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Deals for the Brave

In Southeast Asia
What a Manly
Kitchen
Looks Like
MANSION | W9
OFF DUTY | W1
FRIDAY - SUNDAY, JANUARY 29 - 31, 2016 ~ VOL. XL NO. 106

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Japans Economy Minister Resigns Over Political-Funds Scandal
Business & Finance

libaba posted betterthan-expected quarterly earnings and reached
a deal to sell its stake in
on-demand services provider Meituan. A1, B8
Chinese stocks have been

moving sharply in the final
hour of trading, reminding
investors of the summer
market meltdown. B5
Investors from mutual
funds to hedge funds are
turning away from Asian
stocks at record rates. B5
BG Group shareholders
signed off on Shells
roughly $50 billion takeover bid for the firm. B1
In search of clues to the
BOJs monetary-policy decision, firms are using artificial intelligence to supplement human judgment. B5
Mattels Barbie doll is
getting three new body
sizes to try to stem a long
swoon in sales. B1
Facebook posted more
than $1 billion in quarterly
profit for the first time. B3
World-Wide
The WHO will hold an
emergency meeting to discuss the Zika virus, which
the groups chief said is
spreading explosively. A1
Seoul is leaning toward
introducing an advanced
U.S. missile defense system to guard itself against
North Korean threats. A1
Tokyo unveiled its first
radar-evading stealth aircraft, aiming to close a gap
with China and Russia. A3
Japans economy minister said he would resign to
take responsibility for a
political-funds scandal. A3
Taiwans president visited a contested South
China Sea island that his
government controls. A3
Trump is dominating
the Republican presidential field in the first three
states to vote in the 2016
campaign, a poll shows. A1
The U.K. plans to take
in unaccompanied child
refugees from Syria and
other conflict zones. A4
Irans Rouhani heralded
a new relationship with
France during a visit that
produced a wave of commercial deals. A4, B1, B2
Germanys exports to
China are suffering their
sharpest decline in a quarter of a century. A3
CONTENTS
Arts & Ent............. A12
Books...................... A7-9
Business & Tech. B1-4
Crossword.............. A12
Heard on Street.... B8
Mansion............ W9-14
Money & Inv..... B5-8

Off Duty.............. W1-8
Opinion.............. A10-11
Technology............... B3
U.S. News.................. A5
Weather................... A12
World News....... A2-4
China: RMB28.00; Hong Kong: HK$23.00;

Indonesia: Rp25,000 (incl PPN);
Japan: Yen620 (incl JCT); Korea: Won4,000;
Malaysia: RM7.50; Singapore: S$5.00 (incl GST)
KDN PP 9315/10/2012 (031275); MCI (P)
NO. 106/10/2015; SK. MENPEN R.I. NO: 01/
SK/MENPEN/SCJJ/1998 TGL. 4 SEPT 1998
s Copyright 2016 Dow Jones &

Company. All Rights Reserved
Alibaba
Earnings
Shrug Off
Downturn
By Gillian Wong in
Beijing and Rick Carew
in Hong Kong
reas presidential office said

Seoul was considering all options on missile defense
based on the national-security
interest.
Any such deployment would
put a sophisticated piece of
U.S. military hardware close to
China and potentially raise
friction with Beijing. The radar
systems coverage would exPlease see MISSILE page A6
The e-commerce giant also

reached a roughly $900 million deal to sell its stake in
Meituan-Dianping,
Chinas
largest provider of food-delivery, movie-ticketing and other
on-demand services, according
to people familiar with the situation.
Despite robust results, Alibaba continues to face challenges. For example, it has to
find ways to maintain and accelerate growth in revenue
and the value of transactions
made on its trading platforms
when it is already the dominant competitor in Chinas ecommerce sector, with 80% of
the market. It also faces intensifying competition from
smaller but more rapidlygrowing e-commerce firms, in
particular JD.com Inc., a longtime rival that has been slowly
gaining ground in some areas.
Shares of Alibaba were off
2.1% at $68.06 on the New
York Stock Exchange at midday Thursday. The stock had
fallen, before the earnings report Thursday, more than 30%
Please see ALIBABA page A2
Japan hopes to join stealth

fighter club.................................. A3
Heard on the Street: Alibaba

has uphill fight ahead of it... B8
APOLOGETIC: Akira Amari, a top ally of Japanese Prime Minister Shinzo Abe, said in Tokyo on Thursday that he would resign amid an
unfolding scandal that involved accusations of bribery. Mr. Amari was Japans top negotiator in the Trans-Pacific Partnership trade talks. A3
Seoul Warms to U.S. Shield

Pyongyangs nuclear
test revives interest in
missile defense system
South Korea is leaning toward introducing an advanced

U.S. missile defense system to
guard itself against threats
from North Korea following
Pyongyangs recent nuclear
test, a bulwark strongly opposed by China.
Current and former American officials who have re-
cently spoken with top South Terminal High Altitude Area

Korean policy makers say the Defense system, or Thaad, in
country hasnt decided yet the next week or so.
whether to adopt the system
A former U.S. official who
that the U.S. has
recently met
offered but that
with
senior
By Alastair Gale
informal
talks
South Korean
in Pyeongchang, South
between Wash- Korea, and Gordon Lubold officials said a
ington and Seoul
consensus apin Washington
had increased repeared to be
cently. One American official forming in Seoul. Behind the
said there was a strong scenes, it looks like Thaad is
chance the U.S. could an- close to a done deal, this pernounce that the two countries son said.
are in negotiations over the
A spokesman for South Ko-
Poll Shows Trump Leading Africas Fight Against Boko Haram

In Early-Voting States
BY JANET HOOK
Donald Trump is dominating the GOP presidential field
in the first three states to vote
in the 2016 campaign, including Iowa, where he has extinguished the lead once held by
Sen. Ted Cruz of Texas, a new
Wall Street Journal/NBC/Marist Poll finds.
In New Hampshire and
South Carolina, Mr. Trump
leads by double-digit margins.
In all three states, he is the
first choice of more than 30%
of people likely to vote in the
Republican primaries or caucuses.
Trump is positioned to run
the house in these first three
states, said Lee M. Miringoff,

director of the Marist College
Institute of Public Opinion.
His supporters are committed
and plan to turn out.
The poll suggests Mr. Cruz
will be his strongest competitor, even if the senator has
lost ground in Iowa, which
holds the first-in-the-nation
caucuses on Monday.
Mr. Cruz now stands in second place in all three states,
including New Hampshire,
which doesnt typically favor
Republicans with his kind of
conservative profile.
Among Democrats, the poll
points to a roller-coaster ride
through the three early-voting
states. Former Secretary of
State Hillary Clinton and Sen.

Bernie Sanders of Vermont remain deadlocked in Iowa; Mr.
Sanders has opened a commanding 57% to 38% lead in
New Hampshire, which votes
on Feb. 9; in South Carolina,
Mrs. Clinton enjoys an even
wider 64%-to-27% spread
ahead of its Feb. 20 primary.
The polls demonstrate that
Mr. Trump and Mrs. Clinton
remain their partys front-runners. While Mrs. Clinton has a
rougher road than Mr. Trump
in Iowa and New Hampshire,
South Carolina gives her a
firewall, Mr. Miringoff said.
The Iowa poll found that
Mr. Trump is leading Mr. Cruz
Please see POLL page A6
At This Tennis Tourney, the Racket Is in the Cafe

i
Players at Australian Open run for free food and other swag
BY TOM PERROTTA
MELBOURNE, Australia
The Australian Open, the first
Grand Slam tennis tournament
of the year, is known as the
Happy Slam among players because of its many perks.
There is unlimited transportation by friendly drivers, even
to faraway spots like the scenic
Great Ocean Road. There is a
generous travel voucher. There
are gifts (like Ugg boots and
Apple watches), excursions
(like hot-air balloon rides) and
private movie screenings (Star
Wars: The Force Awakens).
This year, something new is
filling up the players with more
happiness than ever before:
endless plates of free food.
Rather than having a per
diem of 60 Australian dollars
(US$42), players and coaches stocked with sandwiches,

now have meal cards that let drinks, doughnuts, and cookies
them eat as much as they and has a smoothie bar.
please at the player restaurant
Bob Bryan said the tournainside Rod Laver Arena. Bob ments generosity has taught
and Mike Bryan, the American him a valuable lesson. If food
twins who have
was free, people
dominated doubles
would eat a lot more
for the past decade,
of it, he said. Thats
said there has been
what its telling me.
a feeding frenzy.
The players insaYoure sitting in
tiable
appetites
these sushi lines
caused the tournaTennis arena
and guys are taking
ment to amend the
cuisine
food for the road,
takeout policy to
theyre getting food for every- speed up checkout lines: only
one in their family, Mike two containers of sushi at a
Bryan said. Guys are grabbing time. But players can get back
all the chips, just clearing it in line if they want more.
out.
Ive never met a tennis
Other fare includes duck player that hates sushi, said
breast, braised veal, rice noo- Serena Williams, who has won
dles with crisp tofu, and vari- six titles here, and has reached
Please see TENNIS page A6
ous pastas. The restaurant is
YAROSLAV TROFIMOV/THE WALL STREET JOURNAL
Oil prices rose on comments from Russias energy

minister that the nation is
willing to discuss production cuts with OPEC. B5
DLR 118.73 0.04%
Alibaba Group Holding Ltd.

posted stronger-than-expected
earnings in its latest quarter
despite a slowdown in Chinas
economy, highlighting the resilience of Chinese consumers.
FRANCK ROBICHON/EUROPEAN PRESSPHOTO AGENCY
Samsungs profit declined 40% in a difficult

quarter for its chip and
mobile businesses. B1, B8
ASIA EDITION
WAR-TORN: Boko Haram, Islamic States deadliest affiliate, is reacting

to setbacks in Africa with an intimidation campaign, Yaroslav Trofimov
writes. Here, a local self-defense vigilance committee in Cameroon. A2
Health Agency Says

Zika Spreading Fast
BY BRIAN BLACKSTONE
AND REED JOHNSON
ZURICHThe head of the
World Health Organization
said Thursday she would convene an emergency meeting in
Geneva on Monday to discuss
the Zika virus, which she said
is spreading explosively.
The level of alarm is extremely high, WHO DirectorGeneral Margaret Chan said in
remarks to a regularly scheduled meeting of the public
health agencys executive
board. Questions abound. We
need to get some answers
quickly.
The announcement by WHO
underscores the alarming
speed with which a virus that
began as an obscure tropical
malady afflicting Africa and
then several remote Western
Pacific islands has transformed into a major international health threat, particularly within the Americas.
More than 20 countries in the
hemisphere, including Mexico,
Panama, El Salvador, Colombia, Venezuela, as well as the
U.S. territory of Puerto Rico,
have registered cases of active
Zika transmission, according
to the U.S. Centers for Disease
Control and Prevention.
No country has been hit
harder than Brazil, where
health officials estimate as
many as 1.5 million people
may be infected by Zika. More
puzzling and concerning to
health officials is that Brazil
uniquely has registered thousands of suspected cases in
which the Zika virus is believed to be causing babies to
Please see ZIKA page A2
THE WALL STREET JOURNAL.
A2 | Friday - Sunday, January 29 - 31, 2016
WORLD NEWS
Losing Land, Boko Haram Sends In Bombs
ZIKA
Continued from Page One
be born with microcephaly, or
underdeveloped skulls and
brains.
More than 4,100 cases of
what was initially suspected of
being Zika-related microcephaly have been recorded in Brazil, and nearly 70 babies have
died. Zika has subsequently
been discounted as a cause in
some of the cases but the vast
majority of them are still under investigation. In all of
2014, the country recorded 147
microcephaly cases.
Although the link isn't yet
proven, medical authorities believe that Zika can be transmitted from pregnant women to
fetuses through the placenta.
The CDC has warned pregnant
women to avoid travel to Zikainfected countries. It has also
urged women who are trying
to become pregnant to talk
with their doctors about the
planned trip, and to protect
themselves from mosquitoes if
they do go.
Pregnant women are likely
most at risk during their first
trimester, when brain development is occurring, the CDC
says, but adds there is evidence the risk continues into
the second trimester as well.

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Paul Beckett, Asia Editor

Troy McCullough, Senior News Editor, Asia
David Holland, News Editor, Asia
Margaret de Streel, International Editions Editor
Darren Everson, Deputy International Editor
Hugo Restall, Editorial Page Editor
Mark Rogers, Advertising Sales
Jacky Lo, Circulation Sales
Jacquelyn Drozdoff, Communications
Stuart Wood, Operations
Simon Wan, Technology
victed from much of

the Belgium-sized area
it controlled a year
ago, Boko Haram is the only
one of Islamic States many
affiliates to have suffered
such dramatic territorial
losses. Developments here,
therefore, offer insights into
what may happen should Islamic States central command be ousted one day
from the core areas it controls in Syria and Iraq.
A disheartening lesson so
far: Islamic States loss of
territory only transforms the
nature of the war rather than
WHOs
announcement
comes within days after confirmation by U.S. health authorities that several U.S. residents
in states including New York
City, Arkansas, Texas and Florida have tested positive for the
virus after traveling to countries where it is circulating.
There haven't been any confirmed homegrown cases of
Zika in the continental U.S., although many experts believe it
is inevitable some cases will
turn up as spring and summers warmer weather comes
to the Northern Hemisphere.
Ms. Chan said key concerns
include the viruss link to birth
defects and neurological problems, the potential for it to
spread further and the lack of
vaccines and treatments.
I am asking the committee
for advice on the appropriate
level of international concern
and for recommended measures that should be undertaken in affected countries and
elsewhere, she said.
WHOs action is the latest
and, so far, most visible signal
of the international health
ALIBABA
over the past year amid concerns about Chinas economy,
whose growth rate moderated
to 6.9% last yearthe weakest annual pace in a quarter
century.
But Alibaba said Thursday
that its net profit for the three
months ended in December
more than doubled from a
year earlier to 12.5 billion
yuan ($1.9 billion), including a
gain from the sale of the companys movie-related businesses. Excluding that gain,
the company said its profit
communitys growing anxiety,

amplifying the concerns of
world governments. This week,
U.S. President Barack Obama
urged cooperation between the
U.S. and Brazil in speeding development of a Zika vaccine,
which health authorities say is
still three to five years from
development.
Some Brazilian health au-
thorities welcomed WHOs announcement, saying Brazil and

the rest of the hemisphere
would benefit from the heightened global attention to slowing the Zika viruss advance.
WHO recognizes that this
is an international emergency,
and not a problem of one
country, said Carlos Fortaleza,
an infectologist at the univer-
rose 25%, boosted by improvements in its ability to increase

the amount of money it earns
from each transaction hosted
on its marketplaces.
Revenue rose 32% to $5.3
billion, helped in part by
blockbuster sales during Singles Day, Chinas online shopping festival in November. Alibaba said sales that day
increased 54% from a year
earlier, better than what many
analysts had expected.
Executive Vice Chairman
Joe Tsai said on a conference
call that Alibaba was well-positioned to benefit from
Chinas shift from an investment-driven and manufacturing-heavy economy to one that
is fueled by consumption and

services.
Consumption as a share of
[gross domestic product] is
becoming higher, so we benefit from that, Mr. Tsai said.
He said the shift of users accessing the Internet on mobile
devices continues to help
boost the use of e-commerce.
Underlying our business is a
very significant secular trend,
and that is really decoupling
from the larger economy.
Many analysts have said the
selloff in Alibabas shares was
unjustified because Chinas online retail sector remains a
rare bright spot in the slowing
economy and that overall consumption remains solid. Nomura Securities analysts expect Chinas overall online
shopping market to grow at a
33% compound annual rate between last year and 2017. The
Boston Consulting Group expects Internet surfers and affluent shoppers under the age
of 35 to push Chinas consumer market up to $6.5 trillion in sales by 2020, an increase of 54% from 2015.
Still, Alibaba faces intensifying competition in the race
to provide Chinas smartphone
users with offline services
such as dining reservations,
takeout delivery and movieticket bookings.
Asked on the conference
call about Alibabas plans to
sell its stake in Meituan-Dianping, Mr. Tsai said Alibabas
own online-to-offline business,
called Koubei, is doing well.
We believe a better allocation of our capital is to put
our resources into Koubei and
exiting Meituan is just a matter of time, he said.
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CORRECTIONS AMPLIFICATIONS
Beijing-based venture-capital firm Chinas Innovation
Works was incorrectly called
Innovation Works in the China
Circuit column Thursday.
The last name of Sarah Kobrin, acting chief of health systems and interventions research at the National Cancer
Institute, was incorrectly given
as Krobin in a U.S. News article in some editions Thursday
about cancer centers calling
for more vaccinations against
the human papilloma virus.
Richard Cordray, director
of the Consumer Financial Protection Bureau in the U.S., ordered lender PHH Corp. to return $109 million in ill-gotten
in some ways, more difficult

to tackle than the more conventional battles of last year.
Boko Harams campaign of
intimidation has almost completely paralyzed the regions
economy, with streets emptying after dark and travel on
key roads only possible with
military escorts. It has also
prompted at least 100,000
people from Cameroons Far
Northa one-time tourism
magnetto flee to safer
parts of the majority-Christian country.
Their caliphate project
involved amputating parts of
our territory, said Minister
of Communications Issa Tchi-
Zika is spread primarily by Aedes aegypti mosquitoes, above.
Jonathan Wright,
Managing Director Asia & Publisher
Advertising through Dow Jones Advertising
Sales: Hong Kong: 852-2831 2504; Singapore:
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1-212 659 2176.
Or email: Mark.Rogers@wsj.com
roma Bakary, who hails from

a prominent Muslim family.
Militarily, they can no longer achieve thatand so now
their objective is no longer
to amputate but simply to
kill.
To counter the suicide
bombers, Cameroonian authorities have also spurred
the creation of so-called
vigilance committeeslocal self-defense groups that
keep an eye on strangers entering villages and provide
intelligence to the military.
Cameroons Israeli-trained
special forces, known as BIR,
also receive training in intelligence collection and defussity of So Paulo state, UNESP.
The response time of international authorities to combat
the epidemic should be faster,
since with international support there is an exchange of
experiences, and also more investment in research.
Rafael Cortez, a political
scientist at So Paulo-based
consultant Tendencias Consultoria, said Brazils struggle
with an economic recession
and political turmoil has hindered its ability to stem the
Zika outbreak. Brazil also is
battling epidemics of two
other similar mosquito-borne
viruses, dengue and chikungunya.
This combination of factors
leads to a lack of adequate answers to the problem, by the
politician system, Mr. Cortez
said.
Zika, a tropical disease like
yellow fever and dengue, is
spread to people through mosquito bites, not person to person. About one in five people
who are infected with Zika virus will develop symptoms, the
most common of which are fe-
ver, rash, joint pain and conjunctivitis, or redness in the

eyes. Other symptoms are
muscle pain and headache. It is
usually a mild disease lasting a
few days or a week, and rarely
requires hospitalization.
The virus was first identified in Uganda in 1947, and has
caused outbreaks in Africa,
Southeast Asia and on several
Pacific islands. It is believed to
have crossed the Pacific and
been introduced into Brazil in
2014.
Zika is spread primarily by
the Aedes aegypti mosquito,
commonly known as the yellow-fever mosquito. In the U.S.,
its range extends from South
Carolina and Florida along the
Gulf Coast to Texas, as well as
Hawaii and some parts of Arizona. Zika is also spread, perhaps to a lesser extent, by the
Aedes albopictus mosquito,
whose range in the summer
can reach as far north as New
York and New Jersey, as well
as parts of Illinois and Indiana.
Reed Johnson and Betsy
McKay contributed to this
article.
A member of Cameroons armed forces near the countrys border with Nigeria.
ending it.
They have changed their
methods because they realized that frontal combat is
no longer in their favor, said
Capt. Ticko Kingue, who
commands a company of
Cameroonian mechanized infantry deployed along the
border with Boko Haramheld areas of Nigeria. So
now they have shifted to the
tactic of cowardsthe phase
of kamikaze attacks.
This new phase of the
war, which also involves an
upsurge in roadside bombings and other guerrilla-type
actions by Boko Haram, is
proving just as deadlyand,
gains, 17 times more than initially ordered by a judge. A

Money & Investing article
Tuesday about the case incorrectly said 18 times the original amount.
Germany had hyperinflation in the 1920s. A Money &
Investing article Tuesday
about German savers taking on
more risk incorrectly said the
hyperinflation was in the
1930s.
A photo accompanying an
Off Duty article in the Jan.
22-24 edition about travel in
Hong Kong showed the citys
skyline in 2010. The photo caption failed to indicate it wasnt
a current image.
Readers can alert The Wall Street Journal to any errors in news articles by
emailing wsjcontact@wsj.com.
n a recent afternoon,
several hundred vigilance committee
members lined up on the
road not far from Gancey to
greet a visiting commander
of BIR. Many were armed
with homemade muskets and
pistols, machetes, or arrows
and bows.
We know that Boko
Haram wants to take over
the village, so whenever we
know that someone is not
from here, we act, said one
of the committee leaders,
Warrai Coumandji.
But loyalties in the region
cut both ways. Cameroon has
jailed several local officials
for suspected Boko Haram
links, and many young villagers along the border have
joined the group.
Boko Haram, too, has informers all over, BIR Lt. Col.
Leopolde Nlate Ebale, head
of operations for the Cameroonian task force overseeing
the most sensitive areas
along the Nigerian border,
said as he surveyed the vigilance committee members
lined up to greet him. Boko
Haram bets on feareither
to force people into actively
supporting them, or to at
least constrain them into silence.
YAROSLAV TROFIMOV/THE WALL STREET JOURNAL
GANCEY, CameroonJust
before dawn prayers earlier
this month, a young man
wearing a belt of 12 explosive canisters walked into the
squat, ochre-colored building
that serves as the mosque of
this Cameroonian village.
As he recited the prayers
in the dissipating darkness,
the young
man accidentally stepped
on the foot
of Abba Ali,
a 70-year-old
villager.
I looked up at him and
suddenly realized that this
was a stranger, Mr. Ali said.
That scared me.
Moments later, the intruder detonated his device
in one of some 40 suicide
bombings that Boko Haram, a
militant group that has become the West African
province of Islamic State,
has unleashed on Cameroons
Far North region since July.
Luckily for the faithful of
Gancey, the explosives belt
malfunctioned and nobody
except the attacker died in
the blast. But that doesnt
mean the villagers are feeling
secure.
Everyone is afraid that
ing roadside bombs from U.S.

Special Operations troops.
The U.S. has also set up a
drone base in the northern
Cameroon city of Garoua to
provide all the four countries
targeted by Boko Haram with
surveillance and intelligence
data about the militant
group.
FELIPE DANA/ASSOCIATED PRESS
MIDDLE EAST CROSSROADS

YAROSLAV TROFIMOV
we will have another suicide

bomber here soon, said the
Gancey mosques imam, Moustapha Goni. They have
tried it once, and they will
likely try it again.
Boko Haram, the deadliest
of Islamic States many affiliates world-wide, expanded
its long-running conflict with
Nigeria into neighboring
Cameroon, Chad and Niger
over the past year-and-a-half.
Some of these offensives involved attacks by formations
as big as a thousand men,
aided by columns of armor
pilfered from Nigerias military bases.
By conventional measures,
Boko Haram is finally losing
this war. Recent operations
by Cameroonian forces,
which receive assistance
from U.S. Special Operations
troops, and parallel offensives by the militaries of Nigeria and Chad have significantly reduced the militant
groups ability to wage conventional warfare.
Under Pressure
Despite Alibabas revenue growth, investors have sold off shares on
concerns about China's economic slowdown.
Revenue
Year-over-year change
60%
Share-price performance
4Q 2015
$5.3 billion
s32%
50
$110
Thursday,
12 p.m. ET
$68.06
100
40
90
30
80
20
70
10
60
50
0
2014
15
2015
16
Sources: company llings (revenue); WSJ Market Data Group (shares)
In the latest quarter, Alibaba reported 407 million annual active buyers, up 22%
from a year earlier. Mobile
monthly active users increased
48% to 393 million, fueling a
near tripling of the companys
mobile revenue.
As Alibabas user base
grew, the company managed
to increase its monetization
ratethe rate at which the
company is able to earn
money from transactions
hosted on its marketplace. The
company said the blended
monetization rate of its China
retail marketplaces rose to
2.98% from 2.7% in the yearearlier quarter. Its gross merchandise valuea measure of
total value of e-commerce
transactions on its platforms
increased 23% to $149 billion
in the fourth quarter.
These are pretty strong results, said Henry Guo, a se-
nior research analyst with

Summit Research Partners LLC
in New York.
Based on the companys
large market share and user
base, we can still see strong
momentum in the company. It
continues to be dominant in
China despite the slowdown,
Mr. Guo said.
He said Alibaba is more
representative of everyday
consumer spending, which
hasnt been significantly affected by the slowdown in the
broader economy.
Investors concerns on
economic impact on Alibabas
quarterly results [are] likely
overdone, Mr. Guo said.
This year, Alibaba plans to
refocus efforts on expanding
its reach in Chinas top-tier
cities, Chief Executive Daniel
Zhang has said.
Lisa Beilfuss in New York
contributed to this article.
Friday - Sunday, January 29 - 31, 2016 | A3
WORLD NEWS
Japan Unveils Stealth Fighter Prototype

Radar-dodging plane
is part of Tokyos
effort to bolster its
defense industry
NAGOYA, JapanJapan unveiled its first radar-evading

stealth aircraft, aiming to close
a gap with neighbors such as
China and Russia, which have
been flying fighter planes
equipped with the technology
for more than five years.
Confronted with regional
challenges such as Chinas
building of artificial islands in
the South China Sea and North
Koreas nuclear device testing
program, Japans Prime Minister Shinzo Abe has eased postwar restrictions on the countrys military and is trying to
bolster its limited weaponsbuilding capabilities.
In the latest move, the Ministry of Defense showed off a
test aircraft called X-2 in a
heavily guarded hangar at a
factory here that is operated
by Japans biggest military
contractor, Mitsubishi Heavy
Industries Ltd. Ministry officials said the plane could perform its first test flight as
early as mid-February.
At 14 meters (46 feet) in
length, the 40 billion ($340
million) red and white-painted
X-2 is smaller than a standard
TOMOHIRO OHSUMI/BLOOMBERG NEWS
BY ERIC PFANNER
AND CHIEKO TSUNEOKA
Unarmed and underpowered, the X-2 may be designed to help Japan win a role in an international aerospace design partnership.
jet fighter. It is unarmed and
its engines are underpowered.
Analysts say it would take
many years for Japan to develop it into an actual warplane.
But that might not be the
point. Rather than aiming to
build its own plane, they say,
Japan may be signaling its
hopes of joining the U.S. or
other allies in developing a
fighter through an international partnershipa way for
allies to develop ever more ex-
pensive weapons systems. By

joining the small club of countries with stealth technology,
including the U.S., Russia and
China, Japan can show that it
brings something to the table.
In order to participate in a
project as an equal partner,
Japan has to offer knowledge,
experience
or
technologies worthy of an equal partner, said aerospace analyst
Yoshitomo Aoki.
A postwar policy of pacifism, including restrictions on
weapons exports, made it difficult for Japan take part in international partnerships such
as the Joint Strike Fighter,
which led to the development
of Lockheed Martin Corp.s
F-35. But Mr. Abes government in 2014 eased the ban on
exports in an effort to boost
the competitiveness of Japans
arms industry.
The X-2s stealth features
include a special coating on
the canopy that houses the pilot, as well as a carbon-fiber
composite material that absorbs radar waves, said Hirofumi Doi, program manager at
the Ministry of Defenses procurement agency, in an interview before the Thursday unveiling.
Demonstrating its capabilities with these and other technologies puts [Japan] in a
better position to negotiate
with foreign manufacturers on
the specifications and technologies involved in any joint development project, said Lance
Gatling, president of Nexial Research, an aerospace consulting firm.

The X-2 will also bolster
Japans defenses in another
way, Mr. Doi said. Because
China and Russia have developed radar-evading jets, we
can come up with countermeasures by learning what stealth
technology is all about, he
said.
Russia flew its first stealth
fighter in 2010 and China followed a year later, although
each countrys programs have
experienced delays and other
setbacks. The U.S. has flown
stealth aircraft since the 1980s.
The X-2 also reflects the
growing ambitions of Mitsubishi, which made the legendary
World War II-era Zero fighter
and now makes wings for the
Boeing 787 jetliner. A passenger airliner developed by the
company, the Mitsubishi Regional Jet, completed its first
test flight in November, although delivery of the plane to
airline customers has been delayed repeatedlymost recently until 2018.
Mitsuru Hamada, chief engineer in the aircraft division of
Mitsubishi Heavys integrated
space systems division, said he
hoped Japan would decide to
build a fighter. More than 200
companies were involved in
developing the test plane
alone, so doing so would bolster the entire aerospace industry, he said.
China Slowdown Has German Exports Shuddering

BY NINA ADAM
FRANKFURTGerman exports to the important Chinese market are suffering
their sharpest drop in a
quarter of a century, casting
a shadow over Europes biggest economy and showing
the global impact of Chinas
slowdown.
With new orders from
China and other emerging
economies sagging, German
businesses fear the bad
news is only beginning, data
and surveys released in recent days suggest.
German exports to the
U.S. and many other markets
are still growing, cushioning
the impact of Chinas troubles. But with much of Europe still licking its wounds
from the long eurozone debt
crisis, business confidence
in Germany is vulnerable to
continued cooling in Asia.
The overall situation in
China is depressed, said Ulrich Reifenhuser, a management-board member at
machinery maker Reifenhuser Group in North
Rhine-Westphalia. I see
very few orders in the near
future.
German exports to China
fell by 4.3% from January
through November, compared with 2014, the German
statistics service said this
month. Barring an improbable spike in December, German exporters took a bigger
hit than during the 1997
Asian financial crisis, when
exports to China fell 2.4%.
Above all, capital-goods
sales to Chinese factories
are down, as overcapacity
there takes its toll on investment spending.
And German and other
European companies say
they expect exports to
weaken further, according to
surveys by the Munichbased Ifo economics institute and the European Commission.
For years, German exporters knew only one direction in China: that was up.
Those days are gone, said
Andr Schwarz, spokesman
for the BGA federation of
German
exporters
and
wholesalers.
The stakes are high for
Germany. The 30 companies
in its DAX stock-market in-
dex have 672 subsidiaries in

China, according to the Munich-based consultancy EAC.
The ease of finding Chinese customers these days
varies greatly by sector. In
heavy industry, it can be
close to impossible.
China is suffering from
massive
overcapacities,
said Olaf Stalfort, head of
Bright spots remain.

Many German companies in
consumer and service sectors say they are benefiting
from Chinas rapidly growing middle class. Engineering companies that can help
China improve its infrastructure and relieve traffic
pressures, and environmental-technology companies
whose equipment can help
reduce pollution, are also
reporting growing orders.
Among them is Herrenknecht AG from southern
Germany, which makes tunnel-boring
equipment.
Founder and Chairman Martin Herrenknecht said his
China business remains solid
and he expects it to stay
that way, despite growing
competition from Chinese
companies in simpler, standard-tunnel projects.
At DELO, a company near
Munich that makes adhesives for electronic devices,
exports to China have risen
about 10% since April. The
Chinese would rather cut
back on food than make do
without their smartphones,
said DELO managing partner
Sabine Herold.
Lets face it. Well

probably have to
downsize, a
Dsseldorf steelindustry exporter
says.
sales and marketing at SMS
group in Dsseldorf, which
builds steel plants and rolling mills. The consolidation
of the Chinese steel industry
is still ahead of us, he said.
Lets face it. Well probably
have to downsize.
Some Chinese companies
have started to dump unused machinery on the market, further hurting German
companies sales and profit
margins.
Ms. Herold said complacency about Chinas economy would be a mistake, and
her company is trying to expand elsewhere. We are
targeting Vietnam, Indonesia, the Philippines and
Thailand, she said.
But it is the U.S. that is
doing most to compensate
for Chinas stumble. German
exports to the U.S. rose just
over 19% from January to
November from a year earlier, according to the statistics office.
Even the long-suffering
eurozone is helping: The
gradually recovering region
absorbed about 6% more
German exports in the first
11 months of last year.
But some German businesspeople, used to stellar
growth in China, say it is
hard to replace.
There simply is no other,
single market around to
make up for Chinas weakness, which means that we
will have to do better in
many markets to compensate for falling Chinese orders, at least partly, Mr.
Stalfort said. Thats a big
challenge.
Mixed Bag
Germany's exports to China fell
in 2015*...
Russia
26.5%
China
4.3%
Brazil
3%
Eurozone
5.5%
U.K.
13.7%
U.S.
19.4%
6.7%
Total
...but China's demand for

German goods varied widely
among sectors.
Metals
16.2%
Autos and parts
15.6%
Machinery
Clothing
Pharmaceuticals
Food
7%
10.1%
52.4%
58.7%
*Figures represent January-November 2015,

change from a year earlier.
Hit by international sanctions
Source: German Federal Statisical Ofce
Taiwan Leader Visits Disputed Island AbesEconomyMinister

Taiwans president made a
rare stop on a contested South
China Sea island that his government controls, the latest in
a series of moves by rival
claimants to aggravate tensions in the region.
Ma Ying-jeous visit on
Thursday is the first by a Taiwan president to the island,
known as Taiping or Itu
Aba, in eight years. Mr. Ma
said the purpose of his threehour stop was to support Taiwans claims. He also dispensed Lunar New Year wishes
to the coast guard personnel
at the garrison, which Taiwan
has maintained since 1956.
The island, about 1,600 kilometers southwest of Taiwan,
is home to an aircraft-landing
strip, a wharf, a lighthouse
and freshwater resources,
making it a strategic asset for
Taipei in the busy sea lanes
around the Spratly islands.
Taiwans claims in the area
overlap with those of Vietnam,
Malaysia, the Philippines, Brunei and China. Jostling among
the parties has risen in recent
years, as China asserts its
claim to the islands and waters around them, putting it at
odds with the U.S., which has
sent military vessels and
planes into the area.
On the eve of Mr. Mas
foray, a spokeswoman for the
American Institute in Taiwan,
the U.S. de facto embassy,
AGENCE FRANCE-PRESSE/GETTY IMAGES
BY TE-PING CHEN
Ma Ying-jeou (second from right) arrived Thursday on Taiping island.

called it extremely unhelpful. The Philippine Foreign
Ministry said all parties share
a responsibility to refrain from
actions that could increase
tensions.
Mr. Mas office, in a statement, said the island is the
inherent territory of the Republic of China, Taiwans official name. In his speech on the
island, Mr. Ma said Taiwan
wants to play a peacemaking
role; later, at a news conference back home, he said Taiwan needs to defend its claim
now that the Philippines has
filed an arbitration case on the
Spratlys with an international
tribunal.
China, which also claims
Taiwan as its territory, offered
indirect support for Mr. Mas
trip by seeing it as an asser-
tion of Chinese sovereignty.

