For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.

To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

MONDAY, OCTOBER 2, 2017 ~ VOL. XLII NO. 22 WSJ.com ASIA EDITION

As of 4 p.m. ET DJIA 22405.09 À 0.11% NIKKEI 20356.28 g 0.03% STOXX 600 388.16 À 0.47% BRENT 57.54 À 0.23% GOLD 1281.50 g 0.31% EURO 1.1808 À 0.17% DLR ¥112.68 À 0.29%

Catalonians Defy Government Over Independence Vote Hedge

What’s
Funds
News
Business & Finance
Pull Off
Rebound
H edge funds, written
off less than a year
ago as overpriced and un- BY ROB COPELAND
derperforming, this year
are making money and Written off less than a year
taking in new cash. A1 ago as overpriced and under-
performing, hedge funds are
 China’s central bank
pulling off an unexpected two-
said it would free up funds
step this year: making money
for banks that boost lend-
and taking in new cash.
ing to small businesses. A1
The average hedge fund was
 Chinese households are
up 5.4% through the end of Au-
diverting consumer loans
gust, while stock-focused
toward real estate rather
hedge funds have gained 8.31%,
EDU BAYER FOR THE WALL STREET JOURNAL

than cars and appliances. A4

according to the researcher
 U.S. officials voted to
remove federal oversight of
AIG, one of the most tangi- On a Roll
ble steps yet in the admin-  S&P 500 ends quarter
istration’s push to re-evalu- with a 4% gain.................... B5
ate financial regulations. B1  Bond yields rise on a new
belief in inflation................ B4
 Google is investigating
 Oil snaps two-quarter
whether Russian-linked en-
losing streak......................... B4
tities used its ads or services
to try to manipulate voters
SECESSIONIST STANDOFF: Clashes erupted as Catalonians tried to cast ballots Sunday in an independence vote outlawed by Spain.
ahead of the U.S. election. B3
Above, a scene from Sant Julià de Ramis, the small town where Catalan President Carles Puigdemont was scheduled to vote. A3 HFR. Over the same period,
 Uber’s ousted chief is ap- the Standard & Poor’s 500 rose
pointing two new directors 11.9% including dividends,

Chinese Banks Get a Break

to the ride-hailing firm’s while the traditional 60-40
board, a surprise move that split of stocks and bonds
would bolster his clout. B1 would have earned 8.9%.
That makes this year the in-
 Two Asian nations took
dustry’s best relative perfor-
contrasting measures tied
mance in a rising market since
to cryptocurrencies, with
Japan giving exchanges the Beijing to let lenders amount of reserves select The announcement follows In the past year and a half, 2010. Investors, particularly in
banks are required to keep a notice issued last week by the central bank has refrained Asia and the Middle East, have
green light and South Korea to small businesses with the central bank by be- the governing State Council, from using this traditional begun sending new money
joining the crackdown. B8
hold fewer reserves; a tween a half and 1 percentage which urged the central bank monetary-policy tool out of hedge funds’ way, attracted by
 Proxy-advisory firm ISS point starting in 2018. to help lower financing costs concern that more lending the better returns and a broad
is recommending P&G bid to aid economy To qualify, banks must meet for small and private busi- could weaken the yuan, caus- lowering of the industry’s fa-
shareholders put Nelson central-bank criteria on lend- nesses. In recent weeks, a ing capital flight, and under- mously hefty fees.
Peltz on the board. B2 BY LINGLING WEI ing to small businesses. For in- growing chorus of voices, mine the government’s cam- For now, at least, the gloom
stance, banks whose outstand- mostly from Chinese banks paign to reduce corporate debt that had beset hedge funds is
 The Fed fined HSBC $175
BEIJING—China’s central ing loans to small firms and brokerages, has also called and other financial risks. In- lifting and even giving way to
million for its foreign-ex-
bank said it would free up account for 10% of total loans on the central bank to act stead, the central bank has outright optimism.
change trading practices. B8
funds for banks that boost will receive the largest reduc- amid signs that tight mone- used short-term fund injec- “It just feels better,” said
 The plunge in Axovant’s lending to small businesses, in tion of 1 percentage point in tary policy is starting to weigh tions into the financial system Alper Ince, a partner at the
stock price after its failed a targeted measure to balance their reserve ratio. Based on on growth. to ensure adequate liquidity. hedge-fund investor Pacific Al-
Alzheimer’s drug has stung support for the economy with- its own calculation, the central The reserve-requirement Now, the Chinese currency ternative Asset Management
Wall Street investors. B7 out aggravating already high bank said the cut will apply to ratio varies depending on the has largely stabilized, and Co. Mr. Ince credited an im-
corporate debt. all large and medium-size size of the bank. At 17% of all while some economic indica- proved environment for stock
World-Wide In a statement Saturday, commercial banks and about deposits for big banks, the ra- tors have pointed to a slow- picking, with popular stocks
the People’s Bank of China 90% of the country’s city-level tio is currently among the down, others point to contin- like Amazon.com Inc. outper-
said it would reduce the commercial banks. highest in the world. Please see PBOC page A2 Please see FUNDS page A2
 After Kim Jong Nam
was killed, North Korean
Publishing Magnate Dies at 89
Dissidents Quietly Helped
dissidents scrambled to
get his mother and sister
to safety, thwarting many
attempts to interfere with

North Koreans in Peril

the evacuation. A1
 The U.S. is in contact
with North Korea, “prob-
ing” to see if Pyongyang is
willing to engage in talks BY ALASTAIR GALE and fly them to safety in a se- for other rescues in the future,
despite tensions. A4 cure location. the representative said.
When Kim Jong Nam, the Details have been largely a “We were disappointed by
 The Supreme Court be-
exiled half brother of North mystery since February, but refusals to protect by several
gins a new term with a
Korean dictator Kim Jong Un, the group that helped the trio countries earlier this year,”
conservative majority and
RON GALELLA/WIREIMAGE/GETTY IMAGES

was killed with nerve gas in a get out agreed to discuss the the person said, communicat-
a docket filled with long-
Malaysian airport on Feb. 13, it evacuation with a media or- ing on the group’s official
time conservative goals to
was evident who might be tar- ganization for the first email account.
go with it. A1
geted next. time—and from its account, it Cheollima sought help from
 Clashes between police His 21-year-old son, Kim appears that Kim Han Sol foreign governments for the
and protesters erupted in Han Sol, had similarly criti- was targeted. rescue of Kim Han Sol. The
Catalonia as voters tried cized the regime in Pyongyang, There were “attempts by U.S., China and the Nether-
to cast ballots in an inde- which was suspected of carry- several parties to interfere” lands provided assistance with
pendence referendum out- ing out the attack. The son’s with the evacuation, a repre- travel, visas or other aspects
lawed by Spain. A3 bloodline made him a potential sentative of the group, Cheol- of the plan, according to the
 Most Spaniards are threat to the Kim dynasty. lima Civil Defense, told The group. China’s foreign ministry
against allowing Catalonia, What followed was a secre- Wall Street Journal. said it had no information on MAGAZINE MAN: Samuel Irving Newhouse Jr., who transformed
or any of Spain’s 16 re- tive scramble by a group of Cheollima agreed to discuss Please see ESCAPE page A4 Condé Nast into one of the world’s most distinguished magazine
gions, to secede. A3 North Korean dissidents to get some details of the family’s re- companies, died Sunday after a long illness. B1
Kim Han Sol, his mother and location because it expects to  Trump casts doubt on talks
 Myanmar’s army
sister out of their Macau home seek international assistance with Pyongyang....................... A4
launched a counterinsur-
gency in Rakhine, clearing
villages inhabited by the Ro-
hingya Muslim minority. A4 Bold Eagles: Angry Birds Are INSIDE High Court Faces
 Trump criticized San
Juan’s mayor in a series of
Ripping Drones Out of the Sky
tweets that also took aim
at Puerto Ricans who
“want everything to be
i i i

Australia’s wedge-tailed eagle uses crack

Conservative Slate
done for them.” A5
 Republicans are con-
aerial skills to attack pricey machines BY JESS BRAVIN at Hastings College of the Law
in San Francisco, said the re-
flicted in how far their lat-
WASHINGTON—The Su- newed conservative majority
est tax plan should go in
BY MIKE CHERNEY my last flight on my last day, preme Court begins a new in some cases will feel com-
reducing the amount paid
and one of these wedge-tailed term Monday with a conserva- fortable reaching 5-4 rulings.
by the rich. A7
 Died: Samuel Irving Ne-
SYDNEY—Daniel Parfitt eagles just dive-bombed the
thought he’d found the perfect drone and punched it out of
A KITCHEN SINK tive majority and a docket
filled with longtime conserva-
“But I do get the sense that
Roberts and some of the other
whouse Jr., 89, publishing drone for a two-day mapping the sky,” said Mr. Parfitt, who APPROACH tive goals to go with it, includ- justices are attentive to the
magnate. B1 job in a remote patch of the believed the drone was too big
Australian Out- for a bird to
TO STYLE ing cases that could curtail the
power of organized labor, ex-
need to preserve the court’s
reputation and legitimacy in a
CONTENTS Markets...................... B8 back. The roughly damage. “It pand religious exceptions to period that’s very politically
Business & Fin...... B2 Opinion.............. A10-11
Crossword.............. A12 Quarterly Mkts.. B4-5
$80,000 machine ended up be- LIFE & ARTS, A8 legal obligations and validate fraught,” said Mr. Price, who
Europe File............... A2 Technology............... B3 had a wingspan ing a pile of tougher scrutiny of voter rolls. clerked for Justice Anthony
Heard on Street..... B8 U.S. News.......... A5,A7 of 7 feet and re- splinters.” As he steered the court Kennedy.
In Depth.................... A6 Weather................... A12 sembled a stealth Weighing through a yearlong eight- With Republicans and Dem-
Life & Arts.... A8-9,12 World News....... A2-4
bomber. up to nine member limbo, before Justice ocrats engaged in pitched par-
China: RMB28.00; Hong Kong: HK$23.00;
Indonesia: Rp25,000 (incl PPN);
There was just pounds with a Neil Gorsuch took the bench in tisan battles elsewhere in
Japan: Yen620 (incl JCT); Korea: Won4,000; one problem. His wingspan that April, Chief Justice John Rob- Washington, he added, some
Malaysia: RM7.50; Singapore: S$5.00 (incl GST)
machine raised Wedge-tailed eagle can approach erts crafted a series of centrist justices may seek to show the
KDN PP 9315/10/2012 (031275); MCI (P)
NO. 066/01/2017; SK. MENPEN R.I. NO: 01/ the hackles of eight feet, the rulings, often in controversial court operates apart from raw
SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998
one prominent local resident: a wedge-tailed eagle is Austra- cases. politics. “Ultimately, the
wedge-tailed eagle. lia’s largest bird of prey. Once The question now is court’s authority to resolve
Swooping down from vilified for killing sheep and whether the restraint of the these important questions
above, the eagle used its tal- targeted by bounty hunters, it
ons to punch a hole in the car- is now legally protected.
COSMOPOLITAN past year reflects a new con-
sensus within the court’s ideo-
comes from it being perceived
as a court and not a political
bon fiber and Kevlar fuselage Though a subspecies is still KOREA GOES logical center or was a tempo- body,” Mr. Price said.

s Copyright 2017 Dow Jones &

of Mr. Parfitt’s drone, which endangered in Tasmania, it is
lost control and plummeted to again dominating the skies
ON DISPLAY rary accommodation to the 4-
to-4 partisan split left by
Please see COURT page A7
Company. All Rights Reserved
the ground. across much of the continent. Justice Antonin Scalia’s death.  A reckoning is in the cards
“I had 15 minutes to go on Please see BIRDS page A2 LIFE& ARTS. A9 Zachary Price, a professor for gerrymandering................ A6
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

WORLD NEWS

Migration Crisis Still Hangs Over Europe

EU reaching an agreement built on proposals laid out
on fiscal integration look re- by commission president,
mote given opposition from Jean-Claude Juncker, in a
several Northern European speech in September—for an
countries, not just Germany. enhanced EU border force,
The reality is that there is swifter returns of failed asy-
no urgent need for the euro- lum seekers, an EU budget to
zone to pursue fiscal integra- fund support for asylum
EUROPE FILE tion, particularly now that it seekers, and deeper engage-
By Simon Nixon is in a cyclical recovery. ment with the countries
Sure, the eurozone remains from which migrants are
vulnerable to shocks. But coming could all help to re-
In the eyes of some, Em- there is little the eurozone build public trust.
manuel Macron flunked it. could do that would improve But these ideas are sec-
When the French presi- its ability to cope with a cri- ondary to the need to find a
dent last week delivered a sis in the Italian bond mar- long-term solution to the re-
marathon speech outlining kets—widely perceived to be location problem. The com-
his vision of the European the biggest threat to euro- mission is due to come up

LUDOVIC MARIN, PRESS POOL

Union, many economists zone stability—nor the risk with new proposals by the
hoped this would include a that the crisis in Spain over end of this year.
radical plan for deeper euro- Sunday’s attempted referen-

T
zone fiscal integration. dum on Catalonian indepen- hat could pit frontline
Indeed, the dence spirals into a wider states currently host-
expectation threat to financial stability. ing large numbers of
was that this For now, the key to strength- asylum seekers against those
would form ening the eurozone lies in France’s Emmanuel Macron proposed a far-reaching agenda to secure the EU’s external borders. in central and eastern Eu-
the core of his policies that will raise poten- rope hostile to immigration.
speech. Yet tial growth through better shadow over European poli- to drive through on a major- policy despite a recent Euro- Several counties only
Mr. Macron functioning markets. tics, as shown by strong sup- ity vote a controversial pol- pean Court of Justice ruling went along with the 2015
didn’t say anything about Europe’s security chal- port for the anti-immigration icy to ease the pressure on that the commission acted policy because they were as-
pooling eurozone debts and lenges, on the other hand, Alternative fur Deutschland frontline states such as lawfully. sured this was an emergency
had little to say on the cre- really do pose a present risk party in last week’s German Greece and Italy by requiring The EU is now engaged in measure and would oppose
ation of a common eurozone to the EU’s survival. elections. EU officials esti- the mandatory relocation of the delicate task of “trying any continuation of manda-
budget. Instead, the most mate around 200,000 people asylum seekers across the to put the porcelain back to- tory resettlement.

S
eye-catching parts of his enior officials say that will attempt to enter the EU EU. This policy failed on its gether,” in the words of one What’s more, the poison
speech concerned security the closest the EU illegally this year, in line own terms, since only a frac- senior EU diplomat. The first from this debate may be fu-
and defense, where he pro- came to collapse was with the long-term average tion of the 70,000 required task is to do whatever neces- eling wider EU divisions
posed a far-reaching agenda at the height of the migra- over the previous two de- relocations have taken place sary to secure EU borders: with the Polish and Hungar-
to secure the EU’s external tion crisis in 2015. The ar- cades, but even this may no and few have stayed in the The closure of the Southern ian governments relying on
borders, stabilize its neigh- rival of more than one mil- longer be politically sustain- countries to which they were Balkan route was the result increased euroskepticism to
borhood and establish a Eu- lion asylum seekers led to a able. To win back public relocated: Latvia, for exam- of an EU deal with Turkey; win public support for their
ropean Defence Force to be collapse in public trust in trust, the EU needs to show ple, has taken just 200 out of the recent success in closing clashes with the commission
funded by a new tax on fi- the EU. The flow has since it is in full control of its bor- its quota of 700 and no lon- the central Mediterranean over alleged breaches of the
nancial transactions. been slowed, with arrivals in ders. ger knows where any of route is the result of deals rule of law.
But Mr. Macon’s choice of Italy and Greece in recent Its task is complicated by them are. But it has also struck by Italy with Libyan In the eyes of some EU of-
priorities shouldn’t have months having diminished to the fallout from past mis- fueled anger in countries militias. The exact nature of ficials, these clashes may yet
come as a surprise. It isn’t a trickle. But the legacy of takes, in particular the EU such as Hungary and Poland these deals is unclear. prove the biggest EU crisis
just that the chances of the 2015 continues to cast a Commission’s 2015 decision that continue to oppose the Mr. Macron’s ideas—which of all.

FUNDS Comeback
After lagging behind in recent years, hedge funds have kept closer pace with a mix of stocks and bonds in
is up 5% this year, the note in-
dicates.
Within hedge funds, macro-
economic-focused managers,
PBOC
some recent months.
Continued from Page One Monthly performance who try to get ahead of politi- Continued from Page One
forming, and bets against re- cal and other broader trends, ued resilience in the economy.
tailers also paying off. HFRI equity hedge total index HFRI fund weighted composite index Traditional 60/40 portfolio have mostly fallen short in Those factors, many econo-
A year ago, things looked 6% predicting this year’s major mists and analysts have said,
ugly for the industry. moves, particularly the weak- give the central bank a win-
Longtime managers 4 ening in the U.S. dollar, inves- dow of opportunity to act.
like Richard Perry were shut- tors say. The average macro But the central bank also
ting down, and many who re- 2 fund is roughly flat this year, must keep an eye on debt lev-
mained were forced to negoti- according to HFR. els. As a result, many econo-
ate their fees to satisfy 0 For now, the indus- mists don’t expect the central
disappointed backers. The try’s gains are shared by man- bank to conduct an across-the-
pressure was compounded by –2 agers large and small, includ- board cut in reserve-require-
a decade of nearly uninter- ing many who came into the ment ratios soon.
rupted gains for the S&P 500, year with something to prove.
–4
contributing to dramatic out- One of the biggest rebounds
performance for low-cost, pas- is under way at Brahman Capi-
sive investment products. –6 tal Corp., a hedge-fund firm
The PBOC said it
Sticking around seemed 2016 2017 that flew under the radar for would maintain a
even less attractive as manag- Source: HFR THE WALL STREET JOURNAL. more than three decades.
ers had to dip into their pock- At its apex around two
‘prudent and neutral’
ets to pay ever-rising salaries staff would be slashed. lar China-focused fund from well-known so-called value in- years ago, Brahman managed monetary stance.
to dissuade staff from leaving This year, Citadel’s flagship Ray Dalio’s Bridgewater Asso- vestor Whitney Tilson said more than $5 billion, as prin-
for flush technological compa- fund was up more than 9% ciates, the world’s largest last week he would shut his cipals Mitchell Kuflik and Rob-
nies dangling seven-figure through mid-September, al- hedge-fund firm. hedge-fund firm, Kase Capital ert Sobel bet big on hedge-
packages. ready eclipsing last year’s to- Few managers expect a re- Management LLC, which had fund favorite Valeant Saturday’s targeted-easing
Earlier this year, for in- tal 5% gain. Last year was the turn to the heyday of a decade dwindled to $50 million in as- Pharmaceuticals International policy doesn’t change the
stance, billionaire Kenneth fund’s weakest mark in nearly ago, when every young trader sets under management and Inc. When Valeant’s stock overall tone of China’s mone-
Griffin was so frustrated with a decade, the people said. with a pulse dreamed of a lost 8% so far this year. plummeted from $257 to $14 a tary policy, the central bank
investment performance at his Hedge funds at large pulled hedge fund of their own. Pri- Among hedge funds girding share, Brahman fell as the firm said, adding that it will con-
$27 billion hedge fund, Citadel in $39 billion of new money vately, many industry execu- for a bumpy road ahead is Gol- reported losses and investors tinue to adopt a “prudent and
LLC, that he sent the staff a this year, a reversal of $112 tives fret that the industry, denTree Asset Management, a pulled out their money. neutral” monetary stance.
mass letter that read in part, billion in outflows last year, which bets on and against $25 billion firm. GoldenTree Brahman sold Valeant stock It is unclear how much ad-
“I am disappointed that after the researcher eVestment markets world-wide, has been recently warned investors in a last year and pivoted to new ditional money the PBOC will
years of leading our industry says. Industry executives ex- permanently left with an un- private note reviewed by The ideas like a stake in travel free up as a result of this
we failed to deliver,” people pect the inflows to continue desirable patina. Wall Street Journal that credit company Expedia, people move, analysts say. By opting
familiar with the matter said. with several banner fund Fall is typically the season markets were “providing mid close to the firm said. This for selective easing, China
Citadel separately announced launches in the months ahead, of hedge-fund shutdowns and cycle pricing for late cycle year, Brahman’s main fund is economist Larry Hu at Mac-
that compensation for some including a multibillion-dol- this year is no exception. The risk.” GoldenTree’s main fund up 17%, the people said. quarie Securities said, “the
central bank doesn’t want to
send strong easing signals

BIRDS have even considered arming

drones with pepper spray or
noise devices to ward off eagles.
They are the “ultimate an-
more acute as Australia makes a
push to become a hot spot for
drones. One state, Queensland,
recently hosted the “World of
ShuRoo—a device mounted on
cars that makes noise, which
humans can’t hear, to keep kan-
garoos off the road. But he was
attacks, which cost his em-
ployer, South Africa-based
Gold Fields Ltd., some
$210,000. During the past year,
that would run against the
government’s financial de-
leveraging effort.”

Continued from Page One gry birds,” said James Rennie, Drones Congress” and last year concerned it would be cumber- when he focused his flying in THE WALL STREET JOURNAL.
These highly territorial rap- who started a drone-mapping gave about $780,000 to Boeing some on the drone and may not the morning, he has lost two— Dow Jones Publishing Company (Asia)
tors, which eat kangaroos, and inspection business in Co. for drone testing. Ama- ward off eagles anyway. with two more close calls. 25/F, Central Plaza, 18 Harbour Road,
Hong Kong
have no interest in yielding Melbourne called Australian zon.com is expanding in Austra- Instead, Mr. Steven and other Mr. Parfitt, who began his Tel: 852 2573 7121 Fax 852 2834 5291
their apex-predator status to UAV. He figures that 20% of lia and could try using drones drone operators make use of drone business Aerial Image
Andrew Dowell, Asia Editor
the increasing number of drone flights in rural areas get for deliveries, and the machines another weapon: time. The ea- Works about three years ago, Troy McCullough, Senior News Editor, Asia
drones flying around the bush. attacked by the eagles. On one are increasingly favored by big gles are less active in the early remains vigilant. Each of his Darren Everson, International Editions Editor
They’ve even been known to occasion, he was forced to landowners such as miners and morning, because the ther- last three jobs attracted an ea- Hugo Restall, Editorial Page Editor
harass the occasional human evade nine birds all gunning cattle ranchers. mals—columns of rising air— gle attack. Other birds will “fly Mark Rogers, Advertising Sales
in a hang glider. for his machine. The eagles will often attack they use to fly don’t develop at the drone and they’ll act in a Ben Mackness, Circulation Sales
Birds all over the world have The birds are considered big- in male-female pairs, and they until later in the day after the very aggressive manner, but Toby Doman, Communications
Simon Wan, Technology
attacked drones, but the wedge- ger bullies than their more-doc- aren’t always deterred if their sun has warmed the ground. they don’t actually touch you,”
tailed eagle is particularly eager ile relatives, such as the bald first foray fails. Sometimes they In his first 2½ years flying he said. “I’m not scared of any- Jonathan Wright,
Global Managing Director & Publisher
to engage in dogfights, opera- and golden eagles in the U.S. will come from behind, attack in drones at the mine, Mr. Steven thing else attacking my drone
Advertising through Dow Jones Advertising
tors say. Some try to evade Wedge-tailed eagles are the un- tandem from above, or even said he lost 12 drones to eagle except the wedge-tailed eagle.” Sales: Hong Kong: 852-2831 2504; Singapore:
these avian enemies by sending disputed alpha birds in parts of stagger their assault. A drone 65-6415 4300; Tokyo: 81-3 6269-2701;
their drones into loops or steep Australia’s interior but it’s not operator may evade one diving Frankfurt: 49 69 29725390; London: 44 207

climbs, or just mashing the entirely clear why they’re so un- eagle with an upward climb, but CORRECTIONS  AMPLIFICATIONS 842 9600; Paris: 33 1 40 17 17 01; New York:
1-212 659 2176.
Or email: [email protected]
throttle to outrun them. usually aggressive toward the second eagle can then
A long-term solution remains drones. Scientists say they go snatch it, Mr. Rennie said. Printers: Hong Kong: Euron Limited, 2/F., Block 1, Tai
Ping Industrial Centre, 57 Ting Kok Road, Tai Po, Hong
up in the air. Camouflage tech- after drones probably because In 2015, Andrew Chapman, a The U.S. Department of gal hurdle. A Property Report Kong; Indonesia: PT Gramedia Printing Group, Jalan
niques, like putting fake eyes on they view them as potential co-owner at Australian UAV, Commerce ruled in favor of a article Wednesday about a Palmerah Selatan 22-28, Jakarta 10270; Japan: The
Mainichi Newspapers Co., Ltd., 1-1-1 Hitotsubashi,
the drones, don’t appear to be prey or a new competitor. was mapping a quarry and land- complaint from Boeing Co. program that pays some stu- Chiyoda-ku, Tokyo, 100-8051; Korea: JoongAng Ilbo.
fully effective, and some pilots The problem is growing fill site near Melbourne, and fig- over alleged price subsidies for dent-loan debt for home buy- 100 Seosomun-ro, Jung-gu, Seoul, 100-814. Publisher/
Printer: Song, Pil-Ho; Malaysia:Dasar Cetak (M) Sdn
ured it was close enough to the the Bombardier Inc. CSeries ers incorrectly said student Bhd, Lot 2, Jalan Sepana 15/3, Off Persiaran Selangor,
Seksyen 15, 40200 Shah Alam, Selangor. (ROC No:
city that an eagle attack was jetliner. A Business News arti- loans can’t be discharged in 048885)6; Singapore: Singapore Press Holdings
unlikely. But when the drone cle Thursday about Bombar- bankruptcy. Limited, 2 Jurong Port Road SPH Print Centre
Singapore 619088
was about half a mile away, an dier incorrectly said the Inter-
eagle “materialized out of thin national Trade Commission Spelman College’s graduat- Trademarks appearing herein are used under
license from Dow Jones & Co.
air and knocked out the drone,” made the ruling. ing students walk under an ©2017 Dow Jones & Company. All rights reserved.
Mr. Chapman said. He spent arch at commencement. A USPS 337-350; ISSN 0377-9920

two days looking for the ma- Student-loan debt in the Journal Report article Wednes-
NEED ASSISTANCE WITH
chine, worth about $35,000 at U.S. can’t be discharged in day about the top schools
YOUR SUBSCRIPTION?
today’s retail price, and had to bankruptcy unless a borrower where students feel inspired By web: http://wsj-asia.com
ship it to the manufacturer in files a separate court action by their peers incorrectly said By email: [email protected]
By phone: Hong Kong: 800 901 216; Australia:
Switzerland for repairs. known as an adversary pro- Spelman College students walk
AUSTRALIAN UAV

0011 8000 322 8482; China: 400 991 1174;

Rick Steven, a survey super- ceeding and is able to prove under an arch when they enter India: 000 800 440 1938; Indonesia: +62 21
2970 2702; Japan: 0120 779 868; Korea: 0030
intendent at the St. Ives gold “undue hardship,” a high le- school for the first time. 844 0063; Malaysia: 1800 804 612; New
mine in Western Australia, who Zealand: 0800 442 434; Philippines: 1800 1441
uses drones to survey the pits, 0033; Singapore: 1800 823 2042; Taiwan:
Readers can alert The Wall Street Journal to any errors in news articles by
00801 444 141; Thailand: 001800 441 8323
A picture of a wedge-tailed eagle taken by an Australian drone. debated using something like a emailing [email protected].
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | A3

WORLD NEWS
Violence Erupts as Catalonia Tries to Vote
Spanish police force ing his vote, Mr. Puigdemont
denounced “police brutality” on
Catalans from polling the part of the national police.
stations in illegal ballot; “The unjustified, unchecked,
irresponsible violence by the
hundreds are hurt Spanish state today didn’t just

ALBERTO ESTEVEZ/REX/SHUTTERSTOCK/EUROPEAN PRESSPHOTO AGENCY

fail to stop Catalans’ will to
BARCELONA—Sporadic peacefully and democratically
clashes erupted between police vote,” he said. It also made
and Catalan voters as they tried clear “what is at stake for us.”
to cast ballots in an indepen- Enric Millo, the central gov-
dence referendum outlawed by ernment’s top official in Catalo-
Spain, with authorities dragging nia, said security forces had
people from polling stations and shown “exemplary action” in
firing rubber pellets at crowds. their efforts to uphold court or-
Hundreds of people were in- ders. “It makes no sense to con-
jured, local authorities said. tinue with this farce,” he said in
a televised press conference.
By Jon Sindreu, Long queues began forming
Pietro Lombardi before dawn at schools and
and Marina Force other designated polling cen-
ters through the region in
Scenes of national police in Spain’s northeastern corner,
riot gear battling civilians could hours before they were sched-
fuel animosity in Catalonia and uled to open at 9 a.m. local
deepen a long secessionist Police block Catalans seeking to vote in a referendum on secession in Barcelona, the capital of Catalonia. Spain has banned the vote. time. Despite the fact that the
struggle that has riven Spain central government has
and brought the country to the some seriously. The Spanish In- Sant Julià de Ramis, the small the hands of officials, accord- ish police used “rubber bullets” seized millions of ballots,
brink of a constitutional crisis. terior Ministry said 11 police of- town where Catalan President ing to witnesses. People out- on the crowds. He didn’t spec- workers in the polling sta-
A Spanish official said police ficers also had been injured. Carles Puigdemont had been side the building chanted, “We ify where the incident occurred tions had piles of blank bal-
fired “rubber pellets” in what Starting Friday evening, scheduled to vote. will vote.” or against whom. According to lots ready to give to those
the official described as an “iso- thousands of referendum sup- They used hammers to In Tarragona, a small Cata- Marc Bataller, an official on who arrived to vote.
lated incident” when police felt porters—including families break down the door and lan city, Maria Angeles, 75, was health issues for the Catalan “This is a lifelong dream
threatened. with small children—occupied dragged people from the build- in a school with scores of other government, one person was come true for me,” said Josep
Pro-independence groups at least 160 designated polling ing, as helicopters flew over- people to vote when police struck in the eye with a “rub- Navarro, a 37-year-old teacher,
have defied the government of stations throughout Catalonia head. Some of the people re- rushed in. She said one woman ber bullet.” who turned up at 7 a.m. to vote
Spanish Prime Minister Mari- to avoid their closure for Sun- sisted when the police removed was bleeding after police were Spokesmen for the Spanish at a polling station in Tarra-
ano Rajoy, opening thousands day’s vote. them from the station. dragging her outside of the police didn’t respond to re- gona. “Casting the vote gave me
of polling stations in schools Just before the opening of Similar scenes played out at building. “They came in shout- quests for comment. a wonderful feeling…. Changes
and other local buildings for a polls Sunday morning, several a polling station in Barcelona, ing at people and dragging In recent days, the Rajoy take time. It won’t be tomorrow,
ballot on whether Catalonia dozen officers from Spain’s na- Catalonia’s capital city, where them,” she said. “It was a vio- government has sent thousands next month or year, but in a few
should break free from Spain. tional police force, dressed in police blocked people from en- lent intervention.” of extra officers to Catalonia’s year we’ll be independent.”
According to the Barcelona riot gear, removed two hun- tering and forced their way Mr. Puigdemont, who trav- the city, where they are billeted —Jeannette Neumann and
mayor, more than 460 people dred people who had been oc- into the building and removed eled to a small town nearby on large ferryboats. Oliver Griffin contributed to
were injured in the clashes, cupying a polling station in ballot boxes, pulling them from and cast his ballot, said Span- In remarks made after cast- this article.

