close

Вход

Забыли?

вход по аккаунту

?

The Wall Street Journal December 11 2017

код для вставкиСкачать
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
MONDAY, DECEMBER 11, 2017 ~ VOL. CCLXX NO. 137
* * * * *
Last week: DJIA 24329.16 À 97.57 0.4%
NASDAQ 6840.08 g 0.1%
STOXX 600 389.25 À 1.4%
10-YR. TREASURY g 6/32 , yield 2.383%
WSJ.com
OIL $57.36 g $1.00
The government of Qatar and British weapons
maker BAE Systems have
completed a multibillion
deal for 24 combat jets. B3
Oil prices increased,
supported by elevated
geopolitical tensions and
an increase in Chinese
crude imports. B9
A boom in electric vehicles
is stoking demand for a wide
range of metals, which could
have a far-reaching impact
on commodity prices. B9
U.S. employers hired
more information technology workers last month,
signaling strong demand
by businesses to leverage
digital capabilities. B6
The animated film
“Coco” topped the box office for a third time this
weekend, ahead of the next
“Star Wars” release. B2
Died: Atsutoshi Nishida, 73,
former Toshiba president. B3
World-Wide
The Alabama Senate race
entered its final days with
Democrat Jones trying to
mobilize voters and Republican Moore leading in polls
but facing a call from the
state’s senior senator for
GOP voters to avoid him. A1
California’s largest
wildfire blazed into new
terrain, forcing evacuations in two Santa Barbara
County communities. A3
Alabama Hears Final Pitch
Democrat Jones seeks
support against GOP’s
Moore before Tuesday
vote for Senate seat
MONTGOMERY,
Ala.—A
heated race for an Alabama U.S.
Senate seat entered its final
days with Democrat Doug Jones
trying to mobilize voters, especially African-Americans, and
front-runner Republican Roy
Moore facing a fresh call from
the state’s senior senator for
GOP voters to avoid him on
Tuesday.
The two men are competing
in what has become the closest
race for a federal office in the
deeply red state in decades. Mr.
Moore, an evangelical Christian
former judge, was the clear favorite until his campaign was
hit by allegations by several
women that he sought dates
with them when they were teenagers and he was in his 30s. Mr.
Moore, now 70 years old, has
denied the accusations.
President Donald Trump held
a campaign rally in neighboring
Pensacola, Fla., on Friday eve-
Sapphire Cards
Get New Chief
Bitcoin Futures Start, Site Falters
BY JOSHUA JAMERSON
The first bitcoin futures
started trading Sunday, sparking
a swift run-up in the price of the
digital currency as the exchange
provider’s website experienced
outages from heavy traffic.
JPMorgan makes changes in its
rewards card, while overall creditcard account openings fell. B1
New JPMorgan Chase creditcard account openings, quarterly
3 million
By Alexander
Osipovich,
Gabriel T. Rubin
and Paul Vigna
2
1
0
2015
Trading of the hotly anticipated U.S. bitcoin futures began
at 6 p.m. Eastern Time Sunday
on an exchange run by Cboe
Global Markets Inc., while its
larger rival CME Group Inc.
plans to introduce its own bitcoin futures a week later.
The bitcoin contract expiring in January opened at
$15,000 and spiked to $16,660
’16
’17
Source: the bank
THE WALL STREET JOURNAL.
no
Pockets of anger surfaced in the Middle East
and Asia over Trump’s decision to recognize Jerusalem as Israel’s capital, but
riots petered out in the
Palestinian territories. A7
Doug Jones, left, Democratic nominee in the Alabama Senate race, spoke in Birmingham Sunday. Republican candidate Roy Moore, who faces
allegations of sexual misconduct that he denies, has kept a low profile since a Tuesday appearance, shown above, and plans a rally Monday.
Conservatives said repealing the ACA’s individual mandate will have less impact than
predicted because of a rising
number of exemptions. A4
Although Trump’s
overall approval ratings
have hit record lows, he is
getting significantly
higher marks for his handling of the economy. A4
After driving Islamic
State-linked fighters from
Marawi, the Philippines
must rebuild and resettle
nearly 400,000 people. A8
Iraq said it had retaken
the last pockets of territory held by Islamic State
in the country. A8
Some high-income business owners could face marginal tax rates exceeding 100%
under the Senate’s tax bill. A6
Venezuela’s ruling Socialist Party swept local
elections after an opposition boycott and allegations
of pro-government bias. A9
CONTENTS
Business & Finance B2
Business News........... B3
Crossword.............. A16
Heard on Street... B10
Journal Report R1-10
Life & Arts...... A13-15
Markets................B9-10
Opinion.............. A17-19
Sports........................ A16
Technology............... B4
U.S. News............. A2-6
Weather................... A16
World News...... A7-11
>
s Copyright 2017 Dow Jones &
Company. All Rights Reserved
Two major hospital systems
are in talks about a possible
merger that would create the
largest U.S. owner of hospitals,
as a series of deals shape up
to further consolidate control
of the health-care landscape.
Ascension and Providence
St. Joseph Health, both nonprofits, are talking about combining, according to people familiar with the discussions. A
deal would create an entity of
unprecedented reach, with 191
hospitals in 27 states and annual revenue of $44.8 billion,
based on the most recent fiscal year. That would dethrone
the nation’s largest pure hospital operator, HCA Healthcare
Inc., which owns 177 hospitals
and ended 2016 with $41.5 billion in revenue.
Ascension and Providence
have
been
talking
for
months, and a merger is far
from assured, according to
the people. Talks have included a variety of arrangements short of a merger, one
of the people said.
Nearly 60% of U.S. hospitals are private nonprofits, a
status that exempts them
from some taxes but requires
in exchange that they provide
community benefits such as
free care for low-income patients. Remaining U.S. hospitals are government-owned or
Please see DEAL page A2
ly
.
JPMorgan Chase is
bringing in a new executive
to run the Sapphire Reserve
rewards credit card. B1
ning in which he called for Mr.
Moore to be voted in to protect
his and the GOP’s congressional
agenda. But on Sunday, Alabama
GOP Sen. Richard Shelby said on
CNN he had already voted for
another Republican: “I couldn’t
vote for Roy Moore. The state of
Alabama deserves better.”
Even Mr. Jones’s allies say
the 63-year-old former federal
prosecutor faces a challenge in
taking advantage of the GOP’s
ambivalence about their candidate because of a lack of Democratic electoral infrastructure in
the state. A Jones coalition
could unite African-American
voters, who have traditionally
skewed Democratic, and Republicans disaffected with Mr.
Moore, Jones backers said.
“It’s not like there’s some apparatus to get out the vote,”
said Joe Trippi, a Democratic
strategist working with the
Jones campaign. Mr. Trippi said
that Democrats have been “trying to, as quickly as possible,
mobilize and upbuild an infraPlease see VOTE page A4
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Pioneers of the so-called
gig economy have become
some of the world’s most
valuable private companies by
using apps and algorithms. B1
YEN 113.47
BY MELANIE EVANS
AND ANNA WILDE MATHEWS
n-
The first bitcoin futures started trading Sunday, sparking a swift runup in the price of the
digital currency. A1
JIM WATSON/AGENCE FRANCE-PRESSE/GETTY IMAGES (LEFT); DAN ANDERSON/ZUMA PRESS
Business & Finance
wo major hospital systems, Ascension and
Providence St. Joseph
Health, are in talks about a
possible merger that would
create the largest U.S. operator of hospitals. A1
EURO $1.1774
Hospital
Giants
In Talks
To Merge
What’s
News
T
HHHH $4.00
within the first six minutes of
trading, an 11% surge. Prices
later dropped, then rebounded
and the contract was trading at
$18,220 at around 10:30 p.m.,
according to data from Cboe.
About 1,000 contracts changed
hands in the first three hours of
trade.
The exchange halted trading
for two minutes at 8:31 p.m. due
to volatility, said a spokeswoman for Cboe. The exchange
operator can impose such halts
after a 10% price swing.
The price of bitcoin itself was
at $16,559.24, according to CoinDesk. The price climbed 8% to
$15,740.25 in the first seven
minutes after the futures contract started trading.
Interest in the futures caused
problems for Cboe’s website.
i
“Due to heavy traffic on our
website,
visitors
to
www.cboe.com may find that it
is performing slower than usual
and may at times be temporarily
unavailable. All trading systems
are operating normally,” a Cboe
spokeswoman said.
The launch of bitcoin futures
represents a milestone for the
digital currency. But the new
market could be roiled by hacks,
technical snafus or manipulation
schemes.
One risk is that the underlying markets for bitcoin are
largely unregulated and have a
troubled history. Mt. Gox, once
the largest bitcoin exchange,
collapsed in 2014 after being
robbed of more than $470 million of bitcoin. Other bitcoin exchanges have faced criminal
Exemptions to health-law
mandate to rise....................... A4
charges of money laundering.
“The Bitcoin cash markets
are immature, and hardly seem
the epitome of robustness,”
Craig Pirrong, a finance professor at the University of Houston,
wrote in a blog post.
The launch of bitcoin futures
comes as a confluence of economic, financial and cultural developments has spurred a rise of
more than 1,500% this year in
the price of the digital currency.
Regulators in countries such as
Japan have given stamps of approval to trading bitcoin. Surging stock markets have made investors hungrier for riskier
plays.
Meanwhile, consumers have
grown more comfortable with
sending and receiving money
Please see BITCOIN page A8
INSIDE
Hong Kong Plight: Can You Have
Your Cheesecake and Eat It All?
i
In polls, economy is a bright
spot for Trump......................... A4
Infrastructure plan faces
rough road in Congress....... A6
i
Opening of American restaurant inspires
strategies to handle heaping portions
BY JULIE STEINBERG
AND NATASHA KHAN
single slice of key lime cheesecake to share. After the meal,
the group planned a long walk
Halfway through his meal around the harbor to help with
at the new Cheesecake Factory digestion.
“Feta cheese, Parmesan
in Hong Kong, which opened
earlier this year, Ken Wu knew cheese, cheddar cheese…I
he had to come up with a sur- know it’s called The Cheesevival plan to get through the cake Factory but never could
we have imagined how much
rest of dinner.
The amount of food—in- cheese was in everything!”
said Una Wong,
cluding nachos,
who dined with
pasta, a pork
Mr. Wu. “Chichop, pizza and
nese people just
fried dishes—
cannot handle
was overwhelmthis
much
ing. Even the
cheese.”
salad, which Mr.
Mr. Wu nodWu, 29, and his
ded glumly. “All
friends had choI can taste in
sen for “balOreo cheesecake
my mouth is
ance,” arrived
laden with bacon, chicken, av- cheese,” he said. He likened
ocado and a “blue cheese the sensation to Sichuan peppercorn, the numbing and
mountain.”
So the group of seven ac- spicy flavoring used in Westcountants alighted on a new ern China that obliterates the
strategy: Interval eating.
taste of anything else.
They took a full hour to
Since it opened in a shopwork through their main ping mall in May with much
courses. Then they instructed fanfare, Hong Kong’s first and
the server to wait for at least only Cheesecake Factory resa half-hour before bringing taurant has been drawing
Please see CHEESE page A12
dessert, which consisted of a
PUT YOUR
SAVINGS ON
AUTOPILOT
THE BEST
FILMS
OF 2017
HOW WOMEN
LED, LOST FIRST
TECH JOBS
WEALTH MANAGEMENT, R1
LIFE & ARTS, A13
BUSINESS & FINANCE, B1
A Fight in Afghanistan
That America Is Winning
In Achin, the U.S. and its Afghan allies have driven away Islamic State
BY MICHAEL M. PHILLIPS
ACHIN, Afghanistan—The Special Forces
captain gestured to the Takhto Valley, a
brown-hued no man’s land of fallow fields and
abandoned mud-brick compounds within easy
reach of Islamic State gunners.
“Everything over there is bad,” he said.
Then the captain turned toward the Pekha
Valley, an expanse of emerald-green fields of
corn and wheat. Farmers there returned home
this summer as Afghan and U.S. troops drove
Islamic State fighters into the mountains on
the Pakistan border. “Everything that way,” he
said, “is better.”
The war in Afghanistan is at a stalemate, according to Gen. John Nicholson, the top American commander in Afghanistan. But in Achin,
the U.S. and its Afghan allies are winning on a
battlefront demarcated in green and brown.
Islamic State fighters poured into Afghanistan in 2014 and turned this region—particularly the Pekha, Takhto and Mohmand valPlease see AFGHAN page A12
Iraq says it is clear of Islamic State................... A8
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A2 | Monday, December 11, 2017
* ***
THE WALL STREET JOURNAL.
U.S. NEWS
THE OUTLOOK | By Jacob M. Schlesinger
ECONOMIC
CALENDAR
U.S. Shift Puts Pressure on WTO
World trade growth is rebounding, expanding this year at its fastest pace since 2011, while countries have
in recent years taken more steps to open markets than close them. But paralysis at the World Trade
Organization has created a backlog in its court system designed to mediate disputes among members.
Trade policy trends
World merchandise trade
volume growth (average of
exports and imports)
Projected
15%
Trump Hails Heroes
Of Civil-Rights Era
0
NOAA
Right Whales Are at
Brink, Experts Say
Federal government officials
said it was time to consider the
possibility that endangered right
whales could become extinct unless new steps are taken to protect them.
North Atlantic right whales
are among the rarest marine
mammals in the world, and 17
of them have died so far this
year. The National Oceanic and
Atmospheric Administration has
said there are only about 450 of
the whales left.
American and Canadian regulators need to consider the possibility that the population won’t
recover without action soon, said
John Bullard, the Northeast Regional Administrator for NOAA
Fisheries at a meeting in Maine.
“You do have to use the extinction word, because that's
where the trend lines say they
are,” Mr. Bullard said. “That's
something we can't let happen.”
—Associated Press
30
30
20
20
10
10
0
0
-5
-10
-15
1995 2000
’05
’10
’15
2010
’12
’14
’16 ’17*
1995
2000
*Through Oct. 15
†Through Sept.
Source: World Trade Organization
willing to stand up for needed
change.”
All sides agree WTO relevance relies on its ability to
make some big changes.
WTO rules risk growing more out of date, undermining the body’s authority
and leaving a greater portion
of commerce outside world
standards and hampered by
national barriers.
G
lobal trade rules were
last written in 1995, before the emergence of
the internet. The trade rule
book “doesn’t exist in the
form that we actually need,”
Mr. Wolff said. “Without attention, it will erode.”
Mr. Trump has expressed
less concern about WTO
weakness than WTO strength,
Continued from Page One
for-profits, including leading
players HCA, Tenet Healthcare Corp. and Community
Health Systems Inc.
For patients, the sector’s
latest wave of consolidation
could mean more tightly managed networks of medical care,
which proponents say could
reduce unnecessary spending
but critics fear could raise
prices and limit patient choice.
The latest deal, if it happens, would up the ante in the
competition between big hospital operators and health insurers, with each sector making huge deals and aiming to
gain heft in negotiations over
the cost of care and greater
control over patients.
“It can be a vicious cycle
where consolidation happens
in one place, and then other
players say, ‘I need to consolidate too,’” said Martin Gaynor,
a professor of economics and
health policy at Carnegie Mellon University. “Everybody’s
looking for ways to increase
their negotiating leverage.”
Pushing down the use of
costly services such as emergency rooms is a focus of CVS
Health Corp.’s $69 billion deal
for Aetna Inc., announced last
week. UnitedHealth Group Inc.,
the parent of the biggest U.S.
health insurer, just sped up its
own plunge into the healthcare provider sector by saying
its Optum health-services arm
will buy one of the largest
physician groups in the nation,
adding it to a growing roster
of urgent-care clinics and outpatient surgery centers.
“The goal of an insurer is to
try to get people to the lowest
cost-of-care site appropriate
for their care,” said Brent D.
Fulton, an assistant adjunct
professor in the School of Public Health at the University of
California, Berkeley. “The hospital is the most expensive
setting.”
Hospital operators have
pursued ever-larger deals in
recent years, creating multistate chains and regional powerhouses. The number of U.S.
hospitals that are part of a
system rose by nearly 20% between 2006 and 2016, American Hospital Association data
show.
Spending on hospitals accounts for roughly one-third
of the nation’s $3.3 trillion annual health-care bill, the latest
federal estimates show.
Hospital companies have
no
President Donald Trump
praised the achievements of the
20th-century African-American
civil-rights movement and paid
tribute to the movement’s martyrs as American heroes ahead
of a museum opening Saturday,
amid criticism over his past remarks on women, immigration
and other issues.
“Today, we strive to be worthy of their sacrifice, we pray for
inspiration from their example,”
he said in Jackson, Miss., after
describing the life of slain Mississippi civil-rights leader Medgar Evers.
The president spoke at an
event that preceded the larger
official opening of twin museums—the Mississippi Civil Rights
Museum and the Museum of
Mississippi History—as part
of the state’s bicentennial celebrations.
Two black Democratic lawmakers, civil-rights activist Rep.
John Lewis of Georgia and Rep.
Bennie Thompson of Mississippi,
whose district includes some of
Jackson, had said they wouldn’t
attend because of their objections to Mr. Trump’s past controversial remarks.
—Louise Radnofsky
40 disputes
5
n-
MISSISSIPPI
40 per month, average
10
DEAL
U.S. WATCH
Active WTO disputes
per year
Trade-restrictive measures
Trade-facilitating measures
’05
’15 ’17†
’10
THE WALL STREET JOURNAL
and how he sees it harming
American sovereignty and
American business. “We have
not been treated fairly” by
the WTO, the president told a
November summit of Pacific
Rim leaders in Vietnam. He
complained the U.S. has been
punished for following WTO
rules while other countries—
notably China—flouted them.
He reiterated his preference
for bilateral trade deals over
such multilateral arrangements.
Mr. Trump’s aides have
registered dissent by blocking
judicial appointments to the
main WTO court that arbitrates trade disputes. The
seven-member panel now has
three vacancies, aggravating a
mounting case backlog.
The WTO was struggling to
modernize rules and maintain
relevance long before Mr.
Trump took over American
trade policy.
The third ministerial conference in Seattle in 1999 notoriously collapsed amid violent street protests. The
fourth, held in Qatar two
months after the Sept. 11,
2001, attacks, launched the
ambitious Doha Development
Round aimed at somehow reducing poverty and terrorism
through trade liberalization.
The subsequent seven ministerials deadlocked over divisions between developed and
developing countries. The
Doha Round was effectively
declared dead at the 2015
Nairobi session.
The current WTO directorgeneral—Brazilian Roberto
Azevêdo, who took office in
2013—has found more success
by scaling back the organization’s ambitions and seeking
progress on modest projects.
A global “trade facilitation
agreement” took effect this
year designed to simplify and
harmonize customs procedures, a technical pact that
drew little attention. Officials
say that, when fully implemented, it will be the equivalent of a world-wide 14%
across-the-board tariff cut,
boosting global trade by $1
trillion a year. In Buenos Aires, members will seek to
build some momentum with
narrow agreements governing
fishing subsidies and “food
security” programs often used
by governments to protect
domestic agriculture.
M
r. Azevêdo has encouraged member nations to skirt paralysis by creating coalitions of
the willing, or “plurilateral”
agreements that liberalize
trade only among those WTO
members—say 50 or 60, instead of all 164—who accept
the terms. That avoids the bylaws’ requirement for consensus among all members for
comprehensive rounds, giving
any one veto power.
The U.S. helped the WTO
pursue previous plurilateral
pacts. But under the Trump
administration, it isn’t actively taking part in the current discussions.
The big test this week is
whether any of that can happen without American advocacy—whether some combination of the European Union,
Japan, or China, can fill the
void. And, if they do, whether
the result will be less favorable to U.S. interests.
ly
.
Progress and Threats
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Washington
The world trading system
confronts a new power vacuum, with out-of-date rules
and no driving force spearheading any effort to update
them.
That’s in large part because
of the shifting American position on trade. The U.S. has
flipped from being chief advocate to lead skeptic of the
World Trade Organization,
leaving the guardian of globalization without its primary
champion. That new dynamic
is on display at the group’s
biannual meeting, which
started Sunday in Argentina.
Ahead of that session, 164
trade ministers set modest
policy-making goals and have
low expectations they can
meet any of them. For the
first time in memory, WTO
veterans say, Washington has
largely been silent in advance
deliberations meant to fix priorities for the gathering.
“The central challenge to
the world economy today is
the absence of American leadership in the world trading
system,” Alan Wolff, the top
U.S. official at the WTO, said
in a November speech. “The
U.S. was an indispensable
country to the creation of
that system and its management. And now it has opted
out.”
Mr. Wolff took the post in
September with the support
of the Trump administration.
Aides to President Donald
Trump dispute Mr. Wolff’s
characterization.
“The president has never
shrunk away from America’s
role as a leader in global
trade,” White House deputy
press secretary Raj Shah said
in a statement. “Sometimes
being a leader means being
Top Systems
The nation’s largest hospital systems, by number of hospitals, include
for-profit and private nonprofit operators. Consolidation among some
of the largest nonprofits is poised to create new giants.
Number of hospitals
Revenue*
Non-profits
HCA Healthcare
177
$41.5B
Ascension
141
22.6
Community Health Systems
18.4
127
Catholic Health Initiatives
100
15.5
Trinity Health
93
15.2
Tenet Healthcare
77
19.6
LifePoint Health
71
6.4
Providence St. Joseph Health
50
22.2
Dignity Health
39
12.9
Kaiser Permanente
39
64.6†
*Most recent fiscal year operating revenue
†Includes Kaiser Foundation Health Plan Inc.
Sources: the companies; SEC filings; municipal bond
investor filings
THE WALL STREET JOURNAL.
National Hospital Giant
A combination of Ascension and Providence St. Joseph Health
would span the country.
States where the operators are present:
Asension
Providence St. Joseph Health
Both
Wash.
Mont.
Minn.
Ore.
Wis.
N.Y.
Mich.
Conn.
Md.
D.C.
Ill. Ind.
Kan.
Calif.
Ariz.
N.M.
Okla.
Mo.
Ark.
Ky.
Tenn.
Miss. Ala.
Texas
Alaska
Source: the hospital operators
also been deepening their own
role in lower-cost settings outside the hospital walls by acquiring specialist and primarycare doctors, as well as
outpatient surgery centers, occupational-health clinics and
urgent-care centers.
The hospitals say the consolidation aims to lower costs
and help patients. Larger op-
Ga.
La.
Fla.
THE WALL STREET JOURNAL.
erators say they can work better with the emerging, integrated giants on the healthinsurer side by providing more
efficient, better-coordinated
care.
But the large operators are
also seeking to leverage size
to keep patients within their
system, as is the case when
health systems contract with
TUESDAY: The Federal Reserve
begins its two-day policy meeting.
Officials have signaled they are
likely to vote to raise their benchmark short-term interest rate by a
quarter percentage point at the
meeting. Fed officials have been
cheery about the U.S. economy
and job creation that could push
up inflation over time, in turn bolstering the case for further rate
rises in 2018.
The U.K. statistics office publishes figures on consumer inflation in November. Economists
polled by The Wall Street Journal
expect annual price growth to
come in at 3%, unchanged from
October’s reading, but still significantly above the Bank of England’s 2% target. The BOE last
month raised its benchmark interest rate to 0.5%, from a record low
of 0.25%, in an attempt to get inflation under control.
WEDNESDAY: The U.S. Labor
Department releases inflation
numbers for November, the same
day the Fed’s policy meeting
wraps up. The consumer-price index’s soft trend persisted in October, but so-called core prices that
exclude the volatile food and energy categories rose 1.8% from a
year earlier, the strongest annual
gain since April.
THURSDAY: IHS Markit’s composite purchasing managers index is expected to point to a
strong end to the year for the eurozone. The consensus forecast is
for a slight drop in the measure to
57.3 in December, from 57.5 in November, but that would still make
the fourth quarter one of the
strongest three-month periods
since the recovery began in
mid-2013. A few hours later, the
European Central Bank is expected
to leave its policies unchanged, but
its economists are expected to
raise their growth forecasts once
again, a sign that 2018 may see
the end of the ECB’s bond-buying
program launched in early 2015.
The Bank of England also releases a policy statement Thursday. When raising rates last
month, the central bank indicated
further tightening would be gradual and limited, indicating just two
more quarter-point increases by
the end of 2020.
The Bank of Mexico releases a
policy statement, with Gov. Alejandro Díaz de León newly at the
helm. Mexico’s consumer-price inflation hit a 16-year high at 6.66%
in August, though price increases
slowed in September and early
October. Most analysts expect the
bank’s next move to be a rate cut
around August next year. Mr. Díaz
de León recently said all options
are on the table, but uncertainty
makes giving interest-rate guidance risky.
FRIDAY: The Bank of Russia
releases a policy statement, after
cutting its key interest rate by
0.25 percentage point at its last
meeting in late October. The Russian economy is gradually recovering from a recession brought on
by a one-two punch of Western
sanctions and declining global
prices for oil, the country’s primary
export.
insurers to be the primary option for patients in a limited
network of choices. Greater
scale also can give hospitals
greater weight with insurers
in negotiations over prices,
and they may be better able to
counter the insurers’ move
into the health-care-provider
business.
Hospitals are facing a series
of threats to their financial
strength. For them, the early
benefits of the Affordable Care
Act’s 2014 expansion of insurance, which boosted consumers’ use of health care, have
faded. Nationwide, hospitalizations dropped 0.6% last year,
after increasing 1.2% in 2015
and 0.7% the year before that,
according to the latest Census
Bureau data.
Congressional Republicans’
efforts to push forward with a
tax overhaul could add to the
industry’s challenges by repealing the Affordable Care
Act’s penalties for those who
lack insurance, raising worries
that hospitals will continue to
see sagging demand and a rise
in uninsured patients.
Nonprofit hospitals could
face additional financial pressure because the Republican
tax legislation may shut them
out from the tax-exempt debt
market, which could raise
their cost of borrowing. Nonprofit hospitals are rushing to
tax-exempt markets to get
ahead of possible changes in
Congress.
A deal involving Ascension
and Providence would stretch
across much of the U.S. Ascension operates across 22 states
and the District of Columbia,
including Texas and Washington, where Providence also operates. Providence also has
hospitals in Alaska, California,
Montana, New Mexico and Oregon. Both operators have
high-profile CEOs, Ascension’s
Anthony Tersigni and Providence’s Dr. Rod Hochman.
Financial terms of a possible deal weren’t clear. Combinations of nonprofit hospital
operators, unlike with forprofit companies, don’t typically involve one buying the
other. Ascension and Providence are both Roman Catholic institutions, meaning
church authorities would need
to sign off on any merger.
The possible combination
would surpass another huge
planned hospital merger that
was announced Thursday, between Dignity Health and
Catholic Health Initiatives,
which together own 139 hospitals and would have combined
revenue of $28.4 billion.
CORRECTIONS AMPLIFICATIONS
Readers can alert The Wall Street
Journal to any errors in news
articles by emailing
wsjcontact@wsj.com or by calling
888-410-2667.
THE WALL STREET JOURNAL
(USPS 664-880)
(Eastern Edition ISSN 0099-9660)
(Central Edition ISSN 1092-0935)
(Western Edition ISSN 0193-2241)
Editorial and publication headquarters:
1211 Avenue of the Americas,
New York, N.Y. 10036
Published daily except Sundays and general
legal holidays. Periodicals postage paid at
New York, N.Y., and other mailing offices.
Postmaster:
Send address changes to The Wall Street
Journal, 200 Burnett Rd.,
Chicopee, MA 01020.
All Advertising published in The Wall Street
Journal is subject to the applicable rate card,
copies of which are available from the
Advertising Services Department, Dow Jones
& Co. Inc., 1211 Avenue of the Americas, New
York, N.Y. 10036. The Journal reserves the
right not to accept an advertiser’s order. Only
publication of an advertisement shall
constitute final acceptance of the advertiser’s
order.
Letters to the Editor:
Fax: 212-416-2891; email: wsj.ltrs@wsj.com
NEED ASSISTANCE WITH
YOUR SUBSCRIPTION?
By web: customercenter.wsj.com;
By email: wsjsupport@wsj.com
By phone: 1-800-JOURNAL (1-800-568-7625);
Or by live chat at wsj.com/livechat
REPRINTS & LICENSING
By email: customreprints@dowjones.com
By phone: 1-800-843-0008
GOT A TIP FOR US?
SUBMIT IT AT WSJ.COM/TIPS
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A3
* *
©T&CO. 2017
U.S. NEWS
Strong Winds Drive California Wildfires Into New Areas
MIKE ELIASON/SANTA BARBARA COUNTY FIRE DEPARTMENT/ASSOCIATED PRESS
A TIFFANY HOLIDAY
nited coastal mountains and filled
the sky with plumes of smoke.
Across Southern California on
Sunday more than 9,000 firefighters battled some 200,000
acres of wildfires. The blazes,
which began last week, have
claimed one life and more than
800 structures, fire officials said.
Over the weekend, progress
was made on many of the six
fires burning throughout Southern California, with significant
containment reached on three
fires in Los Angeles County and
one in San Diego County, fire officials said. The Liberty Fire in
Riverside County was completely
contained. In Ventura and Santa
Barbara counties, however,
Thomas remained only 15% contained Sunday morning, after
having burned 173,000 acres, according to the California Department of Forestry and Fire Protection.
Mandatory evacuations were
expanded early Sunday for portions of coastal Santa Barbara
County, including within the
communities of Carpinteria,
shown above, and Montecito.
—Alejandro Lazo
800 843 3269
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Team Tracks Clues to Fire’s Path
BY ERICA E. PHILLIPS
attempting to predict the fire’s
behavior at a time when increasingly intense and unpredictable wildfires have made
this California’s worst fire season yet.
Their jobs, now more challenging, are more crucial as
the state faces a new dynamic
of fires more frequently burning into densely populated cities and neighborhoods. The job
OJAI, Calif.—The inferno
consuming Ventura County
tore through rustic Matilija
Canyon, razing homes to smoldering foundations and snapping telephone poles at the
base, downing the power lines
that link this tiny community
to the outside world. The wildfire jumped the canyon road—
then stopped at a swath of dry
grass primed to burn.
“That is pretty freaky,” said
Tim Chavez, surveying the
strange path the wildfire had
cut for clues to its next move.
Mr. Chavez, a fire-behavior
analyst, and his team are
tracking a monster with the
power to level neighborhoods,
and trying to predict where it
might strike next. Their daily
reports on the fire’s behavior
are used by fire officials in
planning their daily attack, deploying firefighters and ordering evacuations.
Over the past week, the
Thomas Fire, one of the 20
largest on record in California,
has cut across more than
250 square miles.
Mr. Chavez and his crew are
The fire analysts’ job
is part science, part
art. And these days,
a measure of luck.
is part science, part art. And
these days, a measure of luck.
Mr. Chavez works closely
with Rich Thompson, a meteorologist, and Ventura County
Fire Captain Brendan Ripley to
anticipate what the inferno
will do next.
“We’re wrong a lot,” Mr.
Chavez said. “But you get informed by your mistakes.”
On Friday, Mr. Chavez and
Mr. Thompson sat together at
Cal Fire’s incident command
post at the Ventura County
fairgrounds, monitoring windspeed data from a handful of
portable weather stations they
had deployed near the fire.
Mr. Thompson ran weather
scenarios in a computer program called WindNinja and
passed the results along via
email to a fire captain on the
ground. His wind report provided crews with a detailed
“spot forecast” for the location
where a fire crew was at work.
The program aims to predict
timing and location for the
strongest winds or “squirelly
wind directions” for a particular ridge or canyon.
“We’re like the geek squad,”
Mr. Thompson said.
Mr. Chavez said computer
models only go so far. They
“just give you kind of a gut
check,” he said. Getting into
the field is a must, he said.
Around 11 a.m. Mr. Ripley
joined them, and the threeman team set out to survey
conditions and check in with
fire crews on the ground.
On the drive up into the
hills above Carpinteria, Mr.
Ripley pointed out an embankment covered with grey, dry
overgrowth. “It’s just chomping at the bit to be burned,”
Mr. Thompson said.
The team tracked the
Thomas fire through a
scorched and empty landscape,
past hillside farms and
ranches, through rural communities and down main thoroughfares of the communities
of Ojai and Santa Paula.
The team discussed each
burn scar and active plume as
they drove, trying to determine which direction the fire
had come from and where it
was going based on the vegetation and the lay of the land.
The recent fires have surprised even Mr. Chavez, a 40year veteran firefighter based
in Southern California.
“This is really not the kind
of fire we deal with on a dayto- day basis,” Mr. Chavez said.
“When a fire burns 17,000
acres in one night, it creates a
whole bunch of problems.
You’ve got this gigantic perimeter, very little of it with containment lines…we just have
all this fire, all over the countryside and its all growing.”
no
Civil-rights advocates in
Florida are pushing to put a
fundamental democratic question on the ballot: Should people convicted of felonies be
able to vote?
Florida bars an estimated
1.69 million people with felony
records from voting unless
they successfully petition the
state to regain their rights. Its
population of disenfranchised
people with felony records accounts for more than a quarter
of the 6.1 million nationally, according to the Sentencing Project, which advocates for criminal justice policy changes. Only
Kentucky and Iowa currently
maintain similar restrictions
on voting.
Every state except Maine
and Vermont disenfranchises
felons in some way, but in most
states, they regain the right to
vote either after leaving prison,
or completing probation and
parole. Democratic Gov. Terry
McAuliffe of Virginia has used
executive authority to restore
voting rights to 154,000 former
felons in the past two years.
Organizers in Florida are
pushing to lift voting barriers
through a ballot measure and
have collected hundreds of
thousands of signatures in support ahead of a February deadline to make November’s election. The Florida Constitution
Revision Commission is also
weighing at least three proposed amendments that would
restore voting rights to some
people with felony records.
“What’s at the heart of this
TIFFANY.COM
Starting at
$1,950
www.baume-et-mercier.com
AND THE WINNER IS...
RATED #1 WORLD’S BEST GIN*
CASSI ALEXANDRA FOR THE WALL STREET JOURNAL
BY JON KAMP
AND ARIAN CAMPO-FLORES
n-
In Florida, a Push to Let Ex-Felons Vote
|
ly
.
CARPINTERIA, Calif.—Reinvigorated by strong winds, Southern
California’s largest wildfire blazed
into new terrain early Sunday
morning, forcing new evacuations
in two wealthy Santa Barbara
County communities.
Fire crews scrambled north
from Ventura to protect hillside
homes as the 173,000-acre fire,
known as the Thomas Fire, ig-
*Cigar & Spirits Magazine
March 2016 Issue
Jhody Polk, a mother of two who works for the ballot campaign, served seven years in prison.
issue is whether or not, when a
person has served their time
and paid back their debt to society, should they have their
rights restored?” said Desmond
Meade, a 50-year-old former
felon leading the ballot effort.
In Florida, felons must wait
five to seven years after completing sentences to reapply
for their civil rights, after
which it takes another nine
years on average to even have
their petitions heard, according
to the state office that oversees the process.
“The system we have in
Florida is not working,” said
Howard Simon, executive director of the American Civil
Liberties Union of Florida,
which has financially backed
the ballot effort.
During the seven-year tenure of Gov. Rick Scott, a Repub-
lican, regaining those rights
has gotten harder. Roughly
2,900 people have regained
their voting rights under the
current governor, compared
with 155,000 people under his
predecessor, Charlie Crist.
A spokeswoman for Mr.
Scott said he believes in the
state’s clemency process.
There is no guarantee the
Florida measure will make next
year’s ballot. To get there, the
campaign needs 766,200 valid
signatures from registered voters by Feb. 1 and must clear
thresholds in half the congressional districts. So far, more
than 950,000 signatures have
been collected and submitted
to county supervisors for review, according to the campaign. State records show that
more than 490,000 signatures
have been validated thus far.
No Vote
States with the highest number
of people disenfranchised due to
felony convictions
*October 2014 Issue
Florida
Virginia*
Texas
Tennessee
Kentucky
Alabama
Georgia
California
Discover More At
NOLETSGin.com
Arizona
Mississippi
0 million
1
*Figure predates Gov. Terry McAuliffe’s
large-scale restoration of voting rights to
former felons.
Source: The Sentencing Project
THE WALL STREET JOURNAL.
2
*Cigar & Spirits Magazine,
October 2014 & March 2016
PLEASE DRINK RESPONSIBLY
NOLET’S® Silver 47.6% Alc./Vol.
(95.2 Proof)
©2017 Imported by NOLET’S
US Distribution, Aliso Viejo, CA.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A4 | Monday, December 11, 2017
P
W
L
C
10
11
12
H
T
G
K
B
F
A
M
1
2
3
4
5
6
7
8
9
O
I
X
X
**
THE WALL STREET JOURNAL.
U.S. NEWS
Health-Law Mandate Exemptions to Rise
BY LOUISE RADNOFSKY
AND STEPHANIE ARMOUR
As congressional Republicans are poised to repeal the
Affordable Care Act’s requirement that most people get insurance or pay a penalty, some
conservatives argue the move
might be less disastrous for the
law than Democrats predict.
Senate Republicans included
a measure to repeal the mandate in their recently passed tax
overhaul; the House didn’t,
leaving GOP leaders to hammer
out a final agreement for the
compromise bill they hope to
pass by year’s end. President
Donald Trump on Friday night
threw his weight behind the
push to strike the mandate,
promising a crowd in Pensacola,
Fla., that it would soon be gone.
But some experts say the impact of undoing the so-called
individual mandate might not
be as devastating to the ACA as
was thought a few years ago.
Rising premiums mean more
people are exempt from the insurance requirement, and exceptions or exemptions granted
during the Obama administration have also reduced the number of people obligated to get
coverage.
Others say the penalty was
never big enough to persuade a
critical mass of people to buy
insurance, so repealing it might
not cripple the individual
health-insurance market.
“It will still be really
healthy,” said Avik Roy, a
health-policy expert who ad-
vised Sen. Marco Rubio (R.,
Fla.) during his presidential
campaign. “It’s a weak mandate
that has all sorts of loopholes.”
Not everyone is persuaded.
Many Democrats say repealing
Rising premiums
mean more people are
exempt from the
insurance requirement.
the mandate would shred the
ACA as younger, healthier people decline to get coverage,
raising costs for older and
sicker individuals. That, they
warn, would plunge the individ-
ual insurance market into a
fresh round of premium spikes
and insurer withdrawals.
“Any Republican who backs
this tax plan is backing a
health-care repeal,” said Brad
Woodhouse, director of the Protect Our Care campaign, which
backs the ACA.
The landscape was different
as recently as 2012. During a
Supreme Court battle over the
constitutionality of the insurance requirement that year, liberals and conservatives agreed
it was essential to the ACA.
But now, more experts are
concluding that rising premiums next year would exempt
many more people from the
mandate. The exemption applies if the least-expensive
health insurance available costs
more than 8.13% of an individual’s income.
The Robert Wood Johnson
Foundation, a think tank whose
research typically supports liberal assessments of the ACA,
found in a recent study that in
the 15 most-expensive states,
premiums would exceed the affordability threshold for a person with an income of $50,000.
Doug Badger, a conservative
health-policy analyst, wrote
recently,
“Premiums
for
Obamacare policies next year
will be so high that millions
will be exempt from the tax
penalty whether Congress repeals it or not.”
Republicans say health-insurance markets have struggled
for years under the ACA because not enough healthy peo-
ple signed up for coverage even
with the mandate. As a result,
they say, the ACA already suffers from the problems liberals
are warning about.
“That was the theory. The
challenge was human behavior
decided otherwise,” Alex Azar,
President Donald Trump’s nominee for Health and Human Services Secretary, said at a congressional hearing in late
November. He continued,
“Twenty-eight million people
are not in that pool, and it
eroded the risk pool.”
The Congressional Budget
Office has projected that about
29 million Americans are uninsured. Of them, about 6.7 million people paid a penalty for
not having coverage of $695 in
2016, or 2.5% of their income.
BORN TO DARE AND BLACK BAY ARE ® TRADEMARKS. NEW YORK.
TUDOR
BRYNN ANDERSON/ASSOCIATED PRESS
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Supporters of Democratic Senate candidate Doug Jones cheered at a rally Saturday in Birmingham, Ala.
BLACK BAY
the-vote events, including a
Sunday rally in Birmingham
headlined by Sen. Cory Booker
(D., N.J.).
Mr. Booker also spoke at Alabama State University, a historically black school in Montgomery, on Sunday with Mr.
Jones. “I don’t want this state
to make this mistake that I’ve
made in the past,” Mr. Booker
said. “I’ve seen that bad people get elected when good people don’t vote.”
Mr. Jones has been visiting
churches, a power center in the
African-American community
that Democrats have long
turned to for support. Black voters make up about 25% of Alabama’s electorate.
“The black church is kind of a
special different entity. The
black congregation follows the
pastor,” said the Rev. G.W.C.
Richardson Jr. of Hutchinson
Missionary Baptist Church in
Montgomery. But Mr. Richardson said he hasn’t spoken with
Mr. Jones since before the candidate secured the Democratic
nomination in August.
Mr. Richardson added that
some conservative Christian
blacks may find Mr. Moore’s antiabortion stances reassuring,
and he suggested that he
wouldn’t be devastated if Mr.
Moore won. “Because he’s a
Christian, I think that he would
project what’s right in a strong
way,” Mr. Richardson said of the
former Alabama chief justice.
Mr. Jones has said he favors
abortion rights.
The Jones campaign has also
targeted students at historically
black colleges and universities,
including Tuskegee, Alabama
State and Alabama A&M. Some
black student leaders say Mr.
Jones could have done
more. Activist groups, such as
Woke Vote, also have sought to
step in late in the race and energize younger African-Americans.
Brett Doster, a Moore campaign strategist, said that campaign also believed it had support among black voters. “If
ultraliberal, pro-choice Doug
Jones is counting on winning
based on support in the AfricanAmerican community, he will
lose,” Mr. Doster said.
Because of past races for positions on the Alabama Supreme
Court, the Moore campaign has
a fuller statewide operation in
place, but it faces some disadvantages.
The Senate GOP’s campaign
arm and the Republican National Committee had ended
joint fundraising agreements
with the Moore campaign last
month when allegations against
him emerged. The RNC restored
its support for Mr. Moore after Mr. Trump officially endorsed him last week, but it
sent no staff to help and just
$50,000 in funds.
In Polls, Economy Is a Bright Spot for Trump
BY ELI STOKOLS
Although President Donald
Trump’s overall approval ratings have dropped to the
lowest point of his presidency, he is getting significantly higher marks in one
important area: his handling
of the economy.
With the U.S. unemployment rate holding at a 17year low, hiring strong and
the stock market hitting regular records, Mr. Trump is
getting stronger reviews
from the public on the economy, with 42% approving and
37% disapproving, according
to the most recent Wall
Street Journal/NBC News
survey, conducted in late October.
That stands in stark contrast to his overall approval
rating, which dropped last
week to 32%, the lowest
point of his 11-month presidency, according to a Pew
Research Center poll. His
disapproval rating of 68% in
the same survey was also a
new high.
The WSJ poll showed the
president with a 38% approval rating, his lowest to
date in this poll, while 58%
disapproved of his overall
performance.
A Gallup survey from November showed the president’s approval rating for his
handling of the economy at
45%, eight points ahead of
his overall approval number,
which sagged to 37%.
KEVIN LAMARQUE/REUTERS
n-
was elected as lieutenant governor in 2006.
Giles Perkins, the Jones campaign chairman, said staff has
had to cull data “county by
county” to build a voter database. “We had to go out and get
whatever existing voting data
there was,” Mr. Perkins said.
“There’s a lot of baseline voter
files…that helped us refine who
we talked to.”
U.S. Rep. Terri Sewell (D.,
Ala.) said the Jones campaign
would have to “overperform”
in Democratic hubs such as
Birmingham, Montgomery and
Selma, all of which are at least
partially inside her district.
Ms. Sewell’s office helped the
campaign organize get-out-
no
Continued from Page One
structure and get-out-the-vote
operation that is a real operation, on a scale that’s never
been seen before.”
Mr. Jones had edged ahead
of Mr. Moore in many public
surveys right after Mr. Moore’s
accusers began to come forward
last month. But Mr. Moore appears to have regained ground
and is now leading Mr. Jones by
3.8 points in the Real Clear Politics average of polls.
A Moore victory would maintain the GOP’s 52-48 majority in
the Senate, a crucial margin for
pressing the agenda of the
party’s congressional leaders
and Mr. Trump. An upset win
for Mr. Jones would give the
Democratic Party momentum
going into the 2018 midterms
after election wins in Virginia and elsewhere that were
widely seen as a referendum on
Mr. Trump’s administration. It
would also improve their odds
of retaking the majority in the
Senate. The winner will serve
the remaining three years of the
Senate term.
Mr. Moore’s campaign on
Sunday also sought to cast the
Alabama race as a referendum
on the president, but in a state
that Mr. Trump won by 28
points over Hillary Clinton. Friday in Pensacola, which is in the
same media market as Mobile,
Ala., Mr. Trump said, in reference to the Democratic congressional leaders: “We can’t afford
to have a liberal Democrat who
is completely controlled by
Nancy Pelosi and Chuck
Schumer.”
The Jones campaign has
been scrambling to galvanize
voters in part because it was
unprepared at the onset for a
truly competitive race, according to Democratic strategists,
African-American pastors, black
college students, activists and
other Democratic stakeholders
across Alabama. The last Democrat to win a major statewide
race was Jim Folsom Jr., who
ly
.
VOTE
Voters give President Donald
Trump credit on the economy.
“He’s a political contortionist in that he has high
economic numbers and very
low personal approval ratings. That’s almost impossible to do,” said Peter Hart, a
veteran Democratic pollster.
On Friday, the White
House celebrated the December jobs report that showed
the economy gaining 228,000
jobs in November.
“President Trump’s bold
economic vision continues to
pay off,” White House Press
Secretary Sarah Huckabee
Sanders said in a statement
that also referenced an increase in manufacturing jobs
since the president took office. “As we continue to unleash the American economy
from unnecessary regulation
and taxes, we look forward
to seeing more reports like
this, showing a healthy and
thriving jobs market for the
American people.”
The president expects to
sign a final version of the
GOP’s $1.4 trillion tax overhaul before the end of the
year. White House political
director Bill Stepien, who
didn’t respond to a request
to comment, has expressed
confidence in the past that
strong economic numbers,
especially in the states Mr.
Trump won in 2016, will be
enough to help him overcome
other political liabilities.
"The issues that drove the
2016 election—change Washington and fix the economy—
continue to break President
Trump’s way. Today’s strong
economy is a bulwark for the
party in power as it faces the
electorate next year in congressional elections,’’ said
Bill McInturff of the Republican polling firm Public Opinion Strategies. Mr. McInturff
directs the Journal/NBC
News poll with Democrat
Fred Yang.
Mr. Hart isn’t so sure. He
pointed to a recent focus
group he conducted with
North Carolina voters. He
said they were less willing to
forgive Mr. Trump’s sometimes controversial behavior
amidst a strong economy
than they were with President Bill Clinton two decades
earlier.
“During the Clinton impeachment, people said,
‘Look, the economy is doing
fine.’ They weren’t in a mood
to pursue impeachment,” Mr.
Hart said. “What’s different
now is the country is looking
for an equilibrium and the
president keeps the country
constantly on edge. There’s
never enough of a lull for
voters to get their breath
and say, ‘I’m comfortable.’
And that’s why Trump
doesn’t get the full political
benefit of the economic
growth.”
Some administration allies
have been trying to impress
upon the president and his
communications team that he
would be in a stronger position if he created fewer distractions with his tweets, according to people familiar
with those conversations.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A5
no
n-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
With IBM Services and
Watson, customer service
ag
gents canít exactly read
minds, but they can know
which customers to
he
elp ˇrst and how to help
th
hem better. This helped
on
ne company to reduce call
re
esolution times by 99%
an
nd saved another company
$1
11.2 million a year. Find
ou
ut more at ibm.com/you
Th
his is customer service
to
o the power of IBM.
ly
.
I CAN KNOW
THOUSANDS OF
IBM and its logo, ibm.com and Watson are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. See current list at ibm.com/trademark. Other product and service names might be trademarks of IBM or other companies. ©International Business Machines Corp. 2017.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A6 | Monday, December 11, 2017
* ****
THE WALL STREET JOURNAL.
U.S. NEWS
Infrastructure Plan Faces
Rough Road in Congress
ELAINE THOMPSON/ASSOCIATED PRESS
BY TED MANN
A roadway project in Seattle in September. The White House says voters want a rebuilding plan.
WASHINGTON—The White
House is preparing to roll out
a long-delayed infrastructure
plan in January, as President
Donald Trump’s advisers bet
that voters want a $1 trillion
road-and-bridge-building
plan—even though it is opposed by some lawmakers.
Mr. Trump’s advisers are
putting finishing touches on a
plan to direct federal spending
of $200 billion or more—funds
it would propose to offset with
cuts elsewhere in the federal
budget—to leverage hundreds
of billions more from local
governments and private investors to pay for road, rail,
water and utility upgrades.
Big legislation can be more
difficult in an election year,
but Mr. Trump’s political advisers say they believe they
have public support. That runs
counter to widespread doubts
in Washington that Congress
would want to craft a major
spending initiative on the
heels of a tax package that
could raise the deficit by more
than $1 trillion.
Polling shared with the
White House recently shows
majority support for an investment in infrastructure among
groups that have favored Mr.
Trump. But the issue also polls
well among groups that disapprove of his performance.
“Infrastructure is an issue
through which we can move
people into the president’s job
approval column,” Deputy
Press Secretary Lindsay Walters said.
First, the administration
will have to get a bill past resistant lawmakers. They include GOP spending hawks,
centrist Republicans who rejected proposed budget cuts
this spring and Democrats who
want any infrastructure to be
paid for directly by the federal
government.
Republicans have been
skeptical of some other budget
moves that could bode ill for
plans to find $200 billion in
cuts. A Senate subcommittee
undid many of the administration’s proposed reductions to
highway and rail funding programs in July, for instance.
The infrastructure package
was further complicated by the
passage of the House and Senate tax-cut bills, a senior White
House official acknowledged.
The bills close off one alternative option for funding because revenue from a one-time
tax on foreign corporate profits would be used to lower
rates, not fund a building plan.
The House bill also eliminates the tax advantage of taxfree bonds that are common in
public-private
partnership
deals of the type the administration wants.
Taxman Cometh: Marginal Rates Could Top 100% for Some
WASHINGTON—Some highincome business owners could
face marginal tax rates exceeding 100% under the Senate’s
tax bill, far beyond the listed
rates in the Republican plan.
That means a business
owner’s next $100 in earnings,
under certain circumstances,
would require paying more
than $100 in additional federal
and state taxes.
As lawmakers rush to write
the final tax bill over the next
week, they are looking at
changes to prevent this from
happening. Broadly, House and
Senate Republicans are trying
to reconcile their bills, looking
for ways to pay for eliminating
the most contentious proposals. The formal House-Senate
conference committee will
meet on Wednesday, and GOP
lawmakers may unveil an
with three children and earnings of about $615,000. Getting $100 more in business income would force the lawyer
to pay $105.45 in federal and
state taxes, according to calculations by the conservativeleaning Tax Foundation. That
is more than double the marginal tax rate that household
faces today.
If the New Jersey lawyer’s
stay-at-home spouse wanted a
job, the first $100 of the
spouse’s wages would require
$107.79 in taxes. And the tax
rates for similarly situated residents of California and New
York City would be even
higher, the Tax Foundation
found. Analyses by the Tax
Policy Center, which is run by
a former Obama administration official, find similar results, with federal marginal
rates as high as 85%, and those
don’t include items such as
state taxes, self-employment
taxes or the phase-out of child
tax credits.
The bill would provide incentives for business owners
to shift profit across calendar
years, move personal expenses
inside the business and engage
in other maneuvers, said David
Gamage, a tax-law professor at
Indiana University.
“I would expect a huge taxgaming response once people
fully understand how it
works,” said Mr. Gamage, a
former Treasury Department
official.
The analyses “raise a valid
concern” that lawmakers are
examining, said Julia Lawless,
a spokeswoman for the Senate
Finance Committee.
“With any major reform,
there will always be unusual
hypotheticals delivering anomalous results,” she said.
Marginal tax rates are dif-
ferent from average tax rates.
A marginal rate is the tax on
the edge, or margin, of one’s
earnings, and so it reflects
what would be the next dollar
of income. The average rate is
a way of measuring a taxpayer’s total burden.
Here’s how that New Jersey lawyer’s marginal rate
adds up to more than 100%:
The household is paying
the 35% marginal tax rate on
their income range. Or, they
are paying the alternative minimum tax, which operates at
the same marginal rate in that
income range.
The household is paying
New Jersey’s highest incometax rate, which is 8.97%, and
now has to pay all of that because the Republican tax plan
wouldn’t let such state or local
taxes be deducted from federal
income.
The household is also los-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
agreement by week’s end.
The possible marginal tax
rate of more than 100% results from the combination of
tax policies designed to provide benefits to businesses and
families but then deny them to
the richest people. As income
climbs and those breaks phase
out, each dollar of income
faces regular tax rates and a
hidden marginal rate on top of
that, in the form of vanishing
tax breaks. That structure
would create some of the disincentives to working and to
earning business profit that
Republicans have complained
about, while opening lucrative
avenues for tax avoidance.
As a taxpayer’s income gets
much higher and moves out of
those phaseout ranges, the
marginal tax rates would go
down.
Consider a married, selfemployed New Jersey lawyer
ing a deduction the Senate created for so-called pass-through
businesses such as partnerships and S corporations. That
23% deduction is fully available to owners of service businesses like law firms, but only
if income is below $500,000
for a married couple.
The Republican bill doubles the child tax credit to
$2,000 but phases it out beginning at $500,000 income
for joint filers.
The analysis assumes that
the lawyer is paying a 3.8% tax
on self-employment income.
Pushing marginal rates
lower on these households
would require tradeoffs. Republicans could make the
phaseout of the business deduction more gentle, spreading
it over, say, $200,000 of income above $500,000. But that
would make the tax cuts bigger.
ly
.
BY RICHARD RUBIN
BUY 4 BACON WRAPPED
FI LET MIGNONS
Int
LOroduct
W ory P
ASrice!
$1
9 65
ea
ch
FOR $84.95* AND GET
95 *
no
free!
teaks
Get 4 S
n-
bacon
4 wrapped
filet MignoNS free
OFF
ER
84
HO
$
DAY
LI
Advance Release:
Order Your New U.S. 2018 Silver Dollars Now!
M
illions of people collect the American
Eagle Silver Dollar. In fact it’s been
the country’s most popular Silver
Dollar for over thirty years. Try as they might,
that makes it a very hard “secret” to keep
quiet. And right now, many of those same
people are lining up to secure the brand new
2018 U.S. Eagle Silver Dollars — placing their
advance orders now to ensure that they get
America’s newest Silver Dollar just as soon as
the coins are released by the U.S. Mint in
January. Today, you can graduate to the front
of that line by reserving your very own 2018
American Eagle Silver Dollars — in stunning
Brilliant Uncirculated condition — before
millions of others beat you to it.
America’s Brand New Silver Dollar
This is a strictly limited advance release of one
of the most beautiful silver coins in the world.
Today you have the opportunity to secure
these massive, hefty one full Troy ounce U.S.
Silver Dollars in Brilliant Uncirculated (BU)
condition. The 100-year-old design features a
walking Lady Liberty draped in a U.S. flag on
one side and a majestic U.S. Eagle and shield
on the other.
