VOL.XXXVII NO.46 MONDAY,NOVEMBER 5,2012 Hyundai and Kia overstated the fuel economy for more than a third of the vehicles they sold in the U.S.in the past two years. Business................19 Berkshire Hathaway secures deal to buy toy and novelty retailer Oriental Trading. Markets................28 OPINION: Obama and Romney Make Their Cases Page 15 An Enclave Turned Prison INDEPTH Pages 16-17 An Enclave Turned Prison INDEPTH Pages 16-17 As of 4p.m.ET DJIA 13093.16 g 1.05% FTSE100 5868.55 À 0.11% Nikkei 225 9051.22 À 1.17% Shanghai Comp.2117.05 À 0.60% HangSeng 22111.33 À 1.33% Sensex 18755.45 À 1.04% S&P/ASX200 4460.10 À 0.06% WSJ.com (India facsimile Vol.4 No.107) ASIA EDITION Australia:A$6.00(InclGST),Brunei:B$7.00,China:RMB25.00,HongKong:HK$20.00(InclMacau),India:Rs30.00,Indonesia:Rp18,000(InclPPN),Japan:Yen500(InclJCT),Korea:Won2,500, Malaysia:RM7.00,Pakistan:Rs140.00,Philippines:Peso80.00,Singapore:S$4.50(InclGST),SriLanka:Slrs180(InclVAT),Taiwan:NT$60.00,Thailand:Baht50.00,Vietnam:US$2.50 KDNPP9315/10/2012(031275)MICA(P)NO.040/10/2012SK.MENPENR.I.NO:01/SK/MENPEN/SCJJ/1998TGL.4SEPT1998 Inside Seeking to Change More Than Just Their Names i i i Looking for Better Luck,Some Thais Try New Monikers BANGKOK—Google Inc.’s Executive Chairman Eric Schmidt once predicted that in the future people around the world will change their names to escape all the em- barrassing things they did on- line in the past.In Thailand, people already are doing it— for good luck. Baramee Thammabandan, 46 years old,had a run of misfortune a decade ago when he was still known as Teer- apol Lilitjirawat.His business trading garments in Bangkok’s mazelike markets slumped, his eyesight began to fail and he could no longer properly manage his affairs.Worse,he says his former wife left him. So,Mr.Baramee did what many Thais do when faced with a patch of bad luck:He changed his name.“I wanted to become a new person,” says the slim,clean-shaven Mr.Baramee,whose new name means “Charisma” and which he chose to bring himwealth and fame. It seems to have worked. Though almost entirely blind,Mr. Baramee now is at the forefront of a booming new indus- try advising other Thais how to choose newnames for them- selves.A long list of Thai celebrities and business tycoons parade into his office in one of Bangkok’s busiest shopping malls,asking for advice on new monikers, while his team fields more than 250 calls from anxious others wanting a consultation. In just five years,he says,his business has doubled,enough for him to create four new websites,and prompting a horde of competitors with names like thai- goodname.com and fortunename.com to jump into the pecu- liar niche. “People are like cars,and changing names is like chang- ing a flat tire.It can take you further,and give you a smoother ride,” Mr.Baramee says,as a pair of old Nokia cellphones chirp on a desk in front of him and incense sticks burn before a collection of Buddha images. Please turn to page 5 B Y J AMES H OOKWAY AND W ILAWAN W ATCHARASAKWET Presidential Race Down To the Wire President Barack Obama and Mitt Romney enter the final sprint before Election Day es- sentially deadlocked nationally in what looks set to be one of the closest presidential elec- tions in U.S.history. A Wall Street Journal/NBC News poll of likely voters re- leased Sunday found Mr.Obama leading his rival by a nose,48% to 47%,as the two men criss- cross the country to rally sup- porters in the states most likely to decide the outcome. Final polls in many of those states,from Virginia and Ohio to New Hampshire,Colorado and Wisconsin,also find the race too close to call. In the last stretch,Mr. Obama implored voters to stick with himfor another four years, while rival Mitt Romney said Americans have a clear choice between a tired incumbent and a businessman who can work with both parties. Mr.Obama asked voters in Mentor,Ohio,on Saturday to reject what he said was the false change being offered by his opponent. “When I talk about change I know what real change looks like.I fought for it.I’ve got the scars to prove it,” he told about 4,000 people at a rally at Mentor High School.“And you fought for change too.Af- ter all we’ve been through to- gether we can’t turn back,we can’t give up on it now.” He said that Mr.Romney was now trying to run as a change candidate but ques- tioned the economic policies Please turn to page 18 By Neil King Jr., Laura Meckler and Sara Murray U.S.Firms Woo China Investment MADISON,Wis.—Sun Wen- bin and his colleagues from China got the red-carpet treatment on a recent trip to the U.S. Over 10 days,Mr.Sun and 60 other Chinese entrepre- neurs and executives were welcomed by former Presi- dent George W.Bush,and courted by businesses ranging from a shrimp breeder in Or- lando to a real-estate devel- oper in Dallas and an alterna- tive-fuel company in Madison. The wooing was part of an ef- fort by local governments to attract more investment from the Chinese,who despite their newfound wealth have the reputation in some quarters as window-shoppers rather than deal-makers. Mr.Sun—a 50-year old who owns 11 electronics stores in Handan,a city three hours by train south of Bei- jing—said he was impressed with some of the technology he saw,and his travel com- panions gushed about the hospitality and clean environ- ment.But,as with many Chi- nese entrepreneurs who made their fortunes during the country’s economic boom of the last decade,he worried it would take a long time to earn a profit on some of the investment opportunities pre- sented. “Life is short.I just want to make a few big deals,” said Mr.Sun,over lunch in Madi- Please turn to page 18 B Y D INNY M C M AHON A ND C AROLYN C UI Gasoline shortages across the New York region began to ease over the weekend,but continued blackouts in the wake of last week’s superstorm kept many filling stations from pumping gas even if they had it.Above,residents line up at a gas station in Brooklyn.Page 8 In Sandy Recovery,Fuel Begins to Flowbut Long Lines Remain European Pressphoto Agency Baramee Thammabandan Vote holds high stakes for business..........................................6 Referendums on gay marriage in several states...7 Final jobs report frames closing arguments.....................7 salesforce.com/like Salesforce + Salesforce helps Dunkin’ Brands keep the conversation going with its 7 million Facebook fans ©2012 salesforce.com,inc.All rights reserved.Salesforce,the Salesforce Corporate logo,andothers are trademarks of salesforce.com,inc.Other trademarks may be heldby their respective owners. 2 | Monday,November 5,2012 THE WALL STREET JOURNAL. PAGE TWO ONLINE TODAY Most Read in Asia 1.Syrian Rebels Draw Fire for Alleged Execution 2.America Gone Wild 3.IPad Mini Tests Crowded Market 4.Sizing Up the iPad Mini 5.Lessons From Ultimate Safe Houses Most Emailed in Asia 1.In Corner of Myanmar,Muslims Seek Relief 2.Asia in Pictures 3.New Images From the Mars Rover 4.Take Monday Off:Oxford,Miss. 5.Tips for Writing a Résumé in a Digital World Driver’s Seat blogs.wsj.com/drivers-seat What James Bond should be driving: the contemptuously awesome 2014 Aston Martin Vanquish Scene Asia Slideshow:Living small in Tokyo wsj.com/scene India Real Time wsj.com/indiarealtime ‘There will be nothing contrary to Indian sensibilities.’ PB Lifestyle Ltd.CEO Sanjay Gupta on Playboy’s arrival in India i i i Business & Finance nThe latest U.S.jobs report showed the economy has gained momentum but is still growing far below its potential,helping both presidential candidates frame closing arguments to voters.7,34 nAn Obama election win could bring buying of haven assets,and selling in stocks,as investors pre- pare for a fight over taxes.Stocks could rally if Romney wins.19 nAn Indian government board revoked Roche’s patent for an ex- pensive drug for an infectious liver disease,in the latest blow to multinational drug companies.22 nVisa will partner with three banks in Myanmar,allowing its credit cards to be issued and ac- cepted in the country.26 nNathaniel Rothschild is consid- ering a bid for some of the coal assets of Bumi,to counter last month’s more than $1.2 billion of- fer by Indonesia’s Bakrie Group.21 nRegulators sought a new fine against Japan Advisory,alleging that the firm traded on inside in- formation gleaned from a Nomura research report.26 nJapan Airlines reported a mod- est rise in net profit in its first re- porting period since it relisted its shares in an IPO.21 nU.S.media companies report- ing earnings this week will attract a spotlight following warning signs from several big advertising firms last month about a signifi- cant slowdown in ad spending.23 nMicrosoft is working with Asian suppliers to test its smart- phone design,suggesting it is in- creasingly adopting a similar busi- ness model to that of Apple.20 nGlobal Logistic Properties is looking to raise as much as $1.5 billion by listing some of its prop- erties in Japan.26 i i i World-Wide nChina’s Communist Party con- cluded a generational shake-up of its military top brass,with the ap- pointment of an army general and a former air-force commander as the two new vice chairmen of its Central Military Commission.4 nThe Coptic Christian church in Egypt named a new pope,who was chosen in an elaborate cere- mony in which a blindfolded boy drew the name of the next patri- arch from a crystal chalice.11 nSyrian rebels captured an oil field in the country’s east after three days of fighting with gov- ernment troops protecting the fa- cility,activists said. nA higher court in the Maldives ordered the suspension of a legal hearing for ex-President Nasheed, accused of illegally ordering the detention of a senior judge. nThousands rallied in Tokyo against U.S.deployment of Osprey aircraft on Okinawa amid escalat- ing anti-U.S.military sentiment following recent crimes. Chinese police clear snow on the Badaling section of the Beijing-Tibet expressway.Beijing received snow and sleet as cold weather swept northern China. Inside World News:Afghan power broker steeped in graft,U.S.says.10 Corporate News: Apple’s new iPad tests crowded market.20 Management:A peek at the M.B.A.‘bible.’ 35 What’s News— THE WALL STREET JOURNAL Dow Jones Publishing Company (Asia) 25/F,Central Plaza,18 Harbour Road,Hong Kong Tel 852-2573 7121 Fax 852-2834 5291 www.wsj-asia.com SUBSCRIPTIONS and Address Changes,please telephone our local customer service hotline,Hong Kong/Taiwan:852-2831 2555;Beijing:86-10 6581 4090; Shanghai:86-21 5836 8228;Indonesia:62-21 527 7592; Japan:0120 779 868;Korea:82-2 756 1695; Malaysia:60-3 2026 4061;Philippines:63-2 848 5873; Singapore:65-6415 4000;Thailand:66-2 690 4222 to 7; India:91-11 6462 0215.Or email:firstname.lastname@example.org ADVERTISING SALES worldwide through Dow Jones International.Hong Kong:852-2831 2504;Singapore:65- 6415 4300;Tokyo:81-3 6269-2701;Frankfurt:49 69 29725390;London:44 207 842 9600;Paris:33 1 40 17 17 01;New York:1-212 659 2176.Or email: email@example.com Trademarks appearing herein are used under license from Dow Jones & Company.USPS 337-350ISSN 0377-9920 SUBSCRIBE TODAY wsj-asia.com/fpf or scan this code Xinhua/Zuma Press THE WALL STREET JOURNAL.Monday,November 5,2012 | 3 WORLD NEWS Laos Summit to Open Asian,European Leaders Will Meet as Region Regains Momentum Asian and European leaders are gathering in the world’s most eco- nomically vibrant region just as it shows signs of regaining momen- tum,possibly taking up some of the slack for Western nations. Government heads and senior deputies from 49 countries in Eu- rope and the Asian-Pacific region open a two-day summit Monday in the tiny Southeast Asian nation of Laos,seeking to strengthen trade and investment ties and promote peaceful development. But topping the agenda at the Asia-Europe summit,in the corri- dors of the capital Vientiane if not in the formal meetings,will be Eu- rope’s seemingly inexorable debt woes.Asian officials say they want the European leaders,including French President François Hollande and Italian Prime Minister Mario Monti,to explain how they plan to resolve the crisis engulfing Greece, Spain and other nations in one of Asia’s top export markets. The leaders are expected largely to duck Asia’s long-standing territo- rial issues,which have recently wors- ened relations,especially Japan’s ties with China and South Korea.China’s premier,Wen Jiabao,has no plans to meet separately with Japanese Prime Minister Yoshihiko Noda,Beijing says.These once-customary bilateral summits have been on hold at global meetings in recent months because of the row over disputed islands. Mr.Noda in September national- ized the Japan-controlled islands— which Japan calls the Senkaku and China calls the Diaoyu—sparking sometimes-violent protests across China and boycotts of Japanese products,notably cars. The furor has eased in the past few weeks,and Mr.Noda,keen to move beyond the disputes,said last week he won’t make an issue of the Senkaku in Vientiane.But prospects are dimfor any Beijing-Tokyo prog- ress soon:Mr.Wen is a lame duck,as the Chinese Communist Party begins a once-a-decade leadership change Thursday,while Mr.Noda,far behind in the polls,is under pressure to call a general election soon by a resur- gent opposition. Reflecting the concerns over- hanging the Asia-Europe meeting as well as the likely lack of concrete progress on major issues at the summit,the Chinese government said only that Mr.Wen will talk in Vientiane about “China’s view on current global economic and finan- cial situations and policy sugges- tions to strengthen cooperation be- tween Asia and Europe.” Mr.Noda,for his part,wants to press Europe to move ahead with free-trade talks,but little progress is expected there either,as individ- ual European Union member coun- tries haven’t given negotiators the go-ahead and the EU remains un- happy with Japan’s tariffs on agri- cultural products and cars,Japanese officials say. Europe’s financial markets have been calmrecently,as the European Central Bank’s offer of an unlimited backstop has curbed bond yields in Spain and other weak economies. But Greece’s fragmented Parliament is to vote this week on €13.5 billion ($17.3 billion) of austerity measures and a budget that Athens must pass to secure fresh aid and avoid run- ning out of money within weeks. Euro-zone finance ministers are to discuss the crisis Thursday,but no decisions are expected. By contrast,data last week of- fered hope that Asia is pulling out of an economic slowdown.Even though Japan appears to be relaps- ing with Europe into recession and Asia’s improvement is patchy,manu- facturing in China expanded for the first time in three months in Octo- ber,suggesting it remains on track to hit the government’s 7.5% growth target this year.Exports fromSouth Korea and Indonesia also picked up. Southeast Asia—where Laos is attracting attention for its impres- sive growth and expanding integra- tion with the global economy—re- mains robust,as domestic demand supplements uneven exports. “Part of the reason why South- east Asia has been more resilient in weathering the global slowdown is because this region is now more in- tegrated than before,” said Indone- sian Vice Finance Minister Mahen- dra Siregar. The region must build on this through greater economic and fi- nancial cooperation,strengthening the region’s financial safety net and improving surveillance and social- security provisions,Mr.Siregar said in an interview recently. The 10 members of the Associa- tion of Southeast Asian Nations “are some of the most dynamic and fast- est-growing in the world,and this is likely to be the case for the next de- cade and more,” said Jayant Menon, lead economist for trade and re- gional cooperation in the Asian De- velopment Bank’s office of regional economic integration. Asean’s newer members—Cam- bodia,Laos,Myanmar and Viet- nam—are set to become increas- ingly open and export-oriented,with a larger share of manufacturing, while the older members focus their economies more on domestic de- mand and become more reliant on services,Mr.Menon said. —Toko Sekiguchi contributed to this article. B Y W ILLIAM M ALLARD A ND N ATASHA B RERETON- F UKUI Representatives from 49 countries are holding a two-day meeting in Vientiane. Reuters TO BREAK THE RULES, YOU MUST FIRST MASTER THEM. ROYAL OAK INSTAINLESS STEEL WITHDIAMOND-SET BEZEL. THI S I CONI C PI ECE CELEBRATES THE PURPOSEFUL ROYAL OAK ARCHITECTURE,OFFSET WITH A CROWN OF DIAMONDS OF ULTIMATE PEDIGREE.ALLURING MASTERY OF BOTH WATCHMAKER’ S AND JEWELLER’ S ART; SIGNATURE AUDEMARS PIGUET. WITHDIAMOND SET BEZ EL. EL 4 | Monday,November 5,2012 THE WALL STREET JOURNAL. WORLD NEWS:ASIA China Party Fills Top Two Military Posts Appointment of First Air-Force General to Key Role Reflects Importance of Projecting Air Power in Joint Operations BEIJING—China’s Communist Party concluded a generational shake-up of its military top brass Sunday when state media announced the appointment of an army general and a former air-force commander as vice chairmen of its Central Mili- tary Commission—the body that controls the armed forces. Gen.Xu Qiliang is the first air- force general to be given the post—a reflection,analysts say,of the esca- lating ambitions and capabilities of China’s military,which is rapidly de- veloping the air and naval power needed to challenge U.S.military dominance in the Asian-Pacific re- gion. The promotion of Gen.Xu and army Gen.Fan Changlong to the most powerful uniformed posts in the country was announced at the conclusion of the final four-day meeting of the Party’s current Cen- tral Committee—its top 370 lead- ers—according to the state-run Xin- hua news agency. But Xinhua gave no indication of whether Hu Jintao,the current party chief and China’s president,would step down from his position as chairman of the commission when he and other top leaders retire at the conclusion of the 18th Party Congress,which begins Thursday. Xinhua also gave no other clues about the agenda for the Congress. But it did say the Central Committee approved a work report and changes to the party’s constitution that are to be presented to the Congress for final approval and that analysts say could set the policy direction for the next decade. The party is facing mounting calls from influential voices inside China to accelerate economic and political liberalization,with the lat- est such appeal coming over the weekend from the son of Hu Yao- bang,a reformist party chief who was ousted by conservatives in 1987. “Reforms cannot be abandoned, promises cannot be discarded,” wrote Hu Deping in the Saturday edition of the Economic Observer,a Chinese-language newspaper.He said the party needed in particular to strengthen the rule of law and to break up state monopolies. Mr.Hu,who has a seat on a con- sultative body to Parliament,is a well-known liberal but is still an in- fluential figure in the party because of his ancestry and his personal re- lations with the offspring of other former leaders,including Xi Jinping, the man expected to take over as party chief this month and as presi- dent in March. Whether Mr.Xi has the political authority to change the status quo will depend to a large extent on whether he has control over the armed forces,which have under- pinned the party’s grip on power since the revolution in 1949,analysts say. Mr.Xi is currently the only civil- ian vice chairman of the 12-member Military Commission,but party in- siders say he may have to wait up to two years to take over from Mr.Hu as head of the body,and would have to defer to himduring that time on defense issues and the appointment of new generals. The military shuffle comes at a transformational moment for China’s military,as it is seeks to pro- tect China’s perceived national inter- ests beyond its own shores,even as the U.S.responds by bolstering de- fense ties with Asian countries and realigning its forces in the region. Gen.Xu,62 years old,is a former pilot who was appointed commander of the air force in 2007 and has long advocated enhancing capability to conduct joint operations involving the navy,air force and ground troops. He is considered close to both President Hu and Jiang Zemin,who retired as party chief in 2002 but still has considerable political influ- ence and has been playing a key role in negotiations over the leadership change,according to party insiders and analysts. Gen.Fan,65,is an army general who has commanded the eastern Ji- nan military region since 2004.His appointment as a vice chairman sur- prised some analysts because he was promoted over the head of another army general,Chang Wanquan,who is already on the Central Military Commission and is considered close to President Hu. “Gen Fan was supposed to be heading toward retirement,” said Willy Lam,an expert on Chinese pol- itics and senior fellow at the Jamestown Foundation.He said for- mer President Jiang and Gen.Xu Caihou,who is due to retire as a Central Military Commission vice chairman this month,had insisted on Gen.Fan’s promotion.“It’s un- usual for themto pick the new vice- chairmen so soon,” Mr.Lam added. The appointments mean that Gen.Fan and Gen.Xu are almost certain to be the only military offic- ers promoted to the party’s Polit- buro—its top 25 leaders—at the con- clusion of the Congress,giving them a say in decision-making on domes- tic and foreign-policy issues. Gen.Chang is now likely to take over as defense minister,a position that normally doesn’t come with an automatic seat on the Politburo,ac- cording to military experts. Almost all of the remaining seats on the new Central Military Com- mission have now been decided fol- lowing the promotion of six generals last month to the most important military posts. Xinhua also announced Sunday that the Central Committee had en- dorsed the expulsion fromthe party of Liu Zhijun,a former railways min- ister,and Bo Xilai,the onetime party highflier whose wife was convicted in August of murdering a British businessman. Neither man has been reachable for comment since his removal. B Y J EREMY P AGE Roll Call China’s current military leadership and possible coming changes. (As of Oct.25,2012) Position Chairman Vice Chairman Vice Chairman Vice Chairman Defense Minister Chief of General Staff Dir.of General Political Dept. Dir.of General Logistics Dept. Commander of Second Artillery Corps Dir.of General Armaments Dept. Navy commander Air force commander Hu Jintao Xi Jinping Gen.Guo Boxiong Gen.Xu Caihou Gen.Liang Guanglie Gen.Chen Bingde Gen.Li Jinai Gen.Liao Xilong Gen.Jing Zhiyuan Gen.Chang Wanquan Adm.Wu Shengli Gen.Xu Qiliang 70 R (possibly) 59 70 R 69 R 72 R 71 R 70 R 72 R 68 R 63 67 62 Currently in job Possible replacement Age in 2012Age in 2012 Sources:China’s Defense Ministry,news reports,‘China’s Coming Central Military Commission,’ by Bo Zhiyue The Wall Street Journal 4 4 4 4 4 4 4 4 4 R = Retiring = Conﬁrmed 70 59 62 65 63 61 61 65 58 62 67 63 Hu Jintao Xi Jinping Gen.Xu Qiliang Gen.Fan Changlong Gen.Chang Wanquan Gen.Fang Fenghui Gen.Zhang Yang Gen.Zhao Keshi Gen.Wei Fenghe Gen.Zhang Youxia Adm.Wu Shengli Gen.Ma Xiaotian Japan Takes Small Step Back FromIts Fiscal Cliff TOKYO—Japan inched away from a fiscal cliff as the main political parties finally agreed to debate a bill to raise the debt ceiling,just a month before a possible suspension of government payments and halt to bond auctions. But political wrangling continued over the timing of a general elec- tion,threatening to disrupt spend- ing plans for the next fiscal year be- ginning April. The bill would allow the issuance of the bonds needed to finance some 40% of this year’s budget.The government has warned that if it isn’t enacted by end of the month, some spending will halt—perhaps including pension payments and support for local governments. The Liberal Democrats,the larg- est opposition party,had refused to discuss the deficit-financing bill,in- sisting that Prime Minister Yoshi- hiko Noda first promise dates for dissolving Parliament and holding an election.Though Mr.Noda needs LDP support to enact the legisla- tion—opposition parties control one of the two houses of parliament—he resisted.The tug-of-war has left the bill up in the air,prompting warn- ings from credit-ratings companies on Japan’s creditworthiness. On Friday,however,the LDP took part in a parliamentary committee where the bill will be discussed.“I amvery grateful,” Finance Minister Koriki Jojima said of the LDP’s deci- sion to attend. The LDP’s change of heart is seen as a way of forcing an early election by meeting the conditions the prime minister has set as pre- requisites.Leading Mr.Noda’s ruling party in the polls,the LDP is seeking an election by the end of December in hopes of returning to power.A new poll found support for the Noda administration at an all-time low of 17.7%,Kyodo News reported Sunday, down from 29.2% just a month ear- lier.Mr.Noda is Japan’s sixth prime minister in as many years,and re- cent history suggests it is difficult to hang long onto power when the approval rating falls below 20%. “It might be called a sunshine policy,but we will continue to press our demands,” LDP President Shinzo Abe said in an interview with na- tional broadcaster NHK on Sunday. Mr.Abe said that the premier must show in the next week his willing- ness to call an election within the year.Mr.Abe declined to say whether the shift in his party’s tac- tics extends to supporting the en- actment of the bill. “We are allowing Mr.Noda a chance to keep his end of the prom- ise,” he said. Mr.Noda reiterated Friday that what must be accomplished in the current parliamentary session:pas- sage of the bond bill,redistricting and progress on a planned social- welfare overhaul.The session runs to the end of the month. “They will be factors in deciding the timing of the lower-house disso- lution,” Mr.Noda said in a group in- terview with members of the prime minister’s press club.He also has said he stands by a promise made to the opposition in August—in return for support on a contentious sales- tax increase—that the election will take place in the “near term.” But senior officials from Mr. Noda’s ruling Democratic Party of Japan have said that meeting the three conditions wouldn’t lead to an election right away.And some of his aides say they can’t all be met in time for a December election. An election next month “is diffi- cult schedule-wise,” the DPJ’s Secre- tary General Azuma Koshiishi said in a TV interview Sunday.“We’re not working with [a December elec- tion] as a premise.” The Noda aides say that redis- tricting to resolve disparities in the weight of a vote will take at least a couple of months.The LDP’s posi- tion is that the condition will have been met if a bill to address redis- tricting is enacted—even if an elec- tion is held with the current dis- tricts.That isn’t Mr.Noda’s take. The LDP says it is acceptable to ap- ply the changes later,one of the aides said,“but the prime minister has all along believed in doing so from the next election.” Another aide said that passage of the deficit-financing bill would push up Mr.Noda’s support rating,em- boldening him to stay in power to tackle next year’s budget—a move certain to meet fierce resistance from the opposition. An escalation in political ten- sions could delay passage of the budget,and result in a repeat of the uncertainty about government spending that the bond-issuance bill has created.On Thursday,Moody’s Investors Service Inc.called the po- tential cancellation of bond auctions due to the political impasse over the bill “credit negative.” While the DPJ,with its control of the more powerful lower house, can push the budget through parlia- ment,a clash between parties could delay enactment and force the gov- ernment to work by an interimbud- get,government officials said.Such a budget would keep spending to a minimum,they say—hindering ef- forts to boost an economy many economists say is on the verge of recession as global demand slows. —Mitsuru Obe and Toko Sekiguchi contributed to this article. B Y G EORGE N ISHIYAMA Deeper in the Red Japan has been borrowing more each year and sinking further into debt. BONDS OUTSTANDINGGOVERNMENT BONDISSUANCE Source:Japan’s Ministry of Finance The Wall Street Journal Note:Fiscal year ends March 31 ¥1 trillion=$ 12.48 billion ¥700 trillion 0 100 200 300 400 500 600 '102000 ¥708.9 TRILLION 2012 ESTIMATED trillion ¥175 0 25 50 75 100 125 150 '10 2000 TRILLION ¥159.2 INITIAL BUDGET THE WALL STREET JOURNAL.Monday,November 5,2012 | 5 Myanmar Makeover’s Education Gap Companies Eager to Pour In Find Dearth of Skilled Workers;Rot at University Embodies Leaders’ Challenge YANGON—The University of Yan- gon was once one of Asia’s best.To- day,abandoned buildings rot away on its overgrown campus,some walkways deserted except for dogs. Its state of affairs embodies a crucial challenge for leaders as Myanmar opens to the outside world.The military junta that domi- nated the country for five decades all but destroyed the university system after a series of student protests convinced its leaders that schools were breeding grounds for dissent. But now that the lifting of most Western sanctions has paved the way for an expected wave of invest- ment,companies are finding a na- tion largely bereft of skilled work- ers.Doctors and lawyers often lack up-to-date training,and other pro- fessions are desperately short of qualified staff with even basic criti- cal-thinking skills,employers say. The lack of expertise was some- times used by military leaders as a justification for handing big busi- ness contracts to associates of the regime.Only over the past year, since the military regime stepped down,has the government actively encouraged those educated abroad to return and share expertise. “There’s a huge,huge shortage” of trained workers,“and going for- ward it will be even more so,” said Suki Singh,managing director of Myanmar Hotels International, which runs several of Yangon’s most prominent hotels and has been look- ing to fill human-resources and en- gineering positions for months. Parami Energy,an oil and gas firm, has been trying since July to fill hu- man-resources jobs and other posts, but keeps finding applicants can’t speak English. “Most of them,I’m sorry to say, are unqualified,” says Tin Cho,an adviser to the company.Some com- puter-science students don’t even know how to turn computers on,he said. Twenty-year-old Zin Nyein Htwe wants to be an architect “to make more beautiful buildings.” But she says her college—the University of West Yangon—doesn’t normally let students into its library and only sometimes allows access to comput- ers.She complains that some in- structors can’t explain what they’re teaching and rarely fail anyone.“I want a better education,” she says. The weak education systemalso means the government lacks enough trained technocrats to fully imple- ment reforms.Opposition leader Aung San Suu Kyi said recently that Myanmar’s “ruined” education sys- tem had made it harder to recruit talented young politicians. In the decades after Myanmar’s military regime took over in the 1960s,it closed the University of Yangon and other campuses repeat- edly to keep student protesters at bay,at one point keeping schools closed for nearly 3½years in the late 1990s.To further prevent students from congregating in urban areas, the regime scattered much of the University of Yangon to remote sites, while new schools were opened far fromcity centers.Funding dried up, with Myanmar spending more on de- fense than education and health care combined—the only country in de- veloping Asia to do so,according to the Asian Development Bank.In- structors were told to stick to rote lesson plans vetted by military lead- ers,teachers say.Some students were left with 40-year-old textbooks. When Kyi May Kaung,now a Washington-based writer,was a stu- dent at the University of Yangon, then known as Rangoon University, in the early 1960s,students hung out at poetry readings and teachers held degrees from places like Har- vard and M.I.T.But by the time she became an economics lecturer,pro- fessors were ordered to stop teach- ing political science and instead lec- tured on the “socialist experience” in the Soviet Union.Teachers had to borrow light bulbs to ensure there was enough light during storms. Foreigners still aren’t allowed to enter the premises of the University of Yangon—which now offers classes mainly just for graduate programs— without special permission.A recent visit by a Myanmar national found a largely deserted campus covered in lush overgrowth. Officials at Myanmar’s Ministry of Education didn’t provide responses to questions.President Thein Sein has vowed to improve education, which he says is necessary to bolster Myanmar’s human resources. “The government is quite aware” of the problems and will make im- provements,said Nay Zin Latt,a presidential adviser.The government “has a strong idea to support re-es- tablishing the University of Yangon,” he added,but he was “not in the po- sition” to disclose details,he said. Efforts to obtain comment from the University of West Yangon,Ms. Zin Nyein Htwe’s school,were unsuc- cessful.A lecturer there said the school struggled to keep facilities open due to funding shortages, though students could ask permis- sion to visit the library.Very fewstu- dents are interested in the library, though,he said.A degree “is easy to get,” he said,since teachers coach students on how to pass exams. Fixing schools will require huge investments and a willingness to let students gather more openly and potentially debate sensitive political issues,educators say. The government has more than doubled its education budget and in- creased teacher salaries,and univer- sities have been ordered to trimen- rollment to boost standards, teachers say.Officials have held dis- cussions with Johns Hopkins Univer- sity—which had a Southeast Asian studies center at the University of Yangon in the 1950s—about working together to improve university pro- grams.The government has also launched a “comprehensive review” of the education system,expected to be finished in 2014. A chemistry lecturer interviewed by The Wall Street Journal said she is now more optimistic about pros- pects for reform than any time in years. But many of the old problems re- main.She said that while each de- partment at her school has a com- puter,many of themdon’t work,and many teachers don’t have permission to use the Internet,which must be obtained fromadministrators.“There is still a military-dictatorship style of rule in some departments,” she said. Another pressing question is whether schools should have inde- pendence to develop their own cur- riculums,which could frighten more conservative elements in the gov- ernment.Universities “one day will get full independence as the rest of the world is practicing,” Mr.Nay Zin Latt said.But another official said Myanmar “needs more comprehen- sive review” before relaxing its grip on schools.Schools don’t have the financial means to run themselves, so must rely on central government oversight anyway,the official said. —Celine Fernandez, Minh Zaw and Swe Min contributed to this article. B Y P ATRICK B ARTA The overgrown entrance gate of the University of Yangon,once one of the best seats of learning in Asia. AssociatedPress WORLD NEWS Some Thais Change Their Names in Quest for Better Luck Changing names might seemlike an extreme remedy for bad luck,but in Thailand,it is sometimes the first thing people do to improve their prospects.Thai parents have long exercised great care in choosing names for their children.Often they consult fortune tellers to help select names that complement the day and time at which their children were born.Mr.Baramee charges people around 500 baht,or around $17,to provide several suitable names. If that doesn’t work,many peo- ple are willing to change their names if they think it will give them a competitive edge now that the country’s economy is quickly swing- ing fromits old rice-farming origins toward the urban,globalized world of iPhones,shopping malls and mass manufacturing.