Protecting national sovereignty and territorial integrity
and safeguarding the overall
interests of the Chinese nation
is the common responsibility
and obligation to compatriots
on both sides, a spokesman
for Chinas Taiwan Affairs Office said.
Mr. Ma, who will step down
in May, has engineered closer
ties with Beijing during his
eight years in office. Late last
year, he and Chinese President
Xi Jinping had a face-to-face
meeting in Singapore, a summit unprecedented since China
and Taiwan split during the
Chinese civil war.
That outreach has been divisive in Taiwan, with voters
this month electing an opposition leader, Tsai Ing-wen, to
succeed Mr. Ma.

Lin Chong-pin, a former
deputy defense minister of
Taiwan, said the island stopoff is part of Mr. Mas legacy
of rapprochement with Beijing.
The visit to this island continues the historic breakthrough of Ma Ying-jeou and
Xi Jinpings meeting, he said.
Mr. Ma hadnt previously visited the island.
Taiping is the largest natural island in the Spratlys chain
and features a new wharf and
lighthouse built as part of a
two-year project to upgrade
infrastructure there.
China, by contrast, controls
smaller features, many of
them reefs and atolls, and it
has ratcheted up an aggressive
land-reclamation project to
build facilities and bolster its
own claims in the region. Earlier this month, China conducted several successful test
flights to a newly constructed
airstrip on Fiery Cross Reef.
Aside from making the area
easier for militaries to use, the
reclamation and construction
work touch on legal issues.
Taiwan has repeatedly reiterated that Itu Aba is a natural
island, as defined by the
United Nations Convention on
the Law of the Sea, as opposed
to a rock. The distinction is
important, since under the
convention, natural islands capable of sustaining human
habitation are entitled to an
exclusive economic zone.
ResignsAmidScandal
BY MITSURU OBE
TOKYOJapanese Economy
Minister Akira Amari, a close
ally of Prime Minister Shinzo
Abe, said Thursday he would
resign to take responsibility
for a political-funds scandal.
Mr. Amari was Japans top
negotiator in the Trans-Pacific
Partnership trade talks, a U.S.led trade agreement among 12
Pacific nations.
His resignation is a blow to
Mr. Abe and comes as Japans
sputtering economy faces
global headwinds, particularly
from China, which have sent
the Japanese stock market
tumbling in recent months.
The scandal, which involves
accusations of bribery, has
threatened to damage the popularity of Mr. Abes government ahead of an election for
seats in the upper house of
parliament this summer.
Mr. Amari said he was resigning to avoid harming Mr.
Abes economic revitalization
program and to ensure the
budget for the fiscal year beginning April 1 would be
passed by Japans parliament
without delay. He apologized
for inadequate supervision of
his aides and said he was taking responsibility for causing
trouble for Mr. Abe and his
government.
Mr. Abe said he has appointed former Environment
Minister Nobuteru Ishihara to

succeed Mr. Amari.
The allegations against Mr.
Amari emerged last week. A
weekly magazine called Shukan Bunshun reported that he
and his aides received at least
12 million ($100,000) in cash
and other benefits between
2013 and 2015 from a construction company involved in
a property dispute. Records
filed by Mr. Amaris support
groups reported only 3.8 million of benefits received from
the company official.
Mr. Amari acknowledged
personally receiving a total of
1 million on two occasions
from the company official, but
said the money was reported
according to the law on political contributions. The records
his support groups filed with
the local election board in
2014 and 2015 back that claim.
A bigger focus has been a
payment of 5 million made to
one of Mr. Amaris aides in
August 2013. The secretary reported 2 million as political
contributions, but used the remainder for himself, Mr. Amari said Thursday.
Mr. Amaris resignation
came just days after a new
session in the Diet, Japans
parliamentary body, opened.
Among the items to be taken
up during the session are the
budget for the 2016 fiscal year
and the TPPs ratification.
HK JP
KO ML
SI
IN UK
FR
MN PR
WORLD NEWS
Iran Signs Deals in France

With sanctions lifted,
visiting president
speaks in Paris of a
new relationship
World
Watch
President Hassan Rouhani, right, greeting French President Franois Hollande on Thursday in Paris.
on the verge of signing contracts with Iran. Oil giant Total SA is pushing to get back
in the Iran.
Before Total left Iran because of sanctions, the country was one of its biggest markets in the Middle East in the
previous decade.
The auto industry is also
moving swiftly. French car
maker PSA Peugeot Citron signed a deal with Iranian
manufacturer
Iran
Khodro to start a joint venture
that will produce cars in Iran,
marking a return to the country after a four-year absence.
The two partners are expected to invest up to 400
million ($435 million) over
five years, and produce up to
200,000 cars a year out of a
factory in suburban Tehran.
France was one of Tehrans
biggest trading partners when
the European Union imposed
sanctions on Iran in 2012.
Over the decades, however,
Irans relations with France
have been tense at times. Ayatollah Ruhollah Khomeini was
released last month.
Sales at large-scale retailers
were flat on the year, after adjusting for the change in the
number of stores.
Eleanor Warnock
PHILIPPINES
IVORY COAST
Former President
Goes on Trial
Five years after he was toppled in a brief civil war, the former president of Ivory Coast
went on trial Thursday at the International Criminal Court, setting up another test for The
Hague-based tribunal.
Laurent Gbagbo, who led the
West African nation from 2000
until 2011, pleaded not guilty to
four counts of war crimes related to four months of postelection violence that left 3,000
people dead and saw him finally
pushed from power by Frenchbacked opposition forces. He
was succeeded by the winner of
the election, Alessane Ouattara.
The trial is expected to last
three or four years.
Joe Parkinson
JAPAN
Retail Sales Declined

By 1.1% in December
The Philippine economy expanded in the fourth quarter,

driven by higher government
spending, private consumption
and increased activity ahead of
the year-end holidays.
Gross domestic product expanded by 6.3% from a year earlier, the Philippine Statistics Authority said Thursday, making
the Philippines one of the fastest-growing economies in Asia.
The rate of expansion was
quicker than the 6% growth
forecast by economists in a poll
by The Wall Street Journal and
beat the previous quarters revised 6.1% pace.
The fourth-quarter performance pushed up GDP growth
for 2015 to 5.8%, better than
many regional peers hit by the
slowdown in China and soft
global demand, but still short of
the governments original 7%-8%
target for the year.
Cris Larano
EUROPEAN UNION
Court Voids Sanctions

On Ukraine Officials
A European Union court

struck down an asset freeze on
two former Ukrainian prime ministers and three other people
tied to ex-President Viktor Yanukovych, but four will stay on the
blocs sanctions list for now.
The EU had already relisted a
number of Ukrainians targeted
on slightly different grounds.
Laurence Norman
PETER DEJONG/ASSOCIATED PRESS
Japanese retail sales fell 1.1%

in December from a year earlier,
reflecting the impact of lower
fuel prices and some weakness
in household demand.
It was the second consecutive monthly fall after a 1.1% decline in November, the Ministry
of Economy, Trade and Industry
said Thursday.
Other recent consumer
spending data has painted a
bleak picture. Overall household
spending fell 2.9% year over year
in November, according to data
Economy Grew
Faster Than Forecast
The former Ivory Coast president in court Thursday in The Hague.
exiled to France before he led

the 1979 revolution that created the Islamic Republic.
In the 1980s Iran-backed
Hezbollah carried out a string
terrorist attacks on France
that French officials said were
in retaliation for support Paris
gave to Tehrans foes.
Even as its firms suffered,
Franceone of the six powers
that negotiated the nuclear accord and a permanent member
of the United Nations Security
Counciltook a hard line in
the international negotiations.
At one point, French Foreign Minister Laurent Fabius
warned that world powers
risked being drawn into a
fools game.
Mr. Rouhani, analysts say, is
under pressure at home to
show the nuclear accord is
paving the way for Iran to
stage an economic recovery.
Irans young population is
burdened by high unemployment creating a powder keg
for its ruling class, which is
scrambling to show results.
The Rouhani administra-
tion needs to announce large

contracts and investment by
international corporations in
Iran so as to tell the Iranian
people that something concrete is happening, said Ardavan Amir-Aslani, an Iran-born
corporate lawyer who has
written extensively on Iranian
foreign policy.
Cutting deals with France is
also a way for Tehran to
tighten relations with a European heavyweight that has
drifted closer to Saudi Arabia
and other predominantly
Sunni Arab countries.
In recent years, France has
landed billions in contracts to
supply Egypt and Qatar with
Rafale jet fighters. It has also
partnered with Saudi Arabia
to reinforce Lebanons military.
Mr. Rouhani is finishing up
a four-day visit to Italy and
France.
Italian and Iranian companies signed deals valued at
about 17 billion late Monday
on the first day of his visit to
Rome.
LONDONThe U.K. announced an initiative to take

in unaccompanied child refugees from Syria and other conflict zones amid pressure to do
more in the face of a continuing tide of asylum seekers
pouring into Europe.
The
British
government said Thursday that it
would work with the United
Nations High Commissioner
for Refugees to identify exceptional cases of such children still in their home region
who could be resettled in Britain, but declined to say how
many children it would accept.
It also said it would give 10
million to support vulnerable
Syrian children who have already made it to Europe. The
announcement comes ahead of
an international Syrian aid
conference co-hosted by the
U.K. in London next week.
While some aid groups
welcomed the announcement, the moves dont immediately answer the calls by
some politicians and campaigners for the government
to take in 3,000 unaccompanied children who have already arrived in Europe. At
least 26,000 unaccompanied
child refugees traveled to Europe last year, according to
the charity Save the Children.
Opposition politicians accused the government of doing the bare minimum and
said it was drawing a false distinction between refugees currently in the Middle East and
those who had already made it
to Europe. There are many
desperate children who had
reached the continent who
also need our help, the main
opposition Labour Party said.
Unlike Germany and many
other European countries, the
U.K. has taken in a relatively

small number of the refugees
fleeing conflict and instability
in the Middle East and North
Africa. Britain said last year
that it would take in 20,000
Syrian refugees over five years
directly from refugee camps in
the region, of which 1,000
have already arrived in the
U.K. The U.K. also took in
2,500 unaccompanied children
last year, British Prime Minister David Cameron said.
About 1.1 million migrants
from Africa, the Middle East
and other regions arrived in
Germany last year, the majority of whom are likely to obtain asylum in the country.
The U.K. government, which
is already trying to reduce net
migration from record highs,
has focused on helping those
in camps bordering Syria so as
not to encourage people to
make the often perilous journey to Europe and so they can
more easily return home when
the fighting stops. Britain has
allocated 1.1 billion ($1.6 billion) since 2012 to support the
work of aid organizations and
other groups helping Syrian
refugees in Jordan, Lebanon,
Turkey, Iraq and Egypt and
provided U.K. Navy ships to
help rescue migrants crossing
the Mediterranean.
No country in Europe has
been more generous than Britain in funding refugee camps,
Mr. Cameron said in Parliament on Wednesday.
Mr. Cameron has faced criticism from opposition politicians since referring to those
at a refugee camp in Calais as
a bunch of migrants on
Wednesday. In July he sparked
a similar uproar when he referred to a swarm of people
coming across the Mediterranean, seeking a better life,
wanting to come to Britain.
Cameron Steps Up to His Big EU Test

BY LAURENCE NORMAN
BRUSSELSU.K. Prime
Minister David Camerons bid
to renegotiate his countrys relationship with the European
Union is entering a critical few
days that could pivot the talks
toward a speedy conclusion or
push the bloc into another major crisis.
On Friday, Mr. Cameron will
meet in Brussels with top EU
officials. EuroBRUSSELS pean Council
BEAT
President Donald
Tusk, who presides over EU
summits, is set to meet with
Mr. Cameron on Sunday night
in London, then set out his proposals for assuaging the U.K.s
demands early next week.
On Feb. 5, senior officials
from all 28 member states are
set to begin discussions on the
proposals in the first true test
of whether so-far encouraging
public comments from other
EU capitals are reflected by
real give-and-take in private.
People familiar with discussions say significant progress
has been made during intensive talks among a small group
of officialsmainly from London and Brusselsover the
U.K. demands, which include
safeguarding the interests of
noneurozone countries and
limiting welfare payments to
non-British EU citizens during
their first four years of residence in the U.K.
However, real challenges
remain. While there are many
ideas on how to address Mr.
Camerons biggest demand
the benefits restrictionspeople familiar with talks say a legally secure package of
measures that could be palatable to other member states
is still being crafted.
On other key issues, feasible solutions have emerged,
but the willingness of the
blocs other governments to
sign up remains untested.
Since Mr. Cameron set out
his case to EU counterparts in
December, the deals target
date has been the Feb.
18-19 European summit.
French Prime Minister Manuel Valls told reporters in Davos last week that negotiations
might take a little more time.
U.K. Foreign Secretary Philip
Hammond said on Tues-
day that if we can get it done

in February, we would be delighted.But if we need more
time, we need more time.
Diplomats say there are
good reasons to aim for February. The EU faces multiple
challenges, including a migration crisis that has drawn deep
divisions within the bloc.
or Mr. Cameron, a February deal leaves the

way clear for a June referendum, one option the government is actively looking at.
U.K. and European officials
agree the welfare restrictions,
which London hopes would reduce net EU migration to Britain, are the most difficult subject. Restrictions would affect
out-of-work benefits and, more
controversially, in-work tax
credits to lower-paid workers.
While EU courts have allowed some discrimination
for out-of-work benefits,
other leaders have charged
the proposal undercuts a key
principle embedded in the
EU treaties: workers freedom of movement.
The U.K. has said it is open
to alternatives that deliver the
same outcome and Mr. Hammond said there have been
lots of ideas floated. However,
it is unclear whether those
ideas, short of a big change to
EU treaties that would garner
little support, would satisfy
Britains demands.
One idea would see the
four-year restrictions applied
to all U.K. residents, including
British workers enteringor
re-enteringthe labor market.
Another option is an emergency brake on incoming
workers if U.K. public services
are overwhelmed.
Some governments have
signaled they could accept
benefit restrictions for a
shorter time period and officials are examining a system
enabling the U.K. to slim child
benefit payments for EU workers in Britain whose dependents live in less wealthy EU
countries.
On other key issues, potential fixes are easier to design.
Officials are seeking language that could free the U.K.
from the EU treaties call for
an ever closer union. They
are also working on ways to
ensure national parliaments
ANDY RAIN/PRESS POOL
PARISIrans
President
Hassan Rouhani heralded a
fresh start with France on
Thursday, as his first visit after the end of international
sanctions prompted a wave of
commercial agreements between the two countries.
Lets forget the rancor,
Mr. Rouhani told a forum of
business leaders in the French
capital, flanked by French
Prime Minister Manuel Valls.
We are ready to turn the
page to a new relationship.
The
Islamic
Republic,
with nearly 80 million people,
represents a rare opportunity:
a large country that is in desperate need of investment after years of international isolation.
The two governments unveiled cooperation agreements
between the French and Iranian rail companies and on renewable energy, among other
deals.
Mr. Rouhani suggested
French companies would benefit from being free of the troubled history that has plagued
Irans relationship with other
Western nations.
Iranians associate certain
countries with trouble, but
that is not the case for
France, he said.
Iran is at a nexus of
Frances diplomatic ambitions
in the Middle East and the
commercial hopes of French
companies abroad. French
leaders are hoping Iran will
push Syrian leader Bashar alAssad, who is backed by Tehran, to negotiate an end to
Syrias war.
Construction-to-media conglomerate Bouyges SA and
construction firm Vinci SA are
among the French companies
BY NICHOLAS WINNING
ETIENNE LAURENT/EUROPEAN PRESSPHOTO AGENCY
BY MATTHEW DALTON
AND STACY MEICHTRY
U.K. Announces
Plan to Take In
Child Refugees
David Cameron will meet in Brussels with top EU officials on Friday.

are more actively involved in
the EU legislative process.
he U.K.s other big aim is

safeguards for countries
that stay out the eurozone, whose 19 countries form
a bloc big enough to push
through most proposals at EU
level.
Chancellor of the Exchequer George Osborne has insisted the U.K. isnt seeking a
veto over a eurozone integration process he says the government supports. However,
the U.K. wants to ensure proposals dont suddenly emerge
that damage its interests, including those of its powerful
financial sector.
Officials say they are looking at how to establish principles and mechanisms that
would legally embed the EUs
current reality: that the bloc
includes several currencies
and its biggest financial center,
London, lies outside the singlecurrency zone.
One way to do so would allow several noneurozone countries to delay legislative proposals for a while, raising the
issue to leaders.
Yet while some British demands have won support in
other capitals, others would
require painful compromise.
Mr. Camerons attack on

the EUs ever closer union
pledge has rankled some capitals that see it as political tokenism.
Many eurozone countries
are wary of clipping their freedom to respond rapidly if another financial crisis hits. EU
lawmakers wont like anything
that gives national parliaments
easy veto rights over EU proposals.
Another critical issue remains unresolved. Mr. Hammond reiterated on Tuesday that the U.K. sees a change
to EU treaties as part of the
dealeven if it is delivered in
the future. EU officials are
hoping to satisfy Mr. Camerons demand for a legally
binding, irreversible deal by
issuing a leaders declaration
which would be notified to the
United Nations as an international legal agreement with
commitments to amend some
EU legislation.
Officials warn that even a
limited, targetedand delayedtreaty change could
spark difficult referendums
and parliamentary approval
processes that few EU capitals
want.
Nicholas Winning, William
Horobin and Valentina Pop
U.S. NEWS
Flint Crisis Exposes Lead Danger

Tainted-water woes
plaguing Michigan city
serve as cautionary
tale for others in U.S.
ORGANIZED LABOR
Union Membership
Held Steady Last Year
BILL PUGLIANO/GETTY IMAGES
BY CAMERON MCWHIRTER
AND KRIS MAHER
The water crisis in Flint,
Mich., has exposed the danger
that lead could potentially
leach into the drinking water
of millions of Americans, showing what can go wrong if aging
infrastructure isnt properly
monitored and maintained.
Lead is common in pipes
across the U.S., mostly in lines
linking street pipes to peoples
homes. Millions of pipes now in
use were installed well before
1986, when federal law banned
lead pipes and solder, and
some date back to the 1800s.
The price tag just to dig up
and replace as many as eight
million lead service lines into
homes and businesses could
easily reach tens of billions of
dollars. The task is complicated
by the fact that utilities and cities often dont know where such
lines are buried. And tens of millions of other water lines have
lead solder or fixtures that also
can contaminate drinking water.
The Flint crisis began when
the city switched to a new water source in April 2014 to cut
costs. The corrosive water
from the Flint River ate away
at the protective lining in old
pipes, laying bare lead that
leached into the water supply.
The corrosive water wasnt
treated, and the high levels of
lead werent reported to the
public for roughly 18 months.
Investigations are under way
into whether laws were broken.
Even though Flint has
switched back to using Detroit
water, it still isnt safe to
drink. The city is now adding
phosphate to coat the pipes,
as many municipalities do, and
authorities say the lead levels
are dropping at residents
taps. In the meantime, resi-
Water from Michigans Flint River, seen this month, corroded protective linings in old pipes and caused lead contamination.
dents are advised to drink bottled water or use a filter to
help remove contaminants.
Nationwide, lead solder that
seals pipes and joints exists in
about 81 million homes, or
roughly two-thirds of households, and leaded brass fixtures,
another source of contamination, are in the vast majority of
homes, said Marc Edwards, an
environmental engineering professor at Virginia Tech.
While Flint is an outlier, it
confirms everything that we
have been speaking out against
for the last 10 years, said Mr.
Edwards, who tested Flint drinking-water samples last summer,
revealing high lead levels.
The crisis comes as the Environmental Protection Agency is
working on revising the primary
federal regulation aimed at pro-
tecting Americans from lead in

drinking water. Children are especially vulnerable to even
small amounts of lead, which
can damage developing brains.
Experts generally agree that
the service lines that connect
water mains to homes are a
leading culprit for lead contamination in water and need
to be removed.
Its going to be a huge financial challenge, said G. Tracy
Mehan III, executive director
for governmental affairs at
American Water Works Association, a trade group representing 4,000 utilities across the
U.S., not including Flints. Just
2% of water utilities surveyed
by the group last year said they
had the financial resources to
cover future pipeline upgrades,
which would include replacing
lead pipes and fixtures.

Replacing Flints lead lines,
solder and joints could take 15
years and cost $60 million, according to a September estimate by an aide to Michigan
Gov. Rick Snyder. On Wednesday, the governor said it was
too soon to estimate the cost.
Flint residents Keri and Michael Webber, who have two
daughters, ages 16 and 20,
have been using bottled water
for drinking, cooking and
brushing their teeth, using tap
water as little as possible.
Its a total nightmare, said
Mr. Webber, 45 years old, who
said his blood pressure has
gone up because of the contaminated water. He takes only
occasional, brief showers now,
he said: In and out, as cold as
you can stand it. Hot water
leaches more lead from pipes.

Lead contamination in the
water supply has cropped up
elsewhere, though on a
smaller scale than in Flint.
This month, Milwaukee suspended all water-main replacement projects that include
lead service lines to nearby
buildings. Tests showed the
construction increased lead
levels in the water going into
several homes, according to
Milwaukee Water Works.
In Sebring, Ohio, schools
were closed for several days
this week after environmental
regulators told residents that
the operator of a local water
system had failed to warn its
8,100 customers of high lead
and copper levels.
Amy Harder contributed
to this article.
Air Force Deploys Shield Against Cyberattacks
TAMPA BAY TIMES/ZUMA PRESS
BY DAMIAN PALETTA
WASHINGTONThe U.S.
Air Force has deployed a cyberweapon system that acts as
a firewall to protect more than
one million intranet users, one
of the militarys first such designations as it ramps up its
digital arsenal.
The Air Force Intranet Control Weapon System has drawn
increasing attention since the
Air Force said it had reached
full operational capability
last week, in part because of
public confusion about what a
weapon system actually is.
The weapon system in effect acts as a highly sophisticated antivirus shield for the
entire Air Force, meant to
block and intercept incoming
malicious traffic. Officials aim
to constantly monitor and update this shield to adapt to
emerging threats.
In the simplest terms, its a
great big firewall for us, said
Air Force Col. Pamela Woolley,
26th Cyberspace Operations
Group commander. It allows
us to look at the inbound traffic for any kind of computer
virus and then block.
This particular weapon system doesnt effectively arm
the Air Force to launch what
are understood as offensive
attacks against others, Col.
Woolley said.
U.S.
Watch
Defense Secretary Ash Carter has launched an effort to accelerate the militarys cyber capabilities.
We are definitely not trying to weaponize cyber, she
said. This is truly a defensive
system to protect the Air
Force network.
We dont reach outpast
our Air Force network. It is literally kind of a fence line for
traffic.
The Air Force receives close
to a billion connection attempts each week, though
most arent considered malicious. Still, Pentagon officials
have said their networks are

under constant cyberattack,
and there have been several
successful breaches in recent
years, both into the Navys
network as well as one operated by the Joint Staff.
Designating this new capability as a weapon system
gives it a certain status within
the Pentagon, making it easier
for the Defense Department to
budget and maintain the program. There are at least five
other cyber-related weapons

systems in the works at the
Air Force, though this is the
first one to be designated fully
operational.
The U.S. government is constantly trying to protect its secrets from criminals and foreign-government spies, with
mixed success. Perhaps few
networks are as heavily fortifiedand as sought afteras
those at the Pentagon.
Col. Woolley said that part
of the new weapon system

consolidated the number of
gateways into the Air Forces
network from more than 100
entry points to just 16. It also
has a team of people updating
the system, adding new signatures that need to be
blocked, and sharing expertise
across the military.
The complexity increases
every single day, she said.
We hope to stay up with that
complexity and do the best
that we can.
Defense Secretary Ash
Carter has launched an effort
to accelerate the militarys cyber capabilities, calling for
more coordination to defend
its networks but also pushing
for the development of offensive options that may one day
be authorized by the White
House. Dozens of other countries are racing to develop
their own cyberweapons, convinced that this will be the future of modern warfare.
Lawmakers have hinted
that the U.S. military has some
of the most sophisticated cyberweapons on the planet, but
details of these capabilities remain closely held.
Still, National Security
Agency Director Adm. Michael
Rogers said last week that so
much progress had been made
that the whole cyber effort
had reached a tipping point.
The rate of union membership

in the U.S. held steady last year,
with slight overall gains in membership rosters outweighed by the
rising ranks of nonunion workers.
The share of U.S. workers in
unions last year was unchanged
at 11.1%, according to Labor Department figures released Thursday, a reflection of the labor
movements struggle to reverse
years of stagnation.
While unions collectively
added new members, including in
sectors such as leisure, hospitality, education and health services,
it wasnt enough to increase the
overall rate of membership.
Membership in the private
sector rose to 6.7% from 6.6% in
2014. The public sector also had
more unionized workers in 2015
than it did the year before, but
the union-membership rate fell
to 35.2% from 35.7% in 2014 because of a larger increase in
nonunion government workers.
Union officials blame battles
in states such as Wisconsin that
have stripped many public-sector
workers of collective-bargaining
rights and say labor laws need
updating to make it easier for
workers to unionize without intimidation from employers. Membership in Wisconsin tumbled to
8.3% last year from 11.7% in 2014.
Youve got a labor movement thats not moving, said
Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass. Its a
failure to be revitalized.
Melanie Trottman
HOUSING
Pending Home Sales

Are Little Changed
The number of existing

homes that went under contract
in the U.S. was little changed in
December, although the National
Association of Realtors warned
of subdued demand in coming
months amid global financial volatility and tight inventory.
The stock markets sizable
losses since the start of the year
and the effect slowing manufacturing activity is having in some
areasespecially in the energy
sectorcould cause some to hold
off on buying, the NAR said.
An index measuring pending
home salesa gauge of purchases before they become finalrose 0.1% to a seasonally
adjusted reading of 106.8 in December, the NAR said. An index
of 100 is equal to the average
level of contract activity during
2001, which the NAR considers
a normal, or balanced, market
for the current U.S. population.
While the figure was a sign
the housing market was steady
in December, it missed the forecast from economists surveyed
by The Wall Street Journal for a
0.6% increase in sales.
Pending sales offer a forecast
of the housing market because
they measure purchases at the
time a contract is signed rather
than at closing. Contracts typically take weeks to become final,
and some are ultimately canceled.
Pending sales have been in
line with steady progress in the
housing market in recent months
and rose 4.2% in December from
the same period a year earlier.
The industry group said contract
activity lost some momentum
toward the end of the year, except for in the Northeast, where
mild winter weather and strong
inventory encouraged buyers.
Harriet Torry
BY ERIC MORATH
WASHINGTONDemand for
long-lasting factory goods declined in December, the latest
signal the U.S. manufacturing
sector is suffering in the face
of global headwinds.
New orders for durable
goodsairliners, computers,
tanks and other products designed to last at least three
yearsfell a seasonally adjusted 5.1% in December from
the prior month, the Commerce
Department said Thursday.
The details of the report
were very weak, said TD Securities strategist Millan Mulraine. The report underscores
the sharp slowdown in domestic economic momentum in
the fourth quarter.

For all of 2015, durablegoods orders fell 3.5%. It was
the first annual decline in demand for long-lasting manufactured goods since 2009, when
the economy was just emerging from a deep recession.
Thursdays report is the latest indicator showing the manufacturing sector is contracting. Data from the Institute for
Supply Management, a group of
purchasing managers, showed a
nearly three-year long expansion in manufacturing came to
an end in November. The Federal Reserves reading on industrial production has declined in
10 of the past 12 months and is
now off nearly 2% from its peak
in December 2014.
A number of forces hampered U.S. factories last year.

