. ADVERTISEMENT GUIDANCE STARTS WITH HEARING YOU OUT. Our Financial Consultants listen before they help you plan. Flip to page B3 to learn more. MONDAY, MAY 14, 2018 ~ VOL. CCLXXI NO. 112 * * * * * * Last week: DJIA 24831.17 À 568.66 2.3% NASDAQ 7402.88 À 2.7% STOXX 600 392.40 À 1.4% WSJ.com 10-YR. TREASURY yield 2.971% OIL $70.70 À $0.98 Churches Targeted by Family of Suicide Bombers in Indonesia What’s News Business & Finance rump said he was working with China’s president to keep ZTE in business, throwing a lifeline to the Chinese telecom giant after U.S. firms were forbidden to sell to it. A1 T Wall Street is showing more interest in home flip loans, projected to swell to $15 billion in 2018. B1 Less demand for scrap, especially by major importer China, is threatening the viability of the U.S. recycling industry. B1 Hearings will give U.S. companies a forum to object to proposed U.S. tariffs on Chinese goods. A2 Trade friction is emerging as a threat to the dollar’s central role in the global financial system. B6 FIERY ASSAULT: Motorcycles burned after a blast Sunday at one of three Christian churches targeted by a family of suicide bombers in the city of Surabaya in East Java, Indonesia. Police said seven people were killed. Islamic State claimed responsibility. A7 Italy Begins Uncertain New Era Anti-elite 5 Star joins hard-right League in coalition that shakes Europe’s establishment CTG plans a $10.8 billion offer to acquire the rest of a Portuguese utility, boosting its European reach. B3 BY GIOVANNI LEGORANO AND MARCUS WALKER Trump raised the pressure on auto makers to increase production and jobs in Rust Belt states. B3 ROME—A movement that channeled Italians’ rage at mainstream politicians struck a pact with a hard-right na- World-Wide Paper Tiger Italy’s 5 Star Movement said it had agreed on the outlines of a political program with the anti-immigration League, clearing the way for a likely coalition government. A1 Middle East tensions grew ahead of the opening of the relocated U.S. Embassy in Jerusalem. A6 Rising rates of violent crime in rural areas are putting a strain on law-enforcement resources. A3 A severe drought is being felt through much of West Texas and parts of four other states, threatening crops. A3 BY REBECCA BALLHAUS, PETER NICHOLAS, MICHAEL ROTHFELD AND JOE PALAZZOLO 100 50 When Michael Cohen came knocking after the 2016 election, touting himself as the president’s lawyer, the man who could decipher the new administration, Ford Motor Co. said no. So did Uber Technologies Inc. He managed to notch AT&T Inc. and Novartis AG. And Squire Patton Boggs, a law and lobbying firm, hired him for a sizable fee—though he felt it wasn’t enough. Mr. Cohen talked to associates about building a huge practice. He mused about approach- Mixed paper 2017 Some conservative House Republicans face electoral headwinds from their voting records. A4 ’18 Rock Collections Aren’t Complete Without One Resembling Brisket i i ing foreign governments and foreign firms. But a broad review of his Washington dealings since they first surfaced last week shows his efforts were scattershot and met only with mixed success—both for Mr. Cohen and his clients. His work did have an impact in one way. It dragged some of the world’s largest corporations and other firms into Special Counsel Robert Mueller’s investigation: Novartis, Ford and AT&T have responded to information requests from Mr. Mueller’s office, according to people familiar with the matter. Please see COHEN page A10 INSIDE i The Chinese think specimens that look like meat are juiciest; fat and skin help China’s first domestically produced aircraft carrier began sea trials to test its power system. A7 BY TE-PING CHEN Iraqi voters gave strong support to a coalition of communists and followers of cleric Sadr, in partial preliminary results. A6 Life & Arts...... A11-13 Opinion.............. A15-17 Sports....................... A14 Technology............... B4 U.S. News............. A2-4 Weather ................. A14 World News......... A6-8 > Italians and the European Union will watch closely whether the pair of rebel parties can overcome the deep malaise in one of Europe’s biggest but most-troubled economies. The expected new government’s performance will show whether alternative remedies can solve the legacies of Europe’s economic and migration crises and assuage Europeans’ widespread discontent Please see ITALY page A8 Handful of firms signed up seeking his insight; Uber and Ford said no Corrogated cardboard 150 Source: Paper Stock Report The WHO is pushing to eliminate trans fats from diets globally to improve cardiac health. B2 s Copyright 2018 Dow Jones & Company. All Rights Reserved U.S. average price for scrap paper, per ton $200 said they would slash and simplify taxes while boosting spending on pensions and antipoverty benefits. They were due to present their program on Monday to President Sergio Mattarella, who formally appoints the government. “We are writing history and we need a bit more time,” said Luigi Di Maio, 5 Star’s leader, as he left talks with League leaders in Milan on Sunday afternoon. Michael Cohen’s Consulting Career Met Mixed Success The U.S. recycling industry is struggling as Chinese imports fall and prices for scrap plunge. B1 0 A family of suicide bombers attacked three churches in Surabaya, Indonesia, killing seven. A7 CONTENTS Business & Finance B2,6 Business News... B3,5 Crossword.............. A14 Heard on Street..... B9 Markets................... B10 Markets Digest..... B7 tionalist party to govern the country, a major prize for the political insurgencies that have been shaking Europe’s establishment. The 5 Star Movement, an eclectic upstart group driven by scorn toward Italy’s ruling elites, on Sunday evening said it had agreed on the outlines of a governing program with the anti-immigration League party, clearing the way for a likely coalition government. The parties JOE RAEDLE/GETTY IMAGES Tesla is dealing with losing two executives as it struggles to boost output and faces doubts about its ability to raise cash. A1 EURO $1.1942 YEN 109.39 Trump Throws Lifeline To Chinese Tech Firm BY DAN STRUMPF AND JOHN D. MCKINNON SURABAYA GOVERNMENT/ANTARA/REUTERS Xerox said it would back out of its merger deal with Fujifilm as it reached a new accord with two of its biggest holders. B1 HHHH $4.00 hundreds over the years. They originate on “MeatLUSHAN, China—Some Chi- Rock Mountain.” When storms nese rock collectors prefer jade, come, the rocks are swept down others prettily crenelated lime- to the river, where they are stone. Jiang Sui’an prefers picked up by the many collectors stones that look like pieces of here in the hills of central China. Lushan boasts pork. a museum dedStones that icated to meat turn up in rivrocks and plans erbeds around another. A local Mr. Jiang’s meat-rock rehome have a search commitrosy or caratee was formed m e l - c o l o re d last year and hue, making now has hunthem resemble Meat or rock? dreds of mempieces of meat. They “look just like pieces of bers. Mr. Jiang’s expertise has pork freshly plucked from a been called on to develop official pot, some stewed, others classifications for what makes a braised or deep fried,” says good meat rock. Please see MEAT page A10 Mr. Jiang, who has collected GASOLINE PRICES ON THE RISE U.S. NEWS, A2 TROPHY ART DISRUPTS AUCTIONS LIFE & ARTS, A11 President Donald Trump said he was working with Chinese President Xi Jinping to keep ZTE Corp. in business, throwing an extraordinary lifeline to the Chinese telecommunication giant that has been laid low by U.S. moves to cut off its suppliers. The surprise intervention comes less than a month after ZTE was hit with an order banning U.S. companies from selling components to the Chinese business. The U.S. Commerce Department directed companies to stop exporting to ZTE in mid-April, saying the Chinese firm violated the terms of a settlement resolving evasion of U.S. sanctions against Iran and North Korea. The Commerce Department is reviewing ZTE’s request for a stay of that order. Mr. Trump said in a tweet that he is working with Mr. Xi to get ZTE “a way to get back into business, fast. Too many jobs in China lost.” He said the Commerce Department has been instructed to “get it done!” Mr. Trump’s comments about the company and concern about Chinese jobs come as the U.S. and China are locked in high-stakes negotiations over trade and intellectual property. Both countries are threatening to slap tariffs on tens of billions of dollars of the other’s products. Mr. Trump has regularly blamed China for U.S. job losses and Beijing’s policies for the U.S. trade deficit, making his shift in tone notable. U.S. concerns about ZTE go beyond its evasion of sanctions. For years, the U.S. has claimed that equipment made by Shenzhen-based ZTE and its larger crosstown rival Huawei Technologies Co. is a national security threat, an accusation that both companies have denied. The U.S. has largely blocked both companies from selling telecommunications gear in the U.S., and the PenPlease see ZTE page A2 U.S. firms given forum to object to China tariffs.......... A2 Big Test for Tesla as Officials Step Away BY TIM HIGGINS AND SAM GOLDFARB Tesla Inc. will be without two important executives just as the electric-car maker struggles to boost production of its first mass-market vehicle and faces doubts about its ability to raise cash. Matthew Schwall, who was the company’s main technical contact with U.S. safety investigators as the Silicon Valley auto maker races to develop driverless-car technology, left the company for rival selfdriving car company Waymo LLC. His departure comes as the National Transportation Safety Board has been investigating multiple crashes involving Tesla vehicles. Mr. Schwall’s exit comes after Tesla said Friday that its engineering chief, Doug Field, was taking a leave of absence to recharge and spend time with his family. Mr. Field is stepping away from the company for several weeks, according to people familiar with the matter. One person described the absence as a “six-week sabbatical” while Tesla declined to say when he would come back. “He has not left Tesla,” a company spokesman said. Mr. Field, a key leader at the auto maker since joining in 2013 from Apple Inc., oversees the engineering of Tesla’s vehicles, and last year he was also given oversight of production to better align those efforts. That changed this spring, when Chief Executive Please see TESLA page A4 Christopher Mims: Drivers become guinea pigs................ B1 . A2 | Monday, May 14, 2018 THE WALL STREET JOURNAL. * *** U.S. NEWS THE OUTLOOK | By Stephanie Yang and Alison Sider Rising Gas Prices Could Brake Growth Trend D rivers gearing up for trips this summer face escalating prices at the gasoline pump, an early sign that $70-a-barrel oil is reaching into consumer wallets and could pinch economic growth. Average U.S. retail gasoline prices are climbing toward $3 a gallon, the most expensive in more than three years. The national average was around $2.87 on Sunday. In states such as California and Washington, prices have already breached the $3 level after rising 24% and 17%, respectively, from a year earlier. Gasoline price spikes coincided with depressed consumer spending and recessions in 1980, 1990, 2001 and 2007-2008, but the two don’t always go hand in hand. A spike in 2011 didn’t stop the expansion. The economy is vulnerable when hit by gas price rises driven by supply shocks, such as Iraq’s invasion of Kuwait in 1990. The economy is also vulnerable when it faces other challenges, such as the global financial crisis of 2007 or the tech bubble burst of 2000. The economy now is buoyed by several factors, including a strong job market, stable financial system and tax cuts—one of the underpinnings of the recent rise in oil and fuel prices. Moreover, U.S. shale producers benefit from rising prices. Still, growth might not measure up to expectations if consumers pull back. “Prices at the pump are quite high especially as we enter the driving season,” said Gregory Daco, chief U.S. economist at Oxford Economics. “That’s going to be one of the channels where you see a hit to people’s disposable income and spending.” R ising fuel costs can also feed inflation and pressure interest rates. The Federal Reserve typically looks past volatile energy prices in the short term, but the central bank is already poised to raise interest rates this year and next and this can contribute to its incentives to keep going. Morgan Stanley estimates that if gas averages $2.96 this year, it would take an annualized $38 billion from spending elsewhere, an upward revision from the bank’s $20 billion estimate in January. That would wipe out about a third of the additional takehome pay coming from tax cuts this year, the analysts said. When oil prices collapsed in 2014, gasoline prices followed. People took advantage, On the Road Drivers are seeing $3 gas again after years of low prices and logging more miles than ever. U.S. average regular gas price Most expensive states for gas Vehicle miles traveled $4 a gallon 3.20 trillion miles California $3.67 a gallon 3.15 $3.66 3.10 3 Hawaii 2 3.05 Washington $3.36 Alaska $3.32 1 0 1990 2000 ’10 Nevada $3.29 driving more than ever and buying larger, less fuel-efficient cars. At one point in 2016, prices tumbled toward $1 in parts of the country. That era may be coming to an end. As gasoline rose above $2.50 in November, Adam Mincey started to worry. His commute in North Carolina is about 60 miles round trip, and his old Chevrolet truck got about 8 miles to the gallon. Recently, he traded the truck in for a vehicle with better mileage. “I make decent money—I’m a scientist. But it’s cutting into our disposal income,” he said. The steadily rising fuel prices brought back bad memories: “There were times I couldn’t fill up my tank in 2008 and 2009. I don’t want that to happen again.” Robert Lozano—a car salesman in Los Angeles, where some gas prices are already above $4—said the dealership’s gas bill has climbed from about $9,000 to $12,000 a month recently. Customers are inquiring more about electric vehicles, he said. Some analysts are predicting another jolt to the market as President Donald Trump’s decision to withdraw from the 2015 Iran nuclear deal could limit the country’s crude exports. Other factors outside the U.S. are pushing oil prices higher. The Organization of LARRY BENVENUTI/THE TURTLE HOSPITAL/ASSOCIATED PRESS SHELL GAME: A loggerhead sea turtle named ‘Judy’ was released off the coast of Marathon, Fla., on Saturday, about three months after the 150-pound reptile was found injured in a fish trap line. Continued from Page One tagon recently pulled mobile phones made by both competitors from stores on U.S. military bases. ZTE continues to sell phones in the U.S. through a number of retail channels, including through Best Buy Co. stores and through AT&T Inc. stores and its website, representatives from both companies said last week. Phones made by Huawei, the world’s No. 3 handset maker, are more difficult to find in the U.S. The company was set to launch a high-end handset earlier this year with AT&T, but the U.S. carrier pulled out of the deal at the last minute without explaining why. Nodding to security concerns, Rep. Adam Schiff of California, the top Democrat on the House Intelligence Committee, responded on Twitter to the president’s remarks: “Our intelligence agencies have warned that ZTE technology and phones pose a major cybersecurity threat.” Senate minority leader Chuck Schumer (D., N.Y.) tweeted in response to Mr. Trump: “How about helping some American The ban placed ZTE at the sharp end of a trade dispute between the U.S. and China. dent judgment, consistent with applicable laws and regulations, to resolve the regulatory action involving ZTE based on its facts.” The Commerce Department declined to comment. Some Wall Street observers have speculated that the administration hoped to use the ZTE sanctions as leverage to soften Chinese resistance in other trade negotiations. One 2010 ’11 ’12 ’13 ’14 ’15 ’16 ’17 possible indication of that was the Commerce Department’s failure to impose about $300 million in fines it was eligible to collect when it announced the penalties on ZTE earlier this year. The Commerce Department also has signaled in recent days that it was trying to expedite ZTE’s appeal, suggesting the agency was sensitive to the urgency of ZTE’s situation. ZTE, which relies on billions of dollars in component imports from U.S. tech titans such as Qualcomm Inc. and Intel Corp., has warned that the ban threatened its survival. Last week, the company said it had ceased major business operations. A person close to ZTE said Sunday: “ZTE has noticed the tweet from President Trump, and welcomes this latest progress. Next, under the guidance of the Chinese government, ZTE will continue to communicate with relevant parties including the U.S. Department of Commerce to facilitate the final resolution.” The Wall Street Journal reported Saturday that in its efforts to have the ban stayed, ZTE has told U.S. authorities that process and human-resource errors, not a plan of systematic deception, were responsible for the lapses in THE WALL STREET JOURNAL. the Petroleum Exporting Countries, along with other major oil producers including Russia, agreed in 2016 to curb output in the hopes of eliminating a global glut. Their efforts have been helped by a steep decline in production in Venezuela as the country has fallen into political and economic turmoil. Airlines and shipping companies also will be paying more for jet fuel and diesel— costs that may be passed along to consumers. Even companies such as Whirlpool Corp. have noted that higher oil prices have boosted the cost of materials. But some economists say the growing importance of energy to the U.S. economy G as prices are still a long ways off from when they reached as high as $4.11 in 2008. And demand hit its highest levels ever last year even as prices rose. “It’s not only the price point, but it’s how long that price point stays,” Karl Fails, chief commercial officer at Sunoco LP, a wholesale fuel distributor, said during an earnings call Thursday. “We’re very comfortable with the U.S. economy right now. And I think that will also have a bearing on any demand impacts.” U.S. Firms Given Forum To Object to China Tariffs BY ANDREW TANGEL AND WILLIAM MAULDIN ZTE 2.95 2.90 Sources: Energy Information Administration (average); AAA (states); Department of Transportation (miles) A Reptilian Success Story in the Florida Keys companies first?” Late Sunday, amid confusion about the meaning of Mr. Trump’s comments, the White House issued a statement saying that the ZTE matter would be decided independently by the Commerce Department. “The administration is in contact with China on this issue, among others in the bilateral relationship,” a White House spokeswoman said. She said that Mr. Trump expects Commerce Secretary Wilbur Ross to “exercise his indepen- 3.00 could blunt some of the impact from rising oil prices. The country has become a more prominent supplier of crude oil and fuel. Domestic production has reached record weekly levels of 10.7 million barrels a day, and a lot of it is being exported. Refiner Valero Energy Corp. said it wouldn’t expect consumer demand to drop off until oil prices are at $80 to $100. “Three dollars is like a small fence. You can get through it, you can get over it,” said Patrick DeHaan, petroleum analyst at GasBuddy, a fuel-tracking app. “But $4 is like the electric fence in Jurassic Park. There’s no getting over that.” The Trump administration is set to face criticism this week from a large cross section of corporations, including U.S. giants like General Electric Co., over how the administration’s proposed tariffs on Chinese imports will affect American manufacturing. The U.S. trade representative’s office will hold three days of hearings from Tuesday on the proposed tariffs. The hearings will not only feature businesses facing supplychain disruptions because of the tariffs proposed for $50 billion of Chinese imports, but also exporters—from farmers to manufacturers—which are likely to suffer from retaliatory tariffs on U.S. exports threatened by China. The U.S. business community has often been skeptical of the Trump administration’s trade initiatives, particularly its threats of tariffs, which are being contemplated under Section 301 of the Trade Act of 1974. Executives from big companies, from electronics retailer Best Buy Co. to Swedish appliance maker Electrolux AB, have asked to testify at the hearings and are expected to raise complaints. fully complying with its 2017 settlement, according to a person familiar with the matter. The sudden sales ban placed ZTE at the sharp end of a rising trade dispute between Washington and Beijing that has included tit-for-tat tariffs. Technology has become a focus of tensions, with the U.S. accusing China of transferring key technologies back home and unfairly supporting domestic champions. Chinese representatives complained to their U.S. coun- CORRECTIONS AMPLIFICATIONS In some editions Saturday, the first paragraph of a World News article about military exercises in South Korea was garbled. The paragraph should have read: RODRIGUEZ LIVE FIRE COMPLEX, South Korea—Fifteen miles south of the demilitarized zone, a U.S. tank battalion is preparing for the possibility that the detente on the Korean Peninsula doesn’t last. Readers can alert The Wall Street Journal to any errors in news articles by emailing firstname.lastname@example.org or by calling 888-410-2667. Some manufacturers support the tariffs, and are calling on the Trump administration to add more to the list of Chinese imports that would face duties. Supporters of the tariffs include manufacturers facing barriers to selling goods in the Chinese market. The Trump administration argues that the threat of tariffs is necessary to bring China to the negotiating table over what businesses generally agree are Chinese economic practices in need of reform. But business groups worry Washington may accept a pledge from Beijing to buy U.S. goods without addressing Chinese practices such as erecting barriers to China’s domestic market or forcing U.S. concerns to transfer technology as a condition of entering into partnerships in China. “The administration has attempted to assure Americans that it has a strategy to resolve trade frictions with China without excessive collateral damage to U.S. economic interests,” the U.S. Chamber of Commerce said in a written submission ahead of the hearings. “However, these assurances lack the coherence that would provide comfort to those businesses, farms and workers whose livelihoods are being put at risk.” General Electric is representative of the sort of discontent the Trump administration will hear from the corporate sector. Company officials say that, should the U.S. follow through on the threats to charges tariffs on Chinese imports, GE will face potential tariffs on parts the company’s imports into the U.S. to manufacture a range of products from aircraft engines to medical machinery. GE officials plan to raise specific examples of the challenges. One instance: magneticresonance-imaging machines that GE makes in Wisconsin will suffer if tariffs are placed on parts imported from China. High standards for quality, and the need to keep parts sterile, mean it would take “well over a year” to find new suppliers of the MRI parts outside China, according to Karan Bhatia, GE’s president for government affairs and policy. terparts about the ban during a recent visit by a U.S. trade delegation to Beijing. The export ban was expected to figure in another round of trade talks between the two sides in Washington. In a subsequent tweet at midafternoon Sunday, Mr. Trump said that China and the U.S. “are working well together on trade” but “it is hard for them [China] to make a deal that benefits both countries.” He added: “But be cool, it will all work out!” The U.S. and China are also in talks with North Korean leader Kim Jong Un about the regime’s nuclear-weapons program. Mr. Trump is set to meet Mr. Kim in person in Singapore on June 12 to discuss denuclearization. ZTE employs roughly 75,000 people world-wide and is the fourth-largest mobile phone vendor in the U.S., selling 19 million phones in America last year. —Peter Nicholas contributed to this article. $50B Value of Chinese imports for which tariffs are proposed. 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: email@example.com NEED ASSISTANCE WITH YOUR SUBSCRIPTION? By web: customercenter.wsj.com; By email: firstname.lastname@example.org By phone: 1-800-JOURNAL (1-800-568-7625); Or by live chat at wsj.com/livechat REPRINTS & LICENSING By email: email@example.com; By phone: 1-800-843-0008 GOT A TIP FOR US? SUBMIT IT AT WSJ.COM/TIPS . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A3 MADDIE MCGARVEY FOR THE WALL STREET JOURNAL (2) U.S. NEWS Rural Crime Strains Law Enforcement BY SHIBANI MAHTANI CHILLICOTHE, Ohio—Ross County, with its rolling forested green hills and two-century-old county seat, is an image of idyllic rural America. But as night fell here on a warm Tuesday in May, chaos descended on the Ross County Sheriff’s Office. A neighbor called to report a disturbance, likely a violent domestic dispute, and another called to report a man slumped over the steering wheel of his pickup, likely an overdose. Calls of other suspicious vehicles came flooding in. “It is nothing but you and the cows and the sirens,” said Sgt. Brenton Davidson, a patrol sergeant at the sheriff’s office. “You are seeing more violence, and you never know where Officers in Ross County, Ohio, above, responded to a call earlier this month of an unresponsive man in a car with his daughter. Above left, female inmates left their section before a search for reported contraband at the county Jail in Chillicothe. your backup is coming from.” The violent-crime rate in rural areas rose above the national average for the first time in a decade, according to the most recently available data from the federal government. Though cities, on average, still have a higher violent-crime rate, large metropolitan areas are safer than they have been in decades, while small communities in some states are getting more dangerous. In at least 10 U.S. states, most in the Midwest and Northeast, the rate of violence in rural counties has increased over the past two decades, even as it has fallen or stayed the same in those states’ metropolitan areas, according to a Wall Street Journal analysis of federal crime data. In these less-populated ar- eas, increased drug use and associated crimes, like drug trafficking, prostitution and theft, as well as domestic violence, are fueling the rise. New crimefighting strategies are designed for urban policing, and sheriffs who police small towns say they are playing catch-up. Small departments, where budgets and the number of deputies have remained stagnant, are overwhelmed. The number of sheriff’s deputies patrolling 691 square miles in Ross County, which sits some 50 miles south of Columbus, has remained at four over the past two decades. The population over the same period has increased to 77,000 from about 72,000. Starting pay for deputies is $35,000 a year, compared with the Ohio average of about $60,000. “Every year I’ve asked for more officers—for patrol, for the jail. Every year,” said Ross County Sheriff George Lavender Jr. The county’s violent-crime rate has tripled in the past two decades. The jail, built to house 92 people, routinely holds 200. The sheriff’s department has received nearly 3,000 calls this year—more than six times the number at the same point in the year a decade ago. In Tennessee, urban gangs are moving out into the country to be closer to their customers, said TJ Jordan of the Tennessee Bureau of Investigation. “They start pushing their wares out into the rural areas,” said Mr. Jordan. “Drugs breed guns, guns breed violence.” Law-enforcement officers play the role of EMTs because firefighters and ambulance squads are mostly staffed by volunteers. Sheriff’s deputies across states like Iowa, Ohio and Kentucky spend hours searching for a free hospital bed in their area, which can take them off their regular jobs for an entire day. In recent years, Sheriff Lavender has piloted a series of programs for the jail inmates, including GED courses and anger-management programs that incorporate cognitive behavioral training—borrowing ideas from his big-city counterparts. A former junk storage room in a corner of the jail now serves as a training room. The sheriff’s office also has formed a post-overdose response team with the Chilli- cothe Police Department. Every week, the group, which includes social workers, visits people who have overdosed in the past seven days, providing materials on treatment, offering to bring them to the hospital and underscoring that their addiction could lead to death. A visit in early May included dropping in on homeless addicts, living out of a corrugated metal shack in the middle of the woods and sleeping on a garbage bag tied between two trees. “We did this by the seat of our pants,” said David Weber, a deputy at the sheriff’s office, noting that they had little training. “It is a completely different capacity than we’ve ever dealt with before.” —Zusha Elinson contributed to this article. L.A. Mayor Ties Political Future to Homeless Plan Seeking Shelter City of Los Angeles homeless population 40,000 Unsheltered Sheltered 30,000 20,000 10,000 0 2007 ’09 ’11 Mayor Eric Garcetti has made housing the homeless a priority. more aggressively to address a spiraling humanitarian emergency. The homeless population has grown nearly 49% ’13 ’15 ’17 Source: Los Angeles Homeless Services Authority THE WALL STREET JOURNAL. since 2013. Last year, there were about 900 more people in shelters than in 2013, according to the Los Angeles Plains Farmers Prepare for Drought BY JIM CARLTON LAMESA, Texas—This time of year, Shawn Holladay usually is laying cotton seeds into rows of red soil on his farm here on the High Plains. But less than two inches of rain has fallen across much of West Texas since last October, compared with an average of about 10 inches over the same period last year. With fields bone dry, many farmers in the Texas Cotton Belt have held off putting seeds in all but patches of irrigated ground out of fear they will dry up. “The way it’s going right now, the chances are slim to none we will have a crop,” Mr. Holladay, 49, said as he inspected his fields this month. After three fairly wet years, a drought ranging from “severe” to “exceptional” has descended on the southern Great Plains of Colorado, Kansas, New Mexico, Oklahoma and Texas, according to the U.S. Drought Monitor at the University of Nebraska-Lincoln. Home to one of the nation’s most fertile farming areas— crop production in the Texas region alone generates about $12 billion in economic activity—observers say the drought could affect cotton, cattle and farming-equipment sales, among others. “It’s going to be in the billions in terms of crop loss,” said Darren Hudson, director of the International Center for Agricultural Competitiveness at Texas Tech University. A semiarid region, the southern Plains region has seen drought conditions for much of the past decade, but the severity of this latest dry spell is of particular concern. For many farmers here, the sudden falloff in precipitation is reminiscent of the drought of 2011 when Texas agriculture incurred a loss of $7.6 billion. Already, the Plains drought has dealt a blow to two other pillars of the region’s agricultural economy: winter wheat and cattle. An estimated 60% Drying Up Drought conditions are hitting one of the nation’s most fertile areas for wheat and cotton. Winter wheat and cotton crops, 2017 Drought conditions for the week ending May 8 Abnormally dry Moderate CO LO . Severe Extreme Exceptional KA N . OKLA. N.M. TEXAS 100 miles 100 km Sources: U.S. Drought Monitor; USDA THE WALL STREET JOURNAL. of the 4.7 million acres of winter wheat in Texas as of May 7 was considered “poor to very poor,” according to Texas Wheat Producers, a trade group, meaning the crops are likely unusable. Kansas, the top winter-wheat-producing state, is expected to have its smallest crop in almost 30 years. The economic ripples in Ochiltree County, Texas, is typical of what is happening across the southern Plains, said Scott Strawn, a Texas A&M agriculture extension agent. He estimated this county in the far northeastern corner of the Texas Panhandle this year could lose half of a wheat crop that is normally valued at as much as $20 million. “Look how bad this is—no roots,” Mr. Strawn said, pulling a shriveled stalk of wheat out of dried ground on a farm outside Perryton, Texas. Local ranchers have begun selling cows, which have grazed down what little grass is left. Reece E. Taylor said he may have to sell many of his 100 cows because they have grazed down the wheat crop he had used for forage on his 1,600-acre farm near Perryton. Three hundred miles south in Lamesa, Mr. Holladay tried to savor little victories like the recent drizzle that helped keep dust down on his 10,000acre farm. “I figure we’ll survive it,” Mr. Holladay said. “But it won’t be easy.” Homeless Services Authority. Homeless encampments have spread in L.A. in recent years, and city officials have sought to fund more affordable housing to combat the problem. But until now, there has been no comprehensive plan to build more shelters. “This is our Katrina,” said Jill Stewart, executive director of the Coalition to Preserve LA, a social-justice group that has opposed the mayor’s handling of the homeless issue. “Where are the shelters?” Under the mayor’s plan, the city would build out a more expansive shelter system, hoping to draw more homeless into temporary shelters until they get on their feet, and speed up affordable housing construction. Mr. Garcetti said people are falling into homelessness at a clip faster than the city can handle. He pointed to a convergence of factors—surging rents, the opioid crisis and lighter criminal penalties— that have pushed people onto the streets. “It is a bigger problem than it’s ever been,” Mr. Garcetti said. “We’ve had the right strategies, but we’ve never had the master plan, and we’ve never had the resources,” he said. The mayor has directed $430 million of the city budget to tackle homelessness, including allocating $20 million to City Council districts to build emergency shelters within a six-month window. The plan is a break from past policies that have focused largely on affordable housing. “We had to work to listen to people on the street and change our approach,” Mr. Garcetti said. ©T&CO. 2018 LOS ANGELES—Since taking office five years ago, Mayor Eric Garcetti has marketed this city as a model of how an American metropolis can dream big: wooing the 2028 Olympics, courting hightech companies and pushing for a “subway to the sea.” But last month, the mayor tied his political future to a goal that has long vexed policy makers here: housing the city’s homeless, which he publicly declared his “No. 1 issue.” Homelessness has exploded during his tenure, leaving Los Angeles with a fast growing population of people living in cars, parks and on the streets. Mr. Garcetti aims to get half of the more than 25,000 unsheltered homeless population into shelters or housing by 2022, his last year as mayor. The 47-year-old Democrat has made no secret of his interest in running for the presidency in 2020, and whether his new plan succeeds will bear heavily on his political future, critics and supporters say. “If there’s any hope of running for president, that’s the problem he has to fix,” said Sherry Bebitch Jeffe, a publicpolicy professor at the University of Southern California. Mr. Garcetti won his first election as mayor in 2013 on a “back to basics” pledge to fix potholes and improve trash pickup, and rode a wave of popularity into a second term last year. In recent months, he has raised his national profile, traveling the country, talking jobs, and taking aim at President Donald Trump. At home, he has come under pressure for not moving MARK RALSTON/AGENCE FRANCE-PRESSE/GETTY IMAGES BY NOUR MALAS AND ALEJANDRO LAZO FRESH FROM THE GARDEN INTRODUCING TIFFANY PAPER FLOWERS™ 800 843 32-9 | TIFFANY.COM . A4 | Monday, May 14, 2018 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 GOP’s Right Flank Gears Up for a Fight November headwinds bring competition to some House Freedom Caucus members BY KRISTINA PETERSON RICHMOND, Va.—The House Freedom Caucus, a group of the most conservative Republicans, doesn’t shy away from bucking the leadership or demanding ideological fealty. That stance could become a liability this year, as Republicans acknowledge they are facing political headwinds in the November midterms. At least five members of the roughly three dozen caucus members face competition in the midterm elections. That is a smaller percentage than within the whole House GOP, but Democrats need to net just 23 seats to retake control, and they are fighting for them everywhere. And, unlike many of the more centrist Republicans who are accustomed to battling Democrats, many of the most vulnerable Freedom Caucus members are running with less money in the bank and in districts where their deeply conservative voting records might not be welcome. In Pennsylvania, redistricting in February added more Harrisburg suburbs to GOP Rep. Scott Perry’s district, instantly tightening his race. There are four Democrats competing in Tuesday’s primary to take him on in November. In Virginia, both Republican Reps. Dave Brat and Tom Garrett face well-funded Democratic challengers. In North Carolina, freshman Republican Rep. Ted Budd is trying to expand his name recognition in a district he won two years ago after capturing a 17-way primary with just over 6,000 votes. And in Iowa, Rep. Rod Blum is working to keep his seat in a district that President Donald Trump won by less than four points. The Freedom Caucus’s chairman, Rep. Mark Meadows (R., N.C.) said he believes his colleagues will be rewarded for sticking to their principles, but he didn’t dismiss the competition. “Every member of Congress, not just Freedom Caucus members, are trying to prepare more,” he said. Last week’s primary elections highlight the challenges facing House Republicans. Two from Indiana lost the Senate primary to a businessman. Rep. Evan Jenkins lost the West Virginia Senate primary, and Rep. Robert Pittenger (R., N.C.) became the first incumbent this year to lose his own primary. In Mr. Brat’s district, which includes the suburbs of Richmond, both redistricting and demographic change are making the race more competitive. In 2013, former Democratic Gov. Terry McAuliffe picked up 38% of the vote in Mr. Brat’s district. Last fall, Ralph Northam, now the state’s Democratic governor, picked up 47% of the district’s support. Two Democrats are considered front-runners in the June 12 primary: former undercover Central Intelligence Agency agent Abigail Spanberger and Dan Ward, a retired Marine colonel who later worked for the State Department. Bill Landsidle, a Henrico, Va., resident and independent, voted previously for former GOP Rep. Eric Cantor but said he would be supporting Ms. Spanberger. Mr. Brat “is to the right of the right of the Republican Party,” he said. “He’s doctrinaire, and I don’t like doctrinaire people.” But Henrico resident Dana Smith, a Republican publicschool teacher supporting Mr. Brat, said the GOP-controlled Congress had put more money in his pocket through the new tax law. Trump’s Hard Line on Iran Could Test Alliances WASHINGTON—The Trump administration’s decision last week to pull out of the nuclear deal with Iran will create an economic policy challenge for the U.S.: How does it enforce sanctions that the rest of the world no longer backs? The White House last week announced a plan to reimpose economywide sanctions on Iran in two stages over six months, banning any financial or business dealings with blacklisted entities. Any non-Iranian bank, firm or person who violates that ban risks penalties themselves, including the possibility of losing access to U.S. markets and the ability to use the U.S. dollar in trade and finance. Few U.S. firms had re-entered the Iranian market after the 2015 nuclear accord gave Tehran sanctions relief across most of the economy in exchange for halting its nuclear development. But the rest of the world ramped up buying Iranian crude and restarted trade relations, pulling the Mideast economy out of recession. The world largely supported the sanctions regime used during the Obama administration, including America’s Western allies and China, a major pur- Economic Warfare Iranian oil exports surged as sanctions eased... ...but bank lending from rich countries has failed to recover... ...while the country battles double-digit inﬂation and unemployment $3.0 trillion $3.0 billion 40 % 2.5 2.0 1.5 Other France Italy Japan South Korea India China France Germany Italy South Korea U.K. Spain 2.5 2.0 1.5 1.0 1.0 0.5 0.5 30 20 Inﬂation 10 0 0 0 2013 ’14 Unemployment ’15 ’16 ’17 ’18 2012 ’13 ’14 ’15 ’16 ’17 2000 ’10 Sources: Kpler (oil exports); Bank for International Settlements (loan data); International Monetary Fund (unemployment and inﬂation) THE WALL STREET JOURNAL. chaser of crude from Iran. Now, all of the other parties to the 2015 agreement that President Donald Trump pulled the U.S. out of last week say they are committed to sticking with the accord. John Bolton, the White House national security adviser, said in televised appearances Sunday that European countries could face U.S. sanctions if they keep doing business with Iran. That means the U.S. may end up strong-arming European allies to abide by a sanctions regime they disagree with and challenging other world powers, such as China, that have proven reluctant to implement sanctions they say are unilateral and extraterritorial. Western allies alone account for more than 30% of Iran’s oil exports. Adding China and India brings that total to 80%. Some of Europe’s largest companies, including France’s Total SA and Airbus SE, have billion-dollar projects on the line with Iran. France’s financial system had $163 million in cross-border claims on Iranian banks in the last quarter of the year, according to the Bank for International Settlements. Lending to Iran by advanced economies fell under the old sanctions regime and never recovered even after sanctions relief, in part because banks were still wary of facing U.S. action. But there were signs it could pick up. According to the Iran Labour News Agency, the country’s Bank of Sepah collectively secured $10 billion in credit lines from three banks in South Korea, Austria and Denmark. All those transactions, from oil to shipping to finance, will be banned by the U.S. sanctions by early November. Treasury has some flexibility in whether to penalize countries and their firms. If a country has made “significant reductions” in oil purchases of crude over the