“Thailand is chang- ing very quickly and it is natural to look for ways to help you prosper,” said Suchada Jarernsritrakul,a 34- year-old real-estate consultant who changed her name two years ago. The process is quick and straightforward.Thais simply regis- Continued from first page ter their new names at local govern- ment offices and can get new identi- fication cards printed on the spot.In the U.S.,name changes often involve court procedures to be fully recog- nized,while many European coun- tries require government approval for proposed name changes. How often all this is happening isn’t known,but there is enough name-switching to give the police fits tracking criminals.In one case, police say they have launched a man- hunt for a 35-year-old man originally named Sahachat Kasemthang,who allegedly changed his name several times as he opened new bank ac- counts and used bounced checks to buy $167,000 of gold from jewelry stores across the nation.Partly be- cause of problems like this,the au- thorities nowfingerprint not only to identify criminal suspects but also to handle all sorts of routine processes, including visa extensions. “We can’t rely on names and ID cards to accurately identify people any more,” said Lt.Gen.Panu Kerd- larbpol of the Thai Police. Still,you won’t hear a certain Olympic athlete questioning the powers of name changing.At 28, JunpimKuntatean had won a silver medal in the world weightlifting championships but then suffered an elbow injury a year before the 2008 Beijing Olympics.Hoping to change her luck,she visited a fortune teller who suggested a name makeover. The new one,Prapawadee Jaroen- rattanatarakoon,which roughly translates as “Sparkling River-flow of Brilliant Prosperity,” was a chal- lenge to TV commentators,but she did win a gold medal.She wasn’t reachable for comment now,but told reporters after winning that “some people believe in fortune tell- ers and I am one of them.” Businesswoman Benyapa Sujira- pat went to a fortune teller too when, at age 50,she decided to quit her job and start her own advertising busi- ness.She was told her old name, Sutheera Visetsung,had too many letters which brought bad luck,so Ms.Benyapa,decided to select a new one,which means “Flourish with Wisdom.” That gave her confidence to go ahead,said Ms.Benyapa,who not long afterward met the man she married—which she also partly attri- butes to her new identity. There are all sorts of methods for choosing new names,and the pro- cess is growing more sophisticated. Mathematicians at Naresuan Univer- sity,about 320 kilometers north of Bangkok,came up with a novel algo- rithmfor selecting auspicious names in 2009 to make the process even simpler.Based on old beliefs about how different letters of the alphabet can influence a person’s fate,the formula looks at the statistical aus- piciousness of a name,as calculated by its perceived attributes such as wisdomand strength,along with the number of letters in a name. Since then,a plethora of Internet sites have emerged to help people change their names online without going through the hassle of seeing an actual fortune teller or numerol- ogists.Users simply type in their names and their birth dates and the sites will crunch several factors,and provide some alternative,luckier names for a fee.At fortune- name.com,five suggestions cost 299 baht,or just under $10,with addi- tional charges for more names and advice on how to sign your new moniker best.There are even “name-changer” smartphone appli- cations allowing Thais to ponder a name-change while stuck in Bang- kok’s chronic traffic jams. Not surprisingly,not everything about all this all name-changing goes well for people.Ms.Benyapa,the businesswoman,has to walk around with a battered cardboard folder of documents to prove she is who she says she is.In some cases,she com- plains,she has had to rebuild busi- ness relationships fromscratch after changing her name.Other people carry laminated,notarized copies of their old identification cards. Then there is the matter of her recent wedding.“I sent out the invi- tation cards,but nobody knew it was me because I was using my new name,” she says.Many of her guests agreed to attend only after she vis- ited themin person.“If you change your name,you should be ready to face all sorts of problems,” Ms.Be- nyapa says. 6 | Monday,November 5,2012 THE WALL STREET JOURNAL. Vote Holds High Stakes for Business Owners and Executives Focus on What Each Candidate Would Mean for Taxes and Regulations in the U.S. The outcome of Tuesday’s presi- dential election carries enormous weight for executives of American businesses,big and small,influenc- ing everything from the taxes they are required to pay to the attitudes of regulators who scrutinize them. Disappointed by President Ba- rack Obama and in despair over dys- function in Washington,business, for the most part,is investing in challenger Mitt Romney. An Obama re-election,many ex- ecutives figure,would almost surely mean higher taxes for them,contin- ued pressure fromaggressive regu- lators and more years of frustration with a onetime community orga- nizer who,they complain,doesn’t understand the role of business and is quick to scold them publicly. A Romney victory,on the other hand,is more likely to bring tax re- lief,governmentwide restraint on regulation and affinity with a pri- vate-equity pro who describes him- self as a friend of business. Of course,Mr.Obama still has fans in boardrooms fromSilicon Valley to Detroit to Wall Street.On Thursday, he won the endorsement of NewYork City’s billionaire mayor,Michael Bloomberg.Meanwhile,corporate en- thusiasmfor Mr.Romney is tempered by his vowto get tough with China— the most promising growth market for many big companies.Also,some contend that Mr.Romney and his run- ning mate,Paul Ryan,with their no- tax-increase vows,haven’t sketched a realistic plan for attacking the gov- ernment’s mountain of debt. With just days until the election, the candidates are squabbling over how best to give business,and the economy,a boost. Recently,Mr.Obama revived a proposal to consolidate nine federal agencies—including the Commerce Department,Small Business Admin- istration and U.S.Trade Representa- tive—under a newcabinet-level Sec- retary of Business.“There should be a one-stop shop,” he said on MSNBC. On Thursday,Mr.Romney criti- cized the notion that government reorganization is the key.“We don’t need a secretary of business to un- derstand business,” he said on the campaign trail in Roanoke,Va.“We need a president who understands business,and I do.” Stumping in Green Bay,Wis.,Mr. Obama emphasized the importance of government-funded programs on which the economy depends.“If this country invests in the skills and ideas of its people” he said,“then good jobs and businesses will follow.” Business has been voting with its bucks.In the 2008 election,corpo- rate political action committees and employees contributed $2 bil- lion—55% to Democrats and 45% to Republicans,according to the Center for Responsive Politics.So far in this election,60% of the $1.8 billion in business-related contributions has gone to Republicans. Supporters of Mr.Romney hope the former Massachusetts gover- nor—who talks of his success as a Republican dealing with a Demo- cratic legislature—can break the logjam in Washington.Another cadre fears he will be captive to the Tea Party wing of the Republican Party. A constellation of issues stands to impact the way companies do business.An Obama victory would probably cement the president’s health-care law,the merits of which divide businesses;a Romney win would mean an attempt to scale it back.U.S.immigration laws,of keen interest to many employers,may be revisited.And the winner of Tues- day’s vote almost surely will pick a successor to Federal Reserve Chair- man Ben Bernanke. But taxes are high on the busi- ness worry list.The president and Congress will have to decide whether to extend a slew of expiring tax cuts and weigh the wisdom of lifting taxes on wealthier Americans to reduce the deficit.There is also bipartisan talk of an ambitious over- haul of the individual and corporate tax codes—a project that could cre- ate distinct columns of winners and losers in business. Mr.Romney has said that a tax- code overhaul can reduce rates and spur economic growth,ultimately bringing in more tax revenue.More than 80 chief executives said in a joint statement that growth alone won’t suffice,and that both tax-rev- enue increases and spending cuts will be needed to reduce the deficit. Much has changed in the past four years.The 2008 presidential election coincided with an enormous threat to American prosperity.Back then, American business had a single im- perative:Save the economy and fi- nancial system from collapse.Wall Street turned to Washington for a lifeline.Executives of most busi- nesses—even those who were critical of Mr.Obama—cheered for his eco- nomic-resuscitation effort to succeed. The administration says the bail- outs did their job.The U.S.banking system is healthier than it was in 2008,and in better shape than Eu- rope’s.And General Motors and Chrysler,both of which were res- cued by Washington,have restruc- tured,and are making money again. The mood began to shift with Mr. Obama’s December 2009 verbal as- sault on “fat cat bankers” and other rhetoric that ticked off executives. Wall Street lobbyists and executives felt shunned by the White House, even as liberal Democrats com- plained the administration was too soft on them. The showdown in Washington over raising the debt ceiling in Au- gust 2011 brought many executives off the sidelines.As talks between the White House and congressional Republicans broke down,headlines warned of a possible U.S.Treasury default. About 395,000 new private-sec- tor firms were formed in 2010,the lowest reading in 33 years,accord- ing to the latest U.S.Census.The Small Business Administration backed a record $30 billion of loans in its 2011 fiscal year. Surveys of small-business own- ers tend to find most in the Romney camp.For them in particular,a big issue is the assertiveness of Obama- appointed regulators. Although measuring regulation is imprecise,the White House budget office counted 192 economically sig- nificant regulations in Mr.Obama’s first 3½ years versus 146 in the same stretch of President George W. Bush’s first term,based on regula- tions published by executive-branch agencies and reviewed by the budget office. If he wins,Mr.Romney would be able to replace top regulators,some of whomserve at the pleasure of the president,others of whomfill fixed terms.But nearly as important is the vigor with which regulators do their jobs and enforce the rules. “I’ve never been audited by more government agencies in my life than I have under Obama,” said Lance Johnson,president of Johnson Brass & Machine Foundry Inc.,a family- owned business in Saukville,Wis., with 115 employees.He estimates the company has spent “well into the six figures” to deal with what he considers duplicative audits—in- cluding $50,300 for its latest inspec- tion by the Occupational Safety and Health Administration. “I would have spent that on more equipment.That would have created more jobs down the line,” said Mr. Johnson. OSHA,in a written response,said it didn’t duplicate work in recent in- spections but sometimes follows up with a company to ensure safety. Some small businesses see mer- its in both candidates.“The idea of having a business guy in the White House is appealing to me as a busi- nessman on sort of a fundamental level,” said Michael Brey,president of Brey Corp.,a Washington,D.C.- area chain of toy and hobby shops. “But I like knowing what’s going to happen and President Obama has laid that out clearly.” Mr.Brey’s company got a Small Business Administration-backed loan in 2010 that helped keep it afloat until it returned to profitabil- ity in 2011,he said. Obama administration officials have been frustrated by the attacks frombusiness,particularly because they feel steps taken by Mr.Obama in 2009,while politically risky, helped prevent an even worse out- come than a deep recession. The breakdown of campaign con- tributions from two large indus- tries—Wall Street and the energy sector—underscores the antipathy toward the president.In 2008,in- vestment bankers,hedge-fund man- agers,private-equity executives and others on Wall Street sent 57% of their $170 million in campaign con- tributions to Mr.Obama and other Democrats.So far this year,70% of their $220 million has gone to Mr. Romney and other Republicans. Energy interests,never a fan of Democratic regulatory policies,have turned particularly hostile to Mr. Obama. Oxbow Corp.,a mining and en- ergy company based in West Palm Beach,Fla.,is the single largest con- tributor to a super PAC founded to help Mr.Romney.It gave $3.75 mil- lion to the group,called Restore Our Future. “We consider Obama and the government right nowto be our big- gest concern and the biggest risk in our business,” said William Koch, Oxbow’s CEO.“They are pushing regulations to the point that they will run us out of business and make it too costly to operate in the U.S.” Mr.Koch’s brothers,David and Charles,are major conservative polit- ical funders;Williamsold his shares in their company,Koch Industries, and isn’t in business with them. White House spokeswoman Amy Brundage said Mr.Obama “has insti- tuted a regulatory policy that is aimed at protecting the health and safety of the American people while at the same time promoting eco- nomic growth and reducing burdens to businesses.” By Damian Paletta, Brody Mullins and Melanie Trottman *Rules with impact of at least $100 million,ﬁrst 3 ½years of ﬁrst term Sources:Ofﬁce of Management and Budget;George Washington University;Washington University (chart 1);Commerce Department (chart 2);Ofﬁce of Management and Budget (chart 3);WSJ Market Data Group (chart 4) The Wall Street Journal ViewFromthe Boardroom Businesses complain of Obama’s regulatory vigor… Number of economically signiﬁcant rules: Number of regulatory staffers: …but pretax corporate proﬁts have risen… Quarterly pretax corporate proﬁts fromcurrent production,annual rate …corporate tax receipts are below prerecession peak… Corporate income taxes …and the stock market is nearly back to prerecession levels DowJones Industrial Average,monthly close $400 0 100 200 300 billion '02'04'06'08'10'122000 14000 6000 8000 10000 12000 '02'04'06'08'10'122000 $2.0 0 0.5 1.0 1.5 trillion '02'04'06'08'10'122000 George W.Bush Barack Obama 146 192* 249,000 284,000 2008 2012 Q2:$1.92 trillion $242.29 billion Oct.31:13096.46 U.S.ELECTION 2012 Chrysler and General Motors are profitable after government bailouts. GettyImages THE WALL STREET JOURNAL.Monday,November 5,2012 | 7 Votes Test Support for Gay Marriage LEWISTON,Maine—Anthony Geroux recently told a door-to-door campaigner who approached his driveway not far from here that he was undecided about Question 1,a voter referendum to legalize gay marriage that will be on the state ballot Tuesday. Mr.Geroux,a 52-year-old finan- cier,previously voted against gay marriage and said his Baptist church published a notice in its Sunday bul- letin saying congregants shouldn’t “redefine traditional marriage.” But after talking with the can- vasser about a close friend who is gay,he wasn’t so sure.“I’mprobably going to vote for it now,because that’s what’s fair,” Mr.Geroux said. Mr.Geroux’s change of heart re- flects what gay-marriage backers say is a turning point in support that will be put to the test in Maine and three other states next week.Gay- rights advocates believe straight people are more likely to back same- sex marriage when they know more gay people,so in Maine,they are taking their campaign door-to-door in 250,000 conversations with voters like Mr.Geroux. Opponents of gay marriage,who challenge the assertion that Ameri- cans’ views on marriage have shifted,say they have reached Maine voters through television spots fo- cused on religious liberties and through churches.“It is a myth that somehow because Americans have brothers and sisters,friends and family that are gay that somehow that equates to support for gay mar- riage,” said Brian Brown,the presi- dent of the National Organization for Marriage,which is supporting the Maine fight with money and strategy.What does matter,Mr. Brown said,is people’s traditional understanding of marriage and the guidance they receive from clergy. “We are very strong in the churches, and will continue to mobilize and work on that base,” he said. Gay marriage has been defeated every time it has been on a ballot in the U.S.,including in Maine,where voters in 2009 overturned a law passed by the state legislature that permitted it.A further 32 states have voted in similar fashion.In the six that allow gay marriage,the unions were sanctioned by lawmak- ers or courts,not popular votes. But in the 2½ years since 1,500 canvassers in Maine began knocking on doors in support of Question 1, American support of gay marriage has,according to polls,grown sharply.Support in the U.S.reached 48% in July,up from 37% in 2009, while 44% opposed gay marriage, according to the nonpartisan Pew Forum on Religion & Public Life.A poll by the Wall Street Journal/NBC News in March found 49% favored gay marriage,and 40% opposed it. “Opinion on gay marriage,among social issues,has been shifting more dramatically than any other,and more consistently in one direction,” said Michael Dimock,associate di- rector of the Pew Research Center. Voters in Maryland and Washing- ton state also will vote Tuesday on laws allowing gay marriage that were passed by their state legisla- tures.Polls in Washington showgay- marriage support running ahead, and it is near a dead heat in Mary- land,although pre-election polls in the past have underestimated voter opposition to it.In Minnesota,vot- ers will decide whether the state constitution should define marriage as between a man and a woman.Re- cent surveys show a slight edge to people who favor the ban. Proponents in Maine remain opti- mistic.Arecent poll commissioned by the Portland Press Herald found 57% of voters support Question 1 and 36% oppose it.Maine’s vote marks a new approach by gay-rights supporters to bring marriage to the ballot on their own terms.Question 1 is the first U.S. effort to put the legalization of same- sex marriage—rather than a ban—to a popular vote. “Every other place,our oppo- nents have used the ballot as a weapon,” said Matt McTighe,a 33- year-old former policy analyst hired to lead the effort just months after gay-marriage proponents lost at the ballot in 2009. Many campaigners introduce themselves as gay;others ask voters whether they have any gay friends or co-workers.“There is no magic number,but the more gay people in relationships they know,the more likely they are to be supportive,” Mr. McTighe said. B Y G EOFFREY A . F OWLER Gay-marriage campaigner Danny DiDomenico speaks with Gillian Bavis in front of her Lewiston,Maine,home recently. GeoffreyA.Fowler/TheWallStreetJournal Labor-Market Gain Adds Fuel to Race The nation’s final employment report before Tuesday’s presidential election showed the economy has gained momentum recently but is still growing far below its potential, helping both candidates frame their closing arguments to voters. The Labor Department said Fri- day that employers added a season- ally adjusted 171,000 jobs in Octo- ber.Figures for previous months were revised higher,showing the economy has added an average 173,000 jobs a month since July— more than double the pace in the spring. The unemployment rate rose to 7.9% last month from 7.8% in Sep- tember,largely because more Amer- icans began searching for jobs. Even though the report was bet- ter than many investors had antici- pated,the Dow Jones Industrial Av- erage fell 139.46 points to close at 13093.16. No president since Franklin Del- ano Roosevelt has run for re-elec- tion with unemployment so high. Since 1948,only four presidents— Gerald Ford,Jimmy Carter,Ronald Reagan and George H.W.Bush—have sought re-election with joblessness above 7%.Mr.Reagan was the only one to succeed. For President Obama,Friday’s report reinforced his argument that the job market is on the mend,with employers adding jobs for 25 con- secutive months after eliminating hundreds of thousands a month at the start of his term.The number of nonfarm payroll jobs is higher now than when the president took office in January 2009. The report adds another detail to the broader picture of an economy picking up.Home sales,prices and construction are rising. Consumer confidence is at its highest level in 4½years,and Amer- icans are stepping up their spending at restaurants,shops and other re- tail establishments.Manufacturing activity is growing again,albeit very slowly,after three months of decline during the summer. However,unemployment is up fromits 7.8% level when Mr.Obama took office.Republican nominee Mitt Romney cites this as evidence the president’s policies have failed. More than 12 million people re- main out of work—a figure that rises to 23 million when taking into account those stuck in part-time jobs who would prefer to have full- time ones and those too discouraged to search for work. The pace of job growth in 2012 is roughly the same as it was last year. The economy grew at an annual rate of just 2% in the third quarter,be- low the roughly 3% pace notched during healthier times. Mr.Obama,campaigning in cen- tral Ohio Friday,pointed to the jobs report as a reason to grant him a second term.But Mr.Romney por- trayed the figures as evidence of a lackluster recovery burdened by the president’s policies. —Colleen McCain Nelson, Jonathan Cheng and Carol E.Lee contributed to this article. B Y J OSH M ITCHELL A ND S ARA M URRAY U.S.ELECTION 2012 Asset enhancement strategies for property owners and developers 20 – 21 November 2012,Novotel Clarke Quay,Singapore Real Estate Asset Enhancement World Asia is where property owners,developers, operators,funds and asset managers convene to discuss and demonstrate the merits of commericial asset enhancement initiatives. 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As Fuel Flows Again,Long Lines Remain The gasoline shortage across the New York region began to ease over the weekend,but the continued blackouts in the wake of last week’s superstorm still made it impossible for many filling stations to pump gas even if they had it. Some eight million gallons of fuel had been delivered as of early Satur- day morning and another 28 million gallons were to arrive in New York City over the next few days. “Fuel is on its way.You don’t have to panic,” New York Gov.An- drew Cuomo said Saturday.“Begin- ning today you will see an increase in the supply.” The gasoline was being trucked in to gas stations that have electric- ity,and generators were being deliv- ered to stations that have gasoline but no power.The governor also an- nounced five mobile gas-distribution centers that were set up Saturday at armories in the Bronx,Brooklyn, Queens and Staten Island.They were to distribute a maximum of 10 gal- lons of gas per person,free of charge. But by late afternoon the Na- tional Guard said in a statement that it had closed the mobile-fueling sta- tions to the general public as fuel- hungry crowds formed long lines for the free gas. “The Department of Defense mo- bile fueling stations are currently shut down for the public so that emergency personnel and first re- sponder vehicles can utilize them. Members of the public should not go to these fueling stations,” wrote Eric Durr,spokesman for the New York State Division of Military Affairs.“It is also important to remember that 28 million gallons of fuel are headed to this area right now and the lines at stations across the city should dissipate soon.” The fuel shortage began after the U.S.Coast Guard closed the New York Harbor in the aftermath of Sandy and fuel tankers were held in ports.The harbor is now open and gasoline can begin to be distributed, the governor said on Saturday. Another vital gasoline-distribu- tion terminal,in Linden,N.J.,now has electricity and will soon be oper- ational.That will help provide addi- tional fuel supplies. Mr.Cuomo also praised the speedy work of the Metropolitan Transportation Authority and its chairman,Joseph Lhota,in bringing subway service back online.Only 16% of the city’s subways were ex- pected to be offline as of Monday morning,he said. Government officials raced over the weekend to get gasoline to frus- trated and frightened motorists across the New York metropolitan area,suspending rules and opening waterways closed by debris from Sandy’s onslaught. But there was only limited prog- ress in dealing with the blackouts that left more than 3.5 million util- ity customers without power. “This continues to be an issue of electricity generation and not an is- sue of supply,” said Avery Ash, spokesman for AAA,which reported that about half of the gas stations in New York City and New Jersey were still without power as of Friday. Hess stations,many of which had generators to power their pumps, reported lines of cars that stretched for up to three miles. But there were some signs of progress in New York.Power was restored Friday afternoon to parts of lower Manhattan,causing people to rejoice on the streets as the lights flickered on in restaurants, apartments and office towers.The Staten Island Ferry resumed service and the city lifted occupancy re- strictions on vehicles entering Man- hattan. City officials still face enormous challenges.Sunday’s New York City Marathon was canceled amid com- plaints that resources were being diverted from hard-hit areas,and that it was unseemly to hold the event when neighborhoods still were reeling. The Federal Emergency Manage- ment Agency set up its first mobile recovery center in New York City, distributing water and food and tak- ing applications for disaster assis- tance.Gasoline shortages emerged as one of the biggest headaches.The federal government estimated that only one-third of gas stations in the metropolitan area had fuel for sale, based on a survey that found more than half were shut down. Petra Marfil,35,of Newark,N.J., had been parked for hours outside an empty Lukoil Station there,hop- ing for a delivery to fill up her mini- van.“I’ve been looking for gas since Wednesday,” she said,adding that her house has no power.“I amcold, hungry.It’s been frustrating.” Gov.Chris Christie late Friday ordered odd-even gasoline rationing in 12 New Jersey counties starting at noon Saturday.Drivers with li- cense plates ending with an even number can only buy gasoline on even numbered days of each month, and vice versa. Late Friday,the White House said the Defense Logistics Agency would buy up to 12 million gallons of unleaded fuel and up to 10 million gallons of diesel fuel and send it by tanker trucks to communities af- fected by the storm.The federal government also said Friday it will lend diesel fuel from a strategic stockpile to emergency agencies to help keep supply trucks,power gen- erators and water pumps running. The Department of Homeland Se- curity said it was suspending laws so tankers can move fuel quickly from Gulf Coast refineries to the North- east.Two million barrels of gas have been delivered so far,according to Rear Admiral Daniel Abel,the re- gion’s Coast Guard commander. By Joseph De Avila,, Dan Strumpf and AndrewGrossman Crowds wait for free gasoline on Saturday at the Bedford Avenue Armory in the Brooklyn borough of New York City. GettyImages CriticismHelpsHalt Marathon Amid mounting public pressure, Mayor Michael Bloomberg on Friday canceled plans to host the New York City Marathon this weekend,saying it had become a divisive issue that was distracting the city fromefforts to recover from superstorm Sandy. Mr.Bloomberg made the after- noon announcement in a joint state- ment with New York Road Runners Chief Executive Mary Wittenberg. The decision came just hours af- ter Mr.Bloomberg reiterated a posi- tion he had held for days:the race should be held Sunday as a sign of resilience and because it generates some $340 million in economic ac- tivity. But that was met with a growing chorus of dissenters,including top city officials,who said the marathon would tax city resources at a crucial time.The spectacle of the mara- thon—a celebratory,citywide event—also struck many as un- seemly when at least 41 people had died,including a brother and sister who were found on Staten Island on Friday after staying home to protect their pets,police said. The race wouldn’t be resched- uled,Deputy Mayor Howard Wolf- son said. Earlier,in an effort to salvage the race,Ms.Wittenberg had attempted to recast it as a “Race to Recovery” highlighted by a fundraising drive to support relief efforts.Already those efforts had raised $1.1 million from the Rudin family,a longtime sponsor of the marathon,a $1 million com- mitment from the Road Runners, $500,000 fromING,the event’s title sponsor,and what would likely have been hundreds of thousands more fromrunners who were asked to do- nate to recovery efforts. But shortly after the midday Fri- day news conference where Mr. Bloomberg said the marathon would go on,aides “began having conver- sations about options” for canceling the event,a city official said.The mayor believed the city had the manpower to host the race without harming recovery efforts but agreed the issue had become too divisive, the official said. City Hall officials and the mara- thon’s organizers discussed a num- ber of alternatives,including hold- ing a 10-mile run in Manhattan and moving the traditional start of the race out of Staten Island.But in the end,the mayor didn’t believe any of the options would quash criticism. One person familiar with the matter said the mayor was aware of the criticism.But “it was definitely his senior staff” telling him the event couldn’t move forward that led to the decision. “The mayor did not believe that would bring the race back to being what everyone wants it to be,” said one person familiar with his think- ing. “It is with an especially heavy heart that we’re here to say there will not be a 2012 New York mara- thon,” a shaken-looking Ms.Witten- berg said at an evening news con- ference.Serious thought was also given to holding an elite race,said Mr.Wolfson. By MatthewFutterman, Michael Howard Saul and AndrewGrossman Workers take down signs at the finish line of New York’s marathon. AgenceFrance-Presse/GettyImages AFTERMATH OF THE STORM Slow Recovery >> Scan this code to watch a video on gas shortages in the New York area,or go to WSJ.com/US. As Storm’s Impact Lingers, Signs of Life Are Emerging As Greater New York showed halting signs of progress on Friday, a realization began to set in:Megas- torm Sandy’s effect on daily lives would linger long after the floodwa- ters recede. In New York City,57 schools were so badly damaged that up to 34,000 schoolchildren and their teachers could be sent elsewhere, with no return date in sight,the schools chancellor said.Even when the region’s transit system starts running at something closer to full capacity in coming days,there will be stations and train lines that take weeks to fully bring back.And some large Lower Manhattan office towers could remain dark even as neighbor- ing buildings fill up with tenants. New Jersey Gov.Chris Christie spoke Friday of standing in calf- deep sand in still-deserted shore towns where rebuilding will take months,if not years. “It’s unrecognizable,” he said. “Everybody,once you’re allowed to go there,you’re not going to believe what you see.” That sentiment resonated,even as a semblance of normalcy returned to parts of the region.Lights clicked on in some previously dark neigh- borhoods,prompting cheers across large parts of Manhattan.At the Bowery Mission,a downtown home- less shelter,people started singing hymns when the lights flickered to life.By 7 p.m.,fewer than 100,000 customers were without power in Manhattan,according to Consoli- dated Edison Inc. At the same time,mandatory carpooling for motorists headed to Manhattan ended and New York City schoolchildren found out that they would be heading back to school on Monday after a week off. New York City schools will re- open Monday for most of the sys- tem’s 1.1 million schoolchildren,but the start date has been pushed back to Wednesday for an estimated 38,000 children who attend 65 schools in severely damaged build- ings,schools officials said.Some schools have damaged roofs,under- water boilers and oil tanks. On Wednesday,many students and staff members in those schools will be sent elsewhere.“That’s seri- ously going to be a challenging day,” schools Chancellor Dennis Walcott said. —Ted Mann,Jacob Gershman, Jennifer Weiss and Laura Kusisto contributed to this article. By AndrewGrossman, Jacob Gershman and Lisa Fleisher THE WALL STREET JOURNAL.Monday,November 5,2012 | 9 10 | Monday,November 5,2012 THE WALL STREET JOURNAL. WORLD NEWS U.S.Details Graft by Afghan Leader JALALABAD,Afghanistan—One of Afghanistan’s top power brokers has been freeing suspected insur- gents,running an open extortion scheme and traveling with suitcases of undeclared cash earned from criminal activity,according to inter- nal U.S.documents. A few years ago,the U.S.military described Gov.Gul Agha Shirzai as the best hope for securing Nangar- har province,a critical gateway to Pakistan.Now,under Gov.Shirzai, U.S.officials say,Nangarhar has turned into a center of corruption, allowing the Taliban and criminal groups to stage a comeback. An assessment of Gov.Shirzai prepared by a top U.S.civilian offi- cial in eastern Afghanistan—marked “secret” and viewed by The Wall Street Journal—details “systemic corruption” by the governor and members of his administration,in- cluding extortion,illegal “land grab- bing” and narcotics trafficking. The assessment is a draft diplo- matic cable that is awaiting final re- view.A second document,a shorter U.S.diplomatic cable marked “sensi- tive” and prepared by civilian U.S. customs experts,sounds a similar theme.U.S.officials said the docu- ments were authentic and didn’t dispute their contents. Gov.Shirzai,contacted through his spokesman and intermediaries with details on the allegations, didn’t respond to repeated requests for comment. U.S.officials acknowledge that corruption is a problem in Nangar- har province.They have long de- scribed Gov.Shirzai as someone who could deliver on security and reconstruction,even while acknowl- edging he was an autocrat with a fortune frominsider dealings.Now, U.S.officials working in Afghanistan openly question whether that bar- gain was a miscalculation. Cmdr.WilliamSpeaks,a Defense Department spokesman,said the Pentagon takes corruption allega- tions “very seriously,” but added: “It’s also important to remember that we are not in a position to se- lect the country’s leaders—that is a matter for the Afghan people.” The deterioration in Nangarhar— home to around 1.4 million people and eastern Afghanistan’s biggest city,Jalalabad—underscores the pit- falls of America’s long-standing strategy of relying on Afghan war- lords to bring security.After a de- cade of nation-building attempts, U.S.and Afghan officials worry that, as the U.S.-led coalition withdraws, the country will be dominated once again by what they describe as “criminal patronage networks,” fuel- ing the insurgency. The Taliban began their march to power in the 1990s in the southern city of Kandahar because of popular outrage with local warlords’ abuses. Gov.Shirzai was one of these war- lords,serving as Kandahar governor at the time,and once again follow- ing the 2001 U.S.invasion. Afghan President Hamid Karzai, a fellow Kandahari,appointed Gov. Shirzai to oversee Nangarhar in 2005.Mr.Karzai’s term expires in 2014.Gov.Shirzai has publicly indi- cated his interest in running for the presidency. The draft U.S.assessment of Gov. Shirzai,which is based on intelli- gence reports and other sources,al- leges that he has amassed a vast personal fortune fromthe so-called Shirzai Fund,an unauthorized tax collected at the Torkham Gate bor- der crossing with neighboring Paki- stan.The operation nets the gover- nor $1.5 million to $4 million per month,according to the report. During a trip to Germany in early July,Gov.Shirzai was detained for two hours by the German Customs Police as he tried to enter carrying three briefcases full of undeclared cash,the report says.“Because of his diplomatic passport,he was re- leased and allowed to enter the country with his ill-gotten gains,” it says. The German Foreign Ministry wasn’t informed about the gover- nor’s visit to the country,said a per- son familiar with the matter.Ger- man tax law prohibits customs officials fromrevealing details of in- dividual cases or incidents,said a spokeswoman for the Frankfurt Air- port customs office. The U.S.document also says offi- cials in Gov.Shirzai’s administration “have recently been involved in fa- cilitating the insurgency by refusing to detain and prosecute insurgents caught preparing attacks” on U.S. and Afghan troops. The U.S.document also details Mr.Shirzai’s association with al- leged local criminals.One passage describes the governor attending wedding parties in the company of an alleged crime boss who had been recently been released on bail.Ac- cording to the document,Mr. Shirzai helped broker the man’s re- lease.Footage of the events was carried on local television,the re- port said. Gov.Shirzai was once a U.S.fa- vorite.In interviews with the Jour- nal in 2009,senior U.S.officials said he was able to get things done through “force of personality”—in- cluding cutting opium production, boosting security and pushing through reconstruction projects.It was the U.S.that installed the for- mer warlord as governor of Kanda- har after ousting the Taliban in 2001,and he amassed a consider- able fortune providing contracting services to the giant U.S.military base there. U.S.civilian and military officials working in the region these days openly describe Gov.Shirzai as em- blematic of the dysfunctional gov- ernment that Afghanistan will in- herit af ter most U.S.and international troops withdraw in 2014.“He is the biggest detriment to good governance in Nangarhar,” said Lt.Col.Martin Willmarth,an Army civil affairs officer in the province.“I wish we could get rid of him.” While Gov.Shirzai isn’t a Nan- garhar native,his revenue-collection scheme gives him a powerful tool for winning local loyalties.At a pro- vincial development committee meeting at the governor’s palace in September—chaired by Gov.Shirzai and observed by a Wall Street Jour- nal reporter—local officials hashed out the details of local development projects:school textbooks to be or- dered,bridges and canals to be re- paired,power outages to be dis- cussed. The meeting stalled because U.S. advisers working with Gov.Shirzai had put an uncomfortable topic at the top of the agenda:The prov- ince’s massive budget shortfall.The local directors,who report to minis- tries in Kabul,struggled to under- stand the detailed budget numbers that had been prepared for themby U.S.advisers.With just a few months left in Afghanistan’s current fiscal year,the central government in Kabul had transferred less than 5% of the $48 million earmarked for development projects in Nangarhar to the provincial level. That left a gaping shortfall in funding for social programs. Gov.Shirzai intervened by spreading around the cash. “I’ll give you $50,000 from the Shirzai Fund to solve your problem,” he told the man representing the Ministry of Labor,Social Affairs, Martyrs and Disabled.The governor then doubled his offer to $100,000, to applause.His fund would also foot the $30,000 bill for an X-ray machine at a local hospital,he added. “He’s making it rain again,” an astonished U.S.official said after the meeting. “This is how the sausage gets made,” said Air Force Lt.Col.Grant Hargrove,the commander of the U.S.