For personal, non-commercial use only. Do not edit, alter or reproduce.

For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

ADVERTISEMENT

GUIDANCE STARTS WITH HEARING YOU OUT.

Our Financial Consultants listen before they help you plan. Flip to page R6 to learn more.

* * * * * * MONDAY, JUNE 11, 2018 ~ VOL. CCLXXI NO. 135 WSJ.com HHHH $4.00
Last week: DJIA 25316.53 À 681.32 2.8% NASDAQ 7645.51 À 1.2% STOXX 600 385.12 g 0.5% 10-YR. TREASURY g 12/32 , yield 2.937% OIL $65.74 g $0.07 EURO $1.1771 YEN 109.54

G-7 Feud
What’s
Escalates
News
FROM LEFT: TERENCE TAN/SINGAPORE GOVERNMENT/ASSOCIATED PRESS; EVAN VUCCI/ASSOCIATED PRESS

Business & Finance

After
rout in emerging-
Summit
A market assets has
sparked concerns that the U.S. administration officials
turbulence could spread to escalated President Donald
the U.S. and elsewhere, fu- Trump’s criticisms of Canadian
eling a cycle of accelerat- Prime Minister Justin Trudeau
ing risk aversion. A1 and the global trading system
on Sunday, heightening tensions
 Amazon’s acquisition of
with major allies as Washington
Whole Foods, showcasing its
enters an important stretch of
ability to track orders and
negotiations on several fronts,
market to buyers, is shaking
from China to the North Ameri-
up the food industry. A1
can Free Trade Agreement.

.
 KKR is nearing a deal

ly
to buy Envision Healthcare By Vivian Salama in
for about $5.5 billion in Washington and Paul
one of the largest recent Vieira in Ottawa
leveraged buyouts. B1 on After the Group of Seven in-
 Star India has emerged as
dustrialized nations summit
a prize as Walt Disney and
North Korean leader Kim Jong Un and President Donald Trump arrived in Singapore on Sunday for their summit. The unprecedented ended Saturday in Canada with
Comcast gear up for possible
meeting, scheduled for Tuesday, is aimed at ultimately reaching a denuclearization agreement for the Korean Peninsula. a joint communiqué stressing
us l,

bids for Fox assets. B1

the importance of a rules-based

Trump, Kim Gird for Talks

 Arif Naqvi is trying to international trading system, a
al a
e
keep Abraaj afloat as spat erupted between Messrs.
some investors allege the Trudeau and Trump.
private-equity firm mis- Mr. Trudeau asserted Can-
ci on

used some funds. B2 ada’s strength and indepen-

 Cheaper and easier-to- North Korean, U.S. about whether the talks will be period of time” to achieve a dence and criticized U.S. tariffs
program robots that work leaders set stage for
more substance or symbolism.
Tuesday’s scheduled face-to-
Tough Tactics deal. “At a minimum, I do be-
lieve, at least we’ll have met
on Canadian metals. Mr. Trump
later withdrew his support for
alongside humans are be-
summit after months face meeting—the first be- An insider’s guide to the each other,” he said. “Hopefully the communiqué, an unprece-
er rs

ing given new tasks. B4

tween a sitting U.S. president president’s foreign-policy we will have liked each other dented move that left the allies
 Swiss voters upheld of diplomacy, rancor and a North Korean leader—fol- deal making........................... A9 and we’ll start that process.” divided in a way they hadn’t
commercial banks’ ability to lows months of hurled insults Mr. Kim is scheduled to de- been for decades.
create money, in a victory SINGAPORE—President Don- and tumultuous diplomacy part Singapore at 2 p.m. Tues- On Sunday evening from
m e

for the central bank. B3 ald Trump and North Korean aimed at ultimately reaching a sweeping economic sanctions to day, just five hours after his Singapore, where Mr. Trump
leader Kim Jong Un arrived denuclearization agreement on press North Korea to abandon summit with Mr. Trump is set will meet with Kim Jong Un of
 U.S. allies are embarking
here to set the groundwork for the Korean Peninsula. its atomic arsenal, has of late to begin, a person familiar with North Korea, the president in a
m rp

on a naval shopping spree

North Korean state media played down the likelihood of a the matter said. Mr. Trump is tweet questioned why he
as territorial standoffs in-
By Jonathan Cheng, reported on Monday that Mr. rapid solution to the standoff. set to leave on Wednesday should continue to allow coun-
tensify in the Pacific. B3
Andrew Jeong Kim outlined goals for the sum- The president, who clashed morning, this person added. tries to run a trade surplus
and Chun Han Wong mit, including establishing new with important U.S. allies in the A senior U.S. official cau- with the U.S. when, in his view,
World-Wide relations between the two Group of Seven industrial na- tioned against hopes for a it comes at the expense of U.S.
co Fo

a high-stakes summit that could countries and building a perma- tions over trade and tariffs breakthrough in Singapore farmers and workers. He also
reshape the security environ- nent peacekeeping mechanism. over the weekend, told report- such as a formal end to the criticized Canada’s trading
 President Trump and ment in Asia, amid questions Mr. Trump, who has used ers he expected it “will take a Please turn to page A8 Please turn to page A9
North Korean leader Kim
Jong Un are set to meet in
Singapore at a summit
that could reshape the se-
curity environment in Asia Amazon Stirs Up Change Emerging-Market Rout
after months of turbulent
Feeds Contagion Fear
diplomacy. A1, A9
 U.S. officials escalated
Trump’s criticism of Ca-
nadian Prime Minister
Across the Food Business A rout in emerging markets countries, threatening assets
BY HEATHER HADDON habits,” she added. has sparked concerns that the that investors recently consid-
n-

Justin Trudeau and the Attention, Shoppers Food retailers, manufactur- turbulence could spread from ered to be comparatively safe.
global trading system. A1 Amazon.com Inc.’s year-old ers and other suppliers have distant corners of the world The repercussions range
Whole Foods store traffic,
 The South Carolina Re- acquisition of Whole Foods is change from a year earlier begun to make fundamental to the U.S. and elsewhere. from increased pressure on
publican gubernatorial prompting rival retailers and changes to their strategies, A sharp selloff in Brazilian economies in Argentina and
no

primary is pitting a food wholesalers to remake Merger completed driven partly by stronger sales stocks and its currency late Turkey, which gorged on cheap
4%
Trump ally against two how they sell their products, a from Whole Foods stores since debt when interest rates stood
well-funded outsiders. A4 costly overhaul involving new the acquisition. By Ira Iosebashvili, near record lows, to the rise of
technology, investment and ac- 2
Whole Foods’ foot traffic Ben Eisen Italy’s populist and euroskeptic
 The U.N. launched a celerated online strategies. has increased about 3% year to government, analysts said.
and Amrith Ramkumar
diplomatic effort to avert The e-commerce giant year in each quarter since Am- So far, few believe the
a United Arab Emirates as- agreed to buy Whole Foods azon bought the chain, accord- last week fed into a wider re- weakness in riskier markets
sault on a Yemeni port, 0
Market Inc. last June for $13.5 ing to an analysis by Thasos treat that hit assets from threatens the nine-year-long
fearing a civil disaster. A6 billion and closed the deal in Group, which uses mobile- Mexico to South Africa and U.S. stock advance, but the re-
 Buyers of Iranian oil, August. Since then, Amazon phone location data to deter- rattled Italy’s weakened bond cent market moves have bol-
–2
including close U.S. allies, has rolled out additional food mine trends. That came after market. Many currencies of stered the case for caution.
are balking at Washing- deals and delivery options to two straight years of stagnat- developing countries are near More turbulence could be
ton’s attempts to isolate its Prime members. Companies, ing sales at the chain before multiyear lows, despite a in store this week, when the
investors and analysts expect –4 the deal. boost from strong commodity European Central Bank and
Tehran economically. A7
more changes as Amazon uses FY2014 ’16 ’18 Higher foot traffic improves prices and solid global Federal Reserve hold mone-
 Students needing to its data capabilities to track a retailer’s likelihood of sales, growth, while investor alloca- tary-policy meetings. Many
Note: Fiscal year ends in September
redo schoolwork are satis- what shoppers buy at the gro- and the figure can be a used tions to emerging-market-fo- expect the Fed to raise inter-
Sources: the company (through Q2 2017);
fying criteria in individual cery chain and market to them. Thasos Group (Q3 2017 onward) as a proxy for a chain’s health. cused bond funds are at their est rates, which would in-
sessions that can markedly The deal has been “shaking THE WALL STREET JOURNAL. Of 11 supermarkets analyzed lowest level of the year, ac- crease pressure on emerging
cut learning times. A3 up the food industry from top by Thasos, Trader Joe’s and cording to the Institute of In- markets and test the ability
 Southern Baptists will to bottom,” said Angela Spivey, marketing to sell at Amazon Sprouts customers were most ternational Finance. of some countries to repay
choose between a leader a food-and-beverage attorney and Whole Foods. “Don’t be eager to try Whole Foods after The spasms highlight how Please turn to page A2
who has called for greater at McGuireWoods LLP, who is surprised if the milk and cereal the acquisition to potentially a stronger dollar and higher
roles for women and a more- advising clients on how to just shows up at your door check out subsequent price U.S. bond yields can amplify  Nick Timiraos: Fed turns
traditionalist candidate. A3 change their packaging and based on your usual eating Please turn to page A4 the problems of vulnerable focus to long-term plan....... A2

Journal Report The Real Beef With Meatless Meat INSIDE

It’s time to A/B test i i i
your financial life
Wealth Management R1-6 Cattle ranchers say veggie burgers invade turf; dairy squeezed
ALESSANDRA TARANTINO/AP
LUCAS JACKSON/REUTERS

CONTENTS Technology............... B4 BY JACOB BUNGE and “natural flavor.” They’re

Business News.... B3,5,6 Life & Arts...... A11-13
Crossword.............. A14 Opinion.............. A15-17 AND HEATHER HADDON part of a posse of look-alikes
Heard on Street... B10 Sports....................... A14 invading meat country—from
Journal Report...........R1-6 U.S. News............. A2-5 Staring at the pink, pre- plant-based burgers that ooze
Markets............... B9-10 Weather ................. A14
Markets Digest..... B7 World News...... A6-10
packaged burger patties in the “blood” at first bite to chicken
meat case of a Kansas grocery strips grown in a tank from

>
store this spring, Larry Kendig
felt disgust. No meat involved
poultry cells.
For thousands of years,
‘BAND’S VISIT,’ NADAL’S
Mr. Kendig, 68 years, was so meat came from slaughtered ‘POTTER’ FRENCH
bothered he took the depart-
ment manager aside to explain
Nothing from a cow.
The “Beyond Meat” patties
animals, and milk was
squeezed from cows. Tech-
WIN BIG THRONE
s 2018 Dow Jones & Company, Inc.
his beef with U.S. food labeling that offended Mr. Kendig were style disruptions are now up-
All Rights Reserved rules: Do shoppers really know made with pea protein, canola ending supermarket meat LIFE & ARTS, A11 JASON GAY, A14
what goes into those burgers? oil, coconut oil, potato starch Please turn to page A10
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A2 | Monday, June 11, 2018 * *** THE WALL STREET JOURNAL.

U.S. NEWS
THE OUTLOOK | By Nick Timiraos
ECONOMIC

Fed Turns Focus to Long-Term Plan CALENDAR

TUESDAY: The Federal Re-
serve beings its two-day policy
The big Trade tensions, the election of strictive level. meeting in Washington. Fed offi-
question head- On Target populist parties in Italy, and “That’s where the angst is cials are widely expected to raise
ing into the A measure of how the economy is performing compared with the turmoil in emerging markets today,” said Mr. Meyer. “What their benchmark short-term inter-
Federal Re- Federal Reserve’s goals shows officials are closer to their objectives have all emerged as risks. the heck are we doing with an est rate by another quarter per-
serve’s meet- than they have been in recent history. Emerging-market curren- accommodative policy? And centage point. They also will re-
ing this week cies have weakened since do you want to be so aggres- lease updated projections for the
isn’t whether officials will Distance from the Federal Open Market Committee’s goals* mid-April on fears of capital sive that you then go beyond path of rate increases.
raise interest rates—they (zero=goal) outflows in response to rising neutral?” THURSDAY: China will release
will—but rather how to frame U.S. rates, with the most acute If the Fed decides to raise its monthly business activities
0
their policy plans for the rest problems occurring in Argen- rates just once more this year data (release time is Wednesday
of the year. tina and Turkey. after June, Mr. Powell will night in the U.S.). The world’s
The central bankers haven’t 2 “Global growth has been have to explain why they are second-largest economy is show-
resolved a debate over how synchronized over the past departing from their recent ing more resilience than many
much to raise rates this year 4 year, but recent developments pattern of taking steps to re- economists had expected. China’s
to ensure the rapidly expand- pose some risk,” said Fed gov- duce stimulus at every other value-added industrial output, a
ing U.S. economy doesn’t 6 ernor Lael Brainard in a meeting since December 2016. rough proxy of economic growth,
overheat, according to inter- speech last month. Alternately, if officials de- is likely to have grown 7% in May
views and public comments 8 Recessions So far, these risks don’t cide to lift rates twice more from a year earlier, the same as
from Fed officials. look as severe for the U.S. after this meeting, he’ll have in April. Growth in fixed-asset
In March, 12 of 15 Fed offi- 10 economy as market turmoil in to explain whether the Fed is investment, a key gauge of con-
cials were equally split be- early 2016 that led the Fed to concerned about overheating. struction activity, also may have
tween raising rates a total of 1970 ’80 ’90 2000 ’10 ’20 scratch plans for multiple rate Mr. Powell signaled last held steady at 7% in the January-
three or four times this year, increases that year. month he sees less need for May period. Retail sales are ex-
leaving their median projec- Most officials agree they the Fed to continue providing pected to accelerate a bit to 9.6%
tion at three. should steadily raise rates verbal guidance about the growth in May, from April’s 9.4%.
from low levels that stimulate likely path of rates, which it The European Central Bank

T
hey are on track to an- the economy to a neutral level started doing after the finan- releases a policy decision, a day
nounce Wednesday an helping send unemployment with fire? That’s a discussion that neither presses on the cial crisis. after the Fed. Last week, the
increase in their bench- down to 3.8% in May, an 18- we haven’t heard,” said for- gas pedal nor the brake. After Officials could update ECB’s chief economist, Peter
mark federal-funds rate by a year low. Inflation has also hit mer Fed governor Laurence that, some have suggested the postmeeting policy state- Praet, sent a signal that the bank
quarter percentage point to a the Fed’s 2% target after years Meyer. holding rates steady for a ment to reflect this, such as could decide as soon as this
range between 1.75% and 2%— of falling short. Top Fed officials, including while to see how the economy by discarding or modify- week’s meeting to wind down its
the second such rise this year. The Fed traditionally ad- Chairman Jerome Powell, responds. ing language saying it would bond-buying program.
They’ll also release updated justs rates based on forecasts have indicated they don’t seek to stimulate growth “for The U.S. Commerce Depart-

T
projections indicating they of where growth, employ- feel much urgency to raise wo debates will con- some time.” ment releases May retail sales
plan to raise rates at least ment, inflation and other eco- rates more aggressively. sume officials as they At the same time, they’ll figures. Despite rising gas prices,
once more in 2018. nomic trends will be years “There is no sense in the formulate their ap- reassure markets they aren’t Americans ramped up their

.
The Wall Street Journal’s ahead, and not just on recent data that we’re on the cusp of proach. The first centers on moving to a more aggressive spending at the start of spring,

ly
survey of economists this data, because monetary policy an acceleration of inflation,” where the neutral rate sits. approach now that inflation is signaling modest wage gains and
month found respondents ex- works with long time lags. said Mr. Powell at his March The second is how much at 2%. the recent tax overhaul helped
pected four rate increases this Some economists worry news conference. above neutral to push rates to Officials have emphasized buoy spending.
year, with several citing accel- the Fed risks falling behind on Developments since then keep the economy steady. this target is “symmetric,” FRIDAY: The Bank of Japan
erating economic growth, a the curve if it raises rates too don’t provide a conclusive Even Ms. Brainard, the meaning they won’t raise releases a policy statement. The
tightening labor market and slowly and allows inflation to case for officials to pick up Fed’s leading voice for raising rates faster if inflation over- central bank is expected to stick
firming inflation. take off or financial bubbles the pace of rate increases yet. rates slowly, has said the shoots it a bit. The word to its monetary-easing policies,
Recently enacted tax cuts to build. The bright domestic eco- strong economic outlook sug- “symmetric” appeared 10 including negative interest rates
us l,

and government spending in- “How long can you play nomic outlook contrasts with gests lifting rates to neutral times in the minutes of the and large purchases of govern-
creases are spurring demand, this game? Are you playing a cloudier picture abroad. and “after some time” to a re- Fed’s May meeting. ment bonds.
al a
e

Tax Havens Draw Sizable Chunk of Corporate Profits

ci on

BY RICHARD RUBIN trend toward lower corporate The research draws on data shifting to take advantage of
tax rates in major countries— from countries such as Ireland, smaller rate gaps between
Pay vs. Profit Ireland 774%
Bermuda
er rs

Multinational companies including the recent U.S. re- Luxembourg and the Nether- high-tax countries, Mr. Zucman Companies in countries (and Carribean) 743
shift about 40% of the profits duction to 21% from 35%— lands. According to the paper, said. Companies fight harder labeled tax havens have Luxembourg 558
they earn outside their home won’t by itself cause companies typically make 30 against audits of shifting to profits that outweigh
countries into tax havens, companies to alter their tax- to 40 cents in profits for every tax havens, making that work what they pay in Switzerland 304
m e

eluding tax-collection efforts, avoidance moves. Companies dollar of wages. In Ireland, for- less efficient for governments compensation. Singapore 216
according to an analysis that can still lower their tax bills eign companies have $8 in to pursue, he said. Netherlands 179
Taxable profits of U.S.
points to persistent gaps in significantly by shifting profits profits for every dollar of Countries tax corporate in-
m rp

multinational affiliates as China 86

government revenue collec- to places with effective tax wages. come based on where eco- share of compensation
tion. rates between zero and 10%. The data come from 2015, nomic value is created, and Japan 86
U.S. companies are among Such profit-shifting reduces before the new U.S. tax law those definitions lead to dis- Tax havens
the most aggressive users of the taxes corporations pay in and amid efforts by developed putes about which country
Mexico 73
Non-tax-haven countries
profit-shifting techniques, the European Union by about countries to cooperate against gets to tax a given company. Belgium 60
co Fo

which often relocate paper 20%, according to the paper, corporate profit-shifting. Mr. Zucman said the research Canada 51
profits without bringing jobs with a global annual revenue “There are still large incen- points toward a system that
and wages, according to the loss of $200 billion. An earlier tives and big possibilities for bases corporate income taxes India 37
study by economists Thomas estimate by the Organization firms to shift profits to low-tax on the location of sales. U.K. 33
Torslov and Ludvig Wier of the for Economic Cooperation and places,” Mr. Zucman said in an According to the Congres-
University of Copenhagen and Development said all profit- interview. sional Budget Office, the new
Italy 29
Note: Tax havens are low-tax
Gabriel Zucman of the Univer- shifting, not just through tax High-tax countries struggle U.S. law would reduce the countries identified by paper’s
Germany 25
sity of California, Berkeley. havens, reduces global corpo- to pull profits back from tax $300 billion in annual profit- authors. France 14
Mr. Zucman said the re- rate tax revenue by between havens, instead focusing their shifting out of the U.S. by Source: paper by Torslov, Wier and Zucman
search suggests the global $100 billion and $240 billion. tax-collection efforts on profit- $65 billion. THE WALL STREET JOURNAL.
Brazil 6

Contagion high leverage or an unpopular

government are also vulnera-
“This is what you are get-
ting compensated for,” he said.
n-

Fears
ble to rising rates and a stron- Rising U.S. bond yields,
ger dollar, Mr. Rogoff said. Po- however, may be wearing
litical jitters sent Italy’s bonds away at that sentiment. With

Increase
on their worst one-day slide two-year Treasury yields at
no

since 1989 last month, al- 2.5%, the assets of potentially

though they have stabilized vulnerable countries become
since. Countries at the euro- much less attractive, said Ed-
Continued from Page One zone’s periphery, such as Por- ward Al-Hussainy, currency
dollar-denominated debt. tugal and Greece, could also strategist at Columbia Thread-
“Rising global real interest experience “big problems” if needle Investments.
rates are the No. 1 predictor of global rates continue to rise, “Is the return high enough
financial problems in vulnera- he said. to compensate you for the
ble economies,” said Kenneth For now, many believe mar- risks? Clearly the answer across
Rogoff, a professor at Harvard kets will be able to weather the board is ‘no,’” he said.
University and former chief the recent turmoil. The World —Daniel Kruger
economist of the International Bank estimates the global contributed to this article.
Monetary Fund. “The risks are economy will grow by 3.1%
greater than people realize.” this year, unchanged from its
LEO CORREA/ASSOCIATED PRESS

A stronger dollar is a dan- forecast in January and THE WALL STREET JOURNAL
ger for some countries be- matching the pace seen in (USPS 664-880)
(Eastern Edition ISSN 0099-9660)
cause it weakens their curren- 2017, itself the strongest year (Central Edition ISSN 1092-0935)
cies and makes it more since 2011. While recent turbu- (Western Edition ISSN 0193-2241)
difficult to pay back dollar- lence has hurt countries with Editorial and publication headquarters:
1211 Avenue of the Americas,
denominated debt. Higher large debt loads, other emerg- New York, N.Y. 10036
U.S. rates dim the allure of ing markets have reduced debt Published daily except Sundays and general
foreign assets, especially in and built up reserves in recent legal holidays. Periodicals postage paid at
emerging markets, where in- Many currencies of developing countries are near multiyear lows, despite solid global growth. years, analysts said. New York, N.Y., and other mailing offices.
vestors often take on greater Harry Gakidis, a portfolio Postmaster:
Send address changes to The Wall Street
risk in exchange for higher generate most of their revenue manager at Acadian Asset
yields and returns. Pileup ‘Rising global real in local currencies, such as Management, said he sees re-
Journal, 200 Burnett Rd., Chicopee, MA 01020.
All Advertising published in The Wall Street
More than $10 billion has Record amounts of emerging- some in Latin American coun- cent volatility less as the start Journal is subject to the applicable rate card,
flowed out of mutual and ex- market debt are set to mature interest rates are the tries, are also a worry, he said. of a crisis and more as part of copies of which are available from the
Advertising Services Department, Dow Jones
change-traded funds that in- this year and next year. No. 1 predictor of The potential for dimin- a sporadic selloff that happens & Co. Inc., 1211 Avenue of the Americas, New
vest in emerging-markets Matured Hasn’t matured ished investment in these from time to time. York, N.Y. 10036. The Journal reserves the right
debt and equity in the past $1.5 thousand
financial problems.’ countries comes amid soaring not to accept an advertiser’s order. Only
publication of an advertisement shall constitute
six weeks, according to Bank levels of emerging-market gov-
CORRECTIONS 
final acceptance of the advertiser’s order.
of America Merrill Lynch. The 1.0 ernment and corporate debt. Letters to the Editor:
outflow has sparked some de- A record $1.6 trillion of Fax: 212-416-2891; email: [email protected]
clines in assets that rewarded
investors with rich yields and
0.5 Mohamed El-Erian, chief eco-
nomic adviser at Allianz.
debt issued by governments,
financial companies and
AMPLIFICATIONS
NEED ASSISTANCE WITH
big upside moves in recent 0.0 “What’s becoming more evi- other businesses in all cur- YOUR SUBSCRIPTION?
years: Stock markets in Bra- 2014 ’15 ’16 ’17 ’18 ’19 dent today is that with the ex- rencies matures this year, America’s Constitutional By web: customercenter.wsj.com;
zil, Indonesia and Turkey Note: Includes all currencies and debt from ception of the U.S., where pol- while $1.7 trillion will mature Convention occurred in 1787. By email: [email protected]
By phone: 1-800-JOURNAL (1-800-568-7625);
have notched double-digit governments, financials, and other corporates. icy is driving growth, the in 2019, according to the In- An article on Hamilton, Madi- Or by live chat at wsj.com/livechat
drops since mid-February, Source: Institute of International Finance other factors are proving to be stitute of International Fi- son and populism in Satur-
along with many emerging- THE WALL STREET JOURNAL. less durable.” nance. That debt, concen- day’s Review incorrectly said REPRINTS & LICENSING
market currencies. Mr. El-Erian said he is keep- trated in China, South Korea, that the convention happened
By email: [email protected]
That weakness is concern- celerating in unison. ing a close eye on countries India and other countries, in 1789. By phone: 1-800-843-0008
ing to some, who see it as evi- “The world confused a with a lot of government debt, will either need to be paid
dence that the world has lucky confluence of growth as well as corporate debt, such down or refinanced. Readers can alert The Wall Street
Journal to any errors in news articles GOT A TIP FOR US?
slipped out of a brief period in factors with a self-feeding as Turkey. Companies that Developed countries that by emailing [email protected] or SUBMIT IT AT WSJ.COM/TIPS
which all economies were ac- synchronized pickup,” said borrow heavily in dollars but suffer from weaker growth, by calling 888-410-2667.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | A3

U.S. NEWS

Leaders’ Exits Test Southern Baptists

A generational split cation leader, after an old ser- in terms of empowering diver-
mon, in which he recounted sity in our leadership,” Mr.
and the role of women telling an abused woman not Greear said in an interview.
are big issues as a new to leave her husband and in- His critics say he subscribes
stead to pray, was made pub- to Calvinist—or Reformed—
president is selected lic. The seminary said Mr. Pat- theology, which includes the
terson also mishandled the belief that God elects those
BY IAN LOVETT case of a student who said she who will be saved.
was raped in 2015. Mr. Patter- Mr. Greear declined to di-
The nation’s largest Protes- son’s lawyer denied the stu- rectly answer a question about
tant denomination is enduring dent said she was raped at the his views but said, “The SBC,
a test of faith. time. from its earliest days, has al-
In recent months, one top Karen Swallow Prior, a ways had more Calvinist-lean-
Southern Baptist Convention Southern Baptist professor at ing Baptists and more free-
official resigned, citing a “per- Liberty University, said the fir- will-leaning Baptists.”
sonal indiscretion,” and an- ing of Mr. Patterson exposed a A former president of
other was fired following alle- divide between “people who Southwestern Seminary who is
gations that he mishandled a have wanted to change the mi- interim pastor at Second Bap-
sexual assault reported by a sogynistic, sexist culture of tist Church in Springfield, Mo.,

JEFF ROBERSON/ASSOCIATED PRESS

seminary student. the SBC…and those who have Mr. Hemphill holds to the “tra-
“God has brought a day of either been blind to it or just ditionalist” theological view
reckoning to us,” J.D. Greear, a didn’t care.” that anyone can be saved.
North Carolina megachurch Mr. Greear has built his He also supports larger
pastor, said in a video on Face- North Carolina congregation roles for women in the church.
book last month. into a megachurch with multi- Although some people had
Mr. Greear now is the lead- ple campuses that draw up- tried to lump in views about
ing candidate to be the next wards of 10,000 people, many women “with the old guard,”
president of the Southern Bap- of them racial minorities and he said, “I don’t think it’s
tist Convention, which gathers Choir members at a 2016 meeting of the Southern Baptist Convention in St. Louis young people. Though he about generation.”
in Dallas for its annual meet- maintains the denomination’s Jack Graham, a former de-
ing this week. ures who questioned Mr. formed’ movement,” said Da- although church attendance belief in complementarian- nomination president and pas-
At 45 years old, Mr. Greear Greear’s theology and commit- vid Hankins, executive director has ticked up this year and ism—the view that women tor of a megachurch outside
would be the denomination’s ment to the convention and of the Louisiana Baptist Con- Southern Baptists have main- have different God-given roles Dallas, invited Mr. Greear to
youngest president in decades, who recruited another candi- vention, who asked Mr. Hemp- tained significant influence in from men and men should be speak at his church on Sunday.
and he has advocated for giv- date, Ken Hemphill, 70, to run. hill to join the race. Washington. leaders at home and in “This convention is about the
ing women a larger role in the “We’re hoping to bring Both sides agree that this is Recently, the Southwestern church—he says there are future,” he said. “We are at a
conservative institution. some corrective to an overem- a crucial moment. Membership Baptist Theological Seminary roles other than senior pastors tipping point, but I’m very
But he faces strong opposi- phasis on what has been called in the denomination has been fired Paige Patterson, its long- that women should hold. hopeful that changes and cor-
tion, especially from older fig- the ‘Young, Restless and Re- falling for more than a decade, time president and a demoni- “We need a culture change, rections can be made.”

Wildfire Rages in Hot, Dry Colorado

.
ly
on
us l,
al a
e
ci on
er rs
JERRY MCBRIDE/THE DURANGO HERALD/ASSOCIATED PRESS

m e
m rp
co Fo

FIGHTING FIRE FROM THE AIR: A helicopter helped ground crews battle a wildfire over the weekend in Hermosa, in the southern
part of Colorado. Authorities have ordered residents of at least 1,000 homes to evacuate and have said the blaze is 10% contained.

New Way to Avoid Summer School

n-

BY TAWNELL D. HOBBS question their rigor.

Los Angeles Unified School
LOS ANGELES—Isaac District officials say the pro-
no

Hipolito flunked a semester of grams allow students to

JENNA SCHOENEFELD FOR THE WALL STREET JOURNAL

ninth-grade English. Giving up breeze past content they’ve al-

part of his summer to redo the ready mastered and focus on
class wasn’t something he failed areas.
wanted to do. “We give them another
So, on a recent day after chance. Who doesn’t want to

AMERICAN SPIRIT
school at Downtown Magnets graduate with their class?”
High School in Los Angeles, said Carol Alexander, a direc-
the 14-year-old and a small tor in the Los Angeles school
group of students worked indi-
vidually to get credit for the
district’s Division of Instruc-
tion. “There’s no argument SWISS PRECISION
class by completing a packet that students learn at different
of work at their own pace. rates.”
Such programs, called Some educators question
credit recovery, allow students the quality of credit-recovery
to satisfy course requirements Los Angeles students in a program to recover school credits. classes, some of which are
in a fraction of the time, some- provided by independent com-
times in days or a few weeks, panies, and say they artificially
depending on how much Standards Increase end-of-course assessment and boost graduation rates. The
knowledge they gained the received a lower grade for the four-year national graduation
first time around. Use of Programs course than students who re- rate rose to 84% in 2015-16
Just over one million high- did it in a traditional classroom. from 79% in 2010-11, but na-
school students in almost Jessica Heppen, vice presi- tional test scores are flat and
16,000 of the nation’s 24,000 A 2016 U.S. Department of dent for research and evalua- more students are showing up
public high schools took at Education-sponsored study by tion at American Institutes for unprepared for college-level
least one credit-recovery class American Institutes for Re- Research and the study’s lead math and reading.
in the 2015-16 school year, ac- search, a nonprofit scientific re- author, said online credit-re- “If the school sets up credit
cording to a Wall Street Jour- search firm, and the University covery programs are growing recovery in such a way that it’s
nal analysis of the latest data of Chicago Consortium on in part because they are con- easier to get, then struggling
from the U.S. Department of School Research, found that venient for schools and stu- students can skip out on the
Education. Most credit-recov- ninth graders in Chicago Public dents. “Standards have in- regular course and get it in
ery classes are taken online; Schools who failed Algebra 1 creased and districts have to credit recovery,” said Bobson
some are led by a teacher, or and retook it in online credit find a way to…keep kids on Wong, a public high-school
are a blend. recovery scored lower on an track,” she said. math teacher in New York
Mr. Hipolito, who said the City. He said he’s not opposed
regular class was hard to un- to the idea of credit recovery
derstand, expected to have the place of traditional summer held back from advancing a but believes that in many
class redone in about half the school and could also mean grade level or graduating. cases it’s “a poor substitute for
KHAKI AVIATION X-WIND
time of the regular four-month fewer students repeat a grade. There’s no recent national the original course.” AUTOMATIC
session and said it’s easier. It’s mostly an option offered in data on summer-school en- Some administrators in the
“We don’t have to read a high school—but also shows rollment. The Los Angeles Uni- Los Angeles Unified School
lot,” he said. “It’s a lot more up in middle schools. Students fied School District said it has District say students might
simple, not as specific. We who take advantage of the op- fewer seniors graduating in find credit-recovery classes
didn’t have to do big essays. tion typically have failed at the summer, which it partly at- easier because they’ve already
It’s more answering the ques- least one class and don’t want tributes to credit recovery. sat through the regular course.
tions.” to attend summer school, re- Schools praise the programs as “It’s the second time they’re SHOP.HAMILTONWATCH.COM
In some school districts, peat the class in its entirety helping boost graduation hearing this,” Ms. Alexander
credit recovery is taking the during the school year or be rates, but some educators said.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A4 | Monday, June 11, 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

Migrant Parents Feel Bite of Border Law

After border arrests, process could take years.
Assistant federal public de-
defendants’ anxiety fender Azalea Aleman-Bendiks
ratchets up as U.S. said her office determined
that more than 400 children
separates families had been separated from par-
ents whose criminal cases
BY ALICIA A. CALDWELL were heard in McAllen during
a 2½-week period ended the
MCALLEN, Texas—Norma first week of June.
Leticia Ulloa Montoya was ar- Hundreds of migrants
rested after rafting across the passed through Judge
Rio Grande with her sons and Ormsby’s courtroom last week,
illegally entering the U.S. A filling most of the room’s six
day later, she was sent to fed- wooden benches. The hearings
eral court here, separated were conducted in English,
from her children, 9 and 6 with the immigrants listening
years old. It was unclear when to a Spanish translator
she would see them again. through a headset. Each guilty
Ms. Ulloa joined more than plea took roughly a minute.
70 other migrants in a Most of those brought before
crowded courtroom in this the judge simply responded
South Texas city, including “si,” “no” or “culpable,” mean-
about a dozen other Central ing guilty in Spanish, when
American parents. They faced questioned by the judge or a
misdemeanor charges for ille- prosecutor.
gally entering the U.S., an of- On Wednesday, Diego Nico-
fense that carries a maximum las Gaspar of Guatemala ini-
6-month jail sentence. People charged with crossing the border illegally, including parents separated from children, at a hearing last week in McAllen, Texas. tially pleaded not guilty to
“If one pleads guilty, does rafting across the river with
one have a right to stay in this ministration adopted a zero- are being prosecuted and fac- During Ms. Ulloa’s hearing, ment governing the treatment his 11-year-old son. He
country with their babies?” tolerance policy last month to ing jail time. Immigration and Judge Ormsby sought to reas- of immigrant children and a changed his plea to guilty in
she asked U.S. Magistrate illegal immigration at the bor- Customs Enforcement said it sure the parents in the room, more recent court ruling both the hopes of being quickly re-
Judge Peter E. Ormsby der, pursuing criminal charges provides parents information saying that the government’s bar the government from jail- united with his son.
through a translator. Judge against offenders, including to track their children’s intent was to protect and care ing children. A federal law Prosecutors asked the judge
Ormsby said he didn’t know if parents with minor children. whereabouts. for the children while their bars most unaccompanied mi- to sentence everyone with no
she or any other migrant in Homeland Security Secre- “If people don’t want to be parents navigated the courts. grant children from being criminal or immigration his-
the courtroom could stay in tary Kirstjen Nielsen, Attorney separated from their children, The administration’s policy quickly deported, and requires tory in the U.S. to 10 days in
the U.S., or when they might General Jeff Sessions and oth- they should not bring them has spurred backlash among they be turned over to Health jail as a deterrence. Judge
see their children again. ers in the Trump administra- with them,” Mr. Sessions said immigrant-rights advocates and Human Services, where Ormsby instead sentenced
Her question strikes at the tion have said federal law re- last week in an interview with and some lawmakers, mostly officials find a sponsor in the them to time served and re-
heart of a debate that has quires them to separate conservative radio host Hugh Democrats. U.S. to house them while their turned them to the custody of

.
emerged after the Trump ad- children when their parents Hewitt. A decadesold court settle- case is decided in court. That immigration authorities.

ly
Trump Shapes South Carolina GOP Sessions’ Marijuana on
BY VALERIE BAUERLEIN
Fight Loses Steam
us l,

The crowded and expensive

South Carolina GOP guberna-
al a

BY SADIE GURMAN
e
torial primary is coming down ety take a more tolerant view of
to whether voters want a vet- AND NATALIE ANDREWS pot, creating a cadre of sup-
eran politician who is person- porters from both parties. Yet
ci on
GRACE BEAHM ALFORD/THE POST AND COURIER/ASSOCIATED PRESS

ally close to President Donald Attorney General Jeff Ses- the drug remains illegal under
Trump or one of two political sions vowed to use federal law federal law, posing a challenge
outsiders—one who resembles to get tough on marijuana, an- for U.S. officials in deciding
him in tone, the other in pro- nouncing in January he was how to pursue it.
fessional experience. ending Obama-era protections President Barack Obama’s
er rs

The June 12 primary is un- for the nascent pot industry in administration took a largely
usual because the governor, states where it is legal. Six hands-off approach to states
who has been in office for 16 months into his mission, he is that legalized marijuana. Mr.
months, is in the race, and it largely going it alone. Sessions initially showed deter-
m e

has been decades since a sitting Mr. Sessions’ own prosecu- mination to change that, blam-
South Carolina governor faced a tors have yet to bring federal ing marijuana for helping fuel
competitive intraparty foe. charges against pot businesses the opioid crisis and for caus-
m rp

But Gov. Henry McMaster, that are abiding by state law. ing spikes in violence.
who was lieutenant governor, And fellow Republicans in Con- The Justice Department de-
inherited the job when Mr. gress, with support from Presi- clined to comment. Mr. Ses-
Trump made Nikki Haley his dent Donald Trump, are pro- sions, however, recently told
ambassador to the United Na- moting several bills that would members of Congress that the
co Fo

tions—a move seen as a Catherine Templeton, Gov. Henry McMaster, center, and John Warren faced off in a debate last week. protect or even expand the le- department is now emphasiz-
thank-you for Mr. McMaster’s gal pot trade. ing the pursuit of more danger-
early endorsement of Mr. ning sanctuary cities mirrors million he has raised, has months after his competitors. As a result, Mr. Sessions, an ous drugs.
Trump. Mr. Trump’s. spent $2.5 million. He is a former Marine who unabashed drug warrior, has In an unusual move by a Re-
“He didn’t run and win the “When the other candi- If no candidate gets more started a company that lends struggled to make his anti-mar- publican senator against his
office,” said Joel Sawyer, a dates bear-hug Trump, they than 50% in the primary, the money to residential property ijuana agenda a reality, a nota- own party’s attorney general,
GOP political consultant who are essentially endorsing Gov- two top vote-getters will go flippers. ble contrast with the success he Mr. Gardner blocked nominees
isn’t involved in the race. ernor McMaster’s conserva- to a June 26 runoff. Mr. Warren is emphasizing has had in toughening law-and- for Justice Department jobs af-
Mr. McMaster, 71 years old, tive record,” spokeswoman Ms. Templeton, 47, is a for- his military background in the order policies in other criminal- ter Mr. Sessions announced he
has been a political fixture Caroline Anderegg said. mer cabinet member of Ms. Middle East and his experi- justice areas. was undoing the Obama admin-
since the 1980s, when Presi- But Mr. McMaster has been Haley’s. She has been cam- ence running Lima One Capi- Marijuana advocates say Mr. istration’s approach.
dent Ronald Reagan named rivaled in fundraising by two paigning since April 2017 on a tal, named for his military call Sessions’ approach, in seeking Mr. Gardner stood down af-
him U.S. Attorney for South younger, first-time candi- promise to take on the estab- sign. to spur a crackdown on the le- ter receiving assurances that
Carolina. dates. He has raised $4.4 mil- lishment, in the mold of Mr. “Much like President gal marijuana market, has Mr. Trump would support pro-
n-

Mr. Trump endorsed Mr. lion and spent $3.6 million as Trump. She is running on her Trump, John Warren is the largely backfired. It has cata- tections for pot-legal states like
McMaster at a recent rally of May 28, according to State experience firing bureaucrats only true conservative out- lyzed bipartisan support for re- Colorado, essentially undermin-
and again in a Saturday Ethics Commission filings. and confronting political ap- sider running for governor,” search, they say, and for action ing Mr. Sessions on the issue.
tweet. Lawyer Catherine Templeton pointees, describing herself in campaign manager Taylor to improve the young industry’s Supporters of relaxing mari-
no

Mr. McMaster is trying to has raised $3.6 million and ads as a “conservative buzz Hall said. access to banks, which have juana drug laws cheer the re-
make the most of his experi- spent $2.5 million. Entrepre- saw.” The Templeton campaign been generally unwilling to ac- cent developments. “It was ter-
ence, saying his record of neur John Warren, who con- Mr. Warren, 39, jumped didn’t respond to a request cept proceeds from pot sales. rific,” Don Murphy, director of
supporting tax cuts and ban- tributed $3 million of the $3.3 into the race early this year, for comment Friday. Underlining the pushback, federal policy for the Marijuana
Sen. Cory Gardner (R., Colo.) on Policy Project, said of Mr. Ses-
Thursday joined Sen. Elizabeth sions’ threat to the industry. “It

Amazon expected. Those chains have

slowed store growth to deploy
millions of dollars of capital
in select markets.
Many food makers are rede-
signing their packaging and
the largest drop in more than
two years, after the company
posted its third-quarter earn-
Warren (D., Mass.) in introduc-
ing a bill that essentially would
allow states to pass their own
moved this issue to a burner.”
Mr. Sessions’ January mari-
juana policy left federal prose-

Shakes Up for technology.

“We are continuing to look
across the U.S. and the world
formulas to better sell through
Amazon and Whole Foods,
placing an emphasis on online
ings. The stock added 27 cents
to close at $39.85 on Friday.
Amazon’s formula for at-
marijuana laws without federal
interference.
Mr. Trump on Friday reiter-
cutors to decide what resources
to devote to marijuana crimes,
stirring fear among dispensary

Food Retail for potential partnerships,”

Kroger Chief Executive Rod-
ney McMullen said in an in-
repeat purchases instead of
impulse buys, industry consul-
tants said.
tracting customers to Whole
Foods was simple. After the
deal closed, the online retailer
ated his support for Mr. Gard-
ner, saying, “I know exactly
what he’s doing, we’re looking
owners that raids and arrests
were imminent.
Instead, many U.S. attorneys
Continued from Page One terview after the company Meanwhile, Whole Foods’ slashed prices on avocados, at it, but I probably will end up continued to use their limited
cuts, with 8% of their regular said it would take a $250 mil- main distributor, United Natu- bananas and other items at supporting that, yes.” manpower to target unusually
shoppers visiting the rival. lion stake in British online ral Foods Inc., has experienced Whole Foods’ 460 U.S. stores. The dynamic highlights the brazen marijuana operations
A Sprouts spokeswoman grocer Ocado Group PLC last a flood of business in the past That formula has helped drive unusual state of the nation’s that are also illegal under state
said traffic was up at the month. year. Net sales at the Provi- year-over-year sales growth of marijuana laws. More states are law, such as sprawling mari-
Phoenix chain in its most re- Whole Foods remains a dence, R.I., company jumped grocery goods and health legalizing marijuana use for juana growers on federal lands
cent quarter and that the small part of the roughly $800 products at the chain by the medical or even recreational or gangs that peddle pot along
brand “continues to resonate.” billion U.S. food retail market, greatest levels in seven years, purposes as many parts of soci- with other drugs.
A Trader Joe’s spokeswoman with less than one-fifth the according to financial filings
said sales were strong. Ama- number of stores of Kroger,
Grocery chains have by United Natural.
zon and Whole Foods declined the nation’s largest grocer. Ex- accelerated investing United Natural supplies the Hashing It Out
to comment. ecutives at Kroger and other bulk of Whole Foods’ shelf-sta-
Grocery chains have accel- large conventional chains say
in online delivery and ble and consumer products,
A growing number of states are legalizing marijuana use, but it
remains illegal under federal law.
erated planned investments in they haven’t seen a big drop in pickup services. but not fresh food. Whole
online delivery and pickup ser- sales in the past year because Foods no longer discloses its Recreational use legal Medical use legal Marijuana decriminalized
vices, in some cases bumping they cater to mainstream stand-alone sales figures since
plans ahead to two-to-three- shoppers and have little over- the acquisition, but its last fi- Wash. N.H.
year timelines instead of five lap with Whole Foods, whose 12% for its most recent quar- nancial filing, which included Mont. N.D. Minn. Vt.
to seven years, according to average customer household ter, ended in April. Business to partial Amazon ownership, Ore. Mich. Maine
Idaho S.D. Wis. N.Y.
Steve Caine, a Bain & Co. part- income exceeds $70,000, ac- Whole Foods alone increased showed that between July and Wyo.
ner who consults with grocers cording to market research. 24%. United Natural reported September 2017, sales rose 4% Iowa Pa.
Nev. Neb.
on their online strategies. After Amazon extended dis- nearly $1 billion in sales to to $3.7 billion from the year- Utah Ill. Ind. Ohio Mass.
Dozens of supermarkets counts at Whole Foods to its Whole Foods for the April earlier period. Colo. W.Va. Va. R.I.
Calif. Kan. Mo. Ky.
have struck deals with Insta- Prime members—which will quarter, up from about $800 “I do find myself going N.C. Conn.
Okla. Ark. Tenn.
cart Inc., an online grocery-de- help it gather data about million a year earlier, before there more often,” said The- Ariz. N.M. N.J.
S.C.
livery service that has ex- shoppers’ preferences—ana- the deal. resa Bond, a 46-year-old li- Ala. Ga. Del.
panded to more than 200 lysts said competitors might But United Natural has brarian in Bridgewater, N.J., Texas Miss. Md.
La. D.C.
retailers from 30 before Ama- need to update their own struggled to keep goods in who said she has noticed less-
Alaska Fla.
zon’s deal. Kroger Co., Wal- shopper-loyalty programs. stock, resulting in millions of expensive prices on crackers,
mart Inc. and Target Stores Amazon now offers free, two- dollars in lost sales and sud- tortillas and tea at Whole
Inc. have all stepped up e- hour delivery and additional den expenses for unforeseen Foods stores. Hawaii
commerce acquisitions, with 10% discounts on several hun- storage and staffing needs. On —Laura Stevens
more technology investment dred items for Prime members Thursday, its shares fell 14%, contributed to this article. Source: NORML THE WALL STREET JOURNAL.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * Monday, June 11, 2018 | A5

U.S. NEWS U.S. WATCH

Insurers See New

NEW YORK
Latest Trade Center
Tower Is Set to Open

ACA Uncertainty An 80-story office building

set to open this week at the
World Trade Center will be the
BY MELANIE EVANS nies that say, ‘Enough al- third completed skyscraper at
ready.’” the site where the twin towers
Consumers and insurers The marketplace experi- stood.
face new uncertainty with the enced similar tumult about a Monday's ribbon-cutting for
Justice Department’s assertion year ago, as insurers were set- the 1,079-foot 3 World Trade
last week that key provisions ting rates amid questions Center marks a major step in the
of the Affordable Care Act are about whether the White rebuilding of the site, stalled for
invalid. House would end some ACA years by disputes among govern-
In a brief filed Thursday, subsidies—a step the adminis- ment agencies, trade center de-
the department asked a federal tration in October announced veloper Larry Silverstein, insurers
court to unwind the health it was taking. In some cases, and 9/11 victims' family members.
law’s protections for individu- state insurance regulators The new $2.7 billion building,
als with existing medical con- scrambled last year to ensure designed by Pritzker Prize-win-
ditions, such as diabetes or markets would be viable. ning architect Richard Rogers,
asthma. The law, known as Rates next year: ACA pre- has been the fifth-tallest building
Obamacare, prohibits insurers miums are expected to rise 15% in New York City since construc-
from refusing to sell coverage next year, on average, largely tion topped out in 2016.
to people with pre-existing because Republicans in their The lobby of 3 World Trade
conditions or from charging tax law last year got rid of the Center faces the National Sep-
them more than healthy con- health law’s penalty for the tember 11 Memorial & Museum.
sumers. uninsured, according to the —Associated Press
The brief was filed in a law- federal Congressional Budget
suit brought by attorneys gen- Office. The ACA’s backers ar- FLORIDA
eral that may take months to gue that lets healthier people
wind through the courts, and it opt out of coverage. Orlando Prepares to
isn’t clear what the outcome Ms. Corlette said insurers Mark Pulse Massacre
will be. Changes would create could seek further increases as
winners as well as losers. a buffer against uncertainty. Survivors and victims' rela-
Meantime, insurers face new Lower premiums for some tives are marking the second an-
variables as they are deciding people: Should the courts in- niversary of the Pulse nightclub
where to sell coverage and at validate the requirements on shooting.
what rates in 2019. covering people with pre-exist- Ahead of Tuesday's commem-
Health insurers warned of ing conditions, healthy consum- oration of the massacre of 49
disruption. “Removing those ers likely would see cheaper in- people at the gay nightclub,
provisions will result in re- surance, said Larry Levitt, some survivors and victims' rela-
newed uncertainty in the indi- senior vice president at the tives have sued the Orlando Po-
vidual market, create a patch- Henry J. Kaiser Family Founda- lice Department and the owners
work of requirements in the tion. Their premiums would no of the nightclub.
states, cause rates to go even longer be an average market The federal lawsuit against

.
higher for older Americans rate that ensures those with the police and city of Orlando

ly
and sicker patients, and make pre-existing conditions pay the was filed last Thursday, and it
it challenging to introduce same premiums, he said. claims police officers should have
products and rates for 2019,” Young, healthy buyers have acted more aggressively to stop
America’s Health Insurance already seen their options in- on the shooter. The state lawsuit
Plans, a trade group, said in a creased by other moves taken against Pulse owners Barbara
statement. by the Trump administration and Rosario Poma was filed Fri-
Here are four ways the case to allow plans that offer lim- day, and it says the nightclub
could affect health-insurance ited coverage for a lower price. had inadequate security.
us l,

markets: Expensive or hard-to-get The Pomas said in a state-

Options next year: In the coverage for some people: ment that they hadn't seen the
MARK LENNIHAN/ASSOCIATED PRESS
al a
e
short term, some health-insur- People with pre-existing condi- lawsuit and that the focus this
ance markets could see fewer tions could find they are no week should be on healing.
options if companies react to longer able to get coverage, The Orlando Police Depart-
ci on

renewed uncertainty by leav- should insurers return to prac- ment said their officers and
ing the marketplace, said Sa- tices followed before the other law-enforcement officers
brina Corlette, a research pro- health law of charging more to did everything they could to save
fessor at the Georgetown such consumers or refusing to as many lives as possible.
University Health Policy Insti- insure them, Mr. Levitt said. On Tuesday, a service will be
er rs

tute. “Are some insurers going That would vary, as some held at the nightclub, where a
to cry uncle?” she asked. states have laws seeking to The tower 3 World Trade Center, second from right, joins its neighbors One World Trade Center, memorial is in development.
“Maybe there are some compa- protect such consumers. left, and 4 World Trade Center, right, in New York. The center’s latest skyscraper opens on Monday. —Associated Press
m e
m rp
co Fo
n-
no
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A6 | Monday, June 11, 2018 * **** THE WALL STREET JOURNAL.