4 (6 oz) Bacon Wrapped Filet Mignons (#V348) Now $84.95*
ORD E R BY NOON (ct) DEC 19 th
F O R
C H R I S T M A S
D E L I V E R Y
KansasCitySteaks.com
SEARCH PRIORITY CODE: A712W7
OR CALL
8 00 793 9144
Offer expires 12/31/2017. *$12.95 Shipping
applies to standard delivery only. Limit of 5
shipments per customer. Steaks and 8 (4.5 oz)
Steakburgers ship in the same cooler to the same
address. Additional shipping charges apply for
Overnight, Saturday, Alaska and Hawaii deliveries.
Not valid with other offers.
Actual size
is 40.6 mm
The Most Affordable Precious
Metal—GOVERNMENT
GUARANTEED
Silver is by far the most affordable of all
precious metals — and each full Troy ounce
American Eagle Silver Dollar is governmentguaranteed for its 99.9% purity, authenticity,
and legal tender status.
A Coin Flip You Can’t Afford to Lose
affordable price? We’re doing it to introduce
you to what hundreds of thousands of smart
collectors and satisfied customers have known
since 1984 — GovMint.com is the place to
find the world’s finest coins.
Lock In Your Reservation
Call today to reserve some of the very first
brand new Brilliant Uncirculated 2018
American Eagle Silver Dollars. Your reservation and price will be locked in, and your
stunning new Silver Dollars will be shipped to
you just as soon as the U.S. Mint releases the
coins in January.
Call Now And Beat the Crowd!
The American Eagle Silver Dollar is one of the
best selling and most widely collectedsilver
coins in the world, with millions sold each
year. Don’t miss out on this exclusive advance
release—call immediately and secure your very
own American Eagle Silver Dollars ahead of
the crowd!
2018 American Eagle Silver Dollar BU
1-4 Coins 5-9 Coins 10-19 Coins 20+ Coins -
$20.70 ea + s/h
$20.20 ea + s/h
$19.95 ea + FREE SHIPPING
$19.65 ea + FREE SHIPPING
FREE SHIPPING on 7 or More!
Limited time only. Product total over $149 before taxes
(if any). Standard domestic shipping only. Not valid on
previous purchases.
Call today toll-free for fastest service
1-800-514-6468
Offer Code ESB456-19
Please mention this code when you call.
Why are we pre-releasing the most popular
Silver Dollar in America for a remarkably
GovMint.com • 14101 Southcross Dr. W., Suite 175
Dept. ESB456-19 • Burnsville, MN 55337
Prices and availability subject to change without notice. Facts and figures, including market values and the current population of specific graded,
autographed or pedigreed coins are deemed accurate as of December 2017 and may change significantly over time. NOTE: GovMint.com® is a private
distributor of worldwide government coin and currency issues, and privately issued and licensed collectibles, and is not affiliated with the United
States government. GovMint.com is not an investment company and does not offer financial advice or sell items as an investment. The collectible coin
market is speculative, and coin values may rise or fall over time. All rights reserved. © 2017 GovMint.com
THE BEST SOURCE FOR COINS WORLDWIDE™
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A6A
no
n-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
NY
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A6B | Monday, December 11, 2017
NY
THE WALL STREET JOURNAL.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
A
D
E
T
A
N
I DO
no
n-
A CHILD’S ABILITY TO READ HAS
A BIG IMPACT ON THEIR FUTURE.
DONATE AND GIVE THE GIFT
OF LITERACY, OPPORTUNITY,
AND SELF-SUFFICIENCY.
HELP US AT READNYC.ORG
#SPREADTHEWORDS
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A7
* * * * *
WORLD NEWS
Protests Quickly Lose Steam in Mideast
U.S. decision to move
its Israel embassy to
Jerusalem spurs outcry
in Palestinian territories
Protesters in Lebanon tried to remove barbed wire from a road near the U.S. Embassy during a demonstration on Sunday.
Three Held in Attack
On Swedish Temple
HELSINKI—Three people
have been arrested for allegedly throwing firebombs at a
synagogue in the Swedish city
of Göteborg, the second antiJewish attack in the Nordic nation in two days.
No one was injured in the
attack late Saturday during a
youth event at the synagogue
and the adjacent Jewish center
in Sweden’s second-largest city.
Göteborg police spokesman Peter Nordengard said on Sunday
it is being investigated as an
attempted arson. Jewish
groups condemned the attacks
and demanded that authorities
take action.
The attack took place after
some 200 people rallied late Fri-
day in the southern city of
Malmo, yelling anti-Jewish slogans and waving Palestinian flags
to protest U.S. President Donald
Trump’s decision to recognize Jerusalem as Israel’s capital.
On Saturday, Swedish Foreign Minister Margot Wallstrom tweeted that those who
called for Jews to be killed did
something “totally unacceptable.”
—Associated Press
mains undeterred in its efforts
to help achieve peace between
Israelis and Palestinians and
our peace team remains hard
at work putting together a
plan,” said Alyssa Farah, a
spokeswoman for Mr. Pence.
In a television interview,
U.S. Ambassador to the United
Nations Nikki Haley on Sunday
defended Mr. Trump’s decision, calling it a courageous
move that would further the
Mideast peace process.
Israeli officials have mostly
welcomed the move, saying it
reflects the reality on the
ground. Most Israeli government buildings are in Jerusalem and Israelis have long
considered it their capital.
Israeli Prime Minister Benjamin Netanyahu held talks in
Paris on Sunday with French
President Emmanuel Macron,
who has criticized the U.S. de-
cision. In a news conference
following the meeting, Mr. Netanyahu said Jerusalem is Israel’s capital, just as Paris is
the capital of France. Mr. Macron condemned recent attacks against Israel, but reiterated his opposition to Mr.
Trump’s declaration, and
urged Mr. Netanyahu to make
“courageous gestures” of
peace toward Palestinians.
Elsewhere,
protesters
ly
.
Bank and Gaza Strip.
In Jerusalem, police arrested a 24-year-old Palestinian assailant after he stabbed
an Israeli man in what authorities said was a terrorist attack, although this appeared
to be an isolated incident. The
Israeli suffered wounds to his
upper body and was taken to
the hospital, Israeli authorities
said.
Diplomatic steps to penalize the U.S. or Israel have also
been muted, although Palestinian Authority President
Mahmoud Abbas said he
would cancel a planned meeting with U.S. Vice President
Mike Pence this month. Mr.
Abbas has also said the U.S.
decision disqualifies Washington from any peacemaking
role.
Mr. Pence’s office called Mr.
Abbas’s decision unfortunate
and a missed opportunity to
discuss the region’s future.
“The administration re-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
TEL AVIV—Pockets of anger
surfaced in the Middle East
and Asia over the Trump administration’s decision to recognize Jerusalem as Israel’s
capital, but predictions of
widespread upheaval failed to
materialize as riots petered out
in the Palestinian territories.
Protesters gathered outside
the U.S. Embassy in Beirut on
Sunday, with Lebanese security forces firing tear gas and
water cannons. Demonstrators
carried Palestinian flags and
set fire to tires near the embassy, but the unrest had
largely calmed by late afternoon.
Last week’s decision to recognize Jerusalem as Israel’s
capital and move its embassy
there from Tel Aviv was
widely condemned in Lebanon,
which hosts about half a million Palestinian refugees—representing roughly 10% of the
country’s population.
The status of Jerusalem is a
highly charged issue because
Palestinians claim East Jerusalem as the capital of a future
state. The White House has
said its decision doesn’t preclude the establishment of
East Jerusalem as the capital
of a Palestinian state should
Israelis and Palestinians agree
to such a scenario in peace
talks.
Arab and Muslim leaders
have warned that President
Donald Trump’s decision could
spark a Palestinian uprising
against Israel and violence
across the Mideast, as well as
complicate the peace process.
However, after three days
of clashes between Palestinians and Israeli forces that left
four Palestinians dead, the
scene on Sunday was quieter
in East Jerusalem, the West
WAEL HAMZEH/REX/SHUTTERSTOCK/EUROPEAN PRESSPHOTO AGENCY
BY RORY JONES
staged marches in Cairo, Istanbul and Amman over the
weekend, and thousands of Indonesians took to the streets
of Jakarta on Sunday against
the U.S. move.
The most notable fallout
from the U.S. decision came on
Saturday,
when
Israel
launched airstrikes at Hamas
positions in response to rocket
fire from the Gaza Strip. Three
people were killed in the
strikes and more than 20 were
injured, the Palestinian Authority’s state news agency reported Gazan health authorities as saying.
Hamas had called for a Palestinian uprising against Israel
after Mr. Trump’s decision. It
has also fought three wars
with Israel over the past decade, and while exchanges of
fire between the Israeli military and Gaza are common, Israelis fear that such firing
could escalate into a broader
conflict.
The Israeli military said
Sunday it had discovered and
destroyed a tunnel penetrating
Israel from Gaza, dug by
Hamas militants to attack Israel. The Israeli military
mounted a ground campaign
in Gaza in 2014 to destroy tunnels constructed by Hamas.
A Gazan man also died on
Friday after clashing with Israeli soldiers near the border
fence with Israel. Thousands
of Palestinians clashed with
Israeli soldiers on Friday in
cities across the West Bank
but only hundreds turned out
on Saturday and Sunday.
The muted response speaks
to a reluctance to follow calls
from Palestinian leaders for
prolonged protest. Mr. Abbas
is deeply unpopular among
Palestinians after more than
10 years of rule, while Gazans
also are frustrated by Hamas’s
control of the strip and deep
economic stagnation there.
—Raja Abdulrahim in Beirut,
Sam Schechner in Paris
and Felicia Schwartz
in Washington
contributed to this article.
Watching your 8-year-old mix and match potions,
you see “Distinguished Chemistry Scholar” in her future.
U.S.
STOCKS
IVV
no
n-
And a tuition bill in yours.
WHEN INSPIRATION HITS,
BUILD FOR WHAT’S NEXT.
U.S.
BONDS
AGG
INT’L
STOCKS
IEFA
Build for their future with iShares Core ETFs.
At 1/10th the cost of typical mutual funds, iShares Core ETFs
can help you keep more of what you earn.1
INSPIRED TO BUILD.
iShares.com/build
1. Source: BlackRock and Morningstar, as of 12/31/16. Comparison is between the average Prospectus Net Expense Ratio for the iShares Core Series ETFs (0.08%) and the
average Prospectus Net Expense Ratio of active open-end mutual funds (1.17%) available in the U.S. on 12/31/16. Visit www.iShares.com or www.BlackRock.com to
view a prospectus, which includes investment objectives, risks, fees, expenses and other information that you should read and consider carefully
before investing. Investing involves risk, including possible loss of principal. Buying and selling shares of ETFs will result in brokerage commissions. TheiShares funds
are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). © 2017 BlackRock. All rights reserved. iSHARES and BLACKROCK are registered trademarks
of BlackRock. All other marks are the property of their respective owners. 242339
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A8 | Monday, December 11, 2017
NY
* ****
THE WALL STREET JOURNAL.
WORLD NEWS
Says
Setbacks Mar Big Philippine Win Iraq
It Is Clear
Government struggles
to rehabilitate a city
laid waste by a battle
with Islamist militants
Of Islamic
State
A soldier views destruction caused by months of heavy fighting earlier this year between the military and Islamic State-linked fighters.
Marawi residents, the former
textiles trader had no insurance.
“When we saw the house
we cried because all of our effort and all our belongings are
gone,” he said, flanked by four
generations of relatives who
Much of Marawi
remains closed as
soldiers sweep for
improvised explosives.
In an interview in the bullet-strafed
remains
of
Marawi’s Grand Mosque, Mr.
Castro said the government
hasn’t worked out how much
the process will cost, though
some estimates place it at up
to $1.8 billion.
Meanwhile, nearly 1,200
temporary shelters are being
built for displaced people and
more than 2,700 permanent
houses are planned, to be
funded by a private donation.
Recent reports from human-rights groups about soldiers torturing or executing civilians have further fanned
hostility toward the liberators.
The military said it welcomes
any probe and doesn’t tolerate
rights violations.
Underlying this broad distrust are decades of marginalization of the minority Muslim
population of the southern
Philippines by successive governments, including the colonial authorities of Spain and
the U.S., which governed the
country successively for about
350 years.
That experience spawned
dozens of separatist groups
before the recent wave of violent extremists inspired by Islamic State. Once-violent older
groups that have rejected the
extremists, such as the Moro
Islamic Liberation Front, or
MILF, have sought peace in exchange for autonomous government.
An agreement on self-rule
for the small majority-Muslim
part of the country has been
reached, but the Philippine
Congress has been slow to
pass necessary legislation.
MILF leaders warn they could
lose control over their fighters
if the legislation doesn’t pass.
Philippine President Rodrigo Duterte has urged lawmakers to move fast on the
legislation. If it doesn’t pass
soon, he said in October, “we
are headed for trouble.”
lived in the house with him.
“This is not just a house. This
is our roots and all our hard
work.”
Felix Castro, a retired general now charged by the government with coordinating rebuilding,
said
“the
reconstruction
will
take
years.”
Iraq said it had retaken the
last pockets of territory held
by Islamic State in the country, more than three years after the insurgents overran
about a third of Iraq and
threw the wider region into
chaos.
Military commanders said
Iraqi forces had finished clearing a vast but sparsely populated desert area in the west
of the country on Saturday,
taking control of the border
with Syria and marking the
end of Islamic State’s occupation.
“Your land has been fully
liberated and your cities,
towns and villages have returned to the nation’s embrace,” Prime Minister Haider
al-Abadi said in a speech,
flanked by members of the security forces.
Iraqis celebrated the announcement and members of
the international coalition that
has backed the campaign
against Islamic State sent congratulations, while signaling
challenges ahead.
The cost of victory has been
high. A large part of the country is ruined, thousands of civilians and soldiers have been
killed, and many people displaced.
Although Islamic State has
been dealt multiple blows in
recent months—losing its defacto capital Raqqa in Syria,
and Mosul, its stronghold in
Iraq— the group hasn’t been
wiped out.
Militants continue to hold
shrinking territory in Syria;
active affiliates in Afghanistan, Libya and Egypt still
claim allegiance to Islamic
State.
And even as its so-called
caliphate has crumbled in Iraq,
Islamic State has managed to
survive as a deadly insurgency.
ly
.
Officials say Islamist groups
are already seeking to recruit
young men from the many refugee camps crowded with people who lost their livelihoods
in the battle.
Much of Marawi remains
closed as soldiers sweep for
improvised explosives. The
city was attacked on May 23
by hundreds of militants
funded and inspired by Islamic
State, who were joined by dozens of foreign fighters seeking
to declare a caliphate, or Islamic kingdom. At least 165
Philippine security personnel
and 47 civilians died in the ensuing battle, as well as nearly
1,000 militants. Aerial bombardment left the city in ruins.
Hadj Esmail M. Abaton, 77
years old, returned to his
house in late November to find
almost everything destroyed.
The metal roof had fallen in,
charred belongings dotted the
floor and broken furniture was
rusting away. Like most
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
MARAWI, Philippines—The
Philippine military scored a
victory against international
extremism when it drove Islamic State-linked fighters
from this city in October, but
that success is now in peril as
the government discovers as
many pitfalls in rebuilding
Marawi as in liberating it.
The city was decimated in
the battle, fought over five
months with U.S. surveillance
support. The government is
now turning to the task of rebuilding and resettling nearly
400,000 people displaced by
the fighting, while it pushes
for new legislation that would
give greater autonomy to marginalized Muslim-majority areas of Mindanao, the Philippines’ southernmost main
island, in the hope of deterring future conflict.
How it meets those challenges, residents and community leaders say, will determine whether the victory in
Marawi can be a springboard
to longer-term peace or end
up providing new fervor for an
insurgency inspired by Islamic
State.
The rebuilding process is
beginning to fray before new
bricks are laid, as sentiment
turns against the government
for what many residents see
as its heavy-handed use of airstrikes in the campaign to recapture Marawi.
“We hate ISIS, but we also
know the one who destroyed
our homes, our properties, is
the military, by using the airstrikes,” said Agakhan Sharief,
a Muslim leader who served as
an intermediary in unsuccessful talks between the militants
and the government. “If they
don’t fulfill what they have
promised to the victims of
Marawi city, [residents] could
be turning to more radicalization.”
BY GHASSAN ADNAN
AND ISABEL COLES
JES AZNAR FOR THE WALL STREET JOURNAL
BY JAKE MAXWELL WATTS
FROM PAGE ONE
BITCOIN
n-
Continued from Page One
digitally from their phones, even
when a bank isn’t involved. This
has made it easier for individual
investors to pile into bitcoin and
they, in turn, have pushed it into
the cultural mainstream.
The singer Katy Perry recently posted a picture of herself on Instagram talking with
Warren Buffett and said she
asked him about cryptocurrencies (she didn’t reveal his advice).
CBS’s
“Big
Bang
Theory”—the top-rated show on
U.S. television—devoted a recent episode to a story revolving
around bitcoin.
All this puts bitcoin’s recent
ascent in a different category
from gyrations witnessed in
prior years. “I’m still wrapping
my head around cryptocurrency
being cool now,” said Neeraj
Agrawal, the 29-year-old director of communications at Washington, D.C.-based Coin Center, a
nonprofit cryptocurrency research and advocacy organization. “It doesn’t feel natural for
crypto to be cool because of
how nerdy it is.”
Indeed, many people buying
bitcoin today aren’t quite sure
how it works. Bitcoin was designed by a small clique of coders as a stateless, digital alternative to traditional money.
Users trade over a network of
decentralized computers—underpinned by software known as
the blockchain that creates an
immutable, public transaction
ledger—eliminating middlemen
such as banks, governments and
central banks.
But the experience of buying
bitcoin has changed to become
friendlier for investors. Cryptocurrency-related apps have ad-
no
Just Released
per
coin
$25.95
(Price subject to change due to market fluctuations.)
ORIGINAL U.S. GOV’T
MORGAN SILVER DOLLARS
COINS BETWEEN
96-139 YEARS OLD
The National Coin Depository has just released Morgan Silver
Dollars between 96-139 years old. It will offer this limited
stockpile to the public immediately at a guaranteed LOW
price of only $25.95 each, first come, first served. Each
purchase comes with a Certificate of Authenticity verifying
that it is a genuine U.S. Gov’t Morgan Silver Dollar
containing .77344 oz. of pure silver. Avoid disappointment
and future regret. 10 coin minimum order. ACT NOW!
Quantity of Morgan
Silver Dollars
COST
Shipping, Handling
& Insurance
TOTAL
(SD10)
10
$259.50
$15
$274.50
(SD20)
20
$519.00
$20
$539.00
(SD50)
50
$1,297.50
$25
$1,322.50
(SD100)
100
$2,595.00
$30
$2,625.00
(SD150)
150
$3,892.50
$45
$3,937.50
(SD250)
250
$6,487.50
FREE
$6,487.50
CALL TODAY. ACT FAST–QUANTITIES ARE LIMITED!
CALL TOLL-FREE (888) 419-7136
DEPT: MSD-1217
(plus shipping and handling)
NATIONAL COIN DEPOSITORY
2742 Biscayne Blvd • Miami , FL 33137
National Coin Depository is a private company and not affiliated with
the US Mint or any government agency. Prices and conditions are
subject to change without notice.
FOR FASTER SERVICE www.nationalcoindepository.com
Contemporary Gift Solutions For All
Spread the holiday cheer this season to your friends and
family by giving them the gift they’ll enjoy all year long.
We’ve got something for everyone!
Shop Levenger.com for special offers
and sales on our holiday gift guide
Professional Accessories Tech Accessories
Home & Office Furniture & Lighting Travel Essentials
Folios & Notebooks Writing Instruments Bags & Totes
Levenger.com
800.544.0880
opted the look and feel, as well
as ease of use, of popular payments services such as Venmo,
said Scott Harkey, head of the
payments practice at consulting
firm Levvel LLC.
The digital wallet operated
by Coinbase in early December
became the most-downloaded
app in Apple Inc.’s store, above
YouTube, Gmail and Facebook.
There are 8.75 million monthly
active users of the mobile app
globally, according to Apptopia,
which tracks downloads.
“To the early adopters, it
doesn’t matter,” Mr. Harkey said
of the ease with which investors
can trade bitcoin. “To the next
segment of population now investing in crypto, they’re the
ones that got more comfortable
with the idea given the broader
drive of third parties interacting
with their money.”
For all that, bitcoin has been
the best-performing asset in financial markets in 2017. Part of
the reason may have to do with
supply and demand. Bitcoin is
created, or “mined,” at a preset,
steady pace. There are about
16.7 million bitcoin outstanding;
mining will stop when the total
reaches 21 million, expected to
occur around 2140.
So growing interest in bitcoin
driven by its rising price results
in greater demand, while the
supply doesn’t expand at a similar rate. That leads to higher
prices.
Bitcoin futures could help
damp some of the market’s volatility, by drawing in more buyers
and sellers.
But the launch of bitcoin futures has cast a spotlight on the
market’s shaky foundations. Bitcoin exchanges were plagued
with glitches in recent weeks,
even as the price of the virtual
currency soared to records—
passing $17,000 on Thursday,
from just $968.23 at the start of
the year, according to CoinDesk.
For their futures products,
CME and Cboe are betting that a
handful of bitcoin exchanges are
sufficiently reliable and trustworthy to support a derivatives
market.
Still, recent mishaps have
raised questions about whether
bitcoin exchanges are ready for
prime time. On Nov. 29, heavy
trading sparked by bitcoin
breaking through $10,000 the
previous evening caused out-
ages at Bitstamp and GDAX,
among other exchanges.
All five bitcoin exchanges
working with CME or Cboe have
taken steps to embrace regulation and anti-money-laundering
laws. Their representatives said
the industry had matured. “Exchanges that weren’t up to a
certain standard, due to incompetence, have died out,” said
Bitstamp Chief Executive Nejc
Kodrič.
Some critics warn that unscrupulous traders could push
around the price of bitcoin on
the bitcoin exchanges.
1,500%
The increase in the price of
bitcoin this year
The bitcoin exchanges partnering with CME and Cboe account for a narrow slice of the
market. That means a manipulator wouldn’t need to move the
price of bitcoin world-wide, just
on a small number of exchanges.
CME’s four partner exchanges
together
handle
roughly 10% of daily global bitcoin volume, according to coinhills.com, though they account
for around a third of bitcoin
trading in dollars, which CME
argues is the more important
measure.
CME says it has taken steps
to combat manipulation. The index that underpins its futures
contract is based on trades executed over a one-hour period
each day, with anomalous trades
tossed out. CME also is working
to add more bitcoin exchanges
to its index, a CME spokeswoman said.
Cboe’s contract uses a price
determined in a daily auction at
Gemini. Gemini data show its
daily auction volumes this year
have averaged $1.3 million—a
drop in the bucket of global bitcoin trading, which runs into the
billions of dollars daily. Gemini’s
auction process also has failed
to produce a price several times
in recent months, on lightly
traded weekends or holidays.
—Telis Demos
and Peter Rudegeair
contributed to this article
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A9
* * * *
WORLD NEWS
Venezuelan Vote Lifts Rulers Allies to Contest
BY JUAN MONTES
People look for their names on electoral rolls before voting in municipal elections in Caracas.
Some opposition candidates
quit their parties to run as independents in an attempt to
keep control of key metropolitan boroughs.
But the failure of the opposition to effectively confront
Mr. Maduro and offer economic solutions has disillusioned many former supporters and prompted them to stay
home. Images posted on social
media showed deserted voting
centers in opposition strongholds, with participation in
some as low as 10%.
“The lack of vision from the
opposition has taken away my
desire to vote,” said Luis Esteves, a 32-year-old graphic
designer in central Caracas.
“I’m abstaining because I want
to show that I’m against how
they are handling things.”
Some government supporters said they came out to vote
to show their support for the
president.
For the government, Sunday’s poll provides an important test of its ability to mobilize voters ahead of next
year’s presidential election.
WORLD WATCH
Thousands Protest
At U.S. Embassy
NORWAY
Ms. Thurlow said the Hiroshima blast left her buried under
the rubble, but she was able to
see light and crawl to safety. In
the same way, the campaign she
is part of now is a driving force
behind an international treaty to
ban nuclear weapons, she said
after ICAN received the Nobel
prize it won in October.
The treaty has been signed by
56 countries—none of them nuclear powers—and ratified by
three. To become binding, it requires ratification by 50 countries.
ICAN Executive Director Beatrice Fihn accepted the prize
with Ms. Thurlow.
—Associated Press
Nobel Winner Urges
Nuclear-Weapons Ban
A survivor of the atomic
bombing of Hiroshima compared
her struggle to survive in 1945
to the objectives of the group
awarded this year’s Nobel Peace
Prize on Sunday.
Setsuko Thurlow, who was 13
years old when the U.S. bomb
devastated her Japanese city
during the final weeks of World
War II, spoke in Oslo, Norway, as
a leading activist with the Nobelwinning International Campaign
to Abolish Nuclear Weapons.
Ricardo Anaya, standing, with members of the PAN-PRD coalition
n-
Thousands of Indonesians
protested President Donald
Trump’s move to recognize Jerusalem as the capital of Israel,
the second such rally in recent
days in the world’s largest Muslim-majority nation.
The rally outside the U.S. Embassy in Jakarta drew more than
5,000 supporters of an opposition Islamic party and broke up
without incident around midday,
police said. Protesters carried
Palestinian flags and signs de-
claring Jerusalem the property
of a Palestinian state.
Indonesia doesn’t maintain
diplomatic ties with Israel, and
support for Palestinians has long
been a rallying issue.
Sunday’s protest came after
similar gatherings in Jakarta and
Kuala Lumpur two days earlier,
and after Mr. Widodo and Malaysian Prime Minister Najib
Razak condemned Mr. Trump’s
decision.
Political and religious analysts
said the protests and the
broader umbrage over Mr.
Trump’s decision were unlikely to
alter relations with Washington.
—Ben Otto
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
INDONESIA
MEXICO CITY—After long
and sometimes contentious
negotiations, two of Mexico’s
main
opposition
parties
agreed to run together in next
year’s presidential election,
shaking up the political landscape less than seven months
before the vote.
At a crowded event Friday
night, the leaders of the conservative National Action
Party, or PAN, which governed
Mexico from 2000 to 2012,
and the center-left Party of
the Democratic Revolution, or
PRD, registered the alliance
before the electoral agency.
The smaller Citizen Movement
party also signed up to join
forces with the PAN and PRD.
The coalition brings a third
major contender into the field,
and one that could be attractive to many Mexicans who reject President Enrique Peña
Nieto’s ruling party but who
also dislike the early frontrunner, left-wing nationalist
Andrés Manuel López Obrador.
The three coalition parties
combined had 32% of voter
support in a recent survey by
Reforma newspaper, tied with
Mr. López Obrador’s Morena
party. The ruling Institutional
Revolutionary Party, or PRI,
which chose former Finance
Minister José Antonio Meade
as its candidate, was third
with 25%. Mexican presidents
are barred by law from seeking re-election.
PAN President Ricardo
Anaya, a 38-year-old former
lawmaker nicknamed “the Boy
Wonder” for his youth and eloquence, has broad support to
become the coalition’s presidential candidate, party officials said.
“We could see a three-way
race next year. The coalition
would compete with the PRI to
win over the majority of moderate voters,” said José Antonio Crespo, a political scientist
at the CIDE university.
The presidential and congressional elections are scheduled for July 1.
The challenge for the rightleft alliance will be to remain
united in the months before
the voting, according to analysts. It is also to be seen
whether PRD voters would
back a PAN member as candidate, Mr. Crespo said.
It would be the first time
the PAN and the PRD, which
were fierce rivals in 2006 and
2012, run together in a presidential election. Both parties
have strong electoral machineries, and between them govern half of Mexico’s 32 states
and around 62% of Mexico’s
population.
The coalition forms at a
moment of low approval for
President Peña Nieto, amid
rising violence, high inflation
and low economic growth.
ly
.
JUAN BARRETO/AGENCE FRANCE-PRESSE/GETTY IMAGES
CARACAS, Venezuela—The
ruling Socialist Party swept local elections in Venezuela after
an opposition boycott and widespread allegations of pro-government bias, setting the stage
for a presidential vote next year.
President Nicolás Maduro
said his party won more than
300 of the country’s 335 counties, tightening his grip on
Venezuela as he seeks to keep
his movement in power for a
third decade despite hyperinflation and tumbling oil output.
Electoral authorities said
the ruling party won the vast
majority of Venezuela’s major
cities, including former opposition strongholds. In a further
blow to the demoralized opposition, Mr. Maduro threatened
to ban political parties that
boycotted Sunday’s mayoral
elections from fielding presidential candidates.
More than nine million Venezuelans, or 47% of registered
voters, cast ballots on Sunday,
the lowest turnout in at least
six years, but higher than
most observers expected.
Most opposition parties
boycotted the vote following a
surprise defeat in gubernatorial elections in October,
which they blamed on alleged
fraud and unfair conditions.
no
Timeless Tahitian pearls
with 14kt white gold clasp
From the depths of the South Seas to the
top of your jewelry box. Our graduated
strand of rare dark Tahitian pearls lends
a touch of the exotic to your day. Truly
one of life’s finest luxuries.
Dear Santa...
Norman Rockwell
1,195
$
Plus Free Shipping
Tahitian Pearl Necklace with 14kt White Gold Clasp
Saturday Evening Post cover. Famed illustrator. American masterpiece.
This original oil on canvas is part of one of Rockwell’s most
well-known and beloved series, his nostalgic Christmas covers
for the Saturday Evening Post. Exuding incredible character and
personality, this important work is quintessential Rockwell in
each and every detail. Rockwell created just 25 of these holiday
scenes, and today they are among his most highly prized. Signed
(lower left). Painted in 1935. Canvas: 341/2”h x 263/8”w. #30-7180
Graduated 10-12mm black cultured Tahitian pearls. 14kt white
gold ball clasp. Tahitian pearls are unique and may vary.
Shown slightly smaller than actual size.
Ross-Simons Item #777081
To receive this special offer, use offer code: TAHITI9
1.800.556.7376 or visit www.ross-simons.com/TAHITI
630 Royal Street, New Orleans, Louisiana • 877-677-2801 • ws@rauantiques.com • rauantiques.com
Since 1912, M.S. Rau Antiques has specialized in the world’s finest art, antiques and jewelry.
Backed by our unprecedented 125% Guarantee, we stand behind each and every piece.
NATIONAL ACTION PARTY/REX/SHUTTERSTOCK/EUROPEAN PRESSPHOTO AGENCY
Mexico Election
BY ANATOLY KURMANAEV
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
A10 | Monday, December 11, 2017
no
n-
SIGN IN
Manage Your WSJ Account
Update your subscription details any time in the Customer Center.
It’s easier than ever to access and manage your
subscription online. Visit the Customer Center to
reset your password, change an address, update your
payment information, place vacation holds and more.
Explore now at customercenter.wsj.com
© 2017 Dow Jones & Co., Inc. All rights reserved. 6DJ6188
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A11
NY
WORLD NEWS
China Celebrates Xi With Mao-Like Zeal
Communist Party
deploys dancers,
‘camelback publicists’
to spread message
WUZHONG, China—In a
packed auditorium in this Yellow River city, dancers in floral-pattern costumes twirl
against a backdrop of a red star
shining over the Great Wall.
“General Secretary Xi’s
words ring around our ears!”
the dancers exclaim.
Welcome to the “Spirit of
the 19th Party Congress” publicity tour.
The Communist Party traditionally launches propaganda
drives to imprint new slogans
unveiled at major conclaves.
This time, after the party revised its charter in October to
crown Xi Jinping as its greatest
living theorist, an army of
Marxist propagandists has gone
to unusual lengths to spread
their leader’s philosophy.
Some rode camels across
arid steppes to deliver lectures
on Mr. Xi’s political manifesto.
Others braved South China Sea
waves to take his congress report to island outposts and
CHUN HAN WONG/THE WALL STREET JOURNAL
BY CHUN HAN WONG
Singers from the Ningxia Song-and-Dance Theater performed a revolutionary song last month.
fishing trawlers, or turned to
communications satellites to
beam the highlights.
After some Xi allies started
referring to him with labels
such as “helmsman,” which is
usually associated with Mao
Zedong, such reverential
terms have increasingly crept
into broader use by officials
and in state media.
For some Chinese, such zeal
skirts uncomfortably close to
the adulation that underpinned Mao’s tumultuous rule.
Though the party formally
banned personality worship after Mao’s death, officials often
use obsequious propaganda
displays to signal loyalty to senior leaders, at times going
too far in trying to strike appropriate tones of enthusiasm.
A state-run newspaper in
Guizhou province called Mr. Xi a
“great leader”—a title that the
party has granted only to Mao—
under a portrait that dominated
its Nov. 10 front page. That page
and others showing Xi veneration are now absent from the
publication’s website. An employee at the office of its editor
said the pages may be missing
because of technical issues.
Mr. Xi’s congress slogans
blanket cityscapes, filling highway billboards, streetside banners and electronic displays in
malls and office blocks. Hammer-and-sickle symbols flash
on screens above a Gucci store
in Shanghai, paired with slogans promoting Mr. Xi’s vision
of turning China into a “modern socialist power.”
In Henan province, senior
officials paid homage to a tree
planted by Mr. Xi eight years
ago in honor of a county chief
who died in 1964. They listened
to a recital of a poem, “Remembering Jiao Yulu,” that Mr.
Xi wrote in 1990, local newspaper Henan Daily reported.
The top item on China Central Television’s flagship news
program one November evening
broadcast more than four minutes of nonstop applause for Mr.
Xi as he greeted attendees at an
awards ceremony in Beijing.
“The new party constitution
reiterates: The party forbids all
forms of personality cult,”
Wang Zhanyang, a retired Beijing-based professor, wrote on
his verified microblog in a
thinly veiled critique of the Xi
veneration, which was later
censored, according to censorship monitor Weiboscope. Mr.
Wang then republished his
message with dots added, a
common ploy to foil censorship.
That post remained online.
Such a personalized publicity campaign hasn’t been seen
in China since the Mao era,
said Daniel Leese, a professor
at Germany’s University of
Freiburg who has studied the
Mao personality cult. The
Communist Party is demanding
“faith in one absolute truth”
epitomized in its leader, like an
organized religion, he said.
The public celebration of
Mr. Xi is a turnaround from the
staid style of Mr. Xi’s immediate predecessor, Hu Jintao.
The dance performance in
Wuzhong was part of a statebacked concert tour in
Ningxia, an expanse of desert
steppe in western China with a
large Muslim population. The
state troupe had spent two
hectic weeks throwing together a 12-item set list of
choral performances, songand-dance routines and a poetry recital to promote Mr. Xi’s
report to the party congress.
“As performers, it’s our duty
to educate the masses about
how they benefit from party
and state policies,” said Chen
Liyun, the troupe’s director and
Communist Party branch chief.
—Kersten Zhang in Beijing
contributed to this article.
according to witnesses.
Employees in the Feijia government office declined to
comment and wouldn’t say if
police detained protesters.
The protest came on the
same day the U.S., Canada and
the European Union unusually
issued near-identical statements condemning China on
international Human Rights
Day. In previous years, embassies each issued their own
statements. Sunday’s statements, which didn’t mention
the evictions, criticized China
for continued violations of
freedom of speech and religion, and for prosecution of
human-rights lawyers.
Feijia is one of dozens of
neighborhoods across Beijing
where local authorities, citing
code violations, have evicted
residents at short notice in recent weeks. Many of those
evicted in Feijia were angry
because they had belongings
destroyed, residents said.
It was unclear how the protest began or if it was organized to coincide with Human
Rights Day. In past years, social activists and petitioners
have organized protests in
Beijing outside United Nations
offices and other notable
buildings to mark the day,
with authorities quickly detaining protesters.
$1935
n-
*
no
The C8 Power Reserve Chronometer
*A-List
celebrity not included
We love quality watches - so much so that in 2004 we started
making our own. Combining award-winning British design
with the finest Swiss watchmaking skills, and concentrating on
craftsmanship rather than salesmanship, we’ve successfully
created watches that stand comparison with the world’s
greatest watch brands in every respect - apart from price.
Do your research - we know you will.
christopherward.com
Workers prepared to leave their apartment on the outskirts of
Beijing ahead of an eviction deadline in late November.
IT’S THE
DIFFERENCE
BETWEEN
LAUNDRY IN
THE APARTMENT
AND LAUNDRY
AROUND
THE CORNER.
YOU KNOW WHICH IS
BETTER. REALTOR.COM HAS
20% MORE ACTIVE LISTINGS
IN NYC THAN STREETEASY.
NG HAN GUAN/ASSOCIATED PRESS
BEIJING—Migrant workers
held a rare demonstration in
China’s capital on Sunday,
with several hundred protesting outside a local government
office that recent forced evictions across the city violated
human rights.
The uncommon show of resistance by migrant workers
seems to be the first protest
since the Beijing government
began sweeping evictions last
month following a deadly fire
in a slum tenement on the
city’s southern outskirts.
Those evictions have drawn
angry critiques from middle-
class professionals, while
many of the workers left the
city quietly.
In Feijia Village, on the
city’s northeastern fringe, protesters hung a large white
banner reading “Violation of
Human Rights” across the
front gate of the village committee office, according to
smartphone videos verified by
people at the scene. One man
repeatedly yelled “violent
evictions,” and the crowd
chanted back, “violate human
rights.”
The midday protest lasted
several hours, with the crowds
growing to hundreds of people
before police dispersed them,
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY EVA DOU
ly
.
Migrant Workers Protest After Clearances in Beijing
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
A12 | Monday, December 11, 2017
IN DEPTH
Ta kh to
Takhto
Va l le
ley
from the drinking glasses and
décor to its 200-plus menu
items. Novelties include burgers topped with fried macaroni and cheese and cheddar
cheese sauce, and slices of
chocolate-chip
coconut
cheesecake with layers of
chocolate cake, brownie and
coconut pecan frosting that
pack 1,560 calories.
“People ask me why we
don’t make the portion sizes
for Hong Kong,” said a manager working the evening
shift. “But that wouldn’t be
Cheesecake Factory.”
A spokeswoman for the
Hong Kong eatery said “The
Cheesecake Factory has always
been about choices. Many of
our guests come in and want
to celebrate, and not be concerned with calories.” She
noted some diners share
dishes and take food home.
Some customers consider
dining at The Cheesecake Factory a value proposition—a
chance to extend one meal
into many. Bosco Chan, 41, recently came back for dinner
with his wife, father, and two
sons. He was toting two Tupperware containers for the in-
evitable leftovers, a trick he
picked up after his first visit.
“Really worth the wait,” he
said, adding that dinners at
the restaurant—and fighting
over the leftovers in the days
after—were becoming a family
tradition.
On another weeknight, a
group of six men and one
woman were seen sharing a
salad and a single bowl of
pasta.
Others come determined to
tackle a full American meal.
Pan Chiu, 33, who is training
to be a psychologist, said he
started laying the groundwork
for a Monday dinner days earlier. He studied the menu online, briefed his dinner companion on the portions to
come and even warmed up by
eating less during the day on
Sunday and more on Sunday
evening.
When the big day arrived,
he bypassed his usual lunch of
fried rice or noodles in favor
of a small fish sandwich. “I
was very careful to eat less today to save space,” he said.
When the food was served,
he felt confident he could handle it. After chowing down
half a plate of Spicy Chicken
Chipotle Pasta, however, he
and his companion were vanquished by an order of Buffalo
Blasts—chicken, cheese and
spicy sauce encased in a wrapper, then deep fried.
Most of those had to be
taken home.
Founded in 1978, the
Cheesecake Factory has 198
outlets, 18 of which are outside the U.S. The company’s
sales have fallen in recent
quarters. Analysts say pressures on the casual dining sector include consumers’ desire
for smaller meals and healthier options.
In Hong Kong, though, the
portion sizes are part of the
intrigue. First-timers to the
chain say they were attracted
by photos posted by online reviewers and tales of American
excess relayed by friends and
family abroad.
After the meal, however,
their enthusiasm sometimes
diminishes. Mr. Wu, the accountant who practiced interval eating, offered this verdict:
“I don’t think I can have
cheese for another three
months, at least.”
PA K I STA N
M oh
o hm
ma
an
nd
d
ley
Va l le
Sparah
Kangar
N
Tangah
Achin
Pe
ekh
kh a
Va
Vall l e y
Islamabad
ly
.
A FG H A N I STA N
Asad Khel
Site of MOAB airstrike
Mo
ohm
h m a nd
nd
ley
Val le
Sources: NASA (topography); Google (image overlay)
loose rocks in the darkness.
They were looking for a hidden
location from which to monitor
Islamic State fighters below. Instead, they noticed a rocky redoubt where they believe the
sniper had hidden.
The next morning, the Green
Berets guided a U.S. jet to the
spot. The plane dropped two
500-lb. bombs, sending the
stone emplacement sliding
down the mountainside.
“A lot of places, you don’t
know where the enemy is,” a
top U.S. special operations
commander told his soldiers
during a visit to the battlefront.
“At least you know they’re
down that valley.”
The militants operate a pirate radio station that broadcasts messages into Afghan villages. “They say they are
Muslims intent on establishing
an Islamic State, and they invite people to join them,” said
Pvt. Ziyaulhaq, a commando.
Like many Afghans, he goes by
one name. He grew up nearby,
and his family, which had
moved north to avoid insurgent
violence, has returned.
The Americans and Afghans
eavesdrop on Islamic State communications in Urdu, Uzbek and
Russian, languages that suggest
the militants include Pakistani,
Uzbek and Chechen men.
Insurgents know their calls
are being intercepted and are
careful to speak in vagaries:
“That place where we were yesterday,” or “Bring that thing.”
They are sometimes caught
in moments of candor, however.
In one conversation, an Islamic
Renée Rigdon/THE WALL STREET JOURNAL.
State fighter complained that
his commanders had confiscated money from the sale of
gems. Mohmand Valley’s jade
mine is on the Islamic State
side of the battlefront.
And in a conversation between a fighter and a mullah,
or religious leader, the fighter
said a witness could confirm
that the fighter had delivered
300,000 rupees in ransom
money from an Islamic State
kidnapping. “The hostage was
released,” the fighter said in a
recorded conversation heard by
the Journal. “I have no idea
who got the rest of the money.”
Later, the mullah talked derisively about another Islamic
State fighter. “He has become
an apostate,” the mullah said.
“He ran away.”
“This is not an easy war,”
Maj. Gen. Bismillah Waziri,
commander of Afghan specialoperations forces, said in an interview.
The Taliban control or contest a third of Afghan territory,
although they haven’t expanded
their reach in the past year, Gen.
Nicholson said in November.
Over the summer, President
Donald Trump reversed Barack
Obama’s practice of setting
public deadlines for the U.S.
commitment to the war. The
Obama administration had
hoped the threat of withdrawal
would force the Afghan government to address corruption and
military weaknesses.
In recent months, the U.S.
has boosted its forces in Afghanistan to 15,300 from
11,000—the largest American
KEN WU
CHEESE
Continued from Page One
droves of curious brand-obsessed diners who can wait up
to two hours to sample a slice
of American life.
For some, the experience
has produced some predictable confusion. Hoi Lam, 25,
came for dessert one evening
without realizing the restaurant serves dinner, too. “I was
wondering why the Cheesecake Factory is not just about
cheesecake,” she said. “It
doesn’t make any sense!”
Reviews have been mixed.
Some stuffed individuals have
called the meals a “waste of
calories.” Others have found
the cakes too sweet and decadent. Still others proclaim the
food delicious. The most common reaction, however, is this
one: How on Earth are we supposed to eat all of this food?
“I always thought it was a
myth that Americans eat big
portions,” said Charlotte
Hung, 19, her eyes widening as
she described the size of her
meal of Steak Diane and Prawn
Afghan commandos, backed
by Green Berets and U.S. airstrikes, launched the offensive
against Islamic State in Achin
in February. The campaign
drew attention in April when a
U.S. plane dropped one of the
largest bombs in the U.S. arsenal: the Massive Ordnance Air
Blast, also known as the MOAB,
or Mother of All Bombs. The
bomb targeted Islamic State
hide-outs in underground talc
mines in Asad Khel village in
the Mohmand Valley.
The village is back in government hands, about 900
yards behind the battlefront.
Civilians have returned to their
A FG H A N I STA N
PA K I STA N
Afghan/U.S. control
Islamic State control
Special forces outpost
no
One night, U.S. troops spotted two Islamic State fighters
creeping toward the front lines.
Red tracer fire arced across
Takhto Valley in response. A
U.S. plane dropped a 2,000-lb.
bomb. The explosion was so
powerful that a 3-pound chunk
of shrapnel from the bomb flew
more than a mile and crashed
into the Green Beret outpost,
missing a sleeping American
soldier by 20 feet.
The next morning, an Islamic
State sniper took a shot or two
at one outpost just as a U.S.-Afghan patrol prepared to leave.
The soldiers took cover behind
a dirt berm and fired bursts of
machine-gun fire, volleys from
grenade launchers and dozens
of mortar rounds into the ridgelines, which are dotted with
concealed enemy positions.
A couple of nights after that,
three Green Berets and an Afghan minesweeper climbed
onto a ridge overlooking Mohmand Valley, scrambling over
Kabul D ETA IL
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Sniper shots
farms. Someone suspended a
child’s swing from a tree with a
view of the MOAB’s impact site:
mud-brick buildings collapsed
into mud-brick rubble.
In November, U.S. aircraft
conducted strikes in Mohmand
Valley, killing 19 Islamic State
fighters, a special-operations
officer said.
Up and down the front, Afghan and U.S. troops have
seized buildings formerly occupied by Islamic State fighters.
Militants left childlike drawings
of AK-47 rifles and black Islamic
State flags scrawled on walls.
“We’d like to move forward
and clear this place,” said 1st
Lt. Nematullah Moshtaq, who
leads an Afghan commando
platoon in Achin.
Americans have placed remote-controlled
Claymore
mines around their outposts to
defend against militant counterattacks. When a mine is triggered, a wall of metal balls
erupts at explosive velocity
from one face of the rectangular device. The words “Front
Toward Enemy” are embossed
on the dangerous side.
The fighting on the floor of
the Mohmand Valley is
matched by a lethal game of
capture the flag on the ridgelines above.
In September, Islamic State
fighters wedged poles holding
three of their signature black
flags into the rocks on the
north ridgeline, taunting the
Afghan commandos and their
U.S. allies in outposts below.
On Sept. 17, two Afghan border police climbed the ridge to
take down the flags. A booby
trap exploded, killing one officer and wounding the other.
U.S. forces shelled one flag
with high-explosive mortars. It
was windy, and 40 rounds
missed the target. When the
wind calmed, the mortarmen
tried again, hitting the flag on
their fourth try. The Americans
destroyed another black flag
with a bomb after failing to
knock it down with grenades.
The Afghans sent a patrol up
the mountainside to plant a
red, green and black national
flag. “The commandos, they get
really serious about the flag,” a
Special Forces platoon sergeant
said.
As fall deepened, Afghan and
U.S. troops spotted several
buildings on fire a mile or so up
Mohmand Valley. They speculated that Islamic State leaders
Driving Out Islamic State
One U.S. Special Forces outpost looks into the hostile Takhto Valley
on one side and friendly Pekha Valley on the other. A second outpost
is situated in the middle of Mohmand Valley, between liberated
villages and areas that remain within reach of Islamic State gunners.
Ken Wu, right, and friends at the Cheesecake Factory in Hong Kong
in Lemon Garlic Sauce, which
was topped with a heap of
mashed potatoes. The combination had close to 1,800 calories. “Now I know it’s true, it’s
really true,” she added.
Hong Kong food portions
tend to be more restrained.
Overall, sugars and fats make
up about 20% of the diet in
Hong Kong, compared with
about 38% in the U.S., according to food-supply data compiled by the Food and Agriculture Organization of the
United Nations.
Some Western restaurant
chains have trimmed portion
sizes. British chain Pret A
Manger Ltd., which traditionally sells two halves of a sandwich together, started selling
single half-sandwiches in Hong
Kong over a decade ago.
Not Cheesecake Factory.
The Calabasas Hills, Calif.based chain has a simple formula for exporting its hedonism around the world: keep
mostly everything the same,
Home again
The American team leader
had served a tour a year ago,
when the province was so thick
with Islamic State fighters that
his men couldn’t even reach the
Mohmand Valley. Militants
threatened to cut off Highway 7,
an artery for commerce between
Kabul and Peshawar, Pakistan.
Farmers and their families fled.
Now, on the green side of
the front lines, many have returned to work the fields. Children wave at passing Afghan
and American troops, and the
sound of their laughter reaches
the Special Forces outposts.
Awa Jan, a farmer with a
white beard and a weathered
face, said that he, his wife and
their children fled Islamic State
fighters. But with no means to
support his family, he was
forced to return to his village.
He recalled the time Islamic
State fighters ordered residents
to the bazaar, where the militants beheaded seven men.
“They made us watch,” Mr. Jan
said. “They said this would be
our fate if we worked with the
government.”
His family became a target
because his son serves as an
Afghan commando. “Islamic
State told me I had to bring my
son here, or they’d kill me,” Mr.
Jan said, adding that he refused. Militants spared his life,
he said, but expelled him from
the village.
Mr. Jan is back farming his
land—2 acres of wheat, tomatoes and rice. “They came in the
name of Islam,” he said, “but
actually they aren’t Muslims.”
A teenager named Bakhtullah
recalled the headless bodies in
the back of a pickup truck that
passed through his village. The
boy’s father was killed serving
in the army, he said. His mother
and his two older brothers, he
said, had no choice but to remain in the Pekha Valley during
the Islamic State occupation.
Bakhtullah said militants beat
people with sticks and radio antennas when they didn’t attend
prayers at the mosque.
“They were like dogs,”
Bakhtullah said. “Thank God
they ran away”
Wahidullah, a man in his
30s, said he couldn’t afford to
leave his land. “We have a farm
here, our livelihood,” he said.
Islamic State tax collectors
seized half of every bag of
wheat he grew, he said.
Another villager allegedly
told Islamic State fighters that
Wahidullah’s brother worked
for the local police. Militants
beat Wahidullah with a rubber
hose, he said: “I wish all Islamic
State were dead.”
—Jessica Donati contributed
to this article.
U.S. Special Forces troops in the Mohmand Valley, which Islamic State fighters turned into a branch of the caliphate they had declared.
n-
Continued from Page One
leys—into a branch of the
caliphate they had declared in
Syria and Iraq. Militants imposed a harsh brand of Islam
and hunted those who had
worked for the Kabul government.
Afghan and U.S. special-operations troops this year have
pushed back Islamic State in a
monthslong offense largely
overshadowed by high-profile
battles to retake militant-held
cities in Syria and Iraq.
On Saturday, Iraq claimed
victory over Islamic State, more
than three years after the insurgents overran about a third of
the country. Military commanders said Iraqi forces had finished clearing a desert area in
the west of the country, taking
control of the border with Syria.
The campaign in eastern Afghanistan plays to U.S.
strengths. The enemy is now
holed up in unforgiving mountains. Islamic State fighters,
isolated from civilians, are vulnerable to American airstrikes.
On the ground, Green Berets
are paired with some of the
best Afghan units, elite commando companies.
This advance against Islamic
State in Achin contrasts with
the fight elsewhere in Afghanistan against the Taliban and
other insurgent groups who
live among civilians and are
difficult to target. Militants, including alleged adherents of Islamic State, carry out attention-grabbing suicide attacks in
Kabul intended to make the
government appear weak.
U.S. military analysts estimate as many as 1,500 Islamic
State fighters remain in Afghanistan, including areas along the
Pakistan border that militants
claim for their caliphate. The
U.S. is conducting a bombing
campaign to trap them in the
mountains over winter, a top
U.S. commander said.
The Wall Street Journal in
October was granted exclusive
access to allied forces on the Islamic State front. U.S. Special
Forces operate from two outposts about 1,000 yards apart,
both sandbagged mud-brick
buildings that look out onto Islamic State turf, about 7 miles
from snow-covered peaks in
Pakistan. The U.S. military
didn’t allow identification of its
special-operations troops or
commanders for this story.
MICHAEL M. PHILLIPS/THE WALL STREET JOURNAL
AFGHAN
might be torching their bases
and fleeing to nearby valleys.
The Afghans and Americans
plan to form local militias to
help fend off Islamic State once
the troops have forced insurgents away. A dozen village elders have agreed to provide men
for the force, U.S. officials said.
It is a tactic the U.S. has
tried before with limited success over the 16 years of the
Afghan war. In some instances,
U.S.-backed village police have
preyed on residents, alienating
those whose support the Afghan government needs.
U.S. commanders say they
expect Afghan police and regular army forces to help secure
liberated villages. The more
territory seized from militants,
one Special Forces team leader
said, “the more hold forces
we’ll need” to keep it.
deployment there since 2014.
At the peak of the U.S. commitment in 2011, 110,000 American
troops served in the country.
Afghan commando units—
which specialize in capturing or
killing insurgent leaders during
nighttime raids—are expected
to double to 23,300 troops.
From January through Oct. 4,
the commandos and other elite
Afghan army and police forces
conducted 1,790 operations,
about a third of them without
assistance from the U.S. or its
coalition partners, according to
U.S. Army data.
The enemy is holed
up in unforgiving
mountains, vulnerable
to American airstrikes.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A12A
NY
* *
GREATER NEW YORK
NYPD’s Real SVU Changes Tactics
BY ZOLAN KANNO-YOUNGS
Tally of Assaults
Sex crimes in New York City
Reported rapes
Reported misdemeanor sex crimes
Year to date
5 thousand
4
3
2
1
0
2006
’10
’15
Source: New York Police Department
THE WALL STREET JOURNAL.
witness, Detective Santos said.
He said he has interviewed
about 30 victims this year who
initially couldn’t talk about
their experiences until he began asking FETI questions. One
victim didn’t open up until he
asked about what she heard.
She described the sound of a
condom being unwrapped and
then she unspooled more details. Another woman couldn’t
describe the attack until he
asked about smell; then she remembered the scent of the
suspect’s cheap cologne.
Michael Bock, an NYPD sergeant with the Special Victims
Division who retired this year,
said he used the questioning
method to get cold-case victims, those who were assaulted years ago, to recall details about their attack.
FETI interviews, however,
can stretch hours longer than
traditional questioning, Mr.
Bock noted, adding that the division handles more than 13,000
cases a year. “At this case
rate…I just don’t believe it can
be implemented fully,” he said.
The new tactics come as a
spate of recent high-profile
sexual misconduct cases are
encouraging more victims to
come forward. In New York
City, reported misdemeanor
sex crimes so far this year are
up 9.7% to 3,409 from a year
earlier. Total rape cases comPlease see VICTIM page A12B
Deal Made to Sell
Manhattan Home
For $80 Million
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
New York City Detective Eusebio Santos is hoping that his
second interview with a
woman who had been sexually
assaulted will bring her justice.
During the first round of
questioning, Detective Santos
pressed the 25-year-old for details normally found on a
crime sheet: description of the
suspect, location of the assault
and a timeline.
When she couldn’t remember
specifics, she grew frustrated
and wouldn’t talk to the detective for months. When he got a
second chance to sit down with
her in November, he was determined to do it right this time.
After receiving special training, Detective Santos made
open-ended queries such as:
“Tell me about how your experience was.” The woman gradually began recalling sights,
smells, sounds and more.
Detective Santos is one of
101 members of the New York
Police Department’s Special
Victims Division who received
new training in January for in-
terviewing sex-crime victims.