An economic slowdown in
China, Brazil and other markets
for U.S. goods limited foreign
demand. Meanwhile, a stronger
dollar made U.S. goods more
expensive overseas and foreign
products relatively more affordable for American consumers.
The latest manufacturing
data could indicate the economy slowed even more than
thought at the end of 2015.
The Commerce Department
was releasing its first reading
of fourth-quarter gross domestic product on Friday. Economists expect growth slowed to
a 0.8% annual pace, but those
forecasts were made before
larger-than-expected pullback
in manufacturing demand.
GDP, the broadest measure
of goods and services produced across the U.S. economy, expanded at a 2% seasonally adjusted annual rate in
the third quarter.
Still, manufacturing accounts
for about 12% of the nations
economic output and less than
10% of all jobs. So while a slowdown in the sector will drag on
growth, it doesnt necessarily
point to a broader economic
slowdown. The economy is increasingly driven by consumer
spending on services, a category that is expanding steadily.
Thursdays report showed a
closely watched proxy for how
much businesses are spending
on new equipmentorders for
MICHAEL NAGLE/BLOOMBERG NEWS
Durables Orders Fall as Factories Struggle
Global economic headwinds and a stronger dollar have weighed

on U.S. factories. Above, an Ikea store in Brooklyn, N.Y.
nondefense capital goods excluding aircraftfell 4.3% in December from the prior month.
The category was down 3.9% in
2015 from a year earlier, indicating that companies pulled
back on capital investments.
That is a worrisome sign

because such spending is seen
as barometer of businesses
confidence in the economy
and as necessary to boost
workers productivity and
overall economic output.
FROM PAGE ONE
MISSILE
tend beyond North Korea into
Chinas north.
The move would enhance
Washingtons military profile
as it seeks to form a comprehensive missile defense network in Northeast Asia with
an existing Thaad in Guam and
another potentially in Japan,
where officials are considering
the deployment of such a system.
The system would also
highlight a split between
Washington and Beijing over
how to curb Pyongyangs pursuit of advanced weaponry. On
Wednesday, Secretary of State
John Kerry said in Beijing that
the U.S. must take more defensive measures to protect itself
and its allies, as he called for
China to toughen its stance on
North Korea.
The perception of a new
threat from North Korea
emerged on Thursday when
Japans Kyodo News Agency
reported that the country may
be preparing for another longrange missile test within days.
It cited an unidentified Japanese officials interpretation of
recent satellite imagery of a
North Korean missile site.
Such a test would violate
United Nations Security Council resolutions and signal
Pyongyangs intent to continue
to develop weapons of mass
destruction to protect its regime and force concessions
such as aid from other nations.
A South Korean Defense
Ministry spokesman said Seoul
was monitoring North Koreas
missile bases but couldnt confirm any expected launches.
A Pentagon spokesman declined to discuss specific U.S.
intelligence on any missile
launches, but said we urge
TENNIS
Continued from page A1
Saturdays final against Angelique Kerber of Germany.
Perks have played a big part
in the Australian Opens popularity. Stars used to skip the
tournament because traveling
to Australia was onerous and
the event wasnt as grand, or lucrative, as the other Slams:
Wimbledon, the French Open
and the U.S. Open.
John McEnroe played the
Australian Open five times,
compared with 16 at the U.S.
Open. Jimmy Connors, who
won the tournament in 1974,
played twice.
Easier travel, new facilities
and piles of prize money have
made the tournament a must
(the mens and womens singles winners will each earn
A$3.4 million this year). The
tournament has retractable
roofs on three stadiums, spacious gyms and a quiet room
for naps. A sign outside the
quiet room reads, talk out
there, think in here. Players
also like Melbourne, with its
many shops and fine cuisine.
They have the best cafes,
they have the best restaurants,
said Ms. Williams.
American Nicole Gibbs especially
appreciates
the
A$2,500 travel voucher that
poll found that about the same

shareroughly three-quartersof Sanders and Clinton
supporters have a high level of
commitment to their candi-
dates in Iowa and New Hampshire. And in South Carolina,

more Clinton supporters than
Sanders supporters68% to
58%say they are firmly com-
mitted to their candidate

choice.
The stakes for both candidates are higher in Iowa. If
Clinton carries Iowa, she can
North Korea to refrain from

actions and rhetoric that
threaten regional peace and
security.
For years, Seoul has preferred to develop its own missile-defense system but has
made limited progress. In
2014, U.S. officials raised the
prospect of deploying a Thaad
battery in South Korea. That
sparked intense public debate
in South Korea, which balances its defense alliance with
the U.S. along with its close
economic ties with China.
Beijing has made clear its
opposition to a Thaad in South

Korea and has reacted coolly
to closer defense cooperation
between the U.S. and its two
main allies in the region,
Japan and South Korea.
South Korea will sacrifice
its fast-developing relations
with China, if it should be seduced into the defense network, ignoring the protest of
the largest economy in Asia,
Chinas state-run news agency
Xinhua wrote in 2014.
North Koreas Jan. 6 nuclear test refocused discussion
on the Thaad, the officials
said. That is when Pyongyang

claimed to have successfully
tested a small version of a hydrogen bomb.
Since then, South Korean
President Park Geun-hye and
her defense minister said the
introduction of the Thaad system should be considered.
Theres a sufficient need to
review it because our [missile
defense] capabilities are limited, Defense Minister Han
Min-koo said this week on
television.
South Koreas existing defenses rely on intercepting
missiles at low altitudes, giving only a brief window of

time to destroy them. The
Thaad system, made by Lockheed Martin Corp. and Raytheon Co., targets missiles at
higher altitudes, creating another layer of defense and
more time to neutralize an attack. It could also cover other
areas of South Korea currently
vulnerable to attack.
Senior officials from both
of South Koreas main political
parties have spoken out in favor of Thaad deployment in
recent days.
Lee Seok-hyun, vice speaker

of South Koreas National Assembly and a member of the
main opposition party, this
month called Thaad an indispensable self-defense.
Seoul may feel it necessary
to gradually acclimatize the
South Korean public to the
policy shift in bite-sized announcements,
particularly
prior to the upcoming National Assembly elections [in
April], said Bruce Klingner,
senior research fellow at the
Heritage Foundation, a Washington-based think tank.
Donald Trump holds a commanding lead among GOP presidential candidates in early state contests, while
Democratic candidate Hillary Clinton is in a closer race with Bernie Sanders, WSJ/NBC News/Marist Poll shows.
Iowa
New Hampshire
South Carolina
REPUBLICAN
REPUBLICAN
REPUBLICAN
Donald Trump
32%
Ted Cruz
25
Marco Rubio
18
Ben Carson
Donald Trump
Donald Trump
31%
Ted Cruz
12
Ted Cruz
Marco Rubio
11
Marco Rubio
John Kasich
11
Jeb Bush
36%
20
14
9
Jeb Bush
Jeb Bush
Ben Carson
Carly Fiorina
Chris Christie
Chris Christie
John Kasich
Ben Carson
Mike Huckabee
Rand Paul
Carly Fiorina
Carly Fiorina
1
1
1
Chris Christie
Rand Paul
John Kasich
Mike Huckabee
Mike Huckabee
Rand Paul
DEMOCRATIC
DEMOCRATIC
Hillary Clinton
48%
Bernie Sanders
Martin O'Malley
45
3
DEMOCRATIC
Bernie Sanders
Hillary Clinton
57%
38
Martin O'Malley 2
Hillary Clinton
64%
Bernie Sanders
Martin O'Malley
27
2
Sources: WSJ/NBC News/Marist Poll telephone polls of 450 likely Republican and 426 likely Democratic caucusgoers in Iowa; 612 likely
Republican and and 568 likely Democratic primary voters in New Hampshire; and 718 likely Republican and 446 likely Democratic primary voters
in South Carolina; margins of error: +/3.7 to 4.7 pct. pts.
U.S. DEPARTMENT OF DEFENSE, MISSILE DEFENSE AGENCY/REUTERS

by 32% to 25% after weeks of
pummeling his rival by questioning the Canadian-born
senators eligibility to be president, his personality and
character. Earlier this month,
Mr. Cruz had led 28% to 24%
in Iowa, the state that represents his best shot to block
the billionaire businessman.
Whats more, the poll found
that Mr. Trump has inspired
deep support: Three-quarters
of Trump backers in Iowa say
they are strongly committed
to their choice, compared with
58% of Cruz supporters. Similar gaps show up among voters in New Hampshire and
South Carolina.
Showing quiet improvement
in Iowa is Sen. Marco Rubio of
Florida, who came in third
with 18%a five-point improvement over the early-January poll. But he has slipped
in New Hampshire and
dropped behind Mr. Cruz to
third place. In New Hampshire,
Mr. Trump leads with 31%, to
Mr. Cruzs 12% and Mr. Rubios
11%. The South Carolina poll
finds the same three candidates topping the GOP field.
absorb a defeat to Sanders,

who has a home-field advantage in New Hampshire, and
then move on to South Carolina, said Mr. Miringoff. But if
Sanders carries Iowa and then
New Hampshire, this contest
will indeed be a marathon.
The Iowa poll, conducted
Jan. 24-26, included interviews with 426 likely Democratic caucusgoers, for whom
the margin of error was plus
or minus 4.6 percentage
points. It also included 450
likely Republican caucusgoers
and had a margin of error of
plus or minus 4.7 percentage
points.
The New Hampshire poll,
conducted Jan. 17-23, included
interviews with 568 likely
Democratic primary voters
and 612 likely Republican primary voters. The margin of error was 4.1 percentage points
for the Democrats and 4.0 percentage points for the Republicans.
The South Carolina poll,
also conducted Jan. 17-23, included interviews with 718
likely Republican primary voters and 446 likely Democratic
primary voters. The margin of
error was 3.7 percentage
points for the Republicans and
4.6 percentage points for the
Democrats.
Trump on Top
A Terminal High Altitude Area Defense interceptor is launched during a test, in this undated handout photo provided by the U.S. Department of Defense.
all players receive, even the
low-ranked hopefuls who fly to
Australia only to lose in the
events qualifying tournament.
The tournament also will
string five rackets per player,
per match, at no charge (players have to pay around US$30
a racket elsewhere).
People love to ask, Whats
your favorite Grand Slam? and
I always say as an American, its
the U.S. Open, but as an objec-
tive tennis player its the Australian, Ms. Gibbs said.

Theyre very, very generous.
Swag abounds. Each player
receives one stuffed animal
(platypus, echidna, dingo, and
koala are options); a gift card
for A$250 worth of Ugg boots
(Bob Bryans wife asked for
pink); and a backpack. Players
get an additional A$300 gift
card to Myer department store.
They have everything in
there, said Treat Huey, a doubles player who represents the

Philippines.
There is an accountant who
helps players calculate deductions, and an on-site tax office,
where players can pay taxes immediately. Then its off to the
tournament bank for cashing
and wiring checks.
They let you write off a lot
of stuff, you can write off agent
fees, transportation, travel,
VINCE CALIGIURI/GETTY IMAGES
POLL
Among Democrats, the Iowa

poll is little changed from the
neck-and-neck finish found
earlier this month. Mrs. Clinton drew 48% to Mr. Sanderss
45%. Former Maryland Gov.
Martin OMalley remains in
the low single digits in all
three states.
New Hampshire is a growing bastion of support for Mr.
Sanders, who had led Mrs.
Clinton only narrowly earlier
this month, largely on the
strength of his appeal to independent voters. The latest poll
found Mr. Sanders has a double-digit lead, having gained
among those who identify
themselves as Democrats. Mrs.
Clintons earlier 18-point advantage among party regulars
is now an eight-point edge for
Mr. Sanders.
The poll showed how South
Carolina is a formidable backstop for Mrs. Clinton. Her
steep 64%-to-27% advantage
builds on her strength among
the minority voters who dominate that states primary electorate. She leads by 57 points
among African-American primary voters.
Although the passion of Mr.
Sanderss campaign crowds
has suggested a big enthusiasm gap between the two
Democratic candidates, the
Agnieszka Radwanska held a python at an Australian Open event for players and their families.
Mike Bryan said.

Last week, many players and
their families, including Roger
Federer and his two sets of
twins, gathered in the garden
behind the player restaurant for
a show of native Australian
creatures like the wombat, wallaby, salt water crocodile and
echidna (it has quills and is
known as the spiny anteater).
There was also a laughing kookaburra, the largest kingfisher
bird in the world, according to
Chris Humfrey, a zoologist from
Wild Action (company slogan:
The zoo comes to you).
Be calm, because animals
know when youre afraid, Mr.
Humfrey said as he perched
the kookaburra on a childs
arm. Moments later the bird
took off. Mr. Humfrey lunged
and captured the kookaburra
with two hands.
Sick catch! Mr. Federer
said.
Agnieszka Radwanska, a
Wimbledon finalist from Poland, loved holding the python.
A bit scary, but still exciting,
she said. A beautiful python.
Other activities include paper airplane throwing contests,
remote-control car races, Australian barbecues, live music,
visits from a pastry chef, and
tours of Melbournes graffiti.
Dominic Inglot, the British doubles player who threw the winning paper plane, said his rivals
had a limited understanding of
aerodynamics. Some of the

planes were disgusting, I mean
really embarrassing, he said.
Literally folded in half.
This tournament treats the
players so well, said John Isner, the 6-foot-10 American star.
Tournament officials love to
say thank you, too. Mr. Isner
filmed an interview for the
tournaments website last week.
His reward: an Apple Watch.
Its of no use to me because I
have a BlackBerry, he said.
Craig Tiley, tournament director and CEO of Tennis Australia, is the pied piper of the
Australian Opens happiness
parade. He sits in an office,
door open, across from the
player restaurant.
I want to be at the center,
in the heart of it, he said.
Anyone can ask me any question any time and Ill find a
way to help them.
Mr. Tiley intends to continue the free-food policy, and
says its no problem if players
take extra food since he wants
them and their teams to have
everything they need. Players
wear badges that are scanned
at check out, so organizers can
see whos eaten what. The
tournament will tally the calories consumed once all the
champions have been crowned.
We actually will get a printout at the end of the tournament to see whos enjoyed it
the most, he said.
BOOKS
Knowledge is a fine thing, and mother Eve thought so; but she smarted so severely for hers, that most of her daughters have been afraid of it since. Abigail Adams
Behind the Veil
ways an observer, holding back from

expressing moral outrage or insisting on the need to reform Islam.
Given the horrific state of affairs she
documents, perhaps she feels like
the argument makes itself.
Maybe so. But it bears repeating
that all of us should be doing everything in our power to back Muslim
women and men, like Saudi driving
activist and educator Norah Al-Sowayan and her husband, Humoud
al-Rabiah, who are fighting against
the pathological use of honor,
shame and sex to control women
and girls in their country. Arrested,
detained and harassed, the activist
had, at home, her greatest supporter: her husband. I was the one
who taught her to drive! he tells
Ms. Zoepf proudly.
I understand deeply the pain of
navigating such cultures as a femaleand the lifeline that allies can
provide. I was born in 1965 in Bombay, India, into a conservative Muslim family; my mother had to cover
her face with a veil as a teen. I grew
up in Morgantown, W.Va., where, in
the late 1970s, a cousin told me that
my high-school cross-country uniform was haram, or illegal, because
it showed my bare legs and arms. In
the 1980s, I lived a secret life of the
sort documented in Excellent
Daughters by dating and hiding it
from my parents.
In the 1990s, though, I married a
Pakistani Muslim man because I
thought I should. I came to regret
the choice and got divorced, violating a profound cultural taboo. In
2002, in Karachi, Pakistan, covering
the region post-9/11, I became pregnant. According to Pakistans Islamic
laws of morality, I was a criminal because I wasnt married. I left the
country as soon as possible, and I
decided to have my baby after I was
long goneand safe. The next year,
the men at my hometown mosque
told my mother and me that we
were causing fitna because we
prayed in the main hall instead of in
a segregated balcony for sisters.
We refused to leave the hall.
Had it not been for the love and
support of my parents, I might have
given up on Islam. But I believe we
can live as reform-minded Muslims, as Ms. Zoepf writes, and work
toward an Islam in which women
can live with dignity and equality.
The lives of so many depend on it.
Excellent Daughters
By Katherine Zoepf
Penguin, 258 pages, $28
THIS PAST New Years Eve, hordes

of men from North Africa and the
Middle East, many of them Muslim
refugees and migrants, set off like
predators on the streets of European
cities. In Cologne, Salzburg, Zurich
and Helsinki untold numbers of
women were sexually assaulted,
robbed and even raped. They felt
like they were in power and that
they could do anything with the
women who were out in the street,
one victim in Cologne told the BBC.
Germanys Federal Criminal Police
Office, which is investigating the Cologne attack, said, We use the term
taharrush gamea, as a phenomenon
of jointly committed sexual harassment of women in public, adding
that, until the New Years Eve attacks, the phenomenon was unknown in Germany. But women of
the Middle East and North Africa
have long known about taharrush
gamea. Some men used this concept
of strategic public shaming to justify
assaulting women in Egypts Tahrir
Square during the Arab Spring, including 60 Minutes correspondent
Lara Logan.
When 16-year-old Zahra

al-Azzo was murdered by
her brother for being raped,
her family threw a party.
Katherine Zoepfs chilling book
Excellent Daughters: The Secret
Lives of the Young Women Who Are
Transforming the Arab World
doesnt specifically address taharrush
gamea, or collective humiliation. But
the themes of honor, shame, power,
sex and Islam are woven throughout
her intimate portraits of Muslim
women and girls in the Middle East
and North Africa.
Ms. Zoepf has been reporting on
the region since 2004, as a stringer
for the New York Times and contributor to the New Yorker, and her
book is like a Lonely Planet guide
to the dark underbelly of the purity
culture of Muslim societies. From
Damascus to Jeddahand, yes,
now to the capitals of Western Europewomen who transgress their
A. ABBAS/MAGNUM PHOTOS
BY ASRA Q. NOMANI
UNDER COVER Two women and a girl swimming in Dhahran, Saudi Arabia.
perceived social responsibilities
in this matrix of honor and shame
are fair targets for humiliation and
violence.
In one particularly poignant chapter, Ms. Zoepf steps through the
doors of a girls prison in Syria,
where 16-year-old Zahra al-Azzo was
jailed for being raped. (Thats right,
they jailed her.) The prison is a sort
of holding facility for girls like Zahra
who are at risk of being murdered
by their families in a so-called honor
killing. Yet there is little to protect
the young women once they leave.
One of the girls came to me, crying,
the other day, the head social
worker tells Ms. Zoepf. She wanted
to go home and its an honor crime
situation. I told her, Try to relax
here for a while because theyre going to kill you anyway when youre
released. It sounds cruel, but I
needed to calm her down, to get her
to behave sensibly.
Zahra was eventually freed from
the prison in order to marry a
cousin. Shortly thereafter, she was
hacked to death in her apartment
by her own brotherwith the blessing of their parents. Zahras crime:
losing her virginity out of wedlock. Her brother believed he was
washing away the shame to the
family. The day of her murder, Ms.
Zoepf chronicles, the girls family
threw a party.
Excellent Daughters exposes
the tragic dynamics of power and
control that lay siege to the bodies,
minds and souls of women and girls

through inherited rules of patriarchy, tribalism and morality. In eight
chapters set in Saudi Arabia, Lebanon, Egypt, Bahrain, the United
Arab Emirates and pre-civil-war
Syria, we meet brave individuals
who are trying to reconcile the values theyd absorbed growing up
with a changing world and their
own changing hopes.
Transforming the Arab World, as
Ms. Zoepfs subtitle puts it, can take
many forms. Readers learn about
womens secret strategies for protecting virginity, and thus honor, such
as anal sex, hymen-reconstruction
surgery, illegal abortions and passionate friendships, possibly even
love affairs between women. From
the bedroom to the public square, the
book captures the struggles of
women as they challenge laws, traditions, cultural norms and religious interpretations. For some, revolution
looks like taking a job as a flight attendant, or going to law school, or refusing to wear a headscarf. For others, it means playing sports. Ms.
Zoepfs own backgroundshe was
raised as a conservative Jehovahs
Witnessallows her to be particularly empathetic to situations that
otherwise defy logic.
Ms. Zoepf gingerly traces the
roots of twisted practices, such as
honor killings, to Islamic concepts
such as fitna, or the chaos that is
often connected to temptation of a
sexual nature. Quoting a prominent
male Syrian womens-rights advocate, Bassam al-Kadi, she notes that

the current state of Arab politics
has only made matters worse. Arab
societys attachment to the idea of
personal honor as something bound
inextricably to the virtue of female
relatives was becoming even deeper
than it had been historically. Partly
this was a result of the wave of Islamization that had been sweeping
the Arab world since the 1980s, she
writes, summarizing Mr. al-Kadis
argument. The obsession with the
control of female sexuality is, she
notes, a symptom of political despair. As Mr. al-Kadi puts it: No
one talks about loyalty to country,
about professional honor. Now its
just the family, the tribe, the
woman. Thats the only kind of
honor we have left.
The trouble is that, for all of her
meticulous reporting and access to
the women she writes about, Ms.
Zoepf shies away from drawing certain uncomfortable conclusions. She
acknowledges the problems with
many Salafi, or fundamentalist interpretations of Islam, and she
rightly notes, for example, that
honor killings are almost unknown
outside the Islamic world and its
diaspora. Yet she goes on to say, in
the next sentence, that honor killings are not mentioned in the
Quran. This is typical of the kind of
careful dance she does throughout
the book. She bears witness to tyrannical situations but remains al-
Ms. Nomani, a former Journal

reporter, is the author of Standing Alone: An American Womans
Struggle for the Soul of Islam.
State of the Union
By Jakob Wassermann
New York Review, 277 pages, $15.95
BY NATHANIEL POPKIN
JAKOB WASSERMANN was born in
Frth, Bavaria, in 1873, as Bismarck
was beginning to transform Germany
into an imperial power. Wassermann
was one of a handful of brilliant Germans and Austrians (along with
Thomas Mann, Franz Werfel and Stefan Zweig) who gave rise to the figure of the intellectually powerful, financially successful great manauthor. He wrote three dozen books,
most of them intricately plotted novels that pursued grand themes: justice, will and authority. While he
wrote, Germany careered from coup
to revolution, revolution to war. His
books were best sellers in Germany
and Austria (where he lived most his
adult life) and often immediately
translated into English.
The German language, he writes
in his 1921 memoir, My Life as a
German and a Jew, is the breath
of life to me. But for all his life
Wassermann felt split in two. In the
memoir he laid bare the effect of inexorable daily anti-Semitism: If
these are pinpricks they are yet
murderous.
Yet Wassermanns deepest scar
was the one left by his first marriage, to a daughter of Albert
Speyer, a wealthy industrialist. Julie
Speyer, who as a child had been
beaten prophylactically to curtail a
habit of lying, was, according to
Wassermann, a desperately insistent, perpetually victimized, dogmatic, mercurial manipulator who
would do anything to hold on to her
man. To have him was to demonstrate to Julies five bourgeois sisters that she had surpassed them in
a life of intellectual and therefore
morally superior pursuit.
The marriage lasted 25 years.
Wassermann spent almost a quarter
of that time seeking a divorce that
Speyer would accept and then prevent in a pattern of increasingly creative exploitation of the law. It cost
the author his physical and emotional health.
confront his own devastating marriage in his work. After finally composing an account of his time with
Speyer, he buried it inside the third
novel of a sprawling trilogy, disguising it as a piece of fiction. But
before the book appeared, the Nazi
marriage tragedy and rendered it in

English as a stand-alone novel, My
Marriage. It is as lush and brutal
and genuinely honesta portrait of
a relationship as I have ever come
across. At the very first, Julie
Speyer, called Ganna Mevis here,
regime banned his books. Already in

poor health, he had a heart attack
after meeting with his Viennese
publisher, Bermann Fischer, hoping
to persuade him to publish it anyway. Fischer published the book,
but few readers then or since saw it
for what it was: the cri de coeur of
a ruined man.
Now translator Michael Hofmann
has unearthed Wassermanns barely
fictionalized and utterly modern
threatens suicide if Wassermann

Alexander Herzogrefused her. Either youre going to marry me, or Ill
jump. Herzog, of course, should
have known and should have run,
but he didnt. Marriage, Wassermann writes, offers the weaker
party plenty of opportunity to show
no character.
Perhaps weakness of character is
why Wassermann waited until the
end of his life to tell his most pro-
Wassermann buried a
lush and brutal account
of his own disastrous
marriage inside a novel.
EMIL OTTO HOPPE/ULLSTEIN BILD VIA GETTY IMAGES
My Marriage
In 1925, the year before the divorce, at last, became final, Wassermann put out a novel called Laudin
und die Seinen (translated as Wedlock). His failed marriage was
clearly on his mind, though he approaches it only obliquely. Wassermann has a femme fatale, Louise
Dercum, recite, as she reads from
the manuscript of a play:
There is only one sufficient motive for the recording of these
memories. I would revive the past
in order to lay bare the errors
which led to the destruction of my
marriage and the darkening of my
best years. If one would undertake
such a task in genuine honesty, he
must dig deep into the intricate
roots of existence.
But how hard it is to be genuinely honest: It took Wassermann
eight more years, until 1933, to fully
pulsive story. He died before it was

published, as if unable to bear the
response. But the writers fear is the
readers reward: This is Wassermann, a chronic overwriter, at his
boiled-down best. My Marriage is
a story that he had been honing in
his head for years.
Mr. Hofmanns perceptive translation tunes the novel for the contemporary ear, but really for all time:
This is perfectly etched domestic
tragedy. The difference between us
was this, writes Wassermann. She
forgot everything from one hour to
the next, the way angels or demons
forget; I forgot none of it, for all
eternity. And it grew darker and
darker in my heart.
Some readers may not be assuaged by the literary gloss. No
story has only one side, and this is
undeniably the mans version.
Speyers willful ambition, her love of
dogma, her insatiable intellect:
These are characteristics of a commanding woman, in another light, a
model for our time.
Herzog is certainly the victim
here, and Ganna Mevis wields the
knife. But if Mevis holds the knife,
Herzog doesnt run. The stone tumbling down over a precipice doesnt
think about whether its going to
strike some poor walker down below, writes Wassermann. And her
passion, her dumb momentum, was
like a force of nature to me. The
poor walker Wassermann is unflinching in his self-appraisal. He is
a master novelist, after all. Indeed, if
Mevis leaves the knife on the table,
from time to time Herzog picks it up,
turns it in his hand, presses it into
his fleshand hers.
Mr. Popkin is the author of the
novel Lion and Leopard.
BOOKS
BERNARD BISSON/SYGMA/CORBIS
Always listen to experts. Theyll tell you what cant be done, and why. Then do it. Robert Heinlein
All the Colors on the Spectrum

In a Different Key
By John Donvan and Caren Zucker

Crown, 670 pages, $30
BY RICHARD J. MCNALLY
JOHN DONVAN AND Caren Zucker
open this remarkable book with the
story of Donald Triplett, a peculiar
boy born to affluent parents in 1933
in Forest, Miss. Donald was emotionally indifferent to everyone, including his devoted parents, whose displays of affection were never
reciprocated. Yet he was fascinated
with inanimate objects, such as spinning pot lids. His need for sameness
was unnerving; any change in his
home provoked violent tantrums. He
used language in odd ways, but not
to communicate with others. His
rote memory was astonishing; he
could recite the 25 questions and answers of the Presbyterian catechism
before his second birthday. But he
was still unable to feed himself well
into his third year.
Donalds devastated mother, the
authors tell us, concluded that her
son was hopelessly insane. Although doctors recommended his
commitment to an institution in
1937, when he was only 4, his parents never gave up on him. His father wrote to Leo Kanner, Americas
most famous child psychiatrist, requesting a personal evaluation of
his son. Describing Donald to Kanner, he wrote that he never seems
glad to see father or mother. He
seems almost to draw into his shell,
and live within himself. Conversation with Donald was impossible,
said his father, because the boy
was not learning to ask questions
or to answer questions. The Johns
Hopkins doctor was intrigued by the
strange pattern of strengths and
deficits exhibited by the 5-year-old
boy. Several years later, Kanner
published a seminal article describing Donald and similar children he
subsequently assessed. Their central problem, as Kanner saw it, was
the inability of these children from
earliest infancy to relate themselves
to other people.
Coining the term infantile autism, he described a syndrome
characterized by early onset, an extreme need for sameness and an extreme preference for being alone. As
Mr. Donvan and Ms. Zucker put it,
Donald Triplett became autisms
first child. Kanners article, however, attracted little attention at the
time. It would take many yearsand
the patient insistence of many frustrated parentsbefore autism became recognized as a distinct disorder deserving medical, psychological
and scientific attention.
The history of a neurodevelopmental disorder is a topic unlikely to
captivate a general audience. But
this book should succeed in doing so.
Written by two television journalists,
In a Different Key: The Story of Autism tells a riveting tale about how
a seemingly rare childhood disorder
became a salient fixture in our cultural landscape. It features vivid

portraits of people with autism and
their devoted parents and recounts
dramatic controversies among wellintentioned and occasionally misguided advocates and doctors who
have tried to help those with the
condition. These gripping personal
stories give the book tremendous
narrative drive.
Although Kanners classic description of autism appeared in 1943, he
believed that the condition had always existed but had never before
been recognized as a distinct syndrome. I did not discover autism. It
was there before, he said. Mr. Donvan and Ms. Zucker show that Kanners intuition was correct. One
chapter covers apparent instances of
autism throughout history, including
the famous case of the Wild Boy of
Aveyron who mesmerized the Parisian press in 1800 after hunters discovered him living in a forest, presumably abandoned by his parents.
Until the final decades of the 20th
century, pediatricians routinely recommended that parents institutionalize children with severe developmental disabilities, including what
was later called autism. This was especially true for those who were
mute and exhibited violent tantrums
and self-injurious behavior, such as
pummeling their faces and smashing
their heads against walls. Custodial
staff in these settings did little more
than feed, clothe and protect the
youngsters from themselves. The
parents had sent away their children in secret, and in time, the children themselves became secrets,
never to be spoken of again.
In the 1960s, the best-selling
books and media appearances of Dr.
Bruno Bettelheim, director of a program for disturbed children at the
University of Chicago, publicized
the mysterious condition. The popular, authoritative-seeming Bettelheimwhose doctorate was in art
history, not psychology or medicineclaimed that cold, unloving
mothers cause autism in their children. As he asserted: In the case of
these extremely disturbed children,
not only nobody cared, but there
was a wish that it would be much
better if the child wouldnt live.
This quasi-Freudian theory of the
refrigerator mother prevailed for
years despite the absence of any
scientific support.
Bernard Rimland, a psychologist
whose son had autism, wrote a
scholarly book demolishing Bettelheims notions and making the case
for autism as an organic disorder.
Appearing in 1964, Infantile Autism:
The Syndrome and Its Implications
for a Neural Theory of Behavior,
eventually gained great prominence
for synthesizing the sparse and scattered medical literature and acquitting mothers of having caused autism in their children. A major
breakthrough in treatment also occurred in the mid-1960s, when the
UCLA psychologist O. Ivar Lovaas
developed an intensive behavior-
modification program to eliminate

dangerous self-injurious behavior in
severely affected children while
gradually shaping their communication and other social skills via the
positive reinforcement methods of
B.F. Skinner.
Staff would begin, for example, by
training the attention of children by
rewarding them with a piece of
cookie when they obeyed the
prompt, Look at me. Once this behavior had been established, they
would reward the children for imitating sounds and then words on command, laboriously building a functional vocabulary. Trainers shouted
No! when children struck themselves, thereby suppressing negative
behavior while shaping positive behavior. The program, which took
dozens of hours per week, was conducted by trained paraprofessionals
and later by parents themselves.
are clearly involved. Identical twins

are vastly more likely to be concordant for autism than are fraternal
twins, and about 15% of individuals
with autism spectrum disorder carry
known mutations in specific genes.
Scientists suspect that the other 85%
of cases are characterized by mutations at hundreds of genetic loci,
each making a small contribution to
risk. Older, middle-aged parents are
more likely to have a child with autism than are younger parents, and
low-birth-weight infants are at
greater risk than are children of normal birth weight.
As the British psychologist Simon
Baron-Cohen discovered in the
mid-1980s, people with autism have
a serious impairment in their
theory of minda cognitive skill
enabling us to see the world through
the eyes of others. Early work on autism concerned markedly impaired
The diagnosis of autism has risen markedly in recent

years, climbing from a rate of 4 to 5 cases per 10,000
people in 1966 to approximately 1 per 100 today.
In a landmark study, Lovaas reported that 47% of the treated children achieved normal intellectual and
educational functioning, whereas only
2% of a control group did so. Lovaas
didnt claim that his method cures
autism, and he acknowledged residual
deficits. The chief drawbacks of the
method were the enormous amount
of time it required and the relative
scarcity of trained personnel. Nevertheless, Lovaas confirmed that a substantial number of people with autism could make significant progress
with the proper help. Versions of his
program became widely used
throughout the country, and they remain so today.
Fortunately, outside scientific circles, other factors were raising
awareness of the condition. Dustin
Hoffmans Academy Award-winning
portrayal of a man with autism in the
1988 film Rain Man engraved it in
the public imagination. As Mr. Donvan and Ms. Zucker put it: Rain Man
was not perfect, but it was nearly
sothe first movie to get autism
right, and to reach so many people
while doing so. Temple Grandin became famous for earning a Ph.D.,
teaching at Colorado State University
and writing several acclaimed books,
including an autobiography, Thinking in Pictures, conveying how the
social world appears to a woman
with autism. She was, in a way, the
first autistic celebrity.
The prevalence of autism has risen
markedly in recent years, climbing
from a rate of 4 to 5 cases per 10,000
people in 1966 to approximately 1 per
100 on the spectrum today. It is unclear whether this rise reflects improved detection of cases, loosened
diagnostic criteria or a genuine epidemic of autism. Meanwhile, science
has slowly begun to chip away at the
mystery of autisms etiology. Genes
children, most of whom had severe

intellectual disability as well. But
high-functioning people, such as Ms.
Grandin, led to the rediscovery of
work by the Austrian pediatrician
Hans Asperger, who in 1944 had described youngsters with autistic
traits whose intelligence was normal
or superior. Some exhibited brilliance in advanced mathematics.
Foreshadowing the discovery of
theory-of-mind deficits, he noted
their difficulties understanding the
nonverbal behavior and emotions of
others, resulting in rejection by their
peers. In 1994, the American Psychiatric
Association
recognized
Aspergers syndrome as a diagnostic
cousin of autism. When the APA revised its diagnostic manual in 2013,
it placed both syndromes on a continuum of severity, calling it Autism
Spectrum Disorder.
As Mr. Donvan and Ms. Zucker
make clear, parents have been major
agents in the story of autism, tirelessly advocating on behalf of their
children. Beginning slowly in the
1960s, they began to organize, demanding educational and clinical
support from schools and legislatures. National groups formed, securing donors for foundations that
funded scientific research on autism.
These advocacy organizations were
sometimes in competition, quarreling about the best way to help autistic children. But they have achieved
a great deal. More children today
function reasonably well outside institutions than ever before, and
some on the Aspergers end of the
continuum have flourished as young
adults in quantitative havens such as
Silicon Valley. Many autistic adults
reside in the community in supervised group homes, and some are
able to hold jobs.
Parents of autistic children have
helped change how the autistic live

in our society. Still, parents who are
desperate to find a cure for seemingly intractable disorders sometimes fall prey to pseudoscientific
theories whose promoters promise
miracles. In the 1990s, educator
Douglas Biklen popularized a
method called Facilitated Communication, inspiring hope in parents
whose children with autism were
mute. Mr. Biklen claimed that these
youngsters could communicate by
typing out words on a computer if
their hands were gently supported
by a facilitator. The method became
extremely popular when silent children finally began to express their
thoughts and feelings to others via
the keyboard. Or so it seemed to believers in Facilitated Communication. Uproar occurred when children
began typing messages accusing
their parents of sexually abusing
them. Clever experimental tests of
the method confirmed what many
psychologists suspected: Facilitators
were inadvertently directing the
childs typing, converting the keyboard to a Ouija board. Charges
were dropped against accused parents, and Facilitated Communication
fell from favor.
The debunking of Facilitated
Communication broke the hearts of
those who thought that their mute
children were finally able to connect
with them. Another tragedy occurred in response to the rising
prevalence of autism. In 1998 a British physician published a shocking
report in the U.K.s leading medical
journal suggesting that the measlesmumps-rubella vaccine may cause
autism. Parents panicked, and growing numbers in Britain and America
refused to have their children vaccinated. Medical authorities argued
vigorously in defense of vaccines,
emphasizing their safety and their
role in nearly eradicating serious
diseases of childhood. Eventually the
original report was discredited, and
its author lost his medical license
while gaining the No. 1 spot on Time
magazines list of historys great
science frauds. Vaccine refusal
didnt result in a drop in the rate of
autism, but it was followed by increased rates of several diseases. As
Mr. Donvan and Ms. Zucker note,
measles was becoming active again
in the United States, with reported
infections reaching a twenty-year
high in 2014.
One lesson of this outstanding
book is that organized advocacy by
parents and others is vital for those
with mental-health problems to get
the clinical and educational services
they need to flourish. Another lesson
is that the recipients themselves are
best served when advocacy is guided
by science, not impostors. We owe
this to the autistic people among
usindeed, to all our children.
Dr. McNally, professor of psychology and director of clinical training at Harvard University, is the
author of Remembering Trauma
and What Is Mental Illness?
BOOKS
There is nothing more terrible than to be alone among human beings. Stefan Zweig
FIVE BEST: A PERSONAL CHOICE
David Wootton
on histories that read like novels
THE ARMADA
By Garrett Mattingly (1959)
GETTY IMAGES
MR. BEALE HAD not brought the

warrant until Sunday evening. This
is the first sentence. The warrant, we
will soon discover, is the warrant for
the execution of Mary Queen of Scots
in 1587. But are we reading fact or
fiction? The extraordinarily detailed
narrative suggests fiction. Who but a
novelist would mention the raw
wood of the hastily constructed stage
on which the execution took place?
When the executioner turns, with a
theatrical flourish, to display Marys
head to the crowd, all he holds up is
her wig. Rolled nearer the edge of
the platform, shrunken and withered
and grey, with a sparse silver stubble
on the small shiny skull, was the
head itself. Mattinglys Armada is a
marvelous book, one that would be
admired as a historical novel were it
not a true story.
CAFE SOCIETY Stefan Zweig and Joseph Roth in Ostend in 1936.
A Noose In
Your Luggage
Ostend
By Volker Weidermann
Pantheon, 164 pages, $24.95
BY ROGER LOWENSTEIN
OSTEND is an unremarkable city on

the Belgian coast. In the late 1930s,
it served as a beachside haven for
writers fleeing from, or futilely attempting to resist, Nazi Germany. In
Ostend, the German literary historian Volker Weidermann magically
evokes the mood of these artistic
refugees as the sun set on the civilized order of Europe.
The book is foremost the story of
the tangled relationship of two writers, both Jewish: Joseph Roth and
Stefan Zweig. Roth was a successful
Berlin-based journalist and passably
renowned for his fictional meditations on the Jews of middle Europe,
cast into a kind of spiritual homelessness by the dissolution of the AustroHungarian Empire after World War I.
By 1936, he was banned in Germany,
short on cash and made increasingly
anxious by women troubles. Zweig
was the most translated writer in Europe, but he, too, was in crisis. His
magnificent home in Austria, with his
collection of literary treasures from
Mozart and Tolstoy, had been raided
by police, and his ideal of tolerance
had come to seem risible.
Mr. Weidermann calls them Two
men, both falling, but holding each
other up for a time. For a time is
the authors pithy way of signaling
that the writers efforts are ultimately doomed. Ostend, which
has been marvelously translated by
Carol Brown Janeway, abounds in
poetry and deadpan understatement. One of my favorites is a sentence about Zweigs first love: She
made no claims on him, nor could
she, because she was married to
someone else.
The beauty of the writing is such
that a narrative is hardly necessary,
but Ostend has just enough of one.
Its about a feverish gathering of
antifascist intellectuals in the sum-
mer of 1936. Civil war is erupting in