WORLD NEWS
U.N. Seeks to Avert U.A.E. Attack in Yemen
International aid staff about the impact of a military
operation. But U.S. and Gulf
rush to leave Hodeidah officials on Sunday said the
after a warning of an U.A.E.’s position shifted after
its forces outside the Yemeni
‘imminent’ assault port said they came under at-
tack. That triggered a new
BY DION NISSENBAUM push by the U.A.E. to move on
the port, even though the U.S.
WASHINGTON—The United and U.K. have expressed
Nations launched an urgent strong reservations.
diplomatic effort to head off an The Trump administration
expected United Arab Emirates is now reluctantly getting be-
assault on Yemen’s most impor- hind the U.A.E.’s military
tant port in the coming days, moves, but top U.S. officials
fearing an attack could create a are encouraging their Emirati
humanitarian disaster and de- allies to do all that they can to
rail the most promising push in prevent a humanitarian crisis
years to end the conflict, peo- and to limit the impact on U.N.
ple familiar with the talks said. diplomatic efforts, people fa-
Aid groups and U.N. offi- miliar with the matter said.
cials working in the Red Sea One U.S. official character-

NAJEEB ALMAHBOOBI/EPA/SHUTTERSTOCK
port city of Hodeidah are ized the administration as giv-
scrambling to get their inter- ing the U.A.E. a “blinking yel-
national staff out after British low light” for the operation,
officials warned them an at- not a green or red one.
tack on the city was imminent. “This isn’t our preferred
The U.N. special envoy for scenario,” the official said.
Yemen, Martin Griffiths, trav- “What we are scrambling to
eled to the U.A.E. capital over do is, if there’s an inevitability
the weekend in an effort to to this, we want to ensure that
forestall an attack. Mr. Grif- it causes the least amount of
fiths had secured an agree- damage and make sure things
ment with Houthi rebels who A Yemeni fighter with the Saudi-led coalition on the outskirts of the Houthi-held port city of Hodeidah. are set up on the humanitarian
control Hodeidah to allow the side in the best way we can.”
U.N. to operate the port a charge Tehran rejects. The U.N. officials have said an humanitarian coordinator for Journal on Sunday. “In a very There are growing signs
jointly, the people said. But U.A.E.—Saudi Arabia’s most attack on the port, the gate- Yemen, said a fight for the worst case, we cannot rule out that the U.A.E. could launch
people briefed on the discus- important ally in a military co- way for 80% of commercial port could claim the lives of massive casualties.” the offensive as soon as Tues-
sions said they doubted the alition fighting in Yemen—has and humanitarian supplies for up to 250,000 of Hodeidah’s The U.A.E. had initially day, when the world’s focus is
U.A.E. would accept the offer a significant military presence the country, could be devastat- estimated 400,000 residents. promised not to launch an as- expected to be on Singapore,

.
or delay the planned assault. near the port, where it is sup- ing to a country where mil- “We fear that a prolonged sault on the port without where President Donald

ly
Saudi Arabia has accused porting Yemeni allies in their lions of people are on the attack or siege on Hodeidah backing from the U.S. and the Trump will hold a historic nu-
Iran of using Hodeidah to push to seize Hodeidah from brink of famine. could be catastrophic for civil- U.K., which have both ex- clear summit with North Ko-
smuggle missiles into Yemen— the Houthi fighters. Lise Grande, the U.N.’s top ians,” she told The Wall Street pressed serious concerns rean leader Kim Jong Un.
on
Saudis, Gulf Allies Pledge $2.5 Billion in Jordan Aid
us l,

BY SUHA MA’AYEH the United Arab Emirates and years despite wars in neigh- ers across the region. Jordani- World Bank economist and ed- taxes on products like internet
al a

AND MARGHERITA STANCATI

e
Kuwait in a joint statement boring Syria and Iraq, deadly ans took to the streets to ex- ucation minister who said he subscriptions and the elimina-
early Monday said that money unrest at home and the rise of press anger at high would withdraw the tax bill, tion of subsidies on bread,
AMMAN, Jordan—Saudi Ara- includes a deposit in Jordan’s extremist groups across the unemployment, rising prices helping defuse the crisis. which nearly doubled its price.
ci on

bia and its Gulf allies pledged central bank, funding to sup- Middle East. and plans to broaden the in- The tax bill is part of an Meanwhile, the government
$2.5 billion in support of Jor- port the country’s budget for The mass rallies that rocked come-tax base. economic-overhaul plan backed has struggled to contain rising
dan’s monarchy after mass pro- the next five years, World the Jordanian capital of Am- Jordan’s monarch, King Ab- by the International Monetary unemployment, with an 18%
tests over economic grievances Bank guarantees and financing man and other cities in recent dullah II, responded to popular Fund and aimed at narrowing jobless rate that is the highest
roiled the country, sparking of development projects. weeks offer a striking re- pressure by dismissing the Jordan’s growing public debt. in years.
er rs

fears of another Arab Spring. One of America’s closest minder of the 2011 Arab prime minister last week. He The planned income-tax Jordan, which has few re-
After a meeting in the Saudi Arab allies, Jordan has been Spring uprisings that swept appointed a new premier, changes followed austerity sources of its own, has long
city of Mecca, Saudi Arabia, relatively stable in recent the Middle East, toppling lead- Omar al-Razzaz, a former measures that include new relied on foreign assistance.
m e
m rp

Research Expansion
Opportunities in the
co Fo

Restaurant Industry
n-
no

Power strategic decisions with

the professional research engine
Assessing opportunities and fueling decisions takes
insight and intelligence. With its global news database of
more than 33,000 sources, the Factiva research platform’s
powerful search, filtering, analysis and sharing tools put
the world’s knowledge at your fingertips. Cut through
complexity to the actionable information that powers
strategic decisions.

Learn more at dowjones.com/factiva-research

© 2018 Dow Jones & Co., Inc. All rights reserved. 6DJ6518
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. NY Monday, June 11, 2018 | A6A

CYBERSECURITY SOLUTIONS

FROM THE FRONT

LINES TO THE
BOTTOM LINE
Raytheon leverages decades of cyber expertise with
government, military and intelligence customers to
enable businesses to mount an advanced defense
against increasingly sophisticated cyber threats.

.
ly
on Raytheon.com/cyber
us l,

@RaytheonCyber
al a
e

Raytheon Cyber
ci on
er rs
m e
m rp
co Fo
n-
no

© 2018 Raytheon Company. All rights reserved.

 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A6B | Monday, June 11, 2018 NY THE WALL STREET JOURNAL.

MEDICINE IN THE RAW

.
ly
on
us l,
al a
e
ci on
er rs
m e
m rp
co Fo

HEALTH CARE STARTS

WITH HEALTHY FOOD.
Since 1985, we’ve been cooking
n-

and home-delivering nutritious,

no

individually tailored meals to

people living with serious illness.
Being sick and hungry is a crisis.
You can help.

DONATE,
VOLUNTEER, OR
JUST LEARN MORE
AT GLWD.ORG
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | A7

WORLD NEWS

Oil Buyers Balk at Pressuring Iran

BY BILL SPINDLE
Xi, Putin
Fault U.S.
AND ANANT VIJAY KALA

The Trump administration’s

Back to the Future
Iran's crude production and
exports have recovered after the
At Summit
effort to pressure Iran depends
on countries deeply skeptical
of the U.S. campaign against
nuclear deal was reached.
Million barrels a day,
monthly average
In China
the Islamic Republic, creating BY EVA DOU
resistance that some analysts Sanctions Deal
and officials in those countries imposed reached QINGDAO, China—China’s
say could undercut one critical 4 President Xi Jinping warned
element of the push: curtailing against unilateralism and
Iran’s oil exports. trade protectionism as he,
The renewed U.S. targeting 3 Russian President Vladimir
of Iran’s economy comes after For domestic Putin and Central Asian lead-

ALI MOHAMMADI/BLOOMBERG NEWS

President Donald Trump with- consumption ers used a regional meeting to
drew the U.S. last month from a criticize U.S. policy.
landmark deal in which Iran 2 At the annual summit of the
limited its nuclear program in Shanghai Cooperation Organi-
return for restored business and zation, Messrs. Xi and Putin
financial ties with the rest of For export and others pledged their sup-
1
the world. The other parties to port of the Joint Comprehen-
the accord—including the Euro- sive Plan of Action, the 2015
pean Union and China, which Iranian nuclear deal from
have begun developing exten- The oil tanker Devon astride a support vessel prepares to transport crude oil from Bandar Abbas, Iran. 0 which President Donald Trump
sive dealings with Iran—op- 2010 ’15 ’18 withdrew the U.S.
posed the U.S. withdrawal and tarily. Japan and South Korea, could prove challenging after same approach as the Obama Note: Certain months (Aug., Dec. 2011;
“China is willing to work
are trying to maintain the deal. close allies of the U.S. that last month’s U.S. withdrawal administration: asking buyers June ’12; Aug.-Oct. ’17) were unreported. with Russia and other coun-
The last time the U.S. shared its concerns about Iran’s from the deal, known officially of Iran’s oil to voluntarily Source: Joint Organizations Data Initiative tries to preserve the JCPOA,”
ramped up the pressure on nuclear program, reduced their as the Joint Comprehensive eliminate or at least reduce THE WALL STREET JOURNAL. said Mr. Xi.
Iran, the Obama administra- imports of Iranian oil under Plan of Action, some analysts their purchases, backed by ex- Iran’s President Hassan
tion’s targeting of the Islamic U.S. pressure. India, Iran’s sec- and officials say. plicit threats to punish any ing U.S. sanctions could even- Rouhani, who attended as an
Republic’s oil sales was a criti- ond-biggest buyer, refused to The U.S. may get “some re- companies that do business tually work more closely with observer, praised China and
cal tool in disrupting Iran’s acknowledge U.S. sanctions as ductions, but not a whole lot,” with Iran by denying them ac- the U.S. again. Russia for supporting the deal.
economy and pushing its lead- legitimate, but nonetheless re- said Richard Nephew, a former cess to U.S. markets and finan- But that reluctance among He warned of “destructive
ership toward the agreement duced purchases enough to pla- U.S. State Department official cial institutions. U.S. allies could hamper Mr. consequences” if it falls apart.
to restrict its nuclear program. cate the U.S. who implemented sanctions As the Obama administra- Trump’s efforts with Iran’s Founded in 2001 by China
Iran came to the negotiating Even China, Iran’s best cus- during the Obama administra- tion did, the current adminis- two biggest customers: China and Russia to resolve border
table in 2015 only after its most tomer then and now, bought tion and is now a fellow at Co- tration is giving companies up and India. Indeed, some ob- disputes with their neighbors,
reliable customers had slashed less Iranian oil, even as it de- lumbia University’s Center for to six months to start making servers wonder whether one the SCO also includes India,
their oil purchases across the cried the unilateral U.S. sanc- Global Energy Policy. the reductions voluntarily. But or both might actually buy Pakistan, Kazakhstan, Kyrgyz-
board. European buyers cut tions and vowed to defy them. Trump administration offi- ultimately, said U.S. Treasury more Iranian oil, especially if stan, Tajikistan and Uzbekistan.

.
back aggressively and volun- Re-creating that scenario cials say they are taking the Secretary Steven Mnuchin, it is discounted. Iran, Afghanistan, Mongolia

ly
“We will enforce compliance.” China purchased Iranian oil and Belarus are observers.
Unlike the last time around, at a rate of 671,000 barrels a Messrs. Xi and Putin criti-
Landscape Changed the U.S. oil sanctions and from pulling out of the Iran however, the buyers of Iranian day in April, while India im- cized U.S. trade policy, casting
vowed to defy them, reduced on deal, have announced no plans oil are uniformly hostile to U.S. ported 604,000 barrels a day. themselves as upholders of
After 2012 Boycott purchases of Iranian oil, in part, to cut back on Iranian oil, and goals and likely to delay, resist Together those two countries free trade and multilateralism.
some analysts said, because it privately officials say they hope and outright defy U.S. de- buy 60% of Iran’s total exports, “We have reaffirmed our
Europe, others decline to follow wanted Iran to enter into the to avoid doing so. mands, according to analysts more than double the combined readiness, our willingness, to
U.S. lead in pressuring Tehran nuclear deal. Still, European companies and officials in purchasing purchases of the next two big- go with the rules of trade that
us l,

Now the landscape looks that buy Iranian oil are depen- countries. Even U.S. allies in gest importers, South Korea exist in the current world,”
very different, some analysts dent on U.S. markets and are the EU, significant buyers of and Japan, according to Kpler, Mr. Putin said. “This is a very
al a
e
In 2012, European Union and officials said. expected to curtail purchases Iranian oil, hope to keep Iran an oil-industry consulting firm. important statement.”
countries voluntarily imposed a Although the U.S. threat of under U.S. pressure, though in the nuclear deal without U.S. During the last round, India India was the only SCO mem-
complete boycott on oil from shutting companies out of U.S. far more slowly than last participation—something the refused to recognize the U.S. ber to decline to endorse China’s
ci on

the Islamic Republic. Japan, markets remains potent, the time. Iranians say is only possible if oil sanctions, but it did even- Belt and Road infrastructure ini-
South Korea and India also cut Trump administration so far Companies based in other oil sales continue unfettered. tually cut imports from Iran tiative at the summit. The coun-
back, driven by the combination has no active support or open close U.S. allies, such as Japan To be sure, if Iran, which by about 20%, enough to avoid try’s opposition is based partly
of U.S. pressure and a desire to cooperation from any purchaser and South Korea, are also likely has said it would stick with sanctions from the Obama ad- on a major project that runs
see Iran restrain its nuclear pro- of Iranian oil. to grudgingly accede to the the deal for now, ultimately ministration. The government through territory claimed by
er rs

gram. European governments, Trump administration demands, decides to abandon it and re- has recently reiterated that it both Pakistan and India.
Even China, which decried which tried to dissuade the U.S. some analysts said. sume its nuclear program, doesn’t recognize unilateral —Chunying Zhang
some countries that are resist- U.S. sanctions on Iran. contributed to this article.
m e
m rp
co Fo

My grandfather taught
me how to respect power
equipment. That’s important
now in teaching my kids.
n-
no

©2018 STIHL STNUSAT026-22-140109-4

NICK
DAVIS
/stihlusa
stihlusa.com
HOMEOWNER

2018 FATHER’S DAY

FS 38 BG 50 GIFT GUIDE

TRIMMERS STARTING AT | $129.95 BLOWERS STARTING AT | $139.95 | STIHLusa.com/Fathers-Day |

All prices MSRP. Available at participating dealers.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A8 | Monday, June 11, 2018 * **** THE WALL STREET JOURNAL.

WORLD NEWS

U.S., China in Taiwan Spat Trade Wars of 2018:

CAPITAL ACCOUNT | By Greg Ip

Tensions over de facto plans to move ahead after

embassy compound
reflect Washington’s
June 15 on President Donald
Trump’s threat to impose tar-
iffs on $50 billion of Chinese
imports. And the U.S. has pro-
An Alternate History
turn toward Taipei tested a Chinese military Fights with agreed to shorten the time it
buildup in the South China Sea allies and ri- took to achieve final rulings
BY WILLIAM KAZER that it sees as a challenge to vals for what and to narrow the sweep of
its ability to respond to President Don- its appeals panel’s rulings.

DAVID CHANG/EPA/SHUTTERSTOCK
TAIPEI—Tuesday is a big threats to its interests and ald Trump On the North American
day for China, thanks to the those of its allies and part- calls unfair Free Trade Agreement, Can-
Trump administration—and ners—among them Taiwan. trade practices have yielded ada and Mexico acceded to
not only because the U.S. pres- Though the Taiwan event acrimony and retaliation U.S. demands for higher
ident plans to meet with the was long planned, its coinciding from Canada, Mexico and North American content for
leader of North Korea. with the U.S.-North Korea sum- Europe, while China has yet autos and a minimum
The U.S. will also be opening mit in Singapore adds to China’s to budge. Here’s how events amount to be built by work-
a new compound for its de concerns that the Trump ad- might have unfolded with an ers earning at least $16 an
facto embassy in Taiwan, a self- ministration is seeking to blunt alternate approach: hour.
ruled island that China claims The $240 million home for the American Institute in Taiwan, the Beijing’s clout in the region. Looking back from 2020, Canada agreed to slowly
as its own and has been a long- de facto U.S. embassy, under construction in Taipei The new $240 million home it was a masterful applica- phase out quotas on dairy
standing flashpoint between for the American Institute in tion of strategy and tactics imports in return for the
Washington and Beijing. To of- would violate an understand- sentation. The administration Taiwan, as the de facto em- that enabled Donald Trump U.S.’s doing the same on soft-
ficials in the U.S. and Taiwan, ing that Washington should has told Chinese diplomats bassy is known, is nine years to win the trade war with wood lumber. Mr. Trump
Tuesday’s ribbon-cutting cere- have only unofficial relations that its support for Taiwan is in the making and well behind China. downgraded his Mexican
mony in Taipei symbolizes the with Taiwan. consistent with the past and schedule. Located in a part of The U.S. president began border wall; in return, Mex-
strength of their partnership. “They’re setting new red that it is abiding by agree- Taipei known for its parks and unencumbered by the “en- ico amended asylum laws to
Chinese diplomats have lines,” the official said. ments with Beijing. tech companies, the complex gage with China at any cost” no longer let Central Ameri-
urged the Trump administra- A senior State Department The renewed friction over has been hailed by Kin Moy, ideology of his predecessors can refugees transit through
tion not to dispatch a senior official is attending, another Taiwan comes as tensions be- AIT’s director and the de facto and recognized that success Mexico to enter the U.S.
cabinet secretary to the event, U.S. official said, though the tween Washington and Beijing American ambassador, as a required leverage, which As the U.S. noose tight-
a U.S. official said. Doing so, Trump administration hasn’t are already high. “tangible symbol of U.S.-Tai- came from having allies. ened, China retaliated: U.S.
the diplomats suggested, ruled out higher-level repre- The White House has said it wan friendship.” Mr. Trump’s aides had companies suddenly found
persuaded him the real prob- their applications to expand
lem with China was not the in China being slow-walked,

Leaders set trade deficit but how China’s

mercantilist state capitalism
discriminated against foreign
and U.S. exports of car parts

for talks in products in China and forced

foreign companies to give up
their most precious intellec-
Looking back from
2020, how events
Singapore tual property.
U.S. demands reflected
might have unfolded

.
TERENCE TAN/AGENCE FRANCE-PRESSE/GETTY IMAGES

that: If China didn’t change, differently.

ly
the U.S. would ban Chinese
Continued from Page One companies from acquisitions
Korean War of 1950-53, which of, joint ventures with or
ended in an armistice. “A on substantial investments in and agricultural products
peace treaty comes way down any U.S. technology company, were held up at Chinese
the road,” the official said. ban Chinese entities from ports. The U.S. responded by
Mr. Trump’s framing of the supplying U.S. telecommuni- announcing a “Section 301”
summit as a “get-to-know- cations networks and subject investigation that would hit
us l,

you” meeting marks a come- all Chinese investment to China with escalating tariffs
down in expectations from late strict reciprocity. for its nontariff barriers.
al a
e
April, when he batted away China assumed it could China, boxed in on trade,
the notion that he would ac- undercut the U.S. by playing played its foreign-policy
cept anything less than the its allies off against it. But at card. At its prompting, North
ci on

U.S.’s long-stated goal of com- Singapore Foreign Minister Vivian Balakrishnan welcomed North Korean leader Kim Jong Un Sunday. a pivotal G-7 meeting, Can- Korea broke off negotiations
plete, verifiable and irrevers- ada, the European Union and on admitting international
ible denuclearization. the inter-Korean demilitarized three U.S. citizens who had national profile of Mr. Kim, for Japan said they would join weapons inspectors. In re-
For North Korea, the aim zone, Mr. Kim convened an been detained in North Korea years an international pariah. the U.S. in an unprecedented sponse, the U.S. declared it
has been clear and consistent, emergency meeting of the cen- for more than a year, and at the In recent months, Mr. Kim case at the World Trade Or- would seek to expand missile
er rs

said Thae Yong Ho, Pyong- tral committee of North Korea’s end of the month, blew up the has embarked on a flurry of ganization alleging extensive defenses in Japan and South
yang’s deputy ambassador to ruling party, declaring the com- site of the country’s six nuclear diplomacy. He has meetings and undisclosed domestic Korea, step up naval patrols
London until he defected to pletion of the North’s nuclear tests, in an attempt at good planned with Russian Presi- subsidies had “nullified or off North Korea and ask Viet-
South Korea two years ago. program and vowing to work to- faith whose disarmament value dent Vladimir Putin and Syr- impaired” the benefits nam to host a new U.S. naval
m e

In a memoir published in gether with other nuclear states was questioned by independent ian leader Bashar al-Assad, China’s accession was meant base. China, alarmed, nudged
May, Mr. Thae wrote that to “make positive contributions experts. But North Korea has and on Sunday afternoon, met to bring to its partners. North Korea back to the ne-
Pyongyang’s goal has long to the building of the world free continued to defy sanctions with Singaporean Prime Min- Emmanuel Macron, gotiating table.
m rp

been to be recognized as a de from nuclear weapons.” through ship-to-ship oil trans- ister Lee Hsien Loong. France’s president, had also By 2019, Chinese officials
facto nuclear state. At a meet- It remains unclear how much fers, while conducting hacking “It’s hard to see how a small persuaded the EU, Canada capitulated. They announced
ing of North Korea’s diplomats progress has been made toward operations against South Korea. nation like North Korea could and Japan to match the U.S.’s an end to joint-venture re-
in Pyongyang in 2016, senior narrowing the gap between Recurring tensions on both ever garner this kind of interna- ban on Chinese technology quirements, a phased elimi-
North Korean officials agreed Pyongyang, which prefers a sides prompted Mr. Trump to tional attention had it not been investments and its policy of nation of limits on foreign
co Fo

to complete the country’s nu- phased approach to disarma- temporarily call off his meet- for their nuclear threat,” said strict reciprocity on invest- investment, tariff cuts in
clear program by 2017, fol- ment in exchange for conces- ing with Mr. Kim in May. Lindsey Ford, a former senior ment. To slow China’s efforts critical sectors and a phased-
lowed by a diplomatic detente sions from the U.S. and others, Since then, North Korea has adviser to the U.S. assistant to build a national champion in move to a fully flexible ex-
beginning in 2018. and Washington, which wants a lashed out at South Korean secretary of defense for Asian in aviation at their expense, change rate.
“The 2018 peace initiative rapid surrender of North Ko- conservative politicians as and Pacific security affairs. the G-7 agreed to ban joint As U.S. companies’ sales
by Kim Jong Un is to present rea’s nuclear capabilities. well as journalists who have Ms. Ford, now director of ventures and further out- abroad boomed, they teamed
the world with a fait accom- Mike Pompeo, now U.S. sec- questioned Pyongyang’s mo- political-security affairs for sourcing to China by their up with the federal govern-
pli,” Mr. Thae wrote, adding retary of state, visited Pyong- tives in seeking dialogue, but the Asia Society Policy Insti- own aviation companies. ment to retrain thousands of
that Pyongyang’s leadership yang twice this spring to hash steered clear of any attacks on tute in Washington, added: The united front was pos- former factory workers for
feared that international sanc- out parameters of a possible Mr. Trump’s close advisers. “We have to assume other na- sible because Mr. Trump’s high-paying, high-skilled
tions would result in “consid- deal with Mr. Kim. A senior Even if the summit doesn’t tions could watch what’s hap- aides had persuaded him to jobs. Mr. Trump had, as
erable damage” if left in place. North Korean official hand-de- produce a sweeping denuclear- pening here and draw the con- set aside irritants with U.S. promised, fixed the global
In late April, a week before livered a letter from Mr. Kim ization deal or a more modest clusion that behaving badly allies by striking deals that trading system by relying as
his first meeting with South Ko- to Mr. Trump this month. declaration of amity and good- seems to pay off a whole lot let all sides declare victory. the U.S. always had, on alli-
n-

rean President Moon Jae-in at In May, Mr. Kim turned over will, it will have raised the inter- more than playing nice.” On the WTO, members ance-building.
no

17999
The Incredible $
Father’s Day
SALE! SAVE $20

FIRST CLASS
TRAVEL FOR
YOUR FEET

Can’t Hear
Voices On TV?
Our AccuVoice® Speaker uses hearing aid
technology to make TV dialogue crystal clear.
Can’t hear dialogue on TV? You’re not alone. Today’s TVs
have tiny speakers with weak sound. Our new AccuVoice®
Speaker uses advanced computer algorithms to lift voices
out of background sounds. Dialogue is incredibly clear, even at
low volumes. Only 17" wide, it fits anywhere. Hookup is simple –
one connecting cord. Room-filling home theater sound, with
the clearest voices we’ve heard on any speaker, at any price.

“Great for folks who have trouble hearing the TV.” CNET
Travel tip: comfortable feet make everything
more fun. The Un-Sneaker combines the comfort
of a sneaker with the style of a shoe. Travel well!
Great Sound. Made Simple.

800-291-4349
30-Day Home Trial | Free Shipping | zvox.com
® ZVOX & AccuVoice are registered trademarks of ZVOX Audio.

Free shipping and returns. Order online or call 844.482.4800.

ORDER AT ZVOX.COM
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * * * Monday, June 11, 2018 | A9

WORLD NEWS

Trump’s Art of the Foreign-Policy Deal

An insider’s guide to the president’s tactics for international negotiations
Donald Trump is scheduled lided with a campaign prom-
to meet North Korean leader ise, his vow to move the U.S.
Kim Jong Un on Tuesday in Embassy in Israel from Tel
Singapore after a year of tur- Aviv to Jerusalem, as stipu-
bulent foreign-policy maneu- lated in a 1995 law.
vers built on the U.S. presi- The law allowed presi-
dent’s willingness to take dents to sign a waiver and
outsize risks. postpone the move six
months at a time, something
By Michael C. Bender, every previous president did
Dion Nissenbaum and routinely. In June 2017, Mr.
Michael R. Gordon Trump deferred to his na-
tional-security team, said
He has riled European people familiar with the dis-
leaders by quitting the inter- cussions, signing a waiver as

CLOCKWISE FROM TOP: JESCO DENZEL/BUNDESREGIERUNG/REUTERS; THOMAS PETER/REUTERS; AL DRAGO/BLOOMBERG NEWS

national nuclear deal with his son-in-law, Jared Kush-
Iran, is threatening tariffs ner, mapped out a Middle
and other punitive trade East peace plan.
measures against allies and is Six months later, Mr.
contemplating a summit with Trump met again with the
a perennial U.S. adversary, team. This time, he was in-
Russian President Vladimir tent on keeping his cam-
Putin. After calling Friday for paign promise.
Moscow’s readmission to the Mr. Trump asked Mr.
Group of Eight leading na- Kushner to assess what im-
tions, Mr. Trump stunned al- pact the embassy move
lies by refusing to sign a President Donald Trump stunned allies by refusing to sign a communiqué at the end of a Group of Seven summit Saturday. Below, would have on his diplomatic
communiqué at the end of a left, Mr. Trump with French President Emmanuel Macron, in April; and right, with Chinese President Xi Jinping in November. efforts, said one of the peo-
Group of Seven summit Sat- ple. Mr. Kushner “told the
urday in Canada, castigating president it would add uncer-
the summit host, Canadian tainty to the peace process
Prime Minister Justin and create short-term disrup-
Trudeau, for criticizing U.S. tion,” the person said, but
trade policy. “thought it would be net ben-
“He has unrealistic expec- eficial over the long-term.”
tations,” said one top admin- Others in the room, in-
istration adviser, “and I mean cluding Rex Tillerson, then-
that as a compliment.” secretary of state, urged the
The Wall Street Journal ex- president to delay the move,

.
amined key foreign-policy said people familiar with the

ly
moments, many previously talks. Mr. Trump cut off dis-
undisclosed, from Mr. cussion. “I hear you guys,”
Trump’s 16 months as presi- he told them, according to
dent. Here’s a look at his style on one of the people, “but I
in international dealings: want to do it anyway.”
Mr. Tillerson told the pres-
Method 1: “I Alone Can Fix It” ident: “You’re making a huge
Mr. Trump made this dec- mistake.”
us l,

laration at the 2016 Republi- An hourlong back-and- ing too confrontational with policy but also needed to give to some trading partners. Three months later, he re-
can National Convention. forth erupted as his team ar- North Korea, said current and North Korea room to negoti- When the waiver was up, placed Mr. Tillerson with Mr.
al a
e
Twenty-two months later, on gued they were close to a former administration offi- ate, these people said. they would face 25% tariffs Pompeo.
May 8, 2018, he sat alone at a breakthrough in negotiations cials. The speech prepared on steel, 10% on aluminum.
small wooden desk in the with European allies, these for Mr. Trump to deliver to Method 3: Set Deadlines—Real Canada, Mexico and the EU Method 5: Make It Personal
ci on

White House basement. As people said. “Ah, f—it,” Mr. the United Nations in Sep- or Imagined—to Create Pressure commenced urgent negotia- Mr. Trump sees his per-
television cameras zoomed Trump finally said, according tember sought to isolate Kim No one loves negotiating tions. Emboldened, Mr. sonality as key to securing
in, only a few staffers from to one of the people. “I’ll give Jong Un. The president de- against deadlines more than Trump set them a new May foreign agreements. When
his innermost circle watched you one more extension.” parted from the draft and Mr. Trump. “He never gives 31 deadline. A week before Chinese President Xi Jinping
from afar in the Diplomatic He relented, even though turned it personal, calling Mr. an order without a deadline,” time ran out, Canadian Prime visited Mr. Trump’s Mar-a-
er rs

Room as he dramatically he didn’t see much value in Kim “rocket man” on a “sui- an administration official said. Minister Justin Trudeau pro- Lago resort in April 2017, the
signed a stack of documents continuing talks with Euro- cide mission.” At times, deadlines are a posed meeting with Mr. president shattered weeks of
withdrawing America from pean counterparts or giving Mr. Trump’s team got on result of the president’s hur- Trump and Mexico’s president careful choreography by im-
the seven-nation deal aimed Congress a chance to toughen board with the new rhetoric. riedness. Mr. Trump is so ea- to hash out a final Nafta deal. mediately seeking a one-on-
m e

at constraining Iran’s nuclear the deal, these people said. But as Mike Pompeo, then In a phone call, Mr. Pence told one meeting with Mr. Xi.
program. “His gut instinct was that Central Intelligence Agency Mr. Trudeau he could have “Got a minute?” Mr.
It was a display of show- we were better off out,” said director, prepared for his the meeting in exchange for Trump asked Mr. Xi, said
m rp

manship the president him- Sen. Bob Corker (R., Tenn.), first trip to North Korea over
‘The point is, when agreeing to a sunset clause people familiar with the
self devised, employing chairman of the Senate For- the Easter weekend, the pres- the president says that would force new negotia- meeting. As the two strolled
stagecraft learned on reality eign Relations Committee. ident switched tactics and tions in five years. Mr. the grounds, the Chinese del-
TV, administration officials “He shared that with me on surprised top advisers by
something, believe it,’ Trudeau refused, said people egation repeatedly expressed
said. That solitary act several occasions. In his heart urging restraint, the officials an adviser says. briefed on the call. frustration that the presi-
co Fo

showed Mr. Trump’s vision of of hearts, I think he did not said. John Bolton, Mr. Mr. Trump’s critics question dent had breached protocol.
America as a stand-alone su- want that [negotiation] effort Trump’s national-security ad- the strategy, noting he has yet “They were legitimately los-
perpower prepared to break to be successful.” viser, and Vice President to successfully negotiate a ma- ing their minds,” said one of
with the past, confront “OK,” Mr. Trump said in a Mike Pence were instructed ger to make decisions that jor new trade deal. It also the people.
threats and bend would-be May meeting with aides, ac- to tone down their com- staff create arbitrary dates shows his deadlines aren’t On Saturday, as he pre-
partners to its will. cording to a person familiar ments. for implementation, current bluffs, said Lawrence Kudlow, pared to depart for Singa-
In January, Mr. Trump had with the meeting. “I’m shred- “Mike, you got it?” Mr. and former administration of- director of the president’s eco- pore, Mr. Trump said he
sat in the Oval Office with ding it.” Trump told the vice presi- ficials said. He also likes to nomic council. “The point is, would know “within the first
foreign-policy aides, telling dent, according to one of create deadlines with conse- when the president says some- minute” whether the summit
them he wouldn’t sign an- Method 2: Soften Up the Oppo- these officials. “No f—ing quences to prevent others thing, believe it,” he said. with the North Korean
other extension of the Iran sition and Keep It Off Balance crazy talk from anybody in from running out the clock. leader would be a success.
deal, said people familiar Early in the administra- the administration.” When Mr. Trump’s steel Method 4: Don’t Calm the Wa- “Just my touch, my feel.
with the discussions. He had tion, even top advisers inside The president told Mr. and aluminum tariffs were ters—Roil Them That’s what I do.”
approved one such extension the White House were con- Pompeo the administration first announced in March, he Last year, Mr. Trump —Joshua Zumbrun
n-

six months earlier. cerned the president was be- wasn’t going to change its granted one-month waivers faced a deadline that col- contributed to this article.

G-7 Trade Point of View Mr. Trudeau didn’t address

no

Mr. Trump’s tweets, instead

Among G-7 countries, the share of people with a favorable opinion of issuing a statement support-

Tensions the U.S. has dropped since 2016.

2016 72%
ing the G-7 communiqué the
U.S. renounced. His spokes-
woman noted Saturday that Home Security.
Escalate Italy

Japan
2017 61
72
his comments represented
nothing he hadn’t said before
in public and in private with Done Right.
57 the president.
Continued from Page One 61 Canadian Foreign Minister
practices, adding, “Then Justin U.K. Chrystia Freeland, a close ally Introducing the all new SimpliSafe.
50
acts hurt when called out!” of Mr. Trudeau, said Sunday
German Chancellor Angela 63 comments from the White It’s smaller. Faster. Stronger than ever.
France
Merkel said in a TV interview 46 House attacking him aren’t “a Engineered with a single focus: to protect.
late Sunday that it was “sober- 65
useful or productive way of
ing and somewhat depressing” Canada doing business.” More than easy to use:
43
to learn Mr. Trump wouldn’t en- “We have to stand up for our It’s downright delightful.
dorse the final communiqué. 57 principles, our values in Europe,
One senior European diplo- Germany potentially with Canada or All at prices that are fair and honest.
35
mat said Mr. Trump was in- Japan,” Ms. Merkel said in an in-
Source: Pew Research Center, latest polls of between 905 and 1,505 adults in each country,
volved in parts of the drafting conducted between Feb. 16 and April 17, 2017; margins of error: +/- 3.0 to 5.0 pct. pts.
terview Sunday on ARD public
of the statement and that his THE WALL STREET JOURNAL.
TV, adding that the recent
decision not to endorse it after events don’t mark the end of the
his departure came as a com- cisions on its next moves on Trump had departed. trans-Atlantic partnership. “We
plete surprise. “It was a bit of a Nafta and whether to impose “There’s a special place in do not let ourselves be dragged
cold shower for us, that’s for new tariffs on China, as well as hell for any foreign leader that over the table time and again.”
sure,” the official said. attend a North Atlantic Treaty engages in bad-faith diplomacy Most European officials de-
The end of the G-7 meeting— Organization summit mid-July with President Donald J. Trump clined to comment on Mr.
coupled with Mr. Trump’s news in Brussels. and then tries to stab him in the Trump’s tweets and the rift with
conference Saturday, in which Having Western allies on back on the way out the door,” Mr. Trudeau, noting there was
he said major U.S. trading part- board to address issues such as senior White House trade ad- little alternative to the alliance.
ners had treated the U.S. “like China’s overcapacity in steel viser Peter Navarro said Sunday Some foreign policy experts
the piggy bank that everybody could build pressure on the U.S.’s on Fox. “To my friends in Can- warned that the president
is robbing”—left frayed U.S. ties behalf. But that prospect seemed ada: That was one of the worst risked upending the alliance.
with countries that represent dim as Mr. Trump left the G-7 political miscalculations of a Ca- “He really is a wrecking ball
the postwar Western-led eco- meeting threatening to impose nadian leader in modern Cana- and it’s hard to judge how per-
nomic system. Adding to the tariffs on Canadian-built cars. dian history.” manent the damage is, but it’s
tension was Mr. Trump’s call for The administration made no Lawrence Kudlow, director of certainly dramatic,” said Daniel
Russia to rejoin the G-7, a sug- effort at reconciliation. The the White House National Eco- Serwer, a professor at the Johns
gestion most of America’s tradi- president’s senior economic ad- nomic Council, said on CBS: Hopkins School of Advanced In-
tional allies rejected. visers on Sunday attacked Mr. “Trudeau decided to attack the ternational Studies and a for-
Meanwhile, the Trump ad- Trudeau in personal terms, say- president—that’s the key point.” mer U.S. diplomat.
ministration and the Kremlin ing the Canadian leader had be- In another tweet Sunday —Kim Mackrael in Ottawa, Right now get free shipping t
are weighing a summit between trayed Mr. Trump by criticizing night, the president lamented Andrew Ackerman in
Mr. Trump and Russian Presi- U.S. trade policy and threaten- that “the U.S. pays close to the Washington, Nina Adam in SimpliSfe.com/WS
dent Vladimir Putin. ing retaliatory tariffs soon after entire cost of NATO-protecting Frankfurt and Laurence
In the next six weeks, the the G-7 members agreed on a many of these same countries Norman in Brussels
U.S. also will make crucial de- joint policy statement and Mr. that rip us off on Trade.” contributed to this article.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A10 | Monday, June 11, 2018 * **** THE WALL STREET JOURNAL.

WORLD NEWS

Nicaraguan
Students
Lead Revolt
Grandchildren of tradition. “The awakening of
the Nicaraguan people has no
revolutionaries who turning back.”

JUAN CARLOS FOR THE WALL STREET JOURNAL (2)

fought at side of This granddaughter of a
revolutionary fighter com-
Ortega seek his ouster manded a hilltop campsite
surrounded by sandbag
BY JUAN MONTES trenches overlooking the now-
closed campus.
MANAGUA, Nicaragua—The What began as a protest
children and grandchildren of against tax increases to fund
Nicaraguan revolutionaries Nicaragua’s cash-strapped pen-
who fought alongside Daniel sion system morphed into a na-
Ortega to topple a dictatorship tionwide movement that aims
four decades ago are now to force Mr. Ortega’s ouster.
leading a movement to oust Nicaragua’s government
him from power. says that the protests are a A rebel student leader who goes by the name Comandante Tortuga stood at a barricade last week. Below, a student leader known by
The nation’s largest public plot to overthrow a democrati- the pseudonym Tigrillo showed a gunshot wound he said he received during the university takeover.
university, once a stronghold of cally elected government.
Mr. Ortega’s leftist Sandinista The rebellion caught most report and news on a daily Mr. Ortega’s opponents are
revolution, has become a com- Nicaraguans by surprise. Just noon TV broadcast, critics say demanding that he pass elec-
mand bunker for a student-led two years ago, Mr. Ortega won she effectively runs the coun- toral and constitutional
revolt. The government is loath his third consecutive term as try. Ms. Murillo has also alien- changes to level the political
to dislodge the several hundred president by a landslide. Dur- ated many of Mr. Ortega’s old playing field and guarantee
student rebels holed up at Na- ing his 11 years in power, he Sandinista comrades-in-arms. free, early elections.
tional Autonomous University, has worked closely with the Nicaraguans have grown At the university, protesting
where dozens of barricades country’s private sector to de- tired of corruption allegations students share meals while a
made of paving stone and liver economic growth. He has surrounding the ruling couple. radio mostly plays heavy metal
sheet iron control access. kept Nicaragua largely free of They resent the Ortegas’ au- and techno. Most sleep here be-
More violence could further the toxic levels of violence thoritarianism and say the rul- cause of fear that they could be
inflame a conflict during that afflict the region. ing couple have come to re- kidnapped by police or paramil-
which police and paramilitary But the progress has come semble the Somoza family itary gangs if they return home.

.
groups have killed at least 120 at a high price. Mr. Ortega has dynasty, which ruled Nicara- Gunmen have wounded sev-

ly
people in the past seven largely dismantled the coun- gua for decades. Students say eral students during nighttime
weeks. A student leader said try’s fragile democratic institu- the protests are a demand for attacks. Tigrillo, or Little Ti-
that includes four people at tions. He controls the country’s freedom and democracy. ger, a 22-year-old engineering
the university. congress, its Supreme Court on “The students are playing a student, was wounded last
“Ortega is a murderer and and judiciary as well as its elec- key role. For the first time month when a bullet grazed
he has to go now,” said a 21- toral agencies and most media. since he took power, Ortega able to stay in power. He has lowing a breakdown in talks his left temple.
year old engineering student The rebellion is also fueled has lost the streets,” said said he is unwilling to leave between the government, its “We won’t give up. Who
wearing olive-green fatigues by the deep unpopularity of Humberto Belli, a former edu- office before his five-year opponents and the private sec- will win in the end, a corrupt
us l,

who calls herself Comandante his eccentric wife, Vice Presi- cation minister. term ends in 2021. tor, Mr. Ortega said he would dictator or millions of Nicara-
Tortuga (Commander Turtle), dent Rosario Murillo. Beyond The big question now is After meeting with Nicara- study their proposals to “de- guans? The answer is obvious
al a
e
a moniker in the Sandinista giving the national weather whether Mr. Ortega, 72, will be guan bishops on Thursday fol- mocratize” the country. to me,” he says.

WORLD WATCH
ci on

Pope
AFGHANISTAN

Taliban Announce
IRAQ
Fire at Warehouse Decries
er rs

Their First Cease-Fire

The Taliban on Saturday an-
Harms Vote Recount
A fire broke out in a Baghdad
Focus on
Fossil Fuels
m e

nounced their first cease-fire warehouse storing ballot boxes

since the U.S.-led invasion of Af- and voting equipment, in what
ghanistan in 2001, saying they some lawmakers said was an in-
m rp

would stop military operations tentional act aimed at thwarting BY BRADLEY OLSON
against government forces to a manual recount of results for AND FRANCIS X. ROCCA
mark the Muslim observance of an election dogged by fraud alle-
Eid al-Fitr. gations. Pope Francis warned
RODRIGO ABD/ASSOCIATED PRESS

The proposed temporary lull Interior Ministry spokesman against the “continued search”
co Fo

in fighting comes after Afghan Saad Maan said the fire started for fossil fuels Saturday and
President Ashraf Ghani on in one of four warehouses con- urged a gathering of oil exec-
Thursday announced an eight- taining ballot boxes, documents utives, investors and offi-
day unilateral cease-fire in offen- and equipment belonging to the cials to meet the world’s en-
sive operations against the Tali- Independent Higher Electoral ergy needs while protecting
ban to coincide with the Commission, which organized the the environment and the poor.
conclusion of the Muslim holy DEVASTATION: A mourner in San Juan Alotenango, Guatemala, carried a coffin on Sunday with the vote on May 12. Army vehicles “Civilization requires en-
month of Ramadan and the remains of her best friend, who died after the eruption last week of the Volcán del Fuego. arrived to transport the surviving ergy, but energy use must not
three-day Eid festival that cele- ballot boxes to a safe location as destroy civilization!” he said at
brates its end. ment and his offer in late Febru- president’s peace proposal. Saturday, the Taliban pointedly firefighters worked to extinguish a Vatican climate change con-
The Taliban, Afghanistan’s larg- ary to recognize the Taliban as a The Taliban are fighting in exempted U.S.-led NATO forces the blaze. ference attended by top execu-
est and most potent insurgency, political entity and enter reconcili- more areas of Afghanistan than from their plan to suspend fight- The fire broke out hours after tives including Exxon Mobil
didn’t explain the move. But it ation talks without conditions if at any time since they were ing for Eid, saying they would Iraq’s Supreme Judicial Council ap- Corp. Chief Executive Darren
appeared to be an effort to re- the Islamist movement ended forced from power nearly 17 continue to attack “foreign in- pointed a panel of judges to over- Woods, BP PLC Chief Executive
n-

gain some political initiative after fighting. The Taliban haven’t re- years ago. vaders.” Eid begins June 16. see a manual recount. Bob Dudley and BlackRock Inc.
Mr. Ghani’s cease-fire announce- sponded formally to the Afghan In their announcement on —Craig Nelson —Isabel Coles Chief Executive Laurence Fink.
Environmental protection
has been a signature theme
FROM PAGE ONE
no

for Pope Francis, who has said

he took the name of St. Fran-
cis of Assisi in part because of

Cattle Federation has protested bev-

erages made from potato, pis-
is pushing a bill, the “Dairy
Pride Act,” to enforce rules
“People don’t get angry
when you call your cellphone a
from meat industry represen-
tatives.
the medieval saint’s love for
the natural world.

Ranchers
tachio, duckweed, canary grass that the word “milk” on labels phone,” said Ethan Brown, Adam Sarvana, a House At the conference, co-spon-
seed and other greenery bear- only refer to the output of lac- chief executive of Beyond Democratic staffer who co- sored by the University of Notre
ing the “milk” moniker. tating animals. Meat. founded the vegetarian group, Dame and featuring nearly

Have Beef
Cattlemen and dairy farm- Stakes are high for the Jaime Athos, chief executive said its ranks have swelled in 20 speakers Friday and Satur-
ers are saddling up, and law- roughly $200 billion U.S. meat of the Tofurky Co., which sells the years since. day, the pope said that an esti-
yering up, in response. The market. Sales of alternative imitation tofu-based roasts A meat-replacement lun- mated 1 billion people still lack
U.S. Cattlemen’s Association meat products account for less and patties, objects to any ban cheon hosted by the group last electricity and noted that access
has petitioned the Agriculture than 1% of fresh meat sales in on the word “meat” in labels. year ran out of Tofurky before to energy is an essential re-
Continued from Page One Department to bar plant-based the U.S. but are growing at an Consumers hear tofu, he said, the arrival of the guest source for escaping poverty.
cases and turning the stomach products from bearing labels annual rate of 24.5%, according and “expect it to be bland or speaker, U.S. Rep. Ted Deutch, But he warned that a fail-
of cattle ranchers like Mr. that say “beef” or “meat,” with to Nielsen Total Food View. not meat-like.” a Florida Democrat. ure to reduce the use of fossil
Kendig. He and other old- similar restrictions on meat Sales of plant-based “milk” To get better exposure, Be- Mr. Sarvana said the group fuels would lead to a “spiral of
school protein purveyors con- grown from animal cells. climbed 7% over the past year, yond Meat requires that retail- still battles prejudice, but “the extreme climate changes due
sider the meat section their Missouri this month passed while conventional milk sales ers carry its products in the idea we are dirty hippies is to a catastrophic rise in global
turf, a private reserve of a similar law, and the Good declined by 4%. grocery meat section, rather played out. The premise is be- temperatures, harsher envi-
steaks and chops with one Food Institute, which promotes High-tech upstarts say the than the frozen-foods case— coming more mainstream and ronments and increased levels
thing in common—a butchered meat alternatives, plans a legal proposed labeling rules are a what Mr. Brown called the trendy.” Mr. Sarvana and other of poverty.”
animal carcass. challenge. Dairy farmers, poor defense, pointing out that “penalty box.” meatless Capitol Hill staffers The poor “suffer most from
American cattle ranchers meantime, are lobbying the on a molecular level, plant- Alison Pham, 22, of Bokee- must still contend with the in- the ravages of global warm-
are dismayed to find the meat Food and Drug Administration, based meat products can con- lia, Fla., is a vegan who sees fluence of such entrenched ing,” he said, through water
replacements sold next to the which supervises milk labels. tain the same amino acids, fats the realistic looking Beyond protein powers as the North shortages and extreme weather
real thing. “Right in our beef The milk producers federation and minerals as animal flesh. Meat patties as a way to get American Meat Institute. which in turn drive mass mi-
case,” grumbled Mr. Kendig, her father to try a plant-based The meat trade group’s an- gration, among other ways.
who raises about 300 cattle diet. She reaches for the pack- nual hot dog lunch, an outdoor Pope Francis commended
near Osborne, Kan. age in the same meat-filled event now in its fourth decade, oil-and-gas companies for
High-tech startups are cases she long avoided. draws more than 1,000 law- adopting policies that account
building burgers from plant “I don’t look at anything makers, staffers and meat-in- for “assessment of climate risk”
proteins and compounds that else,” she said. dustry lobbyists. The lunch is and he encouraged the practice
TOM WILLIAMS/CQ ROLL CALL/NEWSCOM/ZUMA PRESS

grill and taste more like the In Washington, D.C., where so popular, officials said, the of environmentally sensitive
real thing than old-fashioned the food label battle is being group maintains an invitation- “green finance” investment
veggie burgers. Other firms are waged, industry groups are only policy and requires a strategies. But he warned that
using cell-culture technology spending tens of thousands of badge for admission. “markets and technology”
to grow animal muscle tissue— dollars on lobbying, according Missing from the menu are wouldn’t be sufficient to stop
otherwise known as meat—in to financial filings. vegetarian hot dogs, said Meat climate change, since our “cur-
stainless steel bioreactor The food fight surfaced in Institute public affairs head rent economic system thrives
tanks, similar to the fermen- Capitol Hill cafeterias in 2012, Janet Riley. “If it’s made of on ever-increasing extraction,
tors used to brew beer. when staffers formed the Con- tofu, it’s a long tubular hot- consumption and waste.”
Even dairy cows are feeling gressional Vegetarian Staff As- dog-like food product,” she He lamented the “continued
the squeeze, with consumer sociation to protest a lack of said, “not a hot dog.” The mid- search for fossil fuel reserves”
milk sales threatened by an plant-based offerings on the summer cookout is open to despite the 2015 Paris Agree-
ocean of substitute “milk” menu. A “Meatless Mondays” non-meat eaters, Ms. Riley ment, which “clearly urged
made from nuts, peas and oats. sign, intended to support their said. “We do serve side salads keeping most fossil fuels un-
The National Milk Producers The American Meat Institute’s annual Hot Dog Lunch in 2016. goal, drew a letter of protest and cookies.” derground.”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * NY Monday, June 11, 2018 | A10A

GREATER NEW YORK

Wrenching Parole Decisions Loom City to Pay
$2 Billion
Two men who killed case for parole to the board parole board isn’t putting
this week, according to a enough emphasis on the se-
police officers decades
ago are seeking release;
spokesman for the state De-
partment of Corrections and
verity of the crime when de-
ciding whether to release an
In Housing
Community Supervision. The inmate.
victims’ families say no Black Liberation Army, an off-
shoot of the Black Panther
“Especially in the case of
murder and murder of a police
Settlement
BY ZOLAN KANNO-YOUNGS Party, claimed responsibility officer,” said Patrick Lynch, BY CORINNE RAMEY
for the killings. president of the Patrolmen’s AND LAURA KUSISTO
Two men convicted of kill- Eddie Matos, 50, convicted Benevolent Association.
ing New York City police offi- in 1990 of murder for pushing “That’s the type of evil you New York City has agreed
cers are scheduled this month Officer Anthony Dwyer, 23, don’t put aside.” to spend more than $2 billion
to appear before a parole down an air shaft of a building Mr. Lynch said he is “ex- over a decade to settle fed-
board that could free them, re- in Times Square after a bur- tremely worried” that Mr. Bot- eral prosecutors’ investiga-
newing a debate over when, glary, is slated for a parole tom and Mr. Matos will be re- tion into health-and-safety is-
and whether, parole should be hearing later in the month. leased. sues at the country’s largest
granted to so-called cop-killers. The parole board is now re- Inmate advocates say the public-housing authority, ac-
In April, Herman Bell, 70 quired to use computer soft- efforts to keep an inmate in cording to a person familiar
years old, was released on pa- ware, called Compas, to gauge prison indefinitely send a mes- with the negotiations.
role after spending four de- the danger an inmate would sage that some people are in- An announcement of the
cades in prison for the murder pose to society if released. In capable of rehabilitation. This settlement is expected as
DIANE BONDAREFF/ASSOCIATED PRESS

of two police officers, Joseph 2017, Gov. Andrew Cuomo re- also runs counter to a national soon as Monday, people fa-
Piagentini, 28, and Waverly quired the board to explain to movement to lower the incar- miliar with the negotiations
Jones, 33. The move prompted a felon the reasons for its de- ceration rate. said. City officials have been
a public backlash, including cision if it went against the Those behind the push to engaged in negotiations with
opinion articles and social-me- findings of that software. In curtail the use of parole for prosecutors from the South-
dia campaigns waged by the addition to the crime commit- people who have killed police ern District of New York, who
city’s largest police union, the ted, the board considers a officers are effectively encour- began investigating lead paint
New York Police Department felon’s level of remorse and aging parole boards to ignore and other issues in New York
and elected officials. behavior in prison, and state- the law, said Steven Zeidman, City Housing Authority build-
Anthony Bottom, 66, con- ments made by victims or a professor at CUNY law and ings several years ago.
victed with Mr. Bell in the 1971 their families. board member of Prisoners’ Diane Piagentini, shown in 2004, with a photo of her husband, Under the terms of the
Harlem murder of those offi- In the wake of Mr. Bell’s re- Legal Services of New York. Officer Joseph Piagentini. One of the men convicted in his 1971 agreement, New York City
cers, is scheduled to make his lease, police officials say the Please turn to page A10B murder has a parole hearing scheduled for this week. will spend $1 billion over the
first four years, in addition to
what it has already promised

.
Revelers Show Their Pride at the National Puerto Rican Day Parade to the agency, said the person

ly
familiar with the negotia-
tions. For each of the follow-
ing years over the 10-year
on term, the city will spend $200
million annually.
During the terms of the
agreement, called a consent
decree, the public-housing au-
us l,

thority will also be overseen

by a federal monitor.
al a
e
A City Hall spokesman de-
clined to comment.
New York’s public-housing
ci on

authority oversees the equiv-

alent of a small city, with
176,000 apartment units
across the five boroughs.
er rs

The public housing

authority now needs
m e

an estimated $25
DAVE COLE/THE WALL STREET JOURNAL

billion in repairs.
m rp

Over the years, the agency

has suffered as federal invest-
co Fo

ment has failed to keep pace

with needed repairs and local
politicians have shied away
from bringing in more private
PUERTO RICO STRONG: Zuleika Torrez of Paterson, N.J., joined the festivities on Sunday as crowds lined Fifth Avenue for the 61st annual celebration in Manhattan. investment. The authority
now needs an estimated $25
billion in repairs, up from $6
billion in 2005.