-led Nangarhar Provincial Re- construction Team. Gov.Shirzai’s quick-fix largess presents a big dilemma for Nangar- har.According to the previously un- disclosed report by U.S.government customs experts,the Shirzai Fund collects tolls at an unmarked cus- toms building across fromthe main complex at the TorkhamGate cross- ing.At the crossing,Afghan customs officials levy a lawful fee for vehi- cles entering the country.But pro- vincial officials reporting to Gov. Shirzai collect separate fees—from 200 to 2,500 Afghanis ($4 to $50) per vehicle,with the tariffs set on a sliding scale,depending on the size of the vehicle and the type of cargo. The secret report describes the tax as an “ongoing illegal extortion scheme” at the border. —Habib Khan Totakhil and David Crawford contributed to this article. B Y N ATHAN H ODGE Nangarhar province Gov.Shirzai,center,during a September amnesty ceremony for militants. EuropeanPressphotoAgency SEEWHATAN MBA CANDO FORYOU MBA FAIRSINASIA Taipei November7 Guangzhou November9 HongKong November11 Manila November13 Jakarta November15 Singapore November17 KualaLumpur November19 HoChiMinh November21 Bangkok November23 Babson-Olin•Cambridge-Judge CassBusinessSchool•CEIBS•CheungKong EDHEC•ESADE•Globis•IEBusinessSchool IMD•ImperialCollegeLondon•INSEAD HKUST•LondonBusinessSchool Michigan-Ross•UC-Irvineandmanymore... Registernowat: www.topmba.com *participatingschoolswillvarypercity US$1.2M ScholarshipsAvailable FreeGMATseminars Ofﬁcial business newspaper THE WALL STREET JOURNAL.Monday,November 5,2012 | 11 Egypt’s Coptic Church Chooses a New Leader CAIRO—Egypt’s Coptic Christian church named a new pope on Sun- day,chosen in an elaborate cere- mony in which a blindfolded boy drew the name of the next patriarch from a crystal chalice. Bishop Tawadros will be or- dained Nov.18 as Pope Tawadros II. He will be the spiritual leader of a community that increasingly fears for its future amid the rise of Isla- mists to power following the upris- ing last year that ousted President Hosni Mubarak.Copts,the Middle East’s biggest Christian community, are estimated to make up 10% of the country’s population of 83 million. In a ritual steeped in prayer, chants and incense at Abbasiya ca- thedral in Cairo,the names of three papal candidates chosen in an ear- lier vote were placed in a wax- sealed bowl before the blindfolded boy picked out one name. Copts,who trace their church’s origins to before the birth of Islam in the 7th century,believe this long- established selection process en- sured worldly influences didn’t de- termine the successor to Pope Shenouda III,who led the church for four decades until his death in March at the age of 88. Pope Shenouda had been criti- cized by some Christians for being too close to Mr.Mubarak.Church analysts say he was partly prompted to take a strong role in the Mubarak era because many Christians with- drew from public life,complaining of discrimination,leaving the pope their main defender. Bishop Tawadros,60 years old, will faces challenges,as the coun- try’s transition to democracy has been marked by a deep rift between increasingly politically powerful Is- lamist groups,fromwhich the coun- try’s new president hails,and the liberal and secularist groups who were initially behind the revolt that ousted Mr.Mubarak last year. “Pope Tawadros faces different rules of the political game,” said Youssef Sidhom,editor of the Coptic newspaper Watani.“Copts are now encouraged,and even encouraged by the church,to get out and partic- ipate in the political arena.” Coptic Christians have long com- plained of discrimination by the state and the country’s Muslimma- jority.Church construction,land disputes or Muslim-Christian love affairs have often sparked clashes with Muslims. The prospects of a stronger role for Islamic law in legislation has in- creased concerns of further margin- alization,or that Copts’ rights to worship could be curtailed. All three senior clerics whose names were in the chalice were con- sidered consensus candidates who stayed out of disputes within the church and with other groups,in- cluding Islamists. The current government is led by President Mohammed Morsi of the Islamist Muslim Brotherhood.Mr. Morsi,the Brotherhood and its leader,Mohammed Badie,congratu- lated the church and Bishop Tawadros on Sunday.The Brother- hood has sworn to safe guard the rights of Christians. At the center of the political squabbling in Egypt is the role of Is- lam in the country’s new constitu- tion,currently being drafted.The Christians,along with liberal and secularists,oppose demands by Isla- mists to increase the role of Shariah law.The prospects of a stronger role for Islamic law in legislation in- crease the community’s concern of further marginalization. The new pope,bishop of a region in the Nile Delta north of Cairo,was shown on television praying at Pope Shenouda’s tomb in a desert monas- tery in Wadi el-Natrun surrounded by priests. Bearded,bespectacled and in black priestly robes,Tawadros thanked God,praised his predeces- sor and said:“I carry love to all our brothers in Egypt,” in comments broadcast on television. AWall Street Journal Roundup New Pope Tawadros II,shown in the large poster,is named on Sunday in Cairo. AssociatedPress WORLD NEWS:MIDDLE EAST THE WEBSITE OF CHOICE FOR 13.9 MILLION p E E VERYMONT H Source:Omniture July 2012 Unique Visitors www.thedailybeast.com 2012 Winner 12 | Monday,November 5,2012 THE WALL STREET JOURNAL. WORLD NEWS:EUROPE Fixing Greek Debt Remains Elusive In a string of meetings beginning this week,European leaders will again wrestle with how to keep Greece fromrunning out of cash,but they almost certainly won’t solve the far bigger question of how to cut down the growing pile of debt that is slowly suffocating the country. The consequences are stark. Greece must shoulder a frightful debt burden while suffering an epic recession.The euro zone,which had once hoped to patch Greece up and move along,now faces the prospect of dealing with its problems for years,or engineering a divorce. Europe has choices for address- ing the first problem,though none is appetizing.There is almost no politi- cal will to decisively attack the latter problem.One option under consider- ation is a buyback of some debt.But that would only nibble at the edges. Greek debt will be €346 billion ($448 billion) next year,the govern- ment said Wednesday.At 189% of gross domestic product,that debt is nearly twice what the government thinks next year’s economic output will be. The weight of debt erodes confi- dence in Greece’s government,its fi- nancial systemand in the economy. It also scares off investment and renders ineffective recent palliative measures fromthe European Central Bank,which is trying to persuade in- vestors that stressed countries won’t quit the euro zone,and so it is safe to lend to their governments and busi- nesses.To a degree,this approach has worked for Spain and Italy. But the risk of a second Greek default,after one earlier this year, and a possible euro exit “hasn’t been removed fromthe table by the ECB,” says Ross Pamphilon,co-chief investment officer of ECM,a Lon- don-based asset manager specializ- ing in credit markets. Substantially reducing that risk requires cutting Greece’s debt to a sustainable level.Few European governments are even willing to talk about taking such steps.No sur- prise—they hold most of Greece’s debt. Euro-zone governments made €53 billion in loans to Greece in 2010 and 2011.The ECB and other central banks in the euro zone now have roughly €45 billion in Greek bonds. The euro-zone bailout fund has lent Greece €74 billion and is sched- uled to lend another €71 billion in the coming years—much of it in the coming months.All told,that is more than two-thirds of Greece’s debt burden. By contrast,private bondholders have a bit more than €60 billion. Those bonds trade at around 25 Eu- ropean cents on the euro.So in theory,euro-zone governments could engineer a buyback to retire some of them. They could lend Greece another €30 billion,say,to buy themback at 50 cents on the euro,cutting Greece’s debt by €30 billion,less than 10% of the total stock. More drastic measures collide with political reality.Germany,the dominant player in all euro-zone ne- gotiations that involve money,is among creditors least willing to countenance forgiving any of Greece’s debt. Other frugal Northern European countries,like the Netherlands and Finland,also insist Greece make tough internal reforms. The International Monetary Fund wants the euro zone to forgo some of what Greece owes it.But German Finance Minister Wolfgang Schäuble said during the IMF’s October meet- ing in Tokyo that Greece’s problems were “caused by Greece,and they must be solved by Greece.” Moreover,Chancellor Angela Merkel faces national elections in fall 2013 and is loath to risk splits in her coalition or attacks from euro- skeptic German media by admitting Greece mightn’t repay all its debt to Europe. German politicians trust only that Greek politicians will carry out painful economic reform under du- ress.For them,forgiving debt would remove pressure on Athens to change its ways. European policy makers have discussed forgiving some or all of the €53 billion in loans euro-zone governments disbursed to Athens. But Ms.Merkel and Mr.Schäuble view the proposal as “absurd,” ac- cording to a senior German official. “Northern Europe doesn’t want to make Greek debt too sustainable.In their own mind,they need Greece’s debt to be close to unsustainable so that it implements reforms,” says Ga- briel Sterne,economist at London- based brokerage Exotix Ltd. Tough austerity policies de- manded by Germany and its friends worsen Greece’s debt problem by shrinking the economy,lessening the productive base from which debt can be repaid,many econo- mists argue. Greece’s creditors have continu- ally underestimated the extent of the economic damage.In their first bailout of Greece,in 2010,they an- ticipated that Greece’s GDP would be €235 billion in 2013.The Greek government now says it will be €183 billion. Greece’s other problem—its need for short-term cash—is in many ways easier to solve.While Germany and others resist simply writing a check,there are other tools. Greece could continue issuing high levels of short-term Treasury bills to its banks.The countries might agree to hand over to Greece the profits that the ECB will receive fromits Greek bond holdings,which are being repaid in full despite the central bank’s having bought them at a discount. Or the euro zone could give Greece a break on the interest it owes.As largest creditor,the euro zone gets the bulk of the €10 billion Greece will spend next year on in- terest. B Y C HARLES F ORELLE A ND M ARCUS W ALKER © 2012 Dow Jones & Company,Inc.All rights reserved.4DJ515 Our website is packed with breaking news,live video,interactive graphics, and the insights that have made us America’s top-selling newspaper. Visit WSJ.comtoday. Your Trusted Source for US Elections Coverage .com We know how important it is for you to stay informed on America’s elections and their impact on the world. That’s why we’re making WSJ.comfree for 24 hours – starting at 6 a.m.HKT,GMT+8 on Election Day. THE WALL STREET JOURNAL.Monday,November 5,2012 | 13 OPINION:REVIEW& OUTLOOK T he Ambassador to Libya and three other Americans were murdered September 11 in Benghazi.That we know.But too little else about what took place before,during and after the attack on the U.S.diplomatic mission is clear. The White House says Republicans are “politicizing” a tragedy.Politicians politi- cize,yes,but part of their job is to hold other politicians accountable.The Ad- ministration has made that difficult by offering evasive,inconsistent and con- flicting accounts about one of the most serious American overseas defeats in re- cent years.Unresolved questions about Benghazi loomover this election because the White House has failed to resolve them. Why did the U.S.not heed warnings about a growing Islamist presence in Benghazi and better protect the diplo- matic mission and CIA annex? From the start of the Libyan uprising in early 2011,the Central Intelligence Agency built up an unusually large pres- ence in Benghazi.By this September, two dozen or so operatives and contrac- tors monitored Ansar al-Shariah and other militant groups.Deteriorating se- curity after the war was no secret.U.S. intelligence noted militant camps in the mountains near Benghazi, including “al Qaeda lean- ing” fighters,according to Tuesday’s New York Times. Over the summer,the Red Cross and the U.K. closed their offices in Benghazi after attempted terrorist attacks and assassinations.A bomb went off outside the U.S.mission on June 6 but hurt no one.Ambassador Chris Stevens told his superiors in an Au- gust cable about a “security vacuum” in Benghazi.A different classified State ca- ble sent in August,and obtained by Fox News last week,noted the growth of al Qaeda training camps and expressed con- cern about the Benghazi mission’s ability to defend against a coordinated attack.It said it would ask for “additional physical security upgrades and staffing.” In a House hearing last month,career State Department officials said various requests for security reinforcements to Libya were turned down.A 16-member special security team in Tripoli,the Lib- yan capital,was pulled out in August. The inability of Libya’s weak central government to protect American diplo- mats was overlooked.These revelations came from the career staff at State. Mr.Obama and Secretary of State Hill- ary Clinton have claimed “responsibility” for Benghazi,without saying precisely for what.During the second Presidential debate on October 16,Mr.Obama was asked:“Who was it that denied enhanced security and why?” He changed the sub- ject. What exactly happened on the day of 9/11?During the over six hours that the compounds in Benghazi were under siege, could the U.S.have done more to save lives?What was President Obama doing and ordering his subordinates to do in those fateful hours? An October 9 State Department brief- ing offered the first precise timeline, nearly a month later.There was no dem- onstration outside the consulate the eve- ning of the 11th—“nothing unusual dur- ing the day at all outside,” a State official said. That may not be right.Early that morning,Embassy guards noticed a Lib- yan police officer in a building across the street “photographing the inside of the U.S.special mission,” according to a let- ter dated September 11 fromthe Embassy to the Libyan government,calling it “troubling.” The letter was discovered late last month at the still unsecured compound by two journalists and pub- lished on Foreign Policy’s website Thurs- day. At 9:40 p.m.local time (3:40 p.m. EST),a security officer at the Benghazi consulate heard “loud noises” outside the gate and “the camera on the main gate reveals a large number of people—a large number of men,armed men,flowing into the compound,” according to the State Department timeline. Within half an hour,the consulate was on fire.At about 10:45 p.m.,help arrived from the CIA annex about a mile away. The CIA offered its first account of that evening this Thursday night,nearly two months after the fact.Agency personnel were dispatched within 25 minutes of the initial attack on the consulate.By 11:20, they evacuated the consulate.Stevens and Sean Smith,a State employee,were dead. The fortified annex then came under steady small-arms fire for 90 minutes starting around midnight, according to the CIA time- line,but it was never breached.The fighting lulled for four hours.Be- fore dawn,a sudden mor- tar attack killed two CIA security officers on a rooftop,according to CIA officials.By then,a Quick Reaction Force had arrived fromTripoli to evacuate the annex.The CIA briefers said the agency did not deny aid to the consulate.But the Journal reported on Friday that the CIA and State “weren’t on the same page about their respective roles on security” in Benghazi. The latest account also leaves unan- swered what other options Mr.Obama and his security team considered.The U.S.failed to bring armed drones,gun- ships or other close air support to de- fend the annex from the militias who were outside its gates for over four hours.The fighting at the consulate may have taken place too quickly to bring in outside military support.According to officials who spoke last week,fighter jets in Italy would have created too much collateral damage in a civilian neighbor- hood. An unarmed U.S.drone was diverted to Benghazi but had trouble distinguish- ing between the terrorists and U.S.allies who came to the compounds’ aid.An armed drone wasn’t in the area.A large special operations force fromFort Bragg arrived in Sicily too late to help,accord- ing to a National Public Radio report Thursday. Mr.Obama was informed of the at- tacks at around 5 p.m.—11 p.m.in Libya— during a previously scheduled meeting with his military advisers,and he or- dered military assets moved to the area, according to ABC News.During the at- tacks,however,the Administration didn’t convene the Counterterrorism Security Group,which was created to coordinate a response to a terrorist attack,accord- ing to a CBS News report. Late last month,Mr.Obama was twice asked by a local Denver television anchor whether Americans who asked for help in Benghazi were turned down by the chain of command.He didn’t answer. Lacking “real-time information,” De- fense Secretary Leon Panetta said last month,“you don’t deploy forces into harm’s way without knowing what’s go- ing on.” Officials last week insisted mili- tary intervention was either too risky or impossible to organize in time. Yet it’s still reasonable to ask why the U.S.wasn’t prepared for such a contin- gency.Since 9/11 (of 2001) the U.S.has been at war with the people who at- tacked in Benghazi,even though many liberals don’t like to say so.One of them is the current Commander in Chief,who still refuses to talk about his Administra- tion’s response to his 9/11. Why has the Administration’s story about what took place in Benghazi been so haphazard and unclear? In his September 12 Rose Garden statement,Mr.Obama said “no acts of terror will ever shake the resolve of this great nation,alter that character,or eclipse the light of the values that we stand for.” He said this at the end of his remarks,well after his specific comments about Benghazi. Unnamed Administration officials that same day told Reuters that an al Qaeda regional offshoot and members of Ansar al-Shariah were probably involved.“It bears the hallmarks of an organized at- tack,” one U.S.official said.Intelligence officials briefed Members of Congress later that week that terrorism was the likeliest culprit. Yet by the end of that week,the White House offered a different account:That the Benghazi attack grew out of a spon- taneous demonstration against an anti- Islam video on YouTube.On September 14,Obama spokesman Jay Carney said, “We don’t have and did not have concrete evidence to suggest that this was not in reaction to the film.” Two days later,U.N.Ambassador Su- san Rice went on a tour of the Sunday talk shows to repeat the video-caused- the-protest story.On CBS’s “Face the Nation,” she contradicted Libya’s Presi- dent Mohamed Magarief,who on the same show blamed a “preplanned” at- tack by “foreign” terrorists.The White House and Ms.Rice have since claimed they were merely following talking points provided by the “intelligence community.” Yet Reuters revealed last month that government officials saw a possible al Qaeda connection even as the attacks were taking place.Emails fromState’s re- gional security officer to the White House Situation Room,the Pentagon,the FBI and others noted that Ansar al-Sha- riah had taken responsibility.The Daily Beast’s Eli Lake reported that FBI officers who interviewed security officers who worked at the consulate knew as early as September 14 that the attack was no pro- test. It took eight days for the Administra- tion to formally declare that the four Americans “were killed in the course of a terrorist attack on our embassy,” in the words of Matt Olsen,director of the Na- tional Counterterrorism Center.But six days later Mr.Obama was asked by Joy Behar on “The View” if “it was an act of terrorism”?He said the government didn’t know.In his September 25 U.N.ad- dress,Mr.Obama made several general references to the YouTube video but made no mention of terrorismin the con- text of Benghazi. His campaign stump speech to this day includes the lines that “al Qaeda has been decimated” and the U.S.is “finally turning the page on a decade of war to do some nation-building right here at home” (Thursday in Las Vegas). i i i Mr.Obama has made the defeat of al Qaeda a core part of his case for re-elec- tion.Yet in Benghazi an al Qaeda affiliate killed four U.S.officials in U.S.buildings, contradicting that political narrative. The President may succeed in stone- walling Congress and the media past Election Day.But the issue will return, perhaps with a vengeance,in an Obama second term.The episode reflects di- rectly on his competence and honesty as Commander in Chief.If his Administra- tion is found to have dissembled,careers will be ended and his Presidency will be severely damaged—all the more so be- cause he refused to deal candidly with the issue before the election. America has since closed the Libya diplomatic outpost and pulled a critical intelligence unit out of a hotbed of Isla- mism,conceding a defeat.U.S.standing in the region and ability to fight terrorist groups were undermined,with worrying repercussions for a turbulent Middle East and America’s security.This is why it’s so important to learn what happened in Benghazi. The Fog of Benghazi What we nowknow— and still don’t— about President Obama’s 9/11. The rubble of the U.S.consulate,September 13. AssociatedPress Comments?The Journal welcomes readers’ responses to all articles and editorials.It is important to include your full name,address and telephone number. Please send letters to the editor to: Letters@WSJ.com 14 | Monday,November 5,2012 THE WALL STREET JOURNAL. OPINION Today is a big day for Laos. Overshadowed by its neighbors for years,it will host this year’s Asia- Europe Summit for the first time. The country recently finalized its accession to the World Trade Orga- nization,the last member of the Association of Southeast Asian Na- tions to do so.This marks a major step in Laos’ integration into the global economy.Yet the govern- ment seems bent on grasping de- feat from the jaws of victory. The problem is that WTO mem- bership alone won’t be enough to sustain the country’s current boom.Economic growth of 8.3% this year is impressive,but is tilted toward mining and other heavy industries.The economy must eventually attract a broader range of investments. Although Vientiane will reap many rewards from WTO member- ship,plenty of growth hurdles will remain.The World Bank’s 2012 “Ease of Doing Business” index ranks the Lao Peoples Democratic Republic 165th out of 183 coun- tries,a drop of two spots from 163rd in 2011.In 2011,Laos at- tracted only $450 million in for- eign direct investment,compared to the $892 million into Cambodia or the $7.4 billion into Vietnam, according to the U.N.Conference on Trade and Development. Vientiane has done significant damage to its own reputation through its poor treatment of for- eign and domestic investors alike. For a case study,consider the his- tory of one of our clients,Sanum Investments Ltd.Since May 2007, the Macau-based subsidiary of a Dutch company has invested more than $85 million in a variety of projects,including resorts and gam- ing facilities in Laos.This has cre- ated more than 2,000 jobs. Yet as the businesses have be- come more successful,they have come in for unwanted attention from some quarters of the govern- ment.The Tax Department,under the Ministry of Finance,now claims the company owes $23 mil- lion in unpaid construction taxes, various overtime fees for immigra- tion services provided by the gov- ernment at the border and an agent tax on fees paid to the oper- ators of junkets that bring tourists to the casinos and resorts.These charges range from questionable to entirely fabricated. Such disputes aren’t unusual in the world of international invest- ment,but Vientiane’s handling of the matter has been troubling.The government has used the dispute as an excuse to cancel permits for existing and future projects,launch unlawful audits and impose retro- active tax demands.In one in- stance,of which the Queen in “Alice in Wonderland” would be proud,a Lao court imposed an unheard of $5 million fine and began enforcing it before the hearing was over. The Tax Department has pur- sued the tax case despite the fact that in 2012 the Ministry of Fi- nance signed an agreement with Sanum confirming that all con- struction taxes had already been paid.Three prime ministerial de- crees have stated that overtime fees were not to be charged.The original agreement with the gov- ernment under which Sanum in- vested was supposed to provide for a flat tax on all revenues through December 2013. The matter of agent taxes is slightly more complex,hinging on the correct understanding of the legal relationship between Sanum and junket operators.But the ca- price with which Vientiane has acted in the other matters doesn’t inspire confidence in its ability to reach a fair resolution. Indeed,despite what appear to be firm statements from govern- ment officials in Sanum’s favor in two of the three disputed matters, the Tax Department maintains that if the company doesn’t pay the $23 million bill,it will seize Savan Vegas,the company’s largest re- maining project in Laos. If it does,the likely beneficiary will be the ST Group.It has already been handed another valuable Sa- numasset,the Thanaleng Slot Club. That casino was seized in April 2012,once its monthly net income attained the $3 million mark,after legal wrangling similar to the cur- rent cases involving Sanum. In that instance,which started as a joint venture between Sanum and ST Group,the ST Group sued Sanum on baseless allegations that the expiration of a temporary agreement ended the joint venture, even though the Master Agree- ment between the parties covering all Lao investments remained in full force.The proceeding itself was heavily tilted in ST Group’s fa- vor—Sanum was only given three days’ notice of the setting of the trial,insufficient given the magni- tude of the proceeding. Moreover,Sanumwas afforded only an hour to present evidence in a complex commercial matter,saw its assets seized by the court before the trial was over,and less than an hour later was issued a nine-page, single-spaced court judgment.After wrongfully awarding Sanum’s 60% stake in the venture to ST Group, the court then imposed a $5 million fine on Sanumfor having asserted a counterclaimfor damages that was denied. This kind of case has an obvi- ous chilling effect on foreign in- vestment,but its negative conse- quences for Laotians extend further.Sanum has filed for inter- national arbitration against the government,pursuant to interna- tional investment treaties Vien- tiane signed.Not only is such arbi- tration expensive for Laotian taxpayers,but if Sanum wins,the taxpayers will have to pay com- pensation. Laotians have already incurred such an expense at least once in recent history.In 2009,Thai-Lao Lignite,a Thai company,won an arbitration award against Laos.In that case,the company had signed a project development agreement with Vientiane to build a power plant near the Thai border to sell electricity into Thailand.After a dispute arose over whether the company was also allowed to mine coal in Laos for the plant,the gov- ernment tried to argue Thai-Lao Lignite hadn’t been a party to the PDA.The company received a multi-million dollar judgment from an arbitration tribunal. It does not have to be this way. Just as joining the WTO will re- quire fundamental changes associ- ated with more openness and re- spect for the rule of law,so too Laos’ leaders can decide to turn the corner and respect foreign in- vestment.A positive change here can complement WTO accession and send the message that Laos is ready for sustained growth. Ms.Schwab is a former U.S. Trade Representative.Mr. Burghardt is a former European Union ambassador to the United States.They are a consultant and senior counsel respectively at the law firm Mayer Brown,where they advise the investors of Sa- num Investments. Hurricane Sandy barely qualified as a Category 1 storm when it made land- fall in the New York area.Irene,which landed a year earlier,had been downgraded to a tropical stormby the time it touched the city. For comparison,the 1821 Nor- folk and Long Island hurricane was a Category 3 by current metrics when it laid waste to Lower Man- hattan.The 1938 New England hurricane was a Category 3 when it flooded parts of the city and battered Long Island.Hurricane Donna in 1960 was considered a strong Category 1 when it pro- duced an 11-foot storm surge in New York harbor. Those,like New York Gov.An- drew Cuomo,Mayor Mike Bloomberg and certain local news anchors,who insist on an apocalyp- tic explanation for the city’s recent weather-related mishaps,might want to rein in their shamanizing. The apparent increase in the storms’ destructiveness is not due to climate change but to the simple fact of more people and stuff in the paths of not especially unprece- dented bouts of severe weather. “It’s not prudent to sit here and say it’s not going to happen again,” intoned Mr.Cuomo this week.“I believe it is going to happen again.” Duh.Seventy-five hurricanes have hit or passed near New York since 1800.The governor hardly needs his Nostradamus hat to pre- dict more. When the high tide of political enthusiasm for climate action be- gan to recede around the time of Al Gore’s Nobel,it receded for good reason,and not because of Republican intransigence,or any “climategate” email scandal,or even because of the inconvenient absence of warming from the tem- perature record after 1998. The moment passed because even a political system as prodigal as ours could not bridge the chasm between costs and benefits.Even many Democrats were stopped in their tracks by the question:How much should we spend on climate change in order to have no effect on climate change?Likewise, whatever the truth of man’s role in global warming,whatever the mer- its of regulating CO 2 ,making cli- mate policy the answer to hurri- canes can’t be anything but a fraud on the public.Doing so,literally,is like proposing to spend trillions to reduce by an inch or two an 11-foot storm surge that might occur sometime in the next century. James Hansen,the NASA alarmist,inadvertently illustrates the problem of scale confronting anybody who wants to change the Earth’s climate by regulating CO 2 . He recently claimed it would be “game over” for Earth’s climate if Canada were allowed to develop its oil sands. Canada,never mind its energy industry,accounts for just 1.7% of global CO 2 output.You could ban Canada and the effect would be outweighed by a single year’s Chi- nese growth.And that’s the real problem for climate warriors: Nothing as dinky as Canada’s oil sands,a target we could actually get our hands around,would make the slightest difference. Meanwhile,wasn’t the subject hurricanes? Way back in 1968—when,by the way,scientists were worried about global cooling—Congress was al- ready at wit’s end over the recur- rent bailouts demanded by flood- prone communities.As the Congressional Research Service ex- plains,the solution was a national flood-insurance programthat “would greatly reduce the reliance on federal disaster relief assis- tance.Property and business own- ers would in effect pre-fund their own flood-related property losses.” It didn’t turn out that way. Flood insurance was sold at subsi- dized prices,and disaster aid con- tinued to flow anyway,so the end result was even greater incentive to build and rebuild on exposed flood plains. Congress has been trying to un- tangle its cross-purposes ever since.With its latest efforts,own- ers of “repetitive loss properties” are encouraged to invest in flood- proofing or move.Just this sum- mer Washington began rolling back long-standing subsidies for grandfathered sites. Never mind the silliness on dis- play in New York last week,with Mayor Bloomberg,like a man bursting with newfound resolve, endorsing President Obama be- cause his climate mojo will some- how save the city from future floods.The post-Sandy political ac- tion will not be focused on climate politics,and Mr.Bloomberg knows it.Not only is the flood insurance program broke;it has blown through $18 billion of its $21 bil- lion in borrowing authority to pay post-Katrina claims,meaning the legislature will have to act. Will Congress throw its hard- won insurance reforms to the winds?Will it engage in another disaster-aid blowout of the type that in the past has always guaran- teed that the next storm will be more destructive than the last? History is not encouraging.Bob Sheets,then-head of the National Hurricane Center,told the media after 1979’s Hurricane Frederic:“It was like an urban renewal pro- gram out there.And that kind of thing takes place almost any place you’ve had a big hurricane strike.” Messrs.Bloomberg and Cuomo understandably want to shake off any blame for the disruption caused by the kind of storm that has regularly disrupted the city for two centuries.Not happy are the questions raised by Sandy,and by every hurricane:Where should we build?How should we protect what we build?Those are espe- cially hard questions when the log- ical answer (as in many shore communities) is the politically toxic one of asking people not to rebuild what was just knocked down unless they’re prepared to forgo taxpayer assistance next time it gets knocked down. No wonder politicians prefer to engage in magical talk about cli- mate change while waiting for the federal checks to roll in. [ Business World ] B Y H OLMAN W . J ENKINS, J R. B Y S USAN S CHWAB AND G ÜNTER B URGHARDT The Next Step for Laos You Can’t Fix a Hurricane With Climate Policy Almar Latour,Editor in Chief,Asia Dean Napolitano,Senior Editor Hugo Restall,Editorial Page Editor Wendy DeCruz,Institutional Sales Charlotte Lee,Circulation Sales Dan Molloy,Advertising Sales Chad Tendler,Communications Shawn Hiltz,Marketing Simon Wan,IT Christine Brendle,Publisher Published since 1889 by Dow Jones and Company © 2012 Dow Jones & Company.All Rights Reserved ASIA Politicians avoid the hard questions of where to build and what to protect. Laos’ Industry and Commerce Minister Nam Viyaketh with WTO director general Pascal Lamy. AFP/GettyImages THE WALL STREET JOURNAL.Monday,November 5,2012 | 15 OPINION For the past few days,we’ve all been properly focused on one of the worst storms of our lifetimes.We mourn those who were lost.And we pledge to stand with those whose lives have been turned upside down for as long as it takes to recover and re- build—better than before. Because when hardship hits,America is at its best.The petty differences that con- sume us in normal times fade away.There are no Democrats or Republicans during a storm—only fellow Americans.That is how we get through the most trying times:to- gether. In 2008,we were mired in two wars and the worst economic crisis since the Great De- pression.Together,we’ve battled our way back.Our businesses have created over five million new jobs in the past two and a half years.Home values are on the rise.Manufac- turing is growing at the fastest pace in 15 years.The American auto industry is back. Thanks to the service and sacrifice of our brave men and women in uniform,the war in Iraq is over.And Osama bin Laden is dead. We’ve made real progress.But we’re not done yet.On Tuesday,Americans get to choose between two fundamentally different visions of America—one where we return to the top-down policies that crashed our econ- omy four years ago,and one built on a strong,growing middle class. Our free market is the engine of Amer- ica’s progress,driven by risk-takers,innova- tors and dreamers.Our people succeed when they have the chance to get a good educa- tion and learn new skills—and so do the businesses that hire them,or the companies they start.We believe that when we support research into scientific and medical break- throughs,new industries will start here and stay here.We grow faster when our tax code rewards hard work and companies that cre- ate jobs in America,and when quality health care and a dignified retirement aren’t just achievable goals but a measure of our values as a nation. For eight years,we had a president who shared these beliefs.Bill Clinton asked the wealthiest to pay a little more so we could re- duce the deficit and still make these invest- ments.By the end of his second term,Amer- ica had created 23 million new jobs.Incomes were up.Poverty was down.Deficits became surpluses.And Wall Street did very well. In the eight years after,we followed a different path.Bigger tax cuts for the wealthy we couldn’t afford.Encouraging companies to ship jobs and profits overseas. Fewer rules for big banks and insurers.The result of this top-down economics?Falling incomes,record deficits,the slowest job growth in half a century,and an economic crisis we’ve been cleaning up for the past four years. Gov.Mitt Romney has offered—under the guise of “real change”—these very same pol- icies that failed our country so badly.But we know better. We shouldn’t end college tax credits to pay for millionaires’ tax cuts;we should make college more affordable for everyone who’s willing to work for it.We should re- cruit 100,000 math and science teachers so that high-tech,high-wage jobs aren’t created in China but in America.And we should equip another