Majority in Spain Oppose Region’s Independence Bid

BY JEANNETTE NEUMANN Nationally, only one in 10 pendence emphasize that Carles Puigdemont, who has
Spaniards supports granting Spain is already one of the lead the referendum push,
BARCELONA—David Arias, Catalonia and other regions most decentralized countries said. Catalans “are considered
a 49-year-old lawyer in Ma- the possibility of becoming in- in the European Union. Catalo- and treated as second-class
drid, watched with alarm as a dependent, according to a July nia controls its school and Spaniards, in terms of identity,
crisis unfolded in September survey by the Center for Soci- health-care systems and has culture and language, and in
PABLO BLAZQUEZ DOMINGUEZ/GETTY IMAGES

in the Spanish region of Cata- ological Research, Spain’s its own police force. economic, investment and in-
lonia, whose leaders have state-owned survey agency, in “Of all the countries that frastructure terms, [and] in
pledged to hold a referendum the most recent available poll. have allowed their own re- terms of the possibility of un-
on independence on Sunday. Around 15,000 pro-union gional cultures to develop, it’s leashing what we want to be.”
Earlier this week, Mr. Arias protesters gathered in Barce- been Spain,” said Jaime Carva- Unionists point to the
hung the yellow and red Span- lona, waving Spanish flags, to jal, chief executive of a Ma- messy process that has fol-
ish flag from the balcony of protest the referendum on drid-based investment bank lowed the U.K.’s vote last year
his law offices in central Ma- Saturday, according the cen- and head of the foundation to leave the European Union
drid. “We’ve flown the flag tral government’s delegation Juntos Sumamos, which as undermining separatists’
that represents everyone,” in Catalonia. Thousands more means “better together.” “How claims that secession from
said Mr. Arias, who regards gathered throughout Spain. can they say they are re- Spain would be a seamless
the referendum as “sedition.” Pro-union supporters dis- pressed? They are in charge.” transition. “It’s very easy to
“The nation is facing a danger- agree with the claim by some Pro-union supporters demonstrated in Barcelona against the vote. Separatists say that Catalo- promise things to people,”
ous time.” Catalan separatists that Spain nia, one of Spain’s wealthiest said Jorge Torrus, a Barcelona
As Catalan leaders defy has oppressed their language to vote on Sunday. Many of tor” during recent public regions, would be better off on taxi driver who is against in-
Spanish authorities in their at- and culture and worry that those who oppose indepen- speeches and on social media. its own, sending fewer funds dependence. “But the reality
tempt to stage a vote on Catalonia’s push for secession dence from Spain, or who “It hurts,” he said, because to the central government in would be very different.”
whether to break away from has deeply divided Spain, and don’t want to participate in he has a deep attachment to Madrid. They are particularly Spain’s two major political
Spain, most Spaniards are Catalonia itself. what they consider an illegiti- the region. “I get emotional bitter about a 2010 court deci- parties, the center-right Popu-
against allowing Catalonia, or According to a poll by Cata- mate vote, have pledged to during the [Catalan] anthem,” sion to strike down part of a lar Party and the center-left
any of Spain’s 16 other re- lonia’s regional government boycott the referendum; that added Mr. Ballesteros, who statute that would have Socialists, as well as the cen-
gions, to secede. Spain’s 1978 survey agency in June, 35% of is likely to skew the results in also gives speeches in Catalan. granted Catalonia greater au- trist Ciudadanos, have decried
constitution pledges to uphold Catalans support full-fledged favor of a “yes” to indepen- Nearly 70% of Spaniards tonomy. Catalans approved the planned vote and called on
the country’s “indissoluble independence, down from a dence. want Spain’s regions to have that statue in a referendum their supporters in Catalonia
unity,” and a top court has peak in 2013 of around 50%. Josep Fèlix Ballesteros, the the same or less autonomy and saw the court’s move as to boycott it. After some
ruled a number of times that Some pro-independence media mayor of Tarragona, one of than they already have, ac- politically motivated. equivocation, far-left Po-
Catalonia and other Spanish in Catalonia put support for Catalonia’s larger cities, is cording to the Center for Soci- “There are first-class Span- demos, and some of its allied
regions cannot hold a vote on secession as high as 70% against independence. Sepa- ological Research. Spaniards ish and second-class Spanish parties, decided to withhold
independence. among those who are planning ratists have called him a “trai- who oppose Catalonia’s inde- people,” Catalan President their support.

WORLD WATCH
AFGHANISTAN attempts to extricate the U.S. such as roads, sidewalks and whelmingly to secede from the The ban doesn’t apply to do- CUBA
from a war that has claimed train stations has struggled to rest of the country. mestic flights.
U.S. Weighs Shutting more than 3,500 American lives keep up with the demand that Prime Minister Haider al- The flight ban is the first U.S. to Reduce
Down Taliban in Qatar since 2001, according to people has sprouted up in small pockets Abadi’s office said the ban was concrete retaliatory measure Embassy Staffing
familiar with the move. of new wealth. aimed at reimposing federal gov- against the referendum after
The Trump administration is “Not having a line of effort —Corinne Abrams ernment authority there after Baghdad threatened to isolate The State Department is
crafting plans to shutter the with a clear focus on a political and Vibhuti Agarwal the referendum, not at blockad- and economically cripple the cutting more than half of its
Taliban political office in Qatar, process seems contrary to his ing the region. Kurdish region in response to staff from the U.S. Embassy in
a move that triggered an un- interests, as well as being bad IRAQ The Kurdish government re- what it called a threat to the Havana and warning Americans
usual internal protest from policy,” one former U.S. official fused to comply with the ban. country’s stability. against traveling to Cuba, as
State Department officials who said in an interview. . Baghdad Imposes But it wasn’t clear what practi- Monday’s vote didn’t auto- Washington investigates a mys-
said it would undermine U.S. in- —Dion Nissenbaum Flight Ban on Kurds cal measures Kurdish officials matically confer statehood. Kurd- terious rash of illnesses that
terests in Afghanistan, accord- could take. Baghdad controls the ish leaders now claim a mandate has left more than 20 diplo-
ing to current and former U.S. INDIA Iraq imposed a flight ban on airspace around the Kurdish re- to start negotiations with Bagh- mats with dizziness, concus-
officials. its semiautonomous Kurdish re- gion’s airports and international dad and neighboring countries to sions, hearing loss and other
A group of State Depart- More Than 20 Killed gion, retaliating against a land- airlines already canceled flights form an independent nation. symptoms.
ment specialists on South Asia In Mumbai Stampede mark referendum last week in to the regional capital of Erbil at —Isabel Coles The embassy cut comes as
filed a rare internal “dissent which the Kurds voted over- Baghdad’s request. and Ghassan Adnan investigators scramble to figure
channel cable” on Friday to urge A stampede on a pedestrian out what and who is behind
that the U.S. keep the Taliban overpass at a train station in In- what officials are describing as
office open and launch more in- dia’s financial capital killed more “targeted attacks” in hotels and
tensive talks to end the 16- than 20 people. residences that have affected
year-old war in Afghanistan, ac- At least 22 people died and the health of at least 21 U.S.
cording to people familiar with more than 35 others were in- government employees. The
the move. jured on Friday as a throng of U.S. hasn’t blamed Cuba for the
The internal memo was commuters pushed its way illnesses.
signed by a handful of officials, through the narrow bridge and —Felicia Schwartz
the people said, including some stairways of an overpass con-
longtime State Department em- necting Mumbai’s busy Parel and FRANCE
CHRISTOPHE SIMON/AGENCE FRANCE-PRESSE/GETTY IMAGES

ployees whose contracts with Elphinstone Road train stations

the department expired on Fri- about 10:45 a.m., railway author- Terror Probe Opened
day and weren’t renewed. ities said. In Marseille Attack
Before leaving their posts, The two stations are among
the South Asia experts crafted Mumbai’s busiest. They sit in French authorities Sunday
their unclassified dissent memo the middle of one of the most opened a terror investigation af-
to top State Department lead- rapidly developing areas of the ter a man stabbed two women
ers that urged them to rethink city. The neighborhood, once de- to death around a train station
an evolving strategy that is fined by bankrupt and aban- in the center of Marseille.
sending nearly 4,000 more U.S. doned textile mills, has in the French soldiers patrolling the
forces into Afghanistan to try past decade transformed into a area shot and killed the man af-
and break a battlefield stale- business and entertainment hub ter his rampage in the area of
mate with the Taliban. full of office towers, high-end- the Saint-Charles rail station,
In the internal memo, the ex- condominiums, malls, bars and said a spokeswoman for the
perts said that closing the Tali- restaurants. Paris prosecutor’s office, which
ban office in Qatar would under- As with most of the city and CATWALK: Celebrities, including actor Jane Fonda (above) took to the runway as the Champs handles terrorism investigations.
mine President Donald Trump’s the country, public infrastructure Elysees got a makeover as a giant runway in an event that coincided with Paris Fashion Week. —Matthew Dalton
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Monday, October 2, 2017 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.

WORLD NEWS

Myanmar’s Refugees
Tell Tales of Slaughter
BY SYED ZAIN AL-MAHMOOD
CHINA
TEKNAF, Bangladesh—
Twelve-year-old Sukhutara BHUTAN
said she watched her family’s INDIA
final moments from a hiding
place in the bushes. BANGLA.
She had just finished taking Dhaka
the cows to pasture that morn- M YA N M A R
(BURMA)
ing when soldiers in olive-
green uniform stormed her vil- Naypyitaw
lage in Myanmar’s Rakhine RAKHINE
state. She said her absence STATE
saved her life. Bay of Bengal
“The military shot my fa- Yangon
200 miles
ther, and then as he lay on the
ground a soldier cut his 200 km
throat,” she said. THE WALL STREET JOURNAL.
ANDY WONG/ASSOCIATED PRESS

In a refugee camp on the

border, Sukhutara, who goes mar’s border affairs minister,
by one name, sobbed as she said in an interview.
described how troops dragged Reports of atrocities have
her mother and several other pressured Ms. Suu Kyi, who in
women into a hut. She heard a speech last week defended
screams from inside. Then the Myanmar’s treatment of Roh-
soldiers came out and set the ingya.
A cleaner passed a vacant retail space at an upscale shopping mall that was recently opened in Beijing. hut ablaze. Ms. Suu Kyi serves as state

Why Chinese Are Diverting

In recent weeks, Myanmar’s counselor but the military con-
army has launched a counter- trols certain ministries, includ-
insurgency in Rakhine, clear- ing defense. A spokesman for
ing villages inhabited by the Ms. Suu Kyi said the military
Rohingya Muslim minority and had conducted “clearance op-

Their Loans to Real Estate

prompting at least 500,000 erations” in accordance with
people to flee into Bangladesh, its code of conduct and rules
the United Nations said Thurs- of engagement. Anyone who
day. The military and army- wished to file a case against
backed militias have killed the military could do so and it
about 3,000 people, according would be investigated in accor-
BEIJING—China’s govern- nancial assets via an online to Bangladesh’s government dance with the law, he said.
ment hoped more household Borrowing, Not Shopping system, then send an approval and rights groups. Sukhutara’s account was
borrowing would help the Household loans are becoming a bigger share of Chinese debt, but by text. verified by other survivors
economy become more con- soaring consumer credit hasn’t prompted a rise in consumption. The bank’s representatives from her village who spoke to
sumer-oriented. But instead of have also taken to cold-calling The Wall Street Journal. Hu-
shopping, many Chinese are Debt as share of total bank Annualized growth, seasonally to market their consumer man Rights Watch and Am-

SYED ZAIN AL-MAHMOOD FOR THE WALL STREET JOURNAL

spending the money on real es- loans* adjusted loans. nesty International say there is
tate, undermining Beijing’s ef- Eswar Prasad, a former top evidence of such atrocities.
Household† Corporate Retail sales Short-term
forts to cool that market. consumer loans China hand at the Interna- The United Nations’ human-
Chinese banks, encouraged 100% 120% tional Monetary Fund and now rights chief has described the
by policy makers, have re- professor at Cornell University, army’s clearances as “ethnic
cently been lending more to 80 90 said strong consumer lending cleansing.”
households as companies sink can be good both for house- Close observers of Myan-
perilously deep into debt. At 60 60 holds and the broader econ- mar say the army’s operation
first banks did this with mort- omy. was modeled on the “Four
gages; this year they have “People should be consum- Cuts” strategy former dictator
40 30
stepped up short-term con- ing out of their higher future Gen. Ne Win employed against
sumer loans. income,” he said. “That’s what rebels in the 1970s: targeting
But signs are emerging that 20 0 a financial system is supposed civilian areas to deny insur-
such loans, rather than funding to do.” But in China, “it doesn’t gents food, funds, recruits and
such middle-class trappings as 0 –30 look like that’s happening.” information.
cars, household appliances or 2007 ’10 ’15 ’17 2016 ’17 With few investment op- Sukhutara, 12, recounted the “The army didn’t want to be
gadgets, are instead flowing to tions—domestic stocks are vol- violent killing of her family. bogged down in a counterin-
*Excludes lending to financial institutions †Includes mortgages, consumer loans and other
China’s stubbornly hot prop- family financing atile and considered too risky, surgency in Rakhine, taking ca-
erty market, padding home Sources: Wind Info (debt); E-house China R&D Institute and China strictly controls The U.N. Security Council sualties over a number of
purchases when mortgage (retail sales, consumer loans) THE WALL STREET JOURNAL. capital moving out of the met Thursday to debate the years,” said Richard Horsey, an
loans aren’t enough. country—consumers see prop- crisis as a bipartisan group of independent political analyst
Last month, a Beijing home- New short-term consumer In the past few weeks, local erty as a fail-safe avenue for senators in Washington urged in Myanmar. “They were per-
buyer who provided only her credit surged 160% to 1.27 tril- branches of the central bank storing their wealth. the Trump administration to fectly willing to destroy entire
surname, Zhu, took out a one- lion yuan ($193 billion) in the and the China Banking Regula- The Chinese government help resolve it. “Despite inter- villages to deny safe haven to
year loan of 100,000 yuan first eight months of the year tory Commission have urged has encouraged a rebalancing national condemnation, the the fighters of ARSA.”
(around $15,000) from Bank of from the year-earlier period, banks to check how borrowers of debt away from the corpo- Burmese authorities incredibly Tulatoli, the village where
China, a commercial lender. according to data from the are using short-term consumer rate sector toward households. continue to deny the atroci- Sukhutara lived, was home to
She used it toward the down People’s Bank of China, the loans . In the years since the global fi- ties,” they said in a letter. between 4,000 and 5,000 peo-
payment on a two-bedroom central bank. However, growth Banks have stepped up mar- nancial crisis when property Aung San Suu Kyi, who leads ple before the massacre. It was
apartment—despite rules for- in consumption as measured keting of such loans. At some prices in China took off, buyers the government of Buddhist- victim to among the worst vio-
bidding such borrowing. by retail sales rose just 10.4% banks, applicants can get ap- increasingly turned to banks majority Myanmar, says troops lence in the military’s cam-
Ms. Zhu, who works for a in August, in line with recent proved within minutes. for mortgages. have been hunting militants of paign, with witnesses saying
state-owned financial com- years. China Merchants Bank, for Mortgages form the lion’s the Arakan Rohingya Salvation that at least several hundred
pany, said she had little choice E-house China R&D Insti- example, has a “lightning-loan” share of household debt, which Army who attacked police posts people were killed. Sukhutara
after the city government tute, an independent Chinese service, where customers can now accounts for the equiva- and an army base Aug. 25. said she lost eight close rela-
tightened down-payment re- research firm, estimates that borrow as much as 300,000 lent of 46% of China’s gross Myanmar rejects survivors’ tives: her parents, grandpar-
quirements in March and they at least one third of short-term yuan ($45,540) by filling out domestic product, compared accounts that the military ents and four brothers.
had borrowed all they could consumer loans issued since an application on the bank’s with 17% in 2008, and 33% of committed rape, murder, and —Myo Myo in Yangon and
from family. “Consumer loans March have gone toward prop- mobile app. The lender can outstanding bank credit, up torched villages. “We did not Yantoultra Ngui in Kuala
were our only option,” she erty purchases. quickly review the applicant’s from 18% a decade earlier. do any kind of their accusa- Lumpur contributed
said. Regulators have taken note. credit record, income and fi- —Grace Zhu and Chao Deng tions,” Col. Phone Tint, Myan- to this article.

ESCAPE good connections with foreign

governments. “They moved
very quickly and were verified
make things better,” Kim Han
Sol said in the interview. He
spoke fluent English with a
Tillerson Says U.S. Is
Continued from Page One
the rescue, and the Nether-
at the highest level,” he said.
Two Western diplomats said
Cheollima was trusted to help
British accent, and said he was
interested in the revolution
the previous year in Libya, as
Talking to North Korea
lands and U.S. declined to defectors. related to him by his Libyan BY CHARLES HUTZLER ficial met with a North Korean
CHEOLLIMA CIVIL DEFENSE/REUTERS

comment. “Cheollima” is a mythologi- roommate. diplomat in Norway as part of

Other nations refused to cal winged horse, a North Ko- At the time Mr. Kim was BEIJING—The U.S. is in di- efforts to negotiate the release
give assistance. Among them rean symbol for rapid progress studying at an international rect contact with North Korea, of Otto Warmbier, an American
was Canada, a decision that that is seen on stamps and college in Bosnia. He has also “probing” to see if Pyongyang college student who was im-
reflected its sensitive negotia- statues in the country. been educated in France. In is willing to engage in talks de- prisoned in North Korea for
tions to free a Canadian pastor The Cheollima representa- photos, Mr. Kim has sometimes spite tensions that remain over- more than a year before being
imprisoned in North Korea, ac- tive said the family of Kim appeared with a spiky hair- heated, Secretary of State Rex medically evacuated in June in
cording to a person familiar Jong Nam contacted the group style, hooded tops and jeans Tillerson said. a coma. He died shortly there-
with the decision. directly soon after his killing. more suited to the streets of Mr. Tillerson said Saturday after.
Canada declined to com- Kim Han Sol, the son of slain Three weeks later, Seoul than Pyongyang. that the U.S. has “a couple, Mr. Tillerson’s acknowledg-
ment on the refusal, and said North Korean Kim Jong Nam. on March 7, the group released Kim Jong Un has eliminated three” channels through which ment of the open channels, in
that the release of Rev. Lim a video that showed Kim Han potential challengers as he has it directly engages with the response to a question from a
Hyeon-soo was the result of or aiding an escape risks se- Sol displaying his passport consolidated power in recent North Korean government to reporter, came after a half day
diplomatic engagement. The vere punishment, including and confirming he was safe years, including members of see if substantive discussions of discussions in Beijing with
pastor’s release came as ten- the death penalty. with his mother and sister. his own family. In 2013, he ex- are possible. President Xi Jinping and top
sions ramped up between The number of North Kore- Cheollima declined to connect ecuted his uncle, allegedly for “We are probing. Stay
North Korea and the U.S. over ans who reached South Korea the Journal to Kim Han Sol or building a rival power base. tuned,” Mr. Tillerson said in Bei-
Pyongyang’s nuclear weapons between January and August his family. South Korean and U.S. officials jing after meeting with China’s
and missile development. this year was down almost 13% Kim Jong Nam was almost said Kim Jong Nam was likely president and senior officials.
The two governments
The family first flew to Tai- from last year to 780, data certainly killed by North Ko- killed under orders from Kim While U.S. officials have said have held talks via
pei, a person familiar with the from the Seoul government rean agents, U.S. and South Jong Un. the government has direct con-
relocation said. There they show. Korean officials said. Pyong- “North Korea stresses the tacts with North Korea despite
North Korea’s United
spent a tense 30 hours in the “We came to meet an urgent yang denies involvement. Kim bloodline for leadership, no formal diplomatic ties, Mr. Nations mission.
airport trying to confirm need by North Koreans for pro- On Monday, the trial will making estranged family mem- Tillerson’s comments were a
travel and visas for a final tection of those in danger,” the begin in Malaysia of two bers potentially threatening as rare high-level acknowledg-
destination, this person said. Cheollima representative said women charged with murder- a theoretical replacement for ment. He didn’t provide details
Cheollima declined to confirm of the group’s mission. ing Kim Jong Nam by smear- Kim Jong Un,” said Patrick but said ridding North Korea of foreign-policy officials. Their
the evacuation route and The Journal spoke to diplo- ing his face with VX, a nerve McEachern, an expert on nuclear weapons remains the talks, Mr. Tillerson said, fo-
hasn’t said where the family mats, a high-level defector and agent. Four North Koreans North Korea and fellow at the goal of U.S. policy. cused on North Korea and prep-
went. a European human-rights who left Malaysia soon after Wilson Center in Washington. U.S. President Donald Trump arations for a November sum-
Cheollima is one of several worker who helped Cheollima the incident have also been As Kim Jong Un continues a on Sunday expressed skepti- mit in Beijing between Mr. Xi
groups that help those seeking evacuate the family to learn named as suspects in the case. crackdown on defections, Che- cism over hopes for talks with and Mr. Trump.
to escape the Kim Jong Un re- more about the group. Mr. Kim’s family had been ollima said it would continue North Korea, tweeting he had Beijing has urged the U.S. to
gime. The representative said The defector, who isn’t part living outside of North Korea to provide assistance to those told Mr. Tillerson “that he is negotiate with Pyongyang di-
it consists of North Koreans of the group, said Cheollima is for many years but said they seeking to leave the country wasting his time trying to nego- rectly and expressed alarm at
both outside and, unusually, a small but well-connected or- felt under threat in their well- and look for foreign assis- tiate with Little Rocket Man,” a the recent rise in tensions since
within the country. ganization that had helped known Macau home. Kim Han tance. term the president has used to North Korea’s latest nuclear
North Koreans are barred North Koreans escape their Sol had been critical of the “To those good nations of refer to North Korean leader test, its sixth, in early Septem-
from leaving the country with- country through China and North Korean government in a the world, stand on the right Kim Jong Un. ber and the threatening rheto-
out government permission. into Southeast Asia. 2012 Finnish television inter- side of history,” the Cheollima The two governments are ric traded by Messrs. Trump
The country has tightened The human-rights worker view. representative said. “Our com- known to have held talks via and Kim.
border controls in recent confirmed the group consisted “I’ve always dreamed that patriots and the world will re- North Korea’s United Nations —Eva Dou contributed
years, and anyone attempting of North Koreans and had one day I will go back and member.” mission. A State Department of- to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | A5

U.S. NEWS
Trump Lashes Out at Puerto Rico Mayor
Series of tweets took
aim at Puerto Ricans New York Sends
who ‘want everything Emergency Workers
to be done for them’ To Help With Relief

BY MICHAEL C. BENDER New York emergency

workers spent last week in
President Donald Trump Puerto Rico rebuilding infra-
over the weekend criticized structure, delivering resources
San Juan’s mayor in a series of to families and aiding volun-
Twitter posts that also took teers.
aim at Puerto Ricans who New York Gov. Andrew
“want everything to be done Cuomo on Friday said he dis-
for them.” patched more than 70 Port
“Such poor leadership abil- Authority workers and more
ity by the mayor of San Juan, than 50 state troopers to
and others in Puerto Rico, who help with relief efforts. The
are not able to get their work- state previously sent 245
ers to help,” Mr. Trump said state military personnel to
Saturday. “They want every- the island to aid local law en-
thing to be done for them forcement and help with de-
when it should be a commu- bris removal and set up dona-
nity effort.” tion drop-off locations
Mr. Trump accused San throughout the U.S. territory.
Juan Mayor Carmen Yulin A total of 147 city work-
Cruz of politicizing a storm ers have traveled to the is-
JOE RAEDLE/GETTY IMAGES

that he said a day earlier had land on the city’s behalf, in-
caused “total destruction” on cluding 30 members of the
the island. Ms. Cruz has ac- fire department and New
cused the Trump administra- York Police Department to
tion of “killing us with the in- help with search and rescue
efficiency” and asked to “make missions.
sure somebody is in charge Other workers are helping
that is up to the task of saving San Juan Mayor Carmen Yulín Cruz spoke to the media Saturday as she arrived at a temporary government center. manage recovery operations
lives.” and set up a distribution cen-
The tweets appeared to The president, who spent much of the burden of rebuild- without phone connections. sites were offline Friday, ter in San Juan, according to
have been deleted Saturday af- the weekend at his golf club in ing. Workers and volunteers have mostly because of electricity city officials.
ternoon. New Jersey, is scheduled to “Ultimately the government worked to get relief supplies blackouts across the island. Speaking about the recov-
Several hours after the first visit Puerto Rico Tuesday. of Puerto Rico will have to from cargo ships in San Juan’s The same high winds that ery efforts days after the
round of posts, Mr. Trump On Friday, Mr. Trump said work with us to determine port to families throughout ripped down power lines also hurricane hit the island,
thanked Puerto Rico Gov. Ri- the federal government was how this massive rebuilding the island. took out copper and fiber-op- Mayor Bill de Blasio said
cardo Rosselló and congress- “fully engaged in the disaster effort—it will end up being The Federal Emergency tic lines linking cell towers to thousands of New Yorkers
woman Jenniffer González-Co- and the response and recovery one of the biggest ever—will Management Agency has been the outside world, which could have a personal connection to
lon, along with Gov. Kenneth effort.” be funded and organized, and sending diesel fuel to hospitals make restoring service espe- Puerto Rico.
Mapp of the U.S. Virgin Is- “We have done an incredi- what we will do with the tre- that are depending on genera- cially hard in the days ahead. “People are struggling for
lands, in another series of ble job considering there’s ab- mendous amount of existing tors that are powering limited About three-quarters of cell electricity, for food, for water,
tweets for their work follow- solutely nothing to work debt already on the island,” he operations. Puerto Rico Gov. sites were offline in San Juan, for all the basics,” Mr. de Bla-
ing the disaster. On Sunday with,” he said, adding that said. “We will not rest, how- Ricardo Rosselló said Friday home to about 350,000 of sio said to a crowd at a fire
morning he praised “the Puerto Rico is “totally unable” ever, until the people of that a little more than half of Puerto Rico’s 3.4 million resi- station in Brooklyn. “And the
amazing work” done by fed- to respond to the catastrophe. Puerto Rico are safe.” the island’s 69 hospitals were dents. Several telecommunica- 700,000 New Yorkers who
eral emergency management “They are working so hard, Hurricane Maria, the functioning by then, with the tions carriers said a shortage are proud Puerto Ricans, we
personnel and the military, but there’s nothing left,” he strongest storm to hit Puerto number slowly growing. of power generators were will not forget what Puerto
and again thanked the island’s said. “It’s been wiped out.” Rico in nearly a century, de- According to the Federal complicating efforts to power Rico is going through.”
governor for working with Still, Mr. Trump said Puerto stroyed the island’s electricity Communications Commission, the cell towers still able to —Zolan Kanno-Youngs
first responders. Rico will have to shoulder infrastructure and left many 89% of Puerto Rico’s cellphone broadcast.

Trump-KushnerMeetings
Upset White HouseCounsel
WASHINGTON—White House the conversations. One person 2016 U.S. presidential election
Counsel Don McGahn this sum- characterized Mr. McGahn’s and whether Trump associates
mer was so frustrated about the frustration as, “Fine, you’re not colluded in that effort. Mr.
lack of protocols surrounding taking my advice? Why stay?” Trump has called the probe a
meetings between President Mr. McGahn stayed, reas- “witch hunt,” and both he and
Donald Trump and Jared Kush- sured in part by the White Mr. Kushner have said they
House’s hiring of a legal team didn’t collude with Russia. Mos-
By Peter Nicholas, specifically to manage the re- cow has denied meddling in the
Michael C. Bender sponse to the probe of Russian election.
and Rebecca Ballhaus meddling in the 2016 election. Some members of Mr.
Attorney Ty Cobb was hired to Trump’s legal team in June con-
ner, his son-in-law whose activ- lead that group. cluded Mr. Kushner should step
ities are under scrutiny in the A White House official said down and aired their concerns
POOL/GETTY IMAGES

Russia probe, that West Wing Mr. McGahn “did not consider to the president, The Wall
officials expressed concerns the resigning, and he was not con- Street Journal has reported.
top lawyer would quit, accord- cerned about any one individ- Their concern was that if Mr.
ing to people familiar with the ual. He was focused on imple- Kushner were to speak to the
conversations. menting the proper processes president or White House col-
Mr. McGahn expressed con- and structures to protect the leagues about the Russia inves- Jared Kushner, right, Donald Trump’s son-in-law, attended a White House meeting last week.
cern that meetings between Mr. White House and its staff, in- tigation, Mr. Mueller could seek
Kushner and Mr. Trump could cluding Jared.” testimony about what was said. amining a meeting during the Kushner and other campaign from family considerations, said
be construed by investigators Mr. McGahn’s concerns illus- Mr. Kushner’s role has transition that included Mr. aides, according to people fa- people familiar with the conver-
as an effort to coordinate their trate the tension that special caused particular concern Kushner and the Russian am- miliar with the matter. sations.
stories, three people familiar counsel Robert Mueller’s probe among some White House offi- bassador, and another one that The fallout from the probe Newly installed Chief of Staff
the matter said. is causing in the West Wing and cials as federal investigators ex- he held with the head of a Rus- continues to reverberate in the John Kelly has tightened access
Two senior White House of- how the White House’s legal amine meetings he held with sian-run bank that has faced White House. Mr. Trump has to the president, requiring
ficials—then-Chief of Staff strategy has evolved to respond Russian officials and business- U.S. sanctions. Mr. Mueller is also spoken to aides about his aides, including Mr. Kushner, to
Reince Priebus and former chief to the probe. people during the campaign and also probing a June 2016 meet- concern about the effect the in- schedule appointments in order
strategist Steve Bannon—urged Mr. Mueller is examining U.S. transition, said people familiar ing at Trump Tower with a Rus- vestigation is having on Mr. to meet with Mr. Trump.
Mr. McGahn not to resign, ac- intelligence agencies’ findings with the matter. sian lawyer tied to the Kremlin, Kushner; Mr. Trump’s questions —Brody Mullins contributed
cording to people familiar with of Russian interference in the Federal investigators are ex- which was attended by Mr. about Mr. Kushner spring partly to this article.

Trial of Alleged Benghazi Attack Mastermind to Begin

BY DEL QUENTIN WILBER Benghazi attacks, including the 2012, federal prosecutors al- At about 9:45 p.m., dozens ers escaped the onslaught and ning and involved an elaborate
alleged murders of Ambassador lege. In the days before the at- of armed men breached the found their way to the annex, double interrogation aboard
On a moonlit night in June Christopher Stevens; State De- tacks, Mr. Khattalah had voiced gates of the U.S. special mis- about a mile away, but that an- the USS New York, with two
2014, a Federal Bureau of In- partment Information Manage- concerns and opposition to the sion where Mr. Stevens was nex soon came under assault separate pods used for ques-
vestigation agent and seven ment Officer Sean Smith; and American presence in Benghazi, staying, according to the indict- from extremists that resulted in tioning.
Navy SEALs landed on a rocky two Central Intelligence Agency which included a State Depart- ment. the deaths of Messrs. Woods The first interrogation was
coast and trekked to a villa in contract security officers, Ty- ment special mission and a CIA The assailants rampaged and Doherty. intelligence-oriented, and it
Benghazi, Libya, the city where rone Snowden Woods and Glen facility known as the annex. Mr. through the mission, stealing Mr. Khattalah is accused of didn’t include advising Mr.
almost two years earlier four Anthony Doherty. Stevens was in Benghazi on property and setting the fires coordinating the assailants’ ef- Khattalah of his rights. It was
Americans, including the U.S. Mr. Khattalah could be sen- Sept. 11 to attend a ribbon-cut- that took the lives of Messrs. forts, taking part in the mission carried out by members of the
ambassador, had been killed in tenced to life in prison if con- ting at a school and to touch Stevens and Smith, prosecutors attack and plundering materials U.S. High-Value Detainee Inter-
a terrorist attack. victed of the most serious base with locals. said. Diplomatic security staff- that included sensitive docu- rogation Group, focused on
Their mission: to arrest Ah- charges. His trial is expected to ments. gathering information that
med Abu Khattalah, an alleged last more than a month and in- The Benghazi attack became might provide insights about
ringleader of that assault, and clude testimony from FBI a heated political issue in the Mr. Khattalah’s associates and
to spirit him to a Navy ship in agents, U.S. personnel who sur- months leading up to the 2016 prevent future attacks.
the Mediterranean, according vived the attacks and Libyans presidential campaign, as some The second interrogation,
to court testimony and Federal who participated in it. Republicans accused Hillary conducted after Mr. Khattalah
Bureau of Investigation reports. His defense team says he Clinton, who was secretary of was advised of his rights,
When Mr. Khattalah, lured played no role in the assault. state in 2012 and would be- sought to gather information
by an informant, arrived at the “The evidence will show that come the Democratic presiden- prosecutors could introduce at
villa, the special operators Mr. Khatallah was not the mas- tial nominee, of being insuffi- trial. In that second session, ac-
pounced. Handcuffed and termind of any attack and that ciently attentive to security and cording to FBI reports,
gagged, Mr. Khattalah was he was wrongly abducted and misleading the public on the is- Mr. Khattalah placed himself at
marched to inflatable boats, brought to the United States to sue. Mrs. Clinton and her sup- the scene of the attacks and ad-
which whisked him to the USS stand trial for murders he did porters said she performed her mitted to turning away police
New York for the long voyage not commit,” said Eric Lewis, job well and didn’t intentionally vehicles responding to the as-
to the U.S. and a trial in a fed- one of Mr. Khattalah’s lawyers. mislead anyone, and they de- sault.
eral courtroom. That trial is Mr. Khattalah was a leader cried a lengthy Republican-led Defense lawyers failed to
scheduled to begin Monday in of the extremist brigade Ubay- congressional investigation as convince a judge during a
Washington. dah Bin Jarrah, which partici- politically motivated. lengthy set of hearings that the
Mr. Khattalah faces 18 fed- pated in the assaults that be- The mission to capture Mr. dual interrogations violated Mr.
eral charges related to the gan on the night of Sept. 11, Mr. Khattalah is seen on a U.S. Navy ship after his capture in 2014. Khattalah took a year of plan- Khattalah’s rights.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

IN DEPTH

Gerrymandering Faces a Reckoning

Contorted voting maps drawn by Republicans and Democrats to cement power might finally have gone too far. The
Supreme Court will hear arguments Tuesday in a case that could force both parties to restrain their partisan motives.