Suicide-Hotline Number Spreads and Calls Surge

This past winter, some of
the housing authority’s an-
cient boilers gave out, leaving
more than 320,000 people
BY LARA KORTE shown to reduce emotional without heat or hot water.
Bourdain Left Mark ness from out-of-towners, who shake the hand of every dish- distress and suicidal crisis,” In addition, the city’s De-
n-

As the world heard the would cite the show, said Mr. washer. His television programs Mr. Draper said. partment of Investigation
news that chef, writer and On City’s Food Scene Greengrass. But more impor- took a deeper dive into a res- Democratic Sen. Chuck said in a report late last year
television host Anthony Bour- tant, Mr. Bourdain’s praise taurant, ultimately earning the Schumer on Sunday called for that the authority had failed
dain died in an apparent sui- “made us feel appreciated for respect of staff and cooks, Mr. increased federal funding for to conduct lead-paint inspec-
no

cide, the same phone number Gary Greengrass, third-gen- the hard work we do.” Salkin said. suicide-prevention programs, tions as required by federal
flooded the internet. eration owner of Manhattan’s New York’s culinary world “Every restaurant he ever saying that several programs rules and city laws for four
The National Suicide Pre- Barney Greengrass, laid out mourned the death of Mr. Bour- visited still displays the photos proven to directly help people years.
vention Lifeline num- Nova Scotia salmon scrambled dain, a New Yorker, who rock- of him eating there,” he said. and prevent suicide haven’t re- The report said former
ber—1-800-273-8255—was with eggs and onions on a ta- eted to notoriety with his 2000 Restaurateur Jason Wang, ceived funding increases for Housing Authority Chair-
pinned to the bottom of me- ble as a tribute to celebrated book “Kitchen Confidential.” the chief executive of Xi’an Fa- years, even as suicides have woman and Chief Executive
morial Instagram posts, shared television personality, author His enthusiasm and plain mous Foods founded in Queens, been on the rise. Shola Olatoye had submitted
in tweets and ran alongside and chef Anthony Bourdain. speaking as a tastemaker influ- said in an Instagram post that Mr. Schumer noted that a documentation to federal offi-
news obituaries. Mr. Bourdain, who was enced a generation of curious Mr. Bourdain’s visit to his fam- New Yorker dies by suicide ev- cials showing the agency had
Whenever a notable person found dead in France on Friday, eaters, and boosted restaurants ily’s food stall in 2007 “helped ery five hours. complied with federal rules
commits suicide, calls to the featured Mr. Greengrass’s res- and purveyors around the city. bring our family out from living New York City’s own crisis for lead paint, which wasn’t
hotline spike, said Director taurant on an early episode of Allen Salkin, a food writer in one room in Flushing to liv- center—NYC Well—was the case. Ms. Olatoye had said
John Draper. Just days before his Food Network show, “A and author, recalled that Mr. ing the American dream.” launched in October 2016 and she verbally told the federal
Mr. Bourdain’s death, handbag Cook’s Tour.” That stamp of ap- Bourdain was one of those ce- —Melanie Grayce has since handled more than Housing and Urban Develop-
designer Kate Spade also took proval certainly brought in busi- lebrities who remembered to West and Charles Passy 340,000 calls, texts, chats and ment Department officials
her life. Calls jumped 25% in online mobile crisis referrals, about the lead-paint lapses.
the two days after her death, according to a report released She resigned from the agency
compared with the same pe- said, there can be a “collective with mental health and the cide. Calls to the national life- last month by the New York in April.
riod the previous week, Mr. sense of loss that many people news of a death prompts them line are directed to centers City Department of Health. HUD took disciplinary ac-
Draper said. feel.” to seek help. near the caller where they can New York residents seeking tion against the authority
People often feel connected Alan Ross, executive direc- The national hotline is a talk to trained counselors. The support for mental-health con- earlier this spring, when it
to celebrities, whether through tor of Samaritans suicide pre- network of crisis centers that lifeline has a network of more ditions or substance abuse for curbed the city’s ability to
a television program or a vention center in New York, provide over-the-phone coun- than 150 local crisis centers. themselves or their loved ones spend money on major re-
product they purchased. When said that in many cases, indi- seling to individuals who “The research is really clear can call 1-888-NYC-WELL or pairs to its public housing
a celebrity dies, Mr. Draper viduals are already struggling might be contemplating sui- that these calls have been text “WELL” to 65173. stock.

INDIAN LIMITED EDITION

TRIBUTE TO BURT MUNRO
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A10B | Monday, June 11, 2018 NY * *** THE WALL STREET JOURNAL.

GREATER NEW YORK

Dockless
Bike Share
Next for Office Parks, a Clubhouse
BY KEIKO MORRIS

Will Get Owners of suburban office

parks have resorted to food

Trial Run trucks, yoga studios, cafes with

baristas and meeting spaces re-
sembling hotel lobbies in their
BY PAUL BERGER campaigns to remake the image
of the sterile suburban campus.
New York City plans to test Now another feature is
dockless bike share systems in emerging in the competition: a
four boroughs this summer, stand-alone
and companies are lining up PROPERTY building de-
for the chance to get in on the voted entirely to
action. amenities,
Dockless systems will be which serves as an office-park
tried out in Coney Island, in clubhouse of sorts.
Brooklyn, and the Rockaways, The Warren Corporate Cen-
in Queens, in the first weeks ter, an 800,000-square-foot of-
of July. Two more pilots are fice park in Warren, N.J.,
expected to launch by the end owned by a venture of Ruben-
of the month, one near Ford- stein Partners LP and Vision
ham University in the Bronx Real Estate Partners, will soon
and the other on Staten Is- have a central hangout. The
land’s North Shore. venture is investing about $12
RENEE ROMAN

Among the biggest concerns million to build a 19,000-

for city officials is how the square-foot structure a short
dockless bikes will affect the walk from the office park’s five
cityscape. Some cities with buildings that will house a
dockless bike shares such as landscaped roof deck, a full Rooftop yoga at Kearny Point, a redevelopment in Kearny, N.J. Suburban office parks are loading up on amenities to attract tenants.
Dallas have received complaints basketball court, fitness center,
that bikes are dumped on side- dining, conference center and Bridgewater, N.J., sold two par- paying off for some landlords.
walks and clutter city streets. meeting spaces. Less Desk Space, been improving the cafeterias cels to be developed into a For example, Rubenstein got
“If you look around the “It’s all based around the that were parts of the original 130,000-square-foot Life Time the idea of a stand-alone ame-
world you will see mixed re- hospitality experience brought More Work Options office-park designs and add- Inc. fitness center and an AC nity building from its redevel-
sults of how dockless programs to the office world,” said Ste- ing food trucks, restaurants, Hotel by Marriott. opment project of a three-
have been working,” said Mi- phen Card, a principal of Phila- bars and coffee shops on cam- “We have seen the future, building campus in Whippany,
chelle Craven, an assistant delphia-based Rubenstein, a Landlords are redesigning pus to provide accessible and if we want to keep our N.J.
commissioner at New York real-estate investment-manage- office spaces to reflect the lat- choices that extend beyond the buildings 100% leased, we need The campus was
City’s transportation depart- ment firm. est concepts in workplace effi- workday. to bring forth amenities,” said only 50% leased in 2012 when a
ment who oversees the bike The central amenity-laden ciency. The basic office gym—with Jeffrey Schotz, executive vice venture of Rubenstein and Vi-
share program. hangout is among the latest Employees are getting less a handful of treadmills and president of leasing and mar- sion, an investment-, develop-

.
Twelve firms expressed in- makeover tools suburban office desk space of their own but weight equipment—also is go- keting at SJP Properties. ment- and asset-management

ly
terest in applying for the pilot. landlords have used as they more options of places to ing the way of the slide rule. At Kearny Point, N.J., de- firm, purchased the campus for
Only about half showed up for equip their properties with fea- work, with different furniture Top-tier office buildings now veloper Hugo Neu Corp. is ren- $25 million. The venture in-
interviews at the Brooklyn tures designed to appeal to a and décor. offer professional fitness-cen- ovating an early 20th-century creased its occupancy partly by
Navy Yard on June 1, according younger workforce. Investing in on Food and drink also are ter operations with classes brick building into a public adding an amenity building
to people who attended, in these major overhauls has be- very important. Landlords have such as yoga or spinning. food hall with a bar and brew- that included a fitness center,
which each company demon- come a prerequisite for leasing ery on a 130-acre campus, cafe and conference center.
strated their technology and in suburban office markets that where the company has been Last year, the venture sold
answered questions from trans- have been struggling to com- But suburban properties are attract and retain the best and converting historic shipyard the campus to Barclays PLC, for
us l,

portation department officials. pete with trendier downtown still getting blown away by brightest, you need to be in the buildings into office and light- $69 million, Rubenstein’s Mr.
Among the companies com- markets. downtown buildings. The over- building that helps you do industrial space. The company Card said.
al a
e
peting in New York are Ofo and The vacancy rate is above all office vacancy rate for Man- that,” said Jeremy Neuer, exec- is adding walking paths and an The Rubenstein and Vision
Mobike, two major Chinese 20% in many suburban office hattan at the end of the first utive vice president at CBRE amphitheater for events and joint venture is creating a simi-
firms that offer basic bikes that markets in New Jersey and quarter was 8.5%, according to Group Inc., a real-estate-ser- concerts, among other features. lar type of amenity building at
ci on

have a locking mechanism on Westchester County, N.Y., ac- real-estate-services firm JLL. vices firm. “The landlords who “That’s what progressive Latitude, a Parsippany, N.J., of-
the wheel. cording to brokers. That rate Meanwhile New Jersey’s over- are winning are providing companies want because that is fice campus. This time, how-
Other competitors include has improved slightly in recent all office vacancy rate was unique experiences around ten- what their talent is going to ever, the 2,500 square-foot
Pace, Lime, Motivate, the par- years as developers have con- 23.9%, JLL said. ants. If they’re not investing, want as more and more people amenity center will join two of-
ent company behind Citi Bike, verted obsolete office proper- Suburban landlords have re- they’re going to lose.” live in cities.” said Nick Shears, fice buildings.
er rs

and Jump, which was recently ties to other uses, such as sponded with features designed SJP Properties, the owner of director of leasing and market- “In New Jersey, we like to
acquired by Uber Technologies apartment buildings or even to create an urban-style envi- the Somerset Corporate Center, ing at Hugo Neu. play off of the flight-to-quality
Inc. warehouses. ronment. “If you are looking to a five-building campus in Investing in amenities is trend,” Mr. Card said.
m e
m rp
co Fo
n-

ASSOCIATED PRESS
no

Herman Bell, right, in 1973. He killed a police officer in 1971 and was released on parole this past April.

Two Killers I do?”

An attorney for Mr. Matos
ane Piagentini.
Edward Dwyer, the father

Of Officers
couldn’t be reached for com- of Officer Dwyer, said his
ment. killer, Mr. Matos, shouldn’t be
Mayor Bill de Blasio, a freed. “An eye for an eye,” he

Seek Parole
Democrat who campaigned on said.
police reform, and Commis- Robert Boyle, Mr. Bell’s at-
sioner James O’Neill said this torney, said his 70-year-old
month they believe both Mr. client satisfied the criteria for
Continued from page A10A Matos and Mr. Bottom should his release and took responsi-
Mr. Zeidman called such a po- serve their full life sentences. bility for the crime on his
sition “a dangerous [one] to “That crime was an outright eighth and final appearance
take,” for law enforcement, assassination,” Mr. O’Neill before the board.
which is required to uphold said of Mr. Bottom’s case. “Everyone is entitled to
the law. Officers Piagentini and fair consideration when they
Sentencing laws have Jones were ambushed and go before the parole board,”
changed since Messrs. Matos shot multiple times by Mr. Boyle said.
and Bottoms were convicted. Messrs. Bell and Bottom as Barbara Hanson-Treen,
The most serious penalty for who served on the parole
the murder of a police officer board from 1984 to 1996,
used to be 25 years to life in agrees. She said the backlash
prison with the possibility of
The attorney for one after Mr. Bell’s release threat-
parole. That changed in 2005 released inmate said ens the independence of the
when the state passed a law board and its process.
allowing judges to issue a life
he took responsibility Ms. Hanson-Treen under-
sentence without parole. for his crime. stands the pressure of consid-
Mr. Lynch said Messrs. Ma- ering a convicted cop-killer
tos and Bottoms “won the pa- for parole. She said she over-
role lottery by chance.” saw the hearing for Shavod
In a statement, Mr. Bottom, they returned to their patrol Jones, who shot and para-
who now goes by Jalil Mun- car after answering a 911 call. lyzed NYPD Officer Steven
taqim, said in the 47 years he Before Mr. Bell was re- McDonald in 1986.
has been in prison, he has leased, the NYPD issued Even though Officer
done “everything necessary, statements through Twitter McDonald, who died last year,
required, and beyond to be saying Mr. Bell wasn’t re- publicly forgave Mr. Jones,
granted release on parole.” morseful. Mr. Lynch stood Ms. Hanson-Treen denied him
“But the Board continues with the families of the dead parole, saying he would con-
to deny me based on the na- officers, sharply criticizing tinue to benefit from the pro-
ture of the crime,” he said. “If the board. gramming in prison.
not for the PBA lobbying the The widow of Officer “It could’ve been Mrs.
Board of Parole to disregard Piagentini said someone who Smith or the milkman. It
the law by denying me parole, kills an officer isn’t deserving wasn’t because of the value of
I would have been released a of redemption. “This is a the victim,” she said. “He was
long time ago. What else can crime of all crimes,” said Di- not ready to come out.”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * * Monday, June 11, 2018 | A11

LIFE&ARTS

CLOCKWISE FROM TOP: THEO WARGO/GETTY IMAGES; LUCAS JACKSON/REUTERS (2)

The cast of ‘Carousel’ perform onstage during Sunday’s Tony Awards in New York. The musical was nominated for 11 awards, with wins for choreography and actress Lindsay Mendez.

TONY AWARDS

.
‘Band’s Visit,’ ‘Potter’ Win Big
ly
on
‘Angels in America,’ ‘Three Tall Women’ win for acting performances
us l,

BY CHARLES PASSY
al a
e

“The Band’s Visit,” the tale of

ci on

an Egyptian orchestra’s accidental

foray into an Israeli town, won 10
Tony Awards on Sunday, including
best musical, while “Harry Potter
and the Cursed Child” took best
er rs

play and swept the technical cate-

gories.
The critically praised “The
Band’s Visit” wasn’t as high-profile
m e

as its best-musical competition,

“Mean Girls,” “Frozen” and
“SpongeBob SquarePants,” but it
m rp

scored upsets such as best book of

a musical, beating “Mean Girls”
creator Tina Fey.
“Music gives people hope and
makes borders disappear,” pro-
co Fo

ducer Orin Wolf said in an accep-

tance speech. “Our show offers a Katrina Lenk and Tony Shalhoub, left,
message of unity in a world that both won acting Tonys for their
more and more seems bent on am- performances in ‘The Band’s Visit’;
plifying our differences.” above, ‘Harry Potter’ actress Noma
“Harry Potter,” the two-part Dumezweni and writer Jack Thorne
drama drawn from author J.K. onstage after the production won for
Rowling’s world of wizardry, won best play.
six Tonys, including best direction
as well as scenic, costume, lighting ing best musical nominees “Mean “Angels in America” won best Broadway,” which has played to son, 82 years old, has won praise
and sound design. Girls,” “Frozen” and “SpongeBob revival of a play. Andrew Garfield sold-out crowds since it opened in for her take on the Edward Albee
Broadway, more than ever, has SquarePants.” won best lead actor in a play for October, wasn’t among the nomi- play’s matriarch, with Wall Street
become a way for artists to extend “All four of tonight’s best musi- his performance as Prior Walter, a nees. Yet Mr. Springsteen received a Journal theater critic Terry Tea-
their brands, and this year talents cal nominees are based on movies, young gay man with AIDS. Nathan special Tony award for his show, and chout calling it “an acrid, wised-up
n-

ranging from Ms. Rowling to rock but only one of these movies paid Lane, who portrays real-life attor- he returned the favor with a perfor- performance that is as pointed as
star Bruce Springsteen to comedians for my boat,” Ms. Fey said onstage ney Roy Cohn, won best featured mance during the awards show. you’d expect from so celebrated an
Ms. Fey and Amy Schumer found to laughs from the audience at Ra- actor, his third Tony in a decades- Laurie Metcalf won best fea- actor.”
their way to the Great White Way. dio City Music Hall. long theater career. tured actress in a play for her role It was her first win after four
no

Broadway reaped the benefits at the “Mean Girls” and “SpongeBob” Mr. Garfield told reporters after in “Three Tall Women.” Ms. Met- previous nominations. Asked after
box office, reaching a record $1.7 each received 12 Tony nomina- his win that “Angels in America” calf, an Oscar nominee for “Lady exiting the stage how it felt, “I was
billion in ticket sales for the 53- tions, the most of any shows this was “for anyone who’s felt like Bird,” won a Tony last year as tempted to say ‘It’s taken you long
week season, which ended May 27. year, but they were largely shut they don’t belong” and said that well, for “A Doll’s House, Part 2.” enough,’ but I thought it was too
The season was dominated by out. “SpongeBob” won for its sce- working on it “changed me—I Glenda Jackson, one of the rude,” she said.
productions based on popular nic design, while “Mean Girls” don’t know how yet, but it has.” other stars of “Three Tall Women,” —Kathryn Lurie contributed
movies or television shows, includ- went home empty-handed. Mr. Springsteen’s “Springsteen on won best lead actress. Ms. Jack- to this article.

WHAT’S YOUR WORKOUT? | By Jen Murphy

THE NONSTOP CHALLENGE OF WATER POLO

WORKING TO KEEP YOUR HEAD ing 7 feet in depth.
above water while opponents jump Touching the bottom of the pool
on top of you will definitely get isn’t allowed and only the goalie
you fit if you do it often enough. can use two hands. Teams of seven
Water polo fanatic Chris Judge has play four-to-eight-minute quarters.
been doing it for 50 years. “I always tell people you have to
He takes after his father, Francis be in shape just to come to prac-
Judge, a water polo player who tice,” Mr. Judge says.
competed in the 1952 Olympic tri- Players use an eggbeater kick,
als. “As a small kid I remember be- where their legs alternate breast-
ing tossed around like a ball at my stroke kicks, to propel their hips
dad’s water polo team practices,” above the water to block and
he says. throw shots.
Chris Judge followed his father’s “At the same time, a 200-pound
path into a sport he compares to guy is grabbing you by the throat,”
REBECCA GREENFIELD FOR THE WALL STREET JOURNAL

rugby in a pool. A four-year starter Mr. Judge says. At 6-feet-2 and 235
and later coach at Fordham Univer- pounds, he says his size helps him
sity in the Bronx, N.Y., he went on in the pool.
to play with the U.S. national water He introduced his four children,
polo team and was an alternate for now 20 to 29, to water polo. His
the 1984 Olympic team. two daughters didn’t like getting
Now 59, Mr. Judge, a certified fi- elbowed in the pool, he says, but
nancial planner based in Ardsley, his two sons embraced the sport.
N.Y., shows no signs of hanging up His youngest attended college in
his Speedo, despite his sport’s Santa Barbara, Calif., which led to
physicality. Mr. Judge joining the Santa Bar-
Water polo is one of the oldest bara Masters team. For the past
Olympic team sports and one of five years he’s competed with them
the most physically taxing. Players around the globe.
Chris Judge takes a shot in a pool in Pelham Manor, N.Y. At 59, he still spends hours a week on the sport. must tread water in a pool averag- Please turn to page A12
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A12 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

LIFE & ARTS

MARTIN O’NEILL
.
ly
on WELLNESS

Hospitals Address Doctor Burnout

us l,
al a
e
ci on

to hire one this year. duties. A leading cause of physi- tive work. This comes after a day tors could meet, unwind and dis-
BY LUCETTE LAGNADO
In a discussion paper published cian distress is electronic record- seeing patients, preparing dinner cuss cases, have largely vanished.
last summer, the National Acad- keeping, which requires doctors to for her family and making sure her While two new Stanford hospitals
DOCTORS WHO FEEL stressed or emy of Medicine noted that more do clerical and billing work, and three children go to bed. Late at have them, Dr. Shanafelt, associate
burned out are getting some ur- than half of U.S. physicians exhib- cuts into time with patients. It has night, she reviews patient notes dean at the Stanford School of Med-
er rs

gent care. ited signs of burnout, a syndrome also increased “Pajama Time,” the and test results. “I am not only icine, would like gathering places
To address what experts view marked by “a high degree of emo- hours doctors devote at home to typing, I am rethinking the whole for doctors throughout his institu-
as a national epidemic of physician tional exhaustion...and a low sense electronic charting that wasn’t fin- case,” says Dr. Peccoralo, who re- tion and at other hospitals “to help
discontent, hospitals are expand- of personal accomplishment.” The ished during the day, Dr. Ripp cently became Dr. Ripp’s deputy as drive community.”
m e

ing their c-suites with the new po- paper cited links between doctors’ says. One solution associate dean for “I am pretty sure everyone has
sition of chief wellness officer. disaffection and the care they gave is having doctors faculty well-being a room where they could offer ba-
In recent years hospitals have patients, with studies suggesting dictate notes di-
System leaves and resilience. gels and coffee” for parts of the
m rp

tried a variety of wellness pro- “a significant effect on quality and rectly into elec- Relieving doc- day, he says. At his initiative, some
grams, but there is a sense this risk of malpractice suits.” tronic records. patients vulnerable tors’ clerical bur- departments have begun gathering
approach didn’t treat the causes of
physician angst and alienation.
To Antonia New, a vice chair of
psychiatry at Mount Sinai, the pre-
A related prob-
lem is managing
to errors, one dens also is a pri-
ority forStanford’s
small groups of doctors for dinner
at local restaurants. Stanford pays
“Telling doctors to eat granola, occupation with wellness seems ill- electronic in-bas- physician says. Dr. Shanafelt. Hir- for the food—but not alcohol—at
co Fo

do yoga and be more resilient isn’t placed. “We all make a mistake by kets filled with pa- ing staff to sit in the meals, where participants are
going to address this problem,” referring to wellness and not call it tient demands. “A on appointments encouraged to discuss topics such
says Tait Shanafelt, who was ap- what it is: Mental health,” Dr. New typical physician and take notes is as “life as a physician.”
pointed chief wellness officer of says. Physicians are exhibiting seri- nowadays gets bombarded with cost-effective, he says, because it In January, David Rogers, a pe-
Stanford Health Care a year ago. ous malaise, she adds, pointing to a tasks,” Dr. Ripp says. frees up doctors to see more pa- diatric surgeon, became chief well-
Instead, hospitals need to reform a spate of young physician trainee He envisions a team approach tients. ness officer of UAB Medicine in
system that has become debilitat- suicides in New York. What is cru- where doctors focus on clinical Yet even that may not be enough Birmingham, Ala. The facility has a
ing to physicians—and left pa- cial, Dr. New says, is making sure care and leave some tasks to oth- to dispel burnout. Physicians have physician dining room, Dr. Rogers
tients vulnerable to medical errors despairing doctors have access to ers. By shaving administrative lost a sense of community and are says, but “doctors say, ‘We don’t
and even malpractice, Dr. treatment and therapy. minutes here and there, Dr. Ripp feeling more alone than ever, he have time to have lunch.’ ”
Shanafelt says. Jonathan Ripp, a Mount Sinai aims to reduce nightly electronic says: “We are interacting with our He lets doctors track their angst
Other major medical centers, in- internist, became chief wellness work by an hour. patients less. We are interacting through a “well-being index” in-
cluding Mount Sinai Health System officer a couple of months ago, Lauren Peccoralo, a primary- with our colleagues less. We are be- vented by the Mayo Clinic. It has a
in New York and UAB Medicine in and says that stress and burnout care physician at Sinai, says every coming more isolated.” short quiz with questions such as
n-

Birmingham, Ala., have appointed affect senior physicians as well as night she spends between one As an example of frayed bonds, “During the past month, have you
chief wellness officers. Johns Hop- residents and medical students. hour and 90 minutes filling in pa- Dr. Shanafelt points out that hospi- worried that your work is harden-
kins Medicine in Baltimore hopes One priority is reducing clerical tient charts or doing administra- tals’ physician lounges, where doc- ing you emotionally?”
no

Nonstop burn in Budapest. They were in Irvine,

Calif., this weekend for the 2018
your hips high in the water.
Three mornings a week Mr.

of water polo
Masters National Championships, Judge works out in his basement
where Mr. Judge’s team placed gym. He warms up on the station-
second. ary bike and uses stretch cords

as a workout
and 2.5-pound dumbbells to work
The Workout stabilizing muscles in his upper
Three afternoons a week Mr. body.
Judge uses his lunch break to Lower-body work might include
swim for an hour at a community leg lifts using resistance bands,
Continued from page A11 pool in White Plains, N.Y., going step-ups holding 15-pound dumb-
“We usually look for tourna- between 2,500 and 3,000 yards. He bells and squats performed with a
ments in places that our wives is chairman of the New York Ath- stability ball between his back and
would like to go on vacation,” he letic Club water polo program and the wall. His core circuit includes
says. plays at the club’s locations two plank and crunch variations.
Last year, the team beat Ger- nights a week. Mr. Judge has practiced yoga on
many in overtime to win the 55+ “Most players are in their 20s and off since college and incorpo-
FINA World Masters Championship and 30s, but I do my best to keep rates poses into a stretching rou-
up,” he says. “I tine. Why Water Polo Players Work Harder
get there early, Mr. Judge had hip-replacement
because it takes surgery in March 2016. He took up Water polo may be relatively ob- require a sudden burst of intense
me a bit longer juggling while recovering and still scure. Perhaps that’s because so power, with a break between plays.
than the young occasionally incorporates it into few athletes have what it takes to In water polo, when you shoot or
guys to warm his home routine. His children play the exhausting game. defend a shot you put out an in-
up.” bought him juggling clubs—he will According to a 2016 study pub- tense burst of power. Even in down
Mr. Judge will toss them around while balancing lished in the Journal of Human Ki- moments you continuously move by
rotate through on his stability ball with his feet netics, more than 58% of match treading water, he says. “Half of the
positions during just off the ground. “It’s a great time is played with a heart rate time is spent vertical, which utilizes
scrimmages, way to work the core and eye-hand greater than 85% of maximum ca- different muscle patterns than
REBECCA GREENFIELD FOR THE WALL STREET JOURNAL

playing every- coordination without stressing my pacity. The sport works big and when swimming.”
thing from hip,” he says. small muscles, including the gluteus Dr. Rao estimates that a 150-
goalie to center medius and maximus and the hip pound person burns 50 calories
forward. The Diet adductors, says Naresh Rao, the treading water for 15 minutes, while
In the fall, he Mr. Judge sticks ripe fruit in the New York-based head physician for a water polo player burns 150 calo-
coaches the U.S. freezer to add to breakfast the U.S. men’s water polo team. ries playing for that same amount
Military Acad- smoothies, mixed with juice and Sports like football or baseball of time.
emy coed water yogurt. He also has a bowl of ce-
polo club in real with 2% milk. Wheaties, Rice
West Point, N.Y. Krispies and Kellogg’s Raisin Bran cutlet sandwich. He and his wife The Gear & Cost
He will often are favorites. trade off cooking dinner. Water polo is a minimalist sport.
hop in with the On the weekends he has eggs, “I’m famous for my chicken and “I have a lot of Speedos,” Mr.
players to do home fries and occasionally a few pasta and my wife is great at fish,” Judge jokes. He estimates that he
drills that work strips of bacon. He picks up lunch he says. On Sunday evenings he spent $400 on his home gym
Mr. Judge gets stretched out by Naresh Rao, the head on ball handling at a deli, usually a turkey and likes to splurge on steak and pota- equipment. He pays about $550 a
physician for the U.S. men’s water polo team. and keeping cheese sandwich or grilled chicken toes. year to use his community pool.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | A13

LIFE & ARTS

ART REVIEW

The Very Model

Of a Lost
Masterpiece
After 200 years in Italy, the life-size plaster prototype of
Canova’s sole American commission is visiting the U.S.

“Canova’s George Washing- primary challenge

BY BARRYMORE
ton.” Organized by Xavier F. was to achieve a
LAURENCE SCHERER
Salomon, the Frick’s chief faithful likeness
curator, with Mario Guderzo, years after Wash-
New York the Gypsotheca e Museo An- ington’s death. Clockwise from left: Antonio
ANTONIO CANOVA tonio Canova’s director, this Painted portraits Canova’s modello of ‘George
(1757-1822) is widely re- admirable show brings to- were suggested Washington’ (1818); Canova’s
garded as the foremost Neo- gether for the first time all models, but Canova primo pensiero of ‘George
classical sculptor of his day. the surviving objects and preferred to use Washington’ (1817); Jean-
His marble statues of myth- sketches related to the mon- the bust modeled Antoine Houdon’s ‘Life Mask of
ological heroes were cele- ument’s creation, and offers from life by his George Washington’ (1785)
brated for the perfection of visitors the rare opportunity contemporary,
their poised athleticism, his to examine in considerable Giuseppe Ceracchi
female and amatory groups depth the exhaustive cre- (1751-1801), who
admired for their refined ative process employed by had visited the U.S.
eroticism and emotional Canova and by academic twice. Ceracchi’s
tenderness. Moreover, as sculptors through the early terra-cotta original
finished by his own hand, 20th century—including his (c.1791-92) and a
the carved surfaces of his first rough bozzetto (model) contemporaneous
nudes achieved an illusion capturing his initial ideas marble version at-
of luscious suppleness that in a small lump of terra tributed to him are
set the standard for sculp- cotta. Canova’s deftly mod- in the show, to-
tural finish through the ad- eled nude version of the gether with the riv-

.
vent of Modernism. statue represents an inter- etingly animate

ly
Apart from Greco-Roman mediate stage that he fa- Washington life mask taken ate for a poet than for the Though this exhibition
subjects, Canova sculpted vored even when composing by Houdon when he visited military leader and farmer. stands persuasively on its
papal and civic monuments a costume piece. Mount Vernon in 1785 in The finished plaster is stud- own, two concurrent shows
and private portraits of Eu- preparation for his own
on ded with tiny nail heads, or in New York lend further
ropean contemporaries. But statue. If Ceracchi’s busts “points,” used by Canova depth. “Canova e la Danza”
his sole American commis- are as accurate as Jefferson and his studio assistants as at the Italian Cultural Insti-
sion is among his least
An uneasy balance declared them, Washington guides in the mechanical tute through June 28 fea-
known works: the seated between the demands at 60 had the massive neck “pointing” process of trans- tures 16 of the sculptor’s el- historical episode in Amer-
us l,

portrait of George Washing- of an Olympic weight lifter. ferring that completed de- egant tempera paintings of ica’s all-too-brief connection
ton in ancient Roman armor
of portraiture and Exhibited alone in the sign to the marble block for dance subjects. Through with Italy’s greatest Neo-
al a

allegory
e
commissioned in 1816 by Frick Oval Room to replicate carving. Sept. 23, “Antonio Canova classical sculptor.
the General Assembly of the original effect of the The complex history of by Fabio Zonta,” at the Ital-
North Carolina—least state house rotunda, the work is clearly summa- ian Consulate, showcases Canova’s George Washing-
ci on

known because 10 years af- Canova’s serene monument rized in the Frick show and contemporary photography ton
ter it was unveiled to tre- The chief precedent in strikes an uneasy balance placed in aesthetic context of the sculptures at the The Frick Collection, through
mendous praise in the Ra- America for Canova’s monu- between the conflicting de- in the masterly catalog es- Canova museum in Passa- Sept. 23
leigh State Capitol in 1821, ment was Jean-Antoine mands of portraiture and al- says by Mr. Salomon, Mr. gno. Whether or not you
it perished in a conflagra- Houdon’s statue of Washing- legory. Wearing Roman ar- Guderzo, and Guido Bel- catch all three shows, this Mr. Scherer writes about
er rs

tion that destroyed the ton in uniform, installed in mor beneath a gracefully tramini, director of the Pal- concatenation brings into music and the fine arts for
building. the State House in Rich- draped cloak, Washington ladio Museum, Vicenza. welcome focus the unique the Journal.
However, the life-size mond, Va., in 1796. Thomas sits, poised in thought while
plaster modello of the statue Jefferson, who had been in- inscribing on a tablet the
m e

is preserved in the Gypsoth- strumental in selecting Hou- opening of his farewell ad-
eca e Museo Antonio don for that work, recom- dress to the nation, in Ital-
Canova, the museum of his mended Canova to North ian. The likeness is trans-
m rp

work he established in Pos- Carolina. Washington, the formed by curly Roman-

sagno, Italy, his birthplace. war hero and head of state style hair, far removed from
Embodying the final stage of who had relinquished his the 18th-century coif that
composition prior to carving power to resume private imparts the iconic Sphinx-
in marble, this full-scale life, was a novelty to Euro- like appearance to the
co Fo

plaster is not a cast or copy peans ruled by hereditary Frick’s Gilbert Stuart por-
(unlike the 1909 plaster princes who reigned until trait hanging nearby, not to
copy now in the North Caro- death. He was likened to the mention the version on the
lina Museum of History or hero of the ancient Roman dollar bill. Viewed from the
the 20th-century marble republic, Lucius Quinctius side, Washington’s Roman
copy installed in the North Cincinnatus, who ruled as nose seems larger than in
Carolina State House in dictator during a crisis and the frontal poses in the fa-
1970), but was modeled by retired to his farm when it miliar paintings. Moreover,
Canova himself. And be- ended. Canova, at the height though the muscular arms
cause of its fragility, it has of his Neoclassicist reputa- may conceivably have been
never left that country—un- tion, therefore conceived of like Washington’s own in
til now. a seated Washington in clas- youth—he was known to
Through Sept. 23, this sical dress—the modern Cin- have been strikingly tall and
monument forms the dra- cinnatus. well built in life—the ideal-
n-

matic centerpiece of the Having never met Wash- ized, beautifully poised
Frick Collection’s exhibition ington personally, Canova’s hands seem more appropri-
no
CLOCKWISE FROM TOP LEFT: GYPSOTHECA E MUSEO ANTONIO CANOVA, POSSAGNO; MUSEO DI ROMA, ROMA; THE PIERPONT MORGAN LIBRARY, NY; THE FRICK COLLECTION, NY

The Work of a Visionary

Thomas Chippendale
Iconic Chippendale. Remarkable craftsmanship.
Incredible rarity. Thomas Chippendale himself
crafted this undeniable museum-quality
Pembroke table, making it one of the few true
Chippendale masterpieces to remain in private
hands. The entire table is veneered in yew
wood, a costly selection that lends its striking
color and grain to this important creation.
Its balanced design, exquisite proportions
and overall incredible quality make this a
quintessential Chippendale creation. Original
brass hardware, “S” lock and casters. Circa
1760. 421/4”w (open) x 261/8”d x 285/8”h. #30-7569

630 Royal Street, New Orleans, Louisiana • 877-677-2801 • [email protected] • 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.

Gilbert Stuart’s ‘George Washington’ (1795), with its iconic Sphinx-like appearance, is far removed
in likeness from Canova’s Washington, which is transformed in part by curly Roman-style hair
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A14 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

SPORTS
NBA

Summer of
Rafael Nadal
celebrates after
winning the French

LeBron Open on Sunday.

BY BEN COHEN

The NBA season is over. And

now summer is coming.
LeBron James can become a
free agent on July 1, and the
question swirling around him
since last season is where he
will play next season. While he
is 33 years old, his talents are no
less immense than when he took
them to South Beach in 2010 or
returned them to Cleveland in
2014. And no one knows where
James is taking them next.
“I have no idea at this
point,” James said.
He’s been to eight consecu-
tive Finals with the Heat and
Cavaliers, a run so long that

CAMERON SPENCER/GETTY IMAGES

Stephen Curry was only a
rookie the last time James was
stuck watching on television,
and he’s already delivered a
championship to his hometown
team. It’s now time for a deci-
sion—a decision, not The Deci-
sion—about which team gives
him the best chance to keep
playing for titles.
He’s coming off another sea- FRENCH OPEN | By Jason Gay
son in which he was once again
the most valuable player in the
NBA, even if he won’t be named
the Most Valuable Player, and
that’s why this summer is going Nadal in Paris Is Ridiculous

.
to be fevered even by the stan-

ly
dards of recent summers. The
frenzy of activity that has come Austria’s Dominic Thiem gives Nadal It feels less crazy today. lier in the season, in Madrid. He
to define the first days of NBA BY JASON GAY a total of 17 victories in tennis’s four “I can’t describe my feelings, be- hung around for much of the first
free agency will be delayed this on major tournaments. (I tend to write cause it’s not even a dream,” he said set, beating back a 12-minute Nadal
year. The entire league will be Paris “Slams,” but I always worry about after his triumph. “Eleven times, it break attempt, but by the match’s
waiting on him. Greetings from Paris, where I’ve offending Bud Collins up in Tennis is impossible to think.” second hour, it was clear he didn’t
But there is no basketball been reading with amusement the Heaven—the late Collins insisted He makes it look easy here, which have enough. Thiem pluckily saved
Shangri-La waiting for him. fretting over the Golden State War- “Grand Slam” applied only to win- is unfair, because it’s terribly hard to four match points in the third set,
us l,

Whatever he chooses will be riors, who have provoked an existen- ning four majors in a calendar year.) win a tennis major—just ask the 20- but it was a mere postponement of
a compromise. Unlike two years tial crisis in basketball with an Nadal’s total is second only to Roger millennial pileup of young talent still the inevitable.
al a
e
ago, when a serendipitous in- “overly dominant” team which has Federer’s 20, with both men poised trying to break through. It’s also Losing to Nadal here is no shame,
crease in the NBA salary cap al- won three out of the last four NBA to hit the grass at Wimbledon next funny, because nothing about Na- of course. As a Rafa runner up in
lowed Kevin Durant to sign titles. month. dal’s playing style is easy—not his Paris, Thiem is in fine company:
ci on

with the Golden State Warriors, Three out of four titles. That’s Zorro-like, open-stance forehand, Federer (four times), Novak Djokovic
*creating a team that now has adorable. The magic horsey won which makes traditionalists hide (twice), Wawrinka (last year),
back-to-back titles,* most of three big horsey races in a row? their eyes; not his backhand, which among others.
the league will be squeezed fi- Way to go, horsey!!!.
Eleven titles at the is a monster truck compared to a Win a bar bet! Who are the two
nancially, and there aren’t Because Rafael Nadal won his French Open is one of balletic one-hander; not his bespoke players to beat Nadal in Paris?
er rs

many teams that can offer him 11th French Open Sunday. flurry of grunts, towelings, picks and Robin Söderling (2009) and Djokovic
the maximum salary and maxi- I know, I know: different sport,
the most dominant runs tics. Nadal can’t be imitated because (2015). Now go buy yourself an Ap-
mize his chances of winning different circumstances, shorter in all of sports. he’s so thoroughly a tennis one-off. erol spritz.
championships. tournament, funky surface, no Kevin On the clay, he parks so far behind Sunday’s final was the last go-
m e

“It will ultimately come Durant. And he didn’t have to win the baseline, he’s basically in Poland. round for one of the grand relics of
down to me,” James said. the Preakness. His endurance is unparalleled. The tennis, Roland Garros’s Court Phi-
But still: if we’re going to talk The great geezer renaissance in spinning on his strokes is absurd. lippe Chatrier, which will undergo a
m rp

about dominance in modern sports, men’s tennis continues apace. For And yet, when it comes down to modernization in the off-season,
the conversation must include Na- the past 18 months, Nadal and the it, what makes Nadal Nadal is that and, eventually, add a roof. There’s
dal, who has turned winning this 36-year-old Federer have been alter- he is one of the most doggedly com- some hand-wringing about what it
majestic clay-court tournament into nating major titles, like a tennis ver- petitive people in all of sports. Na- all means—if sprucing up Chatrier’s
less of an accomplishment than an sion of Lemmon and Matthau, or a dal doesn’t take a point off. There is old concrete and cutting away its el-
co Fo

annual rite. classic rock twin bill. The men’s no slack in his game. Ever. He’s fully egant vines will irreparably change
The 32-year-old Spaniard is al- game hasn’t had an under-30 Slam committed, fighting to the end. the place.
most always the last man standing winner (sorry, Bud!) since Andy Playing him, especially here, is like I think Roland Garros will be
TONY DEJAK/ASSOCIATED PRESS

at Roland Garros. In his career, Na- Murray won Wimbledon in 2016 at getting chased down the hallway fine—a lot of care is going into this
dal has entered the men’s singles the age of…29. with a chainsaw…for roughly three renovation. Still, it’s fitting that a
tournament here 14 times—winning Rafa, meanwhile, is making 32 hours. once-in-a-lifetime champion like Na-
11, losing twice, and withdrawing look like the new 22. Could he keep This is what you’re up against, if dal closed the old joint—or at least
with injury once. In total, he is 86-2 cranking out Roland Garros titles you’re Thiem. The talented 24-year- the memory of what the old joint
here. deep into his late 30s? Not long ago, old Austrian has been billed as a was. Sunday was an end, or the first
86-2! Put that in your Steph it seemed crazy, given Nadal’s wildly Next Gen hope—“one of the players phase of a new beginning. What Ra-
Curry fan blog. physical style of play, and the havoc the Tour needs,” Nadal called him— fael Nadal has done here, however,
LeBron James during the Finals. Sunday’s 6-4, 6-3, 6-2 defeat of it was playing on his body. and he’d beaten Nadal on clay ear- is forever.
n-

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
d
Edmonton
60s <0 1 2 3 4 5 6 7 8 9 10 11 12Down
13 30 Agricultural
70s
no

50s 0s 1 Start of a fitness remedy for a

Vancouver
Vancouver 80s 14 15 16
C g y
gar
Calgary
motto drought
10s
80s 60s 17 18 19 31 Its atomic
Seattle p
Winnipeg 20s 2 True
number is 10
Portl d
Portland Helena 60s 60s ttawa
Ottawa
t
Montreal 70s 30s 20 21 22 23 3 Spade suit?
70s 50s Bismarckk 60s 40s 32 Olympus powers
Billings A g t
Augusta 24 25 26 4 Camcorder
g
Eugene 60s Boise Mpls./St.
pls / Paul Toronto
Toronto A banyy
Albany 50s button abbr. 33 Long story
40s 70s t
Boston
27 28 29 30 31 32
80s 50s Pierre k
Milwaukee t
Detroit ff l
Buffalo rtford
Hartford 60s 5 Weaver of Greek 34 Stereo precursor
oux FFalls
Sioux ll
80s es Moines
Des Cl
Clevel d
Cleveland New Yorkk
ew Y 70s 33 34 35 36 mythology 38 “Whatever”
90s Reno 70s Salt Lake
Lake
ke Cit
C
Cityy C hicago
Chicago
C h y
Cheyenne d p
Indianapolis Pittsburgh
P
Pit b h 60s Phhil d lph
hi
Philadelphia 80s 6 Obsequious 39 White vestments
37 38 39 40
70s h
Omaha h ngton
g on D.C.
Washington DC
t
Sacramento
Denver 70s 90s follower
n Francisco
San 80s C l d
Colorado
Topeka Spring
p i gfi ld
Springfield Ch
Charleston h
Richmond d
41 42 43 40 Signing tool
Las p
Springs 100+ 7 Tennis great
Vegas Kansas St.. Lou h
Raleigh 42 Briefly
90s 70s hit
Wichita City Louis Lo
Louisville 80s 44 45 46 47 Arthur
Los A
An
Angeles 100s 90s Memphis
Grandfather clock 43 Nation on the
100s h
Nashville
Santaa FFe hi Charlotte
Ch
h l 8
Ph i
Phoenix Atl t
Atlanta 48 49 50 51 52 South China Sea
an Diego
San g 80s Albuquerque 90s 100s
kklahoma
homa City LLittlee Rockk
h
Oklahoma C b
Columbia Warm Rain numeral
90s 53 54 55 56 57 45 Belt color
Tucso
Tucson El Paso Ft. Worth D ll
Dallas JJackson
k h
Birmingham
Cold
9 Sailors on leave
T-storms 46 “Survivor” teams
bil
Mobile 80s JJacksonville
k 58 59 60 61 must regain
30s 90s
A ti
Austin them
t
Houston Stationary Snow 47 Stir-fry
40s ew
w Orleans
New l d
Orlando 62 63 64
80s an Antonio
San A t i Tampa 90s 10 With indignation ingredient
50s Showers Flurries 65 66 67
60s Anchorage
A h g
90s
Honolulu
l l
100s 80s Miami 11 Army transport 51 Keyed up
60s
70s Ice 12 Typical Al 52 Borders
DIAMOND DOINGS | By Charlie Oldham Jazeera viewer 53 Military wear,
U.S. Forecasts City
Today Tomorrow
Hi Lo W Hi Lo W City Hi
Today Tomorrow
Lo W Hi Lo W
Across 26 Finished stealing, 49 Sturgeon eggs 13 Abe Lincoln’s for short
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Extremely maybe wife 54 Farm team
Omaha 92 61 pc 87 64 s Frankfurt 79 59 t 70 55 r 50 Gobbled up
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice 18 See the sights
Today Tomorrow
Orlando 92 70 pc 91 71 c Geneva 76 60 t 69 57 t 6 Muhammad Ali’s 27 “Tom Jones” 53 Premium brandy 55 Heredity unit
Philadelphia 69 52 pc 75 61 s Havana 85 73 pc 86 73 t author
City Hi Lo W Hi Lo W boxing daughter 23 Peculiar 56 “I’m a Honky
Phoenix 107 79 s 105 85 pc Hong Kong 91 81 c 87 80 r 56 Hitchhiker’s hope
Anchorage 60 48 pc 60 47 c Pittsburgh 71 60 r 76 65 t Istanbul 82 69 s 82 68 s 11 Muffin topper 33 Game show VIP 26 Address for a Tonk Girl”
Atlanta 87 70 pc 86 72 t Portland, Maine 67 49 s 77 58 s Jakarta 93 78 pc 91 77 c 57 Cruz in the king singer Loretta
Austin 98 77 pc 96 74 t Portland, Ore. 72 50 pc 81 56 pc Jerusalem 81 64 s 75 62 t 14 More in need of a 35 Saturnalian Capitol
Baltimore 66 54 sh 74 63 pc Sacramento 92 59 s 98 60 s Johannesburg 65 38 s 62 43 s massage celebration 28 Twisty fish 60 Nectar collector
Boise 70 45 pc 81 55 s St. Louis 94 75 pc 93 75 c London 72 54 pc 66 50 pc 58 Log chopper
15 Thai or 36 Early auto brand 29 “Mister Roberts” 61 Start for athlete
Boston 65 53 s 76 58 s Salt Lake City 79 55 s 85 62 s Madrid 72 54 pc 76 54 pc 59 Sleepwear with
Burlington 75 52 s 83 63 s San Francisco 74 56 s 74 54 s Manila 87 79 r 86 78 sh Taiwanese 37 Hotel amenity star or angle
Charlotte 91 68 t 81 68 pc Santa Fe 91 57 s 94 59 pc Melbourne 62 52 s 59 47 r
a hood
16 Important period 38 Copenhagen
Chicago 74 62 c 81 63 c Seattle 69 49 pc 71 54 pc Mexico City 77 59 pc 75 59 t 62 All Major Previous Puzzle’s Solution
Cleveland 76 64 r 81 65 t Sioux Falls 78 51 r 78 53 s Milan 83 67 t 83 63 t 17 Striking crowds League Baseball S O F A B OWS L A S S I
Dallas 96 77 s 95 75 s Wash., D.C. 68 59 sh 74 68 pc Moscow 69 55 pc 69 55 r T S A R U T A H I D A H O
Denver 86 54 s 87 56 s Mumbai 90 81 r 91 84 t 19 Cornstalk growth 40 Jab players, as of A C T I S T R E E T V I EW
now MA T Z O H N E B R A S K A
Detroit
Honolulu
74 63 sh 80 66 pc
86 74 sh 86 75 pc
International Paris
Rio de Janeiro
73
85
58 t 63 50 sh
71 pc 88 73 s
20 007 creator 41 Words with hurry P R Y O R J E N S E N

Houston 95 77 pc 95 77 pc Today Tomorrow Riyadh 109 83 s 108 81 s Fleming or heartbeat 63 Singer Cara O
N
C T A
E
G
V A
O N
D A
I H
C H I
E A R
A
D
Indianapolis 84 68 t 88 71 t City Hi Lo W Hi Lo W Rome 84 65 s 78 62 pc 42 Give up on a 64 Came to light S O Y O L E I D A D O O
21 “Sign of Good L U P I N E WY O M I N G
Kansas City 94 67 t 90 67 pc Amsterdam 70 54 pc 63 54 c San Juan 87 78 s 89 79 pc Taste” advertiser, poker hand 65 Number worn O P E N B R I L L O
Las Vegas 102 80 s 106 79 s Athens 90 72 s 91 71 s Seoul 74 59 c 79 63 s D A R R E N E N S U E
Little Rock 89 72 t 91 75 t Baghdad 107 76 s 105 78 s Shanghai 90 72 s 93 73 pc in the 1950s 43 Blood lines by Pee Wee I L L I N O I S A S T E R N
Los Angeles 83 63 s 84 62 s Bangkok 89 81 t 88 79 sh Singapore 89 81 t 89 79 t 22 Visit briefly Reese S E E A N Y B O D Y A L I T
Miami 85 74 t 88 78 c Beijing 85 65 pc 89 64 pc Sydney 63 50 pc 63 53 pc 44 Filling for quilts A S O N E E L I E N E A R
24 “No Scrubs” and cushions 66 Many new T E X A S D E M S A S H Y
Milwaukee 68 59 c 74 61 c Berlin 75 56 pc 73 57 pc Taipei City 82 73 r 95 78 pc
Minneapolis 78 62 r 79 60 s Brussels 69 54 c 63 48 c Tokyo 72 65 r 79 68 t singers drivers The contest answer is MAINE. Taking the five grid
Nashville 93 71 pc 90 73 t Buenos Aires 62 46 sh 53 39 r Toronto 73 55 pc 78 64 s
48 Creative crossings only of pairs of states that border each
New Orleans 89 74 pc 90 75 t Dubai 103 93 s 102 89 s Vancouver 63 47 pc 65 52 c 25 Color endeavors 67 Ore sources other in real life yields WYOMING/MONTANA,
New York City 71 55 pc 74 60 s Dublin 67 48 c 66 49 pc Warsaw 80 58 t 77 56 pc NEBRASKA/IOWA, ILLINOIS/INDIANA, NEVADA/
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Oklahoma City 93 70 t 93 69 s Edinburgh 59 49 c 65 49 pc Zurich 81 59 c 70 56 t ARIZONA and NEVADA/OREGON.