Spain; Nazi Germany is preparing for
its showcase Olympics. Hitler and
Mussolini are coming to seem unstoppable. The book is brimming
with harbingers and portent. Among
the compelling cameos is one of
Ernst Toller, a playwright chased
from Germany for his left-wing politics. Toller has just given a rousing
speech in London, in which he rallied
artists with the words, No one can
flee the present fight.
Zweig was internationally

famous, Roths career was
faltering. It didnt matter:
Their fates would be one.
When Toller and his young actress wife decamp to Ostend, Mr.
Weidermann observes, many battleweary migrs take new heart.
Some of this is due to his wife.
Writers almost go crazy at the sight
of her youth and her beauty, Mr.
Weidermann writes. He never forgets that these intellectual paragons
are also desperate, self-absorbed and
often weak in their private lives. But
Ostend always returns to the political context.
In Tollers case, his wife packs a
length of rope in the top of his suitcase so hell always have a final escape. Its not necessary to know the
playwrights fate to guess that the
writers personal stories are meant
to foreshadow that of Europe. There
is a latent tension buried in all the
talk and chess and cigarettes. You
have the feeling, writes Mr. Weidermann, that one wrong word, and
the whole table would explode.
Most hopeless and deluded are the
faithful communists, who even in exile spy on one another for Moscow.
Arthur Koestler, who will one day
unmask the Soviet regime in Darkness at Noon (1940), is here, already, the author notes, too independent for the Party and perhaps
also too Jewish.
The dissonance between the writers languid summer and the utter
ruthlessness of what awaits gives
Ostend a dreamlike quality. The
book is as transporting as fictionI
had to remind myself that it wasnt
as I read. Partly this is due to the
level of detail. Mr. Weidermann
knows which caf each writer favored, what they drank, which manuscripts they read aloud. It could be
Hemingway. Once again theyre all
sitting in the Flore, begins one passage, trying to pretend that theyre
carefree. But as he then observes,
With every day of this vacation that
goes by, any return becomes less
plausible. They all know it. But its
never discussed. Optimism is a duty.
Theres a length of rope in the suitcase, but nobody talks about it.
Ostend, though, is ultimately
Zweigs and Roths story. Mr. Weidermann is interested in Zweig as
the assimilated Jew, who looked
down on the less-polished Jews
from the East. Roth was just such a
figure, hailing from East Galicia. He
drank too much and spoke Yiddish.
He was a burden on the upper-class
Zweig, financially and emotionally.
The wonder is that their bondMr.
Weidermann calls it lovewas so
strong, given all that separated
them. Roth was depressive whereas
Zweig had an irredeemable faith in
the good in the world. Zweig
warmed on the beach; Roth could
not stand the sun. Roths career
was collapsing; Zweig was internationally famous. Personally needy,
Roth assaulted his friend with angry reproaches. Zweig dissembled
and avoided.
In the end, the distinctions didnt
matter. East or West; Roth or
Zweig; their tragic fates were one.
As Roth wrote to Zweig shortly after Hitlers ascension to power in
1933, You will have realized by
now that we are drifting towards
great catastrophes. . . . I wont bet a
penny on our lives.
THE RETURN OF
MARTIN GUERRE
By Natalie Zemon Davis (1983)

THIS IS THE STORY of a con that
worked, as cons do, for so long as
people wanted to be conned. In 1548,
a Pyrenean peasant, Martin Guerre,
deserted his wife, Bertrande. Eight
years later someone claiming to be
Martin appeared and was accepted as
such by both Bertrandes and Martins
families. But doubts grew, and he was
charged with being an impostor. Tried
and convicted, he appealed and was
about to win when the real Martin
appeared. False-Martin was promptly
executed. The key to the story, as Ms.
Davis tells it, is Bertrande: False-Martin could never have passed for real
had she not coached him, for he knew
more about Martins life with Bertrande before 1548 than even the real
Martin did. He knew the things they
had done before, during, and after the
secret act of marriagedetails that
real-Martin had forgotten but Bertrande had not. Bertrande needed a
husband, and false-Martin had suited
her well. Ms. Daviss book is just as
deceptive as Bertrande: Apparently
simple, at every turn it proves to have
hidden depths.
GALILEO HERETIC
By Pietro Redondi (1987)

PIETRO REDONDIS BOOK is the
story of a document that he came
upon concealed in the papal archives.
What Mr. Redondi discovered is a
world of shadows, of mirrors, of deceptions, of unnamed dangers. Take
Galileos friend Giovanni Ciampoli,
once a senior figure in the papal administration, later disgraced. When he
died, all his papers were seized by the
Holy Office, many never to be seen
again. His correspondence, including
his letters to and from Galileo, were
burned by his secretary, an excellent
idea which freed me of all danger.
The danger is never specified because
just to name it would be incriminating: One could not admit to destroying
evidence of heresy. Mr. Redondi
Mr. Lowensteins latest book is

Americas Bank: The Epic Struggle to Create the Federal Reserve.
claimed that his new document transformed our understanding of Galileos

trial and demonstrated that the real
charge against him was Protestant
heresy. Mr. Redondis attempts to penetrate into this world of suspicions
may not be entirely successful, but he
convinced this reader, at least, that
the sense of claustrophobia he induces
is the beginning of an understanding
of what Galileos world was like.
GIORDANO BRUNO AND

THE EMBASSY AFFAIR
By John Bossy (1991)
IN 1583, Sir Francis Throckmorton

confessed under torture to plotting
to assassinate Queen Elizabeth I. He
had been betrayed by two spies
working for Francis Walsingham, the
Queens spymaster. One of Walsinghams spies had been known to historians only by his code name: Fagot.
Fagot, argued Bossy, was actually the
Italian heretic (burned at the stake in
1600) and philosopher Giordano
Bruno, one of the first to believe that
there are innumerable inhabited
planets circling innumerable stars. At
the very time he was writing some of
the most important philosophical
works of the age, Fagot/Bruno was
working undercover against the very
forces that would later destroy him.
Bossys story is strange, but I think
true; it turns Bruno into a man of action as well as words. But what
makes the book utterly convincing
are the details of daily life. A riot
breaks out when a house undergoes
renovations, for there is nothing
like building work for souring relations between neighbours.
THE RECKONING
By Charles Nicholl (1992)

IS THIS A true story? ask Charles
Nicholl. Yes, he insists. I have not
invented anything. . . . It is as true as
I can make it. The subject is the
death of the great Elizabethan playwright Christopher Marlowe. Marlowe was stabbed with his own dagger, ostensibly in a dispute over a
restaurant bill. But he had been a spy
and was about to be arrested and
charged with atheism; Mr. Nicholl believes that someone high in the government wanted him dead. The playwright carried a dagger and knew
how to use it. We see, for example,
Marlowe, on a street corner in Canterbury, fighting a tailor named
Corkine with a staff and dagger.
Marlowes death is another matter: It
was a professional hit, and Marlowes
dagger was used to make plausible a
story that his killer had acted in selfdefense. I love Reckoning beyond
measure, not because Mr. Nicholl is
right about who ordered Marlowes
death (like all my favorite historians,
he pushes the evidence to its limits
and beyond) but because he is right
about the world Marlowe lived in.
Mr. Wootton is the author, most
recently, of The Invention of Science: A New History of the Scientific Revolution.
Taking the Wrong Root

By Christopher Stevens
Pegasus, 272 pages, $27.95
BY DAVID J. PETERSON
HAVE YOU EVER wondered why the

word catatonic means what it
means? Its actually quite an incredible story. In the 1880s, it was common for traveling hucksters to go
from town to town selling fantastic
potions and cures for everything
from near-sightedness to gout to
scarlet fever. The claims were often
exaggerated, to say the least, and so
it became common practice to test
these concoctions out on pets before
giving them to a sick child or relative. The results werent pretty. The
practice gave rise to the expression
that if someone got knocked cold, it
was like giving a cat a tonic. Before
long, the phrase shortened up, and a
new word was born.
Much like the mid-American jackalope, this story is as false as it is
amazing. I made up every word of it.
In fact, catatonic was a medical
term formed from the Greek roots
kata-, meaning down, and tonos,

meaning tone. The fake derivation
I gave you is whats known as a folk
etymology, and if youre a fluent
speaker of the language in question,
theyre usually not hard to spot. (No,
slang is not a shortening of the
phrase short language.) If youre
not, though, its easy to be fooled.
That brings us to Written in
Stone, a fanciful series of tales
about Proto-Indo-European
roots by Christopher Stevens, a British journalist.
Proto-Indo-European is a
reconstructed language
that linguists believe to be
the ancestor of most Western
languages (all the Romance languages, all the Germanic languages,
and many of the Northern Indian languages, as well as Armenian and
Farsi). The bulk of Written in Stone
is a series of short explications of particular PIE roots, starting with Ak, to
be sharp or quick, and ending with
Wid, to see truly. The write-ups are
short and light, each one stuffed with
jokes, etymologies, related words
from a number of languages, and allusions to history, literature and popular culture. If this sounds fun to you,
I cant help agreeing that it really

should be. The devil is in the details,
though, and thats where Written in
Stone falls flat.
To be sure, there are loads of accurate etymologies in this book
maybe 75% of them are correct. The
rest, though, range from probably
not completely accurate to laughably,
SHERD A 5th-century B.C. piece of

pottery bearing the name of
Themistocles at the top.
obviously, demonstrably false. Reading through Written in Stone, I was
stupefied at how the author evidently didnt even do a simple
Google searchor pick up a gradeschool dictionaryto check some of
the egregiously false ones.
GIANNI DAGLI ORTI/CORBIS
Written in Stone
Choosing just one example, in the

section on the root Ap, to put, he
correctly identifies Indo-European
descendants in Greek apo, Latin ab
and Sanskrit apa. Thereafter, though,
he finds the root Ap in the Latinate
words apply, apprehend and applaud.
And, indeed, all of those words have
the sequence of sounds ap, but they
most certainly do not have the PIE
root Ap in them. In fact, each of
these words is composed of a prefix ad- and a root beginning with
p. In Latin, the ad- prefix (originally a preposition meaning
toward) was added to a
number of words, many of
which have wound up in
Englishe.g., adjective,
adjacent, adorn, address.
When ad- was added to words
beginning with sounds that were incompatible with d, though, the prefix
would change, often resulting in a
doubling of the initial consonant of
the roote.g., arrest (ad- + restare).
Words starting with p were no exception, thus applaud, for example, is
in fact a combination of ad- and the
verb plaudere, to clap.
Mistakes like this one are easy for
an armchair linguist to make, but in
a book purporting to be about etymology, they are deeply troubling.

Even more troubling are the truly
speculative etymologies that Mr. Stevens provides for the roots themselves. A central claim of the book is
that most, if not all, PIE roots are onomatopoeic. This is just not true. He
gives, for example, an etymology for
man that supposes its a compound
of An, a root associated with breathing, and the sound m, which he associates with the self (e.g., me, my,
etc.). This is a tale as tall as the one
I opened this review with. Now, Im
all for speculationit often leads to
great discoveriesbut none of these
facts is presented as speculation,
which I find disturbing.
On the whole, Written in Stone
can be an enjoyable (or, in my case,
intensely frustrating) read for someone with a background in linguistics
who can separate fact from fiction. I
cannot, however, recommend it to a
general audience. Its fun and light,
but fraught with inaccuracy.
Mr. Peterson, who constructed the
language Dothraki for Game of
Thrones, is the author of The Art
of Language Invention.
OPINION
REVIEW & OUTLOOK
inancial analyst and our contributor Republican voters he would also need to win.
Donald Luskin has described Donald His net negative rating with the public is the
Trump as a black swan over the polit- highest in the presidential field in the latest
ical economy. Hes referring to
WSJ/NBC poll at minus-29.
As the GOP nominee or Jeb Bush is minus-27, Mrs.
an outlier event that few anticipated and whose impact is
minus-nine.
President, he would be Clinton
impossible to predict. As the
Mr. Trump might be able to
a political black swan. repair this image if he ran a
voting season begins in Iowa,
this strikes us as a useful way
more sober campaign as the
for Republicans to think about
nominee than he has run so
the Trump candidacy.
far, but he could also blow up under months of
Weve been critical of Mr. Trump on many intense media scrutiny. His biggest test would
grounds and our views have not changed. But be showing he has the temperament to be Preswe also respect the American public, and the ident, and his tantrum this week over Megyn
brash New Yorker hasnt stayed atop the GOP Kelly and Fox News isnt reassuring.
polls for six months because of his charm. DeAll of which means that Mr. Trump has the
mocracies sometimes elect poor leaderssee widest electoral variability as a candidate. He
the last eight yearsbut their choices cant be could win, but he also could lose 60% to 40%,
dismissed as mindless unless you want to give taking the GOPs Senate majority down and
up on democracy itself.
threatening House control. A Clinton Presidency
The most hopeful way to interpret Mr. with Speaker Nancy Pelosi would usher in an era
Trumps support is that the American people of antigrowth policies worse than even
arent taking decline lying down. They know 2009-2010. This is the killer black swan.
the damage that has been done to them over
And how would Mr. Trump govern as Presithe past decadein lower incomes, dimin- dent? Flip a coin. Maybe he would surround
ished economic prospects and a far more dan- himself with astute advisers, work closely with
gerous world. But they arent about to accept Paul Ryan and Mitch McConnell, and craft a rethis as their fate.
form agenda to revive the economy la Reagan.
Americans arent Japanese or Europeans His tax reform outline is close enough to sensiat least not yet. Mr. Trumps promise to make ble that Mr. Ryan could knock it into shape. He
America great again is for many patriotic vot- would not want to be a loser in office.
ers a rallying cry for U.S. revival. In that sense
But history teaches that Presidents try to do
it is motivated more by hope than by the an- what they say they will during a campaign, and
ger so commonly described in the media.
Mr. Trump is threatening a trade war with
i
i
i
China, Mexico and Japan, among others. He
The problem is that Mr. Trump is an imper- sometimes says he merely wants to start a negofect vessel for this populism, to say the least. tiation with China that will end happily when
On politics and policy he is a leap into the it bows to his wishes. China may have other
known unknown. That so many voters seem ideas. A bad sign is that Mr. Trump has hired
willing to take this leap suggests how far confi- as his campaign policy adviser Stephen Miller,
dence in American political leaders has fallen. who worked for Jeff Sessions (R., Ala.), the most
We can debate another day how the U.S. got antitrade, anti-immigration Senator.
here, but with the voting nigh its important to
Foreign policy would also be a leap in the
address what a Trump nomination could mean dark. Mr. Trump has said he respects former
for the GOP and the country.
U.S. Ambassador to the U.N. John Bolton, and
Pundits on the right are stressing the obvi- so do we. But Mr. Trump also admires Vladimir
ous that Mr. Trump is no conservative, but hes Putinenough so that even after a British
also no liberal. He has no consistent political judge found last week that Mr. Putin had probphilosophy that we can detect beyond a kind ably ordered the murder in London of a Rusof relentless pragmatism that is common in sian defector, Mr. Trump defended Mr. Putin
businessmen. Mr. Trump calls it the art of the because he wasnt found guilty.
i
i
i
deal. The President he may most resemble in
Mr. Trump has shown great staying power
that populist pragmatism, if not in manners,
is another business success who turned to poli- in the polls, and perhaps his campaign organizing talents will be as strong as his social-media
tics, Herbert Hoover.
Can Mr. Trump win the Presidency if he is skills. But Iowa and New Hampshire are only
the nominee? Who knows? Weve argued that the beginning of primaries that have weeks or
the GOP nominee should be the favorite this months to run, and a huge chunk of voters hayear, and perhaps Mr. Trump can mobilize mid- vent made up their minds.
Ted Cruz has his own electoral and governdle-class voters in Wisconsin, Iowa, Ohio and
Pennsylvania and win more states than Mitt ing issues and he isnt the only alternative to
Romney did. We certainly know he wouldnt Mr. Trump, despite what both men would like
Americans to believe. Voters could still elevate
shrink from flaying Hillary Clinton.
But theres no guarantee that Mr. Trump one of the other candidates. Republicans
would win the mainstream, college-educated should look closely before they leap.
A Libor Liberation
jury in London acquitted six bankers

Wednesday on charges that they fiddled
with the London Interbank Offered Rate,
or Libor, for fun and profit. Regulators claimed
that banks and individual traders conspired to
rig their reported interest rates to give themselves an advantage.
On the strength chiefly of florid press releases,
authorities have extracted billions of dollars in
fines from banks eager to make the issue go away.
Prosecutors have secured convictions against
some bankers, including London trader Tom
Hayes in August, and Anthony Allen and Anthony
Conti of Rabobank, who were convicted of Liborrelated charges in New York in November.
Far be it from us to say that every banker is
a saint. But evidence of discernible harm from the
alleged Libor-rigging has always been thin. Classaction suits in the U.S. by investors who claimed
theyd been hurt by rigged Libor readings
flopped, and theres evidence that banks misreported their interest rates in Libor-setting for
their own and the financial systems stability during the 2008 panic. Regulators in London and
New York also seem to have been aware at the
time that this was happening and at a minimum
didnt intervene.
Such subtleties long ago got lost in the political
frenzy over Libor allegations, so its a relief that
ordinary citizens in a jury room are still able to
exercise independent judgment. Even better if six
acquittals embarrass politicians who blame
criminally greedy bankers for a crisis born in
part of their own regulatory malfeasance.
Chinas Proliferation Double Game
ohn Kerry was in Beijing Wednesday to be- Thomas Reed has noted, China helped Iran build
seech Chinese leaders to help punish its uranium-conversion facility at Esfahan and
North Korea for its escalating nuclear mis- its laser-enrichment plant at Karaj.
behavior. To see why the SecThe United Nations first
Its hard to punish
retary of States efforts are unsanctioned Tehrans nuclear
likely to bear fruit, consider Pyongyang while aiding
program in 2006, but Chinese
the recent war of words beentities continued exporting
its weapons programs. illicit metals and chemicals to
tween Beijing and a Kerry lieutenant who dared utter an inIran anyway. Since 2009, even
convenient truth about Chinas
as most Obama Administrarole in illicit weapons proliferation.
tion officials have avoided the candor displayed
Assistant Secretary of State Thomas Coun- by Mr. Countryman, the U.S. has sanctioned
tryman told reporters last week that when Chinese entities for illicit-weapons proliferaNorth Korea and Iran seek to purchase high- tion at least 18 times.
technology materials or equipment for their nuThe personification of Chinas continuing
clear and missile programs, the place that they racket is Li Fangwei, also known as Karl Lee, a
like to shop is China. He added a plea that prolific trader and manufacturer of high-tech
China exercise the same degree of vigilance and missile technology who is under U.S. indictment
control on strategic trade with Iran and North for sanctions-busting and money laundering.
Korea as other countries do.
There is an Interpol red alert out for Mr. Li, but
Mr. Countryman is right. For decades Beijing pretends he doesnt exist. If you were
North Korea has turned to Chinese companies to take apart an Iranian missile, theres a good
for missile essentials such as specialty steel, chance youd find at least one component inside
gyroscopes and precision-grinding machin- thats passed through Lees hands, a British anaery. North Korean aircraft with suspicious lyst told Newsweek last year.
cargo have used Chinese airspace and refuelU.S. officials speaking anonymously or after
ing facilities, and North Korean ships that retirement have compared Mr. Li to Pakistans
have visited China have later been found traf- arch nuclear black-marketeer A.Q. Khan, but the
ficking arms and missile technology to Iran Justice Department wont say whether it has
and elsewhere.
formally asked China to turn him over. Its past
Chinese specialists began helping Iran mine time Washington did at least that, and perhaps
uranium and produce uranium hexafluoride in Mr. Countrymans statement is the beginning
the 1980s, around the time that China also be- of an overdue name-and-shame effort. China
gan selling Iran missile components. As nuclear would best serve its interests by ending its help
expert and former U.S. Air Force Secretary for Pyongyangs proliferators.
ZUMA PRESS
The Leap of Trump
Covered statues at Romes Capitoline Museums
The Humbling of the West
Some wonder how history will treat Barack

Obamas presidency.
That depends on who
writes the histories.
Secretary of State
John Kerrys account
WONDER
will fist-pump the Iran
LAND
nuclear deal as the cenBy Daniel
tral
foreign-policy
Henninger
event of the Obama
presidency, a triumph
for Western diplomacy.
But recent news photographs are producing a different history. These photos
document the abject humiliation of the
West by Iran. Americans who plan to
vote in their presidential election should
look hard at these photos, because the
Wests direction after this will turn on
the decisions they make.
The first photo is of a hallway in
Romes Capitoline Museums, a repository of art dating to Western antiquity.
Out of what the government of Italy
called respect for the sensibilities of
visiting Iranian President Hassan Rouhani, the museum placed large white
boxes over several nude sculptures, including a Venus created in the second
century B.C.
Then, because Mr. Rouhani will not
attend a meal that serves alcohol to
anyone, the nominally Italian government of Prime Minister Matteo Renzi
declined to serve wine.
They did so for the same reason
that beggars grub change in front of
Romes churches. Freed by the Obama
nuclear deal with Iran, Italys tin-cup
businesses signed about a dozen deals
with Mr. Rouhani this week, totaling
$18 billion.
The bowing and scraping continues
this week as France and Germany sign
more deals. This isnt economic renormalization. Rather than reform its weak,
politically unstable economies, Europe is
content to make itself a dependency of
the aborning Iranian empire.
The second photo of Western submission depicts what appears to be a gleefilled meeting between the president of
Iran and the leader of the worlds Catholics, Pope Francis, who gave Mr. Rouhani
40 minutes of his time.
The Vatican argues this is realpolitik
by a pope trying to protect Christians in
the Middle East by inducing Iran to play
an important role in the peace process.
Set aside the role Iran has played
in the death of a quarter-million Syrians
and the refugees now destabilizing Europe. One still may ask: Why such public and jolly photo-ops with this person?
The U.S. State Departments religious-freedom report says in 2014 Iran
executed at least 24 individuals for the
crime of moharebeh (enmity against
God). And surely that understates the
total killed.
The persecuted in Iran include Ba-
hais, Sunni Muslims, Christians (notably

evangelicals), Jews, Yarsanis and even
Shia groups.
The third photograph is of 10 sailors
from the U.S. Navy kneeling in rows,
hands on their heads, on the deck of an
Iranian boat.
The Obama administration hasnt
provided an explanation for how this
deviation and capture by Iran in the
Persian Gulf happened.
Instead of outrage over Irans treatment of the sailors, Secretary Kerry
praised the Iranians cooperation and
quick response.
Cooperation? Iran humiliated the
sailors by making them kneel in the
style of an Islamic State execution ceremony and then humiliated the U.S. by
releasing the photo.
Meeting in a congratulatory ceremony with the Islamic Revolutionary
Guard Corps members who took the
sailors, Iranian supremo Ayatollah
Khamenei said, This event should be
considered Gods work.
Europe and America bow

and scrape to ascendant Iran.
One is tempted to tip ones hat to the
Khamenei-Rouhani strategy team. Iran
took the Wests measure with its nuclear brinkmanship and the West bent.
Some may say the Italians are the
Italians, the pope has his reasons, and
Barack Obama and John Kerry are just
finishing their apology tour. But that
understates the long series of political
compromises and cultural surrenders
that have brought the U.S. and Europe
to this point.
Italys repudiation of its own heritage to accommodate Irans president is
a significant symbolic event. The Capitolines Venus isnt just a naked lady
carved out of marble. Just as the naked
man and woman in Masaccios Expulsion From the Garden of Eden, painted
in 1423 at the dawn of the Renaissance,
are hardly figure studies.
In her recently published book arguing a relationship between the Western
artistic legacy and democratic evolution,
Davids Sling, Victoria Gardner Coates
says these works are not isolated aesthetic objects; part of their value as historical evidence derives from their role
in the public life of the communities
that produced them.
Unless that public life is forgotten.
Western schools may no longer teach the
Battle of Thermopylae, but one may assume Hassan Rouhani knows the details
of Persias historic loss to brave Greece
in 480 B.C. as if it were yesterday.
Putting a white box over a Venus to
placate a Rouhani is a loss in the Persians return trip to the West.
LETTERS TO THE EDITOR
Inflation Is Hardly a Worry for U.S. Economy

Martin Feldsteins detailed analysis
of Fed policy and his use of cause-andeffect theories driving the Feds effect
on the economy leaves much to be desired (An Oblivious Federal Reserve,
op-ed, Jan. 15). Lets start with his
statement, Moreover, the Fed is planning a path for short-term interest
rates that is likely to raise the rate of
inflation too rapidly in the next two
years. Where is the supporting documentation that raising interest rates
will affect inflation? We know that
raising rates will drive the dollar
higher, reducing exports, increasing
lower-cost imports and lowering economic activityproducing less, not
more, inflation.
Oil dominates. While it is obvious
that oil-price declines lower inflation
through lower energy prices, we ex-
pect to see across-the-board reductions in prices for companies that have

a large energy-input cost in their products and services (like the airlines).
Mr. Feldstein says that the danger
is that very low interest rates in this
environment would lead to a higher
rate of inflation and higher long-term
rates. Where has Prof. Feldstein
been? America has had record-low interest rates for six years, and inflation
has been going down, not up. With an
underperforming economy, where is
inflation going to come from or the
expected rise in long-term interest
rates? To have a viable economic
theory you have to start out with
some supporting evidence. We dont
see such evidence here.
THOMAS E. NUGENT
Charleston, S.C.
GodSavetheNationalAnthem,butWhichOne?
Joseph C. Sternbergs objections to
Jerusalem as the English national
anthem dont withstand scrutiny
(Sing a Song of England, op-ed, Jan.
19). Hubert Parry composed a readily
singable, unison hymn for the four
stanzas (of only 97 words) of William
Blakes poem. While the first two
stanzas do consist of four questions,
the last two stanzas consist of four
imperatives followed by the singers
pledge to build Jerusalem / In Englands green and pleasant land. Jerusalem in the hymn doesnt refer to a
foreign city, but rather to an ideal,
what President Reagan referred to as
a city on a hill.
It is illuminating to compare it to
Americas national anthem, The Star-
Spangled Banner, which is an adaptation of a notoriously unsingable drinking song. The only stanza commonly
sung (80 words) ends on a question
that we would do well to ask ourselves, not so much as to the continued existence of the flag but rather as
to the nature of the land it flies over.
JUAN RODRIGUEZ
Louisville, Colo.
Letters intended for publication should
be addressed to: The Editor, 1211 Avenue
of the Americas, New York, NY 10036,
or emailed to wsj.ltrs@wsj.com. Please
include your city and state. All letters
are subject to editing, and unpublished
letters can be neither acknowledged nor
returned.
OPINION
By Allysia Finley
Des Moines, Iowa

uper PACs have got
to go! Thats why
Bernie tells them no!
Hundreds of college
students and plenty
of their instructors chant while
waving Free College Tuition and
A Future to Believe In placards
that were distributed before the
rally at Iowa State University. A
Bernie Not for Sale T-shirt
costs $25. A cursory scan of the
room counted one.
This army of Bernie Sanders
college recruits may not be formally organized, but it claps,
stomps and shouts in unison. Hey,
hey, ho, ho, the oligarchy has to
go!
The Sanders revolution

is probably over if he cant
win Iowa, and Clinton is
going all out to kill it.
Iowa State University would be
hard-pressed to fill its Stephens
Auditorium, whose 1,500-seat orchestra is nearly packed to capacity, for a football pep rally. But the
74-year-old socialist senator from
Vermont is better than a rock star.
Hes a self-styled revolutionary.
Mr. Sanders has attracted a cult
of personality among so-called millennials by advocating a revolution
to topple the American political
and market systems.
Fundamentally, Mr. Sanders
declares in a thick Brooklyn accent, gesticulating like an orchestra conductor, his campaign is
about transforming the United
States of America. Millions of
people . . . have concluded it is too
late for establishment politics, he
says. It is too late for establishment economics. They want this
country to move in a new direction. They want to be part of a political revolution!
The Democratic race has turned
into a game of thrones, with the
Iowa caucuses a key skirmish in

the partys war of succession.
Much to her chagrin, Mrs. Clinton
is campaigning as the rightful
Democratic heir who will guarantee President Obamas legacy,
while Mr. Sanders contends that
his liberal convictions are purer.
Both are waging a custody battle
for the presidents supporters.
In 2008 President Obama denied
Hillary Clinton the Democratic
nomination by energizing a coalition of the ascendant (i.e., young
people and minorities). His victory
in Iowa established his viability as
a candidate while exposing the former first ladys weaknesses. Mr.
Sanders is hoping history will repeat itself.
Despite the senators commanding lead in New Hampshire14
points in this weeks CNN/ORC
pollhe is running neck-and-neck
with Mrs. Clinton. The states caucus format also puts Mr. Sanders
at a disadvantage because his support is heavily concentrated in
precincts with college campuses,
especially Story and Johnson counties. In primaries only the raw
vote count matters.
The caucuses will test the
strength of Mr. Sanderss political
organization and following beyond
his home-states backyard. He
needs to win both Iowa and New
Hampshire to convince Democrats
nationwide that his campaign is
more than a lark. Mrs. Clinton has
marshaled a large army in Iowa to
defeat Mr. Sanderss ambitions
with a one-state blow.
In the past month the Clinton
campaign has deployed to Iowa a
brigade of surrogates including female celebrities (Demi Lovato, Jamie
Lee Curtis and Lena Dunham); potential veeps (Cory Booker, Joaquin
Castro); the sisterhood of the traveling pantsuits (Sens. Kirsten Gillibrand, Tammy Baldwin, Mazie Hirono, Amy Klobuchar and Claire
McCaskill); and top gun Bill.
Mrs. Clintons emissaries have
fanned out to enlist supporters,
yet they have a habit of upstaging
the candidate and highlighting her
weaknesses. Case in point: Mr.
Booker, a first-term senator from
REUTERS/EUROPEAN PRESSPHOTO AGENCY
Children of the Corn vs. Hillarys Female Army
Bernie Sanders and Hillary Clinton at a forum in Des Moines, Iowa, Jan. 25.
New Jersey, spent much of his
opening act at an event with Mrs.
Clinton in Marion on Sunday touting his biography with refreshingly
self-deprecating humor. His congenial wit contrasted sharply with
her familiar rallying cry. The audience has heard her lines before
from President Obama.
On the 2008 financial crisis and
recession, she says the Bush administration drove us into that
ditch by defanging regulators
and giving tax breaks to the
wealthy.
She proposes spending more on
infrastructure, biofuels, renewables
and education, and supports raising the minimum wage and equal
pay for equal work. She warns
that Republicans want to privatize Social Security and undo Democratic health care, environmental
and labor reforms.
The goal of her presidency
would be to make sure progress
isnt ripped away. She doesnt
want to throw our country back
into another contentious debate
over health carea tweak at Mr.
Sanders, whos endorsed a singlepayer government system. She admits that progress hasnt been as
fast as many Democrats would like
but argues that they must stay the
course. This was Mr. Obamas reelection pitch in 2012.