I
2010 party control 61st 62nd 63rd n 2010, a nationwide Re- 2016 party control 66th 62nd 63rd
By Brent Kendall publican wave swept the
and Jess Bravin GOP into the Wisconsin
Graphics by Renée Rigdon, governor’s mansion and leg-
Brian McGill, Max Rust islature, giving the party the 62nd
and Angela Calderon 61st power to redraw the state’s
electoral map for the first

D
63rd
emocrat Cory Mason time in half a century.
won a seat in the Wis- The new District 62 sepa-
consin Assembly by rated Mr. Mason from most 63rd
fewer than 1,000 votes in 2006. of his old constituents in Ra-
District 62 was sand- 62nd cine, Wis., and swept in rural
wiched between one heavily and conservative precincts. 66th
Democratic district and an- How much more Republican or Democratic each precinct is than He was stuck in a red dis-
other that strongly favored Wisconsin (pct. pts.)* trict. To stay in office, Mr.
Republicans. The districts Mason moved to District 66,
are outlined in black in the 15 10 0 10 15 a new island of Democratic *Based on the two-party vote in the 2008 presidential election
map to the right. More Democratic More Republican strength, shown at far right. Source: WSJ analysis of Wisconsin State Legislature and Harvard Election Data Archive data

R
epublicans engineered and Republicans have sought nationally from redistricting Voting for the Wisconsin State Assembly
similar moves across to redraw maps that increase have gone to Republicans
DEMOCRAT REPUBLICAN
Wisconsin, erecting a their party’s electoral clout, due to their election suc- 2008
firewall that helped protect largely by creating a greater cesses in 2010. The rise of 55.6% 44.4%
the GOP’s majority of 60 number of winnable seats. computer-powered voter Vote pct.
seats in the 99-member As- The Supreme Court is in a analysis, which allows elec- 52 46
Seats
sembly. The new lines with- position, if it chooses, to cre- toral maps to be redrawn
stood a shift of more than ate the first nationwide defi- with more precision than 2012
53.2% 46.8%
400,000 votes to Democrats nition of how much partisan- ever, has supercharged both Vote pct.
in the 2012 state elections. ship in redistricting is too parties’ efforts. 39 60
Seats
What happened to Mr. much. The high court has In Wisconsin, nearly two-
Mason is now part of a Su- never found a partisan ger- thirds of state assembly 2016
46.8% 53.2%
preme Court case that will rymander unconstitutional, seats were won by Republi- Vote pct.
decide the future of political partly because the justices cans last year when the 35 64
gerrymandering, a phenome- haven’t been able to agree party won 53% of votes Seats
non with a rich, bipartisan on a method to determine statewide. There was almost
Note: Percentages exclude third-party votes. Percentages don't add up to 100 due to rounding. 2008 Assembly seats include one Libertarian.
tradition. Since the founding what too much looks like. no such gap in 2008, as
of the republic, Democrats Lately, most of the gains these charts show. Source: Wisconsin Elections Commission

I
n November, federal several options and chose How much more Republican or Democratic each precinct is than Maryland (pct. pts.)*
judges in Madison, Wis., the one that was the most
More 2002 party control 6th
ruled the new maps un- partisan. “That’s their pre- Dem.
constitutional and “intended rogative,” Mr. Schimel said.
to burden the representa- “It’s a political process.”
tional rights of Democratic Mr. Schimel says using the 6th
voters…by impeding their challengers’ legal arguments MD.
ability to translate their as a constitutional test na-
votes into legislative seats.” tionwide would invalidate a 15
Wisconsin appealed, and third of the legislative maps DEL.
the Supreme Court is sched- drawn in the past 45 years.
uled to hear arguments in Running alongside the
the case Tuesday. A ruling Wisconsin case is one from
against Wisconsin could lead Maryland involving House 10
W .V A . VA .
to major changes in how po- districts. Two years ago, the
litical maps are drawn, forc- Supreme Court ordered a D.C.
ing both parties to restrain three-judge panel to consider
their partisan motives. Much whether a 2011 redistricting
0
of the impact would be felt drafted by Gov. Martin 2012 party control 6th
in the next round of redis- O’Malley, a Democrat, disen-
tricting after the 2020 cen- franchised Republicans.
sus, a process that will shape The map resulted in Dem-
the balance of power in fed- ocratic majorities in seven of 6th
10 MD.
eral, state and local districts Maryland’s eight congressio-
across the country. nal districts and helped cost
Wisconsin’s Republican at- Republicans one of their two
torney general, Brad House seats. The case is on
DEL.
Schimel, says GOP lawmak- hold until the Supreme Court 15
ers followed traditional prac- decides the Wisconsin case.
tices in producing the cur- Before the redistricting,
rent map, such as making Maryland’s Sixth Congressio- W .V A . VA .
districts compact, tidy and nal District was anchored by
with normal-looking shapes. rural, western Republican D.C.
The November ruling strongholds that, as the top More
Rep.
cited evidence Republican map shows, stretched across
leaders were presented with the West Virginia border. *Based on the two-party vote in the 2008 presidential election Source: WSJ analysis of Wisconsin State Legislature and Harvard Election Data Archive data

T T
he impact was clear in added, “Let me state un- he Supreme Court has dering of a magnitude that is How much more Republican or Democratic each precinct is than
the 2014 election, says equivocally, categorically. I been reluctant to in- qualitatively and quantita- Wisconsin (pct. pts.)*
Sharon Strine, a sev- believe that our whole coun- terfere in the process. tively different from what
enth-generation Wolfsville try needs to develop a better It wasn’t until 1962, faced we have seen in the past.”
15 10 0 10 15
resident and one of the Re- process for congressional re- with districts not revised in Mr. Gaddie was a consultant
More Democratic More Republican
publican plaintiffs. She ran districting.” decades, that the court ruled to Wisconsin Republicans
the campaign of GOP chal- The case against gerry- political maps could be chal- during the redistricting. 2010 district boundaries
lenger Dan Bongino. mandering contends the pro- lenged in court. The court There are two common re-
“We were ahead on elec- cess violates the idea that has struck down maps de- districting strategies. “Pack- City of Eau Claire
tion night, when every pre- voters should get to choose signed to disenfranchise Af- ing” crams the minority
cinct was in except for three their representatives, rather rican-Americans and other party’s voters in one district
precincts in Montgomery than the other way around. minorities, but hasn’t ruled to weaken their influence in 68th
County,” a heavily Demo- Redrawing the lines to maxi- against either party for us- other districts nearby. Parts
cratic suburb of Washington, mize partisan gains, the ar- ing redistricting power to of Eau Claire used to be in
she says. When those votes gument goes, allows parties undermine the other. two competitive districts 67th
were counted, Mr. Bongino to win seats in numbers that In 2004, conservative Su- with a mix of GOP and Dem-
lost by less than 3,000 out of disproportionately reflect preme Court justices came ocratic voters, shown in the
a total of 190,000. their popular support and one vote short of closing the top map on the right.
Ms. Strine says the dis- can turn voters into voice- door to challenges of parti- Since 2011, Eau Claire has
trict’s western end is “just a less minorities. san gerrymandering. The been largely lumped into one
different breed of people” The increasing homogene- pivotal vote belonged to Jus- Assembly district, marked as
from those tacked onto the ity can be seen in the decline tice Anthony Kennedy, who the 91st in the bottom map
district by Mr. O’Malley. of competitive House dis- rejected the claim against and filled with Democrats. 93rd
Mr. O’Malley, who left of- tricts. Such districts are de- Pennsylvania’s congressional All the districts around it are
fice in 2015, said in a deposi- fined in the chart below as map but left open the possi- now Republican.
tion he acted “constitution- “swing seats” that vote bility that voters might bring “Cracking” divides the mi-
ally and legally” under the roughly in line with the U.S. a successful claim someday. nority party’s voters into 2016 district boundaries
system he inherited. Still, he as a whole. Some historians credit the more than one district to di-
first congressional gerry- lute their voting power. In
mandering to Patrick Henry Sheboygan, about 250 miles
200 districts for drawing Virginia’s Fifth from Eau Claire, a new line
Republican 67th
leaning
District in 1788 to hurt along Superior Avenue split
175 James Madison’s election the city into two new dis-
Democratic
68th
chances. Mr. Madison won tricts, held by Republicans.
150 leaning anyway. The term comes Mr. Mason, the Democrat
from a salamander-shaped who moved to stay in office,
125
Massachusetts state Senate says he had trouble working
91st
100
district approved in 1812 by with Republicans to accom-
Gov. Elbridge Gerry. plish much beyond small is-
Political scientists Ber- sues. In 2013, he made a suc-
93rd
75
Swing nard Grofman and Ronald cessful proposal to name the
seat Keith Gaddie told the Su- kringle the official state pas-
50
preme Court in a brief filed try of Wisconsin. After seven
1997 2000 ’05 ’10 ’15 in the Wisconsin case there years in the minority, he de-
Note: Republican and Democratic districts voted at least 5 percentage points more for the is “compelling evidence that cided to run for Racine
party's candidate than the nation overall, based on presidential elections. the 2010 redistricting cycle mayor instead. “I’d like to *Based on the two-party vote in the 2008 presidential election
Source: Cook Political Report yielded partisan gerryman- try governing,” he says. Source: WSJ analysis of Wisconsin State Legislature data
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | A7

U.S. NEWS
THE OUTLOOK | By Kate Davidson

Link Between Growth and Tax Cuts Is Tenuous

The Trump growth expanded at an ane- pushing up public debt, crowd work as many hours to keep
administration mic 1.7% rate for the rest of Tax Trajectories out private investment and their after-tax income and
and congres- the decade. And back in the In the (very) long run, the relationship between low taxes and high growth. Some warn that defi- standard-of-living level stable.
sional Republi- 1950s, a top rate of 91% pre- cit increases now could spur

T
GDP growth isn’t cut and dried.
cans are vailed, and the economy nev- the Fed to raise interest rates he net effect of individ-
Taxes as a share of GDP
counting on an ertheless expanded at a faster than expected, poten- ual-tax-rate reductions
overhaul of the U.S. tax code steaming 4.5% annual rate. LOWER-TAX ERA RISING-AND-HIGH-TAX ERA tially offsetting some of the on participation seems
to rev up U.S. economic Joel Slemrod, a University 30% 1870–1929 1929–2014 benefits of lower tax rates. to be modestly positive. Raj
growth. History suggests that of Michigan economics profes- 25 The Trump administration Chetty, a Stanford University
isn’t a sure outcome. sor and co-author of the book, is aiming for a 3% growth professor, found that a 10% in-
John F. Kennedy, a Demo- “Taxing Ourselves,” a study of 20 Federal, state and local rate, compared with the 1.9% crease in after-tax wages led
crat, in 1963 proposed and tax-policy changes over time, growth rate that has prevailed to a 4% increase in hours
15
Lyndon Johnson, also a Demo- looked all the way back to the since 2000. worked.
crat, in 1964 signed into a law 1870s and found a tenuous Federal only Many factors impact a na- Matthew Shapiro, another
10
a cut in the top tax rate from connection between economic tion’s economic growth rate. Michigan economic professor,
91% to 70% and a slightly growth rates and taxes. 5 The productivity of the work- said tax-policy changes can
lower corporate tax rate. Eco- He also found tenuous con- force—driven not just by pol- have important short-run ef-
0
nomic output expanded at a nections when comparing tax icy change in Washington but fects on business investment
swift 4.7% rate for the rest of and growth between coun- 1870 ’80 ’90 1900 ’10 ’20 ’30 ’40 ’50 ’60 ’70 ’80 ’90 2000 ’10 also by innovations like the as well, but the effects tended
the decade. Republican Ronald tries. For example, output per GDP per capita in constant 2014 dollars
internet and the education of to fade over time.
Reagan signed a tax cut into person in Sweden, a high-tax workers—is critical. “Most changes are fairly
law in 1981 and later reduced country, grew faster between $60,000 1.8% AVG. GROWTH 1.8% AVG. GROWTH Labor-force participation is temporary, and there’s a big
the corporate tax rate, and 1970 and 2012, than in Swit- 40,000 also key. The 1970s, a decade incentive to take advantage of
economic output expanded at zerland, a relatively low-tax marred by high inflation and those temporary changes,” he
3.8% for the rest of the de- country. 20,000 slowing productivity, never- said.
cade. “It’s really hard to just look theless produced a 3.4% The Trump administration’s
Those examples suggest a at countries’ growth rates 10,000 growth rate, which was better proposals are meant to boost
strong connection between over time, relate that to what than the 2000s, because baby labor supply by lowering indi-
tax cuts and growth. Other ex- their tax rates and structures Note: Chart is logarithmic, boomers and women joined vidual rates and boost busi-
5,000 with vertical scale
amples cut the other way. are, and say, ‘Ah, here’s the the workforce in droves. ness investment by reducing
Dotted line shows compressed to show changes
silver bullet,’ ” said Mr. Slem- The key to effective tax pol- corporate taxes and incentiv-

G
long-term growth in percentage terms.
2,500
eorge H.W. Bush, a Re- rod. icy is thus whether it can izing investment, Kevin Has-
publican, and then Bill One complicating factor is 1870 ’80 ’90 1900 ’10 ’20 ’30 ’40 ’50 ’60 ’70 ’80 ’90 2000 ’10 drive productivity and labor- sett, the recently confirmed
Clinton, a Democrat, ad- the interplay between taxes, Source: Joel Siemrod's analysis of Maddison Project and Commerce Department data force participation higher. chairman of the Council of
vanced increases in the top interest rates and growth. The THE WALL STREET JOURNAL. Lower income-tax rates in Economic Advisers, said in an
tax rate that became effective U.S. economy boomed in the theory should increase labor- interview.
in 1991 and 1993, and U.S. out- 1980s in part because the Fed- rates were held down by a terest rates and growth. In the market participation because A permanent increase in
put nevertheless expanded at eral Reserve beat down infla- worker-productivity boom 1990s, for example, U.S. policy it means individuals get a big- the growth rate is “very, very
a robust 4.1% annual rate for tion with high interest rates that helped to keep inflation makers counted on deficit cuts ger after-tax payoff from difficult,” he acknowledged.
the rest of the 1990s. George and then, after a deep reces- lower than the Fed expected. to keep interest rates low and working. That is offset to But even a temporary increase
W. Bush, a Republican, cut sion, cut interest rates aggres- Tax and deficit policies can spur economic growth. Some some degree because it means in the growth rate would raise
taxes in 2001 and 2003, and sively. In the 1990s, interest directly affect the level of in- economists say big deficits, by individuals also don’t need to standards of living.

Impact on the Rich

Is a Test for GOP
BY RICHARD RUBIN reap significant benefits from
the plan, including the pro-
Republicans, long champions posed repeal of the estate tax,
of tax cuts for higher earners, the elimination of the alterna-
are conflicted in just how far tive minimum tax and lower tax
their latest plan should go in rates on corporations and busi-
reducing the amount paid by nesses that pay taxes through
the rich. their owners’ individual re-
The party’s tax-plan frame- turns.
work, unveiled last week, jetti- There are benefits for the
soned some tax cuts Republi- middle class, too, but they are
cans have long supported for less specific and subject to
high-income households, leav- change because of details Re-
ing rates on capital gains and publicans haven’t announced
dividends untouched. The party yet. Many households, espe-
also has shown an openness to cially in the upper middle class,
keep the top tax rate for indi- may end up experiencing tax
viduals near its present level of increases.
39.6% and has proposed to cut The top 1% of households
ALEX WONG/GETTY IMAGES

deductions on state and local would get an average tax cut of

taxes that could leave some $129,030 in 2018, boosting their
wealthy households paying after-tax incomes by 8.5% and
more. President Donald Trump, lowering the share of U.S. taxes
for his part, has said the party’s they would pay, according to an
tax plan wouldn’t benefit the analysis released Friday by the
wealthy, including himself. Tax Policy Center. Overall,
Those moves would all help Americans would get a 2.1% in- Rep. Kevin Brady spoke as House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell looked on last week at the Capitol.
the GOP defend itself against crease in after-tax income.
attacks that its tax policy tilts “The top income groups will the plan would raise taxes on sonal exemptions. Households cause the most damage,” said Trump’s speeches reflect.
toward the top of the income receive the biggest tax cuts,” 12% of households in 2018, with in the bottom half of the in- Chris Edwards of the libertar- The heirs of Mr. Trump, who
scale. The problem, so far, is said Eric Toder, co-director of the biggest concentration of come scale—who often pay ian Cato Institute. “Flatter tax says his net worth exceeds $10
that core features of the plan the center. losers in the upper middle payroll taxes used to fund So- rates, flatter tax structures are billion, would benefit from es-
do just that. As the party turns Republicans called the analy- class. cial Security and Medicare but more efficient, period.” tate-tax repeal. The president,
that outline into legislation sis speculative because it didn’t Among Americans in the top little or no income tax—would The challenge for Republi- as the owner of numerous pass-
over the next few months, it consider the pieces of the plan fifth of the income distribution, get average tax cuts under cans is that politically, tax cuts through businesses, would also
will be repeatedly confronted that legislators haven’t written 32% would see a tax increase, $1,000. at the top are unpopular. In a likely gain from the 25% top
with the challenge of reconcil- yet, including the income according to the analysis. Republicans argue that cut- Wall Street Journal/NBC News rate on those firms, down from
ing Republicans’ desire for rate thresholds where the tax brack- Among the top 1%, 10.7% would ting top marginal income-tax poll this month, just 12% of 39.6%. Unlike past presidents,
cuts with their claims about ets hit and the size of the child see a tax increase. rates has the biggest benefit, Americans said they wanted to Mr. Trump has refused to re-
who should pay less. tax credit. Those decisions will That is in part because of creating greater incentives for cut taxes on the wealthy, while lease his tax returns, making
Under the framework, the shape the impact of the plan. the elimination of the state and people to work, save and invest. 62% favored higher taxes on even a rough calculation chal-
top 1% of households would Under Friday’s assumptions, local tax deduction and per- “It is the highest rates that that group. That is a point Mr. lenging.

COURT Some Major Cases

Worth Watching
whether the First Amendment
entitles a baker to refuse to
supply a wedding cake to a gay
Some analysts believe the
aggressive style of the Trump
administration may affect the
chief justice’s approach. In ad-
Continued from Page One couple. dition to the travel-ban case—
No one expects that the Carpenter v. U.S., unsched- currently on hold after the
court will turn left, as it likely Epic Systems Corp. v. uled: The court will consider president revised the order
would have had the Republi- Lewis, Oct. 2: A conflict be- whether old precedents allow- and made it permanent—the
can-led Senate not blocked tween two federal statutes, one ing police to see telephone administration is embroiled in
Obama nominee Judge Mer- that makes arbitration clauses company call records without a litigation over its environmen-
rick Garland last year. Many of nearly ironclad, another provid- warrant also permit authorities tal, immigration, criminal-jus-
the issues being considered ing workers the right to take to seize without probable cause tice and other policies, all is-
have been percolating for collective action. Lower courts cellphone location data tracking sues that could reach the
CHUCK MYERS/ZUMA PRESS

years on their way to the high are split over whether employ- a suspect’s movements over Supreme Court.
court, said Prof. David Pozen ers can block group claims in several months. In addition, the White
of Columbia Law School. employment disputes with an Janus v. American Federa- House itself remains under an
“There will be strong, classic arbitration clause. tion of State, County and Mu- unusual degree of legal scru-
partisan pressures on the Gill v. Whitford, Oct. 3: For nicipal Employees, Council 31, tiny. A special counsel, Robert
court, and it will be difficult the first time in a decade, the unscheduled: A state employee Mueller, is investigating alle-
for the chief to manage the court will consider whether contends he has a First Amend- gations related to the Trump
ideological division,” he said. there is a constitutional princi- ment right to refuse to pay The U.S. Supreme Court begins a new term on Monday. campaign’s possible ties to the
Still, “there may be some ple that can mitigate partisan union dues used for collective Russian government, which
interesting cases this term gerrymandering of electoral dis- bargaining, despite a labor con- issued a series of unsigned nority last Tuesday, when they both Moscow and the presi-
that will yield something other tricts. tract requiring his contribution. opinions finding middle dissented from an unsigned dent have denied.
than a pure 5 to 4 split,” he Masterpiece Cakeshop Ltd. The case is the culmination of a ground in the dispute over order stopping Georgia from Should the Supreme Court
said. One to watch, he said, v. Colorado Civil Rights Com- campaign by conservative President Donald Trump’s executing a black inmate with have to hear any such cases,
questions whether police must mission, unscheduled: In light groups to overrule a 1977 prec- temporary ban on travel to the a pending appeal alleging bias the institution’s reputation for
obtain a warrant to seize cell- of the 2015 ruling extending edent authorizing public agen- U.S. by people from certain because a juror called African- independence and fairness
phone records revealing a sus- marriage rights to same-sex cies to impose such charges. countries. In contrast to lower Americans “n—s.” could be tested before a polar-
pect’s movements over a pe- partners, the court weighs —Jess Bravin courts, which almost univer- In other cases, the conven- ized and skeptical public.
riod of months. sally ruled against the admin- tional ideological split has “We’re in a distinctive mo-
So far, the centrist bloc that istration, sometimes question- continued to prevail. The court ment in the development of
coalesced around the chief jus- held an outsize influence, join- group—sometimes joined by ing the president’s motives, in September temporarily constitutional law, with a
tice—including Justices Ken- ing his right-leaning col- either Justices Ruth Bader the Supreme Court’s decisions blocked a lower-court order president who is shattering
nedy, Stephen Breyer and El- leagues to expand access to Ginsburg and Sonia Sotomayor avoided provocative rhetoric requiring the Texas legislature norms left and right,” Colum-
ena Kagan—has remained firearms and roll back cam- on the left, or Justices Clar- and were divided. to redraw a congressional map bia’s Mr. Pozen said. “People
influential even after the ar- paign-finance regulations ence Thomas and Samuel Alito Justices Thomas, Alito and found to discriminate against are expecting that might lead
rival of Justice Gorsuch to- while siding with liberals to along with Justice Gorsuch on Gorsuch made clear they black and Hispanic citizens. to a confrontation where the
ward the end of last term. expand gay rights and limit the right—has steered the would have given the adminis- The court’s four liberals pub- court becomes newly aggres-
Justice Kennedy, a maverick the death penalty. court. tration all it wanted. They also licly dissented from the un- sive about checking executive
conservative, for years has Recently the centrist Over the summer, the court found themselves in the mi- signed order. power.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A8 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

LIFE&ARTS
BY RAY A. SMITH FASHION ers will buy the whole look includ-

The Kitchen Sink

ing the accessories. Some may say
no to the dress but yes to the bag.
AS THE FASHION industry Or both bags.
scrambles to find hit trends, some At Coach, the layering was
designers appear to be throwing about personalization, creative di-
everything at the wall in the hope rector Stuart Vevers said in an

Approach to Style
that something grabs consumers. email. Some of the layering was
Labels including Marc Jacobs, inspired by trans actress Hari Nef,
Coach, Prada, Marni and Gucci, “who at one of our parties, as the
whom many credit with sparking night went on, took the top layer
this trend, have been sending of her prairie dress off and carried
models down the runways in re- on partying in the slip.”
cent weeks wearing jackets over With women relying less on
jackets and skirts and dresses Designers pile on multiple bags, coats, skirts, pants; Will something stick? fashion magazines to dictate
over pants and carrying several trends to them, the magpie trend
bags and scarfs. Coco Chanel’s fa- can address women who take a
mous maxim—“Before you leave Marni’s collection had a “trea- thetic as “magpie opulence.” It closet, nerd chic, “Grey Gardens,” DIY approach to dressing.
the house, look in the mirror and sure hunt” theme, in which women was apparent at fashion weeks in Walt Disney cartoons, the botani- “It gives you multiple choices,”
take at least one thing off”— “scavenge into trunks full of ob- New York, London, Milan and cal and psychedelia. says Lizzy Bowring, catwalks di-
doesn’t apply to these Spring jects, finding items that belong to Paris, which ends Tuesday. Sometimes a trend takes getting rector at WGSN, who predicted
2018 collections. different individuals and carry dif- A lot of credit—or blame, de- used to. Women who swore by “magpie opulence” would be a
Runways, of course, often show- ferent stories,” according to the pending how you feel about the their skinny jeans, snug pencil trend at the shows. “There is big
case extreme styles and stores program for the show held during trend—can be placed on Gucci. skirts and fitted dresses and moto audience for that, it doesn’t just
eventually sell toned-down ver- Milan Fashion Week. Looks in- Creative director Alessandro Mi- jackets two years ago eventually stop with Gucci.” The trend can
sions. But the pile-on approach cluded 1950s-style bathing suits chele has turned the once-mori- took to the roomier and slouchy be about expressing individuality.
gives stores more options, increas- layered over a top and pant bund fashion house into one of looks being worn today. “Every outfit you can pull apart
ing the chances that women will combo, as well as dresses worn fashion’s top-selling brands since From a sales perspective, layers and take one piece and that is re-
see something they covet when over skirts. his January 2015 appointment of clothing, bags or jewelry in one ally relevant to the way that we
the styles arrive on racks and Trend-forecasting firm WGSN with a feverishly rococo aesthetic ensemble mean more merchandis- dress now. For me that is key, in-
shelves in a few months. refers to the eclectic, pile-on aes- that spans thrift stores, grandma’s ing opportunities. Some consum- dividuality.”

Two C
ith o
A mod ats
A Skirt W
s s Burber el at
AD re ry
ni’s Mar show in ’s recent
A model at Five B wears London
M ila n, where the A mode ags a
show in easure la check g vintage
theme was
‘tr Margiela t Maison ab
s two ’s s jacket ardine
hunt,’ ca rrie Paris wie how in ov
hooded er a
ea ring ld
bags whi le w bags, inc s five coat.
an oversized backpac luding a
k an
dress over bag on h d small
irt. er back.
a long silk sk

 Two Bags
A model in Milan
at Gucci carries
 Gloves With two bags, while
A Watch wearing a jacket
A model at Marc with a skirt and
Jacobs show in New slip. Gucci is
York carries two bags, credited with
a sport fanny helping spark
pack and a sport this trend.
sling, while loading
up on accessories
including a fringe
boa, turban, brooch,
gloves, necklace,
and a watch.

GETTY IMAGES (5)

PLAYLIST: Alice McDermott

COURAGE FROM ‘CATS’

Alice McDermott, 64, is postdoctoral fellow at the sunrise / I must think of a
a novelist and winner Albert Einstein Col- new life / And I mustn’t give in /
of the American Book lege of Medicine, and when the dawn comes.”
Award and National me to enjoy a string My parents didn’t really un-
Book Award. A three- of cheap weekends. derstand the whole writing-liter-
time Pulitzer Prize fi- In the evenings, we ary-novels thing. I think they
nalist, she is the author went to the Huntting hoped I’d soon be ready for law
of eight novels, includ- Inn and nursed a beer school, teachers college or moth-
ing her latest, “The or two. “Cats” hadn’t erhood.
Ninth Hour” (Farrar, opened yet on Broad- Over that summer, the lyric
Straus and Giroux). She way, but the London line haunted me so much that I
spoke with Marc Myers. production had, and wrote it in a notebook along with
Chris, the bar’s piano the pros and cons of going to law
I published my first player, sang “Mem- school. Deep down, I was deter-
novel in the spring of 1982. ory” at least once every set. mined to be a writer.
Though “A Bigamist’s Daughter” I was pretty glum about my I kept working on my second
received some nice, prominent prospects of making a living as a novel, “That Night,” which even-
reviews, it wasn’t a big seller. My novelist. Every time Chris got to tually was published in 1987. It
husband and I were still broke, the line, “I must think of a new sold well, and from then on, my
living in the suburbs of New life,” I imagined that Chris and career picked up.
York. “MEMORY” from “Cats” everyone else there was looking I did go to see “Cats” with
EVERETT COLLECTION

helped me push forward as a at me with pained sympathy. friends in the mid-1980s, but
novelist. In all fairness, the ballad was “Memory” didn’t have the same
In the summer of ’82, my par- musically pleasant. It was still emotional impact on me during
ents rented a house in East new then, before the song be- the show. The theater wasn’t as
Hampton, N.Y. The house allowed came associated with an actor in intimate as the Huntting Inn. Or
my husband, who was then a a cat costume: “I must wait for maybe it was the lousy seats. ELAINE PAIGE in 'Cats,' 1981.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | A9

LIFE & ARTS

ART REVIEW

Cosmopolitan
Korea
Drawn from some 600 holdings, the exhibition
reveals a rich global tradition
style or Buddhist paintings (the
BY LEE LAWRENCE
latter will feature in a future gal-
lery on Buddhism). What we see
Brooklyn, N.Y. instead are the portrait of an
AFTER FOUR YEARS of renova- 18th-century official wearing dis-
tions, the Brooklyn Museum is tinctive Korean garb and an 1811
gradually reintroducing its Asian depiction of a spirit shrine that
and Islamic art collections to the speaks of the predominance of
public, starting with “The Arts of Confucianism during the Joseon
Korea.” It draws on some 600 Ko- dynasty (1392-1910).
rean holdings, considered one of Ancestor worship was wide-
the largest and most varied mu- spread in Asia, and Koreans who
seum collections of its kind in the could not afford to build a shrine
U.S. And it is finally getting its used small paintings as stand-ins,
due. Thanks to grants from the with a blank space in the center
National Museum of Korea (part where family members affixed the
of a longstanding effort by South name of the ancestor they were
Korea’s government to showcase honoring. The work here, how-
the country’s cultural heritage), ever, is 5 ½ by 4 ½ feet and bears
the museum has more than tri- a permanent dedication to the
pled the size of its Korean instal- king and queen, leading scholars
lation and assigned it a promi- to believe it hung in a govern-
nent location: at the top of an ment office—one of many ways
open staircase with glass risers rulers encouraged good Confucian
that connects the Great Hall off behavior.
the main entrance to what will In a similar vein, a lavishly em-
be, once completed, the new suite broidered bridal robe tells of
of Asian galleries. 19th-century women passing
Joan Cummins and Susan L. down the ceremonial garment,
Beningson, the museum’s senior each time making repairs and