 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * Monday, June 11, 2018 | A15

OPINION
Venezuela’s Long Road to Ruin BOOKSHELF | By James Romm

Word from Ca-

racas is that
locals have
Military dictator Marcos
Pérez Jiménez was toppled in
January 1958. Romulo Betan-
rule by decree. He mandated
salary increases for the entire
nation and implemented, for
When CAP returned to
power in 1989, he inherited a
fiscal and monetary time
The Evolution
taken to scour-
ing city streets
for plastic gar-
court, an avowed socialist,
was elected president later
that year.
the first time, a minimum
wage. He froze prices and is-
sued crazy edicts. All commer-
bomb. Out of options, he liber-
ated almost all prices, along
with the exchange rate,
Of a Culture
AMERICAS bage bags full When Venezuela promul- cial buildings had to employ opened the country to foreign
By Mary
of rubbish and,
when they find
gated its 1961 constitution,
Betancourt immediately sus-
elevator operators, and all
public restrooms had to have
investment, and lowered im-
port tariffs. He restored Arti-
Know Thyself
Anastasia
them, empty- pended Article 96, which read: attendants. cle 96 of the constitution. Ac- By Ingrid Rossellini
O’Grady
ing the con- “All can freely engage in the CAP put limits on foreign cording to Mr. Chelminski, a (Doubleday, 469 pages, $30)

‘W
tents so that profitable activity of their investment in everything from former executive director of
they can resell the bags. choice, without any limita- telecom and banking to food the Caracas chamber of com- ho are you?” asks Ingrid Rossellini at the outset
This sounds absurd, but it tions other than those pro- and electricity distribution, merce, the positive effects in- of “Know Thyself: Western Identity From
is believable in a country vided for in this Constitution forcing foreigners to sell what cluded a notable recovery in Classical Greece to the Renaissance.” It’s a
where extreme poverty has and those established by law they owned in Venezuela. He foreign investment, exports question that she intends her survey of art, literature and
spread like the plague. Human for security, health or other and economic growth. ideas to help us answer. She declares in her preface that
capital is fleeing. Oil produc- reasons of social interest.” But Cuba had already infil- she proposes “to return to the early times of our history
tion is plummeting, and the This crucial protection re- Few countries have trated the military. Now it with the intention of rediscovering the building blocks of
state-owned oil company is in mained on the shelf for 30 capitalized on the social un- our contemporary personality.” This grand claim goes
default. The garbage bag, im- years, as a string of socialist been such a perfect rest generated by the sudden beyond what she actually attempts in “Know Thyself,” to
ported with dollars, is a thing governments employed price example of socialist reversal of policies, which ex- say nothing of what she achieves.
of value. and exchange controls in posed pent-up inflation. CAP The injunction “know thyself,” in its original Greek
If anything was more pre- counterproductive attempts to policies in practice. also had credibility problems version, was inscribed at the entrance to the oracular
dictable than the mess cre- raise living standards. with investors. After two coup shrine of Apollo at Delphi. It was addressed to those who
ated by Hugo Chávez’s Marx- Rent control in Venezuela attempts in 1992 he was sought knowledge of their futures. Before we can gain such
ist Bolivarian Revolution, it is dates to 1939 but was not en- nationalized oil in 1976. The weakened and eventually re- knowledge, Apollo seemed to say—before we can know
the pathetic effort by social- forced by Pérez Jiménez. In state expanded its role in iron, moved for corruption. where we are headed and steer our course straight—we
ists to deny responsibility. August 1960 Betancourt re- steel and aluminum and took Rafael Caldera took office must know who we are and
The Socialist Party of Great vived it, passing a new rent- control of coffee, cocoa and for a second time in 1994 and from where we have come.
Britain tweeted recently that control law and prohibitions the previously independent restored price and exchange The story of Oedipus
Venezuela’s problem is that on eviction. Since then, “not central bank. controls. By 1996, facing an- exemplifies the maxim’s
socialism has yet to be tried. one apartment rental building CAP and his successors ran other collapse, he reversed meaning. Oedipus learned,
It blamed the crisis on “a has been built,” writes Vladi- up unsustainable debt. The course again, liberating prices when consulting the Delphic
profit-driven capitalist econ- mir Chelminski in his 2017 bolivar had been fixed at be- and opening markets. The ad- oracle, that he was destined to
omy under leftist state-con- book, “Venezuelan Society tween 4.3 and 4.5 to the dollar justment exposed reality but kill his father and marry his
trol.” Even more preposterous Checkmated.” The legendary since the early 1960s. But by was painful, especially in the mother. Because he had a
is the claim by some academ- slums that climb Caracas’s the late 1970s, with the central face of falling oil prices. Thus, mistaken notion of who his
ics that economic liberalism hillsides are a testament to bank printing money, it was the ground was fertile for an parents were, he ended up
in the 1980s spawned the so- this socialist stupidity. no longer worth that. antiestablishment candidate fulfilling the oracle’s prophecy in
cialism that has destroyed the Carlos Andrés Pérez took Buying dollars with boli- in 1998. the course of trying to escape it.

.
country. the presidency for the first vars became a lucrative na- Chávez was inaugurated in Running away from his adoptive

ly
Learning from history is time in 1974. World oil prices tional pastime until 1983, February 1999, in the midst parents, lest he commit murder
impossible if the narrative is had shot up as President when President Luis Herrera of a recovery in oil prices and incest, he fell in with the birth
wrong. So let’s clear the re- Nixon’s domestic price con- Campins announced exchange and with the bolivar at 576 to father and birth mother he never knew and
cord: By the time Chávez was trols crippled U.S. production. oncontrols. He also reinforced the dollar. He tripled down could not recognize. Only later did he discover that his
elected, Venezuela already As a result, Venezuela felt price controls, which by then on socialism, exacerbating a ignorance of the past had led him into fate’s trap.
had 40 years of socialism un- rich. The national assembly applied to virtually every- long history of destroying Encountering the title of Ms. Rossellini’s book, readers
der its belt and precious little, granted CAP, as the president thing, from cement, hotels and capital that would lead to to- would guess that it includes prominent discussions of the
if any, experience with free was popularly known, an “en- banking to parking lots, meat, day’s disaster. Delphic maxim and of the myth of Oedipus or the play
us l,

markets. abling law” so that he could milk and sugar. Write O’[email protected]. based on it, Sophocles’ “Oedipus Rex.” In fact, despite a
long chapter on Greek thought and literature, the myth is
al a
e
barely mentioned, and the play receives a single thin

Next Stop for Mutual-Fund Fees: Zero paragraph. One soon comes to realize that the book’s title
and preface are window dressing for what is, in essence, a
ci on

Cook’s tour of European civilization from Greek antiquity to

By William A. Birdthistle equity mutual-fund assets. In more than 63% of its expenses scores gratis. The online bro- the end of the Renaissance. The larger themes of “identity”
And Daniel J. Hemel 2017 they accounted for more by lending securities. The de- ker Robinhood charges noth- go unaddressed as we trot through three millennia of

H
than 21%. The rise of index in- mand for securities loans has ing to execute daytime trades cultural evolution.
ow much is a mutual- vesting means fewer Ameri- limits, but growth in that for its more than four million A Cook’s tour is not a bad thing in itself. The BBC has
er rs

fund adviser’s advice cans are paying sizable fees to market will allow an increas- users. offered up a valuable one in its recent “Civilisations”
really worth? portfolio managers, who gen- ing number of funds to offset The mutual-fund industry broadcasts, an update of the earlier “Civilisation” hosted
How about nothing? erally fail to beat the market. some or all of their expenses is ripe for disruptive change. by Kenneth Clark in the late 1960s. Before Clark came Will
Since 2000 the average an- This trend has reduced ex- through loan income. Wise fi- While free funds won’t solve and Ariel Durant, co-authors of the “Story of Civilization”
m e

nual mutual-fund fee has pense ratios significantly. nancial institutions will real- America’s retirement-savings books. “Know Thyself” might be described as an update of
fallen by more than a third. Second, investors have ize that offering a free mutual problems, they could make a that well-loved series, with the pacing quickened and the
For funds that track a stock come to realize that passive fund can attract customers to meaningful difference. Ameri- time frame stopping short of the modern period. Analyses
m rp

index, the average fee is now investing does not require a whom they can cross-sell can workers typically pay of paintings and sculptures take a lead role in each of the
less than 0.1%, but even that fancy index. A fund need not other products, like life insur- tens of thousands of dollars book’s chapters, especially when Ms. Rossellini, whose
is too high. That fraction of a ance and annuities. in fees over a lifetime of sav- biography describes her as an itinerant university teacher,
percentage point means real Finally, free publicity likely ing for retirement. Free funds comes to her own field of expertise, the Italian
money over time. If you in- That could mean tens will buoy the first widely avail- will help ensure more Ameri- Renaissance.
co Fo

vest $10,000 in a mutual fund able free fund. That will spare cans have a secure financial
today, and the stock market of thousands in extra investors substantial advertis- future.
rises 6% a year, a 0.09% ex- savings for investors ing costs. Marketing added If the notion of a free mu- A tour of European civilization from Greek
pense ratio will cost you nearly three-quarters of a ba- tual fund seems exotic, con- antiquity to the end of the Renaissance, though
more than $1,500 over three in retirement. sis point to the SPDR S&P 500 sider that for centuries banks
decades. fund’s expense ratio last year. have paid investors to man- not quite in the manner of Kenneth Clark.
The industry has begun to For smaller funds, the share is age their money. That is what
realize this isn’t sustainable. explicitly track the S&P 500 likely larger. The first truly we call “interest.” While in-
In April Fidelity Investments to offer investors diversified free fund open to all will in- terest rates on bank accounts As a tour guide, Ms. Rossellini is a stalwart if
launched its first-ever free in- exposure to large-cap U.S. eq- stead be able to rely on media have fallen dramatically in re- uninspiring companion. Her voice is closer to the dry tones
dex funds—that is, funds with uities, and decoupling a fund to spread the word. cent decades, perhaps mutual of the college textbook than to Clark’s deeply personal
a stated expense ratio of zero. from a name-brand index can Free mutual funds will add funds of the future, like banks oratorical flights. She never pauses from her itinerary for,
The new funds, part of the cut costs. The SPDR S&P 500 to the suite of complimentary of the past, will pay us to say, first-person reflections or glimpses of her own
firm’s Flex suite, will be avail- ETF, the largest fund tracking financial services now avail- hold our savings. Meanwhile, moments of discovery.
n-

able only to select Fidelity cli- the S&P 500, pays three basis able to Americans. More than eliminating fees seems like a A bigger problem concerns her reliability. No single
ents, but other mutual-fund points for the right to use the 100 million people can use the worthwhile goal—and one author could claim mastery of all the areas she covers, but
advisers will likely emulate S&P 500 name. Better to in- free tax-preparation software that now appears within she commits errors that should have been caught by fact
the model. vest in a mutual fund that offered by the Free File Alli- reach. checking. Discussing the Persian invasions of Europe
no

Four factors should facili- holds a generic basket of eq- ance, a consortium of filing described by Herodotus, Ms. Rossellini confuses a bridge
tate the wider distribution of uities and saves on licensing companies including Intuit Mr. Birdthistle, a professor built by Darius with a later one constructed by Xerxes. She
zero-cost mutual funds in the expenses. and H&R Block, though only at Chicago-Kent College of shows a bust of the Roman general Pompey to illustrate its
near future. Third, mutual funds are in- about three million taxpayers Law, is author of “Empire of evocation of Alexander the Great—by means of “the same
First, passive management creasingly finding that they actually use the service. the Fund: The Way We Save leonine hairstyle”—though the style she refers to belongs
has become more popular can generate income from Mint.com manages bill pay- Now” (Oxford, 2016). Mr. to a different bust. Such missteps are small, but they
with retirement savers and re- nonfee sources. In fiscal 2017, ments for more than 10 mil- Hemel is an assistant profes- undermine Ms. Rossellini’s authority. So too her off-target
tail investors alike. In 2000 the Vanguard Total Stock lion users without fees, while sor at the University of Chi- translations of foreign phrases, like the rendering of puer
index funds made up 7.5% of Market Index Fund earned Credit Karma offers credit cago Law School. aeternus, Latin for “eternal boy”—a child who refuses to
grow up—as “Immortal Baby.”
The subtitle of “Know Thyself” claims “Western Identity”

Charles Krauthammer Goes Out Like Gehrig as its theme, raising questions of how “Western” is defined
and how other, non-Western cultures are to be regarded.
Ms. Rossellini is certainly entitled to limit her survey to
By Fay Vincent was a quiet daily witness that wheelchair. I noticed because I daily Fox News appearances. Europe, but she occasionally hints at a troubling dichotomy

C
the Fates can be cruel. He also “ride” a chair and am lim- He is the finest of our current between that continent and the two that border it.
harles Krauthammer is surely endured untold suffer- ited. Charles never spoke of political translators and com- Imagining what might have happened had the Persians
one of my heroes. For ing, and this latest medical these issues, but I felt a spe- mentators, well-suited for our conquered the European Greeks in the fifth century B.C., she
years my wife and I report seems like piling on, to cial bond and wrote him a fan age because of his contrast speaks of the snuffing out of “the light of civilization that
watched Fox News’s “Special use a football term. He surely letter years ago to commend with it. The prevalence of the Greeks had so brilliantly achieved” and of a descent into
Report With Bret Baier,” had a full dose of suffering his remarkable political com- bloviating, uncivilized scream- “the darkness of chaos and confusion.” This demonizes the
where Charles softly delivered when he broke his neck diving mentary and his courage. Like ers makes Charles’s self-effac- Persians far more than the Greeks did and imposes a
his insights on politics with into a gym pool during his him, I had experienced a para- ing reserve especially refresh- Manichaean scheme of light versus darkness onto an ancient
impressive and often sardonic first year at Harvard Medical lyzing injury—I broke my back ing. Slyly irreverent yet world where shades of gray were far more common.
wit and intelligence. We grew School. Despite that injury, in a fall while at college— respectful and civil, he has a Ms. Rossellini’s discussions of the Muslim rule of Spain
to rely on his electronic com- though mine was less severe classic education and is liter- and of the Crusades, two other cases in which Europe came
panionship and his political than his. ate when those attributes are face to face with non-Europeans, give rise to a similar
navigational skills. He knew I, too, was paralyzed It turned out he knew of being devalued. He is an inspi- discomfort. Her longest quotation is taken from a speech
where true north pointed; and my history for the same rea- ration: We wish we knew what delivered by Pope Urban II in 1095 urging a crusade to
although he could bite, he sel- in a college accident, sons I knew of his. When he Charles knows. wrest Jerusalem from the “wicked race” of the Seljuk
dom barked. so I especially value replied to my letter, he was In his famous prayer, Car- Turks. She doesn’t endorse such views herself, but merely
Now he has announced he gracious and shared his per- dinal John Henry Newman to quote them at length, without any distancing comment,
has a few weeks to live. Our his courage and grit. sonal insight on our youthful asked God to grant him each shows a lack of sensitivity at the least. When she takes
pain is sharp. misfortunes. He wrote that night “a safe lodging, and a note of the cultural fusion that resulted from the Muslim
Charles is a serious base- he and I were fortunate— holy rest and peace at the presence in Spain, she mentions Arabic absorptions of
ball fan. His final declaration which paralyzed his legs to- sort of—to have suffered our last.” It is that “peace at the Greek and Judeo-Christian traditions but seems far less
that “my fight is over” re- tally and his arms partly, he injuries when we were so last” we wish for our friend interested in what Europe learned in return, though she
called for me the moving finished his medical training young. We might have had Charles Krauthammer. We does circle back to this in a later discussion.
exit speech by Lou Gehrig, on time with the class of 1975. more difficulty recovering saw him fight so well, and “Know Thyself” ends with an exhortation toward
who—on July 4, 1939, dying He became a psychiatrist and had we been hurt at an older now he tells us his fight is inclusiveness and the breaking down of boundaries between
of his eponymous disease— turned to journalism when ed- age. His wise diagnosis had over. May peace come to this the West and “the other.” This timely plea feels at odds
called himself “the luckiest itors noticed his talent for the ring of his psychiatric fine man, who led his life in with the way that Ms. Rossellini herself has presented
man on the face of the writing. His weekly column in training. such a noble manner, and set other cultures and, like her title and grandiose preface,
earth.” It is important to the Washington Post became Past great political pun- such a shining example. outstrips the more limited goals of the book itself.
play the game well, but it is a Beltway staple. dits—Walter Lippmann, H.L.
also important how one Many admirers who watched Mencken, Arthur Krock—were Mr. Vincent was commis- Mr. Romm is the editor and translator of “How to Die:
leaves the arena. Charles on Fox News did not not the presence that Charles sioner of Major League Base- An Ancient Guide to the End of Life,” a just-published
For most of his life, Charles know he was sitting in a Krauthammer became with his ball, 1989-92. selection of Seneca’s writings.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A16 | Monday, June 11, 2018 * *** THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

Disruption Isn’t Enough We All See the Iceberg but Nobody Is Steering

D
onald Trump has proved in 18 months ous. His desire for a bilateral trade deal with Ohio Gov. John Kasich warns that Will entitlement reform hurt some
that he can disrupt the global status Japan is also going nowhere because Prime Min- “Entitlements Will Eat America’s of their constituents? Yes. Will real
Economy” (op-ed, May 31) and urges spending cuts hurt some of their con-
quo, for better (Iran) and worse ister Shinzo Abe doesn’t believe Mr. Trump’s
today’s Congress to pass a spending stituents? Yes. Will it cut our yearly
(trade). The question as he promises. The results so far ha- bill that balances the budget. How, ex- deficit, eliminate wasteful spending,
brawls with his G-7 allies after Trump has dismantled ven’t been better trade deals, actly, does he propose ending the cur- help reduce our national debt and bor-
their annual summit and now Obama’s legacy, but as Mr. Trump asserts. They’ve rent political game of fiscal chicken? rowing from other countries? Yes.
meets with adversary Kim been rancor and the biggest Democrats can win big if they stick to Will Congress have the courage to
Jong Un is whether the Presi- can he build his own? threat to world commerce the narrative that today’s entitlements do the difficult work even if it costs
dent knows that disruption since World War II. are affordable as long as Republicans members their seats? Doubtful.
isn’t enough. Sooner or later Now comes the summit stop giving tax cuts to their rich STAN VANTIEM
he has to contribute to a better world order in- Tuesday with Kim Jong Un, another example of friends. If there is a blue wave on the Franklin, Tenn.
stead of merely blowing up the old one. Mr. Trump’s disruptive impulses at work. The horizon and if Democrats also capture
Unlike most of the U.S.-Europe foreign-pol- risk of giving the North Korean dictator equal the White House in 2020, talk in The claim that budgets were bal-
Washington will shift to expanded en- anced in the late 1990s is true only if
icy elite, we think the world needed some shak- status on the world stage is obvious, but then
titlements after tax cuts are rescinded.one ignores the total national debt
ing up. Barack Obama saw America as an over- nothing else across three Presidencies has con- For a decade or more, Democrats have (public debt plus interagency debt)
stretched power that needed restraining for the tained the North’s nuclear threat. held military spending hostage to so- during those years. It is true that re-
world’s good. He thought the U.S. was better off Mr. Trump said Saturday he’ll be able to size cial spending. Republicans who ceipts equaled or surpassed outlays
with its interests tied down like Gulliver in Lilli- up Kim’s sincerity “within the first minute,” and broached the topic of Social Security from 1997-2000, but Mr. Kasich conve-
put in a multinational web of collective security. he probably believes it. On the other hand, he or Medicare reform were portrayed as niently forgets that over $417 billion
As the U.S. retreated, regional powers like is already playing down this first meeting and heartless, right-wing fanatics. of those receipts used to balance an-
China and Russia and rogues like Iran, North says the main result may be establishing a per- nual budgets were taken from the en-
If Mr. Kasich is serious, let him pro-
Korea and Islamic State asserted themselves; sonal relationship with Kim. pose specific benefit reforms and cost titlement that Mr. Kasich now views
the world became more dangerous. The problem is that personal relationships reductions that he thinks American as the culprit: Social Security. Former
voters will welcome and approve and Rep. Kasich and his allies, like many
Mr. Trump sometimes campaigned like an rarely count for more than national interests,
that Democrats and their media on both sides of the aisle before them,
isolationist but he also asserted a more muscu- and Kim’s main interest is in his regime’s (and friends won’t demagogue to death. simply moved excess assets from So-
lar defense of U.S. interests, and he has followed his own) survival. Nuclear weapons are the ALAN JONES
cial Security to the general fund and
up as President. The Iran deal offered the illu- means of that survival and have brought him Atlanta
proudly claimed budget surpluses. At
sion of containing Tehran’s nuclear ambitions to this summit—diplomatic recognition his fa- no time, according to Treasury statis-
while facilitating its imperialism. The Paris ac- ther and grandfather never achieved. He will be I am afraid entitlement reform is tics, did these “surpluses” decrease
cord punished the U.S. economy far more than loath to give up that security. beyond the capacity of our current total national debt.
China’s with little benefit to the climate. He Mr. Trump’s temptation will be to make a House and Senate. The members of “The economic reality,” wrote
withdrew from both. Mr. Trump’s demand that version of the same mistake Bill Clinton and both houses will do nothing that will Thomas Sowell, “is that neither the
NATO partners spend more on defense has George W. Bush did to trade easing sanctions jeopardize their fundraising and government nor anyone else can
achieved more in a year than the previous two and other concessions for the mere promise of therefore their re-election. The Repub- spend and save the same money.”
licans are Balkanized, and the Demo- Those in Congress who ignored this
Presidents did in 16. future denuclearization. Both Presidents also
crats are all Stepford wives under the adage—like then-Rep. Kasich—now
i i i hoped, as Mr. Trump does now, for a historic control of Nancy Pelosi and Chuck scream the loudest for “entitlement
Far more troubling is Mr. Trump’s willy-nilly nonproliferation achievement. But the North re- Schumer, appearing to fear having a reform.”

.
challenge to global trading rules. His with- neged as it played for time to research and de- thought of their own let alone voting MIKE SMITH

ly
drawal from the Pacific trade deal was strategic velop a nuclear threat that will soon be able to with the Republicans. Sugar Land, Texas
folly if his main priority is changing China’s be- reach the U.S. mainland.
havior. His steel and aluminum tariffs punish Perhaps Kim has had a revelation and wants
friends who could forge an alliance against Chi- his nation to join the rest of the modern world.
on
nese mercantilism. Blowing up Nafta would But the test of that commitment should be an
cause widespread economic damage with no immediate declaration of all of his nuclear and
Real Estate Need Not Be So Complex, Costly
compensating benefits. missile facilities for inspection by American ex- Regarding Matthew Hennessey’s pensive, and we at HUD did.
“Buying a Home? It’s a Process” (op- Drafting the proposed new rule
us l,

If Mr. Trump has some grand trade strategy, perts. The dismantling can be done in stages,
ed, May 30): Home buyers have had was the easy part. After three years,
it isn’t apparent. On Saturday he tossed out on but the transparency and verification must be the same experience for decades, and it was increasingly clear that there
his own at a postsummit press conference the immediate and complete. Mr. Trump’s instinc-
al a
e
the federal government’s solution, the wouldn’t be any reform. Secretary
idea of “no tariffs” across the G-7, which would tive judgment about Kim’s character and inten- Real Estate Settlement Procedures Martinez returned to Florida and
be a constructive goal. But he has no process tions isn’t enough. Act of 1974 (Respa), didn’t simplify was elected to the U.S. Senate.
ci on

or plans to negotiate it, and he accompanied the Mr. Trump takes pride in shaking up the the process. In 2001, for example, a Nothing happened until Dodd-Frank
idea with a new threat to cut off access to the world’s elites, but as President he’ll be judged Floridian moving to Washington was established a new Respa enforce-
entire U.S. market and impose tariffs on Euro- not on how much of Mr. Obama’s legacy he dis- appalled by it. “I can’t make any ment agency, the Consumer Finan-
pean cars. mantles but on how much of his own he builds. sense of this, and I’m a lawyer,” he cial Protection Bureau. The CFPB
Amid all of his bluster and threats, no one be- Sooner or later he’ll have to show results that said to himself. “What do most people wrote a new, more complicated rule,
er rs

do?” He was Mel Martinez, the in- with more hoops to jump through
lieves Mr. Trump’s zero-tariff proposal is seri- advance U.S. interests.
coming HUD secretary, and he would and more penalties for violations. It
have enforcement and rule-writing wasn’t simpler, and it wasn’t less

New Bang for a Michigan Buck authority for Respa. He told his staff expensive.
m e

to write a new regulation that would JOHN C. WEICHER

I
make the process simpler and less ex- Washington
n Michigan the roads are so bad they’re a lining some 500,000 classifications of construc-
m rp

joke on social media. “BREAKING NEWS: tion jobs and corresponding pay. This can mean
lost city of atlantis found in detroit pot- that a contractor must pay one hourly rate for a
hole,” local YouTube star Dem- worker for installing drywall
Does Premature Expostulation Hurt Anyone?
etrius Harmon quipped on The state will save $400 but a different rate for painting. There is a reason Jason Furman an “oath” and a “responsibility” for
Twitter in February, garnering didn’t cite any specifics to back up all government statisticians to pro-
million a year with its The rules deterred small busi-
co Fo

his claim that “financial markets re- tect the confidentiality of the eco-
thousands of likes. “I don’t al- nesses from bidding for gov-
acted” to President Trump’s tweet nomic data. I am shocked that senior
ways dodge potholes,” another prevailing-wage reform. ernment business and added about Friday’s jobs report “with un- White House staff defended the presi-
Michigan meme says, “but costs when they did. usual volatility for the early morning dent’s tweet, arguing that the presi-
when I do, I hit four more.” In 2014 Steve Zurcher, hours” (“The Economic Risks of dent didn’t release the actual data.
So it’s a big deal that last week lawmakers owner of St. George Glass & Window, won a con- Trump’s Premature Tweeting,” op-ed, One doesn’t need to release the ac-
passed a reform that will save taxpayers 10% tract to do work on Michigan Technological June 4). The reason is that they tual number to offer color on the eco-
to 15% by repealing the state’s prevailing-wage University’s new welcome center. At the time didn’t. In the 69 minutes between the nomic data.
law for construction on roads, buildings and Mr. Zurcher’s glaziers normally earned $20 an tweet and the actual release, futures JOSEPH CARSON
other public works. That law, passed in 1965, hour. But because this was a public project, he contracts on the S&P 500 meandered Westport Conn.
mandated that contractors pay union wage had to pay the prevailing wage of $43.35. He randomly in a narrow range of about
rates even if non-union workers could do the raised his bid, but that cost taxpayers an addi- one-tenth of a percent of the index’s I find Mr. Furman’s objections spu-
value. The yield of the 10-year U.S. rious. It was a public dissemination,
job for less. Some 27 other states have such tional $12,000.
Treasury bond rose less than two not a private or “insider” one.
n-

laws, which let unionized contractors keep The Mackinac Center estimates that the pre- one-hundredths of 1%, moving in the ROLLIN V. AMORE
their bids high and still win government con- vailing-wage mandate has added about $400 same direction and at the same pace Washington
tracts. Non-union workers account for nearly million a year to the cost of roads, buildings and as it had been all night.
80% of Michigan’s construction industry and other public works in Michigan. The Wolverine The more notable aspect of Mr.
no

dominate private building. State will now have a lot more money to fill Furman’s commentary is that it may Using the English Language
The Michigan law was especially onerous, out- those potholes. mark the first time that a former
Regarding Joseph Epstein’s “Some-
Obama administration official has ad-
times the Language Game Needs a

The Senate’s Nuclear Insurance

mitted that one of President Trump’s
Penalty Box” (op-ed, June 7): May I
tweets was truthful.
make suggestions for the penalty box?
DONALD L. LUSKIN

W
I recommend the following, in order
Chicago
hether or not President Trump Yet the Senate doesn’t set a concrete time- of my desperation never to hear them
strikes a nuclear deal at his summit line for deployment. No one can predict the again: “iconic,” “impactful,” “pleth-
A big “thank you” to Mr. Furman. I
with Kim Jong Un, the U.S. still speed of innovation, but the military does bet- ora” (one of the “many” words), “res-
am a former staff economist at the
needs to prepare for attacks ter when given a specific goal. onate” (I’m sad about this one, a good
Commerce Department and there is
on its homeland and abroad. Space sensors would Asking the Defense Depart- word beaten to death), “I” when in-
correctly used in a prepositional
China recently installed mis- be a game-changer ment to deploy a space-based
phrase that calls for an objective, not
sile systems on artificial is- sensor system by 2022 would Being Able to Gamble 24/7 subjective, pronoun, “quagmire,” “so
lands in the South China Sea, in missile defense. set an aggressive but plausible Means Increased Gambling unique” and finally, “like” when used
while economic backwaters target. It is also crucial, given as filler repeatedly within the same
like Russia and Iran invest Chinese and Russian advances Holman Jenkins’s thesis that the
sentence.
potentially exponential expansion of
heavily in missile tests and research. At least in hypersonic weapons. MARGARET MCGIRR
sports betting is driven by the insa-
Congress is developing bipartisan support for Hypersonic missiles can travel about one tiable needs of the welfare state
Greenwich, Conn.
missile defense. mile a second, faster than modern jet fighters. makes sense and is disturbing (“Get
The Senate this week is expected to vote on Air Force Gen. John Hyten, who leads U.S. Stra- Awesome screed, dude!
Ready to Hate Sports,” Business
its version of the National Defense Authoriza- tegic Command, testified in March that the U.S. STEVEN KRON
World, May 19). Clicking in bets from
Avon, Conn.
tion Act (NDAA), which the Armed Services currently lacks a defense to “deny the employ- a mobile phone with its promise of
Committee approved 25-2 in May. While missile ment of such a weapon.” While hypersonic mis- immediate reinforcement, win or lose,
defense can’t perfectly insulate the U.S. or its siles are vulnerable during slower phases of will drive gambling behavior to here-
troops abroad, the new legislation includes no- flight, the trouble is identifying them early tofore unimaginable heights. I’ll bet 3 Pepper ...
table improvements that would make America’s enough. “The only way that I know to be able to 1 that the inherent moral hazard in
this scheme not only will yield little
And Salt
rivals think twice before striking. to, in my phrase, ‘see them coming’ is from
benefit for the poor, but will inevita- THE WALL STREET JOURNAL
The U.S. fields several missile-defense sys- space,” Pentagon technology chief Michael Grif-
bly increase the needs of the welfare
tems around the world, but each has its own ra- fin said in April. state through further bankruptcies,
dar. The Aegis Ballistic Missile Defense is de- The best way to improve the accuracy and mortgage foreclosures, substance
ployed at sea and can bring down regional precision of existing missile-defense systems abuse and, of course, the need for
threats inside the atmosphere. The Ground- is through increased testing—which the legisla- newer sources of revenue to feed the
based Midcourse Defense (GMD) protects the tion encourages. As North Korea reminded the insatiable welfare beast.
U.S. homeland by targeting long-range missiles world, even “failed” tests move a missile pro- TOM O’HARE
in space. But the systems don’t communicate gram forward. Boston College
and coordinate well. The U.S.-led international order is under- Boston
One Senate NDAA provision calls for deploy- pinned by America’s ability to deploy its forces
ing space-based sensors, which will help inte- around the world, and new missile technology Letters intended for publication should
grate the systems so the U.S. doesn’t lose sight is a growing threat. U.S. ships, aircraft and sol- be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
of a missile. Space-based sensors aren’t cheap, diers can become vulnerable to an attack from or emailed to [email protected]. Please
but the cost of putting them into orbit is falling a lesser country like Russia. The Senate should include your city and state. All letters
as private companies make space deliveries more keep the missile-defense provisions in its final are subject to editing, and unpublished
efficient. The legislation also eases the way for NDAA and work with the House and White letters can be neither acknowledged nor “Your testing indicates that
returned.
future appropriations to pay for the sensors. House to make sure they get funding. you may have some gravitas issues.”
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | A17

OPINION

University Boardrooms Need Reform The Fed

By Paul S. Levy meetings are entirely show and tell,
Can’t Save

I
with discussion severely limited and
recently resigned as a trustee
of the University of Pennsyl-
vote outcomes never in doubt. Penn
Law overseers do not vote on any-
Jobs From AI
vania and an overseer of its thing. One Penn medical school
law school to protest the
shameful treatment of law
board member told me he was
dropped because he had asked too
And Robots
professor Amy Wax. Her career- many questions.
threatening offense was to state The corporate world offers a par- By Martin Feldstein

T
that in her experience with black allel to trustees’ abdication of their
students over 17 years at Penn, few fiduciary duties. Reformers of the he day is coming, experts tell

BARBARA KELLEY
had performed in the top half of 1980s argued correctly that the in- us, when artificial intelligence
their class. Penn Law’s dean, Ted terests of shareholders were too of- and robotics will massively
Ruger, declared her in error but re- ten subjugated to personal interest disrupt the labor market. Autono-
fused to provide evidence. For dis- and small-group social dynamics on mous vehicles will put 3.5 million
senting from politically correct or- boards that compel unanimity. Just truck drivers at risk of losing their
thodoxy, Mr. Ruger forbade Ms. Wax “You . . . have disgraced an institu- incentive to speak out, and everyone as the resulting realignment of in- jobs. Checkout machines may re-
to teach her much-admired first- tion I had admired throughout my seems afraid to do so. Professors terests between corporate boards place 3.4 million retail cashiers. That
year course in civil procedure—for professional career,” Judge Randolph fear retaliation; students worry and shareholders unleashed spectac- is only the beginning of the long list
which the university gave her an wrote, addressing Dean Ruger. about social ostracism. I sent my ular value for American investors, of jobs that will be destroyed by
award in 2015. Mr. Ruger, meanwhile, directed letter of resignation to Angela Duck- an activist response by the govern- technological change.
Since I quit, I have received an his fundraisers to tell alumni that worth, the Penn psychologist and ing bodies of America’s universities The shift will not happen all at
education in why universities can his treatment of Ms. Wax was author of the celebrated 2016 book is now essential. once, and most of the people who
trample free expression with impu- “fairly common”—a brazen false- “Grit: The Power of Passion and Per- The punishment of Ms. Wax coin- lose their jobs will eventually find
nity. My letter of resignation was hood. No Penn professor’s teaching severance.” She and I met last year cides with the launch of the univer- new employment. The benefits of
responsibilities had ever been when I accepted the university’s Dis- sity’s latest fundraising campaigns, automation will include lower pro-
changed or limited for speaking out tinguished Alumni Award and had a which seek $4.1 billion in all and duction costs, which will increase
As in corporate America on public issues. He also claimed lively email correspondence. She did $100 million for the law school
that Penn Law did not “mandate” not respond to my resignation alone. These philanthropic funds will
in the 1980s, self-serving ethnic diversity in selecting appli- email. maintain the massive bureaucracy The central bank’s
managers are putting cants for law review, traditionally Trustees and donors candidly ad- that coddles hypersensitive students
employment mandate
an anonymous, merit-based pro- mit in private that they do not want while issuing hollow claims to up-
institutions at risk. cess. That was misleading, since to jeopardize their children’s hold academic freedom and dissent. can’t be squared with
Penn now encourages a subjective chances for admission. Many serve When universities violate their val-
statement from law-review appli- out of genuine interest and affec- ues, trustees and overseers should coming tech disruption.
printed in full in the student news- cants, which is intended to reveal tion for their alma mater, although resign, and donors should close their
paper and excerpted on this page. I their identity and tip the ethnic they also enjoy the prestige, influ- wallets. Until that happens, nothing
received well over 150 supportive scales rather than reward academic ence and perks, like access to the will change. real incomes and job-creating con-
messages from, among others, trust- excellence. university’s medical system, that go sumer demand. But the technology
ees, students, law school professors Other than me, not a single Penn with the positions. There’s no incen- Mr. Levy founded JLL Partners, a will also cause individual hardship
and alumni. One was from Judge Ray trustee, overseer or professor wrote tive to rock the boat, and universi- private equity firm, and created the and frequent periods of increased
Randolph, a 1969 law graduate who publicly about Ms. Wax’s treatment ties make sure they don’t get much Levy Scholars Scholarship at the unemployment.

.
sits on the U.S. Court of Appeals for or resigned in protest. Nobody in opportunity. At the trustee level, University of Pennsylvania Law These large supply shocks cannot

ly
the District of Columbia Circuit. the university community has an the board is large and its formal School. be offset by monetary policy. They
therefore will present the Federal
Reserve with a new challenge. In

On Legal Weed, Let States Tend Their Own Gardens 1978 Congress gave the Fed a “dual
on mandate” of price stability and
maximum employment. This distin-
By Randy E. Barnett and compels them to seek loans off Cole memorandum seemed to flout where it remains illegal. The feds guishes the Fed from the world’s

‘F
the books from illicit sources. In the president’s constitutional obliga- could still prevent the shipment of other major central banks. The Eu-
us l,

ederalism is not just for con- these ways federal criminalization tion to “take care that the laws be marijuana from states that permit it ropean Central Bank, the Bank of
servatives.” That was my preserves many of the ill effects of faithfully executed.” to ones that don’t. And the legislation England and the Bank of Japan, for
al a
e
mantra in 2005, when I rep- black markets, even in states that The Cole memo was revoked when would prevent state laws regulating example, are required to target only
resented Angel Raich and Diane Mon- have legalized marijuana. Jeff Sessions, a longstanding and vo- how marijuana is distributed from be- the rate of inflation (although they
son before the U.S. Supreme Court. The Obama administration moved cal opponent of marijuana legaliza- ing invalidated for interfering with may informally pay attention to the
ci on

The two California women were chal- to mitigate some of these effects. A tion, became attorney general in federal law. level of employment).
lenging the federal ban on medical 2013 memorandum, issued by Deputy 2017. But by eliminating the safe ha- If enacted, the States Act would The creation of the Fed’s dual
marijuana as applied to states that Attorney General James Cole, guided vens mandated by the executive provide a model for how the U.S. can mandate reflected concern in Con-
authorized its use. U.S. attorneys to cease prosecuting branch, he created a powerful incen- move from one-size-fits-all federal gress that cyclical declines in the
They lost 6-3, and the votes in marijuana offenses in states that had tive for Congress finally to legislate policies to 50 state solutions for so- demand for goods and services
er rs

their favor all came from conserva- on the matter. Also pushing lawmak- cial and economic problems. In a na- would lead to increased unemploy-
tives: Justices Clarence Thomas and ers to act is the legal marijuana busi- tion as large as America, federalism ment. Economic theory implies that
Sandra Day O’Connor and Chief Jus- A new Senate bill would ness, which has grown into a multi- allows for diversity. That’s a better low interest rates and an easy mon-
tice William Rehnquist. Those jus- billion-dollar industry. approach than escalating every policy etary policy can increase the de-
conform federal marijuana
m e

tices agreed with us—and with the The States Act is a compromise: It debate to the national level and then mand for output and labor. Thus,
editorial page of this newspaper— enforcement to each state’s would simply conform federal mari- forcing the losers to live under the Congress charged the Fed with pur-
that the noncommercial cultivation, juana law in each state to whatever regime of the winners. suing a monetary policy that would
m rp

possession and medical use of mari- laws—a win for federalism. that state’s law permits. To the ex- Conservatives who profess a com- achieve maximum employment.
juana is outside Congress’s power to tent that marijuana is legal in Califor- mitment to federalism should sup- The coming challenge is differ-
regulate “Commerce . . . among the nia or New Jersey, so too would it be port the States Act. Progressives, ent. Job losses will be caused not by
several States.” established their own effective regu- legal there under federal law. In meanwhile, should embrace the di- low demand, but by supply shocks
Now the question has moved to latory systems. Yet this didn’t solve states where marijuana is still illegal, versity and choice that federalism as artificial intelligence allows ma-
co Fo

Capitol Hill. Last week Sens. Cory the practical problems confronting le- federal law would also apply. makes possible. chines to replace labor. Technologi-
Gardner and Elizabeth Warren intro- gal marijuana distributors, such as This adaptability would allow fed- cal unemployment has happened in
duced legislation called the States access to bank services. And by estab- eral law enforcement to continue Mr. Barnett, a law professor at the past, such as when automated
Act, which would remove the federal lishing what amounted to sanctuary backing up the states by going after Georgetown, directs the Georgetown looms in factories replaced hand
ban on manufacturing, distributing status for legal-marijuana states, the major marijuana distributors in places Center for the Constitution. looms. But the experts expect that
and possessing marijuana in states AI will lead to much more wide-
that have legalized it. The vote on spread disruption.
their bill, or lack thereof, will be tell-
ing. Do conservative Republicans
support federalism even when it runs
Oman Plays a Double Game on Iran If so, an easy monetary policy
would be the wrong response. Poli-
cies that increase aggregate demand
against their policy preferences? Are By Jonathan Schanzer transactions. But the American banks inspection protocols. Local Yemeni will not succeed in replacing the
Democrats willing to support diver- And Nicole Salter balked, fearing the legal and reputa- authorities also seized a pickup jobs that technology makes obso-

T
sity in state policy? tional risks of doing business with truck on May 9, 2017, at the border lete. With regard to employment,
In 2002, when the Raich litigation he Obama administration Iran. Oman then resorted to buying crossing with Oman. The truck con- the technological change that makes
n-

began, medical marijuana was consid- sought to help Iran cash in on small amounts of euros that it could tained $3.42 million in foreign cur- a truck driverless is equivalent to
ered a fringe issue. Publicity from the the 2015 nuclear deal, a Re- transfer to Iran. It’s unclear if Iran rency and gold. destroying the truck.
legal case helped it gain acceptance as publican-led Senate investigation re- has received all $5.7 billion. Perhaps most troubling, the Syr- Monetary policy will still be an
a reasonable policy option. To my sur- vealed last week. The report also Why Oman? Between 2012 and ian airline Cham Wings began flying appropriate tool the Fed can use to
no

prise, the drive to authorize medical raises questions about the role 2015, the country was the site for between Damascus, Syria, and Mus- respond to traditional cyclical
marijuana actually gained momentum played by Oman, a strategically lo- talks between Iran and the other par- cat, the Omani capital, in 2015. Trea- changes in demand. But technologi-
from the courtroom loss. A small cated if little-known sultanate. ties to the nuclear agreement. The sury imposed sanctions on Cham cal disruption will make the unem-
number of states now have authorized During the run-up to the deal, ad- Obama administration lauded Oman’s Wings in 2016 for terrorism and ployment rate a very noisy signal
recreational use as well. ministration officials promised that arms proliferation. It’s possible that of the demand level. The Fed’s pol-
Yet citizens who use marijuana le- Iran would never get access to the the airline has been bringing weap- icy goal should therefore be shifted
gally under state law are still consid- U.S. financial system. But Team The sultanate, a U.S. ally, ons, parts, personnel or cash into so that it focuses solely on price
ered criminals by the federal govern- Obama was desperate to ensure that Oman from Syria for transshipment stability, in line with what other
ment. Although marijuana users are Iran, a pariah in the banking commu- seems to be helping Tehran to Yemen. It isn’t clear why else this central banks now do. Achieving
rarely prosecuted in these states, it nity, saw some material benefits wage a proxy war against air bridge was established. As Trea- the government’s goal of maximum
does happen. Meantime, growers face from the deal. Among other things, sury Undersecretary Sigal Mandelker employment will require different
seizure of their crops, distributors they sought to convert $5.7 billion of Saudi Arabia in Yemen. recently observed, “People do not go policies, like increased job training
are subject to forced closure, and Iranian-held Omani rials, a decidedly on vacation in Syria.” and the removal of state licensing
both have a hard time leasing space, illiquid currency, into euros. There is no evidence that Omani barriers.
since building owners fear federal The problem was that the rials contributions to the deal, but some authorities directly engaged in illicit Shifting the Fed to a single man-
prosecution. first had to be converted into U.S. dol- of the sultanate’s neighbors view its activities on behalf of Iran. But U.S. date of price stability would pro-
Further, because banks are barred lars. Under the sanctions regime, this policy toward Iran as too accommo- officials have conveyed their con- vide an opportunity to reconsider
by federal law from handling the pro- required a license from the U.S. Trea- dating. The Omanis, less powerful cerns to Omani authorities several the inflation target of 2%. The Fed
ceeds of “unlawful” conduct, mari- sury. According to the Senate report, and less oil-rich than other Gulf Arab times since 2016. The Saudis, Ye- adopted this as its definition of
juana businesses are forced to store Treasury issued the license, then states, have long argued they have menis, Emiratis and Israelis have price stability in 2012, but other
and transport large amounts of cash. asked two American banks to work no choice but to play peacemaker. also expressed concerns. Omani offi- central banks don’t pursue a single,
This makes them susceptible to theft, with Bank Muscat to process the But that doesn’t explain some of cials emphatically deny that there is fixed inflation rate. The European
Oman’s recent behavior. a problem at all. Central Bank aims at inflation “be-
In 2016 Reuters reported that Iran While most Americans probably low, but close to, 2%.” Some central
was smuggling arms through Oman to couldn’t point to Oman on a map, the banks prefer a range of allowable
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY the Houthi rebels fighting the Saudi- country plays an important role in inflation rates.
Rupert Murdoch Robert Thomson backed government in Yemen. The preserving U.S. interests in the Mid- My own preference would be for
Executive Chairman, News Corp Chief Executive Officer, News Corp
shipments allegedly included antiship dle East. Oman has allowed the U.S. the Fed to use monetary policy to
Matt Murray William Lewis
Editor in Chief Chief Executive Officer and Publisher
missiles, surface-to-surface short- to use its military bases since 1980. prevent sharp moves in measured in-
Karen Miller Pensiero, Managing Editor DOW JONES MANAGEMENT:
range missiles, small arms, explosives, The country is also crucial because flation. With this approach, the Fed
Mark Musgrave, Chief People Officer; and unmanned aerial vehicles. All Oman, along with Iran, controls the would tighten if the inflation rate be-
Jason Anders, Chief News Editor; Thorold Barker,
Europe; Elena Cherney, Coverage Planning;
Edward Roussel, Chief Innovation Officer; shipments of weapons to the Houthis crucial oil-shipping lanes in the gan to rise rapidly and would ease if
Anna Sedgley, Chief Operating Officer
Andrew Dowell, Asia; Neal Lipschutz, Standards; violate a 2015 United Nations Security Strait of Hormuz. there were a sharp decline.
Meg Marco, Digital Content Strategy; OPERATING EXECUTIVES: Council arms embargo. President Trump has executed a But whatever the inflation goal,
Alex Martin, Writing; Michael W. Miller, Features Ramin Beheshti, Product & Technology;
& Weekend; Shazna Nessa, Visuals; Kenneth Breen, Commercial; In March 2017, Conflict Armament near-total reversal of American policy the Fed should not try to regulate
Rajiv Pant, Technology; Ann Podd, News Jason P. Conti, General Counsel; Research, a U.K.-based nongovern- toward Iran. Oman is in the unenvi- the rate of unemployment. Though it
Production; Matthew Rose, Enterprise; Tracy Corrigan, Chief Strategy Officer; mental organization, reported that able position of having to adjust to may sound paradoxical, in an econ-
Michael Siconolfi, Investigations; Frank Filippo, Print Products & Services;
Nikki Waller, Live Journalism; Steve Grycuk, Customer Service; UAVs used by the Houthis entered this new reality. American officials omy in which job losses are being
Stephen Wisnefski, Professional News; Kristin Heitmann, Chief Commercial Officer; Yemen through Oman. In a January should be sympathetic, but not if Mus- driven by technological disruption,
Carla Zanoni, Audience & Analytics Nancy McNeill, Advertising & Corporate Sales; 2018 report, the Security Council’s cat is turning a blind eye to Iranian the Fed would do better to ignore
Christina Van Tassell, Chief Financial Officer;
Gerard Baker, Editor at Large panel of experts on Yemen asserted weapons smuggling on its soil. employment and focus exclusively
Suzi Watford, Chief Marketing Officer;
Paul A. Gigot, Editor of the Editorial Page; Jonathan Wright, International that a land route through Oman was on the rate of inflation.
Daniel Henninger, Deputy Editor, Editorial Page DJ Media Group: Almar Latour, Publisher the “most likely” explanation for Mr. Schanzer, a former terrorism-
WALL STREET JOURNAL MANAGEMENT: Professional Information Business:
Joseph B. Vincent, Operations; Christopher Lloyd, Head; how Burkan-2H missiles had arrived finance analyst for the U.S. Depart- Mr. Feldstein, chairman of the
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head in Yemen. The second likeliest expla- ment of the Treasury, is senior vice Council of Economic Advisers under
EDITORIAL AND CORPORATE HEADQUARTERS: nation, according to the report, was president at Foundation for Defense President Reagan, is a professor at
1211 Avenue of the Americas, New York, N.Y., 10036 that Oman’s Salalah port was used as of Democracies, where Ms. Salter is a Harvard and a member of the Jour-
Telephone 1-800-DOWJONES
a transshipment point, due to its lax project manager and Oman analyst. nal’s board of contributors.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

A18 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

ìWhen
I retire,
how do
I make
sure my
knowledge
is retained?î
Neil Maxˇeld
Woodside Energy
General Manager
Project
Capability

.
ly
on
us l,
al a
e
ci on
er rs
m e
m rp

ìWatson
retains
co Fo

expert
knowledge
and helps
me ˇnd
answers
n-

straightaway.î
no

Caitlin Bushell
Woodside Energy
Graduate Process
Engineer

To capture the valuable

experience of senior employees
and pass it on to the next
generation, Woodside Energy
worked with IBM WatsonÆ.
Watson learned from over
30,000 documents, and today
over 80% of Woodside
employees can access expert
knowledge faster than ever.
To know more, visit
ibm.com/instantexpertise

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.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

TECHNOLOGY: ROBOTS MOVE OFF THE FACTORY FLOOR B4

BUSINESS & FINANCE

© 2018 Dow Jones & Company. All Rights Reserved. * * * * THE WALL STREET JOURNAL. Monday, June 11, 2018 | B1

Last Week: S&P 2779.03 À 1.62% S&P FIN À 2.18% S&P IT À 0.69% DJ TRANS À 0.41% WSJ $ IDX g 0.44% LIBOR 3M 2.326 NIKKEI 22694.50 À 2.36% See more at WSJMarkets.com

KKR Near Health-Care LBO Deal firm joined with Walgreens

Buyback Bonanza
Value of announced buybacks
by U.S.-listed firms.