two million Americans at community colleges with skills that busi- nesses are looking for right now. Change is an America that is home to the next generation of manufacturing and inno- vation.I’mproud I bet on the American auto industry.I refuse to cede the future of manu- facturing to other countries.We need a tax code that stops rewarding companies that ship jobs overseas and starts rewarding com- panies that create jobs here;one that stops subsidizing oil-company profits and keeps supporting new energy jobs and new tech- nology that will cut our oil imports in half. Change is an America that turns the page on a decade of war to do some nation-build- ing here at home.So long as I’mcommander in chief,we’ll pursue our enemies with the strongest military in the world.But it is time to use the savings fromending the wars in Iraq and Afghanistan to pay down our debt and rebuild American roads,bridges,schools and broadband. Change is an America where we reduce our deficit by cutting where we can and ask- ing the wealthiest to go back to the income- tax rates they paid under President Clinton. I’ve worked with Republicans to cut a trillion dollars of spending,and I’ll do more.I’ll work with anyone of any party to move this coun- try forward.But I won’t eliminate health in- surance for millions of poor,elderly or dis- abled on Medicaid,and I won’t turn Medicare into a voucher to pay for another million- aire’s tax cut.That is surrender to the same philosophy that hurt middle-class families for too long. I’mfighting for the Americans whose let- ters I read at night,whomI meet on the trail every day.The laid-off furniture worker who’s retraining at age 55 for a career in bio- technology.The owner of a small restaurant who needs a loan to expand after the bank turned himdown.The autoworker who’s back on the job filled with the pride of build- ing a great car. When these Americans do well,America does well.That is the change we need right now.Now’s the time to keep pushing for- ward to make sure that no matter who you are,where you come fromor how you started out,you can work to achieve your American dream. That is the America within our reach. That is why I’masking for Americans’ votes this Tuesday. Mr.Obama,a Democrat,is seeking re-elec- tion as president of the United States. KenFallin The Candidates Make Their Closing Arguments B Y B ARACK O BAMA After more than a year of campaigning, endless political advertisements,two con- ventions and four debates,the presidential election is almost over.The big decision of 2012 will soon be in the hands of the vot- ers.The choice Americans make will shape great things,historic things,and those will determine the most important and inti- mate aspects of every American life and every American family.All presidential elections matter.This one matters a great deal. It matters to the senior who needs med- ical care but,thanks to ObamaCare,can’t find a doctor who is taking new Medicare patients.It matters to the men and women who once had good-paying jobs with bene- fits but now work part-time with no bene- fits just to put food on the table.It mat- ters to the college student graduating this spring with a heavy load of debt and few opportunities to pay it back.It matters to the single mother who lives in fear of fore- closure as her employment prospects dwin- dle. This election is about them.It is about all of us. It is about the education of our chil- dren,the value of our homes,the take- home pay from our jobs,the price of the gasoline we buy,the choices we have in our health care.It is also about broader forces—the growth of the economy,the strength of our military,our dependence on foreign oil,our leadership role in the world. After four years of disappointments,fix- ing America’s problems requires a new di- rection.The path we’re on hasn’t led us where we need to go.In so many ways,it seems that things have gotten even worse. We can make excuses for what has gone wrong,and many have tried.But excuses won’t turn this country around.Only lead- ership can do that. I know something about leadership be- cause I have led before.I have reformed businesses that were on the verge of col- lapse.I have helped to save an Olympics that was plagued by scandal.I have worked with men and women on both sides of the aisle in Massachusetts to achieve real change and real reform. I can do it again in Washington.Repub- licans and Democrats in Congress may seem to share very little these days,but they share responsibility for the problems we now face.Just as it took both parties to bring us to where we stand,it will take both parties to get us moving again in the right direction. That is something we can only accom- plish if we work tirelessly to bridge the di- vide between the political parties.I will meet with Democratic and Republican lead- ership regularly.I will look for common ground and shared principles.And I will put the interests of the American people above the interests of the politicians and the bureaucrats. Together,we will overcome our difficul- ties and usher in a new age of prosperity. America is ready for that kind of leader- ship.Paul Ryan and I will provide it.Our plan for a stronger middle class will create jobs,stop the decline in take-home pay,and put America back on the path of possibility and opportunity. This,in turn,will enable us to fulfill our responsibilities to promote the principles of peace as leader of the Free World.We will help the Muslim world combat the spread of extremism.We will dissuade Iran from building a nuclear bomb.We will build enduring relationships throughout Latin America.And we will partner with China and other great nations to build a more stable and peaceful world. We face big challenges,but we also have big opportunities.New doors are open for us to sell our ideas and our products to the entire world.New technologies offer the promise of unbounded information and lim- itless innovation.New ideas are changing lives and hearts in diverse nations and among diverse peoples.If we seize the mo- ment and rise to the occasion,the century ahead will be an American Century. Our children will graduate into exciting careers that are worthy of their qualifica- tions.Our seniors will be confident that their retirement is secure.Our men and women will have good jobs and good pay and good benefits.Our veterans will come home to a bright future.We will have ev- ery confidence that our lives are safe,and that our livelihoods are secure. This requires a different direction,a change from the course of the past four years.It requires that we put aside the small and the petty,and demand the scale of change that we deserve:real change,big change.I pledge that my presidency will bring about that kind of change—confront- ing the problems that politicians have avoided for over a decade,revitalizing our competitive economy,modernizing our ed- ucation system,restoring our founding principles. If you are ready for that kind of change, if you want this to be a turning point in America’s course,join us and vote Tuesday for the kind of leadership that these times demand. I am running for president because I be- lieve in America.I believe in the America that never gives up,never stops striving, never ceases believing in itself.That is what I have been campaigning for,and that is what I will fight for as president of the United States. Mr.Romney,a former governor of Massa- chusetts,is the Republican candidate for president of the United States. KenFallin B Y M ITT R OMNEY Americans shouldn’t surrender to the same philosophy that hurt middle-class families for so long. ARomney-Ryan administration will confront the problems politicians have avoided for a decade. Real Progress,But We’re Not Done ANew Direction For America 16 | Monday,November 5,2012 THE WALL STREET JOURNAL. In a Corner of Myanmar, Some Muslims Seek Relief Ghetto Develops as Rohingyas Get Hemmed In;Clashes Threaten Economic and Democratic Gains A Muslim enclave in this scrappy port town on the Bay of Bengal is quickly turning into a prison-like ghetto, highlighting the risk that Myanmar’s dra- matic democratic revival could unleash cen- turies-old ethnic hatreds that had partly been held in check by nearly 50 years of mil- itary rule. Sittwe,a town of around 250,000 people, is supposed to be one of Myanmar’s new boomtowns.The main drag is dotted with brand-new banks,and India is funding a new $214 million port to open up a route up the Kaladan River to its eastern border,with an eye to turning this strip of Myanmar’s coast- line into a trading hub. But a couple of hundred meters back from where the river empties into the ocean, 7,000 Muslim Rohingyas are crammed into a steadily shrinking neighborhood called Aung Min Glar. Just a few months ago the Rohingyas in Sittwe moved around freely and often traded with the area’s majority Buddhist Ra- khine population.Now,the Rohingyas homes are ring-fenced by burnt-out buildings and military checkpoints,which,while protect- ing them from attack,also restrict their movements.Spasms of conflict in June and again last week have left more than 170 dead in clashes between the Rohingyas and Buddhist Rakhines,swelling the population of Aung Min Glar and threatening the coun- try’s recent democratic and economic gains, analysts say. “We can’t work,we can’t go out,and we’re running low on food,” said Habib Bul- lah,52 years old,a village elder.When peo- ple fall ill,they are often unable or afraid to go to hospitals and sometimes die,he says, gesturing to four freshly dug graves around the back of one of the three remaining mosques as fruit bats careen through the dusk sky,a world away from the bustling streets nearby. An hour or so’s drive from Sittwe,up to 100,000 more Rohingyas displaced by the clashes are living in a series of sweltering refugee camps where malnourishment and disease are rife and where security forces and local Rakhine activists impede aid work- ers from operating freely. More are arriving every day.“There’s no more fishing for Rohingyas in Kyaukpyu any more,” said one new arrival,28-year-old Aung Hla,referring to a fishing port farther down the coast where 600 Rohingya homes and 200 Rohingya fishing boats were set ablaze last month.“It’s all gone.” Other Rohingyas are speeding up a sea- sonal migration to seek work in nearby countries,especially Malaysia.The United Nations’ refugee agency expressed concern Thursday that a boat with an estimated 130 people on board,possibly including some Rohingya refugees from Rakhine state,sank off the coast of Bangladesh. The growing divides in Rakhine state are also now focusing international attention on what could be Myanmar’s biggest dilemma: How to nurture the growth of a functioning democracy while keeping the lid on ethnic tensions.Loosened reins on expression have opened the door for more inflammatory rhetoric that might not have been tolerated under the military regime,which handed power to a new,quasicivilian government last year. The U.S.and the European Union,among other trade partners,are watching Myan- mar’s response closely.While freer elections and more open media encouraged Western countries to lift many of their sanctions against Myanmar,which is also known as Burma,the measures were only suspended, not removed.Both Washington and Brussels have warned authorities that sanctions could be reimposed if ethnic conflicts worsen. Myanmar’s borders today were set by its former British colonial rulers.It encom- passes a wide range of territory,from the flat delta of the Irrawaddy River to the rug- ged mountains of the north and northeast. There are 135 different ethnic groups recog- nized by the government,with the majority Bamar,or Burman,making up 58% of Myan- mar’s total population of 64 million.Presi- dent Thein Sein’s government has signed cease-fire pacts with large insurgent groups, including the Karen in the east,but conflicts continue with another large group,the Kachin,in the north. The Rohingyas,which number around 800,000,comprise less than 1% of Myan- mar’s total population,but around a fifth of the people in Rakhine state,where tensions with local Buddhists run deep.Since 1982, the government doesn’t classify the Rohing- yas as citizens,considering them to be ille- gal migrants from Bangladesh despite many Rohingya families having lived in the area for several generations.Border police re- strict the movement of many Rohingyas,in- cluding determining whether or not they can marry,Rohingya activists say.Beyond Rakh- ine state,Rohingyas often encounter dis- crimination for their generally darker skin color. This year’s violence began in June after the rape and murder of a Rakhine Buddhist woman was blamed on local Muslims.Tit- for-tat clashes quickly escalated into wide- spread rioting,leaving 75,000 Rohingyas to seek safety in squalid relief camps.Most are still there.The most recent wave of violence began in October and has so far claimed 89 lives and made an additional 32,000 people homeless,according to the government. Animosity toward the Rohingyas is being driven on in part by nationalist-minded Bud- dhist monks who say they fear the Islamiza- tion of large parts of Myanmar.Among other things,monks led by senior cleric Wiseitta Biwuntha,known as the Venerable Wirathu, successfully rallied against the government B Y J AMES H OOKWAY Sittwe,Myanmar IN DEPTH Soldiers marched Wednesday in Sittwe,capital of Myanmar’s Rakhine state,which has been roiled by sectarian clashes. 1057 King Anwarahta founds the first state in Bagan and adopts Buddhism as a national religion. 1948 Burma gains independence from Britain. 1962 A military coup turns Burma into a military state. 1982 Rohingyas denied citizenship 2009 Thailand expels hundreds of Rohingyas,many of whom had washed up there in boats sent off course by a storm. Their fate remains uncertain. 2010 Myanmar’s military government releases dissident Aung San Suu Kyi from prison and holds elections. 2011 The military formally hands power to a new government which begins enacting political and economic reforms. June 2012 Ethnic clashes between Rohingyas and Buddhist Rakhines erupt in western Rakhine state.Scores are killed. October 2012 Fresh clashes and arson attacks occur in Rakhine state.Tens of thousands of Rohingyas seek refuge in a ghetto in Sittwe and relief camps. November 2012 Myanmar’s government warns villagers from both sides to turn in their weapons,or face repercussions. WSJ research Trapped in Conflict Rohingyas in Myanmar have long faced animosity EuropeanPressphotoAgency THE WALL STREET JOURNAL.Monday,November 5,2012 | 17 IN DEPTH to stop the opening of a liaison office for the 57-member Organization of the Islamic Con- ference which was designed to help channel aid from the Muslim world to Rohingyas liv- ing in relief camps.The Venerable Wirathu previously has been jailed for his role for al- legedly instigating anti-Muslim riots in Man- dalay in 2003.He was released in a prisoner amnesty earlier this year,and the monastery where he teaches in Mandalay is a hotbed of anti-Muslim sentiment.Protesters there reg- ularly carry banners urging the army to stop shooting at Rakhines attempting to remove Muslim settlers,and describe Rohingyas as illegal immigrants who must be forced out of Myanmar. The Venerable Wirathu Sunday said in an interview that he was compelled to act in order to protect the interests of Rakhine Buddhists.“They are victims in this conflict, too,” he said. Around Sittwe,Rakhine activists also post stickers objecting to the presence of United Nations and aid workers in the area. Some Rakhines say they also have been victims of violence,blaming Muslims for building settlements near public markets and accusing the security forces of shooting into peaceful demonstrations with little or no provocation.“We were only saying that we don’t want Muslims here,” said one Ra- khine man in his 30s. Local government officials in Rakhine state didn’t respond to requests for com- ment.Myanmar’s national government, meanwhile,has accused unidentified foreign groups of assisting Rohingyas,whom they accuse of launching terrorist attacks in Ra- khine state.Last week,the government or- dered all communities in the area to hand over weapons such as spears,machetes and homemade firearms to the security forces by Sunday.“It is obvious…that some local and foreign [groups] are on the side of [Rohyingya activists] involved in the inci- dents,” the government said in a statement reported by state-run media. Some Rohingyas fear that such language paves the way for massacres and the kind of ethnic cleansing that tore apart the former Yugoslavia in the 1990s.“There is a slow genocide under way here.The other groups want to clear out the Muslims,” said Saw Moe Kyaw,who is now living in the Takebi refugee camp near Sittwe.Kyaw Hla Aung,a former aid worker and court stenographer also living in the camps,worries that the next generation of children are growing up without access to government schools.In- stead,they must resort to Islamic schools which,where they are present,focus on Ar- abic and Islamic instruction rather than Myanmar languages or English. “We are being cut off from the rest of Myanmar.It is as if the government is try- ing to turn us into foreigners,which is what they say we are,” Mr.Kyaw Hla Aung said. Other Rohingyas are more hopeful that the government will slowly respond to in- ternational pressure and broaden its defini- tion of what it means to be a Myanmar citi- zen.The United Nations’ special rapporteur Tomas Ojea Quintana last month urged Myanmar’s leaders to do more to alleviate the root causes of the conflict,especially the issue of the Rohingyas’ citizenship. Either way,political analysts suggest that the government will likely move cautiously in dealing with the Rohingya question, largely because the group is so unpopular among the wider Myanmar population and national elections are approaching in 2015.The opposition National League for De- mocracy led by Nobel Peace Prize winner Aung San Suu Kyi,normally a vocal sup- porter of human rights,has been noticeably quiet on the issue.Earlier this year,Ms.Suu Kyi said she “didn’t know” whether Rohing- yas should be considered Myanmar citizens. A spokesman for her party,Nyan Win,said it is now urging the government to provide more security for all communities in Rakh- ine state. Jan Zalewski at IHS Global Insight in London predicts the government will move only slowly to respond to growing interna- tional pressure on the fate of the Rohingyas. “There will be lots of committees and hear- ings,but little real action,” Mr.Zalewski says. Meanwhile,Sittwe’s economic promise is beginning to falter.Swe Htay,a local fish trader,says many fishermen are afraid to venture out to sea because of the threat of more violence on shore. As a result,the output of one of Sittwe’s main industries is faltering.Cross-border trade with Bangladesh and India’s north- eastern states is also dwindling as traders hold off on making the trek to border cross- ings. In addition,some of the Rohingya middle class has now been displaced from their once-thriving businesses in Sittwe.Fresh transplants to the relief camps often talk about the shocking conditions they see among the teeming tents and stifling dormi- tories.“People are dying for no reason be- cause they don’t have access to proper health care,” said Maung Phyu,a physician who says he used to run a medical clinic in Sittwe until it was burned down by rioters last June. The conflict is also threatening impor- tant foreign investments.The fishing port of Kyaukpyu,where many Rohingyas es- caped apparent arson attacks in boats,is also the starting point of an oil-and-gas pipeline from the Bay of Bengal to China. Asked about the Rohyingya situation last month,China’s Foreign Ministry spokesman Hong Lei said China hoped that Myanmar can remain stable,according to Chinese state media. Essar Group,the Indian company con- structing the new Sittwe port project, meanwhile describes the situation in Rakh- ine state as “critical.” The project envisions building a deep-water port at Sittwe and dredging 225 kilometers upriver to the town of Paletwa,where cargo will be transferred to trucks plying a planned 140-kilometer highway to the Indian border,and,in theory,opening up an alternative route to the rest of the India by sea and bypassing the difficult land crossing squeezing past Bhutan and Bangladesh. So far,there has been no serious impact on construction,an Essar spokesman said, but “we hope that normalcy is quickly re- sumed.” “For us,democracy only seems to make things worse,” says Mr.Kyaw Hla Aung,the former aid worker.“It seems the only thing our politicians can agree on is that the Roh- ingyas must be trod down.” Rohingya refugees took shelter in a relief camp in Takebi on Thursday.More than 170 have died as Myanmar’s Rakhine state has been roiled by clashes between the Muslim group and Buddhist Rakhines. JamesHookway/TheWallStreetJournal Aformer aid worker and court stenographer living in the camps worries that children are growing up without access to government schools.Instead,they must resort to Islamic schools,which focus on Arabic and Islamic instruction rather than Myanmar languages. 18 | Monday,November 5,2012 THE WALL STREET JOURNAL. FROMPAGE ONE he wants to adopt.“He has tried as hard as he can to repackage the same policies that didn’t work and offer them up as change,” he said. Mr.Obama said it also wasn’t change to withhold key details of his plans until after the election—for in- stance,how he would offset the cost of his proposed tax cut.And he again laid into Mr.Romney for suggesting that Chrysler auto jobs were moving to China when in fact,the company is looking to expand in both countries. Mr.Romney,meanwhile,has set- tled into a speech on the campaign trail that embraces the idea that the election is a choice between himand Mr.Obama. He lists his experiences running the Olympics and turning around businesses—though he rarely utters the word “Bain” after his tenure at Bain Capital faced so many attacks. He holds up his termas governor of Massachusetts as evidence of his bi- partisan credentials. “You know your neighbor that may or not have decided who to vote for?They really know all they need to knowabout who to vote for based on what we’ve done in the past,” Mr. Romney said Saturday. The choice concept is one that Romney campaign staffers resisted for months believing that if the elec- tion were anything but a referendum on the president,Mr.Romney would lose. That theory is still being tested with a closely contested race nation- wide.In Iowa,a Midwestern battle- Continued from first page ground,polls have fluctuated giving each candidate an edge at times.But a Real Clear Politics polling average shows Mr.Obama with a slight lead. While the GOP hopeful’s speech is mostly set,Mr.Romney is still snap- ping up opportunities to take digs at his opponent. On Friday night and again Satur- day he seized on Mr.Obama’s remark that “voting is the best revenge.” “He’s asking his supporters to vote for revenge,” Mr.Romney said Saturday.“I’masking you to vote for love of country.” Mr.Obama made the remark Fri- day afternoon.By Saturday morning the Romney campaign had turned it into a television ad that asks “What is your reason for voting?” The two candidates enter the final stage with firmadvantages they had fromthe start.Mr.Obama derives his tiny lead by holding a slightly larger base of support,51% to 43%,among women voters than Mr.Romney has among men,the Wall Street Journal/ NBC News poll found. The former Massachusetts gover- nor has the support of 51% of men, compared to 44% who back the pres- ident. The poll of 1,475 likely voters across the country has a margin of error of plus or minus 2.55 percent- age points. With state polls continuing to show Mr.Romney lagging behind in the critical state of Ohio—Mr.Obama was ahead 51% to 45%,according to a Wall Street Journal/NBC News/ Marist Poll released Friday—his cam- paign is making a concerted,last- minute push to try to seize Pennsyl- vania,a win that would scramble the electoral map and negate a potential loss by the GOP nominee in Ohio. A running average of all national polls maintained by Real Clear Poli- tics now has the two men within 0.2% of one another.The average doesn’t include the newJournal poll. In the similarly down-to-the-wire 2004 clash between President George W.Bush and Sen.John Kerry, Mr.Bush actually entered the final stretch with a lead slightly above 2%—comfortable,by the look of this year’s election. Mr.Obama got high marks in the Wall Street Journal/NBC News poll released Sunday for his handling of the aftermath of Sandy,the storm that lashed the northeast U.S.last week.Nearly seven in 10 voters ap- proved of how he dealt with Sandy, compared with 15% who disap- proved.His approval was higher, 75%,among voters in the northeast. —Corey Boles contributed to this article. son during the trip.After returning to China,Mr.Sun said none of the projects he saw met his criteria for investing.“The returns are too low.” In the wake of the global finan- cial crisis,cashed-up Chinese com- panies were widely expected to swoop in and buy up struggling businesses in hard-hit Western economies.Instead,they mostly went shopping for natural resources in developing economies. Now there is an intensifying campaign to get Chinese investors to write checks in the U.S.The tour group including Mr.Sun is alone ca- pable of investing more than $1 bil- lion,organizers said,which is why cash-strapped states are getting in on the sales pitch. In Wisconsin,the group dined in Gov.Scott Walker’s mansion on a showcase of local products,includ- ing Asiago cheese and herb-crusted tenderloin.“We have big hopes and dreams” for the group,said Rebecca Kleefisch,Wisconsin’s lieutenant governor. The tour also met with Texas Gov.Rick Perry and Florida Gov. Rick Scott. Chinese investment into the U.S. is already on the rise.According to Rhodium Group,a New York con- sulting firmthat tracks Chinese out- ward investment,companies there invested $6.3 billion into U.S.com- panies and projects between Janu- ary and September,more than the $5.8 billion invested in all of 2010, the previous record for annual in- vestment. While energy deals still take up the majority of new investment,a slowing domestic economy in China has small and private entrepreneurs looking for opportunities overseas to earn a better return or give them an edge back in their home market. Continued from first page But obstacles remain,often re- lated to the fact that many Chinese have never invested overseas be- fore—one reason they developed a reputation for being slowto commit. The trend could also slow if Chinese investors feel they aren’t welcome in the U.S. In late September,the Obama Administration,citing national secu- rity,nullified the purchase of four wind-farm projects sites within or near restricted air space in Oregon by a company owned by two Chi- nese nationals. A week later a congressional re- port warned that telecommunica- tions equipment made by Chinese companies Huawei Technologies Inc. and ZTE Corp.pose a threat to U.S. security. Still,things are changing.“It’s getting easier [to do deals] because the U.S.side is learning and more willing,partly…because of the need for capital,” said Hanson Li,head of the San Francisco office of Hina Group,a Chinese investment bank, who wasn’t involved in the U.S.tour. But he said patience is needed “so things don’t turn sour on the U.S. side.” The visit by Mr.Sun’s group was organized by a Chinese private-eq- uity firm,Piyi Investment Co.,that opened its first overseas office in the Trump Building on Wall Street. Many members of the group had never traveled outside of China. The trip started on Sept.20 in Dallas and then the group split up, with some heading to Orlando, where they visited Universal Stu- dios,before heading on to Wiscon- sin. The others went to Los Angeles and Portland,Ore.,where they toured the local vineyards,before reconnecting with the rest of the group in Washington,D.C.,where the State Department hosted a re- ception.The trip ended in NewYork. The group met with more than 100 companies,including a no-frills airline in Florida,a golf course in Texas,and a company making power from biomass in Oregon. The companies,which were ask- ing for funding of between a few million dollars and $275 million,ac- cording to a Piyi prospectus,were also involved in health care,agricul- ture or environmental technologies such as water treatment—all areas Beijing is trying to promote—as well as real estate and vineyards. While no deals have been done yet,the investor group has asked for more information from 25 of the companies they met with,and plan to decide which they are interested in investing in by mid-December,ac- cording to Piyi. One investor has already taken the first step by signing a letter of intent with a California-based life- sciences company looking for $27 million in backing,the fund said. Scott Mosley,foreign direct in- vestment manager for the Wisconsin Economic Development Corp.,said he was aware of a number of re- quests fromindividual investors for more information on the Wisconsin companies. “I think that the largest chal- lenge in getting American entrepre- neurs and Chinese investors to a deal is setting the right environment where each side…can operate in a manner and at the speed to which they are accustomed,” he said. Presidential Election in U.S.Coming Down to the Wire U.S.Firms Put Out Red Carpet for Chinese Investors Republican presidential candidate Mitt Romney,left,in Iowa Sunday.In right photo,President Barack Obama with former President Bill Clinton,left,in New Hampshire. AssociatedPress(2) Zhang Zhenguo rides a bull in Dallas,where a group of potential Chinese investors were on tour. SunTao U.S.Election 2012 >> Scan this image to get real-time coverage on your mobile device,or visit WSJ.com/ElectionsLive at WSJ.com. Coming to America Chinese investment in U.S companies and projects The Wall Street Journal Source:RhodiumGroup 0 2 4 $6billion '07'06'08'09'10'11'12'12 YTD Total By private Chinese companies Full year Rhodiumestimate Monday,November 5,2012 As of 4p.m.ET Euro 1.2844 g 0.72% Yen/US$ ¥80.52 À 0.51% Yen/A$ ¥83.50 À 0.24% Oil 84.86 g 2.56% Gold 1674.10 g 2.33% 10-year Treasury g 4/32 yield 1.728% 3-monthLibor 0.31275 THE WALL STREET JOURNAL. asia.WSJ.com Buffett’s Berkshire Hathaway Buys Another Retailer MARKETS 28 Investors SeemSkeptical Apple Will Overdeliver HEARDONTHESTREET 34 An Election Promise:Market Clarity Investors Hope for Signs About How the U.S.’s Fiscal Problems Will Be Resolved;Avoiding the Cliff Tuesday’s presidential and con- gressional elections can’t come soon enough for investors hoping the re- sults finally provide some clarity on crucial U.S.fiscal policy questions. While the win- ners have a sizable list of long-term is- sues to tackle when it comes to government spending, taxes and regulation,many investors will be watching the results with an eye toward a more pressing concern: reaching a deal to avoid the so- called fiscal cliff,the year-end expi- ration of some $670 billion worth of tax cuts and spending that econo- mists say could send the U.S.back into recession. “The fiscal cliff becomes front and center,” says Michael Jones, chief investment officer at River- Front Investment Group in Rich- mond,Va.,which manages $3.3 bil- lion. Many investors expect a close contest on election night,but for President Barack Obama to win. They also anticipate that Republi- cans will keep a majority in the House of Representatives and that Democrats will retain slimcontrol of the Senate.That is a scenario that will set up an instant battle over whether to keep or kill the tax cuts and spending. A win by Mitt Romney is seen as taking fiscal-cliff concerns off the ta- ble,as both sides of the aisle are ex- pected to agree to an extension that would defer the need for immediate fixes.But a Romney victory also could introduce fresh unknowns, particularly when it comes to the end of Federal Reserve chairman Ben Bernanke’s term in 2014,or trade with China. Regardless of the outcome,inves- tors are looking forward to having the election in the rearview mirror. That is not just fromthe standpoint of investment decisions,but also be- cause uncertainty over tax and regu- latory policy is widely seen as hav- ing been a damper on economic activity in recent months. “Regardless of who gets elected, the clarity of knowing the results of the election is going to be a positive for the markets,” says Matthew Ru- bin,head of the investment strategy group at Neuberger Berman,which manages $203 billion.