BROOKLYN MUSEUM (2)

and assistant curators of Asian covering the sleeves with clean
art, have used the boost in real paper. It is one of the objects on
estate to great effect. With about display acquired by Stewart Culin,
80 works, judiciously selected and Brooklyn’s first curator of Asian
thoughtfully displayed, they bring art. An ethnologist with a keen
out distinctive aspects of the col- appreciation for what objects re-
lection and Korean art generally. veal about culture, he
While the adjoining galleries established the institu- ‘Spirit Shrine,’ (1811), above, and a ewer in the shape of a lotus bud from the first half of the 12th century, left
are still being reinstalled, we tion’s Asian depart-
have to walk to the opposite end ment in 1903, trav- first installation of Korean works glaze. As a grouping of Goryeo ce- the first half of the 12th cen-
to find the start of the chrono- eled to Korea in in 1916. ramics shows, the range of de- tury—the lid’s detailed lotus, the
logical sequence. Many of the 1913, and cre- A century later, his successors signs exploded. luminosity of its celadon glaze,
fifth- and sixth-century works es- ated the highlight Korea’s distinctiveness As tastes changed, so did the the white-dot highlighting of flo-
tablish that the Korean penin- by giving ceramics pride of place. techniques. We are treated to, ral motifs, the torsion in the bam-
sula was not isolated. Thus, re- One display, for example, traces among others, 15th- and 16th-cen- boo-like handle, the white porce-
liefs the ingenuity of 12th-century tury buncheong ceramics with flo- lain cocoon and newly hatched
adorning a potters. We start with the ral motifs made by applying a slip butterfly. Making the point that
bronze mir- problem: The cloud motifs then scratching it off in places (a Korean creativity lives on, con-
ror emulate on one celadon vase are so technique called sgraffito); the temporary works bookend the in-
Chinese mod- fluid they border on messy, freewheeling drawing of a dragon stallation, and we see this mas-
els; the mak- illustrating the inability to on a 17th-century pot; a late 18th- terpiece against the backdrop of
ers of gold produce crisp lines with a wa- century or early 19th-century ex- “Ecriture No. 000308” (2000), an
earrings used tery clay or slip. Potters had al- ample of the beloved, off-kilter abstract painting in charcoal gray
a granulation ready learned from Chinese coun- white moon-jar; and a number of by Park Seo-Bo. The interplay be-
technique that terparts that, when they incised a blue-and-white porcelains that tween and within them brings out
traveled from design, the glaze pooled, creating borrow Chinese motifs but render the dance of restraint and free-
the Mediterra- the subtle differences in shade we them with a lighter, airier touch. dom, realism and abstraction that
nean along the see in a nearby gourd-shaped (To get a sense of this, compare permeates this elegant presenta-
Silk Road. But ewer. So, under the patronage of these with the porcelains in the tion of Korean art.
most of the inaugu- the Goryeo dynasty (918-1392), exhibition at the bottom of the
ral display primarily they experimented and hit upon a staircase, “Infinite Blue.”) Ms. Lawrence writes about Asian
stresses Korean origi- solution: Fill incised designs with Finally, pause at the entrance and Islamic art for the Journal.
nality. There are, for white or black clay, wipe off the to the gallery to study one of the
example, none of the excess, buff the surface, then collection’s prize possessions: an The Arts of Korea
collection’s Chinese- cover it with transparent celadon exquisite 10-inch-tall ewer from Brooklyn Museum

FILM

EARLY PRAISE FOR A TOUGH FILM ON CHILDHOOD

BY RICHARD TURNER

SEAN BAKER makes movies

about poor people, a noble effort
but sometimes a fraught one. Es-
pecially these days, filmmakers
like him must pick their way
through a political and cultural
minefield—and set off the occa-
sional explosion.
“I get attacked all the time,” he
says.
Mr. Baker isn’t complaining. His
latest independent film, “The Flor-
ida Project,” about “motel kids” on
the edge of homelessness in the
shadow of Walt Disney World, won
acclaim at the recent Cannes and
Toronto film festivals. Early re-
views have praised its warmth, re-
alism and lack of stridency. It fol-
lows a flawed young mom, Halley,
her daughter, Moonee, and her
wild-child friends, scraping by in
A24

$38-a-night single rooms along

gaudy, rundown Route 192 in Kis- Sean Baker’s new ‘The Florida Project,’ starring Willem Dafoe, is about ‘motel kids’ on the edge of homelessness in Central Florida.
simmee, Fla. The motel is close
enough to the Magic Kingdom that about an imagined backwater com- lawyer and a former preschool sciously keeps some details ting—a journalist or some other
they can see the fireworks show munity in Louisiana, was widely teacher. He went to film school at sketchy. kind of interloping character.
every night in the distance. praised and Oscar-nominated. But New York University and discusses The reasons for Halley’s trou- Fairly or unfairly, movies from
The new film mixes professional one critic called it “patronizing and Italian neorealism as easily as bled parenting aren’t spelled out. “Dances With Wolves” to “The
actors, notably Willem Dafoe, with borderline racist,” adding: “It senti- crystal meth. His earlier movies It isn’t clear why she is unemploy- Help” have taken heat for featur-
first-timers, like the child who mentalizes poverty and glosses over have looked at transgender prosti- able at the local theme parks, al- ing such “white saviors.” Mr. Baker
plays one of Moonee’s pals, discov- neglect.” tutes in Hollywood (“Tangerine”), though the piercing and the re- avoids them.
ered at a Target store. Mr. Baker That was nearly five years ago. porn actresses in the San Fer- splendent tattoos may be a factor. Mr. Dafoe’s long-suffering motel
found Bria Vinaite, who plays Hal- The climate is more highly nando Valley (“Starlet”) and un- Her own family appears to be out manager Bobby, trying to pacify
ley, on her weed-promoting, tat- charged today, amid raging debate documented immigrants and street of the picture, and it isn’t spelled his tenants and collect their bills
too-festooned Instagram account. about race, class, inequality, free hustlers in New York (“The Prince out when she had Moonee, but one so he doesn’t have to evict them,
Brooklynn Prince, who plays speech and cultural elites. of Broadway” and “Take Out”). can deduce that she was 15. “Do is a case in point. Mr. Baker and
Moonee, had a short resume: She “We’re living in an age of the One review of “The Florida Proj- the math,” Mr. Baker says. his writing partner Chris Bergoch
was 6 when the film was shot. The think piece,” Mr. Baker says. ect” complains that Mr. Baker, as a “I’m from outside most of these met several such managers from
movie is scripted but also impro- “Most filmmakers, if not all, come college-educated white male, is worlds I’m focusing on, and I feel the strip. One in particular helped
vised and filmed in documentary- from a place of privilege, if only wary of assuming too much about there’s an ethical approach to Mr. Dafoe emphasize that Bobby is
like style. It opens Oct. 6. because of the expense. Now his characters and “cannot fully making these kinds of films. My no saint, just a blue-collar guy
Along with this attention you’re being thought about in a fathom their inner lives.” biggest fear is that if you paint with a job to do. If he’s a father
comes scrutiny. Recent films different way. It’s about who can Mr. Baker says he understands your characters in, you could be figure to the children sometimes,
about the poor have been called tell these stories, who has owner- such criticism and has a few rules doing them wrong.” he’s a reluctant one who keeps a
exploitative and sentimentalized, ship of certain topics.” for trying to avoid it. Indeed, he Films about overlooked commu- professional distance. “Willem
too gritty and not gritty enough. Mr. Baker, 46, was born in Sum- doesn’t want to assume too much nities often use a kind of guide to knew never to get melodramatic or
“Beasts of the Southern Wild,” mit, N.J., the son of a trademark about his characters, and he con- help the audience react to the set- cheesy,” says the director.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK LETTERS TO THE EDITOR

The GOP’s First Reform Test Older Workers Face Mistaken Discrimination

T
he Republican tax “framework” is at- Chuck Schumer have been on a tour of rhetori- There is no getting around the fact well-paid older employees to retire
tracting the perennial criticism from cal excess about preserving the state and local that people are living longer and are early, creating opportunities for youn-
healthier and therefore can contribute ger employees. Perhaps the authors
the left, but the bigger question is deduction. They fear the wealthy, including
their skills and experience long past should write their congressmen and
whether competing clans on many of their campaign do- the age at which their parents and suggest they make “retiree medical”
the right can hang together to So long to low tax rates nors, would suddenly feel the grandparents left the workforce part of their new health-care plan.
pass reform that grows the if Congress blinks on full pain of what they owe. (“Let’s Agree on An Age to Retire,” KRISTI DINSMORE
economy. The GOP is already That exposure could make Review, Sept. 23). This is a win for Centerville, Ohio
showing cracks on eliminating the state tax deduction. state tax increases more diffi- employers and employees alike. Age-
the state and local tax deduc- cult to pass and blowout discrimination laws aren’t the barrier The authors propose to encourage
tion, but surrendering on this spending less sustainable. to hiring older adults; the barrier is the employment of younger people by
hoary carve-out could dilute the final product Some of Mr. Schumer’s benefactors may de- ageism. Outdated assumptions about implementing mandatory retirement
and compromise its growth impact. camp for Florida, but the hope is that states older workers’ abilities and energy ages. The good professors would be
Republican Rep. Pete King of New York would be forced to confront their spending ad- levels get in the way of hiring, even well advised to consult with their uni-
interviewing, older candidates for versity’s economics department,
tweeted this week that any tax package “must dictions. Call it a last-ditch effort to save New
jobs. The result is that any job search where they would learn that the
retain” the state and local deduction, which al- Jersey. for an individual over 55 takes an av- “lump of labor” theory that forms the
lows filers who itemize to deduct taxes paid to The press has noted that 33 House Republi- erage of 20 weeks longer than for a premise to their argument is widely
lower governments. The GOP framework didn’t cans hail from the top nine states for the deduc- person under 55. And employed older regarded as a fallacy by economists.
single out the state and local deduction for exe- tion as a share of income, but not all of them adults are disproportionately pushed If workers in their 60s are truly
cution, though everyone knows the intention are as parochial as Mr. King. Devin Nunes on out before they are ready to retire. less productive, as the authors sug-
is to eliminate the special treatment and plow the tax-writing Ways and Means Committee The Age Discrimination in Employ- gest, then the answer is simple: adjust
the more than $1.25 trillion savings over 10 represents parts of California’s Central Valley, ment Act is a toothless tiger and their pay and responsibilities as ap-
years into lower rates. where the average deduction is much lower should be strengthened, not further propriate. Let’s focus on policies that
This is good tax policy. The deduction is a than in L.A. or San Francisco. Mr. Nunes’s con- watered down. create jobs, rather than policies that
classic example of a tax preference that adds stituents like taxpayers everywhere would ben- ANN MACDOUGALL trade one worker for another under
New York the dubious assumption that employ-
complexity to the code and subsidizes some efit far more from lower rates and faster eco- ment is a zero-sum game.
Americans at the expense of others. The prime nomic growth. I am in the same age group as our RAYMOND KUBIAK
beneficiaries are folks who live in states with The reality is that Republicans cannot pre- recent presidential candidates, and I Boston
high tax burdens like California, New York and serve the deduction and pass pro-growth re- am fighting to work as an educator,
New Jersey—or, respectively, the 48th, 49th and form that satisfies the arcane procedural re- attorney or at anything else I can find As an older worker who has re-
50th tax climates in the U.S. in the Tax Founda- quirements of Congress. The GOP is looking that uses my skills from those prior cently been hired, I can tell you that
tion rankings. Six states swallow more than half to pay for cuts by streamlining preferences, careers. Please don’t tell me to retire the notion that older workers start at
the cost, and the credit runs the federal fisc $100 and the $1.25 trillion over 10 years from elimi- or threaten me with Social Security a high salary and are guaranteed both
billion a year in lost revenue. nating the state and local deduction would fi- reform. I want to work. continued employment and regular in-
And zoom in closer: The credit tends to bene- nance a more than 10-point cut in the corpo- EILEEN FERRIS creases is nonsense. The market de-
Newington, Conn. termines starting pay, and results de-
fit the wealthiest people living in the most afflu- rate rate.
termine any increases and continued
ent parts of progressive outposts, not least be- No other loophole would save as much As an executive coach, I know doz- employment—as with anyone else.
cause nine in 10 filers earning north of $500,000 money. Killing or capping the mortgage-interest ens of senior-age leaders who could Corporate America has mastered
a year itemize. Some 88% of the benefits flowed deduction would bring in a good haul, but that replace their income were they to re- the art of getting rid of older workers
in 2014 to households earning more than sop to the housing lobby has been classified as tire tomorrow, but who couldn’t af- who aren’t as sharp or don’t justify
$100,000, according to Congress’s Joint Commit- politically untouchable. The GOP will also have ford, or in some cases couldn’t get, in- their pay, no matter what age-discrim-
tee on Taxation. A puny 1% went to filers who to buy off conservative redistributionists like dividual health insurance to “bridge” ination laws there are. I’m not saying
earn less than $50,000, as the Tax Foundation’s Utah Senator Mike Lee, whose King Size child them until they are eligible for Medi- that is right or wrong, it just is.
Jared Walczak noted in a March paper. tax credit could cost another $1 trillion. care. Companies used to offer “retiree KIRK SCHLUP
In New York County, N.Y., home to Manhattan, If the GOP can’t kill the entire state and local medical” that made it possible for Woodbury, Conn.
the average deduction is more than $24,000, ac- deduction, perhaps a compromise is possible.
cording to Tax Foundation county analysis. In Since the deduction so overwhelmingly flows
the Bay Area’s San Mateo County the write-off to the affluent, Republicans could work up a so-
tops $15,000. Yet further inland in California’s lution that produced most of the revenue while Abbas Shows No Sign of Wanting Real Peace
Merced County the average deduction plummets protecting low and middle-income taxpayers on In their op-ed “How Do Palestinians “We welcome every drop of blood
to less than $1,700. Taxpayers in Florida, which some portion of their property taxes. Define ‘Terrorism’?” (Sept. 12), Jona- spilled in Jerusalem. . . . With the help
doesn’t inflict an income tax on residents, can i i i than Schanzer and Grant Rumley call of Allah, every shaheed [martyr] will
take a typically much smaller write-off for their All of this gives the GOP an opening to turn on the Palestinian Authority to define be in heaven, and every wounded will
sales tax payments. the class-war argument in their favor: Since terrorism as a first step toward dis- get his reward.” This was an un-
Mr. King said in his tweet that “hard working when do Mr. Schumer and Elizabeth Warren op- couraging it and comply with the abashed endorsement of terrorism. He
New Yorkers must not be taxed twice,” but state pose raising taxes on the 1%? But more impor- soon-to-be-enacted Taylor Force Act. also dehumanized Jews in his address,
The flaw in their proposal is that it saying that the Temple Mount, the
and federal budgets are distinct. Federal taxes tant, Republicans must eliminate the deduction
presumes “moderate” Palestinian Au- Church of the Holy Sepulcher and “ev-
pay for the military, for example, while state if the party wants to deliver on its stated goals thority President Mahmoud Abbas ac- erything [in Jerusalem] is ours, all
and local taxes finance public education—or in of simplifying the code and unleashing growth. tually wants to rein in terrorism. Yet it ours,” and Jews “have no right to des-
New York and California’s case, teachers unions The alternative is a limp tax cut that doesn’t was Mr. Abbas, himself, who incited ecrate them with their filthy feet and
and public-pension liabilities. lift the economy. The state and local fight is a the current wave of deadly Palestinian we won’t allow them to.”
That’s why Democrats like Minority Leader crucial test of the GOP’s political sincerity. stabbings and car rammings of Israelis, And lest one forget, Mr. Abbas’s his-
Americans and others that included tory of supporting terrorism goes back
the murder of Taylor Force. On Sept. decades.
Paying for Standing Rock 16, 2015, during that year’s Jewish
High Holy Days, Mr. Abbas declared:
STEPHEN A. SILVER
San Francisco

T
he Standing Rock protests ended seven mon law enforcement from 11 states for backup.
months ago, but the saga is far from More than 750 protesters were arrested, and at
over. On Monday North Dakota’s De- least 107 of those charged have pleaded guilty The Truth Is Ever Green, but Not at Evergreen
partment of Emergency Ser- or been found guilty, some on Regarding Jillian Kay Melchior’s and certainly didn’t warrant the com-
vices announced that taxpay- Dakota Access Pipeline multiple counts. “Inside the Madness at Evergreen pletely over-the-top condemnation of
ers will have to pay about $43 protesters cost North Dakota’s state court State” (op-ed, Sept. 22): I’m unable to law school deans supposedly speak-
million in expenses accrued as administrator said the num- understand how our government in- ing in defense of those fragile stu-
the state struggled to respond taxpayers $43 million. ber of criminal cases filed in stitutions became incubators of hate, dents who may have been trauma-
to protesters. Morton County surged by but after reading the commentaries tized by hearing such obviously
Between 8,000 and 10,000 some 14%, at a time when the about Evergreen College and “bour- beneficial advice.
people camped out to protest the Dakota Access clerk of court’s office was already understaffed. geois norms,” I can’t escape that con- In a similar vein, when a respected
Pipeline, many from outside the state. Locals fre- To this date 323 protest-related cases are still clusion. professor questions the value of iden-
When someone speaks the inconve- tity politics, the massive overreaction
quently reported protesters who had trespassed open and pending. The state had to put aside
nient truth that people are generally of the student body and faculty is
on their land or stolen property. At state offices $2.4 million to provide public defenders for more successful if they follow a pat- reminiscent of Mao’s Red Guards.
the phones rang off the hook; throughout the protesters, though not all of that money has tern of education, marry before hav- Those who don’t exactly conform to
233-day protests almost 90,000 people called to been spent. ing children and avoid drugs and the students’ orthodoxy need to be
discuss the pipeline. A large portion of these All of this undermines the Standing Rock crime, one wouldn’t expect it to gen- shamed, vilified and physically
calls were hostile or abusive, and state employ- protesters’ claims that they were “peaceful and erate a hysterical backlash about rac- threatened for daring to speak truth
ees had to listen, screening for threats. prayerful.” The left threatens democracy when ism, bias and white supremacy. These to power. All that’s missing was
The Morton County Sheriff’s Department re- it embraces violence and vandalism, and the markers of success apply universally Mao’s “Little Red Book” being bran-
counted how rioters threw stones, feces and government has to spend money to keep rogues dished by the students. I can only
Molotov cocktails at cops, obstructed roads, set under control. North Dakotans will cover most imagine that the self-loathing ex-
fires and even rode on horseback behind a herd of these costs, but the Department of Justice The Rescue Boat Decision pressed by the white students for
their culture has been inculcated by
of bison, “attempting to stampede them toward also provided the state with a $10 million grant, Wasn’t Mine, but Was Right the schools, and now those teachings
law enforcement.” Protesters significantly out- leaving taxpayers nationwide on the hook for I am the subject of the article “A are coming back in the form of viru-
numbered local authorities, who had to sum- these criminal antics. Doctor’s Hard Decision” (page one, lent hate for any who disagree.
Sept. 16). I fear that readers will mis- GEORGE HARRISON
interpret the moral dilemma we La Selva Beach, Calif.
Trump’s Latest Casualty faced. We didn’t choose to save one

L
life over many. The Golfo Azzurro
oyalty for Donald Trump too often is a And if taking private jets is a firing offense, didn’t leave those refugees to drown Family Has Its Own Tempo
one-way escalator—up but not down— there will soon be many empty first-class seats in an effort to save just one man.
That wouldn’t have been morally de- Regarding the Pepper . . . And Salt
and the latest to discover this is Tom in Washington. A 2013 Government Account- cartoon of Sept. 22: Lethargy may run
fensible. The GPS coordinates of that
Price, who resigned late Fri- ability Office report found
drifting life raft were known to other in some families, but it walks in mine.
day as Health and Human Ser- The President doesn’t that then Attorney General rescue vessels in the vicinity besides BILL DUTCHER
vices Secretary. Mr. Trump like cabinet members Eric Holder and FBI Director ours, vessels equally competent to ef- Norman, Okla.
had all but run him out Friday Robert Mueller used govern- fect rescue.
afternoon by saying “I’m dis- who get bad press. ment jets to take personal Please note that the decision to
appointed in him” and that he trips, which they reimbursed sail north to Lampedusa was taken by Pepper ...
would determine Mr. Price’s at a rate comparable to com- Proactiva’s head of mission, not me.
fate “sometime tonight.” The cabinet member mercial flight prices. It was a carefully considered, profes-
And Salt
took the message and got out before he could Our guess is that Mr. Trump was sore at Mr. sional and in my view utterly proper THE WALL STREET JOURNAL
hear “you’re fired.” Price over the failure of ObamaCare repeal, and decision. The commitment with which
Mr. Price has been taking media heat for fly- he saw the travel flap as an excuse to send him the entire crew of the Golfo Azzurro
accepted the challenge was moving.
ing on private jets, and he surely should have packing. Mr. Price was recommended to Mr.
The questions to consider are:
known better than to give his enemies a sword. Trump as a veteran of the House who could ma- Should our vessel have been on
Yet Mr. Price had said he would reimburse the neuver repeal through Congress. Repeal did standby off the Libyan coast in the
government for the cost of his private air pass the House, only to fail in the Senate. first place? Having stationed our-
travel, cutting a check for nearly $52,000. Mr. Now Mr. Trump will have to find a replace- selves there, should we have taken a
Trump shoved him out the aircraft door any- ment even as HHS faces crucial regulatory de- 20-hour leave of absence to take this
way, saying “I was disappointed because I cisions on ObamaCare. Mr. Price knows the law one bloke up to Lampedusa?
didn’t like it cosmetically or otherwise.” and had invested nine months trying to figure JOHN R. VALLENTINE
Perhaps the President thinks dumping Mr. out the bureaucratic traps. Mr. Trump in par- Sydney
Price will send a populist message, but we ticular will need a nominee who already under-
wonder. Mr. Price is merely a political appe- stands the waiver power that the executive Letters intended for publication should
tizer. His resignation is motivation for the branch has under the Affordable Care Act. be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
swamp denizens to go after others in the Perhaps he can coax former Oklahoma Sena- or emailed to [email protected]. Please
Trump Administration on whatever issue they tor and medical doctor Tom Coburn to take the include your city and state. All letters
can find. Mr. Trump can expect to be answer- job. But if Mr. Trump keeps treating his cabinet are subject to editing, and unpublished
ing questions soon about how this or that cabi- officers like “The Apprentice” cast, he might letters can be neither acknowledged nor “I usually only fist-bump
returned.
net travel differs from Mr. Price’s. find that no one wants to work for him. on the first deal.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | A11

OPINION

Partisanship Is Breaking Both Parties

How they tried to get the bills But that was another world—a
through suggests they are living in a broadly popular president, both par-

© BILL CLARK/CONGRESSIONAL QUARTERLY/NEWSCOM VIA ZUMA PRESS

dream. The dream was that once ties strong, each working, however
they held the House, the Senate and reluctantly, with the other.
DECLARATIONS the White House, they would be able As strange as Mr. Ryan’s enacting
By Peggy Noonan to call the shots, crush the foe, bully of a happy warrior’s joy was the

T
their way through. They thought Democrats’ response. They reverted
he subject is realism. It in- they would finally be able to do what to their own antique playbook, tak-
volves seeing clearly your the Democrats did when President ing potshots, being unserious. The
moment in time and where Obama and the Democratic Congress Republican plan is “a massive wind-
you are within it. We have bullied through Obamacare. fall for the wealthiest Americans,”
a heck of a time with this. That was a mistake. What the Dem- said Minority Leader Chuck
Our dreams, hungers and illusions ocrats did shouldn’t be emulated. Schumer. “It seems that President
get in the way. Sen. John McCain, who basically Trump and Republicans have de-
But I’ve never seen such a lack of killed the two Republican bills, did it signed their plan to be cheered in
reality among our two great political based on a central insight as to the the country clubs and the corporate
parties in Congress. facts of the moment and the issue: boardrooms.” It should be called
Their own survival as parties re- The path to a new health-care law “wealth-fare.” Sen. Bernie Sanders
quires bipartisanship—concrete runs through the Democrats. The said the plan is “morally repugnant
achievements and progress. They path to a bill better than Obama- and bad economic policy.”
have to work together and produce! Care—and it would have to be bad Republicans announce their tax-reform plan, Sept. 27. But the tax code is too big and too
Nobody likes them. The biggest indeed to be worse than Obama- complicated, as Mr. Ryan said. It
“party” in America is those who call Care—runs through the Democrats. architects that it was marketed to be accepted by America. It will have would do the country good to see it
themselves independent. Gallup has Changing one-sixth of the American take advantage of “the stupidity of to be a compromise that comes from improved.
economy cannot be successfully done the American voter,” and the revela- both parties or it will not pass the Both parties are breaking and bro-
without them. The American people tion that the central promise—“If Kimmel test, the nonsensical but ken. They both need a win. They
Republicans fail again will never accept a health-care law you like your doctor you can keep powerful showbiz bar such a bill could recover some of their standing
that is not backed by both parties. your doctor”—was a lie. must now clear. That means it will be with a bipartisan victory. It would
on health care, while That means regular order—hearings, The bill failed on its own terms, more liberal than the Republicans show America the two-party system
Democrats refuse to debate, negotiations—as Mr. McCain and it is still the law of the land. want, and more expensive. itself can win and produce something
has said. When Republicans tried to replace it, The Democrats will be hellish in needed. This would reinforce the po-
get serious about taxes. The Republicans failed because they tried to do just what the Demo- negotiations. They will not call it “re- sition of both parties. It would sug-
they tried to do what Mr. Obama, crats did—hold party-line votes on peal and replace”; they’ll call it “re- gest they’re needed! If they can’t pro-
Speaker Nancy Pelosi and Majority bills that few in the electorate fully pair and reinforce.” They’ll be de- duce something big together, more
the Democrats’ and Republicans’ fa- Leader Harry Reid did, passing understood. The difference is the manding. And this is unjust. They Americans will become certain they
vorability each at about 40%. Both ObamaCare on a party-line vote. But electorate had previously been caused the problem in the first place! are not.
parties are internally riven, warring bills that make great changes in how scalded. They’re not in a trusting They should be feeling chastened; Meanwhile, thousands of K Street
and ideologically divided. Neither is Americans live, such as Social Secu- mood. they should be desperate to create a tax lobbyists will be crawling the
as sure as it’s been in the past of its rity and Medicare, must always have Health care is experienced now as fix. Instead they’ve been amusing halls trying to affect the shape of the
philosophical reason for being. Both broad, two-party support. The Demo- a fully national issue, and there are themselves watching the hapless Re- bill for their clients.
have to prove they have a purpose. crats pushed ObamaCare without signs America is tilting left on it. (A publicans blow it again. They should Everyone is acting as if they don’t
Otherwise they will in time go down, fully understanding what the bill bipartisan health-care bill might help amuse themselves less. know what time it is, or what posi-
and it may not take that long. even contained. “We have to pass the blunt the coming movement for sin- Now the Republicans turn to tax tion they themselves are in.
Both parties go forward as if they bill so that you can find out what is gle payer.) reform. Again they move from a America is in trouble, with huge
are operating in a pre-2016 reality. in it,” said Mrs. Pelosi, mindlessly Democrats have to be part of fix- weakened position. They’re going problems. The people need improve-
But the election, now almost a year and in a way accurately: They were ing ObamaCare. And though they forward without the momentum of ments in health care, in the tax code.
ago, should have changed so many content to let regulators and admin- should be in a weak position, having victory, without the confidence of re- They’re desperate for is a sense that
assumptions. For instance, when the istrators figure out the implications lost the congressional majorities and cently demonstrated skill. As he un- improvement is actually possible.
Republican nominee promised not to of everything. the White House, they’re holding veiled the plan this week, Speaker This is no time for Democrats to
cut entitlements, his crowds—Repub- But fierce pushback followed—the strong cards. The Republicans have Paul Ryan wore a weirdly triumphant be small, tatty and cheap, to do the
licans, Democrats and indepen- tea party uprising grew; the Demo- crashed and burned twice, and smile. “Today,” he said, “we are tak- old class warfare, to issue one-liners
dents—cheered. crats lost the House in 2010. Then there’s no reason to think they’ll ing the next step to liberate Ameri- instead of thoughts. They should
Health-care reform this week went came the failure in 2013 of the web- magically succeed next time. cans from our broken tax code.” He wake up and get serious.
down, again. The Republicans did not site on which the entire program de- Health-care reform will have to compared this moment to 1986, It’s weird to see everyone going
have the votes in the Senate, again. pended, the admission by one of its come from both parties or it will not when Ronald Reagan won tax reform. through the old motions, dream-like.