She recites the same refrains
two or three times a day, with the
same singsong inflections. The audiences, which appear to be made
up disproportionately of women
over 45, cheer at the scripted applause lines. A majority of these
women backed her in 2008, but
she needs them to turn out en
masse on Monday and bring their
husbands too.
Following Hillary around Iowa
can be exhausting because she
leaves little down time between
eventsjust enough to cart her
staff from one venue to the next.
On Sunday morning, she visited
Mt. Zion Missionary Baptist
Church in Cedar Rapids, then
spoke at a rally in Marion at 1:15,
which was followed by another
rally with Planned Parenthood
President Cecile Richards in North
Liberty at 4:15 and another Get
Out the Caucus event in West Des
Moines at 7:15. One suspicion is
that her managers intentionally
jam-pack her schedule to limit
questions and small talk. While Bill
excels one-on-one, Hillary exudes
discomfort.
The oddly Burkean theme of her
campaign is to build incrementally
on the liberal progress under President Obama, but this is uninspiring to voters dissatisfied with the
status quo who want radical
change, even if they dont know in
what shape or form.
Mr. Sanders has hit a nerve
among young peoplewho have no
recollection of socialism in the Soviet Unionby advocating an overthrow of the U.S. political and economic order. He decries the
rigged economy and proliferation of millionaires and billionaires. He calls for free college
tuition, universal government
health care and paid family leave.
None of these ideas are utopian,
he asserts.
All the while, he speaks in Orwellian terms. He calls food
stamps nutrition programs. He
describes his socialist vision as
democracy. At a Monday town
hall in Des Moines, he was asked
whether he was bringing back the
era of big government and making
it bigger.
We got to put what I am doing
in context, Mr. Sanders replied.
Today in America we have more income and wealth inequality than we
have had since 1928. There has,
Chris, been a massive transfer of
wealthIm talking about trillions of
dollarsfrom the pockets of working
families into the hands of the top
one-tenth of one percent.
Sen. Sanders often tells young
people that they can effect bold
changes in the polity by voting
for him and standing up against
the establishment. For now,
theyre going to have to stand up
against the Clinton machine as it
marshals its union support to turn
out the vote for Mondays
caucuses.
Many politicians in American
historyfor example, Eugene Debs
and William Jennings Bryanhave
run for president by campaigning
for radical changes in American
government. The problem for Mr.
Sanders and his idealistic followers
is that if he loses in Iowa, his revolution dies.
Ms. Finley is an editorial writer
for the Journal.
The Obama Uncertainty Principle

By Bill Archer
his week Johnson Controls

Inc. and Tyco International
PLC decided to merge, giving
the combined commercial-buildingsystems company Tycos Irish address. Its the latest deal that will be
accomplished through an inversion,
or when two companies merge to
gain a tax savings. The perfectly legal maneuver is a common-sense
business response to the absurdly
uncompetitive U.S. tax code (Americas corporate-tax rate is 35%;
Irelands is 12.5%). But companies
moving addresses irks the Obama
administration, and the White
House has been seeking to block
such deals by executive fiata hallmark of the Obama yearsrather
than push Congress to change the
law.
This unilateral approach is contrary to how the Founding Fathers
set up the government, and the

uncertainty it breeds is bad for the
economy.
Executive-branch regulations are
supposed to provide guidance to individuals and businesses on how to
interpret and follow the laws passed
by Congress. When it comes to writing rules, the executive branchs
goal should be to determine what
Congress intended and then fill in
the details. This has benefited the
American public for more than 200
yearsat least until President
Obama took office.
For the past seven years, the
Obama administrations policy has
been that unless Congress has specifically forbidden a result the White
House desires, this executive branch
will write a regulation achieving it.
Were not just going to be waiting
for legislation in order to make sure
that were providing Americans the
kind of help they need, President
Obama said in early 2014. Ive got

a pen and Ive got a phone. And I
can use that pen to sign executive
orders and take executive actions
and administrative actions that
move the ball forward. He vowed to
use all the tools available to us, not
just legislation.
Firms flee the absurd U.S.

tax code as the White
House bypasses Congress.
The Obama administrations approach to inversions is a case study.
Congress wrote clear rules in 2004
to address the types of corporate inversions it believed should be
blocked. Ten years later, in reaction
to some mergers that fully complied
with the lawbut that the Obama
administration didnt likethe Inter-
nal Revenue Service issued a notice

outlining future retroactive regulations that would have the effect of
changing the law. The agency followed with another notice promising
even more regulations. Media reports
note that the pending regulations are
already 150 pages long.
But apparently that isnt all.
Treasury Secretary Jack Lew recently said: Weve taken administrative actions to stop inversions as
best we can and were looking at
more things we can do.
So the U.S. Treasury Department
is writing the rules it desires despite what Congress penned in
2004. Its my suspicion that Treasury is taking its time to issue the
corporate-inversion regulations because it wants companies, uncertain
about what the future holds, to hold
off making otherwise sensible transactions. The policy is wrongheaded
and hurts the economy.
The Constitution says: All legislative powers herein granted shall

be vested in a Congress of the
United States. It also says the president shall take Care that the Laws
be faithfully executed.
Though denunciations of the
Tyco-Johnson deal by Hillary Clinton and Bernie Sanders this week
werent encouraging, it would be
good to think that the next administration, whether Democratic or
Republican, would show more respect for the constitutionally established roles of the legislative and executive branches. The U.S. economy
cant afford to continue on Mr.
Obamas path of skirting the law to
achieve his objectives.
Mr. Archer, a former U.S. representative from Texas (1971-2001),
was chairman of the House Ways
and Means Committee from 1996 to
2001.
Narendra Modi Is Losing Indias Market Liberals

By Sadanand Dhume
hen Indias Prime Minister

Narendra Modi addresses a
high-powered
business
summit in New Delhi on Friday,
hell put a positive spin on his governments economic stewardship.
But free-market liberals are already
losing faith that Mr. Modi will deliver on his promise to launch India
on a path of prosperity.
Two years ago, as Mr. Modi
gathered steam ahead of national
elections, a small but influential
cohort of market-friendly analysts
and commentators were among his
most ardent supporters. Today

many of them have lost enthusiasm
for Mr. Modi, who appears to lack
both clarity and appetite for bold
reforms.
The prime ministers advisors
may pooh-pooh this development.
Indias elections, they say, are
won by appealing to the masses,
not to intellectuals spouting Adam
Smith and Friedrich Hayek. They
are wrong. Already loathed by the
cultural left, Mr. Modi cannot afford to alienate the economic
right. Should Finance Minister
Arun Jaitley deliver another lackluster budget next monthwhich
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would be his third dud in a row

it will not only hurt Indias economy but also his bosss re-election
prospects.
Already some of the most influential market liberals in India have
signaled their disappointment. Former cabinet minister Arun Shourie,
who successfully privatized stateowned firms during Prime Minister
Atal Bihari Vajpayees tenure from
1998-2004, accused the Modi government of confusing managing
the economy with managing the
headlines.
News commentator T.N. Ninan
said: One-third of the way into its
tenure, the Modi government has
not really been able to get on top
of its inherited economic problems. Investment guru Jim Rogers, once an enthusiastic Modi
backer, accused the prime minister
of having done little to change
the basic macroeconomic problems
facing India.
To be sure, some of the disappointment can be chalked up to
high expectations. On the campaign
trail, Mr. Modi built up hopes that
he would be different from the cutrate socialists and lazy populists
who have mostly ruled India since
its independence. He proffered his
vision for the economy through
slogans such as: minimum government, maximum governance, red
carpet, not red tape, and the
government has no business being
in business.
The government has done its
best to roll out a red carpet for investors, with the prime minister
himself acting as Indias chief

pitchman. But in terms of minimizing government, particularly in
business, the slogans have little
connection with reality.
It hasnt helped that Mr. Modis
more ambitious plans have been
blocked in Parliament by an intransigent left-of-center Congress
His failure to reform

the economy is hurting
him among his onceenthusiastic supporters.
Party. A proposed goods and services tax to stitch India into a common market wont be rolled out
this April as planned, if its rolled
out at all. The opposition also
forced the government to retreat
on a proposal to ease land-acquisition norms for industry.
Perhaps fearing more political
turmoil, Mr. Modi kicked the reform
of labor lawswhich currently discourage job growth by making it
difficult to lay off workers during a
downturnto state governments.
But except in a few states, progress
hasnt been stellar.
A deeper problem is that the
Modi administration displays no
philosophical clarity on the economy. Despite having a majority in
the lower house of Parliament, he
has done nothing to reverse the
previous governments worst laws,
like an unpopular retroactive tax.
Also in force is a government

directive compelling companies to
channel some of their profits toward social objectives such as reducing child mortality and combating AIDS. In reality, politicians use
the provision to encourage businessmen to fund their favorite
boondoggles.
Instead of winding up the previous governments flagship makework programa rural job guarantee that wasted billions of dollars
Mr. Modi plans to increase its
funding. He also believes he can
stem the rot in state-owned companies by picking the right managers rather than privatizing the
firms.
Contrary to what senior politicians from Mr. Modis Bharatiya
Janata Party argue, the governments lackluster reform record
will likely have electoral consequences. Take away the market
liberals, and the only opinion makers left supporting the BJP are a
group of culture warriors championing ancient Hindu glory. Mr.
Modi will also fail to achieve his
goal of being seen as a global
statesman if he cant deliver on
his promise to transform Indias
economy.
Perhaps Mr. Jaitley will surprise
observers next month by rolling
out a bold budget. If he fails to do
so, Mr. Modis charmed run among
investors will likely head south.
Mr. Dhume is a resident fellow
at the American Enterprise Institute and a columnist for WSJ.com
Casey Affleck
UNMOORED HOURS:
Imperfect Storm
REVIEW
JOE MORGENSTERN
ing between spectacular struggles on the

Atlantic and generic anxieties on shore.
Generic describes much of the movie,
starting with the title, which was also the
title of the book, by Casey Sherman and Michael J. Tougias, that was adapted for the
screen by Scott Silver, Paul Tamasy and Eric
Johnson. Thats a surprise, as well as a disappointment, because the director, Craig
Gillespie, is best known for the distinctive
humanity of Lars and the Real Girl, and
Chris Pine, who plays Bernie Webber, the
captain of the rescue boat, usually invests
his roles with easy charm. But Mr. Gillespie
had the benefit of Nancy Olivers heartfelt
screenplay when he directed Lars. Neither
he nor Mr. Pine can do much with this
script, which is economical, if youre inclined to be charitable, and, if youre not, so
impoverished that it keeps Bernie tediously
THE FINEST HOURS, based on a true story,

amounts to half of a serviceable action
thriller about the U.S. Coast Guards legendary rescue of more than 30 seamen from
half of a shipthe stern section of the SS
Pendleton, an oil tanker that split in two off
Cape Cod in the winter of 1952. The action
sequencesinside the shattered vessel and
aboard a motorized Coast Guard lifeboat
during an epic stormimpressively portray
the power of the sea and the peril of the
rescue effort, which verges on a suicide mission. But the drama is almost stillborn,
thanks to a slow, deadly dull romantic preface, and its subverted by incessant switch-
Weather
Shown are todays noon positions of weather systems and precipitation. Temperature bands are highs for the day.
Beijing
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Seoul
Shanghai
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T k
New D
Delhi
h
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Karachi
h
Kolkata
k
Hong
ong Kong
Ko
Taipei
T ip
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Email Joe at joe.morgenstern@wsj.com and

follow him on Twitter: @JoeMorgenstern.
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Stationary
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J k
crew, or whats left of it, have no radio contact with shore because they have no radio.
(Its striking to note, from our higher-tech
vantage point, the primitive nature of
mid-20th century communication equipment: a balky radar at the Coast Guard station at Chatham, Mass., and nothing by way
of technology but a compass and a searchlight aboard Bernies wooden lifeboat, which
is startlingly, indeed poignantly, small and
fragile.) And the seldom-sung heroism of
the Coast Guard gets the pictorial evocation
it deserves when the rescue boat, crossing
the Chatham bar on the way to the open
sea, braves walls and curls of water that
may have been generated digitally, but are
awesome all the same.
The WSJ Daily Crossword | Edited by Mike Shenk
Hanoi
Bangkok
Ban k k
humble at the outset, then tight-jawed but

inexpressive in the face of hurricane-force
winds, and gimlet-eyed but inexpressive in
the face of mountainous waves.
The cast includes Ben Foster, Eric Bana
(weirdly wooden as Warrant Officer Daniel
Cluff, the man who sends Bernie and his crew
out to sea), and Holliday Grainger as Miriam,
the bright-faced young love of Bernies life.
When he and she first meet in that pokey
preface, its like a scene out of Marty gone
wrong; were supposed to see both of them
as touchingly awkward, but the scene is so
laggardly that the touchingly gets lost.
The physical production, by contrast, is
extraordinary, with an elaborate re-creation
of the Pendletons amputated stern. Trapped
in the shuddering, foundering vestige of the
tanker, the chief engineer, Ray Sybert (good
work by Casey Affleck), and the terrified
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yd y
s...sunny; pc... partly cloudy; c...cloudy; sh...showers;

t...tstorms; r...rain; sf...snow flurries; sn...snow; i...ice
2016 Dow Jones & Co., Inc. All rights reserved. 6DJ3009
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HERE ON THE MAP | By Todd McClary

This answer to this
weeks contest
crossword is a type
of geographical
feature.
Across
1 Service seat
(example #1)
4 Breather
(example #2)
8 Big name in
sauce mixes
(example #3)
13 Its stock symbol
is CAR
15 Field of
knowledge
16 Jack of The
Great Dictator
17 Location of
example #1
20 Goes downhill
fast
21 ___ up (confined)
22 Permits
23 CCLI quadrupled
24 Its destroyed in
Gravity: Abbr.
25 Scoring out
29 Moral authority?
31 Act the advocate
32 Sun tea brewing
spot
33 Gauchos
feathered prey
37 Location of
example #2
40 Mention
honorably
41 Function
42 Total
43 Tense situation
45 Moves
defensively
46 ___ corda (piano
direction)
49 15th-stanza
subject of
Ogden Nashs
ABC of Baseball
Immortals
50 Image of Pluto,
perhaps
51 Indiana rival
53 Emergency exit
device
58 Location of
example #3
60 Civil rights leader
Medgar
61 Winnebago
tribe
62 Caddies offering
Email your answerin the subject lineto crosswordcontest@wsj.com

by midnight Eastern Time Sunday, Jan. 31. A solver selected at random
will win a WSJ mug. Last weeks winner: Mike Miller, Houston, TX.
Complete contest rules at WSJ.com/Puzzles. (No purchase necessary.
Void where prohibited. U.S. residents 18 and over only.)
City
Amsterdam
Anchorage
Athens
Atlanta
Baghdad
Baltimore
Bangkok
Beijing
Berlin
Bogota
Boise
Boston
Brussels
Buenos Aires
Cairo
Calgary
Caracas
Charlotte
Chicago
Dallas
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-1 -5 pc
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10 2 sh
10 2 r
9 5 c
City
Geneva
Hanoi
Havana
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Houston
Istanbul
Jakarta
Johannesburg
Kansas City
Las Vegas
Lima
London
Los Angeles
Madrid
Manila
Melbourne
Mexico City
Miami
Milan
Minneapolis
Monterrey
Montreal
Moscow
Mumbai
Nashville
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Omaha
Orlando
Today
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1 -1 i
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8
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65
Flurries
b
Melbourne
Global Forecasts
62
63 1,000 kilograms
(example #3)
64 Act the shark
(example #2)
65 Speedy transport
(example #1)
Down
1 They help a
boxers stance
2 FEMA operation
3 Desire
4 Gangster Meyer
played by Ben
Kingsley in
Bugsy
5 Dieters problems
6 Brooklyn cagers
7 Fed. auditors
8 It declared its
independence
from Serbia in
2008
9 The U.K. is in it
10 Giraffe cousin
11 Baptisms and
bar mitzvahs
12 Swamp flora
14 Moo ___ pork
18 Wagner heroine
19 CBS procedural
spinoff, familiarly
23 Scrap
25 Blueprint detail
26 Kyrgyzstan
mountain range
27 ___ magnifique!
28 Trio of myth
29 Congressional
divider (example
#2)
PUZZLE
CONTEST
30
32
34
35
36
38
39
44
45
46
47
48
50
52
53
54
55
56
57
59
Vainglorious
Nasal laugh
Relax, informally
Deco luminary
Disturbances
Requiring an ID,
perhaps
Bush portrayer in
W.
University
catalog listing
Like maxed-out
credit cards,
often
Tourney surprise
___ Laredo (city
on the Rio
Grande)
Tolkien character
who marries
Aragorn
Pachelbel work
H-E-doublehockey-sticks!
Seahawks coach
Carroll
CBS procedural
with three
spinoffs
___ Khalifa
(worlds tallest
skyscraper)
Lip balm additive
Lewis Black
routine
D.C. insider
Previous Puzzles Solution

J A V A
N A
O X E N
OM
B E T A WA
G R I S
S H A R O N S
P A N AM
A N I MA L P
R O T
N O O
K I A S
H E
C R A T
MA C R O N S
A P H I D
G R A P H I C
MO I
A D V
A N N MO S
D I R S
E L E T
L L C A L
T
T O
S T U T
A T E S T
L A N
O
G I E S
A R T MO
E
E C
C L A T
S H E R A
N O V
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I S E
O
T E L
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BOJs Tea Leaves
Quarterly earnings top $1 billion for first time TECHNOLOGY | B3
COMMODITIES | B5
2016 Dow Jones & Company. All Rights Reserved.
Friday - Sunday, January 29 - 31, 2016 | B1
Samsung Braces for More Woes

BY JONATHAN CHENG
AND MIN-JEONG LEE
SEOULAs Samsung Electronics Co.s mobile business
stumbled over the past year,
the South Korean technology
giant found a measure of salvation in its surging semiconductor unit.
But no more. On Thursday,
Samsung posted a 40% drop in
net profit for the last three
months of 2015 to 3.2 trillion
won ($2.65 billion), as its chip
business recorded its slowest
quarter of profit growth in
more than three years.
Samsungs mobile business
didnt fare much better, depriving the company of its two

important profit drivers as a
broader global economic
downturn threatens to exacerbate a natural slowdown in the
maturing smartphone market.
Samsungs main business
units are all facing a downturn, said C.W. Chung, an analyst for Nomura in Seoul.
Company executives suggested that there would likely
be more pain to come this
year, helping send shares in
the company down 2.6% on
Thursday, wiping out about
$3.5 billion in its market capitalization.
Samsung mobile executive

Lee Kyeong-tae warned that
competition among smartphone players will intensify
Net profit fell 40%

in a difficult quarter
for the chip and
mobile businesses.
even further as a consequence
of the market-growth slowdown.
The companys investor-relations chief, Robert Yi, told
analysts that it will be a chal-
lenge to maintain last years

earnings levels in the first
half, citing forecasts of slack
demand for information-technology products.
While Mr. Yi said he hoped
for a modest improvement in
the second half of the year,
other executives tried to emphasize Samsungs longerterm prospects, pledging a renewed push to develop an
ecosystem of mobile software
and services to attract and
keep more smartphone users.
They also said they would
focus on winning consumers of
low- and midrange smartphones in developing markets.
Executives are touting a lot

of new business pushes in different areas, but they have yet
to translate into solid results,
said Mr. Chung of Nomura,
who added that most analysts
now expect Samsungs operating profit to fall this year from
the $21.9 billion that it
earned in 2015.
If the company manages to
sustain last years profit levels
this year, thatll be impressive, he said.
Samsung isnt the only techPlease see MOBILE page B2
Heard: Samsung cant rely on
its chips......................................... B8
Irans Lofty Aviation Plans Move Forward

Financial curbs, aging
infrastructure hinder
redevelopment of
air-travel,cargosectors
TEHRANAfter a flurry of
big deals aimed at revamping
Iranian commercial aviation,
officials and executives here
face a host of obstacles that
could keep many of their biggest ambitions grounded for
some time to come.
Iranian officials have been
eager to court Western buyers
for the nations crude oil and
natural gas, but they have signaled that civil aviation is also
a priority.
Iran has committed to buying 118 commercial jets from
Airbus Group SEan order
that tops $25 billion at list
priceto help replace its aging fleet of jetliners, some
bought before the Iranian Revolution in 1979. Tehran has
also signed deals this week
with a handful of French firms
to revamp Tehrans Imam Khomeini International Airport.
But residual financial sanctions, capital restrictions, aging infrastructure and limits
on Iranian flights abroad could
slow growth, Iranian and foreign officials warn.
Our infrastructure at this
moment isnt enough, said
Bagherian G. Hossein, deputy
chief executive at the Iran Airports Co.
Revamping Irans airports
and commercial fleet would be
crucial to help the country
open up to foreign business
travelers eager to take advantage of the removal of sanctions. It could eventually help
boost tourism, another potential new revenue stream. A
new fleet of commercial jets
and a revamped international
gateway could go some way in
demonstrating to everyday
Iranians the economic benefits
of Tehrans nuclear deal with
international powers.
Developing the infrastructure, building new airport facilities, cargo villages, a railway line to the airport from
the city, all will have direct
and indirect impact on the
economy, said John Grant, executive vice president at British aviation consultancy OAG.
So far, the aviation industry
BEHROUZ MEHRI/AGENCE FRANCE-PRESSE/GETTY IMAGES
BY ROBERT WALL
Revamping Irans airports and commercial fleet would help attract business travelers. A passenger jet in 2013 in Tehran.
has appeared to be the single
biggest beneficiary of the lifting of a set of broad international sanctions against Tehran.
Iran Air is the first airline
to benefit from sanctions relief, agreeing to a deal with
Airbus for 118 new jetliners.
The deal was announced
Thursday during the current
visit of Iranian President Hassan Rouhani to Paris.
The order includes some of
Airbuss biggest planesas
many as 12 A380 superjumbos
and 16 A350 long-range jets.
Deliveries of some A320 single-aisle planes and A330
widebodies, which are part of
the transaction, are due to
start this year, said Fabrice
Brgier, the head of the European plane maker.
No one is expecting those
planes to show up on the tarmac right away. Airbus and rival Boeing Co., whose planes
Tehran is also interested in
buying, are working through
record backlogs, so new planes
ordered today might not show
up until after 2020.
Another obstacle: Most airplane purchasing and finance
deals are in dollars. Executing
Ready for Takeoff

International seat-capacity growth to and from Iran has
outpaced the domestic market driven by foreign airlines.
16 million seats
12
Domestic
International
0
2005 06 07 08 09 10 11
Source: OAG
those deals amid U.S. banking

restrictions would be difficult,
especially for nonstate-owned
airlines. Deputy Transport
Minister Asghar Fakhrieh
Kashan told an audience of international aviation executives
at a conference here this week
that Irans central bank is engaging with the U.S. Treasury
Departments Office of Foreign
Assets Control, which enforces
sanctions, to address the issue.
The banking sanctions
12
13
14
15
limit our growth vision, said

Iraj Ronaghi, vice president of
Meraj Airlines, an independent airline that operates domestic flights and some to
neighboring states.
Iran was suspended in 2011
from the global aviation-payment system run by the International Air Transport Association. Iran Air Chairman
Farhad Parvaresh said the airline is hoping to be readmitted, a move that would make
international ticketing easier.

Mr. Kashan, the deputy
transport minister, said Tehran has also started the process of joining the so-called
Cape Town Convention. The
multinational
agreement
smooths the process of repossessing planes, in case of default. Membership is typically
a key component of any plane
financing or leasing agreement.
The European Union has
imposed limits on Iran Airs
operations because of the age
of its fleet, limiting the carriers opportunity to add more
slots at other global destinations. That could put the carrier at a disadvantage compared with international
carriers, particularly those
based elsewhere in the Persian
Gulf.
Direct flights to the U.S.
arent likely soon. That would
require a new bilateral treaty
between the U.S. and Iran.
--Doug Cameron in Chicago
Peugeot signs a car deal in
Iran....................................................B2
Iran takes step toward
satellite deals ............................B2
Apples
Stalled
Growth
Puts Focus
On Prices
BY DAISUKE WAKABAYASHI
AND EVA DOU
Stalling revenue raises an existential question for Apple Inc.:
Does the iPhone maker need to
move down market to restart
growth?
Apple rose to become the
most profitable and valuable
company in the world by selling
consumer electronics at premium prices. The iPhone sold
for an average $691 in the
fourth quarter of 2015, roughly
three times the $231 average
selling price in 2015 of a phone
using Alphabet Inc.s Android
operating system, according to
researcher Statista.
But iPhone sales scarcely
grew in the fourth quarter, and
are projected to decline in the
current quarter, for the first
time since the phone was introduced in 2007. That prompted
questions to Chief Executive
Tim Cook from analysts on a
conference call Tuesday about
lowering prices.
Mr. Cook doesnt agree. I
dont see us deviating from that
approach, he said. We dont
design to a certain price point.
We design a great product and
we make it priced at a great
value.
The question will be in the
spotlight soon. Apple is expected to unveil a new 4-inch
iPhone in the first half of this
year, according to people familiar with the matter. The new
phone will be the same size as
the iPhone 5S, and is expected
to replace it, adding a faster
processor and the capability to
use Apple Pay, the companys
wireless payment service.
The iPhone 5S, introduced in
2013, is now Apples low-end
model, starting at $450. It is
$100 cheaper than the iPhone 6,
which was introduced in 2014,
$200 cheaper than last years
iPhone 6S, and $300 cheaper
than the large-screen iPhone 6S
Plus. However, at $450, it is still
about twice as expensive as the
average Android phone.
It isnt clear how Apple plans
to price the new phone. An Apple spokeswoman declined to
comment.
Please see APPLE page B3
Price Check
Average selling price
for the iPhone
1Q 2016*
$690.50
$700
650
600
550
500
450
400
FY 2013
14
*Ended Dec. 26, 2015
15
16
Source: the company
Mattel Reshapes Barbie to Reflect Times BG Group Deal Caps
MATTEL
BY PAUL ZIOBRO
Curvy,
petite
and tall
Barbies
will join
lineup.
More than 50 years after her

debut, Mattel Inc.s Barbie doll
will be getting three new body
sizescurvy, petite and tallto
try to stem a long swoon in
sales of the iconic toy.
The changes coming to Barbie later this year are the latest attempt to address concerns that Barbies traditional
tall, slim and blonde look is
out of touch with children and
the type of doll that girls want
to play with.
We believe we have a responsibility to girls and parents
to reflect a broader view of
beauty, Evelyn Mazzocco, a

Mattel senior vice president and
head of the Barbie brand, said in
a statement. The news was earlier reported by Time magazine.
Last year, Mattel Introduced more skin tones, facial
structures and hairstyles to its
Fashionistas line, the most diverse lineup that Mattel had
given to Barbie since it was introduced in 1959.
Mattel has sold more than a
billion Barbie dolls during the
decades and it has historically
been the companys largest
and most profitable toy. But
its sales recently have fallen
Please see BARBIE page B2
Shells Big Bet on Gas

BY SARAH KENT
AND JUSTIN SCHECK
A decade ago, natural gas

played second fiddle to oil at
Royal Dutch Shell PLC. Now,
the company is staking its future on gasand pitting it
against oilwith the acquisition of BG Group PLC, which
cleared its final hurdle on
Thursday.
BG shareholders on Thursday signed off on the roughly
$50 billion deal, a day after
Shell investors approved the
combination. The acquisition
will nearly double Shells production of liquefied natural

gas within two years, and turn
it into the worlds largest marketer of the fuel by the end of
the decade.
Shells move isnt just a bet
on gas but also a wager
against crude oil as the energy
industrys future, Maarten
Wetselaar, the chief of Shells
newly created gas division,
said in an interview.
At its heart, Shell will become primarily a business that
extracts, liquefies and transPlease see SHELL page B2
B2 | Friday - Sunday, January 29 - 31, 2016
INDEX TO BUSINESSES
BUSINESS NEWS
These indexes cite notable references to most parent companies and businesspeople
in todays edition. Articles on regional page inserts arent cited in these indexes.
Great Wall Motors ..... B4
Pars Khodro ................ B2

PHH.............................A2
Ping An Bank..............B8
Posco...........................B4
Postal Savings Bank of
China.........................B8
PSA Peugeot Citron..B2
Henderson Land
Development.............B8
Hengfeng Bank...........B8
Hennes & Mauritz......B4
Hong Kong &
China Gas..................B8
Bank of Jiangsu..........B8
BG Group.....................B1
BMW ........................... B4
Boeing ......................... B1
Intel.............................B2
Iran Air........................B1
Iran Khodro.................B2
C
China Guangfa Bank...B8
D
Delta Air Lines ........... B1
Deutsche Bank............B8
E
Emirates Airline ......... B1
F
Facebook......................B3
Ford Motor..................B4
Fortescue Metals
Group.........................B4
Q
Qualcomm...................B2
J
J.P. Morgan Chase......B3
K
KLM.............................B1
Korn/Ferry International
.....................................B3
M
Meraj Airlines.............B1
Mitsubishi UFJ Financial
Group.........................B8
N
Nasdaq OMX Group....B8
Nissan Motor..............B4
R
Reifenhuser Group ... A3
Renault........................B2
Rio Tinto ..................... B4
Royal Dutch Shell.......B1
S
Samsung Electronics
............................... B1,B8
Scalable Path..............B3
SMS group..................A3
T
Theranos......................B2
Toptal .......................... B3
V
Vale..............................B4
INDEX TO PEOPLE
B
R-S
Blachman, Andrew ..... B3

Bowler, Bill..................B5
Kashan, Asghar
Fakhrieh .................... B1
Koh, D.J.......................B2
Ronaghi, Iraj................B1
Rouhani, Hassan.........B1
Shin, J.K......................B2
C
Chung, C.W..................B1
Coates, David..............B4
Cook, Tim....................B1
Coombs, Andrew.........B8
Cryan, John.................B8
G-H
Grant, John.................B1
Hossein, Bagherian G.B1
L
Lee Kyeong-tae...........B1
Lin, Amy......................B7
T
Takada, Shigehisa.......B4
Tavares, Carlos ........... B2
Maestri, Luca..............B3
Mahaney, Mark...........B3
Moskowitz, Mark........B3
van Agtmael, Antoine

.....................................B7
Yi, Robert....................B1
Parvaresh, Farhad.......B1
Pearce, Stephen..........B4
Zuckerberg, Mark ....... B3
BARBIE
Continued from the prior page
on hard times. In the last four
quarters, Barbies global sales
were $904.2 million, down
14% from the previous four
quarters. Mattels total sales
fell 6.2% in that same period.
Barbies sales have fallen at
more than 10% in each of the
last eight quarters, as the toy
has lost shelf space to dolls from
Walt Disney Co.s Frozen property, which Mattel produced up
until this year, and even to some
off-brand dolls that retailers
would rather stock.
The slump by Barbie and
some of Mattels other large
brands, such as Fisher-Price,
cost Mattels then-chief execu-
SHELL
ports natural gas used mainly
for heat and electricity, rather
than pump oil for the transportation industry.
The change comes during a
tumultuous period for crude
oil, with prices falling by twothirds over the past year and a
half in a rout that has shaken
the energy industry. Shell and
Y
Z
tive, Bryan Stockton, his job

last year. He has been replaced
by Mattels longest-tenured
board member, Chris Sinclair,
who has overhauled Mattels
management team and tried to
refocus the company on making better toys.
Barbie has been a lightning
rod for criticism since Mattel
co-founder Ruth Handler introduced her creation at the 1959
Toy Fair in New York. Womens
groups complained that the
blonde, plastic doll conveyed an
unrealistic body image to girls.
More recent complaints
have been around a lack of diversity in the doll line, especially now that nonwhite Hispanic children make up a
majority of the U.S. child population, according to the Census Bureau.
the other largest oil companiesExxon Mobil Corp., BP
PLC and Chevron Corp.have
all experienced sharp blows to
profitability.
Those companies and others have also turned to natural
gas in recent years. BP expects
gas to make up 60% of its production by 2020 and forecasts
demand for natural gas to
grow by almost 2% a year
through to 2035the fastestgrowing of all the fossil fuels
over that time frame.
ADVERTISEMENT
The Mart
Peugeot Heads Back to Iran

BY JASON CHOW
PARISIn the race among
auto makers to re-enter the
Iranian market, PSA Peugeot
Citron of France has sped to
the front of the pack.
Peugeot on Thursday signed
a contract with former Iranian
partner Iran Khodro to start a
joint venture that will make
three models from scratch in
the country beginning next
year. Iran is crucial market for
the car maker, which is
starved of revenue growth.
The deal, expected since
Iran and the West signed a
historic nuclear deal last year,
comes just one week after economic sanctions were lifted
against the Middle Eastern
country. The contract, along
with several other major business deals between Iran and
France, was signed at a special
ceremony with Iranian President Hassan Rouhani in Paris.
We are coming in hopes of
a very long-term relationship,
said Carlos Tavares, Peugeots
chief executive. We will be
present in this country in a
very profound manner.
The two partners are expected to invest up to 400
million ($435 million) over
five years, and the joint venture is expected to produce up
to 200,000 cars a year out of a
factory in suburban Tehran.
Production is slated to begin
EBRAHIM NOROOZI/ASSOCIATED PRESS
A
Airbnb..........................B3
Airbus Group...............B1
Alibaba Group
Holding......................B8
Alphabet ................ B1,B3
Anglo American..........B4
Apple.................B1,B2,B3
Iran Khodro kept making cars using local parts amid sanctions.
in the second half of 2017.
The deal is a coup for Mr.
Tavares, who has long sought
to re-enter the Iranian market
since he took Peugeots helm
in 2014. It also puts him ahead
of his former boss and current
rival Carlos Ghosn, Renault
SAs CEO. Renault remains in
discussions to buy local Iranian car maker Pars Khodro,
people familiar with the matter have said, but wasnt able
to complete a deal in time for
the ceremony.
Renault will intensify its
activities in Iran to a significant level and will prepare,
with its two partners, new
model launches, the company
said Thursday. Renault declined to comment on the sta-
tus of its negotiations.

