles Fds MuHYAdml 11.39 ... 0.9 (877) 412-9564 (877) 344-7758
FreedomK2030 13.35 +0.14 -6.8 LSBondI 12.48 +0.07 -3.1 MuIntAdml 14.38 ... 1.0 AloStar Bank of Commerce /5 0.40 First Internet Bank of Indiana /4 2.22
Notes on data:
FreedomK2035 13.65 +0.16 -7.5 Lord Abbett A MuLTAdml 11.84 ... 1.0 (877) 751-0294 (877) 412-9564
ShtDurIncmA p 4.29 ... -0.2 MuLtdAdml 11.06 -0.01 0.5 U.S. prime rate is effective December 17, 2015. Discount rate is effective December 17, 2015. U.S.
FreedomK2040 13.68 +0.16 -7.5 prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks;
Fidelity Invest Lord Abbett F MuShtAdml 15.83 ... 0.2 Notes: Accounts are federally insured up to $250,000 per person effective Oct. 3, 2008. Yields
Other prime rates aren’t directly comparable; lending practices vary widely by location; DTCC GCF
AMgr50% 15.41 +0.10 -3.9 ShtDurIncm 4.29 +0.01 -0.2 PrmcpAdml r 95.10 +0.86 -7.9 Repo Index is Depository Trust & Clearing Corp.'s weighted average for overnight trades in applicable are based on method of compounding and rate stated for the lowest required opening deposit to
Balanc 20.04 +0.15 -5.6 Metropolitan West REITAdml r 109.93 +2.36 -2.7 CUSIPs. Value traded is in billions of U.S. dollars. Futures on the DTCC GCF Repo Index are traded on earn interest. CD figures are for fixed rates only. MMA: Allows six (6) third-party transfers per
BalancedK 20.04 +0.15 -5.6 TotRetBd 10.70 +0.01 0.8 SmCapAdml 48.13 +1.05 -9.3 NYSE Liffe US. month, three (3) of which may be checks. Rates are subject to change.
BluCh 62.62 +0.41 -9.2 TotRetBdI 10.70 +0.02 0.9 STBondAdml 10.49 ... 0.7 Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; Source: Bankrate.com, a publication of Bankrate, Inc., North Palm Beach, FL 33408
Contra 91.48 +0.73 -7.5 TRBdPlan 10.08 +0.02 0.9 STIGradeAdml 10.58 ... 0.3 General Electric Capital Corp.; Tullett Prebon Information, Ltd. Internet: www.bankrate.com
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Snowmobile Valhalla Indestructible

Cam Newton
A Minnesotan’s winter passion MY RIDE | D4 SPORTS | D6

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | D1

The Rise of Tech’s Late Adopters Progress in

The Hunt for
Users swipe through an average
1.4 billion-plus profiles a day in 2015.
Mr. Schinn’s friend downloads a Tinder-like The Perfect
TV Remote
dating app, Dater, onto his Blackberry in 2015.

’12 ’15 BY JOANNA STERN

Main system power on. Switch

DUSTIN SCHINN
Tinder launchesin 2012.
’09
Uber launches in 2009.
RYAN FISSEL
Fitbit launches in 2007.
’07
Nokia launches a smartphone precursor,
the Nokia 9000 Communicator, in 1996.
’96
BLAKE RECTOR
As new product cycles get shorter,
latecomers are becoming more
influential; they start out skeptical
but, once on board, remain loyal
BY CHARLIE WELLS
Dustin Schinn still isn’t sure if he wants
an iPhone.
He once gave a friend cash to order an
Uber for him because he still hasn’t down-
loaded the car-service app. A friend recently
tried to get him onto Tinder, the mobile dat-
ing service, but had to install an app called
Dater, because Mr. Schinn is still using a
Uber is available in 100
cities in 2014.
Mr. Platt gets his first
Fitbit in 2013.
WES PLATT
’07
Apple launches the first-
generation iPhone in 2007.
Mr. Rector’s old flip phone.
CLOCKWISE FROM TOP RIGHT: TINDER; UBER; FITBIT; SAMSUNG; WES PLATT; BLAKE RECTOR (2); RYAN FISSEL; DUSTIN SCHINN
Blackberry.
The 27-year-old Washington, D.C., resident
is a late adopter. And he’s proud of it. “Peo-
ple make fun of me,” Mr. Schinn says. “But I
often don’t feel the need for these new tech-
nologies...They require you to sort of con-
stantly adapt to something new, and I often
feel this is just unnecessary.”
Many people are late adopters or know
one. When it comes to technological adop-
tion, as much as 16% of the population is con-
sidered to be in the “laggard” category, with
another 34% encompassing a “late majority,”
according to a landmark 1962 study about the
spread of new ideas and technology by the
late University of New Mexico professor Ever-
ett Rogers. His theories have since been
Mr. Fissel orders his to input two, power a go. Second-
first Uber car in 2015. ary control prepped and ready.
Auxiliary volume cranked up to
level nine on third control. Prepar-
ing for liftoff at Cape Canaveral or
to find a movie to watch on a Sat-
urday night? You decide.
While Smart TVs were sup-
posed to send our idiot boxes to
graduate school,
’14 ’15 most of our living
rooms still have
cable boxes,
streaming media
Mr. Platt upgrades to a devices, Blu-ray
wrist-based Fitbit device. players, gaming consoles and
sound systems—along with the re-
motes to control them.
Universal remotes were sup-
posed to solve this, but their jum-
bled mess of buttons have long
made things more difficult. That
is, if you ever figured out how to
’12 ’13 ’15 program one in the first place.
Like me, you probably admitted
defeat and bought an unsightly re-
mote control basket.
It may be time to reconsider.
The addition of touch screens, Blu-
Fitbit sells 1.3 million etooth and Wi-Fi has given birth
devices in 2012. to a smarter, easier-to-use genera-
tion of universal remotes.
After testing eight, including
options that use your phone, I
found the new $250 Ray Super Re-
mote to be the biggest help in my
family room. But don’t get your
’15
hopes up: Outdated technology
still stands in the way of a frustra-
Mr. Rector buys his first tion-free experience and if you
have newer devices you’ll lose out
smartphone, a Samsung on features.
Galaxy Core Prime in 2015. Sure, you can still get a $13
universal remote at CVS, but Log-
itech’s Harmony line has long
dominated the $50-and-up cate-
gory. Why so much? These sleek
widely applied to everything from laptop remotes control up to 15 devices,
computers to mobile phones. don’t require programming codes
Generally speaking, late adopters are peo- and many have screens.
ple who buy a product or service after half of Over three months, I tested the
a population has done so. $80 Harmony 650, $250 Ultimate
They tend to share certain characteristics: One and $350 Elite and found
They are skeptical of marketing and tend to them to be best at single actions.
point out differences between advertised The programmable Watch TV but-
claims and the actual product. They often ton takes care of everything I need
value a product’s core attributes, ignoring the to watch cable, including setting
bells and whistles intended to upsell the lat- my TV to the HDMI 1 input. No
est model. They may not try something new more nagging when your visiting
until weeks, months or even years after the uncle wants to watch “Judge
crowd has moved on. Judy.”
A 19th century French sociologist, Gabriel Of all the Logitechs, I unsur-
Tarde, explored how technologies spread as a prisingly liked the most expensive
Please see LATE page D2 best. Unlike the other models, you
program the Elite using your
Please see REMOTES page D3

52 Years and Counting: The Power of Daily Writing

BY CLARE ANSBERRY

Charley Kempthorne wakes

each morning before sunrise,
pours a cup of black coffee, opens
his computer and writes in a pri-
vate journal that he began in 1964.
These days, he logs between 1,000
and 3,000 words a day. By his
rough calculations, his journal is
JORDAN STEAD FOR THE WALL STREET JOURNAL (2)

about 10 million words long.

Some passages are narrative
scenes from his past and others
reflections about why
TURNING he started believing
POINTS in God. He grumbles
about former teach-
ers, analyzes his
shortcomings, and admires his
wife, children and parents.
Every month, he prints the last
30 days of entries (single space,
two-sided) and puts it all in a
three-ring binder. His collective Charley Kempthorne says writing in a journal every morning—10 million words so far—helps him feel better and make sense of his life.
writings consume about 15 feet of
shelf space in a storage unit in ing a journal, their public nature and get started on the day in a “When you translate an emo- college to serve in the Navy, he
Manhattan, Kan., where he lived makes them very different, he be- better mood.” tional experience into words, it or- was about to graduate from the
before moving last year. No one, lieves. You tend to pick your words Taking 15 or 20 minutes to ganizes them in ways not orga- University of Kansas with a B.A. in
including June, his wife of 41 more carefully when writing for write freely about emotions, se- nized before. It makes them English. He had long dreamed of
years, has read it. the world to see, worrying about crets or upheaval can be a powerful simpler and easier to get past,” he writing a great novel but felt inad-
Mr. Kempthorne, 78 years old, being judged or hurting someone’s tonic, says James Pennebaker, a says. There is some evidence that equate. Keeping a journal, he felt,
knows that many people now feelings. psychology professor at the Univer- writing about emotional issues on would qualify him as a writer,
chronicle their lives and history on “Most of my journal has been sity of Texas and author of several social media can be beneficial for without the anxiety of having to
blogs and social media. He himself and continues to be an end in it- books including “Writing to Heal.” health in ways similar to writing show it to anyone else or finish.
recently started posting portions self,” says Mr. Kempthorne, who Dr. Pennebaker says writing privately, he says, but that re- He opened a notebook and
of his journal on Facebook, a me- quit a university teaching job in privately about traumatic experi- search is new and not definitive. wrote, “I have decided to be a
dium that has become a public his 30s to run a farm and small ences, even for as few as four con- Mr. Kempthorne started his writer. I will it, thus: I am a writer.
journal for many. But even if such house-painting business. “It helps secutive days, can reduce stress, journal on Feb. 24, 1964. At the Now—by definition if for no other
media offer frequent opportunities me understand my life better. Or help people sleep and improve time, he was 26 and divorced, with reason, writers are distinguished
to record and reflect, akin to writ- maybe it just makes me feel better their immune systems. two children. Having postponed Please see JOURNAL page D2
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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D2 | Wednesday, January 27, 2016 NY THE WALL STREET JOURNAL.

HOME & DIGITAL

Marketing Decoder Wild Turkey Bourbon
Bourbon drinkers may soon see a incorrectly assumed 81 was a “watered
prouder bird on their Wild Turkey down,” version of 101, Ms. Batchelor
bottles. says, whereas it is actually a different
The redrawn turkey is part of a formula. The company hopes
packaging overhaul for its rye and consumers will see the new
bourbon. The brand’s owner, Gruppo straightforward name as a good bottle
Campari, calls the new turkey “icing on for a first try of Wild Turkey, “a
the cake” following more than $100 OLD NEW gateway product,” she says.
million it spent on infrastructure, Wild Turkey is one of five brands,
including modernizing and expanding including Aperol and Skyy, that
its Kentucky distillery, since the Italian Campari has prioritized for growth. The
company acquired Wild Turkey in 2009. new packaging was released in
“We acquired a rather dusty brand, December. New bottles are on shelves
but we also felt that it was a real in places including Texas and Florida
hidden gem,” says Melanie Batchelor, and will appear elsewhere as bars and
Campari’s vice president of global stores replenish their inventories.
strategic marketing. Sales of bourbon Wild Turkey also wanted to better
have been soaring over the past five highlight its master distillers, Jimmy
years in the U.S. and overseas as Russell and his son, Eddie. Ms.
consumers have embraced more spirits Batchelor hopes consumers see
and cocktail culture. authenticity and tradition in the brand
On the old packaging, “our turkey is with touches like Eddie’s signature on
kind of in the background, more of a his creation, 81, and his father’s on the
watermark, and he looks a little sad. 101. The signatures are now larger and

GRUPPO CAMPARI
He’s not proud,” Ms. Batchelor says. on the fronts of the bottles, rather
Also, “a lot of consumers know a lot than the necks.
about turkeys,” she says, adding that Bottles also include the words
customer research found that the “Crafted With Conviction,” a phrase
young-looking turkey conflicted with meant to embody the elder Mr.
the idea that the bourbon is aged. The Wild Turkey’s redesigned bourbon and rye whiskey labels feature a larger, older and more detailed turkey. Russell’s refusal to change his formula
older a bourbon is, the more it is prized over many decades. They wanted to
by drinkers. The new turkey was spent months working on a realistic, is on Wild Turkey 101 bourbon. The The turkey is larger and centered on avoid using “handcrafted,” a phrase Ms.
internally named Jacob, a grown-up detailed turkey for the new packaging. liquor is a high proof and the brand’s Wild Turkey’s other varieties as well, Batchelor feels has become so
take on the word for a young male It is centered and more of a close-up boldest, Ms. Batchelor says, so the and pictured in full-length, such as on common in the spirits industry that it
turkey: a jake. image, with prominent eyes and fluffy turkey is “really front and center by the renamed Wild Turkey Bourbon, sounds generic.
Wildlife illustrator Julie Rhodes feathers. The turkey’s biggest star turn just showing the headshot.” formerly Wild Turkey 81. Consumers —Erin Geiger Smith

JOURNAL
year, she reads the prior year’s en-
How to Build a Daily tries. Much lately has involved her
parents, who are in their 80s and
Writing Habit require a lot of attention, and her
Continued from the prior page feelings that she hasn’t done
chiefly by the fact that they write.  Write 500 words every day for 28 enough for them. Going back and
I must write—two hours a day un- consecutive days, preferably at the reading about helpful things she
til I finish school.” same time and same place, to create has done, but forgotten, has been
Looking back at it now, Mr. a routine. comforting. “I felt exonerated in
Kempthorne said the only good some way,” she says.
JORDAN STEAD FOR THE WALL STREET JOURNAL

thing about that first entry, which  Don’t worry about grammar or Mr. Kempthorne and his wife
he calls “pompous,” is that it punctuation. Be willing to write badly. moved last year to Olympia,
launched a practice that has be- Authenticity is more important than Wash., to live with their son and
come both satisfying and sustain- excellence. his family. While much of his early
ing. “If I don’t write each day, I journal was introspective and
feel something is missing,” he  Use prompts to get you going. filled with self-analysis, he now
says. His wife, June, says he is Make a list of six of the stories you mostly writes short narrative
“out of sorts” if he skips a session. commonly tell. Get a photo and tell scenes, which he finds easier and
Often, he has no idea what he the story of that picture. more enjoyable.
will write until he opens the folder The good thing about writing
labeled “My Journal” on his com-  Keep it private. If you show it to over such a long period of time, he
puter. One day he might write others, you might worry about what says, is that it has given him a
about going to the Goodwill store Charley Kempthorne’s wife, June, says he is ‘out of sorts’ if he skips writing. they will say and never start. chance to revisit events and peo-
in Olympia. The next, he recalls ple in his life, including his father.
fighting with a boy named Jimmy gave up by the end of April. In ried to his second wife and expect-  If you can’t think of what to write, In his 20s, 30s, and early 40s, Mr.
over whose dad was best and tell- 2013, an especially productive ing his fourth child. By then, he describe the room you are in, what Kempthorne wrote that his father,
ing Jimmy his father probably year, he wrote 586,415 words. had a master’s degree from the you are wearing, or a room from your a successful eye, ear, nose and
didn’t eat anything but vegetables. If he happens to be in a place University of Kansas and a Master childhood home, or what it felt like throat doctor in a small town, was
He will sometimes consult a list of he can’t use his computer, he jots of Fine Arts from the University of to brush your teeth. a cold man, spare with praise and
phrases kept in another computer in a little notebook, using a gel Iowa. The University of Wisconsin- obsessed with making money. His
file or on paper that refer to pen he keeps in his right pocket. Stevens Point offered him a ten-  Carry a notebook to jot down father died when Charley was 45.
events in his past that he might “I’m a routine-lover,” he explains. ured position in the English de- ideas or a recollection, conversation As Charley got older, the act of
want to write about, like “My fi- If he is traveling early in the partment, he says. Instead of or image. writing daily allowed him to focus
ancé and I move out to a cabin on morning, he stops at a rest stop accepting, he resigned to move to Source: ‘Narrative Journaling: 28 days to writing
more intently on some memories
Lone Star Lake.” and writes at a park bench. Kansas and live on a farm owned more or less happily for the rest of your life,’ a and see what they meant. One in
Once he starts writing, he be- He doesn’t bother revising or by his parents. workbook by Charley Kempthorne. particular stood out.
gins to remember things, people, deliberating over his sentences, The university would have In the 1970s, after Charley
conversations that help tell a far saying he wants to be authentic. given him some unpaid leave, he met and married June, and to- moved to the farm, his parents
richer story. It reminds him of his Before he dies, Mr. Kempthorne says, to experiment with farming. gether they lived on his parents’ came over for dinner. His father
farm in Kansas, which was filled wants to go through and delete “But, no, I just had to stick my fin- farm, started Kempthorne Painters followed Charley into the work-
with rocks that needed to be what might be too boring, per- ger in the Establishment’s eye and & Paperhangers, which lasted 40 shop and watched him build a
cleared before he could plow. “I’d sonal or hurtful, in case someone quit,” he says. “It was a self-cen- years, and began printing a news- bookcase. His father, who could
pick up one and find two. In a way, in his family ends up reading it. tered and silly move. And I deeply, letter, LifeStory, now online, to perform delicate surgery on dam-
writing about my life is like that.” He is also compiling writings deeply regret it,” he wrote. help other people write journals. aged eyes, admired it. “I can’t do
He prefers the computer to about his six children for them. Mr. Kempthorne has written One of those people is Janice anything with a hammer,” Charley
longhand because typing is fast. But for now, since the journal is about that decision many times. At Dinkel, who lived next door to the recalls him saying.
The faster he writes, the better he private, he can freely explore why first, he says, he was unable to ad- Kempthornes in Kansas. She had a “My dad may have made me
writes, says Mr. Kempthorne, who he does what he does and ac- mit to himself that it was a mis- diary, with a little gold lock, as a many compliments over the years,
can type 100 words a minute. “I’m knowledge regrets. take. “But for at least the last half young girl. Over the years, she but maybe I just didn’t hear them,
not an artist. I’m just trying to “I have a lot of regrets as to decade or so, I’ve seen it as being wrote sporadically in a journal. Mr. or didn’t want to hear them,” he
write it down,” he says. One year, what I did with my life,” he says. self-centered and even stupid,” he Kempthorne encouraged her to says. “It took me a while to appre-
he tried to write a million One of his biggest involves a deci- says. write more regularly, which she ciate that man. The act of writing
words—2,750 words a day—but sion made when he was 33, mar- His second marriage ended. He does now. At the beginning of each helped.”