Previously, detectives were
told to press victims for details—the who, what, when,
where, why and how. Some
complained that the interactions
were more like interrogations.
The Forensic Experiential
Trauma Interview technique
teaches that such details are
stored in the prefrontal cortex
of the brain, which shuts down
during traumatic events. In FETI
training, the detectives are instructed to ask broad questions
that tap into a victim’s primitive
brain, which maintains sensory
information of those events.
Channeling this part of the
brain can result in a more substantial narrative, said Deputy
Chief Michael Osgood, head of
the Special Victims Division.
“When you say, ‘What did
you feel?’ they can now go to
their experienced part of the
brain and their sensory part of
the brain and they now start
telling you stuff,” he explained.
Information obtained during victim interviews can
make or break a case because
often the victim is the only
FROM TOP: ALEXANDER COHN/THE WALL STREET JOURNAL; ANDREW KELLY/REUTERS
A more open-ended approach to interviewing sex-assault victims has been successful, police say
BESS ADLER FOR THE WALL STREET JOURNAL
BY KATHERINE CLARKE
Jeff Staten, senior cybersecurity analyst at the New York Power Authority’s operations center, which opens Monday in White Plains.
Utility Powers Up Tool to Keep Tabs on Network
no
The New York Power Authority, the largest state public
utility in the U.S., has flipped
the switch on a digital system
that will monitor its 16 power
plants and 1,400 miles of transmission lines.
The remote monitoring system continuously collects data
such as temperature readings
at a power plant in New York
City and feeds the information
into an operations center opening Monday in White Plains.
The operations center makes
6,000 calculations a minute
based on 24,000 data points.
The goal is to improve reliability throughout its network
that supplies power to governmental agencies in New York
City and the Metropolitan
Transportation Authority, to
prevent unplanned shutdowns
of power plants, and cut costs
on maintenance and replacement of aging infrastructure,
said NYPA Chief Executive Gil
Quiniones.
The authority estimates it
will save about $1 billion over
10 years.
Many of the state’s fleet of
power plants are nearing retirement age and nearly 4,700
miles of transmission lines will
need to be replaced during the
next three decades, at an estimated cost of $25 billion, according to a recent report by
the New York Independent System Operator, which oversees
the state’s grid.
The new remote-monitoring
system is part of a $500 million investment to modernize
the authority, which produces
about a quarter of the power in
New York state.
“This hub keeps New York
n-
BY JOSEPH DE AVILA
at the forefront of innovation,
while leading the nation in
combatting climate change
through bold investments in
clean-energy technology,” Gov.
Andrew Cuomo said in a statement.
NYPA is one of a growing
number of power utilities in
the U.S. seeking to update their
operations in response to rapid
transformation in the industry
coming from renewable energy
and increased pressure on the
grid from extreme weather
events, said Bill Ruh, digital
chief for General Electric Co.
“They are in their early days,”
of modernization, Mr. Ruh said.
GE produced the software
that NYPA is using for its operations center, and the authority
is GE’s first client to use the
software for its entire network,
he said.
At NYPA’s headquarters in
White Plains just north of New
York City, the operations center has a 9-foot-tall computer
screen that stretches 80 feet
wide. Here, authority officials
are able to get a real-time look
at virtually every aspect of
NYPA’s network.
For instance, one part of the
screen can monitor NYPA’s
transmission lines across Long
Island Sound, sending the authority notifications if a boat
drops anchor and accidentally
begins to drag them.
People at the operations
center also can view an infrared camera image monitoring
the performance of a transformer inside a power plant.
This type of monitoring typically was done monthly at the
power plant itself, said Paul
Tartaglia, the authority’s senior vice president of technology and innovation.
A roughly 20,000-squarefoot mansion with its own redvelvet movie theater and panic
room is in contract for around
$80 million, according to two
people with knowledge of the
deal.
If it closes for that price,
the property will become the
most expensive townhouse
ever sold in New York City, according to appraiser Jonathan
Miller. The current record was
set in 2006, when financier J.
Christopher Flowers paid $53
million for the Harkness mansion on East 75th Street, Mr.
Miller said.
The townhouse at 12 E.
69th St. is owned by Vincent
Viola, the billionaire owner of
the National Hockey League’s
Florida Panthers who was
briefly President Donald
Trump’s nominee for secretary
of the army, and his wife, Teresa Viola. They paid $20 million for the property in 2005,
according to public records.
Several people close to the
deal said the buyer is the
same person who purchased a
penthouse at trophy condominium tower 15 Central Park
West from former Barclays
Chief Executive Bob Diamond.
The penthouse sold for $50.5
million earlier this year, according to public records.
About 40 feet wide, the
seven-bedroom property dates
to 1884 but was renovated in
the past few years by the Violas, who installed the panic
room, according to an old listing for the property. The
movie theater has a 12-foot
Vincent Viola, above, and his
wife, Teresa Viola, are selling
the Upper East Side home, top.
screen and a balcony, and the
home comes with a sauna and
a swimming pool, the listing
said.
The house came on the
market in 2013 for about $114
million, but was delisted after
a price cut to $98 million in
2014, according to listings
website StreetEasy.com.
$114M
Asking price of the townhouse
when it hit the market in 2013
Real-estate agent Paula Del
Nunzio of Brown Harris Stevens, who represented the
buyer in the deal, declined to
comment on the identity of
her client. The property
wasn’t formally listed for sale
at the time the contract was
signed.
“First Republic not only cares about their
communities, they care about the future
of the kids in those communities.”
COMMON SENSE MEDIA
James Steyer, Founder and Chief Executive Officer
(855) 886-4824 | firstrepublic.com | New York Stock Exchange symbol: FRC
MEMBER FDIC AND EQUAL HOUSING LENDER
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A12B | Monday, December 11, 2017
NY
THE WALL STREET JOURNAL.
* *
GREATER NEW YORK
Online Retail Puts
Warehouse Space
In the Sweet Spot
Building Up
Construction of warehouse
space in New Jersey has been
surging
12 million square feet
STEPHEN REMICH FOR THE WALL STREET JOURNAL
9
Completed construction
Anticipated construction
6
3
0
2007
’10
’15
’18
Source: CBRE Group Inc.
THE WALL STREET JOURNAL.
Employees pick, pack and ship orders at Dotcom Distribution in Edison, N.J., a logistics and distribution company that serves online retailers.
faster deliveries, is the ability of larger ships to get to
local ports, expansion of food
and beverage delivery, and
displaced warehouse tenants
from New York, said Bill
Waxman, an executive vice
president at CBRE.
“It has been nonstop,” he
said of businesses’ hunt for
space. “From paper companies to packaging companies
to internet sellers, brick-andmortar sellers...everybody is
looking at their supply chain.
New Jersey is unique in its
location and ability to service a huge consumer zone.”
New Jersey’s real-estate
market is being swept up in a
sea change that is reshaping
the U.S. retail sector as online shopping gains ground.
Department-store chains and
clothing retailers have been
among the most-prominent
casualties, closing thousands
of store locations across the
U.S. in recent years, leading
mall landlords to scramble
for new tenants.
Warehouses, meanwhile,
are thriving. In New Jersey,
for each of the past seven
years, the state’s warehouse
availability rate—the percentage of space that is vacant or soon-to-become
available—has declined, to a
postrecession low of 6.8% in
NEW JERSEY
City Ballet Names
Interim Leadership
Town Faces Lawsuit
Over Leaf-Blower Ban
The New York City Ballet appointed an interim team to oversee the artistic management of
the company during an investigation into a sexual-harassment accusation against longtime leader
Peter Martins.
Mr. Martins has referred to
the accusation as “false claims.”
The ballet company said
Thursday that Mr. Martins, 71, is
taking a leave of absence from
the company and its School of
American Ballet during the probe.
City Ballet’s board of directors
said Saturday the interim artistic
management team will be led by
Jonathan Stafford, a ballet master at the school and a former
principal dancer with the company. He will be assisted by soloist Justin Peck and ballet masters
Craig Hall and Rebecca Krohn.
The company hired a law firm
to investigate after receiving an
anonymous letter accusing Mr.
Martins of past harassment.
—Associated Press
A New Jersey town’s ban on
landscapers and other businesses using gas-powered leaf
blowers is heading to court.
The suit by the New Jersey
Landscape Contractors Association and nine companies against
Maplewood calls the ban costly
and discriminatory.
The leaf-blower ban was approved in April after residents
complained that a less-restrictive leaf-blower rule wasn’t being enforced. It bars commercial
landscapers from using gas-powered blowers during summer
months.
The landscapers say the ban
doesn’t apply to residents, noncommercial associations and
even the town itself. And they
say landscapers can be fined for
violations, but residents and others face no penalties for violating other parts of the ordinance.
Mayor Victor DeLuca declined
to comment, citing the litigation.
—Associated Press
no
n-
NEW YORK
Outsmart Burglars
The Moment You Plug It In
SimpliSafe is a complete home security arsenal.
With motion sensors, glass break sensors, entry
sensors, and a high-definition security camera,
you’ll have everything you need to keep your
family safe—and 24/7 professional monitoring
is only $14.99 a month.
Act now! Holiday deals end soon
Manning Returns but Giants’ Troubles Persist
BACK IN THE SADDLE: Eli Manning took the field at MetLife Stadium on Sunday after being sidelined
the week before. The Giants lost to the Cowboys, who managed to keep their playoff hopes alive.
VICTIM
Continued from page A12A
pared with last year are down
2%, but there were 15% more
rapes reported in November of
2017 compared with November
of 2016, according to the NYPD.
“The focus that’s occurring
on sexual criminal conduct
coming out of the Hollywood
celebrities and members of
Congress may be a watershed
moment,” Chief Osgood said.
Previously, when sexual-assault victims went to advocacy
organizations for help, Chief Osgood said, many staffers would
caution that they could expect
pressure from police to cooperate. Some victims wouldn’t report the incidents to law enforcement because they didn’t
want the added stress, he said.
The FETI approach, and a
rule that a victim can opt out
of a criminal investigation at
any time, has helped to change
that, he said.
Sonia Ossorio, president of
the New York chapter of the
National Organization for
Women, said her advocates
still warn victims about NYPD
questioning. “The old standard
of grilling the victim like a
suspect is woefully outdated
but still is the norm,” she said.
Aggressive questioning by
some patrol officers who typically make initial contact with
sexual-assault victims still occurs, said Josh Ulan, a detective with the Special Victims
Division. “Everyone wants to
catch the bad guy, all patrol
guys they do, but they’re not
trained like we are,” he said.
“They would ask more direct
questions: What color are his
eyes? Was he black or His-
panic? Someone that’s been a
victim of trauma can’t necessarily answer that question.”
Prosecutors in the Manhattan District Attorney’s office
have noticed a positive change.
“We applaud the NYPD for offering [FETI training] to all investigators and hope to be able
‘Grilling the victim
like a suspect is
woefully outdated but
still is the norm.’
to do the same ourselves in the
coming months,” said a spokeswoman for Manhattan District
Attorney Cyrus Vance Jr.
Detective Santos hopes the
new information he gained from
the second round of questioning
the sexual-assault victim last
month will help build a case.
Initially, the woman’s recollections were fragmented: She
Frank.
Businesses are seeking
warehouses and fulfillment
centers closer to population
centers, said Karl Siebrecht,
chief executive of Flexe Inc.,
a company that connects
firms with warehouse space
and fulfillment services on a
pay-as-you-go basis.
“As it is more and more
important to get your goods
to consumers faster, you’ve
got to put up additional fulfillment centers,” Mr. Siebrecht said. “Shipping from
one site in Indianapolis can’t
get it to consumers as fast as
six sites closer to population
centers.”
ly
.
services firm Cushman &
Wakefield. “If we’re expecting e-commerce to get to 50%
of total retail sales, you’ve
got a long way to go before
we see any sort of slowdown.”
As internet sales have increased, traditional retailers
have been expanding their
online operations and boosting their warehouse space,
real-estate executives said.
E-commerce uses accounted
for 51% of the 7.6 million
square feet of leases signed
in 2017 for big box space in
New
Jersey,
typically
500,000 square feet or more,
according to Newmark Knight
ELSA/GETTY IMAGES
GREATER NEW YORK WATCH
SimpliSafe.com/Wall
the third quarter from 12% in
2010, according to CBRE.
A burst of construction
hasn’t had much impact. Of
the 7.9 million square feet of
active warehouse-construction projects in New Jersey,
more than 60% of that space
already has been committed
to tenants. Eight of the 14
largest
projects—those
200,000 square feet or
larger—have been leased to
single tenants, the CBRE report said.
“E-commerce represents
something between 8% and
15% of total retail sales” in
the U.S., said Stan Danzig, a
vice chairman at real-estate-
was in front of a building eating. A drunk man was struggling nearby. Another man
walked toward her. She was
assaulted indoors.
But a big question remained: Why did she go inside
the building, apparently with
one or both of those men?
During the most recent interview, Detective Santos asked
what she was thinking and
what she saw. She wrote down
a new detail: Another man had
asked her to help him bring the
drunk man inside the building.
That second man is now Detective Santos’s suspect.
Establishing an explanation
as to why she went into the
building with the suspect is a
crucial detail for the investigation, he said. “When you’re
putting a case together you
need everything to be as full
of a story to the person reading or hearing about it,” Detective Santos said, lamenting
missed opportunities. “I think
of so many cases I wish I
could go back to do.”
MARK KAUZLARICH FOR THE WALL STREET JOURNAL
The growth of online shopping, which is stretching package-delivery systems across
the U.S., is sparking a frenzy
in New Jersey’s commercial
real-estate market.
Despite a feverish pace of
construction in recent years,
tight inventoPROPERTY ries and surging
demand
are
driving
rents for New Jersey warehouse space to new highs, according to a report from
CBRE Group Inc.
By the third quarter of
this year, developers added
about 7.8 million square feet
of space, 83% more than in
all of last year, according to
CBRE. By the end of 2017,
new industrial space completed is expected to reach
11.2 million square feet, more
than twice the amount built
in 2016 statewide.
Rents have been on an upward march since 2012, surpassing a 2004 high of $6.23
a square foot last year and
reaching $6.64 in the third
quarter of 2017.
The demand for space
isn’t expected to let up anytime soon, real-estate brokers and consultants said,
and so rents could keep rising.
Behind the growing demand, in addition to online
shopping and the drive for
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY KEIKO MORRIS
NYPD Deputy Chief Michael Osgood says a new questioning
technique for sexual-assault victims has been effective.
For Some,
Technique Is
A Tough Sell
BY ZOLAN KANNO-YOUNGS
Forensic
Experiential
Trauma Interview training was
developed in 2009 when Russell Strand, a retired army
special agent, responded to a
mass shooting at the Fort
Hood army base in Texas and
asked traumatized soldiers
what they were feeling, instead of pressing for details
about the incident.
He now trains other first
responders around the U.S. in
the technique.
From Oregon to New Hampshire, police departments are
learning how to question people using FETI.
A typical five-day training
course costs $1,690. For the
New York Police Department
the course runs seven days
and trainers hold sessions at
the new police academy in
Queens. This year, the NYPD
said it is spending $850,000
on FETI.
Carrie Hull, who works with
Mr. Strand at the Oregonbased Certified FETI training
first responders, is developing
a certificate course to identify
departments that are properly
using FETI.
A former detective in Ashland, Ore., Ms. Hull knows it
can be difficult to get police to
change. “My favorite part about
law enforcement is they are
skeptical of things,” she said.
New York Police Department Deputy Chief Michael
Osgood, head of the Special
Victims Division, said he
learned about the training in
February 2016.
After investigating about
14,000 rapes, he knew it was
normal for sex-assault victims
to forget details of their
trauma. He thought FETI could
help, but recalled thinking, “I
don’t know if I can teach this
to the detectives.”
He took one of his more
“experienced, gritty” sergeants, Michael Bock, to a
week-long
FETI
training
course Oregon in March 2016.
Mr. Bock, who retired this
year, was open to the program
because he knew the traditional approach wasn’t working. “We were like a processing plant,” Mr. Bock said. The
victims “come in…and then
they move along.”
When Mr. Bock bought in to
the technique, most Special
Victims Division detectives followed. But there are still
doubters, he said. “They think,
now you’re a therapist,” he
said of some of his former colleagues. “I don’t believe you’re
a therapist, I just think it’s a
way of extracting information.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
CLOCKWISE: FOX SEARCHLIGHT PICTURES; UNIVERSAL PICTURES; A24 (2); SONY PICTURES CLASSICS; WARNER BROS.
LIFE&ARTS
Monday, December 11, 2017 | A13
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
Sally Hawkins and Octavia Spencer in ‘The Shape of Water,’ above; Ana de Armas and Ryan Gosling in ‘Blade Runner 2049,’ below
Timothée Chalamet in ‘Call Me by
Your Name,’ above; Saoirse Ronan and
Laurie Metcalf in ‘Lady Bird,’ below
Cinematic Gold
Amid the Dross
n-
continue to make extraordinary
films for the big screen, and the
very best of them for me this year
was Guillermo del Toro’s “The
Shape of Water,” with Sally Hawkins as an enraptured lover in a
fish story that’s pure fantasy—
none of that squishy stuff about
being based on a true incident—
and pure pleasure, from bubbly
start to submerged finish.
The other choices follow, in alphabetical order.
Blade Runner 2049
Denis Villeneuve’s direction enlivens his sequel to the 1982 Ridley
Scott classic with verve and heart
that couldn’t be predicted from the
cool intelligence of his earlier sci-fi
feature, “Arrival.” This broodingly
sumptuous saga, starring Ryan Gosling, explores the primacy of feelings, the nature of memories and
the essence of being human,
no
BEFORE I LAY OUT my list of
bests and the bestest, a few words
about the movie year, and the list
itself. Theatrical features remain
an endangered species, yet a vital
one, with an extra spurt of yearend vitality that makes the medium look healthier than it is; how
many people do you know who
still see movies in theaters on a
regular basis? These choices don’t
reflect, though they surely will in
the future, the emergence of a new
genre—the feature film, produced
by a service like Netflix or Amazon, that plays in a few big-city
theaters while simultaneously
streaming throughout the country.
That said, gifted filmmakers
FILMS OF THE YEAR | By Joe Morgenstern
Daniel Kaluuya in ‘Get Out,’ above;
Willem Dafoe and Brooklynn Prince in
‘The Florida Project,’ below
ous music—but most of all in one
another. It’s a tale of totality, not
during an eclipse but during a brief
conjunction that changes at least
one life surprisingly.
The Florida Project
framed as the difference between
being manufactured or born.
Call Me by Your Name
Luca Guadagnino’s radiant romance
immerses us in the lives of two
people, a boy coming into manhood
and a man already there, who immerse themselves in everything an
Italian summer has to offer—warm
sunlight, good wine, ripe fruit, joy-
I didn’t appreciate this film sufficiently when I saw it the first time
around. My review was certainly admiring, but Sean Baker’s sixth feature, shot on a small budget, is bigtime remarkable—for its slice-of-life
vision of kids living in shabby motels in the shadow of Walt Disney
World, and for its cast of amateurs
and professionals that includes
Brooklynn Prince, Bria Vinaite, and
Willem Dafoe as the harried manager of one of the motels.
Get Out
What makes Jordan Peele’s debut
feature so special is its prime location at the intersection of horror
and race. No preachments are
preached, no parables are dwelled
on. This funny and genuinely scary
film starts with a great title and a
promising idea—a black man’s fear
as he walks at night down a street
in an affluent white suburb. Then
it delivers on that promise with
explosive brilliance.
Lady Bird
Greta Gerwig is a wonderful actor,
and wonderful actors often make
good directors. But this debut film,
the first that Ms. Gerwig has directed and also written on her own,
goes way beyond good into allaround wonderfulness; it’s wise and
Please see FILM page A14
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
A14 | Monday, December 11, 2017
LIFE & ARTS
WHAT’S YOUR WORKOUT? | By Jen Murphy
Mr. Onysko estimates it takes him
FILM
ly
.
Mr. Onysko has prided himself on
being what he calls a healthy vegan, avoiding processed foods and
sweets. In April, he embraced a ketogenic diet high in healthy fats
and low in sugars and starches. “It
taught me that there is sugar in
everything,” he says. “I used to
think orange juice was healthy.”
He cut all fruit from his diet
and lessened his alcohol consumption by 80%. He lost 19 pounds in
four weeks. He does the diet for
six weeks every six months. When
he’s off it, he tries to have carbs
pre- or post-workout.
In the morning he makes a
warm drink of matcha, coconut
milk and coconut oil. He later has
a smoothie of matcha, Amazing
Grass Green Superfood and coconut milk. For lunch he has a salad
with kale, arugula, olive oil, lemon
juice, pumpkin seeds, a whole avocado and stir-fried tofu. Dinner is
a similar salad or a bowl of
steamed vegetables and tofu. He
snacks on nuts such as pecans,
macadamia nuts and cashews. “I
flavor them with different seasonings like chipotle and smoked sea
salt and leave them in jars on my
counter, so if I get a craving I
reach for a handful of nuts.”
Build Your Muscles
The Lumberjack Way
Lumberjacking could be considered the mountain man’s version of CrossFit. “Whether you’re
swinging an ax or pulling a saw,
you’re using every single muscle
in your body,” says Matt Cogar, a
West Virginia-based professional
lumberjack and five-time Stihl
Timbersports U.S. champion.
“While your legs are working
with your back to give you
power, your arms are guiding the
tool to make each cut as precise
as possible.”
Each lumberjack discipline engages certain muscles more than
others. The underhand chop,
which uses an ax to cut fallen
logs to length, primarily works
the shoulders and hamstrings,
Mr. Cogar says. The two-man
saw works the abdominals, quadriceps and lower back, while using a chain saw engages the
shoulders, biceps and abdominals.
Mr. Cogar says core strength
is key to chopping and sawing
through logs safely and efficiently. His own workout routine
involves cable woodchops, dead
lifts, body-weight squats, pullups, sit-ups and push-ups.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Joshua Onysko chops wood with a maul, top. Above left, with friend David
Delcourt, he uses a two-man saw to cut down a tree on his property.
five hours to cut a cord of wood—it
provides a full-body workout.
“You’re usually carrying a 40pound chain saw and other equipment up a mountainside, and you
have to burn piles out of all the
dead trees you cut down,” he says.
Once a week he’ll take down a
tree with an ax. “It’s not the most
efficient way to chop down a tree,
but it’s a great stress release,” he
says. He says the two-man saw is
the best core workout.
Monday through Friday he goes
to a CrossFit class at Easton Training Center in Boulder. “It’s a great
complement to lumberjacking, because you use every muscle in
your body,” he says. Each hourlong
workout focuses on two different
sets of exercises, such as low-hang
squat cleans, a lift that starts with
the barbell just below the knee. He
then does a circuit consisting of
one minute on the rowing machine, one minute of dumbbell
presses, sit-ups, push-ups and one
minute of jumping rope. “After five
n-
The Workout
The Diet
no
WHEN WINTER approaches the
Rockies, Joshua Onysko has extra
motivation to work out. He needs
to chop wood to heat his home in
Boulder, Colo. “Lumberjacking is
harder than any exercise I’ve ever
tried,” says the founder of the
Pangea Organics skin-care line.
“Within minutes you’re dripping in
sweat. It also takes my mind off of
the stresses of owning a company.
Nothing releases tension like taking an ax to a dead tree.”
Mr. Onysko spends weekends
from November through April
chopping wood on his 15-acre
property. He estimates he goes
through three cords—each cord is
a stack 4 feet by 4 feet by 8 feet—
each winter. Friends now ask to
join him. “We each get on the end
of a two-man saw. They call it the
mountain-man workout.”
Mr. Onysko says using a chain
saw, ax and two-man saw requires
him to use every muscle in his
body. The lumberjacking sessions
made him realize he wasn’t as
strong as he thought. His low
back, shoulders and legs would be
sore at day’s end. When he turned
40 this year he decided he should
start lifting weights, something he
abandoned in his 20s following
three knee surgeries—two on his
left knee, one on his right—from
ski injuries.
A friend convinced him to try
CrossFit. “It’s a lot of the same
movements I do lumberjacking, but
with a focus on proper technique
and with the added motivation of a
group atmosphere and coach,” he
says. “I had to toss my ego out the
door. I’m lifting the lowest weight
in class, but I’m not trying to get
huge, I’m trying to get fit.”
MORGAN RACHEL LEVY FOR THE WALL STREET JOURNAL
For Fitness,
He Gets
The Ax
rounds of a circuit, I’m dead,” he
says. “I can tell my endurance has
improved, because this season it’s
easier than ever to get up the
mountain with my saws and gear.”
He does 15 minutes of extra core
work before class, like back extensions in the Roman chair and planks
with weighted plates on his back.
“My cat is pretty fat, so I put her on
my back at home when I plank,” he
says. Thanks to a stronger core, he
says he’s no longer using his lower
back when he chops or saws.
He meditates for 15 minutes every morning. He’s been practicing
yoga for 11 years and streams online yoga classes via YogaGlo in the
evenings. “I try to practice 90 minutes and like classes by Rod
Stryker and Elena Brower,” he says.
Mr. Onysko says that in Boulder,
everyone is “ultrafit.”
“It’s constant motivation to
work harder and a reminder that if
I can keep fit, I can get out more
and ski, hike and enjoy where I
live,” he says.
Mr. Onysko engineered a trade
with local clothing company, Pact,
swapping some of his company’s
products for 30 black V-neck
shirts. “It’s like my uniform,” he
jokes. His Manduka eKO SuperLite
travel yoga mat folds up to fit in
luggage and retails for $42. He
pays $200 a month for his membership at Easton Training Center
and $18 a month for his YogaGlo
membership. He paid $1,200 for
each of his Stihl MS 362 C-M chain
saws, $250 for his two-man saw,
and $80 for his ax and maul,
which has a thick, blunt head for
heavy splitting. He wears Kevlar
chaps, earplugs and eye protection
when he uses a chain saw.
The Playlist
“When I hike I want to listen to
nature,” he says. At the gym, he
opts for electronic dance music or
the OutKast Spotify station.
FROM LEFT: WARNER BROS.; FOCUS FEATURES; STX ENTERTAINMENT; 20TH CENTURY FOX
Continued from page A13
funny and full of grace. As her
semi-autobiographical heroine
and the title character, Saoirse
Ronan captures the fullness of
adolescence, while Laurie Metcalf
gives a heartbreakingly beautiful
performance as Lady Bird’s loving and deploring mother.
Phantom Thread
From left:
Gal Gadot in
‘Wonder Woman’;
Vicky Krieps and
Daniel Day-Lewis
in ‘Phantom Thread’;
Gemma Arterton in
‘Their Finest’; Woody
Harrelson and Frances
McDormand in ‘Three
Billboards Outside
Ebbing, Missouri’
The Gear & Cost
Paul Thomas Anderson’s latest film
doesn’t open until Christmas Day,
but it’s a gift worth waiting for. The
arena is haute couture in 1950s London. The combatants, for they are
exactly that, are Reynolds Woodcock, a reigning dressmaker played
by Daniel Day-Lewis and, no, not so
much the great man’s competitors
as his favored model and precious
muse, Vicky Krieps’s enchanting
Alma. If this is Mr. Day-Lewis’s last
performance, as he has said, it’s not
just a gift but a treasure.
Their Finest
A perfect comic drama, one that’s
been all but forgotten since it
opened in April. The slightly opaque
title refers to “their finest hour,”
the culminating phrase of an inspirational speech Winston Churchill
gave in 1940, during the darkest
days of World War II. But it’s also
an intricate reference to a movie
within the movie, a woefully unpromising propaganda melodrama
that Britain’s Ministry of Information is developing, in 1940, to provide some inspiration for the home
front during the Blitz.
Three Billboards Outside
Ebbing, Missouri
Is that the longest title of the
year? Martin McDonagh’s third
feature is surely the fiercest comedy of the year. It’s blazingly profane, flat-out hilarious and shockingly violent, not to mention
flippant, tender, poetic and pro-
found. At its core, the film is a tale
of revenge, a testament to the
power of grief and the possibility
of forgiveness. Frances McDormand, Sam Rockwell and Woody
Harrelson head a flawless cast.
Wonder Woman
Here is everything that can go
right with a big-budget summer
movie, a category of entertainment
often diminished in recent years
by galumphing enterprises bereft
of joy. And here’s everything you
need to know about what the right
woman’s touch can do with the
right woman in the title role. The
director, Patty Jenkins, and the
star, Gal Gadot, deserve each other
in the best way, while Chris Pine,
in a lesser role, makes a major
contribution to the fun and the
soaring excitement.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A15
LIFE & ARTS
TELEVISION OF THE YEAR | By Dorothy Rabinowitz
Sex, Lies and Lots of Spies
attention to those studio chiefs and
their relation to the women who
serve them. The character of Pat
Brady (a splendid Kelsey Grammer)
perfectly exemplifies those bosses
who viewed sex as part of their job
entitlements. This superbly written
work that grasped the Hollywood
of the ’30s in luscious detail, as it
did the passionate politics of the
era, unfortunately failed to impress
the moguls at Amazon who declined to give it a second season.
The Americans (FX)
Season five of the best drama series on television had a special
timeliness, coming as it did just
after Donald Trump’s election to
the presidency—a period of proliferating questions about Russian
meddling in American affairs. The
lives of Philip (Matthew Rhys)
and Elizabeth Jennings (Keri Russell), Soviet sleeper agents, are
now complicated by conflict.
Philip, still loyal to his mission
and homeland, has by now become an American at heart, unable to deny his attraction to
freedom. The sixth and final season, which is bound to feel even
timelier, begins March 28, 2018.
Hunting the KGB Killers
Big Little Lies (HBO)
This riveting tale of suspicion, rivalry and worse
among residents of an upscale community in Monterey, Calif., begins with a
brutal murder committed
during a school fundraiser.
Whose murder no one will
know till the end. Nor does
the subject of the deceased
have anything to do with
the endless tensions that
drive the lives of these
mostly prosperous citizens,
surrounded by lush oceanside vistas that seem unable
to calm the demons that
haunt these characters.
Three wives are at the
center of this serio-comic
work, among them Madeline, a triumph of a creation
as delivered by Reese Witherspoon in top form.
There’s the beautiful Celeste—a commanding performance by Nicole Kidman—whose seemingly
enviable family life is
plagued by terror, and Jane
(Shailene Woodley), a single
mother whose young son becomes
a target of accusations that provide most of the series’s searing
social satire.
n-
no
HBO (2); ACORN TV (2); AMAZON PRIME TV; FX; RICHARD JONES/JOHN DOWNER PRODUCTIONS
Spy in the Wild (PBS)
This five-part film concerns
the kind of secret intelligence operations that uncover only moving, emotionally rich and uplifting
information. In this irresistible series, robotic creatures
disguised as animals insinuate themselves into communities of meerkats, crocodiles, giraffes—no animal
escapes its camera eye. So
viewers are able to watch, in
awe, a procession of mourning giraffes, come to pay respects to one of their aged kin,
found dead. A spectacle equaled
only by the crocodile whipping her
young into her mouth—under her
terrifying teeth—to save them from
predators.
The Last Tycoon (Amazon)
There aren’t many echoes of F.
Scott Fitzgerald in this adaptation
of his unfinished novel. That’s clear
as this ambitious and powerfully
engaging series by Billy Ray and
Christopher Keyser establishes a
voice of its own—one imbued with
a fierce clarity in its representation
both of 1930s Hollywood and of
America and Europe at the edge of
war. It is, in addition, a story of
moguls—a timely theme, especially
in its meticulously close, scathing
ly
.
Maggie Gyllenhaal in ‘The Deuce,’ above; Lily Collins and Matt Bomer in ‘The Last Tycoon,’ below; Ashley Jensen and
Kenny Doughty in ‘Love, Lies & Records,’ bottom left; Keri Russell and Matthew Rhys in ‘The Americans,’ bottom right
(Acorn TV)
The 2006 assassination, in London,
of Alexander Litvinenko—a former
KGB officer who had fled Russia for
England, where he worked with
British intelligence—would spur a
criminal investigation that would
implicate Vladimir Putin in
his death. Spellbinding in its
clinical pursuit of the cause
of the extreme symptoms Litvinenko presented when he
was hospitalized, the film is
both the story of a medical
mystery solved—his assassin
had injected him with the
heavy metal thallium, a poison favored by the KGB—and
a spine-chilling account of
the efforts that had been
made to kill Litvinenko before a Russian agent finally
succeeded.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
The Deuce (HBO)
Its grim subject notwithstanding,
“The Deuce” came barreling along
in 2017, spreading light, wit and a
humanity that glowed from its
darkest places. And there are
plenty of those in this series (by
David Simon and George Pelecanos) set amid the prostitution and
pornography that was thriving in
Times Square during the early ’70s.
The story’s eight episodes—exuberant, brutal and moving—follow
the daily lives of the hookers and
pimps of this place whose streets
are filled with trash and, during
prime business hours,
with girls
looking for
customers.
Girls with
good reason
to be aware
that they’d
better produce for their pimps. All,
that is, except Candy, a rare independent who has determined that
all the money she makes on her
back belongs to her alone—a character Maggie Gyllenhaal summons
to life with conspicuous brilliance.
There’s something different about
this working girl in her kinky
blond wig, who gives off a sense of
self-possession even after being viciously beaten by a client—something that could happen at any
time to someone in her profession,
and does.
An extraordinary work that will
be returning next season.
Nicole Kidman, Shailene Woodley and Reese Witherspoon in ‘Big Little Lies,’ above; robotic meerkat being investigated
by a young meerkat in ‘Spy in the Wild,’ right top; Alexander Litvinenko in ‘Hunting the KGB Killers,’ right bottom
Love, Lies & Records (Acorn TV)
A splendid brew of soap opera and
murder mystery, set among the
employees of the Register Office of
Greater Leeds, England. A creation
of British television writer Kay
Mellor, who thought she found in
the government office where citizens come to register births and
deaths of loved ones, and where
they marry, rich material for
drama. She was right.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
A16 | Monday, December 11, 2017
THE WALL STREET JOURNAL.
* *
SPORTS
NFL
BIZARRE GAME
IN A BLIZZARD
BY ANDREW BEATON
JAE C. HONG/ASSOCIATED PRESS
The Bills and Colts were never
expected to produce much aesthetically pleasing football Sunday, especially with both teams playing
backup quarterbacks. Then it
snowed so hard in Buffalo that it
produced one of the most delightfully ugly football games.
The Bills won 13-7 in overtime,
but the final score was only memorable because of how they arrived
there. At times, the field was
barely visible. The snow was piled
so high that running didn’t exist.
There was only painstakingly slow
trudging. Passing was so difficult
it was barely even attempted. And
kicking the ball was even more
harrowing—which is why the Colts
went for two points and the win
with 1:16 left in regulation.
This is how backward things
were in the whiteout: The Colts
didn’t attempt their first pass until
there was 6:13 remaining in the
second quarter.
Indianapolis began with 17
straight runs—the most since the
Raiders’ 21 consecutive rushes to
start a game in 2003, according to
Stats LLC.
Trailing 7-6, the Colts went
for—and converted a 2-point conversion, for what would have been
an 8-7 lead with barely any time
left. But a penalty took the score
off the board, leaving kicker Adam
Vinatieri with a 43-yard extra
point. But Vinatieri wasn’t a perfect hero: With six seconds left, he
missed a 43-yard field goal that
would have won it in regulation.
In overtime, Bills running back
LeSean McCoy scored on a 21-yard
run to end the game. McCoy
rushed for 156 yards on 32 carries.
For most of the game, the play
was about as ugly as the final
passing stats: The Colts’ Jacoby
Brissett finished 11-for-22 with 69
yards. The Bills, who used Nathan
Peterman and Joe Webb with Tyrod Taylor out injured and Peterman leaving after a hit to the
head, finished 7-for-16 for 92
yards.
It was the fewest combined
passing yards in a game since
2010, according to Stats LLC.
The Los Angeles Angels have to devise a schedule that will allow Shohei Ohtani to flourish simultaneously as a member of the rotation and as a regular hitter.
MLB
ing relief duties to outfielder Brett
Eibner’s repertoire to boost his
versatility and value. And now
Ohtani will bring his triple-digits
fastball and prodigious home-run
power to the Los Angeles Angels.
“We definitely plan on him being a two-way player,” Angels
manager Mike Scioscia said Saturday, speaking at Ohtani’s introductory news conference in Anaheim.
“There’s no doubt about that.”
BY JARED DIAMOND
unprecedented puzzle: how to devise a schedule that will allow
Ohtani to flourish simultaneously
as a member of the rotation and
as a regular hitter, a feat barely attempted, let alone accomplished,
since Babe Ruth.
“The mindset an individual like
Ohtani has to have is, ‘This is a pioneering position,’” said Owings,
who retired with a 4.86 ERA in 138
outings and a .283 batting average
in 205 at-bats. Owings attempted
to establish himself as a two-way
threat late in his career, but it
never panned out on a large scale.
Looking back now, Owings thinks
that “it wasn’t really sat down,
discussed and mapped out as well
as it could have been.”
To an extent, the same goes for
Brooks Kieschnick, who actually
enjoyed some success in that role
for the Milwaukee Brewers in 2003
and 2004. Over that span he appeared in 74 games out of the bullpen and received 144 plate appearances mostly as a pinch hitter.
Though Kieschnick established
himself as the closest thing to a
true two-way asset baseball has
seen in years, even he admits that
the Brewers more or less drew up
the blueprint on the fly.
“We didn’t know how to approach it,” Kieschnick said.
The Angels will employ a much
more sophisticated approach with
Ohtani, allocating large amounts of
time and resources to take full advantage of his unique talents. Eppler said that in their initial meeting with Ohtani they presented
JEFFREY T. BARNES/ASSOCIATED PRESS
With a six-man pitching
rotation, Ohtani could
DH in three games
between starts.
How exactly that will look remains unclear at this point, as the
baseball world gathers in Florida
this week for the annual winter
meetings. At Saturday’s media
event, which doubled as a pep
rally for Ohtani that drew hundreds of fans outside Angel Stadium, the relevant parties offered
little by way of specifics.
General manager Billy Eppler
said that the Angels don’t expect
to put Ohtani in the outfield next
season, meaning his offensive contributions will come exclusively as
a designated hitter. Other than
that, officials remained vague
about the details of the plan.
Before spring training, however,
the Angels must solve a virtually
n-
LeSean McCoy rushed for 156 yards.
Weather
The WSJ Daily Crossword | Edited by Mike Shenk
Edmonton
d
t
Calgary
C ary
no
Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Vancouver
V
Winnipeg
ip
ttl
Seattle
Por
P
d
Portland
l
Helena
40s
20s
Boise
30s
Reno
Salt Lake
Lake Cit
C
Cityy
40s
Honolulu
l l
t
Houston
San
an Antonio
80s
60s
U.S. Forecasts
31
Rain
l d
Orlando
International
City
Amsterdam
Athens
Baghdad
Bangkok
Beijing
Berlin
Brussels
Buenos Aires
Dubai
Dublin
Edinburgh
Today
Hi Lo W
36 31 sn
60 50 s
66 43 s
93 77 pc
36 14 s
40 37 c
38 33 r
76 59 s
78 70 s
40 30 pc
35 25 pc
Tomorrow
Hi Lo W
38 32 pc
64 50 s
67 44 s
92 78 s
29 12 pc
42 31 c
36 33 pc
87 65 pc
78 65 s
42 37 sh
37 33 pc
9
10
11
24
28
25
38
39
60
61
26
30
33
34
35
41
36
37
42
44
52
13
22
29
32
12
16
45
47
53
48
54
49
55
50
56
58
59
Cold
T-storms
62
63
Stationary
Snow
66
67
68
Showers
Flurries
69
70
71
64
65
Tampa
Ice
City
Omaha
Orlando
Philadelphia
Phoenix
Pittsburgh
Portland, Maine
Portland, Ore.
Sacramento
St. Louis
Salt Lake City
San Francisco
Santa Fe
Seattle
Sioux Falls
Wash., D.C.
8
19
43
51
7
21
46
Warm
6
18
57
Miami
Tomorrow
Hi Lo W
44 28 pc
73 41 s
46 23 sn
78 48 s
33 16 sf
38 21 sn
47 31 s
63 31 s
39 28 pc
42 24 s
65 45 s
53 20 s
48 35 s
39 26 pc
50 25 c
5
15
23
27
40
70s
Today
Hi Lo W
47 23 c
63 41 s
43 32 s
76 47 pc
38 32 c
38 18 s
47 30 s
63 32 s
55 27 pc
39 24 s
65 46 s
55 22 s
48 36 s
39 19 sn
45 36 pc
4
20
70s
90s
3
17
City
Frankfurt
Geneva
Havana
Hong Kong
Istanbul
Jakarta
Jerusalem
Johannesburg
London
Madrid
Manila
Melbourne
Mexico City
Milan
Moscow
Mumbai
Paris
Rio de Janeiro
Riyadh
Rome
San Juan
Seoul
Shanghai
Singapore
Sydney
Taipei
Tokyo
Toronto
Vancouver
Warsaw
Zurich
Today
Hi Lo W
44 37 r
49 39 r
71 52 s
71 60 s
60 54 s
89 77 sh
66 47 pc
75 57 t
38 25 sn
50 29 c
88 77 pc
72 51 c
67 38 s
44 40 r
37 24 sh
84 69 pc
50 34 r
87 72 pc
73 42 s
64 55 sh
84 72 pc
24 12 s
50 38 s
86 77 c
81 68 s
66 59 c
61 37 s
27 25 sn
44 36 s
46 41 c
42 36 c
Tomorrow
Hi Lo W
40 31 c
42 25 sh
74 60 s
66 64 pc
62 52 pc
88 76 c
68 45 s
84 61 t
37 34 pc
49 28 s
89 77 pc
80 58 pc
69 38 s
51 33 pc
37 35 r
81 68 pc
42 35 pc
79 69 r
75 42 s
62 50 sh
86 74 pc
24 11 s
48 40 pc
84 76 t
80 68 s
66 62 c
49 38 pc
30 11 sn
45 35 c
53 33 c
39 25 sh
PARK PLACE | By Freddie Cheng
Across
1 Commotion
5 Least likely to
bite, perhaps
11 Wd. that
modifies a
noun
14 Take ___
(snooze)
15 Noisy bedfellow
16 Command to an
attack dog
17 •Pigs flying, for
example
19 Four-term pres.
20 Houston
ballplayer
21 Vowel from
Greece
22 Effortlessness
23 •“Not today...”
27 To’s counterpart
29 Danson of “The
Good Place”
30
31
33
36
40
43
44
45
46
48
50
51
57
58
59
62
Fast-running bird 63 Attractions in
Paris, Tokyo,
Enlist again
Hong Kong and
Poker payment
Shanghai, and
Period of history
the ends of the
•Summer
starred answers
blockbuster
66 Last letter
movie genre
67 Most slippery, in
Chairperson?
a way
Milk choice
68 Canvas for a
Thorn setting
tattoo
Chinese leader
with a Little Red 69 Gridiron figs.
70 Patched up
Book
71 Ballpark figs.
Helping hand
Down
___ Moines
•Space, to
1 Appetizer for
Juan
Trekkies
2 Burden
___ Bator,
Mongolia
3 Smallest Ivy
League school
Not that many
4 Donizetti
Zodiac sign for
specialty
babies born on
April Fool’s Day
5 Airport screening
org.
Nada
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s
s...sunny; pc... partly cloudy; c...cloudy; sh...showers;
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice
Today
Tomorrow
City
Hi Lo W Hi Lo W
Anchorage
44 34 c
41 34 sh
Atlanta
54 38 s
47 27 c
Austin
74 37 pc 64 30 s
Baltimore
44 31 s
47 20 pc
Boise
30 24 c
32 22 pc
Boston
38 27 s
43 23 sn
Burlington
24 17 c
33 19 sn
Charlotte
54 36 s
53 25 pc
Chicago
38 20 sn 26 14 pc
Cleveland
36 28 sn 29 16 sn
Dallas
77 40 s
61 39 s
Denver
59 30 s
65 33 s
Detroit
33 21 sn 26 6 c
Honolulu
82 69 pc 81 69 sh
Houston
71 44 s
64 35 s
Indianapolis
43 22 c
30 16 sf
Kansas City
53 24 pc 42 26 pc
Las Vegas
63 38 s
64 41 s
Little Rock
69 35 s
55 29 s
Los Angeles
82 53 s
81 49 s
Miami
70 48 s
74 54 s
Milwaukee
35 17 sn 24 12 pc
Minneapolis
34 12 sf 25 14 c
Nashville
57 37 s
43 24 pc
New Orleans
66 47 s
60 39 s
New York City
40 35 s
44 22 sn
Oklahoma City
68 30 s
55 31 s
Raleigh
l igh
h
C
h l tt
Charlotte
Columbia
C
b
2
80s
100+
Richmond
h
d
Jacksonville
Mobile
bil
A ti
Austin
60s
hington
hi
gton D.C.
DC
Washington
Atl
t
Atlanta
LLittle Rockk
Birmingham
i h
D
ll
Dallas
Jackson
Jack
ew Orleans
New
70s
Anchorage
A h g
40s
50s
Oklahoma
k oma City
City
70s
10s
20s 30s
Albany
A banyy Boston
Buffalo
ttfordd
Hartford
t
Detroit
Cleveland
C
l d
k
Milwaukee
ew York
New
h
Chicago
Philadelphia
Ph
hil d lphi
30s Pittsburgh
Pit b gh
Indianapolis
d
p
phi
Memphis
Ft. Worth
50s
Toronto
T
30s
1
14
40s
Augusta
A g t
p i gfi ld Charleston
Kansas Springfield
Ch l t
Charles
City
Lou
L
St.. Louis
LLouisville
Lou
ill
Wichita
hit
Nashville
h ill
60s
30s
Montreal
Ottawa
Topeka
Santaa F
Fe
Albuquerque
Alb q q
El P
Paso
10s
Omaha
h
Denver
60s
80s Loss AAngeles
50s
Ph
Phoenix
80s
San Diego
70s Tucson
T c
20s
Des
es Moines
i
Colorado
C
Colorad
Springs
p
Las
Ve
Vegas
10s
Sioux
oux FFalls
Cheyenne
Sacramento
an Francisco
San
0s
0s
Mpls./St
/ . Paul
Mpls./St.
Pierre
P
40s
<0
0s
20s
Bismarckk
Billings
Eugene
g
him with a potential calendar outlining what he would do every day
of the season.
“I don’t want to say that that
plan gets ripped up,” Eppler said.
“But I bet you that a large portion
of that plan now gets modified because it was from a one-party perspective, and now we have two
parties.”
Eppler brought up the possibility of the Angels constructing a
six-man starting rotation, which
would better approximate Ohtani’s
customary workload. In Japan,
pitchers start once a week, rather
than once every five days.
Though Ohtani will need to create an individual routine he feels
comfortable with, Owings drafted
a theoretical schedule based on his
own experiences that he thinks
could work.
After a start, Owings recommended a full day of recuperation,
outside of perhaps some light tossing or cardio. With a six-man rotation, Owings said Ohtani could DH
each of the next three days, taking
traditional batting practice before
the game. On one of those days, he
would throw his between-start
bullpen session. At some point, he
would go to the weight room for a
total body lift instead of dividing
it into separate upper and lower
body workouts, as he would as
only a pitcher. On the day before a
start, rest is suggested.
“It’s going to take some trust
from both parties,” Owings said.
“When he gets on the field, his talent will take over.”
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Long before Japanese two-way
sensation Shohei Ohtani captivated
the baseball universe, Micah Owings dreamed of thriving on the
mound and at the plate at the major-league level. Though the Arizona Diamondbacks drafted him as
a pitcher, while in the minors Owings would spend his spare time in
the batting cage keeping his swing
in shape, just in case.
The extracurricular activities
didn’t go over well.
“I would continually get reprimanded for going in there,” Owings said in a recent interview,
adding that the team even threatened to fine him in clubhouse kangaroo court. “They really didn’t
want me to be swinging it.”
During Owings’s career, which
lasted from 2007 through 2012,
the very notion of a player doing
both transcended the realm of possibility. He says he “was told many
times that it’ll never happen, that
it can’t be done” from people
across the industry. He even remembers meeting with a prospective agent who outright dismissed
the idea. Owings found representation elsewhere.
But fast forward a decade, and
the concept of a two-way player
no longer sounds so crazy. Top
Tampa Bay Rays prospect Brendan
McKay started six games as a
pitcher and 21 more at first base
in Single-A last season. The Los
Angeles Dodgers considered add-
ly
.
The Angels’ Plan for Ohtani
6 TV journalist
Curry
7 Sacred song
8 Muse of lyric
poetry
9 Seeds ground to
make tahini
10 Have a go
11 “I trust you about
___...” (start of a
wary comment)
12 Playground
comeback
13 Banana Republic
rival
18 Four-time Indy
500 winner A.J.
22 What Old
Faithful does
roughly every 90
minutes
24 Noggin
25 Writers Ferber
and O’Brien
26 Sign that can be
good or bad
27 Herr’s spouse
28 CDs and LPs:
Abbr.
32 Whom Simple
Simon met
34 Japanese co. that
made lots of
cassettes
35 Water brand
sourced near
Lake Geneva
37 Takes more shots
than, perhaps
38 One of Canada’s
First Nations
39 Tailoring tasks
41 Spoken
42 Radiate
47 Cubicle setting
49 Clock face
51 Like some
dangling dice
52 “But you
promised!” retort
53 Turtlenecks cover
them
54 Amber material
55 Held title to
56 Make blank
60 Tweak, as text
61 Nos. coveted by
identity thieves
63 Not too bright
64 Jargon ending
65 From Jan. 1
Previous Puzzle’s Solution
F E L I
B R I T
I A MW
P E
R I O
UM P S
B O O K
I
U R I
N A N C
I N S E
C L U E
O A R
R T E
N E D
X
O
E
P
R I T
O N
X V I
I M
T A
V E G
A R E
Y
S
AM
A A
N UM
O N E
S A N
S
H
I
N
C
O
N
E
D
O
O
N
E
B
I
T
T
E
N
A
B E
U P
T A
A
N
G
E
L
R
E
A
O
C
T
N O
O O P
A D U
S T
S
T H E
I
P A
N
S L
G O
A
E D AM
R S D O
O R D
N Y E
T
H
E
N
I
L
E
S
I
L
E
N
T
T
G E
I T
N A
N E
E R
T S
The contest answer is OOPS! As noted at 59-Across,
the editor carelessly changed four clues without
realizing they affected other entries: OSCAR’s clue
must have been something like “...and the other half”
for 1-A to make sense with its ellipsis; OCTOPUS
must have been “Creature named with a numerical
prefix” for 42-D to make sense with its “Another”;
PAGE must have been the missing “Part 4 of the
quip” and SANTA must have been “With 58-A, a
California city” or the like. The first letters of the
changed clues’ answers spell the contest answer.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A17
* * * * *
OPINION
W
ith recent setbacks in
the Philippines, Turkey, Venezuela and
elsewhere, it is common to
hear laments about the decline of democracy worldwide. Turbulent times in Britain and the U.S. add to the
concern, as does the sweeping
failure of the so-called Arab
Spring since 2011. After major
waves of progress in the wake
of World War II and the Cold
War, is freedom starting to
sputter?
Democracy has taken some
hard hits. But before we cede
bragging rights to autocrats, or
persuade ourselves of the need
for precipitate action to arrest
a perilous strategic slide, we
need perspective on what has
been happening.
It is true that the “third
wave” of democratization—
the proliferation of democratic
states in the late 20th century—has largely ended. But it
has not been reversed by any
stretch of the imagination.
Recall the magnitude of
what transpired last century.
By 2000 about 120 countries,
or nearly two-thirds of the nations of the planet, had become electoral democracies. A
hundred years before, the total
could be counted on a single
hand—or less, if one defines
democracy as a system of full
enfranchisement of women
and men of all races.
The 21st century is not off
to such a good start. But the
net setbacks have been modest.
By one measure, according to
Freedom House, 25% of all
countries were assessed as
“not free” in 2016, compared
with 23% in 2006.
Yet if one adjusts for population, there has been no setback at all. India, Indonesia,
Nigeria and Brazil, with a
combined population of two
billion, have, for all their admitted troubles, been holding
generally steady in recent
years. The countries experiencing setbacks have generally
been less populous. As a result, the fraction of people living in “not free” countries has
declined slightly over the past
dozen years, from 37% to 36%,
while the total living in “free”
countries rose gently, from
44% to 45%. The remainder
were in countries deemed by
Freedom House to be “partly
free.”
Much as we might regret
partial setbacks to liberal democracy in Hungary, population 10 million, developments
there pale in significance
when compared with democratic progress in Indonesia,
population 261 million. The
big outlier here is Russia, with
its 142 million people, where
the early signs of liberalism in
the mid-2000s have been decisively reversed.
Viewed in broad historical
terms, the democratic model
continues to excel when measured against all the alternatives. Established democracies
almost never go to war with
each other, helping explain
why the decades since World
War II have been among the
least violent in human history,
at least when it comes to interstate war.
A world of democracies is
also proving to be unambiguously good for fighting poverty and strengthening the
global middle class. As our
colleague Homi Kharas has
In 12 years, the share
of the world’s people
who live in ‘free’
countries has risen.
shown, in 1950 less than 10%
of the world’s population
could be said to be middleclass—with daily family income between roughly $10
and $100 in 2005 dollars, adjusted for purchasing power.
Today the figure approaches
50%. Some of that progress
has been within autocracies,
notably China. But more than
two-thirds of it has been in
democratic countries.
Most of these democracies
also generally remain united
in a common strategic purpose, despite the occasional
robust debates over when and
how to use force. The U.S.
leads a coalition or loose alliance system of some 60 states
that together account for
roughly 70% of world military
spending and a similar fraction of total world gross domestic product. Except in the
Middle East, almost all these
U.S. allies are democracies.
And while the megastate of
India is not a U.S. ally in the
way that Canada and the U.K.
are, it is nonetheless an increasingly close American
strategic partner.
Democracies have struggled
with corruption, violent crime,
poverty, populism, challenges
from globalization, and other
hard realities of modern life.
Democracy does not change
human nature. It does, however, generally put us in a
much better position to address those problems peacefully.
Witness South Korea, which
impeached a president earlier
this year but seems no worse
for the wear. Or Brazil, dealing
with similar political problems
in an ugly yet still constitutional manner. Or India, where
a strongman leader is nonetheless checked in some of his
ambitions by a balance-ofpowers system. Or the U.K.,
where Brexit, itself the result
of a democratic choice, seems
likely to cause only limited
damage.
We do need to learn one
lesson from history’s recent
sobering course: Democracy is
fragile and can never be taken
for granted. But declarations
about democracy’s demise, or
even its significant decline, go
too far.
Mr. Jones is vice president
and Mr. O’Hanlon director of
research at the Brookings
Institution’s Foreign Policy
Program.
Mary Anastasia O’Grady is
away.
Protectionism Is a Negative-Sum Game
T
Foreign companies
operating in the U.S.
employ some seven
million Americans.
tariffs on washing machines
made by South Korea’s LG
and Samsung. Lost is the fact
that Samsung plans to employ
1,000 workers at a South Carolina plant previously shuttered by Caterpillar. LG is
slated to hire 600 American
workers at a planned facility
in Tennessee.
Perhaps the worst example
of us-versus-them policies is
the Commerce Department’s
recent preliminary decision
against Canada-based aircraft
manufacturer Bombardier.