next several months, the U.S. can issue an exemption from penalties. But issuing waivers and exemptions, or failing to penalize noncompliance, undermines the intent of the strategy: to pressure Iran to the negotiating table. Those actions also encourage others to flout U.S. sanctions, undermining Washington’s credibility. “The U.S. cannot prevaricate,” said Behnam Ben Taleblu, an Iran expert at the Foundation for Defense of Democracies, a think tank that has criticized the nuclear deal. If the U.S. falters, failing to penalize noncompliant European companies or banks, the U.S. casts doubt over its competence and capability to enforce sanctions. Even if Europe largely com- plies, other countries with foreign-policy aims often at odds with the U.S. may see an opportunity. Total, for example, is considering transferring its stake in a joint venture with the National Iranian Oil Co. to China National Petroleum Corp. The best-case scenario is that the Europeans and Americans are able to craft a new deal that addresses U.S. concerns over Iran’s nuclear development, missile program and support for regional proxies, said Jonas Parello-Plesner, a former Danish diplomat who is a senior fellow at the conservative Hudson Institute. “Worst-case, we have a spat around whether European governments try to protect their companies, do counterlegislation, or challenge it at the WTO,” he said, referring to the European Union’s use of the World Trade Organization’s to defy the U.S. embargo against Cuba in 1996. Despite a decadeslong U.S. embargo on Cuba, the world’s rejection of the U.S. position, including Europe, meant Washington wasn’t able to dislodge the Communist Castro government’s grip on the nation. Heard on the Street: Risk for French car makers in Iran....B9 TESLA Continued from Page One Elon Musk said he retook control of production. Tesla is at a critical juncture as it tries to produce enough of its mass-market Model 3 cars to generate cash to fund the business and instill confidence in investors that the company can move beyond being a niche-product maker. Excitement about Tesla’s ability to bring electric vehicles to the masses and then to develop autonomous vehicle technology helped push the company’s stock to record levels last year and give it a market value that rivals that of General Motors Co. But Tesla has struggled to crank up Model 3 output since it began last July in Fremont, Calif. It has twice delayed a critical goal of producing 5,000 Model 3s a week, more than double the pace the company said it reached at the end of the first quarter. Tesla now says it expects to make that many cars by around the end of the second quarter. Mr. Musk has said Tesla won’t need to raise more money this year, but the longer it takes Tesla to meet its production targets the “greater the financial risk,” said Efraim Levy, a senior equity analyst at CFRA Research. Tesla shares have fallen roughly 2.2% this year to $301.06. Tesla finished the first quarter with $2.7 billion in cash on hand, versus $3.4 billion at the end of last year. Analysts surveyed by FactSet predict the company will burn through $1.2 billion in the rest of the year. It will need to pay down a $230 million convertible bond this November if its stock doesn’t reach a conversion price of $560.64, and a $920 million convertible note next March if the stock doesn’t reach $359.87. Issuing new shares would dilute shareholders and likely drive down the share price, potentially rattling creditors and pushing up borrowing costs. And the falling price of Tesla’s unsecured bond means new debt could lead to significant added interest expense. Tesla also could sell convertible bonds, a hybrid of debt and equity that has been BRET HARTMAN/ASSOCIATED PRESS BY IAN TALLEY Matthew Schwall, shown in 2010 when he was a Toyota Motor executive, left Tesla for self-driving car company Waymo. the company’s favored means of raising cash in recent years. But that could prove more challenging. Many investors, such as hedge funds, will buy convertible bonds only if they can also bet against, or short, the issuer’s shares. But Tesla is now the most shorted stock in the U.S. by dollar volume, making it increasingly costly and difficult to borrow its shares, a necessary move for shorting. “If there isn’t enough stock available, or the rate is so high, the hedge becomes untenable,” said Ihor Dusani- Tesla has long been known as a difficult place to work, given its demanding CEO. wsky, managing director of predictive analytics at S3 Partners, who previously worked on the stock-loan desk at Morgan Stanley. Neither Mr. Schwall nor Mr. Field could be reached for comment. Waymo confirmed Mr. Schwall has begun working for the Alphabet Inc. unit. Tesla has long been known as a difficult place to work, given its demanding CEO, and key leaders have departed in the past year or so. In early 2017, Jason Wheeler left as chief financial officer after less than two years. He had previously been vice president of finance at Alphabet unit Google, and some Wall Street analysts thought he might be able to instill more conservative targets for the auto maker, which under Mr. Musk’s leadership have been wildly off. Mr. Wheeler was succeeded by Deepak Ahuja, a longtime Musk confidant who spent more than seven years as Tesla financial chief. Then, this past February, Jon McNeill, Tesla’s president of global sales, marketing and delivery and service, left to become chief operating officer at ride-hailing service Lyft Inc. In April, Tesla lost Jim Keller, the head of the company’s driver-assistance system called Autopilot, which can handle speed and steering in certain situations. That business has been hit with several departures, as Mr. Musk has pushed the team to put a self-driving car on the road. Tesla has also recently lost its corporate treasurer and chief accounting officer. Mr. Schwall, who was director of field-performance engineering, served as “primary technical contact” at Tesla with safety-regulation agencies including the NTSB and the National Highway Traffic Safety Administration, according to his LinkedIn biography. The NTSB last week opened its fourth investigation into a crash involving a Tesla vehicle after a Model S sedan veered off the road in Florida. The agency has said it was initially reviewing the emergency response to the vehicle’s battery fire that occurred after the crash. Tesla has said it hadn’t retrieved the vehicle logs but that it appeared it crashed at a very high speed and that Autopilot wasn’t engaged. . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A5 The future of wealth since 1818. . A6 | Monday, May 14, 2018 * * THE WALL STREET JOURNAL. WORLD NEWS New Embassy Clouds Peace Bid Early Vote Returns In Iraq Suggest Political Shake-Up JERUSALEM—The opening of the relocated U.S. Embassy here this week fulfills a campaign promise of President Donald Trump’s while dialing up tension around another administration goal: peace in the Middle East. Mr. Trump’s decision to relocate the embassy to Jerusalem from Tel Aviv has faced fierce criticism from European and Arab officials who say it could hamper any future peace negotiations. Palestinians are refusing to meet with representatives of the Trump administration and say they no longer recognize the U.S. as the main broker of peace talks with Israel. U.S. officials said they would press on with their still-secret plan to secure what Mr. Trump has called “the ultimate deal” for Middle East peace. The plan is mostly finished, they said, and the administration is seeking the right time and place to present it. “The peace process is most decidedly not dead,” Secretary of State Mike Pompeo said on Fox News on Sunday. “We’re hard at work on it. We hope we can achieve a successful outcome there as well.” U.S. officials have said recognizing Jerusalem as Israel’s capital reflects the reality on the ground. Israel’s parliament, the Knesset, and much of its government is in Jerusalem. The international community doesn’t recognize Jerusalem as Israel’s capital. In an interview that aired Sunday on ABC, White House national-security adviser John Bolton said the embassy location would help the peace process. “I think recognizing reality BY ISABEL COLES AND ALI NABHAN RONEN ZVULUN/REUTERS BY FELICIA SCHWARTZ A worker prepares for Monday’s opening ceremony at the U.S. Embassy compound in Jerusalem. always enhances the chances for peace,” he said. A peace deal has eluded Mr. Trump’s three most recent predecessors as president, and the most recent round of talks collapsed in 2014. The U.S. Embassy opening on Monday culminates nearly six months of preparations. The State Department spent about $400,000 to retrofit a consular building in Jerusalem’s Arnona neighborhood, straddling West Jerusalem and what is called No Man’s Land, a contested area that lies in between the 1949 armistice lines. Ahead of the opening, new road signs for the embassy appeared near the site. Israel captured East Jerusalem and the West Bank from Jordan in the 1967 Arab-Israeli war. Palestinians want East Jerusalem as the capital of a future state. The Trump administration has said the final boundaries of Jerusalem would be left up to final status negotiations. The embassy move exacerbated tensions with Palestinian leaders, with the Palestine Liberation Organization calling for protests on Monday at the new embassy. The issue of the U.S.’s recognizing Jerusalem has also drawn repeated condemnation from Arab rulers, including Saudi Arabia’s King Salman, Jordan’s King Abdullah and Egypt’s president Abdel Fattah Al Sisi, staunch U.S. allies. While the move announcement didn’t initially spark as much violence as predicted by some opponents of the move, it U.S. officials say they will press on with their plan to secure Mideast peace. has helped fuel protests in the Gaza Strip, where thousands of Palestinians have turned out each Friday at the border fence to call for their right to return to what is now Israel. So far, more than 40 Palestinian protesters have died in repeated clashes with Israel’s military. The Gaza protests are expected to culminate the day after Monday’s embassy opening, on what Palestinians call Na- kba Day, or Day of the Catastrophe, marking the day after the anniversary of Israel’s founding on May 14, 1948. Yahya Sinwar, leader of Hamas in Gaza, which controls the territory, suggested last week that more than 100,000 people could storm the fence. Nearly all European ambassadors skipped a reception Sunday evening in honor of the embassy move held by Israeli Prime Minister Benjamin Netanyahu. Representatives from 33 countries including Nigeria, Vietnam, Paraguay and Guatemala were there, and the latter two have said they would also move their embassies. Mr. Trump won’t attend Monday’s ceremony but will address the proceedings by video. The U.S. delegation is being led by Deputy Secretary of State John Sullivan and includes Mr. Trump’s son-in-law and senior adviser Jared Kushner, daughter and senior adviser Ivanka Trump and Treasury Secretary Steven Mnuchin. —Dov Lieber in Jerusalem and Kate O’Keeffe in Washington contributed to this article. MOSUL, Iraq—Voters appeared to deal a blow to Iraqi Prime Minister Haider alAbadi in this weekend’s election, giving surprisingly strong support to an unlikely coalition of communists and followers of populist cleric Moqtada al-Sadr in partial preliminary results. Mr. Sadr, a firebrand whose militias once fought openly with U.S. forces and were implicated in sectarian bloodshed, has since entered the political mainstream. His new alliance with Iraq’s communists did well in a contest in which many Iraqis stayed home and those who did vote said they wanted to shake up a political status quo known for corruption and bad governance. With preliminary results counted in 10 of Iraq’s 18 provinces, Mr. Sadr’s coalition came in first in four of them, including the country’s most populous city, Baghdad, and was near the top in all of them, according to preliminary results. Mr. Abadi’s coalition didn’t finish first in any of the provinces for which results were released, suggesting his chances of re-election may be slim even after his government led the country to victory over Islamic State last year. Neither Mr. Abadi’s coalition, seen as being implicitly supported by the U.S., nor Iran-backed groups were as successful as Mr. Sadr. The predominantly Shiite provinces for which results were released account for around one-third of the seats in Iraq’s parliament. The early results don’t necessarily mean that Mr. Sadr will become prime minister, a post chosen in a round of political horse trading between political parties after the vote. But the vote gives him a powerful voice in the coming negotiations. In recent months, Mr. Sadr has criticized Iranian influence in Iraq and received overtures from Saudi Arabia, a Sunni Muslim country that sees him as a possible bulwark against its rival Tehran. In 2016, Mr. Sadr was one of the few politicians with the ability to mobilize a protest movement against corruption that culminated in the storming of the fortified Green Zone and broke into parliament. His Sairun coalition was born from that movement. Mr. Abadi is expected to win more seats than his Shiite rivals in Sunni provinces that were occupied by Islamic State, for which results have yet to be announced. The outcome of the vote in the Kurdish north is also yet to be announced amid claims of fraud that may force a manual recount. —Ghassan Adnan in Baghdad contributed to this article. HAIDAR HAMDANI/AGENCE FRANCE-PRESSE/GETTY IMAGES Trump keeps his word to shift Israel mission to Jerusalem, but draws Arab, European criticism Moqtada al-Sadr’s new alliance with communists did well. • Dominating Basic Cable - 22 Consecutive Months in Total Day • Real News. . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A7 * * WORLD NEWS Three Indonesian Churches Are Bombed Indonesians gather at a vigil for victims of the bombings, carried out by members of a family suspected of supporting Islamic State. one of the attacks, the mother and her two daughters, ages 9 and 12, were killed when they detonated one or more bombs at the entrance to the Indonesian Christian Church, a Protestant church. He said he believed all three had bombs wrapped around their waists. In another attack, he said, two sons, 16 and 18, rode a motorcycle onto the grounds of the Immaculate Santa Maria Catholic Church and detonated a bomb. A witness speaking on local television said a volunteer security coordinator was killed when he tried to stop the two from entering the compound. The biggest blast was at Pentecost Church Central Surabaya, where police believe the father detonated a car bomb. Islamic State claimed re- China Tests First Aircraft Carrier BY TE-PING CHEN BEIJING—China’s first domestically produced aircraft carrier began sea trials, the latest step forward in the country’s quest to advance its military footprint. The carrier set out from Dalian in northeast Liaoning province on Sunday, China’s state-run news agency, Xinhua, reported. The trials are intended to test the reliability and stability of its power system, Xinhua reported. While China trails the U.S. in its technological capacity, Beijing is rapidly modernizing its forces under President Xi Jinping and has ramped up efforts to build a world-class navy that can safeguard its interests at home and abroad. On Sunday morning, China’s state broadcaster CCTV showed footage of the carrier on a gray day at sea. Hu Wenming, the aircraft carrier’s chief engineering commander, told the broadcaster that the newly launched vessel was smaller than the U.S.’s Nimitz class, which can sail longer without refueling and accommodate more planes. However, the launch was a sign that the country had the ability to build more similarly sized aircraft carriers in the future, and larger ones as well, the broadcaster said. The carrier’s sea trials come as China has continued to expand its military presence in the South China Sea, including runway construction and the recent deployment of military jamming equipment in the area, sparking concern among neighbors and in the U.S. In recent years, China has also dispatched ships and submarines deep into the Indian and Pacific oceans. “It’s raising the cost of an intervention, particularly by the U.S., in any conflict off China’s coast,” Michael Kovrig, senior adviser for North East Asia at the International Crisis Group, said of the carrier, citing China’s recent shows of force directed at Taiwan in particular. “It’s one more step in shifting the strategic balance in the western Pacific and in creating a Chinese sphere of influence.” China’s first aircraft carrier, the Liaoning, was based on the refurbished hull of an old Soviet model purchased from Ukraine in 1998. —Fanfan Wang contributed to this article. sponsibility for what it described as “three martyrdom operations.” Indonesia, the world’s largest Muslim-majority nation, has more than 25 million Christians, representing about 10% of the population, according to a 2010 census. President Joko Widodo called the attacks “barbaric“ and said he would “uproot the cells entirely.” Police placed Jakarta, the capital, on high alert as terrorism experts warned of more attacks, with extremists rallying followers ahead of the Muslim fasting month of Ramadan, which begins this week. The bombings come amid a wave of bloodshed largely targeted at police. Last week, inmates killed five officers in a 36-hour siege of a terrorist-detention center in Jakarta. Islamic State claimed responsibility for that uprising, the second at the jail since Aman Abdurrahman, the de facto leader of the group’s supporters in Indonesia, was transferred there last year to stand trial on charges of inciting followers to carry out attacks. Hundreds of Indonesians have traveled to the Middle East to support Islamic State, and authorities worry their influence and possible return could lead to new attacks, a concern shared by Indonesia’s neighbors. Last year, militants seized the Philippine town of Marawi for several months. —Anita Rachman and Joko Hariyanto contributed to this article. An Endorsement Undone TONY FERNANDES JAKARTA, Indonesia—A family of suicide bombers carried out coordinated attacks on three churches in the Indonesian city of Surabaya, police said, in the country’s deadliest act of terrorism in almost a decade. The attack Sunday on members of Indonesia’s Christian minority, claimed by Islamic State, comes amid a rise in extremist violence and security lapses in the country, where supporters of the Islamist group have sought to wage large-scale attacks. It was the first time children have been involved in a terrorist attack in Indonesia. Police said seven churchgoers and security personnel were killed and dozens were injured in the near-simultaneous morning bombings at the three churches in Surabaya, Indonesia’s second-largest city, on the island of Java. National Police Chief Tito Karnavian said the attackers came from a single family that had spent time in Syria in support of Islamic State. All six family members died in the bombings, police said. Mr. Karnavian said that in ROBERT RIZKY/EPA/SHUTTERSTOCK BY BEN OTTO AND I MADE SENTANA AirAsia chief Tony Fernandes apologized for ‘buckling’ to government pressure to support former Prime Minister Najib Razak, who lost last week’s election in Malaysia, where political connections often determine whether businesses succeed or fail. • Number One in all of Cable News – 196 Consecutive Months • Real Honest Opinion. Source: Nielsen, Live+SD, FNC #1 Cable News Network for 196 consecutive months in M-S Total Day (6A-6A) and Prime (8P-11P) with P2+ (Jan’02-April’18). FNC #1 for the month in M-S total day (6A-6A) now 22 months in a row in basic cable with P2+ (July’16-April’18). Subject to qualiﬁcations which will be made available upon request. . A8 | Monday, May 14, 2018 THE WALL STREET JOURNAL. * ***** WORLD NEWS Lights Going Out in ‘Desperate’ Caracas Just 15 years ago, Venezuela’s capital was one of Latin America’s jewels CARACAS, Venezuela—The young family bought their dream home six years ago, a five-bedroom triplex with marble floors in a luxurious building with a swimming pool in this city’s fashionable La Castellana district. They paid $1.5 million, including renovations, for the penthouse apartment, according to the real-estate company that handled the deal, and got a 360-degree view over Caracas, for decades one of Latin America’s most expensive urban gems. No more. This city is unraveling fast: Water doesn’t reach most homes, mass transit is grinding to a halt and businesses are closing in the face of hyperinflation expected to top 13,000% this year. Shotgun-toting troops wearing camouflage and balaclavas run checkpoints. Cash is so scarce people can’t pay for the smallest necessities like bus fare. Last year, the family fled their apartment in La Castellana, sold it for a third of what they paid and moved to the U.S. Since then, the exodus from this city has only accelerated, as Venezuelans escape an increasingly authoritarian government and an economy that has contracted by 40% in five years. Few here see much hope for change as President Nicolás Maduro seeks re-election in a WIL RIERA FOR THE WALL STREET JOURNAL BY RYAN DUBE An empty Palos Grandes area of Caracas. The city is unraveling under an authoritarian government and a crumbling economy. vote on May 20 that the U.S. and other governments say will be rigged. “There are an enormous number of properties [for sale] because everyone wants to leave,” said Aura Corzo, who was a real-estate agent here until fleeing to Colombia recently. “They’re desperate to go.” Just 15 years ago, Caracas was one of Latin America’s most modern capitals, home to the region’s tallest skyscrapers, a sleek subway system and a university campus described by Unesco as a “mas- terpiece of modern city planning.” Its museums displayed works by Pablo Picasso and Luciano Pavarotti performed at the renowned Teresa Carreño theater. Some Venezuelans dined here at world-class restaurants, sipped imported whiskey and flew to Paris on the Concorde to shop. Now, the city’s lights are going off. “Living in Caracas is hellish and inhumane,” said Ángel Luis Lecuna, 32, a lawyer who has seen 10 relatives flee Venezuela. “It’s so bad it makes you think the government is open sewer searching for scraps of metal to sell. State employees, unable to get to their offices because of a dilapidated transportation system, are increasingly abandoning work; their salaries have been rendered all but worthless by inflation anyway. Yulimar Toala, 26, says the lack of means to pay for the bus has left her unable for weeks to show up at work or take her two small boys to school. “Oh, dear, this city isn’t the same,” she said. “I used to go out. I could give things to my being negligent just to humiliate us.” Most international flights have been canceled, leaving the airport’s runways nearly empty. The Teresa Carreño, now a theater in decay, is used for Socialist Party rallies. And the once bustling nightlife has gone quiet in a city with roving bands of kidnappers and one of the world’s highest murder rates. In today’s Caracas, malnourished families rummage through garbage for food, and young men wade into a toxic NORTH KOREA BY JONATHAN CHENG AND YUN-HWAN CHAE Continued from Page One with their political class. The old center-right and center-left parties that built today’s EU are losing popular support across most of the Continent, as new rivals seize on voter frustrations including unemployment and fears about societal cohesion amid largescale immigration from the Middle East and Africa, which has brought 750,000 migrants to Italy since 2011. The main beneficiaries are politicians who argue self-serving elites are robbing ordinary people of their livelihood or cultural identity—a narrative political scientists call populism. While many of Europe’s rising populists are on the nativist right, others have roots in the anticapitalist left. Some—notably the 5 Star Movement—are an ideological hodgepodge united by their claim to offer a new politics. In a continent battered by a decade of crises, es- YONHAP/NEWSCOM/ZUMA PRESS North Korea said it would dismantle its nuclear test site in less than two weeks, an event that would set up leader Kim Jong Un’s summit with President Donald Trump in June. Pyongyang plans to destroy all the tunnels at its northeastern testing ground with an explosion and remove observation and research facilities and ground-based guard units, the Foreign Ministry said. “A ceremony for dismantling the nuclear test ground is now scheduled between May 23 and 25,” depending on weather conditions, the ministry said. The announcement comes days after the U.S. said the summit between Messrs. Kim and Trump will be held June 12 in Singapore. —Associated Press South Korean marines return to their barracks in Pohang after a joint drill with U.S. troops. has raised questions in recent months about the terms of the U.S. relationship with South Korea. He has said Seoul should pay for a $1 billion U.S. missiledefense system, and threatened to abandon their bilateral freetrade pact. This month, Mr. Trump said that “troops are not on the table,” but added: “At some point into the future, I would like to save the money.” Lawmakers in Seoul have argued for years that the U.S. is getting a better deal on its Korean bases than it might appear. Figures from the South Korean Defense Ministry and U.S. budget appropriations often tablished parties have often tried to copy such insurgents’ policies or to enlist them as junior governing partners. In Italy, however, antiestablishment groups are poised to take power on their own for the first time in one of the EU’s major countries. The reasons aren’t hard to find: Italy has yet to recover fully from the global financial crisis. Industrial output and business investment remain depressed, bad loans burden banks, youth unemployment is among the highest in Europe, and many educated people are emigrating. Years of austere fiscal policies have shored up the budget but further alienated voters. High undocumented immigration from Africa and the Middle East has piled cultural angst on economic woes. It wasn’t clear late Sunday how the parties would tackle irregular immigration, which was a major election issue. The League has called for faster deportations of undocumented immigrants who don’t qualify for asylum, which would require reaching agreements with countries of origin to take them back. The status quo’s most effective critics, the 5 Star Movement and League, together won just over 50% of the vote in Italian parliamentary elections in March. Italy has been without a government since then because of the parties’ tactical and policy differences. With new elections looming, the two populist groups overcame the impasse in recent days. The parties won the elections by offering opposite kinds of fiscal largess. The 5 Star Movement pledged to introduce a universal basic income aimed at protecting the poor and unemployed, winning widespread support in Italy’s economically blighted south. The League proposed a flatrate income tax of 15%. Both parties vowed to scrap or dilute an unpopular pension overhaul from 2011 that steadily raises the retirement age. Economists say the parties’ fiscal promises, if enacted in full, would greatly add to It- show Seoul’s contribution at less than half—as low as 42% of the combined $2 billion stationing cost this year, by one standard measure. The calculation is “unfair” because it doesn’t incorporate land-rent waivers Seoul grants the U.S. military, said Kim Jong-dae, a lawmaker with the left-leaning Justice Party. “It leaves all the big parts out.” Lee Jae-myung, a former mayor who rose to prominence last year as an upstart challenger for the presidency, has calculated South Korea’s share at 77% and called for Seoul to cut its contribution. He declined to comment for this article. 5 Star leader Luigi Di Maio aly’s budget shortfall, likely breaking EU rules that cap deficits at 3% of gross domestic product. Italy’s public debt, at 132% of GDP, is the EU’s highest after Greece. It isn’t clear how fast or how fully the expected new government will implement the promised measures. So far, financial markets have reacted calmly to the prospect of a 5 Star-League government. man had been flagged as a potential terror risk in one of France’s security databases, where the government keeps the names of thousands of people who have expressed sympathy for radical Islam. Islamic State claimed responsibility for the assault. —Matthew Dalton BURUNDI Attack Ahead of Vote Leaves 26 Dead A French national of Chechen origin stabbed a person to death in central Paris on Saturday and wounded four others, in an assault that investigators were treating as a terrorist attack. Police shot and killed the man shortly after the attack, French authorities said. Paris prosecutor François Molins said the man yelled “Allahu akbar!”—“God is great” in Arabic—during the stabbing. A judicial official said the Twenty-six people were killed and seven others wounded in an attack by an unidentified group in rural Burundi, the country’s security minister said Saturday. The attack came shortly before Burundians vote May 17 in a referendum that could extend the president’s term. It wasn’t immediately clear if the attack was related. Security Minister Alain Guillaume Bunyoni said 24 people were killed in their homes Friday night and two others died of their wounds at a hospital. He gave no further details about the attack in Ruhagarika community in the northwestern province of Cibitoke. Burundi has seen deadly political violence since early 2015 when President Pierre Nkurunziza successfully pursued a disputed third term. He later survived a coup attempt by army and police officers, including some who fled and announced they had launched a rebel group against the government. —Associated Press For now, the European Central Bank’s interventions in bond markets in recent years have removed fears of capital flight from indebted Southern European countries. But a sharp Italian departure from EU commitments to fiscal discipline could cast doubt on the ECB’s willingness to keep markets steady. Mr. Di Maio, 5 Star’s 31-yearold leader, has tried to reassure Italians, investors and the EU that his party would behave prudently in government, countering critics’ charge that it is more suited to rabble-rousing than running the state. Mr. Di Maio said a 5 Star-led government would maintain budget discipline and stay within EU rules. His prospective junior partner, League leader Matteo Salvini, continues to say he would break EU fiscal rules if they are hurting Italians. “Populists are normal people,” said Alberto Bagnai, a member of Italy’s Senate for the League. “They have a defect: They love their country and look with great sorrow at the problems caused by the economic policies of recent years.” Mr. Bagnai, an economist strongly critical of the euro, said the common currency remains a bad idea—but the League won’t push to leave it. “Our top priority is growth. Exiting the euro is not at the top of our list of priorities.” In Italy, the prevailing mood is that it is time to try something new. “The flat tax is an interesting proposal,” said Beppe Fumagalli, chief executive of homeappliance maker Candy Group. Although he doubts it can be enacted in full, given Italy’s financial reality, he said: “Anything that leads to simplification is positive.” The prospective coalition is “a jump in the dark,” Mr. Fumagalli said. “But I think these parties are reaching a certain political maturity. These groups seized on the desire for change, and how they have to translate that into policies.” —Eric Sylvers in Milan contributed to this article. FRANCE Paris Attacker Was Flagged as Risk MAULE/FOTOGRAMMA/ROPI/ZUMA PRESS ITALY Pyongyang Plans to Destroy Nuclear Site of South Korean land for its military bases—costs borne by Seoul that aren’t included in either side’s recent published financial assessments. South Korea, like Japan, relies on the U.S. security umbrella to contain regional threats. The country hosts more than 20 U.S. bases and 28,500 U.S. troops, who enjoy a strategic location on the Asian mainland. Mr. Trump has said “we get practically nothing” for the roughly $1.2 billion a year the U.S. spends to station forces there, and has said allies should pay 100% of costs. More broadly, Mr. Trump Heard: Venezuela’s oil meltdown worsens................. B9 WORLD WATCH U.S. Gets South Korea Rent Break SEOUL—President Donald Trump’s demand that South Korea foot more of the cost for basing U.S. troops on the peninsula reflects calculations that leave out one of Seoul’s biggest contributions to the American presence: rent-free land. U.S. and South Korean officials are set to meet in Washington on Monday for a third round of negotiations on costsharing terms. The White House’s push for better terms in its agreements with Seoul comes at a critical time for the alliance. Since the leaders of North and South Korea met in April—and ahead of a June 12 meeting between Mr. Trump and North Korean leader Kim Jong Un—senior officials and advisers in Washington and Seoul have raised the possibility that U.S. troops might be withdrawn from South Korea in the event of a peace treaty. South Korean officials have been quick to swat down the possibility of a withdrawal, and Mr. Trump’s new nationalsecurity adviser, John Bolton, had warned before joining the administration in April that a failure of denuclearization talks could open the door to allied military action against Pyongyang. The Pentagon aims for host nations to bear half of stationing costs, which exclude soldiers’ wages. A 1966 agreement grants the U.S. free use kids. I could buy them shoes. Now, I can’t buy them anything.” Particularly vexing to Caraqueños, as residents here are known, is the breakdown in services. Garbage piles up on streets. Streetlights are out, leaving many of the city’s byways in total darkness at night. The city’s decrepit waterworks has largely broken down, creating the cruel irony of a lack of water in a country replete with rain forests and raging rivers. As Mr. Lecuna’s neighborhood enters its third month without water, he says he has to skip work so he can visit friends and relatives in other parts of the city to load plastic jugs with water. “It’s draining to live this way,” he said. Those who say they can no longer withstand the hardship are selling homes at a fraction of what they paid, desperate for cash to start fresh elsewhere. A 66-year-old therapist remembered falling in love with her three-bedroom apartment when she first walked into the hilltop building on a quiet, residential street more than 40 years ago. She recently turned down an offer of $150,000—less than what she paid for the place in 1975. “The country I grew up in is no more,” she said. “It will take at least two generations to get the country back on its feet. I don’t think I’ll see it in my lifetime.” —Maolis Castro, Kejal Vyas and Juan Forero contributed to this article. . THE WALL STREET JOURNAL. NY Monday, May 14, 2018 | A9 CYBER SOLUTIONS PROTECTING EVERY SIDE OF CYBER Raytheon delivers solutions that help government agencies, businesses and nations protect critical information, systems and operations across every side of cyber — to make the world a safer place. Raytheon.com/cyber @RaytheonCyber Raytheon Cyber © 2018 Raytheon Company. All rights reserved. . A10 | Monday, May 14, 2018 THE WALL STREET JOURNAL. * *** IN DEPTH COHEN Mr. Cohen repeatedly pitched Uber, which said no, citing Mr. Cohen’s ownership of New York taxi medallions as a potential conflict of interest with the ride-hailing firm, a person close to the company said. He modified his pitch in response those objections, reminding the company he was “the president’s lawyer,” this person said. The company, this person said, was “bemused.” Severe losses on his New York City taxi investments had, in fact, fueled Mr. Cohen’s desire to make money from his ties to the president. A friend described his financial situation as “precarious” and said Mr. Cohen was having trouble maintaining his family’s upscale Manhattan lifestyle. “I want you to know I’m looking out for deals,” Mr. Cohen told his friend Mark Cuban in April 2017 as he pitched the owner of the Dallas Mavericks on hiring a health-industry firm Mr. Cohen took on as a client, according to Mr. Cuban. “Michael is a hustler,” Mr. Cuban said. “That’s who he is, that’s what he does.” Mr. Cohen didn’t register himself as a lobbyist, which wasn’t required provided he only gave companies advice and didn’t seek to influence policy on Capitol Hill or in the White House. His clients largely remained quiet about having added him to their payrolls. Lobbyists connected to the companies that hired Mr. Cohen said they were unaware their clients had done so. His successful consulting deals were made through Essential Consultants LLC, the same company he had used months earlier to arrange a secret pay- U.S. Chamber of Commerce $82.2 million National Association of Realtors 54.5 Business Roundtable 27.4 Pharmaceutical Research & Manufacturers of America 25.8 Blue Cross/Blue Shield Continued from Page One Not so fast. Lushan’s bid to be the center of meat-rock culture is landing with a thud with collectors in other parts of China whose rocks also resemble meat. They say Mr. Jiang’s classification system favors Lushan’s rocks. “Of course we object,” says Zhang Yaowen, 59, a meat-rock collector in a north China county also vying for recognition. “If Lushan wants to spread their standard throughout the country, that’s not possible.” More is at stake than bragging rights. Lushan and other local governments hope meat rocks will draw investment and tourists. Across China, various governments seeking both have seized on monikers ranging from “Land of Donkey-Hide Gelatin”—a traditional Chinese remedy—to “Land of Big Drums,” which a southern region known for its plus-size drums has embraced. Development has lagged in Lushan, a mountainous region where farmers hawk mushrooms and honey roadside. “Meat rocks 22.1 American Medical Association 21.5 Alphabet 18.1 AT&T 16.8 Boeing Michael Cohen, who tried to launch a Washington consulting business, arrives at Capitol Hill in 2017. ment of $130,000 to former adult film star Stephanie Clifford, professionally known as Stormy Daniels, in exchange for her silence about an alleged sexual encounter with Mr. Trump. He denies the affair. When contacted by the Journal for this article, Mr. Cohen said in a written statement: “These falsehoods and gross inaccuracies are only being written in the hopes of maligning me for sensationalistic purposes. The truth will prevail and will ultimately be proven in court and not by pundits.” He didn’t respond when asked what he was disputing. It is common for people close to a new administration to offer their services based on their proximity to power. “The more you can be seen as an intimate of the president, the more important you become to prospective clients,” said Tom Daschle, the former Senate Democratic leader and head of a company that provides strategic counsel to large companies and other clients. Last month, federal prosecutors raided Mr. Cohen’s properties as part of an investigation into possible bank fraud and campaign-finance violations in his efforts to raise cash and conceal negative information about Mr. Trump during the 2016 campaign, according to people familiar with the matter. Mr. Cohen has denied wrongdoing. The investigation, being led by the U.S. Attorney for the Southern District of New York, stemmed in part from Mr. Muel- Ford’s Ziad Ojakli, right, was queried over Mr. Cohen’s approach. MEAT 24.3 American Hospital Association are a resource we can develop to promote the economy,” says Xing Chunyu, vice-chair of a local political advisory body. Nationwide, prices for meatrock specimens have boomed, helped in part by the country’s state broadcaster, which in recent years has aired multiple segments spotlighting meat rocks. Stones bearing the most striking resemblance to meat can sell for thousands of dollars. “Everyone can appreciate meat rocks,” says Yuan Ziming, a collector from the northeast city of Tianjin who, like many, prefers to photograph his treasures on plates with real vegetables to boost their verisimilitude. (He also has a favorite stone that resembles a potato.) Lushan’s guidelines, which were published by the provincial government late last year, classify meat rocks into more than a dozen subcategories. These include definitions for what kinds of rocks look like beef, bacon and chicken and suggest stones should appear to have fatty meat, lean meat and skin, with pores, to be considered highquality. Rocks are graded on a 100-point scale. Few places may be able to match all those attributes, crit- ler, who is probing Russian meddling in the 2016 election and whether the Trump campaign colluded with Moscow. The president has denied any collusion and Moscow denies meddling. A spokesman for Mr. Mueller’s office declined to comment. From the campaign days, Mr. Cohen made an effort to establish his reputation as a confidant of Mr. Trump, whom he referred to as “the boss” regardless of whether he was speaking to the president or to others, according to people familiar with the matter. In the first weeks after the election, Mr. Cohen maintained an office in Trump Tower in ‘I’m not being fairly compensated,’ Mr. Cohen said of his law-firm deal. New York, close to the transition offices. On Jan. 18, 2017, two days before the inauguration, he announced in a Fox News interview that he was leaving the Trump Organization, where he had worked since 2007, to serve as Mr. Trump’s personal lawyer. By that time, however, he knew he wouldn’t achieve his biggest goal: a prominent role in the new White House, where he hoped he would serve as chief of staff. Mr. Cohen doesn’t appear to have played a major role early in the administration as the president’s personal legal counsel, despite his new title. Several current and former White House officials said they don’t recall ever dealing with Mr. Cohen in that capacity. Mr. Cohen soon began saying he was “going to build up a huge practice” finding investments for clients, said one associate. “He’d use words like, ‘Big guys are going to hire me.’ ” Mr. Cohen began trying to strengthen his relationships with others in Mr. Trump’s orbit, including Donald Trump Jr., the president’s eldest son who was serving on the transition team, and Elliott Broidy, a top Trump fundraiser who was serving on the inaugural comics of Lushan’s standards say. Some, like Liuzhou, in the south, carve their rocks, which purists like Mr. Jiang frown on. Size also matters in Lushan’s standards. “Some claim their rocks are pork shoulders, but they aren’t even as big as a fist!” says Mr. Jiang. China’s appreciation of meat rocks is centuries old, part of a tradition among scholars and connoisseurs who seek out stones in the service of meditation or beauty, prized for their resemblance to everything from mountains to mythical creatures. In the case of meat rocks, the stones contain varying degrees of quartz and silica; highiron content in some brings out a reddish hue. Riverbeds and hot springs add polish to the finishes. The world’s most famous meat rock is a piece of jasper carved to resemble a slice of braised pork belly. A gift to a Qing Dynasty emperor some 300 years ago, it rests on a gold stand in Taiwan’s National Palace Museum and is featured on postcards and museum memorabilia. Many Chinese meat-rock collectors say Taiwan’s meatshaped stone is inferior to local mittee, according to people familiar with the matter. In January, Mr. Cohen signed two of the wealthy donors to the president’s inaugural committee as his clients: AT&T and the investment management firm Columbus Nova. AT&T had donated $2 million to the inauguration; Columbus Nova CEO Andrew Intrater had donated $250,000. Mr. Cohen solicited Mr. Intrater’s donation, according to a person involved in the inauguration. Columbus Nova’s biggest investor is a company called Renova Group that was founded by Russian oligarch Viktor Vekselber, Mr. Intrater’s cousin and one of the richest men in Russia, who has close ties to the Kremlin. At Mr. Intrater’s invitation, Mr. Vekselberg attended inauguration festivities, where Mr. Cohen networked with the crowd and spent time with Mr. Intrater, according to people who witnessed his interactions. He pitched potential clients on what he said was his ability to help them understand the administration, according to people familiar with the strategy. AT&T agreed to pay him $50,000 a month. Columbus Nova paid $500,000 last year. “It was never that he could talk to Trump” about a client’s particular policy interests, one person familiar with Mr. Cohen’s pitch said. “It was more that he could decipher what the orbit was thinking because of his long-term relationships and understanding of how the president operates.” In February 2017, Mr. Cohen began discussing with Mr. Broidy, a venture capitalist who had helped raise money for Mr. Trump during the campaign, the possibility of going into the foreign-consulting business together, and told associates about those plans, according to people familiar with his discussions. A spokesman for Mr. Broidy denied there were any plans to work together. That partnership didn’t pan out, but Mr. Cohen kept trying, the people said. He proposed pitching foreign governments, including from the Middle East and Asia. One of his early clients, Swiss drugmaker Novartis, paid Mr. Cohen $100,000 a month for a year, even after a March 2017 meeting in which it determined the attorney’s services wouldn’t 16.7 Open Society Policy Center 16.1 DowDuPont 15.9 Growing frustration National Association of Broadcasters As 2017 passed, Mr. Cohen grew frustrated with his lack of access to the administration. In calls with associates of the president, Mr. Cohen often asked: “Have you heard from the boss?” One person who saw Mr. Cohen at a restaurant over the winter said Mr. Cohen voiced unhappiness about the state of his relationship with Mr. Trump, complaining that the president was “not calling him and not helping him,” this person said. In November, he landed another client, Korea Aerospace Industries Ltd., which said it hired him to provide “legal consulting concerning accounting standards on production costs.” Mr. Cohen proposed to associates pitching foreign governments and companies with a big U.S. presence, including Samsung Electronics Co. Samsung says it wasn’t approached. “I’m going to try to go out and get as many foreign clients as I can,” one former associate recalled him saying. Toward the end of the year, Mr. Cohen’s Washington efforts started to unravel. AT&T and Novartis have since called hiring him a mistake. In March, Mr. Cohen confided in friends that he felt undervalued by Mr. Trump and questioned whether he should continue his work as lawyer for the president, said a person familiar with the matter. About a week later, Mr. Cohen’s ambivalence seemed to have vanished. He called associates seeking contributions for a legal-defense fund for White House aides who had been subpoenaed by investigators, the person said. A person familiar with the fund said Mr. Cohen was never asked to raise money for it, and didn’t do so. Less than a month later, the FBI raided his home, a hotel room where he and his family were staying temporarily and his office at Squire Patton Boggs. The law firm, which had notified Mr. Cohen earlier in March that it was terminating his contract, announced the split that day. —Michael C Bender, Drew FitzGerald and Julie Bykowicz contributed to this article. 15.5 Comcast 15.3 Lockheed Martin 14.5 Source: Center for Responsive Politics THE WALL STREET JOURNAL. be useful. Monthly retainers for such services in Washington typically run from $15,000 to $30,000, lobbyists say. In April 2017, Mr. Cohen signed a consulting contract with 4C Health Solutions, a Virginia-based startup. David Adams, the chief executive of 4C, previously told the Journal he met Mr. Cohen through another consultant. Mr. Adams said last month that the company, which agreed to pay Mr. Cohen 5% of business he generated, hadn’t paid Mr. Cohen in connection with the contract because he hadn’t brought in any business. Mr. Cohen’s deal with law and lobbying firm Squire Patton Boggs was for $500,000 a year, and gave him a cut of any fees the law firm collected from clients he referred. Among the five clients he delivered to the firm was U.S. Immigration Fund LLC, a company with ties to Mr. Kushner. The Florida company connects businesses with foreign investors through a U.S. visa program. A friend of Mr. Cohen said that Squire Patton Boggs worked “hand in hand” with Mr. Cohen, and the firm’s leaders “paraded him around like a model” for many of their clients. Mr. Cohen had an office in the firm’s Rockefeller Center space in New York. He exchanged pleasantries with other lawyers in the hallway, but his office door was closed about 90% of the time, said one person close to the firm. At Mr. Cohen’s request, Squire Patton Boggs installed a lock on his door for which only he had the key, the person said. About his relationship with the president, he told lawyers at the firm he could call “the boss at any time,” the person said. YUAN ZIMING Uber pitch Top lobbyists by 2017 spending PABLO MARTINEZ MONSIVAIS/ASSOCIATED PRESS (2) Continued from Page One More fortunate are the dozens of Fortune 100 companies who, when contacted by The Wall Street Journal, said they hadn’t received any overtures from Mr. Cohen or had any contact with him. Mr. Cohen’s pitch was blunt. He would tell prospective clients—large corporations worried about their lack of connections to President Donald Trump’s incoming administration—that he didn’t know who was advising them, but that they “should fire them all,” a person familiar with Mr. Cohen’s approach said. “I have the best relationship with the president on the outside, and you need to hire me,” Mr. Cohen told them, according to this person. People close to the White House say there was little contact between the two and, unlike other longstanding advisers to the president who wandered in and out of the White House in the early weeks, Mr. Cohen was more often found at the bar and restaurant of the new Trump International Hotel in Washington. Over time, Mr. Cohen became frustrated with the relationship, telling one associate he believed he deserved more money, because Squire Patton Boggs was capitalizing on his ties to the president to sell clients on the firm. “Every one of these motherf—ers is going around the world and using my relationship in order to acquire clients, but I’m not being fairly compensated,” the associate recalled Mr. Cohen saying. The firm declined to comment on Mr. Cohen remarks. He told associates he wanted to seek partnerships with other consulting and lobbying firms, including Baker Botts and FTI Consulting, both international firms, according to people familiar with the matter. Both firms said they weren’t aware of talks with Mr. Cohen and never entered partnerships with him. Lobbying Leaders A collection of meat rocks on platters, arranged banquet style. specimens. Taiwan’s stone “doesn’t have any lean meat,” notes Mr. Zhang, the collector from northern China. By contrast, he says, stones from his county, Kangbao, contain darker stripes of lean meat, as well as pale stripes suggesting succulent layers of fat. They are deeper in color, Mr. Zhang says, than those found in Lushan. Like other enthusiasts, he is fond of reminiscing about the first time he saw meat rocks, in his case back in the countryside in 1981: “It was like the whole field was covered with pieces of pork!” Drafting Lushan’s rock standards wasn’t easy, says Mr. Jiang, 65. The task involved heated debates over nomenclature, including whether the rocks should be referred to as “meat rocks”—as they have long been called—or “meat-shaped rocks.” The latter, he says, won out: “It sounds more scientific that way.” He says Lushan’s standards can be a reference point for others but aren’t intended to be prescriptive. Huang Weiping, from Liuzhou, says meat rocks shouldn’t have any standards at all, and that they are firmly a matter of taste. While Liuzhou’s rocks wouldn’t hold up well by Lushan’s standards, given that they are carved, he says that doesn’t diminish their quality. “For those who’ve just begun playing with meat rocks, ours are very good for their price.” He boasts of their deep red color, saying that they look like raw meat. “Cooked-meat rocks aren’t so appealing, they aren’t so bright and beautiful,” he says. Back in Lushan, meat-rock aficionado Liang Peng says he hopes their stones can help put the county on the map. In 2015, he founded the China Lushan Meat-Rock Museum, where slabs of rocks—some the size of small boulders—sit carefully plated inside glass cases. It sees a slow trickle of visitors, mostly meat-rock enthusiasts from elsewhere in China. “We aren’t a big city like Beijing or Shanghai,” Mr. Liang says. “But our meat rocks are the country’s finest. We should be proud.” —Kersten Zhang contributed to this article. . THE WALL STREET JOURNAL. May 22, 2018 Monday, May 14, 2018 | A10A NY | Four Seasons Hotel | Washington, D.C. How innovation is revolutionizing the business of health This spring, the editors of The Wall Street Journal will convene experts from across the health and health-care industries to focus on the innovations transforming this critical sector. SPEAKERS Scott Gottlieb, M.D. Commissioner, U.S. Food and Drug Administration Rear Adm. Anne Schuchat, M.D. Acting Director, Centers for Disease Control and Prevention Steven H. Collis Andrew Bremberg Chairman, President and CEO, AmerisourceBergen Corporation Assistant to the President and Director, Domestic Policy Council, The White House Mark T. Bertolini Alex Gorsky Chairman and CEO, Aetna Inc. Chairman and CEO, Johnson & Johnson David A. Ricks Mary E. Klotman, M.D. Chairman and CEO, Eli Lilly and Company Dean, School of Medicine and Vice Chancellor for Health Affairs, Duke University Michael A. Mussallem Steven J. Corwin, M.D. Chairman and CEO, Edwards Lifesciences President and CEO, NewYork-Presbyterian Anthony S. Fauci, M.D. Regina M. Benjamin, M.D. Director, National Institute of Allergy and Infectious Diseases, The National Institutes of Health Founder and CEO, BayouClinic, Inc. Peter B. Bach, M.D. Alexis Borisy Director, Center for Health Policy and Outcomes and Faculty Member, Department of Epidemiology and Biostatistics, Memorial Sloan Kettering Cancer Center Partner, Third Rock Ventures George M. Church, Ph.D. Stephanie Domas, P.E.,C.E.H. Professor of Genetics, Harvard Medical School Vice President of Research, MedSec Surgeon General of the United States (20092013) Director, PersonalGenomes.org Thomas McLellan, Ph.D. David N. Osser, M.D. Co-Founder and Scientiic Director (19922015), Treatment Research Institute Associate Professor of Psychiatry, Harvard Medical School Deputy Director and Senior Scientist (20092011), White House Ofice of National Drug Control Policy Attending Psychiatrist, Domiciliary Treatment Program for Homeless Veterans, Veterans Affairs Boston Healthcare System Eric Topol, M.D. Sarah E. Wakeman, M.D. Founder and Director, Scripps Translational Science Institute, Professor of Molecular Medicine and Executive Vice President, The Scripps Research Institute Medical Director, Substance Use Disorders Initiative, Massachusetts General Hospital Feng Zhang, Ph.D. Daphne Zohar Core Institute Member, Broad Institute of MIT and Harvard Co-Founder and CEO, PureTech Health plc. Assistant Professor of Medicine, Harvard Medical School PROUDLY SPONSORED BY: Request your invitation: healthforum.wsj.com © 2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6495 . A10B | Monday, May 14, 2018 NY THE WALL STREET JOURNAL. Turn one lunch into a bunch. $15 helps make 60 happy tummies. May 14-18, be a part of Skip Lunch Fight Hunger. r Donate the cost of your lunch and join thousands of New Yorkers helping to fuel City Harvest’s work delivering fresh, nutritious food to the nearly 365,000 children facing hunger in NYC. Help us feed NYC’s children. Donate at CityH CityHarvest.org/SkipLunch #S SkipLunchFightHunger . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A10C NY * * ADVERTISEMENT Workspace That’s Flexible, Beautiful, and Human wework.com GREATER NEW YORK Candidates for Job Of Temporary AG To Face Legislators A ‘glamping’ site is being built on a part of Governors Island, the latest effort to draw more visitors and make the park self-sustaining. Taming Governors Island BY MELANIE GRAYCE WEST It isn’t much more than a dirt lot with wood platforms right now, but in less than a month’s time Governors Island will host guests willing to pay as much as $500 a night to stay in luxury tents with hotel amenities and views that can’t be matched. The “glamping” experience will include king-size beds, rain-style hot showers, farmto-table dinners, morning yoga and evening s’mores. Sometime during the summer, the camp will add shipping containers refashioned as hotel rooms that can be used 365 days a year. “I think of it as a sleepover on a private island,” said Peter Mack, the chief executive of Denver-based Collective Retreats, which will operate the campsite. Over the years the 172-acre oasis off the southern tip of Manhattan has been a military property used to store artillery and house infantry troops in the War of 1812 and in recent decades for the U.S. Coast Guard. In 2003, the federal government sold 150 acres of the island to the city and state, with the remaining 22 acres staying under the control of the National Park Service. Visitors from May 1 to Oct. 31 can stroll the grounds, rent bikes, picnic, hit up food trucks or just read Ambitious Goals To Fill the Space The long-term plan is for the island to be open yearround, but Michael M. Samuelian, president and chief executive of the Trust for Governors Island, thinks that requires two or three different draws. With 50 vacant buildings totaling some 1.5 million a book on the grass. Now, with the 100-person campsite, which will open in stages beginning on June 1, and an 80,000-square-foot European-style spa set to begin construction soon, Governors Island is taking a luxe turn. It offers a glimpse into how a park can be self-sustaining while continuing to serve as a resource for public enjoyment. Michael M. Samuelian, president and chief executive of the Trust for Governors Island, the city-controlled independent nonprofit that runs the island, said the campsite is an experiment to prove to the hotel market that people will want to stay overnight on an island that lacks some basic amenities, such as a drugstore. “We’ve toured around every hotelier you can think of,” said square feet, the Trust is shopping for a major cultural institution—perhaps a gallery or museum—to take space. Mr. Samuelian declined to say who is looking. A bigger hotel using some of the old barracks or a university with a dormitory are also options. So, too, is an outdoor concert space. “One of my fantasies is to be the Tanglewood of New York,” Mr. Samuelian said. Mr. Samuelian in an interview. “I think hospitality, conference center, convening is a very natural next step for us.” It has only been in the past 15 years that tourists have come to poke around the island’s landmarked buildings or lounge on the grass. Some 800,000 people visited last year and a million are expected over the next six months. This year the island will add an artificial skating rink and a film series. Wi-Fi is on the way, and the island will remain open late on Friday nights to draw more weekday visitors. The Trust has roughly $51 million in operating and capital sources today. The city pays 85% of the Trust’s $16 million annual operating budget, and nearly all of its capital expenditures. The park’s biggest single New Jersey Preps for Court To Rule on Sports Gambling BY KATE KING The Supreme Court hasn’t yet ruled on the future of sports betting, but New Jersey is already gearing up to cash in. State officials, casinos, racetracks and sports-betting operators have been making preparations and investments in anticipation of the court’s decision. They want to be ready for the first wagers if the justices side with New Jersey in its challenge to a 1992 federal law that effectively blocked gambling on sporting events outside of Nevada and a handful of states. DraftKings Inc., the webbased fantasy sports firm, has been hiring staff for a new office it opened in Hoboken in February. Chief Executive Jason Robins said the company has also held discussions with officials at the New Jersey Division of Gaming Enforcement, which would need to approve the company’s license and gambling software. “We think we’ll be ready Day 1 and we think it will be a real big success,” Mr. Robins said, adding that he believes the company could see “hundreds of millions in revenue” from sports betting in New Jersey. New Jersey has been trying to legalize sports betting at racetracks and casinos since 2011, when 63% of the state’s voters approved a ballot referendum that allowed the state The state has been trying to legalize sports betting at racetracks and casinos since 2011. constitution to be changed to permit sports betting. Major professional and college sports leagues have sued to block the state from allowing sports betting, and the ensuing legal battles have cost New Jersey taxpayers more than $8.5 million since 2012, according to state records. Supreme Court justices heard oral arguments in the case in December and expressed skepticism over the federal law, called the 1992 Professional and Amateur Sports Protection Act, which prohibits states from sponsoring, operating, licensing or authorizing sports gambling. Nevada, the only state to allow legal wagering on individual sports contests, and Oregon, Delaware and Montana, which offer more limited versions of sports betting, were grandfathered in. New Jersey has argued that the law violates states’ rights. Daniel Wallach, a sports and gambling-industry attorney with the Florida-based law firm Becker & Poliakoff, predicts that the court will rule narrowly, issuing a decision that would allow New Jersey to decriminalize sports betting without striking down the federal law as unconstitutional. “That will have significant consequences in that it could create, at least for New Jersey, a short-term monopoly on sports-betting outside of NePlease see BET page A10D expense is the ferry, the way visitors get to and from the island. It now costs $3 roundtrip, up from $2 last year. Some $300 million in capital spending has already taken place, and another $100 million is in the pipeline for infrastructure, according to the Trust’s spokeswoman. The island’s many dilapidated buildings, mostly on the Brooklyn-facing side, eventually will be torn down. Geoffrey Croft, founder of NYC Park Advocates, an advocacy group, applauded the Trust’s decision to allow for overnight stays and said the park has done a good job with its programming. But he is concerned that in providing highend camping that there will be a “two tier park system.” “I’m worried about these blatant commercial ventures taking over the park and ruining it,” he said. Yet big park spaces need revenue to provide nice free things, said Adrian Benepe, a former parks commissioner and now a senior vice president of the nonprofit Trust for Public Land. “I always felt that the restrictions placed on the island’s use were a little bit too onerous,” Mr. Benepe said. “Parks function best with cheek-byjowl use with 24-hour communities.” New York lawmakers are set to interview more than a dozen candidates as possible temporary successors to former Attorney General Eric Schneiderman, who resigned last week following allegations of abuse. Assemblyman Joseph Lentol, a Democrat from Brooklyn, will head a bipartisan committee of eight lawmakers from the state Senate and Assembly that is scheduled to begin public hearings Tuesday to question candidates for the post of interim attorney general. Some prominent figures who are considering running for the job in the November election have decided to sit out the current legislative process. One such potential candidate, New York City Public Advocate Letitia James, wrote on Twitter Friday that she decided to skip the legislative interviews. Among the applicants to be interviewed by lawmakers is acting Attorney General Barbara Underwood, a Democrat who served as the state’s solicitor general until she replaced Mr. Schneiderman following his abrupt resignation. Lawmakers will also interview Congressman Sean Patrick Maloney, a Democrat from the Hudson Valley who unsuccessfully ran for attorney general in 2006, and Lloyd Constantine, a close adviser to former New York Gov. Eliot Spitzer. Some, worried the interim position could be decided by backroom deal making, have called for lawmakers to keep Ms. Underwood in charge of the attorney general’s office until November. Zephyr Teachout, a former primary opponent of New York Gov. Andrew Cuomo who isn’t scheduled to be interviewed by the legislature but is considering running for Mr. Schneiderman’s former seat, said Ms. Underwood should stay on until the election. State Sen. Brad Hoylman, a Democrat from Manhattan serving on the interview committee, said “of course” any legislative appointment would have politics behind it, but the state constitution is clear that the legislature is supposed to appoint a replacement for the attorney general position. He said there is a “vigorous debate” about whether Ms. Underwood should be appointed for the remaining months of Mr. Schneiderman’s term. Mr. Cuomo, a Democrat, said in an interview on the TV station NY1 on Sunday that he would be “just fine” with Ms. Underwood continuing to lead the attorney general’s office until the November election. Ms. Underwood wrote in a letter to Assembly Speaker Carl Heastie that she wished to fill out the remainder of Mr. Schneiderman’s term. She said she wouldn’t run in the November election. Rutgers Rolls Out Its Graduates SETH WENIG/ASSOCIATED PRESS ELIZABETH SHAFIROFF FOR THE WALL STREET JOURNAL BY KATE KING FINISH LINE: Thousands of students received their degrees at a commencement ceremony on Sunday in Piscataway, N.J. Much More Than An Office WeWork provides refreshingly designed workspaces, access to an inspiring community, and meaningful services to empower your business. wework.com . A10D | Monday, May 14, 2018 NY * * THE WALL STREET JOURNAL. GREATER NEW YORK Chef’s Doughnuts Are a Labor of Love One of New York’s most celebrated and innovative chefs is whipping up a new career selling doughnuts. Wylie Dufresne, who became a leading practitioner of a scientific cooking style known as molecular gastronomy in the 2000s, now slings cake doughnuts, crullers and coffee at Du’s Donuts inside the William Vale Hotel in Williamsburg, Brooklyn. Mr. Dufresne opened up shop in April 2017 after being forced out of his groundbreaking Lower East Side gastronomic laboratory, WD-50, in 2014 by a real-estate developer who planned to tear down the building. Now, Mr. Dufresne is branching out, selling his sweet treats in all Whole Foods stores in New York City as well as coffee shops around Manhattan. Mr. Dufresne, who won the James Beard Foundation’s Best NYC Chef award in 2013, spent three months perfecting his made-from-scratch cake doughnut recipe and glazes. Eccentric flavors include pomegranate tahini, peanut butter yuzu, pistachio pink lemonade and grapefruit camomile. The doughnuts cost $3.50 each, or $38.50 for a dozen. Mr. Dufresne discussed the inspiration for his new career, scaling the new business from doughnut destination to wholesale enterprise, and what goes into the creation of such a pricey doughnut. What made you decide to go from fine dining to making doughnuts? Wylie Dufresne: I wanted to pursue this a number of years ago. My great-grandfather was a doughnut maker, so doughnuts have always factored heavily into my childhood and left a deep mark. Doughnuts are like a blank slate waiting to be adorned. How can we use our pseudoscientific approach to cooking to make a great doughnut and also use our creativity to make delicious, fun, flavorful glazes? That’s where our creativity process hopefully is serving us well. ELIZABETH SHAFIROFF FOR THE WALL STREET JOURNAL (2) BY JEANETTE SETTEMBRE Acclaimed chef Wylie Dufresne, left, and his shop in Williamsburg where the sweet magic happens. New York loves its sweets. When Du’s Donuts opened, people were lining up like it was the new Cronut. Are you aiming to be the next doughnut king? I would love that. I would love for those crowds to come back. We certainly do great business here, and we’re very happy, and we’ve expanded our wholesale business tremendously since those early days when the line was around the corner, but if you were to come here on a Saturday there’s no longer lines around the corner. It would be lovely to be some sort of doughnut king, but I think we’re currently just trying to make it a good doughnut and get it in front of as many people as we can. How did you scale your business so quickly? Every time I see a coffee shop I make a note of it. I say, ‘Hey, why don’t we reach out to them?’ I was down walking by the Whole Foods on Houston Street and I noticed there was a coffee shop inside and I reached out. Turns out it was their inhouse brand and they offered us an opportunity. Now we’re in all New York City locations. A dozen Du’s Donuts cost $38.50. How do you justify the price? There’s a lot of labor that goes into our doughnuts. A lot of doughnut shops around the country are using pre-mixes where you just add water the same way you’d go buy boxed cake. We’re making it all from scratch and we’re using highquality ingredients. We’re using really good flour, cage-free eggs, non-GMO this and that, and those ingredients can be expensive. We’re certainly not trying to gouge people, but you know, to me, it’s not that expensive when you see what people are paying for other baked goods. You can go buy commodity ice cream, or you can buy ice cream that’s $14 a pint. Downtown Tower Lands New Tenant in Tough Market BY KEIKO MORRIS Talk about flipping the script. The office tower at 180 Maiden Lane, a 1.2 millionsquare-foot PROPERTY building in downtown Manhattan that once housed insurance giant American International Group Inc., is getting a new tenant: consumer-debt resolution company National Debt Relief. The property is a short stroll from 33 Maiden Lane, a building owned by the Federal Reserve Bank of New York, which played a crucial role in stabilizing the banking system during the financial crisis. Maiden Lane also was the name of a series of companies created by the New York Fed to help control the damage from AIG and other wobbly firms during the crisis. AIG was among the companies rescued during the financial crisis with bailout packages from the federal government. National Debt Relief, which got its start in 2009, helps consumers restructure personal debt, collecting fees for its service. The company signed a lease to take roughly 95,000 square feet of office space at 180 Maiden Lane, which has undergone about $100 million in renovations in recent years and added amenities. Owners MHP Real Estate Services and Clarion Partners bought the building in 2015 with about 750,000 square feet of space left vacant after AIG relocated to another downtown tower. The lease deal with the growing debt-resolution firm follows a lease for 276,000 square feet signed last fall with New York City’s Department of Investigation, as well as other midsize deals with financial technology firms, media companies, law firms and nonprofit organizations. National Debt Relief expects to move its offices to floors 29, 30 and 31 from 11 Broadway by the end of the year. “The momentum depended on the investment the owner- ship made up front,” said Jesse Rubens, a partner at MHP’s brokerage services department. “You have to put in the work. You have to put in the renovations and invest the money up front.” The building’s location, capacity to handle the company’s technology requirements, and its amenities, which include a conference facility, new cafeteria, fitness center, bike room and a revamped, enclosed public space, were a draw for National Debt Relief, which now has more than 900 employees at 11 Broadway, where it has seven floors, said Grant Eckert, the company’s chief marketing officer. A robust economy, high con- sumer confidence and low unemployment have revived consumer lending, making it easier for people to take on debt, he said. Some take on too much. National Debt Relief’s new offices will be able to accommodate the company’s growth, provide the sort of space to attract workers and offer a convenient transportation hub to draw employees from the tristate area, Mr. Eckert said. The firm intends to hire hundreds of employees over the next 12 months, he said. “This shows how much tenants truly value these amenity spaces and areas,” said Tara Stacom, executive vice chairman at Cushman & Wakefield and part of the team leasing GREATER NEW YORK WATCH The most stylish British blazer? Special offer $179 Free shipping & returns Single breasted blazer MJBLAZ Double breasted blazer MJDBBZ BUY YOUR BLAZER NOW Shop at usa.josephturner.co.uk/blazer and enter code BLAZ01 when you checkout or call 1-800-830-4774 and quote code BLAZ01 Please allow 10-12 business days for delivery. If you’re not entirely satisﬁed with your products, you can return them to us within 60 days for a hassle free exchange or refund. Imported from the UK. JERSEY CITY Katyn Memorial Dispute Resolved BILL DENVER/EQUI-PHOTO/ASSOCIATED PRESS All blazers are not created equal. Pure wool navy cloth woven by our friends at Alfred Brown in Yorkshire makes our jackets a cut above the rest. This elegantly tailored formal staple is topped oﬀ with brass buttons, internal pen & ticket pockets, twin back vents and working button cuﬀs. Available as either single breasted (pictured) or double breasted (see website). the tower. “Companies need to put employees in spaces that can attract the talent.” Built in 1983, the tower, which is about 85% leased, still faces a tough downtown leasing market. Coming off a busy 2017 marked by a number of large lease deals, the first-quarter availability rate for office space rose to 14%, up 2.7 percentage points from the previous year, according to CBRE Group Inc. Large blocks of office space for sublease could also add to the competition. But the team leasing 180 Maiden Lane said they are in discussions with potential tenants for many of the six full floors remaining available. “We see the light,” Mr. Rubens said. The Haskell Invitational at Monmouth Park Racetrack in 2016. BET Continued from page A10C vada,” said Mr. Wallach, who doesn’t represent any of the parties in this case. If the court rules the way Mr. Wallach expects, sports gambling would become legal in New Jersey but not regulated, so the state wouldn’t be able to tax sports betting. In anticipation of legalized sports betting, Monmouth Park Racetrack operator Dennis Drazin has been making investments. The racetrack signed a 2013 contract with William Hill US, to spend millions building a sports bar and other facilities to accommodate customers who want to place bets on basketball and football games as well as horse races. The facility could start accepting wagers within two weeks of the Supreme Court’s ruling, said Mr. Drazin, who hopes sports betting will help the state’s struggling horseracing industry survive. He predicts Monmouth Park’s profits from sports gambling could range from $25 million to $50 million annually, which would be split evenly with William Hill. Joe Asher, chief executive of William Hill US, said he invested early in New Jersey because the state was committed to going the distance to legalize sports betting. He believes the state’s market could grow to more than twice that of Ne- vada’s, reaching a handle, or total amount wagered, of $10 billion or more a year. “There’s a lot of people in New Jersey and also the sports culture is so deeply ingrained in that region,” said Mr. Asher. “We just made a bet, that’s all. It seemed like a good bet at the time.” In northern New Jersey, Meadowlands Racetrack operator Jeff Gural said he has taken a wait-and-see approach to sports betting. He believes sports wagers could help plug a $3 million annual deficit his racetrack is operating with due to competition from higher purses in New York and Pennsylvania. “It would bring me probably to a break-even, which would be helpful,” he said. In the event that the Supreme Court goes further and decides to strike down the federal law as unconstitutional, Mr. Gural believes that operators will have to wait for the state legislature to pass a law that would regulate and tax the industry. State lawmakers are also preparing for this possibility, and earlier this month introduced legislation providing for an 8% gross revenue tax on inperson wagering and a 12.5% levy on online sports bets. One of the bill’s primary sponsors, Democrat Assemblyman John Burzichelli, said the legislation is a “placeholder” that was introduced to make sure lawmakers can move quickly following the Supreme Court’s ruling. A battle over plans to move a waterfront statue commemorating the 1940 massacre of Poles has ended. Jersey City Mayor Steve Fulop and local Polish groups said they reached an agreement on relocating the Katyn Memorial. Details on the deal will be announced Monday. Mr. Fulop wrote in a tweet that the goal was one that “respects/cares/keeps the monument in an extremely prominent location to honor sacrifices” while also giving the city “a chance to re-purpose our waterfront.” City officials wanted to move the statue as part of a renovation of the plaza where it currently stands on the waterfront across from lower Manhattan. The Polish groups opposed that and had sought a court order in recent days to block the move. The bronze statue depicts a Polish soldier bound, gagged and impaled by a bayonet. The planned move sparked strong emotions in Poland, where Katyn is remembered as one of the worst tragedies to befall the nation. —Associated Press NEW YORK Tappan Zee Panels To Be Used Elsewhere Fourteen deck panels salvaged from the old Tappan Zee Bridge are heading north for use in new projects. Orange County’s Department of Public Works plans to use the panels in four bridge and two rail-trail projects. The deliveries of the old Hudson River bridge panels to New Hampton more than 40 miles away will start on Monday. Thruway Authority officials sold 150 of the concrete-andsteel panels for $1 each to public-works agencies willing to recycle them. The 50-ton panels measure 13 feet wide by 50 feet long. Orange County officials say the panels will save taxpayers about $770,000. —Associated Press . THE WALL STREET JOURNAL. LIFE&ARTS Monday, May 14, 2018 | A11 What to Do When a Man’s Sex Drive Flags? Have reasonable expectations. Don’t buy into the stereotype that says men are always ready to have sex. Be open to talking, and try not to get offended. Think of it as a chance to improve the relationship. Consider therapy. If the male partner is reluctant to go, the woman can suggest he talk to the therapist on the phone. Have the woman initiate. Often couples have a “sexual script” where the man always initiates. The woman can take some of the pressure off him by starting the interaction. Pick your timing. Don’t have the conversation when you’re in the middle of a sexual situation. Focus on the positive. Rather than a criticism—“we never have sex anymore”— tell your partner you miss being intimate. Do new nonsexual things together. Take up a new hobby, try a new cuisine, ride a roller coaster. Change your environment. Try the shower, the guest room, in front of the fire. JON KRAUSE Be nice to each other. Kind partners desire each other more, research shows. BONDS: ON RELATIONSHIPS | By Elizabeth Bernstein When Your Husband ‘Has a Headache’ CONTRARY to conventional wisdom, sometimes it’s men who first lose sexual desire in a long-term relationship, a new study finds. Men’s desire for sex can be as tricky as women’s, according to researchers at the University of Kentucky. Men often lose interest when they feel insecure, when they worry they are losing autonomy in a relationship, or when physical changes cause embarrassment. Pressure to be the initiator compounds the stress. “We expect male desire to always be high and to be simple, like an on and off switch, while we expect women’s desire to be a complicated switchboard, but they are both complex,” says Kristen P. Mark, associate professor of health promotion and director of the Sexual Health Promotion Lab at the University of Kentucky and the lead researcher on study, a broad look at men and women that analyzed 64 studies on sexual desire conducted since the 1950s. Psychologists say desire in both sexes ebbs and flows. And it’s natural for it to decline after the heady honeymoon period, which typically lasts about 18 months to two years. Still, almost 80% of married cou- ples have sex a few times a month or more: 32% reported having sex two to three times per week; 47% reported having sex a few times a month, according to “The Social Organization of Sexuality: Sexual Practices in the United States,” a 1994 University of Chicago study considered the most comprehensive in the field. Women do lose desire more often than men: Research shows that about one out of three women—regardless of age—report a lack of interest in sex for at least several months in the past year, compared with one in five men, according to Edward Laumann, a professor of sociology at the University of Chicago, who has studied sexual desire and dysfunction for 25 years. But experts say that men are often reluctant to talk about sexual troubles, so the problem may be more prevalent. Dr. Mark’s research, published in March in the Journal of Sex Research, found that the reasons for a drop in desire generally fit into three main categories—individual, interpersonal and societal. Some issues, such as stress, a drop in self-esteem or changes in their attraction to their partner, affect both men and women. But men’s desire also wanes for different reasons. Men have trouble when they expect their desire to always remain high and it does not, or when they fail to make their relationship a priority. Sometimes men’s desire drops when a couple has sex for negative reasons—to avoid a fight, for example—rather than positive ones, such as to increase intimacy. Men Men have trouble when they expect their desire to always remain high and it does not. also feel pressure to always be ready for sex and to initiate it. There are often physical issues, as well. A man’s less-efficient blood flow as he ages, diseases such as depression, or medicines for issues such as high blood pressure or mood disorders can all hurt a man’s sex drive. And these physical changes can cause emotional distress. Embarrassment is a big issue for men who have trouble getting or maintaining an erection, and so they may stop initiating sex. “For the guys who don’t like to do what they don’t do well, there will be avoidance, because they feel ashamed,” says Michael A. Perelman, co-director of Weill Cornell Medicine’s Human Sexuality Program. Unlike women, men often lose interest in sex when they are unhappy or insecure, Dr. Laumann says. Stress about a promotion, worry about a child, the transition to retirement “all undercut a man’s sense of his abilities and prowess,” he says. And sometimes the problem does stem from the relationship. Sex can become routine in a longterm marriage, or partners grow apart. A man may harbor resentments, often about money. Or he may de-eroticize his wife. “He sees her as a good person, mother, supporter, but not as an exciting lover,” says Barry McCarthy, a psychology professor at American University. Is the relationship doomed when a man—or a woman, for that matter—loses interest in sex? Not necessarily. But it’s definitely a signal that you need to evaluate what is going on. And there is the possibility that a decrease in desire for your partner may indicate that the person is no longer right for you, says Gurit Birnbaum, a social psychologist and associate professor of psychology at the Interdisciplinary Center, a private university in Herzliya, Israel. You may have grown too far apart, or your goals, values or interests may have changed. “Your body may be telling you something,” she says. But often the problems can be solved. This will require talking, the experts say, and it’s important to do that before it is too late. “A relationship becomes more fragile when it loses its sex aspect,” says Dr. Birnbaum. Start by having a conversation outside of a sexual situation—go for a walk or have a glass of wine. Tell your spouse you miss having sex rather than criticizing. Both partners should ease pressure by accepting that men, not just women, don’t want sex all the time. “Approaching hard conversations by being vulnerable up front automatically creates a safer environment for a tough talk,” says Dr. Mark. ART BY KELLY CROW WHAT’S THE GOING RATE for a masterpiece? As Sotheby’s, Christie’s and Phillips kick off a week of spring auctions Monday, the market for trophy art is in flux. The historic sale of a $450 million Leonardo da Vinci painting last fall continues to shake up art values at the marketplace’s high end, as auctioneers seek to manage collectors’ expectations and recalibrate price levels for dozens of other blue-chip artists. Until recently, $100 million was a gasp-inducing price for any work at auction. Six years ago, Sotheby’s New York saleroom erupted with shouts and applause when the house sold Edvard Munch’s “The Scream” for $119 million. Yet last week during Christie’s sale of the estate of Peggy and David Rockefeller, the packed room was silent as Pablo Picasso’s “Young Girl with a Flower Basket”—which had a $100 million estimate—sold for $115 million after a single