Peugeots deal marks its return to Iran after a four-year
absence. Iran Khodro, which is
14%-owned by the Iranian government, was Peugeots former partner before the French
company ended its operations
there in 2012 because of international sanctions. Before
2012, Peugeot would send car
kits to be assembled in Iran.
The joint venture includes a
technology transfer and will
build cars from scratch in the
country. Peugeot said it would
also incorporate the vehicles
made in Iran and that they
will be at least 40% comprised
of locally sourced parts.
The strategic partnership
with [Peugeot] will serve as a
Iran Explores Deals for Satellites

BY ANDY PASZTOR
Iran is taking preliminary

steps toward leasing or buying
commercial satellites and potentially acquiring related
technologies, according to industry officials familiar with
the matter, another sign of
changes stemming from the
recent international rollback
of economic sanctions.
Providers of satellite services and hardware on both
sides of the Atlantic are maneuvering to land business in
Iran, even as Tehran has
started recruiting Western advisers to pave the way for
such deals, which could include using satellites already
in orbit, according to some of
these officials. But agreements, they predicted, are at
least weeks or months away.
Some of the global satellite
industrys biggest players are
actively involved, and the secretive Iranian Space Agency
already has made preliminary
moves to get assistance from
various legal and technical experts in the U.K., according to
one person involved in the discussions.
For now, these officials

said, European space companies seem to have the inside
track thanks in part to closer
diplomatic ties and because
the European Unions remaining sanctions against Iran are
less restrictive than those enforced by the U.S.
The current talks are
largely exploratory, according
to industry officials, with no
major satellite-related deals
believed to be imminent as
Iranian President Hassan Rouhani visits Paris this week. The
heightened level of activity,
however, reflects Irans longstanding interest in gaining
access to Western commercialspace technology.
Iranian government officials at an aviation-industry
conference in Tehran said they
werent responsible for space
issues, and the relevant official couldnt immediately be
reached for comment.
Since the rollback of international nuclear and other
sanctions nearly two weeks
ago, Iran has moved quickly to
complete multibillion-dollar
deals for aircraft, cars, construction projects and energy
with Italian and French companies.

Now, authorities in Tehran
also appear ready to rev up
negotiations for potential satellite pacts with U.S. and European suppliers.
There are going to be
some big contracts, and
theyre going to come quickly,
said Keith Volkert, a U.S.-
Some of the global

satellite industrys
biggest players are
actively involved.
based satellite-industry consultant who works for American and European clients. As
soon as Tehran decides on a
path, he adds, a number of
satellite-services companies
could put coverage into Iran
instantly.
Tehran has built and
launched a number of fledgling
domestic
satellites,
though so far they have all
been relatively small and the
government was forced to turn
to Russia, China and India for
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nology company to send a
warning signal on growth. U.S.
semiconductor peers Intel
Corp. and Qualcomm Inc. have
reported weaker earnings as
growth in demand for smartphones and other IT products
slows, while Apple Inc. on
Tuesday forecast its first revenue decline since 2003 as
iPhone sales slowed.
But Samsung is particularly
vulnerable. It is the worlds
biggest producer of smartphones and memory chips
used in mobile phones and
personal computers. Research
firm Gartner estimates global
Theranos has 10 days from

the receipt of the letter, dated
Jan. 25, to come up with a
credible plan to fix the
problems.
If the lab doesnt correct
them and come back into com-
pliance, CMS could revoke the

facilitys certification to test
human specimens and fine
Theranos as much as $10,000
a day, according to the letter.
U.S. officials didnt release
a detailed description of the
problems they found but are
expected to within a few
months. CMS is the chief regulatory overseer of clinical
labs.
Theranos is one of Silicon
Valleys highest-profile startups.
Founder
Elizabeth
Holmes is seeking to revolutionize the blood-testing industry, and the companys
valuation swelled to about $9
billion in 2014.
Theranos said the inspection outcome, as summarized
in the letter, does not reflect
the current state of the lab.
The company said the lab,

which houses its proprietary
testing devices, now processes less than 10% of the
tests done by Theranos.
We value engagement
with our regulators...and are
committed to ensuring that
all our labs operate at the
highest standards, the firm
said.
We are still reviewing the
report, but we addressed
many of the observations during the survey and are actively continuing to take corrective action, it added. A
full plan of correction will be
submitted to CMS within
days.
Theranoss practices in hematology pose immediate
jeopardy, the government
said.
chip sales fell 1.9% last year,

the first decline since 2012.
Global smartphone shipments increased just 6% in the
fourth quarter, according to
data tracker Strategy Analytics.
Samsung has long touted its
diversified approach to the
technology business, with cyclical downswings in chips offset by gains in mobile devices,
and stable-if-unspectacular
revenue from the companys
television and home-appliances businesses.
Indeed, those products were
a rare bright spot for Samsung, though TV sets and appliances contribute less than
5% of Samsungs overall operating profit.
In the longer term, Sam-
sung executives laid out a road

map to competitiveness in the
mobile business, creating a
collection of software and services unique to Samsung
smartphones that can help the
company differentiate itself
from Android smartphone
manufacturers.
Late last year, Samsung
stripped its longtime mobile
chief J.K. Shin of his day-today duties, and promoted the
mobile research-and-development chief D.J. Koh. Instead of
naming one mobile R&D chief
as a successor to Mr. Koh,
Samsung appointed two executives: one to oversee mobile
hardware R&D, and the other
mobile software R&D.
The reason, said Mr. Lee,
the Samsung mobile executive,
is to accelerate innovation on
software and services.
In the fourth quarter, Samsungs operating profit from
chip sales edged up just 3.7%
despite robust revenue, reflecting a fall in profit margin
to 21%the lowest level since
the second quarter of 2014.
In the mobile-phone business, Samsung continues to
face stiff competition from
low-cost Chinese brands that
have squeezed Samsungs mobile margins and eroded its
market share.
While operating profit from
Samsungs mobile business
rose 14% from the fourth quarter a year earlier, mobile revenue slipped. Mobile profit
margin edged up to 8.9% from
7.5% a year earlier.
GREG ALLEN/INVISION/ASSOCIATED PRESS
U.S. inspectors found deficient practices at a Theranos

Inc. laboratory that pose immediate jeopardy to patient
health and safety, according a
letter released Wednesday.
The Centers for Medicare
and Medicaid Services said an
inspection completed in November at the firms lab in
Newark, Calif., uncovered five
major infractions that violate
the federal law on clinical labs.
The agency defined one infraction by the blood-testing
company, based in Palo Alto,
Calif., as a situation likely to
cause, at any time, serious injury or harm, or death, to individuals served by the laboratory or to the health and
safety of the general public.
Unique, secure , quality US

investment. Fee Simple,
complete discretion.
$2.9 Mil . POB 122169 ,
San Diego, Ca. 92112
design and launch of potentially more-ambitious projects.

An Italian-built communications satellite that was never
delivered because it was
caught up in sanctions may be
turned over to Tehran in coming months, according to industry officials.
But bigger and more expensive plans may be brewing.
Paris-based Eutelsat Communications SA, which operates
a fleet of 39 satellites with
considerable capacity for television broadcasting and Internet connectivity over Iran and
the Middle East, is talking
with the countrys space
agency about expanding offerings in the region, according
to one of the industry officials
familiar with the matter.
Irans focus on commercial
space stretches back at least
to the beginning of the decade, when officials of Informatics Services Corp., affiliated with the Central Bank of
Iran, publicly acknowledged
reverse-engineering some U.S.designed ground equipment
they purchased before it was
restricted by sanctions imposed by Washington.
Deficient Practices Found at Theranos
ANNOUNCEMENTS
BUSINESS OPPORTUNITY
unique platform, for both parties to capitalize on each

others competitive advantages, especially given the
scale, said Hashem Yekehzare, Iran Khodros CEO.
Peugeots return to Iran
comes after 18 months of difficult negotiations, Mr. Tavares said.
Before sanctions, the country was Peugeots second-biggest market after France, with
annual sales of about 400,000
cars. Peugeot pulled out of the
deal in 2012 in response to
pressure from its then-partner
General Motors Co.
[Peugeot] would have liked
to not have left, said Mr. Tavares. We, too, were victims of
international sanctions.
For now, Iran represents
Peugeots best opportunity to
boost sales for a company that
is in need of revenue growth
as sales in China have gone
flat and demand in Latin
America and Russia continues
to fall. Peugeot doesnt sell its
cars in the U.S.
After Peugeot decamped in
2012, Iran Khodro continued
to make cars bearing the Peugeot name. In 2015, the company assembled about 350,000
cars, Peugeot estimates.
The French car maker estimates there are roughly three
million cars on Iranian roads
with its logo and the brand already has a 30% market share.
Theranoss Elizabeth Holmes
TECHNOLOGY
BY REBECCA BLUMENSTEIN
AND KHADEEJA SAFDAR
Lenovo Group Ltd. sees

emerging markets as a path to
growth amid a slowdown in demand for personal computers
and smartphones.
In most emerging markets,
we still see growth opportunity, Chief Executive Yuanqing
Yang said in a recent interview on the sidelines of the
World Economic Forum in Davos, Switzerland. Lenovo is the
worlds top PC vendor by shipments.
The
remarks
come
as the Chinese electronics
maker continues to grapple with weakness in the global
personal computer and China
smartphone markets while it
integrates the acquisitions of
Motorola Mobilitys smartphone business and International
Business
Machines Corp.s low-end server
business. With the slowdown in
China, Mr. Yang said he sees
substantial opportunity for
growth in India, Middle East
and Africa. Im still optimistic
in emerging-market growth,
he said. Mr. Yang said he intends to leverage Lenovos Motorola brand to penetrate the
smartphone market in the U.S.
The company is launching a
more innovative, more attractive device in July aimed at
U.S. consumers, he noted.
Mr. Yang predicted that Apple Inc. has reached a ceiling in
the U.S. market, while Android
still has room for growth.
Apple already has more
than 50% share in the U.S. Can
you expect more? I dont think
so, he said. I think Android
will take more share. But Mr.
Yang is betting smartphone users in emerging markets will
eventually shift to PCs.
Facebook Makes Strides in Mobile Ads

Quarterly net income,
revenue soar, as social
network hones ability
to reach young users
BY DEEPA SEETHARAMAN
Facebook Inc. on Wednesday posted more than $1 billion
in quarterly profit for the first
time, showing the social networks mobile strength as advertisers increasingly look to
reach younger users.
Investors drove shares up
nearly 13% in after-hours trading, to $106.62, giving the 12year-old company a market
capitalization greater than
$300 billion.
Mobile ads accounted for
80% of Facebooks ad revenue in
the fourth quarter; three years
ago, mobile-ad revenue accounted for just more than 20%.
RBC Capital Markets analyst
Mark Mahaney said, 2015 was
the year that Facebook went
from being an experiment to a
must-buy for advertisers.
For most of past year, Facebooks spending outpaced its
revenue growth, as the company accelerated hiring and
invested in projects such as
virtual reality, artificial intelligence and delivering Internet
access to remote areas.
In the latest quarter, how-
APPLE
Continued from page B1
In the past, Apple has said
used iPhones offer a lower-cost
alternative for budget-conscious
consumers. Apple doesnt get
direct revenue from the sale of
a used iPhone, but it benefits
from an additional user who
may spend on apps, movies or
services.
The iPhones price premium
mattered less when telecom
carriers subsidized the upfront
cost of a new phone. However,
ever, that dynamic reversed:

Revenue rose 52% to $5.84 billion, from $3.85 billion. Costs,
meanwhile, rose 21%.
Advertising revenue jumped
57%. Excluding the effects of the
stronger U.S. dollar, Facebook
said ad revenue would have increased 66%, marking the fastest
quarter of ad revenue growth
since the first quarter of 2014,
when revenue was less than half
as much, Mr. Mahaney said.
Quarterly net income crossed
the $1 billion threshold for the
first time, roughly 3 years after Facebooks 2012 initial public offering. By comparison,
Google parent Alphabet Inc.
first posted quarterly net income of $1 billion in late 2006,
less than 2 years after its IPO.
Facebooks strength on mobile is a sharp turnaround from
the time around the IPO, when
mobile was considered a weakness. There was a long time
when people thought, you know,
our business might not be as
good because we had no ads on
mobile, Chief Executive Mark
Zuckerberg said Wednesday.
But as users shifted to mobile devices, Mr. Zuckerberg told
his product team to prioritize
mobile-first products. If you
come in and you try to show me
a desktop product, then Im going to kick you out, Mr. Zuckerberg said he told the team at
the time. You have to come in
and show me a mobile product.

During the past two years,
the number of people who tap
Facebook exclusively through
mobile devices has nearly tripled. In the fourth quarter, 823
million mobile-only users accessed Facebook, or its Messenger app, at least once a month.
Facebook said ad prices
rose 21% in the fourth quarter,
compared with a year earlier,
largely due to demand for mobile ads. Mobile newsfeed ads
fetch higher prices than ads on
desktop, Chief Financial Officer
David Wehner told analysts.
Advertisers say they are
willing to pay up. Facebook is
by far the most effective mobile channel for us, said Andrew Blachman, chief operating
as more carriers move away

from subsidies, Apples higher
prices appear more stark.
Mark Moskowitz, a research
analyst at Barclays, said the
idea of lower prices is on the
top of everyones mind but
cautioned against it. He said
Apple faces tough comparisons
to last years booming sales of
its first larger-screen models.
But he said the iPhone franchise
is extremely strong and the next
versionthe iPhone 7is
expected to arrive later this
year.
Lowering prices may give the
iPhone a commodity feel, he
said. Psychologically, its a

tightrope.
Apple has long benefited
from its strategy. It accounts for
about 14% of the global smartphone market, according to
Strategy Analytics, and yet gobbles up nearly all of the industrys profits. That is true in
other Apple product categories,
such as tablets and computers.
In each, Apple has relatively low
market share and an outsize
portion of the industrys profits.
Even in emerging markets
like China, Apple has thrived by
sticking to the high-end of the
market. The iPhones hefty price
Facebooks mobile ad revenue as

a share of total ad revenue
80%
100%
(or $4.5B)
80
60
40
20
0
2012
13
14
15
Source: the company
GETTY IMAGES
Lenovo
Maps Way
To Boost
PC Sales
@wsjd | wsjd.com
Facebook CEO Mark Zuckerberg demanded mobile-first products.

officer of e-commerce company
Tophatter Inc. He credits Facebook ads in part for Tophatters explosive growth during
the past year. Weve shifted
more of our spend there.
For the fourth quarter, Facebooks net income totaled $1.56
billion, or 54 cents a share, up
from $701 million, or 25 cents a
share a year earlier. Excluding
certain expenses, Facebook said
it would have earned 79 cents a
share, up from 54 cents on that
basis a year earlier. Analysts
had expected earnings of 68

cents a share on that basis.
Beyond mobile, analysts say
Facebook still has many untapped revenue drivers at its
disposal, including video, messaging and virtual reality. Facebook users watch 100 million
hours of video on the social network daily, Mr. Zuckerberg said.
For 2016, Facebook expects
expenses to rise 30% to 40%,
and that capital spending would
rise to $4 billion to $4.5 billion,
from $2.5 billion last year.
tag helps it stand out from a

fast-growing pack of low-cost
smartphones and reinforces the
view that it is higher quality.
Apple said it actually raised
prices of certain products during the past quarter in some
overseas markets to offset the
impact of a strong dollar. Chief
Financial Officer Luca Maestri
said higher prices played a role
in the companys forecast that
revenue will decline.
Inevitably over time, higher
prices affect demand and so
were capturing that in our
guidance, said Mr. Maestri.
For now, Apple seems fo-
cused on expanding revenue by

other means. It wants to attach
services to its base of iPhone
users. For example, Apple said
it has 10 million subscribers
paying for its streaming music
service. At $10 a month, Apple
created a $1 billion-a-year business that didnt exist a year earlier.
It is also looking to shorten
the time between new iPhone
purchases. Apple introduced the
iPhone upgrade program in
September that effectively turns
the iPhone into a subscription
service for customers who want
a new phone every year.
Companies Find Tech Talent

In Robust Freelance Market
BY STEVEN NORTON
VICTOR J. BLUE/BLOOMBERG NEWS
A new class of private marketplace that connects software developers with corporations eager to hire people with
the latest tech skills has
popped up in Silicon Valley and
other markets that attract
mostly young, freelance coders.
The new approach to hiring
tech workers allows corporations to quickly
CIO
assemble teams
JOURNAL. that have the
skills for specific
projects, without
taking on the long-term financial obligations of hiring permanent, full-time employees.
Elite software developers,
increasingly in demand in an
age when more or less all companies are technology companies, also are building their careers based on flexibility and
the option to move around.
A talented freelance coder
easily can earn $100 to $200
an hour, says Damien Filiatrault, CEO and founder of
Scalable Path, a San Francisco-based company that manages a network of more than
1,000 freelance coders. If you
work freelance youre easily
going to make more, he said.
Scalable Path data show clients are willing to pay a software architect $145 an hour. Assuming a 40-hour workweek for
48 weeks, a freelancer could
gross $278,400 a year. Special-
ists with more unusual skills,

such as expertise in the Big Data
technology Hadoop, can command rates up to $300 an hour,
Mr. Filiatrault said.
JavaScript is another skill in
high demand, said Taso Du Val,
co-founder and CEO of Toptal,
another freelancer network
that works with clients including J.P. Morgan Chase & Co.
and Airbnb Inc.
There are more than 53 million Americans doing freelance
workaccounting for 34% of the
entire workforce, according to a
2015 survey from research firm
Edelman Berland. Five years
ago freelancing was kind of silly,
what the hipsters did out of college, Mr. Du Val said. Now its
much more of a serious thing.
Hiring freelancers allows a
company to quickly bring in
new expertise, said Andy Beck,
an assistant professor of pathology at Harvard Medical
School who works at the Beth
Israel Deaconess Medical Center. His team recently hired two
freelance coders from Toptal.
One of them is helping design a
videogame that will allow the
hospital to more accurately interpret images.
Mr. Beck chose to hire freelancers because their tasks
dont necessarily match the
hospitals expertise, and it
wasnt obvious that there would
be years of work for them to do.
The two freelancers make
more an hour than full-time
Companies are exploring a new approach to hiring tech workers.
employees, but dont get the

benefits, he said.
Benefits cost employers an
average of $10.48 an hour in
September 2015, about 31% of
total employee compensation
costs for civilian workers, according to a December report
from the Bureau of Labor Statistics. Freelancers often must
pay for their own health care,
which can be expensive.
Many coders increasingly
are demanding cash incentives,
and more flexibility, such as
the ability to work remotely,
said Craig Stephenson, managing director of the North
American CIO practice at executive-search firm Korn/Ferry
International. That could
pressure more traditional companies to do the same.
One of the challenges is
going to be how flexible employers are going forward with
a particular set of talent, he
said, adding that many big
companies havent figured out
how to deal with a large network of remote workers.
To draw from a more techsavvy talent pool, many companies have opened labs in Silicon Valley where they build
up in-house technology teams.
Mr. Beck said he communicates with his two freelancers
via Skype, email and Slack,
and that communication has
not been a problem.
Kris Wallsmith, a 35-yearold freelance developer in
Portland, Ore., said he realistically could earn anywhere
from $150,000 to $250,000 a
year depending on the number
of projects he accepts. It is the
flexibility, however, that
makes it most worthwhile. Mr.
Wallsmith has three young
children, so the ability to
choose his hours is important.
Working as a freelancer
also has helped him broaden
his career horizons.
I can make much more
money working as a freelancer
and picking and choosing my
clients around the world and
working remotely, Mr. Wallsmith said. Working full time
in an office would limit my
choices to what we have in
Portland.
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business, but only a few of them will talk about it.
What can you do with Splunk?
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2016 Splunk Inc.
Find out at splunk.com/justask
BUSINESS NEWS
BY RHIANNON HOYLE
SYDNEYFortescue Metals
Group Ltd. could buy back
hundreds of millions of dollars
of debt in the coming months,
taking advantage of record-low
prices on some of its bonds
and continuing a strategy of
reducing its indebtedness that
on Thursday sent its share
price surging.
The Australian iron-ore exporter, one of the worlds
largest, said it cut net debt to
US$6.1 billion as of the end of
December from $6.6 billion at
Sept. 30, as it worked harder
to drive down production expenses amid a deepening market downturn.
In the early part of 2016,
Fortescue hopes to repurchase
even more of its bonds early,
Chief Financial Officer Stephen
Pearce said in an interview.
We certainly have a reasonable amount of cash we can
formally allocate to paying
down debt, Mr. Pearce said.
Fortescue reported a cash balance of $2.3 billion at the end
of its fiscal first half ended
Dec. 31, above the $1 billion to
$1.5 billion liquidity level Mr.
Pearce says he wants to keep
on the balance sheet.
Although a tumbling ironore price has squeezed earnings, a slump in the price of its
bonds in the U.S. debt market
has enabled Fortescue to
cheaply buy back its debt.
Fortescue said it was able
generate surplus cash, in the
face of tumbling iron-ore
prices, after lowering output
costs for an eighth consecutive
quarter.
Fortescues shares surged as
much as 7.9% in Sydney, but
pared gains to close 4.1%
higher. Even after Thursdays
gains, Fortescues share price
is about 70% lower than two
years ago.
Business
Watch
TAKATA
CEO Plans to Resign

As Recalls Mount
Takata Corp.s chief executive

intends to resign, a person familiar with the matter said on
Thursday, paving the way for the
maker of tens of millions of recalled air bags to get aid from
its automotive customers.
Shigehisa Takada, the CEO of
Takata and the grandson of the
air-bag makers founder, is expected to attend a meeting with
car makers Friday, in which the
company will discuss its financial
condition and business plans,
said another person briefed on
the matter.
Executives from Takata customers Honda Motor Co., Toyota
Motor Corp., Nissan Motor Co.,
BMW AG and Volkswagen AG
are among those expected to attend, the person said.
Takata declined to comment
on the matter.
Auto makers have recalled
some 60 million vehicles worldwide with Takata air-bag inflaters that could explode, a problem
linked to 10 deaths, Japans
transport ministry has said.
Analysts have estimated that
costs to replace those air-bag inflaters in these cars could reach
billions of dollars.
Yoko Kubota
and Atsuko Fukase
DAVID PAUL MORRIS/BLOOMBERG NEWS
Fortescue
Looks to
Reduce
Debt Load
H&M said it plans to open 425 stores in the fiscal year, with China and the U.S. as its main markets for expansion.
derscores the difficulties the global
steel industry faces in dealing with
weak demand and overcapacity.
Poscos operating profit fell 25%
to 2.41 trillion won from 3.21 trillion
won a year earlier. The wons weakness against the dollar also inflated
the companys heavy dollar-denominated debt, contributing to its nonoperating losses, it said. Revenue
declined 11% to 58.19 trillion won
from 65.01 trillion won.
In-Soo Nam
HENNES & MAURITZ
POSCO
Korean Steelmaker
Posts First-Ever Loss
South Korean steelmaker Posco

reported its first-ever annual loss,
hurt by Chinas slowdown, investment write-downs and a weaker local currency that inflated its overseas debt.
Posco, the worlds fifth-largest
steelmaker by output, said Thursday that it swung to a net loss of
96.2 billion won ($80 million) in
2015 from a net profit of 557 billion
won a year earlier.
The loss, its first since the company was established in 1968, un-
Net Falls as Retailer

Keeps Bet on China
Swedens Hennes & Mauritz

AB said Thursday that it would
continue to bet big on China despite feeling the pinch from an
economic slowdown in the country, as it blamed an 11% drop in
quarterly net profit on adverse
currency swings and mild November weather across several
markets.
The fashion giant said net
profit fell to 5.53 billion Swedish
kronor ($649 million) for the
three months ended Nov.
30 from 6.22 billion kronor in the
same period a year earlier. Revenue grew 14% to 56.5 billion kronor in the fiscal quarter from
49.7 billion kronor. Excluding
value-added tax, sales totaled
48.7 billion kronor.
H&Ms chief executive, KarlJohan Persson, conceded that
sales growth in China has
slowed sharplycoming in at 4%
in local currencies in the last fiscal quarter, compared with 34%
a year earlier. But he said his
faith in the countrys long-term
prospect remained unshaken.
H&M said it plans to open
425 stores in the fiscal year,
with China and the U.S. as its
main expansion markets.
Jens Hansegard
and Laurie Burkitt
GREAT WALL MOTOR
Chinese Auto Maker

Posts Steady Profit
Chinese car maker Great Wall

Motor Co. said Thursday that its
2015 unaudited net profit held
steady at 8.04 billion yuan (US$1.22
billion), according to Chinese accounting standards, on higher sales
volume and a strong promotion
strategy.
The car maker said its total revenue for the year ended Dec. 31
rose 21% to 76.03 billion yuan despite Chinas economic slowdown
and competition.
Chester Yung
ANGLO AMERICAN
Shares Jump on Cuts

In Jobs, Output Gains
Anglo American PLC shares

jumped more than 10% on
Thursday after it reported job
cuts and higher iron-ore and copper output in the fourth quarter.
Anglos majority-owned South
African Kumba Iron Ore Ltd.,
which is separately listed in Johannesburg, said Thursday it
would reduce its workforce by
just over a third, or about 3,900
jobs, in line with the groups
wider plan to cut its workforce
by more than half in the coming
years to around 50,000 people.
Anglo Americans shares were
up 8.7% at 275.90 pence a share
in Thursdays London trading,
while the FTSE 350 mining index
was up 0.34%.
Alex MacDonald
Inspired by our famous front-page digest, the Journals Whats News App gives you the 10 most important business and
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FORD
U.S. Truck Sales Fuel

Profit in Quarter
Ford Motor Co. swung to a

net profit of $1.9 billion, or 47
cents a share, in the fourth quarter amid accounting changes and
rising sales, capping a lucrative
year for the U.S. auto industry
and fueling a strong near-term
earnings outlook.
The No. 2 U.S. auto maker in
terms of volume relied primarily
on increased light-truck demand
in its home market for its most
recent quarterly performance,
but also reported improved results in Asia and Europe.
Ford originally reported a
modest gain for the fourth quarter of 2014 but revised several
years of results earlier this
month due to a change in pension accounting, leading the company to say it actually had a
$2.5 billion net loss in the final
three months of that year.
Adjusted earnings per share
of 58 cents beat Wall Street expectations for 51 cents a share.
Christina Rogers
and Gautham Nagesh
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Nasdaqs Nontrading
Units Boost Revenue
Samsungs Chips Lose

Their Value as a Hedge
STOCK EXCHANGES | B8
HEARD ON THE STREET | B8

As of 12 p.m. ET
EUR/GBP 0.7626 g 0.38%
YEN/DLR 118.73 0.04% GOLD 1115.70 g 0.01%
OIL 33.02 2.23%
3-MONTH LIBOR 0.61560%
Its 2 p.m., Time for Stocks to Fall

China markets late
swings are similar to
last summers, but is
national team gone?
In Chinese markets, the 2

oclock phenomenon is back
with a twist.
On eight of the 14 trading
days since Jan. 11, the benchmark Shanghai Composite Index has moved more than 1%
By Shen Hong in
Shanghai and
Chao Deng in Hong Kong
in the last hour before the 3
p.m. close. On six of those
eight occasions, the market
headed south.
The pattern is reminding
investors of last summers
Chinese equity-market meltdown, when heavy outbursts
of afternoon market activity
were also frequent, usually following a calm morning and a
long lunch break, when stock
markets are closed between
11.30 a.m. and 1 p.m.
There is one key difference
from the summer, though:
Back then, shares often enjoyed a late rally thanks to
Beijings obvious intervention,
as state-backed funds bought
stocks to prop up the market. When this so-called national team of funds was
more active in the market, it
had a habit of snapping up
stocks after 2 p.m., analysts

say.
The tactic proved effective
initially, as the authorities obvious stock-buying often lifted
spirits among the 90 million
Chinese retail investors that
dominate trading. But when
the national team didnt come
out to play, there were often
dramatic selloffs just before
the markets closed.
The
Shanghai
market
moved more than 1% in the
last hour on 26 out of the 44
trading days during July and
August. On half of the days
when the market moved by
more than 1%, it rose.
Amid a 25% slide in Shanghai stocks already this year,
some have been expecting the
SEONGJOON CHO/BLOOMBERG NEWS
MARKETS DIGEST B6 | FINANCE WATCH B8 |
national team to appear again.

So far, those hopes have been
disappointed.
Its really hard to guess
what the national team is doing nowadays or whether it is
anywhere at all, said Tangyue
Yanglin, an investment adviser
from Caishang Wealth, a financial advisory firm.
Sometimes even if people
think it is in the market, its
buying seems so weak that
some would call it the national
diving team, Ms. Tangyue
said.
The government may have
become more discreet in its
stock-market intervention this
year in order to avoid sparking
a flood of buying by retail investors, said Bill Bowler, sales
trader at Forsyth Barr Asia

Ltd. in Hong Kong. Last year,
Chinese stocks surged in the
first half of the year, as Beijing
encouraged investors to borrow to buy shares.
Some Chinese retail investors are more skeptical.
I suspect that the government is too busy defending a
depreciating currency and has
largely given up on the stock
market, said Dai Yiyun, a
Shanghai-based retail investor.
Analysts said another likely
factor behind the intense selling in the last hour of trading
is the way brokerage firms can
force clients to whom they
have lent money to sell stocks
at times when the market is
Please see FALLS page B7
10-YR TREAS 1/32 yield 1.998%
Rush Hour
Confusion about Beijing's
intervention tactics has prompted
investors to sell late in the day.
Shanghai Composite Index
3200
Last hour before close
Jan. 11
3100
Lunch break
3000
Jan. 26
2900
2800
Jan. 28
2700
2600
9:40 10
a.m.
11
Noon 1
3
p.m.
Source: Thomson Reuters
Lessons From a Frontier Market: U.S. Investors Shed

Shares in Asia
The government massively

overinvested in transportation and land development.
The banking system was inefficient and corrupt. State
governments gorged on debt,
then defaulted on it with
aplomb. The stock market
was crooked, rife with cronyism and insider trading.
Stocks shot up and down like
yo-yos.
China?
No, that was
the U.S. in
the 19th
century, but
THE
it has lesINTELLIGENT sons for inINVESTOR
vestors
JASON ZWEIG looking at
China and
other
emerging markets. Financial
history shows that the return on U.S. stocks during
the countrys own emergingmarket period was no higher
than it has been since World
War II. The lesson: Emerging
markets arent lucrative investments just because they
are emerging. They deliver
higher returns only after
they have been battered, as
China is being battered now.
British investors learned
and relearned that lesson the
hard way in the 19th century,
when they poured todays
equivalent of tens of billions
of dollars into U.S. stocks
and bonds.
They were driven by the
epic, generation-long decline
of U.K. bond yields from
about 5.5% in 1816 to less
than 3% in 1845, and again
from roughly 4% in 1866 to
2% in 1897. With money so
cheap, British investors
Please see LESSONS page B7
New Tools
Read BOJ
Tea Leaves
Scenes of the panic

on Wall Street,
May 14, 1884
Wild Swings
Emerging markets have suffered volatile yearly price changes, including when the U.S. was young.
150%
HISTORICAL
NYSE
MSCI EMERGINGMARKETS INDEX
SHANGHAI
COMPOSITE
100
50
0
50
1834
1840
1850
93
2000
10
93
Nomura Securities and Credit Suisse use articial intelligence to

analyze Bank of Japan text for clues to possible changes in
monetary policy.
70
1.0
65
0.5
60
0.0
55
0.5
50
1.0
45
2010 11
BY NICOLE FRIEDMAN
Nomura Index
Measures broad economic
sentiment. Nomura doesn't have
a threshold for easing.
1.5
40
12
13
14
15
Sources: Nomura Securities, Credit Suisse
weakening expectations.
Credit Suisse said it has
created a numerical indicator
of the likelihood the BOJ will
ease monetary policy. Designing the indicator, the BOJ Text
Index, involved using an algorithm to analyze more than
three million Japanese characters contained in 2,400 pages
of BOJ statements and re-
2010 11
12
13
14
HONG
KONGInvestors
from mutual funds to hedge
funds are turning away from
Asian stocks at record rates.
Mutual funds globally own
the fewest Chinese stocks in
their portfolio in a decade, even when including
Hong Kong-listed shares that
have long been a preferred
way for international investors
to bet on China, according to a
Goldman Sachs Group Inc.
analysis of $1 trillion of mutual-fund assets.
The decision to steer clear
of Chinese shares has helped
many funds that invest in the
region dodge more dramatic
losses as stocks tumbled anew
this month.
Yet it raises the question of
when investors will make wagers on the region again, and
it is another example of the
wary mood of investors
around the world as turbulence continues.
In the absence of better
data, at least on the macro
side, you may see some more
selling in the near term, said
Sunil Koul, Asia-Pacific portfolio strategist at Goldman Sachs
in Hong Kong. Unfortunately,
from China, which is the center of the flow debate, we
dont expect the macro data to
improve this quarter.
Chinas slowing economic
growth has accelerated a prolonged march out of emergingmarket assets. Foreign investors have pulled a cumulative
$40 billion from Asian stock
markets such as those in India
and South Korea since June,

including $8 billion so far this
month alone, according to
Goldman estimates.
Absent the global financial
crisis, that is the most dramatic flight from the region
in a decade, according to Goldman.
Funds are aggressively reducing risk in Asia, Goldmans
strategists said. The risk reduction this time around is
more aggressive than previous
ones .
Hedge funds, which tout
their ability to make money in
good times and bad, have also
been taking a more cautious
approach in Asia, bankers say.
Asian hedge-fund clients
use of leverage, or borrowed
money to amplify bets, continued to fall in December, ending
the year near a two-year low,
according to Bank of America
Merrill Lynch.
Subdued stock-trading activity has continued in the region this month. Average daily
stock-market turnover in Asia
excluding Japan and mainland
China is down roughly 20% so
far this month from its 2015
average, according to Goldman
estimates.
So-called value investors
that specialize in betting on
unloved securities say a chief
hurdle for Chinese shares is
that many stocks remain overvalued despite months of selling.
When people say multiples
in China are so low right
nowthey are low with the
expectation of high growth,
Please see FUNDS page B7
Hope on Output Cut Aids Oil
Word Processors
1.5
10
Sources: International Center for Finance, Yale School of Management (NYSE); FactSet
Credit Suisse Index