Boeing petitioned Commerce
and the International Trade
Commission to investigate
Bombardier. Commerce recommended a jumbo-jet-sized
total tariff of 300% to “protect” Boeing from competition from a new passengerfriendly aircraft. Boeing
voluntarily exited this market
in 2006. Not surprisingly,
Boeing filed its petition
no
he Trump administration’s recent actions on
trade indicate a narrow
view of what drives America’s
economic success. The only
way for President Trump to attain his bold economic growth
targets is to cultivate the jobcreating potential that global
connections and international
companies provide.
Nearly seven million U.S.
workers have jobs because an
international company has set
up operations here—paying
wages and benefits about 25%
higher than the economywide
average. More than 35% of
these jobs are in manufacturing, producing nearly a quarter of U.S. exports. Unfortunately, those high-quality jobs
may soon be at risk if Mr.
Trump continues to approach
trade policy with an us-versus-them mentality.
While other countries—including China—are expanding
their trade networks and economies by pursuing new freetrade agreements, the Trump
administration has focused its
efforts on reducing bilateral
trade deficits, a narrow metric
for measuring the value of
trade, and engaging in skirmishes likely to hurt rather
than help U.S. workers.
Take South Korea, a strategic U.S. ally with a population
of 50 million. While U.S. consumers buy more South Korean-made products than
South Korean consumers buy
American-made goods, South
Korean companies employ
52,000 U.S. workers, an in-
crease of nearly 30% since the
first free-trade agreement between the two countries entered into force five years
ago.
The Trump administration
is not only considering a rewrite of the South Korea freetrade agreement. At the behest of Whirlpool, they are
also considering imposing
n-
By Nancy McLernon
against Bombardier days after
the Trump administration announced a new tariff on Canadian softwood lumber imports.
Casual observers may welcome what they see as the
government punishing an international competitor at the
request of a U.S. company.
But U.S.-based suppliers provide more than half the components in each of Bombardier’s C Series aircraft,
including engines, avionics,
braking systems and fuel systems. The C Series is projected to generate more than
$30 billion in business for
U.S. suppliers across 19
states, supporting more than
22,700 domestic jobs.
In October Bombardier and
Airbus announced a broad
partnership on the C Series
that includes manufacturing
airplanes at Airbus’s plant in
Mobile, Ala. These two foreign companies are investing
in manufacturing and creating
U.S. jobs, supporting U.S. exports, and buying billions
worth of components from
U.S. aerospace suppliers.
Bombardier has been operating and investing in the U.S.
for more than 40 years. It
builds and services planes,
trains and related equipment
in America for both domestic
and export markets. It directly employs more than
7,000 U.S. workers across 17
states, and it generated more
than $15 billion in business
for its U.S. suppliers (and
their employees) over the
past five years. A successful C
Series will only increase
those numbers.
In today’s global economy,
it is difficult to plant one
country’s flag on a company.
Foreign firms are contributing to the U.S. economy in numerous ways, often importing
world-class training programs
that benefit local workforces
and supporting cutting-edge
research and development.
“President Trump is committed to creating a businessfriendly environment across
our nation,” said Commerce
Secretary Wilbur Ross in a
June statement. “The administration welcomes global investment to strengthen local
economies and to ensure job
creation.”
That admirable and farsighted view is at odds with
Washington’s protectionist
tariff spree. Initiating fights
with trading partners leads to
destructive trade wars in
which all sides lose. Would-be
employers around the world
are asking whether the U.S. is
committed to remaining an
open economy or repeating
the mistakes of the past. If international companies lose
faith in the U.S. commitment
to free trade, high-paying jobs
will leave America for friendlier shores.
It can’t be us versus them
anymore. America’s economic
strength is built on its hardworking citizens, who increasingly work because of,
not despite, our global
connections.
Ms. McLernon is president
and CEO of the Organization
for International Investment.
Hispanic Entrepreneurs Need Tax Reform
By Steve Cortes
And Javier Palomarez
T
he two of us are good
friends, and as leaders
in the Hispanic business community, we have a
lot in common. We don’t always see eye to eye: As a Republican and a Democrat, we
disagreed strongly in 2016.
But we both recognize that
Congress must enact meaningful tax reform.
In its present form, the tax
code creates a burdensome
barrier that inhibits innovators from launching new companies and prevents existing
businesses from growing.
Small-business owners regularly name regulations and
taxes as their two biggest obstacles for growth. The Trump
administration has already
embarked on a policy of broad
regulatory relief. Reducing the
onerous tax burden is the final
step to creating a pro-growth
environment.
Today small business faces
A World
Of Sickness
Pale Rider
By Laura Spinney
(PublicAffairs, 332 pages, $28)
W
e live in an age of AIDS, SARS, bird and swine flu,
Ebola, and Zika. Spurred by globalization and hyped
by the internet, those plagues alarmed huge swaths of
the world. Yet, aside from AIDS, none of these diseases has
caused nearly as many deaths as feared. Bizarrely, the greatest
killer of the past century is barely remembered today.
The Spanish flu began in the spring of 1918, infected 500
million people, and killed between 50 million and 100 million
of them—more than both world wars and the Holocaust
combined. Not since the bubonic plague of the mid-14th
century—the Black Death—had such a fearsome pestilence
devastated mankind.
Spanish-flu patients “would soon be having trouble breathing,” writes Laura Spinney in “Pale Rider,” her gripping
account of the pandemic. “Two mahogany spots appeared over
their cheekbones, and within a few hours that colour had
flushed their faces from ear to ear.” Teeth fell out. Hair fell
out. Delirium was common. Soon the doomed turned bluish.
“Blue darkened to black.
The black first appeared at
the extremities—the hands
and feet, including the
nails—stole up the limbs and
eventually infused the abdomen and torso. As long as you
were conscious . . . you
watched death enter at your
fingertips and fill you up.”
At the beginning, everything
about the pandemic was cloaked
in mystery. Where had it originated? How did it spread? What
microbe caused it? How could the
not-yet-infected be protected? How could
the disease be treated? Would it ever end? Ms.
Spinney, a British science writer and novelist, deals with these
questions with exemplary clarity and sure narrative skill.
At least one of the Spanish flu’s oddities can be resolved:
Spain had little to do with it. King Alfonso XIII was one of the
first to be stricken, in May 1918, and soon two-thirds of the
population of Madrid fell ill. The disease had already broken
out in America and in the World War I trenches in France.
Learning of the scourge across the border, the French labeled
it “the Spanish flu,” and, despite all evidence to the contrary,
the name stuck.
Ms. Spinney is at her best in trying to tease out the real
origin of the pandemic. The first suspect was China, where
pneumonic plague had erupted on the Manchurian border in
1910. The government, trying to curry favor with the Allies
in World War I, had then sent tens of thousands of laborers,
many infected, to dig trenches on the Western Front.
Another theory put the initial outbreak at the British army’s
mobilization base in Étaples in northern France. A third
candidate was in the American heartland, at a U.S. Army
staging base, Camp Funston in Kansas. The question is
unsettled, but plainly the movement of troops in the Great
War accelerated the flu’s spread.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
By Bruce Jones
And Michael O’Hanlon
BOOKSHELF | By Edward Kosner
ly
.
Democracy Is Far From Dead
an almost confiscatory tax
scenario, because most are
taxed as individuals and face
a top rate of 39.6%. Throw in
state and local taxes and
many Latino startups surrender over half their income to
Latino Democrats
and Republicans
ought to agree
on that much.
government. Home Depot cofounder Bernie Marcus wrote
in the Hill newspaper last
month, “I believe that if the
Home Depot started today,
overtaxation would have prevented it from achieving its
current success.”
Fortunately, help is on the
way. The House’s tax-reform
bill drops the business tax
rate to 25% and for small enterprises it lowers the rate to
just 9% on the first $75,000
of income. It’s hard to overstate how consequential this
kind of policy can be for Hispanic opportunity.
Hispanics are incredibly
entrepreneurial. Today there
are about 4.4 million Hispanic-owned businesses in the
U.S., and this year they are
projected to contribute $700
billion to the American economy. These businesses are
growing at twice the rate of
all U.S. companies, according
to the U.S. Hispanic Chamber
of Commerce. Data from
American Express also show a
224% increase in Latinaowned businesses between
1997 and 2015.
Now that the House and
Senate have passed tax bills
that put growth first, we recommend they take two further steps. First, advance
through conference quickly
so that the American people
can reap the benefits of economic acceleration sooner.
Second, make the final bill as
pro-small-business and pro-
employer as possible, so that
the recent economic momentum—seen in optimistic CEO
surveys, rising consumer
confidence, and a recordshattering stock market—
only grows.
To keep the American
Dream a reality, Congress
needs to expedite this substantive tax reform. This catalyst can ignite success among
all Americans, and particularly within our community,
the fastest-growing and most
industrious in the U.S. The
right policies, combined with
a growing economy, could
create a new wave of prominent Hispanic entrepreneurs
and businesses. And everyone
would benefit from such
empowerment.
Mr. Cortes, a Fox News
contributor, served on the
Trump campaign’s National
Hispanic Advisory Council.
Mr. Palomarez is president of
the U.S. Hispanic Chamber of
Commerce.
The Spanish flu of 1918-19 infected 500 million
people, killing between 50 and 100 million.
Its cause was discovered only decades later.
The pandemic came in three stages—a relatively mild outbreak in the spring of 1918, a terrifyingly deadly wave that
autumn and a lesser revival the next spring before it burned
itself out. More American service members died of the flu
than from fighting the war. It engulfed tiny Iceland and
sprawling India; Ukraine, where it claimed a movie star named
Vera Kholodnaya; and Brazil, where a British mail ship from
West Africa delivered the seeds of death to Rio de Janeiro.
Few parts of the world, even the most remote, were spared.
The frantic search for the cause of the pandemic was nightmarish, too. A respected researcher persuaded himself and
others that he had found the bacillus, and he persisted even
though autopsies rarely turned up his pet suspect in the
tissues of the dead. The microbe hunters couldn’t find their
quarry because it slipped through the ultrafine strainers they
tried to catch it with, and it was invisible to their microscopes.
It was what the French bacteriologist Émile Roux called an
“être de raison,” an organism whose existence could be
deduced only from its effects. Eventually a virus—1/20th the
size of a bacillus—was identified as the culprit. It was not
actually seen until decades later with the invention of the
electron microscope.
At first, doctors tried aspirin, mercury and other nostrums,
often with side effects worse than many flu symptoms. Antibacterial interventions sometimes worked but gave false hope:
They didn’t relieve the flu itself but rather the pneumonia
many victims developed.
It wasn’t until the 1930s that most of the mysteries were
solved. A lab ferret sneezed in the face of a British researcher,
who developed a flu, establishing, Ms. Spinney writes, that an
airborne virus could pass from animals to man. She goes on to
deliver a masterly tutorial on the workings of the human
immune system, the basis for the eventual development of
vaccines against various strains of influenza.
Ms. Spinney ends her story with speculation about various
unheralded consequences of the pandemic. She suggests that
the trauma of the flu inspired later back-to-nature and faithhealing movements and that the outbreak, by indirectly
triggering the British massacre at Amritsar in 1919, may have
speeded India’s drive for independence. An attack of the flu,
she suggests, brought on Woodrow Wilson’s 1919 stroke, which
doomed his efforts to get the Senate to ratify the Treaty of
Versailles and have the U.S. join the League of Nations—failures that were stepping stones to World War II.
She even traces President Donald Trump’s family fortune
back two generations to the Spanish flu. After the pandemic,
American insurance companies paid out nearly $100 million—
the equivalent of $20 billion today—to the families of the
dead. One victim was a German immigrant who left money to
his widow and his son, Fred Trump, who would later sire
Donald. They invested it in property, she writes, the foundation of Donald Trump’s real-estate empire.
“Pale Rider” is a cautionary tale about human vulnerability
and ingenuity in the face of peril. Today’s anxiety about Zika
and Ebola is in part a proxy for dread of biowarfare waged by
terrorists or rogue states, which could make the Spanish-flu
pandemic look quaintly benign by comparison.
Mr. Kosner is the author of “It’s News to Me,” a memoir
of his career as editor of Newsweek, New York, Esquire and
the New York Daily News.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
A18 | Monday, December 11, 2017
OPINION
LETTERS TO THE EDITOR
Christopher Wray’s FBI Stonewall
Trump’s Jerusalem Move Recognizes Reality
T
Killing the Electric Car Credit
no
n-
he House and Senate are scrambling to and Ford are among the most vociferous special
reconcile their tax bills, and one issue pleaders. They make most of their money on
is how many loopholes to kill. Here’s trucks and SUVs, so they want the government
one that should be easy: Elimito underwrite their electric
Are Republicans really car production.
nating the tax credit for electric vehicles.
people to buy elecgoing to subsidize the tricPaying
The House bill nixes the
cars is a textbook example
Leo DiCaprio set?
credit for plug-in vehicles,
of industrial policy that subsiwhich can run up to $7,500 a
dizes some businesses and
car, while the Senate bill preconsumers, loses revenue and
serves the status quo. The credit is essentially complicates the tax code. The plug-in credit
an indulgence for affluent Americans who have doesn’t cost the government too much revenue,
been buying $70,000 Teslas. But even Tesla CEO but the political symbolism is important. If ReElon Musk now says he’d eliminate the credit publicans are willing to subsidize the purchases
as his company begins to roll out its Model 3, of affluent consumers like Leo DiCaprio who
which will cost $35,000 for a basic model. The want to demonstrate their seeming energy vircredit is capped at the first 200,000 vehicles tue, they’ll subsidize anything.
that each manufacturer sells, and Tesla may
The overall GOP reform is right in lowering
reach its limit for customer tax credits some the top tax rate for corporations to 20% in retime next year.
turn for eliminating many loopholes. That puts
Now other car makers are lobbying to keep all industries on a more level playing field and
the credit as they ramp up electric-car produc- should be enough for GM, Ford, and Americans
tion to meet federal fuel-mileage standards. GM who want to buy electric cars.
T
You state that President Trump’s
announcement that the U.S. will move
its embassy to Jerusalem veers “from
decades of U.S. policy” (“Jerusalem
Move Stokes Tensions,” page one,
Dec. 7). In fact, U.S. policy has recognized Jerusalem as the Israeli capital
since 1995. The Jerusalem Embassy
Act of 1995 states that Jerusalem
should remain an undivided city and
be recognized as the capital of the
State of Israel, and it states that the
U.S. Embassy in Israel “should be established in Jerusalem no later than
May 31, 1999.” The act allows the
president to delay the actual move of
the embassy, which was done by Presidents Clinton through Obama.
This announcement changes nothing for the Palestinians. Every option
for peace that was a possibility before the announcement still exists.
To date, catering to the Palestinian
Arabs has resulted in nothing productive in the pursuit of peace. They
have been offered a portion of Jerusalem as their future capital and repeatedly have rejected it. That is because, despite their rhetoric, what
they really want is for Israel to disappear, have no capital at all and for
Jerusalem to be solely theirs. Until
the Palestinians are willing to accept
Israel’s existence they will continue
to reject any offer of statehood made
to them whether the U.S. Embassy is
in Tel Aviv or Jerusalem. Their furious reaction to this announcement is
another excuse for them to rage
against Israel in their pursuit of its
destruction.
NAN KLEIN
Tuxedo Park, N.Y.
in the center of the crosshairs and
away from the comforts of Turtle Bay,
the U.N. can become a real force for
peace instead of -a debating society.
JOHN A. PETERSON
Walnut Creek, Calif.
Regarding Eliora Katz’s “The Zionist Case Against an Embassy Move”
(op-ed, Dec. 6): President Trump’s
move of the U.S. Embassy from Tel
Aviv to Jerusalem can be questioned
by some in terms of cost/benefit
analysis, but it may turn out to be a
brilliant move in sending the correct
negotiating message to the Palestinians. The U.S. government, under a
Trump administration, will not continue to encourage unreasonable Palestinian demands. The Palestinians
need to become realistic in seeking a
peace, avoid maximalist positions
and cease the official funding of violent terrorism against Israel. Rather
than continue to posture on this issue like the rest of the political
world and try to bully Israel into
concessions (and end up with no tangible results), Mr. Trump has also
wisely sent a strong message to Israelis: This U.S. administration, unlike others in the past, can actually
be trusted. America will not seek to
bully you into an insecure peace deal,
but will truly support you.
RON WEISS
St. James, N.Y.
Eliora Katz is correct in her opinion that, as President Trump said “Jerusalem is Israel’s eternal capital.”
What other nation has foreign countries tell it what its capital is? In recognizing that and moving the American embassy, the administration is
recognizing reality. It is impossible to
make peace with enemies who refuse
to make peace and who vow to destroy you. Congress acknowledged Jerusalem as Israel’s capital in the last
century, and Russia did so this spring.
If not now, when?
HARRY J. JAFFE
Chicago
Moving the U.S. Embassy from Tel
Aviv to Jerusalem is an extraordinarily bad idea. It will achieve nothing except exacerbating an alreadyway-too-tense situation, to say
nothing of putting our diplomatic
corps directly in harm’s way.
I have a better idea. Let’s move the
U.N. headquarters from New York to
Jerusalem. Since the Israelis and the
Palestinians can’t agree on who
Had Arab consent and cooperation
should control what in that historic
city (and the Christians have been un- been a pivotal consideration, there
would be no Israel, no security and
fairly shut out of the debate altono hope for peace.
gether), let’s make Jerusalem an inOSKAR WEG
ternational city with a charter of its
New York
own. And perhaps once they’re there,
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
hristopher Wray was supposed to bring much less be an excuse for executive officials
a new candor and credibility to the FBI to protect their decisions from scrutiny.
after the James Comey debacle, but the
As for hiding behind “classified informacountry is still waiting. The dition,” the House Intelligence
rector’s testimony Thursday
The new director hides Committee that is investigatto the House Judiciary ComRussian campaign medbehind a phony excuse ing
mittee suggests he has joined
dling has appropriate clearthe Justice Department effort
for refusing to answer ances. Mr. Goodlatte reminded
to stop the public from learnWray that the Judiciary
Congress’s questions. Mr.
ing about the bureau’s role in
Committee also has primary
the 2016 election.
jurisdiction over the FISA
Judiciary Chairman Bob
court.
Goodlatte invited Mr. Wray to answer the multiThe FISA application is central to the issue
plying questions about the bureau’s 2016 politi- of Russian meddling and whether the FBI used
cal interference. This includes the role that the disinformation to trigger a counterintelligence
Steele dossier—opposition research financed by investigation of a U.S. presidential candidate.
the Clinton campaign—played in the FBI’s deci- Congress and the U.S. need to know not only if
sion to investigate the Trump presidential cam- Trump officials were colluding with Russians
paign. The committee also wants answers about but also if Russia and the Clinton campaign
reports that special counsel Robert Mueller de- used false information to dupe the FBI into inmoted Peter Strzok, a lead FBI investigator in tervening in a U.S. election. Yet the FBI and Jusboth the Trump and Hillary Clinton email inves- tice have been stonewalling House Intelligence
tigations, after Mr. Strzok exchanged anti- for months.
Trump texts with his mistress, who also works
The lack of cooperation has become more
at the FBI.
troubling amid reports that senior career JusMr. Wray spent five hours stonewalling. The tice officials have a partisan motivation. Judidirector ducked every question about the FBI’s cial Watch last week released emails showing
behavior by noting that the Justice Department that Mr. Mueller’s top lieutenant, Andrew
Inspector General is investigating last year’s Weissmann, praised Obama holdover and acting
events.
Attorney General Sally Yates in January for deIs Mr. Wray concerned that Mr. Strzok edited fying Mr. Trump on his travel ban.
the FBI’s judgment of Mrs. Clinton’s handling
Justice also confirmed a Fox News report last
of her emails to “extremely careless” from week that one of its top lawyers, Bruce Ohr, was
“grossly negligent” in a previous draft? The in contact with Christopher Steele (the dossier
grossly negligent phrase might have put Mrs. author) before the election, and after the elecClinton in legal jeopardy, but Mr. Wray said he tion with Glenn Simpson, the founder of Fusion
couldn’t answer because that is subject to the GPS, the opposition-research firm that hired Mr.
“outside, independent investigation.”
Steele. Mr. Ohr was demoted, which suggests his
Is Mr. Wray taking steps to ensure his top contacts were unauthorized.
ranks are free of political “taint”? He couldn’t
By the way, the chief law enforcement officer
say because of the “outside, independent” in- of the United States is the President. This means
vestigation.
he has the legal authority through his deputies
Ohio Republican Jim Jordan noted that the at the White House and Justice to see the FISA
only way for Congress to know if the FBI used application. AG Jeff Sessions is recused from the
the Steele dossier to obtain a warrant to spy on Russia probe, which complicates his access bethe Trump campaign is for the FBI to provide cause we don’t know the extent of his recusal.
its application to the Foreign Intelligence Sur- But Deputy AG Rod Rosenstein supervises the
veillance Court. “Is there anything prohibiting FBI when Mr. Sessions does not.
you from showing this committee [that applicaMr. Rosenstein can and should order the FBI
tion]?” Mr. Jordan asked.
to meet Congress’s document requests includMr. Wray’s answer was dismissive. “I do not ing the FISA application. If he refuses, then Mr.
believe that I can legally and appropriately Trump through White House counsel Donald
share a FISA court submission with this com- McGahn can order him to do so. Mr. Rosenstein
mittee,” said Mr. Wray. “When I sign FISA appli- could choose to resign rather than comply, but
cations, which I have to do almost every day of he will not have the law on his side.
the week, they are all covered with a ‘classified
The easy way to solve this standoff is for exinformation’ cover.”
ecutive officials, including the FBI, to do their
This is an excuse, not a serious reason. The duty and cooperate with the duly elected MemIG is a watchdog created by Congress to investi- bers of Congress. If they don’t, sterner meagate executive misbehavior. It was never in- sures like a finding of contempt of Congress will
tended to supplant congressional oversight, be needed.
ly
.
C
REVIEW & OUTLOOK
The Apple ‘Windfall’ That Isn’t
he GOP is moving toward a tax-reform publican plan also includes a one-time deemed
victory, which means the political at- repatriation rate on earnings now held abroad.
tacks are increasing in volume if not The House’s 14% rate for cash is what President
logic. A contender for the
Obama proposed in 2015, and
least accurate claim is the re- It’s hard to keep up with the Senate’s rate is 14.49%.
port that the legislation would
“deemed” rate means that
all the false tax claims, The
produce a $47 billion “windcompanies must pay that rate
but this one is a doozy. on income previously earned
fall” for Apple.
The
Financial
Times
overseas but so far untaxed in
splashed this across page one
the U.S.
last week and the media Rockettes all kicked
Enter the Financial Times, which says that
in line. They need a tutorial in international Apple under the current system would owe
taxation.
$78.6 billion in taxes but under the GOP plan
The U.S. has one of the most punishing cor- would pay $31.4 billion. The $47 billion differporate tax rates in the world, with its 35% fed- ence is what it calls a “windfall” for Apple.
eral rate and an average of close to 39% inBut this ignores that under the current syscluding state and local levies. The land of the tem Apple will pay $0 in taxes on that billions
free is also one of the only jurisdictions that overseas because it has no known plans, and littaxes income when it returns to the U.S. after tle incentive, to return the money to the U.S.
it’s been taxed where it’s earned. The rest of Under the GOP’s deemed repatriation alone, Apthe world has reduced corporate rates—the ple would pay more than $30 billion in taxes.
OECD average is about 24%—but the U.S. In other words, the real windfall is the $30 bilhasn’t caught up.
lion in tax revenue that the U.S. Treasury otherThe result has been that companies have wise wouldn’t have.
stashed some $2.5 trillion in cash overseas,
This is the latest of many false claims that
with little incentive to bring it back to the U.S. corporations are the sole beneficiaries of the
at the 39% rate. Apple alone has some $252 bil- Republican tax plan, even though the GOP
lion abroad. They and others even find it more agenda includes “base erosion” rules and many
economical to borrow at home instead of mov- other clamps designed to address current tax
ing the money back for productive uses such as loopholes and prevent future corporate tax
investment and hiring.
trickery. Whether the media attacks on the ReThe GOP plan would enshrine a 20% top cor- publican tax bill represent economic illiteracy
porate rate and a permanent territorial system or ideological tendentiousness is a judgment
that taxes income where it is earned. The Re- we’ll leave to readers.
When a Wedding Cake Is More Than Dessert
Regarding your editorial “Let
Them Not Bake Cake” (Dec. 4): The
issue is whether the Colorado antidiscrimination law is of the type described by Justice Antonin Scalia in
Employment Division v. Smith, i.e., is
it a “valid and neutral law of general
applicability.” You misconstrue Smith
in your claim that the Colorado law
has been “applied” other than neutrally. Even if true, that is not the
Smith test. The whole “non-neutral
application” point is an irrelevant
tangent that permits you to add to
the misdirection with your lesson
from Obergefell v. Hodges.
It may seem to you that this is a
heavy hammer as applied to discriminators who are otherwise decent,
hardworking and, particularly in the
present scenario, religiously observant people. Jack Phillips, like any
artist, could offer his work for sale
privately in his studio-bakery, by appointment, to family, friends or even
strangers (if done carefully, with due
regard to the niceties of the law).
Had he done this, the Colorado law
would not have been applicable, even
if he turned away this gay couple.
But if he adapts generally most or all
of the attributes of a business open
to the public (and it is undisputed
that he did so), then his business behavior would be subject to a panoply
of state laws, including in Colorado’s
case, its antidiscrimination law.
Mr. Phillips has not been censured
for holding different “mores” than
the law contemplated, nor has he
been compelled to affirm any religious belief, nor has he suffered any
special disability based on his religious view. He was found to have
been operating a business generally
open to the public and then to have
discriminated against the gay couple
in violation of the Colorado law.
JONATHAN GOLDSTEIN
New York
In West Virginia State Board of
Education v. Barnette, the 1943 landmark case cited in your editorial, Supreme Court Justice Robert H. Jackson famously wrote: “If there is any
fixed star in our constitutional constellation, it is that no official, high
or petty, can prescribe what shall be
orthodox in politics, nationalism, religion, or other matters of opinion,
or force citizens to confess by word
or act their faith therein.” Colorado
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to wsj.ltrs@wsj.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
officials are trying to force Masterpiece Cakeshop owner Jack Phillips
to act against his faith, his conscience, his sacred honor.
If liberty means anything, it
means freedom from state coercion
in matters of conscience. Lawmakers
and courts tread on perilous ground
when they impinge on a person’s
deeply held religious convictions.
Masterpiece Cakeshop v. Colorado
Civil Rights Commission will go a
long way toward determining
whether “live and let live” and twoway tolerance still have a place in
American society.
CHARLES D. EDEN
Atlanta
Despite all attempts and examples
put forth in the piece to obfuscate
the issue, the only one on point was
the one you disparage—that of hotel
owners during the Jim Crow era.
The others? Cakes with vulgar
messages? Not unless you think foulmouthed individuals should be
treated as a protected class. Personal
participation or abstention at gay
nuptials? Really? Is the Journal trying to liken that to a business service? The two Jehovah’s Witness
cases refusing to participate in civic
expressions? Again, and again, there
is not a business interest in either
case. Anti-gay marriage cakes? (See
bad language above.) Bigots, likewise, will never qualify as a protected class. Forcing Catholic organizations to perform abortions or
place adoptees with same-sex couples? I’m sure “some on the left”
have this on a wish list right after
forcing rabbis to serve pork BBQ at
shul and Latter Day Saints to hold
coffee klatches.
JOHN CARBONE
Louisville, Ky.
Pepper ...
And Salt
THE WALL STREET JOURNAL
“I’m sending it back.
This doesn’t taste funny at all.”
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | A19
OPINION
Can a President Obstruct Justice?
officers, such as the FBI director, is
a core aspect of the president’s executive authority. It is the principal
means by which a president disciplines the exercise of the executive
power the Constitution vests in
him.
The same is true of Mr. Trump’s
request, as purported by Mr. Comey:
“I hope you can see your way clear
. . . to letting Flynn go.” The FBI director wields core presidential powers when conducting an investigation, and the president is entirely
within his rights to inquire about,
and to direct, such investigations.
The director is free to ignore the
president’s inquiries or directions
and risk dismissal, or to resign if he
believes the president is wrong. Such
officials serve at the president’s
pleasure and have no right to be free
of such dilemmas.
A law criminalizing the president’s
Richard Nixon and Bill Clinton at the White House, 1993.
removal of an officer for a nefarious
motive, or the application of a general
law in that way, would be unconstitutional even if the president’s action
interferes with a criminal investigation. Such a constraint would subject
every exercise of presidential discretion to congressional sanction and judicial review. That would vitiate the
executive branch’s coequal status and,
when combined with Congress’s impeachment power, establish legislative supremacy—a result the Framers
particularly feared.
Mr. Trump’s critics claim that
subjecting the president’s actions to
scrutiny as potential obstructions of
justice is simply a matter of asking
judges to do what they do every day
in other contexts—determine the
purpose or intent behind an action.
That is also wrong. The president is
not only an individual, but head of
the executive branch. Separating his
motives between public interests
and personal ones—partisan, financial or otherwise—would require the
courts to delve into matters that are
inherently political. Under Supreme
Court precedent stretching back to
Marbury v. Madison (1803), the judiciary has no power to do so. And
lawmakers enjoy an analogous immunity under the Speech and Debate
Clause.
The president’s independence
from the other branches does not
merely support “energy” in the chief
executive, as the Framers intended.
It also ensures that he, and he alone,
is politically accountable for his subordinates’ conduct. If officials as
critical to the executive branch’s
core functions as the FBI director
could determine whom and how to
investigate free from presidential supervision, they would wield the most
awesome powers of government
with no political accountability. History has demonstrated that even
when subject to presidential authority, the FBI director can become a
power unto himself—as J. Edgar
Hoover was for decades, severely
damaging civil liberties.
There are limits to presidential
power. The Constitution requires
the Senate’s consent for appointment of the highest-level executivebranch officers—a critical check on
presidential power. The Supreme
Court has upheld statutory limits—
although never involving criminal
sanction—on the removal of certain
kinds of officials. But the decision
to fire principal executive-branch
officers like the FBI director remains within the president’s discretion. A sitting president can also be
subjected to civil lawsuits—but
only in a carefully circumscribed
fashion, to avoid impeding his ability to discharge the powers of his
office.
The ultimate check on presidential
power is impeachment. Even though
Mr. Trump cannot have violated criminal law in dismissing Mr. Comey, if a
Messrs. Rivkin and Casey practice
appellate and constitutional law in
Washington. They served in the White
House Counsel’s office and Justice
Department in the Reagan and
George H.W. Bush administrations.
An Attack on My Privacy in Wisconsin’s Political War
‘E
A rogue state agency
took my personal emails
and filed them under
‘opposition research.’
it upon themselves to acquire the
personal emails of Republican politicians, including me.
As of June 2016 the Wisconsin
Government Accountability Board
no longer exists. I wrote legislation
that led to the agency’s elimination, and this has been one of my
no
lena, I have something I
need to tell you.” Those
were the first words I said
to my 29-year-old daughter Thursday
afternoon. I was calling to let her
know that according to the Wisconsin Justice Department report released Thursday, my personal emails,
along with approximately 500,000 of
those belonging to my colleagues in
the Wisconsin Senate and other Republican leaders, were acquired in a
John Doe investigation.
The emails had been kept in the
Governmental Accountability Board
building in a unsecured file called
“opposition research.” Personal
emails with Elena were included, I
had learned. Some of our emails even
involved discussion of her medical records. These communications didn’t
belong in the hands of the government but were collected as part of a
politically motivated investigation
into Gov. Scott Walker.
Under Wisconsin law, prosecutors
can ask a judge to authorize a “John
Doe” investigation, which is intended
to protect the wrongly accused or allow investigators the ability to establish probable cause before filing
charges. But in a gross manipulation
of the law, in 2012 a liberal judge
named Barbara Kluka allowed Milwaukee County District Attorney
John Chisholm, a Democrat, to conduct a secret investigation into
whether Gov. Walker had broken campaign-finance laws. He had not.
Mr. Chisholm weaponized an arm
of the government, which was supposed to be Wisconsin’s ethics
watchdog, to issue broad subpoenas
and warrants for documents. The
agency even worked with law enforcement to conduct paramilitary
raids on people’s homes.
These raids and seizures were the
result of a mere accusation of campaign-finance violation, for which
there was no basis. As it turns out,
investigators at the Wisconsin Government Accountability Board took
n-
By Leah Vukmir
Matthew J. Murray
Executive Editor
Karen Miller Pensiero
Managing Editor
Jason Anders, Chief News Editor; Thorold Barker,
Europe; Elena Cherney, Coverage Planning;
Andrew Dowell, Asia; Neal Lipschutz, Standards;
Meg Marco, Digital Content Strategy; Alex Martin,
Writing; Mike Miller, Features & Weekend;
Christopher Moran, Video; Shazna Nessa, Visuals;
Rajiv Pant, Technology; Ann Podd, News
Production; Matthew Rose, Enterprise;
Michael Siconolfi, Investigations; Nikki Waller,
Live Journalism; Stephen Wisnefski, Professional
News; Carla Zanoni, Audience & Analytics
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
WALL STREET JOURNAL MANAGEMENT:
Suzi Watford, Marketing and Circulation;
Joseph B. Vincent, Operations;
Larry L. Hoffman, Production
EDITORIAL AND CORPORATE HEADQUARTERS:
1211 Avenue of the Americas, New York, N.Y., 10036
Telephone 1-800-DOWJONES
proudest accomplishments as a
state senator.
Yet I am still considering legal
options for the invasion of my personal privacy. I was appalled at the
news, especially because those who
ran the John Doe investigation read
and kept the emails between my
daughter and me. This was criminal
behavior, and the individuals involved ought to see jail time.
Unaccountable investigations and
special prosecutors have become typical. Take a look at the investigation of
the president by Robert Mueller.
More than $3 million in taxpayer
funds, and what has been accomplished? From Lois Lerner and the
IRS to James Comey and the FBI,
something is rotten with the way justice is implemented in America today.
In addition to being a mom and a
nurse, I am a conservative state senator. I fear fewer people like me will
seek office after seeing what I’ve
gone through. Why would a mom
want to speak on her political beliefs
if she thought it might make her
family the target of a government
agency? Why would anyone want to
become an elected official if it might
mean that private conversations are
not protected from unreasonable
search and seizure?
Elena will be fine. But I don’t
want her to live in a country where
the government deprives people of
due process or their right to speak
freely. If it can happen in Wisconsin,
it can happen elsewhere. Let the stories of Wisconsin’s John Doe abuses
be a warning for the rest of the
country that liberty really does require vigilance.
Ms. Vukmir, a Republican, is a
state senator and U.S. Senate candidate from Wisconsin.
About That ‘Hillsdale Exemption’
By Larry P. Arnn
A
s the Senate prepared to pass
its tax-reform plan Dec. 1, Hillsdale College, which I lead, became an unexpected sticking point.
The bill included a proposed 1.4% excise tax on the investment income of
large university endowments. An
amendment introduced by Sen. Pat
Toomey (R., Pa.)—which did not make
the final bill—sought to exempt
schools that do not accept government funding under Title IV of the
Higher Education Act of 1965, which
established many of the financial-aid
programs students use today.
Hillsdale has an endowment that
would qualify for the excise tax under
the version of tax reform passed by the
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY
Rupert Murdoch
Robert Thomson
Executive Chairman, News Corp
Chief Executive Officer, News Corp
Gerard Baker
Editor in Chief
By Greg Rushford
D
on’t expect much progress in
dismantling global trade barriers from the World Trade Organization’s meeting in Buenos Aires
this week. The Trump administration
will take most of the blame. American
trade negotiators have even said they
will refuse to sign the customary ministerial declaration expressing support
for the “centrality of the multilateral
trading system.” The U.S., as WTO
Deputy Director Alan Wolff noted, is
“sitting this one out.”
In the absence of American leadership, all eyes are on Chinese President Xi Jinping. Mr. Xi has missed no
opportunity to declare his support
for the WTO’s mission of advancing
free trade. He acknowledges that
China has benefited greatly since becoming a WTO member in 2001.
Beijing runs with the G-33
—poorer, protectionistminded WTO laggards.
“We should uphold multilateralism
and pursue shared growth,” Mr. Xi
declared last month in a speech to
Asia-Pacific business leaders in Vietnam. His remarks were well-received—in clear contrast to Mr.
Trump’s insular America First exhortations at the same forum. Global
economic leadership is a key part of
Mr. Xi’s “Chinese Dream.”
But going by China’s actual record
in the WTO, Mr. Xi will have to dream
on. Despite the glowing free-trade
rhetoric from Beijing, inside WTO negotiating rooms China is hardly a
champion of free trade. Instead, the
Chinese run with the G-33, a group of
poorer, protectionist-minded WTO
laggards—the likes of South Africa,
Venezuela, Zimbabwe and India.
These countries tailor their negotiating positions to longstanding
grudges against their former European colonial masters, as well as rich
Americans. They support China’s assertion that it remains a developing
nation deserving of “special and differential treatment” when it comes to
dismantling trade barriers.
In the WTO’s thorny agriculture
negotiations, for example, China and
India stand together in demanding
that rich Europeans and Americans
dismantle trade-distorting subsidies.
Yet they demand that “developing”
countries be allowed to continue
propping up tens of millions of subsistence farmers indefinitely.
Beijing insists that it made enough
concessions on lowering agriculture
tariffs and subsidies when it joined
the WTO in 2001. When the WTO
held its ministerial meetings in Bali
in 2013, the Chinese and Indians won
the “temporary” right to circumvent
their existing legal restrictions on exceeding their (wasteful) domestic
support programs. In Buenos Aires,
they will push for the permanent
right to prop up their globally uncompetitive farmers.
Beijing is also resisting an initiative to curb governmental subsidies
that contribute to overfishing. In
2002 a group of WTO members led by
Australia, New Zealand, Iceland and
Chile established the so-called
Friends of Fish to try to reach consensus. But China wants a carve-out to
protect its subsidies and insists that
countries be allowed to police violations themselves—an approach that
threatens the collapse of already depleted global fishing stocks.
China has also failed to join the
WTO’s Government Procurement
Agreement. Forty-seven advanced
economies have opened bidding on
more than $1.7 trillion of their governmental contracts to foreign competition. China entered negotiations to join
the GPA in 2002. The big news from
the WTO’s 2011 ministerial meetings in
Geneva was that Beijing would sign on.
But that deal has never materialized,
while talks drag on and on.
While Chinese rhetoric doesn’t
square with the country’s record in the
WTO, Beijing’s performance is not all
negative. After arduous negotiations,
Beijing joined the Information Technology Agreement, where 82 WTO
members have agreed to slash tariffs
on trade in high-tech goods.
China also slashed average tariffs
on industrial products to less than 9%,
and has promised early action to slash
its 25% auto tariffs. Chinese officials
from President Xi on down vow that
China will continue to play a “constructive” role inside the WTO.
Just how constructive depends on
whether Beijing continues to seek special treatment at the expense of its
partners. This week’s meeting might
begin to shed light on an important
question: Is Mr. Xi’s free-trade talk
worth more than scoring political
points against Donald Trump?
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Yes, but not by doing any
of the things we know
Trump to have done.
JEFFREY MARKOWITZ/SYGMA VIA GETTY IMAGES
S
peculation about Special
Counsel Robert Mueller’s
investigation has turned
toward obstruction of justice—specifically, whether
President Trump can be criminally
prosecuted for firing James Comey
as director of the Federal Bureau of
Investigation or for earlier asking
Mr. Comey to go easy on onetime
national security adviser Mike
Flynn. The answer is no. The Constitution forbids Congress to criminalize such conduct by a president, and
applying existing statutes in such a
manner would violate the separation
of powers.
The Constitution creates three coequal branches of government, and
no branch may exercise its authority
in a manner that would negate or
fundamentally undercut the power of
another. The power to appoint and
remove high-level executive-branch
majority of representatives believe he
acted improperly or corruptly, they
are free to impeach him. If two-thirds
of senators agree, they can remove
him from office. Congress would then
be politically accountable for its action. Such is the genius of our Constitution’s checks and balances.
None of this is to suggest the
president has absolute immunity
from criminal obstruction-of-justice
laws. He simply cannot be prosecuted for an otherwise lawful exercise of his constitutional powers.
The cases of Richard Nixon and Bill
Clinton—the latter impeached, and
the former nearly so, for obstruction
of justice—have contributed to today’s confusion. These were not
criminal charges but articulations of
“high crimes and misdemeanors,”
the constitutional standard for impeachment.
And in neither case was the accusation based on the president’s exercise of his lawful constitutional powers. If a president authorizes the
bribery of a witness to suppress
truthful testimony, as Nixon was accused of doing, he can be said to
have obstructed justice. Likewise if a
president asks a potential witness to
commit perjury in a judicial action
having nothing to do with the exercise of his office, as Mr. Clinton was
accused of doing.
Although neither man could have
been prosecuted while in office
without his consent, either could
have been after leaving office.
That’s why President Ford pardoned Nixon—to avoid the spectacle and poisonous political atmosphere of a criminal trial. In Mr.
Trump’s case, by contrast, the president exercised the power to fire an
executive-branch official whom he
may dismiss for any reason, good
or bad, or for no reason at all. To
construe that as a crime would unravel America’s entire constitutional structure.
ly
.
By David B. Rivkin Jr.
And Lee A. Casey
Don’t Believe
China’s
Trade Hype
William Lewis
Chief Executive Officer and Publisher
DOW JONES MANAGEMENT:
Mark Musgrave, Chief People Officer;
Edward Roussel, Innovation & Communications;
Anna Sedgley, Chief Operating Officer;
Katie Vanneck-Smith, President
OPERATING EXECUTIVES:
Ramin Beheshti, Product & Technology;
Jason P. Conti, General Counsel;
Frank Filippo, Print Products & Services;
Steve Grycuk, Customer Service;
Kristin Heitmann, Transformation;
Nancy McNeill, Advertising & Corporate Sales;
Christina Van Tassell, Chief Financial Officer;
Jonathan Wright, International
DJ Media Group:
Almar Latour, Publisher;
Kenneth Breen, Commercial
Professional Information Business:
Christopher Lloyd, Head;
Ingrid Verschuren, Deputy Head
House. The college has never accepted
any aid directly from the federal government, and since 1985 it has not accepted indirect federal aid that comes
through students. Hillsdale students
who demonstrate financial need can
apply for scholarships entirely funded
by private donors. The proposed tax in
one of its forms would cost Hillsdale
the equivalent of about 20 full-tuition
scholarships every year.
As a matter of principle the government should reduce its subsidies
to universities rather than taxing endowments. But the bill being what it
is, the exemption suggested by Mr.
Toomey seemed fair to me. Taxpayers
heavily subsidize the higher education
of students at almost every school in
the country. Hillsdale is one of fewer
than 10 colleges providing students
with educations paid for exclusively
by private money.
Hillsdale was founded in 1844. Our
oldest building was dedicated on July
4, 1853. Two of my predecessors as
president helped write the Republican Party’s first platform. Frederick
Douglass spoke on our campus in
1863 and again in 1888. Consistent
with the values of the party of Lincoln and Douglass, Hillsdale’s founding charter declares the college will
take “all who wish, without regard to
race, sex, or national origin.” Admissions decisions are still governed by
that principle.
Hillsdale is similarly committed to
helping those in need. Last year we
supplemented our need-based aid program, which assists almost half the
student body, with the Frederick
Douglass Scholarships, targeted to
students from severe poverty. The
first three students have been admitted to Hillsdale under that program.
The college also spent a million dollars over the past three years to sponsor 17 classical K-12 charter schools,
some of which serve needy families in
tough neighborhoods.
Despite these facts, Sen. Jeff Merkley (D., Ore.) claimed during debate
over the proposed amendment that
Hillsdale “quit taking federal funds because of discrimination,” a deliberate
misreading of our historical commitment to merit-based admissions. Sen.
Claire McCaskill (D., Mo.) even alleged
that the suggested exemption was a
political gift to Hillsdale donors, including the family of Education Secretary Betsy DeVos.
All this is hot nonsense. Hillsdale
forgoes government money in order
to spare our students, faculty and administrators the bureaucratic interference that is the price of accepting federal financial support. Suggestions to
the contrary are entirely without
merit.
I am reminded of Daniel Webster’s
1819 argument before the Supreme
Court in defense of his beloved Dartmouth College, then under assault
from aggressive state power. “When I
see my Alma Mater surrounded, like
Caesar in the senate house, by those
who are reiterating stab upon stab,” he
said, “I would not, for this right hand,
have her turn to me and say, ‘Et tu quoque, mi fili’ ”—and you too my son!
Webster had a flair for the dramatic. Unfortunately, the insults leveled at Hillsdale College on the Senate
floor are the commonplaces of our
contemporary political correctness.
One pines for the day when senators
were more artful in their slanders.
Mr. Arnn is president of Hillsdale
College.
Mr. Rushford edits the Rushford
Report, an online journal that tracks
trade politics.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
no
n-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
A20 | Monday, December 11, 2017
Lease for $789 per month*
during the Gran Finale Celebration
2017 Maserati Levante with Q4 Intelligent All-Wheel Drive
36-Month Lease / 10k Miles per Year for Well-Qualified Lessees
$5,584 Due at Signing / Exp. 1/2/18
*Low-mileage lease for well-qualified lessees. 36-month lease. Based on MSRP example of $77,750 for a 2017 Maserati Levante. Total due at lease signing includes a down payment, first month’s payment and acquisition fee. Offer requires dealer
contribution. Tax, title and license extra. Lessee pays for excess wear and mileage of $0.30/mile for each mile over 10,000 miles per year, if vehicle is returned at end of term. Total amount of monthly payments is $28,404. Option to buy at lease
end at pre-negotiated price. Dealer’s actual terms may vary. Offer through Chase Bank. Residency restrictions apply. Must take retail delivery by January 2, 2018. $795 disposition fee due at lease end. See your participating local authorized Maserati
dealer for details. Model shown: 2018 Levante GranLusso. ©2017 Maserati North America, Inc. All rights reserved. Maserati and the Trident logo are registered trademarks of Maserati SpA. Maserati urges you to obey all posted speed limits.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
TECHNOLOGY: AMAZON’S DEAL OF THE DAY CATAPULTS SELLERS B4
BUSINESS & FINANCE
© 2017 Dow Jones & Company. All Rights Reserved.
Last Week: S&P 2651.50 À 0.35%
THE WALL STREET JOURNAL.
* * * * **
S&P FIN À 1.50%
S&P IT À 0.08%
DJ TRANS À 2.12%
WSJ $ IDX À 0.92%
Monday, December 11, 2017 | B1
LIBOR 3M 1.549 NIKKEI 22811.08 g 0.03%
Algorithms Move Into Management
BY SAM SCHECHNER
Uber Technologies Inc. and
other pioneers of the so-called
gig economy became some of
the world’s most valuable private companies by using apps
and algorithms to assign tasks
to self-employed workers.
Now, established companies
such as Royal Dutch Shell PLC
and General Electric Co. are
adopting parts of that model
for the full-time workforce.
Companies say the tools
make them more efficient and
give employees more opportunities to do new kinds of work.
But the software also is starting to take on management
tasks that humans have long
handled, such as scheduling
and guiding strategic projects.
Researchers say the shift
could lead to narrower roles
for some managers and displace others.
When Shell wanted help
evaluating digital business
models in the car-maintenance
sector, executives plugged the
project into an algorithm that
scanned for available Shell
staffers with the right expertise—and handed out the job
with a click. Shell uses machine-learning software designed by Boston-based Catalant Inc. to match workers and
projects. The program tracks
their activity so it can refine
the next round of matches.
Shell said it began testing
the system this year and will
roll out the “Shell Opportunity
Hub” in January across its
business-to-business marketing arm, which has 8,000 employees. “We’re looking at how
we can efficiently access and
use the diverse talent we already have in Shell,” said Caroline Missen, the Shell executive who oversaw the pilot.
These management tools
are part of a broader shift to
apply artificial intelligence to
hiring and other human-resources work.
The overall human-resources and workforce-management software market has
grown 23% in the past two
years to reach $11.5 billion this
year and is projected to grow
a further 25% by 2020, according to research firm Gartner.
There is evidence computers might be better suited to
Please see WORK page B4
Now Starring in Hollywood: Consolidation
Disney could scale back Fox film studio and use TV holdings to become a digital powerhouse
BY BEN FRITZ
That’s a Wrap
For years, many in Hollywood thought it was only a
matter of time until the six
major movie studios that
have dominated the industry
for decades would shrink to
five or even four.
Few, however, thought the
first to go would be Twentieth Century Fox.
Fox has performed in the
middle of the pack among
major studios for the past
decade and the conventional
wisdom has been that one of
the laggards, Viacom Inc.’s
Paramount Pictures or Sony
Pictures Entertainment,
would be bought first.
But now that Walt Disney
Co. is in talks to buy most of
the assets of 21st Century Fox
Inc. in a deal that could be announced as soon as this week,
people with knowledge of the
deal talks said Fox’s movie
studio may be scaled back significantly and folded into Disney’s own film operation.
The talks may not result
in a deal, people close to the
discussions cautioned. Fox
and Wall Street Journal parent News Corp share common ownership.
Founded in 1935 with the
merger of Twentieth Century
Pictures and Fox Films, the
Please see STUDIOS page B2
With Disney in talks to acquire
most of 21st Century Fox,
Hollywood could lose one of its
major studios.
Lions
Gate
8.6%
2017*
Sony
8.8%
Disney
18.1%
Universal
15.1%
*As of Nov. 26
Fox's top-grossing movies
world-wide
$2.8B
Avatar (2009)
MARY DELANEY COOKE/CORBIS/GETTY IMAGES
Titanic (1997)*
1.5
Star Wars: Episode 1 –
The Phantom Menace
(1999)
$1.0
Ice Age: Dawn of the
Dinosaurs (2009)
$887M
Ice Age: Continental
Drift (2012)
$877
*Distributed by Fox overseas. Overseas gross.
Hedy Lamarr on a set at Twentieth Century Fox, one of six studios that have dominated the industry.
Source: Box Office Mojo
THE WALL STREET JOURNAL.
KEYWORDS | By Christopher Mims
Early Women in Tech Were Pushed Out
n-
Sexism in
the tech industry is as
old as the
tech industry
itself.
Memos from the U.K.’s
government archives reveal
that, in 1959, an unnamed
British female computer programmer was given an assignment to train two men.
The memos said the woman
had “a good brain and a special flair” for working with
computers. Nevertheless, a
year later the men became
no
ELECTRIC CARS
LIGHT UP
COMMODITIES
MARKETS, B9
Warner
Bros.
20.3%
Fox
12.3%
her managers. Since she was
a different class of government worker, she had no
chance of ever rising to their
pay grade.
Today, in the U.S., about a
quarter of computing and
mathematics jobs are held
by women, and that proportion has been declining over
the past 20 years. The situation is generally worse at the
biggest tech companies: Only
one in five engineers at
Google or Facebook is a
woman, according to the
companies’ recent diversity
reports. A string of recent
events—from women coming
forward about sexism, harassment and discrimination
in the industry, to the controversy over a memo written by a Google employee arguing that women overall
are biologically less suited to
programming—suggest the
steps currently being taken
by tech firms to address
these issues are inadequate.
A growing army of women
and members of other underrepresented minorities
are working on solutions to
JPMorgan
Sapphire
Cards Get
New Head
JPMorgan Chase & Co. is
bringing in a new executive to
run one of its hottest products,
the Sapphire Reserve credit
card, at a time when doubts
By Emily Glazer
and AnnaMaria
Andriotis
have surfaced within the bank
about its financial prospects.
The nation’s largest bank
has hired Barclays PLC card
executive Matthew Massaua to
oversee the popular rewards
card and other Sapphire cards,
according to a JPMorgan
memo reviewed by The Wall
Street Journal.
Mr. Massaua, who is scheduled to start his new job Jan. 1,
will succeed Lisa Walker,
who ran the Sapphire card
suite and is planning to take
on a new role within the
bank’s card division.
The bank has already made
changes in recent months
to Sapphire Reserve’s rewards
and how it has offered the
card to customers.
Though consumer demand
for Sapphire Reserve was
high when the bank introduced the card last year, JPMorgan executives have
raised concerns that it won’t
make money for the bank,
due in part to the card’s generous rewards, the Journal
reported in July.
The scrutiny inside the bank
reflects changing economics of
the competitive premium-card
market. Rewards for consumers—paid for by card-issuing
banks and merchants—have
gotten sweeter. Spenders,
meanwhile, are growing savvier about maximizing benefits
and avoiding balances that result in interest payments to the
banks. Banks over the past year
have started to pull back on rewards offerings as a result.
JPMorgan has said it is
making a long-term bet on the
millennial customers who favor the card. Much of that has
been riding on how many Sapphire Reserve customers will
spend $450 on the card’s annual renewal fee.
Trish Wexler, a JPMorgan
spokeswoman, said the bank
has seen renewals in excess of
90%. The bank has seen
“strong retention, frequent
card usage, and we’re beginning to deepen these relationships across Chase,” she
added, noting Ms. Walker “was
a big part” of those results.
Mr. Massaua was previously a top executive at Barclaycard International, which
includes the British bank’s U.S.
credit-card unit and is most
well known for its co-branded
cards with JetBlue Airways
Please see CARD page B2
ly
.
Other 11.8%
Paramount
5.0%
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
INSIDE
Domestic box-office
market share
See more at WSJMarkets.com
these issues. The history of
computing, in the U.K. in
particular, backs up one of
their conclusions—that simply educating more women
and other minorities to be
engineers won’t solve the
problem.
At its genesis, computer
programming faced a double
stigma—it was thought of as
menial labor and it was feminized, a kind of “women’s
work” that wasn’t considered intellectual. Though
part of the U.K. governPlease see MIMS page B4
SPY
LIQUIDITY
RESILIENCY
PERFORMANCE
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B2 | Monday, December 11, 2017
THE WALL STREET JOURNAL.
* ***
INDEX TO BUSINESSES
BUSINESS & FINANCE
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
I
Q
Insiris .......................... B4
Queer Chocolatier.......R8
K
Kraft Heinz ................. B4
Kronos.........................B4
L
Ladbrokes..................B10
Leonardo......................B3
Lithium Americas.......B9
Long Financial.............R7
C
M
Catalant Technologies B1
Macy's.........................B4
Marks & Spencer Group
...................................B10
McLaren Automotive..B6
D
Dassault Aviation.......B3
E
Elliott Management . B10
F-G
First Cobalt.................B9
GateHouse Media.......B4
P
PepsiCo........................B4
PPG Industries..........B10
N
Nasdaq ........................ B4
Netflix..................B2,B10
News Corp...................B1
Nexus A.I. ................... B4
R
Raytheon.....................B3
Royal Dutch Shell.......B1
S
Sherwin-Williams.....B10
Sony Pictures
Entertainment..........B1
T
Tea Forté.....................B4
Tesla............................B9
Toshiba........................B3
21st Century Fox........B1
U
Uber Technologies ...... B1
V
Viacom.........................B1
W
Walt Disney................B1
INDEX TO PEOPLE
Hicks, Marie................B4
O
Altfest, Karen.............R8
Atkin, Jodi Rosenshein
.....................................R6
I
Orsolini, Joe................R6
Izzo, Maryrose............R7
P
B
J
Crouch Jr., William.....R6
Page, Nick...................B9
Palmeri, Stephanie.....B4
Pirrong, Craig..............A1
Kenawell-Hoffecker,
Kim Lee......................R6
Kodric, Nejc.................A8
L
Codispoti, Pamela.......B2
Corden, James ............ B2
E
Lake, Marianne...........B2
Long, Chris..................R7
Lundgren, Terry...........B4
Ensmenger, Nathan....B4
M
F
Magram, Jeffrey.........B4
Mason, Rick ................ R2
Massaua, Matthew .... B1
Medina, Victor............R6
Milkman, Katherine....R2
Missen, Caroline.........B1
G
Gennette, Jeff ............ B4
Gold, Gold....................B9
H
Harkey, Scott..............A8
N
Continued from the prior page
Corp. and more recently Uber
Technologies Inc. Barclays declined to comment.