telephone bid. Afterward, dealers said it was unclear whether the lackluster bidding hinged on the Picasso’s dour subject matter—a poor, nude girl— or reflected an audience that has grown accustomed to seeing, and paying, nine-figure prices for art. Please see ART page A12 SOTHEBY’S TROPHY WORKS DISRUPT AUCTIONS David Hockney’s ‘Pacific Coast Highway and Santa Monica’ oil painting goes on the block at Sotheby’s on Wednesday. . THE WALL STREET JOURNAL. A12 | Monday, May 14, 2018 LIFE & ARTS WHAT’S YOUR WORKOUT? | By Jen Murphy Lifting Golf Bags? That’s the Easy Part A retired PGA instructor puts in serious hours at the gym to serve as a caddie at clubs in Georgia and Massachusetts The Workout Mr. Tennant turned an old barn at his Farmington, Conn., home into a gym, complete with kettlebells, a TRX Suspension Trainer, battle ropes and tires. In his off-season, January through March, he works out for 1 to 2½ hours, four days a week. “I’m like a kid in a playhouse,” he says. “I have music for speakers and will go in and hit some golf shots into a net and slam around ropes and medicine balls.” His wife joins him once or twice a week. Mr. Tennant focuses on his lower body, doing squats, dead lifts and one-legged squats using the TRX. He pulls a 200-pound tire 30 yards, flips it 10 times and repeats. Golf requires a lot of trunk rotation, so Mr. Tennant also incorporates exercises like tossing a medicine ball against the wall, ini- tiating the throw from his side body. Last fall he bought a SuperSpeed Golf Training System, which consists of three weighted shafts designed to increase golf swing speed and power. He alternates weights and will swing them for 20 minutes as hard and fast as he can, alternating sides. He tries to get to a 90-minute Bikram yoga class twice a week. “The instructor is very militant,” he says. “I thought I might pass out the first class, but she insisted we could not leave the room. I survived.” When he caddies in Georgia, he goes to a gym on his day off for maintenance. He frequently gets knots in the shoulder he uses to carry the bag. Stretching 15 minutes in the morning and at night helps ease the aches. In the summer, he does yoga and goes to a local gym. He tries to play five holes of golf two to three nights a week. “If I wasn’t in shape, I’d be coming home from caddying and falling on the couch,” he says. MELISSA GOLDEN FOR THE WALL STREET JOURNAL (3); JIM TENNANT (CENTER) JIM TENNANT STARTED caddying at age 12 and carried clubs through his teens as a way to save some fun money. Now retired, he’s hauling 40-pound golf bags around the green again. Mr. Tennant, 51, retired in 2016 after working 25 years as a PGA golf professional teaching juniors and women. Looking to stay connected to the game, he began caddying that fall at private clubs in Augusta, Ga., and near his Massachusetts summer home on Cape Cod. “I chose caddying as a later-life job more for the lack of stress and joy of the game,” he says. “It’s how I started and got hooked on this industry, and ironically how I’ll finish. The money is a nice benefit.” Mr. Tennant caddies nine months a year—February through early May and October through early December in Georgia and late May to early October in Massachusetts. It isn’t unusual for him to work 15 summer days in a row. “Show up, shut up and keep up is the caddie creed,” Mr. Tennant says. “And I’m definitely a few decades older than most of the other caddies.” Caddies carry one or two 40to-50-pound golf bags for 18 or 36 holes in all weather. He was surprised how sore the job made him, especially in his legs. To build his endurance and strength, Mr. Tennant developed a CrossFit-style training routine and started taking Bikram yoga classes. “The yoga prepares your body and mind to focus under physical duress,” he says. “It duplicates the stress of caddying when its 95 degrees outside.” The Diet Mr. Tennant eats the same breakfast six days a week: a mix of Cream of Wheat and Quaker Oats. One day a week he goes out for breakfast with his wife and splurges on eggs and waffles. He eats a Clif Bar pre-workout or on the sixth hole if caddying. He tries to always have a peanut butter and jelly sandwich in his cooler and plenty of water. He refuels post-workout with a protein shake. After 18 holes he’ll have a chef salad. Dinners include shrimp, salmon or steak accompanied by broccoli and sweet potato. Jim Tennant works out at Gold’s Gym outside Augusta, Ga., above, below left and bottom. Below right, Mr. Tennant, left, caddies in Plymouth, Mass. With him are Bob Rotella and pro golfer and instructor Bob Toski. The Golfer’s Workout Versus the Caddie’s Workout Golfers are the star athletes, but their caddies often exert at least as much physical effort. “The two roles are very different, but both require a certain fitness level,” says Corey Hug, a physical therapist with the PGA Player Performance Center. Caddies have to carry a 50-pound bag, sometimes on a very hilly course and in extreme heat for up to 7 miles, he says. “It’s like putting on a heavy backpack and going for a hike,” Mr. Hug says. You don’t have to be a golfer or have experience to be a caddie, says Tim Orbon, director of Caddie Services at Western Golf Association in La Grange Park, Il. As people get older, fitness can be a barrier to entry, though he says most golf bags are much lighter than they were years ago. Caddies, Mr. Hug says, are more like long-distance runners. He says it isn’t unusual to see caddies in the gym with the players, doing a full workout and stretching after a six-hour workday. “Caddies need endurance to carry a load for a long time, whereas golfers have a quiet body and then a fast swing,” he says. The Gear & Cost Mr. Tennant estimates he owns more than 100 golf clubs. Ping is a favorite brand. “If I didn’t have a barn, my wife would get rid of them,” he jokes. His SuperSpeed Golf Training System cost $200. Mr. Tennant caddies in Adidas Superstar shoes ($80). He works out in ON waterproof trail shoes ($150). He wears Oakley Half Jacket sunglasses ($133). “They’re so light, you forget you have them on, but they are indestructible,” he says. His 10-class yoga punch card costs $150. He pays $30 a month for his membership at Gold’s Gym. The Playlist “I’m a big fan of singer songwriters like Phil Vassar, Bruce Springsteen, Eric Church and, I’ll admit it, even Taylor Swift.” ART Among the high-profile works going up for auction in New York this month are, clockwise from above, a 1917 nude by Modigliani, a bronze and marble portrait by Constantin Brâncuși and an untitled sculpture mask by Mark Grotjahn. has pledged to buy the work if no one else steps up during the sale. That is a risk-offsetting maneuver that aims to reassure the seller but can also damp competition because rivals know they will need to outbid the investor to win the work. (Christie’s $115 million Picasso sold to its so-called guarantor.) Overall, the houses will try to sell at least $1.7 billion worth of impressionist, modern and contemporary art during this series. Other potential trophy works to watch: Constantin Brâncuși Christie’s reset the record for this Romanian sculptor last May when it sold “Sleeping Muse” for $57.4 million. On Tuesday, it will ask around $70 million for “Portrait of a Young Sophisticated Girl (Portrait of Nancy Cunard),” a 1932 work of polished bronze and marble that pays homage to the shipping heiress. Christie’s said he sold it in 1955 when an American couple, Frederick and Elizabeth Stafford, stopped by his Paris studio while on vacation. The couple paid $5,000 and later lent it to the Metropolitan Museum of Art for four decades. Now, their children are selling the work. David Hockney At age 80, this British-born painter is hotter than ever. The Metropolitan Museum of Art just closed a retrospective of his colorful landscapes and portraits, and earlier this month, another Hockney show, “82 Portrait and 1 Still-Life,” opened at the Los Angeles County Museum of Art. Sotheby’s hopes to capitalize on the attention to break the artist’s $11.7 million auc- tion record, set two years ago with “Woldgate Woods, 24, 25 and 26 October, 2006,” a forest scene. On Wednesday, Sotheby’s estimates it will sell “Pacific Coast Highway and Santa Monica,” a rainbow-colored mountain vista from 1990 for at least $20 million. Mark Grotjahn This Los Angeles artist’s paintings of masks have sold for as much as $16.8 million at auction. Phillips plans to test another aspect of Mr. Grotjahn’s market by offering one of his lesser-known sculptures, “Untitled (Free Standing Large Garden Sculpture Mask M24.g).” Mr. Grotjahn started experimenting with sculpture in 2010, and deputy chairman Jean-Paul Engelen said this 2014 work is a “mask you can walk around.” Asking price: $500,000. CLOCKWISE FROM LEFT: SOTHEBY’S; CHRISTIE’S IMAGES LTD.; PHILLIPS Continued from page A11 “Maybe $100 million is the new $10 million,” said dealer Larry Gagosian. Christie’s said the Rockefeller family was pleased by the Picasso price, adding that the estate sale totaled $832.6 million overall, a sum that fell short of predictions it might top $1 billion yet surpassed its own estimates. Simon Shaw, Sotheby’s co-head of impressionist and modern art world-wide, said, “It’s becoming more and more difficult to price these masterpieces because people focus so much on them but only a few people in the world wind up competing for them.” On Monday, Sotheby’s will need to convince a few of the world’s roughly 1,500 billionaires to chase after its priciest offering: Amedeo Modigliani’s “Reclining Nude,” which it expects to sell for at least $150 million, the highest estimated price an auction house has ever asked for a work of art. The 1917 portrait depicts a nude brunette looking languidly over her shoulder as she lounges on disheveled sheets. It’s the largest example in a series of at least 35 portraits of nude models that Modigliani painted for his dealer between 1916 and 1919. This one, which has a hunter-green background, is being sold by Irish horse breeder John Magnier, who paid Christie’s $26.9 million for it in 2003. Bloomberg identified Mr. Magnier as the seller. Mr. Shaw said Sotheby’s strategically priced “Reclining Nude” at $150 million so that it looked like a “great value” compared with a smaller Modigliani nude from this same series that Christie’s sold for $170.4 million three years ago. That work had an asking price around $100 million. Sotheby’s also found an outside investor who . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A13 LIFE & ARTS View of ‘Heavenly Bodies’ in The Met’s Medieval Europe Gallery EXHIBITION REVIEW A Gift From the Sartorial Gods BY LAURA JACOBS (for Valentino), Jean Paul Gaultier, Christian Lacroix, John Galliano, Alexander McQueen and Thom Browne— the younger generation. Elsa Schiaparelli, Coco Chanel, Madame Grès and Cristobal Balenciaga—from the midcentury. These designers dominate, but the exhibition’s more than 150 ensembles come from 50-plus designers and grace more space than any Costume Institute show has thus far: 60,000 square feet at the Met Fifth Avenue and the Met Cloisters. Large as it is, “Heavenly Bodies” is so disciplined in its choices and laid out with such a light touch that it feels unforced, airy, as if the Met’s art and architecture were enjoying a visitation from kindred spirits. The exhibition begins with processions in the parallel Byzantine Galleries, where shimmeringly beaded and sequined dresses by Versace (autumn/winter 1997-98) and Dolce & Gabbana (autumn/ winter 2013-14) nod to the Byzantine mosaics and metalwork that influenced their creation. Andrew Bolton, who organized the show and is the Wendy Yu curator in charge of the Costume Institute, has said he wanted “to evoke both the concept and the experience of a religious pilgrimage,” and he achieves this in the hall of Medieval and Byzantine Art. Here the classic silhouettes of Catholicism’s earthly personae and celestial pantheon—the bishop’s soutane, the nun’s habit, the pope’s “cappa magna,” the Virgin Mary’s spire-like sheath, the armor of Joan of Arc and the orders of angelology—find themselves poetically acknowledged and exquisitely, sometimes outrageously, reinvented. Simultaneously, we are invited to look again at the specific artwork that frames the dresses—paintings and sculptures we’ve walked by for years without noticing. THE METROPOLITAN MUSEUM OF ART (2); THE METROPOLITAN MUSEUM OF ART, DIGITAL COMPOSITE SCAN BY KATERINA JEBB (MITER) New York CHASUBLE. Chalice. Crosier. Monstrance. Miter. The words themselves are dipped in gold, and each has its glittering place in a hierarchy of symbolic dress and timeless imagery. Sun rays like spears, piercing the flock with light. Sacred wounds spilling blood, sacrificial and ecstatic. The cross, a design genuflection that is both abstract and transcendent. The martyred saints. The winged angels. Gilt reliquaries housing bits of bone. Renunciation clothed in costume of material luxe. Catholicism! “Catholics live in an enchanted world,” writes the theologian and novelist Andrew Greeley in “The Catholic Imagination,” published in 2000, “a world of statues and holy water, stained glass and votive candles, saints and religious medals, rosary beads and holy pictures.” These are mere hints, Greeley continues, of a “religious sensibility which inclines Catholics to see the Holy lurking in creation.” Enter the Met. Its spring exhibition “Heavenly Bodies: Fashion and the Catholic Imagination” places couture and ready-to-wear from the 20th and 21st centuries amid the museum’s religious triptychs, altars and artifacts, an idea so right, so inevitably majestic, that it’s amazing it never happened here before. As it turns out, most of the designers whose work cried for inclusion in this show were raised Catholic. No matter if they lapsed; the church’s iconography, steeped into the soul, remains a reference and inspiration, voluptuous and transporting. Gianni Versace, Domenico Dolce and Stefano Gabbana, Pierpaolo Piccioli View of ‘Heavenly Bodies: Fashion and the Catholic Imagination’ in the Romanesque Hall at the Met Cloisters, above; 1929 miter of Pius XI (reigned 1922–39), center Make sure to look up. Thierry Mugler’s diamanté gown in virgin blue (autumn/ winter 1984-85), invoking the Assumption of Mary, floats above an archway and blesses the long view into the Robert Lehman Wing, where a tableau of angels awaits. These gowns, two made by Jean Lanvin in the 1930s and the rest from a 2011 capsule collection by Rodarte, suggest an earlyRenaissance rainbow, their colors the saturated pastels of Giotto and the lapis lazuli of Fra Angelico. The coup of the exhibition resides downstairs in the Anna Wintour Costume Center. Approximately 40 vestments from the Sistine Chapel Sacristy—rarely (if ever) released papal mantles and chasubles, priceless tiaras, rings and crosses—speak to the way sumptuous earthly beauty engages the divine. Marvel at embroidered biblical stories, the stitching so fine and nuanced it dissolves into an almost photographic sheen. Here is an echelon of embellished artistry that any czar, king or emperor would envy. Upstarts all, they’ve been trumped by God. Do not forgo a trip to the Cloisters, where Mr. Bolton’s choices are in such intimate dialogue with the art they look like they could live here. The mood is often playful—Craig Green’s knight-like suits of bold medallions (autumn/winter 2017-18) seem to have stepped out of the “Nine Heroes” tapestries that surround them. It is sometimes severe: Olivier Theyskens, using four long slits held in place by simple hooks and eyes, produces a black taffeta gown fit for a goth princess, a cross of bare skin on her chest (spring/summer 1999). And the Passion prevails amid the Unicorn tapestries, where Thom Browne’s wedding dress of 2018, wrought from ribbons of white tulle, hovers like a strange cloud. On the bodice, the creature’s head and horn are formed with twisted tulle and gold bullion. On the back, yes, there they are, the subtle stab wounds (Father, forgive them, for they know not what they do) that we see in the tapestries. Another lone vision in white—the holy grail of fashion purists—is Balenciaga’s wedding dress of spring 1967. It is posed in glorious isolation, back to the viewer, in a stone apse. This glacial cone of satin has long been one of the most revered designs in fashion history, a mysterious evocation of untouchedness. It was long believed to be conceived with one seam. Mr. Bolton discovered it actually has three. The Trinity. Heavenly Bodies: Fashion and the Catholic Imagination The Met Fifth Avenue and The Met Cloisters, through Oct. 8 Ms. Jacobs writes about culture and fashion for Vanity Fair. Aflutter with Diamonds Yellow Diamond Dragonfly Fancy vivid diamonds. Legendary jewelers. Breathtaking workmanship. 60.26 carats of rare fancy vivid yellow diamonds cover this monumental dragonfly brooch. The collaboration of legends Fred Leighton and CarvinFrench,thispiecewascrafted en tremblant, allowingthedragonfly to literally “flutter” with the wearer’s movements. Assembling over 60 carats of perfectly matched vivid yellow diamonds of the most prized color grade is tremendously difficult. The result is this pièce de résistance of singular beauty. Made for Patricia Kluge, then-wife of Metromedia founder John Kluge. Punctuated by 5.40 ctw. rubies. 18K gold. Signed “Fred Leighton”. 41/4”l x 61/2”w. #30-7565 630 Royal Street, New Orleans, Louisiana • 877-677-2801 • firstname.lastname@example.org • 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. . THE WALL STREET JOURNAL. A14 | Monday, May 14, 2018 SPORTS SOCCER WENGER TAKES FINAL BOW BY JOSHUA ROBINSON CLOCKWISE FROM TOP LEFT: REUTERS, AP (2), GETTY (3) HUDDERSFIELD, England—A contrarian until the end, Arsène Wenger took his curtain call before the game even started. On a bright afternoon in Yorkshire, 22 years after his reign in English soccer began, he strode out of the tunnel here and made his way to the section of traveling fans. Ahead of his 1,235th and final appearance as Arsenal manager, he wanted to share one last moment with them in the strange intimacy of a soccer stadium. That’s when, amid the applause and the chanting, the 68-year-old Frenchman did something unexpected: he took a bow. “It was spontaneous,” Wenger said after his side’s 1-0 victory. “I know that we disappointed the away fans this season…They had disagreements with me that I can accept. But we had one thing in common: we loved Arsenal Football Club.” That love has been tested in recent seasons, as Arsenal’s decline became more difficult to ignore. Until Wenger announced his exit last month, the consensus among the club’s supporters was that Wenger had to go—a fact that Huddersfield fans were happy to bring up during Sunday’s love-in by singing, “You wanted him out.” The club has yet to name a successor, but the British rumor mill has generated names such as Mikel Arteta, the 36-year-old former Arsenal player who has spent the past two years learning the trade as an assistant to Pep Guardiola at Manchester City. Other candidates are believed to include Juventus’ Massimiliano Allegri or New York City FC’s Patrick Vieira. Whichever manager Arsenal settles on faces an enormous task. He will have to repair a broken squad that finished sixth in the league with its lowest points total since the mid-1990s, and function in an environment that is reinventing itself while untangling from Wenger. The Western Conference Finals begin on Monday. Clockwise from top left, Stephen Curry, James Harden, Steve Kerr, Chris Paul, Kevin Durant and Mike D’Antoni. NBA PLAYOFFS Myths About Warriors, Rockets ranked 16th of the 30 teams in the NBA. The Rockets were No. 1 with 42.3 per game. And threes accounted for 33.9% of Golden State’s field-goal attempts. That was almost exactly the league average. But it isn’t like the Warriors have completely abandoned the shot. They still lead the NBA in 3point-shooting percentage, which is what happens when Curry, Klay Thompson and Kevin Durant play for the same team. BY BEN COHEN The Golden State Warriors and Houston Rockets have been the two best and most fascinating teams in the NBA for the last two years. They have model front offices, superb coaches and electrifying star players. They reshaped the league. They redefined the sport. And then they reinvented themselves. That’s the thing about their seductive matchup in the Western Conference Finals, which begins with Game 1 on Monday: The Warriors and Rockets have changed so much this season they now defy much of the conventional wisdom about the Warriors and Rockets. Here is how Golden State and Houston turned four popular notions into myths. The Rockets play too fast and don’t play enough defense. They don’t. And they do. Houston coach Mike D’Antoni was basketball’s patron saint of pace when his Phoenix Suns experimented with their “Seven Seconds or Less” offense in the mid-2000s, and he still believes good offense is the result of taking the first good shot. Last year’s Houston team played faster than any NBA playoff team in decades. Which only makes this year’s Houston team all the more unusual: The Rockets win fast and slow. They’re brutally efficient in transition, averaging more points per possession than any team, but they’re also ruthlessly boring in the halfcourt, where James Harden destroys the poor defender he picks to isolate. Their methodical offense is built around getting the mismatch they want every single time down the court and exploiting it until the other team has no choice but to adjust. The Rockets’ tempo actually ranked 14th this The Warriors are a 3-pointshooting team. ANDREW BOYERS/REUTERS They’re not. Golden State is always going to be the face of the league’s 3-point revolution, at least for as long as the Warriors have Stephen Curry, and there is no denying they weaponized the 3-pointer on their way to winning an NBA championship in 2015 and the most regularseason games in the history of the league in 2016. The only problem with that idea is that it isn’t true anymore. The Warriors attempted 28.9 threes per game this year. That Arsène Wenger took his curtain call. Weather d Edmonton 30s 40s V Vancouver 80s Calgary 90s g Billings Eugene Boise i 40s 50s 70s 80s 70s Helena l Portland Portla d Reno Sacramento 50s 50s Angeles Los A Ange l 60s 50s CCheyenne h y San Diego 90s El P Paso FFt.. Worth th 90s bil Mobile 80s New ew Orleans Ta p Tampa Honolulu l l 70s Hartford rtford New Yorkk ew Y 60s 70s 34 Philadelphia Ph hil d lphi h Washington shington hington D.C. h DC 80s 38 Warm 80s Miami 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. Tomorrow Hi Lo W 79 58 t 83 72 t 90 65 t 95 71 s 85 62 t 75 47 pc 80 58 s 75 50 s 87 67 t 73 53 pc 66 54 pc 80 44 s 81 55 s 78 54 pc 93 72 pc International City Amsterdam Athens Baghdad Bangkok Beijing Berlin Brussels Buenos Aires Dubai Dublin Edinburgh Today Tomorrow Hi Lo W Hi Lo W 79 55 pc 73 54 pc 82 66 s 84 67 pc 88 67 s 90 68 s 92 79 t 92 80 t 94 68 s 88 68 c 73 53 s 69 53 t 77 55 pc 73 54 pc 68 53 sh 63 44 s 101 83 s 101 83 s 62 47 c 62 40 pc 65 43 pc 66 40 pc 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 City Tokyo Toronto Vancouver Warsaw Zurich 8 9 18 30 24 32 35 36 50 56 51 53 54 60 61 62 63 64 Showers Flurries 65 66 67 Tomorrow Hi Lo W 73 54 pc 64 48 c 85 71 t 88 79 pc 77 64 s 93 77 t 75 56 s 60 43 t 72 51 s 73 50 s 96 81 t 57 47 c 80 57 pc 68 53 t 71 55 pc 93 84 pc 75 52 pc 85 72 s 97 73 s 63 55 t 85 75 sh 81 65 pc 94 78 c 89 79 c 68 54 c 92 78 t 76 65 s 69 47 c 71 53 s 72 52 t 63 47 t 55 47 Snow Today Hi Lo W 79 55 pc 57 48 c 84 71 t 88 79 s 73 63 s 92 78 pc 70 53 pc 59 46 sh 67 51 pc 67 44 pc 98 82 pc 60 48 pc 79 57 pc 68 50 t 78 55 pc 92 84 s 63 52 r 82 70 pc 101 71 s 66 53 t 86 76 sh 76 58 s 87 75 pc 88 80 c 65 55 sh 91 76 pc 77 61 s 74 55 pc 73 53 pc 67 50 pc 64 48 t 27 43 46 49 59 26 37 42 45 58 25 40 Stationary 57 13 33 39 48 12 22 31 41 11 19 21 29 10 16 T-storms JJacksonville k Orlando l d 7 Cold Ice Today Hi Lo W 73 60 t 78 71 r 79 64 c 93 68 s 83 64 r 66 53 pc 90 58 s 76 51 s 93 70 pc 68 50 c 66 54 pc 79 45 s 86 57 s 71 54 sh 86 71 t 6 23 28 SHARE AND SHARE ALIKE | By Celia Smith Across 1 Winter blanket? 5 Hen pen 9 •Card game with sets and sequences 14 Uber alternative 15 Need a massage 16 Speak pompously 17 Prayer-ending word 18 Office fill-in 19 Insurance company staffer 20 •Place with a wide variety of goods for sale 23 Towering structure on a farm 24 Reverent wonder 25 Min. part 28 Bank lobby sight 31 •Cowhand’s workplace 34 Relax, as restrictions 36 Approves 37 Refrain bit 38 Respect, in slang 39 P.O. boxes have them 40 Mamas’ mates 41 Case for a dermatologist 42 All the rage 43 Mame or Em 44 •Cold comfort? 47 Hockey great Bobby 48 Affirmative, on board 49 Distinct period 50 Jazz combo, sometimes 52 Share owners, and, broadly, what the starred answers all are 57 In progress 60 Cake layer 61 Track shape 62 Insubstantial 63 Gumbo vegetable 64 Puerto ___ 65 •Biathlon need 66 Stand 67 Murdered Down 1 Antlered animal 2 Application form line 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 52 39 c 50 39 c Atlanta 90 70 c 79 68 t Austin 90 68 pc 91 66 pc Baltimore 83 68 t 93 68 pc Boise 77 51 pc 77 52 pc Boston 70 59 pc 75 56 t Burlington 79 58 c 75 46 c Charlotte 92 67 pc 80 66 t Chicago 78 60 t 70 53 t Cleveland 76 62 r 75 55 t Dallas 89 72 pc 91 72 pc Denver 63 46 t 69 48 t Detroit 76 62 t 73 53 t Honolulu 83 72 sh 82 71 sh Houston 91 69 pc 92 69 pc Indianapolis 91 70 r 85 65 t Kansas City 88 64 t 82 62 t Las Vegas 87 67 s 91 68 s Little Rock 93 67 pc 92 66 s Los Angeles 68 55 pc 68 54 pc Miami 81 76 r 85 76 t Milwaukee 70 56 c 64 49 t Minneapolis 77 59 pc 80 61 c Nashville 93 68 pc 93 67 c New Orleans 94 74 s 93 73 t New York City 72 64 c 83 64 t Oklahoma City 89 65 pc 81 62 t Rain 5 15 44 70s U.S. Forecasts It might not be. The Warriors became a team that could become a dynasty when Kerr installed a beautiful offense predicated on the idea that basketball is an egalitarian sport. They consistently rank near the top of the league in passes per game, and the percentage of their offense that comes from cuts and off-ball screens is astounding. The Rockets believe in the exact opposite style as the Warriors’ symphony of motion. They were dead last in the NBA in passing. And that’s because they were first in isolation. Harden isolated defenders on 35% of his possessions this season, and he scored 1.22 points on those possessions. No one else in the league was above 29.3% or 1.1 points. That’s how good he was: 52 70s t Houston San an Antonio A t 80s 50s 90s 4 20 80s Boston t 100+ 3 17 Albany A Atlanta Atl t LLittle ittlee Rock Birmingham i h Dallas D Jackson Jack Austin A ti A h g Anchorage 90s 2 40s h d Richmond h Raleigh C h l tt Charlotte C b Columbia h ill Nashville Memphis hi 30s Montreal 1 14 A g t Augusta 80s Kansas St.. Lou LLouis City Louisville Oklahoma k hom oma City 90s 30s Charles h Charleston 80s 40s 50s T Toronto T p k Topeka Wichita h hit Santaa FFe Albuquerque Alb q q T c Tucson Ottawa k Milwaukee Detroit t l Buffalo Cleveland Cleve Cl l d C h g Chicago Des es Moines Pit b h Pittsburgh d p Spring p i fi ld Indianapolis Springfield C d Colorado p Springs 80s 70s 60s Phoenix Ph 60s Omaha h 10s 20s oux FFalls ll P Pierre Sioux 50s Denver 80s 60s Mpls./St.. Paul Pau LLas Ve g Vegas 60s 0s Bismarckk Salt alt Lake L e City C y an Francisco San <0 50s ip Winnipeg Seattle ttl Isolation basketball is stupid. Harden led the league in volume and efficiency. The Rockets were such outliers in this regard that they even had the league’s other high-volume, high-efficiency isolation guard. That player above 29.3% and 1.1 points? Chris Paul. The mid-range jumper is a bad shot. Except when it isn’t. The mid-range is the most inefficient part of the basketball court. As it turns out, though, the Warriors see it as something of a market inefficiency. While long twos are never going to be as valuable as layups and 3-pointers, other teams have adapted to the game’s evolution, and defenses are increasingly willing to give the Warriors open mid-range jumpers to avoid giving them layups and 3-pointers. And they have taken advantage. Golden State shot 47% in the mid-range this season. Which means they got more value from the least valuable shot than any team in 20 years. Houston prides itself on its midrange disdain. It relied on midrange shots less than any team this year—and for the five seasons before this season. But in an ironic twist, the mid-range was surprisingly useful for Houston in the last round against the Jazz, when Utah’s defense made Paul shoot, and he made them pay by shooting 14-of-26. The Rockets, like the Warriors, were great enough to make a bad shot good. The WSJ Daily Crossword | Edited by Mike Shenk Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day. 70s season and 27th since February. The other hallmark of D’Antoni’s past teams is that they weren’t particularly good on defense. But the Rockets blast that assumption to smithereens. Because this D’Antoni team is excellent on defense. That was the plan all along. “Our whole focus now is to make sure our defense is solid and tight,” D’Antoni said in an interview before the season. And the players Houston general manager Daryl Morey acquired as he engineered a roster to beat the Warriors—Chris Paul, P.J. Tucker and Luc Mbah a Moute—have turned the Rockets into a defensive force. 30 Unification Church member, informally 32 Horn honks 33 Rickman of “Die Hard” 35 Blueprint figure 39 Extra, perhaps 40 Iris opening 42 Medal recipient 43 Colorful sky phenomena 45 Kitchen whistler 46 Those not previously mentioned 51 Smells 52 Flower bed fill 53 Dee who duetted with Elton John 54 Force fighting good 55 Track event 56 Poky 57 Continent south of Eur. 58 Work wk. end 59 Bumbling sort 3 Yoked team 4 Sommelier’s suggestions 5 Language of northern Spain 6 Spotty cat 7 Units of resistance 8 Coaches give them at halftime 9 Lion, at times 10 Yen 11 West of “My Little Chickadee” 12 High-elev. place 13 Thus far 21 Some side dishes 22 Needs to repay 25 Become sharply attentive 26 Bakery treat 27 Beer after bourbon, say 28 Llama’s cousin 29 Like many Billie Holiday songs Previous Puzzle’s Solution L A V A E G A D D O N A M C R U S R A P U N S E I G O R S I L A E N D S K I S S U R A L R A V E T T O P T A T E R S U B V E R T B L E H R O L O I L L G O S P I O U B E Z T I P R I S O N N C O A R S T G B L A O B A N Y T I S L A S T O S M E S EWE G E G U R R E G O OW A V O W N A N O D I N O B L E D E N L I S A T T L A A X S E R E G G A E S T A N D S G E O S T E E L E K The contest answer is TENNIS. Each of the six starred answers conceals the surname of a person famous for a sport: William TELL of Archery, Ben HOGAN of Golf, Al UNSER of Auto racing, Lionel MESSI of Soccer, Lindsey VONN of Skiing and Bobby ORR of Ice hockey. The first letters of those six sports spell AGASSI, suggesting the contest answer. . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A15 OPINION The Argentine Peso’s Death Spiral A sharp selloff of the Argentine peso is sparking new inflation fears in South AMERICAS America’s seco n d - l a rge s t By Mary economy. For Anastasia a country that O’Grady is heavily dependent on foreign capital and has a history of repeatedly destroying its currency, this is no passing storm. The return of the International Monetary Fund to Argentina last week with a $30 billion emergency aid package is proof that the government is in panic mode. But outsiders can’t fix this problem, and IMF austerity is likely only to rekindle isolationist sentiment. Any rescue has to start with President Mauricio Macri explicitly backing the central bank’s independence so that the monetary authority can restore its credibility. That effort was under way in the first year of his presidency, which began in December 2015. But a persistent fiscal deficit, inadequate regulatory reform and slow growth have put increasing pressure on the central bank to print money and lower interest rates. The idea that easy money can substitute as a fix for underlying structural problems wasn’t born in Argentina. Barack Obama and Federal Reserve Chairs Ben Bernanke and Janet Yellen tried it for eight years after the 2008 financial crisis. Yet U.S. growth didn’t pick up until the Trump administration began to cut taxes and reverse an antibusiness bias. It’s astounding that Argentina would administer something similar to the ObamaBernanke elixir, and not only because the U.S. dollar’s reserve-currency status is a unique privilege. Argentina has a terrible monetary reputation that can be overcome only by demonstrating a firm commitment to price stability. Germany learned this lesson in the period between World War I and World War II. Argentina keeps reliving it. The peso is down more than 15% against the dollar in the past three weeks. The central bank has responded by hiking overnight interest rates to 40%. Since April 19 it has sold around $8 billion in international reserves in a futile attempt to reverse the slide. Credit-default swaps spiked last week. Mr. Macri is blaming the peso rout on rising dollar interest rates, higher oil prices and “other variables that we don’t manage.” But as I noted in a February column on this topic, Argentina’s deeply rooted culture of populism is the original sin, and Mr. Macri’s reluctance to confront it threatens his success. The president inherited a fiscal mess from his predecessors, Cristina Kirchner, who was president from 2007-15, and her husband, Néstor, president from 2003-07. But the Kirchners also sowed deep social division with hateful, vicious rhetoric as a strategy for remaining in power. Mr. Macri has sought to heal the nation with a kinder, gentler message from the Casa Rosada presidential office. Yet sugarcoating the grim economic reality is no way to build consensus for change. It is impossible to generate To solve the problem, President Macri needs to get aggressive in challenging Peronism. support for better policy without a conversation in the public square about how economic nationalism—a k a Peronism— has cost the country. Only a leader willing to make the case for smaller government and greater economic liberty—every day—can begin to right the ship. If Mr. Macri can’t do this, he should hire a team of communicators who can. The president has instead opted for gradualism, which is a code word for soft-pedaling the sad facts. More than two years into a four-year term, he hasn’t made a dent in aggregate government spending, and, as important, tax, labor and trade policy remain too restrictive. In 2002, the year before Néstor Kirchner took the reins of power, the consolidated government budget was less than 23% of gross domestic product. When Mrs. Kirchner left it was over 41% of GDP. In other words, there is plenty of fat to cut. Yet the overall fiscal deficit in 2017 was 6.5% of GDP, slightly larger than when Mrs. Kirchner stepped down. Mr. Macri’s first year in office was promising. By October 2016 the exchange rate had been freed, and the central bank was gaining credibility. Inflation was annualizing at more than 44% but the government was able to issue 10-year bonds with a 15.5% coupon. That may have been because the bank had set an inflation target of 10% for 2018. But in December it raised that target to 15% and subsequently began cutting the overnight lending rate. At the same time the government lobbied, not so subtly, for a weaker peso. The idea was to spur growth to generate more government revenue. It was a mega-miscalculation. Financing a fiscal deficit in a country without national savings means importing capital, which naturally generates a current-account deficit and a currency that is stronger than it would otherwise be. Creditors were willing to finance the large budget deficit. But the peso devaluation has them heading for the exits, setting off a death spiral and raising inflationary expectations. Mr. Macri wants Argentina to return to normalcy. But asking the central bank to bear the cost of runaway populism is no way to get there. Write to O’Grady@wsj.com. A Better Alternative to Payday Loans By Todd H. Baker And Snigdha Kumar M ore than 50 million Americans in low-income working families struggle to manage everyday cash flow. That means they have the resources to pay monthly bills but can’t handle small financial shocks or timing mismatches because they lack the savings buffer the more affluent take for granted. Most lack access to reasonably priced credit and can’t stretch out medical, home and auto expenses over time. The result is a damaging cycle of reliance on high-cost payday loans, auto-title loans and bank overdrafts that often leads to financial ruin. While interest groups squabble over whether more or less regulation is the answer, people suffer. There is a solution with benefits for employers and employees. In a new working paper published from Harvard’s Mossavar-Rahmani Center for Business and Government, we show that mobile and online financial products sponsored by employers can cover a wider range of borrowers and charge them less money than those available to individuals in the market. Use of these FinTech products may also significantly reduce employee turnover and save employers millions. The key to their success is the “salary link”—meaning the money provided to employees is automatically repaid through salary deduction. Large employers can make these benefits available today without changes in law or government intervention. Our paper examined two employer-sponsored FinTech products—a short-term installment loan from SalaryFinance and an “early wage access product” provided by PayActiv. The SalaryFinance online loan is available to Using a ‘salary link,’ employers can help low-income workers get access to credit. employees in the U.K. (and starting next month in the U.S.) at a fraction of the cost of competing market products. The cost difference is most significant for borrowers with poor credit. SalaryFinance’s typical loan, made to a borrower with a 480 to 500 U.S. FICO score, bears an 11.8% annualized interest rate. A borrower with such a low credit score wouldn’t qualify for a standard loan in the U.S. market at any price and would be forced to turn to a payday-type loan or bank overdraft at more than 200% interest. An employer that offers SalaryFinance can be sure it is providing much lower borrowing costs and broader credit access to its employees. The same is true of PayActiv, which allows employees access to earned but unpaid salary through a mobile app before their normal payday. PayActiv costs the employee $5 in any month the product is used (although employers frequently subsidize all or part of the fee). Meanwhile, the typical overdraft or payday loan costs around $35. And PayActiv is available to all employees regardless of past credit history. These dramatically lower rates are possible because repayment comes directly from the employee’s paycheck. For PayActiv, this almost entirely eliminates risk. For SalaryFinance, the link to payroll provides better information on employment status than the credit bureaus used by market lenders. The automatic deduction turns the employee’s salary into de facto collateral; SalaryFinance always gets repaid if the employee remains employed at the same company. And many employees who would otherwise default decide against leaving a job that pays eight to nine times the value of their loan. These factors lead to markedly superior loan performance, with default rates running at less than 20% the rate predicted by credit scoring. Our preliminary research also found that such employer-sponsored financial products may improve employee retention, with annual turnover rates 19% to 28% lower among users of PayActiv or SalaryFinance. While more research is needed to fully establish a causal relationship, these findings have significant implications for business. We estimate turnover costs at Target, for example, are around $567 million annually, or $3,300 every time a retail employee leaves the company (half do every year). Even a 5% reduction in turnover is worth around $28 million to a company like Target—and a full 28% reduction would be worth close to $160 million a year. That would be a gold mine for shareholders. One encouraging sign is that Walmart, one of the largest employers of low-wage workers, recently made PayActiv available to its employees. From December to March, 80,000 Walmart employees received more than $30 million through PayActiv. It’s time for more American employers to help low-wage employees deal with liquidity and credit challenges. There’s no excuse for waiting when products are available that will save money for workers and their bosses. Mr. Baker is a senior fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School. Ms. Kumar is a 2018 recipient of a master’s degree in public policy at the Harvard Kennedy School and a former intern at PayActiv. This op-ed is based on their recent working paper. My Long Recovery From Kindergarten By Pamela Jane Bell F or a long time I puzzled over how I managed to go from a hopeless screw-up in school to a hardworking, disciplined writer as an adult. After considering it for 50 years or so, I came to the realization that I had been a very hardworking little girl. In fact I was a workaholic, striving, in my 4year-old way, to decipher the mysteries of the universe and the meaning of life. What was real? What was illusory? Sometimes, in the middle of the night, it seemed as if nothing was real, that sunlight and houses and stop signs were pictures painted on a curtain. Behind the curtain was a black hole—nothingness. We kids weren’t supposed to know about the nothingness. Late at night, when we were asleep, the grown-ups touched up or repaired any wrinkles or tears in the curtain so that we wouldn’t suspect what lay behind the seamless surface. Even my consciousness, my essential being, might be part of the illusion. I lay in the dark, prickling with panic, praying for daylight and the sounds of activity and life to dispel the terrifying specter of nonexistence. Then, in the middle of wrestling with these dilemmas—I admit I wasn’t making much progress—something terrible happened. As a girl I played with ideas. The teachers had other ideas. My parents sent me to kindergarten. Kindergarten came as a rude interruption to my existential preoccupations. What did finger painting or building blocks have to do with the questions that haunted me? It wasn’t that I didn’t want to play; I just didn’t want to play with blocks and finger paint, at least not exclusively. I wanted to play with ideas. I felt hamstrung. This didn’t bode well for future academic achievement. And, sure enough, by third grade I was in the slow reading group. Though I loved to read, I hadn’t read the stories or answered the questions in the workbook. I didn’t want to answer those questions. I had too many of my own. Numbers were even more infuriating, especially when concealed in story-problems about children going to the store to buy candy. Just when you were getting interested in the candy-store adventure, they yanked the narrative out from under you and