LATE
Continued from the prior page
result of imitation of the
elite. In his day, late adopt-
ers were pigeonholed as less
educated, from a lower so-
cial class and with less pur-
chasing power than innova-
tors and early adopters.
©2015 California Closet Company, Inc. All rights reserved. Franchises independently owned and operated.
in Lisbon. more conspicuous than ever uct, developers can create a
Early adopters may have in a world where product new version that is quicker
an emotional response to a cycles are speeding up for to be widely adopted.
new release—and line up to everything from phones to Blake Rector, a Portland,
buy the latest iPhone or refrigerators. Ore., graduate student,
Xbox. “Innovation has pushed waited until this past Christ-
“It takes a lot of time to up the adoption curve,” says mas to buy his first smart-
change late adopters,” she Grant McCracken, a cultural phone. Over the years, as
says. “But once they’ve done anthropologist who has friends and family transi-
all that research, and once done behavioral research on tioned to larger devices with
they are convinced about a Netflix viewers. There are so Internet access, the 33-year-
product, they are going to many things to adopt now, old says he cherished his

Terry Clark, professor of
sociology at the University
of Chicago who has written
on Tarde, says technological
and societal changes mean
that today’s late adopters
exist in all income, educa-
tional and social groups.
Ryan Fissel, a 35-year-old
in Columbus, Ohio, is a late
adopter. He ordered Uber
for the first time last year.
He waits for the latest Hol-
lywood releases to come to
the Redbox DVD-rental kiosk
before seeing them, he says.
With an academic back-
ground, Mr. Fissel says he
enjoys methodically re-
searching films and what
the critics have to say—
which he doesn’t often have
California Closets creates custom storage time to do while the movies
solutions for every room in your home. are at the megaplex. “The
last movie I saw in theaters
Visit our showroom or call today to arrange your was ‘The Hangover: Part
complimentary in-home design consultation. II,’ ” he says. That was in
2011.
What separates late
U PPE R EAST SI DE212.517.7877
adopters and early adopters
TR I B ECA & B ROOKLYN 646.486.3905 is that they perceive prod-
NASSAU & QU E E NS 516.334.0077 ucts and services through
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Jahanmir, a doctoral re-
californiaclosets.com searcher at the Nova School
of Business and Economics
stay for a long time.” he says, “a lot of people Samsung flip phone.
That happened to Wes have effectively bowed out For the most part, he got
Platt, a 49-year-old Durham, of the innovation game.” along fine, he thought. His
N.C., videogame designer Late adopters are emerg- tiny phone was unobtrusive
who says he is a “serial” late ing as an untapped market- in his pocket, the battery
adopter. He mocked Face- ing force, with important lasted four days on a single
book for a long time before things to tell companies charge, and he didn’t have
joining. He’s new to Spotify, about the role new products all those distractions in his
after listening to iTunes for should play. Because they busy academic schedule.
years. His father was the tend to be highly critical, But Mr. Rector felt the
one who finally got him to late adopters can be useful pang of adopting late in a
join Twitter. to companies perfecting world dominated by mobile
When he first heard Internet. With his wife
about Fitbit wearable fitness scheduled to return home
trackers, Mr. Platt remained
Late adopters tend from a trip to Africa, Mr.
true to form, even as his to be critical—and Rector headed to the air-
friends were posting their port. Hours passed, and he
Fitbit step counts on social
they can be useful to didn’t hear from her. He be-
media. new-product makers. gan to worry but wasn’t
“At first, I thought it was able to find out much about
sort of ridiculous—a little her flight status.
too Big Brother-y for me,” their wares. “Everyone just expected
Mr. Platt says. In a 2015 study published that I would have a smart-
But he cracked when he in the Journal of Engineer- phone,” he says. “I tried the
saw a need: His wife wanted ing and Technology Manage- people at the ticket counter
him to get fit. He saw how ment, Ms. Jahanmir and a and they just expected I
automating the process of co-author outlined their could look it up myself.”
tracking exercise could help “Lag-User Method,” a seven- He had to ask a flight at-
him do more. step process for cultivating tendant taking a break in a
Now, the couple and their ideas from late adopters. coffee shop if he could bor-
friends compete in daily and Late adopters tend to row a few bytes of data.
weekly Fitbit challenges. For want simple, cost-effective Only after looking up
his birthday last year, Mr. products focused on specific flight details on the
Platt upgraded from a clip- uses, the researchers found. stranger’s smartphone did
on to a wrist-based device. By listening to late adopters he realize that he was at the
Late adopters can seem of the old version of a prod- airport a day early.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | D3

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Wherever the Job, the Surfboard Comes Along Too

BY ANDREA PETERSEN

Susanne Hatje, general manager of

the Mandarin Oriental, New York, has
lived in seven cities across Europe, Asia
and the U.S. during her 16 years with
the luxury hotel chain. Her glossy red
surfboard has accompanied her to each
town.
In some of those stops, like Boston
and Hong Kong, the
OBJECT OF board seldom saw wa-
DESIRE ter. It is more of an art
piece in the living
room of her New York
apartment. It reminds Ms. Hatje of the
home she owns on the island of Oahu
in Hawaii. She surfs every day, “some-
times twice a day,” she says, during
her trips there. (She has three other
surf boards in Hawaii.)
She bought the 8-foot, 2-inch red
board, by Joel Tudor, for about $920 in
2001, just a few months after she be-
gan surfing lessons. The board, “just
REBECCA GREENFIELD FOR THE WALL STREET JOURNAL (2)

felt right,” she said. “I looked at it,

touched it. It had one fin, which I
wanted. It was an emotional connec-
tion.” Ms. Hatje was living in Hawaii at
the time, working at a Mandarin there.
“I always loved water. And what better
opportunity to get to know locals?” she
says of her decision to take up the
sport.
She was immediately hooked. “The
first time I caught a nice, big wave, I
was flying,” she says. “It was beautiful.
It is a feeling you can’t describe.”
Ms. Hatje now vacations at her Ha-
waii home at least once a year. (She
rents it out the rest of the time.) Her
time there is far different from the Happy Even Without Waves
routines of her job running one of Susanne Hatje, general manager of the Mandarin Oriental, New York, poses with
Manhattan’s most luxurious hotels. her surfboard in the hotel’s ballroom which has a view of Central Park. Ms. Hatje
(Room rates start at $645 this month.) bought her Joel Tudor surfboard for about $920 in 2001.
In New York, she is always reach-
able. She was at the hotel on Thanks- the lineup, the row surfers make while brother and sister. Last summer, she
giving and New Year’s Eve. But, in Ha- waiting for a wave, “you might have a taught her two nephews, ages 11 and
waii, she trades her sleek black New CEO of a Fortune 500 company, an A- 14, how to surf there.
York suits for bikini tops and board list Hollywood star and someone who Ms. Hatje has future plans to spend
shorts, flip flops and zinc-oxide sun- might be homeless. You don’t know more time at the Hawaii house. And
screen. She hikes, relaxes on her and it doesn’t matter. It is about the she hopes to get her red board back in
beachfront terrace and scopes out the sport.” the water. But for now, keeping it in
best food trucks with friends. Ms. Hatje, 45, grew up in Hamburg, her Manhattan living room reminds her
She enjoys the community of fellow Germany. She spent her summer vaca- of the “memories of being able to en-
surfers. “No one has a business card tions on the North Sea island of Sylt, joy the moments in nature. It feels
telling how great they are,” she says. In sailing and windsurfing with her good to have it around.”

REMOTES
know if the box really did what it
was told.
When everything isn’t lined up
perfectly, things can unravel.
Continued from page D1 Here’s an example: If you tell the
phone (rather than with terribly TV to turn on, but it is already on,
outdated PC software) and it mixes it will turn off. Yet the remote will
real buttons and a 2.4-inch touch display settings as if it is on.
screen in an incredibly comfort- It isn’t Logitech’s fault that IR
DREW EVANS/THE WALL STREET JOURNAL (2)

able design. Still, I wouldn’t buy it. is an intrinsically dumb technol-

No matter which Logitech I ogy. But it is at fault for making it
used I ran into maddening trou- so hard for the average, non-tech-
bleshooting issues. It’s by and savvy person to fix the subsequent
large the fault of infrared (or IR), issues. On the Elite’s screen, I
a technology found in most home needed to swipe a couple of times
entertainment devices. The re- to simply find the commonly used
mote sends commands via pulses input and power buttons.
of light to the boxes’ IR receivers. The Ray Super Remote from
There are two big problems: It New York startup Ray Enterprises
requires line of sight to the box similarly relies on IR to communi-
and, because IR is a one-way cate with most items in my living
technology, the remote doesn’t room. But it was far better at pro-
viding the tools to course-correct.
The Ray’s mostly-touch-screen,
iPhone 4-like design may turn off
those who prefer real buttons. But
the 4.8-inch display’s colorful and
adaptable menus quickly grew on
me, especially when it came to
setup. With Wi-Fi and Bluetooth
built-in, you program everything
right on the device.
Using the touchpad to swipe
around my cable box’s Excel-in-
spired menus was freeing and fast.
The best part? When you config-
ure it to control your cable box, it
asks your TV preferences (comedy,
reality, etc.) and then feeds you
suggestions on the remote’s
screen. It immediately got me, rec-
ommending I watch or record “The
Parent Trap” (the Lindsay Lohan
remake, naturally). I wish it also
suggested places to watch it on
The $250 Ray Super Remote streaming services. Ray says it is
connects to Wi-Fi to feed you TV working on that.
recommendations based on your Even if you don’t use the TV
preferences. listings menus, you’ll appreciate
It’s time to get rid of all that coffee table clutter with a new generation of universal remotes.
the simple interface. The main
home screen lists your devices.
While there, tapping on Roku, for
instance, readies the streaming
box, powers on the TV and
changes it to the right input. If
you run into trouble, unlike Log-
itech’s, it’s easy to get to the
menus and options you need for
specific remotes.
It’s far from perfect, though. It
provides the Apple TV basics, but I
missed the Siri voice search of Ap-
ple’s own remote. The Ray does
have a microphone, but Apple
doesn’t have third-party support
for Siri. Neither does Ray offer an
on-remote keyboard for easy
searching, like Apple’s own iOS
apps.
Then there are hardware issues:
Its built-in battery had to be
charged after four days (no AAs
here!) and I repeatedly hit the
poorly placed physical volume but-
tons on the left edge.
The Ray looks awfully like a
smartphone. So why not just use
yours as a TV remote? I quickly
discovered why that’s a bad idea.
First rule of a great TV remote
control: It should always be
quickly accessible to everyone in
the living room. How are you sup-
posed to pause a gripping episode
of “Daredevil” when you have an
incoming call from Mom?
A spare tablet, old smartphone
or iPod Touch is a far better
choice. Most Android phones and
tablets already have built-in IR
blasters and remote apps. The LG’s
G4 remote app worked just fine
with most of my devices, but An-
droid phone owners may prefer a
free app called Peel for its design
and usability. It provides a TV
Guide-like menu and allows you to
set your favorite channels.
Since Apple devices don’t have
built-in IR, you’ll need a middle-
man that connects to your phone
via Bluetooth or Wi-Fi, then routes
the IR commands to your enter-
tainment boxes. I recommend the
$50 Peel Pronto and its companion
app over the Blumoo or Logitech
Harmony Hub, each $100.
Our remote problem is an ex-
tension of a problem as old as TV:
We’re awaiting that one box to do
it all. Until that or a better alter-
native to IR arrives, one remote
that ties together all the pieces in
a easy-to-use experience is our
best bet. The $250 Ray, available
at Amazon and the company’s
website, is the closest I’ve seen.
Sure, it’s an expensive option
that only partially solves a prob-
lem many others are working on,
but I decided to take the plunge.
Anyone want a used, wicker re-
mote control basket?
Write to Joanna Stern at
joanna.stern@wsj.com or on
Twitter @joannastern.

Universal search
You can watch ‘Seinfeld’ on Hulu or
on TBS at 5 p.m. Voice and text
search scours all devices and services.

Voice commands Smarter control

‘Play “She’s All That.” ’ The infrared (IR) confusion
Support for voice commands stops here! With smarter
on Apple TV and others. technology, it knows if it has
or hasn’t done its job.

Months of battery life

Instead of just a couple
of days, this battery
really lasts. What-to-watch intelligence
Knowing what you are
watching, it suggests what
you want to tune into next.
The Remote
of Your Dreams
New TV remotes bring a lot to the table,
but they’re missing these elements.
THE WALL STREET JOURNAL.
D4 | Wednesday, January 27, 2016 NY THE WALL STREET JOURNAL.

CARS

When Minnesota Drops Below Freezing, He’s Free to Fly

Harlan Rohner, owner of a northern Minnesota hunting for
snowmobile and motorcycle sal- old snowmobiles. I have about 700
vage business from Willmar, vintage snowmobiles now, some of
Minn., on his homemade racing them dating back to the 1950s, and
snowmobile, as told to A.J. Baime. in my salvage yard, about another
This coming weekend, thou- 2,000 that I use to sell parts.
sands of people will The sled pictured here, I built
MY RIDE gather at the Waconia in 1996. I used to do a lot of rac-
Snowmobile Show in ing—cross-country and drag rac-
Waconia, Minn., not ing. So I built this sled out of
far from where I live. I’ll be there. spare parts around my yard in my
It’s billed as the largest vintage spare time, to race. The parts
snowmobile event in the world. mostly come from 1996 Arctic Cat
People from Minnesota love ZRT 600s; I put a 1,200 cc engine
snowmobiles. Two of the biggest in it, with chrome carburetors and
manufacturers—Arctic Cat and Po- chrome exhaust. I used it to com-
laris—are here in the state, near pete in radar racing—to see how
DAVID BOWMAN FOR THE WALL STREET JOURNAL

the Canadian border. You can ride fast you could make a sled go in
across a stranger’s lawn on a 660 feet. This one got up to 123
snowmobile in Minnesota, and he mph. They go a lot faster, now.
probably won’t care. Because I used to ride 100 miles a day
that’s just the way it’s always with my friends. There were years
been. in Minnesota when the snowdrifts
I bought my first snowmobile would cover up the 6-foot door to
when I was 17. I wrecked it. But I my shop. But the snow hasn’t
bought another one. And then an- come as much in recent years, and
other one. Pretty soon, I had all when you get older, you can’t do
these snowmobiles. My dad had all the things you used to do. But I
started an automobile salvage still love riding snowmobiles.
business around 1950, and the That’s my passion.
yard became a place to collect vin- Harlan Rohner at his salvage yard in Willmar, Minn., with a racing sled he built out of spare parts. Below a look at his
tage snowmobiles, and to sell machine and his collection that dates back decades. ‘The snow hasn’t come as much in recent years, and when you get Contact A.J. Baime at
parts. I used to drive all over older, you can’t do all the things you used to do,’ he says. ‘But I still love riding snowmobiles. That’s my passion.’ Facebook.com/ajbaime

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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | D5

ARTS IN REVIEW
EXHIBITION

A Room to Be Viewed
brownstone mansion of Ara-
Artistic Furniture of bella Worsham at 4 West 54th
the Gilded Age St., land now occupied by Mu-
The Metropolitan Museum of seum of Modern Art.
Art Worsham’s background was
Through May 1 the stuff of novelists. After her
youth and an amatory liaison
changed little but the worn
carpets. When John D. Rocke-
feller Jr. prepared to demolish
the house in 1938, he donated
the dressing room to the Mu-
seum of the City of New York,
which gave it to the Met in