“Knowing who the president is will allow in- vestors to again focus on the funda- mentals and put this uncertainty be- hind them.” Stocks have posted healthy gains for the year.The Dow Jones Indus- trial Average finished Friday’s ses- sion up 7.2% so far in 2012 while the Standard & Poor’s 500-stock index is up 12.5%. Some say a win for the President could ultimately spark safe-haven buying of U.S.Treasurys and the U.S. dollar and a sell-off in riskier invest- ments such as stocks.That is be- cause House Republicans have re- fused to back any revenue increases and President Obama has said he would veto any extension of upper- income tax cuts,notes John Bellows, investment management strategy analyst at Western Asset Manage- ment,which manages $459 billion. “They set themselves up to have pretty difficult negotiations and that raises the prospect they fail to get the negotiations done by Dec.31,” says Mr.Bellows. While potentially damaging,a prolonged fight may not be as sig- nificant to the markets as last sum- mer’s debt-ceiling debacle,even if it is accompanied by another down- grade to the government’s credit rating,says Benjamin Pace,chief in- vestment officer at Deutsche Bank’s private wealth management group. “It’s not like the shock of last summer when we woke up…and re- alized we were no longer triple-A rated—something we never thought we would see in our lifetime,” he says. ARomney win,by contrast “would Please turn to page 24 B Y T OM L AURICELLA Source:J.P.Morgan The Wall Street Journal Poll Positions J.P.Morgan's viewof which sectors would do better or worse under Romney or Obama ROMNEY WIN Small caps Health care Global cyclicals Energy Hospitals Solar Financial Luxury consumer BUY REDUCE or AVOID OBAMA WIN A Battle to Survive in Bond Trade On the day last week that UBS AG made the striking announcement that it is largely getting out of bond trading,the Swiss bank’s rival, Deutsche Bank AG,said it reaped a windfall on the business. The banks’ differing fortunes shed light on how the securities in- dustry’s biggest business works and the wrenching changes it is under- going.Although most banks experi- enced a third-quarter bounce in the fixed-income business,a variety of factors,including regulatory changes that may crimp already modest returns,could prompt oth- ers to follow UBS’s lead. UBS,buffeted in recent years by depressed markets and costly trad- ing missteps,said Tuesday it is clos- ing down most of its trading opera- tion for fixed-income and related products as it focuses its investment bank on less-risky businesses like advising on mergers and stock un- derwriting. “We have to choose where we can add value,” UBS Chief Executive Sergio Ermotti said in an interview that day. Yet Deutsche Bank reported Please turn to page 29 B Y D ANA C IMILLUCA Hyundai Surrenders on Mileage Claims Hyundai Motor Co.and Kia Mo- tors Corp.overstated the fuel econ- omy for more than one-third of the vehicles they sold in the U.S.in the past two years,an embarrassing con- cession by two of the fastest-growing car makers in the U.S. On Friday,the U.S.Environmental Protection Agency said Hyundai and Kia issued incorrect mileage esti- mates on fuel consumption for about 900,000 vehicles sold since late 2010. Such estimates appear on new-vehi- cle windowstickers intended to pro- vide car buyers information on vehi- cle fuel economy under different driving conditions. Hyundai Motor Group,which owns both companies,acknowledged its estimates differed fromthe fuel- economy figures produced by the EPA during its investigation.The South Korean company apologized for what it called “procedural errors” in its testing,issued new estimates for the vehicles involved,and agreed to compensate buyers of cars and sport-utility vehicles that were la- beled incorrectly. It is the largest correction of mileage calculations by any auto maker since the EPA began compiling estimates.Since 2000,only two other vehicles,a 2012 BMW328i and a 2001 Dodge Rampickup,have had to cut their mpg claims,the EPA said. The changes will lower the miles- per-gallon estimates on most of Hyundai’s and Kia’s 2012-13 models. Their combined fleetwide fuel-econ- omy average will fall to 26 mpg,or about 11 kilometers per liter,for 2012 models from 27 mpg. For the Hyundai Elantra,the change means its EPA mileage rating drops to 28 mpg city and 38 mpg highway,down from 29/40.The Kia Soul Eco falls to 26 mpg city and 31 mpg highway,from 29/36. “We are going to make this right and we will be more driven than ever to make sure our vehicles deliver outstanding fuel economy,” said John Krafcik,chief executive of the com- pany’s North American sales arm. Hyundai said human error led to in- correct calculations. The 2013 vehicles with lower- than-advertised fuel economy include the Hyundai Accent,Elantra,Genesis Azera,Santa Fe,Tucson and Veloster. Kia’s 2013 vehicles include the Rio, Please turn to page 22 B Y E VAN R AMSTAD A ND M IKE R AMSEY Missing MPGs | Hyundai and Kia lowered their estimates for fuel economy on several vehicles ater an investigation by the EPA.Here are three examples: Gasoline Vehicles 2013 Hyundai Santa Fe Sport 22 city 33 highway MPG 21 29 Potential reimbursement:$193* Potential reimbursement:$52* Potential reimbursement:$111* 2013 Hyundai Elantra Coupe 28 city 39 highway MPG 27 37 2013 Kia Rio 30 city 40 highway MPG 28 36 (2WD automatic) (automatic) (automatic) Source:the company *Based on an owner driving 15,000 miles and using the national aver Note:10 miles per gallon is about 4.2 kilometers per liter. age unleaded fuel price through Oct.31. Photos:Associated Press (Hyundai);Kia Motors America The Wall Street Journal ABREAST OF THE MARKET 20 | Monday,November 5,2012 THE WALL STREET JOURNAL. BUSINESS &FINANCE INDEX TO BUSINESSES AND PEOPLE Amazon.com............20,35 Apple........................20,34 Bain & Co......................35 Bakrie & Brothers........21 Barclays....................24,29 Bayer.............................22 Berau Coal Energy........21 Berkshire Hathaway.....28 Bluebird Bio..................22 BNP Paribas.................28 Boston Consulting Group .......................................35 Brey.................................6 Bumi..............................21 CBS................................23 Charles Schwab............29 China Construction Bank .......................................28 Chrysler Group................6 CIPLA.............................22 Colonial Pipeline.............8 Comcast........................23 Consolidated Edison.......8 Co-Operative Bank.......26 Deutsche Bank..............19 Elpida Memory.............26 E*Trade Financial.........29 Facebook.......................23 Ford Motor...............22,24 General Motors..........6,22 Global Logistic Properties..................26 Glovista Investments...24 Google...................1,20,23 Government of Singapore Investment Corp........26 Hewlett-Packard...........20 HSBC Holdings.............28 HTC................................20 Hyundai Motor..............19 Interpublic Group..........23 Japan Airlines..........21,26 J.P.Morgan Chase...24,29 Kanbawza Bank............26 Kia Motors....................19 KKR...............................28 Knight Capital Group....29 Koch Industries...............6 London Stock Exchange Group..........................28 MasterCard...................26 McKinsey.......................35 Microsoft.......................20 Morgan Stanley,...........29 Myanmar Oriental Bank .......................................26 Neuberger Berman.......19 News Corp.....................23 Nokia.............................20 Novartis........................22 Oriental Trading...........28 Oxbow.............................6 Par IV Capital Management..............28 Payden & Rygel............20 Publicis Groupe.............23 Public Service Enterprise Group............................8 Rhodium Group.............18 RiverFront Investment Group..........................19 Roche Holding...............22 Samsung.......................20 Sharp.............................20 Singapore Exchange.....26 Softbank.......................20 Sprint Nextel................20 Standard & Poor's........19 Succorinvest Central Gani............................21 TD Ameritrade Holding29 Time Warner.................23 Twitter..........................23 UBS..........................19,29 UniQure.........................22 Visa...............................26 Wockhardt.....................22 WPP...............................23 ZTE................................18 Businesses This index of businesses mentioned in today’s issue of The Wall Street Journal is intended to include all significant reference to companies. First reference to the companies appears in bold face type in all articles except those on page one and the editorial pages. People This index lists the names of business- people and government regulators who receive significant mention in Today’s Journal. Aldag,Jorn....................22 Asilis,Carlos.................24 Bain,Adam...................23 Bakrie,Aburizal............21 Bernanke,Ben.........19,24 Bewkes,Jeff L..............23 Buffett,Warren............28 Conner,Adam...............23 Cosentino,Marc............35 Di Galoma,Tom............24 Ermotti,Sergio.............19 Flury,Keith...................25 Greenberger,Peter.......23 Griffin,Kenneth............29 Harbath,Katie..............23 Jones,Michael..............19 Koch,William.................6 Krafcik,John.................19 Lakhani,Kinner.............29 Lee,Thomas.................24 Li,Hanson.....................18 Maher,Peter.................26 Malone,Christopher.....35 Moffatt,Zac.................23 Mollineau,Rodell..........23 Mosley,Scott................18 Nowell,Ben..................35 Obama,Mr....................24 Pace,Benjamin.............19 Pamphilon,Ross...........12 Petrilli,Frank................29 Preis,Johannes............35 Reaves,Travis..............35 Rolfes,Brian.................35 Rothschild,Nathaniel...21 Rubin,Matthew............19 Schwartz,Jeffrey.........26 Smith,Sterling.............25 Spengler,Tim................23 Stith,Wilmer................24 Subianto,Prabowo.......21 Sun Wenbin....................1 Taylor,Sam...................28 Ueki,Yoshiharu.............21 Valeri,Anthony.............24 Villanueva,Ricardo.......25 Wieser,Brian................23 Wolfgang,Mel..............35 Corrections Amplifications Softbank Corp.’s bid to take control of Sprint Nextel Corp.is a $20.1 billion deal,excluding debt.A table accompany- ing a Thursday Business & Finance arti- cle about Japanese banks’ overseas lend- ing incorrectly compared it with nine other deals in which the debt was in- cluded. Jay Wong is a portfolio manager for Payden & Rygel.A Business & Finance article Oct.29 about the U.S.stock mar- ket incorrectly gave the firm’s name as Payden & Rydel. Apple’siPadMini HitsaCrowdedMarket Apple Inc.fans lined up to buy the iPad Mini when it went on sale Friday.But the scenes were calmer than for other recent Apple launches,raising the question of whether the device can be a block- buster holiday product. Demand was strong in storm- ravaged New York,where hundreds still gathered outside Apple’s flag- ship Fifth Avenue store.But the ini- tial crowd of 580 fell below the 750 that greeted the launch of the last version of the iPad this March,ac- cording to counts from Piper Jaf- fray. Elsewhere in the U.S.,lines were also shorter than recent launches.In Apple’s backyard of San Francisco, lines at a downtown store were half to less than a third of the size they have been for other Apple gadgets. On his way to work,engineer Mike Boyer,55 years old,noticed the line was less than a block long, so he jumped in.“I was planning to stop by during lunch,” he said. The iPad Mini,which measures 7.9 inches diagonally,is a test of whether Apple can shore up the lower end of the tablet market with a pricier product than rivals.The iPad Mini starts at $329,while rival products such as Google Inc.’s Nexus 7 and Amazon.comInc.’s Kin- dle Fire start at $199 respectively. Those devices have a slightly smaller 7-inch screen. Analysts have predicted Apple could sell more than a million iPad Minis this first weekend and several million for the quarter. The smaller iPad is part of the largest product push Apple has made ahead of a holiday season in recent history.On Friday,the Cuper- tino,Calif.,company also started selling a slightly updated version of its full-size iPad,which has a screen that measures 9.7 inches diagonally. The launches come as investors are newly cautious about Apple af- ter driving up its stock to records in September.Apple shares fell 3.3% on Friday to $576.80. The calmer scenes over the iPad Mini were expected because the de- vice is only part of Apple’s overall iPad lineup and versions with cellu- lar access don’t go on sale until mid-November. In New Zealand,where sales first got under way,just a few people lined up outside a retail store in Wellington on Friday.Even so,the country was running low on stock. Dick Smith Electronics New Zea- land merchandise manager Craig Douglas said the company had re- ceived only a couple of hundred iPad Minis for the entire country.He expected to sell out by the close of business Friday. Outside Apple’s flagship U.K. store in Covent Garden,London,a group of about 50 Apple fans waited early Friday for the new gadgets,a far cry fromthe hundreds that lined up ahead the launch of the iPhone 5 in September. Leaving the store,software de- veloper Ranbir Kler said he bought an iPad Mini after Apple “bom- barded” himon Safari with ads.The 31-year-old is an Apple fan and owns an iMac,Apple TV and an iPod but no iPad.The iPad Mini is the perfect “sofa-surfing device,” he said. —Drew FitzGerald,Lucy Craymer, Lilly Vitorovich and Nicky Redl contributed to this article. B Y I AN S HERR A ND J ESSICA E . L ESSIN Lines in the U.S.were shorter than recent launches.Above,shoppers waited outside an Apple store in Chicago on Friday. BloombergNews Microsoft,AsianSuppliers Test Smartphone Design TAIPEI—Microsoft Corp.is working with component suppliers in Asia to test its own smartphone design,people familiar with the sit- uation said. The move suggests the com- puter-software company is increas- ingly adopting a variation of a busi- ness model favored by rival Apple Inc.,which designs computers and phones along with the software that powers them. Officials at some of Microsoft’s parts suppliers said the U.S.-based company is testing a smartphone design but isn’t sure whether a product will be mass-produced. One person said the screen of Microsoft’s smartphone currently being tested measures between 4 and 5 inches.Apple’s newest smart- phone,the iPhone 5,has a 4-inch screen,while Samsung Electronics Co.’s Galaxy S III phone has a 4.8- inch screen. Speculation has swirled for months that Microsoft would make its own smartphone,after the com- pany unveiled in June its first homegrown computing device,the Surface tablet. The Surface recently went on sale,and it remains controversial among longtime computer-maker al- lies of Microsoft,some of whombe- lieve the company is unfairly com- peting with their personal-computer models running Microsoft’s Win- dows software. In an interview with The Wall Street Journal last week,Microsoft Chief Executive Steve Ballmer de- clined to comment regarding whether Microsoft would make its own smartphone. “We’re quite happy this holiday [season] going to market hard with Nokia,Samsung and HTC,” said Mr. Ballmer,referring to companies making smartphones powered by Microsoft software.“Whether we had a plan to do something different or we didn’t have a plan,I wouldn’t comment in any dimension.” A Microsoft spokesman declined to comment. If Microsoft pushes ahead with its mobile phone,it would under- score how far Microsoft has moved away fromits long-standing practice of making software and leaving de- cisions about design,features and marketing of the computing hard- ware to partners such as Hewlett- Packard Co.or Samsung. In addition to the Surface,Mi- crosoft produces the Xbox video- game consoles and it increasingly has dictated how Windows-powered PCs and smartphones made by its partners look,perform and are pitched to consumers. As it does so,Microsoft pulls froma modified playbook of Apple, whose hardware-plus-software ap- proach Microsoft officials long have scorned.Google Inc.,whose Android smartphone software is the market- share leader,owns cellphone maker Motorola Mobility Holdings Inc. even as outside companies such as Samsung also power their smart- phones with Android. Smartphones running Microsoft’s two-year-old Windows Phone oper- ating software for cellphones ha- ven’t sold well,and Microsoft may want to leave itself an option to test whether its own phone would spur sales. Stephen Elop,the chief executive of Nokia Corp.,last month said he would welcome a Microsoft-made phone because he believed it would be a “stimulant” to sales for compa- nies making Windows Phone de- vices.Mr.Elop said Nokia can stand out from any competing devices. The market for smartphones is rapidly expanding with demand par- ticularly strong in China and other emerging markets.Research firm IDC expects global smartphone ship- ments to increase 39% this year to 686 million units. In 2010,Microsoft launched and then quickly killed a line of youth- oriented smartphones called the Kin.The phones carried Microsoft’s brand,but were manufactured by Japanese electronics company Sharp Corp. B Y L ORRAINE L UK A ND S HIRA O VIDE Heard on the Street:Forecasting sales from Apple’s capital hill........34 THE WALL STREET JOURNAL.Monday,November 5,2012 | 21 BUSINESS &FINANCE JAL’s Net Advances Modestly After IPO TOKYO—Japan Airlines Co.re- ported a modest rise in net profit for the first six months of the fiscal year,its first reporting period since the company relisted its shares in the year’s second-largest initial public offering after that of Face- book Inc. JAL said its net profit edged up 2.4% in the fiscal first half fromthe year before owing to cost-cutting and a pickup in air travel after last year’s earthquake and tsunami in Japan.Net profit was ¥99.72 billion ($1.24 billion) in the six months ended September,compared with ¥97.41 billion in the same period last year.It also raised its forecasts for net profit and operating profit for the full fiscal year through March. The results and revised forecasts may assuage the fears of investors who weren’t fully convinced of the viability of JAL’s outlook in the face of uncertainties for the global econ- omy and price competition from budget carriers in Asia. In a news conference following the earnings announcement,JAL President Yoshiharu Ueki said the company expects the impact of territorial disputes between China and Japan to cut into revenue by ¥10 billion in the second half.But that should be offset by stronger- than-expected revenue in the first half,he said.The company expects the impact of the disputes to last for a year or so,Mr.Ueki said. JAL said its revenue rose 5.7% to ¥634.23 billion in the six-month pe- riod from ¥599.87 billion the year before.After its outlook revision,it now predicts a net profit of ¥140 billion,higher than the ¥130 billion previously foreseen.It raised its op- erating profit outlook to ¥165 billion from ¥150 billion. But the company cut its revenue outlook to ¥1.215 trillion from ¥1.220 trillion due to a slowdown in demand for domestic flights and cargo services,as well as the terri- torial dispute between Japan and China. JAL’s revamp efforts under government-led restructuring has made it one of the most profitable airlines in the world,less than three years after filing Japan’s biggest corporate collapse by a nonfinancial company.The carrier relisted its shares on the Tokyo Stock Exchange on Sept.19.The shares had stayed below the IPO price for several weeks after the market debut. JAL shares closed up 1.7% Friday at ¥3,900 on the Nikkei Stock Aver- age,compared with a 1.2% rise for the broader index. The airline said it would propose at its annual general shareholders meeting in June a change to its arti- cles of incorporation so it can pay a dividend to all foreign shareholders, even if their combined holdings ex- ceed a third of outstanding voting rights. The airline reports earnings under Japanese accounting stan- dards. B Y Y OSHIO T AKAHASHI A ND P AUL B AYLIS Rothschild Seeks Allies In Bid for Bumi Assets JAKARTA,Indonesia—Nathaniel Rothschild is considering a bid for some of the coal assets of Bumi PLC,to counter last month’s more than $1.2 billion offer by Indonesia’s Bakrie Group and has approached one of the group’s most high-profile rivals to join,people familiar with the plans said Friday. The rival,presidential front-run- ner and general-turned-businessman Prabowo Subianto,had been ap- proached more than once since Sep- tember and has consistently re- jected the overtures,people within the Bakrie camp with knowledge of the matter said.Mr.Subianto’s team was campaigning at a local by-elec- tion in the east of Indonesia’s main island,Java,and didn’t immediately answer telephone calls. Bakrie Group’s patriarch,Abur- izal Bakrie,heads Indonesia’s Golkar Party and is also a contender in the 2014 presidential elections. Mr.Rothschild’s rival bid demon- strates how the saga of Bumi’s col- lapse in value and corporate-gover- nance squabbles still may be far from a clean resolution. Mr.Rothschild,who was born in Britain,resigned fromBumi’s board last month,voicing concerns that Chairman Samin Tan was deter- mined to drive through a proposal made by the Bakries aimed at sever- ing strained ties between the family and the London-listed company. The Bakries proposed exiting Bumi and buying back all of the company’s Indonesian assets.This would leave Bumi with no assets other than the cash proceeds from the sale and would return control of some of Indonesia’s most productive coal mines to Bakrie Group. Mr.Rothschild claimed that the proposal wasn’t in the interests of Bumi’s minority shareholders and seemed to favor Mr.Tan. A person familiar with the mat- ter said Mr.Rothschild was consid- ering a consortium bid that would focus on buying Bumi’s 85% stake inPT Berau Coal Energy,Tbk for which the debt-laden Bakrie family has offered $950 million,without providing details on how the pur- chase would be funded.Berau Coal Energy is Indonesia’s fifth-largest coal producer. A spokesman for Mr.Rothschild declined to comment on whether a rival bid was being formed,but con- firmed that “Nat Rothschild is in talks with a number of parties,” to find a way for Bumi to retain its In- donesian coal assets,while main- taining robust U.K.-style corporate governance.“An important part of this solution would be a consensual exit for the Bakries,Mr.Tan and their associates,” the spokesman said. Mr.Tan owns Indonesian coking- coal company PT Borneo Lumbung Energi & Metal,which owns a 23.8% stake in Bumi.Tan’s company hopes to get additional compensa- tion fromBakrie Group in a separate deal to unwind Borneo’s joint ven- tures with the family. Following several news reports of Mr.Rothschild’s rival bid,Bumi’s share closed up 14% on Friday,while shares of PT Borneo Lumbung En- ergi & Metal,one of the largest shareholders,closed up 17%.Shares in PT Bumi Resources and Berau Coal Energy,two of Bumi’s Indone- sian mining holdings,rose 1.7% and 18% respectively. Bumi said it had taken note of its share-price move,but said it hasn’t received any such proposal. Bumi was formed last year when Bakrie Group folded some of their coal assets into Mr.Rothschild’s London-listed investment vehicle. The two sides have been squabbling since over how the assets were managed.The boardroombattle es- calated recently following allega- tions of email hacking,which are under investigation by Indonesian police. The company’s share price has fallen more than 70% since listing. Bakrie Group sought an end to the dispute last month by proposing a deal that would sever its ties with Bumi.In a multistage deal,the Bakries first proposed to give up their 23.8% stake in Bumi in ex- change for a the 10.3% stake the London-listed company holds in PT Bumi Resources,which is Indone- sia’s largest thermal coal producer. In the second stage of the offer, Bakrie Group would buy Bumi’s re- maining 18.9% stake in PT Bumi Re- sources for $278 million.Finally, Bakrie Group would buy Bumi’s other mining asset,an 85% stake in Berau Coal Energy,for about $950 million. Mr.Rothschild reacted to this proposal by resigning fromthe com- pany’s board. Analysts were unconvinced that Mr.Rothschild would be able to se- cure the backing of presidential front-runner Mr.Subianto for his ri- val bid.Despite being a rival of the Bakries,Mr.Subianto is unlikely join a business challenge against themin an area as fraught as Bumi has be- come,they said. Bumi’s board would only enter- tain a fully underwritten offer from Mr.Rothschild for any of its coal holdings,said a person familiar with matter. “Any offer from Rothschild would have to be superior and prop- erly-financed compared to what the Bakries have already put on the ta- ble,” Richard Knights of Liberum Capital said. The person also noted that Bumi’s board was only currently considering the first part of the Bakries’ proposal.The sale of Bumi’s stake in Berau was not being consid- ered,even though the company’s chairman Mr.Tan has said he was prepared to accept the entire Bakrie proposal. —Eric Bellman,Alex MacDonald and I Made Sentana contributed to this article. B Y P ATRICK M C D OWELL A ND E DHI P RANASIDHI Nathaniel Rothschild resigned from Bumi’s board but still wants to prevent Indonesia’s Bakries from gaining control. Reuters Wipro’s Profit Rises 24%; Sales Gains Are Predicted BANGALORE,India—Wipro Ltd. posted a 24% rise in its fiscal sec- ond-quarter net profit,and the soft- ware exporter forecast improved sales growth at its outsourcing divi- sion,which has been struggling amid a tough business environment. The Indian company said it ex- pects revenue at its outsourcing di- vision to increase in a range of 1.3% to 3.2% during the October-Decem- ber quarter fromthe previous three months,as last year’s restructuring at the unit starts to pay off. The improved financial outlook pushed Wipro shares up as much as 3.2% to 373 rupees ($6.93).The stock later pared its gains and closed up 1% at 364.95 rupees on the Bombay Stock Exchange. Bangalore-based Wipro,which is listed in New York and Mumbai,has been struggling to expand its infor- mation-technology business because of the global economic slowdown, which has led many clients to cut technology budgets. Wipro last year appointed a new chief executive for its IT division and restructured its operations. The steps taken by Wipro to spur growth have started taking effect “much,much slower than we ex- pected,” said T.K.Kurien,executive director and chief executive of the IT business. Wipro said its second-quarter net profit rose to 16.11 billion rupees ($299.4 million),compared with 13.01 billion rupees a year earlier. A Dow Jones Newswires poll of 21 analysts had expected a net profit of 15.23 billion rupees. In the three months through September,revenue increased 17% froma year earlier to 106.20 billion rupees. The market was expecting 108.42 billion rupees. Profit increased 2% sequentially, while sales remained flat. The company,which earns more than three-fourths of its revenue from the outsourcing division,ex- pects the unit to generate revenue of between $1.56 billion and $1.59 billion in the current quarter through December. The unit’s revenue increased 1.7% to $1.54 billion in the July-Septem- ber quarter. Wipro also has a consumer-care and lighting-product business, which it plans to make into a sepa- rate unit to focus more on the out- sourcing business. Chief Financial Officer Suresh Senapaty said delays in decisions about technology spending are likely to ease after Tuesday’s U.S.presi- dential election,as clients get more clarity regarding the economic situ- ation. The U.S.accounts for more than half of Wipro’s IT business revenue. The operating margin at the out- sourcing unit shrank 0.3 percentage point sequentially to 20.7% in the July-September quarter,weighed down partly by wage increases in June. Brokerage Prabhudas Lilladher said in a note to clients that it ex- pects Wipro’s “revenue momentum to get better in the fourth quarter.” B Y R UMMAN A HMED A ND D HANYA A NN T HOPPIL Presidential candidate and former Gen. Prabowo Subianto,had been approached. 22 | Monday,November 5,2012 THE WALL STREET JOURNAL. CORPORATE NEWS India Revokes Roche Patent BANGALORE,India—In the latest blow to multinational drug compa- nies,a government board in India revoked the patent of Roche Hold- ing AG’s expensive drug for an in- fectious liver disease. The decision Friday by the Intel- lectual Property Appellate Board to deny patent protection to the hepa- titis C drug Pegasys,came as multi- national drug companies here are reeling from denials of patent pro- tection for several expensive thera- pies that have been granted intellec- tual-property rights elsewhere in the world. Novartis AG is currently battling for patent protection for its block- buster cancer drug Glivec in India’s Supreme Court. The denials of patents on some of the drug industry’s biggest-sell- ing medicines globally show the challenges the industry faces trying to enter India’s fast-growing phar- maceutical marketplace.How these patent decisions play out will affect the viability of India as a market- place for these companies even as it also defines the affordability of these life-saving medicines for poor and middle-class Indians. Roche,the Switzerland-based in- ternational drug maker,had re- ceived a patent for Pegasys fromthe Indian patent authority in 2006. This was subsequently challenged by the Indian generic drug maker Wockhardt Ltd.and the Mumbai- based civil society group Sankalp Rehabilitation Trust.They argued that Pegasys should not be given patent protection because it was neither a “novel” product nor did it demonstrate inventiveness,which are among the criteria for gaining patent protection in India. India had been viewed as an ex- citing place for multinational drug companies because the market is ex- pected to grow to $74 billion by 2020 from $11 billion last year,ac- cording to PricewaterhouseCoopers LLP. But they have faced several re- versals on the patent front of late. India’s patent office earlier this year ordered Germany’s Bayer AG to issue a “compulsory license,” allow- ing an Indian generics company to copy its patented cancer treatment Nexavar and market it at one-30th the cost.Bayer has taken its appeal to the Indian patent appellate board. Novartis has been trying to patent its cancer drug Glivec in In- dia since its application was re- jected in 2006.The case is currently before India’s Supreme Court. Roche’s Pegasys was the first medicine to get patent protection in India after the country adopted a new patent law in 2005 recognizing patents on pharmaceutical products. Before that,it had protected only manufacturing processes. The new law contained language allowing patents to be opposed on a number of grounds,including lack- ing inventiveness or not being a novel innovation. India’s patent office had in 2009 rejected the patent challenges to Pe- gasys filed by Sankalp and Wock- hardt,upholding Roche’s patent.But Sankalp then filed the appeal before the appellate board. In its decision to set aside Roche’s patent,the appellate board supported the company’s claims that its work on Pegasys was novel but asserted that the technology in- volved in the invention was “obvi- ous” and could be replicated easily. A Roche spokesman suggested the decision boded badly for the fu- ture of drug development in India. “We remain concerned that a policy of neglect for patent rules would in- hibit research into future treat- ments,” he said. Health activists argued that what was at stake was access to life-sav- ing medicines and that people were dying of hepatitis C because they couldn’t afford to buy the medicine. B Y R UMMAN A HMED A government panel denied patent protection to the hepatitis C drug Pegasys.Above,Roche’s Switzerland headquarters BloombergNews At Hyundai, An Apology Over Mileage Sorento,Soul and Sportage.For 2012 models,Kia’s Optima hybrid and Hyundai’s Sonata hybrid are added to the list. Customers will receive a debit card that will reimburse them for their difference in the EPA combined fuel-economy rating,based on the fuel price in their area and their own actual miles driven. The blunder could hurt Hyundai’s reputation,particularly because the company has built its marketing on claims of 40 mpg on the highway in many of its cars. Three Hyundai vehicle models,in- cluding the Elantra,and the Kia Rio that all purportedly could get 40 mpg in highway driving were shown to fall short of that mark.For in- stance,fuel economy for the Elantra, one of Hyundai’s top-selling cars, falls to 28 mpg in city driving and 38 mpg on the highway,from 29 mpg and 40 mpg,previously. The company estimated that a Florida Hyundai owner who drove 15,000 miles over a year would be el- igible for a more-than-$90 reim- bursement.It had no estimate on the total cost of compensating custom- ers.Based on its reduced fleetwide fuel economy and the number of ve- hicles involved,it could run upward of $80 million a year. Hyundai advertisements have tweaked General Motors Co.and Ford Motor Co.by saying that its U.S.rivals offer a few models that achieve 40 miles a gallon,as long as they include certain modifications and extra technology—changes sometimes highlighted in the U.S. companies’ advertisements with as- terisks.Hyundai claimed standard versions of cars like the Elantra could get 40 mpg without special fuel-saving features. The EPA opened its investigation after inquiries fromother car makers about Hyundai’s and Kia’s mileage claims and complaints fromconsum- ers who weren’t getting the fuel economy advertised on the label. To rebut Hyundai’s mileage esti- mates,Ford last year set up a test of a Ford Focus and an Elantra that were equipped with sophisticated fuel monitors.Journalists were chal- lenged to achieve the fuel economy advertised in each car’s window sticker.A Ford spokesman said on Friday that it didn’t ask the EPA to retest Hyundai’s claims. The EPA allows car makers to submit mileage estimates,which it certifies,and post themon the win- dowstickers that customers see.The agency occasionally undertakes more comprehensive investigations with car makers.“EPA had received a number of consumer complaints about Hyundai mileage estimates. Through the agency’s ongoing audit program,staff experts at EPA’s [Na- tional Vehicle Fuel Economy Labora- tory] observed discrepancies be- tween results from EPA testing of a MY2012 Hyundai Elantra and infor- mation provided to EPA by Hyundai,” the EPA said in a written statement. With tests it made at the Hyun- dai-Kia research-and-development facility in suburban Seoul over recent months,the agency identified mis- takes the company made when it changed its fuel-testing procedure in 2010.Some of the models that Hyun- dai and Kia currently sell in the U.S. aren’t affected because their mileage was tested under conditions the EPA signed off on before 2010. Continued from page 19 Gene-Therapy Approval Marks Milestone The European Union has ap- proved for sale the Western world’s first gene-therapy drug,a type of medicine that introduces function- ing genes to patients whose defec- tive genes cause disease. The costly drug,which treats a rare metabolic disease,is the first gene therapy to be licensed in the U.S.or Europe,though there is a gene therapy for cancer on the mar- ket in China,and many others are being tested in clinical trials. The European approval is a land- mark for the field,which is beginning to make progress after years of false starts and high-profile troubles,in- cluding the death of one patient in a clinical trial in the U.S.in 1999. The drug’s approval is “a huge step forward for the field because it’s the first time a genetic medicine has been licensed,” said Len Seymour,a profes- sor of gene therapy at Oxford Univer- sity who is unaffiliated with the drug’s development.“It begins to exemplify what genetically coded medicines can do.” The drug,developed by the closely held Dutch company UniQure,is a one-time injection that will carry an eye-popping price in the range of €1.25 million ($1.6 million),a company spokesman said.National insurers in Europe are likely to pay the tab.In some markets,UniQure may collect payment in installments over five years,he said. In an interview,UniQure Chief Ex- ecutive Jorn Aldag said the high price is justified in part because the company will have a very small mar- ket:only about one or two people per million have the extremely rare disease that the drug,called Glybera, treats.That amounts to several hun- dred people in the European Union. Other drugs for such rare disorders, called “orphan diseases,” also carry high prices of up to $300,000 a year, a phenomenon that has drawn criti- cism from some insurers. Glybera contains a gene that helps the body produce an enzyme that breaks down harmful fats in the blood.Patients with the disease, called lipoprotein lipase deficiency, or LPL,have defective copies of the gene and are unable to process the fat particles,which can lead to po- tentially lethal inflammation of the pancreas,as well as early onset of diabetes and cardiovascular disease. The treatment traveled a long road to approval.The European Medicines Agency,or EMA,initially rejected the drug three times,ex- pressing doubts about its efficacy. This time around,the agency changed its analysis and approved the use of the drug only in severe cases.The agency finally recom- mended Glybera for approval in July,a recommendation the Euro- pean Commission formally endorsed on Friday. UniQure said it plans to file the drug for regulatory approval next year in the U.S.,where there are no gene therapies yet approved for sale. Investment in gene therapy has boomed in recent years as positive clinical trial results have renewed hopes for the field.The California Institute for Regenerative Medicine, or CIRM,a taxpayer-funded insti- tute that finances cutting-edge med- ical research,is backing an array of gene therapy studies,including one being conducted by Bluebird Bio of Cambridge,Mass.,in a rare disorder called beta-thalassemia. The European approval of Glybera gives a boost to a field that has had “fits and starts” since gene therapy research began several decades ago, said Ellen Feigal,vice president for re- search and development at CIRM. The most marked setback was the death of one teenager in a gene- therapy study in 1999.Later,several children in two separate gene-ther- apy trials in Europe came down with leukemia.The results prompted the U.S.Food and Drug Administration to place a temporary halt on certain gene-therapy trials. In April 2003,it eased the ban. Recent results have proved more promising,including a gene therapy that successfully treated children suffering froma genetic illness that causes blindness. Last year,researchers at Univer- sity College London and St.Jude Children’s Research Hospital in the U.S.successfully used gene therapy to treat six patients fromhemophilia B,a blood-clotting disease. Gene therapy is often attempted in diseases caused by single genes,such as cystic fibrosis.Researchers initially hoped that swapping a good gene for a bad would work as a sort of silver bullet in cystic fibrosis,but scientists encountered many obstacles,includ- ing weak efficacy and side effects,said Uta Griesenbach,a cystic fibrosis re- searcher at Imperial College Lon- don. Dr.Griesenbach and colleagues this summer began testing a new gene therapy in 130 patients with Cystic Fibrosis—the largest trial yet of a gene therapy for the disease. B Y J EANNE W HALEN Pricey Medicine The EU approved the West’s first gene-therapy drug. Glybera,made by a Dutch firm, UniQure,is a one-time injection that could cost in the range of $1.6 million. The drug works by introducing functioning genes to patients whose defective genes cause disease. UniQure plans to file for approval next year in the U.S., where there are no gene therapies yet approved for sale. THE WALL STREET JOURNAL.Monday,November 5,2012 | 23 Tweeting for Votes CORPORATE NEWS How Facebook,Twitter Woo Politicians Social-media companies Face- book Inc.and Twitter Inc.are try- ing to turn political advertising into a big business,courting U.S.presi- dential candidates,political-action committees and interest groups to siphon off some of the billions of dollars spent on election ads. Over the past year,the compa- nies have met with hundreds of po- litical groups to tutor themon effec- tive social-media ad strategies.They also have staffed up to work with political campaigns to tailor ads to specific voters and snag ad dollars. “We want to spend every waking moment talking to political advertis- ers about how they can use Twitter to win,” said Peter Greenberger, Twitter’s head of political advertis- ing sales and the executive who es- tablished Google Inc.’s political-ad- vertising arm in 2007. When Republican presidential candidate Mitt Romney picked run- ning mate Paul Ryan in August, Democratic opposition-research group American Bridge 21st Century wanted to bring attention to its new website,MeetPaulRyan.com.That’s when Twitter came into the picture. The San Francisco-based com- pany had held several brainstorming sessions with American Bridge to coach the group on howto use Twit- ter ads to quickly circulate its politi- cal announcements.Based on those meetings,American Bridge decided to pay for a Twitter message to pro- mote its MeetPaulRyan.comwebsite. The ad showed up at the top of the Twitter page when users searched for terms like “Romney,” “Paul Ryan” or “vice president.” The ad,known as a “promoted tweet,” appeared about 160,000 times,and nearly 5,000 Twitter users clicked on it,said American Bridge,which has since bought more than two dozen Twitter ads. “We’ve been very pleased” by the Twitter ads and the response to them,said American Bridge Presi- dent Rodell Mollineau,who adds that his group can’t afford wide- spread TV commercials.The social- media companies “have been in tune to what we’re trying to accomplish.” Across the aisle,Facebook pitched Mr.Romney’s campaign to be among the first users of the ser- vice’s ads on cellphones.The cam- paign is now one of the biggest buy- ers of Facebook mobile ads.These ads,which show up in a Facebook user’s news feed,link to Mr.Rom- ney’s page and indicate which friends are fans of the candidate. About 10% of people who viewed the ads clicked through,said Zac Moffatt,digital director for Mr. Romney’s campaign. “There’s not an advertising prod- uct that they offered that we haven’t at least beta-tested,” Mr.Moffatt said,declining to give specifics on how much the campaign has spent on social-media ads. Mr.Romney’s campaign also re- cently purchased Twitter ads so when a person searches Twitter.com for “Obama,” the most-prominent post is a criticism of President Ba- rack Obama’s policies toward Israel. Twitter ads are sold by comput- erized bidding for words or terms, similar to how Google sells ads alongside Web-search results.Twit- ter said the most in-demand politi- cal keyword ads include “Obama,” “Romney” and “vote.” For Twitter and Facebook,politi- cal advertising isn’t yet big money. Research firm Borrell Associates predicts digital political advertising will reach $170 million this year, more than sixfold the levels of 2008 but still less than 2% of the $9.8 bil- lion estimated total election spend- ing,which remains dominated by TV commercials. But Twitter and Facebook,which both declined to disclose their polit- ical-ad revenue,said success with political campaigns isn’t just about the money—it can also help win more advertising overall frommar- keters selling soap or cellphones.In- deed,Twitter and Facebook are compiling case studies to show non- political marketers how political campaigns used social-media. “Ever since the 1960s with the Kennedy election,political cam- paigns have led marketing thought,” said AdamBain,Twitter’s president of global revenue. Facebook and Twitter executives said now is the time to make politi- cal ads into a bigger business,given that most candidates and others in the Washington political machine use Twitter and Facebook to stay connected with constituents,keep up on news and bicker with rivals. “We used to have to convince campaigns to sign up and be part of the digital bandwagon,” said Adam Conner,a manager of public policy at Facebook.