$800 billion
Private-equity giant vider of physician services to vate-equity buyouts in recent Surg Corp., the company has
hospitals and other health- years. Buyout firms are sitting been trying to turn its opera- Boots Alliance Inc. to buy in-
would pay $5.5 billion care facilities has been con- on over $1 trillion of cash, tions around. Last August, it stitutional pharmacy-services 600
for a provider of ducting an auction after an- which poses a challenge with struck a deal to sell its ambu- company PharMerica Corp. for
nouncing a strategic review markets near record highs and lance business to KKR portfo- $1.4 billion.
services to hospitals last fall. A deal with the pri- big companies on the prowl lio company Air Medical That followed another deal
400
vate-equity firm is expected to for deals of their own. Group Holdings Inc. for $2.4 to buy health-information pro-
BY DANA MATTIOLI be announced Monday, the Shares of Envision, which billion. vider WebMD Health Corp. for 200
AND MIRIAM GOTTFRIED people said. also provides post-acute care KKR has been on something $2.8 billion. KKR also bought a
The price represents a 5% and ambulatory-surgery ser- of a buying spree. Just two majority stake in nutritional-
0
KKR & Co. is nearing a deal premium to Envision’s closing vices, have fallen 23% over the weeks ago it agreed to buy supplements maker Nature’s
to buy Envision Healthcare price of $43.64 on Friday and past year amid questions BMC Software Inc. from a Bounty Co. in a transaction 2010 ’15 ’18
Corp. for $46 a share, or about is nearly 70% above where the about its billing for emergency group of other private-equity valued at roughly $3 billion. Note: 2018 data through June 8.
$5.5 billion, according to peo- stock traded when the review services and disappointing firms for about $8.3 billion in- Last November, the buyout Source: Birinyi Associates
ple familiar with the matter, in was announced. performance. cluding debt. firm also raised $1.45 billion THE WALL STREET JOURNAL.
one of the largest recent lever- Including debt, the deal is Formed through the 2016 It has done a lot of other for a new fund focused on
aged buyouts.
The Nashville, Tenn., pro-
valued at roughly $10 billion,
making it one the largest pri-
merger of Envision Health-
care Holdings Inc. and Am-
deals in health care. Last year,
for example, the New York
small, fast-growing health-
care companies. Insiders
China Returns as Big Consumer of U.S. Cotton Make Hay
Cotton futures in China have
surged amid weather concerns
On Rising
and dwindling supplies...
18,000 yuan a ton
Buybacks
Corporate insiders are per-
17,000 sonally capitalizing on the re-
cent boom in buyback an-

.
nouncements, vexing a top

ly
16,000
regulatory official.
Taking advantage of price
15,000 bumps that often accompany

14,000
2017 ’18
on By Gretchen
Morgenson
And Tom McGinty
us l,

...while U.S. cotton futures are share-repurchase announce-

getting a boost from renewed ments, company executives
al a

demand from China.

e
have been selling significantly
$1.00 a pound more of their stock immedi-
ately after the news than they
ci on

do beforehand, according to
0.90
an analysis by Robert J. Jack-
son Jr., a commissioner at the
0.80 Securities and Exchange Com-
DU BINGXUN/XINHUA/GETTY IMAGES

mission.
er rs

0.70 In a speech on Monday, Mr.

Jackson—appointed by Presi-
dent Donald Trump and sworn
0.60 in this year to fill a Demo-
m e

2017 ’18 cratic seat at the SEC—will

urge regulators to review se-
curities laws that provide pro-
m rp

Note: 10,000 yuan = $1,556.40

Source: Thomson Reuters tection to insiders making
THE WALL STREET JOURNAL. THE COTTON IS HIGH: Prices are at a six-year high, a result of China’s return as a big buyer and poor growing conditions in Texas. B9 such trades.
Insiders who sell stock into
buyout bounces aren’t trading
illegally, of course, and Mr.

INSIDE
co Fo

PERSONAL TECHNOLOGY | By David Pierce

A Coveted Fox Asset Jackson isn’t accusing them of
that. Other investors also have
the opportunity to take ad-

Don’t Settle for a TV In Any Deal: Star India vantage of the bumps. But
these price surges can be es-
pecially beneficial to corpo-

That Sounds Awful As Walt Disney Co. and

Comcast Corp. gear up for a
possible bidding war over a
big chunk of 21st Century
which is fully owned by Fox,
people familiar with the situa-
tion said.
Comcast and Disney, neither
rate executives holding large
chunks of corporate stock
looking for an uptick to un-
load shares.
You proba- while you can count Ber- Fox, both companies are inter- of which has a big presence in “The SEC gives an exemp-
bly bought a nard’s nose hairs every time India, each view Star India as tion from market-manipula-
new TV in the you watch “Westworld,” you an important piece in their tion rules to companies doing
past few can’t hear him speak without By Corinne Abrams plans to challenge Netflix Inc. a buyback,” Mr. Jackson said
n-

years. It’s cranking the volume to 100. and Debiprasad Nayak and tap growth in emerging in an interview. “The SEC
probably big- And all the swelling, surging, in Mumbai, and Shalini markets, the people said. shouldn’t be making it easier
ger than you ever thought emotional music you’re sup- Ramachandran Star India reaches 700 mil- for executives to use them to
you’d want and thinner than posed to be hearing sounds in New York lion customers a month, with cash out.”
no

you ever thought possible— like the tinkling of a faraway 60 channels in nine different Mr. Jackson, a former law
practically wallpaper. ice-cream truck. languages; owns rights to air professor, examined stock
Only one problem with
this handsome new set: It
You need sound that
matches the picture you paid
AUTO LENDERS ested in Fox’s marquee Holly-
wood franchises like “The
popular cricket tournaments;
and has a stake in a produc-
trades at 385 companies that
announced buybacks in 2017
sounds like junk. It’s so thin for. You could set up a full TAKE ON Simpsons,” “Avatar” and “X- tion company that makes Bol- through this year’s first quar-
and surprisingly inexpensive
that whoever made it didn’t
surround-sound system—
even a wireless one—which
MORE RISK Men.”
But among the most de-
Please turn to page B6 ter. He found the percentage
of insiders selling shares more
have the space or money for can offer superlative audio sired assets is Indian media  Heard on the Street: Fox than doubled immediately fol-
a good set of speakers. So Please turn to page B4 FINANCING, B5 conglomerate Star India, bidding to heat up................ B10 Please turn to page B6

Midcap companies are old enough to know

what they’re doing. And young enough to do it.

MDY
MDY invests in growth-hungry, midcap powerhouses that offer immediate potential but are
grown-up enough not to be a flash in the pan. And it’s beaten 82% of the Morningstar U.S. THE
Mid-Cap Blend Category over the last 3, 5 and 10 years. spdrs.com/MDY MIGHTY
MDY is one of the many first-to-market ETFs from State Street Global Advisors. MIDCAP
Source: Morningstar as of 3/31/18. Based on funds in the Morningstar Mid-Cap Investments in mid-sized companies may involve greater risks than those in SPDR®, S&P and S&P MidCap 400 are registered trademarks of Standard & Poor’s
Blend Category (oldest share class). Rankings are based on returns after taxes that larger, better known companies, but may be less volatile than investments in Financial Services LLC, a division of S&P Global (“S&P”) and have been
are net of all fees, maximum federal tax rate (39.6%) and applicable sales loads. smaller companies. licensed for use by State Street Corporation. No financial product offered by
Rankings reflecting lower tax rates may have resulted in less favorable results for ©2018 Morningstar, Inc. All rights reserved. The information contained herein: State Street or its affiliates is sponsored, endorsed, sold or promoted by S&P.
exchange traded funds due to their tax efficiency. Universe: 111 funds for 10 years, (1) is proprietary to Morningstar and/or its content providers; (2) may not be ALPS Distributors, Inc. (fund distributor); State Street Global Advisors Funds
131 funds for 5 years, and 145 funds for 3 years. MDY’s 1 year peer group percentile
is 32% (54 of 177 funds). Past performance is no guarantee of future results. copied or distributed; and (3) is not warranted to be accurate, complete, or Distributors, LLC (marketing agent).
ETFs trade like stocks, are subject to investment risk, fluctuate in market value timely. Neither Morningstar nor its content providers are responsible for any State Street Global Advisors and its affiliates have not taken into consideration
and may trade at prices above or below the ETF’s net asset value. ETF shares damages or losses arising from any use of this information. the circumstances of any particular investor in producing this material and are
may not readily trade in all market conditions. Brokerage commissions and ETF SPDR® S&P MidCap 400® ETF Trust, a unit investment trust, is listed on not making an investment recommendation or acting in fiduciary capacity in
expenses will reduce returns. NYSE Arca, Inc. connection with the provision of the information contained herein.

Before investing, consider the funds’ investment objectives, risks, charges and expenses. To obtain a prospectus or summary prospectus,
which contains this and other information, call 1.866.787.2257 or visit www.spdrs.com. Read it carefully.
2052632.1.1.NA.RTL Not FDIC Insured • No Bank Guarantee • May Lose Value
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B2 | Monday, June 11, 2018 * *** THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS & FINANCE

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A
Ally Financial..............B5
Amazon.com........A1,B10
American Honda Finance
Huntington Ingalls
Industries..................B3
I
Inmarsat......................B6
Rethink Robotics........B4

Santander Consumer
S

USA Holdings ........... B5

CSX Is Leak in Boxcar Pool
.....................................B5 Instacart......................A4 Sears Holdings..........B10 The railroad’s removal
App Annie...................B6
Apple....................B3,B10
International Paper .... B2 Sky.............................B10
Sony.............................B3
of some rolling stock
J
AT&T..........................B10 Star TV........................B6 puts a strain on the
J.C. Penney................B10
Auto Trader Group......B6
K
T U.S.’s diminishing fleet
B Target........................B10
KAZ Minerals..............B6
BAE Systems..............B3 Target Stores..............A4 BY PAUL ZIOBRO
BB&T............................B5 KKR..............................B1
TD Bank.......................B5
Bloomin' Brands ......... B6 Kohl's.........................B10 Railroads operate under a
The Abraaj Group ....... B2
BT Group.....................B6 KPMG .......................... B2 Time Warner.............B10 simple premise: share railcars
C Kroger..........................A4 Total............................A7 and everyone wins. Pooled re-
L TTX..............................B2 sources, even among competi-

GENE J. PUSKAR/ASSOCIATED PRESS

Carillion.......................B6
Lockheed Martin.........B3 21st Century Fox tors, mean more cars available
Cerberus Capital
Management.............B2 ............................. B1,B10 to fill and fewer running
M empty along tracks.
Comcast...............B1,B10 U
Credit Suisse Group ... B4
Macy's.......................B10 That decadesold system
CSX..............................B2 Microsoft.....................B3 Union Pacific...............B2 buckled after CSX Corp. pulled
Mitie Group.................B6 United Natural Foods.A4 hundreds of boxcars out of a
E Universal Robots........B4 nationwide pool about a year
N
EchoStar......................B6 V ago to improve its own opera-
Envision Healthcare ... B1 Navantia......................B3 tions. The move has put added
Netflix..................B1,B10 Valve............................B3
F strain on the shrinking fleet of CSX said its decision to take back boxcars boiled down to the fraying promise of shared resources.
News Corp ........... B6,B10 W boxcars in the U.S. and added
Facebook......................B6
Fincantieri...................B3 O Walgreens Boots
Alliance.....................B1
costs and complexity for some Over the Hill
large shippers, industry execu-
Ford Motor Credit.......B5 Ocado Group...............A4 Most boxcars in the U.S. are over 35-years-old with the number of them in decline.
Walmart...............A4,B10 tives say.
H P-R Walt Disney.........B1,B10 At International Paper Average age of boxcars in the U.S. Annual number of U.S.
Hulu.............................B6 Plexus Cotton ............. B9 WPP.............................B6 Co.’s Savannah, Ga., plant, boxcars in service
0-5 years 700,000
which produces rolls of con-
tainerboard used to make 6-10 600,000

INDEX TO PEOPLE boxes, the paper giant spends

extra time separating CSX
11-15
16-20
500,000
400,000
boxcars from those of other 21-25
A Graham, Jack..............A3 Pasic, Amir..................R4 300,000
companies that can still be 26-30
Alexander, Carol.........A3 H Patterson, Gavin.........B6 shared. A mix-up can result in 31-35 200,000
Al-Hussainy, Edward..A2 Patterson, Paige.........A3 a $2,000 fee from CSX for 36-40 100,000
Hemphill, Ken.............A3
Praet, Peter ................ A2 each car sent on the wrong More than 40 0
B Hipolito, Isaac.............A3
tracks. The problem occurs at
J R 0 box cars 10,000 20,000 30,000 40,000 1971 ’80 ’90 2000 ’10 ’18
Barbakoff, Nathan......R5 other facilities that are served
Beijk, Patrick...............B4 Jakob, Olivier..............B9 Rai, Vikram.................B9 by two railroads. Source: FTR, AllTranstek THE WALL STREET JOURNAL.
Boseman, Wayne........B9 Ramthun, Roy.............R2 “This adds additional com-

.
Jr., Robert J. Jackson.B1
Braca, Greg..................B5 Reynolds, Nadia..........R2 plexity and inefficiency to our ates a glut of empty cars dent. Mr. Kloster estimates loaded, Union Pacific Corp.
K

ly
Rogoff, Kenneth ......... A2 system,” said Fred Towler, a there. that forest products account Chief Executive Lance Fritz
Brown, Jeffrey............B5
Kadow, Joseph............B6 supply-chain vice president at “The purpose of the pool is for close to two-thirds of box- said. “That’s the magic,” Mr.
C Kimmelman, Gene....B10
S International Paper. to reduce empty miles,” said car shipments. Fritz said.
Caine, Steve................A4 L Sacconaghi, Toni.......B10
on CSX’s decision to pull two Michael Rutherford, CSX vice About 25,000 of the re- Mr. Rutherford said CSX
Craft, Zac .................... B5 Schwarzenegger, Arnold types of boxcars from the na- president of merchandise sales maining boxcars, Mr. Kloster isn’t to blame. Congestion on
Lance Fritz .................. B2
.....................................R5 tional pool boiled down to the and marketing. “The moment said, are managed in a na- other railroads is causing the
E M fraying promise of shared re- it no longer achieves that ob- tional pool by TTX Co., a Chi- boxcar shortage, he said.
Shankar, Uday.............B6
Edenzon, Irwin............B3 sources, the railroad said. In- jective, it isn’t working. That’s cago company jointly owned The change in CSX’s boxcar
us l,

Maestri, Luca............B10 Slott, Ed......................R2

Egli, Peter ................... B9 McMullen, Rodney......A4 stead of quickly reloading why we pulled out.” by the biggest North American use strategy is part of a
Smith, Elizabeth.........B6
El-Erian, Mohamed.....A2 empty cars, CSX said the box- The U.S. boxcar fleet has railroads, including CSX. TTX broader reorganization that
Messitte, Zach............R4
al a

Sorrell, Martin............B6
e
cars were being recalled to dwindled to about 122,000 also manages pools of other Mr. Rutherford said would
F Muirhead, Angus........B4 Spesard, Jenna ........... R5 customers on other rail lines, from more than 660,000 in railcars, including flatcars and help customers get their goods
Foux, Mikhail .............. B9 Munster, Gene............B3 Spivey, Angela............A1 requiring CSX to ship the cars 1971, according to AllTranstek automobile carriers. Partici- on faster, more reliable trains.
ci on

Murdoch, Rupert.......B10 back empty, sometimes past LLC, a railcar management pants in each pool can use the CSX’s order fulfillments for
G Swallow Prior, Karen
N .....................................A3 its own customers. and consulting firm. cars as their own. boxcars to its customers are
Gakidis, Harry.............A2
One problem is geographic. “What’s left is the stuff that Having as many railroads as now close to record levels, he
Galant, Debbie............R2 Naqvi, Arif...................B2 W
CSX operates in the eastern truly wants to ship in a box- possible in the pool helps said. “I find it hard to see that
Gates, Bill ................... B2 P Winter, Donald............B3 U.S., where many boxcar ship- car,” said Richard Kloster, an match empty cars with cargo customers aren’t benefiting,”
er rs

Goldstein, Jeff............B5 Pachter, Michael.........B3 Wong, Wong...............A3 ments are received. That cre- AllTranstek senior vice presi- nearest to where they are un- Mr. Rutherford said.

Abraaj Founder Scrambles as His Empire Teeters

m e
m rp

Arif Naqvi wooed the likes the lender. A court hearing for of Louisiana and Washington tors from their pledges to the
of Bill Gates, the World Bank Major Headaches the bankruptcy case in the State Investment Board agreed new fund.
and U.S. pension funds with an The Abraaj Group is facing a lawsuit from a lender and investigations Cayman Islands is scheduled to invest. Amid such concerns, Mr.
ambitious pitch: Invest in his by powerful investors into alleged accounting irregularities. for late June. Then everything changed. Naqvi stepped back from man-
Some former employees News of the investigation into aging Abraaj’s fund-manage-
co Fo

By Simon Clark, The Abraaj Group's structure* said in interviews that as the health-care fund in Febru- ment unit and put it up for
William Louch Abraaj’s leader, biggest share- ary caused “turmoil” as it “un- sale. He remains the largest
and Nicolas Parasie holder and its driving force, leashed the floodgates” of in- shareholder in the Cayman Is-
Mr. Naqvi had a dominating vestors asking Abraaj what lands-based company that
emerging-markets funds to Arif Naqvi attitude that laid the ground- was happening at the firm, Mr. owns the fund-management
make money—and help poor Founder, work for trouble. Naqvi said in the telephone in- unit.
people, too. The Abraaj Group Several of these former em- terview. Mr. Naqvi said sale talks are
Now some investors in the ployees blame the problems on Mr. Naqvi released inves- “advanced.”
funds of the Abraaj Group, the what they say was Mr. Naqvi’s
Dubai-based private-equity overly ambitious expansion
firm he founded, are alleging beyond Middle East deals. ADVERTISEMENT
the company misused some of In response, Mr. Naqvi said
the nearly $14 billion it man-
aged, and a lender is suing for Abraaj
Kuwait's Public
Institution for Social
he is proud of the firm’s recent
attempt to raise the biggest The Marketplace
n-

an unpaid debt. Mr. Naqvi is Holdings Security is suing for emerging-markets private-eq- To advertise: 800-366-3975 or WSJ.com/classifieds
trying to keep his firm afloat (Cayman Islands) non-repayment of uity fund.
and defend his reputation. $100 million loan. The reversal of fortune is a
BANKRUPTCIES BUSINESS OPPORTUNITIES
The 57-year-old Pakistani startling turn for Mr. Naqvi,
no

deal maker was in crisis talks whose rise came by challeng-

last week. Buyout firm Cer- ing the perception that emerg-    
 
   
          
 

  
berus Capital Management ing markets are riskier than 
   
    
offered $125 million for Abraaj Private-equity firm Western markets as places to
     !!

Abraaj’s fund-management Investment Cerberus proposes to invest.


        !"#!$%&$
     !"#'(")    !  "# 
    
  *+,-. /,,
unit, people familiar with the Management buy for $125 million, “Dare I say it, cheekily, that    0-
 +12 3 1/
$$$%&'()'* +,%)


offer said. A regulatory delay (Dubai) according to people when risk came into the global   
 
 -).&/ %)
in the sale of a $1.77 billion familiar with the offer. financial system and into all  

 


 
stake in a power plant Abraaj our lives it came from right 
  +4 ! )(!& 
 
 56
 7
 6      
controls in Karachi, Mr. here, in New York City, in 2008  8,94,, *:;  -
,1-4 GREAT BUSINESS
Naqvi’s native city, has made with the Lehman Brothers / *: ! ""!#!"; /,
  <-   941.  
,1-4 OPPORTUNITY
his cash-flow problems worse. crash,” he said at a conference       6 
“We have been working re- in New York in September.
  5     =  6    
)(!& *$%"&  4  14-
Under $10,000
lentlessly with all our inves- Abraaj’s first investors were  ,>  1,  941.  

,1-4 /  -, <,> 
Premium Territories
tors, creditors and regulators wealthy Middle Eastern fami-   6     5   
,   
 ' () )*(+ " ((,**
Questeduf.com
round the clock,” Mr. Naqvi lies who, Mr. Naqvi said, “of- # -!"  "#!.   0- +12
3 1/ ,,> +4> ,  
said in a written response to
interview questions from The Abraaj Growth Markets Abraaj Private Equity
ten sent us money in large
chunks and said, ‘Deploy it as
324 1. 4 / %&) )!$ 

 ,1> 8 %(%(  ,>  1, www.earn11.com
EARN 11%
  6  5    =     
Wall Street Journal. “We re- Health Fund Fund IV you wish.’ ”  . 4    4
'  . ?1,  
,1-4 up to
main committed to working Fund size: $1 billion $1.6 billion He raised bigger funds on / /4 *!  , ,,>@ *) 1/
INVESTING IN 1st MORTGAGES
  324 1.  81- 4-  .
through this in a confidential Bill & Melinda Gates Foundation, Abraaj told investors in May the back of successful invest-    4@ *'   /  Short Term, High Yield, Low LTV.
Secure & Great Monthly Income.
and coordinated way, towards World Bank and other investors that money from the fund was ments and hired hundreds of    ?1,> .   4 

a satisfactory outcome for all hired forensic accountants to used for general corporate staff, including butlers. Abraaj
 7        
,14-
  
@  * 
, ,14-,.  ,  4  .
Call 800-359-1111
parties.” He denies wrongdo- investigate whether money was purposes, according to people earned more than four times        6    
6  5      6 
ing. not used for its stated purpose, familiar with the fund. its investment in five compa- =   !     6  =  DEA
His woes began this year nies sold by 2007 and reported 4  -   
 ' (* )*(+ 
according to people familiar  -- 1 , 1,< ,//, -1,1
when the Bill & Melinda Gates net annualized returns   5  6 !     "   




with the fund.    6    5     
Foundation and other inves- through 2016 of 17.9%, com- / ,<  /.   1, .        
! "# $ %& '  !
 4
tors hired a forensic accoun- *Showing selected companies pany fundraising documents    %
  ,    ( ) *)$ ! * !*!
  (    ! ! ! 
tant to look into possible mis- Sources: staff reports; Bloomberg News (photo) THE WALL STREET JOURNAL. show. , 
,1-4 /  
- /.  , /  -2   ! )!  ( !)) * )
use of money they had put To expand Abraaj’s investor  324 1. 4 )!$ 
   +, !(   !  !) *)!
/ "!' ,1> 8 %(%(@ 4>     -!   +, !( 
into a $1 billion Abraaj health- Abraaj Growth Markets Health wanted,” he said. “In hindsight base and geographical reach,
7 =  #
$% & AA1,- )   ( $)) '   
care fund, according to people Fund, was used for its stated would we have done things in 2012 Mr. Naqvi led the take- 414><A@  4  , 94 /
 " 7  '
 (! B 
! (    )!  
(  ) $   $ +, !(
familiar with the audit. purpose or returned to inves- differently? Possibly.” over of Aureos Capital. The $! $ ! )* $! #  C B 
8 D' E +12 3-< F!(D( ,1> 8

)! !( * ) !  ))$ !.
//  ' % % 0,,00 ! !  ).
The audit found that Abraaj tors. The firm also said that a Abraaj told investors in May London-based private-equity %(%( - '!)#'D#!(D( GH '!)#'D#!(D$ ,120324,0
,12032 4,033 5(  "0# 44 
1>I>#-1/@ I>#-1/
didn’t spend all of the money separate audit it commis- that it used money invested in firm had raised funds from 5) !)6 4+04 ! 7 0,24/24,,+
$8 !. ! 5 9 !. 0+
on hospitals in countries in- sioned, carried out by KPMG, another fund for general cor- Western institutions including ) ' (
( : 5(  "0# !
cluding India and Nigeria as found that all the money in the porate purposes, people famil- the Gates Foundation. Soon af-  / ! 5 !) 6 ; 00/<0
! 7. 0,24/24,,+ $8 !. !
BUSINESS OPPORTUNITIES
promised, two of these people health-care fund was handled iar with that fund said. terward, the Gates Foundation  5 9 !. 0+ ) ' (

( : 5(  "0# *)!& = 00 /
said. Instead, the audit “in line with the agreed upon Also in May, a Kuwaiti pen- joined with Mr. Naqvi’s foun-  ! )2) !) 63< ,,,>3/1
showed, it transferred some procedures.” sion fund asked a court in the dation in Pakistan on a family- ! 7. ,120324,,+ $8 !. !
) =
 !. 0?4, @ A  >B
27 year old Medical Equipment and
money out of the health-care Mr. Naqvi said in a tele- Cayman Islands to declare an planning project. C- %: 5(  "0# B 5  !
Medical Waste Company with growing ! ?, !)* ! !) 6041,>>
fund, these people said. The phone interview that the dis- Abraaj company based there By 2017, he was seeking to pains looking for loan/investor/partner ! 7. ,324>24,,1 $8 !.
audit didn’t show what the pute was caused by differing insolvent, alleging that it was seal his legacy by raising $6 to help restructure short term debt.
 A% ! ! AA !. 100
@ 0>1   644 $ %& %: 5
money was specifically used interpretations of Abraaj’s unable to repay a $100 million billion for what would have Some innovative exclusive products. (  "0# =* 04 !  !)
for, they said. agreement with investors. “We loan. A spokesman for Abraaj been the biggest emerging- Contact owner at 850-255-1441 or
6 0+4+?< ! 7. 0024,24,0? $8
!. !( B A  A  !.
Abraaj has said money felt we were within our rights said the firm is trying to reach markets private-equity fund. [email protected] >0 A ! '$ 5
moved out of the fund, the to interpret it the way we a “consensual outcome” with Teachers’ Retirement System
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | B3

BUSINESS NEWS

Swiss Vote Down At Sea, a Spending Spree

Money Overhaul Defense firms pursue
potential windfall as
Fighting Frigates
Australia's frigate contest will kick off $70 billion in decisions by nations including the U.S. and Canada.
BY BRIAN BLACKSTONE paign’s final days. Western navies boost
“Action is still urgently BAE Systems Type 26 Fincantieri Marine Fremm Navantia SEA5000
ZURICH—Swiss voters on needed, because the next fi- aging fleets in Pacific Also vying for Canada Also vying for U.S. Vying for U.S., Canada
Sunday overwhelmingly re- nancial crisis will happen
jected a proposal to bar with certainty,” the commit- BY ROB TAYLOR
commercial banks from cre- tee of the Sovereign Money
ating money, a victory for Initiative said in a statement CANBERRA, Australia—U.S.
the central bank which had Sunday, calling the results allies are embarking on a na-
vehemently opposed the ini- “respectable.” val shopping spree as territo-
tiative. “Politicians must now rial standoffs intensify in the
The Vollgeld Initiative, take concrete measures to Pacific.
Antisubmarine and antiair missile Antisubmarine and antiair missile Antisubmarine and antiair missile
also known as Sovereign guarantee that both our Contracts valued at $70 bil-
defense, Australian Ceafar2 radar, defense, Australian Ceafar2 radar, defense, Australian Ceafar2 radar,
Money, attracted interna- money and the payment lion are up for grabs from
Aegis combat system Aegis combat system Aegis combat system
tional attention because it transaction system remain Australia to Canada, as gov-
would have upended the completely secure in a cri- ernments update aging fleets Length and speed Length and speed Length and speed
banking system in a country sis,” they said. to protect shipping lanes and 491 feet, 26+ knots 472 feet, 27+ knots 483 feet, 28+ knots
known for its banks. Under the current system their territorial waters.
Displacement Displacement Displacement
Financial institutions in in Switzerland and else- While defense spending
6,900 metric tons 6,700 metric tons 6,700 metric tons
Switzerland and around the where, when a borrower is globally has fallen over the
world create electronic approved for a loan, the past decade, the Stockholm In- Range Range Range
money every day when they bank creates an electronic ternational Peace Research In- 7,000+ nautical miles 6,000+ nautical miles 5,400+ nautical miles
lend money to households deposit for the borrower, stitute expects spending this
and businesses. which the borrower trans- year to be the highest since Armament 24 strike missile cells Armament 32 strike missile cells Armament 48 strike missile cells
But Vollgeld supporters fers to the seller’s bank ac- the close of the Cold War. Na-
wanted the Swiss National count. tions in Asia and the Middle
Bank to create all the money Much of the money in the East are leading the charge. Helicopter hangars 1 Helicopter hangars 2 Helicopter hangars 1-2
in the economy, putting it in economy is created through That is a potential windfall
direct control of the money these bank-created deposits. for companies such as Lock-
supply. Regulatory limits, such as heed Martin Corp. and Hun- Note: Figures are estimates for BAE Systems and Navantia, images are renderings.
capital ratios, keep banks tington Ingalls Industries Inc. Sources: Navantia, BAE Systems, Fincantieri, Australian Strategic Policy Institute. THE WALL STREET JOURNAL.
from endlessly making loans. in the U.S., BAE Systems PLC
Of the 645 billion Swiss of Britain and Fincantieri fleet is stretched too thin, re- and the U.S. to buy the same than destroyers but carry

24%
Swiss voters who supported
francs (about $652 billion)
in circulation, only about 85
billion francs are notes and
coins.
SpA, Europe’s biggest ship-
builder. The new contracts
could secure thousands of jobs
and guarantee a pipeline of
sulting in cuts to training.
Defense companies say the
coordinated buildup among al-
lies is also an opportunity for
ships. Navantia and BAE are
vying for a Canadian contract
to build 15 frigates valued at
as much as $46 billion.
more firepower than its
smaller littoral combat ships.
Each new frigate costs $950
million, the U.S. Navy esti-
Vollgeld Initiative The Vollgeld Initiative work for at least a decade. Western allies to build a com- While frigates are among mates. A completely outfitted
was put to a binding refer- Western navies are rebuild- mon warship. By adopting the smallest warships in the destroyer costs $1.8 billion.
endum because supporters ing their Pacific fleets as similar designs, they say, U.S. fleet, they are the back- A multibillion-dollar Penta-

.
gathered the required China and Russia challenge countries could share the cost bone of allied navies. Australia gon program to commission

ly
Swiss voters opted to 100,000 signatures under their dominance in the region. of future ship upgrades, with wants its new ships to be al- 20 missile frigates for con-
maintain the status quo, as Swiss law. China is asserting more sway spare parts and maintenance most as large as U.S. destroy- struction in the U.S. has pitted
expected. Only 24% of voters It would have converted over the South China Sea, ten- available at a wider range of ers, capable of hunting subma- Fincantieri against Austal
supported the initiative, ac- these electronic deposits on sions on the Korean Peninsula global shipyards. rines and equipped to defend USA, Lockheed, General Dy-
cording to provisional fig- into central-bank-issued are high and Russia is showing “To have the Canadian against ballistic missiles. namics Bath Iron Works
ures released by the govern- money much like cash. Banks renewed interest in Asia. Late navy, the Australian navy, the About 250 new submarines teamed with Navantia, and
ment, with 76% against. would then have to actually last year, a Russian navy ship Royal Navy, the New Zealand are expected to enter service Huntington Ingalls.
“With conditions now re- have money before they lend docked in Papua New Guinea navy, operating the same frig- in Asia in the next decade as In a sign that Australia’s
us l,

maining unchanged, the SNB it out. for training and Russian ate, that’s not an impossible nations including Australia choice could inform the U.S.
will be able to maintain its Supporters said this bombers visited Indonesia. dream,” said BAE’s managing and Japan seek to counter competition, a board advising
al a
e
monetary policy focus on en- would limit costly booms The U.S. has urged its allies director, Nigel Stewart. China’s militarization of atolls Australian defense officials is
suring price stability, which and busts and eliminate the to spend more on defense. Australia within weeks is in trade lanes running through stacked with experts from the
makes an important contri- danger of bank runs. President Donald Trump has due to award a $26 billion the South China Sea. U.S. including former Secre-
ci on

bution to our country’s pros- Opponents—which besides called for a U.S. naval fleet of contract for nine frigates. BAE, “By 2025, half of the tary of the Navy Donald Win-
perity,” the SNB said in a the SNB included the federal 350 ships. The current fleet of Fincantieri and Spain-based world’s submarines will be op- ter and Irwin Edenzon, the
statement Sunday after the government and bank execu- 273 ships is the smallest since Navantia SA are competing erating off Australia’s eastern former president of Ingalls
vote. tives—countered that it 1916. Last year collisions be- for the deal. seaboard,” Mr. Stewart said. Shipbuilding.
Opinion polls ahead of the would raise the cost of tween U.S. guided-missile de- Warren King, chairman of Frigates are also becoming “The whole world is looking
er rs

vote had support at closer to credit, overburden the cen- stroyers and merchant ships Navantia’s Australian unit, more important for the U.S. at Australia now,” said Dario
one-third, suggesting sup- tral bank and damage the that left 17 sailors dead said the purchases create Navy as the Pentagon seeks Deste, chairman of Fincantieri
port waned in the cam- economy. prompted criticism that the some momentum for Canada warships that are cheaper in Australia.
m e

A School-Shooting Game
m rp

Is Pulled After Complaints

co Fo

BY SARAH E. NEEDLEMAN gated the controversy around

Full Steam Ahead his coming title. We are not
A popular videogame-down- Estimated number of new games going to do business with peo-
load store lowered its bar last added to Steam each year ple who act like this towards
year to make it easier for de- our customers or Valve.”
velopers to hawk their cre- 8,000 Mr. Berdyev, who identified
ations. It ended up letting in a himself in a telephone interview
game that involved shooting as a social-media marketer in
up a school. 6,000 Seattle, said he didn’t create
Valve Corp., the company the game but helped a friend in
behind the online store Steam, Russia list it. “It feels like they
pulled a preview of “Active 4,000 tried to put the blame on me
Shooter” on May 29, about a rather than show that they are
n-

week before the game was censoring the game,” he said.

supposed to go on sale. The re- 2,000 Steam, which launched in
moval followed days of mount- 2003, is among the largest dis-
ing complaints from parents, tributors of downloadable PC
no

advocacy groups and others. 0 games. It generates about $2.5

The game’s fleeting pres- 2010 ’12 ’14 ’16 ’18 billion yearly in PC game sales,
ence on Steam, which draws according to estimates from

Securing
Note: 2018 is to date.
tens of millions of people Source: SteamSpy Wedbush Securities analyst
daily, shows the industry is THE WALL STREET JOURNAL. Michael Pachter, who values
still struggling with how to Valve at about $15 billion.
handle games whose violent as Sony Corp.’s PlayStation Valve asked customers in

Captain Sophie’s
and extreme content has be- and Microsoft Corp.’s Xbox 2012 to review game proposals
come immensely popular. and app stores owned by Ap- submitted by developers new to
Valve, a closely held com- ple Inc. and Google Inc., which Steam, and then vote on which
pany based in Bellevue, Wash., monitor submissions to vary- games should be fully available.

Magic Fort.
said it removed “Active ing degrees before making But five years later, it allowed
Shooter” because of concerns games available. new developers to list games as
about the game’s origins and Critics have railed against “coming soon” as long as they
motives. It wasn’t the first ul- violent videogames for decades, paid $100 and their game de-
traviolent videogame to ap- but they remain some of the scriptions met certain guide-
pear on Steam; it has sold best-selling franchises, includ- lines. Steam says games with
games, including “Hatred” and
“Postal,” that involve players
ing Take-Two Interactive Soft-
ware Inc.’s “Grand Theft Auto”
hate speech or pornography
aren’t allowed, and games with
Unisys improves and protects the
controlling a character com- and Activision Blizzard Inc.’s violence and nudity are permit-
mitting mass murder. “Call of Duty.” At the giant vid- ted with warning labels. home buying process online and
“You don’t see egregious eogame expo E3 over the week- Developers praised Steam
content on the other major end, violent games again were for giving small creators an in-person for tens of millions of
platforms because they have on display, such as Ubisoft En- easy publishing path, with
controls in place to prevent
this kind of stuff,” said Gene
tertainment SA’s next install-
ment of “Assassin’s Creed.”
games taking only a few days
to get listed as “coming soon.”
people around the world. Which
Munster, an analyst at Loup
Ventures. “Steam is more like
For many, however, “Active
Shooter” crossed a line at a
Many, though, said they
weren’t sure what Valve did to
means families just like Sophie’s
the Wild West.”
When removing “Active
time when real-life school
shootings in the U.S. have be-
evaluate their submissions and
had no communication with
get to build forts together in
Shooter” last week, Valve said come all-too-frequent horrors. the company during that time.
it discovered the game’s creator In March, President Donald “Humans at Valve are very their first home. Find out more
at Unisys.com/Banking.
had previously been banned Trump met with industry lead- involved, with groups of peo-
from Steam but had subse- ers to discuss the impact of vi- ple looking at the contents of
quently submitted games, in- olent games on children fol- every controversial title sub-
cluding “Active Shooter,” under lowing the high-school mitted to us,” the company
a different name. Last week, shooting in Parkland, Fla. said in its statement on
Valve said it didn’t want to de- Valve identified Ata Berdyev Wednesday.
cide what games people play as responsible for listing “Ac- Steam has about 22,000
and content developers create, tive Shooter” on Steam. “Ata is videogames listed for sale or
with exceptions for games it a troll, with a history of cus- coming soon, with an average
considers either illegal or tomer abuse, publishing copy- of 25 new games added daily,
“straight up trolling.” Valve re- right material, and user review according to SteamSpy, a small
sponded selectively to requests
for comment and didn’t explain
manipulation,” the company
said in a statement. “His sub-
firm that collects data on the
platform. Valve has an esti-
Consulting | Services | Technology
what it meant by trolling. sequent return under new mated 450 employees, accord-
People also can download business names was a fact that ing to research firm PitchBook
games through consoles such came to light as we investi- Data Inc.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B4 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

TECHNOLOGY WSJ.com/Tech

Robots Shift From Factories to New Jobs

Growing list of tasks ladders. In Japan, a cobot sors, which were often con- tillery & Cocktail Bar in the
boxes takeout dumplings. In fined in cages to protect them Dutch city of Groningen in Rise of the Cobots
includes helping out at Singapore, robots give soft-tis- from injuring nearby humans. 2013, he went looking for a Sales of robots that work Other
bars and takeout sue massages. Cobot arms brake when machine that could scale the alongside humans are expected Collaborative robots
Cobots made up just 5% of they touch humans, and don’t space’s jewel-colored wall of to continue rising.
shops, giving massages the $14 billion industrial-robot have “pinch points” that could spirit bottles. When Mr. Beijk
market in 2017, according to snag fingers and skin. One co- opened a wine bar last year, Estimated value of industrial Estimated sales
BY NATASHA KHAN research by Minneapolis-based bot maker, Boston-based Re- he bought a two-armed cobot robot sector
venture-capital firm Loup Ven- think Robotics, added smiley- programmed to extract wine
Robots are moving off the tures. Loup estimates sales face screens to its robots to from bottles without removing $20 billion 600,000 units
assembly line. will jump to 27% of a $33 bil- make them look friendlier. the cork.
Collaborative robots that lion market by 2025 as de- “Robots are now crossing In Singapore, AiTreat—a 15 450,000
work alongside humans—“co- mand rises. About 20 manu- the chasm from a niche to a startup at Nanyang Technolog-
bots”—are getting cheaper facturers have started selling mass market,” said Angus ical University—has created
and easier to program. That is such robots in the past de- Muirhead, who runs a robotics robots that can give Chinese 10 300,000
encouraging businesses to put cade. fund for Credit Suisse. He lik- medical massages, which focus
them to work at new tasks in Smaller businesses are us- ened the current adoption of on acupressure points.
bars, restaurants and clinics. ing more cobots as labor costs robotics to the introduction in Both Mr. Beijk’s and 5 150,000
In the Netherlands, a cobot rise. Artificial-intelligence the late 1990s of smaller hand- AiTreat’s cobots were made in
scales a 26-foot-high bar to software is making it easier to sets that launched mobile part by Universal Robots, 0 0
tap bottles of homemade gin, teach them repetitive tasks. phones into wider use. which sold its first cobot in
whiskey and limoncello so that The latest models are sleeker When restaurateur Patrick 2008. Last year, the company 2017 2018 2019 2020 2017 2018 2019 2020
bartenders don’t need to climb and safer than their predeces- Beijk opened Mofongo’s Dis- sold 8,600 units. Source: Loup Ventures THE WALL STREET JOURNAL.

TV Should command it with Siri on an

iPhone. The Beam is small
and simple enough to be the
anytime soon—even if manu-
facturers try to wow you
with 8K, HDR and other

Sound a right soundbar for many

people and, based on my
brief time with it, sounds ex-
mysterious upgrades. But the
apps and services appearing
on modern TVs change all

Lot Better cellent.

You spend a lot of time in
the living room, so why not
the time. The solution: Up-
grade only what you need to
in order to get the best con-
Continued from page B1 get one gadget that does it tent.
quality but requires serious all? Lots of people listen to Chinese brand Xiaomi has
money and time. Or you music through their TV just been working on this for the
could go the easier route and EMILY PRAPUOLENIS/THE WALL STREET JOURNAL because it’s usually the loud- past few years. Its Mi TV
get a soundbar. Drop a long est (or only) speaker in the Bar, not currently for sale in
brick of speakers on your TV house. A speaker like the the U.S., attaches to any TV
stand, plug it in, and revel in Beam provides a far better or projector and instantly
the new sound. experience, even when the makes it smart. In its quest

.
TV is off. to build ever-thinner TVs,

E
ly
ven stereo bars that Xiaomi moved all key ports,

R
cost around $100— oku is thinking along plus all the apps, into the
such as Vizio’s 29” similar lines. After soundbar. That way you can
Sound Bar and the Amazon- on years of making set- keep your screen for as long
Basics model with built-in top boxes, the company has as it works, and upgrade the
subwoofer—will put your TV become a force in smart TVs: soundbar whenever you need
speakers to shame. Pricier Smart soundbars, like the $300 Polk Command Bar, can be controlled with the sound of your voice. The company says one in more brains.
soundbars mean better four smart TVs sold in the Right now, the best avail-
us l,

sound. They generally use into hubs for all your con- connect your other home- to support a two-way audio U.S. runs its RokuOS soft- able smart soundbar is the
multiple speakers to blast nected devices. theater devices directly to standard called HDMI-ARC, ware. Later this year, Roku Polk Command Bar, though I
al a
e
sound right, left and center, The first smart thing the soundbar and switch be- which not all do. plans to roll out the Roku think the Sonos Beam, which
and can sync with additional smart soundbars will do is tween them with your voice. The $400 Sonos Beam, a Entertainment Assistant, a starts shipping next month,
speakers behind you. They replace your remote for ba- Voice command isn’t al- small soundbar that will be voice-controlled tool for will likely be an even better
ci on

also can bring out dialogue sic functions. By integrating ways seamless. Alexa-en- available in July, also con- finding stuff to watch and choice, especially if you al-
and tamp down loud noises Amazon’s Alexa and other abled devices are at their nects to your TV with a sin- listen to. One of the first ready have Sonos speakers
automatically. voice assistants, these de- best only when paired with gle HDMI-ARC cable. It also places that assistant will ap- in your house.
And the best soundbars vices know what to do when one of Amazon’s Fire TV de- offers Alexa integration; pear: a soundbar made by Either way, your next
are becoming more than just you say, “turn the TV on,” or vices: The Command Bar Google Assistant is coming TCL. home-theater upgrade
er rs

speakers: Manufacturers are “turn the volume down.” couldn’t do much with my later. And since the Sonos If you did buy an expen- doesn’t need to be a smart
starting to embed voice as- Some, like the $300 Polk Roku. And that clean, one- Beam is compatible with Ap- sive 4K TV recently, you TV. It should be something
sistants, turning the systems Command Bar, allow you to cable setup requires your TV ple’s AirPlay 2, you can also won’t be itching to upgrade smarter. And louder.
m e
©2018 Dow Jones & Co. Inc. All rights reserved. 6DJ6301

m rp
co Fo
n-
no

A few of these are about to break through

Tech-driven innovation is remaking business daily— and corporations, investors and
entrepreneurs are eager to find the next game-changer. Discover 25 startups that
With polling from:
are making their mark. Read The Wall Street Journal’s Tech Companies to Watch.

Read our full rankings and special report on June 13.

 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. * * * * Monday, June 11, 2018 | B5

BUSINESS NEWS

Auto Lenders Are Taking On More Risk

Faced with slowing bel less-than-ideal borrowers
without alarming investors.
loan growth, some are Nonprime and subprime cus-
reaching out to less tomers can generate better re-
turns because they tend to pay
creditworthy buyers higher interest rates.
“When you can kind of op-
New risks are lurking in erate in the belly of credit and
auto loans. generate 7-plus-percent yields
As loan growth slows, on new originations, that’s
banks and other lenders have pretty attractive business,”
been tinkering with loan terms Ally Financial Inc. Chief Exec-
utive Jeffrey Brown said at an
By AnnaMaria industry conference this
Andriotis month. Ally, one of the largest
and Christina Rexrode U.S. auto lenders, does busi-
ness with borrowers across
in an effort to gain more con- the credit spectrum, including
sumers. They are originating a subprime.
greater share of loans with re- Lenders say they typically
payment periods of more than make the longest loans to
five years and, in some cases, prime customers who can af-
extending loans to consumers ford them and understand the

SPENCER PLATT/GETTY IMAGES

who are stretching further to risks.
afford their purchases. Banks A report last month by
such as TD Bank, Santander Moody’s Investors Service,
Consumer USA Holdings Inc. however, found that borrowers
and BB&T Corp., meanwhile, who sign up for loans that last
have said they are increasing six years or longer have lower
their loans to riskier appli- credit scores and owe a larger
cants. share of the vehicle’s price
Their moves come at an un- Many auto lenders have been offering more loans with longer terms. A car dealership in the New York borough of Queens. than consumers with shorter
settled time for auto lending. loans. The loan payments also
Sales growth has been choppy and of itself,” TD Bank Chief money is tight. “There’s some account for a larger share of
and missed payments are up Executive Greg Braca said at Speeding Up security in that,” said Mr. their income, said Moody’s.
from a year ago. Also, used- an industry conference this For new cars, loans are longer and monthly payments Craft, who lives in Hawaii. At Ally, for example, bor-
car prices are under pressure, year. are becoming more expensive. Lenders pushed into sub- rowers with loans stretching
raising the risk of higher Many auto lenders, includ- prime auto lending after the six years or longer owed on
losses for lenders when vehi- ing banks, nonbanks and the Average repayment period Average monthly loan payment recession, which helped boost average around 100% of the
cles are repossessed. Faced finance arms of car manufac- 70 months 550 vehicle sales. Subprime auto car’s purchase price when
with these headwinds, many turers, have been offering lending peaked at $114.4 bil- those loans were originated,
lenders shunned applicants more loans with longer terms. 68 525 lion in 2015, according to according to Moody’s. Borrow-

.
with low credit scores and Generally, these terms allow Equifax, accounting for 19% of ers with a shorter repayment
66 500

ly
have been looking for ways to borrowers to make lower auto loans and leases that period owed 83%. Credit
make up the lost volume. monthly payments, but usually 64 475 year. Higher loan losses fol- scores for borrowers with the
The latest underwriting ef- at a higher interest rate. That, lowed, and lenders subse- longer loans averaged roughly
forts show that lenders, faced combined with the longer pay- on 62 450 quently tightened underwrit- 725, compared with about 760
with conflicting signals about ment period, means that bor- 60 425 ing standards. That resulted in for borrowers with shorter-
the health of the U.S. con- rowers can end up paying a drop in new car sales and term loans.
2008 ’18 2008 ’18
sumer, are engaged in a deli- thousands more for their cars loan originations last year. Similar rifts exist with
cate balancing act to boost than if they opted for a While subprime lending is loans extended by auto mak-
us l,

Note: All data are for the first quarter of each year.
lending and profit without shorter loan. Source: Experian THE WALL STREET JOURNAL. declining, some banks are ers’ in-house financing arms,
taking on overly risky custom- In the first quarter, the av- turning to consumers whose including Ford Motor Credit
al a
e
ers. Though unemployment erage loan term for a new car up from 7% of loans in late quarter, according to Experian. credit scores are neither high Co. and American Honda Fi-
has reached an 18-year low exceeded 69 months, the sec- 2009. Zac Craft wanted a three- nor low. TD Bank, Santander nance Corp.
and wages are creeping higher, ond consecutive quarter it had Lenders say borrowers need year loan when he bought his Consumer USA and BB&T say A Ford Credit spokeswoman
ci on

some households are sliding ever been above that level, ac- flexible terms because new ve- 2012 Chevy Cruze this year they have been extending said the company’s lending
deeper into debt and falling cording to credit-reporting hicles are getting more expen- but opted for a five-year loan more loans to borrowers they standards haven’t changed and
behind on their credit cards firm Experian. Also in the first sive. Despite the longer repay- despite its slightly higher in- define as “nonprime” or “near that longer-term loans are “a
and other debt payments. quarter, new car loans origi- ment periods, average terest rate. Mr. Craft plans to prime.” Santander and BB&T relatively small part of the
If “you only took on the fi- nated with repayment periods monthly loan payments con- pay off the loan in three years also originate subprime auto business.” Honda Finance has
er rs

nancing for the top echelon of of between 73 and 84 months tinue to rise, hitting a record to cut down on interest but loans. kept its maximum repayment
the super prime... [it is] very, represented more than one- $523 for borrowers who wanted the option to make Skeptics say the term period at 72 months, a spokes-
very hard to make money in third of total new car loans, bought new cars in the first lower monthly payments when nonprime is another way to la- man said.
m e
m rp
co Fo
BARRY WETCHER/WARNER BROS/ASSOCIATED PRESS

n-

‘Ocean’s 8’ stars, from left, Sandra Bullock, Sarah Paulson, Rihanna, Cate Blanchett and Awkwafina.
no

Female-Led Heist Film ‘Ocean’s 8’

Bumps ‘Solo’ From Its No. 1 Spot
Associated Press

NEW YORK—“Ocean’s 8,”

Estimated Box-Office Figures, Through Sunday
SALES, IN MILLIONS
the female-led overhaul of the
“Ocean’s” heist franchise, FILM DISTRIBUTOR WEEKEND*CUMULATIVE % CHANGE
opened with an estimated
1. Ocean’s 8 Warner Bros. $41.5 $41.5 --
$41.5 million at the box office,
taking the weekend’s top spot 2. Solo: A Star Disney $15.2 $176.1 -48
from the fast-falling “Solo: A Wars Story
Star Wars Story.” 3. Deadpool 2 Twentieth Century Fox $13.7 $278.7 -41
“Ocean’s 8,” despite ho-hum
4. Hereditary A24 $13 $13 --
reviews, found nothing like the
stormy reception than the fe- 5. Avengers: Disney $6.8 $654.7 -35
male-led “Ghostbusters” re- Infinity War
boot did on the same weekend *Friday, Saturday and Sunday Source: comScore
two years ago.
Made for approximately $70
million, “Ocean’s 8” and its chief Jeff Goldstein. “Number death of its matriarch—a D-
cast, featuring Sandra Bullock, one, it’s fun. Number two, it plus CinemaScore.
Cate Blanchett and Anne Hath- hits an underserved audience. Less successful was “Hotel
away, set an opening-weekend Unfortunately, there is just a Artemis,” starring Jodie Foster.
best for the franchise, not ac- lack of stories that are aimed The Global Road release, also
counting for inflation. The right at women.” starring Sterling K. Brown,
three previous “Ocean’s” Yet the weekend’s three Dave Bautista and Charlie Day,
films—starring Brad Pitt, new wide releases were all fe- flopped with $3.2 million.
George Clooney and Matt Da- male-led. One of the early summer’s
mon, and based on the 1960 The horror thriller “Heredi- more breakout hits has been
original “Ocean’s 11,” with tary,” starring Toni Collette, the Supreme Court Justice
Frank Sinatra—all had debuts made its debut with $13 mil- Ruth Bader Ginsburg docu-
with between $36 million and lion, setting a new company mentary “RBG,” which has
$39 million in the past decade. record for A24, the indie dis- made $9.1 million in six weeks
“Ocean’s 8,” also starring tributor behind releases like of release through Sunday.
Mindy Kaling, Sarah Paulson, “The Witch” and “Moonlight.” Opening over the weekend
Awkwafina, Rihanna and Hel- The feature-film directing de- was another documentary that
ena Bonham Carter, drew a but of Ari Aster, “Hereditary,” may prove a similar sensation:
largely female audience—69% has received rave reviews and the Fred Rogers documentary
female—for a result that been hailed as the year’s scari- “Won’t You Be My Neighbor?”
slightly surpassed expectations. est movie since its debut at The Focus Features release
“We thought we’d come in the Sundance Film Festival. grossed $470,000 in 29 the-
in the $35-40 [million] range,” Audiences gave “Hereditary”— aters for a per-theater average
said Warner Bros. distribution about a family cursed after the of about $16,000.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B6 | Monday, June 11, 2018 * *** THE WALL STREET JOURNAL.