JOSEPH COSCIA/THE METROPOLITAN MUSEUM OF ART; COLLECTION OF PAUL MANGANARO

BY BARRYMORE LAURENCE in the antebellum South (de- 2008.
SCHERER tails of which she Schastey’s dressing room
kept secret), Wor- in solid satinwood combines

T
New York
he singular character of
late-19th century Ameri-
can furniture design is
at the heart of the opulent
show “Artistic Furniture of the
Gilded Age,” at the Metropoli-
tan Museum of Art. Arranged
over three contiguous
galleries, it has been or-
ganized by the mu-
seum’s American dec-
orative arts curator
Alice Cooney Frelin-
ghuysen and Nicholas C.
Vincent, collections plan-
ning manager, to celebrate
the installation and attribu-
tion of the recently con-
served Worsham-Rockefeller
Dressing Room, an ebullient
treasure of 1880s interior de-
sign. It also celebrates the
room’s firm identification as
the work of New York cabinet-
maker and decorator George A.
Schastey (1839-1894). Because
much of Schastey’s work was
either lost or unattributed, his
name has long been unfamiliar.
But in the era when Astors and
Vanderbilts led New York soci-
ety, Schastey’s work rivaled
that of Herter Brothers, whose
decorative legacy is more
widely known.
The Worsham-Rockefeller
Dressing Room takes its place
among the American Wing’s
chronological period rooms. It
was designed in 1881 for the
sham effectively
became the
mistress of
railroad
baron
Collis
Huntington, 30
years her senior, masquerad-
ing as his niece while his ailing
wife still lived. She married
An ebullient treasure
of 1880s interior
design from a little-
known craftsman.
Huntington in 1884, nine
months after he was widowed,
and in that year sold the house
and its Schastey furnishings to
John D. Rockefeller, who
luxurious materials with en-
gaging wit. Surfaces of the
regal built-in cabin-
etry, dressing mir-
ror, doors and
window surrounds
are applied with
carved cherub
heads, festoons,
vases and other
vaguely neoclas-
sical motifs or in-
laid with complex
geometric patterns
characteristic of the
popular Aesthetic
Movement style of
the 1870s and 1880s.
This marquetry inlay and carv-
ing are of contrasting purple-
heart (or amaranth) wood. Above: Worsham-Rockefeller Dressing Room, designed and executed by George A. Schastey; left: an
That this is a woman’s private 1882 Steinway & Sons grand piano.
domain is signaled by the de-
lightful marquetry inlay An 1882 Steinway & Sons mission, the now vanished straint of Medievalist, Geor-
around the doors and windows grand piano, whose riotous William H. Vanderbilt house. gian-revival and Aesthetic
of intertwining hand mirrors, carved and inlaid ornamenta- Inspired by prevailing 19th- productions by contemporane-
jewelry, and other emblems of tion in rosewood, satinwood, century taste for historicism, ous English and Continental
female adornment, heightened purpleheart, brass and silver is leading American designers furniture designers, and which
with mother-of-pearl ve- documented as Schastey’s adapted their ornamental mo- distinguishes the decorative
neers—all of it calculated to work, is contemporaneous tifs from a wide range of vocabulary of high-style Amer-
shimmer in the flickering glow with the Worsham commis- sources—Egyptian sphinxes, ican Aestheticism. Ultimately
of elaborate gaslight fixtures. sion. This documentation Arabesques, Grecian masks this exhibition conveys a
Placing this permanent helped lead to the Schastey at- and columns, Viking shields, stream of imaginative vitality
room installation in the con- tribution of the dressing room. Renaissance putti and griffins, and consummate artistry that
text of other Schastey work In addition are pieces by the Jacobean panels and turnings, transcend conventional expec-
are two adjoining galleries dis- era’s celebrated cabinetmaking Japanesque relief carvings. tations of American Victori-
playing an array of furnish- firms, including Pottier and Yet, it is their vigorous, often ana.
ings—some lent by private col- Stymus and Charles Tisch, crowded application of these
lectors, several newly along with a selection of venerable motifs to bold, often Mr. Scherer writes about
attributed to Schastey and on Herter Brothers pieces created novel cabinetry forms that de- music and the fine arts for the
public view for the first time. for their most important com- parts from the comparative re- Journal.

MUSIC MUSIC

BY ALLAN KOZINN
Reimagining Bach Beautiful Dissonance
BY JIM FUSILLI

A L
Boston Brooklyn, N.Y.
consistent lament ike its predecessors,
among composers is that “The Waiting Room”
once their works have (City Slang), the latest
their premieres, they are too album by Tindersticks, is a col-
often filed away, never to be lection of urbane songs
given second hearings. The crooned with rakish, slightly
Boston Modern Orchestra Proj- sinister self-confidence by Stu-
ect, directed by Gil Rose, exists art A. Staples. But there is also
KATHY WITTMAN

partly to redress that com- something unusual at work on

plaint. Although the orchestra,
now in its 20th season, does its
share of commissioning, it
could be argued that its more
important function is revisit-
ing—and documenting, by way
of its superb recording series
on its BMOP/Sound label—con-
the newly released disc. On
several tracks, echoed over-
tones linger long enough to
The Boston Modern Orchestra Project. create a sense that Mr. Staples
and his quivering baritone
tinue to cultivate the still fer- burg” in the menacing first have wandered off pitch, as in
tile ground between those movement of his “Concerto “Were We Once Lovers?” In
modernist poles. With Echoes,” but added reeds the instrumental “This Fear of
RICHARD DUMAS

temporary works that deserve
revival.
Mr. Rose did not wait long
to take up “The New Branden-
burgs,” a set of six works com-
missioned by Orpheus, the con-
ductorless New York chamber
orchestra, as modern re-
sponses to the popular set of
concertos that Bach dedicated
to the Margrave of Branden-
burg in 1721. Orpheus per-
formed the works over several
seasons, starting in 2006, and
played the full set at a Spring
for Music concert at Carnegie
Hall in 2011. Mr. Rose and his
Boston players offered their
views on Friday evening at the
New England Conservatory’s
Jordan Hall.
The composers of these new
concertos—Stephen Hartke,
Christopher Theofanidis, Me-
linda Wagner, Aaron Jay
Kernis, Peter Maxwell Davies
and Paul Moravec—have very
different styles, but Mr. Rose’s
traversal pointed up an impor-
tant element they share. With
neither Minimalists nor Serial-
ists among them, they all con-
Pepper ...
And Salt
THE WALL STREET JOURNAL
They also took seriously the
project’s goal of creating a
bridge between the conven-
tions of Bach’s time and to-
day’s, each producing a multi-
movement work rich in both
the propulsive energy and me-
lodic invention you hear in the
Bach originals, while at the
same time carefully avoiding
Baroque pastiche. This is, in a
A set of six works that
serve as modern
responses to the
popular Brandenburg
concertos.
way, a defiantly retro set of
works, couched mostly in the
harmonic language and struc-
tural syntax that prevailed
from Bach’s time until Serial-
ism, early in the 20th century,
dissolved tonality and upended
musical thought.
Because Bach’s “Branden-
burgs” are each scored differ-
ently, Orpheus asked the com-
missioned composers to
choose one and match its in-
strumentation. Most complied
religiously, a few going so far
as to include the harpsichord,
though usually with its own as-
sertive lines, rather than as the
harmonic and rhythmic foun-
dation of a Bachian basso con-
tinuo.
Some took liberties. Ms.
Wagner, in her busy, high-en-
ergy “Little Moonhead: Three
Tributaries,” eschewed the
chirpy recorders of her model,
Bach’s Fourth “Brandenburg”
in favor of modern flutes, but
shifted the focus, in any case,
to exquisitely arching violin
and cello lines. Mr. Kernis ad-
hered to the low strings-only
scoring of the Sixth “Branden-
and percussion thereafter, cre- Emptiness,” the notes on a me-
ating a brighter, more varie- lodica played by Mr. Staples
gated (and up-to-date) sound. sound like they stumbled into
And Mr. Davies, whose “Sea the wrong song. As percussion
Orpheus” is linked to the Fifth clatters and reeds squeal, it’s
“Brandenburg,” traded in as if Tindersticks decided to
Bach’s big harpsichord cadenza undermine its clarity and fo-
for a hefty, challenging piano cus.
solo, while preserving Bach’s The effect isn’t entirely dis-
spotlights on the flute and vio- pleasing. But it raises the
lin. question of its purpose. Across
The pianist Angela Kim, the the span of its 11 studio al-
flutist Sarah Brady and the vio- bums, Tindersticks has made
linist Gabriela Diaz were the music so seductive that to ex-
vigorous, precise soloists in perience it can be as comfort-
Mr. Davies’s work. Ms. Diaz able as riding a cloud. On “The
was also a deft soloist in Ms. Waiting Room,” a dab of dis-
Wagner’s work and in Mr. orientation goes a long way to-
Moravec’s “Brandenburg Gate.” ward jarring the listener to re-
Bach fanciers could reasonably gain his attention.
complain that Mr. Moravec did Over morning coffee at a
not give the solo trumpet, boutique hotel in the Green-
played energetically by Terry point neighborhood here, a
Everson, anything like the convivial Mr. Staples said the
prominence that Bach gave it experimental sounds reflect
in the Second “Brandenburg,” how he and the band were try-
Mr. Moravec’s nominal tem- ing to divine the emotional
plate. Mr. Hartke, in “A Bran- subtext of the compositions
denburg Autumn,” expanded even as they were recording
upon the rich textures of the them. Though the 50-year-old
First “Brandenburg,” and took acknowledges the allure of his
a cue from that work in includ- vocal instrument—“I sing and
ing dance movements (if not I got a voice,” he said, offhand-
quite the same ones Bach edly—on “The Waiting Room,”
used). it is part of the ambiguous ar-
Mr. Moravec’s work and Mr. rangements rather than their
Theofanidis’s translucent, bit- primary emphasis.
tersweet “Muse,” based on the Beauty also abounds on the
Third “Brandenburg,” were the new album, as Mr. Staples’s
most hard-driven, adrenaline- colleagues David Boulter on
soaked of these works. At keyboards, Neil Fraser on gui-
times, all six hinted at the neo- tar, Earl Harvin on drums and
Classicism of the 1940s, in Dan McKinna on bass provide
some cases with an updated context that is as memorable
harmonic edge, and they sat as it is discreet. In “We Are
together satisfyingly. More to Dreamers!” kettle drums and
the point, these substantial the low wail of a tenor saxo-
chamber concertos are a re- phone played by Julian Siegel
minder that in the right hands, help create a nebulous atmo-
the time-honored methods can sphere for Mr. Staples and
still yield plenty of vital, in- guest vocalist Jehnny Beth of
spired music. Savages. In “Second Chance
Man,” sustained chords on a
Mr. Kozinn writes about Wurlitzer piano buoy Mr. Sta-
music for the Journal. ples, who maintains a leisurely
Tindersticks (from left to right): Dan McKinna, Neil Fraser, Earl
Harvin, David Boulter and Stuart A. Staples.
pace even as Mr. Harvin plays
a hasty pattern on the high-hat
cymbal and Mr. Siegel tosses in
soft blasts of brass. Afrobeat
horns and Mr. Fraser’s whee-
dling guitar lines inform “Help
Yourself,” the album’s rare up-
tempo tune. “Like Only Lovers
Can,” which closes the album,
is a luscious ballad delivered
Experiments that aim
to bring out the songs’
emotional subtext.
without trickery or a touch of
pitchiness. Its effect lingers.
The centerpiece of “The
Waiting Room” is “Hey Lu-
cinda,” a disarming ballad de-
livered as a conversation be-
tween two disaffected souls
portrayed by Lhasa de Sela,
who died in 2010, and Mr. Sta-
ples, who dusted off the re-
cording for the new album. In-
vited for an evening of drink
and dance, De Sela’s character
bats back her male counter-
part’s every enticement. “I
only dance to remember how
dancing used to feel,” she sings
wearily. Their voices are sur-
rounded by sluggish tones
from a glockenspiel, bass clari-
net and flute, among other in-
struments.
Mr. Staples, former band
member Dickon Hinchliffe and
Tindersticks have long been
associated with independent
filmmaking, providing music
for several movies by director
Claire Denis. (Mr. Hinchliffe, a
founding member who left the
group in 2003, has gone on to
score such films as “Locke,”
“Out of the Furnace” and
“Winter’s Bone.”) For “The
Waiting Room,” Mr. Staples
engaged an international
group of directors to interpret
individual songs without hear-
ing the remainder of the al-
bum. Nevertheless, in the re-
sulting videos, connecting
images emerged: men adrift or
trapped by terror; a point of
view from just below the wa-
ter’s surface; a placid blue sky;
sunrise and sunset. Rosie Ped-
low and Joe King’s film for
“Hey Lucinda” depicts a color-
ful arcade in southeast Eng-
land that seems forlorn despite
a stream of customers; David
Reeve set his film of the in-
strumental “Planting Holes”
above the activity at a fair-
ground in Brazil.
Thus, the album’s overarch-
ing themes of alienation, fad-
ing memories and a dissolving
sense of self are reinforced, as
is the emotional tension Mr.
Staples said is essential to how
Tindersticks works best.
“When everything is too har-
monious, emotion dissipates.
“There’s a certain amount of
experimentation, of fumbling
around,” he added. “We’re cre-
ating uncertain places for us to
visit.” On “The Waiting Game,”
Tindersticks invites the lis-
tener to visit those uncertain
places, too.
Mr. Fusilli is the Journal’s
rock and pop music critic.
Email him at jfusilli@wsj.com
and follow him on Twitter
@wsjrock.
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
D6 | Wednesday, January 27, 2016
Heard On
The Field
Griffin Breaks Hand
On Mysterious Punch
Here’s a new type of NBA injury:
Los Angeles Clippers star forward
Blake Griffin fractured a bone in his
hand Saturday on a trip to To-
ronto—even though he was already
hurt and wasn’t playing on the road
swing—after he reportedly punched
a team equipment manager.
Griffin received X-rays for the in-
jury on Monday and “underwent a
procedure” on Tuesday that will
leave him sidelined for up to six
weeks, according to the Clippers,
though more details about the en-
counter were still unclear as of
Tuesday afternoon. Griffin hasn’t
played since suffering an unrelated
injury on Christmas, and while the
Clippers were 11-3 without Griffin,
they were anticipating his imminent
return—until Saturday’s embarrass-
ing incident. In a joint statement,
Clippers owner Steve Ballmer and
coach Doc Rivers said “this conduct
has no place in our organization”
and that they were investigating
along with the NBA.
Griffin couldn’t immediately be
reached for comment.
Griffin, though, was only the lat-
est NBA star to injure his hand un-
der completely bizarre circum-
stances. Cleveland Cavaliers guard
Kyrie Irving broke his hand in 2012
after hitting a padded wall out of
frustration in a summer practice,
while an injury to Amar’e Stou-
demire when he was with the New
York Knicks was even more unex-
pected: He punched a fire-extin-
guisher case. —Ben Cohen
Tennis Panel to Review
Anticorruption Unit
MELBOURNE, Australia—Tennis
governing bodies responded to a re-
cent uproar over match fixing by
appointing an independent panel to
review its anti-corruption programs.
At a news conference at the
Australian Open, high-ranking tennis
officials announced that Adam
Lewis, a London-based attorney and
expert on sports law, would lead
the panel.
The panel will investigate the ef-
fectiveness of the sport’s Tennis In-
tegrity Unit, which was criticized for
being lax by a BBC / BuzzFeed in-
vestigation into match fixing earlier
this month.
The panel is expected to address
the TIU’s transparency, its structure
and whether it needs more funds.
The unit currently has an annual
budget of $2 million.
—Tom Perrotta
Duke and Wisconsin Did Play in the NCAA Finals, Right?
Last year’s NCAA tournament title
game between Duke and Wisconsin
was one of the most thrilling ever.
Luckily, they may be headed for a
postseason rematch... in the NIT.
Since their meeting last April,
when Duke triumphed 68-63, these
two teams have struggled so badly
that they could both be bound for the
second-tier tournament that hosts
teams not good enough to make the
big dance.
Wisconsin is 12-9 after Monday’s
win against Indiana while the Blue
Devils are 15-6 but floundering after a
strong start, having lost four of their
last five games. Duke and Wisconsin’s
combined winning percentage, 64.3%,
is tied for the third worst for teams
coming off a national championship
appearance since 1985, when the
tournament expanded to 64 teams.
Butler and Connecticut take the
cake as the worst duo, winning just
59.1% of their games in 2011-12 after
meeting in the 2011 championship.
Carolina Panthers quarterback Cam Newton dives for a touchdown during the third quarter against the Arizona Cardinals in the NFC Championship Game.
Why Cam Newton Can’t Be Stopped
There is growing evidence that
Cam Newton cannot be stopped.
Newton, the likely NFL MVP
who led the Carolina Panthers to
the Super Bowl by beating up the
Arizona Cardinals 49-15 on Sun-
day, is marching to-
wards a historically
decorated career.
Only one person in
history has won a
Heisman Trophy, the
NFL NFL MVP award and a
JOURNAL. Super Bowl title. That
KEVIN would be former
CLARK Southern California
and Raiders running
back Marcus Allen.
Newton has a chance to become
the second when he faces the Den-
ver Broncos next Sunday.
At just 26 years of age, he is on
the cusp of accomplishing almost
everything a quarterback can rea-
sonably expect to accomplish, leav-
ing defensive players and opposing
coaches asking the same question:
Why can’t anyone stop this guy?
“I have never seen nobody who
was that size, who looks like a typ-
ical NFL quarterback, who can sit
in the pocket and then [he] can
run,” said Denver Broncos corner-
back Aqib Talib. “He’s probably the
most dangerous quarterback in the
NFL right now.”
Defenses have tried everything
to stop Newton this season. But
none of the schemes or strategies
they’ve attempted have managed to
slow him down. Five years into his
NFL career, as he prepares to make
his first Super Bowl appearance, it
But that downturn was less surpris-
ing: Butler was a No. 8 seed while
the Huskies were a No. 3. The same
goes for Michigan and Seton Hall in
1989-90, the second-worst pairing at
59.3%, after both were No. 3 seeds in
the 1989 tournament.
What makes Duke and Wiscon-
sin’s fall so staggering is the fact
they were both No. 1 seeds and lost a
Ethan Happ
SPORTS
appears Newton is the perfect
quarterback for the perfect time.
When the Jacksonville Jaguars
faced Newton earlier this year, they
were determined not to abandon
their regular defensive schemes.
Instead, they would emphasize
tackling and focus on taking down
the Panthers quarterback before he
could build up a head of steam.
“Not only do you have to have a
tackling plan for the running
backs, but what made the game
unique was you had to have a
tackling plan for him because of
his size and ability to run,” Jag-
uars coach Gus Bradley said then.
That line of thinking has
echoed around the league. But in-
structing a defender to focus on
tackling Newton is like telling an
NBA player to focus on guarding
Stephen Curry’s jump shot. The
league has never seen anything
quite like Newton, who at 6-
feet-5 and 245 pounds, is two
inches taller and just five pounds
lighter than Denver’s star line-
backer Von Miller.
“He’s a big, big human being
so you can’t take him on up top,”
Cardinals defensive back Patrick
Peterson said of tackling Newton.
“He’ll definitely make you miss
that tackle. For a [defensive back]
it’s all about taking out his legs.”
For all the concern about his
running, Newton’s most effective
plays may be his passes—targeting
tight end Greg Olsen over the mid-
dle hasn’t failed him yet. But de-
fenses say it is Newton’s ability to
do anything on any given play that
combined eight games all of last year.
Their decrease in winning percentage,
25.6%, is much larger than Butler-
Connecticut’s (16.8%) or Michigan-
Seton Hall’s (22%). The Pirates, who
went 12-16 that year, are one of two
teams in this era to finish below .500
the next season after making the ti-
tle game—the other is Duke, which
went 13-18 in the 1994-95 season af-
Cue the ‘Overrated’ Chants
The NCAA finalists that combined for the worst results the
following season, since 1985
REIGNING
SEASON CHAMPION RECORD
2011-12 Connecticut 20-14
1989-90 Michigan 23-8
2015-16 Duke 15-6
1994-95 Arkansas 32-7
1986-87 Louisville 18-14
2002-03 Maryland 21-10
2009-10 North Carolina 20-17
2007-08 Florida 24-12
1995-96 UCLA 23-8
1985-86 Villanova 23-14
Source: Stats, LLC
* ***
really keeps them up at night.
He is a pass-first quarterback
capable of picking up a first down
with his legs at any moment.
Newton ran for 56 first downs
this year on just 132 rushing at-
tempts. That means he moved the
chains on a remarkable 42% of
the times he ran with the ball. To
put this in perspective, the three
players with more total first
downs were running backs.
Adrian Peterson, who led the
league in rushing yards and first
downs gained, did so on just 21%
of his runs.
Newton’s success can mostly be
traced to his rare instincts and
raw speed. But it also has some-
thing to do with the way modern
NFL defenses are constructed.
About five years ago, offenses de-
cided to deploy more wide receiv-
ers on the field and to pass the
ball more than ever. This led to de-
fenses removing run-stuffing line-
backers from the field and playing
more defensive backs on nearly ev-
ery down. Those linebackers who
survived quickly shed weight, too,
in an effort to deal with the new-
found speed of the game.
These new-look defenses
couldn’t stop passing numbers from
climbing, but they were able to hold
offenses mostly in check. What they
were totally unprepared for, it turns
out, is a team like the Panthers and
a quarterback like Newton.
Newton’s size means he can run
at virtually any time without fear
of being hurt. This was illustrated
on Sunday when he ran for a 12-
ter losing in the 1994 championship.
Although both Duke (Jahlil Okafor,
Justise Winslow, Tyus Jones) and
Wisconsin (Frank Kaminsky, Sam
Dekker) lost stars to the NBA Draft,
both teams were still expected to be
major players. The Blue Devils were
ranked No. 5 to start the year with
the Badgers at No. 17.
Following Duke’s loss on Monday
REIGNING COMBINED
RUNNER-UP RECORD WIN %
Butler 22-15 .592
Seton Hall 12-16 .593
Wisconsin* 12-9 .643
Duke 13-18 .643
Duke 24-9 .646
Indiana 21-13 .646
Mich. State 28-9 .649
Ohio State 24-13 .658
Arkansas 20-13 .672
Georgetown 24-8 .681
The Wall Street Journal.
NFL JOURNAL: REUTERS; THE COUNT (L-R): ASSOCIATED PRESS; GETTY IMAGES; HOF: ZUMA PRESS
THE WALL STREET JOURNAL.
yard touchdown that featured him
flipping over Cardinals defensive
back Tony Jefferson and landing
on his own neck, seemingly un-
harmed.
But the Panthers have sur-
rounded their talismanic quarter-
back with a stable of powerful
runners who can also flatten de-
fenses. While fullback is generally
thought of as a dying position in
the NFL, Carolina put Mike Tolbert
on the field on 38.3% of offensive
snaps this season, according to
Football Outsiders. No other full-
back played more than one third
of their team’s offensive snaps and
only three others surpassed 30%.
When he’s not carrying the
football himself, the Panthers em-
ploy Tolbert as a destroyer of
linebackers and defensive backs
who happen to find themselves in
the way of a running play. Behind
Tolbert, their main running back,
Jonathan Stewart, is at least 10
pounds heavier than any running
back on the Broncos’ roster—and
they aren’t known as small.
There have been rare occasions
when Newton has struggled, of
course. But even these provide little
solace for defenses since there
seems to be no commonality in the
teams that have shut him down. His
worst games have come in mini-
clusters, like a rough stretch in Oc-
tober 2014, or early in 2012 and in
the middle of the 2013 season.
Those dips suggest Newton is
human and may be prone to
slumps. The bad news for the
Broncos? He’s not slumping now.
night to Miami, the team will likely
fall out of the top 25 for the first
time since the end of the 2006-07
season. At the end of the game, Mi-
ami fans chanted “overrated.”
“I’m glad that the students were
yelling ‘overrated,’” Duke coach Mike
Krzyzewski said afterward. “Man, I
didn’t know we were rated: thank
you!” —Andrew Beaton
Luke Kennard
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