presented you with a math problem involving money laundering. I hated school so much that I took to heating up the thermometer on the radiator so my parents would think I had a temperature and let me stay home. This worked well, except for the time the thermometer registered 105 degrees and my mother took me to the emergency room. Because no one talked about the ideas that absorbed me, and because I couldn’t begin to articulate them, I felt invisible, as though I didn’t exist. The more ignored and invisible I felt, the richer my interior life became. Standing on the beach during summer vacations, I imagined that I alone understood the secret language of waves as each one broke, breathing its brief tale before sinking back into oblivion. I might be flunking out of school, but in my inner life I reigned supreme—author of existence, teller of tales, master of tides. Through it all I was striving to transform reality, answer impossible questions, and create a story out of a big mess. In other words, I was working to become a writer. Mrs. Bell writes children’s books, memoirs and essays under the pen name Pamela Jane. BOOKSHELF | By Melanie Kirkpatrick Ambitious, Shrewd, Ladylike Phoebe Apperson Hearst By Alexandra M. Nickliss (Bison Books, 630 pages, $39.95) O rson Welles’s “Citizen Kane” is famously based on the life of William Randolph Hearst, the flamboyant newspaper publisher and politician of the first half of the 20th century. But there’s at least one detail that Welles made up: Kane’s parents. In the film, Kane’s mother, played by Agnes Moorehead, inherits a fortune and abandons her young son to the care of a banker to protect him from his abusive father. In real life, Hearst’s mother, a San Francisco philanthropist and socialite, doted on him, while his workaholic father was largely absent. Hearst mère is the subject of “Phoebe Apperson Hearst: A Life of Power and Politics” by Alexandra M. Nickliss, an instructor of history at City College of San Francisco. Phoebe Apperson was born in a tiny town near St. Louis in 1842, the eldest child of parents who made sure that their daughter got a good education and who taught her the value of hard work. When she was 19, she married George Hearst, 22 years her senior. George, the son of a neighbor and a successful miner in California, was on a visit home. Phoebe saw him as her ticket to a better life. Her rise from schoolteacher in rural Missouri to one of the country’s wealthiest and most powerful women is worthy of examination, and I wish I could say I liked Ms. Nickliss’s book. But it is overlong, over-footnoted and overly PC in its perspective. It is also repetitive. If only I had a Susan B. Anthony dollar for every time the reader is informed that Hearst was a member of the “elite,” or “wealthy,” or “white.” That said, “Phoebe Apperson Hearst” is deeply researched, and the persistent reader will be rewarded with a vivid portrait of the challenges faced by women with ambitions outside the home in the latter part of the 19th century. Rich women like Hearst “built distinguished reputations as wellknown philanthropists,” Ms. Nickliss writes. “But few Americans, especially men, acknowledged and recognized their power.” It didn’t hurt that Hearst was a shrewd businesswoman with a “masculine grasp of financial affairs,” in the words of one of her friends. Her husband entrusted most of his business finances to her and left her full control over his vast estate at the time of his death in 1891. The wealthier Phoebe Hearst became, the better she learned to direct the recipients of her largess. In public, as Ms. Nickliss describes, she maintained a “ladylike” demeanor with men—quiet, reserved and dignified. In private, however, she was far more assertive, in order to “gain acceptance, achieve her goals, and be effective.” Men who worked with her often made the mistake of underestimating her capabilities. With control over the Hearst estate, she had leverage over William Randolph, to whose money requests she usually, if not always, acceded. Hearst focused her philanthropic interests on education, especially the education of women. She championed the establishment of free kindergartens in Washington, D.C., where her husband served as a senator in the 1880s, and she was a founder of the National Cathedral School, then only for girls. Back home on the West Coast, she was the first woman to serve on the University of California’s Board of Regents, where she used her influence and money to create an architectural plan for the Berkeley campus after a highly publicized international competition. Harvard, Princeton, Yale and other universities drew on her creative model. Her grants to women to attend the University of California may have been the first scholarships based on financial need. She encouraged the university to hire women faculty members; she established a handicraft program so that working-class women could earn money to pay for their studies; and she persuaded the University of California at Berkeley to hire a female doctor and provide physical education for women, who had previously been considered too fragile for such exertions. Hearst’s impulse to do good was shaped by her evangelical upbringing as a member of the Cumberland Presbyterian denomination and by parents who pushed her to “find a useful role in life with meaning and purpose beyond the traditional domestic role,” the author relates. In Ms. Nickliss’s telling, Hearst was often caught between conflicting desires to give away money and to spend it on expensive homes and lavish entertaining in a manner that befitted what she saw as her proper station in life. The medieval-style castle she built on the McCloud River in California, Ms. Nickliss says, “left little doubt about Hearst’s craving to be viewed and treated like a queen.” She apparently passed along the castle gene to her son, whose sumptuous Hearst Castle in San Simeon, Calif., is a popular tourist site today. Which brings me to an odd omission—her relationship with her famous son. William Randolph Hearst puts in only a few appearances in Ms. Nickliss’s narrative. We learn that Will accompanied his mother to Europe as a boy, that his father considered him a spendthrift and refused to leave him any money, and that Phoebe made an agreement with him not to interfere in the management of his newspapers. Since she controlled the Hearst estate, she had significant economic leverage over Will, to whose requests for money she usually—but not always—acceded. It would have been interesting to know whether his mother’s business acumen had an influence on the more famous Hearst. Phoebe died in 1919, at age 76, a victim of the influenza epidemic. For most of her life she distanced herself from the rough-and-tumble of politics, preferring to work with nonpartisan voluntary organizations. Toward the end of her life, she came to support women’s suffrage. Breaking her usual rule about not appearing in public, she dressed in suffragette white and marched in the women’s division of a parade for war readiness in San Francisco in 1916. Hearst died before the adoption of the 19th Amendment in 1920. Her life story shows how women—especially rich women—exercised power before they had the right to vote. Ms. Kirkpatrick, a former deputy editor of the Journal’s editorial page, is a senior fellow at the Hudson Institute and the author of “Thanksgiving: The Holiday at the Heart of the American Experience.” . THE WALL STREET JOURNAL. A16 | Monday, May 14, 2018 OPINION REVIEW & OUTLOOK The African Terror Fight F ighters loyal to Islamic State killed four holy war might do better in Africa. American soldiers in Niger last fall, surAfrican “jihadist operations have generally prising even some Members of Congress become more sophisticated,” according to a who apparently had no idea February report from the The U.S. should stay on Foundation for Defense of Dethe U.S. is fighting ISIS in Africa. Last week the Pentagon “Between January the continent despite mocracies. published a highly critical 2007 and December 2011, jisummary of its investigation the failed Niger mission. hadists conducted 132 sucinto the incident, but it should cessful, thwarted, or failed atlead to military improvements tacks against Western not a U.S. retreat from Africa. interests in Africa.” The report blamed the deaths on “individual, That number almost tripled between 2012 organizational, and institutional failures and de- and 2017. U.S. strategy has shifted accordingly. ficiencies.” On Oct. 4 a platoon-size force of Ni- There are now about 7,200 Americans working geriens, accompanied by 11 U.S. Special Forces for the U.S. on the continent, according to Gen. soldiers, was ambushed by a larger and better- Waldhauser. The U.S. conducts drone strikes, equipped terrorist force outside the village of surveillance flights, training missions and occaTongo Tongo. In addition to not being properly sional raids against many jihadist groups. integrated with the Nigeriens, the Americans The Islamist group al-Shabaab controls hadn’t completed rehearsals to prepare for en- swaths of Somalia and plots attacks across emy contact. By the time French aircraft arrived, East Africa. It has actively recruited foreignfour Americans were dead. ers, including dozens of Americans. President The incident has prompted reforms to how Trump loosened use-of-force restrictions in dangerous missions are approved, and Ameri- Somalia, where American troops assist Somali cans will now have heavier weapons and ar- and African Union troops. U.S. forces launched mored vehicles. Gen. Thomas Waldhauser, who 31 strikes in Somalia last year, according to the leads the U.S. Africa Command (Africom), ac- Long War Journal, up from 15 in 2016 and knowledged in a press conference last week that three in 2015. Americans are also deployed in while the U.S. mission is to advise and assist, it’s nearby Kenya. “a little bit of an art, not necessarily a science.” The U.S. operates a drone base in Cameroon, Americans have since accompanied Africans on conducting missions against Boko Haram, the fewer risky missions, which are vetted higher on Nigerian terrorist group that has killed thouthe chain of command, and protective aircraft sands. Then there’s Niger, which shares a borare required to join them. der with lawless Libya, where the U.S. has conIt’s reassuring that the U.S. military and the ducted airstrikes against Islamists. Boko Haram White House have chosen to reform—not to cut is on Niger’s southeastern border, while an Isand run. Most Americans associate Islamist ter- lamic State offshoot operates to the west. rorism solely with the Middle East, but the American personnel also assist from nearby threat has spread to Africa. Chad and Nigeria. The Bush Administration created Africom in About 800 American military personnel are 2007 to deal with growing threats in the region. based throughout Niger, with many working at President Obama made progress against al a drone base outside the central Nigerien city of Qaeda in his first term—until he declared the Agadez. Most troops are involved with drone opgroup effectively defeated and gave Islamic erations, though some Special Forces soldiers— State an opening in Iraq and Syria. The Islamist like those who died in October—remain. menace grew in Africa and around the world as A Presidential speech laying out the threat the U.S. disengaged, and Mr. Obama had to play and a strategy would provide some clarity and catch up late in his Presidency. prepare Americans for potential casualties. Mr. ISIS has captured America’s attention since Trump can rightly say that Americans are fight2014. But after the caliphate’s collapse as a geo- ing today to prevent new jihadist sanctuaries graphic power in Syria and Iraq, aspiring jihad- that could be used to launch attacks against the ists are looking elsewhere for safe havens and U.S. homeland, and so that our African allies can softer targets. Today someone looking to wage eventually manage their own security. Contradicting Comey on Flynn—Again T he contradictions of former FBI director James Comey keep piling up. The latest came Friday when Senate Judiciary Chairman Chuck Grassley provided new evidence that Mr. Comey told Congress a different story last year about the truthfulness of former White House national security adviser Michael Flynn than Mr. Comey is now telling the public. In a letter to the FBI and the Justice Department seeking documents, Mr. Grassley relates that Mr. Comey “touched on” the Flynn case before the Judiciary Committee on March 15, 2017. A “career, non-partisan law enforcement officer” was present and took notes. “According to that agent’s contemporaneous notes,” Mr. Grassley writes, “Director Comey specifically told us during that briefing that the FBI agents who interviewed Lt. General Michael Flynn, ‘saw nothing that led them to believe [he was] lying.’” Mr. Grassley says this contradicts Mr. Comey’s “public statements during his current book tour denying any memory of those com- R ments,” and that Mr. Comey “led us to believe during that briefing” that “the Justice Department was unlikely to prosecute [Mr. Flynn] for false statements made in that interview.” The House Intelligence Committee has released a transcript of Mr. Comey saying the same thing about Mr. Flynn, so this is the second time Mr. Comey has been contradicted on the point. In December Mr. Flynn pleaded guilty to making false statements to the FBI, and the question is whether special counsel Robert Mueller pressured him to plead to a crime he didn’t commit. Attorney John Dowd asks the same question in a nearby letter and says Congress should seek the 302 forms filed by FBI agents who did the interviewing. This is presumably among the documents Mr. Grassley is seeking from Justice and the FBI, which have no good reason to resist cooperating now that Mr. Flynn has pleaded guilty. This would help Americans learn whether Mr. Flynn was telling the truth—and whether Mr. Comey is lying now. A Useful Spending Debate epublicans in this Congress have failed fund, but only spent a bit more than $14 billion. to tame federal spending—on either en- No child will lose health care. titlements or the discretionary accounts That won’t stop Democrats from claiming that won a big increase in this the worst, and Senate MinorRepublicans can win a ity Leader Chuck Schumer year’s omnibus bill. Perhaps they can now impose at least wasted no time saying Repub‘rescissions’ battle if a little restraint on money licans are “looking to tear they make their case. that the government isn’t apart” the program, “hurting even spending. middle-class families and lowCongress can claw back income children.” Republicans spending with a simple majority through a pro- have to call out the Democrats for wanting to cedure in the Congressional Budget and Im- keep these funds in reserve so they can spend poundment Control Act of 1974, and last week it later on pork. the White House sent such a $15 billion “rescisThe current package avoids cuts from the sions” package to Capitol Hill. The Administra- omnibus bill because Senate Majority Leader tion proposes cuts, and the accounts are frozen. Mitch McConnell fears that would make it Congress has 45 days to act, or the spending harder to negotiate another deal with Demoproceeds. crats when the budget year ends in September. The package zeros out $4.3 billion from the Mr. McConnell is right that some conservatives Advanced Technology Vehicle Manufacturing are too quick to denounce the tradeoffs in the loan program, an Energy Department outfit that omnibus bill; a military spending increase was hasn’t made a loan since 2011. The program lent urgently needed. Democrats used the leverage your tax dollars to the likes of Fisker Automo- of the 60-vote filibuster to extract more domestive, the electric car maker of the Obama years tic spending in return. that went bust. But the GOP now has the leverage of the reSome $133 million would be cut from a scission process to claw some back. This isn’t lapsed railroad unemployment insurance pro- “reneging” on the deal. Republicans are gram, and $252 million from an Ebola response merely using the tools of the majority to pass account, as apparently the money outlived the their agenda, much as Democrats used the outbreak. The proposal would cut more than tools of the Senate minority to pass theirs in $100 million in Hurricane Sandy funds that the omnibus. Democrats will do that again in states haven’t put up the matching money to September no matter what Republicans do on tap. The nickels and dimes include farm market- rescissions. ing cash that had been used in at least one case The larger political point is that the GOP has to promote chocolate-covered peanuts, which an opportunity to make the sensible case to votwe’ll eat even without subsidies. ers that defending the country is more imporAbout half the package is a rescission to the tant than other spending and transfer proChildren’s Health Insurance Program. Every year grams. The Administration says this is the first Congress dedicates more money to the program of “several” rescission packages to come, and than is spent, and appropriators pocket the rest if Republicans want to motivate their voters to to spend elsewhere. In 2016 Congress appropri- come out in November they’ll argue for and ated about $23 billion, including a contingency pass these cuts. LETTERS TO THE EDITOR Tribalism Threatens the Great Melting Pot Regarding Jason Whitlock’s “Kanye Had One of the Best Tweets of All Time” (op-ed, May 8): There is a debate today over whether anyone should be entitled to independent thought and free speech. That is, should anyone be entitled to think and say things that the established purveyors of “correct” thought and speech deem inappropriate? The outrage among African-American “leaders” toward Kanye West is palpable. How could he, an African-American, possibly tweet such things? It is obviously an outrage to his race, no? This is very similar to the debate about a woman’s right to free thought and speech. As Madeleine Albright said regarding women who didn’t support Hillary Clinton, “there’s a special place in hell” for them. Increasingly, it seems, we are required to identify with our tribe and then fall lockstep in line with the views established by the chiefs of the tribe. Our tribal leaders are, of course, a jealous lot that fight over their fiefdoms of women, AfricanAmericans, Hispanics, immigrants, etc. And the turf fighting seems to get nastier and more bitter as the chiefs’ selfish interests are whetted. It’s truly ugly stuff. I am proud to be a member of the only group that apparently doesn’t have a politically correct tribe: European-American males. In this group, I am allowed to think freely and express my First Amendment right of free speech without being criticized for “abandoning my tribe.” It is a good group to be in and I welcome all others who wish to leave their tribes and enjoy the liberation of independent thought and free speech. HENRY SCOTT Potomac, Md. In the 1960s I often sent letters of support to white people in the Southern states who bravely stood up against segregation, often at the risk of their lives and acceptance in their communities. Now I must applaud Kanye West for his eloquent expression of the need for cultural change and political independence from the yolk of government-support addiction—an equally brave stand that has brought him similar pressures and reactions from his peers. Thank God there are a few brave souls who see beyond the safety of conformance and are willing to start another march for freedom. BRAD BENNETT Binghamton, N.Y. The greatest form of racism and bigotry is to assume by looking at someone you know who they are, what they think and how they should act. STEVE RESTAINO Chesapeake, Va. That Population Bomb Dud Is Still a Danger William McGurn presents a great overview of the argument for why “The Population Bomb Was a Dud” (Main Street, May 1). However, there is a reason people should not pick up a dud bomb—some blow up unexpectedly. Paul Ehrlich’s “The Population Bomb” was that kind of dud; its problem was one of timing. As someone who studies natural resources, I’ve never had a problem seeing the population problem described in that book. The original title was “Population, Resources, and the Environment,” and that’s the way it needs to be read. The publisher insisted on the catchier title. Casually keeping up with the news last week, I noted a garbage dump in the middle of the Pacific twice the size of Texas, another smaller one in the Atlantic, microplastics in the water I drink and immigrants scaling border walls—all parts of that “bomb.” Population and consumption need to be jointly considered, but you have to be pretty naive not to think that dud might still go off. PROF. THOMAS J. STRAKA Clemson University Clemson, S.C. If there is anything to be learned from that famous bet Julian Simon made against Paul Ehrlich, it’s that they bet on the wrong things—metals. Any farm boy (or thinking person) could tell you that what’s in increasingly scarce supply in an overpopulated world are the very things life depends on—potable water and arable land. Since that 1980 bet, the price of these have dramatically increased while the supply continues to diminish. JIM WALTERS Iowa City, Iowa President Trump Should Pardon Gen. Flynn Regarding your editorial “The Mystery of Michael Flynn’s Plea” (May 7): If I were Rudy Giuliani, I would advise President Trump to immediately issue a full pardon to Gen. Michael Flynn based on the sworn testimony of both the director and deputy director of the FBI. News organizations could hardly ignore the pardon and, given the testimony of James Comey and Andrew McCabe, would be hard pressed to call it obstruction of justice. Once pardoned, Gen. Flynn should then be asked, under oath, if he was coerced, due to lack of funds or by a threat to his family, to plead guilty to making a false statement. There is a growing smell of “swamp gas” and it appears to be rising from the top echelons of the FBI and Justice Department. The good people who make up the core of those agencies must be furious with their leadership for the disgrace they all are forced to share. JIM BARBER Mesa, Ariz. The Sale of Manhattan In Balance of Trade Terms I enjoyed the exchange between Profs. Jason Furman (“Worry About the Trade Deficit—a Bit,” op-ed, May 2) and Donald Boudreaux (Letters, May 8) on the meaning of “currentaccount deficit.” Mr. Furman says: “If a country saves less money than it puts toward things like factories and equipment, then it has to finance the difference with foreign borrowing.” Mr. Bourdreaux argues: “It is simply untrue that the difference between total investment in the U.S. and total savings in the U.S. must be financed with borrowed funds.” He then gives a number of examples of redressing the balance by transferring U.S. assets to foreign creditors. The correct formula is (investment - disinvestment) = (saving + borrowing). A classic example is the transfer of Manhattan from American Indians to the Dutch for 60 guilders. I am not sure who got the better deal, but the Indians’ current account remained in balance. STEVEN CROW, PH.D. Boulder, Colo. Letters intended for publication should be addressed to: The Editor, 1211 Avenue of the Americas, New York, NY 10036, or emailed to email@example.com. Please include your city and state. All letters are subject to editing, and unpublished letters can be neither acknowledged nor returned. Congress needs the FBI “302” report of the Flynn interview. There are reports that Gen. Flynn referred to the FISA wiretap of the Ambassador Sergey Kislyak conversation at the outset of the FBI interview. If those reports are true, his reference to the complete and accurate wiretap precludes any charge of false statement. The Flynn plea on Dec. 1, 2017 was improvident and should not have been accepted by the court. A provident plea to 18 USC § 1001 (false statement to FBI) has two elements: A) that it be false; B) that it be material to the inquiry. The Mueller investigation concerned possible collusion with Russia during the 2016 election campaign that ended Nov. 8, 2016. The questions and answers in the Flynn FBI interview occurred in December 2016 and involved conversations with the Russian ambassador in December 2016—after the 2016 election campaign, and are thus immaterial to the stated inquiry of collusion during the 2016 campaign. Gen. Flynn kept his security clearance. Neither DAG Sally Yates nor Mr. Comey recommended charging Gen. Flynn. Thus, the improvident plea as drafted and signed by Special Counsel Robert Mueller was defective on its face and should have been unacceptable by the court. The special counsel and the court failed us. JOHN M. DOWD Washington Mr. Dowd formerly served as counsel to President Trump. Pepper ... And Salt THE WALL STREET JOURNAL “Amazon has taken from us the sense of waiting your turn.” . THE WALL STREET JOURNAL. Monday, May 14, 2018 | A17 OPINION By Steven G. Calabresi J udge T.S. Ellis has expressed skepticism about the scope of special counsel Robert Mueller’s investigation. “What we don’t want in this country is . . . anyone with unfettered power,” Judge Ellis, who is to preside over the trial of former Trump campaign manager Paul Manafort, told prosecutor Deputy Solicitor General Michael Dreeben May 4. “So it’s unlikely you’re going to persuade me that the special prosecutor has unlimited powers.” Judge Ellis is right to be skeptical. Mr. Mueller’s investigation has crossed a constitutional line, for reasons the U.S. Supreme Court made clear in the 1988 case Morrison v. Olson. That case is best known for Justice Antonin Scalia’s powerful lone dissent arguing that the post-Watergate independent counsel statute was unconstitutional. But Chief Justice William Rehnquist’s opinion for the court, while upholding the statute, set forth limits that the Mueller investigation has exceeded. It’s unconstitutional under Morrison v. Olson—the decision, not the dissent. At issue is the Constitution’s Appointments Clause, which provides that “principal officers” must be appointed by the president with the Senate’s consent. Rehnquist wrote that independent counsel Alexia Morrison qualified as an “inferior officer,” not subject to the appointment process, because her office was “limited in jurisdiction” to “certain federal officials suspected of certain serious federal crimes.” Mr. Mueller, in contrast, is investigating a large number of people and has already charged defendants with many different kinds of crimes, including—as in Mr. Manafort’s case— ones unrelated to any collaboration between the Trump campaign and Russia. That’s too much power for an inferior officer to have. Only a principal officer, such as a U.S. attorney, can behave the way Mr. Mueller is behaving. Mr. Mueller is much more powerful today than any of the 96 U.S. attorneys. He is behaving like a principal officer. Rehnquist’s majority opinion has never been overturned. In Edmund v. U.S. and in Free Enterprise Fund v. Public Company Oversight Board, the justices said that an officer cannot be inferior unless he has a boss—as Mr. Mueller does in Deputy Attorney General Rod Rosenstein, who appointed him. But that’s not a sufficient condition. As a principal officer, Mr. Rosenstein could legally have brought all the indictments Mr. Mueller has. But he may not delegate that authority to Mr. Mueller, any more than President Trump could delegate his veto power to Mr. Rosenstein. The Framers struggled long and hard over the Appointments Clause. For better or worse, they arrived at the process of presidential nomination with senatorial consent. The Justice Department’s Office of Legal Counsel should confirm the analysis set forth above in a legal opinion to guide Mr. Rosenstein in the exercise of his duties. Judge Ellis should dismiss the indictment against Mr. Manafort on Appointments Clause grounds. All other defendants Mr. Mueller charges, and witnesses he subpoenas, should challenge the constitutionality of his actions on Appointments Clause grounds. Mr. Calabresi served as a special assistant to Attorney General Edwin Meese (1985-87) and a law clerk to Justice Antonin Scalia (1987-88). He is a co-author of “The Unitary Executive: Presidential Power from Washington to Bush.” America Recognizes One Jerusalem By Eugene Kontorovich T he U.S. on Monday will officially open its new embassy to Israel in Jerusalem. This will correct a surreal policy whereby, since Israel’s independence 70 years ago, the U.S. and other nations have refused to recognize its sovereignty over its capital city. President Trump announced in December he would reverse the old policy. By moving the embassy he now translates words into deed. The embassy’s exact location within Jerusalem has gotten much less attention, but it is equally consequential. It will be housed in buildings used by the American Consulate, as well as in an adjacent former hotel purchased by the State Department in 2014. Most of that complex is located on the far side of the armistice line that divided Jerusalem from 1949 to 1967. Thus the embassy site demonstrates that the U.S. not only sees Jerusalem as Israel’s capital, but also—consistent with bipartisan calls from Congress—recognizes the city as unified. The “Green Line” was created in the wake of Israel’s 1948-49 War of Independence. Upon the country’s founding, Jordan and its allies invaded, with the goal of preventing the creation of a Jewish state. Although they failed at that goal, the Arab armies did occupy significant territory when the armistice was called, including what is now widely referred to as the West Bank and East Jerusalem. Jordan subsequently expelled all Jews from the areas under its control. In 1967, during the Six Day War, Israel recaptured these places. But in the war’s aftermath the United Nations invested the temporary 1949 armistice line with talismanic significance. The U.N. claimed Israel was “occupying” the territory that Jordan had forcibly seized not two 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; 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: 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 Outside the U.S. Consulate in Jerusalem—now the embassy—on May 8. decades earlier. Thus the international community came up with a unique demand: Israel had to keep the areas under its control, including East Jerusalem and the Old City, free of Jewish inhabitants. Any move to unify Jerusalem would be considered a war crime. The new U.S. Embassy straddles the ‘Green Line,’ refusing to dignify claims of Israeli ‘occupation.’ In international law, armistice lines are not borders; they merely mark breaks in the fighting. The claim that the Green Line created a permanent “Judenrein” zone in the area occupied by Jordan, or that it in any way changed the legal status of the territory on the far side, is unique and illiberal. By ignoring the armistice line today, the U.S. is showing that it attaches no legal significance to this outdated demarcation. Having an embassy that straddles the Green Line means recognizing as Israel’s capital a unified Jerusalem that includes the Old City and other eastern areas. It means categorically rejecting the notion that Israel has no sovereign claims across the Green Line. President Trump made this explicit last week, announcing his delegation to attend the embassy opening “in Jerusalem, Israel.” In another sign of change, the State Department’s annual human-rights report on Israel, released last month, for the first time dropped the word “occupied” from its discussion of East Jerusalem and the West Bank. Skeptics, including the foreignpolicy experts who blanched when the president announced the embassy move, are trying to construe his actions as narrowly as possible. They often cite a sentence from his December speech: “We are not taking a position on any final status issues, including the specific boundaries of the Israeli sovereignty in Jerusalem or the resolution of contested borders.” Their interpretation is that Mr. Trump did not say Jerusalem consists of any specific physical area, and certainly not anything across the Green Line. But that sentence does not mean what they claim. The president was leaving open “final status” borders— those that might be negotiated in the future. Mr. Trump was saying that American recognition of today’s Jerusalem, with its well-known municipal boundaries, in no way would prevent Israel and the Palestinians from later agreeing on different lines. Most proposed peace plans contemplate Israel ceding parts of its undisputed sovereign territory to a future Palestinian state. In that sense, all of Israel’s “specific boundaries,” far beyond Jerusalem, are subject to change by a final status agreement. That possibility, however, does not negate American recognition of Israel’s current borders. Others who wish to obfuscate the significance of the new embassy’s location note that it sits in a pocket of land that was a U.N.-administered demilitarized zone from 1949-67. But the legal theory that paints Israel as an “occupier” is not based on who controlled the land during that period. Rather, the argument is that Israel does not have the right to any territory on the Green Line’s far side. The former DMZ is exactly such a location. In 1958 a U.N. Security Council resolution explicitly declared that the DMZ was “beyond” the 1949 armistice line. All this can mean only one thing: The U.S. no longer buys into the legal theory behind claims of Israeli “occupation.” Other countries may soon follow, just as they are now announcing their intention to recognize Jerusalem. America’s affirmation of a unified city may be only the first fissure in the ossified international consensus. Mr. Kontorovich is a director at the Kohelet Policy Forum, a Jerusalem think tank, and a professor at Northwestern University’s Pritzker School of Law School. Managed Trade? I’m Back in the U.S.S.R. By Daniel M. Price T he current U.S.-China trade talks have a historical parallel, with an odd role reversal. On June 1, 1990, seven months after the Berlin Wall fell, Presidents George Bush and Mikhail Gorbachev met at the White House to sign an agreement normalizing trade relations between the U.S. and the Soviet Union. The agreement capped a year of intense negotiations, during which Ambassador Julius Katz, a legendary trade diplomat, led the U.S. delegation, and I served as his legal counsel. Katz had negotiated with the Soviets in the 1970s and was charged with reaching a modern agreement that could be signed at the June summit. The negotiations began with the two sides exchanging initial drafts. The U.S. draft proposed rules for reciprocal market access, nondiscriminatory treatment of U.S. companies, protections for intellectual property, and various other standard trade and investment rules. It stated that trade should proceed on the basis of contracts between parties “concluded in the exercise of their independent commercial judgment and on the basis of customary commercial considerations such as price, quality, delivery and terms of payment.” The Soviet draft was essentially a series of proposed purchase and sale orders, indicating the types and volumes of products the parties were to buy from each other. Not terribly surprising for a centrally planned economy where government fiat and so-called state orders dominated commercial life. Ambassador Katz explained to the Soviet side that the goal was to reach an accord on rules for a fair trading relationship, not prescribe the precise commercial outcomes. That is, government’s role was not to manage trade but to set the legal framework for fair and open trade. As for the Soviet delegation, they were split. Some favored the U.S. 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 ABIR SULTAN/EPA-EFE/REX/SHUTTERS Mueller’s Investigation Crosses the Legal Line William Lewis Chief Executive Officer and Publisher DOW JONES MANAGEMENT: Mark Musgrave, Chief People Officer; Edward Roussel, Chief Innovation Officer; Anna Sedgley, Chief Operating Officer OPERATING EXECUTIVES: Ramin Beheshti, Product & Technology; Kenneth Breen, Commercial; Jason P. Conti, General Counsel; Frank Filippo, Print Products & Services; Steve Grycuk, Customer Service; Kristin Heitmann, Chief Commercial Officer; Nancy McNeill, Advertising & Corporate Sales; Christina Van Tassell, Chief Financial Officer; Suzi Watford, Chief Marketing Officer; Jonathan Wright, International DJ Media Group: Almar Latour, Publisher Professional Information Business: Christopher Lloyd, Head; Ingrid Verschuren, Deputy Head approach as helping the transition to a market economy. Others reflected the older Soviet approach, insisting on immediate transactional benefits. Almost 30 years later, the U.S. again finds itself in difficult trade talks in a changing world. Yet it faces a similar choice: to reach agreement with China on a set of rules for the trade relationship, or, Soviet-style, to dictate commercial outcomes by prescribing purchases and sales. But this time it’s the U.S. that is internally divided. The recent meeting in Beijing was meant to address escalating trade frictions brought on by U.S. threats and Chinese counterthreats of tariffs. President Trump proposed the U.S. actions in response to the U.S. trade representative’s Section 301 report, which exhaustively catalogued China’s unfair and discriminatory practices that impede reciprocal market access, appropriate U.S. intellectual property, and compel technology transfer by foreign companies doing business in China. Reflecting the president’s preoccupation, the U.S. team in Beijing led with a demand that China agree to a numerical trade-deficit reduction target of $200 billion by 2020. Last Thursday Commerce Secretary Wilbur Ross confirmed the administration’s fidelity to the Soviet managed-trade script: “Our approach has been to request individual products on which we could sell more to them . . . as opposed to them selling us less.” Instead of threatening tariffs that U.S. consumers would ultimately have to pay, or prioritizing deficit-reducing purchases by China that Soviet negotiators’ 1990 demands find echoes in the Trump administration today. would temporarily help only a small group of U.S. companies, the administration should seek commitments for systemic change. Once an agreement is reached, it should be recorded in a set of enforceable rules tailored to address China’s unique challenges. The U.S. is more likely to be successful if it works with its allies. And they would readily join in pressing China for such commitments as their companies suffer from the same unfair practices. First, unlike U.S. trade deficit-reducing measures that would likely come at our allies’ expense—China can simply substitute U.S. products for other foreign imports—rules for market access and fair treatment would benefit all. Second, good models for such rules are already reflected in recent trade and investment agreements concluded by the U.S., the European Union, Japan, South Korea, Australia, Canada, Singapore and many others. Moreover, China itself has shown a willingness to negotiate similar rules in various agreements, including in talks begun under the George W. Bush administration, advanced during the Obama administration, but never concluded. As negotiations continue this week in Washington, Mr. Trump should remember that real and sustainable change in trade relationships comes from agreement on rules, not purchase targets. He has a historic opportunity to secure new commitments from China and charter the new rules that eluded his predecessors. To succeed, he must turn away from old Soviet-style trade priorities. Mr. Price is managing director of Rock Creek Global Advisors LLC. A Mayor Tries to Zone Out Free Speech By Margot Cleveland T South Bend, Ind. he U.S. Supreme Court is considering a constitutional challenge to a California law targeting pro-life pregnancy centers. The so-called FACT Act requires the centers to tell clients they may qualify for subsidized abortions—a clear example of compelled speech. But such laws aren’t the only threats to the centers’ freedom of speech. At the local level, activists have begun a quiet push to protect the abortion industry through zoning. Last month the Women’s Care Center, which operates 28 pregnancy and family-resource centers in 10 states, became the latest target. A Texas-based abortion-clinic chain, Whole Women’s Health, convinced the mayor of South Bend, Ind., to veto a decision by the city’s Common Council rezoning a house for a Women’s Care Center next to a planned abortion clinic. Mayor Pete Buttigieg made clear the veto was motivated by the center’s pro-life message: “In my judgment, the neighborhood would not benefit from having the zoning law changed in order to place next door to each other two organizations with deep and opposite commitments on the most divisive social issue of our time,” he wrote. “It is far from clear that a neighborhood benefits from co-locating facilities with such opposite views.” He added that while the Department of Community Investment staff approved the rezoning, “the recommendation did not contemplate broader concerns about the health and welfare of the area, given the deep opposition in values between the petitioner and its existing neighbor.” The mayor also cited his purported concern over violence. He wrote that “research” provided by Whole Women’s Health indicates “clinics in close proximity to a crisis At the behest of an abortion clinic, Pete Buttigieg of South Bend targets a pro-life center. pregnancy center experience significantly higher rates of violence, threats, and harassment (21.7%) than those not near such a center (6.8%).” The Supreme Court has allowed local zoning laws to survive constitutional scrutiny based on negative secondary effects, such as higher crime rates near strip clubs. But that precedent will not save Mr. Buttigieg, for several reasons. First, the so-called research consisted of one unscientific survey distributed to abortion clinics, which self-reported any incidents of violence, threats and harassment. The Supreme Court has said that “shoddy data” cannot be used to justify viewpoint discrimination. Second, in the survey the abortion clinics consider “harassment” to include peaceful protests. Since such demonstrations are constitutionally protected, they cannot be considered a “negative secondary effect.” The survey also does not distinguish between the types of pro-life organizations and the activities they sponsored. While some crisis pregnancy centers may picket abortion clinics or engage in confrontational tactics, the Women’s Care Center does not engage in political activity or allow others to do so on its property. There has never been an instance of violence connected to the Women’s Care Center—the nation’s largest such organization—although 22 of its 28 centers are adjacent to abortion clinics. Mr. Buttigieg’s veto is not surprising. He is 36 and ambitious: Last year he ran for Democratic National Committee chairman. Given the party’s extreme pro-abortion position, he had to comply with the demands of the abortion lobby in order to keep his national political hopes alive. But his first responsibility is to the people of South Bend. Mr. Buttigieg’s decision will subject the city to legal liability under the First Amendment—that is, unless the Common Council overrides the veto when it meets Monday. That would be a victory for choice, for South Bend—and for the Constitution. Ms. Cleveland is a lawyer and an adjunct instructor at the University of Notre Dame. She served on the Women’s Care Center board from 1996-2003. . A18 | Monday, May 14, 2018 THE WALL STREET JOURNAL. Forget horsepower. Now cars run on brainpower. Today, vehicle data securely and privately connects with driver behavior data, trafˇc conditions and weather forecasts. This allows Watson Assistant to help automakers offer more personalized journeys. ibm.com/smart IBM and its logo, ibm.com, Watson and Letís put smart to work 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. 