A reading above 1 indicates a
likelihood of easing.
2000
Note: 2016 annual returns are through Jan. 27
Illustration by Schell and Hogan/Library of Congress
BY MEGUMI FUJIKAWA
TOKYOInvestors
have
spent a lot of time analyzing
Bank of Japan statements for
clues to its monetary-policy
decision Friday. Two firms in
Tokyo say they also have computers on the job.
Nomura Securities Co. and
Credit Suisse Securities said
recently they have artificial intelligence crunching the text
of BOJ economic assessments
to supplement their human
employees judgment regarding possible policy shifts.
The two firms have joined
data analystsincluding social
scientists, journalists and central bankers themselvesin
the growing use of algorithms
to quantify text in search of
insights into sentiment. Such
text mining, or natural-language processing, might parse
BOJ statements for the frequency of words such as inflation, or phrases such as
BY MIA LAMAR
15
portsas well as speeches and

news conferences by the BOJ
governorfrom January 2010
through December 2015.
The program learns as it
goes, checking the correlation
between keywords for economic or price conditions and
keywords indicating concerns
or negativity.
Please see BOJ page B7
NEW YORKRussias energy minister said the country

is willing to meet with members of the Organization of the
Petroleum Exporting Countries
to discuss cuts to oil productionnews that sent oil prices
sharply higher.
On Thursday, a Russian
state news agency quoted Russian Energy
COMMODITY
Minister AlMARKETS
exander Novak as saying
oil-producing nations could meet in February to discuss output cuts of
as much as 5%.
Oil for March delivery on
the New York Mercantile Exchange rose as high as $34.82
a barrel, a 7.8% surge, before
the gain diminished. Brent, the
global benchmark, soared as
much as 8.2% to $35.84 a barrel on ICE Futures Europe.
OPEC historically has cut
production in low-price environments, but the group has
opted not to take action in the
past two years. Saudi Arabia
has said that if it cuts produc-
tion, that only would allow

producers in the U.S. and elsewhere to drill more wells.
Russian officials have long
said they wouldnt cut production because it would be difficult to restart wells in cold
oil-producing regions. Also
Russian oil output is controlled by multiple companies,
not one national oil company,
as is the case in Saudi Arabia.
Weve had a rhetorical
shift to some extent this
week, said Helima Croft, chief
commodities strategist at RBC
Capital Markets. If you look
at the price responsewhats
the downside to floating these
ideas?
The gains shrank after
Bloomberg News reported
OPEC delegates said there
werent plans to hold talks.
U.S. crude slipped back to
$33.06, a 2.4% gain, and Brent
fell to $33.85, up 2.3% from
Wednesdays close.
Russia produced 11.1 million
barrels a day of oil in 2015,
and Saudi Arabia pumped 10.1
million barrels a day, according to the International Energy
Agency. If each country cut
production by 5%, that would

shrink global output by more
than a million barrels a day,
which is roughly equal to the
current oversupply in the market, according to analysts.
Even if Saudi Arabia were
ready to change tack and
agree to coordinated output
cuts, it is not obvious that
Russia would be a reliable
partner, said Capital Economics in a note. Russia is in recession and has a large number of competing oil firms
who are presumably each still
keen to sell as much oil as
possible at almost any price.
Another concern is that
Iran is expected to increase its
production now that international sanctions are lifted.
OPEC Secretary-General Abdalla Salem el-Badri said at
the groups most recent meeting in December that officials
would wait to evaluate Irans
return to the market before
meeting again.
Ese Erheriene
Oil gain gives a brief lift to
stocks in U.S............................... B7
MARKETS DIGEST
Nikkei 225 Index
STOXX 600 Index
Year-to-date
17041.45 t 122.47, or 0.71%
t 10.47%
52-wk high/low20868.03 16017.26
High, low, open and close for each
trading day of the past three months. All-time high 38915.87 12/29/89
334.89 t 5.35, or 1.57%

trading day of the past three months.
65-day moving average
S&P 500 Index
Data as of 12 p.m. New York time

Last
1879.51 t 3.44, or 0.18%

trading day of the past three months.
Year-to-date
t 8.45%
52-wk high/low 414.06 322.29
All-time high
414.06 4/15/15
Year ago
Trailing P/E ratio * 20.69 19.71

P/E estimate *
15.38 17.01
Dividend yield
2.36
1.97
All-time high: 2130.82, 05/21/15
20300
380
2100
19500
370
2050
360
2000
18700
17900
Session high
UP
Close
DOWN
Session open
1950
17100
340
1900
16300
330
1850
Open
Close
350
Session low
Bars measure the point change from session's open
15500
Nov.
Dec.
320
Jan.
Oct.
International Stock Indexes

Region/Country Index
World
Close
% chg
DJ Americas
Sao Paulo Bovespa
S&P/TSX Comp
IPC All-Share
Santiago IPSA
446.27
38415.16
12472.31
42197.46
2840.95
0.69
38.79
94.54
87.57
12.18
0.15
U.S.
DJIA
Nasdaq Composite
S&P 500
CBOE Volatility
15885.49 58.97
4474.00
5.83
1879.51 3.44
23.03 0.08
0.37
0.82
2077.03
1516.51
691.21
0.10
0.76
0.21
0.43
439.73
37046.07
11531.22
39256.58
2730.24
15370.33
4292.14
1812.29
10.88
0.13
0.18
0.35
Stoxx Europe 600

Stoxx Europe 50
France
CAC 40
Germany
DAX
Israel
Tel Aviv
Italy
FTSE MIB
Netherlands AEX
Russia
RTS Index
Spain
IBEX 35
Switzerland Swiss Market
South Africa Johannesburg All Share
Turkey
BIST 100
U.K.
FTSE 100
334.89 5.35
1.57
2837.32 50.70
1.76
4322.16 58.20
1.33
9639.59 241.23 2.44
1452.17
0.30
4.32
18189.95 658.08 3.49
420.10 4.31
1.02
727.13 22.26
3.16
8590.60 150.40
1.72
8153.27 169.41 2.04
48702.61 778.69
1.62
72427.41 374.55
0.52
5931.78 58.59
0.98
322.29
2721.63
4084.68
9314.57
1427.45
17836.03
392.44
607.14
8206.00
7935.47
45975.78
68230.47
5639.88
Asia-Pacific
Australia
China
Hong Kong
India
Indonesia
Japan
Malaysia
New Zealand
Pakistan
Philippines
Singapore
South Korea
Taiwan
Thailand
1261.38
0.42
4976.20 29.80
2655.66 79.90 2.92
19195.83 143.38
24469.57 22.82
0.09
4602.83 19.20
17041.45 122.47
0.71
1634.53
2.99
6149.70
7.76
31193.73 92.35
6563.38 56.16
2562.45 16.27
1906.94
9.07
7905.10 55.27
1288.40 10.11
1213.08
4841.50
2655.66
18542.15
23962.21
4120.50
16017.26
1532.14
5546.88
28927.04
6084.28
2532.70
1829.81
7410.34
1224.83
DJ Asia-Pacific TSM
S&P/ASX 200
Shanghai Composite
Hang Seng
S&P BSE Sensex
Jakarta Composite
Nikkei Stock Avg
Kuala Lumpur Composite
S&P/NZX 50
KSE 100
PSEi
Straits Times
Kospi
Weighted
SET
52-Week Range
Close
Low
0.45
0.69
Americas
Brazil
Canada
Mexico
Chile
EMEA
Dec.
Data as of 12 p.m. New York time

Latest
NetChg
2126.92 9.61
1574.35 10.96
721.86
5.88
The Global Dow

MSCI EAFE
MSCI EM USD
Nov.
0.03
0.60
0.75
0.42
0.18
0.13
0.30
0.86
0.64
0.48
0.70
0.79
Coupon
414.06 8.5
3602.76 8.5
5283.71 6.8
12390.75 10.3
1728.89 5.0
24157.39 15.1
510.55 4.9
1092.52 4.0
11884.60 10.0
9537.90 7.5
55355.12 3.9
91805.74 1.0
7122.74 5.0
Commodities
20%
15
10
5
0
5
10
15
20
25
Europe
WSJ Dollar index

s
Yen
s Euro
2015
2016
US$vs,
YTDchg
Thu
in US$ per US$ (%)
Country/currency
Americas
Argentina peso-a
0.0721 13.8725 7.2
Brazil real
0.2445 4.0907 3.3
Canada dollar
0.7114 1.4057 1.6
Chile peso
0.001406 711.20 0.4
Colombia peso
0.0003015 3317.03 4.5
Ecuador US dollar-f
1
1 unch
Mexico peso-a
0.0547 18.2665 6.2
Peru sol
0.2885 3.4665 1.5
Uruguay peso-e
0.0322 31.090 3.9
Venezuela bolivar 0.158595
6.31 0.005
Asia-Pacific
0.7093 1.4098
0.1521 6.5727
Australia dollar
China yuan
2.7
1.2
Key Rates
Country/currency
Hong Kong dollar
India rupee
Indonesia rupiah
Japan yen
Kazakhstan tenge
Macau pataca
Malaysia ringgit-c
New Zealand dollar
Pakistan rupee
Philippines peso
Singapore dollar
South Korea won
Sri Lanka rupee
Taiwan dollar
Thailand baht
Cur Stock
0.42620%
0.61560
0.86575
1.15105
0.17090%
0.25460
0.35790
0.62040
Euro Libor
One month
Three month
Six month
One year
-0.23071%
-0.17429
-0.09714
0.01429
-0.00500%
0.03214
0.09500
0.23643
Euribor
One month
Three month
Six month
One year
-0.22900%
-0.16000
-0.08300
0.02200
0.00100%
0.05200
0.13200
0.27100
0.38714%
0.68757
0.98790
1.35400
Offer
0.23673%
0.38500
0.53857
0.83929
0.5000%
0.7000
0.9000
1.2000
Latest
0.4000%
0.6000
0.8000
1.1000
52 wks ago
3.50%
2.70
1.475
5.00
3.25%
2.85
1.475
5.00
0.05%
0.50
0.50
2.00
1.00
0.25
2.25
0.05%
0.50
0.50
2.50
0.75
0.00
2.00
Overnight repurchase rates

U.S.
0.48%
Euro zone
n.a.
0.11%
n.a.
Prime rates
U.S.
Canada
Japan
Hong Kong
Policy rates
ECB
Britain
Switzerland
Australia
U.S. discount
Fed-funds target
Call money
7.7940 0.6
68.0898 2.8
13831 0.04
118.73 1.3
375.30 10.8
8.0284 0.3
4.1610 3.3
1.5432 5.4
104.850 0.05
47.765 1.9
1.4270 0.6
1205.20 2.5
143.86 0.3
33.556 1.9
35.790 0.7
52 wks ago
Libor
One month
Three month
Six month
One year
Eurodollars
One month
Three month
Six month
One year
0.1283
0.0147
0.0000723
0.008422
0.002665
0.1246
0.2403
0.6480
0.0095
0.0209
0.7008
0.0008297
0.0069512
0.02980
0.02794
2.6560
0.1277
0.2531
3.2950
2.5970
0.2746
0.2666
0.0618
0.3765 0.2
7.8301 0.004
3.9513 1.5
0.3035 0.002
0.3851 0.03
3.641 0.04
3.7516 0.1
16.1825 4.6
Close Net Chg % Chg YTD % Chg
WSJ Dollar Index
90.87 0.48 0.53
0.78
1.951
2.644
-0.384
0.696
-0.367
0.729
-0.443
0.406
0.005
1.495
-0.031
0.224
-0.435
0.523
0.140
2.748
0.016
1.614
-0.531
0.670
0.405
1.675
0.841
1.994
111.1
65.0
-122.5
-129.8
-120.7
-126.6
-128.3
-158.8
-83.6
-49.9
-87.1
-177.0
-127.5
-147.1
-70.1
75.4
-82.4
-38.1
-137.2
-132.4
-43.5
-31.9
...
...
CBOT
CBOT
CBOT
CME
ICE-US
ICE-US
ICE-US
ICE-US
ICE-EU
COMEX
COMEX
COMEX
LME
LME
LME
LME
LME
LME
TCE
Palm oil (MYR/mt) MDEX

NYMEX
Crude oil ($/bbl.)
NY Harbor ULSD ($/gal.) NYMEX
RBOB gasoline ($/gal.) NYMEX
Natural gas ($/mmBtu) NYMEX
Brent crude ($/bbl.) ICE-EU
ICE-EU
Gas oil ($/ton)
Spread Over Treasurys, in basis points

Previous
Month Ago
Year ago
101.8
53.7
-134.0
-129.1
-130.1
-126.3
-134.7
-161.5
-96.1
-59.4
-103.3
-197.0
-138.0
-145.0
-93.3
26.7
-95.8
-43.6
-145.3
-117.8
-40.1
-31.5
...
...
110.5
62.5
-121.8
-128.8
-120.9
-124.8
-128.3
-155.5
-83.5
-50.1
-87.1
-178.8
-126.7
-144.6
-72.3
73.6
-82.4
-38.2
-135.9
-130.3
-41.8
-29.0
...
...
169.5
89.2
-55.1
-117.7
-54.7
-115.0
-63.3
-140.7
-8.1
-14.7
-47.0
-143.4
-58.9
-129.6
-24.7
60.9
-5.3
-27.0
-42.4
-100.7
-13.1
-25.8
...
...
Previous
Yield
Month ago
1.949
2.628
-0.374
0.715
-0.365
0.755
-0.438
0.448
0.009
1.502
-0.027
0.214
-0.423
0.557
0.121
2.739
0.021
1.621
-0.515
0.700
0.427
1.713
0.844
2.003
2.037
2.773
-0.321
0.945
-0.282
0.973
-0.328
0.621
0.058
1.643
-0.014
0.267
-0.361
0.787
0.086
2.504
0.061
1.800
-0.434
1.059
0.618
1.922
1.019
2.237
365.75
872.25
471.75
134.625
2,787
118.45
13.20
61.34
1402.00
-3.50
-10.75
-4.75
-0.625
23
0.25
-0.38
0.48
-14.00
2.0450
1115.90
14.225
1,505.50
14,075.00
4,510.00
1,657.00
1,595.00
8,700.00
156.50
-0.0190
-0.40
-0.234
24.50
175.00
9.00
16.00
44.00
105.00
-0.30
-0.92
-0.04
-1.62
2477.00
32.90
1.0435
1.1104
2.159
34.63
309.25
-21.00
0.60
0.0065
0.0434
0.002
0.70
10.00
-0.84
Sources: WSJ Market Data Group, SIX

Financial Information, Tullett
Sym
Close
AIAGroup
AstellasPharma
AustNZBk
BHP
BankofChina
CKHutchison
CNOOC
Canon
CentralJapanRwy
ChinaConstructnBk
ChinaLifeInsurance
ChinaMobile
CmwlthBkAust
EastJapanRailway
Fanuc
Hitachi
Hon Hai Precisn
HondaMotor
HyundaiMtr
Ind&Comml
JapanTobacco
KDDI
Mitsubishi
MitsuUFJFin
Mitsui
Mizuho Fin
NTTDoCoMo
NatAustBnk
NipponStl&SmtmoMtl
NipponTeleg
NissanMotor
NomuraHldgs
Panasonic
PetroChina
PingAnInsofChina
RelianceIndsGDR
RioTinto
SamsungElectronics
Seven&I Hldgs
SoftBankGroup
Sumitomo Mitsui
SunHngKaiPrp
TaiwanSemiMfg
1299
4503
ANZ
BHP
3988
0001
0883
7751
9022
0939
2628
0941
CBA
9020
6954
6501
2317
7267
005380
1398
2914
9433
8058
8306
8031
8411
9437
NAB
5401
9432
7201
8604
6752
0857
2318
RIGD
RIO
005930
3382
9984
8316
0016
2330
42.25
1628.00
24.04
15.10
2.95
94.50
7.19
3308.00
21540
4.62
18.16
84.70
77.83
10370
18115
573.30
75.10
3252.00
135000
3.92
4402.00
2922.50
1840.00
627.00
1307.00
209.30
2461.50
27.10
2047.00
4873.00
1101.50
611.00
1086.00
4.56
34.15
29.60
38.93
1145000
5055.00
5099.00
4050.00
80.85
140.00
-1.63
-0.15
1.52
0.60
...
1.45
2.57
0.64
1.20
1.54
-1.09
1.19
0.30
0.39
-1.74
-2.18
-0.27
-1.93
-1.46
1.29
2.54
0.90
-0.62
-1.10
-0.68
-0.71
2.09
0.74
-3.63
1.25
-0.14
-0.94
-2.25
1.11
1.04
0.17
2.15
-2.55
-0.22
-1.70
-1.36
0.62
0.36
2.164
2.613
-0.082
0.544
-0.078
0.571
-0.163
0.314
0.388
1.574
-0.000
0.287
-0.119
0.425
0.223
2.330
0.417
1.451
0.046
0.714
0.339
1.463
0.470
1.721
12 p.m. New York time
-0.95%
-1.22
-1.00
-0.46
0.83%
0.21
-2.80
0.79
-0.99
1.65
1.26
0.20
0.98
2.84
1.22
-0.19
1.86
0.63
4.07
0.09
2.06
3.34
Year
low
372.50
888.00
488.50
138.550
3,219
126.30
15.24
63.55
1,544.00
348.50
852.00
456.00
127.150
2,731
111.05
13.15
60.67
1,339.00
2.1395
1,128.70
14.585
1,505.50
14,455.00
4,647.50
1,760.00
1,595.00
8,765.00
163.30
1.9355
1,061.90
13.730
1,451.50
13,225.00
4,320.50
1,598.00
1,467.00
8,195.00
146.00
2,547.00
39.53
1.2036
1.3617
2.4930
40.11
362.25
2,425.00
27.56
0.8605
1.0220
2.0800
27.83
253.00
Cross rates
London close on Jan 28
Australia
USD
1.4098
GBP
2.0257
CHF
1.3914
JPY
0.0119
HKD
0.1809
EUR
1.5443
CDN
1.0032
AUD
...
Canada
1.4057
2.0192
1.3868
0.0118
0.1804
Euro
0.9130
1.3116
0.9010
0.0077
0.1171
1.5394
...
0.9968
...
0.6496
Hong Kong
7.7940
11.1968
7.6901
0.0656
0.6475
...
8.5370
5.5447
5.5282
84.2100
118.7340
170.5700
117.1600
...
15.2340
130.0400
84.4710
Switzerland
1.0135
1.4557
...
0.0085
0.1300
1.1099
0.7211
0.7188
U.K.
0.6961
...
0.6870
0.0059
0.0893
0.7626
0.4953
0.4937
U.S.
...
1.4365
0.9867
0.0084
0.1283
1.0953
0.7114
0.7093
Japan
Source: Tullett Prebon
Sources: Tullett Prebon, WSJ Market Data Group
12 p.m. New York time
% YTD%
Chg Chg
Asia Titans
HK$
AU$
AU$
HK$
HK$
HK$
HK$
HK$
HK$
AU$
TW$
KRW
HK$
AU$
HK$
HK$
$
AU$
KRW
HK$
TW$
Year ago
Sources: SIX Financial Information; WSJ Market Data Group
Middle East/Africa
Bahrain dinar
Egypt pound-a
Israel shekel
Kuwait dinar
Oman sul rial
Qatar rial
Saudi Arabia riyal
South Africa rand
Latest
Top Stock Listings

Latest
Yen Libor
One month
Three month
Six month
One year
US$vs,
YTDchg
Thu
in US$ per US$ (%)
Bulgaria lev
0.5594 1.7876 0.7
Croatia kuna
0.1429 6.996 0.2
Euro zone euro
1.0953 0.9130 0.8
Czech Rep. koruna-b 0.0405 24.673 0.9
Denmark krone
0.1468 6.8142 0.8
Hungary forint
0.003490 286.53 1.3
Iceland krona
0.007702 129.83 0.3
Norway krone
0.1159 8.6275 2.4
Poland zloty
0.2452 4.0780 3.9
Russia ruble-d
0.01308 76.451 6.3
Sweden krona
0.1176 8.5057 0.7
Switzerland franc
0.9867 1.0135 1.1
Turkey lira
0.3364 2.9730 1.9
Ukraine hryvnia
0.0402 24.8990 3.8
U.K. pound
1.4365 0.6961 2.6
Jan.
Prices of futures contracts with the most open interest
Copper ($/lb.)
Gold ($/troy oz.)
Silver ($/troy oz.)
Aluminum ($/mt)*
Tin ($/mt)*
Copper ($/mt)*
Lead ($/mt)*
Zinc ($/mt)*
Nickel ($/mt)*
Rubber (Y.01/ton)
US$vs,
YTDchg
Thu
in US$ per US$ (%)
Country/currency
Yield
Corn (cents/bu.)
Soybeans (cents/bu.)
Wheat (cents/bu.)
Live cattle (cents/lb.)
Cocoa ($/ton)
Coffee (cents/lb.)
Sugar (cents/lb.)
Cotton (cents/lb.)
Robusta coffee ($/ton)
London close on Jan. 28
Yen, euro vs. dollar; dollar vs. major U.S. trading partners
Dec.
EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
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 1/27/2016
Year
One-Day Change
Commodity
Exchange Last price
Net
Percentage
high
Source: SIX Financial Information;WSJ Market Data Group
Currencies
Country/
Maturity, in years
5.500
Australia 2
3.250
10
3.500
Belgium 2
0.800
10
4.250
France 2
1.000
10
0.500
Germany 2
0.500
10
4.500
Italy 2
2.000
10
0.100
Japan 2
0.300
10
0.500 Netherlands 2
0.250
10
4.350
Portugal 2
2.875
10
0.500
Spain 2
2.150
10
3.750
Sweden 2
2.500
10
1.000
U.K. 2
2.000
10
0.750
U.S. 2
2.250
10
18351.36 8.8
5231.94 10.7
2134.72 8.0
53.29 26.5
Nov.
Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
and 10-year government bonds around the world. Data as of 12 p.m. ET
525.25 8.4
58574.79 11.4
15524.75 4.1
46078.07 1.8
3361.36 3.5
1621.10 9.2
5982.70 6.0
5166.35 25.0
28442.75 12.4
29681.77 6.3
5523.29 0.2
20868.03 10.5
1862.80 3.4
6324.26 2.8
36228.88 4.9
8127.48 5.6
3539.95 11.1
2173.41 2.8
9973.12 5.2
1615.89 0.03
Oct.
Global government bonds
2643.78 9.0
1956.39 8.3
1067.74 9.1
High
YTD
% chg
1800
Jan.
-9.33
-5.98
-13.93
-15.45
-14.74
-9.48
-10.90
-9.99
-0.28
-12.99
-27.65
-3.20
-9.00
-9.43
-14.07
-17.09
-7.05
-16.83
-9.40
-16.24
-1.54
-7.34
-9.27
-17.18
-9.58
-14.05
-0.91
-10.26
-15.27
0.77
-13.91
-10.03
-12.45
-10.41
-20.40
-3.27
-12.93
-9.13
-8.92
-16.94
-12.07
-13.76
-2.10
Cur Stock
Sym
Close
HK$
AU$
AU$
AU$
4502
0700
8766
7203
WES
WBC
WOW
5668.00
141.60
4083.00
6883.00
41.95
30.48
24.48
TakedaPharm
TencentHoldings
TokioMarineHldg
ToyotaMtr
Wesfarmers
WestpacBanking
Woolworths
Stoxx 50
CHF
CHF
CHF
CHF
CHF
DKK
ABB
AXA
Allianz
Anheuser Busch
AstraZeneca
BASF
BGGroup
BNP Paribas
BT Group
BancoBilVizAr
BancoSantander
Barclays
Bayer
BP
BritishAmTob
FinRichemont
CreditSuisse
Daimler
Deutsche Bank
DeutscheTelekom
Diageo
ENI
GlaxoSmithKline
HSBC Hldgs
INGGroep
ImpTobaccoGrp
IntesaSanpaolo
L'AirLiquide
LVMHMoetHennessy
LloydsBankingGroup
NationalGrid
Nestle
Novartis
NovoNordiskB
Prudential
ReckittBenckiser
ABBN
CS
ALV
ABI
AZN
BAS
BG.
BNP
BT.A
BBVA
SAN
BARC
BAYN
BP.
BATS
CFR
CSGN
DAI
DBK
DTE
DGE
ENI
GSK
HSBA
INGA
IMT
ISP
AI
MC
LLOY
NG.
NESN
NOVN
NOVO-B
PRU
RB.
17.16
22.16
144.65
112.00
4347.00
60.65
1044.00
42.91
466.20
5.71
3.84
178.40
101.95
368.45
3768.50
65.15
17.50
63.89
16.18
15.55
1841.50
13.17
1414.50
477.65
10.27
3654.00
2.51
94.63
143.70
64.07
960.30
73.20
77.45
372.20
1321.00
6125.00
% YTD%
Chg Chg Cur Stock
-0.47 -6.55
0.78 -7.27 CHF
-1.71 -13.35
0.03 -8.08
0.17
0.82
0.49 -9.18
1.53 -0.08
CHF
-0.92 -4.45
-1.66 -12.19
-1.93 -11.56
-1.75 -2.10
-2.82 -5.84 CHF
-0.49 -14.24
1.41
5.99
-2.82 -17.83 $
-2.53 -1.17 $
-3.43 -15.27 $
-3.59 -15.77 $
-1.87 -18.50 $
-2.95 -11.96 $
1.53
4.08 $
0.12 -0.07 $
-0.76 -9.64 $
-2.23 -19.32 $
-3.09 -17.65 $
-5.44 -28.19 $
-3.45 -6.86 $
-1.37 -0.81 $
0.23 -4.57 $
-1.50
3.02 $
-0.51 -10.92 $
-3.52 -17.51 $
$
-0.35
1.88
$
-5.06 -18.59
$
-0.47 -8.70
$
-1.64 -0.83
$
-1.31 -12.32
$
-0.56
2.43
$
-0.95 -1.81
$
-3.85 -10.77
$
-3.25 -6.93
$
-1.01 -13.72
$
-0.71 -2.48
$
RioTinto
RocheHldgctf
RoyDtchShell A
SAP
Sanofi
SchneiderElectric
Siemens
Telefonica
Total
UBSGroup
Unilever
Unilever
VodafoneGroup
ZurichInsurance
Sym
Close
RIO
ROG
RDSA
SAP
SAN
SU
SIE
TEF
FP
UBSG
UNA
ULVR
VOD
ZURN
1700.00
258.10
1495.00
71.01
75.03
48.38
86.53
9.35
40.22
16.55
39.49
2966.50
215.30
222.00
DJIA
AmericanExpress
Apple
Boeing
Caterpillar
Chevron
CiscoSystems
CocaCola
Disney
DuPont
ExxonMobil
GenElec
GoldmanSachs
HomeDepot
Intel
IBM
JPMorganChase
JohnsJohns
McDonalds
Merck
Microsoft
NikeClB
Pfizer
Procter&Gamble
3M
TravelersCos
UnitedTech
UnitedHealthGroup
VISAClA
Verizon
WalMart
AXP
AAPL
BA
CAT
CVX
CSCO
KO
DIS
DD
XOM
GE
GS
HD
INTC
IBM
JPM
JNJ
MCD
MRK
MSFT
NKE
PFE
PG
MMM
TRV
UTX
UNH
V
VZ
WMT
52.59
93.13
115.16
59.75
84.85
23.09
42.13
93.25
51.48
75.86
28.00
154.09
120.55
29.81
121.16
56.77
102.09
120.76
49.69
51.44
60.36
30.19
78.95
145.35
103.55
86.12
111.44
69.99
48.65
63.84
% YTD%
Chg Chg
-0.99 -14.12
-3.84 -6.62
2.19 -2.03
-3.23 -3.23
-2.76 -4.54
-1.13 -7.94
-2.19 -3.73
-2.53 -8.70
0.16 -2.54
-0.72 -15.22
-1.21 -1.53
-1.28
1.37
-3.54 -2.58
-1.38 -14.09
-3.55
-0.31
-1.22
2.45
1.87
-1.45
0.10
-1.13
0.04
0.76
0.02
0.24
-0.84
...
0.17
-0.47
-0.07
-0.09
-1.36
0.43
1.31
-1.08
0.19
-0.14
0.23
0.36
-0.79
-1.30
-0.78
-0.18
-24.39
-11.53
-20.35
-12.08
-5.68
-14.97
-1.93
-11.26
-22.70
-2.68
-10.10
-14.50
-8.85
-13.47
-11.96
-14.02
-0.61
2.22
-5.93
-7.28
-3.42
-6.47
-0.58
-3.51
-8.25
-10.36
-5.27
-9.75
5.26
4.14
Asia Titans 50
Last: 122.49 s 0.06, or 0.05%
High
Close
Low
30
6
Nov.
YTD t 10.1%
150
140
130
120
110
100
Oct.
50day
moving average
13
20
27
4
Dec.
11
18
25 31
Jan.
15
22
Stoxx 50
Last: 2837.32 t 50.70, or 1.76%
YTD t 8.5%
3350
3200
3050
2900
2750
2600
30
6
Nov.
13
20
27
4
Dec.
11
18 24 31
Jan.
15
22
Dow Jones Industrial Average
P/E: 15
Last: 15885.49 t 58.97, or 0.37%
YTD t 8.8%
17750
17250
16750
16250
15750
15250
30
6
Nov.
13
20 27
4
Dec.
11
18 24
Note: Price-to-earnings ratios are for trailing 12 months

Sources: WSJ Market Data Group; Birinyi Associates
31
Jan.
15
22
MONEY & INVESTING
Chinese Shares Sink Again

China shares fell sharply
Thursday, with the benchmark
index closing at its lowest
level since November 2014.
The Shanghai Composite Index dropped 2.9% to 2655.66,
with losses
THURSDAYS accelerating
late in the
MARKETS
session.
T
h
e
benchmark has fallen by almost half since it peaked last
June, off 48.6% as of Thursdays close. It is down 25% this
year, on track for its worst
monthly performance since
October 2008.
China shares finished lower
for the third consecutive session, even as authorities appear to be ramping up efforts
to halt money outflows.
The smaller Shenzhen Composite Index fell 4.2%, while
Chinas Nasdaq-style ChiNext
fell 4.6%.
Elsewhere in Asia, the Hang
Seng Index closed up 0.8% at
19195.83. Japans Nikkei Stock
LESSONS

helped fund the Erie Canal,
successful railways and
thriving telegraphs. Those
who came in on the crests of
euphoria lost fortunes on
steamboats, mines and even
municipal bonds, as state after U.S. state repudiated its
debt.
In much the same way, the
campaign by the Federal Reserve and the European Central Bank to cut interest rates
and drive investors into riskier assets helped set off a
wave of investment in emerging markets. Between 2009,
when low interest-rate policies began to kick in, and the
end of last year, U.S. investors
pumped more than $200 billion into emerging-market
mutual funds and exchangetraded funds.
The overseas bubble that
many Western investors have
mocked is thus partly of our
own making. The losses so
many have incurred are
largely the result of fleeing
the low yields of the U.S.
markets without thinking
twice about the higher risks
in emerging-market stocks
and bonds.
When you pull down returns on deposits to zero or
below, then you create a portfolio effect that distorts markets elsewhere, says Sandy
Nairn, chief executive of Edinburgh Partners, an investment firm in Edinburgh, Scotland.
Emerging markets dont offer higher returns merely because they are growing faster.
Stocks gained an average of
6.7% annually after inflation
between 1802 and 1870, when
the U.S. was an emerging
market. They have returned 6.9% on that basis since 1926. And the 19thcentury returns might well be
overstated by at least a percentage point annually, given
the difficulties of measuring
the performance of the thousands of stocks that disappeared without a trace.
Early in the 19th century,
middle-class Americans began
ANINDITO MUKHERJEE/REUTERS
BY CHAO DENG
Fords Figo Aspire in New Delhi in August. The firms stock fell.
Average fell 0.7% to 17041.45,
Australias S&P/ASX 200 finished up 0.6% at 4976.20, and
South Koreas Kospi gained
0.5% to 1906.94.
U.S. stocks swung between
gains and losses, as oil prices
rose and a slew of companies
posted fourth-quarter earnings.
The Dow Jones Industrial
Average was up 29 points, or
speculating wildly on stocks,
egged on by financial promoters publishing tout sheets
that hyped the hot stocks of
the day. Kickbacks flew as local and state officials, as well
as the federal government,
pumped public funds into
companies run by their cronies. Stock exchanges sprang
up everywhere from Norfolk,
Va., to Virginia City, Nev.
Chinas evolution as an
emerging market has thus far
followed a similar path.
As a nation that aspires to
be a developed market but
still is emerging, China remains subject to the wrenching volatility and wild swings
of sentiment that always have
characterized young and rambunctious markets.
Countries learn from their
mistakes, says Antoine van
Agtmael, the pioneering investor who coined the term
emerging markets in 1981.
So will China.
Investors will learn, too, if
slowly. A study of more than
a centurys worth of investment returns shows that
emerging markets deliver
their best results not when
hopes are highest, but after
they break investors hearts.
Emerging markets handed
investors a 30% loss in 2000,
but then doubled in the decade of the 2000s, even as developed markets went down,
according to investment research firm MSCI. Their popularity peaked in 2010. In the
five years since, they have
lost a cumulative 22%, even
as global stocks rose 44% and
U.S. stocks 75%.
With the Shanghai Composite Index down 25% so far
in 2016 and more than 50%
from its record high in October 2007, the Chinese stock
market is nearing the point at
which investors are likely to
give up on it. Talk of Chinas
graduation from emerging- to
developed-market status already has begun to die down.
Soon, investing cynics may
start to quip that China isnt
even emerging but is rather a
submerging market. At that
point, intelligent investors
should finally get excited
about it again.
0.2%, at 15973 in midmorning

trading, pulling back from a
gain of as much as 143 points
earlier in the session. The S&P
500 added 0.4%, while the
Nasdaq Composite added 0.7%.
Stocks were volatile in early
trade after oil prices initially
jumped in the wake of reports
that Russia is willing to meet
with members of the Organization of the Petroleum Ex-
FALLS
falling.
It is common for Chinese
brokerages to impose these
so-called margin calls on their
clients at 2 p.m., in addition to
once in the morning session.
Brokerages can ask investors
who have borrowed from them
to either add more money to
their trading accounts or to
unwind their bets if the market has fallen below certain
thresholds.
If a clients position starts
to deteriorate in the morning
and by 2 oclock the pain has
become deeper, brokerages
Legal Notices
PUBLIC NOTICES
() )
!) *+(,- .
!
$ ! ! *+,-
LEGAL
NOTICES
ADVERTISE TODAY
(852) 2831-2553
or
(65) 6415-4279
Susan.Tsang
@wsj.com
LIBRARY OF CONGRESS
wsj.com/classifieds
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An 1881 print depicts the fate of small investors.

said long-time value investor
David Marcus, chief executive
of Evermore Global Advisors in
New Jersey. Chinese stock valuations, he added, are still
factoring in growth that its
not clear to me companies will
achieve.
Mr. Marcus and other established value investors say they
believe that fears about
Chinas economy have run
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self-service option at:
FUNDS
tend to exercise the margin

calls, said Amy Lin, senior analyst at Capital Securities.
The second margin call of
the day tends to be more significant because brokers base
the money they are requesting
on the current days trading.
Still, the recent slump in
the market has made investors
much less eager to borrow
money to buy shares. Chinas
total margin debt has dropped
for 19 consecutive trading
days to 931.8 billion yuan
($141.6 billion) as of Wednesday, compared with the peak
level of 2.27 trillion yuan in
June, according to data provider Wind Information.
Yifan Xie

Nomura also uses deep
learning, in which software
mimics neurological functions,
to study and interpret the
BOJs views. The Nomura AI
economic-sentiment index is
based on analysis of the BOJs
monthly economic reports.
Nomuras research group
had been experimenting with
AI for about a year and a half,
analyzing information from
sources such as corporate-financial reports, chat boards
and news articles. Last summer, the team decided it was
ready to apply the technology
to macroeconomic analysis.
Yuhki Yamamoto, Nomuras
senior quantitative analyst,
who led the project, said AI
analysis offers a higher level
of objectivity, partly by eliminating human discretion about
what words should be analyzed or given more weight.
Credit Suisse cautioned that
its index provides only a decent level of indicative value,
and only in the nearer term,
and should be used to augment human analysis.
Still, its indicator, which
wasnt yet in place, would
have flagged a high chance
of additional BOJ action in October 2014, when the central
bank shocked markets with a
big expansion of its easing
program, Credit Suisse said in
a recent report. And it pointed
to a limited chance in October
last year, when many were
predicting action but the central bank stood pat, Credit Suisse said.
Similarly, Nomuras index
had also shown an uptick in
the central banks economic
assessment before last Octobers meeting.
Some market participants
had held on to their wrong expectation for easing even
though the BOJs economic
sentiment was improving,
ADVERTISEMENT
Place an ad using the
ahead of reality, however, and

they are keeping a close eye
on well-managed companies
that can weather the storm.
The key to value investing
is that you buy something decent that on the other end of
the nightmare is still there and
operating, said John Goetz,
co-chief investment officer of
$26 billion New York-based
Pzena Investment Management. We continue to be selective about what we buy, and
we will continue to buy China
through this whole nightmare.
porting Countries to discuss

production cuts. U.S.-traded
crude gained 2.8% to $33.21 a
barrel, after earlier climbing
to as high as $34.82.
In corporate news, Ford
Motor shares fell 2.6% despite
swinging to a net profit.
In Europe, the Stoxx Europe
600 fell 1.6% to 334.89 after a
weak reading on eurozone
consumer confidence.
In Asia, the possibility of
the Fed increasing interest
rates in March was unnerving
investors. A longstanding policy of low interest rates has
driven a rally in stocks worldwide since the financial crisis.
The S&P 500 fell 1.1% on
Wednesday after the central
bank stopped short of saying
that recent economic and financial developments could
restrain economic activity and
push down inflation. A loss of
more than 10% in U.S. oil
prices this year has raised
questions about the outlook
for already-low inflation and
added a sense of general uncertainty in markets.
BOJ
said Nomura economist Yoshiyuki Suimon.