A Yankee Visits Charlottesville, Where Gen. Lee Is Under Cover

By Allen C. Guelzo Because the Charlottesville Lee went buffs as markers of unit positions room, and Berlin’s Olympic Stadium, to the campus deniers of free-speech:
up in 1924, at the apex of Jim Crow, during the battle. which the Nazis used as a propaganda They understand monuments and

T
Charlottesville, Va. it is easy to suppose that it was de- Image-smashing undoubtedly has theater in 1936, has survived to host speech solely as manifestations of
his city seems to be in mourn- signed to reinforce white supremacy. its satisfactions, but they tend to be the World Cup—all without much power, which only can be confronted
ing. On the campus where But the dedication ceremonies fea- short-lived. Pulling down statues of more notice than the occasional his- and silenced by power.
Thomas Jefferson planted the tured high-school bands, cadets from George III, Stalin and Saddam Hussein torical footnote. On a recent humid evening in Char-
“academical village” that grew up to the Virginia Military Institute, uni- was understandable when done by There have been times and places lottesville, I walked past the Lee
be the University of Virginia, the uni- versity faculty and the American Le- those who actually lived through their where monuments really were asser- statue, huddled in its improvised
versity’s statue of Jefferson was gion—not the Ku Klux Klan. outrages. Otherwise, we look with tions of white Southern defiance, like burqa. He fought for a cause that ran-
briefly swathed in black plastic. In One of the dedication speeches shudders on past iconoclasts—the the cemetery obelisk in Colfax, La., cel- kles me to the soles of my abolitionist
nearby Emancipation Park, a 26-foot- celebrated Lee for surrendering at ones who burned the Library of Alex- ebrating the perpetrators of the 1873 boots. But the armies that marched at
high equestrian statue of Robert E. Appomattox and averting “scattered andria, or who smashed religious stat- Colfax Massacre who were “fighting his orders also melted away at his or-
Lee remains swathed in black, mostly guerrilla warfare for many years” and ues during the Protestant Reforma- for white supremacy,” as the monu- ders a long time ago; and the statue is
to prevent defacement. In the wake for pointing Southerners “in the tion—as puritanical idiots. ment proclaims unashamedly. immobilized, solitary, powerless. As
of the Aug. 12 riot between fanatics shadows of the defeat of war” toward David Rieff, in his book “In Praise of But does the Lee monument serve Jefferson once said about the reli-
of the neo-Nazi right and the new “the star of hope with its radiant Forgetting,” suggested that “a decent the same purpose? The answer would gious dissenter, he neither picks my
Red Guards of the Antifa left, an un- promise and prophecy of the tri- measure of communal forgetting” be yes only if we believed that 1865 pocket nor breaks my leg. So with Lee.
easy atmosphere prevails throughout umphs of peace.” Those words came about historical offenses may be “the and 1873 were yesterday, and that ev- I can let him alone.
Charlottesville, as if awaiting, like from the Rev. M. Ashby Jones, a Bap- sine qua non of a peaceful and decent erything about the past is a state-
Pompeii, yet another eruption. tist minister whose opposition to society.” Sometimes the best revenge ment of power (or a clever conceal- Mr. Guelzo is a visiting professor at
lynching made him a target of the is living well. Hitler’s refuge in the ment of power) in the present. This is Princeton’s James Madison Program
Klan. The pedestal read only “Robert Obersalzberg today functions as a tea what links the monument-smashers in American Ideals and Institutions.
Image-smashing Edward Lee,” and the statue itself
was sculpted by Italian-born Leo Len-
undoubtedly has its
satisfactions, but they
telli and cast in Brooklyn, N.Y.
There is a difference between
monuments and memorials. Monu-
Trump Bullies the NFL Because It’s Easy
tend to be short-lived. ments invite us to see exemplars. Me- Many worry that agreeing among themselves to end to fear the police, but the issue is
morials are simply remembrances Donald Trump’s the politicization of the anthem. Let complicated. Reconcile these state-
that something happened in this tweets might in- the anthem go back to being a non- ments: Blacks are nearly three times
As a Yankee I find it a little diffi- place. Often memorials are state- flame the North event. as likely as whites to be killed by
cult to grasp why monuments to Lee ments of mourning, occasionally of Korea conflict. Alas, Sports Illustrated this week police, yet a white homicide victim
are here in the first place. He lost, repentance, but they are not about Maybe his critics supplied a metaphor for the league’s is 2.6 times as likely as a black ho-
and if there is one sin American cul- power or approval. That’s why we should step back hopeless search for the right politi- micide victim to have been killed by
BUSINESS
ture still prefers to bury from sight, don’t take the Donner Party Monu- with renewed ad- cal correctness to make its prob- police.
WORLD
it’s losing. Worse, Lee committed ment in Donner Memorial State Park miration for the lems go away. Its “unity” cover only The explanation: A black person
By Holman W.
treason against the flag and the Con- as an incitement to cannibalism. man and his subtle provoked criticism—for the pres- is so much more likely to be a homi-
Jenkins, Jr.
stitution. And behind that is the ugly The line between memorials and arts. Just notice ence of Mr. Goodell, the absence of cide victim in the U.S.—nearly seven
truth that the Confederate cause was, monuments is not always clear. The how thoroughly his Colin Kaepernick, a dearth of fe- times as likely—that police shoot-
when all the rhetorical chaff is swept Union statuary that populates the tweets have reduced the mighty males, an excess of whites. ings are a smaller proportion of
away, designed to protect chattel Gettysburg battlefield was originally NFL to impotence. Ditto Aaron Rodgers’s invitation black homicides than white
slavery, the singular birth defect of intended as a monument to the righ- Indeed, a bystander wonders to Green Bay fans on Thursday homicides.
the American republic. teousness of the Union cause. At the with what whimsical malice this night to link arms in the stands. It Not that the politics of race rela-
But statues of Lee don’t baffle me dedication of the monument to the aged man-child, blessed with super- fell almost as flat as an Odell Beck- tions is a special competence of the
more than the Whiskey Rebellion 84th Pennsylvania Infantry in 1889, powers, decided the league should ham Jr. end-zone antic. NFL—any more than North Korea
statue in Washington, Pa., or the Dorr the speaker described the Civil War be the newest target to be emascu- Mr. Trump is disdained for low policy or health-care policy, though
Rebellion Museum in Chepachet, R.I., as “the greatest of rebellions against lated and confounded by his 140- cunning, but low cunning beats no players have opinions on these mat-
or the bust of Aaron Burr in the U.S. the grandest of governments.” By the character missiles. cunning. Mr. Trump said nothing at ters too.
Senate Chamber. They all remember middle of the 20th century, visitors Actually one doesn’t wonder: It his Alabama rally or in his tweets The most deadly omen for the
treasons committed in the past, but I were more inclined to regard the was Roger Goodell. Mr. Trump knows about race or police shootings. league, however, the one that should
pass them by with a shrug. Time has monuments as memorials of a great weakness when he smells it. He said only that football players strike fear in Mr. Goodell, owners
rendered them harmless. and tragic sacrifice. Today they are Mr. Trump landed a smart bomb should stand for the anthem, a sen- and players alike, was an article by
Monuments can also be deceptive. mostly used by tourists and history on Tuesday with his tweeted sug- timent widely supported in polls. Roxanne Jones, a founding editor of
gestion that the league should ban First Amendment rights also apply ESPN magazine and former vice
protests during the national an- to the league and team owners. president of the ESPN network. She
them—thereby making it impossible They are under no obligation to declared, “I found a reason to feel
PUBLISHED SINCE 1889 BY DOW JONES & COMPANY for Mr. Goodell to enact such a ban subsidize a platform for player po- good about watching football again,”
Rupert Murdoch Robert Thomson and thus reverse the league’s plum- litical expression. It is not censor- as if the salvation of the game lies
Executive Chairman, News Corp Chief Executive Officer, News Corp met toward the abyss. ship. The NBA requires its players in picking political fights with large
Gerard Baker William Lewis Mr. Goodell could have fairly to stand respectfully for the an- chunks of its fan base.
Editor in Chief Chief Executive Officer and Publisher said, It’s time to get back to foot- them. A mystery without an answer, of
Matthew J. Murray DOW JONES MANAGEMENT: ball. Everyone had their say last Mr. Trump wins this argument course, is how this Trumpian sally
Deputy Editor in Chief Mark Musgrave, Chief People Officer; Sunday. The Cowboys knelt before hands down, which is why critics actually advances any national inter-
Edward Roussel, Innovation & Communications;
DEPUTY MANAGING EDITORS:
Anna Sedgley, Chief Operating Officer & CFO;
the anthem and then stood, the resort to attacking straw men. “Yes, est that Mr. Trump was elected to
Michael W. Miller, Senior Deputy;
Thorold Barker, Europe; Paul Beckett, Katie Vanneck-Smith, President Steelers and Seahawks chose to stay Trump’s True Aim Is to Inflame Ra- advance. A president referring to
Washington; Andrew Dowell, Asia; OPERATING EXECUTIVES: off the field, etc. cial Tensions,” insists the headline fellow citizens as SOBs in a televised
Christine Glancey, Operations; Ramin Beheshti, Product & Technology; Players have every right to express over an Al Hunt column at speech is also a new low that hope-
Jennifer J. Hicks, Digital; Jason P. Conti, General Counsel;
Neal Lipschutz, Standards; Alex Martin, News; Frank Filippo, Print Products & Services; their opinions in all the venues open Bloomberg. fully won’t soon be surpassed.
Shazna Nessa, Visuals; Ann Podd, Initiatives; Steve Grycuk, Customer Service; to them, but not here. This league CNN reporter Coy Wire, himself a Still, with trepidation, the world
Matthew Rose, Enterprise; Kristin Heitmann, Transformation; cannot afford to become an obliga- former NFL player, claimed on-air awaits to see which power or princi-
Stephen Wisnefski, Professional News Nancy McNeill, Advertising & Corporate Sales;
Jonathan Wright, International tory weekly stage for the divisive po- (emphasis added): “President pality the colossus of the White
Paul A. Gigot, Editor of the Editorial Page;
Daniel Henninger, Deputy Editor, Editorial Page
DJ Media Group: litical cause of the moment. Trump urged NFL owners to fire or House Twitter account decides to
Almar Latour, Publisher; A different NFL commissioner, suspend any NFL player who confound and humiliate next. We be-
WALL STREET JOURNAL MANAGEMENT: Kenneth Breen, Commercial
Suzi Watford, Marketing and Circulation; Professional Information Business: with a less embarrassing history, kneeled during the anthem in pro- gin to feel sorry for Kim Jong Un.
Joseph B. Vincent, Operations; Christopher Lloyd, Head; might have been able to play this test of racial injustice.” i i i
Larry L. Hoffman, Production Ingrid Verschuren, Deputy Head role without appearing to truckle to In order to get the better of Don- A version of Wednesday’s column
EDITORIAL AND CORPORATE HEADQUARTERS: the Twitter-bully of the White ald Trump, they must put words in confused Douglas Durst with his
1211 Avenue of the Americas, New York, N.Y., 10036 House. As it is, NFL players would his mouth. brother Robert. Apologies for the
Telephone 1-800-DOWJONES
do the league a favor by informally Black Americans may have reason error.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

LIFE & ARTS

WHAT’S YOUR WORKOUT? | By Jen Murphy

Yoga Too Easy? Try It on Water

An Oakland food executive stays centered with morning yoga sessions on her paddleboard on San Francisco Bay
WHILE LISA CURTIS was getting
her food startup off the ground in The Scaredy Cat’s
2013, she learned two important Guide to SUP Yoga
lessons: She needed to find bal-
ance and she couldn’t be scared to If a backbend on land sounds
take risks. Stand-up paddleboard- intimidating, then getting upside
ing seemed like the perfect work- down on a stand-up paddleboard
out to reinforce both. over undulating waves probably
“Paddling is like a metaphor for sounds bonkers.
life,” says Ms. Curtis, who is 29 But the challenges you’ll expe-
years old. “It teaches you to find rience on the water will actually
your center even amidst the increase your strength, stability
waves. And the worst that happens and focus in your mat-based
is you fall in the water. It’s good to practice, says Shannon Paige, a
do something that keeps you a bit SUP yoga instructor and co-
on the edge.” owner of Earth Yoga Studio in
Ms. Curtis’s company, Kuli Kuli, Boulder, Colo.
makes bars, powders and teas “Lower postures are steadier
made from moringa, a nutrient- than taller postures,” Ms. Paige
dense plant she discovered during says. “Practice seated poses for
her time working in Niger for the flexibility and get used to the
Peace Corps. As Ms. Curtis went movement of the board beneath
through rounds of fundraising, she you before you take the same
found her time for workouts shapes upward to your feet.” The
shrinking. more points of contact you have
Rather than choose between on the board, the less likely you
yoga and stand-up paddleboarding, are to fall, she says. “A narrower
she combined her two fitness pas- stance will be more challenging,
sions. Ms. Curtis lives a 10-minute so start with wider feet to build
walk from the San Francisco Bay confidence.”
near Oakland’s Jack London Ms. Paige says if you feel

JASON HENRY FOR THE WALL STREET JOURNAL

Square. “It was the perfect break Lisa Curtis performs tree pose on her paddleboard near her home in Oakland, Calif. wobbly, set a point for your eyes
from the stress of getting a to focus on. “A steady gaze is es-
startup off of the ground, and way quences. body position. “You’re always ask- Salmon River in 2014 and now aims sential for balance,” she says. The
more exciting than running,” she “When you do yoga on a paddle- ing yourself, ‘If I shift my weight, to do a white-water SUP trip three worst thing that can happen is
says. “Trying to do downward-fac- board, it’s less about perfect form will it rock the board too much and to four times a year. “The adrena- losing your balance and ending
ing dog or side plank on a board and more about feeling what is cause me to fall into the water?’ ” line rush is incomparable,” she says. up in the water. “Take the fear
instantly erases any work right for my body,” she says. “I’ve Ms. Curtis occasionally paddles out of the unknown and practice
thoughts.” practiced yoga since high school, with her husband, Trenton Arthur, The Diet jumping off and climbing back on
Now that her company has and postures I thought I’d mas- who kayaks. “I like the core and “I travel a lot, so it helps to be a the board. Once you do, the fear
grown to 10 people, she uses stand- tered, like warrior one and two, leg engagement of SUP,” she says. creature of habit,” Ms. Curtis of falling will no longer distract
up paddleboarding, also known as feel so difficult on the water.” “Plus, you can see more standing says. In the morning, she makes your focus.”
SUP, for team-building. “It’s a fun She says mastering tree pose, on a paddleboard versus sitting. oatmeal topped with a variety of
team experience and a great confi- where you balance on one leg I’m always spotting cool birdlife toppings such as moringa, goji
dence-builder,” she says. while the opposite foot rests on and sometimes even seals.” berries, chia seeds and almond or parel, she’d rather buy spandex at
the standing calf or inner thigh, is She still tries to fit in yoga ses- sunflower butter. Salads are her Costco than spend $60 on a fancy
The Workout a new accomplishment. “If you sions on the mat. She has a yoga go-to lunch on the road. She likes yoga brand. She bought her
Ms. Curtis likes to stand-up pad- think balancing on one foot on the space in her home and tries to to mix salads with bell pepper, Jimmy Styks stand-up paddle-
dleboard in the morning, usually ground is challenging, try it on the meditate or practice yoga for at tofu and nuts. Vegetable stir fries board at Costco for $200. Other
around 8 a.m., when the water is water,” she says. “I’ve finally got- least 10 minutes a day, or she are a staple for dinner. than earphones, she prefers her
calm and there is less boat traffic. ten used to kayakers snapping streams classes from the website workouts gadget-free. “People get
She starts with 15 to 20 minutes of photos of me.” Yoga With Adriene. The Gear & Cost so caught up in tracking steps and
paddling, which she says calms her Ms. Curtis says practicing in the Her new obsession is stand-up “I’m a big Patagonia fan,” she calories,” she says. “I like my
mind and works her core. She then water requires her to be much paddleboarding over white-water says. She likes Gaiam yoga mats, workouts to be more meditative
goes through a few yoga se- more aware of her alignment and rapids. She first tried it on Idaho’s but says when it comes to ap- and less gamified.”

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. 33 Outburst of
-15 1 2 3 4 5 6 7 8 9 10 11 12 13 6 Evil count in laughter
-10 Lemony Snicket
-5 14 15 16 35 Sow’s mate
books
0 36 Misplace
17 18 19 7 Bruce of “The
5 37 It ends when
j
Beijing Hateful Eight”
10 20 21 the parachute
Seoul 8 Masters of
15 opens
Shanghai
h h Tokyo 20
22 23 24 25 26 meditation
38 David’s weapon
New D
Delhi
h 25 27 28 29 30 31 9 Musical mix of
Riyadh
h 30 two songs 39 Nonhuman
lk t
Kolkata Taipei
Karachi
h 32 33 34 member of the
35 10 Neighbors of
Hong Kong
ong Kon family
Hanoi
Manila 35 36 37 38 Ethiopians and
Bangkok
k k 42 Acropolis
Warm Sudanese
39 40 11 Card with the setting
Cold
Kualaa LLumpur
p
41 42 43 44 45 46 47 most pips 43 Taken in
Stationary
Singapore
p 12 56-Down, to 45 Humiliating
48 49 50 51 failure
Showers Fernando
Jakarta
k
52 53 54 13 Scathing review 46 Deal with, as a
Rain clogged drain
55 56 57 58 19 They sometimes
T-storms clash 47 Violin bow
59 60 61 21 Quick-cooking applications
Snow noodles 49 Sandwich
62 63 64
Sydney
yd eyy 24 Young red shops
Flurries
b
Melbourne Muppet 51 Assertion
Ice MAKING THE BED | By Theresa Schmidt 25 Like rush-hour 53 London art
Global Forecasts City
Today
Hi Lo W
Tomorrow
Hi Lo W City
Today
Hi Lo W
Tomorrow
Hi Lo W
Across 31 “Accio!” and 55 Kilauea flow traffic, ironically museum
s...sunny; pc... partly cloudy; c...cloudy; sh...showers; 1 Does well on a “Lumos!” in Harry 58 Piedmont wine 26 Chiding sound 54 Simple toy train
Geneva 16 13 pc 18 8 pc Ottawa 20 5 pc 23 12 pc Potter’s world
t...t’storms; r...rain; sf...snow flurries; sn...snow; i...ice Hanoi 32 25 c 31 25 c Paris 19 11 c 17 7 s hole region 29 Stairway unit layout
Havana 32 23 t 31 23 pc Philadelphia 24 12 s 24 12 s 5 Soul mate? 32 Trusted adviser 59 Garnish for a 55 Target of the
Today Tomorrow Hong Kong 33 28 t 33 27 t Phoenix 34 20 s 35 21 s
30 Lugged
City Hi Lo W Hi Lo W 9 Got together 34 In a frenzy Gibson feds
Honolulu 32 24 sh 32 24 pc Pittsburgh 23 9 s 25 10 s 32 She played Brigid
Amsterdam 17 12 r 15 11 r Houston 31 24 pc 30 21 r Port-au-Prince 33 24 pc 34 24 pc 14 Suit to ___ 35 Winter 60 Slanted type: O’Shaughnessy 56 Count start
Anchorage 11 8 r 11 8 r Istanbul 20 15 pc 20 15 pc Portland, Ore. 18 7 pc 21 8 s wonderland Abbr. in “The Maltese 57 Whopper, for
Athens 23 16 pc 23 15 s Jakarta 32 24 t 32 25 t Rio de Janeiro 34 22 t 28 20 t 15 Butter feature
Atlanta 25 17 s 26 15 s Johannesburg 22 11 t 25 13 s Riyadh 39 21 s 38 21 s alternative 61 Desktop picture Falcon” example
Baghdad 36 21 s 36 22 s Kansas City 29 20 pc 27 17 t Rome 23 14 pc 23 15 pc 39 Unacceptable
16 Rock concert 62 Saloon choices Previous Puzzle’s Solution
Baltimore 24 10 s 24 11 s Las Vegas 26 14 s 28 15 s Salt Lake City 12 3 pc 16 7 pc 40 Lisa Simpson
Bangkok 32 24 t 30 24 t Lima 20 16 pc 21 16 s San Diego 23 18 pc 24 17 pc venue 63 Hawk P E N A P E E R S A B E L
Beijing 17 7 r 20 9 pc London 17 9 r 16 8 s San Francisco 23 13 s 22 13 s
wears them A L A S A L L A Y L I R A
17 Carpet type 64 Does some B O B H O S K I N S I S N T
Berlin 16 11 r 15 9 r Los Angeles 25 17 pc 24 14 pc San Juan 32 27 sh 32 26 pc 41 Gut courses
Bogota 19 9 r 20 8 sh Madrid 29 15 pc 29 15 s Santiago 19 6 pc 24 8 pc 18 Rudely disturbs, janitorial work L I B Y A C T S Q U E
44 Number U S E K A T E H E P B U R N
Boise 16 3 pc 16 3 pc Manila 33 26 t 31 26 t Santo Domingo 31 23 pc 32 23 pc perhaps Down M E D S G Y M MA R I S T
Boston 18 11 s 19 11 s Melbourne 18 7 pc 23 10 pc Sao Paulo 26 16 t 20 14 sh between zwei T R O P E S R A C E S
Brussels 17 9 r 15 8 sh Mexico City 23 13 pc 21 14 pc Seattle 17 8 pc 19 8 s 20 Burglars may and vier 1 Mathematician G R E G O R Y P E C K
S I R E D S I N I S E
Buenos Aires 19 10 c 20 12 c Miami 30 26 t 31 25 t Seoul 27 14 pc 23 12 c escape under it 45 Cat coat Blaise C L A WA T T O P S O F A
Cairo 34 22 s 30 21 s Milan 20 13 pc 20 12 sh Shanghai 27 20 r 24 19 c 22 Unconcerned 2 Not out R O Y S C H E I D E R H U M
Calgary 2 -5 sn 6 -3 pc Minneapolis 22 19 t 22 10 sh Singapore 30 24 c 30 25 t 48 Picked up the A V A T E L U N I T E
Caracas 31 25 pc 32 25 pc Monterrey 30 21 pc 29 21 pc Stockholm 14 10 r 14 8 pc with ethics dinner tab 3 Acknowledge W E R E J AM E S MA S O N
L I E N O T E R I S E N D
Charlotte 23 12 s 25 12 s Montreal 19 7 s 23 13 c Sydney 24 16 pc 24 16 pc 23 Most 50 Los Angeles again S T A G B E G A N H E S S
Chicago 27 17 pc 29 19 s Moscow 7 2 c 9 2 c Taipei 36 27 pc 34 26 pc embittered
Dallas 33 23 pc 30 22 t Mumbai 33 25 pc 33 26 pc Tehran 29 17 s 27 15 s neighborhood 4 “Like a Rock” The contest answer is ARGO. Each of the
Denver 15 4 pc 13 7 c Nashville 26 16 s 29 15 s Tel Aviv 32 23 s 28 19 s 27 “Ben-Hur” writer near Bel Air rocker characters in these films rode on a famous vessel:
Detroit 24 13 s 26 17 s New Delhi 37 24 s 36 24 s Tokyo 25 21 pc 25 17 sh Wallace Smee was on the Jolly Roger, Rose Sayer on the
52 Window 5 Black songbird African Queen, Towers on the Sawfish, Chief Brody
Dubai 38 30 s 37 29 s New Orleans 29 24 r 30 23 t Toronto 21 10 pc 25 15 pc
Dublin 15 8 pc 13 7 pc New York City 22 13 s 22 13 s Vancouver 17 7 s 17 9 s 28 Fog’s kin makeup named for its call on the Orca and Captain Nemo on the Nautilus.
Edinburgh 14 8 sh 13 8 pc Omaha 29 20 t 23 12 t Washington, D.C. 24 13 s 25 13 s The first letters of these five vessels spell JASON,
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Frankfurt 18 10 c 17 7 sh Orlando 29 23 pc 29 22 s Zurich 15 13 pc 16 7 r who sailed on the Argo.

Follow Today,
Lead Tomorrow.

Get the latest breaking stories

delivered in real time—follow WSJ
on Twitter, Facebook, Instagram
and Snapchat.

© 2017 Dow Jones & Co. Inc. All rights reserved. 6DJ5620
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com

TECHNOLOGY: GOOGLE CONDUCTS INQUIRY ON RUSSIAN INFLUENCE B3

BUSINESS & FINANCE

© 2017 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Monday, October 2, 2017 | B1

Yen vs. Dollar 112.6770 À 0.29% Hang Seng 27554.30 À 0.48% Gold 1281.50 g 0.31% WTI crude 51.67 À 0.21% 10-Year JGB yield 0.065% 10-Year Treasury yield 2.328%

U.S. Drops Federal Oversight of AIG BY LESLIE SCISM aminers at the firm. since 2008. The company is pose a threat to financial sta-
AIG’s Path AND RYAN TRACY The Financial Stability committed to continued vigi- bility,” Treasury Secretary
After a near collapse, AIG has faced a bumpy road in its recovery. Oversight Council, a group of lant risk management and to Steven Mnuchin said in a
WASHINGTON—U.S. offi- senior financial regulators, working closely with our nu- statement.
$1,000 cials voted Friday to remove voted 6-3 to rescind the global merous regulators to enable a Two Obama-era appointees,
September 2008 federal oversight of American insurer’s designation as a strong AIG to continue to Fed Chairwoman Janet Yellen
900 U.S. government seizes International Group Inc., an “systemically important finan- serve our clients.” and Roy Woodall, the council’s
control of AIG with
emergency loan insurance company now about cial institution,” indicating The practical impact of Fri- insurance expert, joined four
800
half the size it was when it they no longer view AIG as a day’s action was limited be- Trump appointees in approv-
700 August 2009 December 2012 was on the brink of collapse threat to the broader economy. cause many of the rules for in- ing the action. Three Obama
Robert Benmosche AIG completes and became a poster child of The action came earlier surance companies have yet to appointees opposed the move,
600 arrives as AIG’s repayment of its the global financial crisis. than many analysts expected. be written. and none commented on why.
turnaround CEO bailout, which The move is one of the Although the Trump adminis- The council applied the la- Securities and Exchange Com-
and begins gradual topped $180 billion
500 asset sales most tangible steps yet in the tration has recommended bel to AIG in July 2013 and mission Chairman Jay Clayton
Fall 2015 Trump administration’s push dozens of changes to financial previously had affirmed its recused himself.
400 Activist investors to re-evaluate financial regula- rules, it has so far taken ac- findings annually. This year, Ms. Yellen declined to com-
including Carl Icahn tions, which has included a tion incrementally, in part be- regulators appointed by Presi- ment through a spokesman.
300 demand a breakup top-to-bottom review of rules cause of the slow pace of in- dent Donald Trump reversed AIG “has changed dramati-
of AIG put in place in response to the stalling personnel at key course, pushed along by new cally since the start of the fi-
Friday
200 U.S. rescinds crisis. Friday’s decision frees regulators. leaders at AIG who were more nancial crisis,” said National
SIFI label the insurance company of AIG Chief Executive Brian aggressive about disputing the Credit Union Administration
100 stricter oversight by the fed- Duperreault said in a state- systemically important tag. Chairman Mark McWatters, a
eral government, such as ment that the council’s “deci- “This action demonstrates council member who voted in
0
tighter capital rules, federal sion reflects the substantial our commitment to act deci- favor of removing the label.
’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 approval for large mergers and and successful de-risking that sively to remove any designa- “It’s time to let them go back
Source: WSJ Market Data Group THE WALL STREET JOURNAL. placement of government ex- AIG’s employees have achieved tion if a company does not Please see AIG page B7

KEYWORDS
By Christopher Mims At Uber,
Facebook Kalanick
Remains in Pursues
Denial Amid Power Play
BY GREG BENSINGER

Scrutiny Uber Technologies Inc.’s

ousted chief executive, Travis
It’s a good Kalanick, is appointing two
time to re-ex- new directors to the ride-hail-
amine our re- ing firm’s board, a surprise
lationship with move that would bolster his
Facebook Inc. clout as the company faces
Over the several critical decisions in-
DAVID PAUL MORRIS/BLOOMBERG NEWS

past month, it has been re- cluding a possible multibillion-

vealed that Facebook hosted a dollar investment from Soft-
Russian influence operation Bank Group Corp.
that might have reached be- Mr. Kalanick appointed for-
tween three million and 20 mer Xerox Corp. CEO Ursula
million people on the social Burns and former CIT Group
network, and that Facebook Inc. CEO John Thain as the
could be used to micro-target 10th and 11th Uber directors,
users with hate speech. It effective Friday, according to a
took the U.S.-based company statement from him to The
more than two weeks to Ford CEO Jim Hackett at a symposium in San Francisco in August. Mr. Hackett is likely to push for quick action at the auto maker. Wall Street Journal.
agree to share what it knows The Uber co-founder, who

Ford’s Chief Is Ready to Tinker

with Congress. resigned as CEO in June, made
Increased scrutiny of Face- the appointments without con-
book is healthy. What went sulting the rest of the board.
mainstream as a friendly He was granted control of
place for loved ones to swap After a summer reviewing the auto maker, new boss Hackett prepares to lay out road forward three board seats as part of
baby pictures and cat videos $3.5 billion investment from a
has morphed into an opaque BY CHRISTINA ROGERS ter than its Detroit competi- Saudi wealth fund in 2016.
and poorly understood me- tors, but now feels growing Courting Wall Street The appointments could
tropolis rife with influence DETROIT—Ford Motor pressure from tech companies Ford’s share price has climbed since CEO Jim Hackett took over in May, serve as an effort to push back
peddlers determined to ma- Co.’s new boss spent the sum- and traditional rivals in the rising about 10%, but investors are still looking for a firmer strategic plan. against one of Uber’s largest
nipulate what we know and mer touring the auto maker’s emerging era of self-driving investors, Benchmark, which is
how we think. We have barely global operations, brainstorm- cars and ride-sharing services. Ford daily share price suing Mr. Kalanick over con-
begun to understand how the ing with his ex- Wall Street has yet to fully $12.5 a share June 20 trol of those two seats. The
massive social network THE WEEK ecutives on new embrace Ford’s leadership Ford says it will move production Friday venture firm, which also holds
shapes our world. AHEAD business con- change at a time when U.S. car of the U.S.-sold Focus compact car $11.97 a board seat and led an inves-
Unfortunately, Facebook it- cepts and even sales are softening. Ford’s 12.0 from Michigan to China tor coup to push Mr. Kalanick
self seems just as mystified, paying a visit to stock has risen 10% since Mr. out, has proposed a new vot-
providing a response to all of an electric-car maker in Sili- Hackett took charge, but in- 11.5 ing structure for shareholders
this that has left many unsat- con Valley that his predeces- vestors are still looking for a allowing them to vote based
isfied. sor had considered buying. firmer strategic road map. 11.0 on the size of their stake,
What the company’s lead- Now, he is ready to start Under Mr. Hackett, the rather than the current system
ers seem unable to reckon tinkering under the hood. leadership team set up mini May 22 which rewards the earliest in-
with is that its troubles are Jim Hackett was promoted in war rooms in conference 10.5 vestors with greater voting
Jim Hackett July 26
inherent in the design of its May to chief executive after the spaces at Ford’s Dearborn, appointed Ford CEO Ford issues new 2017 guidance, power.
flagship social network, board ousted then-CEO Mark Mich., headquarters, according 10.0 indicating weaker-than- “I am appointing these
which prioritizes thrilling Fields, amid concern about the to people familiar with the forecasted pretax profits seats now in light of a recent
posts and ads over dull ones, company’s strategy. After matter. Executives huddled 9.5 board proposal to dramatically
and rewards cunning provo- spending several months asking there to sketch out concepts— restructure the board and sig-
May June July Aug. Sept.
cateurs over hapless users. questions and strategizing, the often on sticky notes and nificantly alter the company’s
No tweak to algorithms or 62-year-old former office-furni- sheets of paper stuck to the Source: WSJ Market Data Group THE WALL STREET JOURNAL. voting rights,” Mr. Kalanick
processes can hope to fix a ture executive is set to provide wall—to shake up the com- said in the statement.
problem that seems en- an update on Ford’s progress at pany’s thinking on everything analyst, Adam Jonas, wrote in certain peers and boost its Benchmark sued Mr. Kalan-
meshed in the very fabric of an investor meeting Tuesday. from its culture to branding. a recent research note. “We profit margin. General Motors ick in August to return to
Facebook. Mr. Hackett is expected to “We expect Ford’s next are not convinced investors Co., for instance, has shown a board control the two seats he
On a network where article show how Ford is streamlining strategy to be more open to are prepared for the required greater willingness to make oversees and his own, arguing
and video posts can be spon- its core business while pursu- partnerships, new structures, sacrifice to near-term profit.” bold cost-cutting moves, in- he reneged on an agreement
sored and distributed like ing futuristic ideas. The 114- new entities, and far greater Other analysts say Mr. cluding exiting its unprofitable to relinquish them when he
ads, and ads themselves can year-old company survived the emphasis on all-electric” vehi- Hackett needs to rekindle European operations, while at stepped down in June.
go as viral as a wedding-fail recession last decade far bet- cles, a Morgan Stanley auto Ford’s competitiveness with Please see HACKETT page B2 Uber said in a statement
video, there is hardly a differ- that the appointments “came
ence between the two. And as a complete surprise,” add-
we now know that if an ad
from one of Facebook’s more
than five million advertisers
goes viral—by making us feel
Condé Nast Publishing Titan Dies at 89 ing: “That is precisely why we
are working to put in place
world-class governance to en-
sure that we are building a
something, not just joy but BY JEFFREY A. TRACHTENBERG tions Inc. Together with his cluded Tina Brown, who edited company every employee and
also fear or outrage—it will brother, Donald, he oversaw a Vanity Fair and then the New shareholder can be proud of.”
cost less per impression to Samuel Irving Newhouse vast media company with in- Yorker; Vanity Fair’s outgoing A representative for Bench-
spread across Facebook. Jr., the publishing magnate vestments in newspapers, editor Graydon Carter; David mark didn’t respond to a re-
In one example, described whose passion for art, photog- magazines, cable and assorted Remnick, who succeeded Ms. quest for comment.
in a recent Wall Street Jour- raphy and popular culture digital properties. Brown as editor of the New Uber’s board and new chief
nal article, a “controversial” transformed Condé Nast into Those who worked for Si Yorker; and Anna Wintour, ed- executive, Dara Khosrowshahi,
NEIL RASMUS/PATRICKMCMULLAN

ad went viral, leading to a one of the Newhouse described him as an itor of Vogue. are weighing an investment
30% drop in the cost to reach SAMUEL world’s introverted but rigorous busi- Advance Publications owns from a consortium led by Jap-
each user. Joe Yakuel, founder IRVING most dis- nessman whose zest for maga- newspapers such as the Times- anese tech investor SoftBank
and chief executive of Agency NEWHOUSE JR. tinguished zines reshaped the publishing Picayune in New Orleans and that could total $10 billion, ac-
Within, which manages $100 1927-2017 magazine landscape. Although he had the Staten Island Advance; mag- cording to people familiar
million in digital ad pur- companies, command of even the smallest azines including Vogue and with the matter. SoftBank is
chases, told our reporter, died Sun- details, he gave top staffers Glamour; and stakes in Discov- seeking to obtain two board
“Even inadvertent contro- day at age 89, according to a the freedom to make their ery Communications Inc. and seats of its own, the people
versy can cause a lot of en- spokesman for the family. own editorial decisions. Mr. Newhouse, seen in 2006. Charter Communications Inc. said.
gagement.” He died at home following a Otherwise, Mr. Newhouse Advance also owns data analyt- A SoftBank spokesman de-
Keeping people sharing long illness. was very much hands-on. “He Florio, a former senior publish- ics firm 1010data Inc. and is the clined to comment.
and clicking is essential to Mr. Newhouse, known as Si, was a brilliant kingmaker who ing executive at Condé Nast. majority owner of social news
Facebook’s all-important met- was chairman emeritus of knew how to pick winners, be it Top Condé Nast editors that site Reddit Inc.  CEO Khosrowshahi to plead
Please see MIMS page B3 closely held Advance Publica- editors or publishers,” said Tom Mr. Newhouse handpicked in- Please see MEDIA page B2 his case in London.................. B2
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS & FINANCE

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

A
Activision Blizzard......B3
Alphabet......................B3
GoldenTree Asset
Management ............ A2
H
Prudential Financial....B7
PTC Therapeutics........B8
Q
Uber CEO to Make London Call
American HSBC ........................... B8 QVT Financial..............B7 BY SAM SCHECHNER chief published an open letter
International Group..B1 AND WIKTOR SZARY to Londoners, apologizing “for
Anhui Zotye I R
Automobile...............B2 Institutional Roivant Sciences ........ B7 the mistakes we’ve made.”
Audi.............................B2 Shareholder Ryanair Holdings ........ B8 Uber Technologies Inc.’s While he reiterated that Uber
Axovant Sciences ....... B7 Services.....................B2 S new chief executive plans to would appeal the ruling in
B K meet Tuesday with London’s court, he said the company
SoftBank.....................B7
top transport regulator to would do so “with the knowl-
Barclays.......................B8 Kase Capital SpaceX.........................B3
Management ............ A2 plead for a reversal of the edge that we must also
Brahman Capital.........A2 T
city’s decision to strip the change.”
C L-M Toyota Motor..............B2 ride-hailing company of its op- London Mayor Sadiq Khan
Coca-Cola.....................B8 Lyft..............................B2 Trian Fund erating license. welcomed Mr. Khosrowshahi’s
E Mahindra & Mahindra B2 Management ........... B2
The agency, Transport for apology and was pleased the

DAVID RYDER/BLOOMBERG NEWS

Medivation..................B7 Twitter ........................ B3
Electronic Arts............B3 London, a week ago cited what executive acknowledged the is-
Microsoft.....................B3 U
F it called a lack of corporate re- sues Uber faces in London, a
N Uber Technologies ...... B2 sponsibility as the reason for spokesman for the mayor’s of-
Facebook................B1,B3
Nestle..........................B8 Unilever.......................B8
Ford Motor..................B1 not renewing Uber’s license to fice said.
G News Corp...................B2 V operate a private-hire car ser- Mr. Khan won’t be present
Norwegian Air Viking Global vice in the city. Uber plans to at Tuesday’s meeting. But the
General Mills...............B8
Shuttle......................B8 Investors...................B7 appeal the ruling in court. mayor asked transport agency
General Motors...........B2
Glass Lewis.................B2 P W But the San Francisco- officials to remain open to dis-
GlaxoSmithKline.........B7 Procter & Gamble.......B2 Waymo........................B2 based company is also turning Dara Khosrowshahi will meet with the top transport regulator. cussions with the company,
on the charm. Chief Executive the spokesman added.