“Now it’s step one.” Facebook now has half a dozen employees in Washington D.C.,Aus- tin,Texas and its Menlo Park,Calif., headquarters working with political campaigns,up from one in 2008. The company has pitched politi- cal consultants on targeting ads at users based on the email addresses of supporters.Facebook has also passed tips to political campaigns, including how Facebook users are most likely to engage with a political ad shown from 9 p.m.to 10 p.m., said Katie Harbath,a manager of public policy at Facebook.The com- pany speaks to each campaign’s digi- tal staff nearly every day,according to members of both teams. Twitter launched its political-ad effort last fall after the company identified politics as a pillar of its young revenue strategy. “We thought this was going to be the year of the Twitter election,” Mr. Bain said. The group of staffers pitching political ads is the only Twitter ad team devoted to a single industry. Twitter also recently commissioned research aimed to showpolitical op- eratives how Twitter users who see frequent tweets and Twitter ads from campaigns are more likely to make political donations. Political campaigns are spending on the “promoted tweet,” which looks like a regular Twitter post and which advertisers pay to have show up at the top of a streamof tweets, or to people who might not see the tweet otherwise,the company said. Based on demand from political campaigns,Twitter also prioritized a project announced in September to let advertisers tailor paid messages to people by state or region.This would presumably let campaigns target voters in swing states such as Ohio and Colorado. The pace of political-ad efforts at the social-media companies has picked up in recent weeks. Before one of the recent presi- dential debates,Twitter’s Mr.Green- berger called and emailed political- related advertisers to suggest they craft ads based on words likely to generate attention during the de- bate. For example,on Twitter’s sug- gestion,seniors group AARP bought ads during a presidential debate tied to terms such as Medicare and Candy Crowley,the debate modera- tor. Mr.Greenberger said after next week’s election,“we take a vaca- tion”—but then Twitter’s political ads team will shift attention to the next drama in Washington.“The lame-duck [U.S.] Congress could be a very busy term,” he said. B Y S HIRA O VIDE A ND E VELYN M . R USLI Warning signs from several big advertising companies late last month about a significant slowdown in ad spending puts the spotlight on U.S.media-company earnings due this week. CBS Corp.,Time Warner Inc., Discovery Communications Inc. and News Corp.,each of which have significant advertising exposure through their TV networks and other media outlets, will report for the September quarter.Analysts looking for clues about the state of the ad market are likely to closely scrutinize their results,along with any comments company executives make about the fourth quarter. Executives are likely to indicate the expected impact of Hurricane Sandy.Some TV stations broadcasting news coverage of the storm cut their advertising drastically or went ad- free for a couple of days last week.The superstorm’s total impact on the advertising market could be a revenue loss of about $500 million,or 1% of the volume for the fourth quarter,estimates Pivotal Research Group analyst Brian Wieser. The overall ad climate this year has been lackluster,despite the strong boost provided to TV advertising by the election.During earnings reports for the second quarter,over the summer,media executives blamed the Olympic Games for soft ad-revenue growth,saying that much of the available ad spending had been shifted to NBC during the Games, hurting competing media companies. At that time,executives,in general,were cautiously positive about the third quarter.In late September,Time Warner Chief Executive Jeff Bewkes said at a conference that the ad market looked “a little better,” but “there’s not yet resurgence.” But comments 10 days ago from advertising holding companies Interpublic Group of Cos.WPP PLC and Publicis Groupe SA portray a much bleaker climate.Each reported that marketers had cut back their spending in September,a result of political uncertainty in the U.S. and the economic crisis in Europe. The weakness was evident in several industries,including retail, pharmaceutical and consumer packaged goods industries,ad executives said. Researchers have scaled back ad-spending forecasts.Pivotal Research,Group said last week that U.S.advertising spending would be flat for 2012,excluding the impact of political and Olympic ad spending.In August it had forecast a 1.4% gain.Media buyers say they don’t expect a major uptick by the end of the year or even the first half of 2013. “The majority of conversations we are having with clients are not about spending more,” says Tim Spengler,chief executive officer of MagnaGlobal,a media-buyer arm of Interpublic Group. Given the timing of the slowdown,it may be the fourth quarter that shows the impact more.For the third quarter,signs suggest results are likely to be tepid.Comcast Corp,owner of NBCUniversal,said late last month its big cable networks division had flat ad sales in the quarter. Among those particularly exposed to any ad slowdown is CBS,which reports on Wednesday. CBS,which owns the CBS broadcast network,a TV station group,as well as a big radio business and billboards,got 63% of total revenue from advertising last year,according to its filings, more than most media companies. That share may come down this year,as CBS has been beefing up revenue from subscription fees shared by cable and satellite TV firms as well as licensing revenue from digital outlets. Pivotal’s Mr.Wieser estimates CBS’s broadcast advertising revenue fell 3% in the third quarter to $652 million.Total revenue,however,he expects to increase slightly.And he expects third-quarter earnings to rise 19%. Big cable networks also are feeling a pinch.Time Warner, which owns networks like TNT, TBS and CNN,likely had a 2% decline in ad revenue,says Michael Nathanson of Nomura Securities.Time Warner also reports on Wednesday. At News Corp.,whose properties include Fox News,the Fox broadcast network,and the FX network,as well as newspapers like The Wall Street Journal,ad revenue is expected to be roughly flat in the broadcasting division and rise by a mid-single-digit percentage in the cable division,says David Bank of RBC Capital Markets. News Corp.is due to report on Tuesday,as is Discovery. The Week Ahead looks at coming corporate events. Media Companies Likely to Be Ad-Market Bellwether [ The Week Ahead ] B Y J OHN J ANNARONE A ND S UZANNE V RANICA U.S.political campaigns and their backers are buying more ads on social networks such as ike Facebook and Twitter. At the top,a Twitter ad bought by the Obama campaign to appear when a Twitter user searched for the phrase or hashtag ‘Romnesia,’ Among the Rom- ney campaign’s Twitter ads was the one at the bottom,about defense cuts. Twitter’s ads are sold by computerized bidding;it said the most in-demand political keyword ads include ‘Obama,’ ‘Romney’ and ‘vote.’ TaylorCallery 24 | Monday,November 5,2012 THE WALL STREET JOURNAL. MARKETS Election Could Set Course for Treasurys For Bond Traders,It Is a Matter of Who They Think Will Have a Smoother Time Addressing ‘Fiscal Cliff ’ After Tuesday,bond investors could have a new compass for trad- ing Treasurys,when they find out which party claims the presidency. The election,and what it means for year-end fiscal negotiations and growth in the com- ing years,is ex- pected to set a di- rection for a market that has been in limbo for the past three months.The widely held view is that President Barack Obama re- claiming the executive branch of government would support Trea- surys,while a win for Republican challenger Mitt Romney would lift appetite for riskier investments at the expense of U.S.debt. “Once we get the election behind us,all this political uncertainty about who’s going to be in the White House and what our country’s road map is going to be will be ce- mented,” said Wilmer Stith,portfo- lio manager of the $300 million Wil- mington Broad Market Fund. For bond managers,it comes down to which administration will have a smoother time addressing the so-called fiscal cliff—a set of spending programs and tax cuts ex- piring at year-end that would likely send the still-recovering economy back into recession if triggered all at once. Many regard Mr.Romney as the more business-friendly candidate, who is seen having an easier time reaching a deal with Congress to avoid the fiscal cliff. Mr.Romney has also stated he wouldn’t reappoint Federal Reserve Chairman Ben Bernanke when his term expires in early 2014,which would remove a key promoter of the central bank’s bond-buying stimulus programs. By contrast,investors fear a re- peat of the political tensions seen last August during the debt-ceiling debate if Mr.Obama is re-elected. “We won’t hit the full fiscal cliff no matter who gets in,but the feel- ing on Wall Street is just that chances are better with a Romney win,” said Tomdi Galoma,managing director at broker-dealer Navigate Advisors. This thinking played out Friday after the release of an upbeat Octo- ber employment report,considered supportive of Mr.Obama’s cam- paign.Treasurys sold off in reaction to the positive data,but quickly found buyers positioning for an Obama-led fiscal negotiating pro- cess. Benchmark 10-year yields,which move inversely to prices,rose as high as 1.78% before falling back to 1.73% late Friday.Barclays sees this yield rising to 2% on a Romney vic- tory and falling to 1.5% or lower on an Obama win.The election out- come could also set the tone for Wednesday’s $24 billion,10-year of- fering and Thursday’s $16 billion, 30-year bond sale. Still,regardless of who takes of- fice,uncertainties remain about how the negotiating process will play out through year-end,a factor that will prevent yields from surg- ing significantly in November and December. Wilmington’s Mr.Stith remains invested in five-year notes,which he says offer the juiciest yield still pro- tected by the Fed’s policies,while also being more immune to selloffs than longer-dated bonds when growth expectations improve. For now,10-year yields rest in the middle of a 0.45-percentage- point range held since early August, as polls showed Mr.Romney run- ning a tighter race than many ex- pected. Fixed-income analyst Anthony Valeri at LPL Financial points to moves in the bond market that coin- cided with Mr.Romney closing in on Mr.Obama in the polls after the first presidential debate on Oct.3, which suggest a Republican victory would weigh on Treasurys. Corporate bonds,for instance, outperformed Treasurys after the first debate,widely heralded as a Mr.Romney win.An average of the extra yield demanded on invest- ment-grade corporate debt over comparable Treasurys fell by 0.17 percentage point last month. The Treasury yield curve,a line that illustrates yield levels across maturities,also steepened since that debate.The gap between two- and 10-year yields rose as high as 1.53% from1.37% on Oct.3.Steeper curves often reflect a brighter eco- nomic outlook. B Y C YNTHIA L IN U.S.CREDIT MARKETS Hemmed In Yield on 10-year Treasury note The Wall Street Journal Source:Ryan ALMvia WSJ Market Data Group 1.4 1.5 1.6 1.7 1.8% A S O N One Hope for Presidential Outcome:Clarity lead to a pretty-good sized relief rally” for stocks and other risky invest- ments,says RiverFront’s Mr.Jones. Within the stock market,Mr. Jones and others see defense stocks as an instant beneficiary of a win by Mr.Romney,in large part because the sector likely would avoid the au- tomatic spending cuts that a failure to reach agreement on the fiscal cliff issues would trigger. In addition,Mr.Jones believes a win by Mr.Romney would be a big boost for banks because it would raise expectations of a repeal of the Dodd Frank financial-oversight law. The re-election of President Obama likely would hurt stocks of high-end retailers because of expectations of higher taxes on the wealthy,he says. J.P.Morgan stock-market strate- gist Thomas Lee also expects a vic- tory by Mr.Romney to benefit en- Continued from page 19 ergy and health-care stocks due to expected regulatory changes.Coal stocks would be one potential bene- ficiary,he says.Small-company stocks,also could get a boost on an expected pickup in mergers-and-ac- quisition activity. Meanwhile,a re-election of Presi- dent Obama would be a positive for hospital stocks and high-dividend payers,Mr.Lee says,while financial stocks should be avoided in such an event. Still,some investors see a win by Mr.Romney as introducing new un- certainties. Chief among them is the course of monetary policy,says Carlos Asi- lis,chief investment officer at Glo- vista Investments,which manages $500 million.Mr.Romney has criti- cized the Fed’s Mr.Bernanke and any replacement could enact more restrictive monetary policy than would be the case in a second term under President Obama,he says. Mr.Asilis says he would play a win by Mr.Romney by betting on a decline in gold prices and a rise in the dollar.He would play a re-elec- tion of Mr.Obama by emphasizing “reflation trades” such as bullish bets on housing and commodities and bets against the U.S.dollar. Another area of uncertainty would be relations with China,says Mr.Asilis.Mr.Romney has promised to label China a “currency manipula- tor” under U.S.law,which could lead to trade frictions that would un- nerve markets,says Mr.Asilis.And with a tougher stance toward Iran, ultimately a “Romney victory would be bad news for the markets.” RiverFront’s Mr.Jones says that while a win by Mr.Romney would prompt worried chatter about mone- tary policy,he thinks fears of a sud- den change in monetary policy will prove unfounded.“Interest rates will stay at zero,” he says. When it comes to the makeup of Congress,RiverFront’s Mr.Jones says a surprise win in both houses by either side would be negative for riskier investments. “I don’t think it’s a question of Republican or Democratic,when one party controls both ends of Pennsyl- vania Avenue,people in the markets believe that’s when bad things hap- pen,” says Mr.Jones. Dollar,Too, Seen Driven By the Vote NEWYORK—All eyes in the for- eign-exchange market this week will be on Tuesday’s U.S.election. “The election is important be- cause of what happens with the fis- cal cliff,government regulations and Fed policy,” said Aroop Chatterjee,a foreign-exchange strategist at Bar- clays in New York. The so-called fiscal cliff is a set of spending programs and tax cuts whose expiration,scheduled for year end,could send the economy into recession if legislators fail to reach a deal to avert that. The result of the presidential and legislative elections could de- termine how the debate over the fis- cal cliff plays out.But no matter which presidential candidate wins,a deadlock over the matter is possi- ble,and this could increase market volatility,Mr.Chatterjee said. The election could also affect the U.S.Federal Reserve’s policies.The central bank has been buying bonds, weakening the U.S.currency by in- creasing the supply of dollars.Mitt Romney has indicated he might nominate more hawkish members to the Fed’s board,who would be less inclined to support future easing. “The [potential] tightening of Fed policy is positive for the dollar,” Mr.Chatterjee said. On Friday,the dollar touched a six-month high against the yen and gained against the euro after a bet- ter-than-expected U.S.employment report.This pointed to an improving economy,a contrast with Japan and with continued concerns over the euro zone’s outlook. Market participants are also waiting for the Bank of England’s policy decision Thursday,in which it might announce another target for its asset-purchase program.An in- crease would tend to weaken ster- ling. B Y A NUSHA S HRIVASTAVA CURRENCY MARKETS What a difference a few months makes. Back in June, two influential surveys from the Institute for Supply Management showed both manufacturing and the far-larger service part of the economy in an alarming slowdown. The manufacturing survey that month fell below 50,the line between expansion and contraction,for the first time in three years.The services component was still above that boundary,but the weakest in three years. Three positive ISM surprises later,economists are projecting Monday will see yet another good reading of 54.5 for October’s nonmanufacturing index after last week’s 51.7 for manufacturing. Given the steady improvement, it seems unlikely that September’s surprisingly strong 55.1 reading was a fluke. And good ISM surveys tend to come in clusters. That is in part because the ISM surveys ask respondents whether things are improving,not how good they are.A soft patch like that in spring and early summer can either be a sign of a change in the business cycle or the springboard for renewed optimism. What could go wrong? One red flag,a weakening in auto sales to an annualized rate of 14.3 million vehicles in October from 14.9 million a month earlier, can be chalked up almost entirely to Hurricane Sandy. Ford Motor Co.estimated that the storm cost the industry up to 25,000 units in the final days of the month.When annualized,that would have left sales at 14.6 million,only slightly below expectations. Other consumer indicators looked fairly strong,too. The Thomson Reuters Same Store Sales Index registered a better-than-expected 4.7% gain last month excluding drugstores. Positive sentiment could begin stalling this month,though. Warnings about the pre-emptive impact of the “fiscal cliff” of automatic spending cuts and tax hikes are beginning to sound like a broken record,but the public finally may be paying attention. A survey by RBC Capital Markets showed 55% of respondents in June weren’t following the fiscal cliff;this has dropped to 39% recently. Once Tuesday’s election is out of the way and the political horse- trading can begin,the reality of which tax and spending measures are on the table will begin to influence both consumer and corporate budgeting. Another good ISM services reading for October can dispel doubts about the economy’s momentum—just as it faces its biggest threat. ISMReport Should ShowU.S.Momentum [ Ahead of the Tape ] B Y S PENCER J AKAB Staying Upbeat ISMnonmanufacturing index Expansion Contraction Sources:FactSet;Dow Jones Newswire (consensus) 58 48 50 52 54 56 2012 54.5 Many investors expect a close contest on election night,but for President Barack Obama to win. THE WALL STREET JOURNAL.Monday,November 5,2012 | 25 For information about listing your funds,please email firstname.lastname@example.org or call +852 2573-7121 Data as shown is for information purposes only.No offer is being made by Morningstar,Ltd.or this publication.Funds shown aren’t registered with the U.S.Securities and Exchange Commission and aren’t available for sale to United States citizens and/or residents except as noted.Prices are in local currencies. All performance figures are calculated using the most recent prices available. NAV —%RETURN— FUNDNAME GF AT LB DATE CR NAV YTD 12-MO 2-YR NAV —%RETURN— FUNDNAME GF AT LB DATE CR NAV YTD 12-MO 2-YR NAV —%RETURN— FUNDNAME GF AT LB DATE CR NAV YTD 12-MO 2-YR NAV —%RETURN— FUNDNAME GF AT LB DATE CR NAV YTD 12-MO 2-YR nALEXANDRAINVESTMENTMANAGEMENT Tel:+12123011800Fax:+12123011810 Alexandra Convertible Bond Fund I,Ltd.(Class A) OT OT VGB 08/31 USD 2155.22 NS NS NS nCREDITPACIFICASSETMANAGMENT www.creditpacific.com CPS-Master Priv Fund GL OT WSM 11/01 USD 112.21 NS 11.1 17.9 nPLATINUMCAPITALMANAGEMENT Tel:+442070249840,www.platinumfunds.net Platinm-All Star OT OT CYM 09/30 USD NS 3.0 0.5 -0.2 Platinm-All Weather OT OT USA 10/31 USD 129.92 2.4 3.2 3.8 Platinm-Dynasty OT OT CYM 09/30 USD 96.84 -3.4 -8.5 -7.9 Platinm-Emancipation OT EQ CYM 05/31 USD 105.47 0.2 -8.5 5.7 Platinm-Equity Plus OT OT USA 05/29 USD 35.02 -18.2 -63.7 -45.6 Platinm-Gbl Dividend GL EQ CYM 09/30 USD 60.56 4.5 1.2 -10.1 Platinm-Nordic OT OT CYM 09/30 SEK 511.64 2.9 4.7 -9.9 Platinm-Premier OT OT CYM 12/31 USD NS -55.9 -66.0 -44.3 Platinm-Turnberry OT BD USA 02/28 USD 60.14 -1.2 -3.0 NS nSUPERFUNDASSETMANAGEMENTGMBH Forinfoaboutopenfunds,email@example.com *ClosedforNewInvestments Superfund Cayman* GL OT CYM 10/30 USD 32.70 -14.8 -37.8 -16.2 Superfund GCT USD* GL OT LUX 10/30 USD 1565.00 -15.6 -36.8 -17.8 Superfund GreenGold A(SPC) GL OT CYM 10/30 USD 1126.76 -2.5 -23.7 -1.5 Superfund Green Gold B(SPC) GL OT CYM 10/30 USD 960.27 NS NS NS Superfund Q-AG* GL OT AUT 10/30 EUR 5813.00 -5.9 -19.2 -8.4 nWINTONCAPITALMANAGEMENTLTD Tel:+44(0)2076105350Fax:+44(0)2076105301 WintonEvolution EURCls H GL OT CYM 09/28 EUR 1063.00 -5.7 -3.8 0.6 WintonEvolution GBPCls G GL OT CYM 09/28 GBP NS -5.5 -3.6 0.6 WintonEvolution USDCls F GL OT CYM 09/28 USD NS -5.7 -3.9 0.5 WintonFutures EURCls C GL OT VGB 09/30 EUR 231.79 -3.3 -3.2 3.6 WintonFutures GBPCls D GL OT VGB 09/30 GBP 251.13 -3.1 -3.0 5.9 WintonFutures JPYCls E GL OT VGB 09/30 JPY 16102.23 -3.8 -4.1 2.7 WintonFutures USDCls B GL OT VGB 09/30 USD 822.53 -3.3 -3.4 3.5 NAV —%RETURN— FUNDNAME GF AT LB DATE CR NAV YTD 12-MO 2-YR NAV —%RETURN— FUNDNAME GF AT LB DATE CR NAV YTD 12-MO 2-YR Advertisement [ ALTERNATIVE INVESTMENT FUNDS www.WSJ.com ] Advertisement Large-Cap Funds which are fairly representative of the Indian large cap equity market.At least 75%of total equity assets invested in Indian equities.Ranked on %total return (dividends reinvested) in U.S.dollars for one year ending November 02,2012 Leading10Performers FUND FUND LEGAL %Return in $US** RATING* NAME FUNDMGM'TCO.CURR.BASE YTD 1-YR 2-YR 5-YR NS Mirae Asset Mirae Asset Global INRIND 26.90 10.88 NS NS India China ConsumptionDiv Inv (India) Pvt.Ltd NS SBI Magnum Sbi Funds INRIND 28.54 7.45 -10.85 -5.93 BluechipDiv Management Private Limited NS Templeton Franklin Templeton INRIND 25.24 7.29 -9.69 -1.93 India Equity Inc Div Asst Mgmt(IND)Pvt Ltd NS Principal Principal Pnb INRIND 31.97 6.91 -13.56 -10.80 GrowthDiv Asset Mgmt.Co.Priv.Ltd. NS Fidelity Fidelity Fund INRIND 30.32 6.48 -9.38 -2.36 India Special Situations Div Management Private Limited NS Reliance Reliance Capital INRIND 32.05 6.04 -14.14 -8.48 Equity Bns Asset Mgmt Limited NS Reliance Reliance Capital INRIND 33.65 5.72 -13.25 0.45 Regular Savings - Equity Gr Asset Mgmt Limited NS Reliance Top Reliance Capital INRIND 32.12 5.56 -10.02 -4.17 200Bns Asset Mgmt Limited NS Kotak Contra Kotak Mahindra INRIND 25.55 5.28 -12.49 -3.28 Div Asset Management Co.Ltd. NS QuantumL/T QuantumAsset INRIND 25.26 5.11 -8.67 2.66 Equity Div Management Co Pvt.Ltd. NOTE:Changes in currency rates will affect performance and rankings.Source:Morningstar,Ltd KEY:** 2YRand 5YRperformance is annualized 1 Oliver’s Yard,55-71 City Road NA-not available due to incomplete data;London EC1Y1HQUnited Kingdom NS-fund not in existence for entire period www.morningstar.co.uk;Email:firstname.lastname@example.org Phone:+44(0)203 107 0038;Fax:+44(0)203 107 0001 INTERNATIONAL INVESTOR Arabica-Coffee Futures Look Poised to Keep on Dropping NEW YORK—Arabica-coffee prices are at nearly their lowest point since June,and market condi- tions point to still lower prices ahead. Arabica coffee for delivery in De- cember ended at $1.5345 a pound on ICE Futures U.S.on Thursday,the lowest settlement since June 20. Prices recovered slightly on Friday, rising 1.3 cents,or 0.8%,to $1.5470 a pound,but were still down 1.9% for the week. Arabica-coffee futures have been well below 2011’s levels,when prices peaked above $3 a pound. To try to counter the drop,Bra- zilian coffee growers have been storing rather than selling their ara- bica beans. But Colombia and Central Ameri- can growers kicked off their har- vests last month,and as the influx of supply pushes prices lower,Bra- zilian growers may try to sell before the prices fall too far. “There’s a lot of coffee in the hands of Brazilian producers,” said Marcio Bernardo,an analyst at bro- kerage Newedge. Growers in Brazil,the source of about one-third of the world’s cof- fee,are expected to reap a record 50.48 million 60-kilogrambags this year,according to a government forecast.Colombia is expected to produce about eight million bags in 2012,according to the National Fed- eration of Coffee Growers for Co- lombia,and at least 10 million bags in 2013. The harvest in Brazil is com- plete,but Colombia and Central America started picking their beans last month.As those beans are har- vested,growers there are expected to sell because they aren’t as well- financed as their counterparts in Brazil.”We can’t wait,” said Ricardo Villanueva,president of the Guate- malan Coffee Association.Guate- mala is Central America’s second- largest grower after Honduras. Central America and Colombia “don’t have a lot of options in keep- ing those beans off the market as the Brazilians,” said Keith Flury,a senior commodities analyst at Ra- bobank. Some are predicting a cascade effect once Central American and Colombian producers start selling. “I think this will put some pres- sure on [Brazilian] growers and en- courage the wiser ones among them to let go of some coffee beans,” said Sterling Smith,a commodities spe- cialist at Citibank.“As the harvest picks up,more coffee will become available and that tends to create pressure on prices.” Prices could slip as low as $1.40 a pound,Mr.Smith said.Arabica- coffee prices last traded around that level in June 2010.Some traders are preparing for the release of grow- ers’ beans on the market by selling now,Mr.Smith said. Arabica-coffee futures are down 11% since Oct.1. B Y L ESLIE J OSEPHS Fund Scorecard nAHWCAPITALMANAGEMENT Tel(+49)1805-238282 www.ahw-capital.com AHWTop-Div.Int.GL EQ LUX 07/29 EUR 46.59 -8.9 -8.2 -2.7 nALLIANZGLOBALINVESTORSKAPITALANLAGEGESELLSCHAFT Concentra AE EU EQ DEU 11/02 EUR 68.69 26.2 25.4 8.0 Industria AE EU EQ DEU 11/01 EUR 77.05 14.3 18.6 2.8 InternRent AE EU BD DEU 11/02 EUR 45.83 5.5 11.3 7.9 nCHARTEREDASSETMANAGEMENTPTELTD- TELNO:65-6835-8866 FaxNo:65-68358865,Website:www.cam.com.sg,Email:email@example.com CAM-GTF Limited OT OT MUS 10/25 USD 381727.96 24.3 20.5 -0.4 India Equity AA EA EQ LUX 10/31 USD 1.00 18.3 -5.7 -12.4 International Growth GL EQ LUX 10/31 USD 3.38 11.5 8.3 4.4 International Growth AA GL EQ LUX 10/31 USD 0.78 11.2 8.0 4.2 Japanese Growth JP EQ LUX 10/31 USD 2.46 -2.3 -6.5 -5.7 Japanese GrowthAA JP EQ LUX 10/31 USD 0.63 -2.5 -6.8 -5.9 Latin America Equity AA GL EQ LUX 10/31 USD 1.18 6.3 -2.3 -7.8 Manulife GF Strategic Income Fund AA OT OT LUX 10/31 USD 1.13 7.5 7.5 5.6 Manulife Glbl Fund Asia Total ReturnAA AS BD LUX 10/31 USD 1.03 10.7 8.9 NS MGF Asia Value Dividend Equity Fund OT OT LUX 10/31 USD 1.37 21.6 13.9 2.7 Russia Equity AA EE EQ LUX 10/31 USD 0.61 6.0 -8.1 -8.3 TaiwanEquity AA AS EQ LUX 10/31 USD 1.30 17.2 9.7 5.7 Turkey Equity AA OT OT LUX 10/31 USD 0.98 46.7 24.8 -5.4 U.S.Bond AA US BD LUX 10/31 USD 1.26 8.3 9.1 6.4 U.S.SmCap Equity AA US EQ LUX 10/31 USD 0.91 12.3 5.7 -2.0 U.S.Special Opportunities US BD LUX 10/31 USD 0.90 28.3 19.5 1.1 U.S.Tsy Inf-ProtSec AA OT OT LUX 10/31 USD 1.39 5.6 6.9 7.3 nPTCIPTADANAASSETMANAGEMENT Tel:+622125574883Fax:+622125574893Website:www.ciptadana.com IndonesianGrthFund GL EQ BMU 10/31 USD 184.85 2.8 -0.5 1.3 nSENSIBLEASSETMANAGEMENTLIMITED www.samfund.com.hkTel:(852)28686848Fax:(852)28109948 Asia Value Formula Fd-B OT OT CYM 11/01 USD 9.61 10.3 3.6 -2.6 nTHENATIONALINVESTOR TNITower|Zayed1stStreetKhalidia|Web:www.tni.ae TNI MENASpecial Sits Fund OT OT BMU 09/30 USD 1040.85 5.5 3.4 -4.4 TNI MENAUCITSFund OT OT IRL 10/25 USD 1030.18 11.0 9.8 -0.9 TNI UAEBlue Chip Fund OT OT ARE 10/24 AED 5.16 19.5 16.5 -1.2 nWEBSITE:WWW.VALUEPARTNERS.COM.HK,TEL:(852) 28809263,FAX:(852) 25648487 *formerlyknownasChinaABHSharesFund Intel-ChinMainlnd Foc AS EQ CYM 11/01 USD 32.02 5.3 -0.5 -8.4 Intel-China Converg* AS EQ CYM 11/01 USD 110.50 2.9 -3.6 -11.3 VPClassic - 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Reuters In print & online. Contact: email@example.com LIST YOUR FUNDS 26 | Monday,November 5,2012 THE WALL STREET JOURNAL. MARKETS Insider Fine Sought in Japan TOKYO—Japanese regulators on Friday sought a new fine against To- kyo-based investment adviser Japan Advisory,for allegedly trading on information gleaned froma research report compiled by Nomura Hold- ings Inc. In June,Japan Advisory’s license was revoked and its Tokyo opera- tions effectively shut down after regulators alleged it placed a large short-sale order for shares of Nip- pon Sheet Glass Co.based on confi- dential information of a forthcoming equity issuance in 2010.At the time, the Securities and Exchange Sur- veillance Commission sought a fine of ¥370,000 ($4,600). On Friday,the SESC sought a second fine,totaling ¥120,000 ($1,500),against Japan Advisory for allegedly trading on what regulators said was inside information ahead of a share and bond offering by Elpida Memory Inc.in July 2011.Nomura was one of the underwriters of the deal. The SESC is the securities watch- dog of Japan’s Financial Services Agency,the country’s financial regu- lator.The SESC has to ask the FSA to impose a fine,and the FSA makes the actual order for the fine. The SESC didn’t seek a fine against Nomura. Japan Advisory’s Tokyo office was closed after its license was re- voked,and a company executive couldn’t be reached for comment Friday.While Japan Advisory hasn’t publicly commented since the case came to light in June,the FSA said Japan Advisory has submitted a written complaint denying the ear- lier allegations of insider trading. The case is the latest in Japan’s ongoing crackdown on insider trad- ing,where employees at brokerage firms were alleged by regulators to have passed on nonpublic informa- tion to clients on share offerings. The SESC alleged that Japan Ad- visory employees found out about the Elpida offering by noticing that the issuer’s name had been left out of a sector report provided by a No- mura employee and concluded for themselves what it meant. As part of internal rules,names are removed from research reports of companies that will announce a share offering within the coming week. Regulatory officials said the lat- est instance is different from five previous cases in which sales staff at a number of brokerage firms were accused by regulators of deliberately leaking confidential information to clients. In June,Nomura confirmed that some of its employees were the source of leaks in three of those cases,and two of its top officials re- signed to take responsibility. Because the Nomura employee was complying with company rules, the latest case also highlights the complexities and consequences of the ways in which full-service bro- kerages such as Nomura handle con- fidential information. An SESC official said Nomura re- ported the Elpida case to regulators after discovering its potential in- volvement during an internal probe the brokerage has been conducting. The FSA in August issued Nomura a business-improvement order for lax internal controls. In a statement Friday,Nomura said there was a “strong possibility” it was connected to the incident. “Nomura continues to fully cooper- ate with the commission in its inves- tigation,” the brokerage said. Nomura has already implemented various improvement measures that include allowing the name of compa- nies preparing a share offering to be included in research reports. The FSA also ordered Nomura to report on the cause of the latest case,and said it will closely monitor the effectiveness of the steps No- mura announced to enhance its in- ternal controls. The insider-trading cases have resulted in modest fines because fines in Japan are calculated based on fees investment funds receive from clients.Penalties in Japan are generally imposed only on those who trade on inside information,al- though those who leak information can also be prosecuted if they bene- fit from others’ trading or are seen as accomplices. Elpida’s Tokyo office was closed Friday and a company spokesperson couldn’t be reached for comment. —Atsuko Fukase contributed to this article. B Y K ANA I NAGAKI Nomura was one of the underwriters on an Elpida Memory deal on which Japan Advisory is accused of insider trading. EuropeanPressphotoAgency GLP Plans $1.5 Billion REIT IPO In Tokyo Warehouse operator Global Lo- gistic Properties Ltd.is looking to raise up to $1.5 billion by listing some of its properties in Japan,in what could be the second-biggest initial public offering in that coun- try this year,a person with knowl- edge of the deal said Friday. The Singapore-listed company, which is 50.6%-owned by sovereign- wealth fund Gov- ernment of Singa- pore Investment Corp.,intends to complete the IPO of its Japanese real-estate invest- ment corporation by the end of this year,the person said. The proposed J-REIT IPO,if suc- cessful,would be this year’s second- largest offering in Japan after Ja- pan Airlines Co.’s $8.5 billion September flotation. GLP’s plan comes amid a bout of strength in Japan’s property-related stocks,which have outperformed the broader local equities market. The Tokyo Stock Exchange REIT In- dex is up about 27% this year,best- ing the Topix index’s 3.2% rise over the same time.Meanwhile,the Topix real-estate subindex is up 49% so far this year. As part of the deal,GLP plans to sell 30 of its Japanese properties to J-REIT,which it will partly own and manage,for about ¥209 billion ($2.6 billion),the company said in a state- ment. The company will keep ¥100 bil- lion in cash proceeds mainly for in- vestments in China and Japan, where it operates a $14 billion port- folio that includes 446 warehouses across 36 cities. A GLP spokeswoman declined to comment.In its Thursday state- ment,GLP didn’t state when the IPO might launch or the offer’s potential size. GLP wholly owns 68 properties in Japan and partly owns another 15 with joint-venture partners.Apart from the initial deal for 30 proper- ties,J-REIT has a three-year option to buy up to three more of GLP’s Japanese warehouses for up to ¥12.6 billion,according to GLP.J- REIT will also have priority over other potential buyers should GLP decide to sell any of its remaining Japanese properties over the next 10 years. In the Thursday statement,GLP Deputy Chairman Jeffrey Schwartz said the proposed asset sale is part of the company’s plans for “recy- cling capital to fund expansion in high-growth markets and growing our strong fund management plat- form.” GLP listed on the Singapore Ex- change in October 2010 after rais- ing about 3.5 billion Singapore dol- lars (US$2.9 billion),in what was at the time the city-state’s biggest IPO since 1993. The plan by GLP to list J-REIT shares in Tokyo also comes as Croe- sus Retail Trust,a company to be backed with Japanese shopping-mall assets,tests investors’ interest for its proposed S$800 million initial public offering in Singapore,people with knowledge of that transaction said last month. —Brad Frischkorn contributed to this article. B Y P . R . V ENKAT A ND C HUN H AN W ONG IPO FOCUS Visa Signs Deals With Myanmar Banks Visa Inc.said Saturday that it will partner with three banks in Myanmar,allowing Visa’s ubiquitous credit cards to be issued and ac- cepted in the nascent market—a move designed to bring the long- isolated Southeast Asian country closer to global financial integra- tion. The U.S.-based financial-services giant signed licensing agreements with three local banks,Kanbawza Bank Ltd.,Myanmar Oriental Bank Ltd.and Co-Operative Bank Ltd., known as CB Bank,following an an- nouncement in August that it will start training workshops for banks in the country.In September,com- petitor MasterCard Inc.signed a similar licensing agreement with CB Bank—one of Myanmar’s largest pri- vate banks,set up in 1992—and said it was preparing ATMs and point-of- sales machines to accept credit cards issued by foreign banks. Visa’s announcement,made in the commercial center of Yangon,is a further milestone in the develop- ment of Myanmar’s financial infra- structure,crippled after decades of harsh military rule and international sanctions.Tourists and investors still have to carry large quantities of cash,unable to use foreign-issued credit cards at the few ATMs around Yangon or even in many hotels. Peter Maher,Visa’s group coun- try manager for Southeast Asia and Australasia,didn’t give a specific date on when foreigners could ex- pect to use their Visa-branded credit cards in Myanmar,but he ex- pects it to be by early next year. However,he said delays might occur in readying banks for the technology necessary to process electronic pay- ments. “In all my meetings in Yangon, the lights were going on and off and the air-conditioning was going on and off,” Mr.Maher said in an inter- view.