2018. . LABOR: AUTO MAKERS FACE PRESSURE ON JOBS IN MIDTERM ELECTION YEAR B3 BUSINESS & FINANCE © 2018 Dow Jones & Company. All Rights Reserved. Last Week: S&P 2727.72 À 2.41% S&P FIN À 3.60% * * S&P IT À 3.45% THE WALL STREET JOURNAL. DJ TRANS À 3.31% WSJ $ IDX À 0.08% Monday, May 14, 2018 | B1 LIBOR 3M 2.343 NIKKEI 22758.48 À 1.27% Xerox Pulls Out of Fujifilm Deal BY CARA LOMBARDO Xerox Corp. said it would back out of its merger deal with Fujifilm Holdings Corp. as it reached a new settlement with two of its biggest shareholders, the latest twist in a monthslong tug of war over the future of the iconic American company. The printer and copier company said it reached a settlement to replace its chief executive and overhaul its board after it ended a plan to combine with its joint venture with Fujifilm. This is Xerox’s second settlement with activist shareholders Carl Icahn and Darwin Deason; the company had earlier struck a deal with the two billionaires to oust Chief Executive Jeff Jacobson and flip the board, but that agreement abruptly expired ear- lier this month before receiving court approval. The new settlement marks a win for Messrs. Icahn and Deason, who agreed to table their proxy fight after several months of drama. They opposed the plan to combine with the joint venture Fuji Xerox, arguing it undervalued Xerox, and had planned to run their own slate of directors for Xerox’s board. Xerox appointed five new members to the board and five existing members resigned, plus Mr. Jacobson. One of the newly appointed members, Icahn Enterprises CEO Keith Cozza, is expected to be chairman. Now, the new Xerox board— the majority of which is made up of directors backed by the activists—will immediately begin examining strategic alternatives. Messrs. Icahn and Deason have said Xerox could be sold to a competitor or private-equity firm. As part of the settlement, John Visentin will succeed Mr. Jacobson as chief executive, the company said Sunday. Mr. Visentin is a former executive at several technology companies and had been working with the Please see XEROX page B2 Recycling Firms Hit by Crushing Economics Plunging prices for scrap paper, plastics prompt cities to send some items to landfills Before and After The average price paid by house ﬂippers has risen faster than the average sales price of rehabbed houses. Sale price Price paid $300,000 250,000 200,000 150,000 100,000 50,000 0 2000 ’05 ’10 ’15 ’17 Source: ATTOM Data Solutions THE WALL STREET JOURNAL. KKR Ups Ante On Home Flippers BY BOB TITA BY RYAN DEZEMBER AND PETER RUDEGEAIR MAX WHITTAKER FOR THE WALL STREET JOURNAL The U.S. recycling industry is breaking down. Prices for scrap paper and plastic have collapsed, leading local officials across the country to charge residents more to collect recyclables and send some to landfills. Used newspapers, cardboard boxes and plastic bottles are piling up at plants that can’t make a profit processing them for export or domestic markets. “Recycling as we know it isn’t working,” said James Warner, chief executive of the Solid Waste Management Authority in Lancaster County, Pa. “There’s always been ups and downs in the market, but this is the biggest disruption that I can recall.” U.S. recycling programs took off in the 1990s as calls to bury less trash in landfills coincided with China’s demand for materials such as corrugated cardboard to feed its economic boom. Shipping lines eagerly filled containers that had brought manufactured goods to the U.S. with paper, Please see RECYCLE page B2 See more at WSJMarkets.com Many trash haulers and city agencies that paid for curbside collection by selling scrap are now losing money on almost every ton they handle. INSIDE ABU DHABI JOINS BOOM IN MIDEAST OIL REFINING ENERGY, B9 KEYWORDS | By Christopher Mims Drivers Become Guinea Pigs Even if you don’t own a Tesla, you are, or might soon become, part of the company’s experiment in automotive safety. There are already more than 200,000 Teslas on the road, and all of them built after early 2015 are capable of Autopilot—that is, semiautonomous driving. This makes drivers, and anyone encountering these cars on the road, guinea pigs who are helping to train the artificial intelligence Tesla hopes to use for a fully au- tonomous driving system. During this experiment, at least two people have died in driver’s seats of Teslas that crashed while Autopilot was engaged, but Chief Executive Elon Musk argues the system continues to improve and, overall, Teslas are safer than they would be without the technology. U ber Technologies and Alphabet’s Waymo, among others, are also road-testing on public streets. They’re experimenting at much smaller scales, though an Uber autonomous vehicle struck and killed a pedestrian in March. Subsequently, Uber suspended its self-driving-car program. CEO Dara Khosrowshahi has said it will resume within a few months. These experiments are based on assumptions about the abilities of AI, and the compatibility of humans and partially autonomous driving systems. If automobile companies are wrong about any of them—and there’s reason to believe they are—we’ll almost certainly see more self-drivingPlease see MIMS page B4 KKR & Co. is raising its bet on high-interest, short-term home loans, the latest sign that Wall Street firms are aiming to cash in on the risky but lucrative house-flipping market. Borrowers of residential transitional loans—or flip loans, as they are better known—use the money to buy a property, renovate it and then try to quickly resell at a profit. They have become a lucrative and growing niche of finance in recent years. Nomura Holdings Inc. estimates that flippers will borrow some $15 billion this year, nearly 25% more than last year. KKR is the latest example of Wall Street’s growing interest in the area. The private-equity house is boosting its commitment to Toorak Capital Partners LLC, a New Jersey concern that buys up loans made to home flippers and other residential-rehabilitation specialists from originators throughout the U.S. and the U.K. Toorak has been able to so far buy more than $1 billion of this debt. KKR had previously invested $75 million in equity in Toorak. Now, the firm says it is increasing that to $250 million. Goldman Sachs Group Inc. is another big financial player that has entered the business of writing and buying flip loans. Toorak and other firms like it buy flip loans from originators, often online operations like Peer Street Inc. and LendingHome Corp. Those companies have backing from Silicon Valley venture firms Andreessen Horowitz and Please see KKR page B6 . B2 | Monday, May 14, 2018 INDEX TO BUSINESSES BUSINESS & FINANCE A F-G Abu Dhabi Natl Oil.....B9 Airbnb..........................B4 Alphabet................A4,B1 Andreessen Horowitz.B1 Apple...........................A1 Archer Daniels............B2 AT&T......................A1,A2 Fiat Chrysler...............B3 First Round Cap.....B1,B6 Ford Motor ............ A1,B3 Fujifilm Holdings........B1 Geely Holding Group .. B3 General Mills...............B2 General Motors.....A4,B3 Goldman Sachs...........B1 B C Cargill..........................B2 China Three Gorges....B3 Citigroup......................B4 Comcast.......................B5 D-E Daimler........................B3 EDP-Energias de Portugal .................... B3 Novartis ...................... A1 P-R-S H-I-K Peer Street ................. B1 Peugeot.......................B9 P.F. Chang's.................B6 Renault........................B9 Rhône Group...............B4 Samsung...................A10 Saudi Aramco..............B9 Squire Patton Boggs..A1 Huawei Technologies . A1 Hudson's Bay..............B4 Icahn Enterprises........B1 InterActiveCorp...........B9 Kellogg.........................B2 KKR..............................B1 Korea Aerospace.......A10 Tesla.......................A1,B1 Time Warner...............B5 Toorak Capital.............B1 Toyota Motor..............B3 Unilever.......................B2 Volkswagen.................B3 L-M-N LendingHome..............B1 Match Group...............B9 McDonald's..................B2 Mondelez Internatl.....B2 Nestle..........................B2 Nissan Motor..............B3 T-U-V W-X-Z Walt Disney................B5 Waste Mngemt ..... B1,B2 WeWork ...................... B4 Window Rock.........B1,B6 Xerox ........................... B1 ZTE..............................A1 INDEX TO PEOPLE B I-J Osanloo, Michael........B6 Barry, Michael.............B2 Beacham, John............B6 Briede, Kristen............B6 Browne, Warren..........B3 Icahn, Carl...................B1 Jacobson, Jeff.............B1 Jones, Nick..................B5 Pagliari, Joseph .......... B4 Pettiford, Jeffrey........B6 C Khosrowshahi, Dara ... B1 Krafcik, John...............B4 Cozza, Keith................B1 Cuban, Mark..............A10 D Deason, Darwin .......... B1 Deseglise, Christian ... B6 DiClemente, Anthony .....................................B9 K L Langman, Steven........B4 Lee, Jennifer 8............B6 M F-G Marcus, Gary...............B4 Moore, Steve .............. B2 Musk, Elon..................B1 Frieden, Tom...............B2 Gopinath, Gita ............ B6 Goss, Jon.....................B5 Neumann, Adam.........B4 Nordvig, Jens..............B6 N-O XEROX Continued from the prior page activist investors at Xerox. Xerox said it opted to back out of the deal with Fujifilm because the Japanese company didn’t deliver Fuji Xerox’s audited financial statements by April 15, and there were material deviations in the audited financials when compared with the unaudited financials. Fujifilm didn’t immediately respond to a request for comment. Xerox in January struck the complex merger deal with Fujifilm, which would have traded Xerox’s 25% ownership of their 60-year joint venture to Fujifilm for 49.9% of a new company that combines all of Xerox with the joint venture. Xerox shareholders RECYCLE Continued from the prior page scrap metal and plastic bottles for the return trip to China. As cities aggressively expanded recycling programs to keep more discarded household items out of landfills, the purity of U.S. scrap deteriorated as more trash infiltrated the recyclables. Discarded food, liquid-soaked paper and other contaminants recently accounted for as much as 20% of the material shipped to China, according to Waste Management Inc.’s estimates, double from five years ago. The tedious and sometimes dangerous work of separating out that detritus at processing plants in China prompted officials there to slash the contaminants limit this year to 0.5%. China early this month suspended all imports of U.S. recycled materials until June 4, regardless of the quality. The recycling industry interpreted the move as part of the growing rift between the U.S. and China over trade policies and tariffs. The changes have effectively cut off exports from the U.S., the world’s largest generator of scrap paper and plastic. Collectors, processors and the municipal governments that hire them are reconsidering what they will accept to recycle and how much homeowners will pay for that ser- Processing Costs For Waste Pile Up China stopped taking shipments of U.S. mixed paper and mixed plastic in January. Mixedpaper shipments to other Asian countries now fetch $5 a ton, down from as much as $150 last year. Other buyers such as Vietnam and India have been flooded with scrap paper and plastic that would have been sold to China in years past. Dave Vaccarezza, president of Cal-Waste Recovery Systems near Sacramento, Calif., intends to invest more than $6 million in new sorting equipment to produce cleaner bales of recyclables. P R Renaldi, Rocco.............B2 Rosa, David De La......B4 S Sloan, Doug.................B2 Stender, Steen............B2 T-V-W Tosi, Laurence.............B4 Vaccarezza, Dave........B2 Vain, Frank..................B5 Verleger, Philip ........... B9 Visentin, John.............B1 Warner, James............B1 would also have been paid $2.5 billion in aggregate via a special dividend. Messrs. Icahn and Deason have been seeking to kill the merger, and Mr. Deason had filed a lawsuit against it, alleging Mr. Jacobson raced to seal the deal to protect his own job. Documents and communications disclosed in the suit showed the Xerox board in November had nearly replaced Mr. Jacobson with Mr. Visentin, and that it had told Mr. Jacobson to halt negotiations with Fujifilm. Instead, Mr. Jacobson struck the deal. In late April, a judge temporarily blocked the deal, saying the transaction was negotiated by a “massively conflicted” Mr. Jacobson and that he was looking out for his own interests over those of Xerox shareholders. —David Benoit contributed to this article. WHO Attacks Trans Fats U.N. health arm urges industry, governments to accelerate effort against heart disease BY BETSY MCKAY AND JACOB BUNGE The World Health Organization is launching an initiative to eliminate trans fats from diets globally, pressing makers of foods and oils, and governments, to accelerate work to prevent hundreds of thousands of deaths from heart disease each year. The public health arm of the United Nations said it will urge governments to ban or restrict those fats and replace them with healthier fats and oils. WHO Director-General Tedros Adhanom Ghebreyesus said eliminating trans fats from human diets would be “a global win in the fight against cardiovascular disease.” Multinational companies that make trans fats and have used them as ingredients said they have largely eliminated those oils from foods in the U.S., parts of Europe and Canada, where governments already restrict their use. But trans fats remain widely used where regulators and food makers have been slower to take action. Many of the fats are in foods or oils made by local producers. The International Food and Beverage Alliance—a Geneva group representing food companies including Kellogg Co., General Mills Inc., McDonald’s Corp. and Unilever NV—said its members have removed industrially produced trans fat from 98.8% of their global product portfolios. “We welcome this action by the World Health Organization,” said Rocco Renaldi, the group’s secretary-general. Nestlé SA is working toward “complete removal of all trans fats” originating from partially hydrogenated oils, a spokeswoman said. She said Nestlé has eliminated these vice. Many trash haulers and city agencies that paid for curbside collection by selling scrap said they are now losing money on almost every ton they handle. The upended economics are likely to permanently change the U.S. recycling business, said William Moore, president of Moore & Associates, a recycled-paper consultancy in Atlanta. “It’s going to take domestic demand to replace what China was buying,” he said. “It’s not going to be a quick turnaround. It’s going to be a long-term issue.” The waste-management authority in Lancaster County this spring more than doubled the charge per ton that residential trash collectors must pay to deposit recyclables at its transfer station, starting June 1. The higher cost is expected to be passed on to residents though a 3% increase in the fees that haulers charge households for trash collection and disposal. The additional transferstation proceeds will help offset a $40-a-ton fee that the authority will start paying this summer to a company to process the county’s recyclables. Before China raised its quality standards at the beginning of this year, that company was paying Lancaster County $4 for every ton of recyclables. Mr. Warner may limit the recyclable items collected from Lancaster County’s 500,000 residents to those that have retained some value, such as cans and corrugated cardboard. He said mixed plastic isn’t worth processing. Pacific Rim Recycling in Benicia, Calif., slowed operations at its plant early this year to meet China’s new standard. But company President Steve Moore said the more intensive sorting process takes too long to process scrap profitably. Pacific Rim idled its processing plant in February and furloughed 40 of its 45 employees. “The cost is impossible. We can’t make money at it,” Steve Moore said. “We quit accepting stuff.” “It’s going to cost the rate payer to recycle,” he said. “They’re going to demand we make our best effort to use those cans and bottles they put out.” Sacramento County, which collects trash and recyclables from 151,000 homes, used to earn $1.2 million a year selling the scrap to Waste Management and another processor. Now, the county is paying what will amount to about $1 million a year, or roughly $35 a ton, to defray the processors’ costs. Waste Management paid the county $250,000 to break the revenue-sharing contract and negotiate new terms. County waste-management director Doug Sloan expects costs to keep climbing. “We’ve been put on notice that we need to do our part,” he said. The county hasn’t yet raised residential fees. Some recyclers said municipalities need to give up the “single-stream” approach of lumping used paper and cardboard together with glass, cans and plastic in one collection truck. Singlestream collections took hold about 20 years ago. Collecting paper separately would make curbside recycling service more expensive but reduce contamination. “We’re our own worst enemies,” said Michael Barry, president of Mid America Recycling, a processing-plant operator in Des Moines, Iowa, of singlestream recycling. “It’s almost impossible to get the paper away from the containers.” Compacted U.S. recyclable exports from California ports 20 million tons 15 Other countries 10 5 China 0 2006 ’10 ’15 ’17 Source: Cal Waste THE WALL STREET JOURNAL. VINCENT MUNDY/BLOOMBERG NEWS 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. Bayerische Motoren Werke........................B3 Best Buy.....................A2 Brookfield Property....B4 Bunge .......................... B2 THE WALL STREET JOURNAL. * *** Food makers like Mondelez say they are eliminating harmful oils. Countries Cutting Fat The number of countries limiting trans fats is growing, but most are high-income or upper-middle-income. Total countries with trans-fat bans or limits* Canada, U.S. 20 North America Middle East Asia Africa Central/South America Europe 15 10 5 Denmark 2003 ’05 ’10 ’15 ’18 *Mandatory bans or limits on industrially produced trans fat THE WALL STREET JOURNAL. Source: World Health Organization from 99.8% of fats and oils the company uses. Snack giant Mondelez International, maker of Oreo cookies, is on track to eliminate partially hydrogenated oils from its products by the end of the year, a spokeswoman said. Trans fats, often in the form of partially hydrogenated food oils, played a leading role in the post-World War II popularization of packaged foods in the U.S. and elsewhere. Gen- erally made from soybeans, partially hydrogenated oils are similar in consistency to Crisco shortening and replaced animal lard in many recipes. Food makers used them to make longer-lasting cooking oils, stabilize margarine and help packaged cookies retain their taste. For food-oil manufacturers like Archer Daniels Midland Co., Bunge Ltd. and Cargill Inc., the challenge has been replacing partially hydrogenated oils without altering the taste, texture and consistency that diners expect. Minnesotabased Cargill has replaced partially hydrogenated oil with products like a new doughnut shortening, which blends palm oil with healthier versions of canola or sunflower oil. Consumers didn’t miss trans fats when they were replaced in Denmark, the first country to eliminate them, said Steen Stender, professor of nutrition, exercise and sports at the University of Copenhagen. “No one is addicted to trans fatty acids,” said Dr. Stender, who was involved in the effort in Denmark. Some of the alternate oils that food makers use carry their own potential drawbacks, including health concerns and, in the case of palm oil, deforestation. More than 20 nations have restricted trans fats because they raise LDL or “bad” cholesterol, a marker for heart disease, while lowering HDL, or “good” cholesterol. The WHO recommends trans fat intake be limited to less than 1% of total energy intake, meaning less than 2.2 grams a day in a 2,000 calorie diet. Trans fats are linked to 537,000 deaths from heart disease globally each year, or about 7.7% of all heart-disease deaths, according to a 2016 study in the Journal of the American Heart Association. The WHO is promoting a six-point blueprint called “Replace” to help governments eliminate trans fats. It was developed with Resolve to Save Lives, part of the public health nonprofit Vital Strategies. “There’s no doubt that artificial trans fat can and should be replaced,” said Tom Frieden, president and chief executive of Resolve to Save Lives. As New York City’s health commissioner from 2002 to 2009, he led implementation of a ban on trans fats in restaurant foods there. “It’s one of the easiest ways to prevent heart-disease-related deaths,” Dr. Frieden said. The best allergy medication is clean air Molekule is a complete reinvention of the air puriﬁer. Its unique nanotechnology completely destroys allergens like pollen and mold, leaving nothing but truly clean air in your home. And when the allergens that cause your symptoms are eliminated, so is your need to rely on expensive allergy medication with worrying side effects. “We had HEPA air ﬁlters previously, and they never made a signiﬁcant impact like the Molekule devices do.” -David Austin $ 75 OFF CODE: CLEAN5E Offer Ends 06/15/2018 Molekule.com/allergies One of Time Magazine’s 25 best inventions of 2017 . THE WALL STREET JOURNAL. Monday, May 14, 2018 | B3 BUSINESS NEWS Chinese Trump Presses Car Makers to Hire AUtility Bid Auto executives urged to boost factory jobs; 20% tariff proposed for imported vehicles Generates Scrutiny The auto industry is juggling a range of policy priorities in Washington, from tariffs to tailpipe emissions. But one item remains firm atop President Donald Trump’s agenda for the industry: more jobs for Rust Belt states that helped elect him. Mr. Trump made clear at a White House meeting Friday with top auto-industry executives that he wasn’t done prodding them on jobs—including foreign manufacturers. During a televised portion of the meeting, Mr. Trump told the executives he wants to see “manufacturing of millions of more cars within the U.S.—for Michigan, for Ohio, for Pennsylvania.” Mr. Trump’s pressure on car companies could mount as midterm elections draw closer, especially because the auto sector has been a central focus in his effort to generate American factory jobs. Last year, as Mr. Trump urged auto makers to shift manufacturing to the U.S., some committed to fresh U.S. investments collectively worth billions of dollars and thousands of jobs. But Detroit’s car companies are more focused on the future, as U.S. sales have stalled. General Motors Co. and Ford Motor Co. have unused U.S. factory space and are steering more capital toward advanced technology such as driverless cars. Mr. Trump lately has been putting more pressure on foreign auto makers. During Friday’s session, he proposed a 20% tariff on imported autos, people briefed on the session said. He also raised the prospect of subjecting imported vehicles to Obama-era emissions standards while domestic vehicles would get more lax BY BEN DUMMETT JONATHAN ERNST/REUTERS BY MIKE COLIAS General Motors CEO Mary Barra at the White House Friday. President Trump is seeking more automotive jobs in Rust Belt states. standards, the people said. The proposal rattled executives from European and Asian auto makers, including Germany’s Volkswagen AG, BMW AG and Daimler AG and Japan’s Toyota Motor Corp. and Nissan Motor Co., according to people familiar with the matter. The session had been billed as a discussion of emissions rules but was dominated by trade talk, the people said. “It was a reminder that his priority is manufacturing and jobs,” said a person briefed on the meeting. “More job wins will continue to be the theme.” Mr. Trump is targeting foreign auto makers at the same time much of the growth in U.S. vehicle production is being fueled by factories built by Japanese and European car companies. In the past decade, Toyota, Nissan, Volkswagen, BMW, Geely Holding Group Co.’s Volvo Cars and others have opened or significantly expanded U.S. plants, or outlined plans to do so. European auto makers are on pace to make one million vehicles in the U.S. this year, said Warren Browne, a consultant and former GM executive. In the first quarter of 2018, foreign auto makers were expected to have matched American auto makers in U.S. production for the first time, according to WardsAuto.com. In January, Fiat Chrysler Automobiles NV said it would relocate production of some trucks to a Detroit-area factory from a plant in Mexico, creating about 2,500 jobs. During introductions at the meeting with auto executives, Mr. Trump interrupted to call out FCA Chief Executive Sergio Marchionne for “leaving Mexico, going to Michigan,” even though FCA will continue to operate three plants south of the border. “He’s my favorite man in the room,” Mr. Trump said. —Chester Dawson and Adrienne Roberts contributed to this article. Optimism Grows For Emissions Deal Auto makers were walking a fine line on emissions regulations heading into last week’s White House meeting with President Donald Trump, lobbying for a limited relaxation of rules that risked unraveling once administration officials began working on changes. Most important, car companies have wanted any rule changes to be acceptable to California, which has an Environmental Protection Agency waiver to set its own, tougher emissions standards that a dozen states follow. Auto makers want to avoid a patchwork of regulations across the U.S. During Friday’s meeting, Mr. Trump initially suggested engaging in a legal battle with California, a move that could prolong regulatory uncertainty auto makers want to avoid. By meeting’s end, he suggested EPA Administrator Scott Pruitt and Transportation Secretary Elaine Chao would be assigned the task of reaching a deal with California on emissionsrule changes. Auto makers fear a rollback would force California and other states making up more than one-third of the U.S. car market to go their own way, resulting in conflicting regulations nationwide that could wreak havoc on vehicle designs and business plans mapped out years in advance.. Industry representatives left the meeting cautiously optimistic they could still achieve their nuanced goal of relaxing emissions regulations without antagonizing California. Mr. Trump was open to a deal with California during the meeting, according to a person familiar with the gathering. —Mike Spector China Three Gorges Corp. late Friday said it plans to launch a €9.07 billion ($10.8 billion) offer for the almost 77% it doesn’t already own of Portugal’s main energy utility, a bold move to expand further into Europe’s power sector that will likely attract scrutiny from the U.S. and other Western governments. By consolidating its ownership of Energias de Portugal SA, or EDP, China Three Gorges, or CTG, would gain exposure to EDP’s operations in other European countries, including Spain, France, Italy and the U.K. In the Americas, the Lisbonbased company is present in Brazil, Mexico and the U.S., where it operates wind farms. As one of the world’s largest sources of greenhouse gases, China has pushed construction of alternative energy sources, while adopting policies designed to drive the purchase of electric vehicles. CTG’s interest EDP underscores that effort. CTG said it is offering €3.26 in cash for each EDP share it doesn’t own, or a 5% premium to EDP’s share price Friday. The biggest challenge CTG could face may come from regulators in the U.S. and the European Union, which are scrutinizing acquisitions by foreigners in sectors such as energy infrastructure to guard against security breaches. The Committee on Foreign Investment in the U.S., a multiagency panel is required to rule on the proposed deal since EDP operates wind farms in that country. A simmering trade war between China and the U.S. could also complicate matters for CTG in winning regulatory approval in the U.S. —Michael Wright in London contributed to this article. Guidance starts with hearing you out. TD Ameritrade’s Financial Consultants take the time to understand what matters to you and why, before discussing investment strategies. To help you find the plan that works for you, we want to get to know you first. Schedule a complimentary goal planning session today and get up to $600 when you open and fund an account. Call (800) 870-9668 or visit tdameritrade.com/goalplanning to learn more. See tdameritrade.com/600offer for offer details and restrictions/conditions. All investments involve risk, including risk of loss. 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. . B4 | Monday, May 14, 2018 THE WALL STREET JOURNAL. * * BUSINESS & TECHNOLOGY WSJ.com/Tech WeWork Wants to Be Its Own Landlord New investment fund aims to buy buildings where the company would be a tenant On the Rise WeWork's quarterly revenue has shown consistent growth. Funds Try to Avoid Potential Conflicts according to people familiar with the matter. But unlike the WeWork fund, that plan called for the fund’s management to report to an independent board, a measure meant to limit potential conflicts, the people said. An Airbnb spokesman said the company isn’t pursuing the fund plan. WeWork appears to have benefited from the fund with a low-interest loan. WeWork debt documents show it borrowed $26 million at 1.52% annual interest from its real-estate fund last year. It is uncommon for tenants to borrow millions from their landlords. The debt documents didn’t state the purpose of the loan. WeWork faces higher interest rates on the private market; the company borrowed $702 million at nearly 8% last month. $300 million BY ELIOT BROWN 250 In mid-2017, the giant landlord Brookfield Property Partners LP was in advanced talks to buy the Lord & Taylor department-store building in New York City for about $700 million, when an unexpected buyer swooped in and sealed a deal, according to people familiar with the matter. Behind the deal was WeWork Cos., which put together the $850 million purchase with a hefty premium, a surprising move for a firm that leases buildings and subleases the office space to other companies. WeWork didn’t put up the money. Instead, it came from a new real-estate fund comanaged by WeWork and one of its early shareholders, private-equity firm Rhône Group. The fund aims to raise tens of billions of dollars from investors in coming years to buy buildings where WeWork would become a tenant, people familiar with the fund said. The unusual arrangement effectively makes WeWork its own landlord using other investors’ money, raising questions about how it will make deals with itself as a tenant while co-managing the fund. “There’s huge potential for conflicts,” said Nori Lietz, a lecturer at Harvard Business 200 SHANNON STAPLETON/REUTERS 150 100 50 0 2016 ’17 Source: the company WeWork assembled a deal for the retailer’s New York address. THE WALL STREET JOURNAL. School and longtime adviser to investors in real-estate funds. “They’re using other people’s money, and they’re on both sides of the transaction at the end of day.” WeWork has made these ties clear to investors in offering documents, and the fund has established some measures to mitigate conflicts of interest, people familiar with the matter say; specifics couldn’t be learned. In other cases, real-estate funds might have outside groups negotiate certain issues to avoid conflicts. WeWork’s pitch to investors is that its role as both tenant and landlord could yield better investment returns than conventional real-estate funds. The fund largely aims to buy buildings that WeWork would then lease, at least in part, to itself. The value of a building some of the office space to customers. The company also secured the ability to lease some other department stores owned by Lord & Taylor’s parent, Hudson Bay Co. The fund has sought to raise money from wealthy clients of Citigroup Inc., which circulated a presentation about the fund that stated a plan to “capitalize on the growing demand for flexible community-based office space,” according to a copy reviewed by The Wall Street Journal. The fund is run by WeWork and Rhône executives including WeWork Chief Executive Adam Neumann and Rhône Chairman and Co-founder Steven Langman, according to the Citigroup presentation. Real-estate experts say WeWork’s involvement raises concerns the fund could tilt with a tenant in place tends to be significantly higher than an empty building. WeWork rose from a tiny, one-office location in Manhattan to a global player in part by leasing property, rather than spending more to buy it. The company, valued at $20 billion by investors, is under pressure to secure more real estate after pledging continuing rapid expansion. Last year, it formed WeWork Property Investors, which has disclosed raising $400 million and has struck deals for at least four properties. It is seeking $767 million in debt to fund the purchase and renovations of the Lord & Taylor building, and expects to complete the purchase by the fall. WeWork has said it would make the Lord & Taylor building its headquarters and lease Investment funds in the real-estate world—like the property ownership arm of a casino or a senior living company—typically have management that is independent of the operating business, according to David De La Rosa, who is an adviser to real-estate investors for Green Street Advisors. The layer of independence is meant to avoid conflicts that could hurt investors, he said. Another well-funded private company, Airbnb Inc., considered a similar concept to WeWork’s fund last year. Under then-financial chief Laurence Tosi, Airbnb planned to create a real-estate investment trust that would have rented its houses and apartments on Airbnb, decisions on items like lease rates in favor of the company, or pursue riskier behavior than a normal landlord would in order to benefit WeWork. Generally with conflicts, “you’re going to push profits to the side [where] you have the greatest financial interest,” said Joseph Pagliari, a professor at University of Chicago’s business school, who has studied real-estate funds. The Citigroup documents, listing risks about the fund, say WeWork and Rhône are “expressly permitted” to engage in activities that may be “adverse” to the fund. Rhône executives are meant to take the lead when some conflicts arise, according to a person familiar with the fund. Rhône’s Mr. Langman sits on WeWork’s board, in a seat controlled by Mr. Neumann. Entities tied to Mr. Langman and Rhone held 2.2 million shares of WeWork private stock worth over $100 million, based on the latest valuation, according to documents from a bond offering made public last month. MIMS T esla says its cars with autonomous-driving technology are 3.7 times safer than the average American vehicle. It isn’t clear how much of this safety is because of the driving habits of enthusiast owners or other factors, SEONGJOON CHO/BLOOMBERG NEWS Continued from page B1 car accidents, as semiautonomous technology becomes commonplace. That isn’t to say we shouldn’t be on this path. Every year, some 40,000 people die in the U.S. in traffic-related accidents—a situation made worse by distracted driving. We have established methods for responsibly rolling out life-saving new technologies before—think of clinical trials for new drugs—and we can do it again. But it might mean pumping the brakes on the rollout of self-driving cars. When engaged, Autopilot keeps the car within in its lane, can automatically change lanes, and maintains a safe distance from cars ahead and behind. When it senses a dangerous situation it alerts the driver, whether or not Autopilot is engaged. Sometimes, however, it’s up to the driver to realize the Autopilot system isn’t doing what it should. Gary Marcus, a professor of psychology and neural science at New York University and the former head of Uber’s AI lab. AI is brittle because it can’t carry over insights from one context to another, opaque because humans can’t evaluate its neuron-like tangle of connections, and shallow because it’s easy to fool. You can’t just throw more deep learning at a problem and expect it to be as good as a human, says Dr. Marcus. Tesla displayed one of its Model S electric vehicles in Seoul last month. Over 200,000 of the company’s vehicles are on the road. such as the cars’ crashavoidance technology, rather than Autopilot. After a fatal 2016 crash, which happened when Autopilot was engaged, Tesla cited a report by the National Highway Traffic Safety Administration as evidence that Autopilot mode makes Teslas 40% safer. NHTSA recently clarified the report was based on Tesla’s own unaudited data, and NHTSA didn’t take into account whether Autopilot was engaged. Complicating things further, Tesla rolled out an auto-braking safety feature— which almost certainly reduced crashes—shortly before it launched Autopilot. There isn’t enough data to independently verify that self-driving vehicles cause fewer accidents than human-driven ones. A Rand Corp. study concluded that traffic fatalities already occur at such relatively low rates—on the order of one per 100 million miles traveled—that determining whether self-driving cars are safer than humans could take decades. What we do have is evidence—acknowledged in Tesla’s own user manuals— that Tesla’s semiautonomous driving system is fooled by bright sunlight, faded lane markings or seams in the road. Researchers continue to document other ways to trick these systems, as well. Tesla emphasizes its system is driver-assist technology, not full autonomy, and blamed the driver in the most recent crash that occurred when the system was engaged. Yet Tesla drivers and news reports suggest that in some cases, the only thing keeping drivers from getting into Autopilot-related accidents is their own reflexes. None of this surprises experts who understand the AI at the heart of autonomous driving systems. Deep learning—the so-called intelligent component of these systems—is “brittle, opaque and shallow,” says A lphabet’s Waymo decided it was too dangerous to let drivers take control when needed, and skipped to a fully selfdriving ride-share service, Waymo CEO John Krafcik has said. According to the company, a system that never asks a driver to take over is safer than making potentially tricky machinehuman handoffs. Tesla promised to release safety data on its self-driving technology starting next quarter. It isn’t clear what kind of data it will release, but experts say public sharing of data, from all makers of autonomous vehicles, is the only way to ensure proper evaluation of the safety of these technologies. Given that we already evaluate the safety of every other part of a motor vehicle in this way, it just makes sense. Jack Otter, Associate Publisher at Dow Jones Media Group, will moderate a panel of cybersecurity professionals As cyber attacks increase in number and sophistication, how can companies stay one step ahead to protect their data? Join our informative live discussion as we explore the possibilities of AI as a potentially powerful cybersecurity solution. Tomorrow at 2 p.m. EDT. Kiersten Todt Charlie Jacco President and Managing Partner, Liberty Group Ventures Principal, KPMG LLP Cybersecurity Services, Financial Services Leader Principal, KPMG LLP Innovation & Enterprise Solutions !"#$! WSJ. Custom Studios is a unit of The Wall Street Journal advertising department. The Wall Street Journal news organization was not involved in the creation of this content. . THE WALL STREET JOURNAL. Monday, May 14, 2018 | B5 BUSINESS NEWS ‘Avengers’ Notches Huge China Opening BY ERICH SCHWARTZEL Estimated Box-Office Figures, Through Sunday SALES, IN MILLIONS FILM DISTRIBUTOR WEEKEND* CUMULATIVE % CHANGE Disney $61.8 $547.8 -46 2. Life of the Party Warner Bros. 3. Breaking In Universal $18.5 $16.5 $18.5 $16.5 --- 4. Overboard 5. A Quiet Place $10.1 $6.4 $29.6 $169.6 -31 -18 1. Avengers: Infinity War Lions Gate Paramount *Friday, Saturday and Sunday HOPPER STONE/WARNER BROS./ASSOCIATED PRESS LOS ANGELES—Three weeks after setting records with its opening in the U.S., “Avengers: Infinity War” opened to gargantuan returns in China. The premiere of Walt Disney Co.’s superhero epic took in an estimated $200 million in the world’s second-largest box-office market, surpassing the record set by the local release “Monster Hunt 2” by about $13 million. Measured in local currency, the “Infinity War” opening was second to last year’s “The Fate of the Furious.” The China gross brings the “Infinity War” global haul to $1.61 billion, making it the fifth-highest-grossing film of all time after three weeks of release. Domestically, the movie had no trouble holding the No. 1 spot over the weekend with an additional $61.8 million in the U.S. and Canada. Its cumulative domestic gross of $547.8 million puts it at No. 8 on the all-time chart. “Infinity War” will face its first serious competitor next weekend with “Deadpool 2,” but the movie’s start in China puts it on track to potentially ‘Life of the Party,’ starring Melissa McCarthy, made its debut in second place in the U.S. and Canada. cross the $2 billion mark world-wide. In the past decade, China’s box office has gone from an afterthought to a priority for Hollywood studios. The country continues to construct theaters at a fast clip, and its box office is ex- pected to surpass the U.S. within the next few years. Chinese consumers haven’t always been aligned with Western audiences in what they want to see, but Marvel Studios titles have performed notably well. Disney’s “Star Wars” franchise, for instance, hasn’t caught on in China to the extent it has in other foreign markets. But the massive Chinese grosses come with a significant caveat. Under the terms of China’s import agreement, studios get about 25% of ticket sales from most exports, com- Source: comScore pared with approximately 60% for major releases in the U.S. The U.S. and Chinese governments are currently in negotiations to update that agreement, and boosting that percentage is a priority for the studios. “Infinity War” has already collected more in its opening weekend there than the total Chinese grosses of other Marvel releases such as “The Avengers” and “Captain America: Civil War.” After the weekend results, it is already the ninth-highest-grossing Hollywood export in the market. IMAX Corp., which has developed China into a major market for its auditoriums, said it posted a new company record with “Infinity War” in the country. IMAX auditoriums grossed $20.5 million in China, far exceeding the previous record of $13.3 million set by “The Fate of the Furious.” In the U.S., two new wide releases tied to Mother’s Day opened to solid returns. Melissa McCarthy’s “Life of the Party,” starring the comedian as a mom who returns to college, collected $18.5 million in second place. The movie was released by Time Warner Inc.’s Warner Bros. “Breaking In,” starring Gabrielle Union as a mother who stops at nothing to protect her children from intruders, grossed $16.5 million in third place. It was released by Comcast Corp.’s Universal Pictures. This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares and/or ADSs (both, as defined below). The U.S. Offer (as defined below) is made only by the Offer to Purchase, dated April 4, 2018, the related Share Acceptance Form, the related ADS Letter of Transmittal and the related Share Withdrawal Form and any amendments or supplements thereto, and is being made to all U.S. holders of Shares and all holders of ADSs, wherever located. The U.S. Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the U.S. Offer or the acceptance thereof would not be in compliance with the securities,“blue sky” or other laws of such jurisdiction. In those jurisdictions where applicable laws or regulations require the U.S. Offer to be made by a licensed broker or dealer, the U.S. Offer shall be deemed to be made on behalf of Offeror (as defined below) by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Offeror. Results of the Initial Acceptance Period of the U.S. Offer to Purchase All Outstanding Ordinary Shares, No Nominal Value, Held By U.S. Holders and All Outstanding Ordinary Shares Represented By Outstanding American Depositary Shares, Held by All Holders, Wherever Located, of BESS ADLER FOR THE WALL STREET JOURNAL Ablynx NV for €45.00 Per Share, Net To The Seller In Cash, Without Interest and €45.00 Per American Depositary Share, Net To The Seller In Cash, Without Interest Pursuant to the Offer to Purchase dated April 4, 2018 by Sanofi Soho House’s 20th members club is set to open later this month at 55 Water St. in Brooklyn, N.Y. Exclusive Club Goes Global BY CHRIS KIRKHAM AND ERICH SCHWARTZEL Soho House & Co., known for chic, members-only properties catering to those in creative industries such as entertainment and media, is in the midst of a counterintuitive strategy: expanding its limited-entry club model into a global empire. The 23-year-old London operation says its 19 locations in nine markets around the world currently have 71,000 members, who pay $1,050 to $3,200 each in annual dues for access to the club and its hip events and social networks. (Food and drink not included.) The company plans to open as many as five new clubs each year in major cities around the world, and is considering a public stock offering in the U.S. as a way to fund that expansion, said founder and Chief Executive Nick Jones. The company’s The Rise of the ‘Anticlub’ Scene The popularity of the new breed of urban social clubs like Soho House comes amid a decline in private club membership across the U.S. over the past decade, as the babyboomer generation ages and some suburban country clubs are in decline. Membership in private clubs overall has fallen slightly since 2011, according to data from consulting firm Club Benchmarking, though membership in urban or athletic clubs not tied to golf has grown over the same period. Frank Vain, president of the McMahon Group, which consults for private clubs, said the new generation of urban clubs has found a way to create a mystique around membership without being overtly exclusive or stuffy. “People always want what they can’t have, and they want something that’s special,” said current locations include London, New York and Istanbul, and new sites are planned in Amsterdam, Hong Kong and Mumbai, among others. “We really do feel there are some good, long legs here,” said Mr. Jones, who opened the first Soho House in London in 1995. Soho House’s core business model isn’t new. Private social clubs have been around for centuries, popularized in British high society in the 19th century and later in university and city clubs tailored to elite businessmen in the U.S. Membership in Soho House is selective. Admission requires a lengthy application and interview process, and the waiting list hovers around 27,000, the company said. But unlike elite private clubs of the past, membership isn’t based primarily on wealth or family status. There’s no set formula for new admissions. Membership Mr. Vain. The new clubs “have redefined special. There’s an anticlub aspect to them that is creating a buzz.” The Wing, a women’s social club and co-working space, started in New York in 2016 and has four locations, with plans to expand to seven new sites around the world. Its Dumbo site is near the soonto-open Soho House. NeueHouse, a co-working company founded four years ago, is borrowing aspects of the Soho House model at its locations in New York and Los Angeles. But the company is focused on building spaces more oriented toward work than socializing, said Jon Goss, the company’s chief commercial officer. Like Soho House, NeueHouse holds events for members. About 1,600 members pay anywhere from $150 to several thousand dollars a month for a space big enough for multiple employees. NeueHouse doesn’t offer overnight rooms. committees for each house meet quarterly and decide how many new members to admit. Soho House has purged its ranks when members don’t fit the image it wants to portray. In New York after the financial crisis, it removed about 100 bankers from its rolls, the company said. Membership committee decisions are final. Its average member is 36 years old and getting younger, the company said, compared with an average age of above 50 for the typical U.S. private club, according to data from the National Club Association. Executives say Soho House is tapping into a desire for flexible workplace arrangements such as those offered by WeWork Cos. “There’s plenty of proof that people are less corporate, more entrepreneurial. The 9 to 5 is disappearing,” said Mr. Jones, who said the company’s model provides spaces for social gatherings, meetings or workouts throughout the day, along with options to stay overnight at many locations. Soho House is majorityowned by Ron Burkle’s Yucaipa Cos., which took a 60% stake in the company in 2012. London fashion and restaurant impresario Richard Caring has a 30% stake, and Mr. Jones owns the rest. The company posted $371 million in operating revenue in 2016, up 21% from a year earlier, according to data provided to the U.K. government. As it has pursued global expansion plans in recent years, Soho House has taken on significant debt that led to ratings downgrades in 2016. In early 2017, the company agreed to a consolidation of its debt with one of its bondholders, Permira Debt Managers, according to a person familiar with the matter. “We were going down the motorway a few years ago and skimmed the central barrier. It was a brief skid,” said Mr. Jones. “We’ve been growing at a heavy pace, which takes capital.” On April 4, 2018, Sanofi, a French société anonyme (“Offeror”), commenced an offer to purchase up to 100% of the issued and outstanding ordinary shares, no nominal value (“Shares”) of Ablynx NV, a Belgian naamloze vennootschap (the “Company”) from U.S. holders (within the meaning of Rule 14d-1(d)) under the U.S. Securities Exchange Act of 1934, as amended, and up to 100% of the Shares of the Company represented by outstanding American Depositary Shares of the Company (each, an “ADS” and collectively, “ADSs”) issued by JPMorgan Chase Bank, N.A., acting as depositary (the “Depositary”), pursuant to that certain Deposit Agreement, dated as of September 5, 2014, among the Company, the Depositary and all holders from time to time of American depositary receipts issued thereunder (as amended, the “Deposit Agreement”), from all holders, wherever located, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated April 4, 2018 (the “Offer to Purchase”), the related Share Acceptance Form, the related ADS Letter of Transmittal and the related Share Withdrawal Form, as applicable (which, together with the Offer to Purchase, as they may be amended or supplemented from time to time, collectively constitute the “U.S. Offer”). The U.S. Offer is being made pursuant to that certain Heads of Agreement Relating to a Friendly Tender Offer for Ablynx NV, dated January 28, 2018 (as it may be amended from time to time, the “Heads of Agreement”), by and between Offeror and the Company. Under the Heads of Agreement, Offeror agreed to commence the U.S. Offer and a contemporaneous offer under the laws of Belgium (the “Belgian Offer” and, together with the U.S. Offer, the “Offers”) to purchase all of the Company’s Shares, ADSs, warrants (the “Warrants”) and 3.25% Senior Unsecured Convertible Bonds due on May 27, 2020 (the “Bonds,” and together with the Shares, ADSs and Warrants, the “Securities”). The offer price in the Offers is €45.00 per Share and per ADS, net to the seller in cash, without interest (the “Offer Price”). The Offer Price paid to holders of ADSs will be paid in U.S. dollars converted in the manner described in the Offer to Purchase and will be distributed, net of expenses (including a fee related to the foreign exchange conversion and a fee of $0.05 per ADS for the cancellation of the American depositary receipt evidencing such tendered ADS, in each case, as contemplated by the Deposit Agreement), to such holders. The initial acceptance period of the Offers expired at 5:00 p.m., New York City time, on May 4, 2018 (the “Initial Expiration Date”). As of the Initial Expiration Date, a total of 71,972,994 Shares (including 7,446,312 Shares represented by ADSs), 2,594,841 Warrants and 975 Bonds have been validly tendered into the Offers and not withdrawn. The Shares (including Shares represented by ADSs and underlying Warrants) validly tendered into the Offers and not withdrawn represent approximately 95.60% of the outstanding Shares on the settlement date of the Offers. The minimum tender condition has been satisfied. All conditions to the Offers having been satisfied, Offeror has accepted for payment all Securities validly tendered pursuant to the Offers and not validly withdrawn. The Securities accepted for payment are expected to be settled on or about May 18, 2018. In accordance with applicable Belgian law, Offeror has determined to commence a squeeze-out period (the “Squeeze-Out Period”) on May 22, 2018. U.S. holders of Shares and holders of ADSs who did not previously tender their Shares and/or ADSs into the U.S. Offer may tender their Shares and/or ADSs into the U.S. Offer during the Squeeze-Out Period, on the terms and conditions as set forth in the Offer to Purchase, the related Share Acceptance Form, the related ADS Letter of Transmittal and the related Share Withdrawal Form. THE SQUEEZE-OUT PERIOD AND RELATED WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JUNE 12, 2018. As set forth in the Offer to Purchase, any Shares (including Shares represented by ADSs) not tendered during the Squeeze-Out Period (including Shares and/or ADSs withdrawn and not properly re-tendered) will be transferred to Offeror by operation of Belgian law for the Offer Price at the end of the Squeeze-Out Period. The funds necessary to pay for the Offer Price of such untendered Shares will be deposited with the Bank for Official Deposits (Deposito- en Consignatiekas / Caisse des dépôts et consignations) in favor of the holders of Shares who did not previously tender into the U.S. Offer. Holders of ADSs who did not previously tender into the U.S. Offer prior to the end of the Squeeze-Out Period will have the right to receive the Offer Price. Upon, or as soon as possible after, completion of the Squeeze-Out Period, the Shares will be delisted from the regulated market of Euronext Brussels by operation of Belgian law, and the Company shall cause the delisting of the ADSs from the NASDAQ Global Select Market and the delisting of the Bonds from the open market Frankfurt MTF (Freiverkehr). Notice of the results of the Squeeze-Out Period will be published in the U.S. via press release and an amendment to the Tender Offer Statement on Schedule TO related to the U.S. Offer, which, when filed by the Offeror, will be available at the Securities and Exchange Commission’s (the “SEC”) website at www.sec.gov. Offeror has filed a Tender Offer Statement on Schedule TO with the SEC and the Company has filed a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC. Holders of Securities are urged to carefully review these documents and other documents filed by the Offeror and the Company, including the Offer to Purchase, the related Share Acceptance Form, the related ADS Letter of Transmittal and the related Share Withdrawal Form, because they contain important information. U.S. holders of Shares and holders of ADSs should carefully read all documents in their entirety before any decision is made with respect to the U.S. Offer. These documents are available for free at the SEC’s website at www.sec.gov. Requests for copies of these documents may be directed to the Information Agent (as defined below) or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Offeror’s expense. Questions or requests for assistance may be directed to MacKenzie Partners, Inc. (the “Information Agent”) at the address and telephone numbers set forth below. The Information Agent for the U.S. Offer is: 1407 Broadway New York, New York 10018 (212) 929-5500 or Call Toll Free (800) 322-2885 Email: firstname.lastname@example.org May 14, 2018 . B6 | Monday, May 14, 2018 THE WALL STREET JOURNAL. NY BUSINESS & FINANCE BY CHELSEY DULANEY AND JOSHUA ZUMBRUN Trade friction is emerging as the latest threat to the dollar’s position at the heart of the global financial system. For decades, central banks have held the bulk of their foreign-exchange reserves in the dollar, reflecting the dominant role the U.S. and its currency have played in global trade. As the U.S. pulls back from partnerships while countries like Mexico and Japan strike their own trade deals, the dollar’s dominance could be undermined, investors and analysts said. That dominance has been referred to as an “exorbitant privilege,” allowing the U.S. to borrow cheaply and run persistent deficits. Though a less U.S.-centric trade system would take years to fully evolve, it would have significant implications for global central bankers charged with allocating some $11 trillion in reserves. Many are now ramping up investment in such currencies as the euro and Chinese yuan, reflecting the effects of such moves as the U.S. retreat from the North American Free Trade Agreement and Trans-Pacific Partnership. While the U.S. and Mexico remain in negotiations over Nafta, which could come to a head in the coming days as House Speaker Paul Ryan, R., Wis., has set a Thursday deadline to receive paperwork, Mexico has struck major trade deals in recent months with the European Union and the group of Pacific Rim nations that make up the TPP. Alejandro Díaz de León, governor of Mexico’s central bank, said that while the U.S. remains Mexico’s most important trade partner, he expects the euro to play a bigger role in the country’s foreign-exchange holdings in coming years as the balance of the na- KKR Continued from page B1 First Round Capital, respectively. These loans command juicy interest rates of 8% to 12% and often have maturities of around 12 months, though many borrowers repay earlier. A one-year U.S. Treasury, by comparison, yields, around 2.27%. But flip loans come with risks. If a renovated property doesn’t sell for a higher price or the borrower can’t refinance, the lender may wind up owning a house. That can happen if the housing market sours mid-flip, if remodelers misjudge their costs or the tastes of potential buyers, or if appraisals value properties too richly at the onset. Because home prices have risen steadily since 2012 and new construction hasn’t flooded the market with inventory, flippers haven’t had much trouble repaying loans in recent years. So far defaults have been few. Window Rock Capital Partners LLC, a private investment firm that focuses on real-estate-backed credit, took tral bankers tend to adjust reserves slowly, “the flows that potentially come out of this are really big.” Few are calling for an immediate end to the dollar’s reign as the world’s primary reserve currency. Central banks held about 63% of their reserves in dollars at the end of last year, the lowest level in four years, according to data from the International Monetary Fund. Meanwhile, allocations to the euro rose to 20% and reserves held in the Japanese yen rose to 4.9%. “What’s sure is that over the long term, if trade relations change, it will have an implication on the currency makeup of the reserves,” said Christian Deseglise, global head of central banks for HSBC. “As trade becomes more denominated in euros [and yuan], they’ll need to have currencies to match.” Central banks have long been encouraged to hold enough foreign currency in reserve to cover a few months of imports, and often debt obligations, in case money stopped flowing into the country. Changes to the currencies those imports are denominated in would encourage reserve managers to reshuffle their allocations, while analysts say a recent uptick in debt issued in currencies such as the euro could amplify the need for more diversified reserves. That comes as investors worry that the global economy has become too closely tied to the U.S. economy and its currency. Roughly 40% of all global trade is invoiced in dollars, according to a 2015 paper from Harvard University economist Gita Gopinath, and many countries have borrowed heavily in the currency in recent years. The risks of the dollar’s dominance have come into focus in recent weeks as a modest dollar rally raised concerns about the ability of some emerging-market nations to service their dollar debt and pay for imports. Argentina, whose currency has fallen to record lows against the dollar, is seeking a credit line from the International Monetary Fund to help stabilize its economy. While the dollar’s biggest competitors remain plagued by economic and structural questions—including the long-term viability of the euro system and the economic risks of China’s debt-fueled growth and aging society—analysts believe both the euro and yuan could benefit from recent shifts in global trade. meet the demands of a huge generation starting families and buyers whose credit has Many homes bought to be renovated and promptly resold, or recently recovered from the ﬂipped, are paid for with all cash. foreclosure crisis. They also reason that there are plenty of Amount spent on U.S. ﬂip homes house hunters who would Financed purchases Rest struggle to get a loan to remodel or repair an older home $80 billion on top of a mortgage. 70 The wager by KKR and other big investors also de60 pends on the continued demo50 graphic shift to big cities, where houses tend to be older 40 and more in need of upgrades 30 than those in suburbs and swathes of the Sun Belt. 20 In 2017, Memphis, Tenn., 10 was the U.S. city with the highest proportion of sales in0 volving a flipped house at 2000 ’02 ’04 ’06 ’08 ’10 ’12 ’14 ’16 12.8%, compared with a naSource: ATTOM Data Solutions tional average of about 6%, acTHE WALL STREET JOURNAL. cording to ATTOM Data Solutions. Flipping activity also possession of only four prop- peaked last year in Cleveland, erties and has yet to record three Wisconsin cities and any losses on roughly 200 flip along the Interstate 35 corriloans that it has bought, said dor in Texas, according to ATJeffrey Pettiford, head of busi- TOM. ness development. In the years leading up to But today’s crop of loans 2007’s crash, speculators has yet to be tested in a down flipped droves of homes. They market. often took on second and third Wall Street firms are bet- mortgages to buy them while ting that home prices can keep doing little more than poundclimbing. They reason that ing for-sale signs into the home construction alone won’t lawns. That strategy backfired spectacularly when home prices crashed and over-extended flippers couldn’t sell them. Following the meltdown, big investors gobbled up nonperforming loans and foreclosed homes. Some of the houses were spruced up and sold while others were turned into rentals. In recent years, flippers have shifted from homes in financial distress to those suffering physical deterioration. Renovations can be as simple as replacing worn flooring or as involved as adding entire new floors, from replacing outdated kitchens in suburban homes to gutting inner-city brownstones and converting them into small apartment buildings. Historically fix-and-flip jobs have been funded by regional investors, known as “hard money lenders.” Toorak Chief Executive John Beacham said that left open an opportunity to institutionalize the business. He took a similar approach to the rental-home business as a senior banker at Deutsche Bank AG’s commercial real-estate lending business. “The market has been local lenders, usually not banks, lending inefficiently,” he said. Trade Blocks As the U.S.’s trade rhetoric has intensiﬁed, other countries have worked to build alternative trade relationships. Trans-Paciﬁc Partnership • Size of economies: $9.9 trillion • Signed March 2018 Canada EU-Japan Economic Partnership Agreement • Size of economies: $21.9 trillion • Negotiations ﬁnalized December 2017 Japan Vietnam EU-Canada Comprehenesive Economic and Trade Agreement • Size of economies: $18.5 trillion • Provisionally in force September 2017 Brunei Malaysia Singapore United States European Union* New Australia Zealand GDP, 2018 $10 trillion 5 EU-Mexico Global Agreement Mexico 1 Peru Chile Sources: IMF (GDP); staff reports *Excludes the U.K. tion’s bilateral trade shifts in that direction. “It is Mexico’s conviction to be a very open economy, open to trade and financial flows,” Mr. Díaz de León said. Trade deals with Europe “will definitely at the margin continue to diversify our external accounts and increase the relevance of the euro.” Jens Nordvig, chief executive of analytics firm Exante Data, estimates global central banks could shift $200 billion to $300 billion in reserves into the yuan, euro and a handful of other foreign currencies this year as a result of trade changes. His estimate is based on central banks’ increased buying of Chinese bonds in the first few months this year. While he cautions that cen- Sweat Equity • Size of economies: $17.9 trillion • Agreement in principle April 2018 THE WALL STREET JOURNAL. In China, P.F. Chang’s Serves Up Chinese Food American-Style BY WAYNE MA AND LIZA LIN SHANGHAI—P.F. Chang’s may be seen as an upscale Chinese-food restaurant in the U.S. But the chain is calling its debut location in China “an American bistro”— which is exactly how its early customers there see it. “The food looks similar, but you eat the food and you know instantly it’s not Chinese,” said Zhang Ji, 35 years old, who works in finance. The restaurant had a soft opening last month in a highrise shopping mall in a tourist area here. On a recent Saturday night, fewer than half the tables were occupied, and no one was mistaking the Mongolian Beef or Dynamite Shrimp for the Real McCoy. Animation designer Zhang Xue said she came because P.F. Chang’s got a shoutout on “The Big Bang Theory,” the U.S. sit-com popular in China. “In U.S. films and TV shows, everyone is eating American Chinese takeout,” she said. “They eat noodles out of these paper cartons, slurp the noodles down with chopsticks, and look like they are enjoying themselves very much…it made me wonder what Chinese American food was like.” After sampling the food, Ms. Zhang’s curiosity was sated. “I don’t think this is Chinese food,” she said. “I think it’s what Americans think Chinese food should taste like.” Executives at P.F. Chang’s China Bistro headquarters in Scottsdale, Ariz., aren’t arguing—which is why they came up with the idea to call the restaurant, the first of several they are planning here, an American bistro. “We did focus groups, and what we learned was, don’t pretend to be something you’re not,” said Kristen Briede, head of the restaurant’s international business. With a rising affluent middle class, China has plenty of people able to pay for pricey, protein-rich dishes, said P.F. Chang’s Chief Executive Michael Osanloo. “We’re taking advantage of the law of large numbers,” he said. “I don’t need adoption by 10% of China’s consumers; I just need 2% to like my food.” Although the restaurant wasn’t busy on a recent visit, traffic might pick up after the grand opening on May 17. Like many upscale restaurants in China, the restaurant is in a shopping mall. There is a prominent white P.F. Chang’s sign on the 8th-floor entrance, but the company wasn’t able to secure permission for the terra cotta horse that is a fixture at its U.S. outlets. Inside, the décor looks like a mix of old Shanghai meets American diner, with booths and tables. A large mural of a Chinese woman wearing a traditional cheongsam smiles down on customers. P.F. Chang’s created 10 new dishes for Shanghai customers, including Dusk ’Til Dawn Honey Chicken and Scallion Pancake, an Asian take on chicken and waffles that puts crispy chicken on top of a buttermilk pancake. The Duck Spring Roll features mozzarella, something a Chinese chef might consider sacri- ‘I think it’s what Americans think Chinese food should taste like.’ lege. Prices are on par with the U.S., although portion sizes are smaller, so Chinese customers can order more dishes and share them. Diners bring home leftovers in white takeout boxes, which aren’t a thing in China. Jennifer 8 Lee, an author and producer of “The Search for General Tso,” a documentary about Chinese-American food, thinks the big question is P.F. Chang’s staying power in China. “Chinese people might try it for the novelty, but I don’t know if they would embrace it,” she said. “Sweet, fried and chicken. Those are things that Americans love.” Industry professionals say P.F. Chang’s American bistro might appeal to Chinese people who have sampled its fare overseas, including the hundreds of thousands of those who return each year after studying abroad. DAVE TACON FOR THE WALL STREET JOURNAL Dollar Reign Faces Threat Diners in Shanghai at the first China outlet of P.F. Chang’s Discover what the world of mining can do for the world of the people. . THE WALL STREET JOURNAL. Monday, May 14, 2018 | B7 MARKETS DIGEST Dow Jones Industrial Average New to the Market S&P 500 Index Last Year ago 24831.17 s 568.66, or 2.34% last week Trailing P/E ratio 24.44 P/E estimate * 16.41 High, low, open and close for each of Dividend yield 2.14 the past 52 weeks 2727.72 s 64.30, or 2.41% last week High, low, open and close for each of the past 52 weeks 20.38 17.72 2.35 All-time high 26616.71, 01/26/18 Current divisor 0.14523396877348 Last Trailing P/E ratio * 24.28 23.83 P/E estimate * 17.05 18.45 Dividend yield 1.91 1.97 All-time high 2872.87, 01/26/18 26400 2900 Week's high t DOWN Monday's open t Friday's close Year ago 65-day moving average UP Friday's close Monday's open Public Offerings of Stock IPOs in the U.S. Market 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 Symbol/ Pricing primary Shares Range($) exchange (mil.) Low/High Issuer/business Bookrunner(s) 25200 2800 24000 2700 22800 2600 Lockup Expirations 21600 2500 Below, companies whose officers and other insiders will become eligible to sell shares in their newly public companies for the first time. Such sales can move the stock’s price. 20400 2400 5/16 4/16 Pluralsight Develops a cloud-based technology learning platform. 20.7 PS Nq 10.00/ MS, JPM, 12.00 Barclays, BofA ML Week's low 65-day moving average 200-day moving average 200-day moving average 19200 2300 Lockup expiration Issue date J J A S O N D J F M A M t Primary market NYSE weekly volume, in billions of shares M t M 2200 Composite J J A S O N D J F M J A S O N D J F M A M Pimco reported net outflows of $21.7 billion for the first three months of year after earlier management reshuffle resulted in departure of CEO Mohamed El-Erian. A M *Weekly P/E data based on as-reported earnings from Birinyi Associates Inc. Major U.S. Stock-Market Indexes High % chg 52-Week Close (l) Low Dow Jones Industrial Average 24868.65 24198.34 24831.17 Transportation Avg 10751.39 10329.38 10713.57 Utility Average 705.71 676.25 689.49 Total Stock Market 28370.35 27610.68 28312.79 731.86 Barron's 400 734.34 714.45 568.66 343.34 -14.89 667.63 17.41 2.34 20606.93 3.31 8783.74 647.90 2.42 24391.29 2.44 624.99 -2.11 l l l l l 26616.71 11373.38 774.47 29630.47 757.37 18.8 19.0 -1.5 14.4 14.9 0.5 1.0 -4.7 2.3 2.9 11.1 7.0 5.9 8.8 8.6 7588.32 7131.12 20.9 22.3 7.2 8.7 14.0 16.1 last week 7417.67 7224.70 6969.30 6770.30 7402.88 6952.56 193.27 183.45 2.68 2.71 64.30 41.64 27.95 2.41 2.19 2.91 l 6011.24 5580.55 l 7450 7300 7150 S&P 2732.86 2655.20 1945.07 1901.77 989.79 961.16 500 Index MidCap 400 SmallCap 600 2727.72 1939.09 986.87 l 2357.03 1691.67 817.25 l 2872.87 1995.23 l 986.87 2.0 2.0 5.4 14.1 12.8 17.7 1565.73 1606.79 12458.25 12761.82 551.97 562.65 4483.12 4663.80 514.23 532.12 106.19 110.83 81.08 83.86 153.90 161.66 1301.87 1350.46 12.65 12.65 41.19 268.47 10.68 180.69 13.55 4.33 1.46 5.75 53.73 -2.12 2.63 2.15 1.93 4.03 2.61 4.06 1.77 3.69 4.14 -14.35 l 1355.89 11423.53 503.24 3507.64 514.66 88.87 76.42 117.79 1020.51 9.14 Nasdaq PHLX 1610.71 13637.02 l 589.69 l 4939.86 l 593.12 l 116.52 l 93.26 l 165.78 l 1445.9 l 37.32 l s 667.63, or 2.42% Region/Country Index Close DJ Americas Sao Paulo Bovespa S&P/TSX Comp S&P/BMV IPC Santiago IPSA Latest Week % chg 52-Week Range Close Low 3108.41 402.22 267.71 2.17 2.02 1.65 2722.96 352.67 237.56 653.98 85220.24 15983.32 46728.92 4252.10 2.34 2.53 1.61 567.12 60761.74 14951.88 45826.64 3593.92 The Global Dow DJ Global Index DJ Global ex U.S. –0.56 1.13 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 OMX Stockholm Switzerland Swiss Market U.K. FTSE 100 392.40 3132.46 395.56 3565.52 3522.17 3884.40 5541.94 13001.24 822.37 1472.19 24159.34 562.27 5613.82 1193.98 58422.86 10271.40 585.83 8993.51 7724.55 363.18 2894.75 366.11 3278.72 3058.09 3793.62 –0.26 5031.92 0.47 11787.26 1.42 701.36 –0.18 1363.50 0.22 20584 –0.72 507.15 1.18 5073.89 2.30 973.33 4.13 50831.89 1.34 9381.0 1.66 545.83 1.38 8509.29 1.01 6888.69 2.08 Asia-Pacific Australia China Hong Kong India Japan Malaysia Singapore South Korea Taiwan 6116.20 3163.26 31122.06 35535.79 22758.48 1846.51 3570.17 2477.71 10858.98 5651.8 0.88 3061.95 2.34 3.99 25136.52 30188.15 1.78 19274.82 1.27 1713.13 0.25 3201.77 0.70 2286.02 0.66 9947.62 3.13 EMEA S&P/ASX 200 Shanghai Composite Hang Seng S&P BSE Sensex Nikkei Stock Avg FTSE Bursa Malaysia KLCI Straits Times Kospi TAIEX • • • • • 1.39 1.15 0.72 0.42 2.01 • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • High YTD % chg 3323.74 425.41 285.34 0.7 1.3 0.4 687.75 87652.64 16412.94 51713.38 4442.56 1.8 11.5 –1.4 –5.3 1.0 402.81 3276.11 404.86 3697.40 3688.78 4176.88 5545.95 13559.60 886.54 1554.30 24544 570.82 5791.88 1324.62 61684.77 10982.4 600.20 9611.61 7778.64 0.8 –1.4 2.6 1.8 3.0 –2.3 4.3 0.6 2.5 –2.5 10.6 3.2 4.2 3.4 –1.8 2.3 3.0 –4.1 0.5 6135.8 3559.47 33154.12 36283.25 24124.15 1895.18 3615.28 2598.19 11253.11 0.8 –4.4 4.0 4.3 –0.0 2.8 4.9 0.4 2.0 Source: SIX Financial Information;WSJ Market Data Group Consumer Rates and Returns to Investor Selected rates A consumer rate against its benchmark over the past year New car loan 27950 Sunshine Savings Bank Tallahassee, FL 2.49% 850-219-7200 3.50 Think Mutual Bank Rochester, NY 2.49% 800-288-3425 3.00 Cambridge Savings Bank 2.69% Cambridge, MA 888-418-5626 4.00 New car loan t 2.50 J J A S O ND J FMAM 2017 2018 Farmers State Bank Waterloo, IA Yield/Rate (%) Last (l)Week ago Federal-funds rate target 1.50-1.75 1.50-1.75 Prime rate* 4.75 4.75 Libor, 3-month 2.37 2.34 Money market, annual yield 0.41 0.45 Five-year CD, annual yield 1.68 1.69 30-year mortgage, fixed† 4.55 4.56 15-year mortgage, fixed† 4.01 4.03 Jumbo mortgages, $424,100-plus† 4.83 4.82 Five-year adj mortgage (ARM)† 4.54 4.58 New-car loan, 48-month 4.25 4.26 2.90% 877-FSB-1879 4 7 8 9 10 11 May 3-yr chg 52-Week Range (%) Low 0 2 4 6 8 High (pct pts) 0.75 l l 4.00 l 1.17 0.25 l l 1.31 l 3.73 l 2.99 l 4.21 l 3.22 l 2.85 1.50 4.75 2.37 0.45 1.69 4.63 4.11 4.96 4.70 4.27 DJ Commodity TR/CC CRB Index Close Net chg 655.84 203.56 1.67 0.30 %Chg YTD % chg 0.25 0.15 4.87 5.00 70.70 0.98 1.41 17.01 0.095 3.50 -4.98 1.50 1.50 2.07 0.10 0.22 0.63 0.90 0.55 1.27 1.34 Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest banks.† Excludes closing costs. Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com 276.0 93.9 180 days Nov. 16, ’17 scPharmaceuticals SCPH 14.00 102.1 0.5 180 days Nov. 16, ’17 Sterling Bancorp SBT 12.00 207.0 13.8 180 days Nov. 16, ’17 Stitch Fix SFIX 15.00 137.6 54.1 180 days BXG 14.00 104.6 44.9 180 days % Chg From Friday3s Offer 1st-day close ($) price close HUYA HUYA May 11/$12.00 16.06 33.8 ... Carbon Black CBLK May 4/$19.00 23.44 23.4 –2.1 AXA Equitable Hldgs EQH May 10/$20.00 21.39 7.0 5.2 Construction Ptnrs ROAD May 4/$12.00 12.03 0.2 –0.6 Evelo Biosciences EVLO May 9/$16.00 16.00 ... –1.5 Spirit of Texas Bancshares 21.38 STXB May 4/$21.00 1.8 –2.2 Origin Bancorp OBNK May 9/$34.00 37.16 9.3 –0.9 Inspire Med Sys INSP May 3/$16.00 26.74 67.1 7.0 ASLAN Pharmaceuticals 6.50 ASLN May 4/$7.03 –7.5 15.9 Unity Biotechnology UBX May 3/$17.00 15.49 –8.9 –7.0 Primary Amount exchange ($mil.) Expected Issuer/Business May 14 Friday’s price ($) Bookrunner(s) Evofem Biosciences Healthcare EVFM Nq 35.7 6.40 RBC Cptl Mkts, Cantor Fitzgerald & Co Nemaura Medical Healthcare NMRD Nq n.a. 3.10 Roth Cptl Ptnrs Taiwan Liposome Healthcare TLC Nq 35.0 n.a. Cantor Fitzgerald & Co “Shelf registrations” allow a company to prepare a stock or bond for sale, without selling the whole issue at once. Corporations sell as conditions become favorable. Here are the shelf sales, or takedowns, over the last week: Issuer/Industry Takedown date/ Deal value Registration Registration date ($ mil.) (mil.) Inuvo Computers & Electronics May 11 Sept. 1,317 $2.0 $15.0 0.48 0.97 0.47 Public and Private Borrowing 0.07 0.08 0.29 Euro, per dollar 0.8374 0.0015 0.18 0.51 Treasurys Yen, per dollar U.K. pound, in dollars 109.39 0.25 -2.94 92.56 WSJ Dollar Index 86.23 6.30 0.27 1.35 0.0010 0.07 0.21 52-Week Low Close(l) High % Chg DJ Commodity 532.01 l 659.25 17.62 TR/CC CRB Index 166.50 l 204.52 12.04 Crude oil, $ per barrel 42.53 l 71.36 47.78 Natural gas, $/MMBtu Gold, $ per troy oz. 2.55 3.63 -18.05 l l 1208.60 U.S. Dollar Index 88.59 WSJ Dollar Index 82.70 Euro, per dollar 0.80 Yen, per dollar 1362.40 7.57 l 99.19 -6.68 l 90.14 -4.34 0.91 -8.46 l 104.73 l 1.26 l U.K. pound, in dollars 1.43 5.08 Plus, get deeper money-flows data and email delivery of key stock-market data. All are available free at WSJMarkets.com Friday t One year ago 10 5 1.50 0 0.75 –5 0.00 –10 30 Yen WSJ Dollar index 2017 Sale Final maturity Issuer Spread +/- Treasurys, Yield (%) in basis pts, 52-wk Range Last Wk ago Last Low High 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 2.971 3.886 3.330 5.983 3.470 2.542 6.421 34 297 20 5 289 Total ($mil.) May 15 May 1, 2038 Boston City- Rating Bookrunner/ Fitch Moody’s S&P Bond Counsel(s) 150.0 N.R. N.R. May 15 prelim. 250.0 N.R. NYC Transitional N.R. N.R. Preliminary/Norton Rose Fulbright Finance Auth. May 15 prelim. N.R. Preliminary/ Locke Lord LLP Massachusetts 850.0 N.R. NYC Transitional N.R. N.R. Preliminary/Norton Rose Fulbright Finance Auth. May 15 March1,2039 Pennsylvania 1,247.0 N.R. N.R. N.R. Preliminary/Ballard Spahr LLP/Turner Law PC May 18 prelim. Grand Parkway 1,521.9 N.R. N.R. N.R. Goldman & Co 150.0 N.R. N.R. N.R. BoA Merrill Transport Northampton Gen Closed-End Funds | WSJ.com/funds 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 Friday, May 11, 2018 Fund (SYM) Corporate Borrowing Rates and Yields n.a. 312 n.a. 16 347 Deals of $ 150 million or more expected this week 2018 Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group 2.946 3.902 3.310 6.044 3.440 2.578 6.465 Public and Municipal Finance Source:Thomson Reuters/Ipreo Euro Bond total return index Tuesday, April 15 Auction of 4 week bill; announced on May 14, settles on May 17 Purpose Auth 15% 2.25 Bookrunner(s) Roth Cptl Ptnrs Thursday, April 17 Auction of 10-year TIPS; announced on May 10, settles on May 31 May 18 prelim. Yen, euro vs. dollar; dollar vs. major U.S. trading partners 3.00 Monday, April 7 Auction of 13 and 26 week bills; announced on May 10, settles on May 17 114.17 -3.50 Real-time U.S. stock quotes are available on WSJ.com. Track mostactive stocks, new highs/lows, mutual funds and ETFs. WSJ .COM % Chg From Friday3s Offer 1st-day close ($) price close Company SYMBOL IPO date/Offer price -0.01 -0.01 U.S. Dollar Index 3.75% 1 2 3 5 710 years maturity 12.00 Off the Shelf Natural gas, $/MMBtu 2.806 Gold, $ per troy oz. 1319.00 Crude oil, $ per barrel Yield to maturity of current bills, notes and bonds 1 3 6 month(s) 180 days Nov. 16, ’17 SailPoint Technologies Holdings SAIL Sources: Dealogic; WSJ Market Data Group 27050 s 2.37% 407-422-7129 ... May 16 Nov. 17, ’17 Bluegreen Vacations 27500 s TrustCo Bank Orlando, FL 4.50% t 300.0 Symbol/ 28400 s Prime rate 10.00 Other Stock Offerings Benchmark Yields and Rates Treasury yield curve Forex Race 4.26% Bankrate.com avg†: LGC.U Secondaries and follow-ons expected this week in the U.S. market Commodities and Currencies Last Week t U.S. consumer rates Interest rate 9.1 4.6 3.2 5.3 -3.1 13.8 4.8 -9.6 24.4 -3.0 Sources: SIX Financial Information; WSJ Market Data Group International Stock Indexes Americas Brazil Canada Mexico Chile 4.6 -0.4 0.1 10.5 -2.4 3.9 -1.7 8.1 7.8 14.6 16.2 10.5 8.5 28.8 2.3 21.2 -1.3 9.6 29.2 21.6 180 days Nov. 16, ’17 Legacy Acquisition Sources: WSJ Market Data Group; FactSet Research Systems last week Russell 2000 1609.45 NYSE Composite 12788.75 Value Line 564.15 NYSE Arca Biotech 4673.68 NYSE Arca Pharma 532.99 KBW Bank 111.42 PHLX§ Gold/Silver 84.54 PHLX§ Oil Service 165.24 PHLX§ Semiconductor 1363.04 CBOE Volatility 15.56 180 days –26.9 DJ US TSM Other Indexes World 7000 4 7 8 9 10 11 May 9.0 8.5 11.5 113.8 180.0 Company SYMBOL IPO date/Offer price Nasdaq Stock Market Nasdaq Composite Nasdaq 100 46.0 8.00 Performance of IPOs, most-recent listed first s 193.27, or 2.68% % chg YTD 3-yr. ann. % chg High 10.00 JT IPO Scorecard Nasdaq Composite Latest Week Close Net chg Low May 15 Financial Flashback The Wall Street Journal, Monday, May 14, 2014 30 20 10 0 M J ASNS Nov. 15, ’17 Jianpu Technology May 14 Nov. 15, ’17 Arsanis Bars measure the point change from Monday's open 18000 Offer Offer amt Through Lockup Symbol price($) ($ mil.) Friday (%) provision Issuer 44 376 34 18 362 Total Return 52-wk 3-yr -3.39 -0.14 0.11 2.69 -0.02 1.36 2.548 3.352 -0.01 1.09 1.333 2.210 -0.774 4.050 Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch Prem NAV Close /Disc 52 wk Ttl Ret General Equity Funds Adams Divers Equity Fd ADX 17.54 14.99 -14.5 Boulder Growth & Income BIF NA 10.80 NA Central Securities CET 32.89 27.03 -17.8 CohSteer Opprtnty Fd FOF 13.45 12.58 -6.5 Cornerstone Strategic CLM 12.74 15.83 +24.3 Cornerstone TR Fd CRF 12.38 15.80 +27.6 EtnVnc TaxAdvDiv EVT 22.79 22.21 -2.5 Gabelli Dividend & Incm GDV 23.80 21.97 -7.7 Gabelli Equity Trust GAB 6.22 6.10 -1.9 Genl American Investors GAM 40.04 33.74 -15.7 Guggenheim Enh Fd GPM 8.55 8.37 -2.1 HnckJohn TxAdv HTD 24.31 22.60 -7.0 Liberty All-Star Equity USA 6.65 6.20 -6.8 Royce Micro-Cap RMT 10.63 9.67 -9.0 Royce Value Trust RVT 17.21 15.95 -7.3 Source Capital SOR 44.20 39.78 -10.0 15.7 18.5 13.6 4.6 16.7 16.5 9.4 8.3 10.5 9.1 13.0 -3.7 24.0 18.9 15.9 6.7 Fund (SYM) Prem NAV Close /Disc 52 wk Ttl Ret Tri-Continental TY 29.80 26.64 -10.6 Specialized Equity Funds Adams Natural Rscs Fd PEO 23.39 19.61 -16.2 AllnzGI NFJ Div Interest NFJ 14.44 12.73 -11.8 AlpnGlblPrProp AWP 7.07 6.43 -9.1 BlkRk Enh Cap Inco CII 16.64 15.93 -4.3 BlkRk Engy Res Tr BGR 15.72 14.63 -6.9 BlackRock Enh Eq Div Tr BDJ 9.52 8.96 -5.9 BlackRock Enh Gl Div Tr BOE 12.03 11.30 -6.1 BlkRk Intl Grwth&Inco BGY 6.52 6.01 -7.8 BlkRk Health Sci BME 35.06 34.89 -0.5 BlackRck Rscs Comm Str Tr BCX 10.26 9.58 -6.7 BlackRock Science & Tech BST 29.70 31.50 +6.1 BlackRock Utilities Infr BUI 20.56 20.02 -2.6 CBREClarionGlblRlEstIncm IGR 8.47 7.41 -12.5 Sprott Physical Gold CEF NA 13.27 NA ClearBridge Amer Engy CBA NA 7.25 NA ClearBridge Engy MLP Fd CEM NA 13.74 NA Clearbridge Engy MLP Opp EMO NA 11.00 NA Clearbridge Engy MLP TR CTR NA 10.69 NA Cohen & Steers Infr Fd UTF 24.26 22.17 -8.6 C&S MLP Incm & Engy Opp MIE 10.23 9.82 -4.0 Cohen & Steers Qual Inc RQI 12.28 11.49 -6.4 CohnStrsPfdInco RNP 21.11 18.51 -12.3 Cohen & Steers TR RFI 12.38 12.28 -0.8 CLSeligmn Prem Tech Gr Fd STK 21.18 21.86 +3.2 Duff & Phelps DNP 9.08 10.98 +20.9 Duff&PhelpsGblUtilIncFd DPG 16.26 14.30 -12.1 16.7 8.8 5.0 18.8 14.1 15.0 9.3 2.8 5.3 5.4 23.5 51.6 4.0 5.3 9.0 -15.7 -8.7 -7.2 -11.9 4.8 -3.8 -2.6 -0.4 5.6 7.7 8.6 -6.3 Continued on Page B8 . THE WALL STREET JOURNAL. B8 | Monday, May 14, 2018 CLOSED-END FUNDS wsj.com/funds Continued From Page B7 52 wk Prem Ttl NAV Close /Disc Ret Fund (SYM) Eaton Vance Eqty Inco Fd EOI 14.87 15.19 +2.2 Eaton Vance Eqty Inco II EOS 16.24 16.59 +2.2 EtnVncRskMngd ETJ 9.66 9.21 -4.7 Etn Vnc Tax Mgd Buy-Write ETB 15.60 15.80 +1.3 Eaton Vance BuyWrite Opp ETV 14.72 14.95 +1.6 Eaton Vance Tax-Mng Div ETY 12.04 12.10 +0.5 EatonVanceTax-MngdOpp ETW 11.25 11.60 +3.1 EtnVncTxMngGlDvEqInc EXG 9.23 9.24 +0.1 Fiduciary/Clymr Opp Fd FMO 11.71 11.60 -0.9 FT Energy Inc & Growth Fd FEN 21.75 22.46 +3.3 FstTrEnhEqtIncFd FFA 16.07 14.98 -6.8 First Tr Engy Infr Fd FIF 16.39 15.79 -3.7 First Tr MLP & Engy Incm FEI 12.64 12.56 -0.6 Gabelli Hlthcr & Well GRX 11.26 9.51 -15.5 Gabelli Utility Tr GUT 5.02 6.01 +19.7 GAMCOGlblGoldNatRscs&Inc GGN 5.20 5.07 -2.5 GoldmanSachsMLPIncOpp GMZ 8.96 8.71 -2.8 Goldman Sachs MLP Energy GER 6.11 6.11 -0.1 John Hancock Finl Opps Fd BTO 38.05 39.04 +2.6 Macquarie Glbl Infrstrctr MGU 26.25 22.83 -13.0 NeubergerBermanMLPIncm NML 9.10 8.61 -5.4 Neubrgr Brm Rl Est Sec Fd NRO 5.04 4.82 -4.4 Nuveen Dow 30 Dynamic DIAX 18.36 18.75 +2.1 Nuveen Core Eq Alpha JCE 14.78 14.53 -1.7 Nuveen Diversified Div JDD 12.04 12.19 +1.3 Nuveen Engy MLP Fd JMF 10.58 10.29 -2.7 NuvNASDAQ100DynOver QQQX 23.12 25.83 +11.7 Nuveen Real Est Incm Fd JRS 10.25 9.83 -4.1 Nuveen Real Asset Income JRI 18.59 16.47 -11.4 NuvS&P500DynOverwrite SPXX NA 18.51 NA NuveenS&P500Buy-Write BXMX 13.81 14.07 +1.9 Reaves Utility Fund UTG 30.77 28.32 -8.0 21.7 24.0 9.5 3.5 5.2 17.1 12.3 13.9 -12.9 -8.0 9.4 -8.6 -12.6 -3.1 -0.1 5.5 -7.2 -14.3 15.6 2.4 -4.9 1.9 24.1 19.9 11.7 -12.5 28.9 -4.4 1.9 28.4 8.1 -12.4 Prem NAV Close /Disc Fund (SYM) 52 wk Ttl Ret Tekla Hlthcr Investors HQH 22.54 20.72 -8.1 Tekla Healthcare Opps Fd THQ 18.19 16.39 -9.9 Tekla Life Sciences HQL 19.10 18.29 -4.2 Tekla World Hlthcr Fd THW 13.84 12.79 -7.6 Tortoise Energy TYG 25.45 28.04 +10.2 Tortoise MLP Fund NTG 16.25 17.86 +9.9 Voya Gl Equity Div IGD 7.76 7.23 -6.8 Income & Preferred Stock Funds Calamos Strat Fd CSQ 12.74 11.95 -6.2 Cohen & Steers Dur Pfd LDP 26.21 25.90 -1.2 Cohen & Strs Sel Prf Inco PSF 26.48 25.78 -2.6 FT Interm Duration Pfd FPF 23.80 22.12 -7.1 Flaherty & Crumrine Dyn DFP 24.96 23.70 -5.0 Flaherty & Crumrine Pfd FFC 19.51 18.83 -3.5 John Hancock Pfd Income HPI 20.82 20.73 -0.4 John Hancock Pfd II HPF 20.53 20.17 -1.8 John Hancock Pfd Inc III HPS 18.34 17.95 -2.1 JHancock Pr Div PDT 14.62 15.43 +5.5 LMP Cap & Inco Fd SCD 14.09 12.79 -9.2 Nuveen Pfd & Incm Opps Fd JPC 10.27 9.93 -3.3 Nuveen Pfd & Incm Secs Fd JPS 9.90 9.43 -4.7 Nuveen Preferred & Incm JPI 24.76 24.03 -2.9 Nuv Tax-Adv Div Gr JTD 17.30 16.71 -3.4 TCW Strategic Income Fund TSI NA 5.40 NA Virtus Global Dividend ZTR 11.14 11.05 -0.8 Convertible Sec's. Funds AdvntClymrFd AVK 16.91 15.24 -9.9 AllianzGI Conv & Incm NCV 6.29 6.85 +8.9 AllianzGI Conv & Incm II NCZ 5.65 5.99 +6.0 AllianzGI Equity & Conv NIE 23.38 21.21 -9.3 Calamos Conv Hi Inco Fd CHY 11.63 12.19 +4.8 Calamos CHI 11.04 11.46 +3.8 World Equity Funds Alpine Tot Dyn Div AOD 10.07 9.03 -10.3 Prem NAV Close /Disc Fund (SYM) -10.0 1.2 -2.0 -2.7 -8.3 -2.2 7.3 52 wk Ttl Ret Calamos Glbl Dyn Inc CHW 9.02 9.30 +3.1 24.8 Cdn Genl Inv CGI 34.20 23.50 -31.3 14.3 China Fund CHN 23.73 21.23 -10.6 24.7 Clough Global Opp Fd GLO 11.86 10.82 -8.8 13.6 EtnVncTxAdvGblDiv ETG 18.16 16.84 -7.3 6.4 EatonVance TxAdv Opport ETO 24.24 25.66 +5.9 16.5 First Trust Dynamic Eur FDEU 18.82 17.50 -7.0 3.4 Gabelli Glbl Multimedia GGT 8.81 9.33 +5.9 21.0 GDL Fund GDL 11.17 9.35 -16.3 -1.4 India Fund IFN 28.64 25.01 -12.7 9.4 Japan Sml Cap JOF 13.99 12.42 -11.2 29.7 Korea Fund KF 46.08 41.51 -9.9 16.5 Mexico Fund MXF 17.87 15.62 -12.6 -2.6 Morgan-Stanley Asia-Pac APF 20.60 17.71 -14.0 12.9 MS China a Shr Fd CAF 29.14 24.70 -15.2 32.2 MS Emerging Fund MSF 19.84 17.40 -12.3 12.2 MS India Invest IIF 34.19 30.73 -10.1 7.5 New Germany Fund GF 21.81 19.52 -10.5 25.2 Swiss Helvetia Fund SWZ 13.47 12.28 -8.8 2.0 Templeton Dragon TDF 25.14 21.67 -13.8 25.0 Templeton Emerging EMF 17.65 15.61 -11.6 15.7 Virtus Total Return Fund ZF 11.35 11.07 -2.5 5.8 Voya Infr Indls & Matls IDE 15.97 15.29 -4.3 10.2 Wells Fargo Gl Div Opp EOD NA 5.81 NA 7.5 Prem12 Mo Fund (SYM) NAV Close /Disc Yld U.S. Mortgage Bond Funds BlackRock Income Trust BKT 6.37 5.76 -9.6 5.5 Nuveen Mtg Opp Term Fd JLS 24.28 23.48 -3.3 8.0 Investment Grade Bond Funds Blackrock Core Bond Tr BHK 14.09 12.89 -8.5 6.0 BlkRk Credit Alloc Incm BTZ 14.15 12.46 -11.9 6.5 John Hancock Income Secs JHS 14.65 13.63 -7.0 5.7 11.2 7.0 0.5 0.3 1.0 -4.3 1.3 0.6 2.4 4.0 -1.9 5.1 2.4 3.7 14.9 5.2 -0.1 2.2 9.6 8.8 15.2 15.6 13.6 13.0 Cash Prices | WSJ.com/commodities Friday, May 11, 2018 These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace— separate from the futures price on an exchange, which reflects what the commodity might be worth in future months. Friday Energy 0.8919 1.0201 2.750 2.730 2.500 1.910 1.650 0.910 2.590 60.400 12.450 Propane,tet,Mont Belvieu-g Butane,normal,Mont Belvieu-g NaturalGas,HenryHub-i NaturalGas,TranscoZone3-i NaturalGas,TranscoZone6NY-i NaturalGas,PanhandleEast-i NaturalGas,Opal-i NaturalGas,MarcellusNE PA-i NaturalGas,HaynesvilleN.LA-i Coal,C.Aplc.,12500Btu,1.2SO2-r,w Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w Metals 1327.90 1427.49 1324.35 1470.02 *1314.80 *1318.80 1373.37 1386.58 1386.58 1600.19 1297.40 1386.58 Silver, troy oz. Engelhard industrial Engelhard fabricated Handy & Harman base Handy & Harman fabricated LBMA spot price Friday SoybeanMeal,Cent IL,rail,ton48%-u Soybeans,No.1 yllw IL-bp,u Wheat,Spring14%-pro Mnpls-u Wheat,No.2 soft red,St.Louis-bp,u Wheat - Hard - KC (USDA) $ per bu-u Wheat,No.1soft white,Portld,OR-u Other metals LBMA Platinum Price PM *923.0 Platinum,Engelhard industrial 929.0 Platinum,Engelhard fabricated 1029.0 Palladium,Engelhard industrial 1009.0 Palladium,Engelhard fabricated 1109.0 Aluminum, LME, $ per metric ton *2327.0 Copper,Comex spot 3.0950 Iron Ore, 62% Fe CFR China-s n.a. Shredded Scrap, US Midwest-s,m n.a. Steel, HRC USA, FOB Midwest Mill-s n.a. 16.8300 20.1960 16.7620 20.9530 *£12.2400 0.5800 0.8362 *94.35 61.500 6.00 Burlap,10-oz,40-inch NY yd-n,w Cotton,1 1/16 std lw-mdMphs-u Cotlook 'A' Index-t Hides,hvy native steers piece fob-u Wool,64s,staple,Terr del-u,w Grains and Feeds n.a. 108 3.6850 135.9 518.4 258 108 305 2.8150 25.75 7.0000 Barley,top-quality Mnpls-u Bran,wheat middlings, KC-u Corn,No. 2 yellow,Cent IL-bp,u Corn gluten feed,Midwest-u,w Corn gluten meal,Midwest-u,w Cottonseed meal-u,w Hominy feed,Cent IL-u,w Meat-bonemeal,50% pro Mnpls-u,w Oats,No.2 milling,Mnpls-u Rice, Long Grain Milled, No. 2 AR-u,w Sorghum,(Milo) No.2 Gulf-u 388.10 9.6700 7.3250 4.9450 5.0300 5.8300 Food Beef,carcass equiv. index choice 1-3,600-900 lbs.