INDEX TO PEOPLE Dara Khosrowshahi, who took

the reins at Uber in early Sep-
tember, plans at Tuesday’s
woman said.
“We want to work with
London to make things right,”
Mr. Khosrowshahi’s deci-
sion to travel halfway around
the world for the London
London is an important
market for Uber. While the
company doesn’t break out
A K R meeting with the agency’s the spokeswoman said. meeting is the latest step in revenue by market, it has said
Ablin, Jack...................B5 Kemery, Ebele.............B4 Ramaswamy, Vivek....B7 commissioner, Mike Brown, to A spokesman for Transport his effort to prove Uber is London accounts for about 5%
C-D Kuflik, Mitchell...........A2 S ask about specific complaints for London confirmed it is ar- changing its ways after the de- of the 65 million people
Curtis, Lisa................A12 Sobel, Robert..............A2
and how the company could ranging the meeting “follow- parture of former CEO Travis around the world who use the
M resolve them, an Uber spokes- ing an approach from Uber.” Kalanick. On Monday, the new service at least once a month.
Dalio, Ray....................A2 Staley, Jes...................B8
Musk, Elon..................B3
G T
Gold, Daniel.................B7 P
Tilson, Whitney..........A2
Griffin, Kenneth..........A2
H
Hung, David ................ B7
Parry, Gavin ................ B5
Peltz, Nelson...............B2
Perry, Richard.............A2
W
Wright-Casparius,
Gemma......................B4
How to Control a Self-Driving Car?
BY TIM HIGGINS Brad Stertz, Audi’s director of when announcing the deal. The disparate approaches
AND MIKE COLIAS government affairs, who ac- Some developers, such as from some of the world’s larg-

WSJ Ending Print This summer, Audi held an

elaborate media event in Spain
to celebrate a new sedan that
knowledged a shift in timing.
Audi’s predicament reflects
the challenge for auto makers
as they plunge into an awk-
Waymo, the driverless-car
unit of Google parent Alphabet
Inc., are planning to skip the
interim step, convinced there
est auto makers highlight the
intense competition to be
among the first to market with
technology many believe will

In Asia and Europe would allow drivers to let go

of the wheel and pedal while
in traffic jams and pay atten-
ward phase of development
years before fully driverless
cars are ready: how exactly to
isn’t a reliable way to hand off
the wheel.
Others are devising semiau-
upend the industry. Tesla Inc.’s
introduction of a semiautono-
mous system called Autopilot
tion to something else. pass control back and forth tonomous vehicles that rely on in 2014 has helped spearhead
BY LUKAS I. ALPERT ing the foreign editions no The driverless technology between driver and machine. humans when driving condi- development.
longer cost-effective, people heralded a new era for main- Congress is still deliberat- tions exceed the computer’s But the slew of semiautono-
The Wall Street Journal is familiar with the matter said. stream auto makers in their ing how to establish rules gov- abilities. mous driving technology is ar-
ceasing publication of the Eu- Staffers who worked on pursuit to create fully autono- erning driverless cars, for now General Motors Co. is mar- riving as the National Trans-
ropean and Asian print edi- putting together the overseas mous vehicles. But the rollout leaving it to a patchwork of keting the new Cadillac CT6 portation Safety Board raises
tions of the newspaper as the print editions have been reas- by Volkswagen AG’s luxury state laws. Last week, senators sedan, due out this fall, which concerns in the wake of an in-
company shifts its focus to signed, the company said. Edi- unit—with production for the said they reached a bipartisan lets drivers go hands-free on vestigation into last year’s fa-
digital amid an increasingly tors and reporters in foreign U.S. originally planned to be- deal on a draft of a bill that the highway—but the car also tal Tesla Model S crash that
challenged print-advertising bureaus will continue produc- gin this year—is now uncer- would help speed develop- features eye-tracking technol- found Autopilot lacked proper
market. ing content for the Journal’s tain, as the car maker contin- ment, but the outcome is un- ogy that forces the driver to safeguards to prevent its mis-
The final print edition in various platforms. ues to wait for Congress to certain. look at the road or the robot use.
Europe was this past Friday, In an editor’s note to read- pass legislation paving the “This legislation proposes pilot will disengage. Toyota The NTSB warned that
with Asia’s print publication ers in Friday’s Europe edition, way for autonomous vehicles, common sense changes in law Motor Corp. has been touting semiautonomous features such
ceasing after this coming Fri- the paper pledged to provide “It’s not a matter of need- to keep pace with advances in the redesigned Lexus LS sedan as Autopilot could lull drivers
day, company officials con- the same quality and depth of ing permission, it’s more a self-driving technology,” Sen. that automatically can swerve into a false sense of security.
firmed. After that, the printed news via its digital services. matter of wanting to introduce John Thune, the Republican to avoid pedestrians, but driv- Federal investigators esti-
newspaper will no longer be The reduction of the pa- the car when we know what chairman of the commerce ers must keep their hands on mated the Tesla driver had at
sold in some markets and will per’s print presence comes the ground rules are,” said committee, said in a statement the wheel. least 10 seconds to take con-
be replaced by the U.S. edition amid a broad reorganization trol of the sedan before hitting
in others—such as Tokyo—at a of the Journal’s editorial a truck crossing the highway,
later date, the company said. structure to transform the but he had an “overreliance on
WSJ. Magazine will also con- 128-year-old newspaper into a automation.”
tinue to be available through mobile-first news operation. Following the crash, Tesla
partner publications in many The Journal, a unit of News changed the software to re-
international markets. Corp, launched an initiative quire drivers to keep their
The Journal began printing called WSJ2020 in October hands on the wheel more often
a separate edition in cities 2016 to revamp operations as and urged drivers to remain
around Asia in 1976 and in Eu- the news industry undergoes a attentive. Tesla contends Au-
ropean markets in 1983. But in tumultuous shift toward digi- topilot is safer than a human
recent years, a steep drop in tal and mobile. Other news or- driver without the aide.
overseas sales and print ad- ganizations, such as the New Research has shown it takes
vertising revenue, coupled York Times, have undergone most drivers two to three sec-
with steady growth in digital similar operational reviews onds—perhaps longer if they
PAU BARRENA/BLOOMBERG NEWS

subscriptions, made continu- and restructuring initiatives. are occupied—to take back
control of an automated car.
“We have concerns that

MEDIA bet on business magazine

Portfolio closed in 2009 after
only two years, due in part to
drivers may give over too
much control and take away
some of their own attention
Continued from the prior page pressures from the recession. from driving,” said David
The Newhouse family said in As an owner, Mr. Newhouse Zuby, head of research for the
a statement: “Today is a day of was willing to spend gener- Insurance Institute for High-
emotion, of genuine loss, for our ously to achieve his ends. “He Audi and other auto makers are wrestling with how to safely shift control between car and driver. way Safety.
family and for Si Newhouse’s was somebody who could say
extended family at Condé Nast. yes or no, and who believed in
Si loved Condé Nast. He was
proud to publish the finest mag-
azines in the world and to offer
quality,” said Bill Wackermann,
a former Condé Nast veteran.
At one point Mr. Wacker-
HACKETT ent Alphabet Inc. that are
edging in on the car industry.
Associates say Mr. Hackett,
bile Co., to form a new elec-
tric-car brand in the world’s
largest vehicle market.
Mr. Hackett also needs to
address concerns dealers have
had about the company shifting
exceptional content on every mann told Mr. Newhouse that Continued from the prior page a former longtime CEO of Separately, in June, Mr. too much attention away from
digital platform.” he had taken some cost-cut- the same time focusing more Michigan-based Steelcase Inc., Hackett dropped by Lucid Mo- its current product portfolio.
Condé Nast Chief Executive ting initiatives, expecting to sharply on future technolo- is likely to place big bets and tors Inc., a Silicon Valley elec- The issue arose during Mr.
Bob Sauerberg added: “Si New- be praised. Instead, Mr. New- gies. push for quick action. tric-car startup, for a presenta- Fields’s tenure when he empha-
house created the Condé Nast house expressed exasperation, Barclays analyst Brian John- This past week, Ford an- tion, according to people sized future projects such as
we know today. His entrepre- saying, “Who told you to cut? son said Mr. Hackett needs to nounced a deal with ride-hailing familiar with the visit. Ford car-sharing services with no
neurial spirit energized the You get what you pay for.” take a “bold course of action” service Lyft Inc. to test its self- considered buying the com- near-term profit potential.
company. In the past decade, That moment encapsulated to revive interest on Wall driving cars on Lyft’s network pany under Mr. Fields, but Among Mr. Hackett’s other
even as he was gradually step- Mr. Newhouse’s ambitions as a Street. “In the past few years, and co-develop software to con- talks have been put on the back stops: Ford’s operations in
magazine owner and cultural Ford simply hasn’t had a com- nect Ford vehicles with the San burner as Mr. Hackett works to Turkey and Russia, and a
tastemaker, said Mr. Wacker- pelling narrative that investors Francisco-based company’s app. firm up Ford’s strategy. transmission plant in subur-
‘He wanted to create mann. “He wanted to create could latch onto,” Mr. Johnson Ford also is studying a Mr. Hackett is concerned ban Detroit. In September, he
art, to create something better wrote in a research note. partnership with India’s Ma- about the company’s ability to met with union leaders from
art,’ a Condé Nast than existed at the moment. Mr. Hackett’s hiring came hindra & Mahindra Ltd. that earn money as regulations and Ford’s U.S. factories and paid a
veteran said of He was telling me to do it the after Ford’s board grew con- could cover a swath of ideas, the race to make electric and visit to Microsoft Corp.’s head-
right way. There’s a reason cerned about how the com- from electric vehicles to con- self-driving cars pressure the quarters, after an appearance
Si Newhouse. why those brands were what pany would maintain high nected-car services, and is bottom line. He talks about by the software giant’s CEO,
they were. He was a titan.” profits while competing with pursuing a joint venture with evaluating Ford’s “fitness,” a Satya Nadella, at a Ford lead-
Mr. Newhouse leaves be- tech firms such as Google par- China’s Anhui Zotye Automo- term he uses for efficiency. ership meeting in August.
hind a Condé Nast that, like all
ping away from day-to-day its publishing peers, is trying
management, his final gift to
Condé Nast was to encourage its
transition from a publisher of
print magazines to a far more
to find its footing. There is in-
creasing pressure to produce
growth from initiatives such
as online video and branded
Activist Gets Boost in P&G Proxy Fight
varied, digital enterprise.” content. Several publishers, in- BY SHARON TERLEP seat on the consumer-products pany for failing to consider and-beverage companies
Advance was founded by Mr. cluding Rodale Inc. and giant’s board. Mr. Peltz’s outside candidates following doesn’t equate to expertise
Newhouse’s father, Samuel I. Wenner Media’s Rolling Stone, Less than two weeks before Trian Fund Management is the troubled tenure of Mr. with consumer-packaged
Newhouse, a successful newspa- are on the sales block. (As a the largest proxy vote in his- one of P&G’s biggest share- Taylor’s predecessor. goods like paper towels and
per investor who bought Condé closely held company, Condé tory, activist Nelson Peltz got holders with a 1.5% stake val- ISS said the fact that all but razors.
Nast in 1959. Si Newhouse, his Nast doesn’t report its finan- a big boost in his high-profile ued at $3.5 billion. one of P&G’s 10 nonexecutive On Friday, P&G said its case
oldest son, was named Condé cial results, but revenue is ex- fight against Procter & Gam- ISS’s recommendation was directors lacked previous con- against Mr. Peltz is bolstered
Nast’s chairman 16 years later. pected to be down in 2017.) ble Co. largely a criticism of P&G’s sumer-products experience by ISS observations that the
As a magazine executive, Si Mr. Newhouse was one of Institutional Shareholder current board, which is may have contributed to P&G’s company has produced posi-
Newhouse quickly made his New York’s leading art collectors. Services Inc., the largest stacked with current and for- inability to spot key trends. tive results amid efforts to
mark. Condé Nast launched “When he was really active proxy-adviser firm, recom- mer leaders of blue-chip com- “Considering Peltz’s extensive shrink its product portfolio
Self magazine in 1979 and we’d have breakfast every Satur- mended on Friday that P&G panies like American Express background with consumer and streamline management.
snapped up GQ. Mr. Newhouse day morning at my office,” said shareholders put the 75-year- Co., Home Depot Inc., Hewlett- companies, particularly his di- “We believe ISS set too low a
later bought Gourmet, re- gallery owner Larry Gagosian, old investor on the board over Packard and Boeing Co. rectorships at Heinz and Mon- standard for adding an activist
launched Vanity Fair, and ac- who once paid $17 million at the company’s protests. An- While noting positive re- delez, many shareholders investor to a board,” P&G said
quired the New Yorker, Bon auction for a painting by Jasper other proxy adviser, Glass sults since Chief Executive Da- might not readily agree with in a statement. “Change is not
Appétit, Architectural Digest, Johns on behalf of Mr. New- Lewis & Co., came out in favor vid Taylor took over P&G the board’s dismissiveness of warranted when a highly en-
Wired, Fairchild Publications, house. “He loved the hunt. Many of Mr. Peltz last week. nearly two years ago, ISS his potential contribution as a gaged board is overseeing a
Golf Digest and Modern Bride. times we’d take private planes The two sides have traded blamed directors for ill-ad- director,” ISS said. plan that is working.”
Not all of Mr. Newhouse’s when somebody wanted to sell a barbs for weeks about vised acquisitions and CEO P&G has argued that Mr. —Joann S. Lublin
moves were successful. His big painting that interested him.” whether Mr. Peltz deserves a turnover. It criticized the com- Peltz’s experience with food- contributed to this article.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | B3

TECHNOLOGY WSJ.com/Tech

Musk: We Google Conducting

Will Shoot Internal Inquiry on
For Mars Russian Influence
By 2024 BY JACK NICAS
AND ROBERT MCMILLAN
whether it would accept an in-
vitation this week from the
BY ANDY PASZTOR Senate Intelligence Committee
Google is conducting a to testify publicly on Nov. 1
Elon Musk unveiled plans broad internal investigation to about Russian interference.
to build the most powerful determine whether Russian- The committee also invited
rocket ever and use it to linked entities used its ads or Facebook and Twitter. Face-
launch a giant, reusable services to try to manipulate book said it had yet to accept
manned spacecraft to Mars— voters ahead of the U.S. elec- the invitation. Twitter also
potentially in less than a de- tion, according to a person fa- hasn’t responded, a person fa-

BLUEHOLE STUDIO
cade—in the billionaire’s most miliar with the matter, a move miliar with the matter said.
aggressive expression yet of that comes after Facebook It is unclear what sort of
his vision for privately funded Inc. and Twitter Inc. said Rus- activity, if any, happened on
space exploration. sian actors used their sites. Google’s sites. But Google runs
Mr. Musk sketched out new ‘PlayerUnknown’s Battlegrounds’ has raked in millions of dollars with no marketing expense. Google, part of Alphabet the world’s largest advertising
ambitions for his company, Inc., is also talking with con- business and largest online-

Videogames Get Upstart

SpaceX, including technical gressional officials who are in- video site, YouTube, making it
details of capsules larger than vestigating Russian efforts to an obvious place for investiga-
superjumbo airliners and the influence the election and tors to look.
kernel of a business plan to plans to share its findings with Rep. Adam Schiff, the top
pay for it, at an international ‘PlayerUnknown’s It resembles the “The Hun- aren’t polished. The only mar- them once completed, the per- Democrat on the House Intelli-
astronautics conference in ger Games,” and players are keting came from players on son said. gence Committee, which is in-
Australia on Friday. Battlegrounds’ proves snapping up the $30 game. live-streaming sites such as Congressional leaders have vestigating Russian influence
Projecting the first trips to a hit, and it isn’t even More than 13 million copies YouTube. scrutinized Facebook and on the 2016 U.S. election, said
Mars in 2022 or 2024—more have sold world-wide since A tentpole game from a big Twitter for Russian activity on lawmakers want to speak to
than a decade before the U.S. or a finished product yet March, according to its pub- publisher, meanwhile, often their sites and criticized the Google “given their dominant
any other governments antici- lisher, Bluehole Studio Inc., a takes hundreds of employees tech companies for their lack force online that has an adver-
pate coming close—Mr. Musk’s BY SARAH E. NEEDLEMAN privately held company in years to make and can cost of disclosure of such informa- tising component.”
latest plans are built around a South Korea. tens of millions of dollars if tion. Google sells ads above its
business model he hadn’t pub- The hottest videogame right That puts Battlegrounds in not more, plus additional Google, pending a potential search results, before YouTube
licly broached before. now spends no money on mar- a league with blockbusters spending for marketing. It can meeting with lawmakers, has videos and on third-party web-
Space Exploration Technol- keting, has raked in hundreds such as Electronic Arts Inc.’s be akin to producing a Holly- said little. Earlier this month, sites and apps.
ogies Corp., as his company is of millions of dollars in sales “Star Wars Battlefront” and wood popcorn flick. the company said it found no Google even offers a spe-
formally called, seeks to create and isn’t finished being devel- Activision Blizzard Inc.’s Battlegrounds, available for evidence that it sold election- cific ad tool for political cam-
a single fleet of super-power- oped. “Overwatch.” PCs, is launching on Microsoft related ads to Russian actors. paigns that it says will help
ful rockets and spacecraft able “PlayerUnknown’s Battle- Battlegrounds’ rise from a Corp.’s Xbox One consoles But it didn’t say how deeply it advertisers “win the moments
to serve commercial satellite grounds”—or “PUBG,” as fans constant work in progress to later this year. Big publishers was investigating the issue, or that win elections.”
operators, U.S. government call it—caught the videogame the buzziest title of the year should take heed, industry whether there were other Google’s YouTube site is
customers and Mr. Musk’s own industry off guard this year challenges the conventions of watchers said. types of Russian interference also one of the world’s largest
dreams of deep space explora- with its twist on the timeworn how modern blockbuster vid- Bluehole “effectively dis- on its platform. social-media communities,
tion. shooter genre. Rather than eogames are made. rupted the market,” Bench- On Friday, the company with more than 1.5 billion
“I think we have figured out rack up the highest kill count, An early playable version mark Co. analyst Mike Hickey said, “We will of course coop- monthly users, compared with
how to pay for it,” he told the 100 players parachute onto an was created in a year for less said. erate with inquiries; we’re more than 2 billion on Face-
crowd of scientists, industry island with nothing and do than $5 million by a team of The game’s success shows looking into how we can help book and 328 million on Twit-
officials and space aficionados whatever it takes (hiding in- 40 developers and sold at a developers don’t need deep with any relevant informa- ter.
gathered in Adelaide. “We cluded) to be the last one discount since March on a site pockets to create a block- tion.” —Byron Tau
think we have a way to do it.” alive. for “early access” games that buster, he said. Google also hasn’t said contributed to this article

MIMS and Society.

“Facebook has become so
central to how people com-
This move is a good start,
but it excuses Facebook from
its responsibility to be the
posted to Facebook.
For Facebook, a company
with more than $14 billion in
Continued from page B1 municate, and it has so much primary reviewer of all adver- free cash flow in the past
ric, engagement, which is market power, that it’s essen- tising it is paid to run. Why year, to say it is adding 250
closely linked to how many tially immune to market sig- are we, the users, responsible people to its safety and secu-
ads the network can show us nals,” Dr. Benkler says. The for vetting ads on Facebook? rity efforts is “pissing in the
and how many of them we only thing that will force the By default, most media ocean,” Mr. Galloway says.
will interact with. Left un- company to change, he adds, firms vet the ads they run “They could add 25,000 peo-
checked, algorithms like Face- is the brewing threat to its and refuse ones that might be ple, spend $1 billion on AI
book’s News Feed tend to- reputation. offensive or illegal, says Scott technologies to help those
ward content that is intended Facebook Chief Executive Galloway, entrepreneur, pro- 25,000 employees sort, filter
DAVID PAUL MORRIS/BLOOMBERG NEWS

to arouse our passions, re- Mark Zuckerberg recently fessor of marketing at NYU and ID questionable content
gardless of source—or even said his company will do Stern School of Business and and advertisers, and their
veracity. more to combat illegal and author of “The Four,” a book cash flow would decline 10%
An old media catchphrase abusive misuse of the Face- criticizing the outsize growth to 20%.”
was, “If it bleeds, it leads”— book platform. The primary and influence of Amazon, Ap- Of course, mobilizing a
that is, if someone got hurt or mechanism for vetting politi- ple, Facebook and Google. massive team of ad monitors
killed, that’s the top story. In cal and other ads will be “an Mr. Zuckerberg acknowl- could subject Facebook to ex-
an age when Facebook sup- even higher standard of edged in a recent Facebook ponentially more accusations
plies us with a disproportion- transparency,” he said, post that the majority of ad- of bias from all sides. For ev-
ate amount of our daily news, achieved by, among other vertising purchased on Face- ery blatant instance of abuse,
a more appropriate catch- things, making all ads on the book will continue to be Mark Zuckerberg said Facebook will do more to combat misuse. there are hundreds of cases
phrase would be, “If it’s out- site viewable by everyone, bought “without the adver- that fall into gray areas.
rageous, it’s contagious.” where in the past they could tiser ever speaking to anyone book to read over everything “Facebook has embraced The whole situation has
Will Facebook solve this be seen only by their target at Facebook.” His argument typed by our friends and fam- the healthy gross margins Facebook between a rock and
problem on its own? The audience. for this policy: “We don’t ily before they share it. But and influence of a media firm a hard place. But it needs to
company has no immediate “Beyond pushing back check what people say before many people would feel it’s but is allergic to the responsi- do more, or else risk further
economic incentive to do so, against threats, we will also they say it, and frankly, I reasonable for Facebook to bilities of a media firm,” Mr. damaging its brand and repu-
says Yochai Benkler, a profes- create more services to pro- don’t think our society should review all of the content it Galloway says. tation, two things of para-
sor at Harvard Law School tect our community while en- want us to.” gets paid (tens of billions of Mr. Zuckerberg has said it mount importance to a ser-
and co-director of the Berk- gaging in political discourse,” This is false equivalence. dollars) to publish and pro- would hire 250 more humans vice that depends on the trust
man Klein Center for Internet Mr. Zuckerberg wrote. Society might not want Face- mote. to review ads and content of its users.

BUSINESS WATCH Advertisement INTERNATIONAL INVESTMENT FUNDS

through its site. [ Search by company, category or country at asia.WSJ.com/funds ]
Amazon completed $500,000
in online sales in the first week NAV —%RETURN—
FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR
after it started offering Whole
VP Classic-B Units AS EQ HKG 09/28 USD 154.24 34.6 24.6 16.7
Foods’ “365 Everyday Value” VP Classic-C Units AS EQ HKG 09/28 USD 19.36 34.0 23.9 16.4
VP Classic-C Units AUD H AS EQ HKG 09/28 AUD 15.86 32.8 23.2 16.6
products, according to the One VP Classic-C Units CAD H AS EQ HKG 09/28 CAD 15.55 34.3 24.1 16.6
Click Retail, an e-commerce data VP Classic-C Units HKD H
VP Classic-C Units NZD H
AS
AS
EQ HKG
EQ HKG
09/28 HKD
09/28 NZD
13.22
16.38
34.2
35.8
24.6
26.7
NS
18.0
Data as shown is for information purposes only. No offer is being made by
analytics firm that focuses on Morningstar, Ltd. or this publication. Funds shown aren’t registered with the VP Classic-C Units RMB AS EQ HKG 09/28 CNH 12.84 23.2 21.1 NS
BORIS ROESSLER/DPA/ZUMA PRESS

U.S. Securities and Exchange Commission and aren’t available for sale to United VP Classic-C Units RMB H AS EQ HKG 09/28 CNH 13.30 38.4 29.0 NS
the site’s transactions. Weekly States citizens and/or residents except as noted. Prices are in local currencies. VP Multi-Asset Fund Cls A HKD OT OT HKG 09/28 HKD 10.69 11.1 7.2 NS
sales fell to about $300,000 for All performance figures are calculated using the most recent prices available. VP Multi-Asset Fund Cls A USD OT OT HKG 09/28 USD 10.78 10.3 6.5 NS
VP Taiwan Fund AS EQ CYM 09/28 USD 19.93 19.0 15.7 19.5
the next two weeks after Ama- NAV —%RETURN—
FUND NAME GF AT LB DATE CR NAV YTD 12-MO 2-YR
zon ran low on some products For information about listing your funds,
but rebounded in the fourth n Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866 please contact: Freda Fung tel: +852 2831
Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: [email protected]
week, the analysis found. CAM-GTF Limited OT OT MUS 09/22 USD 307672.65 1.9 1.6 6.9 2504; email: [email protected]
—Heather Haddon

MERCK
A VW concept car on display in September. The auto maker said
it will book another charge tied to its emissions-cheating scandal. Drugmaker Trims n Website: https://www.valuepartners-group.com/ Tel: (852) 2143 0688

VOLKSWAGEN sions levels for its diesel cars.

Hepatitis C Efforts
China A-Share Fund Cls A AUD H OT
China A-Share Fund Cls A AUD UnH OT
China A-Share Fund Cls A CAD H OT
China A-Share Fund Cls A EUR H OT
OT HKG
OT HKG
OT HKG
OT HKG
09/28 AUD
09/28 AUD
09/28 CAD
09/28 EUR
13.69
12.61
12.59
13.15
16.1
15.4
15.3
14.4
16.2
17.9
14.9
13.8
12.0
6.5
10.4
9.7
LIST YOUR
The company also agreed to pay Merck & Co. is halting devel- China A-Share Fund Cls A EUR UnH OT OT HKG 09/28 EUR 12.78 10.8 13.3 NS
Auto Maker Adds nearly $25 billion in fines, penal- opment of new hepatitis C
China A-Share Fund Cls A GBP H OT OT HKG 09/28 GBP 13.17 14.3 13.7 11.6

To Scandal’s Costs ties and compensation after it

settled a number of civil law-
treatments after reviewing their
effectiveness and determining
China A-Share Fund Cls A GBP UnH OT
China A-Share Fund Cls A HKD H OT
China A-Share Fund Cls A HKD UnH OT
China A-Share Fund Cls A NZD H OT
OT HKG
OT HKG
OT HKG
OT HKG
09/28 GBP
09/28 HKD
09/28 HKD
09/28 NZD
15.26
13.41
13.89
13.49
13.9
14.9
24.6
16.3
17.0
14.5
19.6
16.4
19.9
10.3
12.4
12.1
FUNDS
China A-Share Fund Cls A NZD UnH OT OT HKG 09/28 NZD 11.99 20.4 20.9 5.9
The bill for Volkswagen AG’s suits. Two Volkswagen employ- there is already an abundance of China A-Share Fund Cls A RMB (CNH) OT OT HKG 09/28 CNH 14.83 18.3 18.5 13.9
China A-Share Fund Cls A USD OT OT HKG 09/28 USD 13.78 23.8 18.9 11.8
diesel-emissions scandal jumped ees caught up in the scandal treatments, including its own China A-Share Fund Cls A USD H OT OT HKG 09/28 USD 13.42 15.5 15.3 10.8
China Greenchip-A Units AS EQ CYM 09/28 HKD 67.47 32.6 25.0 14.1
by €2.5 billion ($3 billion) to just have faced charges in the U.S., Zepatier drug. China Greenchip-A Units AUD H AS EQ CYM 09/28 AUD 11.46 33.4 26.1 14.9
under $30 billion after the com- with one sentenced to just over The market to treat the liver China Greenchip-A Units CAD H AS
China Greenchip-A Units NZD H AS
EQ CYM
EQ CYM
09/28 CAD
09/28 NZD
11.15
11.70
33.4
32.7
25.6
25.5
14.0
15.1
pany said it would take another three years in prison. disease afflicting 3.5 million China Greenchip-A Units USD AS EQ CYM 09/28 USD 11.14 32.3 24.7 13.9
China Greenchip-A2 QDIs Units AS EQ CYM 09/28 HKD 12.15 32.2 24.7 13.9
charge to earnings, citing higher- —William Boston Americans has become increas- GC Hi Yield Inc - Cls A MDIs GBP H OT OT CYM 09/28 GBP 9.62 6.9 8.8 13.1
than-expected costs for fixing and Max Bernhard ingly competitive, prompting GC Hi Yield Inc-Cls A MDIs AUD H OT
GC Hi Yield Inc-Cls A MDIs CAD H OT
OT CYM
OT CYM
09/28 AUD
09/28 CAD
9.21
9.28
8.3
7.4
10.7
9.5
15.1
13.6
cars in the U.S. Merck and others to focus their GC Hi Yield Inc-Cls A MDIs NZD H OT OT CYM 09/28 NZD 9.57 8.6 11.1 15.6 In print & online. Contact:
GC Hi Yield Inc-Cls P HKD Acc sh OT OT CYM 09/28 HKD 15.32 8.7 10.9 14.4
Volkswagen shares fell as AMAZON.COM attention elsewhere. GC Hi Yield Inc-Cls P HKD MDIs sh OT OT CYM 09/28 HKD 9.27 8.6 10.9 14.4
GC Hi Yield Inc-Cls P MDIs SGD H OT OT CYM 09/28 SGD 10.12 7.5 9.5 14.0
much as 3% after the disclosure Johnson & Johnson’s Janssen
Friday, but ended the day little Whole Foods Gets unit earlier in September discon-
GC Hi Yield Inc-Cls P USD Acc sh OT
GC Hi Yield Inc-Cls P USD MDIs sh OT
OT CYM
OT CYM
09/28 USD
09/28 USD
15.34
9.27
8.0
8.0
10.1
10.2
14.0
14.0
GC Hi Yield Inc-ClsA MDIs EUR H OT OT CYM 09/28 EUR 10.05 6.4 8.0 12.3 [email protected]
changed at €138. Boost After Takeover tinued development of its own Hi-Div Stk Cls A RMB H Acc
Hi-Div Stk Cls A RMB UnH Acc OT
OT OT HKG
OT HKG
09/28 CNH
09/28 CNH
12.54
14.46
25.4
18.0
19.3
16.2
15.3
14.3
The new write-down, which hepatitis C treatment, which an- Hi-Div Stk Cls A1 OT OT HKG 09/28 USD 88.45 23.3 16.4 12.6
will be booked in the third quar- Amazon.com Inc. has sold alysts said had good but not Hi-Div Stk Cls A2 AUD H MDIs OT
Hi-Div Stk Cls A2 CAD H MDIs OT
OT HKG
OT HKG
09/28 AUD
09/28 CAD
10.23
10.39
22.2
21.9
15.4
14.5
12.4
11.2
ter, comes as many investors about $1.6 million in Whole competitive results. The com- Hi-Div Stk Cls A2 GBP H MDIs OT OT HKG 09/28 GBP 9.88 23.6 15.7 11.7
Hi-Div Stk Cls A2 HKD MDIs OT OT HKG 09/28 HKD 10.85 24.0 16.8 13.0
were hoping the financial fallout Foods beans, breakfast cereal pany said it would focus on hep- Hi-Div Stk Cls A2 MDIs OT OT HKG 09/28 USD 11.76 22.5 15.6 12.2
Hi-Div Stk Cls A2 NZD H MDIs OT OT HKG 09/28 NZD 10.51 22.8 17.0 13.0
from the emissions-cheating and other store-brand products atitis B treatments, an area Hi-Div Stk Cls A2 RMB H MDIs OT OT HKG 09/28 CNH 10.40 26.7 19.5 15.8
scandal was in the German auto in the first month since taking where there are fewer options. Hi-Div Stk Cls A2 RMB UnH MDIs OT
Hi-Div Stk Cls A2 SGD H MDIs OT
OT HKG
OT HKG
09/28 CNH
09/28 SGD
10.46
11.36
18.6
NS
16.7
NS
15.2
NS
maker’s rearview mirror. over the organic chain, one of Merck said Friday it made its Intel-China Converg Fund-A AUD H AS EQ CYM 09/28 AUD 11.27 NS NS NS
Intel-China Converg Fund-A CAD H AS EQ CYM 09/28 CAD 12.18 19.8 15.5 NS
In 2016, Volkswagen pleaded the first infusions of cash the e- decision after Phase 2 trials of Intel-China Converg Fund-A NZD H AS EQ CYM 09/28 NZD 12.58 22.6 18.7 NS
guilty to conspiracy to defraud commerce company has deliv- two combination regimens. Intel-China Converg Fund-A Units AS
Intel-Chinese Mainland Foc Fund AS
EQ CYM
EQ CYM
09/28 USD
09/28 USD
170.33
53.78
27.7
45.2
21.5
39.0
9.7
18.1
the U.S. government over emis- ered to the natural grocer —Cara Lombardo VP Classic-A Units AS EQ HKG 09/28 USD 343.98 35.1 25.2 17.3
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B4 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