In recent weeks, JPMorgan
also promoted its head of
Chase branded cards Pamela
Codispoti,
who
helped
launch Sapphire Reserve, to
run the bank’s branch network, Ms. Wexler said.
During the bank’s most recent earnings call in October,
JPMorgan Chief Financial Officer Marianne Lake said
that Sapphire Reserve renewMatthew
Massaua will
oversee the
JPMorgan
Sapphire
Reserve
credit cards.
W
Walker, Lisa................B1
Wesley, Matthew.......R8
Wexler, Trish...............B1
Whittington, Marna ... B4
Wierbicki, Diana ......... R6
Williamson, Gavin ...... B3
Wittenberg, Steve......R8
Wolf, Carolyn ReinachR6
woman said the decline is due
in part to three card launches
in mid-to-late 2016.
Banks including JPMorgan generate credit-card revenue from the annual fees customers pay, the interest
charged on their balances and
the fees merchants pay when
the card is used at their businesses.
The bank pays out when it
offers rewards, such as the
100,000-point sign-up bonus
that JPMorgan initially offered on Sapphire Reserve.
But after about five months,
it halved that offer. Around
that time the bank sent an internal notice to branch employees stating it would no
longer preapprove customers
for the card, according to the
late January memo reviewed
by the Journal.
When bank customers meet
with JPMorgan personal bankers for matters relating to
their deposit accounts, personal bankers often suggest
credit-card offers that they can
qualify for. According to the
memo, though, the bank
wouldn’t
include
Sapphire Reserve among the cards
it pitches to them.
Still, consumers can apply
for the card. And JPMorgan isn’t shying away from
advertising it. In September,
it rolled out its first Sapphire Reserve television campaign, with late-night host
James Corden highlighting
the card’s travel and dining
rewards.
no
als are in the “early stages”
but are “so far, very encouraging…better than our expectations, but a little early to sort
of draw firm conclusions.”
Ms. Lake also said, however, that revenue in the division that includes the card
business is expected to be “relatively flat” in the fourth
quarter. Credit-card openings
fell to 1.9 million in the third
quarter, down 30% from 2.7
million in the year-earlier period. Another bank spokes-
V
Veale, Michael ............ B4
Nicklas, Therese R......R6
Nishida, Atsutoshi......B3
CARD
S
Salman, Mohammed bin
.....................................B6
Sebastian, Nicole........R8
Sheppard, ChristopherB6
Summers, Matthew ... B4
n-
Fredricks, Laura..........R8
Friedman, Adena.........B4
NOTICE OF REDEMPTION BY
PS BUSINESS PARKS, INC.
OF ALL OUTSTANDING DEPOSITARY SHARES
REPRESENTING INTERESTS IN ITS
6.00% CUMULATIVE PREFERRED STOCK, SERIES T
NOTICE IS HEREBY GIVEN that, pursuant to Section 3.05 (c)(1) of the
Restated Articles of Incorporation of PS Business Parks, Inc. (“PS Business Parks”)
and Section 2.8 of the Deposit Agreement dated as of May 3, 2012 (the “Deposit
Agreement”) by and among PS Business Parks, American Stock Transfer & Trust
Company, LLC, as Depositary (the “Preferred Stock Depositary”) and the holders
from time to time of the depositary receipts issued by the Preferred Stock Depositary
under the Deposit Agreement, PS Business Parks has called for redemption, and will
redeem, on January 3, 2018 (the “Redemption Date”), all of the shares of 6.00%
Cumulative Preferred Stock, Series T (“Preferred Stock”), and, in accordance with
the Deposit Agreement, the Preferred Stock Depositary will redeem, on the
Redemption Date, all of the outstanding depositary shares (the “Depositary Shares”)
representing interests in the Preferred Stock.
On the Redemption Date, (1) PS Business Parks will deliver, or cause to be
delivered, out of funds legally available therefor, to the Preferred Stock Depositary
$130,000,000 plus a sum equal to all accrued and unpaid dividends in redemption of
all of the Preferred Stock, and (2) the Preferred Stock Depositary will pay to the
holders of record of the Depositary Shares, in exchange for each Depositary Share,
$25.00 plus a sum equal to all accrued and unpaid dividends from January 1, 2018
through the Redemption Date (the “Redemption Price”).
Depositary Receipts representing the Depositary Shares, accompanied by proper
instruments of assignment and transfer if payment is to be made other than to the
registered holder(s), shall be surrendered for redemption at the following place:
By Mail, Overnight Courier or By Hand
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Delivery of the foregoing instruments and documents to any other address shall not
constitute valid delivery.
On or before the Redemption Date, PS Business Parks will deposit with American
Stock Transfer & Trust Company, LLC the Redemption Price, in trust for the pro rata
benefit of the holders of the Depositary Shares called for redemption. On and after the
Redemption Date, all Depositary Shares and shares of Preferred Stock shall be
deemed no longer to be outstanding; dividends thereon shall cease to accrue; and all
rights with respect to the Depositary Shares and shares of Preferred Stock called for
redemption shall forthwith at the close of business on the Redemption Date cease and
terminate, except only the right of the holders thereof to receive the Redemption Price
of the shares so redeemed, but without interest, upon surrender of their Depositary
Receipts.
Any moneys deposited by PS Business Parks and unclaimed at the end of five
years from the Redemption Date shall, to the extent permitted by law, be repaid to PS
Business Parks, after which repayment the holders of the Depositary Shares called for
redemption shall look only to PS Business Parks for the payment thereof.
December 4, 2017
‘Coco’ on Top but ‘Star Wars’ Looms
cations in its second weekend in theaters. It managed
to bring in $6.4 million,
landing it in fourth place.
Greta Gerwig's coming-ofage film “Lady Bird” also
added 363 locations and
placed 9th in its sixth weekend in theaters. With the $3.5
million from this weekend,
“Lady Bird” has netted $22.3
million.
The Guillermo del Toro-directed romantic fantasy “The
Shape of Water” expanded to
41 theaters in its second weekend and earned $1.1 million.
The Tonya Harding biopic
“I, Tonya” launched in four locations in New York and Los
Angeles and brought in a solid
$245,602.
The Winston Churchill film
“The Darkest Hour” and the
summer romance film “Call
Me By Your Name” also continue to thrive in more limited
releases as well. “The Darkest
Hour,” which stars Gary Oldman as Churchill, earned
$777,000 from 53 locations,
and “Call Me By Your Name,”
with Armie Hammer and Timothée Chalamet, took in
$291,101 from nine theaters.
“This is the best time to be
a moviegoer if you’re an indie
fan,” said comScore senior
media analyst Paul Dergarabedian. “The last few weeks
have enabled films like ‘The
Shape of Water,’ ‘Three Billboards Outside Ebbing, Missouri’ and now ‘I, Tonya’ to really find an audience.”
He added: “It’s a great time
for those films ahead of the
box-office death star that is
‘Star Wars.’ ”
LOS ANGELES—The animated family film “Coco”
topped the box office for a
third time on a quiet, pre”Star Wars: The Last Jedi”
weekend in theaters.
Disney estimated Sunday
that “Coco” added $18.3 million, which would bring its domestic total to $135.5 million.
The weekend's sole new
wide release was the Morgan
Freeman film “Just Getting
Started,” which launched to a
meager $3.2 million from 2,161
theaters and barely made the
top 10.
Many studios have chosen
to avoid competing against
“The Last Jedi,” which is expected to dominate theaters
and moviegoer attention when
it opens on Dec. 15.
As a result, most of the
charts have looked quite similar for the past few weeks.
Warner Bros. and DC's “Justice League” took second
place with $9.6 million and
the Lions Gate sleeper hit
On Fox’s Los Angeles studio
lot, anxiety is high as staffers
speculate about their future
while also trying to focus on
three movies they will be opening in the next two weeks: the
animated “Ferdinand,” the musical “The Greatest Showman” and
the historical drama “The Post.”
Nodding to wildfires raging
just a few miles away from the
studio, a Fox staffer last
Wednesday tweeted, “Power
outages here at the office. Not
sure if it’s related to the fires
or just the first phase of Disney cost-cutting measures.”
“TOO SOON,” replied a colleague.
Executives and producers
who work at Fox say they ex-
pect their business to be
slimmed down but hope Disney
allows them to maintain an independent culture and continue
to make a range of films, some
of which aren’t based on existing franchises. They said they
recognize their business would
likely be oriented more toward
providing content for streaming
platforms like Hulu, but hope
Disney keeps releasing movies
of all types in theaters first.
releases from traditional Hollywood studios at a time when
Netflix and Amazon are aggressively expanding their film
output, primarily for their
streaming platforms, these
people said. The six major studios released 139 films last
year compared with 189 in
2007, according to the Motion
Picture Association of America.
Movies are essentially a
stagnant business, with
global box-office revenues up
just 1% last year and U.S.
home-entertainment revenues
down 7%, according to the
MPAA and the Digital Entertainment Group. That is why
many in Hollywood believe
consolidation is inevitable.
As he has reshaped Disney’s movie operation in his
12 years running the company, Mr. Iger has reduced
the number of films it
makes. Disney now focuses
almost exclusively on bigbudget pictures based on existing properties—meaning
sequels, remakes and comicbook adaptations.
The strategy has been
successful, with higher average grosses per picture and
higher profit margins than
competitors.
Fox’s movie studio, led by
CEO Stacey Snider, has a reputation as more “filmmaker
friendly” and releases more
movies—24 this year compared with Disney’s eight—at
all budget levels. Unlike Disney, it makes a number of
original live-action movies.
Combined profits from
Fox’s movie and television
studios were just over $1 billion in the company’s most
recent fiscal year, compared
with nearly $2.4 billion for
Disney’s film studio alone.
Fox doesn’t report separate
movie-studio results.
One certain thing, the people familiar with the talks
said, is that Disney has its
eye on Fox’s two biggest
movie franchises. “Avatar,”
which still ranks as the highest-grossing movie of all time
with $2.8 billion world-wide,
was recently turned into a set
of attractions at Walt Disney
World in Orlando. Fox has begun production on a quartet
of sequels to the 2009 hit
and Disney would likely integrate the brand into its movie
business and exploit synergies with its theme parks and
merchandise units.
Fox also controls the movie
rights to Marvel’s X-Men under
a deal that dates to the 1990s,
before Disney owned the superhero company. Reuniting
characters that have long coexisted in comic books but not
on the big screen would be a
creative coup for Marvel Studios and provide new merchandising opportunities.
Fox’s Marvel pictures, including the R-rated hit “Deadpool,” have been less familyfriendly than Disney’s, though,
and it may be a challenge to
merge the two sensibilities.
Estimated Box-Office Figures, Through Sunday
SALES, IN MILLIONS
FILM
1. Coco
2. Justice League
DISTRIBUTOR
WEEKEND* CUMULATIVE
Disney
$18.3
Warner Bros. $9.6
% CHANGE
$135.5
$212.1
-34
-42
3. Wonder
Lions Gate
4. The DisasterArtist A24
$8.5
$6.4
$100.3
$8
-30
431
5. Thor: Ragnarok
$6.3
$301.2
-36
Disney
*Friday, Saturday and Sunday
Source: comScore
“Wonder,” which has now
passed $100 million, placed
third with $8.5 million. Warner Bros. also crossed the $2
billion benchmark domestically Saturday—the first studio to do so in 2017.
This quiet period before
“Star Wars” has allowed
some of the indie and prestige titles to thrive in limited
releases and expansions, like
James Franco’s “The Disaster
Artist.” The film, about the
making of one of the worst
films of all time, “The
Room,” expanded to 840 lo-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
C
K
Disney’s animated family film ‘Coco’ was No. 1 at the box office for a third time with an estimated $18.3 million for the weekend.
Associated Press
A
Bareis, Andreas..........B6
Bartow, Bill.................B4
Benartzi, Shlomo........R2
Beshears, John...........R2
WALT DISNEY/EVERETT COLLECTION
BAE Systems..............B3
Barclays.......................B1
Bayerische Motoren
Werke........................B6
Berkshire Hathaway
...................................B10
Boeing ......................... B3
Boston Herald.............B4
H
Herald Media Holdings
.....................................B4
Hulu.............................B2
Nippon Paint Holdings
...................................B10
NYSE Euronext...........B4
PS BUSINESS PARKS, INC.
STUDIOS
Continued from the prior page
studio was in its earlier
years known for stars like
Henry Fonda and Shirley
Temple and films including
“Gentleman’s Agreement,”
“The Sound of Music” and
the Liz Taylor-Richard Burton epic “Cleopatra,” which
became a cinematic icon but
nearly bankrupted the studio
during its troubled production. In 1977 it released “Star
Wars,” the beginning of a relationship with George Lucas
that would span six films
and generate $4.6 billion at
the box office.
Since Rupert Murdoch
took control of the studio in
1985, it has had its biggest
successes with “Avatar” and
the “X-Men” film series, as
well as hits such as “Independence Day,” “Home
Alone” and “The Martian.”
Disney is looking to buy
Fox primarily for its television distribution and production businesses, the people
close to the talks said. It
would gain control of Fox’s
foreign satellite services, a
set of U.S. cable networks
and majority control of
streaming service Hulu.
Those assets would
largely be put to work in
Disney Chief Executive Robert Iger’s goal of transforming Disney into a direct-toconsumer digital
powerhouse that can rival
companies like Netflix Inc.,
rather than simply selling
content to them.
The Twentieth Century Fox
television studio would be
kept busy producing shows
for Disney-owned streaming
services, as well as for other
outlets, people with knowledge of the deal talks said.
But it isn’t clear how Disney would integrate the Fox
movie studio, which is ranked
fourth at the domestic box office this year, with hits including “Logan” and “Kingsman:
The Golden Circle” and disappointments such as “Alien:
Covenant” and “Snatched.”
Some people close to the
deal talks said Twentieth Century Fox could become a production label within the Walt
Disney Studios, akin to Pixar
and Marvel. In that scenario,
Fox operations such as theatrical and home-video distribution would likely be cut
back, resulting in job losses
among the studio’s approximately 3,200 employees.
Fox under Disney would
likely make fewer movies, further reducing the number of
Liz Taylor in the
epic ‘Cleopatra,’
an extravaganza
that nearly
bankrupted Fox.
ASSOCIATED PRESS
B
General Electric .......... B1
GVC Holdings............B10
ly
.
A
Airbus..........................B3
Akzo Nobel................B10
Amazon.com ............... B4
Aston Martin Lagonda
.....................................B6
Axalta Coatings
Systems..................B10
High Anxiety
Seizes Fox Studio
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | B3
BUSINESS NEWS
Atsutoshi Nishida
The British government and Qatar this summer first disclosed the potential deal over the sale of two dozen Eurofighter Typhoon jets.
Qatar, U.K. in Fighter Deal
BY ROBERT WALL
LONDON—The government
of Qatar and British weapons
maker BAE Systems PLC have
completed a multibillion-dollar
deal for 24 combat jets, continuing a weapons buying
spree by the Middle East
country.
BAE Systems on Sunday
said the two sides have entered a roughly £5 billion ($6.7
billion) contract for the Eurofighter Typhoon combat jets,
training and related items. Qatar and the British government
this summer first disclosed the
potential deal over the sale of
two dozen of the combat
planes. The contract would include weapons provided by
Raytheon Co. and its European rival MBDA, the British
government said.
The deal comes days after
Qatar said it was buying 12
more Rafale combat jets from
France’s Dassault Aviation SA.
The Persian Gulf state previously bought 24 Rafale planes.
The tiny but gas-rich Gulf
state earlier this year also
signed a deal to buy 72 F-15
combat aircraft from Boeing
Co. in a transaction valued at
$12 billion.
Qatar’s weapons purchases
come amid a monthslong regional diplomatic spat between the Persian Gulf state
and some of its neighbors. Saudi Arabia, the United
Arab Emirates, Bahrain and
Egypt broke off diplomatic relations with Qatar in June, accusing their neighbor of supporting
terrorism
and
meddling in their internal affairs, charges Doha denies. The
diplomatic standoff in the Gulf
pits several U.S. partners
against one another.
For BAE Systems, the deal
comes at an important
time. The London-based company in October said it would
eliminate almost 2,000 jobs
and slow production of Typhoon combat jets amid a
dearth of orders. The deal is
still subject to financing conditions and first payments, BAE
ceive its planes starting in late
2022.
The British government
said the contract signature, in
the presence of its new defense secretary Gavin Williamson, included the intent to
purchase six Hawk trainer
planes made by BAE.
The Middle East has been
one of the rare bright spots for
exports of the Typhoon, which
has struggled to win orders in
other regions. Saudi Arabia
has acquired 72 of the planes
and may take more. Oman and
Kuwait also are customers for
the twin-engine combat plane.
Regional tension with Iran
and the fight against Islamic
State have bolstered Middle
East demand for the newest
defense equipment despite financial pressures on government budgets from a slump in
oil prices since the middle of
2014. Saudi Arabia in May announced $110 billion in arms
deals with the U.S., though
several of those agreements
had been previously disclosed.
ly
.
Persian Gulf state
to buy 24 combat jets
from BAE Systems
for about $6.7 billion
The Middle East has
been one of the rare
bright spots for exports
of the Typhoon.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
TOKYO—Atsutoshi Nishida,
who rose from a locally hired
employee in Iran to become
president of Toshiba Corp. but
saw his later years tarnished
by an accounting scandal, has
died at age 73.
ATSUTOSHI
Mr. Nishida
NISHIDA
died Friday at
1943-2017
a hospital in
Tokyo after a
heart attack,
Toshiba said Saturday.
After graduate study in
German political thought, Mr.
Nishida, whose wife was from
Iran, joined Toshiba through
an affiliate in Iran in 1975. He
served as president from 2005
to 2009 and chairman from
2009 to 2013.
He was known as a hardcharging executive who helped
make Toshiba, which pioneered the notebook computer, into a personal-computer leader in the 1990s.
“I’m practical, but I also
have enthusiasm, which is the
side of me that’s not practical,” he said in an interview
with The Wall Street Journal
in 2008. “If you have that in
addition to a strong will to
achieve your goals, then you
can overcome any adversity.”
While Mr. Nishida was president in 2006, Toshiba gambled on the nuclear-power
business by paying $5.4 billion
to buy U.S. nuclear company
Westinghouse Electric Co. But
global demand for nuclear
power shriveled after the
Fukushima Daiichi nuclear
meltdowns in Japan in 2011,
and Westinghouse filed for
bankruptcy protection in
March 2017.
In 2015, Toshiba acknowledged inflating profits by
more than $1 billion over
seven years. An independent
panel hired by the company to
investigate the matter blamed
three former presidents of the
company including Mr. Nishida
for the scandal and said they
put intense pressure on business units to achieve unrealistic profit targets.
In an interview published in
the weekly magazine Shukan
Post in November, Mr. Nishida
denied knowing about the accounting irregularities and
criticized the independent
panel for what he described as
its ignorance about business.
He said there was “absolutely no way” he would try to
keep a lid on improprieties. “I
would like to say, look at the
way I have lived my life,” he
said. What the panel described
as improper pressure was just
everyday encouragement to
his subordinates to try hard,
he said.
Mr. Nishida is survived by
his wife, a son and a daughter,
Toshiba said. Further information about survivors wasn’t
immediately available.
Another former Toshiba
president, Taizo Nishimuro,
died in October at age 81. Mr.
Nishimuro, who served as
president from 1996 to 2000,
was seen as the power behind
the throne when Mr. Nishida
was president and chairman.
PASCAL LAUENER/REUTERS
BY PETER LANDERS
AND TAKASHI MOCHIZUKI
JASPER JUINEN/BLOOMBERG NEWS
Former President
Made Toshiba a
Computer Leader
Systems said. It expected
those to be in hand by
mid-2018.
The decision to slow the
pace of production of Typhoon
planes, which BAE makes in
conjunction with Airbus SE
and Italy’s Leonardo SpA,
stretched the current production activity until 2022 from a
threatened stop in 2019. BAE
said Qatar should start to re-
no
n-
IF THERE ARE
THREE TRADING
THINGS YOU WANT,
THEY’RE THESE
THREE THINGS.
POWER.
VALUE.
SERVICE.
Want more information about Power E*TRADE?
•
Advanced trading platform with
a seamless experience between
desktop and tablet
• $4.95 equity trades, $0.50 options
contracts, $1.50 futures contracts1
• Licensed specialists and former
floor traders who speak to you
on your level
Futures and options transactions are intended for sophisticated investors and are complex, carry a high degree of risk, and are not suitable for all investors. For more information, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure Statement for Futures and Options
by visiting etrade.com/optionsdisclosure or calling 1-800-387-2331 prior to applying for an account. 1. Equities are not the only types of securities available. Commissions for equity and options trades are $6.95 plus $0.75 fee per options contract. To qualify for $4.95 commissions for equity and options trades,
and $0.50 fee per options contract, you must execute at least 30 equity or options trades per quarter. Futures trades are $1.50 (per side, per contract, plus exchange and NFA fees). In addition to the $1.50 per contract per side commission, futures customers will be assessed certain fees, including applicable futures
exchange and NFA fees. These fees are not established by E*TRADE Futures LLC and will vary by exchange. Additional fees apply to brokerage assisted trade for execution of futures and options contracts. Securities products and services are offered by E*TRADE Securities LLC, member FINRA/SIPC. Commodity futures
and options on futures products and services offered by E*TRADE Futures LLC, Member NFA. E*TRADE Securities LLC and E*TRADE Futures LLC are separate but affiliated companies. © 2017 E*TRADE Financial Corporation. All rights reserved.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
B4 | Monday, December 11, 2017
THE WALL STREET JOURNAL.
TECHNOLOGY
WORK
WSJ.com/Tech
Driving Sales
Total gross merchandise volume
$100 billion
80
New Management
Sales of software that helps
manage people, from human
resources to workforce planning
and scheduling, has seen an
uptick in growth.
$14 billion
12
10
8
40
(LEFT) EMILY KARDAMIS; (RIGHT) TEA FORTE
Share from
Amazon's
retail sales*
60
Third-party
merchants
20
0
2015
A cat-shaped touch lamp featured in one deal.
’16
’17
*Includes related shipping fees and digital media content, as well as a portion of Amazon
Prime fees
Sources: the company; FactSet
THE WALL STREET JOURNAL.
A Tea Forté cup. Some of the firm’s sales jumped.
Merchants Ride Amazon’s Deals
BY LAURA STEVENS
wide selection of merchandise
and keep shoppers interested.
Besides its roughly 30 “deals
of the day” on Cyber Monday
and other big shopping days,
Amazon also promotes outside
merchants in less-selective
“lightning deals,” which typically cost a seller a $300 fee
although in some cases are
free. Amazon collects roughly
15% of each purchase, plus
fees for warehousing and shipping under its Fulfillment by
Amazon offering.
An Amazon deal prompted
Emily Kardamis to click “buy”
late last month on a thirdparty item, a cat-shaped silicone touch lamp. Ms. Kardamis, a web designer,
discovered the $12.59 item in
a tweet and clicked through to
Amazon.com’s deal page,
where she found the item was
almost sold out. Ms. Kardamis,
24 years old, said she wasn’t
intending to buy a lamp. But
“it strikes my fancy, and the
price is also really good,” the
Cleveland resident said.
Amazon’s ability to keep up
the steady stream of tempting
impulse offerings year-round
is possible in large part because of the company’s vast
base of third-party sellers.
Many smaller brands sell only
On Cyber Monday, Tea
Forté featured eight products
priced from $10.40 to $19.25.
At the peak, it was selling one
unit every three seconds.
Deciding on the discount
means “we just find that
sweet spot,” Mr. Nebelung
said. It is a price where the
company can earn money, protect its brand and fuel sales
for the entire holiday season,
he said. Last year, it participated in a holiday deal on Dec.
2 and made it to some of Amazon’s best-seller lists. “It had a
halo effect,” Mr. Nebelung
said, adding that sales of
products that weren’t part of
the holiday deal also rose.
A sales surge will influence
Amazon’s algorithmic suggestions to consumers. Recommendations might include
items often purchased together or bought by customers
looking at the similar items.
Jason Boyce, chief executive
of retailer Dazadi.com, hopes
to help launch a rowing machine in a daily deal on Amazon this holiday season. He
plans to offer 15% off its retail
price of $129. Most of the
company’s more than $20 million in annual sales come to it
through Amazon. “It gets
more eyeballs,” he said.
on Amazon, making some of
the deals exclusive.
The variety of promotions
makes for a type of “game-ification of the shopping journey,” says Forrester retail analyst Brendan Witcher.
Traditional retail rivals
such as Best Buy Co. and
Macy’s Inc. tend to take markdowns across entire categories
or offer selected “door buster”
prices to drive store traffic.
Amazon’s third-party deals, in
70%
Portion of Amazon.com's sales
contributed by third-party sellers
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Christmas came early this
year for Tea Forté Inc.
Amazon.com Inc. selected
the company’s loose-leaf tea
samplers and tea-steeping
mugs as some of its Cyber
Monday deals, causing one
sampler to skyrocket to No. 4
in Amazon’s grocery rankings
from No. 588 the previous day.
“For us, the deal of the day
is a game changer,” said Jurgen Nebelung, vice president
of e-commerce and digital for
Tea Forté. By sacrificing 35%
of revenue per unit for the Cyber Monday discount on Amazon, Tea Forté did 6.5 times
its normal sales volume on the
website.
Tea Forté, based in Concord, Mass., is one of more
than two million independent
merchants on Amazon, many
of them jockeying to get their
merchandise into the rotation
for one of the site’s seemingly
random holiday promotions.
For an item to be considered,
the online giant typically requires merchants to take a
minimum 15% price reduction;
sellers often slash prices further to try to get picked.
While Amazon sells and
promotes its own merchandise, third-party sellers of
products as diverse as coffee
pots, pet accessories and pajamas contribute 70% of the
site’s sales, analysts estimate.
Such is Amazon’s holiday
selling might that winning a
slot in one of Amazon’s shortterm promotions can trigger a
sales windfall for the rest of
the season, third-party sellers
say. Those chosen say the promotions improve their odds of
showing up in consumer
search results on the site.
Third-party sellers sold
more than 140 million items
on Amazon.com over the fiveday Thanksgiving holiday
weekend this year, according
to Amazon.
Because the window can be
short between submitting an
item and notification that it
has been selected as a daily
deal, some merchants take a
risk and stock up on inventory
before they know the answer.
For Amazon, promoting
third-party sellers via limitedtime offers is a way to offer a
ly
.
Site’s daily promotions
can trigger windfalls
over holiday season as
search results improve
contrast, feature a broad variety of products in categories
that consumers might not actively search.
Amazon’s deal of the day
selections hinge on two important factors—whether it thinks
an item will be a hot seller
and whether the discount is
deep enough. Amazon also
takes into account the number
of units the seller is willing to
offer and customer reviews.
n-
Continued from page B1
ment’s low-paid “Machine
Operator Class,” women performed knowledge work including programming systems for everything from tax
collection to scientific research, using punch cards on
a vacuum-tube computer.
Then they were pushed
out of the field, says technology historian Marie Hicks,
assistant professor at the
University of WisconsinMadison, who wrote about it
in her recent book, “Programmed Inequality.”
Government leaders in the
postwar era held a thencommon belief that women
shouldn’t be allowed into
higher-paid professions with
long-term prospects because
they would leave as soon as
they were married.
Instead, the government
sought to develop a class of
career-minded and management-bound young men.
But replacing experienced
women with male novices
didn’t go as bureaucrats
planned, according to Dr.
Hicks. “They were just hemorrhaging money and time to
try and train and recruit this
ideal young man, this technocrat who will manage people and machines,” she says.
Not only were the male
MIT PRESS
MIMS
no
Continued from page B1
some managerial tasks than
people are. Humans are susceptible to traps such as confirmation bias. People using
intuition tend to make poor
decisions but rate their performance more highly, according to a 2015 University of
New England analysis of psychological studies. And in an
increasingly quantitative business world, managers are
asked to deliver more datadriven decisions—the sort at
which machines excel.
“What managers do mostly
is identify potential, build
teams, assign tasks, measure
performance and provide feedback. Generally speaking, humans aren’t very good at these
tasks,” said Tomas ChamorroPremuzic, a professor of business psychology at University
College London. “Someday, we
might not need managers.”
Other researchers suggest
artificial intelligence, too, can
fall prey to traps when making
decisions. AI systems are often
trained to make decisions by
finding similarities to historical data. But that can make
them bad at predicting rare
events, such as when employees would excel at a task they
haven’t encountered before,
said Michael Veale, a researcher in responsible machine learning at University
College London. “What makes
a great salesman this year
might not make a great salesman next year,” Mr. Veale said.
Companies that make and
use workforce-management
software acknowledge these
concerns but say machines are
no substitute for human judgment. Instead, they say their
software speeds up administrative work and uses data to
help human managers improve
decisions they previously
made only by drawing upon
gut instinct and experience.
“Our goal here is to optimize managers’ time,” said Bill
Bartow, vice president of
global product management at
Kronos Inc., which this month
announced software that evaluates vacation requests without human intervention and
assigns tasks based on worker
preferences and qualifications.
Several startups and established firms offer tools to automate and optimize the allocation of work shifts and
assignments, enabling one
person to manage many more
workers than previously.
Insiris Ltd., a U.K.-based
maker of workforce-management software, uses machine
learning to draw up assignments for 100 river pilots at a
large European port, taking
into account variables such as
each pilot’s past performance.
“If you’re a human allocating work, a computer’s going
to be much more efficient at
that,” said Matthew Summers,
Insiris’s managing director.
Other firms focus on morecomplex forms of management. Chicago-based Nexus
A.I. uses its algorithms to
search employees’ profiles to
determine which ones would
work best together on projects. It also performs automated performance reviews.
Amazon's third-party merchants make up a growing share of overall
sales on the site.
Early computer programming was considered menial labor and wasn’t deemed intellectual work.
recruits often less qualified,
they frequently left the field
because they viewed it as
unmanly. A shortage of programmers forced the U.K.
government to consolidate
its computers in a handful of
centers with the remaining
coders. It also meant the
government demanded gigantic mainframes and ignored more distributed systems of midsize and mini
computers, which would give
rise to the personal computer, Dr. Hicks says.
As a result, the U.K.’s
computing industry imploded. By 1968 there was a
6
single firm, ICL.
Some women who were
pushed out of government
and corporations started
their own companies of
women programmers. One
was Dame Stephanie Shirley,
who in the 1960s built a tech
firm, Freelance Programmers, made up almost entirely of women and that
even offered family-friendly
benefits such as working
from home. (The firm, eventually known as Xansa, was
sold to a rival in 2007 for
nearly $1 billion.)
Dame Shirley has said
that when she founded the
company, she was seeking
not wealth but “a workplace
where I was not hemmed in
by prejudice, or by other
people’s preconceived notions of what I could or
could not do.”
In the U.S., as in the U.K.,
women found programming
jobs after World War II. All
six of the first programmers
of America’s first digital
computer, Eniac, were
women. The decline in female programmers coincided
with the professionalization
of coding in the 1960s,
writes computer historian
Nathan Ensmenger in his
2012 book “The Computer
Boys Take Over: Computers,
Programmers, and the Politics of Technical Expertise.”
The proportion of women
earning degrees in computer
science peaked in 1984 at
37% and has declined ever
since. Today, 18% of computer-science degrees are
granted to women, according
to a 2016 study from Accenture and the nonprofit Girls
Who Code. America’s computing workforce is 24%
women, and that proportion
is falling too, despite hundreds of millions of dollars
the industry has spent on diversity and inclusion efforts.
Stephanie Palmeri, a partner at venture-capital firm
Uncork Capital, says raising
the ratio of women in technology primarily requires
having more women in positions of power, both as investors and executives.
Without external influence, you can’t expect a system that prizes “culture fit”
to change, says Dr. Hicks.
You also can’t expect to rise
in a “meritocracy” that
doesn’t reward everyone
equally. The risks of baking
these flaws into the system
become greater in an age
when employers are training
artificial intelligence to do
the hiring—and in which AI
is learning from pre-existing
notions of what constitutes a
“good” employee.
BUSINESS WATCH
4
MACY’S
0
2014
’15
’16
’17
’18
Note: 2017 and 2018 are forecasts
Source: Gartner
THE WALL STREET JOURNAL.
THE REPUBLIC OF
ARGENTINA
Collateralized Floating Rate Bond
Due 2023
In accordance with the provisions
of the Fiscal Agency Agreement,
notice is hereby given that for the
six month Interest Period from
30 November 2017 to 30 May
2018, the Bonds will carry an
Interest Rate of 1.6875% p.a. and
the Coupon Amount per
US$1,000 nominal of the Bonds
will be US$12.57.
Citibank Agency & Trust
11 December 2017
Chairman’s Exit
Completes Transition
Macy’s Inc. Executive Chairman Terry Lundgren will retire
next month from the board, completing a transition of leadership
for the department-store operator
announced nearly 18 months ago.
Mr. Lundgren’s retirement will
be effective on Jan. 31, Macy’s
announced Friday. The board
named Chief Executive Jeff Gennette as chairman.
Mr. Lundgren left the chief executive post in March after serving in the role since 2003. Before
becoming CEO, he was president
and chief merchandising officer.
Following Mr. Lundgren’s retirement, the board will have 10
directors, the company said.
Marna Whittington will remain
PEPSICO
as lead independent director.
Mr. Lundgren said he is confident the company “has the
strategies, resources, talent and
leadership to capitalize on the
fundamental shifts in consumer
shopping patterns we have all
experienced.”
—Aisha Al-Muslim
Nasdaq Wins Listing
From the Big Board
BOSTON HERALD
ANDREW KELLY/REUTERS
2
Tabloid Seeks
A Purchaser
The owner of the Boston
Herald newspaper has filed for
chapter 11 bankruptcy and is
putting itself up for sale, with a
$5 million starting offer from
GateHouse Media Inc.
The feisty tabloid, which
dates to 1846, cited the growth
of alternative media and erosion
of ad revenue for the need to
Terry Lundgren at Macy’s Herald Square in New York last year.
seek bankruptcy protection.
GateHouse intends to buy
the newspaper free and clear of
pension and retiree health and
welfare obligations, according to
an affidavit signed by Jeffrey
Magram, chief operating officer
of Herald Media Holdings Inc.
—Peg Brickley
and Becky Yerak
PepsiCo Inc. said it would
transfer its stock-exchange listing from the New York Stock
Exchange to the Nasdaq later
this month, in a big win for the
Nasdaq Stock Market as it
builds its data business.
PepsiCo, which has a market
capitalization of about $165 billion, is one of the largest companies to change exchanges recently and joins Kraft Heinz Co.,
which jumped ship from the
NYSE in 2012.
Under Chief Executive Officer
Adena Friedman, Nasdaq has focused on building advanced marketplace technology and information analytics.
—Austen Hufford
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | B5
Transform Your Tomorrow
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
#
$ %
(
%
&
$
Every Precision '
% ) ' )' %
5
9 :$/ ; #
1.. 8
1. <
3
6 7
#
3 4
no
n-
Enjoy ! tomorrowsleep.com " WSJ
...-$1=$1/2-.>$:
*+
,-.. ./012012
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
B6 | Monday, December 11, 2017
BUSINESS NEWS
Firms
Luxe Cars Are Hot in Persian Gulf U.S.
Boosted
Region becomes No. 1
market for extremely
expensive cars based
on per capita buying
November
IT Hiring
BY ANGUS LOTEN
On a typical Friday evening,
some of the world’s swankiest
cars can be seen crawling
along a roughly 16-mile stretch
of Dubai’s Jumeirah Beach
road. Bentleys pull up next to
Bugattis; there are Ferraris
and Lamborghinis.
In heavy traffic, most don’t
speed up further than the next
stop light, but for many of
their owners, driving isn’t necessarily the point.
Ultraluxury cars, some costing hundreds of thousands of
dollars, are experiencing a
surge in popularity in the Persian Gulf. The region’s rich
sheikhs, wealthy locals and
well-paid expatriates are
splurging on relatively rare vehicles, along with designer
jewelry, bespoke yachts and
penthouses in London and
New York.
Saudi Arabia’s Crown Prince
Mohammed
bin
Salman,
through a proxy, bought a
500-year-old Leonardo da
Vinci masterpiece in November for a record $450.3 million, The Wall Street Journal
reported this past week.
McLaren Automotive Ltd.
recently created a one-off version of its latest 720S car for a
customer in the United Arab
Emirates.
Finished in satin black with
gold highlights, the vehicle has
a 24-carat-gold engine heat
shield, gold-painted wheels
and Arabic calligraphy evoking
the Dubai skyline on the air
brake. The price: half a million
dollars.
“You are unlikely to find a
McLaren in your rearview mirror at the traffic light,“ said
Andreas Bareis, McLaren’s
managing director for the
Middle East, Africa and Latin
America, referring to the Gulf
market. “That’s a big attraction.”
U.S. employers hired more
information-technology workers last month, signaling
strong demand by businesses
across all sectors of the economy to leverage digital capabilities and other tech tools
wherever possible, CompTIA
reported Friday.
The number of new IT positions at companies outside of
the technology sector rose by
an estimated 243,000 jobs in
November, after dropping by
77,000 the previous month,
the tech trade group said.
For the year, IT jobs have
grown by 223,000, following a
series of ups and downs since
January.
“There is a degree of uncertainty and volatility in the
monthly
occupation-level
data,” said Tim Herbert, the
group’s senior vice president
for research and market intelligence. “The trend line over
time is the more important indicator,” he said.
The results are based on an
analysis of the latest Bureau of
Labor Statistics data, released
Friday.
It shows nonfarm payrolls
across the board rose by a
seasonally adjusted 228,000
last month, a slight downturn
from October, The Wall Street
Journal reported. Unemployment held steady at 4.1%.
Jobs posting for IT project
managers also rose in November, while software developers, computer systems engineers, architects and analysts
were down. So far this year,
employers have posted an estimated 2.1 million jobs for IT
positions.
Separately, jobs within the
IT sector rose by 8,100, driven
by an upturn in hiring at IT
and software-services firms
and computer, electronic and
semiconductor manufacturers.
PATRICK T. FALLON/BLOOMBERG NEWS
BY NIKHIL LOHADE
The Persian Gulf’s rich sheikhs and wealthy locals are splurging on relatively rare vehicles such as McLaren Automotive’s 720S.
Car companies don’t disclose their sales in the Persian
Gulf region, but auto-industry
executives estimate that the
low-volume luxury segment, especially special editions built in
limited numbers, has grown by
high single digits in the past
two years.
Aston Martin says sales in
the Gulf region are set to grow
10% to 15% for 2017 to about
250 cars. And McLaren Automotive expects a 12% increase
in Gulf sales compared with
last year, to some 200 cars.
Rolls-Royce’s Dubai representative was the company’s
top dealer by volume last year,
the company said. A sales executive for the Dubai dealer
said it sold more than 200 vehicles with the famous “Flying
Lady” hood ornament, up from
about 160 in 2015.
Months before its ultraluxury sedan hits the roads early
next year, the all-new RollsRoyce Phantom VIII has sold
out in the Gulf, according to
Rolls-Royce Motor Cars Ltd, a
unit of BMW AG. The company
declined to reveal the number
of units sold, but a single car,
with features such as handcrafted seats and wood interior
paneling, costs at least half a
million dollars.
Aston Martin’s limited-edition Vanquish S Pearl, with
mother-of-pearl finishes inside
and a price tag of about
$450,000, sold all 10 units
made at its launch in the Gulf
in November, according to the
company.
Sheppard said.
The demand at the top end
contrasts with relatively weak
automobile sales overall in the
Gulf region. A sharp drop in
the price of oil since mid-2014
forced Gulf countries to cut
back on government spending
and adopt austerity measures,
such as the withdrawal of fuel
subsidies. The region’s overall
new-car market shrank by
nearly 20% last year and sales
are down so far in 2017, according to Autodata Middle
East, a Dubai-based company
that collates data from auto
dealers.
ly
.
Luxury-Car Makers
Cash In on Demand
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Lavish displays of wealth
are linked with social status
everywhere.
But the Gulf’s bloc of oil-exporting countries has emerged
as the world’s No. 1 market for
ultraluxury cars—most costing
at least $250,000—based on
per capita buying, according to
executives from several luxury
car makers who track global
sales data. The U.S. and China
remain the largest markets
overall for such automobiles.
The tendency of many limited-edition vehicles to rise in
value has made them even
more attractive in the Gulf region’s otherwise wobbly investment climate, which is
largely the result of volatile
crude prices as well as political conflict and a sweeping anticorruption campaign in
Saudi Arabia.
“When you are buying
[cars] right at the top of the
market, they are investments,”
said Christopher Sheppard,
chief executive for Aston Martin Middle East and North Africa. “They are appreciating
assets.”
An Aston Martin Vantage
Zagato, for example, which
cost about $440,000 in 2013,
now is changing hands at
more than $1.1 million, Mr.
DEFY
Your Age.
Only $29!
You would be hard pressed
to find a timepiece of this
outstanding quality
and precision at
this price.
no
n-

“Are you kidding?
What a great watch
at a ridiculous price.
Thank you Stauer!”
— Gitto, Hicksville NY
It’s Enough to MakeYou
Blue in the Face
Time to take a stand against overpriced watches with the
Stauer Urban Blue, now only $29.
Y
Take Control of Your Health.
Feel 10+ years younger with the Cenegenics Elite Health
Program, the Gold Standard in Age Management Medicine.
BENEFITS INCLUDE
+
Decreased Body Fat
+
Increased Muscle Tone
+
Increased Physical and
Sexual Vitality
+
+
Improved Mental Sharpness
and Sleep Quality
Decreased Risk of
Age-related Diseases
Schedule your complimentary consultation today!
866.251.2319
TRYCENEGENICS.COM
ou need a new watch…the one you are
wearing was made when Nixon was in
office, but extravagantly-priced watches that
add zeros just because of a high falootin’ name
are an insult to your logic. Why shell out big
money so some foreign company can sponsor
another yacht race? It’s time to put an end to
such madness. It’s absolutely possible to have
the highest quality, precision classic timepiece
without the high and mighty price
tag. Case in point: The Stauer Urban Blue.
Packed with high-end watch
performance and style, minus the highend price tag. It’s everything a high-end
watch should be: Sturdy stainless steel and
genuine leather construction. Precision
timing that’s accurate to four seconds a
day––that’s more precise than a 27-jewel
automatic watch priced at over $6,000. And,
good looking–– with simple, clean lines
and a striking metallic blue face.
“Blue watches are one of the growing style
trends seen in the watch world in the past
few years”––WATCHTIME®
Your great escape from the over-priced
watch craze. At Stauer, we go directly to the
source (cutting out the middleman), and
engineer our own watch designs. This means
we can offer a top quality timepiece that
happens to only cost the same as two wellmade cocktails at your favorite bar. So, while
we’re busy revolutionizing the watch industry
to bring you more real value, you can take your
own stand against overpriced watches with
the Urban Blue.
Your satisfaction is 100% guaranteed. Wear
the Urban Blue for 30 days. If you’re not
convinced that you achieved excellence for less,
send it back for a refund of the item price. The
Urban Blue is one of our fastest sellers. It takes
six months to engineer this watch so don’t
wait. Take a stand against overpriced watches
in impeccable style. Limited to the first 1900
responders to this ad only. Don’t miss
out...call today!
Stauer Urban Blue Watch $199†
Offer Code Price
$29 + S&P Save $170
1-800-333-2045
Your Insider Offer Code: UBW248-02
You must use this insider offer code to
get our special price.
† Special price only for customers using the offer code versus
the price on Stauer.com without your offer code.
Stauer
®
Rating of A+
14101 Southcross Drive W., Dept. UBW248-02
Burnsville, Minnesota 55337 www.stauer.com
Precision movement • Stainless steel caseback and crown • Cotswold™ mineral crystal
• Date window • Water resistant to 3 ATM • Genuine leather band fits wrists 6 ¾"–8 ¾"
Smar t Luxuries—Surprising Prices™
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | B7
MARKETS DIGEST
S&P 500 Index
Dow Jones Industrial Average
Last Year ago
2651.50 s 9.28, or 0.35% last week
High, low, open and close for each of
the past 52 weeks
Trailing P/E ratio 21.42 21.55
P/E estimate *
19.93 18.43
Dividend yield
2.14
2.44
All-time high 24329.16, 12/08/17
Current divisor 0.14523396877348
Year ago
Trailing P/E ratio 24.85 24.87
P/E estimate *
19.78 18.45
Dividend yield
1.90
2.09
All-time high: 2651.50, 12/08/17
t
2550
23000
Monday's open
t
Initial public offerings of stock expected this week; might include some
offerings, U.S. and foreign, open to institutional investors only via the
Rule 144a market; deal amounts are for the U.S. market only
Expected
pricing date Filed
UP
Friday's close
Friday's close
IPOs in the U.S. Market
2625
24000
Week's high
DOWN
Monday's open
New to the Market
Public Offerings of Stock
65-day moving average
22000
21000
2400
20000
2325
65-day moving average
200-day moving average
19000
2250
18000
2175
17000
2100
M
A
M
J
J
A
S
O
N
t
Primary
market
NYSE weekly volume, in billions of shares
D
D
t
F
Composite
J
F
M
A
M
J
J
A
S
O
N
J
F
M
A
M
J
J
A
S
O
N
D
Bank of America announces plans to cut up to 35,000
jobs, about 10% of its workforce at the time, as a result
of its purchase of Merrill Lynch and a weak economy.
D
Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.
Major U.S. Stock-Market Indexes
High
Nasdaq Composite
Latest Week
Close
Net chg
Low
% chg
52-Week
Close (l)
Low
Dow Jones
Industrial Average 24534.04 24101.24 24329.16
Transportation Avg 10504.80 10178.29 10402.51
Utility Average
770.08 746.86
757.69
Total Stock Market 27997.67 27169.22 27435.24
704.12
Barron's 400
716.02 697.48
6899.23 6734.13
6380.77 6234.22
0.40 19732.40
2.12 8783.74
-1.23
645.05
0.22 23276.73
-0.16
600.24
97.57
215.88
-9.47
59.34
-1.15
-0.11
-7.51
6.69
6840.08
6344.57
l 24329.16
l 10402.51
l
774.47
l 27435.24
l
708.56
l
5383.12
4863.62
0.11
0.35
9.28
-3.72
-9.20
2651.50
1890.86
928.11
6912.36
6422.56
l
23.1
15.0
14.9
17.9
17.0
23.1
10.6
17.3
16.6
15.2
1508.15 1521.72
12512.03 12643.06
550.98
555.99
4068.32 4232.75
531.58
539.62
104.69
106.66
75.65
76.93
131.06
134.10
1211.49 1238.24
9.58
9.43
27.1
30.4
25.6
29.6
13.0
14.0
-15.30
28.50
-1.15
-23.14
-3.81
1.98
-2.72
-3.80
-20.41
-1.85
-1.00
0.23
1.89
-3.42
-2.75
-1.62
-16.19
Latest Week
% chg
l
l
l
l
l
l
l
l
l
l
3015.17
389.92
259.18
635.36
72731.84
16096.07
47572.86
3704.57
EMEA
Stoxx Europe 600
Stoxx Europe 50
Eurozone
Euro Stoxx
Euro Stoxx 50
Austria
ATX
Belgium
Bel-20
France
CAC 40
Germany
DAX
Greece
Athex Composite
Israel
Tel Aviv
Italy
FTSE MIB
Netherlands AEX
Portugal
PSI 20
Russia
RTS Index
South Africa FTSE/JSE All-Share
Spain
IBEX 35
Sweden
SX All Share
Switzerland Swiss Market
U.K.
FTSE 100
S&P/ASX 200
Shanghai Composite
Hang Seng
S&P BSE Sensex
Nikkei Stock Avg
FTSE Bursa Malaysia KLCI
Straits Times
Kospi
Weighted
389.25
3176.94
391.98
3591.45
3327.38
4025.75
5399.09
13153.70
740.72
1445.68
22773.80
547.22
5360.26
1119.54
58012.31
10321.10
576.14
9319.16
7393.96
Low
0.38
0.08
–0.13
0.20
0.65
0.36
0.65
–2.73
1.38
1.22
1.67
1.81
–0.02
1.55
1.55
2.27
–1.06
–0.66
3.02
2.18
0.18
–1.22
–2.42
2.34
1.06
0.48
1.28
no
DJ Americas
Sao Paulo Bovespa
S&P/TSX Comp
S&P/BMV IPC
Santiago IPSA
5994.40
3289.99
28639.85
33250.30
22811.08
1721.25
3424.64
2464.00
10398.62
52-Week Range
Close
540.31
57110.99
14951.88
44895.29
3137.71
353.74
2940.03
341.67
3197.54
2592.86
3542.27
4748.90
11190.21
608.79
1363.50
18293
469.77
4467.94
973.33
49400.56
9169.6
531.09
8040.09
6890.42
0.08
–0.83
–1.49
1.27
–0.03
0.20
–0.72
–0.46
–1.90
5532.9
3052.79
21574.76
25807.10
18335.63
1617.15
2871.05
2024.49
9078.64
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
3017.76
391.12
263.11
19.1
19.6
21.1
635.36
76989.79
16131.79
51713.38
4255.93
17.6
20.8
5.3
4.2
14.9
396.77
3276.11
400.44
3697.40
3445.23
4118.51
5517.97
13478.86
858.08
1478.96
23046
555.22
5475.67
1195.61
61211.52
11135.4
600.20
9328.63
7562.28
7.7
5.5
11.9
9.1
27.1
11.6
11.0
14.6
15.1
–1.7
18.4
13.3
14.6
–2.8
14.5
10.4
7.8
13.4
3.5
6049.4
3447.84
30003.49
33731.19
22937.60
1792.35
3449.54
2557.97
10854.57
•
•
•
•
•
•
YTD
% chg
5.8
6.0
30.2
24.9
19.3
4.8
18.9
21.6
12.4
Source: SIX Financial Information;WSJ Market Data Group
Consumer Rates and Returns to Investor
U.S. consumer rates
Selected rates
A consumer rate against its
benchmark over the past year
Five-year ARM, Rate
4.00%
8.8
9.7
11.2
Bay State Savings Bank
Worcester, MA
2.99%
508-890-9015
1.00
Haven Savings Bank
Hoboken, NJ
3.00%
201-659-3600
Amalgamated Bank
New York, NY
3.13%
800-622-0860
Yield/Rate (%)
Last (l)Week ago
Federal-funds rate target
1.00-1.25 1.00-1.25
Prime rate*
4.25
4.25
Libor, 3-month
1.49
1.55
Money market, annual yield
0.33
0.34
Five-year CD, annual yield
1.49
1.49
30-year mortgage, fixed†
3.90
3.88
15-year mortgage, fixed†
3.32
3.29
Jumbo mortgages, $424,100-plus† 4.30
4.30
Five-year adj mortgage (ARM)† 3.71
3.68
New-car loan, 48-month
3.18
3.20
3-yr chg
52-Week Range (%)
Low 0 2 4 6 8 High (pct pts)
0.25 l
l
3.50
0.96 l
0.26 l
1.19 l
l
3.73
l
2.99
l
4.21
l
3.20
l
2.85
% Chg From
Friday3s Offer 1st-day
close ($) price close
Denali Thera
DNLI Dec. 8/$18.00
GigCapital
GIG.U Dec. 8/$10.00
21.45
19.2
...
10.00
...
...
Luther Burbank
LBC Dec. 8/$10.75
11.75
9.3
...
CURO Grp Hldgs
CURO Dec. 7/$14.00
Odonate Thera
ODT Dec. 7/$24.00
14.20
1.4
...
22.67
–5.5
–1.4
1 4 5 6 7 8
December
6725
1.25
4.25
1.55
0.36
1.49
4.33
3.50
4.88
4.03
3.36
Net chg
%Chg
26900
YTD
% chg
596.18 -16.95 -2.76 5.10
185.02 -5.67 -2.97 -3.89
57.36
Crude oil, $ per barrel
-1.00 -1.71
6.78
Natural gas, $/MMBtu 2.772 -0.29 -9.44 -25.56
Gold, $ per troy oz.
1245.20 -33.60 -2.63 8.28
U.S. Dollar Index
93.90
1.02
1.09 -8.13
WSJ Dollar Index
87.29
0.79
0.92 -6.08
Euro, per dollar
0.8494 0.0087
1.04 -10.65
Yen, per dollar
U.K. pound, in dollars
113.47
1.09 -3.02
Issuer/Industry
Takedown date/ Deal value Registration
Registration date ($ mil.)
(mil.)
Fennec Pharmaceuticals
Healthcare
Dec. 8
Oct. 24,317
1.22
l
616.58
l
58.95 11.38
3.93 -26.00
l
l
1346.00
7.40
l
103.25 -7.57
84.49
l
93.56 -4.98
0.96 -10.29
l
118.18 -1.64
l
l
1.36
6.45
Real-time U.S. stock
quotes are available on
WSJ.com. Track mostactive stocks, new
highs/lows, mutual
funds and ETFs.
Plus, get deeper money-flows data and
email delivery of key stock-market
data.
All are available free at
WSJMarkets.com
Yield to maturity of current bills,
notes and bonds
1.00
1.00
1.31
-0.09
-0.08
-0.12
0.03
-0.20
0.13
0.04
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
3.75%
10%
5
2.25
0
1.50
–5
One year ago 0.75
–10
0.00
–15
t
1
3 6
month(s)
Yen, euro vs. dollar; dollar vs.
major U.S. trading partners
3.00
Friday
1 2 3 5 710
years
maturity
30
National Storage Affiliates TrustDec. 7
Real Estate/Property
May 25,316
$127.5
$750.0
Tellurian
Oil & Gas
Dec. 7
Feb. 10,317
$100.0
...
Credit Suisse
GW Pharmaceuticals
Healthcare
Dec. 6
April 17,317
$317.4
...
GS, MS, BofA ML,
Cowen & Co
At Home Group
Retail
Dec. 6
Oct. 20,317
$140.9
$1,106.8
Bill Barrett
Oil & Gas
Dec. 6
June 25,315
$105.0
$500.0
Attunity
Technology
Dec. 6
July 22,315
$20.0
$50.0
Viking Therapeutics
Healthcare
Dec. 6
June 20,316
$12.8
$150.0
Cleveland-Cliffs
Mining
Dec. 5
Feb. 9,317
$316.3
...
BofA ML, GS, DB,
Credit Suisse, Jefferies
Tabula Rasa HealthCare
Technology
Dec. 5
Oct. 16,317
$82.5
$350.7
Piper Jaffray, Citi,
RW Baird & Co, W. Blair
Editas Medicine
Healthcare
Dec. 5
March 3,317
$51.2
$354.2
MS
GoDaddy
Technology
Dec. 4
April 5,316
$344.4
...