-u select 1-3,600-900 lbs.-u Broilers, National comp wghtd-u,w Butter,AA Chicago Cheddar cheese,bbl,Chicago Cheddar cheese,blk,Chicago Milk,Nonfat dry,Chicago lb. Cocoa,Ivory Coast-w Coffee,Brazilian,Comp Coffee,Colombian, NY Eggs,large white,Chicago-u Flour,hard winter KC Hams,17-20 lbs,Mid-US fob-u Hogs,Iowa-So. Minnesota-u Pork bellies,12-14 lb MidUS-u Pork loins,13-19 lb MidUS-u Steers,Tex.-Okla. Choice-u Steers,feeder,Okla. City-u,w Fibers and Textiles Gold, per troy oz Engelhard industrial Engelhard fabricated Handy & Harman base Handy & Harman fabricated LBMA Gold Price AM LBMA Gold Price PM Krugerrand,wholesale-e Maple Leaf-e American Eagle-e Mexican peso-e Austria crown-e Austria phil-e Friday *16.6000 12314 (U.S.$ equivalent) Coins,wholesale $1,000 face-a 201.88 182.71 1.1642 2.3500 162.00 163.25 85.00 n.a. 1.1882 1.3933 0.9150 16.00 n.a. 63.84 n.a. 1.0336 122.00 171.44 Fats and Oils 29.5000 0.2400 n.a. 0.2966 0.2400 n.a. Corn oil,crude wet/dry mill-u,w Grease,choice white,Chicago-h Lard,Chicago-u Soybean oil,crude;Centl IL-u Tallow,bleach;Chicago-h Tallow,edible,Chicago-u Prem12 Mo Fund (SYM) NAV Close /Disc Yld MFS Inc Tr MIN 4.19 3.87 -7.6 9.7 Western Asset Infl Incm WIA 12.94 11.45 -11.5 3.6 Western Asset Infl Opps WIW 12.62 11.33 -10.2 3.8 Loan Participation Funds Apollo Sr Fltg Rate Fd AFT 17.81 16.75 -6.0 6.5 BlkRk Debt Strat Fd DSU 12.58 11.37 -9.6 7.1 BlackRock FR Incm Strat FRA 14.96 14.49 -3.1 5.0 Blkrk FltRt InTr BGT 14.43 13.76 -4.6 5.0 BlackstoneGSO Strat Cred BGB 16.96 15.92 -6.1 7.8 Blackstone GSO Sr Float BSL 17.77 17.81 +0.2 6.6 Eagle Point Credit ECC NA 18.45 NA 11.8 Eaton Vance FR Incm Tr EFT NA 15.06 NA 5.4 EatonVnc SrFltRate EFR NA 14.75 NA 5.8 Eaton Vance Sr Incm Tr EVF NA 6.66 NA 5.4 First Trust Sr FR Fd II FCT 14.06 13.15 -6.5 5.7 FT Sr Floating Rate 2022 FIV 9.65 9.47 -1.9 5.3 Highland FR Opps Fd HFRO 15.19 NA NA NA Invesco Credit Opps Fund VTA 13.16 11.78 -10.5 6.8 Invesco Senior Income Tr VVR 4.90 4.45 -9.2 5.5 Nuveen Credit Strt Inc Fd JQC 9.06 8.12 -10.4 7.1 NuvFloatRteInco Fd JFR 11.50 10.85 -5.7 7.3 Nuv Float Rte Opp Fd JRO 11.42 10.78 -5.6 7.6 Nuveen Senior Income Fund NSL 6.85 6.63 -3.2 7.1 Pioneer Floating Rate Tr PHD 12.41 11.57 -6.8 6.2 Voya Prime Rate Trust PPR 5.68 5.18 -8.8 5.4 High Yield Bond Funds AllianceBernstein Glbl AWF NA 11.72 NA 7.1 Barings Glbl Short Dur HY BGH 20.49 18.70 -8.8 9.6 BlackRock Corp Hi Yd Fd HYT 11.89 10.61 -10.8 7.9 BlackRockDurInco Tr BLW 16.74 14.98 -10.5 6.4 Brookfield Real Assets RA 24.35 22.26 -8.6 10.7 Credit Suisse High Yld DHY 2.70 2.63 -2.6 9.8 DoubleLine Incm Solutions DSL NA 20.39 NA 8.9 Dreyfus Hi Yd Strat Fd DHF 3.43 3.18 -7.3 9.1 Fst Tr Hi Inc Lg/Shrt Fd FSD 17.10 15.05 -12.0 9.7 Guggenheim Strat Opps Fd GOF 19.14 21.03 +9.9 10.4 Ivy High Income Opps Fund IVH 15.93 14.27 -10.4 9.6 Neuberger Berman HYS NHS 12.78 11.02 -13.8 7.8 NexPoint Strat Opps Fund NHF 26.42 24.23 -8.3 10.0 Nuveen Credit Opps 2022 JCO 9.84 9.52 -3.3 5.9 Nuveen Gl Hi Incm Fd JGH 17.97 16.04 -10.7 8.9 Nuveen High Incm Dec18 JHA 9.98 9.84 -1.4 4.3 Nuveen High Incm Dec19 JHD 10.06 9.83 -2.3 5.4 Nuveen Hi Incm Nov 2021 JHB 9.98 9.59 -3.9 6.2 Pioneer High Income Trust PHT 10.53 9.46 -10.2 8.2 Prud Gl Shrt Dur Hi Yd GHY 16.17 13.81 -14.6 7.7 Prudentl Sh Dur Hi Yd Fd ISD 16.33 14.11 -13.6 7.8 Wells Fargo Incm Opps Fd EAD 9.00 8.09 -10.1 8.4 Wstrn Asset Glbl Hi Inco EHI NA 9.47 NA 8.3 Wstrn Asset High Inco II HIX NA 6.58 NA 8.8 Wstrn Asset Opp Fd HIO 5.43 4.85 -10.7 7.0 West Asst HY Def Opp Fd HYI NA 14.81 NA 7.6 Other Domestic Taxable Bond Funds Ares Dynamic Credit Alloc ARDC NA 16.35 NA 7.0 Barings Corp Investors MCI NA 15.16 NA 5.9 BlackRock Multi-Sector IT BIT 18.91 16.93 -10.5 9.0 BlackRock Taxable Mun Bd BBN 23.07 21.93 -4.9 7.1 Doubleline Oppor Credit DBL NA 21.06 NA 9.5 Duff & Phelps Utl & Cp Bd DUC 9.26 8.47 -8.5 6.3 EtnVncLtdFd EVV NA 12.96 NA 7.4 Franklin Ltd Duration IT FTF 11.80 11.03 -6.5 12.3 GuggenheimTaxableMuni GBAB 22.60 21.55 -4.6 7.0 Invesco High Incm 2023 IHIT 10.03 9.94 -0.9 6.0 KKR Income Opps Fund KIO NA 15.99 NA 9.7 MFS Charter MCR 8.85 8.04 -9.2 9.2 MFS Multimkt MMT 6.30 5.68 -9.8 9.2 Prem12 Mo NAV Close /Disc Yld Fund (SYM) Nuveen Build Am Bd Fd NBB 21.61 20.36 PIMCO Corporate & Incm PTY NA 18.07 PIMCO Corporate & Incm PCN NA 17.40 PIMCO HiInco PHK NA 8.19 PIMCO Inco Str Fd PFL NA 12.04 PIMCO Incm Strategy Fd II PFN NA 10.61 Putnam Mas Inco PIM 5.07 4.78 Putnam Premier Income Tr PPT 5.65 5.40 Wells Fargo Multi-Sector ERC 13.92 12.93 World Income Funds Abeerden Asia-Pacific FAX 5.12 4.48 Brandywine Global Incm BWG NA 12.43 Etn Vnc Short Dur Fd EVG 15.03 13.32 MS EmMktDomDebt EDD 8.66 7.41 PIMCO Dynamic Credit PCI NA 23.12 PIMCODynamicIncomeFund PDI NA 31.04 PIMCO Income Opportunity PKO NA 27.47 PIMCO Strat Income Fund RCS NA 9.54 Templeton Emerging TEI 12.09 11.14 Templeton Global GIM 7.28 6.41 Wstrn Asset Emerg Mkts EMD NA 13.94 Wstrn Asset Gl Def Opp Fd GDO NA 16.60 National Muni Bond Funds AllianceBrnstn NtlMun AFB 14.27 12.46 Blackrock Invest BKN 15.42 13.69 BlackRockMun2030Target BTT 23.58 21.14 BlackRock Municipal Trust BFK 14.06 12.79 BlackRockMuni BLE 14.61 13.71 BlackRockMuni Tr BYM 14.73 13.09 BlkRk MuniAssets Fd MUA 14.07 13.22 BlkRk Munienhanced MEN 11.57 10.54 BlkRk MuniHldgs Inv MFL 14.18 12.79 BlkRk MuniHldgs Qlty II MUE 13.57 12.15 BlkRk MuniVest MVF 9.40 8.66 BlkRk MuniVest II MVT 14.83 14.07 BlkRk MuniYield MYD 14.46 13.15 BlkRk MuniYld Quality MQY 15.36 13.90 BlkRk MuniYld Qlty II MQT 13.50 11.98 BlRkMunyldQltyIII MYI 13.98 12.51 Deutsche Mun Income Tr KTF 12.15 11.12 Dreyfus Mun Bd Infr Fd DMB 13.97 12.58 Dreyfus Strat Muni Bond DSM 8.17 7.54 Dreyfus Strategic Munis LEO 8.39 7.63 Eaton Vance Mun Bd Fd EIM 13.21 11.75 Eaton Vance Mun Income EVN 12.96 11.79 EV National Municipal Opp EOT 21.26 20.39 Invesco Adv Mun Incm II VKI 11.75 10.59 Invesco Mun Incm Opps Tr OIA 7.44 7.45 Invesco Mun Opportunity VMO 13.12 11.70 Invesco Municipal Trust VKQ 13.10 11.91 Invesco Qlty Mun Inco IQI 13.21 11.88 Invesco Inv Grade Muni VGM 13.56 12.30 Invesco Value Mun Incm Tr IIM 15.78 14.32 MainStayMacDefinedMuni MMD 19.99 18.96 MFS Munl Inco MFM 7.25 6.53 NuveenAMT-FreeMunValue NUW 16.38 15.71 Nuveen AMT-Free Quality NEA 14.65 12.94 Nuveen AMT-Free Mun NVG 16.02 14.89 Nuveen Mun Credit Incm Fd NZF 15.58 14.33 Nuveen Enhncd Mun Val Fd NEV 14.59 13.37 Nuveen Intermed Dur Mun NID 13.54 12.53 NuveenMuniIncoOpp Fd NMZ 13.21 12.43 Nuveen Muni Value Fund NUV 10.06 9.49 Nuveen Qual Mun Incm Fd NAD 14.95 13.20 Nuveen Sel TF NXQ 14.51 13.54 PIMCO MuniFd PMF NA 13.01 -5.8 6.0 NA 8.9 NA 7.9 NA 12.3 NA 9.0 NA 9.1 -5.7 6.5 -4.4 5.8 -7.1 9.9 -12.5 NA -11.4 -14.4 NA NA NA NA -7.9 -12.0 NA NA 9.1 8.0 6.7 8.1 8.6 8.6 8.4 9.2 9.0 4.4 8.4 8.1 -12.7 -11.2 -10.3 -9.0 -6.2 -11.1 -6.0 -8.9 -9.8 -10.5 -7.9 -5.1 -9.1 -9.5 -11.3 -10.5 -8.5 -9.9 -7.7 -9.1 -11.1 -9.0 -4.1 -9.9 +0.1 -10.8 -9.1 -10.1 -9.3 -9.3 -5.2 -9.9 -4.1 -11.7 -7.1 -8.0 -8.4 -7.5 -5.9 -5.7 -11.7 -6.7 NA 4.8 5.3 4.1 6.0 6.0 5.5 5.1 6.1 6.4 6.1 6.2 6.1 6.2 5.9 5.7 6.2 6.2 5.1 6.3 6.4 5.2 5.5 5.0 6.1 5.5 5.9 6.0 5.6 6.2 5.2 5.7 5.8 4.5 5.5 5.9 6.1 6.0 4.9 6.2 4.0 5.5 3.7 5.6 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 568.66 points, or 2.34%, 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 $30,316, or a gain of 1.05%, on the $30,000 investment, including reinvested dividends. The Week’s Action Pct Stock price Point chg chg (%) change in average* Company $1,000 Invested(year-end '17) $1,000 Symbol Close KEY TO CODES: A=ask; B=bid; BP=country elevator bids to producers; C=corrected; E=Manfra,Tordella & Brooks; G=ICE; H=Hurley Brokerage; I=Natural Gas Intelligence; M=monthly; N=nominal; n.a.=not quoted or not available; R=SNL Energy; S=Platts-TSI; T=Cotlook Limited; U=USDA; W=weekly, Z=not quoted. *Data as of 5/10 Source: WSJ Market Data Group 5.80 8.49 58.46 Caterpillar CAT $154.86 5.70 4.38 30.16 Exxon Mobil XOM 5.01 5.43 37.39 JPMorgan Chase Insider-Trading Spotlight 4.16 4.97 34.22 3.82 2.46 16.94 JPM 113.86 United Technologies UTX 124.48 DowDuPont DWDP 66.93 3.58 1.89 13.01 Intel INTC 54.67 1,199 3.55 0.50 3.44 General Electric 3.43 4.31 29.68 Chevron 1,047 3.40 7.98 54.95 Goldman Sachs GE 14.60 CVX 129.84 GS 242.92 3.36 1.94 13.36 Merck MRK 59.69 1,070 AXP 101.42 MMM 205.16 V 131.82 1,029 Trading by ‘insiders’ of a corporation, such as a company’s CEO, vice president or director, potentially conveys new information about the prospects of a company. Insiders are required to report large trades to the SEC within two business days. Here’s a look at the biggest individual trades by insiders, based on data received by Thomson Financial on May 11, and year-to-date stock performance of the company KEY: B: beneficial owner of more than 10% of a security class CB: chairman CEO: chief executive officer CFO: chief financial officer CO: chief operating officer D: director DO: director and beneficial owner GC: general counsel H: officer, director and beneficial owner I: indirect transaction filed through a trust, insider spouse, minor child or other O: officer OD: officer and director P: president UT: unknown VP: vice president Excludes pure options transactions Biggest weekly individual trades Based on reports filed with regulators this past week Date(s) Company Symbol Insider Title No. of shrs in Price range ($) $ Value trans (000s) in transaction (000s) Close ($) Ytd (%) Buyers May. 7-9 Tempur Sealy International R. Jaffer May. 3 Achaogen AKAO R. Duggan B May. 3 Second Sight Medical Products EYES G. Williams DOI TPX BI 2.85 5.28 36.36 Home Depot 2.67 2.54 17.49 Microsoft 2.59 4.76 32.77 Apple 2.46 3.05 1,147 1,123 21.00 1,218 PG 73.37 TRV 131.25 UnitedHealth Group UNH 238.28 812 4.54 Pfizer 0.63 4.34 Cisco Systems 9,851 301.06 -3.3 1.30 0.94 6.47 Procter & Gamble 1.19 1.54 10.60 1.01 2.38 16.39 CFR G. Weston DI 43 113.36-116.04 Sientra SIEN T. Haines FOI 281 13.50 May. 8-9 Sohu.com SOHU C. Zhang CEOI 100 35.16-35.51 May. 8-10 Entercom Communications ETM J. Field May. 9 May. 9 Dentsply Sirona XRAY N. Alexos D. Casey May. 8 Fluor FLR May. 7-9 American Assets Trust AAT 973 Travelers 1,084 4,904 118.86 25.6 0.91 0.92 6.33 Walt Disney DIS 102.07 3,800 16.54 17.6 0.89 0.43 2.96 Verizon VZ 48.62 941 3,534 35.70 -17.6 0.48 0.33 2.27 Nike NKE 68.43 1,097 MCD 165.39 IBM 144.14 967 949 R 303 7.65-9.64 2,478 7.50 -30.6 0.22 0.36 2.48 McDonald’s CFOI CEOI 50 23 44.71 44.52 2,236 1,002 46.93 -28.7 0.16 0.23 1.58 IBM –0.22 –1.51 Coca-Cola KO 42.14 P. Fluor 44.51-45.29 2,227 46.55 -9.9 927 D 50 –0.52 –4.15 –28.57 WalMart WMT 83.38 E. Rady CEOI 48 34.73-34.96 1,660 35.25 -7.8 –4.74 855 May. 4 May. 4 CVS Health CVS D. Dorman C. Brown D D 24 10 62.22 61.99 1,512 620 64.41 -11.2 May. 7-9 MACOM Technology Solutions Holdings MTSI J. Ocampo CBI 60 21.93-22.18 1,319 22.77 -30.0 Sellers A. Borisy 1,818 78.43-78.73 CEOI CEOI 677 437 177.71-182.88 172.79-176.47 DI M. Zuckerberg M. Zuckerberg ORCL T. Kurian O 979 45.15-45.85 May. 3 Mastercard MA A. Banga CEO 239 184.56-187.35 May. 7 May. 7 Tableau Software DATA C. Chabot C. Stolte CB OD 400 285 91.04-91.43 91.04-91.44 May. 4-8 Garmin GRMN M. Kao H 450 May. 4-7 May. 9 May. 8 Charles Schwab SCHW C. Schwab C. Schwab C. Schwab CBI CBI CBI 450 300 250 May. 9 Salesforce.com 81.51 8.1 121,360 186.99 76,506 6.0 46.82 -1.0 142,642 44,461 44,450 193.35 27.7 36,438 25,977 95.00 37.3 59.28-59.97 26,870 59.29 -0.5 56.19-57.01 57.99 57.23 25,492 17,397 14,307 59.46 15.7 CRM A. Dayon P 166 May. 8-10 HealthEquity HQY S. Neeleman OD 241* May. 7 Chevron Corporation CVX M. Wirth CEO 130 May. 8-9 NVR Inc NVR D. Schar D May. 3-4 Andeavor ANDV P. Foster DI 100 May. 3 Anthem ANTM B. Griffin O 59 May. 4-7 Kirby J. Pyne D 138 88.05-88.36 129.08 69.59-70.66 128.00 5 3011.45-3101.56 21,467 130.63 27.8 71.48 53.2 16,640 129.84 3.7 16,835 U.S. consumer price index 250.546 257.025 All items Core Latest 13,999 140.16 22.6 224.32-225.35 13,334 232.05 3.1 90.20 35.0 U.S. Canada Japan Week ago Finance Health care Industrial Media Technology Transportation Utilities 10,620,709 3,885,179 391,963 1,980,955 4,581,696 299,550 156,042 150,493,269 108,873,332 56,459,015 1,674,456 179,542,711 28,194,652 5,579,164 Sources: Thomson Financial; WSJ Market Data Group 2.5 2.1 -12.7 5.3 -12.4 5.3 -12.7 5.8 -13.1 5.3 -11.4 5.4 -12.7 5.4 -12.7 5.6 -13.3 5.1 -13.7 5.4 -10.2 5.4 -13.6 5.4 -9.4 5.4 -12.1 5.6 -8.1 4.1 -12.1 5.6 -14.5 4.9 -15.5 4.8 -14.9 5.3 -14.1 4.9 -14.0 5.3 -15.3 5.0 -15.3 5.4 -13.3 4.5 NA 6.2 NA 6.3 52 wk Prem Ttl Fund (SYM) NAV Close /Disc Ret General Equity Funds Specialized Equity Funds Griffin Inst Access RE:A 26.82 NA NA 6.5 Griffin Inst Access RE:C 26.29 NA NA 5.7 Griffin Inst Access RE:I 27.01 NA NA 6.7 Griffin Inst Access RE:L 26.77 NA NA 6.3 Griffin Inst Access RE:M 26.62 NA NA 5.9 NexPointRlEstStrat;A 20.35 NA NA 6.3 NexPointRlEstStrat;C 20.41 NA NA 6.1 NexPointRlEstStrat;Z 20.43 NA NA 7.2 NorthStar RE Cap Inc:Adv NA NA NA NS PREDEX;T 26.13 NA NA NS PREDEX;W 26.13 NA NA NS Resource RE Div Inc:A 10.18 NA NA 6.2 Resource RE Div Inc:C 10.17 NA NA 5.4 Resource RE Div Inc:D 10.34 NA NA 5.8 Resource RE Div Inc:I 10.61 NA NA 6.6 Resource RE Div Inc:L 10.18 NA NA NS Resource RE Div Inc:T 10.16 NA NA 5.5 Resource RE Div Inc:U 10.19 NA NA 6.2 Resource RE Div Inc:W 10.34 NA NA 6.3 SharesPost 100;A 28.37 NA NA 10.3 SharesPost 100:I 28.40 NA NA NS Tot Inc+ RE:A 29.84 NA NA 7.5 Tot Inc+ RE:C 28.95 NA NA 6.7 Tot Inc+ RE:I 30.22 NA NA 7.8 Tot Inc+ RE:L 29.77 NA NA NS USQ Core Real Estate:I USQIX 25.35 NA NA NS USQ Core Real Estate:IS USQSX 25.35 NA NA NS Versus Cap MMgr RE Inc:I 27.66 NA NA NE Versus Capital Real Asst VCRRX 25.38 NA NA NS Wildermuth Endwmnt Str 13.28 NA NA 11.1 Wildermuth Endwmnt S:C 13.06 NA NA 10.4 Wildermuth Endwmnt S:I 13.36 NA NA 11.9 Income & Preferred Stock Funds MultiStrat Gro & Inc:A 14.54 NA NA -0.8 MultiStrat Gro & Inc:C 14.18 NA NA -1.5 MultiStrat Gro & Inc:I 14.74 NA NA -0.6 MultiStrat Gro & Inc:L 14.30 NA NA -1.3 The Relative Value:CIA VFLEX 24.95 NA NA NS Convertible Sec's. Funds Calamos Dyn Conv & Incm CCD 21.01 20.68 -1.6 13.9 World Equity Funds BMO LGM Front ME 11.40 NA NA 17.1 Calamos Global Tot Ret Fd CGO 13.34 14.10 +5.7 15.5 Prem12 Mo Fund (SYM) NAV Close /Disc Yld U.S. Mortgage Bond Funds Vertical Capital Inc:A 12.18 NA NA 3.2 Vertical Capital Inc:C 12.24 NA NA NS Vertical Capital Inc:I 12.30 NA NA NS Vertical Capital Inc:L 12.30 NA NA NS Loan Participation Funds 504 Fund 9.63 NA NA 4.0 Angel Oak Strategic Crdt ASCIX NA NA NA NS Blackstone/GSO FR EI I 25.05 NA NA NS FedProj&TrFinanceTendr 10.04 NA NA 3.1 FS Global Crdt Opptys D NA NA NA 5.3 Invesco Sr Loan A 6.72 NA NA 3.9 Invesco Sr Loan C 6.73 NA NA 3.2 Invesco Sr Loan IB 6.72 NA NA 4.2 Invesco Sr Loan IC 6.72 NA NA 4.0 Invesco Sr Loan Y 6.72 NA NA 4.2 RiverNorth MP Lending RMPLX 24.02 NA NA 9.2 Sierra Total Return:T SRNTX 24.98 NA NA NS Voya Senior Income:A 12.56 NA NA 4.9 Voya Senior Income:C 12.54 NA NA 4.5 Voya Senior Income:I 12.52 NA NA 5.2 Voya Senior Income:W 12.57 NA NA 5.2 High Yield Bond Funds Griffin Inst Access Cd:A NA NA NA 4.9 Griffin Inst Access Cd:C NA NA NA 4.9 Griffin Inst Access Cd:F NA NA NA NS Griffin Inst Access Cd:I NA NA NA 4.9 Griffin Inst Access Cd:L NA NA NA NS PIMCO Flexible Cr I;Inst NA NA NA 6.7 PionrILSInterval 9.63 NA NA 1.4 WA Middle Mkt Dbt 736.76 NA NA 10.3 WA Middle Mkt Inc WMF764.88 NA NA 10.3 Other Domestic Taxable Bond Funds BlackRock Mlt-Sctr Oppty 99.05 NA NA NS Capstone Church Capital 11.65 NA NA 3.4 CION Ares Dvsfd Crdt;A NA NA NA 5.4 CION Ares Dvsfd Crdt;C NA NA NA NS CION Ares Dvsfd Crdt;I NA NA NA NS CION Ares Dvsfd Crdt;L NA NA NA NS CNR Select Strategies 9.66 NA NA NS GL Beyond Income 2.72 NA NA NE Palmer Square Opp Income 19.51 NA NA 4.6 Resource Credit Inc:A 11.13 NA NA 6.4 Resource Credit Inc:C 11.25 NA NA 5.6 Resource Credit Inc:I 11.16 NA NA 6.6 Resource Credit Inc:L 11.12 NA NA NS Resource Credit Inc:W 11.13 NA NA 6.4 National Muni Bond Funds Tortoise Tax-Adv Soc Inf 10.00 NA NA NS 0.00 0.50 0.50 1.50 0.00 0.50 0.50 1.50 1.79 U.S. 1.76 0.00 0.50 0.50 1.50 0.00 0.50 0.25 1.50 2.18 0.76 U.S. government rates Discount 2.25 2.25 2.25 1.50 1.7300 1.9000 1.6500 1.6800 1.7200 1.7300 1.9500 1.7100 1.7200 1.7400 0.8600 1.0625 0.7000 0.8200 0.8300 Federal funds Effective rate High Low Bid Offer 1.7300 1.9500 1.6900 1.7200 1.7400 —52-WEEK— High Low 1.660 1.650 1.720 0.695 1.840 1.835 1.840 0.900 2.000 1.990 2.000 1.015 4 weeks 13 weeks 26 weeks Secondary market Fannie Mae 52-Week High Low Policy Rates Overnight repurchase 25,722,380 25,678,357 0 12,120,341 16,131,967 49,548,282 38,678,427 6.1 5.8 5.7 5.4 5.5 5.4 5.8 4.5 May 11, 2018 Treasury bill auction 30-year mortgage yields 30 days 60 days Latest Week Latest ago Week ago 2.51500 2.52019 2.52375 1.39906 2.76579 2.77666 2.78031 1.69511 Six month One year Euro Libor -0.399 -0.351 -0.315 -0.241 One month Three month Six month One year -0.371 -0.327 -0.271 -0.189 One month Three month Six month One year 52-Week high low 3.50 Latest 3.50 3.50 2.75 Treasury MBS -0.397 -0.351 -0.274 -0.143 -0.420 -0.389 -0.339 -0.263 -0.372 -0.328 -0.269 -0.190 Value Traded -0.366 -0.325 -0.250 -0.127 -0.374 -0.332 -0.279 -0.194 52-Week High Low 2.19 2.17 2.31 1.04 Libor 1.91871 1.92770 1.92851 0.99244 2.34250 2.36906 2.36906 1.17172 1.800 1.816 40.100 2.068 0.791 97.010 1.971 0.794 Open Implied Settle Change Interest Rate Commercial paper (AA financial) One month Three month -0.401 -0.353 -0.314 -0.243 DTCC GCF Repo Index Call money 90 days —52-WEEK— High Low Euro interbank offered rate (Euribor) 4.200 4.177 4.275 3.253 4.227 4.206 4.304 3.281 Other short-term rates 4.75 4.75 4.75 4.00 3.45 3.45 3.45 2.70 1.475 1.475 1.475 1.475 Based on actual transaction dates in reports received this past week Selling 0.40 0.16 International rates 137.24-141.41 Buying Week Latest ago Inflation April index Chg From (%) level March '18 April '17 Buying and selling by sector Sector NA NA -6.6 -9.6 -9.8 -10.5 NA +5.9 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. Euro zone Switzerland Britain Australia Selling Pimco Muni Inc II PML NA 12.82 PIMCO Muni Inc III PMX NA 11.38 Pioneer Mun Hi Inc Adv Tr MAV 11.60 10.83 Pioneer Mun Hi Incm Tr MHI 12.56 11.35 Putnam Tr PMM 7.82 7.05 PutnamMuniOpportunities PMO 13.00 11.64 Wstrn Asset Mngd Muni MMU NA 12.89 WesternAssetMunTrFund MTT 20.74 21.96 Single State Muni Bond BlackRock CA Municipal Tr BFZ 14.81 12.93 BlkRk MuniHldgs CA Qlty MUC 15.01 13.15 BlkRk MunHl NJ Qlty MUJ 15.21 13.28 BlRk MuHldg NY Qlty MHN 14.33 12.45 BlkRk MuniYld CA Fd MYC 15.08 13.36 BlkRk MuniYld CA Quality MCA 15.24 13.30 BlkRk MuniYld MI Qlty MIY 15.04 13.13 BlRk Muyld NY Qlty MYN 13.73 11.90 Eaton Vance CA Mun Bd EVM 11.93 10.29 Invesco CA Value Mun Incm VCV 12.99 11.66 Invesco PA Value Mun Incm VPV 13.62 11.77 Invesco Inv Grade NY Muni VTN 14.09 12.77 Nuveen CA AMT-Free Qual NKX 15.30 13.45 Nuveen CA Muni Value NCA 10.23 9.40 Nuveen CA Quality Muni NAC 15.20 13.36 Nuveen MD Qual Muni NMY 14.20 12.14 Nuveen MI Qual Muni NUM 14.94 12.62 Nuveen NJ Qual Muni NXJ 15.40 13.11 Nuveen NY AMT-Free NRK 14.02 12.05 Nuveen NY Qual Muni NAN 14.60 12.56 Nuveen OH Qual Muni NUO 16.12 13.66 Nuveen PA Qual Muni NQP 14.81 12.54 Nuveen VA Qual Muni NPV 14.10 12.22 PIMCO California Muni PCQ NA 15.13 PIMCO California Mun II PCK NA 8.18 Borrowing Benchmarks | WSJ.com/bonds Money Rates Prime rates 12,186 960 *Based on Composite price. DJIA is calculated on primary-market price. Source: WSJ Market Data Group; FactSet. 15,447 3053.61 -13.0 * Half the transactions were indirect **Two day transaction p - Pink Sheets 3,683,584 55,700 0 0 750,522 2,891,498 0 999 45.93 0.66 1.39 Cullen/Frost Bankers Basic Industries Business services Capital goods Consumer durables Consumer nondurables Consumer services Energy 35.50 1.89 -1.6 May. 7 Buying PFE CSCO 17.1 May. 3-4 Sector 342.46 1.88 7.49 -16.4 916 1,173 BA 12.58 6,208 4,315 3,008 877 1,158 AAPL 188.59 Johnson & Johnson JNJ 127.24 10,000 7.17-7.25 7.27-7.39 7.35 956 1,010 11,072 295.03-302.13 844 97.70 1.48 33 945 190.31 11.31-11.54 859 588 409 981 HD 977* DO DO DO 1,076 MSFT 6,757 CEOI KEX Visa Boeing A. Otto A. Otto A. Otto Oracle 25.20 55.29 E. Musk May. 2-4 3.66 8.03 DDR FB 2.86 2.40 TSLA BPMC 3M 48.30 -23.0 Tesla Facebook American Express 39.94 30,719 DDR Corp Blueprint Medicines 21.14 5.80 43.85-44.92 May. 7 May. 7-9 May. 3-4 3.07 689 May. 2-3 May. 4-7 May. 8 May. 4-7 3.12 2.91 $992 992 81.28 Prem12 Mo NAV Close /Disc Yld Fund (SYM) DTCC GCF Repo Index Futures Treasury May Treasury Jun Treasury Jly 98.210 0.002 1155 1.790 98.035 -0.005 732 1.965 97.935 unch. 464 2.065 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 March 22, 2018. Other prime rates aren’t directly comparable; lending practices vary widely by location; Discount rate is effective March 22, 2018. 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. . THE WALL STREET JOURNAL. HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY Email: email@example.com What French Car Makers Risk in Iran Once bitten, twice shy— unless you are a French car maker. Peugeot and Renault are among the few companies that have bet on Iran since the 2015 nuclear deal. Their history risks repeating itself. Peugeot has been a big brand in Iran for decades, but it quit the country in 2012 under pressure from General Motors. The U.S. manufacturer had bought a 7% stake in its French peer with a view to sharing costs but sold it in 2013. Peugeot’s aggrieved local partner Iran Khodro kept making cars under the French brand; Peugeot just didn’t count them. That explains its speedy return after sanctions lifted and it patched things up with Iran Khodro. Last year it sold 444,600 vehicles in the country, some 30% of the market. Peugeot’s French rival Renault, which never left Iran, sold 162,000. Both have committed big sums to new joint ventures. Renault wants to roughly double sales in the country by 2022. President Donald Trump’s decision to reimpose sanctions raises the risk of impairments, though much of the money committed won’t have been spent yet. The European Union may yet succeed in persuading Iran to stick with the 2015 deal, but early signs aren’t promising. Even if it does, though, the outlook is hardly sunny. The country’s economic recovery is under threat, calling bullish growth plans into question. Peugeot also will have to rethink its U.S. expansion—a market it quit in 1991 but wants to get back into. Meanwhile, Renault will have to hope its tightening global alliance with Nissan doesn’t threaten the latter’s valuable U.S. business. —Stephen Wilmot Monday, May 14, 2018 | B9 * * Venezuela’s Oil Meltdown Worsens Match-Making Tinder subscriber additions, quarterly 600,000 500,000 400,000 300,000 200,000 100,000 0 2016 ’17 WSJ.com/Heard ’18 Sources: the company; Bloomberg News (photo) Room for 2 in Date Game The search for a soul mate has become a big business. In the U.S., one in three dates now begins online. The global market for online dating services—about 500 million people—is expected to reach 672 million by 2019, according to research by Jefferies. The business has been lucrative for the biggest player, InterActiveCorp and its listed subsidiary, Match Group, which owns Tinder, OkCupid and Match.com. That explains why shares of IAC and Match nose-dived 20% and 25%, respectively, when Mark Zuckerberg said Facebook would enter the dating scene. IAC and Match just offered a strong retort, posting firstquarter earnings that beat analysts’ expectations. IAC, which owns 22% of Match and brands including ANGI Homeservices and Vimeo, reported revenue of $995 million, topping estimates for $922 million. Match Group, its largest subsidiary, grew by 36% year over year to $407 million, notching the highest quarterly revenue growth since it went public in November 2015. Tinder, which added 1.6 million subscribers since the same period last year, is now at 3.5 million. The good news boosted their shares—IAC is up nearly 15% from its postFacebook low. But both re- main well below where they were before the social network’s May 1 announcement. The conventional wisdom among investors is that Facebook can do to IAC and Match what it did to Snapchat when it began Instagram Stories. There certainly are risks, but Facebook has a tougher task in the dating business. Facebook, like Snapchat, is all about sharing. But not everyone wants to share details of their love life, especially with friends and family on 3.5M Number of subscribers to Tinder dating app their news feed. (Facebook has promised to keep them separate.) Facebook also needs to win users’ trust—no minor feat given its recent privacy and data scandals. There is already evidence to suggest users don’t like to mix Facebook and dating: Signing up for Tinder was initially only possible through a Facebook account. But two months after Tinder started offering an alternative, non-Facebook sign-up, 75% of new users opted not to sign up through Facebook. “Users quickly and decisively separated Facebook from their dating experience,” said Mandy Ginsberg, CEO of Match. Many young people are also using Facebook less frequently. And even if they do look for dates on Facebook, that doesn’t mean they will leave Tinder. The biggest risk for Match may be the erosion of its pricing power. On Tinder, users can swipe free of charge but they can also pay to “boost” their profile or “super-like” potential mates. Facebook has said its service will be free. After strong rallies in the past couple of years, shares of IAC and Match, while not wildly overvalued, could be vulnerable to a downturn. Still, IAC has a huge headstart on Facebook, and it plans to use it. One response could be to consolidate by making further acquisitions. “What the market is saying is that scale really matters,” said Anthony DiClemente, an analyst at Evercore ISI. IAC’s management team, led by Chairman Barry Diller has the financial flexibility right now to make a new move. Investors shouldn’t be so quick to jump ship on IAC. If anything, Facebook’s interest in dating confirms that it is an industry worth watching. —Elizabeth Winkler Death spiral is an overused term, but it is justified when describing Venezuela’s oil industry now. Energy consumers and investors should pay attention. Though production at national oil company Petróleos de Venezuela SA has been falling fast, investors have assumed the company could keep global markets supplied and hard currency flowing to the country. Those assumptions are starting to unravel. ConocoPhillips has moved to take control of PdVSA facilities in the Caribbean after winning a $2 billion legal judgment tied to Venezuela’s seizure of its assets in 2007. That move alone hurts Venezuela because that storage and refining infrastructure is needed to blend the country’s heavy crude with lighter varieties and make it suitable for sale abroad. Energy economist Philip Verleger estimates the issue could cut off exports of as much as 500,000 barrels a day out of the 1.4 million Venezuela produces. Coupled with renewed sanctions on Iran, the cutback could push oil prices above the current multiyear highs. Now Conoco’s gambit has set off a rush by others to seize the assets that PdVSA holds outside of Venezuela, including tankers and oil cargoes. Canadian gold mining firm Rusoro, for example, is going after Citgo Holding, the Venezuelan-owned U.S. refiner. Citgo is a vital link to the U.S. market for Venezuela and one of its only assets not shielded by being physically within its borders. While the legality of seizing these assets is questionable, the uncertainty is already affecting operations. PdVSA representatives couldn’t be reached for comment, but a Reuters report cites nine vessels that appeared to be headed to the PdVSA facilities in the Caribbean but were diverted to Venezuelan or Cuban waters in the past week, probably to avoid having their cargoes seized. PdVSA has a much bigger creditor than ConocoPhillips. China has lent the company roughly $50 billion and a grace period on repayment of some loans was agreed to in 2016 when oil prices were around half of today’s level. Should China demand that payments resume, the company would have to send it nearly a quarter of the oil it produces, cutting the amount of revenue it gets from exporting oil. Even without a further push from China or from possible U.S. sanctions to protest the May 20 presidential election, the latest woes are choking off the regime’s already scarce foreign currency earnings and increasing the odds of more serious domestic unrest. Reports about Venezuela’s oil output put it at multidecade lows with the exception of a strike in 20022003 that sent world oil prices surging. A repeat of that episode is looking more likely. —Spencer Jakab Stuck in the Ground Proved oil reserves, billion barrels 301 Venezuela 261 Saudi Arabia 170 Canada 158 Iran 143 Iraq 80 Russia 35 U.S.A. Source: U.S. Energy Information Administration THE WALL STREET JOURNAL. MARKETS THE TICKER | Market events coming this week Monday EIA report: natural gas Earnings expected* Previous change in stocks in billions of cubic feet Estimate/Year Ago* Estimate/Year Ago($) Agilent Technologies 0.64/0.58 Invitation Homes 0.03/ (0.14) Tuesday Business Inventories Feb.., previous up 0.6% March, expected up 0.2% Empire Manufacturing April, previous 15.8 May, expected 14.9 Eagle Materials 1.05/0.88 Home Depot 2.06/1.67 up 89 ANDREW KELLY/REUTERS Earnings expected* Retail sales March, previous April, expected Currencies Wednesday Mort. bankers indexes Purch., previous down 0.2% Refinan., prev. down 1% EIA status report Previous change in stocks in millions of barrels Crude oil Gasoline Distillates down 2.2 down 2.2 down 3.8 up 0.6% up 0.3% Building permits March, previous 1.354 mil. April, expected 1.35 mil. Retail sales ex autos March, previous up 0.2% April, expected up 0.5% Capacity Utilization March, previous 78.0% April, expected 78.4% Macy’s is expected to report earnings Wednesday. Housing starts March, previous 1.319 mil. April, expected 1.32 mil. Industrial production March, previous up 0.5% April, expected up 0.6% Earnings expected* Estimate/Year Ago($) Cisco Systems 0.65/0.60 Macy’s 0.37/0.24 Take-Two Interactive 0.63/0.68 Leading indicators March, previous up 0.3% April, expected up 0.4% Philadelphia Fed survey April, previous 23.2 May, expected 20.5 Earnings expected* Estimate/Year Ago* Applied Materials 1.14/0.79 Nordstrom 0.43/0.37 Walmart 1.12/1.00 Friday Thursday Initial jobless claims Previous 211,000 Expected 215,000 Earnings expected* Estimate/Year Ago* Campbell Soup Deere & Co. 0.61/0.59 3.30/2.49 * FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES) ADJUSTED FOR STOCK SPLITNOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS U.S.-dollar foreign-exchange rates in late New York trading Country/currency in US$ US$vs, YTDchg Fri per US$ (%) Country/currency Americas Europe Argentina peso .0435 23.0120 23.7 Brazil real .2778 3.6002 8.7 Canada dollar .7815 1.2797 1.8 Chile peso .001614 619.60 0.7 Ecuador US dollar 1 1 unch Mexico peso .0515 19.4224 –1.3 Uruguay peso .03449 28.9900 0.7 Venezuela b. fuerte .00001469900.0001 675794.5 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 Asia-Pacific Australian dollar .7539 1.3264 China yuan .1579 6.3341 Hong Kong dollar .1274 7.8497 India rupee .01484 67.405 Indonesia rupiah .0000717 13950 Japan yen .009142 109.39 Kazakhstan tenge .003049 327.97 Macau pataca .1236 8.0887 Malaysia ringgit .2531 3.9505 New Zealand dollar .6965 1.4358 Pakistan rupee .00865 115.600 Philippines peso .0191 52.459 Singapore dollar .7484 1.3362 South Korea won .0009365 1067.86 Sri Lanka rupee .0063367 157.81 Taiwan dollar .03360 29.764 Thailand baht .03133 31.920 Vietnam dong .00004392 22770 3.6 –2.6 0.5 5.5 3.5 –2.9 –1.4 0.5 –2.7 1.8 4.5 5.0 –0.1 0.1 2.8 0.3 –2.1 0.3 in US$ US$vs, YTDchg Fri per US$ (%) .04685 21.345 .1603 6.2395 1.1942 .8374 .003787 264.08 .009771 102.34 .1250 8.0026 .2799 3.5727 .01615 61.915 .1163 8.5972 .9997 1.0003 .2318 4.3136 .0381 26.2125 1.3542 .7384 0.3 0.6 0.5 2.0 –1.2 –2.5 2.7 7.3 5.0 2.7 13.7 –6.9 –0.2 Middle East/Africa Bahrain dinar Egypt pound Israel shekel Kuwait dinar Oman sul rial Qatar rial Saudi Arabia riyal South Africa rand 2.6525 .3770 –0.03 .0565 17.7020 –0.4 .2797 3.5757 2.8 3.3171 .3015 0.01 2.5971 .3850 0.02 .2743 3.645 –0.1 .2666 3.7507 0.01 .0815 12.2642 –0.8 Close Net Chg % Chg YTD%Chg WSJ Dollar Index 86.23 –0.03–0.03 0.29 Sources: Tullett Prebon, WSJ Market Data Group Abu Dhabi’s national oil company said Sunday it would spend $45 billion over the next five years to join other giant, state-run petroleum giants, like Saudi Aramco, in reBy Nicolas Parasie in Dubai and Summer Said in Abu Dhabi fining much of their own crude instead of just exporting it. Abu Dhabi National Oil Co., or Adnoc, said it aims to create the world’s largest refining and petrochemicals complex about 150 miles west of Abu Dhabi, the capital of the United Arab Emirates and one of the world’s top oil exporters. The initiative allows Abu Dhabi to join an oil refining boom in the Middle East, where, until recent years, petroleum-rich countries simply pumped crude and then exported it for processing else- where. Adnoc follows Saudi Arabian Oil Co., known as Aramco, in building a refining empire. Aramco has boosted its global refining capacity by more than a third to 5.4 million barrels a day, according to Scottish energy consultancy Wood Mackenzie. The kingdom has commissioned an additional refinery in its southwest region set to come online in 2019. Kuwait also plans a boost in its refining capacity though on a smaller scale. Along with new Asian refineries, the Middle East facilities have pressured older, less competitive refiners in Europe and led to widespread closures there. Saudi Arabia is now among the top suppliers of diesel fuel to Europe. Adnoc said it wants to boost its refining capacity to 1.5 million barrels of crude a day, about half the crude it pumps, by 2025. That is lower than the percentage big oil companies like Exxon Mobil Corp. refine of their own crude but it would be up substantially from the 922,000 barrels a day that ADNOC refines today. Focusing on refined products such as gasoline and petrochemicals and gives petrostates like the U.A.E. a buffer when oil prices drop. Refineries and chemical factories make more money when oil prices are low because crude is among their highest costs. Profit margins are generally higher on refined products than a barrel of crude. Adnoc’s plans also fits into a broader play by Gulf governments to diversify their economies and to end their historic reliance on selling crude oil to generate the bulk of their revenues. With the new investment, Adnoc and Abu Dhabi hope to position themselves as a more attractive investment destination and a generator of high-skilled jobs. SATISH KUMAR/REUTERS Abu Dhabi Joins Rush Into Oil Refining in Middle East Adnoc’s headquarters in Abu Dhabi. The oil company has laid out plans to boost refining capacity. . THE WALL STREET JOURNAL. B10 | Monday, May 14, 2018 MARKETS Stocks Regain Calm After Bout of Turbulence Volatility is falling again after weeks of tumult By Gunjan Banerji and Peter Santilli Wall Street’s fear gauge has been getting less scary by the week. The Cboe Volatility Index, or VIX, closed below its 200-day moving average last Wednesday for the ﬁrst time since January and has remained there since. The VVIX, a measure of how volatile the VIX itself is, dipped under its average weeks ago. The VVIX, also known as “the VIX of the VIX,” is based on options prices on the volatility index. The fear gauge has fallen in each of the past ﬁve weeks, the longest streak since a six-week stretch in the summer of 2016, according to The Wall Street Journal’s Market Data Group. The VIX tends to fall when stocks rise. It uses options on the S&P 500 index to spit out a measure of expected stock swings over the next month. The prospect of calm in markets marks a sharp reversal from the weeks of turbulence that followed a spike in volatility in early February that sent the VIX on its biggest one-day move ever and U.S. stocks into correction territory. Despite the recent drop, volatility remains elevated across sectors from year-ago levels. Some say that the current expectations for future volatility are too low, after the S&P 500’s gyrations this year. The equity index has gained or lost at least 1% this year 32 times, the most since 2009. Time will tell whether the recent calm will persist. Cboe Volatility Index With 200-day moving average Record one-day jump Last year was the calmest on record for the VIX. 30 VIX dips below its 200-day average 20 oving 200-day m 10 average Record low 0 Jan. 2017 Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Jan. 2018 Feb. March April May 75% Weekly changes in the VIX Longest streak of weekly declines since the summer of 2016 50% 25 0 –25 –50 2016 2017 Exepected volatility by sector* May 10, 2017 2018 May 10, 2018 S&P 500 Consumer staples Utilities Consumer disc. Health care Technology Materials Industrials Financial Telecom Energy Expected volatility, next 30 days† Frontier Communications 66.8% Mallinckrodt 64.2 Signet Jewelers Macy’s 52.5 5 10 15 20 60 sessions 40 51.7 30 50.9 20 Southwestern Energy 50.4 10 Best Buy 49.6 0 L Brands 48.8 *Based on corresponding sector ETFs †As of May 10 Sources: WSJ Market Data Group (VIX, daily moves); FactSet (VVIX, VIX weekly changes); Trade Alert (expected volatility) Most since 2009 50 Kohl’s Chesapeake Energy 0 60.5 Number of S&P 500 daily moves of at least 1% through May 11 of each year 2000 ’05 ’10 ’15 ’18 THE WALL STREET JOURNAL. The fourth industrial revolution is closer than you think. The combination of robotics, artificial intelligence, big data and the Internet of Things will change the way businesses compete. We’re transforming and expanding our network — laying the groundwork for a whole new paradigm. So you can make an impact with the speed, capacity and low-latency of 5G. 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