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Wednesday, January 27, 2016 | S1

PHOTO ILLUSTRATION BY LINDSAY HOLMES

THE INSURGENTS VS.

THE ESTABLISHMENT
A guide to the people, issues, data and trends that will shape the election
BY PATRICK O’CONNOR
AND PETER NICHOLAS
DES MOINES, Iowa—From the beginning,
the 2016 White House race has defied just
about every expectation. Donald Trump was
more punchline than presidential contender
when he announced his bid back in June. Af-
ter six months leading the Republican field,
the joke might be on his detractors.
The opposite is true for Hillary Clinton.
Vermont Sen. Bernie Sanders interrupted her
much-anticipated coronation in the Demo-
cratic primary with his swatch of white hair
and his broadsides against Wall Street banks,
billionaires and big donors.
With the Iowa caucuses days away, these
unexpected plot twists raise a simple question
for the race ahead: What’s next?
Polls suggest the still-crowded contest for
the Republican nomination has boiled down to
a two-man race between Mr. Trump and Texas
Sen. Ted Cruz, but an early stumble by either
could open the door for another contender.
That happened in 2004, when Massachusetts
Sen. John Kerry won the Democratic nomina-
tion after trailing Howard Dean, a former Ver-
mont governor, for months.
Likewise, next week’s Iowa caucuses will test
the strength of the Sanders surge. The race
there is close, public-opinion surveys show, but
it’s still unclear whether Mr. Sanders’s support-
ers can outmuscle a Clinton campaign built to
prevent a repeat of her 2008 defeat to the
leader of a previous political movement. A
Clinton win in Iowa could insulate her from an
expected loss in New Hampshire.
To this point, the 2016 race has upended a
half-century of conventional thinking about
politics, particularly the belief that the candi-
date with the most money controls the con-
Please see ELECTION page S2

Democratic Base Broadens Outsiders Reshape GOP Race

BY LAURA MECKLER
NASHUA, N. H.—Ben Burrows, set to cast
his first presidential ballot, is the quintessen-
tial example of a Bernie Sanders voter. He’s
young, white, male and passionate about the
need to address income inequality.
“The middle class is completely wiped out
and we need to restore that,” Mr. Burrows, 20
years old, said at a recent Sanders campaign
event in Nashua. “If the youth sticks together,
we can get him elected.”
The problem for Mr. Sanders: Voters such as
Mr. Burrows are nowhere near a large enough
share of today’s Democratic Party to get him
elected. The party, once dependent on white
working-class voters, is now dominated by
women and has a substantial share of minorities.
While young voters are playing a larger role,
more party members are over age 45 than under.
State polls show the Vermont senator could
win contests in Iowa or New Hampshire, or
both. But national polls suggest his coalition
won’t be enough to carry him beyond those
states unless he broadens his appeal to more
women, older people and nonwhite voters.
Front-runner Hillary Clinton is polling way
ahead with all three groups, and she is leading
by smaller margins with whites, liberals and
men, who form the core of Mr. Sanders’s sup-
port, according to an analysis of Wall Street
Journal and NBC News national polling data.
The candidates are tied in support among
men, but women make up a larger
share—58%—of Democratic primary voters. In
January, Mrs. Clinton was ahead with them by
38 percentage points.
The 74-year-old Mr. Sanders enjoys his big-
gest lead—24 percentage points—with voters
Please see YOUTH page S6
BY JANET HOOK
For all the twists, turns and unprecedented
developments of the 2016 campaign, one polit-
ical reality remains in place: The demographic
makeup of the Republican Party hasn’t
changed much over the past 15 years. What
has changed is the mood of the GOP electorate.
The Republican Party has been dominated
by white, older conservative voters, as it was
a generation ago. But, with much of the coun-
try becoming more diverse, younger and more
liberal, many GOP voters are seething with
frustration and anger.
Many Republicans feel “a sense of alienation
from America, a sense that ‘this isn’t my coun-
try anymore,’ ” said Pete Wehner a former ad-
viser to President George W. Bush. “Rather
than find principled ways to accommodate
themselves to the changes we’re undergoing,
some Republicans are raging against them.”
That helps explain the emergence of Donald
Trump, the businessman who has appealed to
independents and other voters new to the Re-
publican Party who are furious about immigra-
tion, economic stagnation and the failures of
Republicans in Washington.
He appears to have succeeded in energizing the
growing ranks of working-class voters—the ones
former Minnesota Gov. Tim Pawlenty once called
“Sam’s Club Republicans”—who have drifted into
the party over the years but have had trouble, in
the past, finding a presidential candidate or GOP
message that could stir them to action.
A recent Wall Street Journal/NBC News/Mar-
ist poll found that Mr. Trump did best among
Iowans who said they were likely to participate
in the Republican caucuses for the first time. He
drew 32% of those first-time voters and led
Please see MOOD page S6