“This is Myanmar;everyone is doing things for the first time.” Serious infrastructure concerns remain even in Myanmar’s biggest cities.Yangon,the most developed and prosperous of Myanmar’s cities, is only 67% electrified,according to the Asian Development Bank.Visa will make additional investments, including in power terminals and telephone lines,to buffer capabili- ties in providing electronic pay- ments.Mr.Maher declined to spec- ify their size but said they were “not multimillion-dollar invest- ments.” Myanmar’s steady steps toward financial inclusion,analysts say, could have a huge impact on tour- ists and investors,and boost Myan- mar’s fledgling economy as more visitors make impulse retail pur- chases and other spending decisions using credit cards. Still,lawyers observing the coun- try say the market remains murky for the world’s biggest companies— often subject to the greatest amount of scrutiny and corporate due dili- gence—which have to choose local partners carefully. Visa said it chose the three banks based on their interest and enthusiasm in providing electronic payments,their existing networks, and after a process of analyzing which banks are most ready to com- ply with international compliance standards. —James Hookway contributed to this article. B Y S HIBANI M AHTANI Visa’s Peter Maher discusses the company’s move into Myanmar. EuropeanPressphotoAgency THE WALL STREET JOURNAL.Monday,November 5,2012 | 27 28 | Monday,November 5,2012 THE WALL STREET JOURNAL. MARKETS Berkshire to Buy Oriental Trading Berkshire Hathaway Inc.said it agreed to buy Oriental Trading Co., a mail-order toy and novelty retailer owned by private-equity firmKKR & Co.and a group of other investors. Berkshire,run by Warren Buf- fett,agreed to pay about $500 mil- lion for the business,according to a person with knowledge of the deal. The purchase of Oriental Trad- ing,based in Berkshire’s hometown of Omaha,Neb.,adds another retail company to Berkshire’s stable and marks a vote of confidence in the company,which emerged from bankruptcy protection in February last year. “Oriental Trading is a leader in its industry,has a strong manage- ment teamand delivers exceptional customer value and service,” Mr. Buffett said in a statement released jointly with Oriental Trading on Fri- day. Separately,Berkshire said Friday that third-quarter profit jumped 72% to $3.92 billion on investment gains and an improvement in the company’s derivatives portfolio. But operating earnings,Mr.Buf- fett’s preferred metric for evaluat- ing his company,fell 11% to $3.4 bil- lion,or $2,057 per Class A share. The decline was the result of an un- favorable comparison to last year’s third quarter,when the company benefited froma large re-estimation of reserves at one of its reinsurance operations.Profit at Berkshire’s noninsurance businesses rose 19% to $2.47 billion. Berkshire is just the latest in a string of owners for Oriental Trad- ing. KKR took a stake in the company during its bankruptcy proceedings, exchanging debt for a shareholding in the company.The firmowns one- third of Oriental Trading through the special-situations unit of its KKR Asset Management business.Other investors in the company include hedge funds Crescent Capital Group and Par IV Capital Management LLC.They all hold seats on Oriental Trading’s board. Berkshire’s purchase values the company at about seven times earn- ings,allowing KKR to double its ini- tial investment in Oriental Trading’s loans,according to two people with knowledge of the matter. As recently as 2006,Oriental Trading was valued at about $1 bil- lion,when Carlyle Group LP paid about $750 million to buy a 75% stake from Brentwood Associates. Shortly after that deal,Oriental Trading’s sales began to slip and,by early 2009,it had missed financial performance targets required under its loan agreements,according to Moody’s Investors Service. KKR and the other funds bought up the company’s loans,which were trading at a discount,and ex- changed themfor stock through the bankruptcy.Since then,Oriental Trading has increased its revenue by improving its sales process and reaching new customers,the person with knowledge of the deal said. B Y M ATT W IRZ Warren Buffett’s firm will pay about $500 million for the retailer. AgenceFrance-Presse/GettyImages CCB Eyes U.K.Dim-SumBond HONG KONG—State-owned China Construction Bank Corp.is considering selling up to 2.5 billion yuan ($400 million) of offshore yuan-denominated bonds in London as part of Beijing’s effort to interna- tionalize its currency,people famil- iar with the situation said Friday. The planned issue is scheduled for this month,one of the people said.It would be the first “dim-sum bond” issued by a Chinese bank in London, which has been promoting itself as an offshore yuan hub. Hong Kong,which Beijing has designated as the test bed for the yuan’s internationalization,remains the world’s largest offshore yuan trading center,though other finan- cial centers such as London and Sin- gapore are seeking a slice of the market. China Construction Bank’s pro- posed yuan bond—to be issued by its London unit CCBL Funding PLC and guaranteed by CCB—will target European investors and likely will be listed on the London Stock Ex- change,the people said. CCB units CCB International Cap- ital Ltd.and CCB (London) Ltd.will be arranging the bond sale,one per- son said.While the list of under- writers has yet to be completed, HSBC Holdings PLC and BNP Paribas SA are likely to participate, the person said. Fitch Ratings said in a statement Friday the proposed issue is ex- pected to be rated at A. A spokesman at CCB,China’s second-largest bank by assets,said the timing of the issuance hasn’t yet been determined. The issue comes after HSBC is- sued a two billion yuan,three-year yuan bond in April,the first ever dim-sumbond in London.The bond was listed on the London Stock Ex- change and had drawn substantial interest from European investors. B Y C AROL C HAN A ND F IONA L AW BOND MARKET THE WALL STREET JOURNAL.Monday,November 5,2012 | 29 MARKETS E*Trade Answers a Critic FromWithin Director—and Rival—Kenneth Griffin Raised Questions About How Brokerage Handled Orders E*Trade Financial Corp.agreed to improve order-handling practices after Kenneth Griffin,a director who also runs a competing trading firm, raised concerns over whether the brokerage delivered on its promise to execute trades as quickly and as cheaply as it could for its 2.9 million brokerage customers. Mr.Griffin’s questions prompted E*Trade to conduct an internal re- viewinto its handling of orders from customers of its online brokerage, including how it uses its own mar- ket-making business to execute those trades,according to people fa- miliar with the discussions. E*Trade said a director’s ques- tions had prompted the inquiry but didn’t identify the board member in its filing.An E*Trade spokesman de- clined to comment on the director’s identity.According to one person fa- miliar with the matter,Mr.Griffin, who joined E*Trade’s board in 2009, raised concerns about the order- flow practices several months ago. Mr.Griffin has told people close to him that he is concerned about whether E*Trade customers are re- ceiving the best execution on their trades,compared to what they might receive if outside firms han- dled the orders,according to people familiar with discussions about the matter. Mr.Griffin couldn’t be reached for comment on Friday. The inquiry marks the latest set- back for a brokerage firm still reel- ing from losses from its mortgage business and a lack of management stability.It also underlines the com- plex relationship E*Trade has main- tained with Mr.Griffin,whose firm is the company’s largest shareholder. Mr.Griffin’s Citadel LLC,a Chi- cago-based trading firm,owns a 9.6% stake of E*Trade,and has come to the firm’s rescue twice in recent years to help shore up its capital po- sition.But Citadel also operates its own market-making business,which competes with E*Trade for profits from executing retail-investor or- ders. As part of Citadel’s initial rescue in 2007,E*Trade agreed to route 40% of its “marketable customer or- ders” in certain publicly traded stocks to Mr.Griffin’s firm.That pact expired in 2010.Recent filings don’t specify how many orders E*Trade now sends Citadel’s way. Last year,Mr.Griffin publicly pushed for E*Trade to sell itself, without success.In July 2011,Cita- del sent E*Trade a letter,saying that managers of the online brokerage had “squandered” a “phenomenal franchise” and that the board had “continually failed to act in the best interest” of shareholders. Prospects for a deal faded as the European sovereign-debt crisis weakened investor confidence and sent stocks lower.E*Trade said in- stead it would focus on its core on- line brokerage operations. This summer,E*Trade ousted Chief Executive Steven Freiberg,a former Citigroup Inc.banker,two years into his four-year contract.He had succeeded Robert Druskin,an- other Citi veteran who had served as interimCEO for only a few months. Mr.Druskin had succeeded Donald Layton,who retired after less than two years as CEO. E*Trade Chairman Frank Petrilli has now stepped in on an interim basis while the firm searches for a permanent successor for Mr. Freiberg. The company’s reviewfocuses on “best execution,” or the legal obliga- tion brokers have to assure that cus- tomers get the best prices for their trades in the shortest time frame. Many E*Trade customers are mom- and-pop investors trading small ac- counts fromtheir personal comput- ers. E*Trade said in its filing that it has changed how it monitors its handling of customer orders,and is still analyzing “data necessary to as- sess the quality of execution” for brokerage customers. Outside firms are conducting E*Trade’s review,and “the firms have recommended that we imple- ment changes to improve upon our standards,processes and compliance procedures,” the filing said.“The company agrees with these recom- mendations.” E*Trade differs fromsome of its biggest competitors,including Charles Schwab Corp.and TD Ameritrade Holding Corp.,in that it executes a bigger chunk of its cus- tomers’ trades internally rather than routing themto brokers such as Cit- adel,UBS AG or Knight Capital Group Inc. E*Trade routed 39% of its cus- tomer orders in New York Stock Ex- change-listed securities and 38% of its orders in Nasdaq Stock Market securities to its own market-making business during the quarter ended Sept.30,according to a regulatory filing. The E*Trade unit that matches customers’ buy and sell orders makes payments to another E*Trade affiliate based on the volume of or- der flow.Rivals like Citadel compete for the same order flow and the profits driven by it. B Y B RETT P HILBIN A ND J ENNY S TRASBURG E*Trade director Kenneth Griffin’s Citadel LLC competes with the brokerage. BloombergNews Banks’ Differing Fortunes Show The Upheaval in Bond Trading third-quarter revenue in its fixed-in- come division of €2.5 billion ($3.24 billion),a 15% gain fromthe second quarter.It was a strong result that reflected a broad rebound in the business this summer. The upswing resulted froma de- cision by the European Central Bank over the summer to take steps to ease the borrowing costs of Spain and other financially stressed coun- tries in the euro zone.That as- suaged investors’ fears that the cur- rency bloc could splinter,bringing cash that had been on the sidelines Continued from page 19 flooding back into the market. Trading volumes on fixed-income floors on both sides of the Atlantic surged,as did the prices of bonds banks were holding on their books. Both factors contributed to a surge in revenue compared with a de- pressed second quarter.The ECB de- cision,together with steps taken by the Federal Reserve,also served as a catalyst for many companies to is- sue debt,providing a further boon to trading. Fixed-income trading could eas- ily turn south,however,if the Euro- pean situation worsens.Many ana- lysts said that remains a possibility. The business,generally referred to as fixed income,currencies and commodities,or FICC,comprises a number of trading segments includ- ing foreign exchange and commodi- ties such as oil,as well as govern- ment,mortgage and high-yield bonds.It is Wall Street’s biggest revenue generator.Banks globally took in $100 billion to $105 billion from the business last year,said Citigroup analyst Kinner Lakhani. He estimated that FICC revenue globally rose about 8% in the third quarter from the previous three months. Despite the uptick,the UBS news has prompted a number of investors and analysts to question whether some banks,especially those that aren’t in the top tier,should also consider retrenching.In recent years,returns in the fixed-income business have often been subpar. Business has been volatile as inves- tor sentiment ebbed and flowed re- garding the financial and economic challenges Europe and the U.S.face. Even Barclays PLC,a power- houses in the business,was forced to field questions in its third-quar- ter conference call following a lack- luster FICC resultClearly,there will be significant pressure from inves- tors,especially post-UBS,for other second-tier global players to con- sider restructuring their fixed-in- come operations,” said Mr.Lakhani. Other factors that help explain why investors are questioning banks’ participation in the business include looming regulatory changes,includ- ing new rules that will force banks to set aside more capital against some trading books and to move some trading and clearing opera- tions to exchanges.In many case, returns for banks on their fixed-in- come businesses are already below their cost of equity—a yardstick in- vestors use to judge performance— and the regulatory overhaul is ex- pected to make matters worse The banks that are expected to come un- der the most pressure to rethink their fixed-income strategies are those that lag in terms of scale, such as Morgan Stanley,analysts said.The securities firmhad a mar- ket share in the business of 5.2% in the first half,compared with 12.3% for market leader J.P.Morgan Chase & Co.,according to Citigroup. Investors undoubtedly took note that UBS shares have risen 17% this week in response to the news. Fixed-income trading is a scale- dependent business,in part because there are a number of fixed costs, for items such as technology and regulatory compliance,that banks must ante up if they want to be in the market,no matter how large they are.Morgan Stanley’s fixed-in- come business came roaring back in the third quarter after a depressed second quarter,nearly doubling its revenue.CEO James Gorman said recently that the fixed-income busi- ness is “very critical” and “attrac- tive.” Others at the firmpoint to im- portant links between the business and other products Morgan Stanley offers clients,such as merger ad- vice. They acknowledge that the chal- lenge is to gain scale and trim the amount of capital it has tied up in the business. —Liz Rappaport and David Enrich contributed to this article. Deutsche Bank reaped a windfall in fixed-income trading. BloombergNews Bumpy Broker E * Trade Financial’s daily share price Source:WSJ Market Data Group $12 0 2 4 6 8 10 2012 Friday $8.40 Size Matters Top 10 banks by market share in the bonds-trading business in the ﬁrst half of 2012 Source:Citibank The Wall Street Journal J.P.Morgan Deutsche Bank Barclays Goldman Sachs Bank of America BNP Paribas RBS Morgan Stanley Credit Suisse HSBC 12.3% 10.5 9.9 9.6 8.3 6.0 5.6 5.6 5.2 4.9 30 | Monday,November 5,2012 THE WALL STREET JOURNAL. Giants aroundtheworld InU.S.-dollar terms. DowJones CountryTitans INDEXPERFORMANCE Previous session Year-to-date 52-week Turkey -1.72% 40.2% 28.5% Germany 0.34 20.5 19.1 Switzerland 0.66 17.0 20.8 SouthAfrica 0.84 14.1 14.5 Singapore 0.41 14.0 5.4 Netherlands 0.71 13.8 16.1 HongKong 1.56 13.7 6.4 Australia -0.07 11.2 5.6 France 0.49 10.5 11.4 Sweden 0.65 9.9 9.8 Italy -0.28 5.5 2.9 Russia 0.75 5.4 -2.4 U.K.0.09 5.1 5.9 Japan 1.31 4.0 unch. Canada -0.97 3.6 -0.2 SouthKorea 1.22 2.4 -3.8 China88 0.44 -0.7% -13.1 Spain 0.94 -3.9 -2.4 Brazil -0.54 -5.5 -11.1 DowJones Regional Sector Titans Media -0.78% 24.2% 25.6% Fincl Svcs -0.24 22.6 18.4 Real Estate 1.00 22.6 17.9 Banks -0.28 20.9 16.5 Insurance -0.75 19.6 12.6 Retail -0.45 18.2 17.4 Tiger 50* 0.99 14.8 6.8 Global 50 -0.77 11.0 11.8 Asian50 0.75 9.1 4.7 Arab50 -0.01 2.5 -3.1 *AsiaexcludingJapan Source:S&PDowJones Indices Major players & benchmarks At right,a look at the Asia Titans,the biggest and best known companies in Asia.Below,some of the Dow Jones Titans indexes of biggest and most liquid stocks in individual countries and regions DowJones AsiaTitans:Friday's best andworst... Market value,Previous in billions close,in STOCKPERFORMANCE Company Country Industry of US$ local currency Previous session 52-week Three-year Fanuc Corp.Japan Industrial Machinery $39.9 13,350 3.81% 8.1 % 79.4 % Softbank Corp.Japan Mobile Telecommunications 37.5 2,714 3.67 8.1 27.4 KomatsuLtd.Japan Commercial Vehicles Trucks 21.9 1,786 3.66 -3.1 0.9 Honda Motor Japan Automobiles 55.7 2,467 3.26 7.1 -12.5 SamsungElectronics South Korea Semiconductors 178.9 1,327,000 2.31 36.7 84.8 HonHai PrecisionInd Taiwan Electrical Components Equipment $35.6 88.60 -1.34% 12.2 -8.0 Reliance Industries India Exploration Production 48.9 29.93 -1.03 -16.5 -63.9 Woolworths Australia Food Retailers Wholesalers 36.8 28.73 -0.97 22.8 1.7 NTTDoCoMo Japan Mobile Telecommunications 63.3 116,300 -0.77 -15.0 -10.7 Panasonic Japan Consumer Electronics 12.6 411.00 -0.72 -44.4 -67.4 ...Andtherest of Asia's bluechips Latest, Market value,inlocal STOCKPERFORMANCE Company/Country (Industry) inbillions (U.S) currency Latest 52-week Three-year East JapanRailway 27.5 5,510 2.23% 18.6% -3.3% Japan (Travel Tourism) Shin-EtsuChml 25.1 4,655 2.08 20.1 -1.6 Japan (Specialty Chemicals) NissanMotor 38.7 686.00 2.08 -2.1 5.5 Japan (Automobiles) ItochuCorp.16.0 808.00 2.02 6.3 43.5 Japan (Industrial Suppliers) RioTintoLtd.25.9 57.38 2.01 -13.6 -8.6 Australia (General Mining) KDDI 35.1 6,270 1.95 9.2 32.0 Japan (Mobile Telecommunications) TokioMarine Hldgs 20.6 2,148 1.95 19.3 -7.4 Japan (Property Casualty Insurance) China Life Insurance 22.9 23.85 1.92 17.2 -35.7 China OffShore (Life Insurance) Mitsui 25.9 1,137 1.79 3.0 -4.1 Japan (Industrial Suppliers) BHPBilliton 114.6 34.42 1.77 -5.8 -6.2 Australia (General Mining) Mitsubishi 30.0 1,454 1.68 -6.2 -24.1 Japan (Industrial Suppliers) Hitachi Ltd.24.7 427.00 1.67 2.6 46.2 Japan (Electronic Equipment) SumitomoMitsui Finl 43.6 2,475 1.64 15.4 -20.4 Japan (Banks) Toyota Motor 135.0 3,140 1.62 25.3 -12.0 Japan (Automobiles) MizuhoFinancial Grp 37.8 126.00 1.61 16.7 -31.1 Japan (Banks) SunHungKai Prop 37.2 110.10 1.38 2.8 -6.5 Hong Kong (Real Estate Holding Development) PetroChina 29.0 10.66 1.33 6.2 12.4 China OffShore (Integrated Oil Gas) Bank of China 35.1 3.25 1.25 18.6 -25.0 China OffShore (Banks) CNOOC 94.1 16.34 1.24 8.4 37.5 China OffShore (Exploration Production) Mitsubishi UFJ Finl 63.9 362.00 1.12 8.4 -26.0 Japan (Banks) Latest, Market value,inlocal STOCKPERFORMANCE Company/Country (Industry) in billions (U.S) currency Latest 52-week Three-year SumitomoCorp.16.8 1,078 1.03% 10.2% 25.3% Japan (Industrial Suppliers) Indl CommBk China 58.8 5.25 0.96 6.3 -15.1 China OffShore (Banks) China ConstructionBank 184.3 5.94 0.85 1.9 -9.6 China OffShore (Banks) NipponT&T 59.8 3,625 0.83 -7.8 -3.8 Japan (Fixed Line Telecommunications) JapanTobacco 55.7 2,235 0.81 17.3 75.8 Japan (Tobacco) TaiwanSmcndtr Mfg 79.7 89.90 0.78 21.7 50.3 Taiwan (Semiconductors) CheungKong 34.6 115.80 0.70 21.3 17.0 Hong Kong (Real Estate Holding Development) China Mobile (HK) 227.7 87.80 0.57 14.8 19.0 China OffShore (Mobile Telecommunications) POSCO 26.9 337,500 0.45 -10.6 -32.2 South Korea (Steel) Canon 43.0 2,589 0.43 -25.6 -24.3 Japan (Electronic Office Equipment) Woodside Petroleum 29.1 34.01 0.32 -6.5 -29.5 Australia (Exploration Production) Takeda Pharm 36.5 3,710 0.27 6.8 3.1 Japan (Pharmaceuticals) CommonwlthBk of Aus 95.8 57.37 0.17 19.0 12.7 Australia (Banks) Seven I Hldgs 27.3 2,471 0.12 15.3 23.8 Japan (Broadline Retailers) WestfieldGrp 24.8 10.58 -0.09 42.6 9.8 Australia (Retail) Wesfarmers Ltd.40.9 34.01 -0.38 6.7 25.0 Australia (Home Improvement Retailers) Westpac Bking 79.9 25.03 -0.44 16.3 -2.2 Australia (Banks) Hyundai Motor Co.Ltd.43.4 215,000 -0.46 -7.3 110.8 South Korea (Automobiles) National Australia Bk 58.6 24.87 -0.60 -0.2 -13.9 Australia (Banks) Aus NZBk 70.8 25.15 -0.71 20.3 11.3 Australia (Banks) Sources:DowJones Indexes;WSJ Market Data Group Credit derivatives Spreads oncredit derivatives areonewaythemarket rates creditworthiness.Regions that aretreadinginroughwaters canseespreads swingtowardthemaximum—andviceversa. Indexes belowarefor five-year swaps. Markit iTraxxIndexes SPREADRANGE,inpct.pts. Mid-spread, sincemost recent roll Index:series/version inpct.pts.Mid-price Coupon Maximum Minimum Average Europe: 18/1 1.27 98.68% 0.01% 1.41 1.16 1.29 Eur.HighVolatility: 18/1 1.97 95.44 0.01 2.11 1.82 1.97 EuropeCrossover: 18/1 5.13 99.45 0.05 5.81 4.76 5.33 Asiaex-JapanIG: 18/1 1.20 99.02 0.01 1.43 1.14 1.28 Japan: 18/1 2.11 94.74 0.01 2.27 2.02 2.16 Note:Dataas of November 1 Spreads Spreads on five- year swaps for corporate debt; based on Markit iTraxx indexes. In percentage points 8.00 6.00 4.00 2.00 0 t Europe Senior Financials t Europe Crossover 2012 May June July Aug. Sept. Oct. Index roll Source:Markit Group NOTICE TO READERS All statistics published in The Wall Street Journal Asia from markets outside the Asian-Pacific region reflect preliminary data. Tracking credit markets & dealmakers Credit-default swaps:Asiancompanies Atitsmostbasic,thepricingof credit-defaultswapsmeasureshowmuchabuyer hastopaytopurchase-and howmuch a seller demands to sell-protection fromdefault on an issuer's debt.The snapshot belowgives a sensewhichwaythemarket was movingyesterday. Showingthebiggest improvement... CHANGE,inbasis points Yesterday Yesterday Five-day 28-day RenesasElectrs 626 –28 –20 –106 KT&G 68 –3 –5 –16 ChinaConstr Bk 139 –3 –4 –38 GLOBALFOUNDRIES SINGAPORE 276 –5 –10 –1 Natl Agric CoopFedera 92 –2 –10 –13 Nankai Elec Rwy 160 –3 –3 –8 Expt Import BkKorea 75 –1 –2 –16 Advantest 67 –1 –3 –2 Kawasaki KisenKaisha 837 –12 –17 –25 NipponTelegraph Tel 48 –1...–2 Andthemost deterioration CHANGE,inbasis points Yesterday Yesterday Five-day 28-day Panasonic 478 99 189 215 SANYOElec 472 95 182 210 Sony 499 43 59 86 NEC 450 25 –49 –149 Hitachi 74 3 –2 –11 SwirePac 97 3...–9 RicohCo 223 6 9 27 KoreaDepIns 69 2 1 –14 KookminBk 86 2..–13 CapitaLand 186 4 8 5 Source:Markit Group BLUE CHIPS & BONDS WSJ.com >> Follow the markets throughout the day,with updated stock quotes,news and commentary at WSJ.com/Email. Also,receive emails that summarize the day’s trading in Europe and Asia.To sign up,go to WSJ.com. BehindEurope's deals:Bankrevenue rankings,France BehindeveryIPO,bondoffering,merger deal or syndicatedloanis oneor moreinvestment banks.Hereare investment banks rankedbyyear-to-daterevenues fromrecent deals. PERCENTAGEOFTOTALREVENUE Revenue, Equity Debt Mergers & inmillions share capital markets capital markets acquisitions Loans BNPParibas $162 11.1% 12% 47% 30% 11% SGCorporate Investment Banking 130 8.9 16 47 22 15 Credit AgricoleCIB 115 7.8 6 56 16 22 Natixis 95 6.5 2 78 3 17 JPMorgan 77 5.2...44 49 7 HSBC 73 5.0 11 60 13 16 DeutscheBank 62 4.3 3 36 56 5 MorganStanley 61 4.2 16 27 57 1 Barclays 51 3.5 2 37 55 6 Source:Dealogic THE WALL STREET JOURNAL.Monday,November 5,2012 | 31 WSJ.com >> Follow the markets throughout the day with updated stock quotes,news and commentary at at WSJ.com.Also,receive email alerts that summarize the day’s trading in Europe and Asia.To sign up,go to WSJ.com/Email Commodities Prices of futures contracts withthemost openinterest EXCHANGELEGEND:CBOT:Chicago Board of Trade;CME:Chicago Mercantile Exchange;NYBOT:NewYork Board of Trade;MDEX:Bursa Malaysia Derivatives Berhad;LIFFE:London International Financial Futures Exchange;LME:London Mercantile Exchange;NYMEX:NewYork Mercantile Exchange; ICE:IntercontinentalExchange ONE-DAYCHANGE Year Year Commodity Exchange Last price Net Percentage high low Corn (cents/bu.) CBOT 740.25 -10.75 -1.43% 849.00 499.00 Soybeans (cents/bu.) CBOT 1525.75 -34.25 -2.20 1,781.50 1,183.00 Wheat (cents/bu.) CBOT 866.50 -2.00 -0.23 953.25 629.50 Live cattle (cents/lb.) CME 125.300 -0.025 -0.02 135.550 122.400 Cocoa ($/ton) ICE-US 2,444 24 0.99% 2,707 2,050 Coffee (cents/lb.) ICE-US 154.50 1.05 0.68 247.10 152.80 Sugar (cents/lb.) ICE-US 19.41 0.03 0.15 25.13 19.18 Cotton (cents/lb.) ICE-US 70.30 0.09 0.13 97.39 64.61 Rapeseed (euro/ton) LIFFE 479.00 -5.25 -1.08 520 396 Cocoa (pounds/ton) LIFFE 1,577 17 1.09 1,737 1,380 Robusta coffee ($/ton) LIFFE 1,974 -10 -0.50 2,226 1,935 Copper ($/lb.) COMEX 3.4825 -0.0695 -1.96 4.02 3.26 Gold ($/troy oz.) COMEX 1679.60 -35.90 -2.09 1,800.90 1,535.40 Silver ($/troy oz.) COMEX 30.970 -1.278 -3.96 37.65 26.22 Aluminum ($/ton) LME 1,960.00 27.50 1.42 2,349.00 1,831.00 Tin ($/ton) LME 20,295.00 -150.00 -0.73 25,700.00 17,675.00 Copper ($/ton) LME 7,785.00 -30.50 -0.39 8,647.00 7,270.00 Lead ($/ton) LME 2,135.00 25.00 1.18 2,322.00 1,760.00 Zinc ($/ton) LME 1,892.00 3.00 0.16 2,195.50 1,756.50 Nickel ($/ton) LME 16,200 -195 -1.19 21,880 15,260 Crude oil ($/bbl.) NYMEX 84.87 -2.22 -2.55 110.25 79.11 Heatingoil ($/gal.) NYMEX 2.9519 -0.0813 -2.68 3.3517 2.5428 RBOBgasoline ($/gal.) NYMEX 2.5770 -0.0566 -2.15 2.9554 2.1726 Natural gas ($/mmBtu) NYMEX 3.669 -0.149 -3.90 4.0880 3.0950 Brent crude ($/bbl.) ICE-EU 104.95 -2.39 -2.23 120.77 90.16 Gas oil ($/ton) ICE-EU 918.75 -21.00 -2.23 1,040.25 798.00 Sources:SIXFinancial Information;WSJ Market Data Group Currencies LondoncloseonNov.2 Per In AMERICAS Per euro In euros U.S.dollar U.S.dollars Argentina peso-a 6.1289 0.1632 4.7719 0.2096 Brazil real 2.6086 0.3833 2.0311 0.4924 Canada dollar 1.2772 0.7830 0.9944 1.0056 Chile peso 617.27 0.001620 480.60 0.002081 Colombia peso 2347.11 0.0004261 1827.43 0.0005472 Ecuador USdollar-f 1.2844 0.7786 1 1 Mexico peso-a 16.6887 0.0599 12.9936 0.0770 Perusol 3.3355 0.2998 2.5970 0.3851 Uruguay peso-e 25.495 0.0392 19.850 0.0504 U.S.dollar 1.2844 0.7786 1 1 Venezuela bolivar 5.59 0.178985 4.35 0.229885 ASIA-PACIFIC Australia dollar 1.2386 0.8073 0.9644 1.0369 1-mo.forward 1.2416 0.8054 0.9667 1.0345 3-mos.forward 1.2476 0.8015 0.9714 1.0294 6-mos.forward 1.2560 0.7962 0.9779 1.0226 China yuan 8.0224 0.1247 6.2462 0.1601 HongKong dollar 9.9541 0.1005 7.7501 0.1290 India rupee 69.1195 0.0145 53.8155 0.0186 Indonesia rupiah 12349 0.0000810 9615 0.0001040 Japanyen 103.42 0.009669 80.52 0.012419 1-mo.forward 103.40 0.009671 80.50 0.012422 3-mos.forward 103.33 0.009678 80.45 0.012430 6-mos.forward 103.23 0.009687 80.37 0.012442 Malaysia ringgit-c 3.9203 0.2551 3.0523 0.3276 NewZealand dollar 1.5542 0.6434 1.2101 0.8264 Pakistanrupee 122.652 0.0082 95.495 0.0105 Philippines peso 52.789 0.0189 41.101 0.0243 Singapore dollar 1.5711 0.6365 1.2232 0.8175 SouthKorea won 1402.22 0.0007132 1091.75 0.0009160 Taiwandollar 37.529 0.02665 29.220 0.03422 Thailand baht 39.536 0.02529 30.783 0.03249 Per In EUROPE Per euro In euros U.S.dollar U.S.dollars Euro zone euro 1 1 0.7786 1.2844 1-mo.forward 0.9997 1.0003 0.7784 1.2847 3-mos.forward 0.9991 1.0009 0.7779 1.2856 6-mos.forward 0.9982 1.0018 0.7772 1.2867 CzechRep.koruna-b 25.246 0.0396 19.656 0.0509 Denmark krone 7.4594 0.1341 5.8078 0.1722 Hungary forint 281.67 0.003550 219.30 0.004560 Norway krone 7.3599 0.1359 5.7303 0.1745 Polandzloty 4.1088 0.2434 3.1990 0.3126 Russia ruble-d 40.423 0.02474 31.472 0.03177 Swedenkrona 8.5995 0.1163 6.6954 0.1494 Switzerland franc 1.2070 0.8285 0.9397 1.0641 1-mo.forward 1.2065 0.8289 0.9393 1.0646 3-mos.forward 1.2052 0.8298 0.9383 1.0657 6-mos.forward 1.2032 0.8311 0.9368 1.0675 Turkey lira 2.3004 0.4347 1.7910 0.5583 U.K.pound 0.8013 1.2480 0.6239 1.6029 1-mo.forward 0.8014 1.2478 0.6239 1.6027 3-mos.forward 0.8015 1.2476 0.6241 1.6024 6-mos.forward 0.8018 1.2472 0.6243 1.6019 MIDDLEEAST/AFRICA Bahraindinar 0.4842 2.0653 0.3770 2.6526 Egypt pound-a 7.8402 0.1275 6.1043 0.1638 Israel shekel 4.9976 0.2001 3.8911 0.2570 Jordandinar 0.9091 1.0999 0.7079 1.4127 Kuwait dinar 0.3620 2.7621 0.2819 3.5476 Lebanonpound 1931.65 0.0005177 1503.95 0.0006649 Saudi Arabia riyal 4.8168 0.2076 3.7503 0.2666 SouthAfrica rand 11.2569 0.0888 8.7645 0.1141 UnitedArabdirham 4.7175 0.2120 3.6730 0.2723 a-floatingrateb-commercial ratec-government ratec-commercial rated-RussianCentral Bank rate. Source:ICAPPlc. Major stockmarket indexes Stockindexes fromaroundtheworld,groupedbyregion.Showninlocal-currencyterms. PREVIOUSSESSION PERFORMANCE Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. ASIA-PACIFIC DJ Asia-Pacific 126.63 0.73 0.58% 7.5 % 1.7 % Australia SPX/ASX200 4460.10 2.50 0.06 9.9 4.2 China CBN600 19294.65 83.57 0.44 -0.9 -16.8 Hong Kong Hang Seng 22111.33 289.46 1.33 19.9 11.4 India Sensex 18755.45 193.75 1.04 21.4 6.8 Indonesia Jakarta Composite 4338.89 3.530 0.08 13.5 14.7 Japan Nikkei Stock Average 9051.22 104.35 1.17 7.0 2.8 Topix 752.09 8.77 1.18 3.2... Malaysia Kuala Lumpur Composite 1656.13 -19.56 -1.17% 8.2 12.1 NewZealand NZSX-50 3914.08 -17.81 -0.45 19.5 17.5 Pakistan KSE100 16101.55 139.18 0.87 41.9 34.7 Philippines Manila Composite 5424.51 Closed 24.1 27.3 Singapore Straits Times 3040.75 14.14 0.47 14.9 6.8 South Korea Kospi 1918.72 20.28 1.07 5.1 -0.5 Taiwan Weighted 7210.47 30.83 0.43 2.0 -5.2 Thailand SET 1306.60 8.61 0.66 27.4 36.5 EUROPE Stoxx Europe 600 274.85 1.15 0.42 12.4 14.6 Stoxx Europe 50 2561.55 8.38 0.33 8.1 12.3 PREVIOUSSESSION PERFORMANCE Region/Country Index Close Net change Percentage change Yr.-to-date 52-wk. EuroZone Euro Stoxx 252.17 1.31 0.52% 11.7 % 11.7 % Euro Stoxx 50 2547.15 13.28 0.52 10.0 11.2 Denmark OMXCopenhagen 446.91 3.84 0.87 25.3 33.2 Finland OMXHelsinki 5634.91 61.50 1.10 5.2 -0.2 France CAC-40 3492.46 17.06 0.49 10.5 11.8 Germany DAX 7363.85 28.18 0.38 24.8 23.4 Italy FTSEMIB 15769.28 -37.45 -0.24% 4.5 2.8 Netherlands AEX 337.60 2.17 0.65 8.0 11.8 Russia RTSI 1444.19 0.69 0.05 4.5 -6.4 Spain IBEX35 7968.9 82.50 1.05 -7.0 -7.3 Switzerland SMI 6701.37 41.12 0.62 12.9 18.4 Turkey ISENational 100 71422.61 -1129.90 -1.56 39.3 27.1 U.K.FTSE100 5868.55 6.63 0.11 5.3 6.2 AMERICAS DJ Americas 366.53 -3.44 -0.93 11.3 10.5 Brazil Bovespa 58382.68 Closed 2.9 -0.5 Argentina Merval 2395.13 44.80 1.91 -2.7 -13.3 Mexico IPC 41761.78 Closed 12.6 13.8 EuropeanandAmericasindexdataareasof 5:00p.m.ET. Sources:SIXFinancial Information;WSJ Market DataGroup Cross rates U.S.-dollar andeuroforeign-exchangerates inglobal trading US$ A$ £ C$ YUAN EURO HK$ RUPEE RUPIAH YEN NZ$ WON RINGGIT PH.PESO S$ SFRANC TW$ BAHT U.S.0.964 0.624 0.994 6.246 0.779 7.750 53.815 9614.95 80.523 1.210 1091.75 3.052 41.101 1.223 0.940 29.220 30.783 Australia 1.037 0.647 1.031 6.477 0.807 8.036 55.803 9969.97 83.496 1.255 1132.06 3.165 42.618 1.268 0.974 30.298 31.919 Britain 1.603 1.546 1.594 10.012 1.248 12.423 86.260 15411.60 129.069 1.940 1749.93 4.892 65.879 1.961 1.506 46.835 49.341 Canada 1.006 0.970 0.627 6.281 0.783 7.794 54.119 9669.26 80.978 1.217 1097.91 3.069 41.333 1.230 0.945 29.385 30.956 China 0.1601 0.154 0.100 0.159 0.125 1.241 8.616 1539.34 12.892 0.194 174.79 0.489 6.580 0.196 0.150 4.678 4.928 Euro 1.284 1.239 0.801 1.277 8.022 9.954 69.120 12349.26 103.422 1.554 1402.22 3.920 52.789 1.571 1.207 37.529 39.536 HongKong 0.129 0.124 0.080 0.128 0.806 0.100 6.944 1240.62 10.390 0.156 140.87 0.394 5.303 0.158 0.121 3.770 3.972 India 0.0186 0.0179 0.0116 0.0185 0.1161 0.0145 0.1440 178.67 1.4963 0.0225 20.29 0.0567 0.7637 0.0227 0.0175 0.5430 0.5720 Indonesia 0.0001 0.0001 0.0001 0.0001 0.0006 0.0001 0.0008 0.0056 0.0084 0.0001 0.11 0.0003 0.0043 0.0001 0.0001 0.0030 0.0032 Japan 0.012 0.012 0.008 0.012 0.078 0.010 0.096 0.668 119.41 0.015 13.56 0.038 0.510 0.015 0.012 0.363 0.382 NewZealand 0.826 0.797 0.516 0.822 5.162 0.643 6.404 44.471 7945.50 66.542 902.18 2.522 33.964 1.011 0.777 24.146 25.438 SouthKorea 0.0009 0.0009 0.0006 0.0009 0.0057 0.0007 0.0071 0.0493 8.81 0.0738 0.0011 0.0028 0.0376 0.0011 0.0009 0.0268 0.0282 Malaysia 0.328 0.316 0.204 0.326 2.046 0.255 2.539 17.631 3150.12 26.382 0.396 357.69 13.466 0.401 0.308 9.573 10.085 Philippines 0.024 0.023 0.015 0.024 0.152 0.019 0.189 1.309 233.94 1.959 0.029 26.56 0.074 0.030 0.023 0.711 0.749 Singapore 0.818 0.788 0.510 0.813 5.106 0.637 6.336 43.995 7860.32 65.828 0.989 892.51 2.495 33.600 0.768 23.887 25.165 Switzerland 1.064 1.026 0.664 1.058 6.647 0.829 8.247 57.267 10231.56 85.687 1.288 1161.76 3.248 43.736 1.302 31.093 32.757 Taiwan 0.034 0.033 0.021 0.034 0.214 0.027 0.265 1.842 329.06 2.756 0.041 37.36 0.104 1.407 0.042 0.032 1.053 Thailand 0.032 0.031 0.020 0.032 0.203 0.025 0.252 1.748 312.35 2.616 0.039 35.47 0.099 1.335 0.040 0.031 0.949 Source:ICAPPlc. Price-to- PERFORMANCE Dividend earnings Net Year- Three-yr., yield* ratio* Dows Jones Index Last change Daily to-date 52-wk.annualized 1.29% 21 Shenzhen -c 293.71 0.96 0.33% -0.6% -19.5% -8.2% 2.10 17 U.S.TSM 14639.53 -149.46 -1.01 12.4 12.4 11.4 5.38 12 Global Select Div -d 216.82 -1.16 -0.53 7.7 4.3 4.2 5.57 9 Asia/Pacific Select Div -d 329.95 -0.08 -0.03 18.4 10.6 8.0 3.62 6 HongKongSelect Div -d 190.02 1.13 0.60 10.2 6.1 2.3 3.94 16 U.S.Select Dividend -d 413.28 -5.15 -1.23 6.8 10.0 12.1 2.05 16 Islamic Market 2256.87 -15.73 -0.69 9.1 5.9 7.1 2.25 15 Islamic Market 100 2442.97 -18.81 -0.76 9.8 10.0 7.1 2.59 10 Islamic China/HKTitans30 1634.27 18.90 1.17 16.4 8.6 4.8 1.44 13 SustainabilityKorea 1362.57 17.18 1.28 7.0 -3.4 6.8 3.27 23 BrookfieldInfrastructure 2745.85 -16.75 -0.61 9.5 12.5 14.6 DJ-UBSCommodity-p 140.37 -2.72 -1.90 -0.2 -6.1 1.8 MSCI indexes Developedandemerging-market regional andcountryindexes fromMSCI Barraas of November.02,2012 Price-to- LOCAL-CURRENCY Dividend earnings PERFORMANCE yield ratio MorganStanleyIndex Last Daily YTD 52-wk. 2.90% 14 ALLCOUNTRY(AC) WORLD* 331.82 -0.83% 10.8% 6.9% 2.80 14 World(DevelopedMarkets) 1,313.19 -0.89 11.0 7.9 2.20 25 WorldSmall Cap 238.33 -1.20 12.6 8.7 2.90 14 Kokusai (Worldex-Japan) 1,327.48 -0.99 12.4 9.3 3.60 14 EAFE 1,531.52 -0.61 8.4 1.8 2.90 12 EmergingMarkets (EM) 999.63 -0.43 9.1 0.4 3.10 13 ACASIAPACIFICEX-JAPAN 442.75 0.11 12.7 3.5 2.70 13 ACFar East ex-Japan 491.18 -0.14 12.4 5.2 2.60 21 Japan 455.38 0.02 2.1 -3.1 3.10 10 China 59.59 1.27 12.6 5.7 2.00 12 ChinaA(ChinaDomestic) 2,211.17 1.91 -1.7 -15.2 2.60 16 HongKong 12,006.00 0.77 20.6 13.4 1.40 15 India 723.31 0.56 21.0 4.2 1.20 11 Korea 541.97 -1.00 4.3 -0.2 2.90 16 Malaysia 593.72 0.36 6.1 8.1 3.30 12 Singapore 1,594.49 -0.53 13.5 4.7 3.70 21 Taiwan 257.76 0.18 1.4 -4.3 3.00 15 Thailand 480.55 0.12 18.2 20.2 4.70 14 Australia 906.21 -1.27 10.2 3.7 5.00 14 NewZealand 94.96 -0.91 11.9 12.0 2.10 15 USBROADMARKET 1,603.53 -1.17 13.6 13.7 3.90 13 EUROPE 94.33 1.27 11.0 11.7 *Twenty-threedevelopedand26emergingmarkets Source:MSCI Barra *Fundamentals arebasedondatainU.S.dollar.Footnotes:c-inlocal currency.d-dividends reinvested.p-previous day.Note:All dataas of 11:30a.m.ET.Source:DowJones Indexes DowJones Indexes Price-to- PERFORMANCE Dividend earnings Net Year- Three-yr., yield* ratio* Dows Jones Index Last change Daily to-date 52-wk.annualized 2.41% 16 Global TSM 2587.67 -11.56 -0.44% 10.4% 7.4% 5.7% 2.86 22 Global DOW 1932.44 -4.06 -0.21 7.2 3.9 1.2 2.74 14 Global Titans50 193.61 -1.50 -0.77 11.0 11.8 5.3 2.91 15 Asia/Pacific TSM 1249.69 7.14 0.57 7.6 1.6 2.5 2.99 13 Asia/Pacific ex-JapanTSM 3285.53 17.06 0.52 13.3 4.1 4.8 2.97 18 EuropeTSM 2618.35 -7.29 -0.28 11.5 7.0 0.3 2.72 8 EmergingMarketsTSM 4077.59 11.30 0.28 9.5 0.8 2.6 3.34 11 AsianTitans50 130.17 0.97 0.75 9.1 4.7 0.3 3.59 8 BRIC50 516.10 2.35 0.46 3.9 -6.2 -3.1 1.88 13 CBNChina600 -c 19294.65 83.57 0.44 -0.9 -16.8 -10.9 2.89 8 ChinaOffshore50 3888.64 36.03 0.94 9.9 1.6 -1.2 1.94 13 Shanghai -c 262.88 1.42 0.54 -0.8 -16.9 -10.2 GLOBAL MARKETS LINEUP 32 | Monday,November 5,2012 THE WALL STREET JOURNAL. DowJones Industrial Average P/E:14 LAST: 13093.16 t 139.46,or 1.05% YEAR TODATE: s 875.60,or 7.2% OVER 52 WEEKS s 1,109.92,or 9.3% *Price-to-earnings ratio for the Nasdaq 100 Note:Price-to-earnings ratios are for trailing 12 months Sources:WSJ Market Data Group;Birinyi Associates 14000 13500 13000 12500 12000 11500 3 10 17 24 31 Aug. 7 14 21 28 Sept. 5 12 19 26 Oct. 2 High Close Low 50–day moving average t Nasdaq Composite Index P/E:15* LAST: 2982.13 t 37.93,or 1.26% YEAR TODATE: s 376.98,or 14.5% OVER 52 WEEKS s 295.98,or 11.0% 3350 3200 3050 2900 2750 2600 3 10 17 24 31 Aug. 7 14 21 28 Sept. 5 12 19 26 Oct. 2 S&P500 Index P/E:17 LAST: 1414.20 t 13.39,or 0.94% YEAR TODATE: s 156.60,or 12.5% OVER 52 WEEKS s 160.97,or 12.8% 1600 1500 1400 1300 1200 1100 3 10 17 24 31 Aug. 7 14 21 28 Sept. 5 12 19 26 Oct. 2 DJIAcomponent stocks Volume, CHANGE Stock Symbol inmillions Latest Points Percentage AT&T T 23.1 $34.93 –0.16 –0.46% Alcoa AA 13.4 8.65 –0.10 –1.14 AmExpress AXP 6.0 56.71 –0.14 –0.25 BankAm BAC 220.0 9.85 0.11 1.13 Boeing BA 4.2 70.05 –0.74 –1.05 Caterpillar CAT 6.8 85.79 –1.86 –2.12 Chevron CVX 8.2 108.37 –3.09 –2.77 CiscoSys CSCO 28.6 17.35 –0.15 –0.89 CocaCola KO 10.9 37.08 –0.25 –0.67 Disney DIS 9.3 49.86 0.08 0.16 DuPont DD 8.4 44.15 –0.85 –1.89 ExxonMobil XOM 12.5 90.27 –1.33 –1.45 GenElec GE 44.9 21.31 –0.03 –0.14 HewlettPk HPQ 26.6 13.76 –0.24 –1.71 HomeDpt HD 8.7 62.02 –0.24 –0.39 Intel INTC 51.5 22.06 –0.20 –0.90 IBM IBM 4.1 193.43 –3.72 –1.89 JPMorgChas JPM 16.8 42.42 –0.42 –0.98 JohnsJohns JNJ 7.7 70.90 –0.60 –0.84 McDonalds MCD 7.7 86.86 0.06 0.07 Merck MRK 10.9 46.00 0.06 0.13 Microsoft MSFT 56.9 29.50 –0.02 –0.05 Pfizer PFE 30.8 24.55...... ProctGamb PG 6.8 69.19 –0.06 –0.09 3M MMM 2.9 88.97 –0.28 –0.31 TravelersCos TRV 5.0 69.62 –0.61 –0.87 UnitedTech UTX 4.7 78.07 –0.99 –1.25 UtdHlthGp UNH 4.7 56.05 –0.90 –1.58 Verizon VZ 12.0 44.52 –0.62 –1.37 WalMart WMT 8.4 72.77 –0.68 –0.93 U.S.stocks:most active... Volume, CHANGE Stock Symbol in millions Latest Points Percentage BankAm BAC 220.0 $9.85 0.11 1.13% SPDRS&P500 SPY 131.2 141.56 –1.27 –0.89 SiriusXM SIRI 68.3 2.90 0.09 3.20 Microsoft MSFT 56.9 29.50 –0.02 –0.05 AmIntlGp AIG 56.1 32.68 –2.52 –7.16 iShrMSCIEmrgMkt EEM 53.7 41.60 –0.22 –0.53 FordMotor F 52.9 11.17 –0.08 –0.71 SPDRFnclSelSct XLF 52.2 16.00 –0.09 –0.59 Intel INTC 51.5 22.06 –0.20 –0.90 GenElec GE 44.9 21.31 –0.03 –0.14 SprintNextel S 41.3 5.70 0.09 1.60 PwrShrsQQQ QQQ 41.0 65.17 –0.70 –1.07 iShrRu2000 IWM 39.3 81.19 –1.30 –1.57 FacebookClA FB 38.2 21.18 –0.03 –0.14 AlphaNtrlRes ANR 37.1 9.06 0.20 2.26 Biggest gainers... BigFvSprts BGFV 2,044.1 $12.02 3.10 34.76% RestorationHardwr RH 6,837.7 31.10 7.10 29.58 EnzoBiochm ENZ 2,952.2 2.78 0.48 20.87 AssistLivngA ALC 779.6 9.64 1.63 20.35 TripAdvisor TRIP 12,206.4 35.12 5.71 19.42 ...Biggest losers ActiveNetwork ACTV 16,192.6 $5.42 –3.87 –41.66% GluMobile GLUU 8,926.7 2.56 –0.70 –21.47 GlobusMedical GMED 1,582.5 14.38 –3.29 –18.62 SkywrkSol SWKS 17,233.9 19.95 –4.13 –17.15 ChinaHGSRealEst HGSH 1,100.3 2.25 –0.46 –16.97 ADRs of Asiancompanies* 52-WEEK Volume, CHANGE High Low Stock Symbol inOOOs Latest Points Percentage $16.31 $12.00 TaiwanSemi TSM 6,865.4 $15.77 –0.34 –2.11% 154.15 99.71 BaiduADS BIDU 5,967.3 105.09 –1.61 –1.51 30.08 8.79 FocusMediaHldg FMCN 5,459.8 24.91 1.05 4.39 13.78 9.27 KoreaElecPwr KEP 4,593.1 13.28 –0.46 –3.35 36.41 12.36 CtripInt ADS CTRP 3,673.6 20.34 0.05 0.24 4.40 0.71 SuntechPwr STP 3,198.1 1.00 0.18 21.95 22.35 10.91 SonyADS SNE 2,733.8 11.33 –0.49 –4.15 82.23 59.87 BHPBiltonADS BHP 2,105.5 70.93 –0.81 –1.13 30.63 14.86 TataMtrsADS TTM 1,802.5 25.26 –0.26 –1.02 18.83 14.03 NTTDoCoMoADS DCM 1,727.6 14.37 –0.28 –1.91 16.22 10.85 SKTeleADS SKM 1,482.0 15.76 –0.18 –1.13 60.86 37.93 InfosysADS INFY 1,285.2 43.81 –0.11 –0.25 5.98 2.70 AUOptrncs AUO 1,200.2 4.01...... 