MS
$292.4
$805.1
Orion Engineered Carbons Dec. 4
Chemicals
March 4,316
Performance Food Group
Food & Beverage
Dec. 4
Nov. 16,316
$188.2
...
s
Yen
Monday, December 11
WSJ Dollar index
Corporate Borrowing Rates and Yields
35
307
12
5
303
46
394
34
18
372
W. Blair
GS, MS
Barclays
JPM
Cantor Fitzgerald & Co
Sale
Final
maturity Issuer
Total
($mil.)
Rating
Bookrunner/
Fitch Moody’s S&P Bond Counsel(s)
Dec. 11 Sept.14,2018 Connecticut
350.0 N.R.
N.R.
Dec. 11 Jan. 15, 2028 Connecticut
400.0 N.R.
N.R.
Dec. 11 Feb. 15, 2034 Howard CoMaryland
227.1 N.R.
N.R.
Dec. 14 March15,2032 Empire State
Development
Dec. 14 March15,2027 Empire State
Development
Dec. 15 prelim. Alaska Indus
Dev & Export Auth
Dec. 15 prelim. Allen Co-Ohio
545.7 N.R.
N.R.
739.7 N.R.
N.R.
162.8 N.R.
N.R.
724.2 N.R.
N.R.
Dec. 15 prelim.
200.0 N.R.
N.R.
Dec. 15
240.0 N.R.
N.R.
385.0 N.R.
N.R.
450.0 N.R.
N.R.
350.0 N.R.
N.R.
N.R. Mesirow
Financial Inc/—
N.R. Goldman &
Co/—
N.R. Wells Fargo &
Co/—
N.R. Citi/—
153.5 N.R.
N.R.
N.R. Citi/—
573.9 N.R.
N.R.
N.R. M. Stanley/—
795.0 N.R.
580.2 N.R.
N.R.
N.R.
N.R. Loop Capital Markets/—
N.R. BoA Merrill/—
200.0 N.R.
N.R.
N.R. BoA Merrill/—
189.0 N.R.
N.R.
281.3 N.R.
N.R.
181.1 N.R.
N.R.
N.R. M & T
Securities Inc/—
N.R. Piper
Jaffray/—
N.R. Wells Fargo &
Co/—
158.4 N.R.
N.R.
Dec. 15
Dec. 15
Dec. 15
Total Return
52-wk
3-yr
Dec. 15
2.88 1.50
6.46 3.90
3.44 2.30
6.853 4.480
2.17 1.91
4.965 2.633
9.656 6.312
Dec. 15
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch
Tuesday, December 12
Deals of $ 150 million or more expected this week
Dec. 15
Dec. 15
Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
n.a.
346
n.a.
14
316
W. Blair,
Needham & Co, Roth Cptl
Ptnrs
Public and Municipal Finance
Dec. 15
2.383
3.140
2.690
5.621
2.890
2.107
5.565
JPM
Auction of 3 and 10 year note;
Auction of 30 year bond;
announced on December 7; settles on December 15announced on December 7; settles on December 15
Dec. 15
10-yr Treasury, Ryan ALM
DJ Corporate
Aggregate, Barclays Capital
High Yield 100, Merrill Lynch
Fixed-Rate MBS, Barclays
Muni Master, Merrill
EMBI Global, J.P. Morgan
BofA ML, GS, Jefferies,
Barclays, Guggenheim
Prtnrs, MS
Auction of 13 and 26 week bills;
Auction of 4 week bill;
announced on December 7; settles on December 14announced on December 11; settles on December 14
s
Bond total return index
Jefferies, MS, Citi, WFS
Treasurys
Dec. 15
Spread +/- Treasurys,
Yield (%)
in basis pts, 52-wk Range
Last Wk ago
Last
Low High
GS, Cowen & Co
Public and Private Borrowing
Euro
2017
2.363
3.137
2.680
5.545
2.910
2.212
5.559
...
4.17
195.14 -3.63
l
91.35
WSJ
.COM
$190.3
...
1.20
1.6
Dec. 7
Dec. 5,317
$149.9
107.84
1.7
Revance Therapeutics
Healthcare
Dec. 4
July 6,317
WSJ Dollar Index
Yen, per dollar
Oppenheimer
Heron Therapeutics
Healthcare
U.S. Dollar Index
U.K. pound, in dollars
54.8 –26.8
$100.0
% Chg
0.83
–0.1
$15.0
52-Week
Low Close(l) High
1127.80
–0.1
Dec. 8
Sept. 2,316
$1,275.8
2.56
–0.8
Aqua Metals
Metal & Steel
$154.8
Crude oil, $ per barrel 42.53
Euro, per dollar
Wedbush Sec
Dec. 4
Nov. 13,317
166.50
Gold, $ per troy oz.
$90.0
BlackLine
Technology
532.01
–1.2
Bookrunner(s)
$20.0
8.42
TR/CC CRB Index
Natural gas, $/MMBtu
Big Rock Ptnrs Acquisition 10.17
BRPAU Nov. 20/$10.00
1.34 -0.0094 -0.70
DJ Commodity
7.74
4.1
“Shelf registrations” allow a company to prepare a stock or bond for
sale, without selling the whole issue at once. Corporations sell as
conditions become favorable. Here are the shelf sales, or takedowns,
over the last week:
27200
TR/CC CRB Index
RETO Eco-Solutions
RETO Nov. 29/$5.00
21.2
6775
27500
DJ Commodity
Quanterix
18.18
QTRX Dec. 7/$15.00
Leisure Acquisition
9.88
LACQU Dec. 1/$10.00
Regalwood Global Energy 9.99
RWGE.U Dec. 1/$10.00
Off the Shelf
27800
Close
% Chg From
Friday3s Offer 1st-day
close ($) price close
Company SYMBOL
IPO date/Offer price
6825
s 59.34, or 0.22%
Commodities and
Currencies
Last Week
Third Federal Savings and Loan
2.79%
Cleveland, OH
866-627-1785
2.00
t
J FMAM J J A S ON D
2017
3.71%
Bankrate.com avg†:
2.88%
800-530-2680
0.00
Performance of IPOs, most-recent listed first
Secondaries and follow-ons expected this week in the U.S. market
None expected this week
DJ US TSM
12.1
9.2
14.3
5.2
9.8
4.1
37.6
6.3
12.1 -0.8
16.2 12.7
-2.4
3.1
-27.0 -12.6
36.6 21.3
-31.8 -12.3
t
5-year Treasury
note yield
19.00/ GS, BofA ML, Citi,
22.00 Cantor Fitzgerald,
PNC Bank, Mizuho
6875
Benchmark Yields and Rates
Treasury yield curve Forex Race
Epic Funding
Fort Myers, FL
3.00
30.0
Lockup Expirations
s
5-year adjustablerate mortgage
t (ARM)
Interest rate
18.4
13.9
10.8
17.3
11.7
8.2
1544.14
9.6
12643.06 13.0
559.05
7.1
4304.77 34.5
560.52 14.2
106.84 14.7
96.72 -3.9
192.66 -29.3
1341.69 38.7
16.04 -18.5
High
•
•
•
•
•
•
2527.82
325.34
211.72
n-
Close
The Global Dow
DJ Global Index
DJ Global ex U.S.
Asia-Pacific
Australia
China
Hong Kong
India
Japan
Malaysia
Singapore
South Korea
Taiwan
l
l
1345.24
11056.89
503.24
3075.02
469.13
88.02
73.03
117.79
885.46
9.14
-0.21
-0.54
-0.70
International Stock Indexes
Americas
Brazil
Canada
Mexico
Chile
2651.5
1899.18
944.1
1 4 5 6 7 8
December
Sources: SIX Financial Information; WSJ Market Data Group
Region/Country Index
NMRK
Nq
Other Stock Offerings
10.9
4.8
8.0
8.7
9.6
last week
Philadelphia Stock Exchange
World
l
2238.83
1660.58
815.62
-0.20
-0.98
Other Indexes
Russell 2000
1559.61
NYSE Composite
12724.50
Value Line
563.35
NYSE Arca Biotech 4313.97
NYSE Arca Pharma
545.29
KBW Bank
107.77
PHLX§ Gold/Silver
79.37
PHLX§ Oil Service
141.14
PHLX§ Semiconductor 1268.66
CBOE Volatility
11.86
10/23 Newmark Group
Full-service commercial
real estate services
business.
12/14
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
2665.19 2624.75
1916.71 1869.98
952.10 923.02
15.00/ MS, Barclays,
17.00 Raymond James
& Assoc, Stifel
Sources: WSJ Market Data Group; FactSet Research Systems
last week
Standard & Poor's
500 Index
MidCap 400
SmallCap 600
8.4
t 7.51, or -0.11%
% chg
YTD 3-yr. ann.
% chg
High
Nasdaq Stock Market
Nasdaq Composite
Nasdaq 100
CASA
Nq
Company SYMBOL
IPO date/Offer price
Financial Flashback
The Wall Street Journal, December 11, 2008
30
20
10
0
D
11/17 Casa Systems
Provider of cable edge
devices and services.
12/13
IPO Scorecard
Bars measure the point change from Monday's open
J
9.00/ Aegis Cptl,
11.00 Maxim Grp,
Dawson James
Sec
Adial Pharmaceuticals
Manufacturer and
developer of medications
for addiction.
None expected this week
200-day moving average
D
1.4
9/7
Week's low
Bookrunner(s)
ADIL
Nq
12/12
2475
Symbol/
Pricing
primary Shares Range($)
exchange (mil.) Low/High
Issuer/business
ly
.
24329.16 s 97.57, or 0.40% last week
High, low, open and close for each of
the past 52 weeks
Last
Dec. 15
Dec. 15
American
Municipal Power
prelim. Chicago CityIllinois
prelim. Jacksonville
Electric Authority
prelim. Jacksonville
Electric Authority
prelim. Maine State
Housing Authority
prelim. NYS Housing
Fin-Mortgage Agcy
prelim. Nassau CoNew York
prelim. NewJerseyTurnpikeAuthority
prelim. Philadelphia
City-Pennsylvania
prelim. Pittsburgh
Water & Sewer Auth
prelim. Suffolk CoNew York
prelim. Washington
(Hillsboro) SD #1J
prelim. Washington
Health Care
Facs Au
Aug. 15, 2045 West Travis
Pub Util Agency
N.R. Preliminary/
HawkinsDelafield &Wood/Pullman&Comley/
Robinson&Cole/SchiffHardinLLP
N.R. Preliminary/
DayPitney/HawkinsDelafield&Wood/
Pullman&Comley/Squire PattonBoggsLLP/Soeder&AssociatesLLC
N.R. Preliminary/
McKennon
Shelton & Henn
N.R. Preliminary/
Harris Beach
N.R. Preliminary/
Harris Beach
N.R. Raymond
James/—
N.R. J P Morgan
Securities LLC/—
N.R. BoA Merrill/—
N.R. BOK
Financial Securities Inc/
Andrews Kurth Kenyon LLP
Source:Thomson Reuters/Ipreo
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
B8 | Monday, December 11, 2017
FINANCE WATCH
MUTUAL FUNDS
SEC Grants Delay on
Portfolio Disclosures
Mutual funds will get a ninemonth reprieve from sending
detailed portfolio information to
their regulator as the government reviews how to ensure
the valuable data aren’t hacked.
The Securities and Exchange
Commission said Friday that
mutual funds won’t have to
send forms starting July 2018
that would reveal their positions in stocks, bonds and derivatives as well as monthly
performance. The forms would
have been sent to the SEC’s Edgar system, which was hacked
in 2016.
Some of the portfolio information in the new forms is confidential, with investors being
able to see only a slice of the
data on a delayed basis.
The SEC imposed new disclosure rules because for years
the agency lacked complete
data on mutual funds’ investments, securities lending activity and cash flows in and out of
portfolios.
Under the changes outlined Friday, mutual funds will
have to collect the data and
store it internally. It must be
given to the SEC upon the regulator’s request.
—Dave Michaels
LEVERAGED LENDING
Regulators Consider
Reissuing Guidelines
U.S. banking regulators have
told Congress they are considering reissuing guidelines that
were the basis for a crackdown
on leveraged lending.
The Federal Reserve, Office
of the Comptroller of the Cur-
rency and Federal Deposit Insurance Corp. in letters to Rep.
Blaine Luetkemeyer (R., Mo.), a
senior member of the House Financial Services Committee,
said they may revise and reissue for public comment a 2013
policy document laying out
lending standards for leveraged
loans to highly indebted companies.
The Wall Street Journal
viewed copies of two of the letters and spoke with a person
who viewed the third.
The leveraged-lending policy
document had been thrown into
legal limbo recently when a
government auditor ruled that
regulators didn’t meet their obligations to notify Congress
about it.
Fed Chairwoman Janet Yellen
told Mr. Luetkemeyer on Dec. 5
that the central bank is “considering soliciting public comment
on the [leveraged lending] guidance in the near term with a
view to improving the clarity of
the guidance and reducing any
unnecessary burden.”
Acting Comptroller of the
Currency Keith Noreika wrote
Mr. Luetkemeyer on Nov. 16: “I
favor soliciting further public
comment on the [leveraged
lending] guidance in the near
term. We would then revise the
[leveraged lending] guidance as
necessary to reduce ambiguity
and promote additional transparency.” Mr. Noreika has since
been replaced by Joseph Otting.
A spokesman for Mr. Otting
had no comment.
“The FDIC is open to soliciting further public comment on
the Leveraged Lending Guidance
and revising it as appropriate to
reduce ambiguity and promote
additional transparency,” FDIC
Chairman Martin Gruenberg
wrote Mr. Luetkemeyer on
Dec. 5.
—Ryan Tracy
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
Nuveen Hi Incm Nov 2021 JHB 10.13 10.00 -1.3 6.0
Pioneer High Income Trust PHT 10.82 9.73 -10.1 8.2
Prud Gl Shrt Dur Hi Yd GHY 16.35 14.44 -11.7 7.9
Prudentl Sh Dur Hi Yd Fd ISD 16.55 14.79 -10.6 7.9
Wells Fargo Incm Opps Fd EAD 9.31 8.40 -9.8 8.8
Wstrn Asset Glbl Hi Inco EHI NA 10.01 NA 8.7
Wstrn Asset High Inco II HIX NA 6.94 NA 8.9
Wstrn Asset Opp Fd HIO NA 5.03 NA 7.2
West Asst HY Def Opp Fd HYI NA 15.24 NA 7.9
Other Domestic Taxable Bond Funds
Apollo Tactical Incm Fd AIF 17.54 15.67 -10.7 8.9
Ares Dynamic Credit Alloc ARDC NA 16.50 NA 6.9
Barings Corp Investors MCI NA 15.89 NA 1.9
BlackRock Multi-Sector IT BIT 19.99 18.14 -9.3 9.8
BlackRock Taxable Mun Bd BBN 24.04 23.28 -3.2 6.8
Doubleline Oppor Credit DBL NA 22.49 NA 9.0
Duff & Phelps Utl & Cp Bd DUC 9.66 8.92 -7.7 6.6
EtnVncLtdFd EVV
14.98 13.47 -10.1 7.3
Franklin Ltd Duration IT FTF NA 11.61 NA 11.9
GuggenheimTaxableMuni GBAB 23.45 22.94 -2.2 6.7
Invesco High Incm 2023 IHIT 10.06 9.89 -1.7 5.5
John Hancock Investors JHI 18.34 17.23 -6.1 7.4
KKR Income Opps Fund KIO NA 15.60 NA 10.0
MFS Charter MCR
9.27 8.51 -8.2 8.9
MFS Multimkt MMT 6.63 6.10 -8.0 8.8
Nuveen Build Am Bd Fd NBB 22.63 21.83 -3.5 5.6
PIMCO Corporate & Incm PTY NA 16.50 NA 10.4
PIMCO Corporate & Incm PCN NA 17.03 NA 10.6
PIMCO HiInco PHK
NA 7.42 NA 13.6
PIMCO Inco Str Fd PFL NA 11.66 NA 9.4
PIMCO Incm Strategy Fd II PFN NA 10.46 NA 9.2
Putnam Mas Inco PIM 5.03 4.64 -7.8 6.5
Putnam Premier Income Tr PPT 5.58 5.17 -7.3 6.0
Wells Fargo Multi-Sector ERC 14.25 13.07 -8.3 9.6
World Income Funds
Abeerden Asia-Pacific FAX 5.39 4.88 -9.5 8.5
Etn Vnc Short Dur Fd EVG NA 14.03 NA 7.1
Legg Mason BW Glbl Incm BWG NA 12.86 NA 8.4
MS EmMktDomDebt EDD 8.87 7.71 -13.1 8.6
PIMCO Dynamic Credit PCI NA 22.59 NA 11.5
PIMCODynamicIncomeFund PDI NA 30.62 NA 13.4
PIMCO Income Opportunity PKO NA 26.22 NA 10.1
PIMCO Strat Income Fund RCS NA 8.75 NA 10.1
Templeton Emerging TEI 13.11 11.63 -11.3 4.5
Templeton Global GIM 7.47 6.55 -12.3 6.0
Wstrn Asset Emerg Mkts EMD NA 15.30 NA 7.7
Wstrn Asset Gl Def Opp Fd GDO NA 17.91 NA 7.5
National Muni Bond Funds
AllianceBrnstn NtlMun AFB 14.94 13.76 -7.9 4.6
Blackrock Invest BKN 16.10 14.81 -8.0 5.3
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
BlackRockMun2030Target BTT 24.41 22.64 -7.3 4.1
BlackRock Municipal Trust BFK 14.54 14.13 -2.8 5.7
BlackRockMuni BLE 15.09 14.55 -3.6 6.1
BlackRockMuni Tr BYM 15.31 14.44 -5.7 5.3
BlkRk MuniAssets Fd MUA 14.20 15.26 +7.5 4.6
BlkRk Munienhanced MEN 12.01 12.14 +1.1 5.6
BlkRk MuniHldgs Inv MFL 14.78 14.81 +0.2 5.7
BlkRk MuniHldgs Qlty II MUE 14.11 14.08 -0.2 5.5
BlkRk MuniVest MVF 9.70 9.80 +1.0 5.7
BlkRk MuniVest II MVT 15.30 15.57 +1.8 5.7
BlkRk MuniYield MYD 14.93 14.55 -2.5 5.9
BlkRk MuniYld Quality MQY 15.95 15.74 -1.3 5.5
BlkRk MuniYld Qlty II MQT 14.00 13.20 -5.7 5.6
BlRkMunyldQltyIII MYI 14.55 14.21 -2.3 5.8
Deutsche Mun Income Tr KTF 12.69 12.02 -5.3 6.5
Dreyfus Mun Bd Infr Fd DMB 14.33 13.26 -7.5 4.9
Dreyfus Strat Muni Bond DSM 8.38 8.45 +0.8 5.9
Dreyfus Strategic Munis LEO 8.60 8.79 +2.2 5.9
Eaton Vance Mun Bd Fd EIM 13.72 12.70 -7.4 5.0
Eaton Vance Mun Income EVN 13.40 12.36 -7.8 5.4
EV National Municipal Opp EOT 22.02 22.93 +4.1 4.4
Invesco Adv Mun Incm II VKI 12.20 11.51 -5.7 5.8
Invesco Mun Incm Opps Tr OIA 7.65 8.12 +6.1 5.1
Invesco Mun Opportunity VMO 13.57 12.40 -8.6 6.1
Invesco Municipal Trust VKQ 13.57 12.57 -7.4 5.9
Invesco Qlty Mun Inco IQI 13.68 12.59 -8.0 5.4
Invesco Inv Grade Muni VGM 14.06 13.43 -4.5 5.8
Invesco Value Mun Incm Tr IIM 16.36 14.95 -8.6 5.0
MainStay DefinedTerm MMD 20.21 20.18 -0.1 5.5
MFS Munl Inco MFM 7.38 6.92 -6.2 5.6
Nuveen AMT-Free Quality NEA 15.23 13.85 -9.1 5.4
Nuveen AMT-Free Mun NVG 16.64 15.68 -5.8 5.7
Nuveen Mun Credit Incm Fd NZF 16.21 15.46 -4.6 5.8
Nuveen Enhncd Mun Val Fd NEV 15.15 14.32 -5.5 5.7
Nuveen Intermed Dur Mun NID 13.87 13.38 -3.5 4.9
NuveenMuniIncoOpp Fd NMZ 13.68 13.87 +1.4 5.9
Nuveen Muni Value Fund NUV 10.36 10.24 -1.2 3.8
Nuveen Qual Mun Incm Fd NAD 15.58 14.17 -9.1 5.5
Nuveen Sel Tax Free NXP 15.52 14.85 -4.3 3.7
Nuveen Sel TF NXQ 14.90 14.24 -4.4 3.5
PIMCO MuniFd PMF
NA 12.98 NA 5.8
Pimco Muni Inc II PML NA 13.36 NA 5.8
PIMCO Muni Inc III PMX NA 11.77 NA 5.8
Pioneer Mun Hi Inc Adv Tr MAV 11.95 11.65 -2.5 5.3
Pioneer Mun Hi Incm Tr MHI 12.89 11.84 -8.1 5.0
Putnam Tr PMM
8.01 7.53 -6.0 5.4
PutnamMuniOpportunities PMO 13.40 12.53 -6.5 5.2
Wstrn Asset Mngd Muni MMU NA 14.25 NA 5.3
WesternAssetMunTrFund MTT NA 21.46 NA 5.0
Single State Muni Bond
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
BlackRock CA Municipal Tr BFZ 15.31 14.19 -7.3 5.2
BlkRk MuniHldgs CA Qlty MUC 15.56 14.72 -5.4 5.0
Blkrck MunHl NJ Qlty MUJ 15.76 14.44 -8.4 5.7
BlRk MuHldg NY Qlty MHN 14.89 13.85 -7.0 5.0
BlkRk MuniYld CA Fd MYC 15.64 15.29 -2.2 5.1
BlkRk MuniYld CA Quality MCA 15.80 14.79 -6.4 5.2
BlkRk MuniYld MI Qlty MIY 15.54 14.27 -8.2 5.5
BlRk Muyld NY Qlty MYN 14.27 13.08 -8.3 5.0
Eaton Vance CA Mun Bd EVM 12.36 11.79 -4.6 4.9
Invesco CA Value Mun Incm VCV 13.47 12.73 -5.5 5.1
Invesco PA Value Mun Incm VPV 14.11 12.18 -13.7 5.2
Invesco Inv Grade NY Muni VTN 14.61 13.78 -5.7 5.0
Nuveen CA AMT-Free Qual NKX 15.95 15.56 -2.4 5.1
Nuveen CA Muni Value NCA 10.51 10.57 +0.6 3.9
Nuveen CA Quality Muni NAC 15.75 14.63 -7.1 5.5
Nuveen MD Qual Muni NMY 14.67 12.79 -12.8 5.0
Nuveen MI Qual Muni NUM 15.47 13.46 -13.0 4.8
Nuveen NJ Qual Muni NXJ 15.96 13.79 -13.6 5.2
Nuveen NY AMT-Free NRK 14.48 13.03 -10.0 4.9
Nuveen NY Qual Muni NAN 15.12 13.95 -7.7 5.1
Nuveen OH Qual Muni NUO 16.73 14.82 -11.4 5.0
Nuveen PA Qual Muni NQP 15.34 13.47 -12.2 5.3
Nuveen VA Qual Muni NPV 14.56 13.02 -10.6 4.3
PIMCO California Muni PCQ NA 17.40 NA 5.3
PIMCO California Mun II PCK NA 10.19 NA 5.6
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
General Equity Funds
Specialized Equity Funds
Griffin Inst Access RE:A 27.00 NA NA 6.3
Griffin Inst Access RE:C 26.54 NA NA 5.5
Griffin Inst Access RE:I 27.16 NA NA 6.6
Griffin Inst Access RE:L 26.97 NA NA NS
Griffin Inst Access RE:M 26.86 NA NA 5.8
NexPointRlEstStrat;A 20.33 NA NA 6.1
NexPointRlEstStrat;C 20.40 NA NA 5.9
NexPointRlEstStrat;Z 20.41 NA NA 7.2
NorthStar RE Cap Inc:Adv NA NA NA NS
Resource RE Div Inc:A 10.11 NA NA 5.4
Resource RE Div Inc:C 10.10 NA NA 4.7
Resource RE Div Inc:D 10.26 NA NA 4.9
Resource RE Div Inc:I 10.54 NA NA 5.5
Resource RE Div Inc:L 10.11 NA NA NS
Resource RE Div Inc:T 10.08 NA NA 4.6
Resource RE Div Inc:U 10.12 NA NA 5.4
Resource RE Div Inc:W 10.27 NA NA 5.4
SharesPost 100;A
26.49 NA NA -2.5
SharesPost 100:I
26.49 NA NA NS
Tot Inc+ RE:L
NA NA NA NS
USQ Core Real Estate:I USQIX 25.30 NA NA NS
USQ Core Real Estate:IS USQSX 25.30 NA NA NS
Versus Cap MMgr RE Inc:F 27.64 NA NA 5.8
Versus Cap MMgr RE Inc:I 27.71 NA NA 6.1
Versus Capital Real Asst VCRRX 25.13 NA NA NS
Wildermuth Endwmnt Str 12.84 NA NA 10.6
Wildermuth Endwmnt S:C 12.67 NA NA 9.8
Wildermuth Endwmnt S:I 12.90 NA NA NS
Income Preferred Stock Funds
MultiStrat Gro & Inc:A 15.19 NA NA 3.4
MultiStrat Gro & Inc:C 14.86 NA NA 2.7
MultiStrat Gro & Inc:I 15.38 NA NA 3.7
MultiStrat Gro & Inc:L 14.97 NA NA 2.9
The Relative Value:CIA VFLEX 25.57 NA NA NS
Convertible Sec's. Funds
Calmos Dyn Conv and Inc CCD 20.68 20.39 -1.4 15.3
World Equity Funds
BMO LGM Front ME 10.53 NA NA 16.2
CalamosGlbTotRet CGO 13.43 14.66 +9.2 21.6
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
U.S. Mortgage Bond Funds
Vertical Capital Income 12.59 NA NA 3.0
Loan Participation Funds
504 Fund
9.79 NA NA 3.7
FedProj&TrFinanceTender 10.08 NA NA NS
Invesco Sr Loan A
6.66 NA NA 4.2
Invesco Sr Loan B
6.66 NA NA 4.2
Invesco Sr Loan C
6.67 NA NA 3.4
Invesco Sr Loan IB
6.66 NA NA 4.4
Invesco Sr Loan IC
6.66 NA NA 4.3
Invesco Sr Loan Y
6.66 NA NA 4.4
RiverNorth MP Lending RMPLX 24.60 NA NA 9.1
Sierra Total Return:T SRNTX 24.88 NA NA NS
Voya Senior Income:A 12.51 NA NA 5.3
Voya Senior Income:C 12.49 NA NA 4.8
Voya Senior Income:I 12.47 NA NA 5.5
Voya Senior Income:W 12.52 NA NA 5.5
High Yield Bond Funds
Griffin Inst Access Cd:A NA NA NA NS
Griffin Inst Access Cd:C NA NA NA NS
Griffin Inst Access Cd:F NA NA NA NS
Griffin Inst Access Cd:I NA NA NA NS
Griffin Inst Access Cd:L NA NA NA NS
PIMCO Flexible Cr I;Inst NA NA NA NS
PionrILSInterval
9.43 NA NA 10.5
WA Middle Mkt Dbt
NA NA NA 11.3
WA Middle Mkt Inc WMF NA NA NA 11.2
Other Domestic Taxable Bond Funds
Capstone Church Capital 11.48 NA NA 1.5
CION Ares Dvsfd Crdt;A NA NA NA NS
CION Ares Dvsfd Crdt;C NA NA NA NS
CION Ares Dvsfd Crdt;I NA NA NA NS
CNR Select Strategies 9.60 NA NA NS
GL Beyond Income
3.69 NA NA NE
Palmer Square Opp Income NA NA NA 5.0
Resource Credit Inc:A 11.23 NA NA 6.4
Resource Credit Inc:C 11.34 NA NA 5.6
Resource Credit Inc:I 11.25 NA NA 6.6
Resource Credit Inc:L 11.22 NA NA NS
Resource Credit Inc:W 11.22 NA NA 6.3
Notice to Readers
We have made some minor changes in our daily listings. The names of
companies listed in the Biggest 1,000 Stocks and New Highs and Lows
tables are now listed alphabetically and not separated by exchange. We
also shortened some corporate names and tightened up our footnotes to
make them more readable. Finally, we will continue to report on corporate
dividends but will exclude ETFs and Closed End fund dividend changes.
This information remains available free on markets.wsj.com.
Please send comments to wsjcontact@wsj.com.
Friday, December 8, 2017
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
General Equity Funds
Adams Divers Equity Fd ADX 17.38 14.83 -14.7 28.0
Boulder Growth & Income BIF 12.89 10.76 -16.5 24.3
Central Securities CET 32.44 26.86 -17.2 28.2
CohSteer Opprtnty Fd FOF 13.80 13.00 -5.8 19.4
Cornerstone Strategic CLM 13.58 15.18 +11.8 20.2
EtnVnc TaxAdvDiv EVT 23.71 22.70 -4.3 21.0
Gabelli Dividend & Incm GDV 24.68 22.54 -8.7 19.8
Gabelli Equity Trust GAB 6.52 6.33 -2.9 24.9
Genl American Investors GAM 40.24 33.44 -16.9 16.9
Guggenheim Enh Fd GPM 9.15 8.86 -3.2 23.5
HnckJohn TxAdv HTD 25.88 25.11 -3.0 24.7
Liberty All-Star Equity USA 6.79 6.11 -10.0 30.3
Royce Micro-Cap RMT 10.43 9.30 -10.8 19.8
Royce Value Trust RVT 17.57 15.93 -9.3 22.6
Source Capital SOR 44.69 39.84 -10.9 14.2
Tri-Continental TY
29.95 26.61 -11.2 25.4
Specialized Equity Funds
Adams Natural Rscs Fd PEO 22.21 18.82 -15.3 -1.6
AllnzGI NFJ Div Interest NFJ 14.87 13.50 -9.2 14.9
AlpnGlblPrProp AWP 7.32 6.45 -11.9 35.5
ASA Gold & Prec Metals ASA 12.31 10.71 -13.0 -0.1
BlkRk Enh Cap Inco CII 17.04 15.93 -6.5 24.8
BlkRk Engy Res Tr BGR 15.08 13.61 -9.7 -0.3
BlackRock Enh Eq Div Tr BDJ 9.91 9.07 -8.5 19.4
BlackRock Enh Gl Div Tr BOE 14.44 13.43 -7.0 23.6
BlkRk Intl Grwth&Inco BGY 6.95 6.42 -7.6 24.9
BlkRk Health Sci BME 35.45 36.09 +1.8 18.9
BlackRck Rscs Comm Str Tr BCX 10.07 8.92 -11.4 12.6
BlackRock Science & Tech BST 27.47 26.32 -4.2 50.4
BlackRock Utilities Infr BUI 21.39 21.34 -0.2 23.6
CBREClarionGlblRlEstIncm IGR 8.86 7.70 -13.1 14.9
Central Fund of Canada CEF 13.01 12.69 -2.5 7.9
ClearBridge Amer Engy CBA
7.87 NA -1.8
ClearBridge Engy MLP Fd CEM
13.51 NA -1.8
Clearbridge Engy MLP Opp EMO
10.87 NA -5.9
Clearbridge Engy MLP TR CTR
11.34 NA 0.1
Cohen & Steers Infr Fd UTF 26.02 23.34 -10.3 30.2
C&S MLP Incm & Engy Opp MIE 10.22 9.60 -6.1 0.3
Cohen & Steers Qual Inc RQI 13.65 12.46 -8.7 13.3
CohnStrsPfdInco RNP 22.91 20.72 -9.6 18.8
Cohen & Steers TR RFI 13.46 12.47 -7.4 11.1
CLSeligmn Prem Tech Gr Fd STK 21.77 22.99 +5.6 36.6
Duff & Phelps DNP
10.08 11.31 +12.2 19.9
Duff&PhelpsGblUtilIncFd DPG 17.85 15.78 -11.6 12.4
Eaton Vance Eqty Inco Fd EOI 15.00 14.13 -5.8 23.2
Eaton Vance Eqty Inco II EOS 15.72 14.99 -4.6 22.5
EtnVncRskMngd ETJ 10.07 9.24 -8.2 14.6
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
Etn Vnc Tax Mgd Buy-Write ETB 16.40 16.63 +1.4 8.6
Eaton Vance BuyWrite Opp ETV 15.03 15.24 +1.4 11.0
Eaton Vance Tax-Mng Div ETY 12.30 12.09 -1.7 28.2
EatonVanceTax-MngdOpp ETW 11.58 11.82 +2.1 25.8
EtnVncTxMngGlDvEqInc EXG 9.43 9.32 -1.2 26.3
Fiduciary/Clymr Opp Fd FMO 11.66 11.32 -2.9 -12.9
FT Energy Inc & Growth Fd FEN 22.82 22.75 -0.3 -3.1
FstTrEnhEqtIncFd FFA 16.72 15.75 -5.8 25.0
First Tr Engy Infr Fd FIF 18.63 17.66 -5.2 4.5
First Tr MLP & Engy Incm FEI 14.08 14.28 +1.4 -2.1
Gabelli Hlthcr & Well GRX 11.50 9.91 -13.8 11.3
Gabelli Utility Tr GUT 5.51 7.01 +27.2 25.9
GAMCOGlblGoldNatRscs&Inc GGN 5.27 5.01 -4.9 11.4
GoldmanSachsMLPIncOpp GMZ
8.37 NA -2.2
Goldman Sachs MLPEnergy GER
5.77 NA -10.0
John Hancock Finl Opps Fd BTO 37.02 37.40 +1.0 9.3
Macquarie Glbl Infrstrctr MGU 28.07 24.80 -11.6 34.4
NeubergerBermanMLPIncm NML 9.28 8.59 -7.4 -0.9
Neubrgr Brm Rl Est Sec Fd NRO 5.76 5.45 -5.4 11.1
Nuveen Dow 30 Dynamic DIAX 19.07 18.47 -3.1 31.5
Nuveen Core Eq Alpha JCE 16.52 15.85 -4.1 28.2
Nuveen Diversified Div JDD 13.14 12.24 -6.8 18.6
Nuveen Engy MLP Fd JMF 11.01 10.71 -2.7 -11.0
NuvNASDAQ100DynOver QQQX 23.05 24.19 +4.9 37.5
Nuveen Real Est Incm Fd JRS 11.51 11.00 -4.4 13.4
NuvS&P500DynOverwrite SPXX
17.08 NA 29.6
NuveenS&P500Buy-Write BXMX 14.52 14.13 -2.7 17.7
Reaves Utility Fund UTG 33.82 31.40 -7.2 15.5
Tekla Hlthcr Investors HQH 23.88 22.25 -6.8 12.7
Tekla Healthcare Opps Fd THQ 19.32 17.51 -9.4 20.1
Tekla Life Sciences HQL 19.69 18.95 -3.8 21.4
Tekla World Hlthcr Fd THW 14.63 13.39 -8.5 9.7
Tortoise Energy TYG 24.06 25.35 +5.4 -8.9
Tortoise MLP Fund NTG 16.05 15.66 -2.4 -9.7
Voya Gl Equity Div IGD 8.25 7.70 -6.7 20.8
Income Preferred Stock Funds
Calamos Strat Fd CSQ 12.91 12.19 -5.6 28.9
Cohen & Steers Dur Pfd LDP 27.33 26.09 -4.5 16.2
Cohen & Strs Sel Prf Inco PSF 28.01 28.20 +0.7 18.9
FT Interm Duration Pfd FPF 24.98 24.98 0.0 24.3
Flaherty & Crumrine Dyn DFP 26.47 26.73 +1.0 26.9
Flaherty & Crumrine Pfd FFC 20.45 20.60 +0.7 15.8
John Hancock Pfd Income HPI 21.34 21.41 +0.3 17.1
John Hancock Pfd II HPF 21.08 21.32 +1.1 17.7
John Hancock Pfd Inc III HPS 18.81 18.62 -1.0 17.2
JHancock Pr Div PDT 15.46 16.61 +7.4 28.4
LMP Cap & Inco Fd SCD
13.74 NA 13.2
Nuveen Pfd & Incm Opps Fd JPC 10.80 10.51 -2.7 18.4
Nuveen Pfd & Incm Secs Fd JPS 10.38 10.46 +0.8 28.6
Nuveen Preferred & Incm JPI 26.03 25.43 -2.3 20.2
TCW Strategic Income Fund TSI
5.53 NA 11.5
Virtus Global Dividend ZTR 12.82 13.18 +2.8 34.8
Convertible Sec's. Funds
AdvntClymrFd AVK 17.49 15.77 -9.8 17.8
AllianzGI Conv & Incm NCV 6.64 7.05 +6.2 19.3
AllianzGI Conv & Incm II NCZ 5.95 6.18 +3.9 20.4
AllianzGI Div Incm ACV 22.54 21.63 -4.0 28.0
AllianzGI Equity & Conv NIE 23.26 21.04 -9.5 21.2
Calamos Conv Hi Inco Fd CHY 11.75 11.92 +1.4 25.1
Calamos CHI
11.15 11.41 +2.3 25.2
World Equity Funds
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Listed are the 300 largest closed-end funds as
measured by assets. Closed-end funds sell a limited
number of shares and invest the proceeds in securities.
Unlike open-end funds, closed-ends generally do not
buy their shares back from investors who wish to cash
in their holdings. Instead, fund shares trade on a stock
exchange. NA signifies that the information is not
available or not applicable. NS signifies fund not in
existence of entire period. 12 month yield is computed
by dividing income dividends paid (during the previous
twelve months for periods ending at month-end or
during the previous fifty-two weeks for periods ending
at any time other than month-end) by the latest
month-end market price adjusted for capital gains
distributions.
Source: Lipper
52 wk
Prem Ttl
Fund (SYM)
NAV Close /Disc Ret
Alpine Tot Dyn Div AOD 10.14 9.15 -9.8 30.5
Cdn Genl Inv CGI
31.90 22.99 -27.9 25.9
China Fund CHN
23.19 21.30 -8.2 41.0
Clough Global Opp Fd GLO 12.04 10.67 -11.4 33.1
EtnVncTxAdvGblDiv ETG 18.37 17.20 -6.4 31.2
EatonVance TxAdv Opport ETO 24.79 24.73 -0.2 32.2
First Trust Dynamic Eur FDEU 19.59 18.35 -6.3 30.6
Gabelli Glbl Multimedia GGT 9.18 8.58 -6.5 29.4
GDL Fund GDL
11.55 9.82 -15.0 8.3
India Fund IFN
31.28 27.34 -12.6 29.7
Japan Sml Cap JOF 14.97 13.55 -9.5 40.8
Korea Fund KF
48.78 43.01 -11.8 31.2
Mexico Fund MXF
18.05 15.59 -13.6 8.3
Morgan-Stanley Asia-Pac APF 20.50 17.85 -12.9 31.0
MS China a Shr Fd CAF 27.88 23.29 -16.5 28.5
MS Emerging Fund MSF 19.64 17.22 -12.3 29.6
MS India Invest IIF
40.28 35.75 -11.2 41.3
New Germany Fund GF 21.73 19.46 -10.4 54.6
Swiss Helvetia Fund SWZ 13.86 12.63 -8.9 27.4
Templeton Dragon TDF 23.73 20.49 -13.7 32.9
Templeton Emerging EMF 19.01 16.95 -10.8 43.2
Virtus Total Return Fund ZF 13.53 12.68 -6.3 25.2
Voya Infr Indls & Matls IDE 16.77 16.01 -4.5 25.6
Wells Fargo Gl Div Opp EOD 6.70 6.17 -7.9 24.3
Prem12 Mo
Fund (SYM)
NAV Close /Disc Yld
U.S. Mortgage Bond Funds
BlackRock Income Trust BKT 6.63 6.17 -6.9 5.1
Nuveen Mtg Opp Term Fd JLS 26.63 25.91 -2.7 5.3
Investment Grade Bond Funds
Blackrock Core Bond Tr BHK 14.90 13.90 -6.7 5.5
BlkRk Credit Alloc Incm BTZ 14.83 13.29 -10.4 6.3
John Hancock Income Secs JHS 15.34 14.56 -5.1 5.4
MFS Inc Tr MIN
4.42 4.11 -7.0 9.4
WstAstClymr InfLnkd Fd WIW NA 11.33 NA 3.7
WstAssetClymr InflLnk Sec WIA NA 11.61 NA 3.4
Loan Participation Funds
Apollo Sr Fltg Rate Fd AFT 18.01 16.52 -8.3 7.5
BlkRk Debt Strat Fd DSU 12.73 11.67 -8.3 7.1
BlackRock FR Incm Strat FRA 14.96 13.99 -6.5 5.8
Blkrk FltRt InTr BGT 14.43 13.86 -4.0 5.5
BlackstoneGSO Strat Cred BGB 17.01 16.04 -5.7 8.5
Blackstone GSO Sr Float BSL 17.70 17.37 -1.9 6.7
Eagle Point Credit ECC NA 18.53 NA 8.6
Eaton Vance FR Incm Tr EFT 15.53 14.44 -7.0 5.8
EatonVnc SrFltRate EFR 15.20 14.38 -5.4 6.1
Eaton Vance Sr Incm Tr EVF 7.14 6.48 -9.2 5.7
First Trust Sr FR Fd II FCT 14.02 13.09 -6.6 6.2
FT Sr Floating Rate 2022 FIV 9.70 9.14 -5.8 NS
Invesco Credit Opps Fund VTA 13.05 11.62 -11.0 7.3
Invesco Senior Income Tr VVR 4.87 4.43 -9.0 5.9
Nuveen Credit Strt Inc Fd JQC 9.06 8.20 -9.5 7.5
NuvFloatRteInco Fd JFR 11.51 11.34 -1.5 7.4
Nuv Float Rte Opp Fd JRO 11.42 11.29 -1.1 7.8
Nuveen Senior Income Fund NSL 6.82 6.51 -4.5 7.4
Pioneer Floating Rate Tr PHD 12.42 11.60 -6.6 6.3
Voya Prime Rate Trust PPR 5.64 5.10 -9.6 5.9
High Yield Bond Funds
AllianceBernstein Glbl AWF 13.87 12.69 -8.5 6.8
Barings Glbl Short Dur HY BGH 20.95 19.39 -7.4 9.5
BlackRock Corp Hi Yd Fd HYT 12.24 11.09 -9.4 8.1
BlackRockDurInco Tr BLW 17.04 15.93 -6.5 7.8
Brookfield Real Assets RA 25.12 23.47 -6.6 NS
Credit Suisse High Yld DHY 2.78 2.80 +0.7 9.6
DoubleLine Incm Solutions DSL 21.73 20.20 -7.0 8.9
Dreyfus Hi Yd Strat Fd DHF 3.52 3.30 -6.3 9.1
Fst Tr Hi Inc Lg/Shrt Fd FSD 17.96 16.25 -9.5 8.8
Guggenheim Strat Opps Fd GOF 19.82 21.64 +9.2 10.1
Ivy High Income Opps Fund IVH 15.93 14.64 -8.1 10.0
Neuberger Berman HYS NHS 13.24 11.75 -11.3 7.6
NexPoint Credit Strat Fd NHF 26.04 23.86 -8.4 10.1
Nuveen Credit Opps 2022 JCO 9.93 10.04 +1.1 NS
Nuveen Gl Hi Incm Fd JGH 18.55 16.78 -9.5 8.7
Nuveen High Incm Dec18 JHA 10.07 9.90 -1.7 5.1
Nuveen High Incm Dec19 JHD 10.24 10.00 -2.3 5.8
Insider-Trading Spotlight
Trading by ‘insiders’ of a corporation, such as a company’s CEO, vice president or director, potentially conveys
new information about the prospects of a company. Insiders are required to report large trades to the SEC
within two business days. Here’s a look at the biggest individual trades by insiders, based on data received by
Thomson Financial on December 8, and year-to-date stock performance of the company
Biggest weekly individual trades
Based on reports filed with regulators this past week
Company
Symbol
Dec. 1
Nov. 6-8
Nov. 20-21
Dec. 4-6
Nov. 27-29
Dec. 1
Dec. 5
Dec. 4
Nov. 30
Nov. 29
Dec. 1-5
Nov. 30
Dec. 6
Dec. 5
Dec. 6
Dec. 5-7
Dec. 1
Dec. 4
Insider
Title
no
Buyers
n-
KEY: B: beneficial owner of more than 10% of a security class CB: chairman CEO: chief executive officer CFO: chief financial officer
CO: chief operating officer D: director DO: director and beneficial owner GC: general counsel H: officer, director and beneficial owner
I: indirect transaction filed through a trust, insider spouse, minor child or other O: officer OD: officer and director P: president UT:
unknown VP: vice president Excludes pure options transactions
Date(s)
Barnes & Noble
American Assets Trust
BKS
AAT
Prospect Capital
PSEC
Versartis
ClearOne
Delphi Technologies
Allergan
VSAR
CLRO
DLPH
AGN
Tile Shop Holdings
TiVo
Kimco Realty
TIVO
Wal-Mart Stores
WMT
TTS
KIM
L. Riggio
E. Rady
E. Rady
E. Rady
E. Rady
J. Barry
J. Barry
J. Barry
J. Barry
J. Barry
S. Akkaraju
E. Bagley
K. Clark
C. Coughlin
B. Saunders
P. Jacullo
E. Rodriguez
M. Cooper
CB
CEOI
CEOI
CEOI
CEOI
CEO
CEO
CEO
CEO
CEO
DI
B
CEOI
D
CEO
DI
CEO
OD
S. Walton
A. Walton
J. Walton
S. Walton
A. Walton
J. Walton
J. Connaughton
J. Danhakl
M. Midle
R. Schulze
R. Schulze
E. Williams
B. Krzanich
J. Fisher
A. Malkin
J. Sokoloff
R. Gonzalez
W. Rhodes
DOI
BI
BI
DOI
BI
BI
DI
DI
DI
BI
BI
D
CEO
BI
CEO
DOI
CEO
CEO
No. of shrs in Price range ($) $ Value
trans (000s) in transaction (000s)
1,000
85
40
28
27
435
266
250
170
141
976
290
23
10
5
188
56
50
6.80
38.62-38.95
39.32-39.38
38.40-39.49
39.20-39.48
6.82
6.73
6.77
6.86
6.80
2.00-2.21
6.95-7.00
87.88
163.30
164.71-165.35
8.37-8.59
17.68-17.86
19.20
Close ($) Ytd (%)
6.55 -41.3
6,803
3,308 38.49 -10.7
1,580
1,072
1,046
6.76 -19.0
2,968
1,792
1,693
1,169
961
2.25 -84.9
2,115
8.90 -21.9
2,027
1.0
1,977 51.00
1,633 167.80 -20.1
758
9.20 -52.9
1,592
1,000 16.00 -23.4
960 18.29 -27.3
Sellers
Dec. 4-5
Dec. 4-5
Dec. 4-5
Nov. 29-30
Nov. 29-30
Nov. 29-30
Nov. 30
Nov. 30
Dec. 5
Dec. 1-4
Nov. 29
Nov. 28-29
Nov. 29
Nov. 29-30
Dec. 4
Nov. 29-30
Nov. 21
Dec. 6-7
IQVIA Holdings
IQV
Limelight Networks
Best Buy
LLNW
BBY
Twitter
Intel
Gap
Empire State Realty Trust
Shake Shack
AbbVie
AutoZone
TWTR
INTC
GPS
ESRT
SHAK
ABBV
AZO
1,865
97.09-97.61
1,865
97.09-97.61
1,865
97.09-97.61
1,488
97.04-98.04
1,488
97.04-98.04
1,488
97.04-98.04
1,163
102.00
800
102.00
15,000
4.35
1,000
60.17-61.08
1,000
58.68-59.12
1983*
20.72-21.82
890
44.05-44.56
850
31.77-32.50
1243*
20.45
523
39.63-41.06
218
94.01
27 700.37-707.18
181,719 96.55
181,719
181,719
145,144
145,144
145,144
118,645 101.35
81,628
4.69
65,250
60,242 63.79
58,804
41,891 21.10
39,323 43.35
27,472 33.49
25,423 20.37
21,081 46.30
20,512 95.95
18,599 721.89
A Week in the Life of the DJIA
A look at how the Dow Jones Industrial Average component stocks
did in the past week and how much each moved the index. The DJIA
gained 97.57 points, or 0.40%, on the week. A $1 change in the price
of any DJIA stock = 6.89-point change in the average. To date, a
$1,000 investment on Dec. 31 in each current DJIA stock component
would have returned $36,998, or a gain of 23.33%, on the $30,000
investment, including reinvested dividends.
The Week’s Action
Pct Stock price Point chg
chg (%) change in average* Company
99.98
9.78
18.52
12.88
20.59
Boeing
Nike
United Technologies
Visa
Home Depot
BA
NKE
UTX
V
HD
$285.90
61.30
122.81
112.60
183.41
$1,888
1,222
1,147
1,453
1,399
1.65
1.09
0.71
0.56
0.44
2.34
1.14
0.69
1.40
0.61
16.11
7.85
4.75
9.64
4.20
Caterpillar
J.P. Morgan Chase
American Express
Goldman Sachs
Johnson & Johnson
CAT
JPM
AXP
GS
JNJ
143.86
105.93
98.55
250.35
140.59
1,598
1,255
1,352
1,059
1,252
0.34
0.16
0.03
0.03
0.01
0.41
0.28
0.05
0.01
0.01
2.82
1.93
0.34
0.07
0.07
Chevron
McDonald’s
IBM
Cisco Systems
Procter & Gamble
CVX 119.92
MCD 173.15
IBM 154.81
CSCO 37.61
PG
90.37
1,060
1,459
969
1,289
1,108
–0.12
–0.31
–0.39
–0.54
–0.82
–0.10
–0.16
–0.28
–0.30
–0.80
–0.69
–1.10
–1.93
–2.07
–5.51
Microsoft
Verizon
DowDuPont
Merck
Wal-Mart Stores
MSFT
VZ
DWDP
MRK
WMT
84.16
51.09
70.73
55.57
96.55
1,384
1,004
1,270
965
1,433
–0.95
–0.96
–0.97
–0.98
–1.25
–0.17
–0.80
–1.02
–1.68
–3.02
–1.17
–5.51
–7.02
–11.57
–20.79
General Electric
Exxon Mobil
Walt Disney
Apple
3M
GE
17.71
XOM 82.66
DIS 104.23
AAPL 169.37
MMM 238.13
575
951
1,016
1,486
1,365
–1.27
–1.44
–1.68
–1.81
–2.98
–2.87
–0.66
–0.61
–2.46
–1.33
–19.76
–4.54
–4.20
–16.94
–9.16
UnitedHealth Group
Coca-Cola
Pfizer
Travelers
Intel
UNH 223.91
KO
45.31
PFE 35.74
TRV 133.75
INTC 43.35
1,420
1,130
1,143
1,118
1,229
*Based on Composite price. DJIA is calculated on primary-market price.
Source: WSJ Market Data Group; FactSet.
Borrowing Benchmarks | WSJ.com/bonds
Money Rates
Latest
Week
ago
Basic Industries
Business services
Capital goods
Consumer durables
Consumer nondurables
Consumer services
Energy
241,500
76,426
0
0
209,755
7,485,297
1,398,046
27,785,485
24,370,723
0
17,117,429
62,261,890
43,001,191
20,246,702
Finance
Health care
Industrial
Media
Technology
Transportation
Utilities
10,978,037
8,171,691
339,336
1,001,824
4,426,454
75,641
8,413
Selling
187,505,291
88,984,175
66,959,415
680,230
161,396,805
8,671,174
12,368,032
Sources: Thomson Financial; WSJ Market Data Group
2.0
1.8
U.S.
Canada
Japan
Treasury bill auction
1.180 1.170 1.300 0.340
1.290 1.285 1.290 0.490
1.450 1.435 1.450 0.590
4 weeks
13 weeks
26 weeks
Secondary market
30-year mortgage yields
30 days
60 days
4.25 4.25 4.25 3.50
3.20 3.20 3.20 2.70
1.475 1.475 1.475 1.475
Latest
0.00
0.50
0.50
1.50
0.00
0.50
0.50
1.50
1.08
1.14
0.00
0.50
0.50
1.50
0.00
0.50
0.25
1.50
0.24
Six month
One year
—52-WEEK—
High Low
1.72988 1.67425 1.72988 1.29600
2.01075 1.96044 2.01075 1.64844
Euro Libor
One month
Three month
Six month
One year
-0.405
-0.387
-0.317
-0.256
-0.399
-0.383
-0.312
-0.256
-0.376
-0.329
-0.220
-0.083
-0.405
-0.387
-0.322
-0.259
One month
Three month
Six month
One year
52-Week
high
low
-0.369
-0.326
-0.271
-0.191
Latest
-0.369
-0.326
-0.271
-0.188
Value
Traded
-0.366
-0.313
-0.216
-0.081
-0.375
-0.332
-0.276
-0.192
52-Week
High
Low
DTCC GCF Repo Index
3.00
3.00
3.00
2.25
Treasury
MBS
1.44
1.39
1.44
0.72
Libor
1.44438 1.37938 1.44438 0.68000
1.54878 1.49463 1.54878 0.95650
1.103
1.139
33.470 1.366 0.264
94.430 1.506 0.284
Open Implied
Settle Change Interest Rate
Commercial paper (AA financial)
One month
Three month
U.S. government rates
Week
ago
Call money
90 days
1.38
Week
Latest ago
Euro interbank offered rate (Euribor)
3.470 3.488 3.865 3.253
3.487 3.512 3.899 3.281
Other short-term rates
Policy Rates
Euro zone
Switzerland
Britain
Australia
—52-WEEK—
High Low
Fannie Mae
52-Week
High
Low
Prime rates
U.S.
Buying
–0.06
0.28
International rates
Overnight repurchase
Sector
Chg From (%)
Sept. '17 Oct. '16
246.663
253.638
All items
Core
Based on actual transaction dates in reports received this past week
Selling
Week
Latest ago
Inflation
Oct. index
level
86.1
49.5
29.4
19.5
49.2
0.9
29.4
53.2
-8.6
December 8, 2017
Key annual interest rates paid to borrow or lend money in U.S. and international markets. Rates below are a
guide to general levels but don’t always represent actual transactions.
U.S. consumer price index
33.3
$1,000 Invested(year-end '16)
$1,000
14.52
1.42
2.69
1.87
2.99
Buying and selling by sector
Buying
Symbol Close
5.35
2.37
2.24
1.69
1.66
39.7
* Half the transactions were indirect **Two day transaction
p - Pink Sheets
Sector
ly
.
Closed-End Funds | WSJ.com/funds
DTCC GCF Repo Index Futures
Treasury Dec
Treasury Jan
Treasury Feb
98.680 0.010 2515 1.320
98.565 unch. 1286 1.435
98.560 0.005 577 1.440
Discount
1.75
1.75
1.75
1.00
1.1700
1.3125
1.0500
1.1600
1.1700
1.2000
1.3125
1.1600
1.1700
1.1900
0.4200
0.5625
0.2500
0.4000
0.4200
Federal funds
Effective rate
High
Low
Bid
Offer
1.1700
1.3125
1.0500
1.1600
1.1700
Notes on data:
U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks,
and is effective June 15, 2017. Other prime rates aren’t directly comparable; lending practices vary
widely by location; Discount rate is effective June 15, 2017. DTCC GCF Repo Index is Depository
Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in
billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET. Futures on the
DTCC GCF Repo Index are traded on NYSE Liffe US.
Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information;
Tullett Prebon Information, Ltd.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | B9
MARKETS
Electric Cars Disrupt Metal Market Chinese
Imports
Investors dive into
commodities,
companies likely to
benefit from trend
Feeling Electric
Investors bullish on electric vehicles are scooping up a wide range of metals, supporting several mining
stocks and bringing less well-known raw materials into the spotlight.
Materials used by car type*
Copper
BY AMRITH RAMKUMAR
AND IRA IOSEBASHVILI
Cobalt
Electric vehicles as a percentage of demand†
Lithium
2016
23 kilograms
Conventional car
Lithium
0
0
Plug-in hybrid
15%
77
Copper
37
65%
1%
Nickel
Battery electric vehicle 9
17%
37%
4
19
2025
7%
Cobalt
51
1%
4%
Shares of lithium and cobalt miners large and small have swung on their way up this year.
300%
200
First Cobalt
100
Lithium and Battery Tech ETF
Glencore
0
J
F
M
A
M
J
J
A
S
O
N
D
*For a conventional lithium-ion battery with a nickel-cobalt-manganese cathode
†Based on projection that fully electric vehicles account for 9.2% of global auto sales in 2025
THE WALL STREET JOURNAL.
Some investors think the
long-term losers from electric
cars could include palladium
and platinum, which are used
to scrub emissions in gasoline
and diesel engines.
Even perceived winners
like cobalt could be vulnerable
if battery companies find
cheaper alternatives, a process some skeptics say has
already started.
These analysts say there
are plenty of other reasons to
be cautious. Forecasts on the
use of electric vehicles are
vulnerable to many factors,
from a slowdown in global
growth to low gasoline prices,
and it is difficult to predict
how readily consumers will
buy the vehicles when governments slash incentive programs. Tesla Inc.’s sales in
Hong Kong came to a standstill in the month after authorities slashed a tax break
for electric vehicles on April 1.
Higher metals prices also
typically spur increased production, which eventually
forces prices lower as supply
floods the market.
“It’s very speculative,” said
Nick Page, a global emergingmarket analyst for assetmanagement firm Fiera Capital’s European division.
“Everyone is jumping on this
bandwagon because people
are scared of missing out.”
Mr. Page said his firm hasn’t
made investments based on
electric-vehicle-related bets
but is monitoring their adoption rate.
Other challenges include a
sparse infrastructure of
charging stations, needed to
keep vehicles powered. Analysts say there is little chance
oil will soon return to its
2014 level above $100 a barrel, keeping gasoline relatively
inexpensive.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
A completely burned lithium-ion car battery before its dismantling by a German recycling firm
“We’re at a tipping point
where this next generation of
commodities becomes more
significant for industry and
growth,” said Maxwell Gold,
director of investment strategy at ETF Securities.
2.64%
The weekly decline in gold for February
delivery, the worst weekly drop since May
Analysts said the metal
priced in the near certainty that
the Federal Reserve will boost
short-term interest rates this
week. Higher interest rates and
the stronger dollar that tends to
follow are both bad news for the
precious metal. The higher rates
go, the greater the opportunity
cost for owning the metal in lieu
of interest-bearing bonds. A
stronger greenback, meanwhile,
makes the metal costlier for
overseas buyers.
no
It was an ugly week for gold.
The most actively traded Comex
futures for February delivery
slumped 2.6% an ounce last
week, the biggest weekly slide
for the metal since May.
n-
Gold Bugs Get Squished
MONEYBEAT
Gold’s weekly price drop followed a quiet November stretch
that had been the narrowest
trading range in dollar terms in
over a decade.
However, “it is so early in
the process that it is difficult
to determine who the winners
and losers will be,” he said.
As sales of electric vehicles
ramp up, so will the need for a
spectrum of metals that are
But traders couldn’t help but
consider additional factors that
might have contributed to the
selling. A portion of investors
have long preferred gold as a
hedge to global chaos and market turmoil. Anecdotally, the rise
of bitcoin seems to have lured
some of this cohort. Gold’s
weekly decline coincided with a
huge surge in the cryptocurrency.
Gold prices recently fell below their 200-day moving average for the first time since June.
Breaking through long-term momentum levels tends to usher in
additional buying on the way up,
or in this case, selling on the
way down.
—Chris Dieterich
ONLINE
WSJ
.COM
For more
MoneyBeat blog
posts, go to
blogs.wsj.com/
MoneyBeat
used to make everything from
batteries to wiring, some investors said.
Automotive demand for
lithium is set to climb 35%
each year through 2021, according to Citigroup Inc. projections.
Cobalt used in electric vehicles will increase roughly
450% from this year to 2025,
Morgan Stanley said. Electric
vehicles will become the second-largest nickel-consuming
sector by that year, with demand rising nearly 10-fold,
while copper demand for cars
and infrastructure is also expected to grow steadily, a JPMorgan Chase & Co. forecast
showed.
Ralph Aldis, director of research and fund manager at
U.S. Global Investors, said he
has picked up shares of several lithium producers for the
firm’s World Precious Minerals
fund.
“I just know that’s the direction that the world seems
to be going, and I’m not going
to fight it,” Mr. Aldis said.
Shares of Lithium Americas Corp. have soared 202%
this year on the Toronto Stock
Exchange. First Cobalt Corp.,
which is exploring cobalt
mines in Canada, has notched
a 215% gain.
“People are following the
money,” said Trent Mell, chief
executive of First Cobalt,
which has yet to extract any
cobalt and recently began
drilling in a group of 50 mines
that once produced cobalt and
silver. “I’m able to raise a lot
of capital I wouldn’t have been
able to even a year ago.”
The gains have accompanied a surge in global electric
and hybrid-vehicle sales,
which rose 50% in the first 10
months of 2017 from the same
period a year earlier, according to EV-Volumes, a research
group that tracks electric-car
sales.
And growth is expected to
continue. Sales of electric and
hybrid vehicles are slated to
surge to 31.5 million units in
2035 from 1.2 mWillion units
in 2017, according to Jefferies
Group.
Driving that growth is
China, which will demand auto
makers meet gradually escalating quotas for energy-efficient cars starting in 2019.
The U.K. and France are set to
phase out sales of diesel and
gasoline vehicles by 2040,
while India plans to sell only
electric vehicles by 2030. In
the U.S., auto makers are investing billions of dollars in
electric vehicles despite expensive technology costs and
lukewarm customer demand.
THE TICKER | Market events coming this week
Gasoline
Distillates
Short-selling reports
Ratio, days of trading volume of
current position, at Nov. 15
NYSE
Nasdaq
4.6
4
Tuesday
Fed 2-day meeting starts
up 6.8
up 1.7
Consumer price index
All items, Oct.
up 0.1%
Nov., expected
up 0.4%
Core, Oct.
up 0.2%
Nov., expected
up 0.2%
Earnings expected*
Estimate/Year Ago($)
Producer price index
All items, Oct.
up 0.4%
Nov., expected
up 0.3%
Core, Oct.
up 0.4%
Nov., expected
up 0.2%
Wednesday
Fed policy meeting ends
Target rate
1.00-1.25
Mort. bankers indexes
Purch., previous
up 2%
Refinan., prev.
up 9%
EIA status report
Previous change in stocks in
millions of barrels
Crude oil
down 5.6
Nordson
1.33/1.39
Thursday
Initial jobless claims
Previous
236,000
Expected
237,000
EIA report: natural gas
Previous change in stocks in
billions of cubic feet
up 2
Business inventories
Sept., previous
0.0%
Oct., expected down 0.1%
Import price index
Oct., previous
up 0.2%
Nov., expected
up 0.7%
Retail sales
Oct., previous
Nov., expected
up 0.2%
up 0.3%
Retail sales, ex. autos
Oct., previous
up 0.1%
Nov., expected
up 0.6%
BY CHRISTOPHER ALESSI
Oil prices rose Friday, supported by elevated geopolitical
tensions and data showing an
increase in Chinese crude imports.
Light, sweet crude for January delivCOMMODITIES ery
advanced 67
cents,
or
1.2%, to $57.36 a barrel, on the
New York Mercantile Exchange. Brent, the global
benchmark, rose 33 cents, or
0.5%, to $63.40 a barrel.
Prices were buoyed by official Chinese customs data released Friday, showing crude
imports rose in November to
over 9 million barrels a day
from 7.3 million the month before, according to Giovanni
Staunovo, commodity analyst
at UBS Wealth Management.
Mr. Staunovo said crude
prices, which had fallen to a
three-week low Wednesday,
also benefited from “positive
equity markets around the
world.”
The Chinese import data for
November represent the second-highest monthly figure on
record, while crude imports
rose 12% year over year during
the first 11 months of 2017, according to analysts at Commerz bank.
“Consequently, China will
supersede the U.S. as the
world’s largest crude importer
this year,” the analysts wrote.
Geopolitical tensions in the
Middle East—including President Donald Trump’s decision
to recognize Jerusalem as the
official capital of Israel and
the death of former Yemeni
President Ali Abdullah Saleh—
also helped to lift prices
Thursday and Friday, analysts
said.
“Speculation that there
might be some problems in
the region” that could lead to
supply disruptions has supported crude prices, Ehsan UlHaq, director for crude oil and
refined products at consultancy Resource Economist Ltd.
The shifting factors behind
prices comes just over a week
after the Organization of the
Petroleum Exporting Countries
agreed with other major producers, including Russia, to
extend a deal to hold back
nearly 2% of crude output
through the end of next year.
The accord, first adopted a
year ago, was meant to rein in
a global oil supply glut and
boost prices.
—Stephanie Yang
contributed to this article.
Estimate/Year Ago($)
1.16/0.90
1.33/1.17
0.68/0.61
Friday
Capacity utilization
Oct., previous
77.0%
Nov., expected
77.2%
Empire Manufacturing
Nov., previous
19.4
Dec., expected
16.5
Industrial production
Oct., previous
up 0.9%
Nov., expected
up 0.3%
* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES
IN PARENTHESES) ADJUSTED FOR STOCK SPLITNOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY
OF ECONOMISTS
U.S.-dollar foreign-exchange rates
in late New York trading
Country/currency
in US$
US$vs,
YTDchg
Fri
per US$ (%)
Americas
Argentina peso
.0580 17.2560 8.7
Brazil real
.3038 3.2918 1.1
Canada dollar
.7783 1.2849 –4.4
Chile peso
.001525 655.60 –2.1
Ecuador US dollar
1
1 unch
Mexico peso
.0529 18.9210 –8.7
Uruguay peso
.03447 29.0100 –1.2
Venezuela b. fuerte .093210 10.7285 7.3
Asia-Pacific
Australian dollar
.7509 1.3317
China yuan
.1511 6.6179
Hong Kong dollar
.1281 7.8053
India rupee
.01551 64.488
Indonesia rupiah .0000738 13545
Japan yen
.008813 113.47
Kazakhstan tenge .002984 335.11
Macau pataca
.1243 8.0423
Malaysia ringgit
.2450 4.0811
New Zealand dollar
.6835 1.4631
Pakistan rupee
.00945 105.850
Philippines peso
.0198 50.491
Singapore dollar
.7393 1.3527
South Korea won .0009151 1092.75
Sri Lanka rupee
.0065270 153.21
Taiwan dollar
.03331 30.018
Thailand baht
.03066 32.620
Vietnam dong
.00004403 22711
Czech Rep. koruna
Denmark krone
Euro area euro
Hungary forint
Iceland krona
Norway krone
Poland zloty
Russia ruble
Sweden krona
Switzerland franc
Turkey lira
Ukraine hryvnia
UK pound
Earnings expected*
Adobe
Costco
Oracle
Currencies
–4.1
–4.7
0.6
–5.1
0.1
–3.0
0.4
1.6
–9.0
1.3
1.4
1.8
–6.5
–9.5
3.2
–7.5
–8.9
–0.3
Europe
.04606 21.711 –15.5
.1582 6.3218 –10.6
1.1774 .8494 –10.7
.003749 266.71 –9.4
.009565 104.55 –7.4
.1205 8.2963 –4.0
.2804 3.5663 –14.8
.01693 59.064 –3.6
.1184 8.4457 –7.3
1.0074 .9927 –2.6
.2607 3.8364 8.9
.0369 27.1160 0.1
1.3384 .7472 –7.8
Middle East/Africa
SCOTT MCINTYRE/BLOOMBERG NEWS
Monday
Boost Oil
ly
.
Sources: Citigroup (materials by car type); Morgan Stanley (demand); FactSet (shares)
WOLFGANG RATTAY/REUTERS
A boom in electric vehicles
is stoking demand for a wide
range of metals, a shift some
investors believe will have a
far-reaching impact on commodity prices around the
world.
Investors eager to get in
early have doubled the price
of lithium and cobalt—key
components of electric-car
batteries—in the past two
years. Shares of companies
that claim to sit on deposits of
the metals have soared this
year, too, even though some
have yet to bring any production to market.
Many investors also have
found fresh reasons to love
some of the better-known
metals, which are used more
heavily in electric and hybrid
vehicles than in ordinary cars.
Prices for nickel, copper and
other base metals have hit
multiyear highs in 2017, although some have receded in
recent weeks.
Meanwhile, analysts expect
a host of minor metals such as
manganese, vanadium and molybdenum to become more important in coming years.
It is a bet that coincides
with Tesla Inc.’s soaring market value and the surge of bitcoin, the latest wager tied to
disruptive technology with uncertain ramifications. As more
countries pave the way for
electric vehicles to supplant
gasoline-powered ones, the
most bullish investors are convinced the world is about to
experience its biggest shift in
commodities demand since the
19th century, when petroleum
replaced whale oil as lamp
fuel.
More skeptical observers
see echoes of the late 1990s
dot-com era, when most investors correctly predicted the internet would change the
world, but few found the
handful of companies that
would survive the sector’s
brutal crash and thrive in the
21st century.
Plenty of Reasons
To Be Cautious
Bahrain dinar
Egypt pound
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
2.6529 .3770 –0.1
.0562 17.7865 –1.9
.2837 3.5248 –8.4
3.3137 .3018 –1.3
2.5976 .3850 unch
.2750 3.636 –0.1
.2667 3.7501 –0.02
.0732 13.6570 –0.3
Close Net Chg % Chg YTD%Chg
WSJ Dollar Index 87.29
A Costco Wholesale Corp. location in Miami. The big-box retailer posts results Thursday.
0.10 0.12 –6.08
Sources: Tullett Prebon, WSJ Market Data Group
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
B10 | Monday, December 11, 2017
MARKETS
The New Face of Treasury Auctions
In the depths of the financial crisis, the borrowing needs of the U.S. more than tripled, and now
surpass $2 trillion on an annual basis each year since 2009. Foreign investors and Wall Street
banks bought most of the debt at government bond auctions. As the U.S. stiffened its financial
regulations and the crisis atmosphere abated, demand from those quarters waned. Individual
investors—through their stakes in fixed-income mutual funds—have stepped up to fill the gap.
Purchases of U.S. Treasurys
$2.5 trillion
2.0
Other
Foreign
1.5
Brokers
and dealers
1.0
0.5
16%
19%
18%
2009
’10
’11
25%
31%
’12
’13
’14
Less than 15% of Treasury purchases in October
auctions were made by foreign investors, down
from nearly 43% in June 2009. Today, domestic
bondholders account for greater than half of the more
than $14 trillion in marketable debt outstanding.
Total domestic holdings
$7.88 trillion
Other domestic
$5.41 trillion
Other domestic
Total foreign holdings
$6.32 trillion
44%
’15
’16
’17*
40%
30
20
10
2009 ’10
’12
’13
China
Belgium
France
1.18
Switzerland
India
Many large investors, including hedge funds, domicile in
places with legacies of being light on regulations, favorably
disposed toward privacy or as a haven from taxes.
0.15
Thailand
0.07
Deal Making Challenges Netflix
The Show Must Go On
Estimated share of 2017 programming expense by category
Sports
Film
Fox
Disney
TV
n-
TWX
Netflix
no
Amazon
Hulu
Apple
0
25
50
75
100
THE WALL STREET JOURNAL.
Source: MoffettNathanson
Disney already has said
that it is planning to pull its
movies from Netflix in 2019
and it is likely to relaunch
them on its own family-entertainment streaming service. By buying out Fox’s
stake in streaming service
Hulu, it also would take majority control of a Netflix
competitor, bolstering it
with content from Fox’s television studio and FX cable
shows like “The Simpsons.”
Similarly, AT&T hopes to
use Time Warner content, including on a new internet TV
service, to gain a competitive edge among distributors.
Another digital threat
comes from Amazon.com
and Apple, which have spent
$4.5 billion and $1 billion,
respectively, on original programming in the past year.
That is small compared with
the studios, but they are
sure to ramp up those investments.
Still, Netflix shouldn’t be
underestimated. Netflix’s
troves of data on viewing
habits helped it create shows
like “House of Cards” and
“The Crown.” On the surface,
those looked like risky investments, some $100 million per season, but they
have paid off.
While the deal making
may not dethrone Netflix,
the company faces risks.
High audience numbers will
be driven by blockbuster
shows, not loyalty, which
helps explain why content
exclusivity on platforms is
rising.
But hits come and go. Research by MoffettNathanson
suggests that winners won’t
just be the players with the
best content, but those who
can build a consumerfriendly interface with a
deep reservoir of library programming alongside constantly refreshed, original
content.
Deals or no deals, consumers care about content
and price. That will be a
challenge for everyone.
—Elizabeth Winkler
OVERHEARD
It isn’t easy being green.
Avocados haven’t been
this menacing since they
were called “alligator pears.”
Earlier this year they became something of an economic meme when an Australian property mogul
seemed to blame millennials’
spendthrift ways, singling out
a penchant for “smashed avocado,” as the obstacle to getting on the housing ladder.
Avocado toast is now a sarcastic answer to many money
problems.
Now physical self-injury,
not financial, is making headlines. “Avocado hand” is the
phenomenon of people cutting themselves when slicing
the fruit, which has a tough
skin and pit. The solution?
One British medical group
suggested adding safety labels to protect the inept public. British retailer Marks &
Spencer has a better idea. It
is selling a seedless avocado
with edible skin imported
from Spain.
Now if they could just
slash the price, the world
might finally be safe.
Big Paint Companies Still Look Primed for an M&A Wave
One might be forgiven for
thinking that some paints
just don’t mix.
Three megadeals in the
global paint industry have
failed this year: PPG Industries ended its three-month
pursuit of European leader
Akzo Nobel in June; Akzo
aborted its subsequent suggestion of a merger of equals
with Axalta Coatings Systems after Japan’s Nippon
Paint made its own cash bid;
and recently the Nippon-Axalta talks broke down.
Yet the strategic logic
driving big deals has only
grown. Debt remains cheap,
and paint producers have
been caught this year between lackluster sales and
Taiwan
0.18
All other
foreign holders
1.10
0.13
Reporting by Daniel Kruger, graphic by Peter Santilli/THE WALL STREET JOURNAL.
FINANCIAL ANALYSIS & COMMENTARY
The biggest winner in the
battle to win the fracturing
television audience has been
Netflix. Will it become a
loser amid the deal making
roiling the media industry?
Disney’s TV operation
dwarfs Netflix in size, but
the two companies are heading in opposite directions.
Netflix’s revenue increased
32% in the first nine months
of its current fiscal year,
reaching $8.4 billion, and operating income rose 163% to
$593.4 million. Disney’s TV
revenue for the same period
was $18 billion. Yet its
growth was flat compared
with last year, and its operating income fell 11% to $6
billion.
Viewers increasingly are
cutting the cord in favor of
streaming content online or
on mobile devices. The
AT&T-Time Warner merger,
announced last year, and the
potential 21st Century FoxDisney deal, which may be
announced as soon as late
this week, are signals of an
industry searching for ways
to adapt to changing consumer habits.
Japan
1.10
Singapore
HEARD ON THE STREET
Email: heard@wsj.com
’17
0.19
0.14
0.27
’16
Hong Kong
0.25
Brazil
’15
0.09
0.10
Saudi Arabia
0.08
0.27
South
Korea
Russia
0.21
0.10
’14
Treasury holdings help bolster these economies
against shocks such as those experienced
during the 1997 currency crisis.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
0.31
Cayman
Islands
*Through October †As of September
Sources: Treasury Department (purchases, holdings); Federal Reserve (Fed holdings)
’11
All other foreign
0.07
0.24
Investment
funds
Foreign share of U.S. Treasury purchases, monthly
Germany
Luxembourg
0.08
Federal
Reserve
$2.47 trillion
U.K.
Ireland
Canada
Top 20 foreign
40%
0
Holders of U.S. Treasurys†
Federal Reserve
42%
ly
.
0
35%
Blending Problem
Big paint companies by
enterprise value
$48.8 billion
Sherwin-Williams
32
PPG
24.2
Akzo Nobel
Axalta
11.3
Nippon Paint
10.5
RPM
9
Kansai
7.8
Source: FactSet
spiraling raw-material costs.
The savings available from
combining purchasing budgets look more attractive
than ever.
It is tempting to bet a deal
will happen. Akzo used to be
the obvious target, but now a
takeover of Axalta looks
more plausible.
Nippon’s offer came in
around $37 a share. This
looks low. Last year industry
leader Sherwin-Williams
paid 14.2 times expected
earnings before interest,
taxes, amortization and depreciation for Valspar. Applying that multiple to Axalta’s
2018 forecast Ebitda gives a
share price of roughly $43.
Akzo’s all-share offer for
Axalta would have been
worth more than $37 a
share, but only assuming optimistic cost savings estimates of over $700 million.
By comparison, Sherwin-Williams estimated only $280
million of savings through its
combination with Valspar,
which is roughly twice the
size of Akzo-Axalta.
Not only do the savings
look unrealistic, but extracting them would have been up
to Akzo’s new chief, who was
slated to lead a combined entity, according to people familiar with the talks.
Shareholders, including
activist Elliott Management,
failed to bring Akzo’s management into talks with PPG
earlier this year; they might
also fail to hold them to enforce those savings. It is hard
to see why Axalta’s investors,
led by Berkshire Hathaway,
would accept this governance
downgrade.
That leaves the question
of whether Nippon is prepared to pay more. Synergies
could be up to $300 million,
and combining big Japanese
and U.S. automotive-paint
players makes strategic
sense. But Nippon has issued
mixed messages about its appetite for the necessary leverage or equity dilution.
Axalta’s stock languishes
at roughly $32—up from
about $28 before Akzo’s interest became public in late
October but well below a
takeout price. Nothing is predictable in M&A, but there is
probably enough chance that
Axalta again becomes a target to justify a bet.
—Stephen Wilmot
WSJ.com/Heard
This Gaming
Deal Has a
Side Wager
Doing deals for gaming
companies when the government is cracking down on
gambling is tough.
But two U.K.-listed companies, Ladbrokes Coral and
GVC, have come up with a
novel way to pursue their
up-to-£4-billion ($5.3 billion)
merger announced Thursday,
even as the government
looks to crack down on what
experts see as a particularly
addictive and dangerous
form of betting.
The problem is fixed-odds
betting terminals, electronic
slot-machines on which people bet up to £100 every 20
seconds on roulette and
other games with a chance
to win up to £500, or a
greater chance to lose hundreds more. These machines,
sprinkled in betting shops
across the U.K., can be particularly damaging to people
who have gambling problems.
In 2008, they brought in
about 38% of betting shop
revenue. Since then revenues
have grown more than 70%
to £1.8 billion last year,
which was more than 56% of
shop revenues, according to
the U.K. Gambling Commission. Spurred on by growing
public concern, the government is promising to cut the
maximum stake to a range
from £2 to £50.
To get around the threat
to this huge business, Isle of
Man-based GVC is splitting
its offer for Ladbrokes into
three parts: a cash payment,
some new GVC shares and a
“contingent value right.”
That last part will be worth
nothing if the government
limits machine bets to £2
and rises through a scale to
£827 million if the maximum
bet is £50.
That is an odds maker’s
solution to this gambling
problem.
—Paul J. Davies
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
JOURNAL REPORT
w
Follxoperts
The E nline
THE WALL STREET JOURNAL.
© 2017 Dow Jones & Company. All Rights Reserved.
Monday, December 11, 2017 | R1
An Oersation
Conv AILS, R4
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
D ET
The Secret to
Getting
Workers to
Save More for
Retirement
no
n-
If we make it easy for people to
do the right thing, more of
them will...do the right thing
BY SHLOMO BENARTZI
AND RICHARD H. THALER
IN THE MID-1990S, we began thinking
about how to solve an emerging problem: American workers weren’t saving
enough for retirement. At the time, traditional pension plans were starting to
disappear (they have since become increasingly rare), and it was clear that
most workers would need help saving
enough on their own.
Flash forward to today and that inability to save has become a serious societal problem: More than half of American workers might not have enough
money in retirement to maintain their
Dr. Benartzi, a frequent contributor to
the Journal Reports, is a professor
and co-head of the behavioral decision-making group at UCLA Anderson
School of Management and a senior
academic adviser to Voya. Dr. Thaler
was awarded the 2017 Nobel Prize in
Economic Science. He is a professor of
behavioral science and economics at
the University of Chicago.
standard of living, according to an estimate from the Center for Retirement
Research at Boston College.
Why is it so hard for people to save?
In our research, we focused on two main
behavioral causes: a lack of willpower
and inertia. By identifying the problems,
we were able to create a toolbox of
nudges designed to make saving far easier. In examining the successes and failures of those nudges over the years, one
thing has become clear: Making it easy
to do the right thing (in this case, save
more money) is often the best way to
help people reach their goals.
Saving on autopilot
We all have self-control problems of
various sorts when it comes to things
we “should do” but don’t. Limited willpower creates what behavioral scientists
call “present bias,” or our tendency to
favor more immediate payoffs at the expense of longer-term goals. In a study
published in 1998, subjects were asked
to choose between two snacks: a healthy
banana or some unhealthy chocolate.
When asked to choose a snack to eat the
following week, three quarters of people
JOHN KUCZALA
chose the banana. However, when those
same subjects were later asked which
snack they wanted to eat right now,
nearly three-quarters chose the indulgent chocolate. The same logic applies
to our money decisions. We know we
should save for the future—it’s just hard
to resist the spending temptations of
the present.
Inertia, meanwhile, refers to our tendency to accept the status quo, especially when change requires attention
and effort. When it comes to financial
decisions, inertia can be an extremely
powerful force. Data from the U.K.
showed how strong this force can be.
Researchers looked at enrollment rates
in 25 traditional pension plans that
didn’t require employees to contribute
anything to get their benefits; it was the
definition of free money. Nevertheless,
only half of eligible employees signed
up!
Our challenge was to find ways to
help people overcome these deeply
rooted tendencies. The solution we came
up with was modeled on the airplane
autopilot, a system in which smart softPlease turn to the next page
INSIDE
Why Most New Retirees Need
Time to Grieve
Even people who are prepared for
life after work inevitably suffer
withdrawal pains
R2
Documents That You Need
When a Child Turns 18
Parents often don’t realize they can
no longer make legal decisions,
until it is a crisis
R6
What to Consider Before Joining
a Nonprofit Board
Investing in 2018
Alternative to Donating Art
Don’t Get Hit by Estimated-Tax
Penalties
Three advisers offer their thoughts
on the opportunities and risks
R4
Some wealthy collectors opt for
opening their own museum to
maintain control of a collection
R6
Even for the Very Rich, More
Money Brings Happiness
Charity, Near vs. Far
But a study also shows it depends
on where the wealth comes from
R4
Fiduciary:
It’s the word
independent
advisors
live by.
Distance makes the giving heart
grow weaker
R7
Independent Registered
Investment Advisors are held
to the highest standard of
care. As fiduciaries, they are
required to act in the best
interests of their clients at all
times. That’s why we support
independent financial advisors.
And why we think it’s worth
your time to learn more.
FindYourIndependentAdvisor.com
Charles Schwab is committed to the success of over 7,500 independent financial advisors who are passionately dedicating themselves to
helping people achieve their financial goals.
This information is provided to educate investors about working with an independent Registered Investment Advisor—for further information please visit FindYourIndependentAdvisor.com.
©2017 Charles Schwab & Co., Inc. All rights reserved. Member SIPC. (0416-F1LX) (ADP92136-00) (06/16)
The position can be rewarding—
but loaded with work and expense
R8
What taxpayers need to know
R9
More Local Programs Help
Students Pay for College
While the ‘free-college’ idea is on
the back burner on a national level,
states and cities boost efforts
R10
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R2 | Monday, December 11, 2017
JOURNAL REPORT | WEALTH MANAGEMENT
ASK ENCORE | GLENN RUFFENACH
Why Most New Retirees Need Time to Grieve
Even people who are prepared for life after work inevitably suffer withdrawal pains
Mr. Ruffenach is a former reporter and editor
for The Wall Street Journal. His column examines financial issues for those thinking about,
planning and living their retirement. Send questions and comments to askencore@wsj.com.
Older and More Satisfied
Two-thirds of surveyed adults age 60 and older
describe themselves as “satisfied” or “very
satisfied” with their lives, a larger percentage
than younger age groups.
Extremely/very satisfied
Not too/not at all satisfied
18-39
32%
40-59 28%
29%
32%
Satisfied
40%
41%
So…if retirement isn’t all you thought it
would be, you aren’t alone. You have just gone
through one of the biggest changes in your
life—walking away from a job or career that
might have occupied 30 years or more of your
time. If you loved (or even simply liked) your
work and your colleagues, it would be surprising not to feel that something is amiss.
Give it time. Continue to do the things that
give meaning to your days. Retirement usually
ends up being more than satisfying. At first,
though, it can throw you some curves.
i
i
i
I am 62 years old; my husband died at 49. I
am aware that I am eligible to collect a reduced survivor benefit now and then switch
to my benefit at some point in the future.
However, the local Social Security office tells
me that, since I earned substantially more
than my husband, if I collect his benefit now
it will negatively impact my future payouts.
If, on the other hand, I wait until I reach my
full retirement age to collect a survivor’s benefit, it will have no impact on my benefit at
age 70. Is any of this true?
ly
.
Baseball great Nolan Ryan, pictured at his ranch in Gonzales, Texas, has admitted to having
withdrawal pangs when he first retired from the sport.
be exceedingly difficult. I would advise you and
anyone in a similar situation to “run the numbers” with a good financial adviser before approaching Social Security.
In this case, someone appears to be mistaken or confused. So let’s clear up, first, how
switching from a survivor’s benefit to a retirement benefit works, and, second, what might
be behind these “conflicting explanations.”
To start: You’re correct. You can file for a
reduced survivor’s benefit now, at 62, (actually,
you could have done this as early as 60) and
switch to your retirement benefit, the one
based on your earnings history, at some point
in the future. Doing so will allow your retirement benefit to grow significantly.
Most important: Whenever you decide to
switch, there will be no penalty. The fact that
you are claiming a survivor’s benefit “early”—
before reaching full retirement age, as defined
by Social Security—won’t reduce your retirement benefit. The latter will be calculated independently of when you first claim a survivor’s
benefit. And the fact that you earned more than
your husband shouldn’t affect that equation.
So…why the conflicting messages? Two
possibilities: Social Security’s “earnings test”
and spousal benefits. If you claim a survivor’s
benefit now—and if you’re currently working—
Social Security could withhold some, or all, of
your benefits if your earnings exceed certain
levels. That’s the earnings test. But any penalties associated with the earnings test end
once you reach your full retirement age.
So that’s where this idea of “waiting” could
be coming into play. If you wait until your full
retirement age to begin collecting a survivor’s
benefit (and, again, if you’re earning a salary),
you wouldn’t see any reduction in your benefits. That’s because the earnings test no longer applies at full retirement age.
Second, the “Social Security representative
could be confusing spousal benefits with
widow’s benefits,” suggests Andy Landis, author of “Social Security: The Inside Story.” For
instance: If your husband had lived, and if you
were applying for a retirement benefit at 62,
that benefit would be reduced from what you
would receive at your full retirement age—and
the reduction would carry over to a spousal
benefit in the future.
But survivor benefits are different. Any reduction of a survivor benefit won’t carry over
to a retirement benefit. “I know several people
who are taking the survivor payment now, and
who are counting on a fully increased retirement payment at 70,” Mr. Landis notes.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Perhaps you should allow yourself to do
something that most people don’t associate
with retirement: a bit of grieving.
No matter how well you prepare for life after the office, and despite taking the “right”
steps after leaving work, withdrawal pangs
frequently are part of the process. That’s what
we learned in an interview we did a number of
years ago with a retiree you might have heard
of: Nolan Ryan.
Mr. Ryan, of course, was one of the most
celebrated fastball pitchers in the history of
baseball. Over the course of his 27 years in
the major leagues, he set numerous records,
including number of career no-hitters (seven)
and strikeouts (5,714). What got our attention
was the way he approached retirement.
“I always had the attitude that there was
life after baseball,” he told us. “And I tried to
prepare for it.”
To that end, he began fulfilling a childhood
dream of becoming a cowboy by building a
ranching operation. When we met him, that
operation included 1,500 head of cattle on
three ranches (one of which covered 18,000
acres), which allowed him to enjoy an active
outdoor life after walking away from sports.
But even when he was busy—traveling with
his family or tending his ranch operations—
“there was this feeling that I needed to be
somewhere else,” he said. What was missing,
he concluded, was “the competition—the feeling of being a member of a team.” He added:
“It doesn’t matter if you’re the 25th player or
one of the stars. When you walk in that clubhouse, when you put on that uniform, you are
a member of that team.”
Actually, this theme pops up fairly regularly
among retirees. It isn’t that we miss our work,
NOLAN RYAN BEEF
I have been retired for just
over a year. It’s going OK, but
not as well as I had hoped.
I’m doing (I think) many
things “right”: I spend time
volunteering with organizations that are important to
me; I have taken a couple of classes; my wife
and I have taken some nice trips. But I still
feel as if something is missing. Have you
seen or heard about this with other retirees?
60+
35%
32%
33%
Note: Numbers might not total 100% due to rounding.
Source: AARP Disrupt Aging Research: Aging Confidence Survey
THE WALL STREET JOURNAL.
per se; rather, we miss being part of a group
and the excitement that comes from working
toward a common goal.
“I didn’t realize I was going to have such a
tough transition emotionally,” Mr. Ryan told
us. “It took two years,” he said, before he
started to feel comfortable in his new life.
Decisions about when and how to claim
survivor benefits and retirement benefits can
The Secret to Saving More for Retirement
no
n-
Continued from the prior page
Save More Tomorrow was a huge success. Beware controls most of the detailed movements fore the intervention, the workers in the samof the plane. Airplane autopilots reduce human ple had an average savings rate of 3.5%. After
error, which makes flying far safer.
four years in the program, their average savIn much the same way, we developed retire- ings rate had nearly quadrupled to 13.6%.
ment-saving autopilots, which are designed to
In the real world, however, most workers
make it as easy as possible for people to don’t have access to a financial adviser like
achieve a secure financial future. After all, re- Brian; instead, their enrollment process takes
tailers are really good at making it painless for place online. To help these workers save
people to spend their money, from credit cards enough for retirement, it is most effective to
to one-click purchases online. Our goal was to make savings increases automatic, with incremake saving effortmental boosts taking
less.
place every year. AlThe first step was Who Saved More
though workers can
“automatic enroll- Savings rate over four years among workers who
opt out, research sugment.” Employees agreed to a one-time 5-percentage-point savings
gests 80% to 90% will
are enrolled in the increase vs. workers who committed to saving
choose to remain in
company retirement more at a future time.
the program. (By
plan unless they take
changing the default,
Saving more in the future inertia is turned into
One-time increase
the active step of
opting out. This sysa positive force.) For
15%
tem is highly effeccomparison, a study
tive, generally getwe conducted with
ting about 90% of
Ehud Peleg of UCLA
workers to particiusing data from Van10
pate in a plan by
guard Group found
eliminating the inerthat only about 25%
tia. The bad news is
of workers were enthat automatic enrolled in a savings es5
rollment doesn’t encalator before Save
sure workers are savMore Tomorrow was
ing enough. In fact,
made the default
the majority of rechoice.
0
tirement plans sugThe autopilots de1998
1999
2000
2001
2002
gest an initial savveloped in Save More
ings rate of no more Source: Shlomo Benartzi and Richard
Tomorrow have gone
than 3%, which is Thaler; Save More Tomorrow
THE WALL STREET JOURNAL.
on to become an indramatically
less
strumental part of the
than what most workers need to save to main- American retirement-savings system. In 2006,
tain their standard of living in retirement.
the Pension Protection Act passed by Congress
To fix that problem, it is necessary to help encouraged employers to adopt automated
people surmount present bias, which can make savings escalators. According to our latest calit difficult to give up money today for the sake culations, Save More Tomorrow has helped apof future savings. We came up with an idea we proximately 15.5 million Americans significalled Save More Tomorrow, which we tested cantly boost their savings.
with the help of Brian Tarbox, a financial adThe takeaway is clear: By making the pruviser. In that early trial, Brian talked one-on- dent path easy to follow, behavioral autopilots
one with workers. Armed with appropriate can help people reach their desired destination.
software, he was able to determine how much
each employee should be saving. In nearly ev- Details matter
But there is a very important caveat to
ery case, it wasn’t enough. But when Brian
asked the workers if they would be willing to these results: If you are going to automate a
increase their savings rate by 5 percentage decision-making process, you need to pay carepoints, most rejected the offer—they felt that ful attention to the details. If the plane is on
they couldn’t afford to give up that much of autopilot and the crew pays less attention,
then a flaw in the software could be catatheir paycheck.
But Brian then asked the workers if they strophic.
With that in mind, we devised a checklist
would commit to saving more in the future.
Framing the question that way led to far that includes seven key factors that can ensure
higher levels of commitment, with 78% of the that a retirement-savings program is a success.
reluctant savers agreeing to increase their savings at a later date in much the same way the 1. Is the initial savings rate sufficient?
When you ask employers why they suggest
people in the snack study were willing to
choose the healthy option for a later time. an initial savings rate that is far too low, they
Once the workers joined the program, their often express concerns about employee blowsavings rate automatically increased every back. A higher savings rate, they say, will inyear to ensure inertia was working for them crease the opt-out rate, or anger employees
who end up with smaller-than-expected payand not against them.
The real test of the program was whether it checks. New research by John Beshears, Shled to higher savings rates. By this measure, lomo Benartzi, Katherine Milkman and Rick
Mason, however, suggests these concerns may
be misplaced. The researchers, using data from
401(k) provider Voya Financial, found that it is
possible in many cases to enroll workers in a
plan with an initial suggested rate of 7% or
more with little blowback and a significant
boost to worker savings.
2. Does it contain an automatic auto-escalator?
It isn’t enough to help people start saving.
If a retirement program is going to succeed, it
needs to help them save enough to maintain
their standard of living in retirement. This typically requires an automatic escalator, which
gradually raises savings rates to a sufficient
level. We compared those enrolled in Save
More Tomorrow to those who accepted a recommendation from a financial adviser to increase their savings rate by 5 percentage
points today. The result? Those in the program
with the automatic escalators had a savings
rate that was higher than those in the other
group within less than two years. To make saving even easier, we recommend automatically
enrolling workers into the savings escalator,
provided it’s also easy to opt out.
3. When does automatic escalation stop?
Nearly half of companies with a savings escalator stop the automatic increases when the
employee reaches a 6% savings rate. That rate
is way too low: One useful rule of thumb is
that workers should be saving at least 10% of
their income annually, and considerably more
if they got a late start. This means we need retirement plans with far higher savings targets.
4. Are the savings increases properly structured?
Automatic escalators should increase savings rates in 2-percentage-point increments,
not the 1-percentage-point increments commonly used today. While the additional point
might not make a big difference for workers
who stay in the same job for many years, it’s
an essential feature for those who change jobs
frequently, since that typically means starting
over at the initial rate. And since people seem
to have identical reactions to proposed 1- and
2-percentage-point increases, why not get to
the target saving rate faster?
5. Do the savings increases take place at the
right time?
Research shows that people are more willing to take action toward a goal when it takes
place around a calendar landmark. This suggests that retirement plans could be more effective if they boost workers’ savings rates at
specific times, such as Jan. 1 or on a worker’s
birthday. Another idea is to tie savings increases to pay raises, so that employees never
see a smaller paycheck or have to cut their
spending. This minimizes the impact of loss
aversion.
6. Does the new savings plan cover all
employees?
Many retirement plans using Save More Tomorrow apply the program only to new work-
ers, not existing employees. This is a major
mistake. Given the effectiveness of Save More
Tomorrow, limiting the intervention to new
hires can create dramatic differences in the financial security of employees. Is it fair that
someone who joined the company a few days
before Save More Tomorrow went into effect
has half the retirement savings of someone
who joined right after it went into effect?
More generally, we recommend that all plans
have periodic “restarts” to nudge everyone to
take a fresh look at their saving and investment strategies.
7. Is the savings plan personalized?
Retirement plans currently offer all enrolled
employees the same recommended savings
rate, escalator and cap. This one-size-fits-all
approach works well enough, but just imagine
the possibilities if these plan features were instead personalized to suit the financial needs
of the individual. Perhaps you started saving
early, and thus can enroll at a lower rate; or
maybe you have no savings at all, and need to
accumulate a nest egg in less than two decades. If Amazon can personalize shopping
recommendations, and Netflix can predict our
new favorite show, savings plans ought to be
able to come up with personalized nudges.
Updating nudges
Save More Tomorrow demonstrates the
power of behavioral science to help address serious societal problems. But as the nature of
work evolves and new technologies appear, we
need to keep updating the features of the nudge.
A large number of workers today don’t have
a workplace retirement plan available to them,
either because they work for a small firm that
doesn’t offer the option, or because they are
self-employed. According to the Government
Accountability Office, more than 40% of American workers are no longer traditional employees. Some are known as contingent workers, a
category that includes the self-employed, independent contractors and freelancers. These
people need a savings program that builds on
the insights of Save More Tomorrow but relies
on new digital tools.
One such tool is the “round up,” which takes
the spare change from an electronic transaction and deposits it in a savings account. A
Lyft driver, for example, could begin by putting aside the change from each fare toward
savings—a ride that generates $9.50 would
lead to $9 in income and 50 cents in savings—
and then escalate the amount diverted toward
savings each year. Over time, this could help a
freelancer amass a significant nest egg, especially if the money is properly invested.
It is easy to get discouraged about the state
of society; many of our biggest problems feel
intractable. We aren’t quite so pessimistic. We
believe that behavioral change is possible—we
just need to use autopilots in our daily lives
that are properly designed, tested and implemented.
To paraphrase American designer Charles
Eames: The details aren’t details. They make
the nudge.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | R3
FIDELITY WEALTH MANAGEMENT
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
A
WEALTH OF
OPPORTUNITIES
When you come to Fidelity, you get a dedicated advisor who gives you straightforward
advice with the goal of helping you grow and protect your wealth. We can:
Help you invest and plan for your full financial picture
Lay out your options and make clear recommendations
no
n-
Offer strategies designed to reduce the impact of taxes
Schedule an appointment with a Fidelity advisor today.
FIDELITY.COM/WEALTH | 800.FIDELITY
Investing involves risk, including risk of loss.
Fidelity Brokerage Services LLC, Member NYSE, SIPC
© 2017 FMR LLC. All rights reserved. 817924.1.0
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R4 | Monday, December 11, 2017
JOURNAL REPORT | WEALTH MANAGEMENT
Where to Put Your Money in the Next Year
Three financial advisers offer their thoughts on
the opportunities—and risks—for 2018
Expect volatility
WSJ: What do you expect for
markets next year?
MS. EUSEY: We believe the
economy and the developed
markets should continue their
steady advance in 2018. However, the markets are priced
for perfection and we think
any disappointing news will
increase volatility.
The reason for the continued growth is that profits are
strong. Employment continues
to be strong. But that hasn’t
translated into higher infla-
Stretched Valuations
WSJ: How should investors position fixed-income portfolios
amid expected rate increases?
MR. PAGNATO: Investors should
not abandon fixed income. We
feel it is important to continue
to maintain the discipline and
have exposure there. The Federal Reserve raising shortterm rates doesn’t necessarily
mean long-term rates will go
up. We view bonds that are
longer term as a hedge against
a potential market correction
or decline in equity markets.
WSJ: What effects will the cor-
STEPHANIE AARONSON/THE WALL STREET JOURNAL
MS. EUSEY: Investors with a
short time horizon should consider taking some money off
the table if they don’t think
they can weather a market
correction.
Cash positions for us are a
passive byproduct of where
valuations are, not an active
decision to de-risk the portfolio. So cash will be raised as
we can’t find value in this
market environment.
MR. PAGNATO: Valuations have
been elevated for some time.
And investors would have
been penalized if they would
have sold and went to cash. So
we would not reduce equity
exposure unless the client’s
portfolio is unbalanced.
MS. EUSEY: We’re not raising
cash solely based on valuation,
but we want make sure every
investment that we invest in
has a margin of safety to the
intrinsic value of the company.
We are still finding value in
the market in certain spaces.
MR. NEILD: Stocks are expensive. U.S. stocks, the S&P 500,
more specifically, is trading
around 18 times forward-fourquarter earnings—which, if
you look at historical perspectives, is well above average.
But investors should recognize
that high valuations are a notoriously bad predictor of
market corrections.
Shannon Eusey, Ted Neild and Paul Pagnato discuss tax reform
and other factors that could boost or roil the markets next year.
ommend that either they avoid
fixed income or hold near the
bottom of the allowable range
that’s consistent with their
broader investment policy parameters.
ratio is at 32, above where it
was in 1929. The only time it
has been higher was 1999.
MR. NEILD: You have elevated
valuations across multiple
markets. It’s not just isolated
equity markets.
MR. PAGNATO: The biggest
risk is if we get an inverted
yield curve [when long-term
rates are lower than shorter
term]. The last nine times the
yield curve has inverted, we’ve
gone into a recession.
WSJ: Which stock-market sectors do you prefer now?
MS. EUSEY: Sectors that should
relatively outperform if [President Donald Trump’s] progrowth initiatives go through
are financials and materials.
Other cyclicals, such as energy, should also benefit.
MR PAGNATO: Banks will benefit from the tax-policy
changes, deregulation and
higher interest rates. A great
way to invest in the banking
sector is through preferred
stocks. Technology should
continue to deliver above-average earnings and sales
growth in sectors like retail,
automobile, energy, hospital,
hospitality, transportation and
leisure. It is those companies
that are digitizing, that are
embracing the technologies
that are quickly rising to the
top.
Looking Abroad
WSJ: How much should inves-
WSJ: Should investors cut back
on stocks or boost their cash?
MR. NEILD: We continue to rec-
porate tax cut have on the
economy and for investors?
MR. NEILD: There will be a positive effect on earnings for
many publicly traded and privately owned businesses. It
will have a significant effect
on the perception of market
valuations. In theory, companies will have additional capital for investment and hiring,
but there is no requirement to
deploy capital in this manner.
But it could have a substantial
beneficial impact on stockmarket levels.
MR. PAGNATO: We are advising
business clients to be on the
lookout for any potential business expenses that can be escalated into the 2018 tax year.
[The lower corporate tax rate]
will be a stimulus for the
economy. Consumers will have
more discretionary income to
spend. Businesses will have
more cash flow and net income. This will lead to increased distributions to shareholders and more capital to
reinvest in the business.
MS. EUSEY: While it should increase business and consumer
confidence, the positive impact on the overall economy
will likely be marginal at best.
Corporations have quite a bit
of cash. To spur economic
growth, corporations will
need to reinvest in their companies.
Will they take the profit for
themselves as bonuses, or pay
dividends, buy back shares, or
will they hire, pay higher
wages and make capital investments?
We haven’t seen increased
profits in recent years necessarily being used to grow businesses by investing in people
or capital.
ly
.
WITH 2017 coming to a close,
can investors expect another
stellar year for stocks? Not so
fast.
The Dow Jones Industrial
Average surpassed 24000
points this year thanks to solid
earnings, steady economic
growth, subdued inflation and
a careful Federal Reserve. Next
year, market watchers say, tax
reform, possible pro-growth
initiatives from the Trump administration and an improving
global economy could all prolong the current bull market in
stocks, though likely at a more
muted pace.
There are risks, however,
that could upend this upbeat
scenario. These include increased stock-market volatility, an unexpected spike in inflation or geopolitical turmoil.
The Wall Street Journal
spoke at length with three financial advisers about how investors can prepare: Shannon
Eusey, founder and chief executive officer at Beacon Pointe
Advisors in Newport Beach,
Calif.; Ted Neild, president and
chief investment officer at
Gresham Partners in Chicago;
and Paul Pagnato, founder and
chief executive officer at PagnatoKarp in Reston, Va.
Here are edited excerpts of
that conversation:
tion. These all point to steady
growth. We aren’t seeing any
signs of recession soon.
We’re at historic lows in
terms of volatility. So if we see
any signs of an uptick of inflation, unemployment or any
geopolitical concerns, we will
see increased volatility.
MR. PAGNATO: We expect
higher volatility. This year, the
S&P 500 didn’t have a single
day when it was up or down
more than 2%. That’s incredibly low volatility. We expect
the increased volatility to
come from the central banks
reducing the liquidity from the
system. We feel domestic equities could see single-digit returns, primarily driven by a
global synchronized economy,
continued earnings growth
and outside surprises to come
from tax reform.
We do expect some deregulation to occur, particularly in
the financial industry, which
would be a positive tailwind to
the markets.
MR. NEILD: The economy’s fundamentals are fairly positive.
We just completed two consecutive quarters where GDP
growth was over 3%.
We’re finally getting to a
stronger fundamental place
from a corporate earnings perspective. And, unlike earlier
years in the cycle, what we’re
seeing now is revenue growth.
So this isn’t just about productivity and cost cuts. We’re
seeing some headroom for
earnings to grow because topline revenue is growing.
Never say never, but it
would be really hard for volatility not to increase. Think
about all the geopolitical risk
in the world today. The markets are shrugging off things
that they probably shouldn’t
shrug off. And there is a sense
of complacency out there that
is a little bit troubling.
tors allocate to foreign?
MS. EUSEY: We are recom-
mending increases in that asset class. Parts of Southern
Europe may still have underlying problems, but overall, the
economies are improving
there. The longer time horizon
a client has for emerging markets, the better off they are,
because the demographics are
changing in a positive fashion.
MR. PAGNATO: We’re recommending the average investor
put 35% in foreign investments.
Emerging markets are trading
around 12 times earnings,
whereas the U.S. is 18, 19.
MR. NEILD: We have a significant portion of our clients’
portfolios allocated to interna-
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY DAISY MAXEY
tional. In a traditional equity
portfolio today, well over half.
At the core, valuations in the
U.S. are more stretched than
in other places in the world.
WSJ: What’s the biggest risk
investors face in 2018?
MS. EUSEY: Equity valuations
are stretched. The S&P cyclically adjusted price/earnings
Ms. Maxey is a Wall Street
Journal reporter in New
York. Email her at
daisy.maxey@wsj.com.
Even for the Very Rich, More Money Brings Happiness
But a study also shows that happiness depends on where the wealth comes from
around $75,000—in part because increases beyond that
point likely don’t exert as
large an impact on people’s
ability to live comfortably.
But nearly all of this existing research comes with one
caveat: Millionaires, who are
not as motivated to complete
surveys as people with average incomes, have been underrepresented in the results. By
contrast, our study is the first
to have a large sample of millionaires. With our colleagues
Tianyi Zheng at the University
of Mannheim and Emily Hais-
SELMAN DESIGN
no
ANDREW CARNEGIE—one of
the richest people to have ever
lived—was troubled about the
potential effects of his enormous wealth on one particular
constituency: his heirs. He
opined that a parent leaving
their child “enormous wealth
generally deadens the talents
and energies of the child, leading to a less useful and less
worthy life” than they otherwise would have.
Mr. Carnegie’s anxiety
raises two questions: Does
wealth actually lead to greater
happiness for the very
wealthy? And, does inheriting
wealth—versus earning it
yourself—play a role in how
happy that wealth makes us?
The relationship between
money and happiness has been
studied for decades, and typically shows that money matters for well-being, but with
diminishing returns: the difference in happiness between
people with incomes of
$50,000 and $75,000 is larger,
for example, than between
people with incomes of
$75,000 and $100,000. The
more we have of it, it seems,
the more money wears off. Indeed, research by Nobel laureates Daniel Kahneman and Angus Deaton suggests that the
happiness benefits of increased income diminish
n-
BY GRANT E. DONNELLY
AND MICHAEL NORTON
ley at BlackRock, we surveyed
a financial institution’s highnet-worth customers—a sample of more than 4,000 millionaires—about their wealth
and happiness.
Such a large group potentially makes the data more accurate as to how wealth influences happiness among the
very wealthy—who have been
underrepresented in past studies. It also gave us the ability to
explore whether the accumulation of dozens or hundreds of
additional $25,000 sums might
push the needle toward real
Follow The Experts >>
This Journal Report doesn’t stop here. Join us online with The Experts—a group of industry, academic and cultural thinkers who weigh in on
the latest investing, wealth-management and personal-finance issues
raised in this and future reports.
Read what they have to say at WSJ.com/Experts. Posts featured
throughout the week include:
“Why Tax Reform Makes This the Best Time to Open a Donor-Advised Fund,” by Kent
Smetters, a professor at the Wharton School of the University of Pennsylvania, faculty director
of The Penn Wharton Budget Model, blogger at KentOnMoney.com and regular on “Your
Money” on SiriusXM Radio.
“How Much Should You Save for Retirement? Why the 10% Rule Could Work,” by Derek
Tharpe, founder of Conscious Capital and a research associate at Kitces.com.
differences in happiness.
Our respondents answered
questions about their happiness with their life in general,
and about their current net
worth, which we calculated as
the total value of their savings, investments and assets,
minus any debt.
So, do many $25,000s add
up? The very wealthy in our
sample—respondents who reported having a net worth of
roughly $10 million or more—
reported greater happiness
than those with a net worth of
“only” $1 million or $2 million.
The Journal Report welcomes
your comments—by mail, fax or
email. Letters should be addressed to Lawrence Rout, The
Wall Street Journal, 4300 Route 1
North, South Brunswick, N.J.
08852. The fax number is
609-520-7256, and the email
address is reports@wsj.com.
THE JOURNAL REPORT
For advertising information
please contact Katy
Lawrence at 212-416-4119
or katy.lawrence@wsj.com
The effect is significant, but
small, with the very wealthy
roughly one-quarter of a point
happier on a 10-point scale.
Additional millions are associated with additional happiness, but not in life-changing
magnitude.
We also explored whether
the manner in which wealth
was acquired predicted our
millionaires’ happiness. Does
the well-being that people derive from their wealth depend
on whether it was earned or
inherited?
Our respondents also reported the primary source of
their wealth as either earned,
which could mean through investing, business profits, wages
and bonuses; or unearned,
through inheritance, for example, or marrying into wealth.
Although increased wealth was
associated with greater happiness for both groups, those
who earned their wealth reported significantly greater
happiness than those who primarily inherited or married
into it. Of course, there are
likely other differences between people who earned versus inherited their wealth that
may contribute to these different levels of happiness, but
these results do offer support
for Carnegie’s conjecture.
Taken together, our research suggests that the very
wealthy are moderately happier than the “regular”
wealthy, and that the manner
in which wealth is acquired—
earning or inheriting it—influences the happiness derived
from that wealth.
Can millionaires extract
more happiness from their
wealth? Carnegie came up
with one solution: He donated
the vast majority of his fortune to charities, foundations
and universities during the
last few years of his life, keeping it from his heirs in an apparent effort to lead them to
useful, worthy lives. And his
solution has greater wisdom
as well: Because research
shows that giving to others
leads to greater happiness
than spending on oneself, Carnegie was also employing his
wealth in a manner likely to
maximize his own happiness.