INSIDE
THE ECONOMY TERRORISM EARLY VOTING STATES ON THE STUMP

Economic anxiety is putting candidates on the Deadly attacks in California and Paris have re- Iowa and New Hampshire are different from the Multiple candidates bumping across small,
spot as markets fall and global growth slows. shaped the narrative of the presidential race. rest of the U.S.—and different from each other. early-voting states: What could go wrong?
S3 S3 S7 S8
 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
S2 | Wednesday, January 27, 2016
LUCY NICHOLSON/REUTERS
Members of the audience listened to candidates at the first Democratic presidential debate in October in Las Vegas, when five candidates were on the stage.
Primary Fights Leave Hole in Center
CAPITAL JOURNAL
GERALD F. SEIB
I
t is an accepted truth in poli-
tics—one well supported by
polling data—that the largest
share of Americans fall neither on
the ideological left nor the right,
but rather somewhere in the center.
Yet you wouldn’t know that
from the debate in this year’s pri-
mary campaign,
which so far feels
especially polariz-
ing. Which leads to
two questions:
Why does it feel
that way, and will
that dynamic change once voting
actually gets rolling?
By most readings, a big chunk
of voters aren’t comfortable with
either the liberal or conservative
wings of the two major parties.
The latest Wall Street Journal/NBC
News poll found that 37% of voters
classified themselves as “moder-
ate,” a higher share than called
themselves either liberal or con-
servative. Only 11% called them-
selves “very liberal,” and 16% “very
conservative.”
Yet the primary season seems
to be drawing the two main parties
away from the center and toward
those outer wings. In the Demo-
cratic race, Sen. Bernie Sanders—a
ELECTION
Continued from the prior page
versation. Mr. Trump used his ce-
lebrity and his mastery of the media
to generate tens of millions of dol-
lars in free media coverage before
he spent a dime on television ads,
while former Florida Gov. Jeb Bush
has floundered, despite outspending
rivals by millions.
Both party races have cast doubt
on other long-held political beliefs.
Endorsements? Overrated. Policy?
Largely overlooked. Consistency?
Overshadowed by conviction. The
Iowa and New Hampshire contests
may reveal which campaigns built the
best turnout operations—and, more
telling, whether those investments
made a difference in the outcome.
Other conventions could come into
question once the balloting begins.
The easiest explanation for this
unpredictability is that a big chunk
of America is fed up. Republicans
are furious with President Barack
Obama for expanding the reach of
the federal government—and their
own leaders for failing to stop him.
Democrats are exasperated with the
GOP for refusing to work with the
president. And voters in both par-
ties are mad about the resulting
gridlock. Economic insecurity and
growing anxieties over terror and
extremist threats are only adding to
the unsettled mood.
That widespread frustration is
fueling insurgent campaigns by
Messrs. Cruz, Sanders and Trump.
They have animated voters who lost
patience with the calculated nature
of typical politicians, tapping en-
trenched resentments to overtake
rivals with their distinct brands of
candor. Republicans, by a margin of
80% to 18%, favor a candidate who
represents “change,” over one with
the most experience, according to a
January Wall Street Journal/NBC
News poll.
self-identified democratic socialist
who scored a 95% in the most re-
cent ratings from the liberal organ-
ization Americans for Democratic
Action—has pulled longtime favor-
ite Hillary Clinton to the left on is-
sues such as trade and taxes.
In the Republican primary, the
race is being dominated by
Sen. Ted Cruz, a full-throated
movement conservative, and bil-
lionaire Donald Trump, who holds a
checkered ideological history but
has moved steadily rightward on
issues such as abortion, taxes and
health care. Candidates generally
considered more mainstream and
moderate—former Florida Gov. Jeb
Bush, New Jersey Gov. Chris Chris-
tie and Ohio Gov. John Kasich—lag
well behind.
The hole in the moderate mid-
dle is wide enough that former
New York City Mayor Michael
Bloomberg has begun pondering
whether the conditions are right
for a presidential run as an inde-
pendent, centrist candidate,
though history suggests such ef-
forts are difficult at best.
To some extent, it’s normal for
primary elections to draw candi-
dates toward the ideologically
charged activists in their parties’
bases, who are the most energized
players early in any campaign sea-
son. But the trend seems especially
acute in the 2016 cycle.
Here’s one big reason for that:
More Americans actually are sever-
ing their ties to the two main par-
ties, which they see as ineffective.
In doing so, they are leaving the
presidential primary process to be
dominated by the more ideological
Sen. Ted Cruz is one of the insurgents shaking up the Republican contest.
“The Good Old Boy network is
corrupt,” said David Ouellette, 51, a
Republican primary voter from Hud-
son, N.H., who turned out to see Mr.
Cruz at an outdoor rally this month.
“It’s time to crush it.”
Alyssa Kaufold, a 19-year-old col-
lege student who attended a Sand-
ers rally in Nashua, N.H., said she
doesn’t feel like Mrs. Clinton is
“very connected to people like us.
She’s influenced by big money and
big corporations.”
A year ago, Mr. Bush was on his
way to building an early GOP lead
by excelling at the things that usu-
ally define winning presidential
campaigns: raising tens of millions
of dollars for an affiliated super
PAC, racking up top-tier endorse-
ments and rolling out policy posi-
tions to give voters an idea of what
he would do as president. For a few
activists of the left and right.
A study of voter registration in
the most politically competitive
states by Third Way, a think tank
of moderate Democrats, found that
between the 2008 and 2014 elec-
tion cycles, the share of Americans
registered as independents grew
by 17.4%. Meanwhile, Democratic
registration decreased by 4.8%
while Republican registration grew
by just 3.3%. Similarly, a new Gal-
lup study released this month finds
that 42% of Americans now iden-
tify themselves as political inde-
pendents, dwarfing the shares who
call themselves Democrats (29%)
or Republicans (26%).
“We have two phenomena: a
growth of independents and a
growth of partisanship,” says Lee
Miringoff, who directs the Marist
Poll. “The Democrats and Republi-
cans who remain identified with
the parties are really baked into
their positions.” Meanwhile, he
says, “we’re seeing a growth of in-
dependents who say this partisan
show isn’t for me.”
T
he picture could change, and
moderates find a greater
voice, once the calendar
moves beyond the early states of
Iowa and New Hampshire, which
tend to be dominated by core ac-
tivists. The voting population is
more diverse in bigger states such
as Florida, Minnesota, Michigan
and Ohio, and chances seem good
the races in both parties will con-
tinue long enough that primary
voters in such states will have a
say in the outcome this time.
But then the question will rise
BRIAN SNYDER/REUTERS
months last spring, it looked like
Republicans might crown the next
member of the Bush dynasty. Then,
Mr. Trump stole the show, drawing
maximum attention with his occa-
sionally provocative remarks.
If Mr. Trump’s backers turn up to
vote in early caucuses and primaries,
he could lock up the nomination rela-
tively quickly. If they don’t, Mr. Cruz
is well-positioned to outperform his
rivals among more doctrinaire con-
servatives. And a collapse by either
might clear a lane for a more cen-
trist, business-friendly candidate, but
only if someone can emerge from the
logjam behind them. “You could have
five people split the rest of the vote,
and then there’s no clear alterna-
tive,” said Ames Ziegra, 56, a veteri-
narian from Exeter, N.H., who is look-
ing to support someone other than
the two leaders.
anew in the general election. Tra-
ditionally, successful presidential
candidates have tried to avoiding
tacking so far to the left or right in
the primary season that they com-
promise their ability to move back
toward the center once the race to
November is under way.
It isn’t clear such a course cor-
rection will be possible this time,
given the stronger pull of the two
parties’ ideological wings.
“That middle ground is being
left wide open for somebody to
capture,” says Jon Huntsman, the
former Utah governor and Republi-
can presidential candidate. He now
is co-chairman of a group called
No Labels, which urges politicians
to move beyond partisanship to
solve national problems.
It’s certainly possible to see ei-
ther Mrs. Clinton or Mr. Trump, who
seem more pragmatists than ideo-
logues by inclination, tacking to the
center if they get the nomination.
Mr. Huntsman thinks that
Mr. Trump, who took his group’s
“Problem Solver Promise” to work
with both parties, is such an un-
conventional figure that he, in par-
ticular, has a chance to “cobble to-
gether a pretty broad coalition” of
Democrats, Republicans and inde-
pendents.
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Though lacking some of the inter-
personal drama of the GOP race, the
Democratic contest has been nearly
as surprising. Mr. Sanders, who calls
himself a democratic socialist, has
narrowed what was once a 55 per-
centage-point lead for Mrs. Clinton
nationally to single digits in some
polls, consistently outpacing her in
New Hampshire.
Such a development would have
seemed impossible just a few months
back. Mrs. Clinton launched her sec-
ond presidential bid in April with ev-
ery conceivable advantage: universal
name recognition, a formidable fund-
raising apparatus, the allegiance of
the Democratic establishment, and
nearly a quarter century of experi-
ence at the highest levels of U.S. pol-
itics and government.
So dominant was her position
that almost every top-tier Demo-
cratic governor and senator—pres-
ent and past—chose to sit out the
race, concluding that challenging
Mrs. Clinton would be futile.
But Mr. Sanders plunged in and
tapped into the same sort of voter
unease that has propelled Mr.
Trump. He described a political and
economic system “rigged” in favor
of billionaires. He delivered blister-
ing attacks on Wall Street before
crowds of 10,000 and 20,000. With
the Democratic Party tilting left, he
found an enthusiastic audience for
proposals that would do away with
public college tuition, raise the min-
imum wage to $15 an hour, and
usher in a “Medicare-for-all” gov-
ernment-run health-care system.
Voters are also drawn to what they
see as his authenticity. At a Sanders
rally in Iowa this month, 28-year-old
Miles Hayes told how he has more
than $90,000 in college debt and de-
votes more than half his paycheck to
paying down his student loan. Mr.
Sanders asked him to tell more of his
story. “I want everyone to hear this,”
he said. Afterward, Mr. Hayes said of
Mr. Sanders: “He looks me in the eye
and sees me as a human being.”
THE WALL STREET JOURNAL.
Contested
Republican
Convention
Is Possible
BY REID J. EPSTEIN
Three different dynamics are
raising the prospects that delegates
to the Republican convention could
arrive in Cleveland in July without a
clear first-ballot winner, something
that hasn’t happened in American
politics in decades.
First, there is the unusually
crowded GOP field and the uncon-
ventional impact of Donald Trump,
the New York businessman who in
breaking all of the conventional
campaign rules has energized voters
who don’t normally come out for
the party’s primaries.
Then there is the Republican
Party’s redrawn primary map that
gives more sway to Southern states
that often back nominees who aren’t
successful in other regions.
And, finally, the party has insti-
tuted a new way of counting dele-
gates in early contests that will
spread them out among the compet-
itors, preventing anyone from sepa-
rating from the pack.
Those forces could create a sce-
nario in which no candidate arrives
with the 1,237 delegates needed to
clinch the nomination.
For now, the political world is fo-
cused on the first four dates of the
nominating calendar: February con-
tests in Iowa, New Hampshire, South
Carolina and Nevada, where just 133
delegates will be picked.
After that, about 600 delegates
are at stake on March 1 in Texas, Vir-
ginia and nine other states. Delegates
in each of the states will be awarded
proportionally based on the percent-
age of the votes the candidates re-
ceive, making it likely that one candi-
date won’t be able to build an
insurmountable lead over a crowded
field in which several contestants are
accruing delegates.
Recent primary contests have
featured a candidate with main-
And delegates are
obligated to vote for their
candidate only on the
first ballot in Cleveland.
stream backing and financial sup-
port—George H.W. Bush, Bob Dole,
George W. Bush, John McCain and
Mitt Romney—facing upstart candi-
dates who eventually ran out of
money and ceded the nomination.
But in 2016, Florida Sen. Marco
Rubio, Govs. Chris Christie of New
Jersey and John Kasich of Ohio and
former Florida Gov. Jeb Bush are
fighting over centrist voters.
Meanwhile, Texas Sen. Ted Cruz
is consolidating social conservative
support and Mr. Trump is drawing
newcomers or some dormant vot-
ers. Such a contest makes it mathe-
matically tough for any candidate to
clinch the nomination early.
Even if one candidate wins 40%
of the delegates awarded by March
15, he or she would have less than
one-half of the necessary delegates
to win the nomination.
If the leader at that point is a so-
cial conservative like Mr. Cruz, the
road to Cleveland will be difficult:
No Southern states vote after March
15, making a comeback possible in
the Midwest and Northeast for an
establishment candidate, should one
survive. March 15 also brings the
first winner-take-all states: Florida
(99 delegates) and Ohio (66).
The last real chance for candi-
dates to become the presumptive
nominee comes in late April, when
New York and five other Northeast-
ern states hold primaries. There are
few chances after that to run up
large delegate numbers. The biggest
prize on the calendar comes at the
end, when California votes June 7.
But that state, like New York earlier,
will award its 172 delegates propor-
tionally by congressional district.
Delegates won during the pri-
mary season are obligated to vote
for their candidate only on the
party’s first ballot at the July con-
vention. If no candidate wins a ma-
jority in that tally, the delegates
would be free to vote for whomever
they like, creating the possibility of
a free-for-all when GOP delegates
gather at the Quicken Loans Arena
in Cleveland.
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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Economic Anxieties Confront Candidates
Competitors in both parties advance
divergent ideas for boosting growth
BY NICK TIMIRAOS
AND RICHARD RUBIN
Recent market jitters and fears of
slumping global growth show how
quickly economic worries could
bump aside national-security con-
cerns as a dominant theme of the
2016 election.
Fewer than a third of registered
voters surveyed this month by The
Wall Street Journal and NBC News
said they believed the coming year
would offer economic expansion or
opportunity for their household, com-
pared with more than half who said
they were bracing for harder times.
The anxiety underscores what sev-
eral top campaign advisers say poses
the biggest challenge for the next
president: creating growth that
reaches families of all income levels,
a point of consensus forged by 15
years of stagnant wages for the mid-
dle class.
“We need higher growth, but how
do we have higher growth that’s more
inclusive?” said Glenn Hubbard, dean
of Columbia Business School and an
adviser to former Florida Gov. Jeb
Bush, at a panel discussion last month.
More than half of those
polled this month by the
Journal and NBC are
bracing for harder times.
Added Neera Tanden, an adviser to
former Secretary of State Hillary
Clinton: “I would say to the next
president, ‘You are going to have to
solve this problem because the poli-
tics of the country will get more and
more destructive until you do.’ ”
Doing anything on a grand scale
won’t be easy, especially if Congress
and the White House are controlled
by different parties, which are mov-
ing further apart on the key question
of how to boost growth.
So far, many candidates have
spelled out their tax plans, providing
a key measure of their potential eco-
nomic stewardship. The plans show
that the parties are diverging even
more than they did in 2012.
Republican candidates see the tax
code as the best way to encourage in-
vestment and pull Americans back
into the workforce. They also are no
longer promising to avoid higher bud-
get deficits or to prevent the tax bur-
den from shifting from high-income
households to the middle class. And
they reject efforts to lift pay by rais-
ing minimum wages and say fewer
regulations will help boost growth.
Mrs. Clinton and Vermont Sen.
Bernie Sanders want to raise taxes on
high-income households to increase
spending on education, infrastructure
and health care. They are quarreling
over how much to boost minimum
Terror Attacks in U.S., Paris Alter Election Narrative
BY DAMIAN PALETTA
WASHINGTON—The deadly ram-
pages in California and Paris have
brought a new focus on terrorism to
the 2016 presidential election, with
candidates advancing sweeping posi-
tions on the Middle East, email en-
cryption, gun control and immigra-
tion.
Republican voters are gravitating
toward tough-talking candidates
rather than those with extensive for-
eign-policy and security experience.
On the Democratic side, front-runner
Hillary Clinton, a former secretary
of state, says her international expe-
rience gives her an advantage over
her opponents.
These moves reflect how 2016 is
on course to be an inverse of the
2008 election. At the start of that
race, the campaign was shaping up
JAE C. HONG/ASSOCIATED PRESS
to be a referendum on the Iraq war,
but the financial crisis erupted and
became dominant.
This time, what started as a focus
on the economy has morphed in part
into debates about Syria, Iraq, Rus-
sia, Israel, Iran—and more recently,
North Korea.
GOP candidate Marco Rubio of
Florida is trying to seize the mo-
ment by highlighting his expertise as
a member of the Senate foreign rela-
tions and intelligence committees.
But so far, Donald J. Trump and Sen.
Ted Cruz (R., Texas) have captured
the momentum by depicting them-
selves as blunt, aggressive leaders.
“When there’s fear in the water,
as there is now with terrorism, the
loudest and strongest voice may be
the most important voice, and it al-
most eclipses foreign-policy experi-
ence,” said Tim Malloy, assistant di-
rector of the Quinnipiac University
Poll.
wages and expand Social Security
benefits.
The Republican plans all shift the
U.S. away from taxing investments
and toward taxing consumption.
Sen. Ted Cruz (R., Texas) and Sen.
Rand Paul (R., Ky.) want to eliminate
the corporate income tax and payroll
tax and replace them with value-
added taxes. Sen. Marco Rubio (R.,
Fla.) and retired neurosurgeon Ben
Carson would both eliminate taxes on
capital gains, dividends and interest.
The plans would lower marginal tax
rates on income and limit tax breaks.
But that wouldn’t make up for the rev-
enue loss from the rate cuts. Mr. Bush’s
plan would cut tax revenue by $6.8
trillion over a decade, according to the
Tax Policy Center, a nonpartisan proj-
ect of the Brookings Institution and
Urban Institute. GOP front-runner Don-
ald Trump’s plan would lower tax reve-
nue by $9.5 trillion.
“It’s like the competition to see
who can come up with the biggest tax
cuts,” said William Gale, a Brookings
Institution economist. He is skeptical
the GOP plans would promote any-
thing close to the growth they claim
and would instead increase deficits.
“The debt is going to be a burden on
long-term growth, not an asset.”
Mrs. Clinton proposes raising capi-
tal gains tax rates on assets held be-
tween one and six years and a 4%
surcharge on incomes over $5 mil-
lion. She wants tougher curbs on
companies that engage in inver-
sions—transactions that let them
move their tax addresses outside the
U.S.—and has proposed targeted tax
credits aimed at rewarding corporate
behaviors such as sharing profits
with workers and giving them time
off to care for aging relatives.
Mr. Sanders, running to Mrs. Clin-
ton’s left, has proposed a tax on fi-
nancial transactions and an expan-
sion of the estate tax. He also wants
to create a paid-family-leave pro-
gram, funded with an additional pay-
roll tax, and a single-payer health-
care plan for all that would require
higher taxes offset in part by an end
to most health-insurance premiums.
The next president will have less
room to maneuver because the share
of debt held by the public has dou-
bled as a portion of GDP to 75% since
2007. Low interest rates, a conse-
quence of slow growth and the Fed-
eral Reserve’s efforts to stimulate the
economy, have kept the government’s
interest payments on the debt from
ballooning. But those payments are
projected to rise every year over the
next decade. The retiring of the baby
boom generation also means a
slower-growing workforce will bear
higher benefit burdens.
So is there a reason to think Wash-
ington will strike a deal? Yes. Presi-
dents don’t get re-elected, after all, if
they don’t have a record of accom-
plishments.
Rampages on multiple continents have put voters on edge. Above, investigators examine the vehicle where the two
accused San Bernardino, Calif., shooters died after exchanging gunfire with law-enforcement officials on Dec. 2.
In a December Quinnipiac poll,
30% of GOP voters likely to partici-
pate in Iowa’s caucuses cited terror-
ism as the most important issue
when choosing a nominee, eclipsing
issues like jobs and the economy. In
November, just 15% had listed terror-
ism as the top issue.
In part, Republican candidates are
heeding the lesson of Ben Carson’s
slide in the polls. Mr. Carson, a re-
tired neurosurgeon, was polling at
24.4% on Nov. 13, according to a Real
Clear Politics average, putting him
Wednesday, January 27, 2016 | S3
ANDREW BURTON/GETTY IMAGES
Volatility in financial markets around the world has intensified economic worries as the U.S. election season heats up.
Overhaul Plans
Presidential candidates in both parties are seeking ways to boost middle-class incomes, and they're all
turning to the tax code as a main tool.
Republicans want to revamp the tax system to improve incentives for work and investment
In many of the plans, the gains are concentrated among high-income households. Most also would collect less money than
the current tax system does, likely increasing budget deficits or requiring spending cuts.
Top individual Business tax plan Revenue
Candidate
income tax rate
Current is 39.6%
Current corporate
rate is 35%
estimate
over 10 years Other key features
Donald Removes individuals with income under
Trump
25% 15% -$12 $25,000 and married couples under
for all businesses trillion
$50,000 from income tax.
Ted Keeps mortgage and charity deductions and adds
Cruz 10% 16% -$3.7 tax-deferred savings accounts.
value-added tax trillion Businesses would be able to deduct investments.
Marco No taxes on capital gains and dividends from new
Rubio
35% 25% -$6.1 investments.
for all businesses trillion Adds a $2,500 child tax credit.
Would abolish all tax credits and deductions.
Ben 14.9% 14.9% -$5.6
Carson
Eliminates taxes on estates, capital gains, dividends
for all businesses trillion and interest.
Tax rates apply above 150% of federal poverty level.
Jeb State and local deduction would end.
Bush 28% 25% -$3.7 New break for lower-earning spouses.
for corporations trillion Full and immediate writeoff of capital investments
with no interest deduction.
Caps most deductions.
Chris
Christie
28% 25% N/A Says his plan would be revenue neutral.
for corporations
John Full writeoff of capital investments.
28% 25% N/A
Kasich Expand earned-income tax credit.
for corporations
Democratic candidates seek money to expand programs
They view tax policy as an instrument for their broader aims. They have proposed higher taxes on high-income households to
pay for programs that aid middle-income and lower-income families.
Candidate Tax increases Expanded programs
Hillary Higher capital gains rates on assets held for one to six years. Debt-free tuition at public colleges
Clinton Cap on some tax breaks for high-income households Infrastructure plan to rebuild roads and bridges.
Buffett Rule of minimum 30% tax rate on top-earning taxpayers Expanded childcare assistance
Tax on high-frequency trading
4% “Fair Share Surcharge” on taxpayers making more than $5 million a year.
Bernie 0.2% payroll tax increase to pay for family leave program Expanded Social Security benefits
Sanders Estate tax starting at $3.5 million instead of $5.45 million. Free tuition at public colleges
Financial transactions tax. Universal health care and child care
Impose Social Security payroll tax on wages above $250,000
Health plan would require new 6.2% business payroll tax, 2.2% income tax for
all and top rates up to 52%
Note: Details as of Jan. 26; Democratic candidates’ lists are not exhaustive. Revenue estimates don’t include effects of economic growth.
Sources: Candidates' websites; Tax Policy Center (tax rates); Tax Foundation (revenue) THE WALL STREET JOURNAL.
Encryption Battle
Could Intensify in
The Months Ahead
Another intensifying national secu-
rity debate surrounds encrypted com-
munications through things like text
messaging and emails.
Candidates from both parties have
sought to pressure Apple Inc. and
other firms to make it possible for
counterterrorism investigators to
read some private messages if they
get a court order.
Apple has resisted, saying privacy
is part of its business model and
adding that terrorists and foreign
countries could also find a way into
any back door it was ordered to add.
Tech firms have a backer in Sen.
Rand Paul (R., Ky.), who has argued
the government would infringe on in-
dividual privacy by gaining access to
personal messages.
How the issue unfolds in the pri-
maries could depend on whether
there is another major terrorist at-
tack or another crisis like North Ko-
rea’s recent nuclear-weapon test.
—Damian Paletta
neck-and-neck with Mr. Trump. But ‘Hey, guess what—I will pull us out decrying economic inequality, but
Nov. 13 was also the day 130 people of all this’ will attract a fair amount much time during recent debates
were killed by Islamic State terrorists of support” at a time when the pub- has been consumed by discussions
in Paris, and since then, Mr. Carson lic fears another attack, said Freder- of the Middle East. Mrs. Clinton,
has lost roughly 60% of his backers. ick Kagan, a scholar at the conserva- meanwhile, has redoubled her calls
Many of those have defected to tive American Enterprise Institute. for stricter gun-control rules follow-
Messrs. Trump or Cruz. And those The attacks in California and Paris ing the San Bernardino shootings.
two saw an additional spike in sup- are having a less obvious impact on Many Republicans are pushing to
port following the Dec. 2 terror at- the Democratic lineup. But they have limit or block Syrian refugees from
tacks in San Bernardino, Calif., when clearly changed the emphasis of Mrs. entering the U.S., saying terrorists
a married couple who swore alle- Clinton and her main rival, Sen. Ber- could slip in—a switch from the im-
giance to Islamic State killed 14 peo- nie Sanders of Vermont. migration debate in 2015 that fo-
ple at a holiday party. Mr. Sanders’s campaign surged cused largely on those crossing the
“Anybody who comes up and says, early on the strength of a message Mexican border.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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S4 | Wednesday, January 27, 2016 * *** THE WALL STREET JOURNAL. THE WALL STREET JOURNAL. **** Wednesday, January 27, 2016 | S5