QUARTERLY MARKETS REVIEW

Inflation Hopes Spur Bond-Yield Gain

U.S. debt sells off as
consumer prices
bounce and prospect
of tax cuts takes hold
BY DANIEL KRUGER

Bond investors are starting

to believe in inflation again.
The yield on the benchmark
10-year U.S. Treasury note set-
tled at 2.328% Friday and
posted its first quarterly gain
of the year, buoyed by an up-
tick in consumer prices that
lent support to some policy
makers’ insistence that infla-
tion will soon make a long-an-
ticipated return to the central
bank’s 2% target.
Yields soared into the end
of 2016 as investors bet that
Trump administration policies
would spark a surge of growth
and inflation. The so-called re-
flation trade petered out, how-
ever, after inflation remained
tepid and the administration’s
legislative agenda stalled, with
the 10-year yield posting de-
clines in each of this year’s

JOSHUA ROBERTS/REUTERS
prior quarters.
Now, investors are begin-
ning to revive some postelec-
tion wagers. A rebound in con-
sumer prices and the prospect
of tax cuts spurred bond sell-
ing in recent weeks, with the
10-year yield falling just twice The Federal Reserve’s persistent advocacy for a brisk pace of rate increases has helped drive up yields on two-year Treasurys. Fed Chairwoman Janet Yellen.
in the past 15 sessions.
“It’s a hopeful sign of better worried about damages from Treasurys at Vanguard Group. 34% a month ago, according to the Republican tax proposal man Sachs Group has esti-
things to come for the econ- recent hurricanes. The Fed’s persistent advo- the CME Group. could present investors with mated that one version of the
omy,” said Thomas Roth, man- The yield rebounded later cacy for a brisk pace of rate Those expectations were an opportunity to revisit the Republican plan would add
aging director in the rates in the month, however, after increases has helped drive up key to the climb in yields, as reflation trade. But the diffi- 0.6% to the nation’s gross do-
trading group at MUFG Securi- the Fed’s decision to push yields on two-year Treasurys, prices for oil stabilized and culty policy makers have had mestic product.
ties Americas Inc. “The market ahead with an aggressive which are more reactive to ex- the dollar continued its slide, in producing gains in wages The proposal will face seri-
has a little more hope, as it schedule for rate increases, pectations for Fed policy, to boosting prices for commodi- and prices, even as the unem- ous opposition, but if it gath-
did at the beginning of the penciling in one more this their highest level since No- ties and making imports more ployment rate has fallen to ers momentum, it could con-
Trump administration.” year and three for 2018. And vember 2008, before the nadir expensive. Inflation is one of 4.4%—below the level where tinue to push yields higher.
The 10-year government while some analysts still har- of the financial crisis. And as the biggest threats to the the Fed expects it to produce The initial forecasts about the
yield has spent the past six bor doubts about the pros- the Fed has raised rates, it value of long-term govern- inflation—makes some inves- tax overhaul say it could lift
months locked in a range near pects for the passage of tax also has succeeded in boosting ment bonds because it erodes tors skeptical. growth, but the battle to get it
2.25% as the economy has overhaul, or other elements of inflation expectations, even as the purchasing power of their “Even if you get decent passed, and the likely need for
maintained a slow and steady the Trump administration’s the failure of higher prices to fixed payments. growth, the assumption that it legislative compromises, may
pace and as consumer prices agenda, several said they are materialize remains, in Fed Yields in the government- will lead to inflation is some- make it less attractive as time
showed few signs of gathering starting to anticipate more Chairwoman Janet Yellen’s bond market indicate that in- thing that you have to ques- passes.
momentum. In September, it stimulative fiscal policy. words, a “mystery.” vestors are now forecasting tion now,” said Krishna Me- Investors should look at ris-
hit its lowest close since the “There is a lot that policy Fed-funds futures, which in- inflation will average 1.8% dur- mani, chief investment officer ing yields “as a trading pro-
election, 2.061%, as investors makers and the markets are vestors use to bet on central- ing the next five years, ap- at OppenheimerFunds Inc. cess rather than as a long-
sought the relative safety of watching, and nobody knows bank policy, late Friday proaching the 2% level The plan to lower both per- term economic analysis” by
government debt as tension how it will work out,” said showed the chances that the reached in the wake of the sonal and corporate income the bond market, said Jim Vo-
escalated between the U.S. and Gemma Wright-Casparius, who Fed will boost rates for a third election. taxes would give a modest gel, head interest-rate strate-
North Korea and investors manages inflation-indexed time this year at 78%, up from Some analysts suggest that boost to the economy. Gold- gist at FTN Financial.

Oil Prices Bounced Back in Quarter Oil’s Comeback

Strong demand and signs of slowing U.S. production helped oil prices
rebound in the third quarter.
BY ALISON SIDER Agency raised its forecast for oil investors, who had earlier Management. Now, “we’ve
Nymex crude-oil price*
AND AMRITH RAMKUMAR demand growth for next year. feared that output from shale seen the trajectory of U.S. Aug. 25
At the end of March, global producers would cancel out shale production growth $52 a barrel Hurricane Harvey
Oil investors got a reprieve fuel demand was just 1.3% the impact of cuts by members slow.” makes landfall.
from falling oil prices in the higher than the previous year, of the Organization of the Pe- The U.S. Energy Informa-
third quarter, thanks to unex- according to J.P. Morgan Asset troleum Exporting Countries tion Administration’s monthly 50
pectedly strong demand for Management. By the end of and other producers. figures show that U.S. output
crude and signs of ebbing U.S. July, demand grew 3.2% from has increased but that it
production. the previous year—the biggest hasn’t been as high recently as 48
West Texas Intermediate, year-over-year increase since preliminary weekly data had
the U.S. crude benchmark, 2010.
The price of West indicated. The EIA has moder-
ended the quarter 12.2% “Everyone was concerned Texas Intermediate ated its projection of next 46
higher, snapping a two-quarter that global demand for oil was year’s production to 9.8 mil- Sept. 25
losing streak and marking the weakening. As we’ve moved
ended the third lion barrels a day from a pre- Oil prices enter
44 bull market.
biggest quarterly gain since through the year, it’s actually quarter 12.2% higher. vious 10 million.
the second quarter of 2016. strengthening again,” said Rob Some remain skeptical that
U.S. crude futures re-entered a Thummel, managing director the rebound in oil prices will
bull market in September and at Tortoise Capital Advisors. continue. The rig count could 42
are up nearly 21.5% from the “Ultimately consumers re- The number of rigs drilling begin to rise again if prices July August September
lows in June. A gain of 20% or sponded to lower oil prices, oil wells in the U.S. fell by six stay above $50, analysts said. *Leading contract
more signals the start of a bull once again.” during the quarter, compared “There is probably limited Source: WSJ Market Data Group THE WALL STREET JOURNAL.
market. There also were signs that with an increase of 94 rigs upside,” said Andy Lebow, se-
Demand was a bright spot, U.S. output hasn’t increased as during the second quarter. nior partner at Commodity Beyond that, OPEC’s compli- yet to commit to such a move.
even amid worries that dam- quickly as some had expected, “The entire first quarter Research Group. ance with its deal has been “I don’t think we’re on
age from major hurricanes in as producers contended with and into the second, shale was One reason is that produc- high in recent months, and the some fast track” to higher
the southern U.S. would crimp rising costs, slowing oil-field the dominant factor,” said ers are looking to take advan- group has discussed extending prices, said John Saucer, vice
consumption. activity. Ebele Kemery, head of energy tage of the recent rally to lock its production cuts further president of research and
The International Energy That boosted sentiment for investing at J.P. Morgan Asset in higher prices, analysts said. into 2018. But the cartel has analysis at Mobius Risk Group.

Dollar Breaks Losing Streak With a Strong September

BY CHELSEY DULANEY North America at BNP Paribas. Expectations that rates will policy at home as stronger stances and, as always, we bound in the dollar will be
Even with September’s re- rise typically support the value currencies begin to weigh on could still be surprised in ei- short-lived. Hedge funds and
After a bruising year, the covery, the dollar remains of the dollar by making U.S. their economies. While a ther direction.” other speculative investors are
strong-dollar trade is staging a down 7.1% for the year and on assets more attractive to yield- strong currency is often a re- European Central Bank holding a net $17.9 billion in
comeback heading into the fi- Friday notched its third con- seeking investors. flection of confidence in the President Mario Draghi also bets against the dollar, the
nal stretch of 2017. secutive quarter of declines. “We’re back in the mode economy, it also can damp in- has struck a more cautious highest level in five years, ac-
The dollar edged up about Yet the recent rebound gives where the U.S. is going to go flation and growth prospects tone lately, saying in a recent cording to data from the Com-
0.7% against a basket of major some investors hope for a re- outperform,” Mr. Bechtel said. by making imports cheaper speech that “volatility in the modity Futures Trading Com-
peers tracked by The Wall surgence. BNP is forecasting “We’re tightening faster than and exports more expensive. exchange rate represents a mission.
Street Journal in September, that the dollar will gain more other places.” Bank of Canada Gov. Ste- source of uncertainty.” An un- “The big picture is that the
snapping a six-month losing than 2% against both the Japa- At the same time, central phen Poloz said in a Sept. 27 expectedly weak showing for dollar rally has still topped
streak that had been the cur- nese yen and euro by year-end. bankers in Europe and Canada speech that “monetary policy German Chancellor Angela out,” said Mr. Katzive, who ex-
rency’s longest in a decade. “We’ve seen a big shift in have grown more cautious on will be particularly data-de- Merkel’s conservative alliance pects the dollar to resume its
The currency’s dramatic slide momentum,” said Brad Bech- the prospect for tightening pendent in these circum- in September’s election has slide next year. “Once we get
this year—driven by investor tel, a managing director in for- added to pressure on the euro. closer to the end of the year, it
concerns about the U.S. eco- eign-exchange trading at Jef- The euro lost 0.8% against will be time to think about the
nomic and political outlook— feries Group. the dollar in September, downsides for the dollar.”
confounded a broad consensus One factor boosting the dol- though it remains up about Chris Gaffney, president of
that the dollar would lar: Federal Reserve officials 12% for the year. The Canadian EverBank World Markets, said
strengthen heading into 2017. have signaled they will con- dollar has fallen 2.5% since the currency is facing a num-
Now, signs that the Federal tinue to tighten monetary pol- hitting a two-year high in ber of threats. A continuation
Reserve will maintain a steady icy, easing worries among in- early September. in the trend of weak U.S. infla-
pace of U.S. interest-rate in- vestors that weak inflation The U.S. political landscape tion could stymie the Fed’s
AGENCE FRANCE-PRESSE/GETTY IMAGES

creases, along with Republi- would prevent the central also has recently turned more plans for raising rates, while
cans introducing plans for a bank from raising rates. supportive for the dollar. tensions between the U.S. and
tax overhaul, are leading in- At the close of its Septem- Republicans have released North Korea could favor cur-
vestors to re-evaluate bets ber meeting, the Fed penciled their plans for a sweeping tax rencies such as the Japanese
built up against the dollar in in one more rate raise for 2017 overhaul, helping to revive yen and Swiss franc over the
recent months. and three for next year. Mar- hopes that the Trump admin- dollar. Longer-term pressures,
“It was really hard to justify kets now forecast a 78% istration will enact an agenda including an aging U.S. recov-
the speed with which the dol- chance of another U.S. rate-in- that could boost U.S. growth ery that is being eclipsed by
lar had weakened this year,” crease this year, up from about and accelerate U.S. interest- growth abroad, also make a
said Daniel Katzive, head of 34% a month ago, according to rate increases. sustained comeback in the dol-
foreign-exchange strategy for CME Group data. Speculators nonetheless hold big bets against the currency. Some analysts say any re- lar unlikely, Mr. Gaffney said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | B5

QUARTERLY MARKETS REVIEW

S&P 500 Rises 4% in Quarter to a Record

BY RIVA GOLD
AND CORRIE DRIEBUSCH Eight Straight Quarterly Gains
U.S. stocks kept rising over the past three months, as solid earnings and economic
The S&P 500 finished Sep- data supported shares despite concerns about U.S. tensions with North Korea.
tember much like it spent the
past three months—quietly
Dow Jones Industrial Average quarterly performance Technology stocks posted another strong quarter, while
grinding higher.
energy and financials picked up pace in September.
Solid earnings and eco-
nomic data helped support ma- 8% 10% S&P 500 sector performance
jor indexes this past summer, 6 8
Information technology
with trading largely remaining Energy
calm despite disruptive hurri- 4 6 Financials
canes and threats between the
U.S. and North Korea. 2 4
The S&P 500 rose 4% to 0 2
fresh records in the quarter,
but the index’s average daily –2 0
move during the period was
0.3%, the lowest since 1968. –4 –2
The S&P 500 rose 9.30 –6 –4
points, or 0.4%, Friday to
2519.36, a record, while the –8 –6
Nasdaq Composite added 42.51 2015 2016 2017 July August September
points, or 0.7%, to a record
6495.96 as technology stocks U.S. stock-trading volume posted By one measure, the S&P 500’s moves in the Wall Street's ‘fear gauge’ notched its third
extended this year’s gains. The its slowest quarter in three years*. third quarter were the smallest on record†. straight quarterly decline.
Dow Jones Industrial Average
gained 23.89 points, or 0.1%, 10 billion shares traded, daily average 6% 40%
to 22405.09. CBOE Volatility Index,
Friday’s moves leave the 8 5 quarterly performance
Dow industrials up 4.9% since 20
the end of June, its eighth
consecutive quarterly advance. 6 4
“The path of least resis- 0
tance seems to be higher for 4 2
stocks,” said Jack Ablin, chief
investment officer at BMO Pri- –20
vate Bank. 2 1
Some of the biggest gainers
in the past three months were
0 0 –40
energy companies, boosted by
the rising price of oil. U.S.- 2015 ’16 ’17 1975 ’80 ’90 2000 ’10 2015 2016 2017
traded crude is up 12% since *Includes NYSE, Nasdaq, NYSE American and NYSE Arca volumes
the end of June—to $51.67 a †Trading range is calculated by subtracting the intraday low from the high and making that a percentage of the previous day’s close. Available data go back to 1975.
barrel—lifted by unexpectedly Sources: FactSet (DJIA, sector performance, VIX); WSJ Market Data Group (volume); Thomson Reuters (moves) THE WALL STREET JOURNAL.
strong demand and signs of
slowing production. Energy of these fundamentals, when across the eurozone were cific region finished the quar- quarter, its best since 2015, But some markets have
companies in the S&P 500 fin- corporations report their most more upbeat about their pros- ter higher, with solid earnings while Hong Kong’s Hang Seng paused more recently. Taiwan
ished the quarter up 6%. recent quarterly results. While pects than at any time in more and broadly positive risk sen- added 6.9% over the period. and Hong Kong logged their
All but one of the 11 sectors they might show a modest than a decade during Septem- timent continuing to outweigh Japan led the way region- first monthly declines of 2017,
in the S&P 500 ended the slowdown in earnings growth, ber, data from the European the region’s geopolitical con- ally in September, with the with Taiwan shares hit by re-
quarter higher. Consumer-sta- the fact that Republicans are Nikkei Stock Average notching cent worry about tech de-
ples stocks finished in the red. moving forward with tax cuts its best month of 2017, up mand, especially for Apple’s
“The fundamentals are could offer a boost to the 3.6%. iPhone.
good, we’re seeing economic economy and stock market,
The Shanghai Composite Index gained 4.9% Strength in Asian equity Australia’s S&P/ASX 200 re-
expansion in virtually every some investors said. during the quarter, its best since 2015. markets will likely continue corded its worst run in six
country, and as long as we just The Stoxx Europe 600 through the fourth quarter as years by falling for a fifth
continue steady, markets climbed 3.8% in September “there is still massive liquidity straight month. After banks
should climb,” Mr. Ablin said. and ended the quarter 2.3% in the markets” and “most of fell in August, a sharp retreat
“Investors are relatively san- higher, as solid earnings Commission showed Thursday, cerns, in particular the escala- the major global economies in iron-ore prices the past sev-
guine with fundamentals and growth and a buoyant global while the German unemploy- tion of tensions between are still in a stimulus phase,” eral weeks has pressured Aus-
appear to be brushing off the economy have drawn in inves- ment rate fell to a record low, North Korea and the U.S. said Gavin Parry, managing di- tralian mining stocks.
big doom and gloom.” tors. data on Friday showed. The Shanghai Composite In- rector of Parry International —Lucy Craymer
October brings the next test Businesses and households Key indexes in the Asia-Pa- dex gained 4.9% during the Trading in Hong Kong. contributed to this article.

S&PDJI can step up to ESG

S&P DJI’s unrivaled ESG data,
risk metrics and scores lay the
groundwork for holistically
informed decisions. Set your
sights on sustainable solutions
for the environment, our society
and your portfolio when
investing for the long term.

indexology®
for a true ESG footprint
spdji.com/indexology

© S&P Dow Jones Indices LLC, a division of S&P Global 2017. All rights reserved. S&P® and Indexology ® are registered trademarks of Standard & Poor’s Financial Services LLC. Dow Jones ® is a registered trademark of
Dow Jones Trademark Holdings LLC. It is not possible to invest directly in an index. S&P Dow Jones Indices receives compensation for licensing its indices to third parties. S&P Dow Jones Indices LLC does not make
investment recommendations and does not endorse, sponsor, promote or sell any investment product or fund.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B6 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

MARKETS DIGEST Data as of Friday, September 29, 2017

Nikkei 225 Index STOXX 600 Index S&P 500 Index 4 p.m. New York time
Last Year ago
20356.28 t 6.83, or 0.03% Year-to-date s 6.50% 388.16 s 1.80, or 0.47% Year-to-date s 7.40% 2519.36 s 9.30, or 0.37% Trailing P/E ratio 24.22 24.45
High, low, open and close for each 52-wk high/low 20397.58 16251.54 High, low, open and close for each 52-wk high/low 396.45 328.80 High, low, open and close for each P/E estimate * 19.19 18.52
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 1.98 2.13
All-time high: 2519.36, 09/29/17

Session high Weekly P/E data based on as-reported earnings from Birinyi Associates Inc.

DOWN UP 20500 390 2525

t

Session open Close

65-day moving average
Close Open
t

20250 385 2500

Session low
20000 380 2475

19750 375 2450

19500 370 65-day moving average 2425

65-day moving average

19250 365 2400

Bars measure the point change from session's open

19000 360 2375
June July Aug. Sept. July Aug. Sept. June July Aug. Sept.

International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2907.67 11.83 0.41 2390.11 • 2914.34 14.9 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1973.81 10.37 0.53 1614.17 • 1981.49 17.2 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 1081.72 9.34 0.87 838.96 • 1112.92 25.5 2.750 Australia 2 1.965 49.0 53.7 53.1 86.4 1.987 1.848 1.599
2.750 10 2.847 52.1 56.4 50.5 42.2 2.871 2.635 1.978
Americas DJ Americas 608.28 2.10 0.35 503.67 • 608.28 12.6
3.000 Belgium 2 -201.4 -199.9 -188.9 -138.4 -0.548 -0.572 -0.649
-0.539
Brazil Sao Paulo Bovespa 74293.51 726.26 0.99 57110.99 • 76004.15 23.4
0.800 10 0.733 -159.4 -154.6 -146.5 -142.6 0.761 0.665 0.130
Canada S&P/TSX Comp 15634.94 16.69 0.11 14509.25 • 15922.37 2.3
0.000 France 2 -0.482 -195.6 -193.9 -182.9 -135.2 -0.489 -0.512 -0.617
Mexico IPC All-Share 50346.06 209.06 0.42 44364.17 • 51713.38 10.3
1.000 10 0.748 -157.9 -153.5 -146.8 -136.5 0.772 0.661 0.191
Chile Santiago IPSA 4055.19 24.65 0.61 3127.54 • 4055.19 25.8
0.000 Germany 2 -0.686 -216.0 -214.2 -206.6 -141.8 -0.692 -0.749 -0.684
U.S. DJIA 22405.09 23.89 0.11 17888.28 • 22412.59 13.4
0.500 10 0.466 -186.1 -182.6 -178.6 -167.1 0.481 0.343 -0.115
Nasdaq Composite 6495.96 42.51 0.66 5046.37 • 6495.96 20.7
0.050 Italy 2 -0.123 -159.8 -156.5 -134.0 -84.0 -0.114 -0.023 -0.106
S&P 500 2519.36 9.30 0.37 2085.18 • 2519.36 12.5
2.200 10 2.116 -21.1 -18.4 -6.4 -33.6 2.123 2.066 1.219
CBOE Volatility 9.51 –0.04 –0.42 9.36 • 22.51 –32.3
0.100 Japan 2 -0.115 -159.0 -156.7 -147.3 -102.1 -0.117 -0.155 -0.287
EMEA Stoxx Europe 600 388.16 1.80 0.47 328.80 • 396.45 7.4 0.100 10 0.065 -226.2 -223.5 -212.5 -163.9 0.072 0.004 -0.084
Stoxx Europe 50 3172.79 15.40 0.49 2730.05 • 3276.11 5.4 4.000 Netherlands 2 -0.685 -216.0 -214.3 -201.1 -138.7 -0.693 -0.694 -0.653
France CAC 40 5329.81 36.04 0.68 4377.46 • 5432.40 9.6 0.750 10 0.579 -174.8 -170.4 -165.2 -155.4 0.603 0.478 0.002
Germany DAX 12828.86 124.21 0.98 10259.13 • 12888.95 11.7 4.750 Portugal 2 -0.059 -153.4 -149.7 -133.6 -39.6 -0.047 -0.019 0.338
Greece ATG 755.61 0.85 0.11 565.53 • 858.08 17.4 4.125 10 2.371 4.5 8.6 71.0 174.7 2.393 2.839 3.303
Israel Tel Aviv 1421.04 … Closed 1363.50 • 1478.96 –3.4 2.750 Spain 2 -0.323 -179.8 -176.8 -165.9 -93.9 -0.318 -0.342 -0.205
Italy FTSE MIB 22696.32 108.65 0.48 16216.95 • 22696.32 18.0 1.450 10 1.607 -71.9 -67.9 -56.2 -63.5 1.628 1.567 0.921
Netherlands AEX 537.06 3.67 0.69 440.51 • 537.06 11.2 4.250 Sweden 2 -0.672 -214.7 -211.1 -200.9 -140.2 -0.661 -0.692 -0.667
Russia RTS Index 1136.75 11.19 0.99 960.32 • 1195.61 –1.4 0.750 10 0.928 -139.9 -136.4 -155.7 -137.6 0.943 0.573 0.180
Spain IBEX 35 10381.50 53.00 0.51 8607.10 • 11135.40 11.0 1.750 U.K. 2 0.456 -101.9 -99.5 -115.6 -66.3 0.456 0.162 0.072
Switzerland Swiss Market 9157.46 45.30 0.50 7593.20 • 9176.99 11.4 4.250 10 1.362 -96.5 -92.9 -113.0 -93.7 1.378 1.000 0.619
South Africa Johannesburg All Share 55579.92 585.57 1.06 48935.90 • 56655.88 9.7 1.375 U.S. 2 1.475 ... ... ... ... 1.451 1.317 0.734
Turkey BIST 100 102907.73 256.63 0.25 72519.85 • 110423.11 31.7 2.250 10 2.327 ... ... ... ... 2.307 2.129 1.556
U.K. FTSE 100 7372.76 49.94 0.68 6693.26 • 7547.63 3.2
Asia-Pacific Commodities Prices of futures contracts with the most open interest 4 p.m. New York time
Australia S&P/ASX 200 5681.60 11.20 5156.60
0.20 • 5956.50 0.3 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
China Shanghai Composite 3348.94 9.30 3004.70
0.28 • 3385.39 7.9 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 9/28/2017
Hong Kong Hang Seng 27554.30 132.70 21574.76
0.48 • 28159.77 25.2 One-Day Change Year Year
India S&P BSE Sensex 31283.72 1.24 25765.14
0.00 • 32575.17 17.5 Commodity Exchange Last price Net Percentage high low
356.25 3.75 1.06% 417.25 344.25
Indonesia Jakarta Composite 5900.85 59.81 5027.70
1.02 • 5915.36 11.4 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 967.75 8.25 0.86 1,047.00 907.00
Japan Nikkei Stock Avg 20356.28 –6.83 –0.03 16251.54 • 20397.58 6.5
Wheat (cents/bu.)
CBOT
CBOT 449.00 -6.00 -1.32% 592.25 422.50
Malaysia Kuala Lumpur Composite 1755.58 –2.48 –0.14 1616.64 • 1792.35 6.9
Live cattle (cents/lb.) CME 115.025 -0.025 -0.02 122.850 99.825
New Zealand S&P/NZX 50 7930.40 16.78 0.21 6664.21 • 7930.40 15.2
Cocoa ($/ton) ICE-US 2,057 77 3.89 2,301 1,794
Philippines PSEi 8171.43 15.39 0.19 6563.67 • 8294.14 19.5
Coffee (cents/lb.) ICE-US 128.10 -0.40 -0.31 166.75 119.10
Singapore Straits Times 3219.91 –7.23 –0.22 2787.27 • 3354.71 11.8
Sugar (cents/lb.) ICE-US 14.13 0.18 1.29 20.40 13.50
South Korea Kospi 2394.47 21.33 0.90 1958.38 • 2451.53 18.2
Cotton (cents/lb.) ICE-US 68.43 -0.54 -0.78 75.75 66.15
Taiwan Weighted 10329.94 33.49 0.33 8931.03 • 10631.57 11.6 Robusta coffee ($/ton) ICE-EU 1974.00 25.00 1.28 2,272.00 1,892.00
Thailand SET 1673.16 6.80 0.41 1406.18 • 1673.16 8.4
Copper ($/lb.) COMEX 2.9530 -0.0280 -0.94 3.1785 2.5025
Gold ($/troy oz.) COMEX 1285.30 -3.40 -0.26 1,362.40 1,160.80
Silver ($/troy oz.) COMEX 16.715 -0.132 -0.78 18.875 14.440
Currencies London close on Sept. 29 Aluminum ($/mt)* LME 2,128.00 -12.00 -0.56 2,191.00 1,688.50
Tin ($/mt)* LME 20,750.00 95.00 0.46 21,225.00 18,760.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Fri YTDchg Copper ($/mt)* LME 6,452.00 -23.00 -0.36 6,937.00 5,491.00
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 2,472.00 11.00 0.45 2,509.00 2,022.00
10% Europe Zinc ($/mt)* LME 3,128.00 3.00 0.10 3,195.00 2,450.50
Bulgaria lev 0.6040 1.6556 –10.9 Nickel ($/mt)* LME 10,265.00 -335.00 -3.16 12,220.00 8,780.00
s WSJ Dollar index Croatia kuna 0.1576 6.345 –11.5 Rubber (Y.01/ton) TCE 201.80 -4.00 -1.94 n.a. n.a.
0
Euro zone euro 1.1808 0.8469 –10.9
s Euro Czech Rep. koruna-b 0.0454 22.016 –14.3 Palm oil (MYR/mt) MDEX 2697.00 -8.00 -0.30 2876.00 2436.00
–10 Denmark krone 0.1587 6.3028 –10.8 Crude oil ($/bbl.) NYMEX 51.62 0.06 0.12 58.37 42.84
sYen Hungary forint 0.003789 263.93 –10.3 NY Harbor ULSD ($/gal.) NYMEX 1.8068 -0.0175 -0.96 1.8586 1.3943
Iceland krona 0.009422 106.14 –6.0 RBOB gasoline ($/gal.) NYMEX 1.5859 -0.0289 -1.79 1.6822 1.2736
–20 Norway krone 0.1255 7.9694 –7.8
0.2738 3.6520 –12.8
Natural gas ($/mmBtu) NYMEX 3.010 -0.007 -0.23 3.5960 2.8860
2016 2017 Poland zloty
Russia ruble-d 0.01736 57.591 –6.0 Brent crude ($/bbl.) ICE-EU 56.75 -0.41 -0.72 60.09 45.51
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1225 8.1642 –10.4 Gas oil ($/ton) ICE-EU 539.50 -5.00 -0.92 550.50 410.00
Fri Fri
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0322 0.9688 –4.9
Turkey lira 0.2807 3.5626 1.1 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1280 7.8114 0.7
Ukraine hryvnia 0.0376 26.5875 –1.8
Argentina peso-a 0.0576 17.3475 9.3
India rupee
Indonesia rupiah
0.0153
0.0000742
65.3300
13472
–3.9
–0.4
U.K. pound 1.3395 0.7465 –7.8 Cross rates London close on Sep 29
Brazil real 0.3160 3.1647 –2.8 Middle East/Africa
Japan yen 0.008875 112.68 –3.7
Canada dollar 0.7996 1.2507 –7.0 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002939 340.30 2.0 Bahrain dinar 2.6508 0.3773 0.02
Chile peso 0.001564 639.20 –4.6 Australia 1.2757 1.7086 1.3165 0.0113 0.1632 1.5058 1.0199 ...
Macau pataca 0.1243 8.0443 1.6 Egypt pound-a 0.0567 17.6390 –2.7
Colombia peso 0.0003405 2936.96 –2.2 Canada 1.2507 1.6751 1.2908 0.0111 0.1601 1.4765 ... 0.9805
Malaysia ringgit-c 0.2368 4.2225 –5.9 Israel shekel 0.2832 3.5316 –8.2
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7223 1.3845 –4.1 Kuwait dinar 3.3111 0.3020 –1.2 Euro 0.8469 1.1346 0.8742 0.0075 0.1084 ... 0.6772 0.6640
Mexico peso-a 0.0551 18.1639 –12.4
Pakistan rupee 0.0095 105.400 1.0 Oman sul rial 2.5976 0.3850 unch Hong Kong 7.8114 10.4634 8.0643 0.0693 ... 9.2234 6.2458 6.1257
Peru sol 0.3061 3.2668 –2.6
Philippines peso 0.0197 50.888 2.6 Qatar rial 0.2690 3.718 2.1 Japan 112.6770 150.9400 116.3000 ... 14.4240 133.0400 90.1100 88.3500
Uruguay peso-e 0.0343 29.180 –0.6
Singapore dollar 0.7366 1.3576 –6.2 Saudi Arabia riyal 0.2667 3.7502 –0.01 0.9688 1.2977 ... 0.0086 0.1240 1.1440 0.7747 0.7597
Venezuela bolivar 0.098733 10.13 1.3 Switzerland
South Korea won 0.0008733 1145.09 –5.2 South Africa rand 0.0739 13.5338 –1.2
U.K. 0.7465 ... 0.7706 0.0066 0.0956 0.8817 0.5969 0.5853
Asia-Pacific Sri Lanka rupee 0.0065325 153.08 3.1 Close Net Chg % Chg YTD % Chg
0.7839 1.2757 –8.1 Taiwan dollar 0.03295 30.345 U.S. ... 1.3395 1.0322 0.0089 0.1280 1.1808 0.7996 0.7839
Australia dollar –6.5 WSJ Dollar Index 86.35 0.08 0.09 –7.09
China yuan 0.1506 6.6421 –4.4 Thailand baht 0.03001 33.320 –7.0 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