BUSINESS NEWS

WPP Diverging Fortunes

The American TV and homevideo

Looked at market is shrinking, while growth

in streaming video services in
India is outpacing the U.S. market.

Possible Traditional TV and home video,

change in revenue from a year
earlier
Link to U.S.
15%
India

Prostitute 10

BY NICK KOSTOV 5
AND SUZANNE VRANICA
0
The WPP PLC board inves-
tigation that preceded the exit
–5
of Martin Sorrell as chief exec-
utive addressed whether he 2014 ’16 ’18 ’20 ’22
used company money for a

INDRANIL MUKHERJEE/AGENCE FRANCE-PRESSE/GETTY IMAGES

prostitute, people familiar Streaming video market, change
with the matter said. in revenue from a year earlier
The Wall Street Journal re- U.S. India
ported in April that the board 125%
of the advertising giant was
100
looking into an allegation of
improper personal behavior 75
and whether its chief execu-
tive had misused company as- 50
sets, and that the board had 25
retained a law firm for a
probe. 0
WPP said at the time the al- 2014 ’16 ’18 ’20 ’22
legation didn’t involve sums Note: Figures are PwC Estimates.
that were material to the com- Source: PwC Global Entertainment and
pany. Mr. Sorrell said then Media Outlook
that he rejected the allegation The media firm reaches 700 million customers a month, with 60 channels in nine languages, and owns rights to air cricket tournaments. THE WALL STREET JOURNAL.
“unreservedly.”
Later that month, the Brit-
ish company said it had con-
cluded its investigation and
Star India agenda for the future,” Star
India Chief Executive Uday
Shankar said.
ious cable networks and Fox’s
stake in the streaming service
Hulu. But among the most
based Edelweiss Capital Ltd.
Over the past 10 years, Star
India CEO Mr. Shankar has ex-
Last month, 160 million
people watched the final on
Star TV networks and 51 mil-
that Mr. Sorrell had stepped
down.
It is unclear what the probe
Attracts Wall Street research firm
MoffettNathanson estimated
Star will make earnings before
compelling assets—especially
for Comcast—are the interna-
tional ones, Star India and
panded Star’s distribution. It
now reaches nine out of 10 In-
dian homes.
lion watched it on Hotstar, up
from 121 million on TV and
21.6 million on Hotstar a year

.
determined.
Interest interest, taxes, depreciation Fox’s interest in European pay- Star’s programming in- before.

ly
In a statement Friday, a and amortization of $826 mil- TV operator Sky PLC. cludes everything from prime- Hotstar is geared to run on
spokesman for Mr. Sorrell lion by 2020, a 91% jump from 21st Century Fox and Wall time soaps to dance competi- mobile devices, targeting the
said, “When Sir Martin Sorrell this fiscal year. Fox, which had Street Journal-parent News tions and highlights of many people who rely on cell-
stepped down from WPP he Continued from page B1 on $7.17 billion in adjusted oper- Corp share common ownership. international sports events. It phones for entertainment.
signed a nondisclosure agree- lywood movies. ating income on $28.5 billion Buying Star would come has worked to add content in Avadh Narayan, a 26-year-old
Perhaps its biggest selling in revenue in its most recent with some risks. Sports-rights languages other than Hindi construction worker in Mumbai,
point now is Hotstar, a mobile- fiscal year, has said it believes deals, if they follow the course and English. As the economy doesn’t have a television but
first streaming service that fea- Star will earn $1 billion in of the U.S. and Europe, could grew, people who spoke re- uses his mobile phone to watch
us l,

An investigation that tures its content and has 150 Ebitda by 2020. become much more expensive gional dialects had more pur- Hotstar. “TV is not available ev-
preceded Sorrell’s exit million active monthly users. Mumbai-based brokerage upon renewal. And there could chasing power and more ap- erywhere,” he said. “So it’s easy
al a
e
Around 80% of the content is Edelweiss Securities pegged be new competition from the peal for advertisers. “Not to watch your favorite match
as CEO addressed his free on Hotstar, with the com- Star’s value at $14.3 billion as telecom companies driving In- plugging into that change wherever you want.”
use of company funds. pany charging as little as 199 of 2016. dia’s wireless-data boom, in- would have been a loss of op- The service is second to
ci on

rupees ($2.95) a month for Hol- Disney in December cluding Jio, as they start offer- portunity,” Mr. Shankar said. YouTube for streaming-video
lywood movies and shows or reached a $52.4 billion all- ing their users content. It agreed last year to ac- iPhone and Android down-
299 rupees for a year of live stock deal with 21st Century While user cancellations of quire the global TV and digital loads in India, according to
ment which he has adhered to sports. The service, which also Fox. Cable giant Comcast said cable and satellite-TV service rights to India’s wildly popular analytics company App Annie.
and will continue to adhere is available in the U.S. and Can- last month that it is in the ad- are plaguing the U.S. pay-TV in- annual cricket competition, “In this country, for many
er rs

to.” ada, has benefited from an ex- vanced stages of preparing a dustry, “in India, cord-cutting the Indian Premier League, in people, their first experience
“The Company has not dis- plosion of mobile-data usage by rival, all-cash bid. is absolutely a nonissue” and a deal valued at $2.42 billion of screen is with a mobile
closed details of the allegation Indian consumers as prices have The assets for sale include pay-TV is still expanding, said at current conversion rates. screen,” Mr. Shankar said.
of personal misconduct fallen in the past two years. the Twentieth Century Fox Abneesh Roy, senior vice presi- Star fended off a bid by Face- —Dana Mattioli
m e

against Sir Martin Sorrell be- “Hotstar is setting the film and television studio, var- dent of research at Mumbai- book Inc. for the digital rights. contributed to this article.
cause it is prohibited by data
protection law from giving
m rp

such details,” a WPP spokes-

man said in a statement Fri-
day. “Martin chose to resign
Buybacks according to data from Birinyi
Associates Inc. For all of last
year, companies announced
also provides a “safe harbor”
for officers or directors to
trade in the shares during a
after conclusion of the investi-
gation.” Benefit $685 billion in buybacks, up
from $670 billion in 2016.
repurchase without running
afoul of antifraud provisions
co Fo

Under the terms of his de- The recent activity follows of the securities laws.
parture, Mr. Sorrell, 73 years
old, is eligible to receive a
maximum of some 1.6 million
Insiders changes to the tax law that
made buybacks more attrac-
tive for companies. Many in-
Mr. Jackson believes that
executives who sell into buy-
backs are benefiting at the ex-
shares from various long- Continued from page B1 vestors welcome the deals be- pense of shareholders. “If an
term incentive programs. lowing their companies’ buy- cause they often boost a executive believes a buyback
JOSHUA ROBERTS/REUTERS

At WPP’s current share back announcements as many stock’s price, but some con- is the right thing for the long
price of £12.16, the full of the stocks popped. sider them a dubious use of term, they should put their
awards are worth more than Daily stock sales by the in- corporate capital if they are money where their mouth is
£19 million, or more than $25 siders rose from an average of made at high valuations or if and keep their stockholdings,”
million. $100,000 before the buyback the returns from buybacks he said.
These shares will vest over announcements to $500,000 don’t exceed an investment in The study also found that
the next five years, according after them. The sellers re- the business. in the days leading up to
to WPP. ceived proceeds totaling $75 Stock repurchases can Robert J. Jackson Jr. says it’s time to take a look at buyback rules. share-repurchase announce-
n-

Mr. Sorrell, who didn’t have million more than had they make a company’s earnings ments, the companies’ stocks
a noncompete clause in his sold before the announce- per share appear better by re- agh Herlihy sold a combined comment on the sales, but a underperformed the broader
contract, is planning to create ment, the study concluded. At ducing its number of shares 216,562 shares, generating Bloomin’ Brands spokes- market by an average of 1.4%.
an ad company. 32% of the companies, at least outstanding. Buybacks can roughly $1.4 million in net woman said in a statement: During the 30 days after the
no

one insider sold in the first 10 also bolster executive pay at proceeds, regulatory filings “We have had share buyback announcement, the compa-
days after the buyback an- companies using benchmarks show. programs in place continually nies’ stocks outperformed the
nouncement. based on earnings-per-share On March 2, six days after since December 2014 and in overall market by an average
As is customary among SEC increases. the news, Chief Legal Officer similar or larger amounts.” of 2.5%.
commissioners, Mr. Jackson is Mr. Jackson’s study didn’t Joseph Kadow sold roughly In the interview, Mr. Jack- Mr. Jackson is scheduled to
careful to note that his views identify specific companies. 281,000 shares generating son said the SEC hasn’t looked present his analysis Monday
are his own and don’t reflect But Bloomin’ Brands Inc., the $5.07 million, according to the at buyback rules for more at the Center for American
those of the entire agency. operator of casual-dining filings. Also that day, Chair- than a decade. With the re- Progress, a left-leaning think
The SEC didn’t return an spots including Outback man and Chief Executive Offi- cent surge in such activity, he tank in Washington. The study
email seeking comment. Steakhouse, illustrates the cer Elizabeth Smith sold said, “it’s time to take another parallels his past academic
What’s clear is that such trend. Before the market 150,000 shares generating look at these rules.” work on corporate-governance
RUBEN SPRICH/REUTERS

corporate share-repurchase opened Feb. 22, the company $2.5 million, filings indicate. At issue is Rule 10b-18 of issues. He taught law at NYU
programs have grown increas- announced its earnings and The sales were executed at the Securities Exchange Act of and Columbia and was found-
ingly popular among compa- noted the existence of a new prices that were, on average, 1934, which advises compa- ing director of the Columbia
nies. So far this year, buyback $150 million stock-repurchase 7% higher than the closing nies how to proceed with buy- Law School’s Data Lab, which
announcements from all U.S. program. price the day before the buy- back timing and other me- used technology to study the
publicly traded companies to- On that day and on Feb. 26, back was announced. The chanics, such as prices paid reliability of company disclo-
Martin Sorrell, former CEO taled just over $500 billion, Chief Technology Officer Don- three executives declined to and volume restrictions. It sures.

BUSINESS WATCH
BITCOIN MAN-MADE RISKS potential losses each year from ter organic growth and execu- AUTO TRADER GROUP and premium package-tiers to
man-made disasters. tion risks, he said. deliver revenue growth in line
South Korean World’s Cities Face —Adam Clark —Philip Waller Online Sales Site with consensus.
Exchange Hacked Financial Threats Gets Upbeat Report —Adria Calatayudvaello
MITIE GROUP INMARSAT
A South Korean cryptocur- An estimated $320.1 billion in Auto Trader Group PLC has BT GROUP
rency exchange said Sunday that global gross domestic product is U.K. Contractor Proposal Rejected enough levers to pull to meet
it suffered from a “cyber intru- threatened by man-made risks Cuts Pretax Loss From Rival EchoStar market expectations for fiscal Cost Cuts Prompt
sion,” prompting bitcoin prices to each year, outweighing the po- 2019, despite facing headwinds, Dividend Speculation
fall sharply and sending them tential impact of natural catas- Mitie Group, a U.K. business- After much expectation satel- Barclays said.
closer to the lows of the year. trophes, according to Lloyd’s of services contractor, said it re- lite-services company EchoStar “Investors had been nervous The departure of BT Group
Bitcoin dropped more than London. duced its pretax loss by 58% in Corp. might make a play for rival coming into Auto Trader’s full- Chief Executive Gavin Patterson
10% over the weekend, falling The City Risk Index, which fiscal 2018, though net debt Inmarsat PLC, that has now year results, fearing a down- might trigger a dividend cut, an-
below $6,700, according to re- Lloyd’s built with Cambridge Uni- rose year to year. happened. grade on FY19 after six months alysts said.
search site CoinDesk. versity, puts the potential eco- The company has said the Inmarsat, though, said it of a notably tougher market for BT faces pressure to cut
Other large cryptocurrencies nomic risk from natural disasters collapse of rival Carillion raised didn’t like what it saw and re- used car transaction volumes,” costs because of demands from
such as ethereum, ripple and bit- to 279 cities across the world at some fundamental questions jected what it calls a “highly pre- the bank said. regulators to expand fiber broad-
coin cash also fell. The latest de- an annual $226.4 billion, out- about outsourcing, A.J. Bell ob- liminary and indicative nonbind- The online car-sales portal band to homes, they said.
clines came after a small ex- weighed by the collective threat served. ing proposal” that “significantly expects lower revenue growth in Brokerage Raymond James
change called Coinrail said that of man-made issues such as cy- Bell’s Russ Mould said Mitie undervalued” its business. the fiscal year ending March 31, questioned whether BT can
several alternative versions of bercrime, interstate conflict and is cutting costs as part of a plan Inmarsat shares rose 13% 2019, on the back of fewer cars maintain existing payouts if it
bitcoin appeared to have been market crashes. to prove it isn’t going the same amid deal rumors Friday before for sale in the market, but Bar- steps up broadband investment
stolen in the attack. It didn’t dis- Lloyd’s says the top 10 riski- way as Carillion, yet it will take the British company said it re- clays analysts said the company without cutting spending else-
close the amount stolen. est cities in the index face a time. It still needs to deal with jected the approach. could resort to pricing steps and where.
—Steven Russolillo GDP threat of $126.8 billion in large average net debt, lacklus- —Robert Wall to adding sales of its advanced —Philip Waller
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | B7

MARKETS DIGEST
Dow Jones Industrial Average S&P 500 Index New to the Market
Last Year ago Last Year ago
25316.53 s 681.32, or 2.77% last week Trailing P/E ratio 24.89 20.70 2779.03 s 44.41, or 1.62% last week Trailing P/E ratio * 24.59 24.15 Public Offerings of Stock
High, low, open and close for each of P/E estimate * 16.57 18.02 High, low, open and close for each of P/E estimate * 17.29 18.97
the past 52 weeks Dividend yield 2.15 2.33 the past 52 weeks Dividend yield 1.89 1.95 IPOs in the U.S. Market
All-time high 26616.71, 01/26/18 All-time high 2872.87, 01/26/18
Initial public offerings of stock expected this week; might include some
offerings, U.S. and foreign, open to institutional investors only via the
Current divisor 0.14523396877348 Rule 144a market; deal amounts are for the U.S. market only
26400 2900
65-day moving average Symbol/ Pricing
65-day moving average
Expected primary Shares Range($)
25200 2800 pricing date Filed Issuer/business exchange (mil.) Low/High Bookrunner(s)

6/11 5/22 Far Point Acquisition FPAC.U 50.0 10.00/ Credit Suisse,
24000 2700 Blank check company. N 10.00 BofA ML

6/13 5/17 Adaptive Insights ADIN 8.2 13.00/ MS, BofA ML, Jefferies,
22800 2600 Provides cloud-based N 15.00 RBC Cptl Mkts,
performance management JMP Sec,
solutions. Oppenheimer
Week's high
DOWN UP 21600 2500 6/13 5/18 Charah Solutions CHRA 7.4 16.00/ MS, BofA ML, Stifel
t

Monday's open Friday's close Provides environmental N 18.00

and maintenance services
to the power generation
Friday's close Monday's open 20400 2400 industry.
t

200-day moving average 200-day moving average 6/13 5/7 US Xpress Enterprises USX 18.1 18.00/ BofA ML, MS,
Week's low 19200 2300 Provides transportation N 20.00 JPM, WFS
and logistics services.
Bars measure the point change from Monday's open
6/14 5/11 Avalara AVLR 7.5 19.00/ GS, JPM, BofA ML
18000 2200
Provides web-hosted sales N 21.00
J J A S O N D J F M A M J J J A S O N D J F M A M J tax management services.
Primary 6/14 5/18 Puxin NEW 14.4 17.00/ Citi, DB, Barclays,
NYSE weekly volume, in billions of shares market Composite
t
t

Financial Flashback Network of after school

learning centers.
N 20.00 Haitong Sec,
China Int'l
30
20 The Wall Street Journal, June 11, 2013 6/14 5/22 Verrica Pharmaceuticals VRCA 5.0 14.00/ BofA ML, Jefferies,
10 AstraZeneca PLC agrees to buy Pearl Therapeutics for up Dermatology company Nq 16.00 Cowen & Co
0 to $1.15 billion to strengthen its respiratory drug portfolio developing
pharmaceuticals for the
J J A S O N D J F M A M J and restock a dwindling drug pipeline. treatment of skin diseases.
*Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.

Major U.S. Stock-Market Indexes Nasdaq Composite Lockup Expirations

s 91.18, or 1.21% Below, companies whose officers and other insiders will become eligible
Latest Week 52-Week % chg
High Low Close Net chg % chg Low Close (l) High % chg YTD 3-yr. ann. to sell shares in their newly public companies for the first time. Such
last week
Dow Jones sales can move the stock’s price.
Industrial Average 25326.09 24710.82 25316.53 681.32 2.77 21235.67 l 26616.71 19.0 2.4 12.5 Lockup Offer Offer amt Through Lockup
Transportation Avg 10973.89 10685.96 10938.47 44.50 0.41 9021.12 l 11373.38 17.3 3.1 9.5 expiration Issue date Issuer Symbol price($) ($ mil.) Friday (%) provision
7675
Utility Average 688.76 658.83 663.96 -20.78 -3.03 647.90 l 774.47 -8.4 -8.2 5.8 June 12 Dec. 14, ’17 Casa Systems CASA 13.00 89.7 56.7 180 days
Total Stock Market 28955.13 28507.45 28935.59 475.50 1.67 24958.26 l 29630.47 14.8 4.6 9.9
7600 Dec. 14, ’17 Newmark Group NMRK 14.00 322.0 –2.5 180 days
Barron's 400 756.87 743.31 755.65 12.34 1.66 629.56 l 757.37 16.3 6.3 9.8
Sources: Dealogic; WSJ Market Data Group
Nasdaq Stock Market
7525
Nasdaq Composite 7697.41 7561.20 7645.51 91.18 1.21 6089.46 l 7689.24 23.2 10.8 15.0 IPO Scorecard

.
Nasdaq 100 7212.45 7099.09 7152.62 68.70 0.97 5596.96 l 7210.08 24.6 11.8 17.3 Performance of IPOs, most-recent listed first
7450

ly
S&P 1 4 5 6 7 8 % Chg From % Chg From
1.62 2409.75 l June Company SYMBOL Friday3s Offer 1st-day Company SYMBOL Friday3s Offer 1st-day
500 Index 2779.90 2739.51 2779.03 44.41 2872.87 14.3 3.9 10.2 IPO date/Offer price close ($) price close IPO date/Offer price close ($) price close
MidCap 400 2001.49 1956.84 2000.67 42.34 2.16 1691.67 l 2000.67 13.8 5.3 9.7 DJ US TSM
on MeiraGTx Hldgs 15.00 ... ... GreenSky 23.79 3.4 1.8
SmallCap 600 1040.99 1016.12 1038.61 23.04 2.27 817.25 l 1039.13 20.2 10.9 13.1 s 475.50, or 1.67% MGTX June 8/$15.00 GSKY May 24/$23.00
Other Indexes last week Hancock Jaffe Laboratories 4.94 –1.2 –5.7 Kiniksa Pharmaceuticals 17.37 –3.5 –10.8
HJLI May 31/$5.00 KNSA May 24/$18.00
Russell 2000 1679.99 1641.22 1672.49 24.51 1.49 1356.90 l
1675.95 17.6 8.9 10.1
NYSE Composite 12833.57 12620.83 12832.07 211.24 1.67 11696.28 l 13637.02 9.3 0.2 5.5 Trident Acquisitions 10.06 0.6 0.3 Scholar Rock Holding 18.76 34.0 21.0
us l,

TDACU May 30/$10.00 SRRK May 24/$14.00

Value Line 580.12 567.98 579.93 11.95 2.10 503.24 l 589.69 10.6 3.1 4.6 29000
Iterum Thera 12.11 –6.8 –5.8 EVO Payments 20.48 28.0 7.7
NYSE Arca Biotech 4863.75 4703.11 4844.88 23.09 0.48 3646.79 l 4939.86 32.4 14.7 5.6
al a

ITRM May 25/$13.00 EVOP May 23/$16.00

e
NYSE Arca Pharma 536.17 526.90 535.95 7.24 1.37 514.66 l 593.12 1.5 -1.6 -2.6 28750
CLPS 5.20 –1.0 –5.6 Pluralsight 25.44 69.6 27.2
KBW Bank 110.68 106.77 110.00 2.51 2.34 89.71 l 116.52 17.3 3.1 12.5 CLPS May 24/$5.25 PS May 17/$15.00
ci on

PHLX§ Gold/Silver 83.76 82.15 82.93 -0.11 -0.13 76.42 l 93.26 -1.7 -2.8 6.8
28500
PHLX§ Oil Service 160.82 153.06 157.49 2.20 1.41 117.79 l 170.18 14.0 5.3 -9.0 Sources: WSJ Market Data Group; FactSet Research Systems

PHLX§ Semiconductor 1440.55 1400.61 1412.29 0.98 0.07 1020.51 l 1445.9 29.6 12.7 25.6
l 28250 Other Stock Offerings
CBOE Volatility 13.91 11.22 12.18 -1.28 -9.51 9.14 37.32 13.8 10.3 -7.3
1 4 5 6 7 8 Secondaries and follow-ons expected this week in the U.S. market

Nasdaq PHLX Sources: SIX Financial Information; WSJ Market Data Group June
Symbol/
er rs

Primary Amount Friday’s

Expected Issuer/Business exchange ($mil.) price ($) Bookrunner(s)
International Stock Indexes Commodities and Currencies June 11 Achieve Life Sciences
Healthcare
ACHV
Nq
0.3 7.86 Ladenburg Thalmann

Latest Week 52-Week Range YTD Last Week YTD Microvision MVIS Ladenburg Thalmann
18.0 1.30
m e

Region/Country Index Close % chg Low Close High % chg Close Net chg %Chg % chg Computers & Nq
Electronics
World The Global Dow 3060.76 1.16 2756.60 • 3323.74 –0.8 DJ Commodity 655.09 -1.54 -0.23 4.75
DJ Global Index 402.33 1.25 358.20 • 425.41 1.3
m rp

TR/CC CRB Index 200.04 -1.67 -0.83 3.18

DJ Global ex U.S. 262.32 0.81 239.56 • 285.34 –1.7
Crude oil, $ per barrel 65.74 -0.07 -0.11 8.81 Off the Shelf
Americas DJ Americas 664.01 1.50 579.04 • 687.75 3.4
Natural gas, $/MMBtu 2.89 -0.072 -2.43 -2.13 “Shelf registrations” allow a company to prepare a stock or bond for
Brazil Sao Paulo Bovespa 72942.07 –5.56 60761.74 • 87652.64 –4.5
Gold, $ per troy oz. 1298.10 3.30 0.25 -0.63 sale, without selling the whole issue at once. Corporations sell as
Canada S&P/TSX Comp 16202.69 0.99 14951.88 • 16412.94 –0.0 conditions become favorable. Here are the shelf sales, or takedowns,
Mexico S&P/BMV IPC 45939.54 2.06 44647.37 • 51713.38 –6.9 U.S. Dollar Index 93.53 -0.45 -0.48 1.53
over the last week:
co Fo

Chile Santiago IPSA 4090.54 0.95 3593.92 • 4442.56 –2.9 WSJ Dollar Index 86.86 -0.38 -0.44 1.02
Takedown date/ Deal value Registration
EMEA Stoxx Europe 600 385.12 –0.46 363.18 • 402.81 –1.0 Euro, per dollar 0.8496 -0.0082 -0.95 1.97 Issuer/Industry Registration date ($ mil.) (mil.) Bookrunner(s)
Stoxx Europe 50 3057.97 –0.88 2894.75 • 3274.97 –3.8 Yen, per dollar 109.54 0.02 0.02 -2.81
Madrigal Pharmaceuticals June 6 $472.5 GS
Eurozone Euro Stoxx 384.41 –0.18 366.11 • 404.86 –0.3 U.K. pound, in dollars 1.34 0.0061 0.46 -0.75
...
Euro Stoxx 50 3447.30 –0.18 3278.72 • 3697.40 –1.6 52-Week
Healthcare June 5,318
Austria ATX 3349.23 –0.23 3058.09 • 3688.78 –2.1 Low Close(l) High % Chg Sabre June 5 $368.3 ... GS
Belgium Bel-20 3770.97 –1.00 3760.51 • 4176.88 –5.2
DJ Commodity 532.01 l 667.35 18.84
Technology May 2,318
France CAC 40 5450.22 –0.28 5031.92 • 5640.10 2.6
206.38 13.17
Germany DAX 12766.55 0.33 11787.26 • 13559.60 –1.2 TR/CC CRB Index 166.50 l PolarityTE June 5 $63.2 $100.0 Cantor Fitzgerald & Co
Greece Athex Composite 773.06 –0.48 701.36 • 886.54 –3.7 Crude oil, $ per barrel 42.53 l 72.24 43.44 Healthcare July 7,317
Israel Tel Aviv 1532.15 1.33 1363.50 • 1554.30 1.5 Natural gas, $/MMBtu 2.55 l 3.63 -4.90 Business First Bancshares June 4 $25.2 $75.0 Stephens
Italy FTSE MIB 21355.98 –3.41 20584 • 24544 –2.3 Gold, $ per troy oz. 1208.60 l 1362.40 2.33 Finance May 4,318
Netherlands AEX 560.03 0.15 507.15 • 572.05 2.8
Portugal PSI 20 5615.38 1.77 5074.49 • 5791.88 4.2 U.S. Dollar Index 88.59 l 97.75 -3.85
n-

Russia RTS Index 1142.90 –1.84 973.33 • 1324.62 –1.0 WSJ Dollar Index 82.70 l 88.97 -1.87
Public and Private Borrowing
South Africa FTSE/JSE All-Share 58223.72 1.64 50831.89 • 61684.77 –2.2 Euro, per dollar 0.7996 l 0.8980 -4.88
Spain IBEX 35 9746.30 1.18 9381.0 • 10978.3 –3.0
Yen, per dollar 104.73 l 114.17 -0.72 Treasurys
Sweden OMX Stockholm 577.62 –0.25 545.83 • 600.20 1.6
no

l 5.26 Monday, June 11 Tuesday, June 12

Switzerland Swiss Market 8512.06 –1.24 8456.95 • 9611.61 –9.3 U.K. pound, in dollars 1.26 1.43
U.K. FTSE 100 7681.07 –0.27 6888.69 • 7877.45 –0.1 Auction of 13 and 26 week bills; Auction of 4 week bill;
Asia-Pacific Real-time U.S. stock announced on June 7; settles on June 14 announced on June 11; settles on June 14
Australia
China
S&P/ASX 200
Shanghai Composite
6045.20
3067.15 –0.26
0.91 5651.8
3041.44 •
• 6135.8
3559.47
–0.3
–7.3 WSJ
.COM
quotes are available on
WSJ.com. Track most-
Auction of 3 and 10 year notes;
announced on June 7; settles on June 15
Auction of 30 year bond;
announced on June 7; settles on June 15
Hong Kong Hang Seng 30958.21 1.53 25340.85 • 33154.12 3.5 active stocks, new
India S&P BSE Sensex 35443.67 0.61 30834.32 • 36283.25 4.1 highs/lows, mutual
Japan Nikkei Stock Avg 22694.50 2.36 19274.82 • 24124.15 –0.3 funds and ETFs. Public and Municipal Finance
Malaysia FTSE Bursa Malaysia KLCI 1778.32 1.25 1713.13 • 1895.18 –1.0 Plus, get deeper money-flows data and Deals of $ 150 million or more expected this week
Singapore Straits Times 3436.37 0.26 3201.77 • 3615.28 1.0 email delivery of key stock-market Final Total Rating Bookrunner/
South Korea Kospi 2451.58 0.52 2319.71 • 2598.19 –0.6 data. Sale maturity Issuer ($mil.) Fitch Moody’s S&P Bond Counsel(s)
Taiwan TAIEX 11156.42 1.89 10072.46 • 11253.11 4.8
All are available free at
Source: SIX Financial Information;WSJ Market Data Group WSJMarkets.com June 12 prelim. Wayne 156.3 N.R. N.R. N.R. Preliminary/—
Charter Co-
Michigan
Consumer Rates and Returns to Investor Benchmark Yields and Rates
U.S. consumer rates Selected rates Treasury yield curve Forex Race June 14 prelim. Metropolitan 1,600.0 N.R. N.R. N.R. Preliminary/
A consumer rate against its Money market accounts Yield to maturity of current bills, Yen, euro vs. dollar; dollar vs. Transport Auth Nixon Peabody LLP
benchmark over the past year notes and bonds major U.S. trading partners
Bankrate.com avg†: 0.47% (MTA)
American Express National Bank 1.65% 3.75% 15%
1.60% New York, NY 866-215-8754 June 15 prelim. Massa- 436.0 N.R. N.R. N.R. Citi/—
Federal-funds 3.00 10
Barclays 1.65% Friday Euro chusetts
s

target rate 1.20

t Wilmington, DE 888-720-8756 t 2.25 5 Dev Finance Agcy
0.80 CIBC Bank USA 1.65% Yen
s

Money market 1.50 0

account yields Chicago, IL 844-704-7882
0.40 June 15 prelim. Michigan St 328.0 N.R. N.R. N.R. BoA Merrill/—
t
t
Goldman Sachs Bank USA 1.70% 0.75 –5
One year ago WSJ Dollar index Housing Dev Auth
s

New York, NY 855-730-7283

0.00 0.00 –10
J A S O ND J FMAMJ CIT Bank 1.85% 1 3 6 1 2 3 5 710 30
Salt Lake City, UT 2017 2018 June 15 prelim. NYC 553.1 N.R. N.R. N.R. J P Morgan
2017 2018 855-462-2652 month(s) years
Housing Dev Securities LLC/—
Yield/Rate (%) 52-Week Range (%) 3-yr chg maturity
Interest rate Last (l)Week ago Low 0 2 4 6 8 High (pct pts) Sources: Ryan ALM; Tullett Prebon; WSJ Market Data Group
June 15 prelim. New Jersey 186.2 N.R. N.R. N.R. RBC Cptl
Federal-funds rate target 1.50-1.75 1.50-1.75 0.75 l 1.50 1.50
Prime rate* 4.75 4.75 4.00 l 4.75 1.50
Corporate Borrowing Rates and Yields Hsg & Mtg Fin Agency Mkt/—
Libor, 3-month 2.33 2.32 1.24 l 2.37 2.04 Spread +/- Treasurys,
Yield (%) in basis pts, 52-wk Range Total Return
Money market, annual yield 0.47 0.47 0.25 l 0.47 0.11 Bond total return index Last Wk ago Last Low High 52-wk 3-yr June 15 prelim. New Jersey 192.7 N.R. N.R. N.R. RBC Cptl
Five-year CD, annual yield 1.72 1.71 1.33 l 1.72 0.26 Hsg & Mtg Fin Agency Mkt/—
10-yr Treasury, Ryan ALM 2.937 2.895 -4.16 0.34
30-year mortgage, fixed† 4.59 4.48 3.73 l 4.69 0.41
DJ Corporate 3.898 3.860 -0.98 2.94
15-year mortgage, fixed† 4.05 3.95 2.99 l 4.14 0.70
Aggregate, Barclays Capital 3.320 3.280 n.a. 34 44 -1.01 1.61 June 15 prelim. Reno City- 226.4 N.R. N.R. N.R. Goldman &
Jumbo mortgages, $424,100-plus† 4.78 4.73 4.21 l 4.96 0.36
High Yield 100, Merrill Lynch 5.892 6.003 308 297 376 1.871 3.810 Nevada Co/—
Five-year adj mortgage (ARM)† 4.47 4.27 3.22 l 4.78 0.75
Fixed-Rate MBS, Barclays 3.470 3.420 n.a. 20 34 -0.92 1.29
New-car loan, 48-month 4.16 4.15 2.85 l 4.28 1.16
Bankrate.com rates based on survey of over 4,800 online banks. *Base rate posted by 70% of the nation's largest Muni Master, Merrill 2.474 2.483 12 5 17 0.548 2.511 June 15 prelim. Wake Co- 150.9 N.R. N.R. N.R. J P Morgan
banks.† Excludes closing costs.
Sources: SIX Financial Information; WSJ Market Data Group; Bankrate.com
EMBI Global, J.P. Morgan 6.596 6.539 368 289 368 -2.676 4.569 North Carolina Securities LLC/—
Sources: J.P. Morgan; Ryan ALM; S&P Dow Jones Indices; Barclays Capital; Merrill Lynch Source:Thomson Reuters/Ipreo
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B8 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

CLOSED-END FUNDS
wsj.com/funds
Listed are the 300 largest closed-end funds as 52 wk 52 wk Prem12 Mo Prem12 Mo Prem12 Mo
measured by assets. Closed-end funds sell a limited Prem Ttl Prem Ttl Fund (SYM) NAV Close /Disc Yld Fund (SYM) NAV Close /Disc Yld Fund (SYM) NAV Close /Disc Yld
number of shares and invest the proceeds in securities. Fund (SYM) NAV Close /Disc Ret Fund (SYM) NAV Close /Disc Ret
Unlike open-end funds, closed-ends generally do not India Fund IFN 28.25 24.80 -12.2 5.0 BlackRock Corp Hi Yd Fd HYT 11.95 10.62 -11.1 8.0 PIMCO Dynamic Credit PCI NA 23.50 NA 8.3
buy their shares back from investors who wish to cash CBREClarionGlblRlEstIncm IGR 8.55 7.57 -11.5 6.2 NuveenS&P500Buy-Write BXMX 14.15 14.28 +0.9 8.1 Japan Sml Cap JOF 13.87 12.26 -11.6 22.4 BlackRockDurInco Tr BLW 16.74 14.97 -10.6 6.4 PIMCODynamicIncomeFund PDI NA 31.74 NA 8.3
in their holdings. Instead, fund shares trade on a stock Reaves Utility Fund UTG 30.12 28.12 -6.6 -15.9
exchange. NA signifies that the information is not
Sprott Physical Gold CEF NA 13.24 NA 5.2 Korea Fund KF 46.03 41.20 -10.5 13.7 Brookfield Real Assets RA 24.42 22.99 -5.9 10.4 PIMCO Income Opportunity PKO NA 27.54 NA 8.2
available or not applicable. NS signifies fund not in ClearBridge Amer Engy CBA NA 7.80 NA -2.5 Tekla Hlthcr Investors HQH 23.61 21.57 -8.6 -3.3 Mexico Fund MXF 16.61 14.41 -13.2 -12.9 Credit Suisse High Yld DHY 2.68 2.63 -1.9 9.8 PIMCO Strat Income Fund RCS NA 9.67 NA 8.9
existence of entire period. 12 month yield is computed ClearBridge Engy MLP Fd CEM NA 14.64 NA 3.3 Tekla Healthcare Opps Fd THQ 19.25 17.19 -10.7 5.2 Morgan-Stanley Asia-Pac APF 20.88 18.14 -13.1 11.2 DoubleLine Incm Solutions DSL 20.61 20.28 -1.6 9.0 Templeton Emerging TEI 11.72 10.36 -11.6 7.3
by dividing income dividends paid (during the previous Tekla Life Sciences HQL 19.84 18.86 -4.9 1.1
twelve months for periods ending at month-end or Clearbridge Engy MLP Opp EMO NA 11.28 NA -1.4 MS China a Shr Fd CAF 29.71 27.19 -8.5 25.8 Dreyfus Hi Yd Strat Fd DHF 3.39 3.13 -7.7 9.1 Templeton Global GIM 7.10 6.18 -13.0 4.8
during the previous fifty-two weeks for periods ending Clearbridge Engy MLP TR CTR NA 11.45 NA -2.4 Tekla World Hlthcr Fd THW 14.48 13.09 -9.6 -1.0 MS Emerging Fund MSF 19.49 17.00 -12.8 4.5 Fst Tr Hi Inc Lg/Shrt Fd FSD 17.00 14.84 -12.7 9.8 Wstrn Asset Emerg Mkts EMD 15.72 13.64 -13.2 8.4
at any time other than month-end) by the latest Cohen & Steers Infr Fd UTF 23.40 22.45 -4.1 3.4 Tortoise Energy TYG 26.80 28.80 +7.5 7.1 MS India Invest IIF 33.19 29.76 -10.3 1.8 Guggenheim Strat Opps Fd GOF 19.21 21.66 +12.8 10.2 Wstrn Asset Gl Def Opp Fd GDO NA 16.45 NA 8.0
month-end market price adjusted for capital gains Tortoise MLP Fund NTG 17.11 18.37 +7.4 8.2
distributions. C&S MLP Incm & Engy Opp MIE 11.05 10.50 -5.0 7.1 New Germany Fund GF 21.44 19.17 -10.6 22.9 Ivy High Income Opps Fund IVH 16.01 14.39 -10.1 9.5 National Muni Bond Funds
Source: Lipper Cohen & Steers Qual Inc RQI 12.77 11.95 -6.4 2.4 Voya Gl Equity Div IGD 7.66 7.27 -5.1 7.5 Swiss Helvetia Fund SWZ 13.36 12.28 -8.1 0.4 Neuberger Berman HYS NHS NA 10.95 NA 7.8 AllianceBrnstn NtlMun AFB NA 12.57 NA 4.6
Friday, June 8, 2018 CohnStrsPfdInco RNP 21.57 19.16 -11.2 -0.3 Income & Preferred Stock Funds Templeton Dragon TDF 26.51 22.88 -13.7 24.1 NexPoint Strat Opps Fund NHF NA 22.50 NA 10.8 Blackrock Invest BKN 15.43 13.96 -9.5 5.2
52 wk Cohen & Steers TR RFI 12.75 12.56 -1.5 7.5 Calamos Strat Fd CSQ 13.22 12.94 -2.2 18.7 Templeton Emerging EMF 17.75 15.52 -12.6 9.2 Nuveen Credit Opps 2022 JCO 9.83 9.36 -4.8 6.0 BlackRockMun2030Target BTT 23.61 21.45 -9.1 4.0
Prem Ttl CLSeligmn Prem Tech Gr Fd STK 22.06 22.40 +1.5 14.1 Cohen & Steers Dur Pfd LDP 25.91 25.64 -1.0 4.6 Virtus Total Return Fund ZF NA 10.77 NA -1.5 Nuveen Gl Hi Incm Fd JGH 17.89 15.63 -12.6 9.1 BlackRock Municipal Trust BFK 14.08 12.92 -8.2 5.9
Fund (SYM) NAV Close /Disc Ret Duff & Phelps DNP 8.70 10.81 +24.2 5.9 Cohen & Strs Sel Prf Inco PSF 26.27 27.16 +3.4 5.0 Voya Infr Indls & Matls IDE 15.91 15.66 -1.6 9.7 Nuveen High Incm Dec18 JHA 9.98 9.82 -1.6 4.2 BlackRockMuni BLE 14.64 14.31 -2.3 5.7
General Equity Funds Duff&PhelpsGblUtilIncFd DPG 16.22 14.58 -10.1 -7.5 FT Interm Duration Pfd FPF 23.48 21.74 -7.4 -3.0 Wells Fargo Gl Div Opp EOD 6.01 5.76 -4.2 -0.8 Nuveen High Incm Dec19 JHD 10.07 9.82 -2.5 5.2 BlackRockMuni Tr BYM 14.76 13.15 -10.9 5.3
Adams Divers Equity Fd ADX 18.33 15.64 -14.7 19.4 Eaton Vance Eqty Inco Fd EOI NA 15.80 NA 24.3 Flaherty & Crumrine Dyn DFP 24.87 23.39 -6.0 -0.9 Prem12 Mo Nuveen Hi Incm Nov 2021 JHB 9.99 9.47 -5.2 6.2 BlkRk MuniAssets Fd MUA 14.09 13.26 -5.9 5.1
Eaton Vance Eqty Inco II EOS NA 17.37 NA 26.1 Flaherty & Crumrine Pfd FFC 19.44 18.83 -3.1 -5.6 Fund (SYM) NAV Close /Disc Yld Pioneer High Income Trust PHT 10.49 9.44 -10.0 8.2 BlkRk Munienhanced MEN 11.59 10.57 -8.8 5.9
Boulder Growth & Income BIF 12.74 10.69 -16.1 15.6
EtnVncRskMngd ETJ NA 9.43 NA 10.5 John Hancock Pfd Income HPI 21.24 21.75 +2.4 7.6 Prud Gl Shrt Dur Hi Yd GHY 16.18 13.87 -14.3 7.6 BlkRk MuniHldgs Inv MFL 14.20 13.01 -8.4 6.2
Central Securities CET 34.41 28.62 -16.8 18.6 U.S. Mortgage Bond Funds
Etn Vnc Tax Mgd Buy-Write ETB NA 16.07 NA 6.5 John Hancock Pfd II HPF 20.96 21.02 +0.3 4.8 Prudentl Sh Dur Hi Yd Fd ISD 16.35 14.15 -13.5 7.7 BlkRk MuniHldgs Qlty II MUE 13.60 12.21 -10.2 6.0
CohSteer Opprtnty Fd FOF 13.72 12.87 -6.2 8.4 BlackRock Income Trust BKT 6.35 5.77 -9.1 5.4
Eaton Vance BuyWrite Opp ETV NA 15.47 NA 10.2 John Hancock Pfd Inc III HPS 18.71 18.26 -2.4 5.1 Wells Fargo Incm Opps Fd EAD 9.01 8.05 -10.7 8.4 BlkRk MuniVest MVF 9.40 8.76 -6.8 6.1
Cornerstone Strategic CLM 13.04 NA NA NA Nuveen Mtg Opp Term Fd JLS 24.34 23.58 -3.1 8.1
Eaton Vance Tax-Mng Div ETY NA 12.44 NA 18.3 JHancock Pr Div PDT 14.49 15.66 +8.1 6.7 Wstrn Asset Glbl Hi Inco EHI NA 9.28 NA 8.4 BlkRk MuniVest II MVT 14.85 14.11 -5.0 6.0
Cornerstone TR Fd CRF 12.69 14.84 +16.9 8.4 Investment Grade Bond Funds
LMP Cap & Inco Fd SCD 14.76 13.32 -9.8 2.3 Wstrn Asset High Inco II HIX NA 6.50 NA 8.8
EtnVnc TaxAdvDiv EVT NA 23.20 NA 14.3 EatonVanceTax-MngdOpp ETW NA 11.77 NA 11.6 Blackrock Core Bond Tr BHK 14.07 12.83 -8.8 6.0 BlkRk MuniYield MYD 14.48 13.35 -7.8 6.0
Nuveen Pfd & Incm Opps Fd JPC 10.20 9.88 -3.1 2.8 Wstrn Asset Opp Fd HIO 5.42 4.84 -10.7 7.0
Gabelli Dividend & Incm GDV 24.63 22.81 -7.4 10.5 EtnVncTxMngGlDvEqInc EXG NA 9.44 NA 14.1 BlkRk Credit Alloc Incm BTZ 14.09 12.35 -12.3 6.6 BlkRk MuniYld Quality MQY 15.39 14.02 -8.9 5.8
Nuveen Pfd & Incm Secs Fd JPS 9.75 9.42 -3.4 0.3 West Asst HY Def Opp Fd HYI NA 14.65 NA 7.7
Gabelli Equity Trust GAB 6.48 6.42 -0.9 13.5 Fiduciary/Clymr Opp Fd FMO 12.27 12.01 -2.1 1.7 John Hancock Income Secs JHS 14.46 13.23 -8.5 5.8 BlkRk MuniYld Qlty II MQT 13.51 12.07 -10.7 5.6
Nuveen Preferred & Incm JPI 24.46 23.94 -2.1 3.7 Other Domestic Taxable Bond Funds
Genl American Investors GAM 41.75 35.18 -15.7 14.6 FT Energy Inc & Growth Fd FEN 22.58 22.94 +1.6 -2.1 MFS Inc Tr MIN 4.17 3.84 -7.9 9.7 BlRkMunyldQltyIII MYI 13.99 12.67 -9.4 6.0
Nuv Tax-Adv Div Gr JTD 17.79 17.12 -3.8 14.3 Ares Dynamic Credit Alloc ARDC NA 16.38 NA 7.0
Guggenheim Enh Fd GPM 8.89 8.86 -0.3 18.0 FstTrEnhEqtIncFd FFA 16.67 15.79 -5.3 15.0 Western Asset Infl Incm WIA 12.89 11.32 -12.2 3.6 Deutsche Mun Income Tr KTF 12.15 11.06 -9.0 6.0
TCW Strategic Income Fund TSI NA 5.41 NA 2.1 Barings Corp Investors MCI NA 15.25 NA 7.9
HnckJohn TxAdv HTD 23.90 22.40 -6.3 -2.4 First Tr Engy Infr Fd FIF 16.41 16.11 -1.8 -4.6 Western Asset Infl Opps WIW 12.53 11.05 -11.8 3.8 Dreyfus Mun Bd Infr Fd DMB 14.02 12.45 -11.2 5.0
Virtus Global Dividend ZTR NA 11.23 NA -0.5 BlackRock Multi-Sector IT BIT 18.89 17.40 -7.9 8.9
Liberty All-Star Equity USA 6.92 6.54 -5.5 29.1 First Tr MLP & Engy Incm FEI 12.90 12.95 +0.4 -7.4 Loan Participation Funds Dreyfus Strat Muni Bond DSM 8.19 7.59 -7.3 6.1
Convertible Sec's. Funds BlackRock Taxable Mun Bd BBN 23.13 21.75 -6.0 7.2
Royce Micro-Cap RMT 11.03 10.18 -7.7 27.0 Gabelli Hlthcr & Well GRX 11.84 9.98 -15.7 -1.7 AdvntClymrFd AVK 17.49 15.67 -10.4 5.9 Apollo Sr Fltg Rate Fd AFT 17.79 16.64 -6.5 6.6 Dreyfus Strategic Munis LEO 8.41 7.68 -8.7 6.3
Royce Value Trust RVT 17.85 16.22 -9.1 20.7 Gabelli Utility Tr GUT 4.86 5.80 +19.3 -6.8 BlkRk Debt Strat Fd DSU 12.59 11.37 -9.7 7.2 Doubleline Oppor Credit DBL 20.33 20.92 +2.9 9.4 Eaton Vance Mun Bd Fd EIM NA 11.82 NA 5.1
AllianzGI Conv & Incm NCV 6.24 6.93 +11.1 12.5 Duff & Phelps Utl & Cp Bd DUC 9.25 8.45 -8.6 6.1
Source Capital SOR 45.23 40.26 -11.0 8.0 GAMCOGlblGoldNatRscs&Inc GGN 5.16 5.20 +0.8 7.7 AllianzGI Conv & Incm II NCZ 5.60 6.06 +8.2 11.0 BlackRock FR Incm Strat FRA 14.95 14.13 -5.5 5.1 Eaton Vance Mun Income EVN NA NA NA 5.5
Tri-Continental TY 30.97 27.38 -11.6 18.4 GoldmanSachsMLPIncOpp GMZ NA 9.13 NA 3.8 Blkrk FltRt InTr BGT 14.41 13.40 -7.0 5.1 EtnVncLtdFd EVV NA NA NA 7.4 EV National Municipal Opp EOT NA 20.33 NA 5.0
AllianzGI Equity & Conv NIE 24.20 22.06 -8.8 20.8
Specialized Equity Funds Goldman Sachs MLPEnergy GER NA 6.48 NA -2.4 BlackstoneGSO Strat Cred BGB NA 15.86 NA 7.9 Franklin Ltd Duration IT FTF 11.72 10.93 -6.7 12.3 Invesco Adv Mun Incm II VKI 11.77 10.66 -9.4 6.0
Calamos Conv Hi Inco Fd CHY 11.93 12.68 +6.3 18.1
Aberdeen Glbl Prem Prop AWP 6.98 6.43 -7.9 12.8 John Hancock Finl Opps Fd BTO 39.87 39.44 -1.1 14.5 Blackstone GSO Sr Float BSL NA 18.03 NA 6.5 GuggenheimTaxableMuni GBAB 22.60 21.39 -5.4 7.0 Invesco Mun Incm Opps Tr OIA 7.46 7.51 +0.7 5.4
Calamos CHI 11.31 11.81 +4.4 15.2
Adams Natural Rscs Fd PEO 24.15 20.30 -15.9 14.3 Macquarie Glbl Infrstrctr MGU 25.09 22.15 -11.7 -6.8 Eagle Point Credit ECC NA 18.18 NA 13.2 Invesco High Incm 2023 IHIT 10.05 9.81 -2.4 6.0 Invesco Mun Opportunity VMO 13.14 11.81 -10.1 5.8
World Equity Funds
AllnzGI NFJ Div Interest NFJ 14.66 12.90 -12.0 6.4 NeubergerBermanMLPIncm NML 9.88 9.16 -7.3 8.3 Eaton Vance FR Incm Tr EFT NA 14.82 NA 5.5 KKR Income Opps Fund KIO NA 16.31 NA 9.5 Invesco Municipal Trust VKQ 13.12 11.87 -9.5 5.9
Aberdeen Total Dyn Div AOD 10.12 9.00 -11.1 10.7
BlkRk Enh Cap Inco CII 17.31 16.42 -5.1 17.4 Neubrgr Brm Rl Est Sec Fd NRO 5.28 5.08 -3.8 5.8 EatonVnc SrFltRate EFR NA 14.67 NA 5.8 MFS Charter MCR 8.79 7.96 -9.4 9.3 Invesco Qlty Mun Inco IQI 13.22 11.99 -9.3 5.5
Calamos Glbl Dyn Inc CHW 9.07 9.21 +1.5 19.8
BlkRk Engy Res Tr BGR 16.06 15.05 -6.3 20.7 Nuveen Dow 30 Dynamic DIAX 19.01 19.19 +0.9 24.3 Eaton Vance Sr Incm Tr EVF NA NA NA 5.5 MFS Multimkt MMT 6.27 5.64 -10.0 9.3 Invesco Inv Grade Muni VGM 13.56 12.53 -7.6 5.9
Cdn Genl Inv CGI 36.27 25.08 -30.9 18.6
BlackRock Enh Eq Div Tr BDJ 9.81 9.25 -5.7 12.3 Nuveen Core Eq Alpha JCE 15.52 15.22 -1.9 20.0 First Trust Sr FR Fd II FCT 14.02 12.85 -8.3 5.8 Nuveen Build Am Bd Fd NBB 21.59 20.29 -6.0 6.0 Invesco Value Mun Incm Tr IIM 15.80 14.16 -10.4 5.2
China Fund CHN 25.24 22.66 -10.2 25.7
BlackRock Enh Gl Div Tr BOE 12.11 11.23 -7.3 0.3 Nuveen Diversified Div JDD 12.21 12.23 +0.2 6.2 FT Sr Floating Rate 2022 FIV 9.63 9.32 -3.3 5.3 PIMCO Corporate & Incm PTY NA 18.78 NA 8.4 MainStayMacDefinedMuni MMD 20.13 19.38 -3.7 5.5
Clough Global Opp Fd GLO 12.32 11.10 -9.9 16.6
BlkRk Intl Grwth&Inco BGY 6.48 5.88 -9.3 -1.1 Nuveen Engy MLP Fd JMF 11.33 11.06 -2.4 -2.9 Highland FR Opps Fd HFRO NA NA NA NA PIMCO Corporate & Incm PCN NA 17.95 NA 7.6 MFS Munl Inco MFM 7.27 6.65 -8.5 5.7
EtnVncTxAdvGblDiv ETG NA 17.22 NA 9.2
BlkRk Health Sci BME 36.72 37.68 +2.6 13.8 NuvNASDAQ100DynOver QQQX 24.02 27.69 +15.3 32.9 EatonVance TxAdv Opport ETO NA 25.13 NA 13.0 Invesco Credit Opps Fund VTA NA 11.81 NA 6.8 PIMCO HiInco PHK NA 8.33 NA 11.8 NuveenAMT-FreeMunValue NUW 16.37 15.67 -4.3 4.5
BlackRck Rscs Comm Str Tr BCX 10.64 9.57 -10.1 24.5 Nuveen Real Est Incm Fd JRS 10.78 9.99 -7.3 -3.9 First Trust Dynamic Eur FDEU 17.97 16.65 -7.3 -8.0 Invesco Senior Income Tr VVR 4.92 4.41 -10.4 5.4 PIMCO Inco Str Fd PFL NA 12.33 NA 8.8 Nuveen AMT-Free Quality NEA 14.71 12.98 -11.8 5.4
BlackRock Science & Tech BST 31.87 34.45 +8.1 58.5 Nuveen Real Asset Income JRI 18.53 16.39 -11.5 0.5 Gabelli Glbl Multimedia GGT 9.08 9.44 +4.0 14.2 Nuveen Credit Strt Inc Fd JQC 9.11 8.11 -11.0 6.9 PIMCO Incm Strategy Fd II PFN NA 10.71 NA 9.0 Nuveen AMT-Free Mun NVG 16.11 14.89 -7.6 5.7
BlackRock Utilities Infr BUI 19.82 19.79 -0.2 0.1 NuvS&P500DynOverwrite SPXX NA 18.42 NA 23.3 GDL Fund GDL 11.34 9.36 -17.5 -4.7 NuvFloatRteInco Fd JFR 11.55 10.78 -6.7 7.3 Putnam Mas Inco PIM 5.03 4.66 -7.4 6.6 Nuveen Mun Credit Incm Fd NZF 15.65 14.57 -6.9 5.9
Nuv Float Rte Opp Fd JRO 11.47 10.62 -7.4 7.7 Putnam Premier Income Tr PPT 5.61 5.36 -4.5 5.9 Nuveen Enhncd Mun Val Fd NEV 14.65 13.71 -6.4 5.8
Nuveen Senior Income Fund NSL 6.90 6.42 -7.0 7.1 Wells Fargo Multi-Sector ERC 13.75 12.74 -7.3 10.1 Nuveen Intermed Dur Mun NID 13.61 12.51 -8.1 4.8
Cash Prices | WSJ.com/commodities Friday, June 08, 2018
Pioneer Floating Rate Tr PHD 12.39 11.42 -7.8 6.3
Voya Prime Rate Trust PPR 5.65 5.10 -9.7 5.4
World Income Funds
Abeerden Asia-Pacific FAX 5.08 4.46 -12.2 9.3
NuveenMuniIncoOpp Fd NMZ 13.29 12.65 -4.8 6.1
Nuveen Muni Value Fund NUV 10.09 9.59 -5.0 3.9
These prices reflect buying and selling of a variety of actual or “physical” commodities in the marketplace— High Yield Bond Funds Brandywine Global Incm BWG NA 11.51 NA 8.4 Nuveen Qual Mun Incm Fd NAD 15.00 13.25 -11.7 5.4
AllianceBernstein Glbl AWF 13.28 11.62 -12.5 7.2 Etn Vnc Short Dur Fd EVG 14.94 13.09 -12.4 6.8 Nuveen Sel TF NXQ 14.55 13.63 -6.3 3.7
separate from the futures price on an exchange, which reflects what the commodity might be worth in future Barings Glbl Short Dur HY BGH 20.58 18.74 -8.9 9.7 MS EmMktDomDebt EDD 8.13 7.06 -13.2 8.6 PIMCO MuniFd PMF 12.52 13.16 +5.1 5.3
months. Pimco Muni Inc II PML 11.75 13.10 +11.5 5.9
Friday Friday Friday PIMCO Muni Inc III PMX 10.71 11.52 +7.6 5.8