Republicans Feb. 9
With fewer social conservatives, New Hampshire
doesn’t follow Iowa’s lead: No Republican in
N
E PHASE I Democrats
I modern times has won both contests. Its voters W Head Start Feb. 1
O Feb. 1 sometimes reject the direction of party leaders, as
H Democratic candidates can win convention I
with their choice in 2000 of then-dark horse O
W Iowa this year tests Donald A votes before any primaries or caucuses are College students, who tend to

The Path to a Presidential Nomination

Sen. John McCain.
A Trump’s ability to drive M held by wooing superdelegates — public W favor Bernie Sanders, could have a
newcomers to the P officials and party insiders who are free to A big impact at the Iowa caucuses.
caucuses. In polls, Mr. PHASE I back any candidate and aren't selected in The past two caucuses were heldd
S Votes matter. But to win a party’s presidential nod, the real currency is delegates. Here’s how Republicans and Democrats primaries or caucuses. in early January, when most
Trump leads among
first-time caucus-goers.
FEBRUARY H allocate their delegates to the national conventions—and the steps candidates must take to win them. students were home for the

Is corn still king in Iowa? Ted Cruz is

Credentialing
Some 2,472 delegates will attend the
R
I
Republicans shortened their primary process to give their nominee more time to raise money and campaign for the November election. Democrats followed suit.
712
SUPERDELEGATES
holidays. This time, they’ll be on
campus and easier to organize.
popular with the state's large bloc of
Republican National Convention to select the
E
Convention Convention
social conservatives, but Primary Primary Nomination
presidential nominee. The winner must carry
he faces a test as the first 2012 2012
1,237—half of the total, plus one. But the first 4,764 total delegates
candidate to oppose tax 2016 2016 Feb. 9
breaks for ethanol, made
contests are more about building credibility and
Jan. Feb. March April May June July Aug. Jan. Feb. March April May June July Aug. Sept.
N
momentum than winning delegates. Voters here kept the race E
primarily from corn.
W
133 S F Clinton Lead PHASE II
competitive in 2008 by
boosting Mrs. Clinton. But
independents, who can H
Feb. 23
DELEGATES AT STAKE O
U O
L Hillary Clinton already has The Early States vote in the Democratic A
N March 15
won commitments from
Iowa and New Hampshire give Mr. Sanders a primary, lean toward Mr. M
Fewer than 35,000 E 5.4% OF TOTAL AWARDED T PHASE III R more than 350, or half, the chance at promotion from underdog to proven Sanders. P
Republicans turned out in SO FAR H Feb. 20
Feb March 15 LATE MARCH The political home to Jeb Bush I superdelegates, including contender. Like Mr. Sanders himself, the voter S
V D Maggie Hassan, the governor pool in both states is more liberal than the
2012. A well-run campaign If John Kasich survives and Marco Rubio could deal a
can win by motivating even a
D
A C
A
All GO
GOP nominees (and
presi
pre
presidents) dating to Ronald
earlier contests, the Ohio Big Dominoes Fall surprise, given Donald Trump’s A of New Hampshire. party overall.
Democrats, based on 2008 exit polls
H
I
small number of supporters. governor is well-positioned In late March, the rules change. States strength in Florida polls.
A R Reag in 1980, except for
Reagan to claim the state’s 66 can award all their delegates to a single R
Nevada hasn’t had
O inn 22012, have won the “First winner-take-all delegates. O winner of the statewide vote. If the top NATIONAL 47% liberal E
competitive caucuses in L in tthe South” primary. Will He defeated a sitting H two candidates haven’t yet emerged,
years: Mitt Romney won I th state go maverick
the governor in 2010 and won I they probably will now. Republican Convention IOWA 54%
N a
again this time? re-election with nearly 64% O
the last two largely on Nikki Haley endorsed Mitt Cleveland July 18-21
the strength of ties to
the state’s Mormons.
Romney in 2012, but hee lost
the state. The governorr may
A of the vote.
474
DELEGATES AT STAKE
A different kind of year is
raising the prospects of a
N.H. 56%

This year is a scramble. uld

endorse again. But would contested Republican
voters follow her? convention, something
63.5% OF TOTAL AWARDED that hasn’t happened in Centrist Voices
Candidates often stop at the Democratic Convention
SO FAR decades. Liberals dominate many early states,
Versailles Restaurant in Miami Philadelphia July 25-28
Conservative vs. Centrist as a sign of interest in Cuban a benefit to Mr. Sanders. But bigger
Democrats, with only two states that vote later include more
Early-March states are among the most voters, who made up 8% of major candidates,
PHASE II Florida’s 2012 primary electorate. moderates and conservatives, who
conservative—a potential boost to Ted Cruz and other anticipate a more
EARLY MARCH tend to favor Mrs. Clinton. In 2008,
social conservatives. Some 83% of Mississippi GOP March 1 traditional nominating 62% of primary voters in Texas rated
primary voters in 2012 were evangelical Christians.
Building Momentum Texas is the big prize: Its 155 T
Florida Is Expensive
Spring Break If there’s no clear winner, process. themselves moderate or conservative;
More delegates will be awarded in the March 1 delegates are the largest E With few contests in then any candidate with in Ohio, it was 59%.
cache except for those of X Estimates run to $40 million to late March and early even several dozen
VS. SEC primary, named for the Southeastern
Conference of collegiate sports, than on any
other day: 24%. Delegates in this phase are
California, which votes late.
Many GOP candidates have
A
S
compete across the state’s 10 major
media markets. Campaigns that don’t
April, campaigns focuss
on fund-raising.
delegates could become
a kingmaker. PHASE III
want to gamble on a delegate-free,
The hunt for delegates will draw centrist candidates to
awarded proportionate to the statewide vote;
even a third-place finisher may benefit.
roots in Texas, including Jeb
Bush, who grew up there, second-place finish may turn instead
S
The Scramble
the few Northeast and Midwestern states that vote at and Ted Cruz, who claimed to other March 15 states. June 7 N Mrs. Clinton has a large lead among
this point. If Chris Christie remains, watch for him to visit
Massachusetts or Michigan
963
DELEGATES AT STAKE
his Senate seat in 2012. PHASE IV
APRIL TO JUNE
Should Chris Christie remain
in the hunt to the end, his
ain E
W
O
U
African-American and Hispanic voters, who play a
big role in states that vote after Iowa and New
st
state’s es
winner-take-all rules T Hampshire. But that advantage could slip if she
J
44% OF TOTAL AWARDED Return to the Center Last Miles C
A
s
suggest he would have a E H loses the first two contests.

How Republican Delegates Are Allocated

SO FAR
Fewer GOP debates
While the party is heavy
on Southerners and
Voters in California, New York and several other
big states have long complained that they’re cut
L
I
c
claim on 51 delegates.
S
R
A
C
2,383
DELEGATES NEEDED TO
2012 increasingly conservative, out of the nominating process—by the time it’s F E R WIN NOMINATION
18 contests 13 10 10 5 Money Matters it could be centrist their turn to vote, the choice of nominee is O Y O
Proportional Modified proportional Hybrid Winner- Convention settled. This year, they could have the last word. R
Delegates are allocated Proportional unless Some form National
Large donors could have an impact, as 20 Northeastern states that Feb. 27 L
take-all many candidates will have spent their determine the nominee. N I
proportional to the
statewide vote, with
some variances among
one candidate wins
a majority, either
statewide or by
of winner-take-
most (e.g., by
congressional
All delegates
are awarded
convention
delegates
to the plurality chosen at
war chests by this point. Sheldon
Adelson and his wife, who gave more
2016 New York votes on April
19, and Connecticut,
902
DELEGATES AT STAKE
I
A
African-Americans accounted
for 55% of the voting pool in N
A
4,764 total delegates

states. congressional district; district) or directly winner state/territory than $100 million to Repubican election Pennsylvania and the Democrats’ 2008 primary
then winner-take-all elected delegates convention 12 T winner of each of California's
The fornia's here, which should help Mrs.
campaigns in 2012, haven’t said who mid-Atlantic states vote
100% OF TOTAL AWARDED 5
53 congressional districts gets a Clinton. By contrast, Iowa’s
25.8% of delegates 28.7% 24.8% 16.2% 4.5% they’ll back now. a week later.
pportion of the state's 172 2008 caucus-goers were 4%
ddelegates. The challenge? African-American.
D
Deciding where to campaign.
Sources: staff reports; the parties; Des Moines Register (Visits to Iowa); TheGreenPapers.com; FrontloadingHQ (GOP delegates allocated); Associated Press (superdelegate commitments); CNN (State exit polls); WSJ/NBC News polls (National exit polls) Photos: Associated Press (McCain, Reagan, Christie, Rubio, Trump, Versailles, Hassan, Clinton); Getty Images (Haley, Cruz, South Carolina); Agence France-Presse/Getty Images (Romney, Bush); Reuters (Kasich); European Pressphoto Agency (Sanders, Iowa) Aaron Zitner, Carlos A. Tovar/THE WALL STREET JOURNAL.

Trump Puts Unique Stamp on GOP Race

BY BETH REINHARD
A New Iowa Problem for the Clintons?
BY PETER NICHOLAS

Whether he wins the presidential DES MOINES, Iowa—When Hillary

nomination or not, Donald Trump Clinton was making up her mind about
has emerged as the single most in- running for the 2016 Democratic pres-
fluential force in the Republican con- idential nomination, one of her advis-
test. ers offered a reason why the calcula-
He drove rivals to the right on tions involved were so tough: What do
immigration, trade and national se- you do about Iowa?
curity, set the bar for crowd rowdi- No state has given both Hillary
ness and size, and generated a na- Clinton and former President Bill Clin-
tionwide debate over appropriate ton more headaches than the Hawkeye
political speech by disrespecting State. Mr. Clinton opted not to cam-
women, immigrants, Muslims and paign in Iowa in the 1992 Democratic
prisoners of war, among others. contest, recognizing that he couldn’t
And like no one else in the race, compete with a native son, former
Mr. Trump tapped into a boiling- Sen. Tom Harkin. And in January
over frustration among some Amer- 2008, Mrs. Clinton saw her front-run-
icans, especially Republicans, who ner status crumble in the Iowa cold,
feel left behind amid an improving finishing a disappointing third.
economy and changing social mo- Iowa’s quirks have confounded Mrs.
res. Clinton. The state didn’t elect its first
The billionaire developer’s sup- female member of Congress until
porters tend to have less education 2014, and the woman who broke the
JAMES GLOVER/REUTERS

and be lower-income voters. Polling gender barrier was a Republican, Sen.

also shows Mr. Trump’s supporters Joni Ernst. The state’s caucus system
are more attracted to a strong requires intense organizational muscle
leader than to someone who agrees and is dominated by Democratic activ-
with them on the issues or seeks ists who aren’t necessarily drawn to
common ground with Democrats. the centrist, mainstream politics that
“Everything he says is what the Polling shows that supporters of GOP presidential candidate Donald Trump are looking for a strong leader, not someone who will compromise with Democrats. Mrs. Clinton symbolizes.
MARK KAUZLARICH/REUTERS