His strategy has caught on:
More than 170 millionaires and
billionaires have signed on to
The Giving Pledge, a campaign
started in 2010 by Bill Gates
and Warren Buffett to encourage the wealthy to contribute
a majority of their wealth to
philanthropic causes. Our research suggests that this strategy has benefits not only for
the recipients of that charity,
but for the wealthy and their
heirs as well.
Mr. Donnelly is a doctoral
student at Harvard Business
School. Dr. Norton is a professor at Harvard Business
School. They can be reached
at reports@wsj.com.
REPRINTS AVAILABLE
FULL PAPER: The entire Wall Street
Journal issue that includes the Wealth
Management report can be obtained for
$10 a copy. Order by:
Phone: 1-800-JOURNAL
Fax: 1-413-598-2259
Mail*: Wealth Management Report
Dow Jones & Co.
Attn: Back Copy Department
84 Second Ave.
Chicopee, Mass. 01020-4615
JOURNAL REPORT ONLY: Bulk orders of
this Journal Report section only may
take up to six weeks for delivery and
can be obtained for $5 for one copy,
$2 for each additional copy up to 50,
and 25 cents for each copy thereafter.
Order by:
Email: JournalReports@dowjones.com
Mail*: Dow Jones LP
Attn: Mailing Operations Dept.
84 Second Ave.
Chicopee, Mass. 01020-4615
REPRINT OR LICENSE ARTICLES: To
order reprints of individual articles or
for information on licensing articles
from this section:
Online: www.djreprints.com
Phone: 1-800-843-0008
Email: customreprints@dowjones.com
*For mail orders, do not send cash.
Checks or money orders are to be made
payable to Dow Jones & Co.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | R5
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
ly
.
The market
for good
advice is
booming.
There’s a difference between having information and knowing what to do with it.
At Merrill Lynch, we can help. Our advisors work with you to create a long-term financial
strategy that’s built around your life and your priorities. That way you’re ready for
no
n-
whatever comes next.
Learn more or talk to an advisor today.
ML.com I 888.339.9417 I @MerrillLynch
Investing involves risk. Products are offered through Merrill Lynch,Pierce,Fenner & Smith,Incorporated,Member SIPC.
Investment products:
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2017 Bank of America Corporation. All rights reserved. ARKHFLWQ
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R6 | Monday, December 11, 2017
JOURNAL REPORT | WEALTH MANAGEMENT
Documents That You Need When a Child Turns 18
Parents often don’t realize they
can no longer make legal
decisions, until it is a crisis
HEALTH-CARE POWER OF
ATTORNEY
Most people think of using
a health-care power of attorney with an older parent, but
it’s equally important for their
college-age adult children.
Also known as a health-care
proxy, this document gives
parents the ability to make decisions about their child’s
health care. Typically, that
MARGARET RIEGEL
EDUCATION RECORD
RELEASE
whomever
the
student
chooses. Some children may
be hesitant about sharing private medical information with
their parents, but students can
set limits on how much or
what type of information parents can receive, says Carolyn
Reinach Wolf, executive partner at Abrams, Fensterman,
Fensterman, Eisman, Formato,
Ferrara, Wolf & Carone LLP
and director of the firm’s mental-health law practice.
Mr. Medina recommends
that students fill out a blanket
HIPAA authorization, giving
parents full access to the student’s health information in
any circumstances, which is
especially valuable in situations that can’t be anticipated.
“This authorization should be
kept in a handy place, because
you’ll need to show it to a local doctor, hospital or college
if you need to access that private information,” he says.
Jodi Rosenshein Atkin, a
college-admissions consultant
in Rochester, N.Y., had an experience that taught her the
importance of a HIPAA authorization and the value of a
blanket authorization. Soon
after her twin daughters left
for an out-of-state college, one
of the girls became very sick
and was hospitalized. It was
extremely difficult for Ms. Atkin, who lived about four
hours away, to assess the situation from afar, in part because the daughter was in and
out of consciousness. She contacted the daughter’s physician, who had a HIPAA authorization on file that allowed
him to share the daughter’s
health information with her
parents.
As a result, the doctor was
able to get information on the
mother’s behalf. Having a
blanket authorization, allowing any doctor or medical facility to fill her in on her
daughter’s condition, would
have made the process much
smoother, Ms. Atkin says.
Even with a blanket authorization, students might still
need to sign a release that’s
specific to their college student health center, Ms. Wolf
says. Different colleges have
different policies, procedures
and releases based on the confidentially laws in their state,
she says.
become effective immediately,
or at a future point. It can authorize parents to act on the
child’s behalf in all financial
matters, or it can set limits.
Financial power of attorney
can be useful in many situations—for instance, if a student has a car accident or falls
ill, leaving him or her either
temporarily or permanently
unable to make financial decisions. If bank accounts, a car
or other assets are titled in
the name of the student, the
power of attorney avoids the
expensive and drawn-out court
process of having a parent appointed a guardian for the student, says William Crouch Jr.,
a former president of Georgetown College in Kentucky, now
chief executive at Crouch &
Associates, a consultancy for
nonprofit-fundraising professionals. Power of attorney also
could be useful if the student
plans to travel abroad, or if he
or she has a bank account and
is overdrawn—maybe due to
fraud—but the student isn’t
acting responsibly and addressing the issues promptly,
he says.
Financial power of attorney
can be useful in certain circumstances after children
leave school, as well. Adult
children are responsible for
HIPAA AUTHORIZATION
HIPAA authorization allows
doctors to speak about a student’s medical condition with
FINANCIAL POWER OF
ATTORNEY
This document is a way to
allow parents to manage their
child’s finances. Depending
upon how it is worded, it can
The Family Educational
Rights and Privacy Act, or
FERPA, requires that students
age 18 or older provide written consent before education
records such as grades, transcripts and disciplinary records can be shared with their
parents, with limited exceptions. Colleges commonly notify parents of this requirement. Even so, parents don’t
always understand what’s at
stake or they might forget,
says Todd Gambill, vice chancellor for student affairs and
enrollment management at Indiana University Kokomo. His
university talks to students
and parents about the educational-records authorization
process at orientations for
new students, but not everyone signs a release, he says.
That can cause problems
down the road. Ms. Nicklas,
the financial adviser, says she
had a client whose child ignored a notification that financial-aid documents weren’t
complete. When the parents
received the tuition bill for the
coming semester, they were
shocked to see the scholarship
missing, Ms. Nicklas says.
When they called the school
for an explanation, they were
told to contact their child, because the school couldn’t provide information to the parent.
Ultimately, the situation was
resolved and the scholarship
reinstated. But if there had
been a letter of authorization
on file, the family would have
received the notice and
avoided a lot of grief and anxiety, Ms. Nicklas says.
ly
.
A LOT OF THINGS change
when a child turns 18. But one
of the biggest is also one of
the most surprising to a lot of
parents: Once children turn 18,
parents can no longer make legal decisions for them or receive information about them
that is considered private, unless they have the children’s
permission. And not having
that permission can be particularly problematic when a
child is away at college.
For instance, parents can’t
be notified of a student’s
grades at college or enrollment status without written
permission from the student.
Parents also won’t necessarily
know about any bills in the
student’s name that are outstanding. Most disturbing,
without express consent from
the child, parents can’t get details of their child’s medical
condition “and they no longer
have the [legal] ability to
make decisions” regarding the
child’s health-care treatment,
says Therese R. Nicklas, a certified financial planner and
president of Wealth Coach for
Women Inc. in Rockland, Mass.
Some colleges do a better
job than others in advising
parents and students on these
matters. But families can take
the initiative by having documents in place. Here are the
primary ones a family needs:
power doesn’t kick in unless
the child physically or mentally is incapable of making
medical decisions, but each
state has its own criteria.
If a student goes to school
out of state, it’s prudent to
have a health-care power of
attorney from both states,
since some health-care professionals may be hesitant to accept a form they don’t recognize, says Victor Medina, an
estate-planning and elder-law
attorney with Medina Law
Group in Pennington, N.J.
Joe Orsolini, president of
College Aid Planners in Glen
Ellyn, Ill., recalls a family he
worked with who dropped off
their 18-year-old daughter at
college for her freshman year
and didn’t hear from her for
days. The school suggested the
parents call the local hospital,
but the information they received over the phone was severely limited by privacy rules.
They drove frantically to the
hospital and discovered their
daughter had been bitten by a
spider and had been in a coma
for three days.
The daughter eventually recovered, but it was eye-opening for Mr. Orsolini, who now
routinely counsels clients about
how the financial, academic
and legal rights of their children change once they turn 18.
Having a power of attorney
for health care is especially
important because college is a
time when mental-health issues can manifest, says Kim
Lee Kenawell-Hoffecker, a
founding partner of Avantra
Family Wealth in Mechanicsburg, Pa. She also recommends
that clients draft a living will
for the child, which specifies
what medical treatments are
desired at the end of life.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY CHERYL WINOKUR
MUNK
paying their student loans,
even if the child is incapacitated in an accident or has a
mental-health issue. Power of
attorney would allow parents
to act on their child’s behalf to
make the payments or facilitate a deferral or forbearance
of the loan, says Mr. Orsolini.
Ms. Winokur Munk is a
writer in West Orange, N.J.
She can be reached at
reports@wsj.com.
n-
Part of the Margulies Collection
at the Warehouse in Miami, Fla.
THE MARGULIES COLLECTION AT THE WAREHOUSE
For Students in Grad School,
Undergrad Debt Poses Issues
no
An Alternative to Donating Art
BY DANIEL GRANT
WHAT CAN ART collectors do with a
collection that has outgrown its
space? Or a collection that they don’t
want heirs to sell off piecemeal?
One possibility: open a museum.
The move allows very well-heeled
donors to know their legacy will be
kept intact, rather than split up or
displayed by another museum in a
way they wouldn’t like. They also get
to control which works are displayed
and how in their own lifetime, and to
see them in an institution with their
name above the door.
There’s also the financial benefit
of a tax deduction, and the museums
themselves are exempt from taxes.
But controlling their art’s fate matters most to some collectors. “It’s really not tax-driven,” says Diana Wierbicki, a partner at the law firm of
Withers Bergman, a number of
whose clients have set up museums.
Setting up shop
Among the more established private museums are the Brant Foundation Art Study Center in Greenwich,
Conn.; the Linda Pace Foundation in
San Antonio; the Broad in Los Angeles; the Hess Collection in Napa, Calif.; and the Rubell Family Collection
in Miami.
Real-estate developer Martin Margulies set up the Margulies Collection
in a refurbished warehouse in Miami
in 1999. The collection, which consists of 3,000-plus works of modern
and contemporary art, is open to the
public Tuesday through Saturday,
April through October. Mr. Margulies
says he “did this to enjoy my collection and educate young people.”
“At an existing museum, the director may change, the curators may
change, the board members may
change,” he adds. “The people who
promise you one thing, well, they’re
gone, and new people come in. They
don’t like this, they want to change
that. Pretty soon, everything you donated to them is in storage.”
Of course, creating a museum is a
step only the very wealthy can afford. Setup can cost millions of dollars, and annual maintenance can be
hundreds of thousands. Mr. Margulies estimates his annual operating
budget to be $350,000. The San Antonio-based Linda Pace Foundation
expects its annual operating budget,
now $275,000, to top $1 million when
its new space opens in 2019, says
Kathryn Kanjo, a foundation trustee.
One of the first steps in creating a
museum is for donors to set up a private operating foundation to run it,
and then gift their art to it. Just like
other art donors, they get a tax deduction. As part of that initial gift,
they often give cash to the foundation as well. The money goes toward
the rental or purchase of a building
in which to place the artwork, which
likely will need to be refurbished,
and equipped with climate controls
and security, all of which can cost
millions of dollars. And the artwork
will need continuing maintenance
and insurance. (The cash outlay is
deductible at up to 50% of the donor’s adjusted gross income.)
One ongoing aspect of running a
private museum is currently under
debate. The Internal Revenue Service
requires collectors who set up museums to allow the public to come in to
look at the artwork, which requires
the hiring of one or more curators
and art handlers, as well as other
staff. (The artwork must also be
available for loan to other museums.)
But the rules don’t specify how often private museums must be open
to visitors. And most aren’t open
much, compared with public institutions. Most private facilities are open
a few months out of the year for
three days a week or so, sometimes
by appointment only.
Just how often?
Last year, in a letter to IRS Commissioner John Koskinen, Senate Finance Committee Chairman Orrin
Hatch (R., Utah) questioned whether
some of these institutions merit
their tax exemption. Among other
reasons, he referred to “lightly advertised museums that require reservations made weeks or months in advance,” narrowing the visitor pool.
Now the Senate Finance Committee has been gathering information
on privately held museums “as part
of a wider inquiry into the activities
of the tax-exempt sector,” according
to a committee spokeswoman.
It’s still unclear how the tax overhaul being finalized in Washington
will affect rules for private museums.
The House’s bill would require foundations that operate as art museums
to be open during normal business
hours to the public for at least 1,000
hours during the taxable year, says
Ms. Wierbicki of Withers Bergman,
while the Senate version of the bill
makes no change of this sort.
She adds that neither bill indicates any changes in the tax deductions that donors may receive.
Mr. Grant is a writer in Amherst,
Mass. Email reports@wsj.com.
BY DEMETRIA GALLEGOS
FOR STUDENTS pursuing graduate
degrees, there’s a big financial
question that many don’t give much
thought to: What happens to their
undergraduate student debt?
About 60% of all bachelor’s degree recipients have borrowed to
pay for their education, and the
College Board says their debt averages $28,400. Meanwhile, an estimated three million people attend
graduate school each year and most
enroll within 10 years of their undergraduate studies, according to
the Urban Institute.
Some grad students choose to
keep paying down their debt to
meet personal financial goals. Another incentive: In many cases, for
those with unsubsidized loans, deferring the loan can increase its total cost. That’s because during deferment,
unpaid
interest
accumulates and is added to the
principal when payments restart.
Lots of borrowers don’t realize
the interest “meter is still running”
even though the loan appears to be
parked while in deferment, says Patricia Nash Christel, vice president
of corporate communications with
Navient, a federal loan servicer.
Here are some issues for grad
students with previous loans to
consider:
When a student enters graduate
school, existing federal student
loans are automatically deferred.
The nine companies contracted with
the Department of Education to service federal student loans keep tabs
on who is enrolled in college or
graduate school. They assume that
grad students who have unpaid undergraduate loans, and are enrolled
at least half-time in graduate
school, want their loans to be deferred. Thus, the servicers notify
the students by letter or email that
their loans are scheduled to be deferred, and put the loans on hold
unless a student tells them not to
well before the term begins.
Automatic debt payments can
stop without the student realizing.
If students have declined deferment
in a timely manner or if they have
independently arranged automatic
payments through their own bank,
their regularly scheduled loan payments won’t stop.
For most, it’s a different story.
Despite notification efforts by the
servicer, many students don’t read
the notice, or they misunderstand
it. And because borrowers in most
cases put their servicer in charge of
automated payments, in return for
a small reduction in their rate, their
payments can stop without their realizing it. It can take months for the
student to become aware and to get
the payments started again.
Making partial payments can
help keep costs down. In the cases
of deferred loans where the unpaid
interest accumulates, there is an
option in which the student can
keep costs down and still defer
their payments: The borrower just
has to pay off the accumulated interest before the deferment ends,
thus preventing the owed interest
In Debt
Average annual federal-loan amounts
taken per borrower in 2016-2017
Undergraduate
Graduate
Subsidized/unsubsized
$6,590
$18,720
PLUS
$15,880
$23,990
Source: The College Board's Trends in Student Aid 2017
THE WALL STREET JOURNAL.
from being added to the principal.
Older debt may be more difficult
to keep in repayment mode. Students who borrowed more than
seven years ago and have not recently consolidated that debt may
face a more complicated situation
in declining a deferment if their
loan was a Federal Family Education Loan Program, or FFELP, loan.
These loans may involve more parties, says William C. Shaffner, director of business development and
government relations for Mohela,
one of the servicing companies. “It’s
one of the reasons borrowers need
to stay in touch with their servicers,” he says.
Ms. Gallegos is a Wall Street Journal news editor in New York.
Email: demetria.gallegos@wsj.com.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | R7
JOURNAL REPORT | WEALTH MANAGEMENT
CHARITY DOES seem to begin
at home. Last year, Americans
gave $390 billion to U.S.-based
charitable organizations, according to the Giving USA Annual Report on Philanthropy.
But only 6% of this amount
went to nonprofits that do
work outside the country.
There are many reasons for
this disparity, including lack of
awareness and a preference
for tackling local or personally
relevant issues.
There could be, however, a
more mundane reason: the language the nonprofits use in describing where help is needed.
In our recent research published in the Journal of Personality and Social Psychology,
we find that merely describing
a place (Haiti, for example) as
“far away” rather than
“nearby” can make people less
likely to give to a charity helping this place.
Our research shows people
tend to believe that their charitable donations will have a
greater impact when they perceive the intended beneficiaries as near. In turn, potential
donors are more willing to
help those who are described
as close, compared with those
described as far away.
It is certainly true that we
can more directly experience
the impact of helping in our
own communities. However,
the belief that a dollar will do
more when it stays close to
home is mostly erroneous.
There is nothing that makes a
charitable organization more
efficient just because it is
based in one’s hometown. Nor
is there any reason to assume
that dollars spent to help the
poor in one’s own community
have a greater impact on poverty than dollars spent to help
the poor anywhere else.
The misconception about
local donations having more
impact is, in part, a reflection
of people’s strong tendency to
think in terms of metaphors;
in this case, thinking about
charitable impact in the same
terms as physical impact. It
may be true that a snowball
thrown from 10 feet away will
have a greater impact than
one thrown from 50 feet, but
the rules of physics don’t apply to charitable giving.
Nevertheless, the intuition
that distance matters kept
emerging in our data, whether
for charities doing work to relieve poverty overseas, or,
within the U.S., for donations
to support one’s alma mater.
In one of our studies, we
analyzed a data set of about
170,000 alumni included in
university fundraising over the
course of a year. We found a
positive relationship between
distance and annual giving;
the closer alumni were to the
university, the more they had
given that year.
But just because shorter
distances were associated with
greater giving doesn’t mean
they caused greater giving.
Hence, we needed a stronger
test to establish a causal link.
Our idea was simple: use language to make people perceive
the distance to their alma
mater as long or short, regardless of what it was.
We conducted a large field
experiment as part of the annual giving campaign of another institution. Alumni of a
business school got a letter
soliciting a gift for the school
and describing the school as
either “far away” or “nearby.”
We randomly assigned the
alumni to receive one of these
letters regardless of their actual distance from the school.
We found that alumni gave
more, and that a greater percentage of alumni gave, when
the letter described their alma
mater as “nearby” as opposed
to “far away.” And this effect
occurred regardless of the actual distance between alumni
and the university.
Expanding the actual geographic distance, and moving
to a different cause, we next
devised a study to look at the
willingness of Americans to
donate to a cause helping residents of a foreign country. We
chose Ivory Coast, the original
home of one of the co-authors.
To change participants’ perceptions of distance, we had
half of them read a short article about globalization and
shrinking distances between
countries. The other half read
about long distances between
countries
and
long-haul
flights. Then, all participants
saw a charitable appeal from
an organization working to
fight poverty in the Ivory
Coast. We found people were
more willing to donate to the
organization after reminders
of short distances than after
reminders of long distances.
Thus, whether a place was
objectively near or far, subjective perceptions of distance
influenced giving. We found
similar results in related studies we conducted; looking at
donations to causes in Haiti,
Guatemala, and Honduras, we
found that descriptions of distance influenced giving by
changing potential donors’ expectations that they will have
an impact.
Distance is becoming a matter of perspective, which in
turn can be influenced by the
language charitable organizations use to communicate with
potential donors. We should remind ourselves that in times of
need, no country, city or town
should be too far away to help.
BY LISA WARD
Bill and Maryrose Izzo would like to start
working part time when they turn 60, but
the couple is unsure if their nest egg will be
big enough—since they plan to have an active
retirement and travel regularly.
“We would like to go abroad every other
year,” says the 54-year-old Mr. Izzo.
Mr. Izzo works in the food-procurement industry, while Ms. Izzo, age 53, is an underwriter for an insurance firm. They live in the
Chicago metropolitan area and have no children. Their combined income is $250,000.
They have two 401(k) accounts with a
combined value of $860,000. They also have
a traditional IRA valued at about $350,000, a
Roth IRA valued at $79,000 and a brokerage
account valued at $139,000. The couple also
has about $170,000 in cash. They own a primary residence worth about $900,000, with
a mortgage of $325,000, and three condominiums that they use as rental properties.
Most of the income from the rental properties is used to pay the mortgages, maintenance, insurance, taxes, assessments and
neighborhood association fees.
Mr. and Ms. Izzo’s monthly expenses include about $3,000 for the mortgage on
their main residence, $80 for utilities, $90
for insurance on the primary residence, $375
for car payments and insurance and about
$3,000 for food, entertainment and other living expenses.
They also pay about $420 a month for
health insurance from their employers, from
whom they also receive life insurance. The
couple wants to know if it makes sense to
buy long-term-care insurance.
The Izzos need to account for health-care
costs before Medicare kicks in, says an adviser.
long-term-care insurance until they are about
to leave their full-time jobs. Even then, he
says, it may not be necessary. The premiums
for long-term-care insurance probably won’t
increase significantly over the next few years,
and if they remain in good financial and physical shape over that time, they may be able to
self-insure, Mr. Long says.
Once the Izzos estimate how much they are
likely to spend each year during retirement,
they should use that information to analyze
their portfolio, he says.
Tax-advantaged accounts such as 401(k)s
and IRAs require that a certain amount of
money be withdrawn annually once the beneficiary turns 70½. But the mandated withdrawals plus Social Security payments could be
more than the Izzos want to spend each year.
Therefore, they should plan on converting
some of the money in these accounts into a
Roth IRA, which lacks a mandatory withdrawal
provision, Mr. Long says. But they should wait
until after they stop working full time and are
in a lower tax bracket to convert the accounts.
During the conversion, any gains within the
account are taxed as ordinary income.
Mr. Long says that $60,000 is probably
enough for an emergency fund, so the couple
should use some of their cash holdings to pay
off their car loan of approximately $6,000.
They also might want to invest some of that
cash in the market, where the return potential
is greater.
As for their real-estate holdings, Mr. Long
says the couple should think hard about
whether to keep the rental properties, pointing
out that the condos currently are generating a
2.7% return after rent and maintenance expenses are factored in.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY MAFERIMA TOURETILLERY
AND AYELET FISHBACH
THE GOAL:
WORK SOME
AND TRAVEL
IZZO FAMILY
Distance makes the giving heart grow weaker
THE GAME PLAN
ly
.
Charity, Near vs. Far
Ms. Toure-Tillery is an assistant professor of marketing at Northwestern University’s Kellogg School of
Management, and Ms. Fishbach is the Jeffrey Breakenridge Keller Professor of Behavioral Science and
Marketing at University of
Chicago’s Booth School of
Business. Email them at
reports@wsj.com.
ADVICE FROM A PRO: Chris Long of
Long Financial Planning in Chicago says the
couple is on track to begin retirement around
age 60, but they should use the next few
years to get organized.
First, the couple should closely track what
they spend now and then think realistically
about what they will spend in retirement.
One big expense they likely will have to account for is health insurance before Medicare
kicks in at age 65. Mr. Long estimates that
premiums for a private, individual plan will
cost them about $20,000 a year.
He advises the couple to hold off on buying
Ms. Ward is a writer in Mendham, N.J. She
can be reached at reports@wsj.com.
Philanthropy and Narcissists
What soliciting charities need to know
ALS ice-bucket challenge
people were motivated to take
part in the challenge not because they cared about the issue—even though on the surface it may have seemed like
they did—but because they
wanted the attention that
came with posting a video.
That said, the videos themselves helped increase awareness of ALS, so it is likely that
even those who posted videos
without donating played a role
in the campaign’s success.
The takeaway for charities
is that narcissistic people may
prefer engaging in charitable
activities that are easy, don’t
cost anything and that involve
a one-time commitment. An example would be so-called slacktivism activities, such as sharing social-media posts, which
can be used to draw attention
to certain important issues. But
more research is needed.
Other studies, meanwhile,
have found that narcissistic
people are more likely to donate time or money if the
helping occurs in the presence
of others or if the helping results in some sort of personal
benefit. These examples suggest that charities might want
to consider increasing the rewards or benefits that come
ISTOCKPHOTO/GETTY IMAGES
no
NARCISSISTIC PEOPLE aren’t
known for being generous. But
emerging research suggests
that narcissistic people may
be willing to engage in charitable activities in certain situations, a finding that could
have implications for nonprofits seeking to design more effective appeals.
While narcissism’s dark
side is well-documented, with
dozens of studies showing
narcissists’ difficulty with
close relationships and their
tendencies to lash out aggressively when someone insults
them, comparatively little is
known about how and why
narcissistic people do good.
However, new research on
this topic, including some of
my own, suggests that narcissistic people may be the ultimate “rational actors” when it
comes to charitable giving.
That is, they tend to weigh the
costs and benefits to themselves before acting, unlike
other people, who often make
emotionally driven or automatic decisions to help and
give. Sometimes, this can
make narcissists look generous, at least on the surface.
A recent example was the
ice-bucket challenge, in which
people could film themselves
pouring a bucket of ice water
over their heads, and donate
money in support of amyotrophic lateral sclerosis, or
ALS, research. More than 17
million ice-bucket videos were
posted on Facebook during the
challenge, which took place in
the summer of 2014. The videos were viewed more than 10
billion times by more than 440
million people that summer,
according to Facebook, and
the ALS Association said donations surged by more than
$90 million compared with the
same period a year earlier.
We ran a study in which we
asked more than 9,000 Americans about their participation
in the ice-bucket challenge, and
measured their narcissism by
asking them to what extent
they agreed with the statement,
“I am a narcissist.” (Narcissist
was defined as meaning egotistic, self-focused and vain.)
We found that those who
self-identified as narcissistic
were more likely to post a
video of themselves doing the
challenge but less likely to actually donate money. That suggested to us that narcissistic
n-
BY SARA KONRATH
from donating, especially in
populations that tend to score
higher in narcissism, such as
males and younger adults.
These benefits could be tangible, such as a small gift, although intangible benefits
such as attention and reputation might matter even more
to narcissistic people.
People might assume that
those who regularly volunteer
for nonprofit organizations
score lower on narcissism, yet
in one of our studies we actually found no difference between volunteers and nonvolunteers. It’s important to
understand that not everyone
gives and helps because they
care. Concerns about recipients’ needs may be an especially low priority for narcissists. Not only do they score
lower on measures of empathy, research finds that they
report less altruistic motives
for volunteering. Instead, narcissistic people focus on how
they might personally gain
from it, perhaps by making
important career connections.
This suggests that managers
in helping professions need to
strategically frame opportunities to reflect such motives.
So what should people take
away from this new research?
Most would agree that truly
generous people don’t need to
broadcast their good deeds.
That said, there may be a
place for all kinds of givers,
and understanding what
drives narcissistic people to
do good could help charitable
groups be more strategic in
how they appeal for help.
Finally, some research suggests that there is hope for
miserly narcissists. Just as in
the classic holiday Scrooge
story, studies show that there
are dozens of ways to promote
more empathy and generosity
in people. One simple technique is to remind the narcissist to take the perspective of
those in need.
Dr. Konrath is an assistant
professor of philanthropic
studies at Indiana University’s
Lilly Family School of Philanthropy. She can be reached at
reports@wsj.com.
IN THE WAKE OF
A HURRICANE
YOUR DOLLARS ARE
HARD AT WORK
Even a small donation can make a big difference
SupportHurricaneRelief.org
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R8 | Monday, December 11, 2017
JOURNAL REPORT | WEALTH MANAGEMENT
What to Consider Before Joining a Nonprofit Board
The position can be rewarding. But it also can be a lot of work, as well as expensive.
1.
What’s the financial
commitment?
Unlike directors of forprofit companies, nonprofit
board members are typically
called on to make financial
contributions.
“Everyone on the board
should contribute, so make
sure you’re aligned about the
amount,” says Nicole Sebastian, director, U.S., UBS Optimus Foundation.
For example, the minimum
contribution for a certain
board may be $100,000
whereas you were planning to
give $25,000, says Ms. Sebastian, who is also senior strate-
2.
What’s the duration of
my term?
Sometimes people think
they’ll be on a board for a
year, but the commitment can
Candidate Qualifications
Importance board executives assign to the following items when
recruiting members:
High
Medium
Low/not a priority
4%
Passion for the mission
82%
14%
Community connections
53%
34%
Desired skills
47%
40%
Occupation
36%
THE GAME PLAN
13%
37%
32%
46%
30%
Soure: BoardSource's Leading With Intent:
2017 National Index of Nonprofit Board Practices
be much longer.
Karen Altfest, principal adviser at Altfest Personal
Wealth Management, says at
the end of her first year on a
board, she was surprised to
find out she was expected to
stay on for another year. “No
one asked if I was available,”
she says. Ms. Altfest enjoyed
the work and ultimately
agreed to renew several times.
She tells clients to make
sure they are clear on the nonprofits’ expectations before
they sign on to prevent any
THE WALL STREET JOURNAL.
misunderstandings or lastminute requests.
3.
How active are your
board members?
It’s important to know what
kinds of jobs you will be expected to perform, says Ms.
Altfest. Knowing such details
will help you gauge your level
of interest in the work and see
if you have enough time to devote to it.
For example, will you be assigned to a committee or can
you select your own projects?
4.
Does the organization
have proper liability
insurance coverage?
In the past 10 years, 63% of
nonprofits experienced a directors and officers liability
claim, according to a 2012
Towers Watson survey.
While not all claims have
merit, the cost to defend the
claims can often be more than
the actual damages, says Steve
Wittenberg, director, legacy
and philanthropy at SEI Private Wealth Management.
It’s particularly important
for board members with significant assets to make sure
the nonprofit has a Directors
and Officers insurance policy,
he says. This policy should
protect the assets of the organization, the assets of its directors and officers and those
of spouses, domestic partners
and estates, if a director or officer has died, he says.
If the D&O policy is inadequate, consider personal umbrella coverage, Mr. Wittenberg says.
BY LISA WARD
MORGAN RODDY
An adviser suggests Cheri Ellefson (left) and Morgan Roddy start by tackling credit-card debt.
n-
“But,” Ms. Roddy says, “that’d be something we’d want to do once we’re reaching that
mythical stability stage.”
ADVICE FROM A PRO: Ellen Webber, a
Seattle-based certified financial planner, says
the couple has made a good start by cutting
their budget way back, and “putting a bunch of
money into paying off their credit cards.”
Next she recommends a five-year plan.
In the first year, they should transfer their
credit-card balances to a card with zero interest
for a year, which could save them $5,000. If
that isn’t possible, she advises paying down as
much of the debt as they can on the card with
the highest rate, while paying the minimum
amounts allowed on the others.
In year two, assuming positive cash flow
from the business, they’ll resume making payments on the student loans, and if they add
$275 to their existing card payments, the cards
should be paid off by the end of that year. They
can add a few hundred dollars to spending, but
Ms. Webber also wants them each to put $250
a month into a Roth IRA. And even before the
credit cards are paid off, she’d like to see them
put $500 a month into an emergency fund.
“Sometimes people, if they’re putting everything into their credit-card debt and then they
do have something come up, they just end up
adding to the credit-card debt,” she says. “And
it’s a bit demoralizing to see that go backward.”
In year three, Ms. Webber wants them each
to contribute $5,500 to their Roth IRAs, and
start paying an extra $600 a month toward the
private student loan. After they pay off their
car, if they pay an additional $300 a month—a
full $900 over the minimum payments due—
they should have the private student loan paid
off by the end of year four.
If they follow these steps, their car, credit
cards and private student loan will be paid off
by year five. Ms. Webber also suggests they pay
$600 a month extra that year toward the large
government student loan. That will help them
pay it off in 13 years rather than 30, she says.
“If they can keep their nose to the financial
grindstone for five years,” she says, “they’ll
have some decent cash flow.” Then “they’ll be
in a position where they can start thinking
about accumulating for other family goals.”
no
When they married two years ago, this
couple was making close to $100,000 in
Minneapolis. But they felt like they were
treading water.
So, Morgan Roddy, 37, and Cheri Ellefson, 34, moved to Muncie, Ind., where they
can live off Ms. Ellefson’s salary while Ms.
Roddy focuses on their new small business,
Queer Chocolatier. The company sells
chocolate truffles on their website, at farmers markets and in a retail storefront above
a coffee shop downtown. They pay $250 a
month for 250 square feet.
“We knew that it would be difficult to do
it in Minneapolis because the rent would
just be too high,” says Ms. Ellefson.
Now the couple wants to focus on
climbing out of debt. Queer Chocolatier has
been grossing around $1,500 a month. But
Ms. Roddy hasn’t been drawing a salary.
She hopes to bring home about $2,000 a
month in salary by this time next year. Ms.
Ellefson brings home about $4,000 a
month on the roughly $65,000 she estimates she’ll make in 2017 through her fulltime job at Ball State University as a
women’s and gender studies instructor. She
also gets grants that finance her research.
Monthly expenses include $575 for their
duplex, $400 for a Toyota RAV4 with a
$20,000 balance, and $1,300 for the
roughly $30,000 they owe on seven credit
cards. Ms. Roddy has $104,000 in studentloan debt: $15,000 in private loans with an
8.9% interest rate, with the rest in a government loan at 4.8%. She is currently in
deferment on the student loans. When she
is not, she pays $535 a month.
Between rent and other expenses, they
put about $325 a month into the business.
Groceries, bills, utilities and living expenses
eat up $1,460 a month. They put $100 in
Ms. Ellefson’s Health Savings Account each
month and give about $20 to charity.
Once they’re out of debt, they both
would like to be able to travel more and
perhaps be part of the foster-care system
with LGBT youth or even adopt.
Mr. Kornelis is a writer in Seattle. Email him at reports@wsj.com.
5.
Where is the board
working well and where
does it need to improve?
Have a clear understanding
of any problem areas before
you join, says Matthew Wesley, director at Merrill Lynch
Private Banking and Investment Group.
For example, a Merrill
Lynch client got recruited to a
board but found out later that
the board was indecisive.
Because she was a “go-getter,” she found the board’s
lack of direction very annoying, Mr. Wesley says.
Mr. Wesley advises finding
out if the decision-making
process of the board is one
that fits your own approach
and personality. Attend a
meeting, he suggests.
Understand the strengths
and weakness of the executive
director and professional staff
too, he says. “Ask yourself if
the weaknesses in the leadership of the organization are
likely to generate drama in
your life, and if the strengths
will support your sense of enjoyment,” he says.
Speaking to a few people in
the organization can help you
determine if it’s the right fit.
Ms. Dagher is a Wall Street
Journal reporter in New York
and host of the Secrets of
Wealthy Women podcast.
Email her at veronica.
dagher@wsj.com.
In the Next Housing Crisis,
Lessons From the Last One
A FIVE-YEAR PLAN TO CUT DEBT
AND EXPENSES, AND SAVE MORE
BY CHRIS KORNELIS
13%
51%
Ability to fundraise
31%
Demographics
24%
13%
In addition, will you have a
voice or will you be rubber
stamping others’ ideas?
“It can be uncomfortable
when you join a board and
find yourself seated on a committee that holds no interest
for you,” she says.
The longer you remain silent, the more difficult it is to
change later on, she says.
ly
.
IT MAY FEEL like an honor to
be invited to join the board of
a nonprofit. But don’t let ego
cloud your decision.
While being a board member can be rewarding—especially if you’re passionate
about the charity—it’s important for potential members to
first understand what’s expected of them.
Don’t be afraid to ask questions before committing, nonprofit experts say. It’s crucial
to make sure you’re comfortable with the organization’s
mission, governance and finances before you sign on.
Here are five key questions
to ask:
gist-family and philanthropy
advisory at UBS Americas.
There also may be fundraising expectations, she says. If
you have a prominent position
in a corporation, for example,
the group may assume that
you have the ability to secure
donations from your company,
or that you have wealthy
friends whom you will ask for
help, Ms. Sebastian adds.
Some organizations have a
“give or get” number, which
means a target for each board
member to hit in terms of direct contributions or money
raised through friends. Ask if
an introduction to other donors will count to your overall
give-or-get number, says Laura
Fredricks, a fundraising consultant in New York.
Ask if other board members
will know how much you give,
and, if your organization hosts
a gala, whether your contribution for the gala counts toward your yearly gift, Ms. Fredricks says.
If you have an expertise,
the board also may be hoping
to enlist those skills. Make
sure you’re on the same page
as to what your talents really
are, and what demands will be
placed on your time.
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY VERONICA DAGHER
COULD A NEW STUDY ease
the next housing crisis?
When the housing bubble
burst in 2008, federal policy
makers thought they could
limit the economic damage
by helping to reduce
amounts of principal owed
on many mortgages, thus
preventing foreclosures—especially for the millions of
people who saw the value of
their homes fall below the
value of their mortgages.
But, according to a new
working paper, lowering
principal had very little effect on defaults for underwater borrowers. Moreover, it
turned out to be a very expensive initiative.
The federal government
spent about $4.6 billion on
principal reduction to prevent foreclosures from 2010
to 2016, but the policy’s impact was so small, each
avoided foreclosure ended
up costing taxpayers at least
$800,000, says Pascal Noel,
an assistant professor at
University of Chicago Booth
School of Business, and coauthor of the paper with Peter Ganong, an assistant professor at University of
Chicago’s Harris School of
Public Policy.
This new research sheds
light on what went wrong
with the government’s efforts to help underwater
borrowers in the 2007-09 recession, which by early 2010
included more than 11 million people or about 24% of
residential properties with
mortgages, according to Core
Logic, a data and analytics
company.
“If borrowers’ mortgage
balances were much higher
than their home value, policy
makers and academic researchers worried the borrowers might decide to walk
away, ” says Dr. Noel. But a
more effective policy to help
those homeowners and give
the economy a boost, he
says, might have been to
temporarily lower the underwater homeowners’ mortgage payments, freeing up
cash flow and thus spurring
consumer spending.
The Wall Street Journal
spoke to Dr. Noel about the
research. Edited excerpts follow.
WSJ: Why did you decide to
pursue this topic?
DR. NOEL: I was working in
the Obama White House,
helping design the government’s response to the foreclosure crisis, but we didn’t
have the right research to
make the most informed policy decisions. That motivated
me to figure out what exactly would have been the
most effective response to
that and future crises.
WSJ: Explain the study?
DR. NOEL: It has always been
difficult to tease apart the
effect of principal and
monthly payment reductions
because prior research had
studied them together. But
we were able to exploit policy variation in the government’s Home Affordable
Modification Program, which
modified about 1.6 million
mortgages between 2009
through 2016. One group of
borrowers, which became
our control group, received a
modification temporarily reducing their mortgage payments for five years. The
second group received the
exact same short-term pay-
Each avoided
foreclosure cost
taxpayers at least
$800,000, says one
study.
ment reduction, but also received about $70,000 in
mortgage principal reduction, writing down, on average, a third of their mortgage balance.
WSJ: What did you find?
DR. NOEL: The principal re-
duction had no statistically
significant effects on borrowers’ short-term default
rates. Reducing borrowers’
loan-to-value ratio by about
11 percentage points affected
default rates by less than 1
percentage point. That is
within the first three years
of receiving the modification.
It also had very little effect on consumption. A
$70,000 reduction in mortgage principal increased borrowers’ monthly credit-card
expenditures by less than $1
and their auto spending by
less than $5.
The main message is that
underwater borrowers during the financial crisis were
much less sensitive to
changes in their housing
wealth than the average borrower during normal times,
and that was very surprising.
WSJ: Why was it so surpris-
ing?
DR. NOEL: The link between
housing wealth and consumption is very well documented empirically. But we
find that relationship completely broke down. In most
cases, the mortgage-principal reduction wasn’t enough
to bring homeowners above
water.
If, for example, a borrower owes $80,000 more on
their mortgage than their
home is worth and $70,000
is forgiven, the home is still
underwater. There is no collateral. So a homeowner
can’t take out a home-equity
line of credit or a second
mortgage, which is typically
how housing wealth increases consumption.
We calculate that if the
government spent $4.6 billion—the amount of money
it used to subsidize principal
reductions during the financial crisis—and used it instead to reduce short-term
mortgage payments, the
spending response would
have been 10 times greater.
It would have increased consumer spending by about
$1.4 billion.
WSJ: How big a role did a
homeowner’s leverage play
in default rates?
DR. NOEL: During the crisis,
many experts looked at the
historical relationship between leverage ratios and
default rates and believed
there was a causal relationship between them. But our
findings suggest short-term
income shocks, like job loss,
rather than leverage in and
of itself, primarily drive
mortgage defaults.
We have a new version of
the paper coming out soon
where we look at a different
source of variation in the
Home Affordable Modification
Program over the same period and find a 1% reduction
in monthly mortgage payments reduces default rates
by about 1%. That is a much
bigger effect than we get
from reducing mortgage principal without changing payments.
WSJ: What lessons does the
paper suggest in hindsight?
DR. NOEL: The main lesson
looking back is that the government would have been
better off if it had used the
same amount of money to finance deeper reductions in
mortgage payments or reduce more borrowers’
monthly payments. Still,
writing down mortgage debt
before borrowers are underwater might be an effective
policy and is worth further
investigation.
Ms. Ward is a writer in
Mendham, N.J. Email her at
reports@wsj.com.
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
Monday, December 11, 2017 | R9
JOURNAL REPORT | WEALTH MANAGEMENT
TAXES | TOM HERMAN
Don’t Get Hit by Estimated-Tax Penalties
There is a lot of confusion about the rules. Here’s what you need to know.
Mr. Herman is a writer in New York City. He was
formerly The Wall Street Journal’s Tax Report
columnist. Send comments and tax questions to
taxquestions@wsj.com.
Proliferating Penalties
More filers are getting hit by civil estimated-tax
penalties for not having paid enough in taxes
throughout the year.
2010
7.2 million
2015
Although “it can be difficult to estimate
how much tax you will owe in the current
year,” says Mark Luscombe, principal federal
tax analyst at Wolters Kluwer Tax & Accounting in Riverwoods, Ill., “there are a number of
safety nets available.”
In general, taxpayers don’t have to pay a
penalty if they meet any of several conditions,
Mr. Luscombe says. The first is if they owe
less than $1,000 in tax with their tax return,
according to the IRS. Most taxpayers also typically don’t have to pay a penalty if they paid
throughout the year at least 90% of the tax
for the current year, or 100% of the tax shown
on their return for the prior year, whichever is
less. But that 100% requirement typically rises
to 110% for higher-income taxpayers, defined
as those with adjusted gross income of more
than $150,000 (or $75,000 if your filing status for 2017 is married and filing separately
from your spouse). There are special rules for
fishermen and farmers.
Here are a few other suggestions from tax
pros:
ders’s column in August. But, as Mr. Luscombe
points out, don’t expect much sympathy if you
cite such things as ignorance of the law or forgetfulness.
LIFE CHANGES: Many people may need to
tweak their withholding, estimated payments,
or both for a variety of reasons, including
some they might not have anticipated. For example, life changes such as “marriage, divorce,
working a second job, running a side business
or receiving any other income without withholding can affect the amount of tax you owe,”
the IRS says on its website. If you work as an
employee, “you don’t have to make estimated
tax payments if you have more tax withheld
from your paycheck. This may be a convenient
option if you also have a side job or a parttime business.”
THE WALL STREET JOURNAL
ANNUALIZED METHOD: Some people don’t
receive money in equal amounts throughout
the year. For example, a law firm might wait
until the closing months of the year to distribute most of its profits for that year to its partners. In such cases, the IRS says, taxpayers
can make “unequal tax payments, based on
when they receive their income, rather than
four even payments.”
This subject “may be particularly useful and
timely for your readers who receive largerthan-customary payments, not subject to withholding, before the end of 2017,” says Eric
Smith, an IRS spokesman.
NUMBER CRUNCHING: The IRS has a withholding calculator on its website. This works
for most taxpayers, the IRS says. “However, if
you owe self-employment tax, alternative minimum tax, or certain other taxes, you should
use the instructions in Publication 505, Tax
Withholding and Estimated Tax.” Also see the
instructions to Form 1040-ES.
ly
.
LLOYD MILLER
Source: Internal Revenue
Service Fact Sheet
10.0 million
DEADLINES: Even these can be tricky. Just
because they’re called “quarterly” estimatedtax payments, don’t assume the deadlines fall
at the end of each calendar quarter.
For the first three months of the year, the
deadline for estimated-tax payments typically is
April 15. For the April 1-May 31 period, it’s typically June 15, even though that’s only two
months later. For the June 1-Aug. 31 period, it’s
usually Sept. 15. And for the Sept. 1-Dec. 31 period, it’s Jan. 15 the following year. But if these
dates fall on a Saturday, Sunday or legal holiday,
the deadline moves to the next business day.
Thus, the first payment for the 2017 tax
year was due April 18. The fourth and final
payment for 2017 will be due Jan. 16 of next
year. However, the IRS says you don’t have to
make that payment “as long as you file your
tax return for 2017 by Jan. 31, 2018, and pay
the entire balance due with your return.”
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
Instead of dreaming about how the new tax
package will affect them next year, millions of
taxpayers might want to focus on a more immediate issue: How to avoid getting hit needlessly by estimated-tax penalties for 2017.
If you’re confused by the rules, you have
plenty of company. The latest Internal Revenue
Service statistics show a surprisingly large increase in the number of taxpayers ensnared by
these penalties. While the rules can be tricky,
most people who haven’t paid enough taxes
during the year can avoid trouble by doing
some basic homework. That includes focusing
on how to sail into what tax professionals refer
to as “safe harbors,” says Eric L. Green, a lawyer at Green & Sklarz LLC in New Haven,
Conn.
About 10 million people were penalized for
2015, up nearly 40% from 2010, as my colleague Laura Saunders reported in The Wall
Street Journal in August. The IRS assessed
penalties totaling about $1.3 billion in the latest
year for which data is available. This fall, the
IRS followed up on that subject by issuing a
fact sheet leading with those penalty numbers.
Another IRS guide: “Pay As You Go, So You
Won’t Owe.”
Many people are confused about the mechanics and even the basics, says Sidney Kess,
senior consultant at Citrin Cooperman and of
counsel at the Kostelanetz & Fink law firm.
Some taxpayers even assume—mistakenly—
they don’t need to pay anything throughout
the year as long as they pay everything they
owe by the mid-April deadline the following
year. “There may be a shock when they file
their return and the IRS assesses a penalty,”
Mr. Kess says.
That isn’t the way it works. Taxpayers generally are required to pay most of what they owe
throughout the year by having taxes withheld
from their pay, pension or certain government
payments, or by sending quarterly estimated
tax payments—or both. “It’s definitely a big
deal” for many small-business owners, investors, retirees and others with significant
amounts of income that isn’t subject to withholding requirements, says Amy V. Hollander, a
certified public accountant in Clarks Summit, Pa.
This is a good time to take a fresh look at
the rules to see if you should take action before New Year’s Day. Some people may figure
it isn’t worth the time and aggravation.
But why pay a penalty that typically is
avoidable with better planning?
PARDON ME: In some cases, the IRS will be
merciful on penalties. For example, the IRS
says “all or part” of the penalty for an underpayment will be waived under certain circumstances, such as if the underpayment was due
to “a casualty, disaster, or other unusual circumstance, and it would be inequitable to impose the penalty.”
For more on who might qualify for a penalty
waiver, see the IRS website and Laura Saun-
WITHHOLDING EXCEPTIONS: Many people
receive income that isn’t subject to withholding. This may include capital gains, interest income, dividends, rent, alimony and self-employment earnings. In such cases, send in
estimated tax payments throughout the year,
the IRS says. “You may also make estimated
tax payments if the withholding from your salary, pension or other income doesn’t cover
your income tax for the year.” In addition, “if
you do not elect voluntary withholding, you
should make estimated-tax payments on other
taxable income, such as unemployment compensation and the taxable part of your Social
Security benefits.”
Rethinking your charitable giving strategy
could help lift your impact.
no
n-
We call a realization like this an Unlock.
At Wells Fargo Wealth & Investment Management,
our expertise is identifying insights that better
enable our clients to look at their situations
differently. It’s how we help strengthen their
philanthropic efforts. And it’s led us to become one
of the largest investment and wealth management
providers in the country.
wellsfargo.com/Unlock
Investment and Insurance Products: NOT FDIC Insured ► NO Bank Guarantee ► MAY Lose Value
Wells Fargo Wealth and Investment Management, a division within the Wells Fargo & Company enterprise, provides financial products and services through bank and brokerage affiliates of Wells Fargo & Company. Brokerage products and services offered through
Wells Fargo Clearing Services, LLC, a registered broker-dealer and non-bank affiliate of Wells Fargo & Company. Bank products are offered through Wells Fargo Bank, N.A. © 2017 Wells Fargo Bank, N.A. All Rights Reserved.
CAR061705322
For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.
THE WALL STREET JOURNAL.
R10 | Monday, December 11, 2017
JOURNAL REPORT | WEALTH MANAGEMENT
More Local Programs Help Students Pay for College
The underlying
message: Finances
won’t get in the way
of attending school.
of students’ tuition after all other
state and federal grants and scholarships are taken into account, according to the College Promise Campaign,
a nonprofit that advocates for making the first two years of community
college free and accessible. That’s up
from about 50 programs in 2009.
State governments also are picking up on the idea. In the year since
the election, more than half a dozen
states—including New York and
Rhode Island—have moved toward
offering programs, says Morley Winograd, the president of the Campaign
for Free College Tuition, a nonprofit
organization seeking to make public
colleges tuition-free.
“The day of the election the wind
came out of the national sails, but it
doesn’t mean that the movement
slowed down,” says Michelle MillerAdams, a research fellow at the W.E.
Upjohn Institute for Employment
Research who has studied these programs for years. “It just kind of
dropped back down to the state and
local level.”
Lots of variables
new businesses to Richmond,” says
Mayor Tom Butt. “It’s a win-win all
around.”
Eligibility rules, such as income
requirements, also vary. New York,
for instance, offers free college to
families with income under $100,000
a year, which will rise to $125,000
when the program is fully phased in.
Other programs have a merit-based
component, which requires students
achieve a certain GPA in high school
to be eligible for the funding. Some
offerings require students to maintain a certain GPA while in college, or
to participate in certain financial-literacy or financial-aid classes. In Tennessee, students have to participate
in a mentoring program to help them
navigate the financial-aid process to
be eligible for the program.
Sources of funding for the efforts
also can vary. Some local programs
get money, at least in part, from bequests or other private sources. The
advantage, the localities say, is that
the money can’t be cut off on the
whims of politicians or taxpayers.
Since Richmond started its program in February 2016, it has pushed
local nonprofits, high schools and
colleges to work together to get more
students to and through school, says
Jessie Stewart, the executive director
of the program. The program was
made possible through a 10-year, $35
million seed investment in the city
by Chevron Corp., an environment
and community investment deal that
includes funding of other community
programs by the company.
A program in Buchanan, Mich.,
was established through a major bequest from a longtime resident. That
combination of public and private efforts sets these programs apart from
proposals at the state or national
level, says Robert Habicht, chief executive officer of the Michigan Gateway Community Foundation, which
manages the promise program for
Buchanan, Mich.
Every local promise program “is
unique” and “addresses its specific
community’s needs and issues, which
I think is a good way to approach it,”
Mr. Habicht says.
eas, the results are promising so far.
In Tennessee, first-time community-college students in the program
are more likely to continue in college
for a second year than those who
aren’t participating, according to research published by the state. Tennessee also has the highest completion
rate of the Free Application for Federal Student Aid (Fafsa) of any state.
“It has been interesting to see the
national conversation evolve and
certainly we take note of it, but
we’ve just been doing the work,”
says Mike Krause, the executive director of the Tennessee Higher Education Commission.
The state’s promise program is
part of Drive to 55, a broader effort
on the part of the state’s Republican
governor, Bill Haslam, to equip more
residents with the kinds of credentials necessary to compete in today’s
job market. “Right now, economic
development and recruiting new industries to the state as well as retaining current industry is solely
about workforce pipeline,” Mr.
Krause says.
Solid results
For all the differences, what the
programs typically have in common
is the underlying message: letting
students know—particularly those
who believe they can’t afford college—that finances won’t get in the
way of attending school. In some ar-
Ms. Berman is a reporter at
MarketWatch. Email
jberman@marketwatch.com.
no
n-
The programs generally fall into
three buckets, according to Dr.
Miller-Adams. The first are local,
Tennessee’s ‘free-college’ initiative, launched in the 2015-2016 academic year, includes Volunteer State Community
College and other eligible two-year programs.
ly
.
STATES AND CITIES are trying to
give students a leg up on college—by
helping to pay their way through
school.
The idea of government covering
college costs was a big part of the
Democratic campaign last year. But it
had been building steam across the
country before then, and has continued growing locally since the presidential election. More than 200 localities
now
offer
“promise
programs” that vow to cover a chunk
place-based scholarship programs,
which provide some kind of tuition
help to residents of a certain region.
These emanate directly out of the
community, and typically officials are
looking to provide amenities that
will both improve their locales for
current residents and also attract
new ones.
In many cases, community-based
promise programs provide an incentive for elementary and secondary
schools, nonprofits and other organizations to work together to get the
area’s students prepared to go on to
college and take advantage of the
scholarships offered by the community. Dr. Miller-Adams says she gets
a call every couple of weeks from an
area looking to start one of these
programs.
The second category are statewide
programs, which are often part of an
economic-development agenda, Dr.
Miller-Adams says. Finally, there are
community college-based programs.
These initiatives are funded by community colleges or community-college
systems and typically promise that eligible students will be able to attend
those specific schools tuition-free.
Promise programs are often called
“free” college, but these programs
don’t always intend to cover the entire cost of tuition, and they vary
widely in terms of what it takes to
qualify. Some of the programs function as “last-dollar” scholarships,
which means they help fill the gap in
tuition costs for students after state
and federal grants are applied.
Tennessee was the first state to
offer some form of this arrangement,
launching a program during the
2015-2016 academic year to cover
community college or other eligible
two-year programs. Similarly, New
York Gov. Andrew Cuomo earlier this
year announced an Excelsior Scholarship to help qualifying students in
the state attend two-year and fouryear public colleges tuition-free.
Other efforts cover only part of
the cost. Richmond, Calif., provides
qualifying students $1,500 a year for
four years to put toward postsecondary education. “It helps attract residents to Richmond, it helps to attract
co Fo
m rp
m e
er rs
ci on
al a
us l,
e
on
BY JILLIAN BERMAN
KATE DERRICK
The ‘free-college’ idea may be on the
back burner on the national level, but
states and cities are boosting efforts
Make Futures a part of your present.
Trade over 50 futures products on your desktop or mobile device with thinkorswim®. With interactive
in-platform education, access to former floor traders, and the ability to test-drive strategies risk-free,
the time for futures trading is now.
Visit tdameritrade.com/tradefutures to learn more.
subject to review and approval. Not all clients will qualify. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. TD Ameritrade, Inc., member FINRA/SIPC.
© 2017 TD Ameritrade.
Документ
Категория
Журналы и газеты
Просмотров
31
Размер файла
9 321 Кб
Теги
The Wall Street Journal, wall, newspaper
1/--страниц
Пожаловаться на содержимое документа