Energy
(U.S.$ equivalent) *16.7450 Soybeans,No.1 yllw IL-bp,u 9.3300 Borrowing Benchmarks | WSJ.com/bonds Pioneer Mun Hi Inc Adv Tr MAV 11.61 10.97 -5.5 5.5
Pioneer Mun Hi Incm Tr MHI 12.59 11.48 -8.8 5.3
Coins,wholesale $1,000 face-a 12357 Wheat,Spring14%-pro Mnpls-u 7.3250
5.3150 Putnam Tr PMM 7.84 7.00 -10.7 5.4
Propane,tet,Mont Belvieu-g 0.9026 Other metals Wheat,No.2 soft red,St.Louis-bp,u
Butane,normal,Mont Belvieu-g 1.0586 LBMA Platinum Price PM *905.0 Wheat - Hard - KC (USDA) $ per bu-u 5.3575 Money Rates June 8, 2018 PutnamMuniOpportunities PMO 13.03 11.62 -10.8 5.2

.
Wheat,No.1soft white,Portld,OR-u 5.9750 Wstrn Asset Mngd Muni MMU NA 12.63 NA 5.9
NaturalGas,HenryHub-i 2.860 Platinum,Engelhard industrial 904.0
WesternAssetMunTrFund MTT 20.77 20.96 +0.9 4.7
2.790 Key annual interest rates paid to borrow or lend money in U.S. and

ly
NaturalGas,TranscoZone3-i Platinum,Engelhard fabricated 1004.0 Food Single State Muni Bond
NaturalGas,TranscoZone6NY-i 2.320 Palladium,Engelhard industrial 1020.0 international markets. Rates below are a guide to general levels but
2.210 BlackRock CA Municipal Tr BFZ 14.86 13.05 -12.2 5.2
NaturalGas,PanhandleEast-i Palladium,Engelhard fabricated 1120.0 Beef,carcass equiv. index
2.190 choice 1-3,600-900 lbs.-u 192.71 don’t always represent actual transactions. BlkRk MuniHldgs CA Qlty MUC 15.07 13.26 -12.0 5.1
NaturalGas,Opal-i Aluminum, LME, $ per metric ton *2331.0
NaturalGas,MarcellusNE PA-i 1.970 Copper,Comex spot 3.2930 select 1-3,600-900 lbs.-u 169.75 BlkRk MunHl NJ Qlty MUJ 15.24 13.23 -13.2 5.7
Week —52-WEEK—
NaturalGas,HaynesvilleN.LA-i 2.670 Iron Ore, 62% Fe CFR China-s n.a.
on Broilers, National comp wghtd-u,w 1.2100 Inflation Latest ago High Low BlRk MuHldg NY Qlty MHN 14.36 12.47 -13.2 5.2
Coal,C.Aplc.,12500Btu,1.2SO2-r,w 62.250 Shredded Scrap, US Midwest-s,m n.a. Butter,AA Chicago 2.3900 April index Chg From (%) BlkRk MuniYld CA Fd MYC 15.15 13.39 -11.6 5.2
Coal,PwdrRvrBsn,8800Btu,0.8SO2-r,w 12.400 Steel, HRC USA, FOB Midwest Mill-s n.a. Cheddar cheese,bbl,Chicago 156.50 level March '18 April '17 60 days 4.231 4.192 4.371 3.281 BlkRk MuniYld CA Quality MCA 15.31 13.33 -12.9 5.2
Cheddar cheese,blk,Chicago 163.50 BlkRk MuniYld MI Qlty MIY 15.07 13.16 -12.7 5.5
Metals Fibers and Textiles Milk,Nonfat dry,Chicago lb. 80.50 U.S. consumer price index Other short-term rates BlRk Muyld NY Qlty MYN 13.77 12.00 -12.9 5.0
Cocoa,Ivory Coast-w n.a. Eaton Vance CA Mun Bd EVM NA 10.39 NA 5.2
us l,

Gold, per troy oz Burlap,10-oz,40-inch NY yd-n,w 0.5775 All items 250.546 0.40 2.5 Week 52-Week
0.9394 Coffee,Brazilian,Comp 1.1503 Invesco CA Value Mun Incm VCV 13.03 11.80 -9.4 5.3
Engelhard industrial 1300.86 Cotton,1 1/16 std lw-mdMphs-u Core 257.025 0.16 2.1 Latest ago high low
*99.00 Coffee,Colombian, NY 1.3751 Invesco PA Value Mun Incm VPV 13.64 11.87 -13.0 5.4
Engelhard fabricated 1398.42 Cotlook 'A' Index-t
n.a. Eggs,large white,Chicago-u 0.7750 International rates Invesco Inv Grade NY Muni VTN 14.12 12.81 -9.3 5.3
Handy & Harman base 1298.25 Hides,hvy native steers piece fob-u
al a

16.55 Call money

e
Handy & Harman fabricated 1441.06 Wool,64s,staple,Terr del-u,w n.a. Flour,hard winter KC Nuveen CA AMT-Free Qual NKX 15.35 13.57 -11.6 5.4
LBMA Gold Price AM *1298.30 Hams,17-20 lbs,Mid-US fob-u 0.58 Week 52-Week 3.50 3.50 3.50 2.75 Nuveen CA Muni Value NCA 10.24 9.42 -8.0 4.0
LBMA Gold Price PM *1297.25
Grains and Feeds Hogs,Iowa-So. Minnesota-u 73.77 Latest ago High Low Nuveen CA Quality Muni NAC 15.24 13.35 -12.4 5.5
ci on

Krugerrand,wholesale-e 1350.65 Barley,top-quality Mnpls-u n.a.

Pork bellies,12-14 lb MidUS-u n.a. Commercial paper (AA financial) Nuveen MD Qual Muni NMY 14.23 12.10 -15.0 4.8
Maple Leaf-e 1363.64 Bran,wheat middlings, KC-u,w 83
Pork loins,13-19 lb MidUS-u 0.9994 Prime rates 90 days 2.16 2.17 2.31 1.06 Nuveen MI Qual Muni NUM 15.00 12.71 -15.3 4.7
American Eagle-e 1363.64 Corn,No. 2 yellow,Cent IL-bp,u 3.4500
Steers,Tex.-Okla. Choice-u n.a. Nuveen NJ Qual Muni NXJ 15.44 13.02 -15.7 5.3
Steers,feeder,Okla. City-u,w 161.88
U.S. 4.75 4.75 4.75 4.00
Mexican peso-e 1573.84 Corn gluten feed,Midwest-u,w 130.0 Libor Nuveen NY AMT-Free NRK 14.10 12.14 -13.9 4.8
Canada 3.45 3.45 3.45 2.70
Austria crown-e 1275.99 Corn gluten meal,Midwest-u,w 470.0 Nuveen NY Qual Muni NAN 14.66 12.60 -14.1 5.2
Fats and Oils Japan 1.475 1.475 1.475 1.475 One month 2.04617 2.00468 2.04638 1.12711
Austria phil-e 1363.64 Cottonseed meal-u,w 265 Nuveen OH Qual Muni NUO 16.18 13.78 -14.8 4.9
106
Three month 2.32631 2.31781 2.36906 1.23644 Nuveen PA Qual Muni NQP 14.87 12.58 -15.4 5.3
Silver, troy oz. Hominy feed,Cent IL-u,w Corn oil,crude wet/dry mill-u,w 30.1000 Policy Rates
2.47438 2.52375 1.41683
er rs

Engelhard industrial 16.8200 Meat-bonemeal,50% pro Mnpls-u,w 298 Grease,choice white,Chicago-h 0.2600 Six month 2.48875 Nuveen VA Qual Muni NPV 14.12 12.34 -12.6 4.4
Euro zone 0.00 0.00 0.00 0.00
Engelhard fabricated 20.1840 Oats,No.2 milling,Mnpls-u 2.8825 Lard,Chicago-u n.a. One year 2.74025 2.72413 2.78031 1.69511 PIMCO California Muni PCQ 13.58 16.16 +19.0 5.7
Switzerland 0.50 0.50 0.50 0.50 PIMCO California Mun II PCK 8.37 8.22 -1.8 6.0
Handy & Harman base 16.7710 Rice, Long Grain Milled, No. 2 AR-u,w 25.75 Soybean oil,crude;Centl IL-u 0.2887 Britain 0.50 0.50 0.50 0.25 Euro Libor
Handy & Harman fabricated 20.9640 Sorghum,(Milo) No.2 Gulf-u 7.7775 Tallow,bleach;Chicago-h 0.2550 52 wk
367.30
Australia 1.50 1.50 1.50 1.50
LBMA spot price *£12.4400 SoybeanMeal,Cent IL,rail,ton48%-u Tallow,edible,Chicago-u n.a. One month -0.401 -0.407 -0.397 -0.420 Prem Ttl
Fund (SYM) NAV Close /Disc Ret
m e

Overnight repurchase Three month -0.352 -0.351 -0.350 -0.389

-0.305 -0.309 -0.295 -0.339 General Equity Funds
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; U.S. 1.76 1.86 2.18 1.00 Six month
Specialized Equity Funds
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 6/7 One year -0.228 -0.231 -0.180 -0.263 Griffin Inst Access RE:A 27.03 NA NA 6.4
U.S. government rates
m rp

Source: WSJ Market Data Group

Griffin Inst Access RE:C 26.48 NA NA 5.6
Discount Euro interbank offered rate (Euribor) Griffin Inst Access RE:I 27.23 NA NA 6.7
One month -0.371 -0.371 -0.366 -0.374 Griffin Inst Access RE:L 26.98 NA NA 6.2
2.25 2.25 2.25 1.50
Griffin Inst Access RE:M 26.83 NA NA 5.9
Insider-Trading Spotlight Federal funds
Three month -0.321 -0.321 -0.321 -0.332
NexPointHCOpp;A NA NA NA NS
Trading by ‘insiders’ of a corporation, such as a company’s CEO, vice president or director, potentially conveys Six month -0.267 -0.269 -0.264 -0.279 NexPointHCOpp;C NA NA NA NS
Effective rate 1.7300 1.7300 1.7400 0.9300 One year -0.180 -0.184 -0.140 -0.194 NexPointHCOpp;Z NA NA NA NS
new information about the prospects of a company. Insiders are required to report large trades to the SEC High 1.9500 1.9500 1.9500 1.0625 NorthStar RE Cap Inc:Adv NA NA NA NS
co Fo

within two business days. Here’s a look at the biggest individual trades by insiders, based on data received by Low 1.6700 1.6500 1.7100 0.7500 Value 52-Week PREDEX;T 26.27 NA NA NS
1.6800 1.7000 1.7200 0.9000 Latest Traded High Low
Thomson Financial on June 8, and year-to-date stock performance of the company Bid PREDEX;W 26.27 NA NA NS
KEY: B: beneficial owner of more than 10% of a security class CB: chairman CEO: chief executive officer CFO: chief financial officer Offer 1.7100 1.7200 1.7400 0.9300 Resource RE Div Inc:A 10.39 NA NA 6.7
DTCC GCF Repo Index Resource RE Div Inc:C 10.37 NA NA 5.9
CO: chief operating officer D: director DO: director and beneficial owner GC: general counsel H: officer, director and beneficial owner Treasury bill auction Treasury 1.755 26.070 2.068 0.993 Resource RE Div Inc:D 10.54 NA NA 6.2
I: indirect transaction filed through a trust, insider spouse, minor child or other O: officer OD: officer and director P: president UT: Resource RE Div Inc:I 10.83 NA NA 7.0
4 weeks 1.780 1.750 1.780 0.840 MBS 1.775 94.010 1.971 1.009
unknown VP: vice president Excludes pure options transactions Resource RE Div Inc:L 10.39 NA NA NS
13 weeks 1.910 1.895 1.910 0.980
26 weeks 2.070 2.030 2.080 1.070
Open Implied Resource RE Div Inc:T 10.36 NA NA 6.0
Biggest weekly individual trades Settle Change Interest Rate Resource RE Div Inc:U 10.40 NA NA 6.7
Secondary market Resource RE Div Inc:W 10.55 NA NA 6.8
Based on reports filed with regulators this past week DTCC GCF Repo Index Futures SharesPost 100;A 29.36 NA NA 14.0
Fannie Mae Treasury Jun 98.048 -0.002 910 1.953 SharesPost 100:I 29.39 NA NA NS
No. of shrs in Price range ($) $ Value
30-year mortgage yields SharesPost 100:L 29.34 NA NA NS
Date(s) Company Symbol Insider Title trans (000s) in transaction (000s) Close ($) Ytd (%) Treasury Jly 97.955 0.005 581 2.045 Tot Inc+ RE:A 30.09 NA NA 7.7
30 days 4.204 4.166 4.344 3.253 Treasury Aug 97.965 0.005 1324 2.035 Tot Inc+ RE:C 29.18 NA NA 6.8
Buyers Tot Inc+ RE:I 30.47 NA NA 7.9
Notes on data: Tot Inc+ RE:L 30.01 NA NA 7.4
June 5 Axovant Sciences AXON A. Lo BI 14,286 1.75 25,000 4.80 -8.9 USQ Core Real Estate:I USQIX 25.52 NA NA NS
U.S. prime rate is the base rate on corporate loans posted by at least 70% of the 10 largest U.S. banks,
June 5 P. Machado 14,286 1.75 25,000
n-

BI and is effective March 22, 2018. Other prime rates aren’t directly comparable; lending practices vary USQ Core Real Estate:IS USQSX 25.52 NA NA NS
June 4-5 Dova Pharmaceuticals DOVA P. Manning DO 120 24.02-26.93 3,140 28.81 0.03 widely by location; Discount rate is effective March 22, 2018. DTCC GCF Repo Index is Depository Versus Cap MMgr RE Inc:I 27.86 NA NA NE
June 5 S. Goldman D 15 26.41 396 Trust & Clearing Corp.'s weighted average for overnight trades in applicable CUSIPs. Value traded is in Versus Capital Real Asst VCRRX 25.29 NA NA NS
billions of U.S. dollars. Federal-funds rates are Tullett Prebon rates as of 5:30 p.m. ET. Futures on the Wildermuth Endwmnt Str 13.35 NA NA 11.3
May. 31 DISH Network DISH C. Ergen CB 100 29.37 2,937 32.08 -32.8 DTCC GCF Repo Index are traded on NYSE Liffe US. Wildermuth Endwmnt S:C 13.11 NA NA 10.4
June 1-4 Entercom Communications ETM J. Field CBI 400 6.80-7.05 2,770 6.90 -36.1 Sources: Federal Reserve; Bureau of Labor Statistics; DTCC; SIX Financial Information; Wildermuth Endwmnt S:I 13.43 NA NA 11.9
no

Tullett Prebon Information, Ltd. Income & Preferred Stock Funds

May. 21 QTS Realty Trust QTS P. Trahanas D 60 34.72 2,083 41.36 -23.6 MultiStrat Gro & Inc:A 14.60 NA NA -0.4
May. 31 C. Williams CEO 30 37.68 1,130 MultiStrat Gro & Inc:C 14.23 NA NA -1.1
June 6-7 Yum China Holdings YUMC J. Wat CEO 24 40.94-41.00 1,000 41.70 4.2 MultiStrat Gro & Inc:I 14.81 NA NA -0.1
June 6 CCUR Holdings CCUR J. Singer BI 104 5.35 554 5.31 -7.8 A Week in the Life of the DJIA MultiStrat Gro & Inc:L 14.35 NA NA -0.9
The Relative Value:CIA VFLEX NA NA NA NS
June 5 Microsoft MSFT S. Peterson D 5 101.96 551 101.63 18.8 Convertible Sec's. Funds
A look at how the Dow Jones Industrial Average component stocks Calamos Dyn Conv & Incm CCD 21.42 22.04 +2.9 14.0
June 4 LCI Industries LCII J. Lippert CEO 6 83.83 503 94.60 -27.2 did in the past week and how much each moved the index. The DJIA World Equity Funds
June 1 S. Mereness P 4 85.00 340
gained 681.32 points, or 2.77%, on the week. A $1 change in the price BMO LGM Front ME 11.16 NA NA 12.3
June 4-5 Beacon Roofing Supply BECN R. Frost D 12 42.01-42.58 502 43.86 -31.2 Calamos Global Tot Ret Fd CGO 13.33 14.08 +5.6 13.7
of any DJIA stock = 6.89-point change in the average. To date, a
June 1 Unifi UFI R. Bishop DI 15 32.07 481 32.37 -9.8 $1,000 investment on Dec. 31 in each current DJIA stock component Prem12 Mo
Fund (SYM) NAV Close /Disc Yld
June 4 American Assets Trust AAT E. Rady CEOI 10 36.48 365 37.23 -2.6 would have returned $30,891, or a gain of 2.97%, on the $30,000 U.S. Mortgage Bond Funds
May. 30-31 PRGX Global PRGX M. Drapkin DI 36 9.64 345 9.55 34.5 investment, including reinvested dividends. Vertical Capital Inc:A 12.25 NA NA 3.2
May. 29-31 Owens Realty Mortgage ORM B. Draper CEO 20* 16.48-16.99 336 16.50 3.1 Vertical Capital Inc:C 12.31 NA NA NS
The Week’s Action Vertical Capital Inc:I 12.40 NA NA NS
Pct Stock price Point chg $1,000 Invested(year-end '17) Vertical Capital Inc:L 12.40 NA NA NS
Sellers chg (%) change in average* Company Symbol Close $1,000 Loan Participation Funds
6.13 9.75 67.13 McDonald’s MCD $168.91 $994 504 Fund 9.67 NA NA 3.9
June 4-6 Facebook FB M. Zuckerberg CEOI 678 189.85-194.82 130,355 189.10 7.2
5.86 10.98 75.60 Home Depot HD 198.33 1,058 Angel Oak Strategic Crdt ASCIX 25.43 NA NA NS
May. 31-June 1 M. Zuckerberg CEOI 457 187.81-194.46 87,791
Blackstone/GSO FR EI I 24.99 NA NA NS
June 5-6 Walmart WMT S. Walton DOI 1,190 84.63-85.25 100,754 84.36 -14.6 5.08 3.73 25.68 Procter & Gamble PG 77.18 855 Blackstone/GSO FR EI T 24.93 NA NA NS
June 5-6 A. Walton BI 1,190 84.63-85.25 100,754 5.02 3.32 22.86 DowDuPont DWDP 69.49 987 FedProj&TrFinanceTendr 10.08 NA NA 3.1
June 5-6 J. Walton BI 1,190 84.63-85.25 100,754 4.65 FS Global Crdt Opptys D NA NA NA 5.6
4.62 31.81 Walt Disney DIS 103.98 967 Invesco Sr Loan A 6.74 NA NA 3.9
May. 30 Pentair PNR M. Peltz DI 1,675 44.14 73,926 45.00 -5.1
3.58 12.78 88.00 Boeing BA 369.50 1,266 Invesco Sr Loan C 6.75 NA NA 3.2
June 5 American Eagle Outfitters AEO J. Schottenstein CEO 1950* 24.13 47,048 24.02 27.8 Invesco Sr Loan IB 6.74 NA NA 4.2
3.51 7.00 48.20 3M MMM 206.59 889 Invesco Sr Loan IC 6.74 NA NA 4.0
June 5-7 RealPage RP S. Winn CEO 753* 56.35-60.98 44,597 56.25 27.0
3.34 2.02 13.91 Merck MRK 62.58 1,122 Invesco Sr Loan Y 6.74 NA NA 4.2
May. 30-31 CarGurus CARG A. Parafestas DOI 1,036 32.22-33.18 33,477 34.95 16.6 RiverNorth MP Lending RMPLX 23.29 NA NA 10.8
3.01 7.33 50.47 UnitedHealth Group UNH 250.68 1,141
June 5-7 S. Kaufer D 400 33.07-33.47 13,242 Sierra Total Return:T SRNTX 24.75 NA NA NS
2.97 3.89 26.78 Visa V 134.74 1,186 Voya Senior Income:A 12.55 NA NA 4.9
June 5 Polaris Industries PII S. Wine CEO 245 118.36-119.05 28,999 126.01 1.6
Voya Senior Income:C 12.53 NA NA 4.4
June 6 Intuit INTU S. Cook ODI 100 207.58-209.00 20,812 206.26 30.7 2.95 4.19 28.85 IBM IBM 146.14 973 Voya Senior Income:I 12.51 NA NA 5.2
June 1 ServiceNow NOW F. Slootman D 100 177.91-181.49 17,966 178.19 36.7 2.94 2.14 14.73 Nike NKE 74.90 1,204 Voya Senior Income:W 12.56 NA NA 5.2
2.87 1.37 9.43 Verizon VZ 49.18 952 High Yield Bond Funds
June 1-4 Keysight Technologies KEYS R. Nersesian CEO 300 59.38-60.85 17,893 60.99 46.6 Griffin Inst Access Cd:A NA NA NA 5.1
June 1 Snap SNAP E. Spiegel CEO 1,465 11.46 16,788 13.08 -10.5
2.80 2.75 18.93 American Express AXP 101.00 1,024 Griffin Inst Access Cd:C NA NA NA 5.1
2.50 2.71 18.66 JPMorgan Chase JPM 111.11 1,050 Griffin Inst Access Cd:F NA NA NA NS
May. 31-June 1Nutanix NTNX D. Williams CFO 300 53.56-55.18 16,238 56.19 59.3 Griffin Inst Access Cd:I NA NA NA 5.1
June 1-5 RBC Bearings ROLL M. Hartnett CEO 105 128.12-128.39 13,501 130.92 3.6 2.31 2.80 19.28 Johnson & Johnson JNJ 124.06 900 Griffin Inst Access Cd:L NA NA NA NS
2.21 5.04 34.70 Goldman Sachs GS 233.39 922 PIMCO Flexible Cr I;Inst 10.40 NA NA 7.1
May. 31 NVIDIA NVDA J. Gaither DI 45 253.59 11,411 262.28 35.5 PionrILSInterval 9.66 NA NA 1.4
2.16 1.77 12.19 Exxon Mobil XOM 83.60 1,020 WA Middle Mkt Dbt NA NA NA 10.1
* Half the transactions were indirect **Two day transaction
p - Pink Sheets 2.09 2.59 17.83 Chevron CVX 126.44 1,029 WA Middle Mkt Inc WMF NA NA NA 10.1
1.92 Other Domestic Taxable Bond Funds
0.83 5.71 Coca-Cola KO 43.95 966
BlackRock Mlt-Sctr Oppty 98.82 NA NA NS
Buying and selling by sector 1.65 1.37 9.43 WalMart WMT 84.36 865 Capstone Church Capital 11.68 NA NA 3.4
CION Ares Dvsfd Crdt;A 25.60 NA NA 5.4
Based on actual transaction dates in reports received this past week 1.57 2.03 13.98 Travelers TRV 131.32 979 CION Ares Dvsfd Crdt;C 25.60 NA NA NS
1.43 1.80 12.39 United Technologies UTX 127.61 1,011 CION Ares Dvsfd Crdt;I 25.60 NA NA NS
Sector Buying Selling Sector Buying Selling 1.17 1.80 12.39 Caterpillar CAT 155.32 995 CION Ares Dvsfd Crdt;L 25.60 NA NA NS
CNR Select Strategies 9.67 NA NA NS
Basic Industries 1,732,895 11,277,296 Finance 806,278 84,058,041 1.16 0.42 2.89 Pfizer PFE 36.67 1,032 GL Beyond Income 2.58 NA NA NE
Business services 0 14,680,520 Health care 325,096 183,926,218 Palmer Square Opp Income 19.56 NA NA 4.6
0.83 0.84 5.78 Microsoft MSFT 101.63 1,199 Resource Credit Inc:A 11.28 NA NA 6.3
Capital goods 0 0 Industrial 293,760 49,555,767 0.77 1.46 10.05 Apple AAPL 191.70 1,142 Resource Credit Inc:C 11.39 NA NA 5.5
Consumer durables 74,292 47,521,142 Media 3,235,260 7,489,757 –0.41 –0.18 –1.24 Cisco Systems CSCO 43.48 1,153 Resource Credit Inc:I 11.31 NA NA 6.5
Consumer nondurables 547,481 29,846,595 Technology 1,445,885 173,695,606 Resource Credit Inc:L 11.26 NA NA NS
–1.21 –0.17 –1.17 General Electric GE 13.93 805 Resource Credit Inc:W 11.27 NA NA 6.3
Consumer services 1,157,255 109,717,049 Transportation 105,590 1,956,582 –3.56 –2.03 –13.98 Intel INTC 55.05 1,207 World Income Funds
Energy 201,473 15,310,675 Utilities 11,952 6,830,779 Destra Int&Evt-Drvn Crdt 24.85 NA NA NS
*Based on Composite price. DJIA is calculated on primary-market price. National Muni Bond Funds
Sources: Thomson Financial; WSJ Market Data Group Source: WSJ Market Data Group; FactSet. Tortoise Tax-Adv Soc Inf 9.99 NA NA NS
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | B9

MARKETS

Banks Retreat From

Municipal Bonds
BY HEATHER GILLERS other loans and high-quality
corporate bonds, analysts said.
Banks reduced their quar- The reduced appeal of mu-
terly municipal-bond holdings nicipal debt has the potential
for the first time in nine years, to drive up borrowing
a sign of how much new U.S. costs for state and local gov-
tax rules damped demand for ernments.
debt from state and local gov- A widely followed munici-
ernments. pal-bond index fell more in the
CREDIT Municipal se- first three months of the year
MARKETS curities held by than any first quarter of the
U.S.-chartered past 15 years. Muni prices
depository insti- have recovered in the second
tutions fell in the first quarter quarter.
by nearly $16 billion to $554 Some analysts expect prop-
billion, according to Federal erty-and-casualty insurance
Reserve data published Thurs- companies, another traditional
day. buyer, to also unload munici-
Banks emerged over the pal debt because of the change
VCG/GETTY IMAGES

past decade as one of the big- in tax rates.

gest buyers of tax-exempt mu- Their combined holdings
nicipal debt because the in- held constant at $327 billion
vestments were viewed as in the first quarter, according
stable and safe. They hold 14% to the Fed.
China’s return is likely to mean a period of higher prices for a fiber used in most apparel, textiles and upholstery. of outstanding municipal “If munis are less attractive

China Turns Cotton Buyer

bonds, according to the Fed for banks, they might be even
data. less attractive to property-
But new legislation passed and-casualty companies,”
late last year by Congress which invest in lower-yielding
dropped tax rates paid by shorter-dated securities, said
banks to 21% from 35%, mak- Mikhail Foux, head of munici-
After years of who have long labored under a Trump has pressed China to below 70 cents a pound by ing tax-exempt bonds less ap- pal strategy at Barclays
market whose prices investors commit to reduce the $375 bil- 2012, mills didn’t increase pealing. PLC. “We could see more sell-
stockpiling, country is perceived to be capped by lion U.S. merchandise trade cotton purchases, according to “With the lower corporate ing by those companies going
again big customer of China’s cotton stores, which deficit with China by $200 bil- U.S. trade data. tax rate, it makes less sense forward.”
for years have accounted for lion. With China holding half the for [banks] to buy tax ex- Municipal bonds could be-
U.S. producers more than half of all global Cotton is the latest global world’s cotton in storage, empts,” said Vikram Rai, head come slightly more appealing
stocks. commodity market held in some speculators were wary of municipal strategy at Citi- to banks later this year.
BY JULIE WERNAU China announced this sway by Beijing, whose policy to return to a market they group Inc. Citi’s holding of New rules passed by Con-
month that it intends to raise decisions as a major purchaser knew could see a downturn if municipal bonds dropped to gress and signed into law in

.
China is re-emerging as a cotton import volumes, a and supplier of the world’s China decided to unleash its $21.4 billion in the first quar- May made municipal bonds

ly
major consumer of U.S. cotton move that could increase Chi- commodities often shift global stockpiles. China began auc- ter from $22.7 billion in the fi- one of several investments
after years of stockpiling the nese purchases of American fi- markets. tioning off cotton in 2013 due nal quarter of 2017, according that count as “high-quality liq-
fiber, a ber at a time the Trump ad- Chinese strategic cotton re- to shortages among its mills to the bank’s quarterly state- uid assets.” Banks must hold a
COMMODITIES shift that ministration is calling for on serves are likely to run low by and increasing global competi- ments. designated amount of such as-
together more imports from the U.S. the end of August, according tion. China at one point held Banks likely are replacing sets to comply with postcrisis
with poor The shift has revived inter- to analysts. China’s Ministry of 67 million bales of cotton in muni holdings with mortgages, rules.
growing conditions in Texas est in markets that were until Agriculture and Rural Affairs storage, enough to meet all its
has sent prices surging to a recently seen as being over- said in its monthly report on needs for about two full years.
us l,

six-year high. shadowed by Chinese policy. May 10 that while the govern- Market participants were Falling Back
The world’s most populous Open interest has reached all- ment sell-down of cotton always wary that China could Bank holdings of municipal bonds dropped
al a
e
nation has purchased futures time highs for this time of stocks will continue in suddenly unleash those stocks for the first time since 2009.
contracts covering more than year, according to data from 2018-19, the domestic supply in earnest.
361,000 bales of U.S. cotton the U.S. Commodity Futures of high-quality lint is insuffi- “They kept our prices artifi-
ci on

$600 billion
for 2019-20, according to U.S. Trading Commission. July cot- cient and cotton imports are cially low as they were selling
Department of Agriculture ton futures on the ICE Futures expected to increase. those bales on our market,” 500
data. That is enough to make U.S. exchange closed at 94.94 Overbooked auctions and said Wayne Boseman, presi-
400 million T-shirts. China has cents a pound on Friday, the surging futures prices in China dent of Carolinas Cotton
never booked that much cot- highest level for a front-month recently led the country to Growers Cooperative, Inc. 400
er rs

ton that far in advance at this contract since February 2012. limit merchant participation in Demand is starting to
time of year, in data going Commerzbank said this daily cotton auctions. spring back. In May, the USDA 300
back to 1998. week that a commitment from China’s move to begin projected cotton consumption
“It’s very unusual to have China to buy large quantities hoarding the fiber eight years would reach its highest level 200
m e

that many bales in the books,” of U.S. cotton should create a ago pushed cotton prices ever in 2018-19, with global
said Peter Egli, risk manager lasting rise in price levels. above $2 a pound in 2011, mill use at 125.4 million bales.
at Plexus Cotton Ltd. “China China last week offered to bankrupting some mills and That is in a year when world 100
m rp

is the biggest taker of forward purchase nearly $70 billion of merchants globally. When production is expected to drop
sales.” U.S. farm, manufacturing and prices spiked, remaining mills to 121.2 million bales from 0
China’s return to global cot- energy products if the Trump substituted cheaper, synthetic 122.4 million bales last year. 2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17
ton markets is likely to mean a administration abandons fibers into fabrics. The amount The largest year-over-year
period of higher prices for a threatened tariffs on some $50 of cotton used in apparel im- changes to cotton imports are Source: Federal Reserve THE WALL STREET JOURNAL.
co Fo

fiber used in most apparel, billion in Chinese imports ported to the U.S. dropped 12% forecast for China.
textiles and upholstery. It is across 1,300 categories of between 2010 and 2011—and —Lucy Craymer
also a boon to U.S. producers products. President Donald while prices had fallen back contributed to this article. Currencies
U.S.-dollar foreign-exchange rates in late New York trading
US$vs, US$vs,

Oil Prices Drop as Saudis Increase Output Country/currency

Americas
in US$
Fri YTDchg
per US$ (%) Country/currency
Europe
in US$
Fri YTDchg
per US$ (%)

Argentina peso .0395 25.2950 36.0 Czech Rep. koruna .04571 21.877 2.8
BY SARAH MCFARLANE supply from the Organization lower by year-end,” said Oliv- year. Saudi Arabia has the Brazil real .2696 3.7086 12.0 Denmark krone .1580 6.3302 2.0
of the Petroleum Exporting ier Jakob, oil analyst at con- largest spare production ca- Canada dollar .7736 1.2927 2.8 Euro area euro 1.1771 .8496 2.0
Oil prices edged lower Fri- Countries following comments sultancy Petromatrix, adding pacity of any oil exporter Chile peso .001587 630.10 2.4 Hungary forint .003683 271.55 4.8
day as investors continued to from Saudi Arabia and Russia this was a “conservative” esti- globally. Ecuador US dollar 1 1 unch Iceland krona .009436 105.98 2.4
bet on increased supply de- in May that the countries were mate. “The political leadership is Mexico peso .0493 20.2893 3.1 Norway krone .1241 8.0559 –1.8
n-

Uruguay peso .03216 31.0900 8.0 Poland zloty .2751 3.6357 4.5
spite concerns over output open to adding supply to the Analysts said that while clearly coming from Russia
Venezuela b. fuerte .00001379900.0001 772489.0 Russia ruble .01604 62.332 8.1
from Venezuela and Iran. market, after more than a year U.S. shale is driving global oil- and Saudi in terms of an in-
Asia-Pacific Sweden krona .1148 8.7102 6.4
Light, sweet crude for July of measured controls. production growth, it wasn’t crease, I think how they divide
Australian dollar .7600 1.3158 2.8 Switzerland franc 1.0151 .9851 1.1
delivery fell 0.3% to $65.74 a Prices traded slightly enough to offset supply issues the increase between different .2235 4.4740 17.9
no

China yuan .1561 6.4065 –1.5 Turkey lira

barrel on the New York Mer- higher earlier in the session elsewhere. countries isn’t clear,” Mr. Ja- Hong Kong dollar .1275 7.8456 0.4 Ukraine hryvnia .0382 26.1560 –7.1
cantile Exchange. Brent, the on uncertainty over supply The U.S. Energy Informa- kob said. India rupee .01481 67.520 5.7 UK pound 1.3411 .7457 0.8
global benchmark, fell 1.1% to disruptions elsewhere. tion Administration forecasts Commerzbank estimates Indonesia rupiah .0000717 13947 3.4 Middle East/Africa
$76.46. The economic crisis in Ven- the country’s production will that to plug the growing sup- Japan yen .009129 109.54 –2.8 Bahrain dinar 2.6476 .3777 0.2
On Friday afternoon, Saudi ezuela is curtailing the coun- rise to 10.7 million barrels a ply gap, global production Kazakhstan tenge .002988 334.64 0.6
Egypt pound .0560 17.8510 0.4
Arabia said it has started in- try’s oil production, while the day on average in 2018 from needs to be raised by more Macau pataca .1237 8.0861 0.5
Israel shekel .2803 3.5671 2.5
Malaysia ringgit .2507 3.9885 –1.8
creasing crude production planned reinstatement of U.S. 9.4 million barrels a day last than the 300,000 barrels a day Kuwait dinar 3.3100 .3021 0.2
New Zealand dollar .7028 1.4229 0.9
ahead of a meeting to assess sanctions against Iran is ex- year. favored by Saudi Arabia. Pakistan rupee .00864 115.780 4.6
Oman sul rial 2.5974 .3850 0.01
whether to ease caps on out- pected to hit production from This leaves OPEC members, Gasoline futures settled Philippines peso .0189 52.903 5.9
Qatar rial .2748 3.640 –0.3
put among major exporters. the third-largest member of along with Russia, to poten- nearly unchanged at $2.1153 a Singapore dollar .7489 1.3353 –0.1 Saudi Arabia riyal .2667 3.7502 –0.01
Oil futures were little changed OPEC. tially plug any gap. OPEC and gallon. South Korea won .0009303 1074.93 0.7 South Africa rand .0765 13.0662 5.7
Close Net Chg % Chg YTD%Chg
in electronic trading following “If you take the expected its allies are meeting later this Diesel futures declined 0.7% Sri Lanka rupee .0062877 159.04 3.6
Taiwan dollar .03350 29.851 0.6 WSJ Dollar Index 86.86 0.05 0.06 1.02
the announcement. decline for Venezuela and then month to discuss the outlook to $2.1643 a gallon.
Thailand baht .03121 32.040 –1.7 Sources: Tullett Prebon, WSJ Market Data Group
Traders have been antici- Iran, you want to be 800,000 for their deal to cut supplies, — Stephanie Yang
Vietnam dong .00004387 22793 0.4
pating a ramp-up in crude to 1 million barrels a day due to expire at the end of the contributed to this article

THE TICKER | Market events coming this week

Monday H&R Block 5.27/3.76 Initial jobless claims Estimate/Year Ago($)

Previous 222,000 Adobe 1.54/1.02
Short-selling reports
Ratio, days of trading volume of Wednesday Expected 222,000 Jabil 0.45/0.31
current position, at May 15
Fed policy meeting ends EIA report: natural gas
NYSE 4.8
Target rate 1.00-1.25 Previous change in stocks in
Friday
Nasdaq 4 billions of cubic feet Capacity utilization
Mort. bankers indexes up 92 April, previous 78.0%
Tuesday Purch., previous up 4% May, expected 78.1%
Refinan., prev. up 4% Business inventories
Fed two-day meeting
March, previous 0.0% Industrial production
starts
EIA status report April, expected up 0.3% April, previous up 0.7%
Previous change in stocks in
Consumer-price index May, expected up 0.2%
DON EMMERT/AGENCE FRANCE-PRESSE/GETTY IMAGES

millions of barrels Import-price index

All items, April up 0.2% Crude oil up 2.1 April, previous up 0.3% Empire Manufacturing
May, expected up 0.2% Gasoline up 4.6 May, expected up 0.5% May, previous 20.1
Core, April up 0.1% Distillates up 2.2
May, expected up 0.2% June, expected 18.5
Retail sales
Producer-price index April, previous up 0.3%
Treasury budget Consumer Sentiment
All items, April up 0.1% May, expected up 0.4%
May, ‘17 $88.0 bil. deficit Index
May, expected up 0.3%
May, ‘18, expected May, final 98.0
Core, April up 0.2% Retail sales, ex. autos
$127.0 bil. deficit June, prelim. 98.3
May, expected up 0.2% April, previous up 0.3%
May, expected up 0.5%
Earnings expected*
Estimate/Year Ago($) Thursday Earnings expected*

* FACTSET ESTIMATES EARNINGS-PER-SHARE ESTIMATES DON’T INCLUDE EXTRAORDINARY ITEMS (LOSSES IN PARENTHESES)  ADJUSTED FOR
STOCK SPLIT NOTE: FORECASTS ARE FROM DOW JONES WEEKLY SURVEY OF ECONOMISTS Energy Information Administration data on crude and gasoline stockpiles are due out Wednesday.
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

B10 | Monday, June 11, 2018 * *** THE WALL STREET JOURNAL.

MARKETS
An Uneven Recovery in Stocks
After months of trading in a relatively narrow range, the S&P 500 is 3.3% below its all-time high set Jan. 26.
Consumer discretionary Industrials
The broad stock-market index slumped more than 10% over the nine trading sessions following that record and entered correction
Newell territory on Feb. 8 for the first time in more than two years. Technology stocks have powered much of the rebound, thanks to
Brands a big surge since late April. The sector is the best performer this year of the 11 segments in the index, with a gain of 14%.
TripAdvisor

Jan. 26 Feb. 8 Index performance, year to date 15% S&P 500

S&P 500 all-time high 2018 low tech sector
10
Arconic
5 S&P 500
Consumer staples Materials
Dr Pepper 0
Snapple

January February March April May June

S&P 500 stocks, change in share price Tech stocks Other stocks
25%
Six stocks moved against the Twitter Eight stocks rose
Dr Pepper (added to the
market in both periods—rising Snapple
in both periods.
Energy S&P 500 June 7)
20 when the S&P slipped into a Real estate
correction and declining during
the index’s recent recovery.
Qorvo XL Group
Andeavor
10 Newell Brands
TripAdvisor
Skyworks
JAN. 26 THROUGH FEB. 8

Hess Solutions
Motorola Solotions
eBay
Financials Electronic Arts Telecommunications
XL Group 0 Abiomed
(added to the

.
Everest Re F5 Networks
S&P 500 May 31)

ly
AT&T

Under Armour
S&P 500 on Micron Technology (A and C shares)
Jan. 26–Feb. 8
–10 –10.2%

Macy’s
us l,

Health care Utilities

Chipotle
Arconic Dominion
al a

Mexican Grill
e
Energy
–20
349 stocks fell and
ci on

Abiomed
142 stocks declined
in both periods. S&P 500 rose with the market.
–25 Feb. 8–June 8
+7.7%
–40% 0 40 80
Align Technology FEB. 8 THROUGH JUNE 8
er rs

Note: Totals in main chart add to more than 500 because some S&P 500 companies have multiple classes of stock.
Source: FactSet By Lauren Pollock and Peter Santilli/THE WALL STREET JOURNAL.

HEARD ON THE STREET

m e
m rp

Email: [email protected] FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

co Fo

Traditional Fox and the Hounds

Share price over past six months
Apple Finds a Way
Retailers Are
Split Online
20 %
21st Century Fox Inc. Cl B To Lift Momentum
LEON NEAL/AGENCE FRANCE-PRESSE/GETTY IMAGES

10
When investors were bet- If Apple reaches a market nues the current one has
ting that Amazon.com Walt Disney Co. value of $1 trillion, the ac- thanks to higher selling
0
would crush every tradi- complishment may be all the prices. The iPhone’s revenue
tional retailer, it didn’t mat- more unique given the com- is currently projected to re-
ter how their online sales pany’s effort to lighten its main flat for the fiscal year
–10
were doing. Now, a clear gap massive cash load. that ends in September 2019.
n-

has emerged between stores Apple has been buying Yet the stock price has
with solid e-commerce oper- Comcast Corp. Cl A back its own shares at a furi- jumped more than 13% since
–20
ations and those without. ous clip since last year’s tax- Apple’s fiscal second-quarter
At the far ends of each Dec. 2017 Jan. ’18 Feb. March April May overhaul package freed up report last month.
no

group are Macy’s Inc., which Rupert Murdoch Source: WSJ Market Data Group THE WALL STREET JOURNAL. more than $250 billion that What buybacks don’t do is
continues to beat analyst ex- the company had accumu- raise a company’s market

Fox Bidding to Heat Up

pectations, and Sears Hold- lated in its offshore bank ac- capitalization—at least not
ings Corp., whose tailspin counts. Apple repurchased on their own. Although the
appears to be accelerating. about 137 million shares on share price does rise, all else
A study by research firm the open market during its being equal, the share count
Edison Trends highlights the Not so long ago, Rupert merger, it will throw cold hang over Comcast than Dis- fiscal second quarter that falls. But for those obsessing
divergence among traditional Murdoch’s decision to sell water on Comcast’s plans. “It ney,” said Mr. Kimmelman. ended March 31, which is about whether Apple will be
retailers. Sears, despite the crown jewels of his me- will embolden the Justice The battle would reverber- more than triple the pace of the first company to hit the
promises by Chief Executive dia company, 21st Century Department to be more ate across the Atlantic, po- buybacks averaged over the vaunted $1 trillion dollar
Eddie Lampert to boost e- Fox, looked like an acknowl- forceful,” said Gene Kimmel- tentially pushing up the previous eight periods. It mark, the math has been
commerce, has made little edgment that the sun was man, a former Justice De- value of Sky, the satellite-TV also represented about 6% of working out in its favor. Its
progress. Over the past 10 setting on his reign. Now, as partment antitrust attorney. company, which is 39% the total volume of Apple number of shares outstand-
months, Sears’s e-commerce Walt Disney and Comcast That would likely leave Dis- owned by Fox. Right now shares traded during the ing has fallen by 25% on
sales were just 17% of Macy’s prepare to do battle over ney the winner, even if it shares trade at £13.59 quarter—the highest per- split-adjusted basis since the
and Kohl’s, even though those coveted assets, Mr. doesn’t raise its offer. ($18.21), well above the cur- centage seen in more than company began its first buy-
Sears’s overall revenue was Murdoch looks set to go out The messiest—and per- rent offers, but as the only five years, according to Toni back plan in September 2012,
roughly two-thirds that of in a blaze of glory. haps most likely—scenario is option for growth in the U.K., Sacconaghi of Bernstein. according to S&P Global Mar-
Macy’s and about 10% less On Tuesday, a U.S. federal that the AT&T trial resolves Sky is a crucial piece in the The elevated repurchase ket Intelligence. But the
than Kohl’s. judge will determine how somewhere in the middle, new-media puzzle. activity likely has continued. stock price has doubled
Among a crop of five re- glorious that blaze can be. with the judge rejecting the Mr. Murdoch will have to The company said on its lat- since, bringing the com-
tailers analyzed by Edison The judge is scheduled to government’s remedy and weigh all of this as he de- est earnings call that it in- pany’s total market value up
Trends—Sears, Kmart, rule on AT&T’s acquisition of saying the deal can go cides which offer to accept. tends to complete the $10 by 49%. A steadily rising
Kohl’s, Macy’s, and J.C. Pen- Time Warner. If the deal is through if it meets specific Disney and Comcast will billion remaining on its cur- share price has a way of tak-
ney Co.—Macy’s has seen approved outright, it will be conditions. fight to the bitter end. No rent buyback plan before the ing on its own momentum.
the strongest online growth a green light to Comcast to The Justice Department is other media assets are as at- end of the June quarter. It There are worse ways to
in 2018, climbing 28% in make a formal bid for Fox as- unlikely to be pleased by tractive as Fox’s and both also announced a new $100 blow off some cash.
monthly order volume since sets—a vertical merging of that; it has been trying to get companies see them as a ne- billion buyback that Financial —Dan Gallagher
January. Meanwhile, Sears’s distribution and content sim- away from such remedies, cessity to compete globally Chief Luca Maestri said
online order volume fell 25% ilar to AT&T-Time Warner. which are difficult to oversee with Netflix in the new-me- would be executed “effi-
from January to May. Comcast’s bid, which is re- and which force it to play the dia world. (Fox and News ciently and at a fast pace.” Back Pay
Penney looks only margin- portedly planned as a $60 role of industry regulator. It Corp, publisher of The Wall Mr. Sacconaghi estimates Apple’s shares outstanding*
ally better than Sears. Inves- billion all-cash offer, would may appeal the decision. Street Journal, share com- that buybacks could account
tors, who were already dis- top Disney’s $52.4 billion all- This scenario is murky for mon ownership.) for 4% to 8% of Apple’s total 8 billion
appointed by Penney’s weak stock offer. Disney would Comcast and for Fox. It The battle is personal, too: share volume over the next First buybacks begin
first-quarter results and the then sweeten its bid and a means the government will Comcast Chief Executive four to six quarters
sudden departure of Chief high-stakes battle would en- still be inclined to toughen Brian Roberts, who lost a bid Buying back shares is tax- 6
Executive Marvin Ellison, sue, driving up the value of oversight of Comcast, though for Disney in 2004, is loathe efficient way to return cash
should keep a wary eye on Fox. Of course, the Justice how successfully is uncer- to see it pull ahead. Mean- to shareholders. In the case 4
those numbers. Department may still object tain. A Fox-Disney merger while, Disney CEO Bob Iger of Apple, it also may be help-
As Sears shutters stores, to a Comcast acquisition of could also invite scrutiny, be- doesn’t want to close out his ing boost demand for the
e-commerce could have been Fox assets even if it loses its cause of the company’s con- career by losing the shiniest stock during what is typically 2
the company’s future. In- case against AT&T. But it trol over sports program- piece on the chessboard. a weak period seasonally, as
stead it has fallen far behind would have a much harder ming and its power on the For the Murdochs and for iPhone sales generally cool in
traditional retailers and is time blocking the deal. studio side. But these can Fox investors, it is hard to the summer months. Ana- 0
way behind its big competi- Alternately, if the U.S. gov- likely be remedied without imagine a more brilliant way lysts also question whether FY2010 ’12 ’14 ’16 ’18
tors, Walmart and Target. ernment wins its case blocking a deal. to end the empire. the next iPhone cycle can de- *Adjusted for 7:1 split on June 9, 2014
—Elizabeth Winkler against AT&T, blocking the “More regulatory clouds —Elizabeth Winkler liver the same lift to reve- Sources: the company; S&P Capital IQ
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

JOURNAL REPORT

F
The Eollow
THE WALL STREET JOURNAL. Monday, June 11, 2018 | R1
Onlinxperts
© 2018 Dow Jones & Company. All Rights Reserved.

wsj.c e
om/e at
x perts

DO YOU
PREFER
a pricey meal
over a
less-expensive
one?