working class of this country is In 2007, one of her campaign aides

feeling and saying,” said 54-year-
old Roger Aziz Jr., who attended a
recent Trump rally in New Hamp-
shire. “Political correctness hasn’t
worked. Multiculturalism hasn’t
worked. People are fed up.”
Every Republican presidential
candidate has modified their cam-
paign to varying degrees in re-
sponse to Mr. Trump’s ascent. Flor-
ida Sen. Marco Rubio, whose sunny
optimism had drawn comparisons
to former President Ronald Reagan,
has adopted a more ominous tone,
Donald Trump
Businessman
Latest
WSJ/NBC
national
poll:
33%
Events held in Iowa
and New Hampshire
warning of a declining America, and
aired an ad appealing to “all of
those who feel out of place in this
country.”
Almost all other GOP candidate
toughened their language, if not
their policy, on illegal immigration
as Mr. Trump has called for a wall
along the Southern border, mass
deportations, and a ban on Muslims
entering the country.
Perhaps no candidate was im-
pacted more than former Florida
Gov. Jeb Bush, the early front-run-
Ted Cruz
Texas senator
Latest
WSJ/NBC
national
poll:
20%
Events held in Iowa
85 and New Hampshire
ner who is polling in single digits
nationally as he tries to recover
from Mr. Trump’s attacks about his
supposed “low energy.”
For the GOP establishment, a
Trump nomination would signal a
failure to learn from the mistakes of
2012, when women, minorities and
young people widely rejected nomi-
nee Mitt Romney, in part for com-
ing across as too extreme. Mr.
Trump rose in the polls despite
calls from GOP insiders about the
need to expand the party’s reach
Marco Rubio
Florida senator
Latest
WSJ/NBC
national
poll:
13%
Events held in Iowa
202 and New Hampshire 150
beyond its older, white and male
base to build a winning national co-
alition.
“He’s shutting out a lot of the
population,” said 18-year-old college
student Emma Sheehan, who also
attended the New Hampshire rally.
Mr. Trump says he can win by
firing up voters who haven’t partic-
ipated in recent elections.
The first round of nominating
contests in February will put that
claim to the test. And it won’t be
until then that Republicans will
Ben Carson
Neurosurgeon
Latest
WSJ/NBC
national
poll:
12%
Events held in Iowa
and New Hampshire
learn whether the New York busi-
nessman defied decades of conven-
tional wisdom about their presi-
dential primaries and got away
with it.
Conversely, his failure to clinch
the nomination would signal that
the old rules—paid advertising and
experience matter, gaffes can kill a
campaign, the GOP would never
pick a thrice-married, tax-hike-
backing ex-Democrat—still apply.
—Patrick O’Connor
contributed to this article.
Other
candidates
Jeb Bush
Former Florida governor
Chris Christie
New Jersey governor
Carly Fiorina
Former H-P CEO
John Kasich
131 Ohio governor
recommended that Mrs. Clinton by-
pass Iowa and focus elsewhere, calling
it “our consistently weakest state,” ac-
cording to an internal memo that sur-
faced. She wound up campaigning
hard in Iowa, with little to show for it.
An email she sent to Sidney Blu- Democratic candidate Hillary Clinton, who drew complaints in 2008 for holding Iowans at arms length, has sought to be more accessible this time around.
menthal, a confidante, when she was
secretary of state in 2012 suggests she the state until 2014. “I’m baaaack,” swings through Iowa and appeared at Clinton at an event in Cedar Rapids. Mrs. Clinton has hired some of the ad-
doesn’t think much of the caucus sys- she told Iowans at the steak fry hosted more than 100 separate campaign Sitting in the front row, he held a copy visers who guided then-Sen. Barack
tem. She described caucuses as “crea- by Mr. Harkin. Indeed she is, seeking events. She also is deploying her hus- of Mr. Clinton’s autobiography, “My Obama’s 2008 victory in Iowa. She has
tures of the parties’ extremes.” to break the Clinton curse. Her cam- band on the trail and he is proving a Life,” which he hoped to have auto- opened 26 offices around the state
After losing the 2008 caucuses, paign said that as of mid-January she popular draw. graphed. “It’s been a lifelong dream to and her campaign said it was pleased
Mrs. Clinton didn’t make a return to had made more than two dozen Adam Wright, 37, came to see Mr. get to meet him,” Mr. Wright said. to see 500 volunteers show up in sub-
In 2008, Iowa Democrats com- freezing weather on a recent weekend
plained that Mrs. Clinton seemed too to canvass in various neighborhoods.
Latest
Hillary Clinton Bernie Sanders Martin O’Malley removed, perpetually surrounded by Could Iowa Democrats once again
WSJ/NBC
U.S. poll
Former senator, Vermont senator Former Maryland Secret Service agents and protective trip up the “inevitable” front-runner?
secretary of governor aides who kept at a distance from po- It could happen. Recent polls show
tential caucusgoers. Her security Vermont Sen. Bernie Sanders has
state Latest
5% WSJ/NBC Latest needs will never allow her to plunge erased the huge lead Mrs. Clinton once
Latest national WSJ/NBC into crowds, but she has sought to be enjoyed in Iowa. Large crowds are
WSJ/NBC
5% poll: national more accessible this time around. showing up at Sanders rallies, relish-
national
poll: 34% poll: Her first swing through Iowa last ing his bash-the-billionaires message.
3% 59% 2% spring was a low-key affair. She did
away with the stage and the rope lines
At a candidate forum in Des Moines
this month, Mr. Sanders said: “It could
and sat at tables with small groups of be that the inevitable candidate for
3%
Events held in Iowa
174
Events held in Iowa
and New Hampshire 214 Events held in Iowa
and New Hampshire 271
voters, talking about their concerns.
Hoping to learn from past mistakes,
the Democratic nomination may not
be so inevitable today.”
and New Hampshire
NOTE: DES MOINES REGISTER’S IOWA APPEARANCE COUNT FROM 1/2014; NBC NEWS’S 2016 SOUTH CAROLINA STOPS
 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
S6 | Wednesday, January 27, 2016 THE WALL STREET JOURNAL.

Portrait of the Parties

What the Democratic and Republican coalitions look like—and how they have changed
s
Democrats Republicans
The Democratic presidential race is marked by a generational and gender divide, Past GOP primary races have featured two major coalitions, establishment centrists
r

Cli
S an d e

nton
with Bernie Sanders performing best among the youngest voters and social conservatives. But Donald Trump’s coalition represents something new:
and older women strongly backing Hillary Clinton. a secular, populist movement.
Bigger Sanders advantage Bigger Clinton advantage 69
Trump voters Social conservatives Establishment centrists
66 67 Most don’t have a college Typically identify as very Generally more moderate and
60%
54 51 50 54 degree and oppose increased conservative and oppose gay tend to support candidates
48% immigration and trade marriage and abortion backed by party leaders
46 45 45% % of voters† 33% 37% 29%
36% 36 36 By ideology 59% 40% 75% 24% 51% 48%
29 27 23 Conservative Mod./liberal Conservative Mod./liberal Conservative Mod./liberal
Ages White men Very White women White men White women White women Non- White By education 62% 38% 53% 46% 45% 55%
18–34 <college liberal 18–49 college+ <college college+ whites women 50+ H.S./some coll. College degree H.S./some coll. College degree H.S./some coll. College degree
Free trade* 55% 41% 28%
Free trade with foreign countries is bad for America
While Democrats broadly agree on most issues, the primary electorate roughly fall into one of four groups.
Immigration* 81% 60% 45%
Social justice Union Environ- Ideological Immigration hurts the U.S. more than it helps
voters supporters mentalists outliers Marriage 70% 74% 55%
Support Black Lives Support Environmentalists Support tea party Share who call themselves strong supporters of traditional marriage
Matter and gay rights labor unions or support action or NRA or listen to
movements on climate change conservative radio Gun rights 73% 66% 42%
Share who call themselves strong supporters of the National Rifle Association
% of voters 32% 24% 16% 18%
By age 48% 51% 35% 65% 49% 51% 42% 56%
z

Ru
Ted Cruz and Marco Rubio show the strongest appeal beyond their own bases.
Cr u

18–49 50 and older 18–49 50 and older 18–49 50 and older 18–49 50 and older

bio
By ideology 75% 24% 48% 52% 47% 52% 31% 66% Share in each category who can see supporting someone from another lane:
Liberal Mod./cons. Liberal Mod./cons. Liberal Mod./cons. Liberal Mod./cons.
Gun laws* 92% 76% 84% 31%
Donald Trump — 58% 28%
Concerned that the government won’t do enough to regulate access to firearms
Free trade* 59% 54% 65% 50%
Ted Cruz 67% — 52%
Free trade with foreign countries is good for America Marco Rubio 52% 68% —
World role* 66% 74% 59% 66%
Need to focus here at home because America can’t be the world’s policeman Jeb Bush 30% 43% —
*Based on December poll only. All others from December-January combined polls. †Coalitions based on a question offering voters a five-candidate ballot for president, with social conservatives comprising Carson/Cruz supporters and establishment centrists comprising Bush/Rubio supporters.

How the parties have grown more divided

Ideologically, the parties have drifted further apart. Slightly more Democrats Nonwhites are nearly Religious ‘nones’—those with On immigration, the Gun ownership is twice as likely
identify as liberal today than did so 40 years ago, while a majority half of all Democrats, vs. no affiliation—have quadrupled partisan gap has grown. among Republicans as Democrats,
of Republicans now call themselves conservative. just 1 in 6 Republicans.† among Democrats. Immigration is:* a gap that continues to widen.‡
Democrats Republicans Conservative Good Bad
2014 2015 Republicans
50% Liberal 2005
2000
Moderate
Moderate Democrats

Liberal Democrats
0 Conservative Republicans
1980 ’90 2000 ’10 1980 ’90 2000 ’10 Dem. GOP All adults 1980 ’90 2000 ’10 Dem. GOP 1980 ’90 2000 ’10
Note: Party affiliations include independents who lean that way. *Based on polls conducted in December of each year. †Those other than white non-Hispanic. ‡Question asked if respondent has a gun in the home.
Sources: WSJ/NBC News telephone polls, most recent conducted Jan. 9–13; General Social Survey Randy Yeip and Aaron Zitner/THE WALL STREET JOURNAL.

MOOD
Continued from page S1
among independents who said
they were likely to participate
in GOP caucuses.
With Mr. Trump winning
support across the party’s ide-
ological spectrum, the GOP
primary race isn’t fitting
neatly into a traditional two-
way contest between a center-
right establishment choice and
a more conservative alterna-
tive, such as the one between
HAL YEAGER/GETTY IMAGES
The party is facing fresh said it was on the wrong track;
challenges both in its primary only 6% said it was moving in
contest and in the general the right direction. In a late-
election because, while the October poll, 71% of Republi-
makeup of the Republican cans said they felt “unease”
Party hasn’t changed, the about the country’s direction
world around it has. because of changes in immi-
The white share of the U.S. gration, gay rights and the
population dropped from waning influence of religion.
80.3% in 1990 to 74.8% in “The morals in this country
2010, according to Census Bu- are terrible,” said Brian Henry,
reau data. Acceptance of a Trump supporter in Ken-
same-sex marriage has be- tucky who participated in the
come a majority view with October poll. “It seems like in
head-spinning speed. The the past four, five, six years,
younger, more ethnically di- you’re not proud to be an
verse millennial generation is American like you used to be.”

Mitt Romney and former Sen.
Rick Santorum in 2012.
Instead, the GOP field seems
to be morphing into a three-
way brawl pitting Mr. Trump’s
blue-collar populists against
evangelical conservative voters
Vermont Sen. Bernie Sanders has been drawing big crowds for his Iowa and New Hampshire rallies. who are rallying around Sen.
Ted Cruz of Texas and the more
asserting itself. Mr. Trump’s appeal to that
sentiment is cutting across the
party in a distinctly nonideolog-
‘The morals in this ical way: An analysis of Decem-
country are terrible,’ ber-January WSJ/NBC News
polls found that 31% of his sup-
said Brian Henry, a porters call themselves “very
Trump supporter. conservative,” 28% “somewhat
conservative” and 34% are

YOUTH
among liberals. back from an early loss. centrist voters who favor estab- “moderate” or “liberal.”
In 2008, 93% of Democrats That is largely due to her lishment candidates, such Meanwhile, the GOP is just The rest of the party splits
who participated in the Iowa support from racial minorities, as Sen. Marco Rubio of Florida as white as it was in 2000, into two more ideological
caucuses were white, as were who make up nearly 40% of all or Govs. Chris Christie of New even more conservative, and camps: 44% of those supporting
Continued from page S1 95% of voters in the New Democratic primary voters. In Jersey and John Kasich of Ohio. older. According to data com- Jeb Bush and Mr. Rubio are
aged 18 to 34. But these millen- Hampshire Democratic primary. January, she led Mr. Sanders The sprawling 2016 race piled by the Pew Research moderate or liberal; more than
nials make up just 13% of the Using a measure that combines by 42 points among racial mi- bears little resemblance to the Center, the party is 87% half who support Messrs. Cruz
party’s electorate. Also, one in the number of whites and liber- norities. This winter, nearly paths that led to the nomina- white—compared with 88% in or retired neurosurgeon Ben
four Democratic voters are age als who voted in each state in nine in 10 African-Americans tion of George H.W. Bush in 2000. The average age is Carson are “very conservative.”
65 and older, and 68-year-old the 2008 primaries, Nate Silver said they could see themselves 1988, Sen. Bob Dole in 1996, nearly 50—up from 45.5 in It isn’t clear how any candi-
Mrs. Clinton is ahead with of the website fivethir- supporting Mrs. Clinton, Sen. John McCain in 2008 and 2000. More than two-thirds date will assert dominance,
them by 45 percentage points. tyeight.com calculated that strength that dates to races of Mr. Romney in 2012. In each of think of themselves as conser- given these stark splits and
“He’s made inroads and his New Hampshire had the sec- her husband, former President those cases, Republicans—after vative, up from 60% in 2000. each early-voting state giving
message has been particularly ond-highest portion of white Bill Clinton, and his popularity more-or-less foreordained pri- A Wall Street Journal/NBC different factions of the party
effective with younger voters, liberals of any state. Iowa with black voters. mary fights—ended up nomi- News poll this month found a chance to assert themselves.
but that’s not where the vast ranked third. The only state In Nevada, the third state nating the establishment- Republicans were overwhelm- That could mean many states
majority of voters are,” said with a greater share was Mr. to vote, 15% of Democratic backed candidate who naturally ingly pessimistic about the di- throw different candidates a
Jeff Horwitt, a Democratic Sanders’s Vermont. voters in 2008 were African- seemed to be next in line. rection of the country: 91% lifeline to stay in the fight.
polling expert at Hart Re- American and another 15%
search, which runs the poll were Hispanic in 2008.
with Republican Bill McInturff.
‘If the youth sticks In South Carolina, the
Still, Mr. Sanders has proven together, we can get fourth contest, 55% of Demo-
a tougher opponent than many cratic voters in 2008 were Af-
predicted when he entered the
him elected,’ says a rican-American. They over-
race last spring. The energy Sanders supporter. whelmingly picked then-Sen.
pulsing through his campaign Barack Obama, who appealed
raises questions about whether to many of the same liberals
Mrs. Clinton, if nominated, “It just so happens that the as Mr. Sanders.
would generate the enthusiasm idiosyncrasies of the first two In South Carolina, Mrs. Clin-
needed to win in November. states match Sanders’s ton will find such voters as
Mr. Sanders’s best chances to strengths and Clinton’s rela- Yvonne Donald, 58, whose sup-
knock her down will come in tive weaknesses,” he wrote. port for her was reinforced by
Iowa and New Hampshire. Both New Hampshire offers Mr. Donald Trump’s attacks. “I just
are home to large numbers of Sanders another advantage. think we’ve got to come out and
liberals, who are drawn to Mr. Unaffiliated voters can partici- help each other,” said Ms. Don-
SEAN RAYFORD/GETTY IMAGES