35.16 27.28 DrRdyLabADS RDY 1,105.6 33.15...... 9.56 5.00 Panasonic ADS PC 1,097.8 5.00 –0.23 –4.40 15.70 8.41 LGDisplayADS LPL 1,093.4 15.55 0.28 1.83 5.36 4.01 MitsuUFJ ADS MTU 1,072.9 4.46 –0.06 –1.33 21.74 12.16 ChinaUnicomHK CHU 982.9 16.09 –0.41 –2.48 2.77 1.83 UtdMicroADS UMC 880.6 1.84 –0.02 –1.08 42.49 24.14 ICICI BkADS IBN 645.8 40.25 0.17 0.42 4.74 3.14 AdSemEgADS ASX 599.2 3.71 –0.04 –1.07 11.49 7.56 WiproADS WIT 592.0 8.51 –0.10 –1.16 48.48 29.81 CanonADS CAJ 544.6 31.69 –0.86 –2.64 65.54 40.69 Netease NTES 487.1 54.28 –1.67 –2.98 41.14 29.26 TelkomIndo TLK 467.7 39.22 –0.31 –0.78 59.45 46.26 ChinaMobile CHL 463.0 56.15 –0.24 –0.43 6.19 3.95 Slcnwr ADS SPIL 447.8 4.78 0.03 0.63 17.08 11.64 KTCrpADS KT 385.9 16.93 –0.02 –0.12 39.32 24.47 HDFCBnk HDB 331.9 37.52 –0.14 –0.37 39.35 27.52 HondaMtr ADS HMC 288.2 30.47 0.12 0.40 *Most activeAmericandepositaryreceipts trackedbyDowJones Source:WSJ Market DataGroup Global government bonds Latest,month-agoandyear-agoyields andspreads over or under U.S.Treasurys onbenchmarktwo-year and10-year government bonds aroundtheworld.Dataas of 12p.m.ET Country/ SPREADOVERTREASURYS,inbasis points YIELD Coupon Maturity,inyears Yield Latest Previous MonthAgo Year ago Previous Monthago Year ago 4.300 Austria* 2 0.130 -15.6 -15.6 -11.8 71.0 0.137 0.117 0.956 3.650 10 1.948 21.9 23.9 31.1 91.5 1.956 1.934 2.913 4.000 Belgium 2 0.197 -8.9 -8.1 7.4 244.0 0.212 0.308 2.686 4.000 10 2.415 68.6 69.3 91.8 235.9 2.410 2.541 4.357 3.125 Finland* 2 0.032 -25.4 -23.4 -16.2 15.6 0.059 0.072 0.402 3.500 10 1.741 1.2 3.7 12.3 19.9 1.754 1.746 2.197 2.500 France 2 0.170 -11.6 -12.5 -6.8 79.2 0.168 0.167 1.038 3.250 10 2.108 37.9 37.9 56.4 108.7 2.096 2.188 3.085 0.250 Germany 2 0.003 -28.3 -26.5 -18.4 18.0 0.028 0.051 0.427 1.750 10 1.448 -28.1 -25.5 -16.3 -17.9 1.462 1.460 1.820 n.a.Greece 2 n.a.... ... ............... n.a.10 n.a.... ... ............... 3.000 Italy 2 2.370 208.4 206.0 197.6 503.2 2.353 2.211 5.278 5.000 10 4.876 314.7 311.0 333.4 410.7 4.827 4.958 6.105 1.000 Netherlands 2 0.056 -23.0 -23.2 -14.7 37.2 0.061 0.087 0.618 2.250 10 1.705 -2.4 0.2 10.8 25.7 1.719 1.731 2.256 5.450 Portugal* 2 5.056 477.0 438.6 405.6 1901.7 4.679 4.290 19.263 3.850 10 8.294 656.5 637.6 718.2 1095.2 8.093 8.805 12.950 6.750 Spain 2 3.031 274.5 260.5 289.4 369.1 2.898 3.129 3.938 3.500 10 5.645 391.6 382.9 408.8 340.7 5.546 5.711 5.406 2.250 U.K.2 0.254 -3.2 -3.0 -3.9 24.9 0.263 0.195 0.495 4.000 10 1.856 12.7 15.2 8.0 5.7 1.869 1.703 2.055 0.250 U.S.2 0.286... ... ......0.293 0.234 0.246 2.000 10 1.729 ............ 1.717 1.623 1.999 Source:Tullett Prebon,except * markedcountries fromICAPplc Keymoneyrates Latest 52wks ago Primerates U.S.3.25% 3.25% Canada 3.00 3.00 Japan 1.475 1.475 Britain 0.50 0.50 ECB 0.75 1.50 Switzerland 0.53 0.51 Australia 3.25 4.50 HongKong 5.00 5.00 Libor Onemonth 0.20900% 0.24750% Threemonth 0.31275 0.43750 Sixmonth 0.53800 0.63111 Oneyear 0.87500 0.94883 Latest 52wks ago EuroLibor Onemonth 0.05500% 1.19563% Threemonth 0.13071 1.44125 Sixmonth 0.27179 1.65875 Oneyear 0.54357 2.00875 Euribor Onemonth 0.11000% 1.24700% Threemonth 0.19700 1.48800 Sixmonth 0.38500 1.70100 Oneyear 0.61100 2.04400 Hibor Onemonth 0.28000% 0.22000% Threemonth 0.39643 0.29071 Sixmonth 0.54571 0.40000 Oneyear 0.85571 0.71071 Offer Bid Eurodollars Onemonth 0.2500% 0.1500% Threemonth 0.3500 0.2500 Sixmonth 0.5000 0.4000 Oneyear 0.8000 0.7000 Latest 52wks ago U.S.discount 0.75% 0.75% Fed-fundstarget 0.00 0.00 Call money 2.00 2.00 Overnight repurchaserates U.S.0.27% 0.08% U.K.(BBA) 0.430 0.505 Eurozone 0.02 0.62 Sources:WSJ Market DataGroup,SIXFinancial Information,ICAP U.S.Treasuryyieldcurve The curve shows the yield to maturity of current bills,notes and bonds;all data as of 3 p.m.ET. 1 month(s) 3 6 1 years 2 3 5 7 10 30 maturit y 5% 4 3 2 1 0 s One year ago s Friday TOTALRETURN Yield to Modified Month Quarter Year Ryan Index maturity duration to-date to-date to-date 12-month 30-year Treasury 2.919% 19.93 –1.33% –1.46% 2.77 % 6.81 % 10-year Treasury 1.728 8.97 –0.38 –0.67 4.55 7.10 7 Year Treasury 1.168 6.68 –0.21 –0.53 3.54 5.44 Five-year Treasury 0.729 4.89 –0.07 –0.33 2.49 3.31 RyanIndex 1.203 7.57 –0.33 –0.53 2.50 4.14 3 Year Treasury 0.386 2.94 –0.01 –0.18 0.52 0.75 Two-year Treasury 0.285 1.99...–0.07 0.42 0.59 1 Year Treasury 0.178 0.96......0.15 0.17 Six-monthTreasury 0.152 0.50...0.01 0.06 0.12 RyanCashIndex-a 0.117 0.44...0.01 0.10 0.12 Three-monthbill 0.096 0.25...0.01 0.10 0.10 One-monthbill 0.041 0.07...0.01 0.07 0.08 a-Performance of a cash investment Source:Ryan ALM SCANNING THE GLOBE THE WALL STREET JOURNAL.Monday,November 5,2012 | 33 Asianstocks inthenews Want Want ChinaHoldings Ltd. Hong Kong HK$11.40 s 4.0% or HK$0.44 Thesnack-foodmaker hit a52-week highas theHangSengendedat a15- monthhigh. N D 2012 J F M A M J J A S O 4 6 8 10 12 14 In Hong Kong dollars Price-to-earnings ratio N.A. Earnings per share,past four quarters N.A. Dividend yield 1.2 PERCENTAGECHANGE Daily 1 wk.52 wks Food &Beverage 0.3% -0.1% 9.5% Want Want China Holdings Ltd. 4.0% 4.2% 61.2% Mitsubishi EstateCo.Ltd. Japan ¥1,665 s 4.1% or ¥65 Earnings fromdeveloper Mitsui Fudosan boostedstocks across thesector, includingthis one. N D 2012 J F M A M J J A S O 600 900 1200 1500 1800 2100 In yen Price-to-earnings ratio 32 Earnings per share,past four quarters N.A. Dividend yield 0.7 PERCENTAGECHANGE Daily 1 wk.52 wks Real Estate 1.1% 1.5% 23.3% Mitsubishi Estate Co.Ltd.4.1% 3.4% 26.6% SamsungHeavyIndustries Co.Ltd. Korea 34,700won s 6.1% or 2,000won Theshipbuilder reportedsolidearnings onThursday. N D 2012 J F M A M J J A S O 15000 22500 30000 37500 45000 52500 In won Price-to-earnings ratio 10 Earnings per share,past four quarters N.A. Dividend yield 1.4 PERCENTAGECHANGE Daily 1 wk.52 wks Indus Gds &Svcs 1.0% 1.7% -1.7% Samsung Heavy Industries Co.Ltd. 6.1% -2.9% 11.2% GalaxyEntertainment GroupLtd. Hong Kong HK$29.05 s 7.6% or HK$2.05 Gamblingrevenueacross theMacau sector roseabetter-than-expected3.2% inOctober. N D 2012 J F M A M J J A S O 10 15 20 25 30 35 In Hong Kong dollars Price-to-earnings ratio N.A. Earnings per share,past four quarters N.A. Dividend yield N.A. PERCENTAGECHANGE Daily 1 wk.52 wks Travel &Leisure 1.1% 0.8% 6.9% Galaxy Entertainment Group Ltd. 7.6% 6.4% -40.5% ChowTai FookJewelleryGroupLtd. Hong Kong HK$10.58 s 9.6% or HK$0.93 Thejeweler couldprofit fromfavorable economic policies at thepartycongress that begins Thursday D 2012 J F M A M J J A S O 5.00 7.50 10.00 12.50 15.00 17.50 In Hong Kong dollars Price-to-earnings ratio N.A. Earnings per share,past four quarters N.A. Dividend yield 0.9 PERCENTAGECHANGE Daily 1 wk.52 wks Retail -0.1% -0.4% 2.5% ChowTai Fook Jewellery Group Ltd. 9.6% 10.6% 0.0% MacquarieGroupLtd. Australia A$30.66 t 2.3% or A$0.84 Shares went ex-dividend. N D 2012 J F M A M J J A S O 12 18 24 30 36 42 In Australian dollars Price-to-earnings ratio N.A. Earnings per share,past four quarters N.A. Dividend yield N.A. PERCENTAGECHANGE Daily 1 wk.52 wks Financial Services 1.3% 1.9% 5.7% Macquarie Group Ltd.-2.3% 1.4% 31.9% SharpCorp. Japan ¥165 t 2.4% or ¥4 Fitchdowngradedits debt to‘junk’ aday after it warnedit might not beableto surviveonits own N D 2012 J F M A M J J A S O 135.00 270.00 405.00 540.00 675.00 In yen Price-to-earnings ratio N.A. Earnings per share,past four quarters N.A. Dividend yield 6.1 PERCENTAGECHANGE Daily 1 wk.52 wks Personal &Hshld Gds 0.3% -0.4% -2.7% Sharp Corp.-2.4% 1.3% -75.6% AxiataGroupBhd Malaysia 6.2 ringgit t 4.9% or 0.3ringgit Investors cashedinonrecent gains inthe telecomsector.This oneis still upnearly 20%this year N D 2012 J F M A M J J A S O 3.00 4.50 6.00 7.50 9.00 10.50 In ringgit Price-to-earnings ratio 22 Earnings per share,past four quarters N.A. Dividend yield N.A. PERCENTAGECHANGE Daily 1 wk.52 wks Telecommunications 0.0% -0.6% 5.1% Axiata Group Bhd -4.9% -18.7% -57.2% HTCCorp. Taiwan TW$197.00 t 5.7% or TW$12.00 Margincalls after thestockbroke NT$200for thefirst timeaccelerated theday’s decline. N D 2012 J F M A M J J A S O 175.00 262.50 350.00 437.50 525.00 612.50 In Taiwan dollars Price-to-earnings ratio 6 Earnings per share,past four quarters N.A. Dividend yield 20.3 PERCENTAGECHANGE Daily 1 wk.52 wks Technology 0.9% 1.7% 0.8% HTCCorp.-5.7% -13.7% -35.0% NikonCorp. Japan ¥1,928 t 6.1% or ¥125 Fiscal second-quarter net profit slid17% onaslowdowninthesemiconductor and LCDindustries. N D 2012 J F M A M J J A S O 900 1350 1800 2250 2700 3150 In yen Price-to-earnings ratio 17 Earnings per share,past four quarters N.A. Dividend yield 2.0 PERCENTAGECHANGE Daily 1 wk.52 wks Personal &Hshld Gds 0.3% -0.4% -2.7% Nikon Corp.-6.1% -20.5% -52.4% Moving the markets At right,Japan’s benchmarkstockindex andthebiggest movers amongthe larger Asianstocks indexes andstocks Friday.Beloweachindexareits most activelytradedstocks.Thecharts show thepercentagechangeineachindex’s or stock’s value,rather thanthepoint change,for purposes of comparison.The indexlevel or stockpriceis indicatedon eachaxis.All indexes andstocks are showninlocal currencyterms. Asianindexmovers… Nikkei StockAverage Japan 9051.22 s 1.17% or 104.35 N D 2012 J F M A M J J A S O 5000 7500 10000 12500 15000 Volume Change Stock inmillions Close Net % Panasonic 100.14 411 -3 –0.72 Sharp 56.30 165 -4 –2.37 NomuraHldgs 44.59 298 12 4.20 Toshiba 36.31 296 2 0.68 MitsuUFJFin 35.85 362 4 1.12 HangSeng HongKong 22111.33 s 1.33% or 289.46 N D 2012 J F M A M J J A S O 10000 15000 20000 25000 30000 Volume Change Stock inmillions Close Net % BankofChina 397.73 3.25 0.04 1.25 Ind&Comml 333.39 5.25 0.05 0.96 ChinaConstructnBk 286.55 5.94 0.05 0.85 ChinaPetro&Chem 100.29 8.48 0.08 0.95 PetroChina 97.48 10.66 0.14 1.33 Kospi SouthKorea 1918.72 s 1.07% or 20.28 N D 2012 J F M A M J J A S O 1000 1500 2000 2500 3000 Volume Change Stock inmillions Close Net % YungjinPharm 44.64 2,315.00 300.00 14.89 Mirae 22.94 508.00 –5.00 –0.97 WooridulLifeSci 22.74 2,925.00 –95.00 –3.15 KukjePharmIndl 19.53 2,600.00 –120.00 –4.41 WooridulPharm 12.85 2,600.00 … … Sensex India 18755.45 s 1.04% or 193.75 N D 2012 J F M A M J J A S O 10000 15000 20000 25000 30000 Volume Change Stock inmillions Close Net % TataMotors 11.07 270.05 2.60 0.97 Wipro 5.10 364.60 3.35 0.93 SterliteIndsIndia 3.60 101.55 1.95 1.96 ICICIBank 2.08 1,079.65 22.30 2.11 StateBankofIndia 1.76 2,152.45 36.95 1.75 A weak yen and buying in real-estate plays easily offset earnings-related sell- ing in Sharp,Nikon,and Ibiden on Fri- day.The index rose 1.3% on the week. The benchmark hit its highest close since Aug.2,2011,and the week’s 2.6% climb was the best weekly showing since mid-September. Tech stocks and battered shipbuilders led Friday’s advance,the fourth gain in five sessions.The week’s 1.4% rise was the best in seven weeks. This was the biggest one-day gain since Sept.21,and it powered the mar- ket to its 11th weekly rise in the last 14 weeks. MARKETS LINEUP WSJ.com >> Follow the markets throughout the day,with updated stock quotes,news and commentary at WSJ.com. Also,receive emails that summarize the day’s trading in Europe and Asia. To sign up,go to WSJ.com/Email. 34 | Monday,November 5,2012 THE WALL STREET JOURNAL. ABrighter Past Initially reported gains in U.S. employment,and the gains after revisions The Wall Street Journal Source:U.S.Labor Department 300 thousand 0 50 100 150 200 250 FJ M A M J J A S O Initially reported Revised New Job:Lifting CEO Spirits The Labor Department has been revising its job figures upward.Per- haps investors should do the same with their view of the economy. Friday’s employment report showed the economy added 171,000 jobs in October.That is better than the 125,000 gain economists had been looking for,and came despite a loss of 13,000 government jobs. The rise in the unemployment rate to 7.9% from7.8% a month ear- lier reflected not a deteriorating la- bor market but an increase in the number of people looking for work. That suggests that an improving job market has begun drawing people who had quit looking for work back into the hunt. But pleasing as the October fig- ures were,the revisions to data from prior months were more tell- ing.The Labor Department now says that there was a gain of 148,000 jobs in September,rather than the 114,000 it reported a month ago. The August job gain,meanwhile, has been bumped up to 192,000 from an initial 96,000. When it prepares the monthly employment report,the Labor De- partment usually only has responses fromabout 70% of the employers it surveys for the job count.In the later months,the employer response rate climbs to about 95%,and the Labor Department is able to make a more accurate job count. One takeaway from the revised figures is that September’s drop in the unemployment rate to 7.8% from 8.1% in August may have partly re- flected an improving job market rather than some statistical fluke. Indeed,while the survey of households that underlies the unem- ployment-rate calculation covers a smaller share of the workforce than the employer survey does,it can be more sensitive to shifts in the tenor of the job market. The revisions also help explain why consumers have been feeling upbeat lately.Getting a job,seeing people around you getting jobs and not worrying about losing a job are all great mood improvers. What is most surprising is that the job gains are coming in an envi- ronment where business sentiment has been battered by weakness abroad,uncertainty surrounding the election and Washington’s failure so far to address the spending cuts and expiration of the Bush-Obama tax cuts set for Dec.31. In a survey conducted late in the third quarter,the Business Roundta- ble found that the economic outlook of chief executives had fallen to its lowest level since the third quarter of 2009.Back then,of course,the U.S.economy was still rapidly shed- ding jobs. That business is adding workers even though executives apparently feel so down in the dumps says something about underlying de- mand.It can only be imagined how much more hiring and spending they would be doing with a little more clarity on how the “fiscal cliff” might be resolved. —Justin Lahart Forecasting Distant Sales FromApple’s Capital Hill Apple doesn’t give investors much to go on when it comes to forecasts. The only “guidance” Apple regu- larly offers is for the upcoming quarter,and some analysts have grown skeptical of those figures.Af- ter all,the maker of iPhones rou- tinely sets a low bar that it leaps over with ease. But in its 10-K filing published last Wednesday,Apple looks further forward in at least one respect:pro- jecting the amount it plans to in- vest for capital expenditures,par- ticularly on factory equipment. Some have used that figure to esti- mate the following year’s sales,but in 2012 the relationship started to break down. In the fiscal year that ended in September,Apple’s capital spending jumped to $10.3 billion from $4.6 billion in the prior year.Had the figure’s historical relationship with sales held,Apple would have re- ported tens of billions of dollars more in revenue than it actually did.As for fiscal 2013,Apple says capex will be $10 billion,the first time since at least 2004 the com- pany has projected the figure will fall. While Apple spends some capital budget building data centers and retail stores,the vast majority is es- sentially spent outfitting assembly lines within suppliers’ factories. Note the jump in Apple’s long- lived assets in China—up from $2.6 billion to $7.3 billion in the past year.Given suppliers’ thin profit margins,it is easier for Apple to front the cash for manufacturing equipment that can’t be used for anything besides its own products. Yet the stagnation in capital spending doesn’t mean Apple’s sales are going to hit a wall.An- other figure in the filing suggests why.Apple had committed to pur- chase $21 billion worth of products and components from its suppliers as of the end of September.That figure is up from $14 billion this time last year. It isn’t clear why capex is ex- pected to be lower in 2013,but one possibility is Apple spent more in 2012.Last year’s capital budget came in $2 billion higher than origi- nally predicted. Indeed,the bigger issue for Ap- ple in the current quarter may not be sales,but gross profits. The iPhone 4S was largely un- changed from the iPhone 4 and had particularly high margins,having benefited from two years of im- proving component costs,argues analyst Toni Sacconaghi of Bern- stein Research. The iPhone 5 is a totally new de- vice.Combine that with other new products like the iPad Mini,and it is easy to see why Apple says mar- gins will fall. Despite these signals,analysts project earnings per share of $13.57 for the quarter,compared with Ap- ple’s guidance of $11.75. In other words,analysts’ as- sumption seems to be that,once again,the company has simply un- derpromised. Yet the recent slide in Apple’s share price—down 18% from Sep- tember’s peak—suggests another possibility:For the first time in a while,investors themselves are skeptical the company will overde- liver. —Rolfe Winkler Big Apple Apple's capital expenditures Source:SEC ﬁlings *2013 ﬁgure is Apple's guidance $10 0 5 billion '11'09'07'13*2005 China’s Winter of Content: Revived Growth Should Hold China’s growth has revived.Ex- pect it to stay buoyant for a while. The latest sign of recovery:an uptick in October’s purchasing man- agers’ index.This came in at 50.2 in October,up from49.8 in September and above the 50 mark that sepa- rates growth fromcontraction.That is only a slight shift,but it suggests September’s moderate acceleration in growth has been sustained. There are three reasons to be- lieve it will stick around a while lon- ger. First is the year-end government spending splurge.China’s budget targeted a deficit of 800 billion yuan ($128 billion) for the year.So far, the Ministry of Finance has run a surplus of 646 billion yuan.Going on past performance,the last two months will see a rush to spend un- used funds,contributing to a flood of liquidity and stronger demand. Then there is a return to yuan appreciation.With China’s currency down in the first eight months of the year,some exporters held their earnings in dollars rather than con- verting them into yuan. In the past two months,the yuan erased its losses.In October,it rose at an annualized pace of 7.4%.That should push exporters to convert their dollars into yuan,boosting li- quidity further. Finally,the central bank appears fixed on keeping monetary condi- tions relaxed.In the face of higher public spending,stronger inflows fromthe trade account,and capital inflows following a third round of quantitative easing in the U.S., China’s policy makers could have battened down the hatches.Instead, they have continued to push funds into the markets,with a record 379- billion-yuan injection last week. Put it together,and the uptick in China’s growth looks set to be sus- tained a few months longer. —Tom Orlik HEARDONTHESTREET Email:firstname.lastname@example.org FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard ©2012DowJones&Company,Inc.Allrightsreserved.PAHXX2B9UBA Subscribe today at wsj-asia.com/bb or call Hong Kong +852 2831-2555;Singapore +65 6415-4000; Japan 0120 440-971;India +91 11 6462-0215; Indonesia +62 21 527-7592;Thailand +66 2 690-4222 to 7. Floral Prints and Patterns in The Wall Street Journal. Fromthe hottest trends and trendsetters in the world of fashion to vital insights and analysis on business and finance,The Wall Street Journal provides the breaking news and intelligence you need to navigate your business and your life. Any time.Anywhere.Any device. What in the world is going on? THE WALL STREET JOURNAL.Monday,November 5,2012 | 35 MANAGEMENT When in Doubt,M.B.A.s Turn to ‘Bible’ Business Students Rely on Examples in ‘Case in Point’ Study Guide to Prepare for Job Interviews On some college campuses,it’s hailed as a Bible—the guide every M.B.A.or any aspiring consultant needs to ace some of the toughest job interviews.It even comes with a set of commandments;the first: “Listen to the question.” Now in its seventh edition, “Case in Point” has become the biggest business book you’ve never heard of,a best seller with more than 100,000 copies sold in print and electronic versions,ac- cording to its author,Marc Cosen- tino.Published in 1999,the 228- page paperback explains and unpacks the open-ended business dilemmas—known as case ques- tions—that characterize inter- views at management-consulting firms such as McKinsey & Co. “It’s the first book people go to,” says Ben Nowell,the 40-year- old president of the Columbia Graduate Consulting Club,a group of several dozen students who meet to stage mock interviews us- ing questions pulled from “Case in Point” and other sources. The guide’s popularity offers a glimpse into the world of aspiring management consultants,who of- ten spend months preparing for interviews at one of the so-called Big Three firms:McKinsey,Bain & Co.and Boston Consulting Group Inc.From now until the end of the year,students will cram for on- campus interviews,which gener- ally take place from October through December.The prize:a job with a six-figure starting sal- ary and an entree into an elite group that includes prominent CEOs and entrepreneurs. Mr.Cosentino,57 years old, says he never imagined his book— now available in four languages— would become a cult classic.The latest edition,which sells for $30, last week topped Amazon.com’s best-seller chart in the consulting category,and was the site’s 879th most popular book overall as of Wednesday. According to Nielsen BookScan, 17,000 copies of the latest edition and about 58,000 copies of all other editions have been sold to date,though this figure doesn’t in- clude e-books sold on the Kindle or bulk purchases from colleges, such as the 200 copies Harvard Business School orders annually. Between 20% and 30% of the graduating classes from top busi- ness schools such as Harvard,Co- lumbia and Stanford University take jobs in consulting after grad- uation,according to recent statis- tics from those schools. Mr.Cosentino says the book’s aim isn't only to help students ace the case interview process,but also to train them to “think like a senior manager.” In consulting interviews,which typically last 30 to 45 minutes,a partner or senior consultant from the firm spends the first half prob- ing the interviewee’s leadership experience.He or she then pres- ents a scenario,often inspired by a real-life company predicament, such as whether to break into a new market. Armed with nothing more than a pencil and pad,the interviewee must devise a solution on the spot—all while doing the math aloud so the interviewer can eval- uate how he or she thinks. Interviewers often intentionally throw candidates off by telling them their answers are wrong, just to see how they will react,Mr. Cosentino says,so he simulates that approach with the students he tutors.As the student begins outlining a solution,he repeatedly interrupts and tells them they’re wrong,pushing to see whether the student can defend the argument without getting defensive. Brian Rolfes,director of global recruiting at McKinsey,says the firm doesn’t use such tactics.“We don’t throw curveballs,” he says. “[The interview] is meant to be a dialogue.” Bain global chief talent officer Russ Hagey said “there may be others” who try to throw candi- dates off,but his firm doesn’t sub- scribe to this approach.“We really want to put people in a position to show their best.” “If you’re not prepared,you could be right for consulting,but you’ll probably fail,” says Christo- pher Malone,a 30-year-old BCG consultant who graduated earlier this year from Dartmouth Col- lege’s Tuck School of Business, where he led the consulting club. Mr.Malone,who interviewed at four firms in January 2011 and eventually received two internship offers,including one from BCG that led to a full-time job,says he used “Case in Point” but quickly moved on to other prep materials. While he found the book too “rigid” and formulaic in its ap- proach,he says it was neverthe- less a good primer in introducing him to some of the basic princi- ples of case studies. Many take the “Case Com- mandments” as gospel.They were evident during a recent practice session at Columbia Business School,when Travis Reaves,28, instructed Johannes Preis,27,to determine whether a carbonated beverage brand should launch fla- vored bottled water.Mr.Reaves,a former McKinsey summer intern, has already secured a full-time job at the firm after he graduates next year,while Mr.Preis is currently in the midst of interviews at sev- eral firms. After asking several clarifying questions (Commandment No.5) about the product name and mar- ket size,Mr.Preis spent two min- utes scribbling furiously on a piece of paper and organizing his areas of focus (Commandment No.6) into plant utilization,regional markets and management exper- tise.By the time he summarized his rationale to Mr.Reaves (Com- mandment No.13),he had filled four sheets of paper.His conclu- sion,after crunching sales figures, calculating the profit margin and converting ounces to gallons:For a 12.5% slice of the market,the product was “feasible.” Mr.Cosentino began writing study guides for consulting inter- views while working at Harvard’s undergraduate career office in the 1990s.The school published his initial guides,but he later moved to self-publish “Case in Point.” He now runs a business consulting would-be consultants. Consulting firms seem to view Mr.Cosentino with ambivalence. He recalls how a BCG partner once chided him for revealing a current case-study question to a group of students.But BCG also in 2007 or- dered 1,000 copies of the book to give to prospective applicants,he says.A BCG spokesman couldn’t confirm whether either incident took place. But the popularity of “Case in Point,” along with other study guides such as Victor Cheng’s “Case Interview Secrets,” may work against aspiring students. Mel Wolfgang,BCG’s head of recruiting in the Americas,inter- views about 100 students every year and says he can tell when someone sounds too “scripted.” “It’s sort of painful,” he says, about hearing such responses. “Preparation is crucial.Overprepa- ration can be fatal.” B Y L ESLIE K WOH Columbia Business School students Johannes Preis,left,and Travis Reaves during a mock interview session last month. DaniellaZalcmanforTheWallStreetJournal THE POWER LIST ASIA The top business leaders in Asia making headlines last week in select global and regional media.Powered by DowJones Factiva and edited for relevance and clarity. To see historical data and individual country Power Lists,go to asia.WSJ.com/powerlist/or scan the code to the right Photos:Reuters (Okuda);Associated Press (Li);Bloomberg News (Goh and Clyne);Agence France-Press/Getty Images (Mallya) Takashi Okuda President Sharp Sharp warned that it had doubts about remaining a going concern, and Mr.Okuda said the ‘situation could have been different if we took steps more quickly.’ Robin Li Chief Executive Baidu Mr.Li said Baidu’s third-quarter proﬁt rise was ‘driven by encouraging customer growth and improvements to our monetization platform.’ Goh Choon Phong Chief Executive Singapore Airlines The airline bought 10% of Virgin Australia for US$108.5 million in a deal that helps Virgin intensify competition with rival Qantas Airways. Cameron Clyne Chief Executive National Australia Bank National Australia Bank reported a 22% slump in annual proﬁt,and Mr.Clyne cited ‘ongoing challenges in the U.K.’ Vijay Mallya Chairman Kingﬁsher Airlines Mr.Mallya told Reuters he won’t sell assets to help Kingﬁsher. Compiled by Carlos Tejada/The Wall Street Journal 36 | Monday,November 5,2012 THE WALL STREET JOURNAL. MANAGEMENT General Electric Co.Vice Chairman John Rice travels to as many as 40 countries a year to manage business lines as diverse as jet engines,ultrasound machines and wind turbines. Mr.Rice,55 years old,moved to Hong Kong early last year to head global growth for one of the world’s larg- est companies.He took the helm of GE’s overseas opera- tions at a time when the global economy was recovering from a re- cession,and GE’s international presence was growing:In 2011,the non-U.S.busi- nesses generated 53% of the company’s $147.3 billion in revenue,compared with 50% of its $149.6 billion revenue in 2010. In an interview,Mr.Rice,who has worked at GE for more than three decades, talked to Kathy Chu about the company’s big bet on Asia,the challenges of getting into developing economies,and why he won’t be challenging CEO Jeff Immelt for the top job anytime soon. The following interview has been edited. WSJ :As head of global growth for GE,you oversee 150 countries from Hong Kong.Why Hong Kong,and what does this say about GE’s bet on Asia? Mr.Rice :Certainly,Asia is important,but so is the Middle East,Latin America,Africa. The fact that we’re here and not somewhere in Latin America doesn’t lessen the impor- tance of Latin America.The important thing is that it had to be outside the United States so you could get that perspective,and the lens of being situated in a different market. WSJ :GE has made a big bet on Asia,but it’s also bet on resource-rich countries such as Australia,Peru and Canada.As economic growth in China and other parts of Asia slows,how does that affect GE’s investment in the region? Mr.Rice: We certainly are sensitive to,and react to,short-term shifts,but we also have to have a good hand on the rudder and make sure we are keeping a long-term view in mind.We’re in long-cycle businesses,so whether orders are up or down in a specific quarter rarely should change our long-term strategy. There’s no question you have to respond to short-term challenges in a particular place and reduce costs or reallocate costs. That’s part of what every responsible busi- ness does.You also have to balance that with a long-term strategy.If you’re in one day and out the next,you’re not going to be viewed as a good long-term partner. The slowing Asian economies have not lessened the appetite for infrastructure. People still need power generation,health care,water,forms of transportation. WSJ: GE set a goal of generating $10 billion in revenue in China by 2010,but that hasn’t happened yet.Has it been harder to grow in China? Mr.Rice: We began in China as a place to buy inexpensive components for appliances, for the products we were producing in other places.Then we started selling things in China,then we started looking at China as a place to manufacture.Now China is a place where we do all of those things,but growth is going to come more from the partner- ships we create.These take longer to put to- gether,and they’re a little bit more compli- cated.We didn’t really know what to expect. WSJ: GE’s expansion overseas has created a lot of jobs in other countries.How do you respond to the critics who say these jobs should be staying in the U.S.? Mr.Rice :I don’t understand the criticism.In our aviation business,we have 3,000 en- gines on operation on airlines based out of China,and much of the content comes from U.S.operations.There are thousands of jobs in the U.S.that exist because of our ability to participate in the Chinese aviation indus- try. The critics seem to think you can pull all investments out from a market and still have unlimited opportunities to sell into that market.It doesn’t really work that way. If you want to participate in global mar- kets,you have to be an investor.We need to do it in a way that’s complementary.I want to create jobs in the U.S.,too.I don’t think that the global economy is going to be fully healthy unless we get the unemployment rate down in the United States.Too many people take job creation as a zero-sum game,and that’s not the way it works. WSJ: GE is expanding in countries including Myanmar and Mongolia.What opportuni- ties do you see in these countries,and what are the challenges? Mr.Rice: You see in every place an emphasis on electricity.One of the things that gov- ernments want to do is show the popula- tion they can put more electricity on the grid,keep the lights on longer as a way to show people’s lives are getting better.Any talk about a change in standard of living means nothing if you don’t have electricity. But bureaucracies aren’t necessarily wired to go fast.There are concerns about corruption;there are a lot of challenges to the governmental decision-making process. WSJ: What is your management style? Mr.Rice: I have high expectations for myself and for people around me.I hold myself and people accountable,but I also want to be part of the solution.Part of being an ef- fective leader is to be somebody who wants to help solve problems. WSJ: You’re one of three vice chairmen at GE.Any interest in the top job? Mr.Rice: Jeff [Immelt] and I are about the same age.I love being part of the GE lead- ership team.I have no aspiration to another job at GE.I can’t envision a circumstance under which I would be offered the [CEO] job. WSJ: How do you find the right global foot- print? Mr.Rice: Our job is to pull all of the com- pany’s interests together and make sure that’s reflected in our strategy.When we think about where to put an aviation serv- ices shop,you have to look at what engines have been ordered by the airlines in the re- gion,when they might be delivered,what are the other opportunities that might be coming up. The biggest challenge we have is a world that needs enormous infrastructure invest- ments.A billion and a half to two billion people lack the basics.How do their de- mands in basic infrastructure,electricity, power generation get built,and over what period of time?Where do we have to be sit- uated,where do we have to have people, service shops and training facilities,to opti- mize that?One of the things our team is paid to do is figure out where and how this global footprint should evolve so we can get the best results for our shareholders and customers. GeneralElectric Résumé Education:B.A.from Hamilton College in Clinton,N.Y. Career:Mr.Rice joined GE’s financial- management program after college,and has held positions in the industrial conglomerate’s appliance,corporate auditing,plastics,and energy divisions. Extracurricular:Riding motorbikes,enjoying quiet beaches and low-maintenance friends. MANAGING IN ASIA [ John Rice ] General Electric AmericanPowerhouse Builds Global Profile PublishedbyDowJonesPublishingCompany(Asia).PrintedinHongKongbySuperflagPrintingandCommunicationLtd.,1/F,8ChunYingSt.,TseungKwanOInd.Est.,TseungKwanO,NT.PrintedinIndonesiabyPTGramediaPrintingGroup,JalanPalmerahSelatan22-28,Jakarta10270.PrintedinJapanbyYomiuriShimbun,1-7-1,Otemachi,Chiyoda-ku,Tokyo100-8055.PrintedinKoreabyJoongAngIlbo.7,Soonwha-Dong,Chung-Ku,Seoul100-130.1997June04Registrationno.:SeoulKA00020(DailyNewspaper),Publisher/Editor/Printer:Song,Pil-Ho. PrintedinMalaysiabyKHLPrintingCo.Sdn.Bhd.(ROCNo:235060-A)Lot10&12,JalanModal23/2,Seksyen23KawasanMielPhase8,40000ShahAlam,Selangor,Malaysia.PrintedinPhilippinesbyFEPPrintingCorporation,3817MascardoSt.,CornerMetropolitanAve.,PasongTamo,MakatiCity.PrintedinSingaporebyKHLPrintingCo.PteLtd.,57LoyangDrive,Singapore508968.PrintedanddistributedinTaiwanbyTheChinaPost,8FuShunStreet,Taipei104.PrintedinThailandbyNationMultimediaGroupPublicCo.,Ltd.,1854Bangna-Trad Road,(K.M.4.5),Prakanong,Bangkok10260.PublishedandprintedonbehalfoftheWallStreetJournalIndiaPublishingPvtLtd,517BWorldTradeCentre,BarakhambaLane,NewDelhi110001byMrSumanDubeyatA-8Sector7,GautamBudhNagar,Noida-201301andPLOTNo.EL208,TTCIndustrialArea,Mahape,NaviMumbai-400710(Maharashtra),India,Editor:SumanDubey,phone:+91-11-64620215.ACPno.F.2(T/3)Press/2009FACSIMILEEDITION. Asia Today >> Scan this code to watch an interview with GE Vice Chairman John Rice in Hong Kong,or go to WSJ.com/video.