SHOULD
YOU

It’s Time to
retire now
or
wait a
few years?

A/B Test
Your
Financial
Life

.
ly
on WOULD
YOU
us l,

BE BETTER
trying to save
al a

$5 a day or
e
$150 a month?
ci on
er rs

JOHN KUCZALA; GETTY IMAGES(7)

m e
m rp

BY SHLOMO BENARTZI People often don’t know their true preferences, gave a higher average score to the $5 wine
co Fo

than the $90 bottle.

O
N MY LAST WORK TRIP, I whether it’s the size of their house or where to We can apply this to any number of prod-
ucts. We might learn that we prefer inexpen-
learned a valuable lesson
about myself while melting eat or when to retire. There’s a simple solution sive T-shirts over fancier brands, or that a lux-
ury sedan isn’t as much fun to drive as a more
chocolate in a saucepan.
What I learned changed my to this—and it could save you a lot of money. basic coupe with a manual transmission.
At the very least, testing our more expen-
dining habits—as well as the sive preferences can provide reassurance that
way I think about my fi- out our financial preferences before it’s too to major financial decisions. There are three they’re really worth the extra money.
nances. late? I propose that we borrow an essential keys to a successful self-experiment. First, the
Let me explain. For many years, I visited tool used by the most successful technology alternatives have to use randomization. This
fancy restaurants when traveling abroad for companies, such as Amazon, Google and Expe- can be easily done by flipping a coin to see
2.
work. I was convinced this was how I liked to dia: the A/B test. which condition should go first. Then, we MONITORING YOUR PORTFOLIO MORE
eat when traveling. It’s a simple idea. To improve their sites and should aim for scale, repeating the test as VS. LESS FREQUENTLY
n-

On this trip, though, I was meeting a friend apps, these companies generate two versions many times as possible. Finally, we have to
who preferred that we cook at home. So we of a site (A and B). The versions are identical track the results. In my own experiments,
compromised: The first night, we would eat at except for one or two key differences. Perhaps home cooking has yet to lose. Thanks to our smartphones, we can now get
a restaurant I picked, and the second night, we version A has a different color scheme from In the hope of inspiring your own A/B tests, constant updates on our investment perfor-
no

would cook at his place. version B, or has the buy button located in a I’ve outlined five categories in which this sim- mance. My own research, done with Richard
Much to my surprise, I vastly preferred the different part of the screen. ple process can be used to reveal your finan- Thaler, has shown that more frequent updates
home-cooked meal. By the time we were bak- Then, the company randomly assigns users cial preferences. could make people obsess over short-term
ing profiteroles for dessert, I realized that I to one of the two sites. The performance of losses, when they should almost certainly be
had totally misread my preferences. each site is carefully tracked, allowing the firm focused on their long-term investment goals.
If this mistake was limited to my dining to learn which version is more effective.
1. Over time, this can lead to an excessively con-
choices, it wouldn’t be such a big deal. How- In research I’ve conducted with Hal Hersh- BUYING BASIC VS. LUXURY GOODS servative portfolio and lower returns.
ever, research suggests that the same basic field at UCLA and Steve Shu at City University This suggests that investors should conduct
mistake—not knowing what we really want— of London, we used A/B tests to experiment Many people think luxury equals quality; an A/B test on how they’re affected by these
can have huge implications for our financial with different versions of the same basic fi- the more you spend on something, the more new forms of financial feedback. The A condi-
lives. We might think we prefer a big house nancial offer. Users of a saving app were ran- you’ll like it. tion could involve checking your investments
over a smaller condo, or that we want an ag- domly assigned to one of two groups. The first An A/B test that investigates those assump- multiple times a day on a mobile app. How do
gressive investment portfolio. But if we don’t group was asked if they would like to save $5 tions may offer some surprising insights into you feel? Does your blood pressure rise on
test these assumptions, we might never know a day, while the second group was asked if our true preferences. For instance, I thought I days when the market drops? The B condition
that we’re wrong—with potentially major fi- they would like to save $150 a month. (The preferred fancy dining, but an accidental ex- could feature quarterly paper reports only.
nancial consequences. amounts are essentially equivalent.) periment taught me that I prefer those home- Does less feedback make you less stressed? Or
So what’s the solution? How can we figure Although we had predicted that the $5 a made desserts. are you missing relevant information?
day question would perform slightly better—it Another common assumption involves wine. While some people can benefit from contin-
Dr. Benartzi (@shlomobenartzi) is a made saving seem less painful and intimidat- Research by Hilke Plassman, John O’ Doherty, uous digital feedback—such data led me to
professor and co-head of the behavioral ing—I was shocked by how much better it did: Baba Shiv and Antonio Range showed that change my breakfast for the better when I
decision-making group at UCLA Anderson Those users given the $5 question were four when given tastes of wines and told how much bought a blood-sugar monitor—others find it
School of Management and a frequent times as likely to sign up. each bottle cost, people preferred the more ex- too stressful. This means that we need to fine-
contributor to Journal Reports. He can be I believe we should use A/B tests to study pensive wine. But when the wines were sam- tune the amount of information and updates
reached at [email protected]. our own preferences, especially when it comes pled blind—a classic A/B test—the subjects Please turn to the next page

INSIDE

Don’t Claim Social Security For Retirees, Divided Finances On the Road in a Tiny House
at 62. Unless... Get Tricky A traveler and blogger looks
The conventional wisdom Separate financial accounts work to be debt-free within a year.
says to wait. But at least one for many couples. But maybe R5
counterargument is hard to refute. not in retirement.
R2 R4 The Hidden Social Risk
Of Payment Apps
Beer, the Bass Drum—and Debt Experts’ Voices They allow people to pay others
A brewery worker and part-time Retirement insurance products are exact amounts. And that can make
musician looks to save more. disappearing. That’s dangerous. them seem petty.
R2 R4 R6

Alumni Donations Best Bet/Worst Bet Moving and the Tax Law
Get a Lot More Specific Arnold Schwarzenegger on If you’re thinking of changing
College donors attach more strings the move that changed his life— your residence because of new
to gifts to colleges. and the one he regrets. deduction limits, read this first.
R4 R5 R6
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

R2 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

JOURNAL REPORT | WEALTH MANAGEMENT

ASK ENCORE | GLENN RUFFENACH

Don’t Claim Social Security at 62. Unless…

The conventional wisdom says to wait. But at least one counterargument is hard to refute.

Have you spoken with many retirees who Ed Slott, an IRA expert in Rockville Centre, N.Y.
have claimed Social Security benefits at age Benefit Bumps Once that is done, she can then roll over
62? Almost everything I read and hear tells A person who turns 62 in 2018 will reach full retirement age at 66 and fourth months, according to your IRA balance to her IRA (a spousal roll-
me not to do this and, instead, to wait as Social Security. If the monthly benefit at full retirement age is $1,300, this person would be eligible over), and she will begin taking RMDs when
long as possible. It would be interesting to to collect the following at various ages: she reaches 70½, based on her age each year.
hear the other side, especially since so many Technically, a spouse has the option of re-
people don’t seem to wait. FULL MONTHLY 1,681 maining a beneficiary, rather than doing a
BENEFIT BEGINS 1,577 spousal rollover, and wouldn’t have to begin
1,473
I am certainly in the “wait” camp. But yes, I 1,369 RMDs until the deceased spouse would have
have heard from and spoken with a number of 1,300 reached age 70½, Mr. Slott notes. But that
1,184
people who grabbed Social Security at 62, the 1,097 wouldn’t provide any advantage in your case
earliest possible age for most. (Benefits at 62 1,018 since you will be age 70½ this year.
$953
are roughly three-quarters of what they would
i i i
be at a person’s “full retirement age,” as de-
fined by the Social Security Administration.) My husband, who is retired, turned 65 in May
One argument in particular stands out as a and went on Medicare. He has a health sav-
valid reason for leaping early. But before we ings account. We had been in his company’s
get to that… retiree medical high-deductible plan for the
Many retirees claim benefits at age 62 sim- first four months of the year, and I (with a
ply because they need the money; they’re un- AGE 62 63 64 65 66 YRS., 67 68 69 70 few years before I reach 65), remain covered
able to work or they want to enjoy retirement IN 2018 4 MOS. under that plan. My question: What contribu-
while they’re still relatively young, and their nest tions, if any, can we make to an HSA in
egg alone can’t support them. Others are wor- Source: Social Security Administration THE WALL STREET JOURNAL. 2018?
ried about the health of the Social Security pro-
gram and want to get at least some benefits guaranteed financial returns that come from Social Security. Then click on the post for Once a person is enrolled in Medicare, he or
before the system “runs out of money.” And delaying benefits. March 28.) she can no longer contribute to an HSA. But
some individuals apply early because they want Which brings us to the one reason for Granted, even the health argument isn’t given that your husband wasn’t enrolled from
to invest the funds; they calculate that their fi- claiming benefits early that’s tough to argue foolproof; you might be unwell, but every January through April, he can still contribute
nances will come out ahead if they put their with: poor or questionable health. Consider month you’re able to delay claiming Social Se- one-third (or four months’ worth) of the an-
Social Security checks to work in the markets. this recent blog post from Debbie Galant, pub- curity means a larger survivor’s benefit for nual limit of $7,900, says Roy Ramthun, a
Are all these people wrong—or foolish? Of lisher of a wonderful website about growing your spouse (if you die first). On balance, consultant who specializes in high-deductible
course not. It’s just that the counterarguments older titled Midcentury Modern. though, an expectation that your life expec- plans and HSAs. That amounts to $2,633.
tend to be equally, or a bit more, persuasive. “A month ago I decided to apply for Social tancy could be shorter than average is one (Note: The annual contribution limit is
Need the money? Working just one or two Security. When I put it on Facebook, several reason to collect benefits sooner rather than $6,900 for individuals covered under qualify-
additional years, or taking a part-time job, can friends wrote me privately, to see if I’d lost my later. Otherwise, I hope you will give the argu- ing family medical plans. If you’re 55 or older
frequently do wonders for your nest egg and mind. Because, as everybody knows, you’re ments to delay filing for Social Security the in 2018, you can contribute an additional

.
allow you to postpone claiming benefits. supposed to wait as long as you can to pull benefit of the doubt. $1,000.)

ly
Anxious about Social Security collapsing? Social Security—so you can get a bigger check. As for you, you must set up an HSA in
i i i
Yes, the program is facing a financial shortfall, And I’m only 62. your own name, he says. The annual contribu-
but it will never go broke. (The federal govern- “But I’m not crazy. There’s an iron logic in Both my wife and I have individual retirement tion limit for people with single medical cover-
ment—and I don’t think I’m going out on a my decision. I’m taking my Social Security
on accounts. I will turn 70½ this year. She is 69. age is $3,450. Given that you will have cover-
limb here—will always collect taxes, and part early because that’s $1,400 less a month I If I start taking required minimum distribu- age from May through December, your
of that revenue will always go to the Social have to worry about making. I’m taking Social tions from my IRA and then die before she is contribution limit is $3,450 x 8/12 = $2,300.
Security program.) Security early because I had cancer two years 70, and if she inherits my IRA, does she have And because you appear to be 55 or older, you
Planning to invest your monthly payouts? ago, and…cancer taught me that life is not a to continue with my RMDs? Or do the RMDs can also make a $1,000 catch-up contribution,
us l,

Few people can beat, with any regularity, the Google calendar with an infinite number of “stop” until she turns 70½? And if she has bringing your total to $3,300. (Because you
slots to fill. Life is finite. So I’ll give up some to continue, how is that calculated? are eligible to contribute to an HSA for all of
al a
e
Mr. Ruffenach is a former reporter and editor for stuff—and the promise of more money later— 2018, you wouldn’t have to prorate your catch-
The Wall Street Journal. His column examines fi- for more freedom now to spend my time as I If you die after beginning RMDs, and if your up contribution like your husband.)
nancial issues for those thinking about, planning wish.” wife is your beneficiary, she must first with- Combined, says Mr. Ramthun, you and your
ci on

and living their retirement. Send questions and (I urge you to read Ms. Galant’s entire post draw any part of your RMD for the year of husband would be able to deduct $5,933 on
comments to [email protected]. at midcenturymodernmag.com. Search for: death that hasn’t already been withdrawn, says your 2018 income-tax return.
er rs

It’s Time to Start A/B Testing Your Financial Life

m e

Continued from the prior page the workforce. While some of these You might learn, for instance, that mountains or visiting a foreign city.
we get, conducting frequent tests to workers almost certainly needed ad- Back to Work you’re just as happy spending much Perhaps they’ll realize that their
make sure that our technology is ditional income, the Rand authors less money and can thus retire ear- favorite spot really is the beach. Or
m rp

For some older adults, staying retired

helping us, not hurting. suggest that many are working be- isn't a consideration—out of financial lier. Or maybe you miss the extra maybe they’ll discover that they’ve
cause they want to. need or an urge to be back in the spending, and thus should save at a been leaving happiness on the table,
Maybe a leisurely life of golf and workforce. higher rate during your working and that they most enjoy experienc-
3. cards wasn’t as much fun as they ex- years. Either way, a simple A/B test ing new places on vacation.
RETIRING NOW VS. LATER pected. Employed workers who had could be the difference between an
i i i
co Fo

That’s why I think it’s important previously retired enjoyable retirement and one that is
One of the most important finan- to test-drive our dreams. Rather AGE profoundly disappointing. Americans are devoted to the pur-
cial decisions people make concerns than guess what we’ll want to do in suit of happiness. Unfortunately, re-
the timing of their retirement. Un- retirement, we should plan an ex- 55-59 60-64 65-71 search shows that many of us don’t
5.
fortunately, many people are so
tempted by the prospect of enjoying
tended vacation that allows us to
simulate the retirement we think we
8% 25% 40% SPENDING ON THE USUAL VS.
actually know what makes us happy,
so we end up pursuing the wrong
their retirement that they retire too want. We might learn that we’re in NEW EXPERIENCES things.
soon. no rush to stop working, and can Retirees age 50 and older who would The good news is that self-experi-
For instance, I know several peo- thus enjoy a more luxurious retire- return to work if the conditions mentation can help us figure it out,
ple who harbor the fantasy of play- ment once it begins, or that we don’t were right We earn money so that we can allowing us to pursue the right
ing golf seven days a week after they want to retire at all. College Non-college spend it, investing in those things things before it’s too late. Personal-
stop working. But it’s possible that graduates graduates and experiences that make us happy. ization is currently a buzzword, as
the same game that’s extremely en- But many of these spending deci- companies like Amazon and Netflix
joyable when played once a week be-
4. 57% 41% sions reflect our strong bias for the promise to improve our choices by
n-

comes tedious when played every SPENDING MORE VS. Source: Rand Corp.'s “How Americans Perceive the status quo, as people tend to keep offering highly personalized recom-
day. After all, decades of research LESS IN RETIREMENT Workplace" survey choosing those products and experi- mendations based on our past pref-
shows that people consistently un- THE WALL STREET JOURNAL. ences they’re already familiar with, erences.
derestimate the power of adaptation, even if there’s a better option avail- However, given the errors that
no

or the tendency to get used to our People often decide how much To figure out which projection is able. plague many of these preferences,
circumstances. This is why lottery money they’ll need in retirement by correct, people should experiment That’s why it’s important to con- it’s clear we can’t just rely on algo-
winners are rarely as happy as they projecting forward their current life- with higher and lower amounts of tinually try out novel experiences, rithms. If our past choices have been
would have predicted; they get used style. Such forecasting leads many to spending during their working years. like baking profiteroles at home. flawed, then these future recommen-
to the money. conclude that they’ll need to main- In this experiment, the A condition I know many people whose default dations will be no better.
Similar miscalculations might tain their current standard of living; would involve cutting 40% of your vacation choice involves a nice hotel And that’s why we need to A/B
help explain why, according to a anything less feels like a loss. Finan- discretionary spending for a month on a pretty beach. In the spirit of test our life, designing our own ex-
2017 study by Rand Corp., 39% of cial advisers, meanwhile, typically or two, while the B condition would A/B testing, however, I believe these periments and comparing alterna-
workers over 65 who had retired recommend an income replacement involve cutting just 10%. How did the people should try out some vacation tives so that we can ensure our deci-
changed their mind and returned to of 70% in retirement. experiences compare? alternatives, such as hiking in the sions reflect what we really want.

THE GAME PLAN

BEER, THE BASS DRUM—AND DEBT

like more experience in distribution, about marriage, he says, and buying
BY CHRIS KORNELIS sales and marketing as well. He says a home. But they want to get their
he’s interested, somewhere down the fiscal houses in order before they take
Danny Schroeder has found a way line, in starting a home-based brew- those next steps.
to turn beer and music into regu- ery business, perhaps a mobile tap
lar paychecks. And now he wants room that he can drive to weddings ADVICE FROM A PRO: Nadia Reyn-
to keep some of it in the bank. and parties. olds, a certified financial planner at
The 2014 Eastern Washington But first, he would like to get his Seattle’s Laird Norton Wealth Man-
graduate works as a special proj- finances in order. He makes $14 an agement, says that considering his
MATT RIGGS

ects assistant at Silver City Brew- hour at the brewery, or about $460 a age, Mr. Schroeder has plenty of time
ery, in Bremerton, Wash., where week after taxes, and $15.75 an hour to shore up his finances.
he helps in the production of ex- playing with Blue Thunder, or about He shouldn’t feel as if he has to
perimental beers, such as a recent $3,000 a year in take-home pay. tackle everything at once. Financial se- An adviser suggests that Danny Schroeder set up automatic payments for his
Mexican-style lager, an amber la- With his girlfriend he shares a curity can be a long-term process, bro- credit-card debt to establish a history of making on-time payments.
ger and some barrel-aged beers. house for which he pays $900 to ken into steps, she says.
During football season, you’ll find $1,000 a month on rent and utilities. As a first step, she recommends he ity,” Ms. Reynolds says. pay down his debt and make a habit
him playing the bass drum before, Other monthly bills include gas, $180, start monitoring his spending closely, She suggests he set up automatic of saving, Ms. Reynolds says he then
during and after Seattle Seahawks groceries, $200, eating out, $80, and perhaps using an online tool like payments for his credit-card debt, set should consider opening a Roth IRA.
games in Blue Thunder, the NFL $200 for the couples’ phones. He Mint.com. To Ms. Reynolds, it doesn’t at least to the minimum payment, so Even contributing $50 a month will
team’s drumline, which also per- drives a paid-for 1997 Toyota Camry. look like Mr. Schroeder is living extrav- that he can establish a history of help, she says.
forms at parades and other Mr. Schroeder owes roughly agantly, but knowing exactly where his making on-time payments. “At his age, 40 years down the
events. $2,000 on a couple of credit cards, money is going could help him find op- Ms. Reynolds would also like to see road when he’s going to start drawing
“I’d like to stay in the brewery for which he says there were some portunities to belt-tighten. Mr. Schroeder devote all of his Blue on that, it will serve him well,” Ms.
business and see how far I can delinquent payments. He pays $150 a This might “provide a little bit more Thunder earnings to savings and pay- Reynolds says.
take that,” the 26-year-old says. month and is being charged interest flexibility to do other things like pay ing down his debt.
“I’m learning a lot about the brew- rates between 24% and 30%. down his credit card or start saving a If over the next year he can get a Mr. Kornelis is a writer in Seattle. He
ery process.” Eventually, he would He and his girlfriend have talked little bit to add to his financial stabil- handle on where his money is going, can be reached at [email protected].
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | R3

.
ly
on
us l,
al a
e
ci on
er rs
m e
m rp
co Fo
n-
no
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

R4 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

JOURNAL REPORT | WEALTH MANAGEMENT

Alumni Donations Get a Lot More Specific

As college donors attach more strings to gifts, here’s how they can get what they pay for
to help the cycling team, a ma- sites. In most cases, the agree- There will be occasions
BY DAN WEIL
jor focus for him as a student. ment also will contain lan- when a specific gift isn’t what
Last year, the team didn’t have guage about what the school a school wants or needs. Ar-
WHEN IT COMES to donating a coach and was at risk of can do with the donor’s funds thur Criscillis, a managing
money to their college alma shutting down, Mr. Greene if circumstances around the partner at Alexander Haas, an
maters, more alumni are at- says, so he and his family program change. Atlanta-based fundraising con-
taching strings to their gifts. came up with a $250,000 gift “Crafting the gift agree- sultant to nonprofit organiza-
Instead of writing a check that would, among other ment to reflect the donor’s in- tions, says he knows of a lib-
and letting the school decide things, fund a coach’s salary tent and how the organization eral-arts college where a
how to spend it, alumni are for three years. plans to use the gift is a vital donor wanted to finance the
donating money with the stip- The “gift came out of ne- piece of the puzzle,” Dr. Pasic creation of an architecture
ulation that it be used for a cessity and a passion for the says. “You don’t want to have program. “But it wasn’t within
specific purpose—such as team,” says Mr. Greene, a real- to worry about pulling back the purview of what the col-
funding an academic program, estate broker in Minneapolis. from your gift or not having lege wanted, needed or should
a professor, a sports team or Richard Rampell, a Palm trust, because at some point do,” he says, so the school
even the school band. In this Beach, Fla., accountant and a you relinquish control.” passed on it.
way, alumni can target an area member of the Princeton Uni- To gain a better under- A donor has the most lever-
of the school where they have versity class of 1974, says he, standing of how the college or age when he or she makes a
a personal connection, or too, has been able to support university operates, a prospec- contribution in an area that is
where they think their money his alma mater in ways that tive donor could make a small a high priority for the univer-
can have the greatest impact. are meaningful to him. He and trial gift, and see how school sity, Mr. Criscillis says.
Some 90% of the contribu- his wife, also a Princeton officials respond. “Do they
tions that colleges and univer- alumnus, have donated money thank you promptly and show Mr. Weil is a writer in
sities used for current opera- to a professor doing research you what impact your gift West Palm Beach, Fla.
tions last year were restricted on autism, because her brother had?” Dr. Pasic says. Email: [email protected].
gifts, compared with 78% 20 suffers from the condition. Mr.
years earlier, according to the Rampell, who played tennis at
Council for Aid to Education, Princeton, helps finance team Generous Alumni
an education research and trips to California, and he has Average giving by alumni per school
consulting group. donated to the economics de-
AVG. AMOUNT PCT. OF TOTAL
RIPON COLLEGE

Amir Pasic, dean of the In- partment because that was his GIVEN AVG. AMOUNT
diana University Lilly Family major in college.
School of Philanthropy, sees “The way people generally Endowment income (restricted) $3,696,934 35.0%
two factors contributing to give is to support programs Current operations (restricted) 3,664,873 34.5
that increase. First, donors are A $250,000 gift from Ripon College graduate Kyle Greene, that gave them a meaningful
becoming more “investment- who competed with the school’s cycling team (above), and his experience as an undergradu- Property, building equipment 1,586,413 14.9
minded,” meaning they want family helped keep the program from shutting down. ate,” says Mr. Rampell, a mem- Current operations (unrestricted) 1,128,051 10.6
their gifts to generate visible ber of Princeton’s Planned Giv- Newly established deferred gifts* 336,746 3.2
results. Second, big donors are higher? Do you want to sup- that someone comes with a ing Advisory Committee.
accounting for a larger share port a major? Do you want to fully baked idea,” says the col- Mr. Rampell says that re- Endowment income (unrestricted) 212,729 2.0
of giving to higher education, see more students go to col- lege’s president, Zach Mes- cently an accounting professor Loan funds 388 0.0

.
and these outsize gifts often lege, so you might support a sitte. So the school often at Princeton died and two of

ly
go for specific purposes. Many scholarship or fellowship?” starts by asking prospective his former students endowed Note: Based on responses from 688 schools *Present value
donors are very interested in Once donors have a general donors about their experi- professorships in his name,
funding research and student area in mind, they need to en- ences at the college, which “as he had such a profound
aid, says Linda Durant, vice sure the cause fits with the on professors were important to impact on their lives.” Targeted Giving
president of development at university’s mission. Schools them and how the Ripon expe- Average amount of donations for a school's restricted current
the Council for Advancement will be reluctant to accept do- rience impacted their career. Put it in writing operations, by purpose
and Support of Education. nations to start a program if Dr. Messitte says an alum- To ensure projects are exe- AVG. AMOUNT PCT. OF TOTAL
GIVEN AVG. AMOUNT
they don’t see a benefit. nus recently told the college cuted as a donor intends, a
us l,

Finding a cause Experts say prospective do- that he wanted to donate in written agreement is key, ex- Academic divisions $1,002,212 25.9%
How might someone who nors could ask school officials the math/science area and perts say. Most schools have a Athletics 922,080 23.8
al a
e
wants to donate to their alma what they see as their greatest asked for help in refining his standard gift agreement that
mater pick a target for their need or the area where they request. So Ripon officials can be tailored to describe the Other purposes 777,399 20.1
gift? think a gift could make the helped him create an endowed purpose of a gift, the kind of
ci on

Student financial aid 600,586 15.5

“Ask yourself what you biggest impact. “Do the an- math professorship for statis- recognition the donor will re-
want to see changed as a re- swers mesh with your sense of tics in the name of his family. ceive, the expected impact of Research 290,002 7.5
sult of your gift,” says Ken making a meaningful differ- “It was a need we had, and it the gift and how results will Operation/maint. of phys. plant 124,313 3.2
Spruill, director of private- ence through your giving?” fit with him and his wife,” Mr. be measured and reported to Public service/extension 62,961 1.6
foundation management ser- says Dr. Pasic. Messitte says. the donor, Dr. Pasic says.
er rs

vices at Hawthorn, PNC Family When alumni approach offi- Others approach the school It also might stipulate what Faculty/staff compensation 52,458 1.4
Wealth, a wealth-management cials at Ripon College in with a detailed plan for how kind of involvement the donor Libraries 43,625 1.1
firm based in Philadelphia. Ripon, Wis., they often have a and when they want their can have in the gift process,
“Do you want to see the over- general idea of where they money spent. Kyle Greene, such as meeting scholarship Note: Based on responses from 645 schools Percentages may not equal 100% due to rounding
m e

all university’s performance want to give. “But it’s rare class of 2015, says he wanted recipients or visiting program Source: Council for Aid to Education THE WALL STREET JOURNAL.
m rp

For Retirees, Divided Finances Get Tricky EXPERTS' VOICES

BENJAMIN HARRIS
co Fo

Separate financial accounts work for many couples. But maybe not in retirement.
younger age so the cash outlay
BY CHERYL WINOKUR MUNK Yours, Mine and Ours wouldn’t be as steep, Mr. Moeller
Approach to sharing money among couples age 55 and older says, but adds that even in retire-
FOR SOME married couples, keeping ment it may be advisable to buy per-
separate accounts poses no problems Sharing money Sharing bank accounts Sharing credit cards manent life or term insurance.
during their working years. But in He offers the hypothetical exam-
retirement, it can require some re- ple of a couple splitting the mort-
thinking.
Many couples keep at least some Each
Combine
everything
One shared
account
Separate
cards
One
shared
gage evenly. If the husband’s assets
are all earmarked for his children Retirement
assets separate in retirement, often
to preserve assets for children of
has own
30%
62% 20% 65% 34% card
52%
from a previous marriage, the wife
might need the life-insurance money
Insurance Products
n-

prior marriages. There can also be a

desire to continue the financial inde- 9% 16% 14%
to pay her share of the bills once the
husband is no longer contributing.
Are Disappearing.
pendence they’ve grown accustomed Mr. Moeller calls this the “survi- That’s Dangerous.
to. But once couples with separate Keep it separate Separate accounts Shared and personal vor-income stress test” and says
no

accounts enter the drawing-down many couples fail to consider how The market for retirement in-
stage of their financial lives, rules Shared and personal the death of a spouse would affect
THE WALL STREET JOURNAL.
surance products is slowly
and sharing agreements that once Source: TD Love & Money survey, July 2017 their ability to pay their share of the
made sense may no longer apply. expenses. and silently disappearing.
One spouse may have enjoyed or all of the joint expenses to keep share of expenses. Thus, the options From annuities to long-term-
much greater investing success than the couple afloat financially? need to be discussed, advisers say. Travel patterns care insurance to employer-
the other. One may have lots of dis- With more free time in retirement, provided health insurance,
posable income, while the other may Income sources Gifts to family one spouse might prefer to be fre-
insurance products are be-
have to rely on taxable distributions. Couples need to consider how Once they are no longer earning a quently on the go, while the other is
Out-of-pocket health-care costs are their asset allocations will affect paycheck, couples may need to recon- more of a homebody. Couples need to coming less available and
likely to increase—and be unequal. their ability to pay their expenses. If sider how they are gifting money to consider how they are going to divvy less popular.
And if spouses don’t communicate one spouse is mostly dependent on a children and grandchildren, says up the expenses as changes occur, Older Americans should
properly, conflicting ideas about 401(k) for income, he or she might Keith Moeller, a wealth management says Tony D’Amico, chief executive be worried.
spending on travel, helping family run down this savings sooner be- adviser at Northwestern Mutual in and senior wealth adviser at Fidato
and leisure activities can create dis-
First, insurance markets
cause the distributions are taxable. Minneapolis. Wealth LLC, a registered investment
agreements and other unpleasant is- Steve Janachowski, chief executive Making separate gifts may not adviser in Strongsville, Ohio. don’t work as well when they
sues. of Brouwer & Janachowski, a regis- have been a concern during their He recalls a couple where each thin out. In theory, the first
Tamra Stern, a partner at Main tered investment adviser in Mill Val- working years. But before retire- spouse had children from prior mar- consumers to leave a market
Street Research LLC, in Sausalito, ley, Calif., offers the real-life example ment, a couple should discuss what riages. They started retirement by tend to be those least likely
Calif., recalls a wife who retired at of a couple in their 60s. While they happens if one spouse can no longer splitting their travel budget 50/50.
age 58 and started spending so heav- were working, each earned sufficient afford to give as much. Is the other But the wife had more grandchil-
to benefit. This new compo-
ily on travel and other purchases income to split their expenses evenly. spouse willing to pick up the slack dren, and they found themselves sition drives down profits
that she had to go back to work for But after retirement, the husband be- and should other expense sharing be traveling to visit her family more and drives up prices—even-
10 years to avoid being solely reliant came concerned about running out of adjusted as a result? frequently. The solution, Mr. D’Amico tually leaving nothing but the
on her husband’s individual retire- money. While he had saved $1 million says, was for her to cover the cost of highest-risk buyers purchas-
ment account. in a profit-sharing plan that he rolled Other insurance their airfare, and for him to pay
Of course, every couple’s situation over into an IRA, using that money Separate marital finances may their dining-out expenses. ing very expensive plans.
is different. But here are a few cate- to pay for his expenses would cost make life and long-term-care insur- When couples are creative, they The second problem is it
gories that couples with separate fi- him almost half from a tax perspec- ance more necessary. can often find compromises that suit places the bulk of the retire-
nances typically need to address. tive. His wife was in a far better po- Mr. Moeller says he works with a both spouses. Mr. D’Amico gives an- ment security burden on
sition, since she had recently re- couple who are 12 years apart in age. other example of a retired couple public plans. A paring back
Health care ceived an inheritance of $1 million in They were concerned that if the hus- who had been married for more than
Before retiring, couples should after-tax money in a trust and band needed long-term care, the 30 years. In his working years, the of Social Security and Medi-
determine what their Medicare and $400,000 in an inherited IRA. wife would be burdened financially husband frequently traveled interna- care would severely upend
private health-care premiums are go- The couple decided to draw down and emotionally. It might also de- tionally and he wanted to spend his American retirement.
ing to be. Once the premiums and the wife’s after-tax account to pay plete her personal assets and se- retirement hunting, fishing and —Dr. Harris is a visiting associ-
estimates of out-of-pocket costs are for expenses so their IRAs could con- verely diminish the inheritance she camping. His wife, however, had a ate professor at the Kellogg
known, this should lead to a discus- tinue growing tax-deferred. hoped to leave to her children from hankering to travel internationally, School of Management and was
sion about how these expenses will Social Security benefits can be a previous marriage. So the husband but didn’t have the resources. the chief economist to Vice Pres-
be treated. Will they be shared another tricky area for couples with decided to buy long-term-care insur- Their resolution: He footed the ident Joe Biden.
household expenses and split separate finances to navigate. To ance to help protect her in the event bill for her once-a-year trip to an in-
equally, or should each spouse pay maximize benefits, married couples he had an extended need for care. ternational destination. He also The Experts are industry and
for his or her own medical costs? need to coordinate how and when Many advisers and clients assume bought a camper so they could take thought leaders who write on
If one spouse appears likely to run each spouse should start collecting life insurance won’t be needed in re- trips together and do some of the topics of their expertise. You can
out of money due to rising health- benefits. Strategies can differ de- tirement, but it may be necessary to things he enjoyed. read this full blog post and
care expenses in retirement, this pending on their respective ages and help a surviving spouse pay bills. others at WSJ.com/Experts.
needs to be addressed. Does the means, and could have implications Ideally, the couple would have pur- Ms. Munk is a writer in West Or-
other spouse begin to pick up most for each spouse’s ability to pay their chased a permanent life policy at a ange, N.J. Email [email protected].
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

THE WALL STREET JOURNAL. Monday, June 11, 2018 | R5

JOURNAL REPORT | WEALTH MANAGEMENT

BEST BET/WORST BET

BEST BET WORST BET

MOVING TO AMERICA ‘HERCULES IN NEW YORK’
INVESTMENT INVESTMENT
Relentless training as a bodybuilder Time and cultural cachet

GAINS LOSSES
Millions of dollars, movies, Future jobs and cultural cachet
the governorship of California
As a child, Mr. Schwarzenegger looked up to
By the time Mr. Schwarzenegger was 15, his men like Steve Reeves and Reg Park, bodybuilders
mom charged him rent to live at home. After see- who parlayed their muscles into film roles like
ing videos of the U.S.—“the Golden Gate Bridge, “Hercules Unchained” and “Hercules and the Cap-
Empire State Building, the huge highways, the big tive Women,” respectively. So, when Mr. Weider
Cadillacs with the big wings in the back”—he called him in 1969 and asked him if he wanted to
CARLOS ALVAREZ/GETTY IMAGES

didn’t just want to leave his parents’ house, he go for the title role in the film “Hercules in New
wanted to leave his home country, Austria. York,” he went for it.
Mr. Schwarzenegger decided that his ticket to Mr. Schwarzenegger hardly spoke English, so
America would be through bodybuilding. He began Mr. Weider instructed him not to talk during the
to train. He joined the Austrian army and contin- meeting with the producer. (Mr. Weider told him
ued training, his sights always set on moving to Mr. Schwarzenegger was “a German Shakespear-
America. After he won the Mr. Universe competi- ean actor.”) Mr. Schwarzenegger got the job but
tion in 1967—at 20, the youngest champion—he had to talk to make the film. It didn’t go well.
Arnold Schwarzenegger says having a vision has been key to his success. got an invitation from Joe Weider, one of the god- “I just said [the lines], but there was no emo-
fathers of the sport, to train in the U.S. tion there because I didn’t even know what I was
“Coming to America opened up all the doors saying,” he says. “I didn’t have any acting train-
Schwarzenegger Recalls that I didn’t even think about,” he says. “My
movie career happened, and then my political ca-
ing, and even though the director complimented
me, I knew I was kind of in a bit over my head.”
reer, and the money, the millions that I made, it The performance was so bad that his lines had
The Good and the Bad goes on and on and on. Everything that I have ac-
complished in life is because of America.”
to be overdubbed. His phone stopped ringing. “It
really took me back with my career of becoming
an actor for several years because I didn’t get an
ARNOLD SCHWARZENEGGER has had one of the most impressive— THE TAKEAWAY: Mr. Schwarzenegger says he offer or anything,” Mr. Schwarzenegger says.
and oddball—careers in popular culture, from two terms as governor made it to America because he had a vision. From
of California to four (going on five) turns as sci-fi icon the Terminator. the time he was a teenager, he could visualize THE TAKEAWAY: “You have to find the sweet
The financial bets he has placed have been just as diverse. Some have himself onstage winning Mr. Universe and using spot between having courage and being confi-
been high profile, like his ownership position in his success as an entrée to a life in America. dent,” he says, “but also knowing that you’re deep
BY CHRIS Planet Hollywood. Others have flown under the “The No. 1 lesson of being successful is having into it and you’re not ready for something.”
KORNELIS radar. a vision,” he says. “Because when you have a vi- Mr. Schwarzenegger says he got so caught up
In 1970, for instance, when he was a young sion of where you want to go in life and what you in his initial success as a bodybuilder that he
Austrian expat with enormous biceps, he read want to be, then it is just a matter of doing the didn’t slow down and take care of the basics be-
that an airport for supersonic aircraft was being planned for the Mo- work to get there.” fore he capitalized on opportunities. But he
jave Desert. So, he spent $15,000 on 10 acres of land that had neither As he diversified his professional goals— doesn’t think of the experience as a total loss.

.
clean water nor electricity. whether it was being an investor or governor— Looking back, it taught him an important lesson.

ly
But soon after he bought the land, supersonic flight was banned Mr. Schwarzenegger says he employed the same “We learn not only just from our success, but
over the U.S., and the airport never materialized. principle. It is one the things he tries to instill in we learn actually more from our failures,” he says.
Still, Mr. Schwarzenegger says his best and worst bets have had young people today. “I really learned to never do anything that you’re
less to do with writing checks and more to do with investing his time on “They don’t know what they want to do when not really prepped, overly prepped for. Just like in
and effort in getting ahead—as well as having a clear vision of what they get out of college, they don’t know what to bodybuilding, don’t go in the competition if you
he wanted to achieve and preparing for a job. do when they get out of high school, what kind of haven’t done the reps. The same is with anything
work should they do. Should they go intern some- else. Don’t do it if you haven’t done the reps or if
Mr. Kornelis is a writer in Seattle. Email him at [email protected]. where? There is no goal.” you didn’t put the mileage behind it.”
us l,
al a
e

EXPERTS' VOICES
ci on

THE GAME PLAN

MADDY DYCHTWALD

TRAVELS IN A TINY HOUSE

er rs

$9,100, a savings account with

BY LISA WARD $1,000, a personal checking account
with $4,300 and a business checking
Four years ago, Jenna Spesard account with $1,700.
m e

was working at a movie studio in “I try to put 8% to 10% of my

Los Angeles and felt like she was earnings into my retirement,” she says.
on a treadmill. “I had an over- She has a little less than $9,000
The Lifetime
m rp

whelming amount of debt, be- of debt. About a third is from stu-

NABIL KAUSAL-HAYES

longings and no money to pursue

my dreams,” she says.
dent loans with a 5.5.% interest rate.
The rest carries no interest: When
Gender Pay Gap
She quit her job and, with her Ms. Spesard broke up with her boy-
then-boyfriend, built a 165- friend and ex-partner, she assumed Age Wave, together with
co Fo

square-foot home. The idea was his share of the house and is paying Merrill Lynch, analyzed how
to hitch the tiny house to a pickup him back over time. Jenna Spesard earns an income from blogging about her tiny-house travels. an 18-cent gender pay gap
truck, travel around the country She pays about $905 monthly in adds up over the course of a
and chronicle it through a blog, student loans and $200 to her ex. on her monthly income and expenses, going into the emergency fund and set
tinyhousegiantjourney.com. Once the student debt is paid off, she Mr. Barbakoff believes there could be it aside for travel. The $1,100 that had woman’s life.
Since 2014, Ms. Spesard has plans to devote $1,100 to paying off as much as $600 of additional cash been going toward debt could be used Take male and female
driven more than 25,000 miles her ex. Other monthly expenses in- flow that isn’t being counted. to start saving for the property. twins with the same level of
with her tiny home in tow. She clude: $190 for health and dental in- If that is the case, he suggests set- Ms. Spesard should currently be in- intelligence and drive, school-
has also managed to earn a de- surance, $400 for groceries, $500 ting aside $500 of that monthly for vesting in her Roth. But once she has
ing and career. According to
cent income from her blog for restaurants and entertainment, an emergency fund and $100 for an adequate emergency fund, she
through advertising and product $100 for car insurance and gas, $60 travel. (Since Ms. Spesard’s income should switch to the traditional IRA the Bureau of Labor Statis-
promotion, among other things. for cellphone, $75 for home insur- fluctuates, she can save more in the and take the tax deduction to increase tics, if both work full time at
Now, the 32-year-old wants to ance, and $450 for business ex- months she earns more and vice her cash flow, he says. At that point, median wages with no
save more money while continuing penses. She also lives part-time with versa, he says.) “She really needs to she may want to boost her IRA contri- breaks until retirement, the
n-

her wanderlust lifestyle. She a new boyfriend and pays $200 to- be disciplined about spending.” butions to the maximum of $5,500.
would like to be debt-free within a ward expenses at his house. If Ms. Spesard sticks to her sched- Mr. Barbakoff also suggests that
man will earn $411,000 more
year, set aside $6,000 for three ule, she can pay off the student loan Ms. Spesard consult an accountant to than the woman. That’s the
months of international travel ADVICE FROM A PRO: Nathan Barba- and the tiny house by March, Mr. Bar- make sure she’s properly accounting lifetime pay gap.
no

(sans the tiny house) and start koff, a financial adviser at Bleakley Fi- bakoff says. By June, she should have for all of her business expenses and —Ms. Dychtwald is an author
saving for a down payment for a nancial Group, in Fairfield, N.J., says about $6,000 in emergency savings. taking the maximum amount of tax and co-founder of Age Wave.
piece of property near Seattle. Ms. Spesard’s goals are well within That, combined with her existing deductions. “If she is missing a deduc-
Her projected income for 2018 reach, but she needs to track her cash $5,000 in savings, would give her an tion, that might have a big impact on The Experts are industry and
is $52,000 to $62,000. She says flow carefully. emergency fund of $11,000, or a little her cash flow right away.” thought leaders who write on
the tiny house is worth about First, she should review her expen- more than five months of living ex- topics of their expertise. You can
$50,000. Other assets include: an ditures to make sure all expenses are penses, he says. At that point, she Ms. Ward is a writer in Mendham, read this full blog post and
IRA with $4,200, a Roth IRA with included in her monthly budget. Based could take the $500 that had been N.J. Email her at [email protected]. others at WSJ.com/Experts.

Four Generations
of Plot Twists
He’s got a gift for gymnastics. She’s got her eye on
a little start-up in the Valley. And he wants to retire
early. How do you create a wealth plan that reflects
all the complexity of a modern family? Start with a
Financial Advisor who knows how to bring families
together around both shared and personal goals.

morganstanley.com/wealth

© 2018 Morgan Stanley Smith Barney LLC. Member SIPC. CRC 2092970 04/18
 For personal, non-commercial use only. Do not edit, alter or reproduce. For commercial reproduction or distribution, contact Dow Jones Reprints & Licensing at (800) 843-0008 or www.djreprints.com.

R6 | Monday, June 11, 2018 THE WALL STREET JOURNAL.

JOURNAL REPORT | WEALTH MANAGEMENT

TAXES | TOM HERMAN
The Hidden Social Risk
Moving and the Tax Law Of Using Payment Apps
If you’re thinking of changing your residence They allow people to pay others in exact amounts.
because of new deduction limits, read this first And that can make them seem petty.
beyond money. In another experi-
BY TAMI KIM
ment, we gave online daters infor-
AND MICHAEL NORTON
For some people, saving taxes under and local tax deductions, taxpayers mation on potential matches and
the new law could be a moving ex- Shrinking Tax Break should be mindful that federal law asked them who they would most
perience. Because of the new tax law, many controls the proper characterization ONLINE EXCHANGES of money want to date.
Among the biggest changes is a fewer taxpayers will benefit from state of payments for federal income tax among friends and family are a For example, we told them that
provision limiting deductions for and local tax (SALT) deductions. purposes,” the IRS said recently. great convenience. But users face a one potential match had responded
state and local taxes to $10,000 a  Key factors in New York: hidden risk: Paying someone ex- to a friend’s request for help with
year ($5,000 for a married person 2017 2018 Lawyers say clients often assume actly what you owe them could moving by offering two hours of
filing a separate return), starting the only thing that matters is how damage your relationship. assistance, while another had of-
Returns bene- 42.3 mil. 16.6 mil.
this year and scheduled to expire at much time they spend in a high-tax Back in the 20th century, if you fered precisely an hour and 56 min-
fiting from SALT
the end of 2025. Also, the standard state. That’s typically very important paid for a shared meal that cost utes. A total of 62% of would-be
deductions
deduction amounts rose sharply. but not the only factor in at least $20.04, your friend technically daters indicated interest in the
The changes have created a Tax savings for $109.4 bil. $20.3 bil. several states, such as New York owed you $10.02. Rather than force match who had offered two hours
greater incentive for many taxpayers filers claiming and California. your friend to fish around for two of help, while 45% were interested
living in high-tax areas, including New SALT deductions Lawyers say New York state typi- pennies, however, you might have in the match who had offered 1
York City, California, New Jersey and cally focuses on five “primary” fac- been happy to accept a $10 bill and hour and 56 minutes.
Connecticut, to consider becoming tax Source: Congress’s Joint Committee on Taxation tors in determining “domicile.” That “call it even.” But it wasn’t just about shorting
staff estimates
refugees. This includes upper-income includes time spent in New York That kind of rounding, up or a friend four minutes. We added a
taxpayers who have more than one compared with other places. It also down, is no longer necessary with third potential match who had of-
home and want to claim a home in a More Take-Home Pay includes “active business involve- the rise of money-ex- fered a friend two
lower-tax area as the one that counts ment,” such as “active participation change apps. We can hours and four min-
for tax purposes. It also includes
States that don't have an income tax
in a New York trade, business, occu- now transfer exact
When precise utes of help. Even
some taxpayers who are considering n Alaska n Wyoming pation or profession and/or substan- amounts owed in a numbers are though this candidate
fleeing entirely from a high-tax area. tial investment in, and management matter of seconds. In was objectively the
Moving for tax reasons isn’t new.
n Florida n South Dakota
of, any New York closely held busi- fact, when we asked a
involved, most generous, only
n Nevada n Tennessee*
But the new law “has unquestion- ness such as a sole proprietorship, group of people with payments feel 44% of would-be dat-
n New n Texas
ably led increasing numbers of peo- partnership, limited liability company Venmo accounts to ers were interested,
ple to consider moving,” says Kerry Hampshire* n Washington and corporation.” detail their most re-
impersonal— because this person
O’Rourke Perri, a partner in the pri- * New Hampshire and Tennessee generally tax  Other factors: These include cent transactions, we like a business was perceived as petty.
vate-clients group at the law firm the address on your federal income- found that more than Pettiness plays out
White & Case LLP. That’s especially
dividend and interest income.
Source: The Tax Foundation tax return, bank statements, and half of the transac-
transaction. in existing romantic
so among taxpayers in high-tax ar- THE WALL STREET JOURNAL. bills such as utilities and credit tions between friends relationships as well.
eas thinking about selling a busi- cards. Also focus on such items as and family included Are you dating, or
ness, or large amounts of securities, tant at Citrin Cooperman and of your driver’s license, country-club precise amounts, like a payment of have you ever dated, someone who
in the not-too-distant future. counsel to Kostelanetz & Fink. memberships, vehicle and voter reg- exactly $27.31 for a shared meal. keeps strict tabs on who paid for
“There’s a real interest in this Here are a few thoughts and rec- istrations, and hunting, fishing or Here’s the problem with being so what when out for dinner, or tracks

.
topic because of the new federal leg- ommendations from lawyers and gun licenses. precise: In a series of experiments, grocery bills down to the last cent?

ly
islation. We have clients where the other tax professionals:  Superb record-keeping: This we have discovered that making According to a survey we con-
tax savings run in the millions,” says  New limits: Some people as- is absolutely essential, says Mr. such exact payments can signal un- ducted with people in romantic re-
Mark S. Klein, chairman of Hodgson sume the new $10,000 limit applies Klein. “Residency audits—some of likable pettiness. lationships, those dating someone
Russ LLP, and a co-author of the to each taxpayer, which would be
on the most intrusive audits imagin- We asked people to evaluate two who behaves this way were less
2018 edition of “New York Residency $20,000 for married couples filing able—are becoming more and more imaginary individuals based on satisfied and less committed. Not
and Allocation Audit Handbook.” jointly. Wrong. The cap is $10,000 common,” he wrote in a 2014 essay. past online transactions with a only were they more likely to think
Warning: This isn’t as simple as whether you’re single or if you’re fil-  Consider appealing: If you friend: One person had sent three that they would break up in the
it may sound. What may seem like a ing a joint return ($5,000 if married disagree with a state agency’s final precise payments (for example, near future, they also felt they
us l,

clear-cut change in your home for and filing separately), says Mark decision, consider going to court. $9.99, $34.95 and $20.06), while would be less upset about it. That’s
tax purposes may strike state-tax Luscombe, principal analyst at Wolt- Some taxpayers have scored notable the other had sent three round a pretty steep price to pay for pre-
al a
e
auditors as a tax dodge. Rules and ers Kluwer Tax & Accounting. victories. payments ($10, $35 and $20). Even cision.
audit policies can vary by state, and  IRS pushback: Some states  Get expert help: Beware of though the total amount exchanged
many misconceptions have sprung have taken legislative action, or are the do-it-yourself approach. If the was the same, 81% of the people we Dr. Kim is an assistant professor
ci on

up, says Sidney Kess, senior consul- considering steps, designed to com- dollar amounts are significant and asked said they would rather be- at the University of Virginia
bat the impact of the new limits. the issues even slightly murky, hire friend the person who had paid Darden School of Business. Dr.
Mr. Herman is a writer in New York But the Treasury Department and a trusted expert. round amounts. They told us that Norton is a professor at Harvard
City. He was formerly The Wall the Internal Revenue Service plan to And before hiring a moving van, when precise numbers are in- Business School. Ting Zhang, a
Street Journal’s Tax Report propose regulations likely to be a remember this: “Nobody knows volved, the payment feels imper- postdoctoral research scholar at
er rs

columnist. Send us your comments powerful counterattack. “Despite whether the current law will con- sonal—too much like a business Columbia Business School, con-
and tax questions at these state efforts to circumvent the tinue in effect after 2025—or even transaction. tributed to this article. Email
[email protected]. new statutory limitation on state until 2025,” says Ms. Perri. Such precision pettiness extends them at [email protected].
m e
m rp
co Fo
n-
no

Goodnight, normal trading hours.

Say hello to 24-hour trading, five days a week. TD Ameritrade is the first retail brokerage to offer
around-the-clock trading on select securities. The future of trading has arrived.
Get up to $600 when you open and fund an account.

Visit tdameritrade.com/trade24-5 to learn more.

Extended hours trading is subject to unique rules and risks, including lower liquidity and higher volatility. Extended hours trading not available on market holidays.
See tdameritrade.com/600offer for offer details and restrictions. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business.
TD Ameritrade, Inc., member FINRA/SIPC. © 2018 TD Ameritrade.