Sanders’s call for a more-activist pate in either party’s primary ald, of Irmo, S.C. After Mr.
government. And in both, the in the state, where Mr. Sand- Trump said Mrs. Clinton’s use of
vast majority of voters are ers is ahead of Mrs. Clinton the bathroom during a debate
white. Nationally, Mrs. Clinton is among independents. Still, was “disgusting,” Ms. Donald
ahead with whites, but only by without major demographic said, “I started thinking, “I’ll
15 percentage points, less that shifts in the states that follow, vote for Hillary just to make
her overall 25-point lead, ac- Mrs. Clinton looks strong, and sure she gets a good show.’ ”
cording to a January Journal/ her aides have long main- —Peter Nicholas
NBC poll. She’s up 11 points tained that she could bounce contributed to this article. Support for Donald Trump cuts across all segments of the Republican Party, polling data show.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Early
States
Often Out
Of Step
BY REID J. EPSTEIN
AND PETER NICHOLAS
DES MOINES, Iowa—The two
states that have started the presi-
dential-election process for decades
differ from the rest of the nation.
They also differ from each other in
their ability to predict the eventual
nominees.
Iowa’s electorate is older, whiter
and far more rural than the rest of
the country, and its social-conserva-
tive Republican bloc is more reli-
gious than Republicans elsewhere.
New Hampshire also is whiter
than the rest of America, but it is
wealthier, better educated and less
religious. With only 1.3 million peo-
ple, the state is among the smallest
in the nation—about one-tenth the
population of Los Angeles County.
Those characteristics help explain
why the states often produce different
winners in their first-in-the-nation
votes—and why they don’t always pre-
dict what happens the rest of the way.
Iowa Republicans, in particular,
have a propensity for picking losing
candidates—so much so, in fact, that
party officials in the state are wor-
ried about whether it can hold its
place as the nation’s first presiden-
tial nominating contest.
In 2008, Arkansas Gov. Mike
Huckabee won the Iowa GOP cau-
cuses and picked up seven more
states before conceding to eventual
nominee Sen. John McCain. In 2012,
former Sen. Rick Santorum won
Iowa’s caucuses and challenged the
eventual nominee, former Massachu-
setts Gov. Mitt Romney, for just
weeks before bowing out.
Iowa Republicans haven’t picked
the party’s nominee since George W.
Bush won in 2000. Bob Dole in 1996
was the only other Iowa winner to
claim the nomination since 1976.
“Every four years there is hand-
wringing among Iowans as to
whether or not our place in the nat-
ELECTION 2016
YOUR
ESSENTIAL
GUIDE
MAKE THE MOST OF
YOUR MEMBERSHIP
With the breadth of WSJ’s campaign
coverage, you’ll stay informed from the
first caucus to the final vote.
© 2016 Dow Jones & Co., Inc. All rights reserved. 6D3813
How the Caucuses Work
February's caucuses will see voters from all of Iowa's nearly 1,700 precincts gather to kick off the first-in-the-nation presidential contest and the first step toward awarding
delegates. But the parties differ in how the Feb. 1 results ultimately determine how much support each candidate would have at the national conventions.
On the Democratic side, caucusgoers must
physically form groups in support of their
preferred candidate.
If a candidate doesn’t reach a certain
threshold, his or her supporters
must join a different
candidate's group. The
process is repeated C convention
at each step.* ATE
ID
ND
CA
B COUNTY CONVENTIONS (March 12)
TE
D IDA
N
CA
E A
AT
N DID
CA
B CA
E
AT
N DID
CA
EA
I DAT
N D
CA
DISTRICT CONVENTION STATE CONVENTION
delegates aren't required to align with the
NATIONAL CONVENTION
at any previous stage. Republican National
*In most caucuses, Democratic candidates must meet a minimum 15% viability threshold to advance to the next convention or else realign with a different presidential preference group.
Sources: the parties; The GreenPapers.com
ural political order will continue, but ners and smile on insurgents. Since
that angst has been exacerbated by 1952, when New Hampshire primary
what has been a more national ap- voters first began recording their
proach to the presidential primary presidential preferences, the state
season in 2016 than ever before,” has wrecked more than a few candi-
said Matt Strawn, who was the dacies and salvaged others.
chairman of Iowa’s Republican Party New Hampshire was where Bill
during the 2012 presidential cycle. Clinton declared himself the “Come-
The record is different for Iowa back Kid” in 1992 after finishing a
Democrats, who have chosen the surprising second in the state, put-
eventual party nominee in three of ting him on a winning path. Sixteen
the past five contested caucuses. years later, his wife’s campaign was
New Hampshire has a better re- in danger after a third-place finish in
cord of picking winners: Its voters the 2008 Iowa caucuses. But Hillary
have gone with the ultimate winner Clinton’s surprise win over Barack
in three of the past five contested Obama in the Granite State kept her
primaries in each party. in the race for another five months.
But it is perhaps best known for Asked about New Hampshire’s
its ability to punish early front-run- place in American elections, Mr.
NEWSLETTER
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Wednesday, January 27, 2016 | S7
At the Republican event, candidates’ representatives or
surrogates give speeches and then attendees vote in
presidential preference poll, usually on slips of paper.
PRECINCT CAUCUSES (Feb. 1) Only
registered Republicans and Democrats
are eligible to participate, though both
parties offer same-day registration.
Democratic delegates to the county
are allocated in proportion
to the percentage of support each
viable candidate receives.
In each of Iowa's 99 counties,
Republicans and Democrats select
delegates to both the state convention
and the convention of the congressional
B
district the county is part of.
AT
E
N DID
DISTRICT CONVENTIONS E A
AT
April 9 (R), April 30 (D)
N DID
Delegates meet in each of Iowa's four CA
congressional districts and elect
delegates directly to the national party
conventions.
DISTRICT CONVENTION STATE CONVENTION
STATE CONVENTION
May 21 (R) June 18 (D)
Both parties choose more delegates to
the national convention. Democratic
same presidential preference as they did
NATIONAL CONVENTION
Convention delegates are bound by the
presidential preference results from the
precinct caucuses.
THE WALL STREET JOURNAL.
Clinton said at a recent campaign Texas Sen. Ted Cruz leads many re-
stop in Manchester: “You have to do cent Iowa polls, but he opposes etha-
retail politics. You have to look them nol mandates, threatening an indus-
in the eye and listen to their stories try dear to Iowa’s GOP Gov. Terry
and understand what they’re dealing Branstad. Donald Trump has mostly
with. And it makes you a better can- eschewed the retail campaigning that
didate!” So long as you survive. Iowa officials claim vets candidates
Reince Priebus, the Republican for the rest of the country.
National Committee chairman, said Meanwhile, New Hampshire has
in a September interview with Na- its usual chance to puncture front-
tional Journal that Iowa and New runners. If Sen. Bernie Sanders mo-
Hampshire shouldn’t assume they bilizes the liberal voters who make
will always lead the party’s calendar. up a large slice of state Democrats to
“I don’t think there should ever be beat Mrs. Clinton, it would undercut
any sacred cows as to the primary perceptions of her inevitability.
process or the order,” he said. Should Mr. Trump stumble, it would
This year, the leading GOP candi- be an embarrassing setback for a
dates both pose risks to Iowa’s candidate who has long heralded his
chances of picking the nominee. lead in polls there.
WSJ+ EVENTS PODCASTS
Starting Thursday, Jan. 28, follow Get essential context to the
Washington Bureau Chief Jerry Seib campaign from Paul Gigot and
as he heads to key primary states to
lead a series of talks on the race.
Kim Strassel on WSJ Opinion:
Potomac Watch.
EXPLORE LISTEN
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S8 | Wednesday, January 27, 2016
Bumping Heads on the Campaign Trail
BY REID J. EPSTEIN
AND PETER NICHOLAS
FORT DODGE, Iowa—Marco Rubio
told the crowd at a town-hall meet-
ing here earlier this month that he
had a good reason for being late.
His plane was stymied by another
aircraft at his previous event in
nearby Mason City, preventing its
departure, he said. “Suddenly these
four cars pull up. Suburbans. The
doors open. Do you know who was
on that plane? Do you know who
made me late to this event? Hillary
Clinton!”
Mr. Rubio’s travel issue illustrates
the sometimes awkward interactions
in a presidential campaign that be-
gan with two dozen candidates criss-
crossing the country—and small
states like Iowa.
Mrs. Clinton missing for a mo-
ment during a Democratic debate
because of a delay at the ladies’
room, Mr. Rubio bouncing a football
off a child’s head, and Donald Trump
tussling with an eagle on his desk
are all moments caught on camera.
Meanwhile, plenty of others take
place behind the scenes.
Wisconsin Gov. Scott Walker’s five-
state campaign launch in July was dis-
rupted when storms diverted the cam-
paign’s Delta Air Lines flight from Las
10 Ways 2016 Is Different
1 HOPE IS A HARD SELL
Republican Jeb Bush vowed to be
the “happy warrior”—and promptly
began a steady decline in the polls.
Democrat Hillary Clinton says she’s a
progressive who wants to get things
done, even as Bernie Sanders draws
huge crowds by promising to break
up everything from big banks to the
health-insurance system. And Donald
Trump is riding high in the polls after
saying: “We don’t win anymore.”
Barack Obama swept to office eight
years ago on a message of hope that
resonated with the young, minorities,
independents and even some Republi-
cans. Now polls find voters angry, frus-
trated and seething at Washington
and big institutions—aiding outsiders
like Messrs. Trump and Sanders.
2 OUTSIDERS THREATEN
THE ESTABLISHMENT
Mitt Romney was the 2012 GOP es-
tablishment favorite. And while oth-
ers jockeyed to be the more conserva-
tive alternative, it was clear early on
that their efforts wouldn’t succeed.
This year, GOP voters are divided
over the large field of establishment
candidates and yet to settle on a con-
servative alternative to the front-run-
ner, Mr. Trump. The closest to claim
that spot is Sen. Ted Cruz of Texas.
Support for Mr. Sanders is a manifes-
tation of the frustration some Demo-
crats have with the establishment.
While Mrs. Clinton is still the favorite
to win the nomination, he is giving
her a race.
3 A HISTORIC FEMALE
CANDIDACY
If Mrs. Clinton wins the Democratic
nomination, she would be the first
woman in U.S. history to do so for a
major political party. That prospect has
energized some, including older
women. It also tests the views of the
country at large, much as Mr. Obama
did in 2008 as the first African-Ameri-
can to be a major political party’s pick.
Mrs. Clinton has more openly run on
the historical nature of her candidacy
than in 2008. This time, she faces the
challenge of energizing Democrats
who are supporting Mr. Sanders and
voters who are turned off by the idea
of a Clinton political dynasty.
4 THERE ARE TWO
LEGACY CANDIDATES
Like Mrs. Clinton, Mr. Bush also has
to worry about his last name being a
drag on the ticket. The former Florida
governor in some ways has more of a
struggle because he would be the
third Bush in line, following his father
and his brother. Mrs. Clinton would
follow only her husband, Bill Clinton,
who remains popular among Demo-
crats. George W. Bush, however, is
less of a boost for his brother Jeb,
even among Republicans.
HILLARY CLINTON
This H-logo grill spatula has a bottle
opener on the handle. “It’s the perfect
complement to the Grillary Clinton
apron,” her website says. $18
Sen. Bernie Sanders faces a media crush in the spin room after the Oct. 13 Democratic presidential debate in Las Vegas.
Vegas to Memphis instead of Atlanta.
Once they got to Atlanta at 1:30 a.m.,
they missed a connection to Charles-
ton, S.C. That required a five-hour
drive to make an 8 a.m. event.
5 A SITTING PRESIDENT
COULD BE AN ASSET
In 2008 and 2012, no GOP candidate
wanted to be seen with their party’s
last president, George W. Bush, be-
cause his popularity had sunk amid
opposition to the Iraq war. In 2016, Mr.
Obama’s popularity has held steady
among Democrats, although recent
foreign-policy issues have damped his
standing overall. He could be effective
in helping energize African-American
voters this cycle. Coordination be-
tween his White House and the Clin-
ton campaign is near constant.
6 FOREIGN POLICY, NATIONAL SE-
CURITY TRUMP THE ECONOMY
National security has returned as a
top issue—a shift from 2008 and
2012 when the economy reigned—
fueled by a renewed fear of terrorism
following attacks in Paris and San
Bernardino, Calif.
7 VALUE OF MONEY ISN’T
WHAT IT USED TO BE
Mr. Bush, who raised by far the most
super PAC money, is losing. And Mr.
Trump, who isn’t allied with a super
PAC or spending much at all, is lead-
ing. This suggests voters now are
persuaded by something money can’t
buy. Mr. Trump launched his first TV
ad just after the new year began, and
until then had largely relied on media
coverage of his well-attended rallies
and bombastic statements. He also
has used Twitter to make points and
regularly calls into news shows.
8 SMALL DONORS EMERGE
The Obama campaign made
small donations a signature feature in
2008 and 2012. This year, Mr. Sand-
ers reached one million individual do-
nations at a record pace and now has
more than two million. GOP candidate
Ben Carson, a retired neurosurgeon,
also has raised a significant amount
of money through small donations.
9 VOTERS ARE ANGRIER
Voter anger, mainly over the
economy, has been a fixture of the
last two elections. In 2016, voters are
even madder. It isn’t just over the
economy. Polls show frustration with
the political system and, for Republi-
cans, anger over recent societal
changes such as the legalization of
gay marriage.
10 SHORTER PRIMARY,
LONGER GENERAL ELECTION
The primary cycle is shorter in 2016
than before and features far fewer
debates. Primary voting begins on
Feb. 1 instead of in early January, and
ends earlier. The national conventions
will be roughly a month sooner than
in past cycles, making the general
election cycle longer.
—Carol E. Lee
CANDIDATE GIFT GUIDE
BERNIE SANDERS
“Bernie schleps the progressive agenda,
and you can schlep your canvassing
materials for his campaign in this offi-
cial tote bag,” his website says. $27
Mr. Walker dropped his wife and
two sons off at a hotel while he and his
bleary-eyed staff charged through the
day. “I tried to sneak in a few zzzs, but
it’s hard when your head is up against
Diverse Voting States Next in Line
BY BETH REINHARD
Hispanics and African-Americans
will have their first chance to nota-
bly shape the presidential race when
voters in South Carolina and Nevada
cast ballots in late February.
The predominantly white elector-
ates of Iowa and New Hampshire
have played key roles for decades.
But since 2008, South Carolina and
Nevada have injected racial, ethnic
and geographic diversity into the
early rounds of the process.
The top finishers in those con-
tests will be well positioned for the
flurry of a dozen states, many of
them in the South, that will vote on
March 1.
For Democratic front-runner Hil-
lary Clinton, South Carolina’s large
black population could serve as a
crucial firewall if Vermont Sen. Ber-
nie Sanders wins in Iowa or New
Hampshire. In 2008, African-Ameri-
cans made up 55% of the Demo-
cratic voters there and overwhelm-
ingly backed Barack Obama over
Mrs. Clinton to help elect the first
black president.
In the 2016 campaign, Mrs. Clin-
ton has earned strong support from
African-Americans and posted com-
manding leads over Mr. Sanders in
South Carolina. “If you are going to
win black votes in swing states like
Florida, North Carolina and Ohio,
South Carolina is where you hone
those skills,” said Bakari Sellers, a
former South Carolina lawmaker
backing Mrs. Clinton.
Republican Tim Scott, the first
African-American senator from
South Carolina, said he is skeptical
the Democratic nominee will be able
Dates to Watch
Feb. 1 Iowa caucuses
Feb. 9 New Hampshire primary
Feb. 20 Nevada Democratic
Feb. 23
caucuses; South Carolina
Republican primary
Nevada Republican caucus
Feb. 27 South Carolina Democratic
primary
March 1 Alabama primary; Alaska
Republican caucuses;
Arkansas primary; Colorado
caucuses; Georgia primary;
Massachusetts primary;
Minnesota caucuses;
Oklahoma primary;
Tennessee primary; Texas
primary; Vermont primary;
Virginia primary; Wyoming
Republican caucuses
March 5 Kansas caucuses; Kentucky
Republican caucuses;
Louisiana primary; Maine
Republican caucuses;
Nebraska Democratic
caucuses
DONALD TRUMP
His website calls it the “official Donald
Trump Make America Great Again”
cap in orange/camo with a plastic
snap closure. $30
THE WALL STREET JOURNAL.
Sanders found out firsthand after
their debut debate performances.
When Mr. Trump arrived in the
Cleveland spin room after the first
GOP debate in August, he didn’t have
the massive entourage or the Secret
Service detail that would come to his
campaign later. As he ended his
four-minute session, his lone secu-
rity guard announced he was fin-
ished. Mr. Trump pushed through
the crowd, sending several reporters
and photographers—some of whom
were on small stepladders to get a
better view—tumbling in his wake as
he headed to his private jet.
Mr. Sanders confronted the same
problem after he finished a postde-
bate interview with MSNBC in Las
Vegas. With no security to clear a
path, he was swarmed by journalists.
“Excuse me!” he told the crowd,
holding up his hands. “You’re creat-
ing a dangerous situation.”
GETTY IMAGES
The race also has seen the return
of former President Bill Clinton.
Looking a bit frail at 69, having en-
dured multiple surgical procedures
on his heart, he seemed more wistful
than in past campaigns. Working the
an armrest,” Mr. Walker told a crowd crowd at a local restaurant in Man-
that day in Lexington, S.C. chester, N.H., this month, he shook
Arriving at an event isn’t always every outstretched hand. Greeting
the problem. Sometimes it’s leaving. one customer, he said: “I’m trying to
Mr. Trump and Democrat Bernie live to see my grandkids grow up.”
PATRICK T. FALLON/BLOOMBERG NEWS
A Hillary Clinton backer at a Martin Luther King rally Jan. 18 in Columbia, S.C.
to match the record-setting black outreach after the 2012 election.
turnout for Mr. Obama. “In a post-
Obama political world, the field is
more open for Republicans to attract
But some Hispanic Republicans
say Donald Trump’s disparaging re-
marks about immigrants could
African-American voters,” said Mr. thwart their efforts.
Scott, who has hosted forums with at “His message has been basically
least a dozen Republican presidential that you’re not accepted in his coun-
candidates. try, and we are going to get rid of
A Democratic nominee hasn’t won you,” said Fernando Romero, presi-
South Carolina since Southerner dent of a nonpartisan group called
Jimmy Carter in 1976, while Nevada Hispanics in Politics that aims to in-
has swung back and forth, making its volve the community in the political
booming Hispanic population a cov- process.
eted voting bloc. The Hispanic share Mrs. Clinton is by far the most or-
of the general election vote grew to ganized on the ground in Nevada,
18% in 2012 from 10% in 2004, accord- said Las Vegas-based Democratic
ing to the Pew Hispanic Center. Mr. consultant Dan Hart. Former Attor-
Obama overwhelmingly won the His-
panic vote in Nevada and nationwide,
prompting the Republican National
ney General Catherine Cortez Masto
could help her by rallying Hispanic
voters around her campaign to be
Committee to step up its minority the first Latina elected to the Senate.
March 6 Maine Democratic
caucuses
April 26 Connecticut primary;
Delaware primary;
March 8 Hawaii Republican Maryland primary;
caucuses; Idaho Republican Pennsylvania primary;
primary; Michigan primary; Rhode Island primary
March 12
Mississippi primary
District of Columbia
Republican convention
May 3
May 10
Indiana primary
Nebraska Republican
primary; West Virginia
March 15 Florida primary; Illinois primary
primary; Missouri primary; May 17 Kentucky Democratic
North Carolina primary; primary; Oregon primary
Ohio primary May 24 Washington state
March 22 Arizona primary; Idaho Republican primary
March 26
Democratic caucuses;
Utah caucuses
Alaska Democratic
June 7 California primary; Montana
primary; New Jersey
primary; New Mexico
caucuses; Hawaii
Democratic caucuses;
Washington state
primary; North Dakota
Democratic caucuses;
South Dakota primary
Democratic caucuses June 14 District of Columbia
April 1 North Dakota Republican Democratic primary
convention July 18-21 Republican National
April 5 Wisconsin primary Convention, Cleveland
April 9 Wyoming caucuses July 25-28 Democratic National
April 19 New York primary Convention, Philadelphia
Source: the parties, Associated Press; Note: Dates subject to change; Colorado, North Dakota and Wyoming
Republicans won’t hold presidential preference votes in 2016.
MARCO RUBIO TED CRUZ
The Florida senator’s website offers The Texas senator’s website is offering
this baby one-piece, saying it’s “perfect a “Cruzball Cruzie Combo 4-Pack.” It
for the youngest members of Team comes with two Cruzball Can Cruzies
Marco in your life.” $25 and two Cruzball Bottle Cruzies. $21