Key Rates Top Stock Listings 4 p.m. New York time

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 1.23222% 0.53111% ¥ TakedaPharm 4502 6214.00 1.65 28.52 CHF RocheHldgctf ROG 247.20 0.08 6.28 Last: 166.14 s 0.52, or 0.31% YTD s 17.8%
Three month 1.33389 0.85367 Asia Titans HK$ TencentHoldings 0700 336.20 0.96 77.23 £ RoyDtchShell A RDSA 2248.50 0.29 0.27
Six month 1.50600 1.23972 HK$ AIAGroup 1299 57.60 -0.69 31.66 ¥ TokioMarineHldg 8766 4402.00 -0.90 -8.22 € SAP SAP 92.69 0.55 11.93 High 170
One year 1.78233 1.55178 84.01 -0.01 9.25
AU$ AustNZBk ANZ 29.60 -0.50 -2.70 ¥ ToyotaMtr 7203 6710.00 -0.87 -2.44 € Sanofi SAN Close 165
Euro Libor AU$ BHP BHP 25.78 0.78 2.87 AU$ Wesfarmers WES 41.33 1.60 -1.92 € SchneiderElectric SU 73.63 0.68 11.37 Low t 160
One month -0.40357% -0.37571% HK$ BankofChina 3988 3.85 ... 11.92 AU$ WestpacBanking WBC 31.92 -0.65 -2.09 € Siemens SIE 119.20 0.97 2.05
Three month -0.37943 -0.32200 HK$ CKHutchison 0001 99.85 0.10 13.59 AU$ Woolworths WOW 25.21 0.44 4.61 € Telefonica TEF 9.19 0.09 4.22 50–day 155
Six month -0.30929 -0.21214 133.96 0.01 33.41 € Total FP 45.45 0.51 -3.90 moving average
AU$ CSL CSL 150
One year -0.22100 -0.08186 ¥ Canon 7751 3845.00 -0.10 16.69 Stoxx 50 CHF UBSGroup UBSG 16.55 0.61 3.76
145
Euribor ¥ CentralJapanRwy 9022 19730 -1.18 2.60 € Unilever UNA 50.04 1.04 27.93
CHF ABB ABBN 23.94 0.29 11.45
One month -0.37200% -0.37100% HK$ ChinaConstructnBk 0939 6.48 0.31 8.54 £ Unilever ULVR 4319.00 1.23 31.18 30 7 14 21 28 4 11 18 25 1 8 15 22 29
€ ASMLHolding ASML 144.05 0.63 35.07
Three month -0.32900 -0.30100 HK$ ChinaLifeInsurance 2628 23.25 ... 15.10 € Vinci DG 80.40 -0.45 24.27 July Aug. Sept.
€ AXA CS 25.59 1.11 6.69
Six month -0.27300 -0.20300 HK$ ChinaMobile 0941 79.15 -0.38 -3.71 £ VodafoneGroup VOD 208.80 1.73 4.48
€ AirLiquide AI 112.85 1.17 6.81
One year -0.17200 -0.06400 HK$ ChinaPetro&Chem 0386 5.85 1.56 6.36 CHF ZurichInsurance ZURN 295.40 1.93 5.35
189.95
Yen Libor AU$ CmwlthBkAust CBA 75.25 0.17 -8.69
€
€
Allianz
AB InBev
ALV
ABI 101.30
1.66
0.40
20.99
0.75 DJIA Stoxx 50
One month -0.04750% -0.04500% ¥ EastJapanRailway 9020 10385 -0.19 2.82 £ AstraZeneca AZN 4955.00 0.94 11.66 Last: 3172.79 s 15.40, or 0.49% YTD s 5.4%
Three month -0.05121 -0.02593 ¥ Fanuc 6954 22790 -0.15 15.01 € BASF BAS 90.04 1.03 1.96
$ AmericanExpress AXP 90.46 0.36 22.11
Six month -0.00893 0.00336 ¥ Hitachi 6501 792.90 0.04 25.46 € BNP Paribas BNP 68.25 0.86 12.72
$ Apple AAPL 154.12 0.55 33.07 3275
One year 0.10371 0.09929 TW$ Hon Hai Precisn 2317 105.00 0.48 24.70 £ BT Group BT.A 283.90 0.55 -22.62
$ Boeing BA 254.21 -0.02 63.29
$ Caterpillar CAT 124.71 -0.42 34.47 3200
Offer Bid ¥ HondaMotor 7267 3332.00 -0.89 -2.43 € BancoBilVizAr BBVA 7.53 1.11 18.53
KRW HyundaiMtr 005380 150500 2.38 3.08 $ Chevron CVX 117.50 -0.10 -0.17 3125
Eurodollars € BancoSantander SAN 5.91 0.29 19.12
HK$ Ind&Comml 1398 5.80 1.05 24.73 $ CiscoSystems CSCO 33.63 0.84 11.28
One month 1.3500% 1.2500% £ Barclays BARC 193.35 0.60 -13.47 3050
$ Infosys INFY 14.61 2.35 -1.52 $ Coca-Cola KO 45.01 0.22 8.56
Three month 1.4100 1.3100 € Bayer BAYN 115.30 2.13 16.31
2975
¥ JapanTobacco 2914 3688.00 -0.67 -4.06 $ Disney DIS 98.57 0.53 -5.42
Six month 1.5700 1.4700 £ BP BP. 477.30 0.26 -6.34
$ DowDuPont DWDP 69.23 0.25 3.05
One year 1.8700 1.7700 ¥ KDDI 9433 2967.00 0.37 0.25 £ BritishAmTob BATS 4672.00 0.47 1.09 2900
¥ Mitsubishi 2615.50 0.13 5.04
$ ExxonMobil XOM 81.98 -0.26 -9.17
Latest 52 wks ago 8058 € Daimler DAI 67.47 1.23 -4.60 $ GeneralElec GE 24.18 -0.25 -23.48 30 7 14 21 28 4 11 18 25 1 8 15 22 29
¥ MitsubishiElectric 6503 1758.00 1.33 7.89 € DeutscheTelekom DTE 15.79 0.51 -2.52 July Aug. Sept.
Prime rates $ GoldmanSachs GS 237.19 0.73 -0.94
¥ MitsubishiUFJFin 8306 730.70 0.25 1.46 £ Diageo DGE 2453.00 0.51 16.26
U.S. 4.25% 3.50% $ HomeDepot HD 163.56 0.74 21.99
¥ Mitsui 8031 1663.00 -0.09 3.48 € ENI ENI 14.00 0.36 -9.50
Canada 3.20 2.70 $ Intel INTC 38.08 0.66 4.99
197.10 -0.71 -6.05 1488.50
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥
¥
Mizuho Fin
NTTDoCoMo
8411
9437 2570.50 0.19 -3.47
£
£
GlaxoSmithKline
Glencore
GSK
GLEN 342.00
0.44
0.91
-4.71
23.31
$
$
IBM
JPMorganChase
IBM
JPM
145.08
95.51
-0.40 -12.60
0.14 10.68
Dow Jones Industrial Average P/E: 21
AU$ NatAustBnk NAB 31.50 0.10 2.71 £ HSBC Hldgs HSBA 737.10 0.72 12.21 $ J&J JNJ 130.01 0.42 12.85 Last: 22405.09 s 23.89, or 0.11% YTD s 13.4%
Policy rates
ECB 0.00% 0.00%
¥ Nintendo 7974 41560 -0.02 69.36 € INGGroep INGA 15.60 0.65 16.68 $ McDonalds MCD 156.68 -0.51 28.72
Britain 0.25 0.25
¥ NipponTeleg 9432 5157.00 0.33 4.99 £ ImperialBrands IMB 3184.00 0.38 -10.12 $ Merck MRK 64.03 -0.40 8.77 22500
Switzerland 0.50 0.50
¥ NissanMotor 7201 1114.50 -0.09 -5.19 € IntesaSanpaolo ISP 2.99 0.20 23.33 $ Microsoft MSFT 74.49 0.84 19.87
¥ Panasonic 6752 1630.50 0.25 37.07 € LVMHMoetHennessy MC 233.45 1.15 28.69 $ Nike NKE 51.85 -1.48 2.01
22000
Australia 1.50 1.50
HK$ PingAnInsofChina 2318 59.95 0.93 54.51 £ LloydsBankingGroup LLOY 67.73 0.76 8.35 $ Pfizer PFE 35.70 0.28 9.91
U.S. discount 1.75 1.00 21500
Fed-funds target 1.00-1.25 0.25-0.50
$ RelianceIndsGDR RIGD 23.85 ... 51.19 € LOreal OR 179.90 1.12 3.75 $ Procter&Gamble PG 90.98 0.10 8.21
Call money 3.00 2.25
KRW SamsungElectronics 005930 2564000 0.04 42.29 £ NationalGrid NG. 924.60 0.40 -10.93 $ 3M MMM 209.90 0.17 17.54 21000
¥ Seven&I Hldgs 3382 4345.00 -0.23 -2.43 CHF Nestle NESN 81.10 0.06 11.02 $ Travelers TRV 122.52 -0.23 0.08
Overnight repurchase rates 20500
U.S. 1.16% 1.30%
¥ SoftBankGroup 9984 9084.00 -0.34 16.99 CHF Novartis NOVN 82.90 0.42 11.88 $ UnitedTech UTX 116.08 0.21 5.89
Euro zone n.a. n.a.
¥ Sony 6758 4186.00 1.60 27.82 DKK NovoNordiskB NOVO-B 301.00 -0.82 18.18 $ UnitedHealth UNH 195.85 -0.13 22.38 30 7 14 21 28 4 11 18 25 1 8 15 22 29
¥ Sumitomo Mitsui 8316 4320.00 0.23 -3.14 £ Prudential PRU 1786.50 0.39 9.77 $ Visa V 105.24 0.63 34.89 July Aug. Sept.
Sources: WSJ Market Data Group, SIX HK$ SunHngKaiPrp 0016 126.90 0.48 29.49 £ ReckittBenckiser RB. 6813.00 0.89 -1.06 $ Verizon VZ 49.49 0.16 -7.29 Note: Price-to-earnings ratios are for trailing 12 months
Financial Information, Tullett TW$ TaiwanSemiMfg 2330 216.50 1.17 19.28 £ RioTinto RIO 3473.00 1.64 9.96 $ Wal-Mart WMT 78.14 -1.03 13.05 Sources: WSJ Market Data Group; Birinyi Associates
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL. Monday, October 2, 2017 | B7

FINANCE & MARKETS

Axovant’s Problems Drug Fail

Axovant's shares lost more than
70% in a day, a setback for some

Ripple to Wall Street

large hedge funds.
$30

25

20
Some hedge funds see on Roivant, said people famil- miliar with the matter.
iar with the firms, with QVT QVT is a multistrategy
value of investments still making more than 10 hedge-fund firm founded by 15

sink after failure of times its Roivant investment Daniel Gold in 2003. It is the
10
even after the plunge in Axo- biggest backer of Roivant,

LISA LAKE/GETTY IMAGES

Alzheimer’s drug trial vant’s stock price. That’s be- founded by former QVT em-
5
cause of the valuation implied ployee Vivek Ramaswamy.
BY JULIET CHUNG by a $1.1 billion August financ- While working at QVT as a
0
ing round for Roivant led by biotech investor in 2014, Mr.
A sudden collapse in Axo- SoftBank Group Corp.’s Vision Ramaswamy approached Mr. M T W T F
vant Sciences Ltd.’s stock Fund. Gold with the idea of creating Source: WSJ Market Data Group
price after the company’s Alz- But Tuesday’s disclosure of a biotech company to acquire Vivek Ramaswamy founded Axovant, which went public in 2015. THE WALL STREET JOURNAL.
heimer’s drug failed a pivotal the failed trial of the drug and develop drugs that were
clinical trial has stung some known as intepirdine and the being discarded by pharma- cluding using intepirdine to in December 2015, according profitable bets against sub-
big-name Wall Street inves- plunge in Axovant’s share ceutical companies. That com- treat another neurodegenera- to securities filings. Its invest- prime mortgages that paid off
tors. price mark a setback for the pany became Roivant. tive condition known as de- ment is spread over several in 2006 and 2007 helped fuel
New York hedge-fund firms firms. They could also lead to Mr. Ramaswamy, who at- mentia with Lewy bodies. Axo- funds and constitutes a frac- the rise to QVT’s peak size in
QVT Financial LP and Viking a lower valuation price for tended and graduated from vant expects those trial results tion of the roughly $25 billion 2008.
Global Investors both in- Roivant than if the trial had Yale Law School while still by the end of the year. firm’s portfolio. Its flagship Roivant’s Mr. Ramaswamy,
vested in private biotechnol- succeeded. working at QVT, founded Axo- SoftBank doesn’t plan to hedge fund, which lost 4% last 32 years old, said he hoped
ogy company Roivant Sci- Several Roivant investors vant as a subsidiary of mark down the value of its year, gained 10% this year Roivant would have successes
ences Ltd., Axovant’s biggest described their stake as a bet Roivant. Axovant went public Roivant stake, according to through August, according to a with drugs in its pipeline in the
shareholder. Roivant’s Axovant on a diversified platform of in 2015 and is now run by Me- people familiar with the firm, person familiar with the fund. future but expected additional
stake of 75 million shares lost drugs rather than a wager on divation Inc. founder David because it had applied a dis- Roivant comprises a more failures, a sign the company
more than $1.3 billion on pa- just the success of intepirdine. Hung. counted valuation in the first meaningful investment for was taking enough risk in
per in a day, plunging more Roivant has a portfolio of 16 Axovant was formed around place. One person said the QVT, whose assets under man- R&D. “If I feel like I failed any-
than 70% from its value a day drugs across both private and intepirdine, which Axovant lower valuation was partly due agement have fallen to $1.8 one this week it wasn’t the in-
earlier. The loss had pared public biopharmaceutical com- bought from GlaxoSmithKline to the high probability of in- billion at the end of August vestors in Axovant and Roivant.
slightly as of Axovant’s Friday panies. Roivant investors could PLC for $5 million in 2014. tepirdine’s failure given high from more than $12 billion in It’s the patients who didn’t get
closing price of $6.88 also profit from a possible ini- Axovant said last week that failure rates in general for ex- early 2008, according to peo- this medication,” he said.
QVT and Viking still have tial public offering of Roivant it would now focus on other perimental Alzheimer’s drugs. ple familiar with the firm. —Charley Grant
made significant paper profits down the road, said people fa- programs in development, in- Viking invested in Roivant Gains of billions of dollars on contributed to this article.
MICHAEL BUCHER/THE WALL STREET JOURNAL

AIG Chief Executive Brian Duperreault, shown in July

AIG dation.
As of June 30, 2017, the
company had $499.76 billion
of total assets. That makes it
Continued from page B1 smaller than other insurers
to traditional insurance regu- not labeled significantly im-
lators.” portant, including Warren Buf-
Freeing AIG of the “SIFI” fett’s Berkshire Hathaway
label is steeped in signifi- Inc., which has $666 billion in
cance. AIG received one of the assets.
government’s biggest bailouts AIG remains one of the
during the crisis as regulators world’s biggest sellers of prop-
feared its collapse would have erty-casualty insurance to busi-
far-reaching and unpredictable nesses world-wide and is also a
repercussions. It had extensive major seller of life insurance
and complex financial dealings and retirement-income prod-
with big banks and other fi- ucts in the U.S., along with
nancial firms in the U.S. and home and car insurance to
Europe. wealthy households.
Its rescue package, which Removal of the label leaves
ultimately topped $182 billion, Prudential Financial Inc. as
upset many people, including the sole nonbank firm with the
homeowners who were strug- label, for now. Regulators re-
gling to keep up mortgage scinded it for General Electric
payments. The missteps that Co.’s financing arm in June
brought AIG to the brink 2016.
played heavily into lawmakers’ Another insurer, MetLife
decision to create the new Inc., successfully challenged
oversight council in the 2010 its designation in federal
Dodd-Frank financial regula- court, though the matter was
tory law and give it the au- appealed and is now on hold
thority to pull in firms such as while the Treasury Depart-
AIG for tougher regulation. ment reviews the designation
process.
Some Wall Street analysts
think Prudential will be freed
In a 6-3 vote, AIG of its label soon. In a state-
was deemed to no ment Friday, Prudential said it
“will consider our options
longer be a threat to while contesting our designa-
the broader economy. tion through the review pro-
cess. Prudential has long
maintained that we do not
meet the standard for designa-
“AIG got a $180 billion tax- tion.”
payer bailout less than a de- Analysts said AIG’s share
cade ago and, without proper price in recent weeks has re-
oversight, it will remain a flected a high probability that
huge and interconnected com- it would get out of the label.
pany that could bring down Still, action by regulators
the financial system again,” could give shares a lift “as it
said Sen. Elizabeth Warren (D., should help reduce regulatory
Mass.). costs and eliminate the poten-
AIG fully repaid its bailout tial annual ‘black cloud’ asso-
by the end of 2012 by selling ciated with” stress testing by
off businesses and other as- the Fed, Thomas Gallagher of
sets to roughly halve its size. Evercore ISI said in an analyst
Months later, the oversight note.
council determined stress at AIG’s lead regulator will
AIG could threaten the econ- once again be New York’s De-
omy and designated it as sys- partment of Financial Ser-
temically important. It was the vices, widely considered one
first time the council had used of the strictest and most well-
its main Dodd-Frank power. staffed insurance departments
The label subjected AIG to in the country. Superintendent
potentially onerous oversight, Maria T. Vullo said in a state-
including supervision by the ment that the department
Federal Reserve. AIG and “will continue to conduct in-
other insurers are primarily depth and rigorous supervi-
regulated by state insurance sion of AIG’s insurance compa-
departments. nies to ensure their financial
Entering 2008, AIG had soundness and compliance
$1.048 trillion in assets on its with law. This state-based reg-
books, though their true value ulation will continue to keep
was unknown at that point. our financial markets strong
Many government and insur- and robust while protecting
ance officials expected a liqui- consumers.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B8 | Monday, October 2, 2017 THE WALL STREET JOURNAL.

MARKETS
Bitcoin Wins in Japan, Takes Hit in Korea
BY PAUL VIGNA The emergence of Japan as a the regulator said. “The FSC is
AND GREGOR STUART HUNTER major trading center led some concerned that ICOs would lead Bitcoin Gets Rushed in South Korea
Chinese bitcoin traders to shift to fraudulent transactions and The Korean won became the third-most popular national currency for bitcoin
Two Asian nations took con- their investing activities to To- is concerned about the market trading during the summer, as measured by market share.
trasting measures related to kyo and, to a lesser extent, becoming overheated.”
cryptocurrencies Friday, with South Korea. Their emergence The U.S. Securities and Ex- 100%
Japan giving exchanges the as important markets for cryp- change Commission said last
green light to operate just as tocurrencies helped bitcoin week it had established a cyber 90
South Korea added its weight to shrug off Beijing’s regulatory unit to target internet-related Japanese yen
a recent global regulatory crackdown and fueled a year- misconduct, including violations
80
crackdown. long rally. The price of bitcoin of rules involving ICOs and dis-
Japan’s Financial Services declined 25% after the Chinese tributed-ledger technology, also
Agency handed out its first li- clampdown but on Sunday was known as a blockchain, which 70
censes for digital-currency ex- trading at $4,288. underpins cryptocurrencies.
changes, allowing them to oper- South Korea, meanwhile, China banned fundraising 60
ate legally in the country and said it would step up inspec- through ICOs in September as
further solidifying the upstart tions of virtual-currency ex- part of a wider crackdown on
50
currency’s status in the world’s changes and join other leading bitcoin trading. Financial regu-
third-largest economy. economies in banning so-called lators in Hong Kong and Singa- U.S. dollar
BitFlyer, the largest digital- initial coin offerings. pore have said in recent months 40
currency exchange in Japan and Initial coin offerings—the that they would regulate ICOs
one of the largest in the world, sale of bitcoin-like “tokens” to like any other fundraising, cit- 30
was among the 11 exchanges re- fund new businesses—have ing fraud concerns as well as
ceiving a license, as was a come under intense scrutiny the risk of money laundering
smaller exchange called Quoine. this year from regulators world- and terrorist financing. 20
Of the 11, nine were existing and wide who see cybersecurity and The U.K.’s Financial Conduct Korean won
two were new, while an addi- fraud risks in the red-hot mar- Authority warned investors in 10
tional 17 operators are under ket. Korea’s Financial Services September that ICOs are “very Euro
examination, the agency said. Commission cited a rise in high-risk, speculative invest- Chinese yuan
0
“It has been a long and chal- criminal cases involving crypto- ments” and vulnerable to fraud.
lenging process, but we are ex- currencies. In addition to ICOs, Japan has had a rocky his- Jan Feb. March April May June July Aug. Sept.
cited and truly grateful,” said the regulator said it would ban tory with bitcoin. The first ma- Source: CryptoCompare THE WALL STREET JOURNAL.
Quoine Chief Executive Mike coin margin transactions—buy- jor bitcoin exchange, Mt. Gox,
Kayamori. ing virtual currencies with bor- was located in Tokyo. It col- cense until Oct. 1. Yuzo Kano estimated it would search site Coinhills.
Japan has emerged this year rowed money. lapsed and declared bankruptcy The rules require exchanges cost about $1 million for a com- The exchange is also expand-
as the largest market for bitcoin The penalties for illegal acts amid scandal in early 2014, and to maintain minimum capital- pany to be fully compliant with ing overseas. BitFlyer has re-
trading, at the same time that will be “stern,” it said. authorities are still dealing with reserve requirements, segregate the regulations. ceived money-transmitter li-
China has clamped down on its “South Korea is following the fallout. In 2016, the FSA be- customer accounts, and employ BitFlyer is the largest bitcoin censes from 38 U.S. states, Mr.
bitcoin industry. Roughly 50% of China, the U.S. and Singapore to gan planning a set of laws for anti-money-laundering and exchange in the world ranked Kano said. The firm expects to
all bitcoin volume is via the bit- tighten regulations on ICOs and digital currencies. know-your-customer practices. by volume, with 29% of all bit- have its U.S. exchange operating
coin/yen trading pair. A year ago, shares the view of other coun- The law went into effect on While there is a small appli- coin trading, and the third-larg- by the end of the year.
yuan/bitcoin trading made up tries about the risks associated April 1, and exchanges were al- cation fee, the equivalent of est cryptocurrency exchange —Kosaku Narioka
about 93% of all bitcoin trading. with trading virtual currencies,” lowed to operate without a li- about $2,000, bitFlyer CEO globally, according to the re- contributed to this article.

HSBC Fined $175 Million by Fed Over Forex Trading

BY MARGOT PATRICK mer global head of foreign-ex- “in a manner that benefited Prosecutors allege Messrs. municate with competitors ties and ordered remedial ac-
AND RYAN TRACY change cash trading, is on trial them and their trading desk” Johnson and Scott bought about their trading positions.” tion at HSBC over activities in
in New York for allegedly trad- to the detriment of the client. pounds first for HSBC’s own An HSBC spokesman said the same period from 2008 to
The U.S. Federal Reserve ing ahead of a $3.5 billion cur- Mr. Scott has also been accounts, driving up the price. the bank was pleased to have 2013 that the Fed studied. But
fined HSBC Holdings PLC $175 rency transaction for a client. charged and is contesting ex- The bank made about $8 mil- resolved the matter with the none had explicitly singled out
million for failing to ade- Mr. Johnson denies the tradition from the U.K. to lion from the trades, prosecu- Fed and declined to comment the behavior of Messrs. John-
quately supervise its foreign- charges. His lawyer didn’t re- stand trial. He denies the tors say. on Mr. Johnson’s trial. The son and Scott.
exchange trading business and turn a call. charges. The Fed said the British bank isn’t named as a party in Banks collectively have
said activities by two senior The Fed said the bank’s de- In 2011, HSBC client Cairn bank “failed to detect and ad- the action against Messrs. paid billions of dollars in pen-
traders now being prosecuted ficient policies and procedures Energy PLC hired the bank to dress its traders misusing con- Johnson and Scott in New alties since a global regulatory
are examples of the lack of allowed Mr. Johnson and an- convert proceeds from the sale fidential customer informa- York. probe into foreign-exchange
oversight. other senior trader, Stuart of an Indian subsidiary into tion, as well as using The fine comes after other market activities started in
Mark Johnson, HSBC’s for- Scott, to misuse information sterling. electronic chat rooms to com- regulators also levied penal- 2013.

Email: [email protected]
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Barclays Loses Investors’ Love OVERHEARD Why CEOs of

Food Firms
Banks need a good story to have been booming in the So, you’re saying there’s
Falling Behind
explain what they are about.
Barclays PLC wants to tell a
tale of growth, but its audi-
Relative share-price performance
low-rate world. The market
has got increasingly aggres-
sive with cheaper pricing and
a chance?
PTC Therapeutics got
some bad news on Thurs-
Are Exiting
20%
ence is struggling to suspend looser terms. This clearly day. A Food and Drug Ad- A cereal killer is stalking
its disbelief. can’t last. Interest-rate and ministration advisory com- the executive offices of pack-
Stoxx
The U.K. lender’s stock has 10 600 currency trading, Barclays’s mittee voted, 10-1, that aged-food companies, with
had a shocking year: it is Banks other big strength, has been Translarna, the biotech Kellogg boss John Bryant be-
down 13% year to date while Credit laid low by a lack of volatility company’s experimental ing the latest victim.
European banks in the Stoxx 0 Suisse and client activity. drug to treat Duchenne Other companies where
600 index are up 11%. Barclays Tim Throsby, head of the muscular dystrophy, needs chief executives have left
has performed worse even Deutsche investment bank, says a mod- more data to show its effi- since the spring of 2016 or
than Deutsche Bank AG. –10 Bank est increase in revenues cacy before the drug can be are on their way out include
There are a host of issues would produce a tremendous approved. That means the General Mills, Mondelez,
that leave investors cold, but Barclays increase in profitability. He FDA is likely to reject the Hormel, Hershey, Nestlé and
–20
they could be overcome if also wants to recycle capital drugmaker’s application by Coca-Cola.
Barclays focused on producing J FMAM J J A S out of old, low-return lending the Oct. 24 deadline. As recently as 2015 many
income for shareholders today Sources: FactSet; Reuters (photo) Barclays Chief Executive relationships into more credit That ordinarily would be of these companies saw
rather than risk wasting capi- THE WALL STREET JOURNAL. Jes Staley for clients willing to give a lot a problem for investors, but strong investor demand for
tal on trying to buy back mar- more business to the bank. its shares ripped 15% their shares in a “boring is
ket share for its investment they add to concerns about all point to worsening credit But that has been the man- higher on Friday. beautiful” trade—a bet
bank while making a vague the underlying business. Bar- losses. Barclays has been more tra in investment banking for One possible explanation helped along by speculation
promise of future profits. clays’s three main busi- conservative than some with years already. It isn’t hard to for the stock’s surprise that there would be more in-
The bank still has crisis-era nesses—U.K. retail banking, unsecured lending, but it won’t understand why investors rally: The FDA panelists had dustry consolidation like H.J.
hangovers: It is fighting U.S. U.S. credit cards and invest- escape a downturn pain-free. may be skeptical. the option to vote that the Heinz’s purchase of Kraft
authorities over mortgage- ment banking—all face grow- In the U.S., Barclays has in- Barclays slashed its divi- data showed Translarna is Foods. But industry funda-
bond mis-selling and faces a ing risks or poor growth. creased its credit-card lending dend last year to help stabilize ineffective. mentals have been horrific.
U.K. fraud charge. Its chief ex- U.K. retail banking, which at an annual rate of 25% since its balance sheet. With that No panel member voted Of the 10 largest U.S.-
ecutive, Jes Staley, was a big can produce strong returns, is 2013, according to Berenberg. done, the bank would do bet- for that option. That might listed food companies by
plus-point for investors, but a worry because of recent The cycle there is turning and ter to recycle capital into leave the door open for a revenue, not a single one has
his position could be threat- rapid growth in consumer delinquencies are on the rise. shareholders’ pockets rather positive result. outperformed the S&P 500
ened by a U.K. probe into his credit. The disruption of Lastly, in investment bank- than chasing investment-bank- A second, more likely ex- in the past 12 months. An
treatment of a whistleblower. Brexit, the threat of higher in- ing, one of Barclays’s great ing market share. That would planation: It’s a bull market equal-weighted portfolio
Alone, these might not terest rates and a vanishing of strengths is high-yield loans be a story investors could be- for stocks. would have lagged behind by
worry investors, but together real household income growth and bonds. These markets lieve in. —Paul J. Davies 31 percentage points before
dividends.
One reason is moribund

This Long-Haul Airline Disrupter Isn’t Built for Turbulence food prices. Last month’s
U.S. consumer-price index
for food eaten at home was
If you have booked a look stretched, but this isn’t cash flows for the year lines Co. in the U.S. and essentially unchanged from
cheap trans-Atlantic flight Different Flight Paths new. In 2012 the airline as- through June were roughly Ryanair. These combine a the spring of 2014.
with Norwegian Air Shuttle Budget airlines’ operating margins tounded the industry by or- one-quarter lower than in disruptive approach to oper- Even as prices stagnate,
ASA, you can relax: It proba- dering 372 planes. Since then the comparable period. ations with a conservative consumer preferences have
Ryanair 2016 23.1%
bly isn’t about to go bust. 2017 (forecast) 24.7% it has resembled a land-grab- Even so, there is little evi- one to finances. Crucially, shifted toward fresher and
Whether the Oslo-listed air- 23.2 bing property company, us- dence of a cash crunch at strong balance sheets and fat healthier food.
line’s high-risk business Southwest ing its profits as cash depos- Norwegian: It had 5.8 billion margins have given them the Food companies have re-
17.2
model can withstand more easyJet 10.7 its for highly leveraged plane krona ($720 million) at the muscle to expand through shuffled or pruned brands to
difficult market conditions is 8.5 purchases. Many of these end of June, almost double downturns, when rivals are appeal more to consumers
doubtful. Norwegian 4.4 equip its trans-Atlantic long- the level from a year before. in retreat and customers and done expensive acquisi-
Michael O’Leary, the out- –2.2 haul business. The company still seems to hungry for bargains. tions, such as General Mills’
spoken boss of European Note: Years through March 2017 and 2018 for The company’s growth have access to debt, and With its slim margins and 2014 purchase of organic
Ryanair; years through September 2016 and
low-cost leader Ryanair 2017 for easyJet model has showed signs of could also raise cash by sell- leveraged balance sheet, tak- food company Annie’s. To re-
Holdings PLC, told journal- Source: FactSet strain this year. Like Ryanair, ing planes. The real question ing advantage of a downturn ally move the needle,
ists in London last month THE WALL STREET JOURNAL. Norwegian has faced crew is whether the company’s fi- will be much harder for Nor- though, they will have to fo-
that “Norwegian will go in shortages in short-haul. nancial model can survive an wegian. Frequent fliers may cus ruthlessly on costs. Kraft
four or five months.” Norwe- business has poached pilots Whereas Ryanair has can- economic downturn or hope its ambitious project to Heinz’s aborted deal with
gian flatly denied it had fi- from Ryanair. Crew shortages celed flights, risking the higher oil price. disrupt the North Atlantic Unilever early this year is a
nancial problems, and more have forced the Irish carrier wrath of customers, Norwe- The airline operates a very oligopoly thrives. History sign of things to come—a
recently identified a motive to cancel thousands of flights gian leased planes complete different growth model to suggests they shouldn’t get trend that turnover in their
for Mr. O’Leary’s accusations: over the coming months. with crews. This was an ex- tried and tested low-cost car- their hopes up. executive ranks may acceler-
Its mushrooming long-haul Norwegian’s finances do pensive solution: Operating riers such as Southwest Air- —Stephen Wilmot ate. —Spencer Jakab