Of course, central bankers
are hardly forthright when
talking about their intentions
for monetary policy, making
matters more difficult for humans trying to read tea leaves
or computers processing text.
Sometimes the BOJ comes out
of left field, as it did in December when it announced
supplementary measures to
augment its easing program.
Neither firms indicator
points to an expansion of easing Friday, but because they
only cover BOJ statements
through the most recent monetary-policy meeting, they
dont reflect the effects of recent global-market turbulence,
which has resulted in the yen
gaining strength and Tokyo
shares tumbling in recent
weeks.
Our AI tells us that the
BOJs economic assessment
has turned up, supporting our
view that the BOJ wouldnt act
immediately, said Mr. Suimon, who expects the BOJ to
hold its fire until April as long
as the U.S. dollar stays above
115.
Yutaka Matsuo, an AI expert and a project associate
professor at the University of
Tokyo, said he doubted that
AI-based analysis will become
dominant in the financial sector soon. He said he is hopeful
such technology will become
available within the next 10
years.
The BOJ itself is among
central banks watching developments in the field of computational-text analysis, although
it is still premature to say it
can be useful in policy making,
said Seisaku Kameda, head of
the economic and financialstudies division at the BOJs
Institute for Monetary and
Economic Studies.
It is still at a stage where
we should examine how [automated text analysis] can complement existing data, he
said.
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HEARD ON THE STREET

FINANCIAL ANALYSIS & COMMENTARY
Email: heard@wsj.com
Alibaba Has
Uphill Fight
Ahead of It
Alibaba is making the
best of a tough situation.
That may not ultimately be
enough for shareholders.
For a while, Chinas ecommerce market seemed
immune to the Chinese economic slowdown. That is no
longer the case. Growth in
gross merchandise volume,
the total amount of transactions hosted on Alibabas
marketplaces, is clearly feeling some impact.
Alibabas GMV rose 23%
from a year earlier in the
December quarter. That is
down from 28% growth the
previous quarter, and nearly
50% growth in 2014.
Alibaba is overcoming
some of this drag through
better financial execution.
The monetization rate, or
the amount it earns from
each transaction it hosts,
rose for the second straight
quarter. Expanding the ad
space available, especially on
mobile screens, seems to
have had an impact. This allowed revenue to rise faster
than GMV, by 32%.
The question for investors
is which trend will prove
more powerful. If revenue
keeps slowing, investors
might still be disappointed.
Whats more, it is unclear
how much higher the monetization rate can go. At
2.98%, it is already close to
its peak level of 3.05%,
reached in the fourth quarter
of 2013.
Alibaba shares are trading
at 36 times estimated 2016
earnings, according to FactSet, compared with 28 and
25 times for rivals Tencent
and Baidu, respectively.
That gives Alibaba credit
for its ability to mitigate
headwinds. Overcoming the
drag of Chinas slowdown
will be more challenging in
the quarters to come.
WSJ.com/Heard
Deutsche Bank Is Still Struggling

Deutsche Bank needs no
fresh capital, co-Chief Executive John Cryan said Thursday. It looks like he will be
hard pressed to keep that
promise.
Much is unclear about
the crumbling of profits in
Deutsches core business, especially toward the end of
2015, which along with a raft
of provisions, charges and
write-offs pushed the bank
to its first full-year net
loss since 2008.
But what is clear is that
the banks plans will leave it
with a capital ratio that only
just squeaks over the hurdle
it must clear in 2019. And
that plan doesnt take into
account of additions to requirements likely to be in
force by then.
Deutsche can estimate the
ratio it will need in 2019 because it knows what European regulators say it needs
today and it knows the size
of the surcharge for being a
globally systemically important bank that it must hold
by then.
It will need to start 2019
Deutsche is taking the pain

of restructuring and litigation upfront and it will unload assets in its bad bank.
But, despite its huge 5.5 billion ($5.99 billion) in provisions for fines and penalties,
Deutsche still has another
2.2 billion in so-called contingent liabilities, charges it
can foresee it might take but
isnt yet certain enough to
provision against. That number still may rise.
Further, litigation costs
hurt in another way because
Deutsche has to increase its
charges for future operational risks based on the recent past fines. Mr. Cryan
said the extra capital this demanded was likely to offset
any released by shedding
bad bank assets.
Mr. Cryan said 2016 would
be the peak year for restructuring pain but that it
shouldnt cause another fullyear loss. It is critical this
proves true. But even if it
does, Deutsche still may
need another equity injection to make it through.
Paul J. Davies
Lost Ground
Deutsche Bank's quarterly
revenues and prots
Net revenues
Net prots
12 billion
9
6
3
0
3
6
2014
15
Sources: the company; Bloomberg News

(photo)
Deutsche Bank's co-chief

executive ofcer, John Cryan
with a common equity Tier 1

capital ratio of 12.25%. The
banks plan aims to deliver a
ratio of 12.5%. That is the
thinnest of margins.
But as Andrew Coombs of
Citigroup pointed out, the
banks calculations dont include countercyclical buffers,
which each country can apply as lending risks rise in
their economies.
While this buffer is only
applied nationally to assets
within that country, international banks can in effect

have it applied by national
regulators in every country
in which they operate.
In normal times, these demands could add another
one percentage point to
Deutsches group capital
needsand more than twice
that during a credit boom.
This could quickly make
Deutsches capital plan inadequate. To its credit,
Samsung Cant Rely on Its Chips

Samsung Electronics
semiconductor business used
to pick up the slack when its
mobile business declined. But
with the global gadget market in a rut, even Samsungs
chips arent providing as
much support as they used
to.
The Korean electronics giant reported its first quarterover-quarter decline in operating profit for more than a
year. Smartphone sales remained soft. But its semiconductor business, which provided a cushion for falling
profits at its mobile division
in the previous quarters, also
took a hit as prices of memory chips sank.
The decline in memory
prices came as demand for

gadgets waned. Global sales
of personal computers and
tablets have hit multiyear
lows. Sales of high-end
smartphones also have
slowed.
Apple, which sources some
of its components from Samsung, has in the past been a
hedge for Samsung. If Samsungs own phones werent
selling, iPhones filled with
Samsung components were.
But with Apple in a product
cycle lull, iPhone sales grew
at the slowest pace ever last
quarter.
The situation doesnt look
likely to change in the short
term. Gadget makers are
struggling to come up with
OVERHEARD
The timing may be right
for one of Hong Kongs biggest tycoons to play copycat.
Shares in billionaire Lee
Shau Kees Henderson Land
Development popped nearly
7% Thursday. The proximate
cause was Mr. Lee vacuuming
up stock. But Mr. Lees buying
could also be a prelude to reshuffling his corporate empire, following in the footsteps of fellow Hong Kong
potentate, property magnate
Li Ka-shing.
His Henderson share purchases put Mr. Lees ownership over 72%, letting him
push ahead with a rejig without losing control in his
crown jewels.
One strategy would be for
Henderson to distribute its
41.5% stake in natural gas
distributor Hong Kong &
China Gas to Hendersons
shareholders. Since Mr. Lee
would get around 30% of the
gas company, he would maintain effective control, while
unlocking Henderson Lands
value.
Stripping out the value of
the gas company, Henderson
Land is trading at nearly 70%
to its net asset value, according to Citi. Even with the
dour outlook for Hong Kong
and China property, Hendersons low debt should let it
withstand even a prolonged
downturn.
Mr. Lee may be looking at
Li Ka-shings restructuring
with envy. Mr. Li announced
the combination of his two
flagship companies and the
spinoff of a property unit in
early 2015.
Shareholders of his Cheung Kong Holdings have
made 7.2% since the announcement of the deal while
the broader Hong Kong market has fallen 20%.
With Henderson Lands
shares down a third since
last year, this seems a good
time to give shareholders a
boost.
No Buffer Memory
Samsung Electronics'
components business took a
hit as global smartphone sales
slowed.
Operating prot:
new models for which customers are willing to dole out

cash to upgrade. Samsungs
outlook was dour, warning
that the smartphone market
suffers from too much competition amid slowing sales.
Samsungs stock is in a
trough, almost 17% lower
than a year ago. Blame that
on the companys performance. Potential upside from
the controlling Lee familys
wider restructuring, and the
eventual use of the companys $49 billion in net cash,
remain potential catalysts for
the stock.
But investors are right to
worry about Samsungs longer-term prospects. Making
chips for smartphones isnt
Mobile phone business

Components business
8 trillion won
6
4
2
0
2014
15
Source: the company
much of a hedge against the

smartphone business.
Jacky Wong
MONEY & INVESTING
BY TESS STYNES
AND BRADLEY HOPE
Nasdaq Inc. said its fourthquarter revenue rose 3.7%
with a boost from the exchange operators nontrading
businesses, while the effects of
moves in currencies masked
growth in its market-services
segment.
For the three-month period
ended Dec. 31, revenue increased to $536 million from
$517 million a year earlier. Excluding currency effects and
acquisitions, revenue rose 5%.
Analysts polled by Thomson
Reuters expected revenue of
$530 million.
Per-share earnings, excluding certain one-time items,
also exceeded expectations.
Over the last several years,
we have built a strategic portfolio of businesses that provide a level of resiliency
through significant non-transaction revenue streams and
scale potential, Chief Executive Robert Greifeld said in
prepared remarks Thursday.
Market volatility and economic uncertainty increased in
the fourth quarter, during
Finance
Watch
which the companys nontrading businesses produced

strong organic growth, he
said.
Mr. Greifeld said he didnt
believe the U.S. was on the
cusp of a recession, but its
business model would hold up
and even benefit from an extended period of volatility.
For the latest quarter, Nasdaq reported that revenue
from nontrading operations
rose 8% excluding currency
fluctuations and acquisitions.
The companys market technology businesswhich provides exchange infrastructure
to countries around the
worldhelped drive the quarters higher-than-expected revenues, Alex Kramm, an analyst
at UBS Group AG, said in a research note. The divisions
revenue was up 3.7% during
the quarter compared with the
same period last year.
We expect solid results
and positive outlook to bode
well for the shares today, he
said.
Last year, U.S. stocks
turned in their worst annual
performance since 2008. Exchanges benefit more from pefrom the same period a year
earlier. For the full year, revenue
reached 33.5 billion, up slightly
when measured at a constant
exchange rate.
The fourth-quarter net loss
was 2.1 billion and the annual
loss was 6.8 billion.
Jenny Strasburg
DEUTSCHE BANK
First Full-Year Loss

Since Financial Crisis
Deutsche Bank AG reported

losses for the fourth quarter and
2015, as expected, with weakness in its investment bank adding to the burdens of mounting
legal and restructuring costs.
It was the first full-year loss
since the financial crisis, but new
co-Chief Executive John Cryan
said he was optimistic about the
banks turnaround plan and that
there was no need to raise fresh
capital.
Deutsche Bank said fourthquarter revenue totaled 6.6 billion ($7.17 billion), down 15%
riods of heightened trading

and volatility because the
more people trade, the more
fees they collect on transactions.
For the latest quarter, market-services revenue, which
contributes 36% to the exchanges top line, fell 3% to
$195 million. Excluding the effects of currency swings, the
growth was 1%.
The companys informationservices segment, which represents 24% of the top line, reported revenue increased 12%
to $127 million, with a boost
from Dorsey, Wright & Associates LLC, which Nasdaq acquired early last year.
Nasdaq has transformed
from a U.S.-focused exchange
operator to a global business
that includes markets in the
U.S., Canada and the Nordic
region, as well as a suite of
businesses that include investor and public relations, technology and data.
Overall, Nasdaq reported a
profit of $148 million, or 88
cents a share, up from $87
million, or 50 cents a share, a
year earlier. Excluding restructuring- and acquisition-related
quidity operations. These banks
are Postal Savings Bank of
China, Ping An Bank Co., China
Guangfa Bank Co., Bank of Beijing Co., Bank of Shanghai,
Bank of Jiangsu and Hengfeng
Bank.
Grace Zhu
MITSUBISHI UFJ
CHINA
PBOC to Increase
Market Operations
Chinas central bank said

Thursday it would temporarily
increase the frequency of its
open-market operations from
Jan. 29 to Feb. 19 to keep ample
liquidity for the Lunar New Year.
The Peoples Bank of China
said in a statement on its website it would conduct open-market operations each working day
during that period, an increase
from twice a week currently.
The central bank also said it
would allow seven more banks
to participate in short-term li-
Japans Largest Bank

Gets New President
Mitsubishi UFJ Financial
Group Inc. said it has named
Takashi Oyamada as the next
president and chief executive of
its core banking unit, Bank of
Tokyo-Mitsubishi UFJ.
The current president and
chief executive, Nobuyuki Hirano,
will stay on as president of the
parent group for an additional
year or so.
The bank is No. 1 in Japan by
assets and owns slightly more
than 20% of U.S. investment
bank Morgan Stanley.
Atsuko Fukase
STEVE REMICH FOR THE WALL STREET JOURNAL
Nasdaqs Nontrading Units Grow

charges and other items, pershare earnings rose to 89
cents from 81 cents. Analysts
expected per-share profit of
88 cents.
The company also said
Thursday that Chief Financial
Officer Lee Shavel plans to retire at the end of March and
Corporate Controller Ron Hassen will serve as interim finance chief until a permanent
successor is chosen.
Advertisement
Fourth-quarter revenue was higher than expected.
INTERNATIONAL INVESTMENT FUNDS
[ Search by company, category or country at asia.WSJ.com/funds ]
Data as shown is for information purposes only. No offer is being made by

Morningstar, Ltd. or this publication. Funds shown arent registered with the
U.S. Securities and Exchange Commission and arent available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
All performance figures are calculated using the most recent prices available.
FUND NAME
NAV
GF AT LB DATE CR
NAV
%RETURN
YTD 12-MO 2-YR
n Chartered Asset Management Pte Ltd - Tel No: 65-6835-8866

Fax No: 65-6835 8865, Website: www.cam.com.sg, Email: cam@cam.com.sg
CAM-GTF Limited
OT
OT MUS 01/22 USD 265175.46
n Cp Capital Asset Management Limited

www.cpgbl.com
CP Global Alpha Fund
OT
CP Multi-Strategy Currency Fund OT
CPS-Master Priv Fund
GL
OT WSM 01/27 USD

OT CYM 01/28 USD
OT WSM 01/27 USD
134.53
114.79
165.03
-5.3
-22.3
-10.1
13.5
-4.1
0.5
17.7
2.5
11.1
NS
11.8
14.2
n Website: Www.Valuepartners.Com.Hk, Tel: (852) 2880 9263

China A-Share Fund Cls A AUD H
China A-Share Fund Cls A AUD UnH
China A-Share Fund Cls A CAD H
China A-Share Fund Cls A EUR H
China A-Share Fund Cls A GBP H
China A-Share Fund Cls A GBP UnH
China A-Share Fund Cls A HKD H
China A-Share Fund Cls A HKD UnH
China A-Share Fund Cls A NZD H
China A-Share Fund Cls A NZD UnH
China A-Share Fund Cls A RMB (CNH)
China A-Share Fund Cls A USD
China A-Share Fund Cls A USD H
China Greenchip-A Units
China Greenchip-A Units AUD H
China Greenchip-A Units CAD H
China Greenchip-A Units NZD H
China Greenchip-A Units USD
China Greenchip-A2 QDIs Units
GC Hi Yield Inc - Cls A MDIs GBP H
GC Hi Yield Inc-Cls A MDIs AUD H
GC Hi Yield Inc-Cls A MDIs CAD H
GC Hi Yield Inc-Cls A MDIs NZD H
GC Hi Yield Inc-Cls P HKD Acc sh
GC Hi Yield Inc-Cls P HKD MDIs sh
GC Hi Yield Inc-Cls P MDIs SGD H
GC Hi Yield Inc-Cls P USD Acc sh
GC Hi Yield Inc-Cls P USD MDIs sh
GC Hi Yield Inc-ClsA MDIs EUR H
Hi-Div Stk Cls A1
Hi-Div Stk Cls A2 MDIs
Hi-Div Stk Cls A2 MDIs AUD H
Hi-Div Stk Cls A2 MDIs CAD H
Hi-Div Stk Cls A2 MDIs GBP H
Hi-Div Stk Cls A2 MDIs HKD
Hi-Div Stk Cls A2 MDIs NZD H
Intel-China Converg Fund-A AUD H
Intel-China Converg Fund-A CAD H
Intel-China Converg Fund-A NZD H
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
AS
AS
AS
AS
AS
AS
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
OT
AS
AS
AS
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
OT HKG
EQ CYM
EQ CYM
EQ CYM
EQ CYM
EQ CYM
EQ CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
OT CYM
EQ CYM
EQ CYM
EQ CYM
01/27 AUD
01/27 AUD
01/27 CAD
01/27 EUR
01/27 GBP
01/27 GBP
01/27 HKD
01/27 HKD
01/27 NZD
01/27 NZD
01/27 CNH
01/27 USD
01/27 USD
01/27 HKD
01/27 AUD
01/27 CAD
01/27 NZD
01/27 USD
01/27 HKD
01/27 GBP
01/27 AUD
01/27 CAD
01/27 NZD
01/27 HKD
01/27 HKD
01/27 SGD
01/27 USD
01/27 USD
01/27 EUR
01/27 USD
01/27 USD
01/27 AUD
01/27 CAD
01/27 GBP
01/27 HKD
01/27 NZD
01/27 AUD
01/27 CAD
01/27 NZD
10.10
10.01
9.50
10.08
9.75
10.23
10.13
9.98
9.93
9.49
10.59
9.91
10.04
44.37
7.45
7.34
7.58
7.31
8.09
8.99
8.57
8.59
8.79
11.95
8.41
9.12
11.99
8.42
9.39
62.53
9.19
8.30
8.32
7.86
8.41
8.44
7.62
8.98
8.98
-20.3
-17.3
-20.3
-20.5
-20.4
-17.6
-20.4
-20.0
-20.3
-16.2
-20.0
-20.5
-20.3
-16.2
-16.2
-16.2
-16.2
-16.6
-16.2
-2.2
-2.1
-2.2
-2.0
-1.6
-1.6
-2.1
-2.2
-2.2
-2.3
-13.0
-13.0
-12.9
-13.1
-13.1
-12.5
-12.9
-18.9
NS
NS
-16.0
-5.6
-15.8
-14.6
-17.3
-10.4
-15.9
-16.4
-16.9
NS
-13.6
-16.4
-16.1
-28.1
-29.1
-30.2
-28.4
-29.7
-28.1
NS
6.8
5.2
8.2
5.5
5.5
5.8
5.0
5.0
NS
-17.2
-17.2
-16.6
-17.9
NS
-17.0
-15.4
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
NS
-11.6
NS
NS
NS
NS
-11.8
NS
5.1
3.4
6.2
3.2
3.2
NS
3.0
3.0
NS
-1.5
-1.5
-0.1
-1.5
NS
-1.5
0.7
NS
NS
NS
FUND NAME
NAV
GF AT LB DATE CR
Intel-China Converg Fund-A Units

Intel-Chinese Mainland Foc Fund
VP Classic-A Units
VP Classic-B Units
VP Classic-C Units
VP Classic-C Units AUD H
VP Classic-C Units CAD H
VP Classic-C Units HKD H
VP Classic-C Units NZD H
VP Classic-C Units RMB
VP Classic-C Units RMB H
VP Multi-Asset Fund Cls A USD
VP Taiwan Fund
AS
AS
AS
AS
AS
AS
AS
AS
AS
AS
AS
OT
AS
EQ CYM
EQ CYM
EQ HKG
EQ HKG
EQ HKG
EQ HKG
EQ HKG
EQ HKG
EQ HKG
EQ HKG
EQ HKG
OT NA
EQ CYM
01/27 USD
01/27 USD
01/27 USD
01/27 USD
01/27 USD
01/27 AUD
01/27 CAD
01/27 HKD
01/27 NZD
01/27 CNH
01/27 CNH
NS
NS
01/27 USD
NAV
118.24
32.37
216.26
97.78
12.33
10.08
9.83
8.44
10.20
8.44
8.07
NS
13.37
%RETURN
YTD 12-MO 2-YR
-19.1
-21.7
-17.8
-17.8
-17.8
-17.8
-17.9
-17.7
-17.7
-17.3
-17.6
NS
-7.2
-22.2
-21.2
-20.4
-20.8
-20.8
-20.4
-21.3
NS
-18.7
NS
NS
NS
-16.9
-1.1
-3.3
-1.1
-1.6
-1.4
NS
NS
NS
NS
NS
NS
NS
-6.1
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This French
toast recipe
has us in its
(oh-so-simple)
spell
Not large,
but in charge:
Mazdas CX-3
minicrossover
W8
DRINKING
STYLE
FASHION
DESIGN
DECORATING
ADVENTURE
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Friday - Sunday, January 29 - 31, 2016 | W1
When
A Man
Loves a
Kitchen
Now that cooking has been recoded as
a macho pastime, guys are increasingly
shaping kitchen design. Heres what
the manly version looks like
THE BUTCH-ER BLOCK Designer James Ramsey of New Yorks RAAD Studio put burnt oak, steel-mesh-impregnated glass and reclaimed wood in the Manhattan apartment of an outdoorsy client.
BY DEBRA JO IMMERGUT
Y HUSBAND IS a talented cook. Hes also

6 feet tall, so when
we set out to renovate
our kitchen last year,
he lobbied to keep the unusually elevated
countertops2 inches higher than standardinstalled by our houses lanky predecessors. He found them ideally ergonomic for slicing his celebrated smoked
brisket. Meanwhile, at a little over 5 feet,
I stood on my toes to gain leverage while
crushing garlic cloves. I couldnt wait to
lose those 2 inches.
Our clash over countersand over who
calls the shots on our kitchens particu-
larsput us on the cutting edge of a

major, if belated, societal shift. When it
comes to designing the home kitchen, say
data and industry pros, men increasingly
wish to be heard. No wonder: According
to a 2012 University of Michigan study of
Americans born from 1961 to 1981, married and single men now cook more than
their fathers did, an average of about
eight meals a week.
Growing up, I never once saw my
dad cook a meal, recalled Ted Allen,
cookbook author and host of the Food
Network show Chopped. At a dinner
party [I attended] last night, the man
of the house not only infused tequila
with jalapeo to make the evenings
signature cocktail but drove the bus on
the entirely vegetarian pasta.
The rise of foodie culture has made

home-cooking more alluring to everyone,
and the increase in dual-income families
means more men are sharing KP duties.
At the same time, cooking has been recoded as a macho pastime, said Casey
Ryan Kelly, an associate professor of communications who studies gender and culture at Indianapoliss Butler University.
He pointed to the influence of TV chefs
such as the Food Networks Guy Fieri (the
channels viewership is 42% male overall)
and to open-plan kitchens that are half
command station, half performance
venue. Food prep, Dr. Kelly added, has
evolved from feminine-care labor into
an endeavor imbued with traits of rugged masculinity: competitiveness, selfmastery, individualism and strength.
The kitchen is no longer solely the

wifes domain, agreed Young Huh,
a New York designer and member of
a new trend-forecasting panel for the
National Kitchen & Bath Association
(NKBA). And the $18-billion-a-year
kitchen remodeling industry is finally
responding to these aproned gentlemen
in part because, as customers, they put
their money where their mouths are. If
a man is in charge of appliance selection,
said designer Anne Rue of Lake Mary,
Fla., the cost of the indoor and outdoor
kitchen will be at least 30% more than
if a woman makes the choices.
Men will spend, it seems, but what
sort of aesthetic decisions do they make?
When a male client drives the kitchen-dePlease turn to page W2
STEPHEN KENT JOHNSON FOR THE WALL STREET JOURNAL, STYLING BY NIDIA CUEVA
EATING
W6
W2 | Friday - Sunday, January 29 - 31, 2016
OFF DUTY
KITCHENS: THE NEW MAN CAVES?

TOOL TIME
In chef and
restaurateur
Daniel Bouluds
Manhattan home
kitchen, New
York designer
Stephanie Goto
forewent a back
splash and
installed frostedglass sliding
panels that hide
shallow storage
for utensils.
BOYS MUST-HAVE TOYS

// ESSENTIALS FOR THE
CULINARY MAESTRO
The BlueStar Salamander Broiler

uses a pair of 11,000-BTU infrared
ceramic burners to put a crunchy
finish on steaks or crme brle.
It allows you to sear your meat
without going out into the cold,
said Theron Gunter, of Atlanta
appliance retailer Guy Gunter Home.
$2,868, BlueStar, 610-376-7479
I have about 50 different knives,

and they are all amazing, said chef
Daniel Boulud of his home-kitchen
collection. But he called this carbonsteel model, forged by a 150-yearold company in the French cutlery
capital of Thiers, my all-purpose
favorite. K Sabatier 10-Inch Au
Carbone LineCooking Knife, about
$72, sabatier-shop.com
since were both scientists. Far
from seeing his interest as an intrusion, Ms. Pyhtila welcomed her
spouses input, adding, I wish he
was available to cook more.
Men tend to go bold and/or
Stygian in their color choices, said
a number of experts. Weve noticed more requests for dark cabinets, such as black and charcoalgray paint or ebonized wood, and
carbon-finish hardware, said Peter
Sallick, CEO of Waterworks, the
Danbury, Conn., retailer of kitchen
and bath fixtures. Very masculine,
dramatic and interesting.
Roughed-up finishes also appeal.
For a male client in Nashville, designer Jonathan Savage installed
cabinets in cerused oak (wood
treated with wire brushes to accentuate its grain) and 4-inch marble
counter tops. Cerused cabinets
have a weathered appearance which
can be interpreted as masculine,
said Mr. Savage.
Outfitting the Upper West Side
kitchen of a financier whom RAADs
Mr. Ramsey called, without a hint of
exaggeration, a fly-fishing, buckhunting, Patagonia-traveling kind of
guy, he and project designer Yuri
Miyamoto used elemental materials.
The room (shown on D1) features
burnt-oak lower cabinets, steel-andmeshed-glass upper cabinets, matte
zinc countertops and, on the central
island, a 3-inch-thick slab of liveedge reclaimed wood. He can come
home with a salmon and flop it on
the counter, said Mr. Ramsey, and
TEST KITCHEN
This Weston,
Mass., client requested a laboratory-style culinary
workspace, complete with compressed air and
liquid nitrogen
dispensers. LDa
Architects, of
Cambridge,
Mass., and Boston design firm
Weena & Spook
obliged.
THE ELEMENTS OF
GUY-GALLEY STYLE
Interior designers share the
strategies that satisfied their male
clients kitchen demands
Potent color. Predictably
enough, a lot of men like
dark and bold hues, offset
with black or white. Designer
Lisa Steinbach Schecter of
Kitchens on Montana in
Santa Monica, Calif., recently
used a very crisp and clean
palette of charcoal gray, dark
woods, and white to revamp
a Los Angeles bachelors
condo kitchen. (He doesnt
really cook much, she noted,
but wanted a set-up that
might inspire him to.)
Beefed-up hardware. Big

paws need big pulls, so male
cooks should do hands-on
testing. New York designer
Young Huh likes warmer metals for a masculine look:
Brass and bronze are very
populara little different
from the typical chrome.
Gadget pride. Men, designers find, have no interest
in concealing equipment. Colorful appliances are trending,
too; HGTVs John Colaneri,
co-host of Kitchen Cousins
everyone can gather around.

Another emerging form of the
manly kitchen borrows the aesthetic of high-performance sports
cars. Upscale German kitchen manufacturer Poggenpohl has collaborated with Porsche Design Studio
(yes, that Porsche) to engineer a
modular kitchen with finishes such
as black lacquer and gray walnut
set in stainless steel frames. Touchassisted drawer and cabinet closures obviate hardware. The guys
gravitate right to it, said Poggenpohls New York showroom manager and senior designer Roger Zi-
If a man is in charge of
appliance selection, cost
will be at least 30% more.
erman. Kitchens start at $80,000,
including appliances but not labor.
LDa Architects, in Cambridge,
Mass., and Boston design firm
Weena & Spook recently completed
a similarly flashy kitchen for a man
in Weston, Mass. Finishes (shown
left) are stainless steel, bamboo and
glossy Caesarstone countertops in
what LDas Douglas E. Dick dubs
sports-car red. Gadgetry included
a commercial-style glass-front refrigerator from Sub-Zero and Wolf,
a 48-inch Viking range and multiple
flat-screen TVs. The room is anything but soothing.
Neither the woodsy nor the
splashy styles of the masculine
kitchen are about discretion. In my
recent designs, I see women looking
for wood-panel refrigerators and
lots of hidden features, while my
male clients want as much stainless
visible as possible, said Mr. Savage.
Perpetuating another stereotype,
men seem to respond to potency
in appliances. BlueStar offers a
25,000-BTU gas burner (a typical
home stove rates 5,000 to 15,000
BTUs), which inspires a special ardor, said appliance retailer Theron
Gunter, of Atlantas Guy Gunter
Home. Men come in asking for it,
just because of the power. Techno-
and Americas Most Desperate Kitchens, chose a brightred Bertazzoni range for
his own kitchen (sprayed in
the same factory that does
Ferraris!).
A second sink. Including
suitably straightforward hardware. In his clients Upper
West Side kitchen, New
York architect James Ramsey
installed the industrial
Dornbracht Tara Classic
Single-Lever Mixer, with a
spray-faucet attachment
worthy of the local firehouse.
Elevated counters. Or at
least one of them. Elijah and
Kelty White, a Wellesley,
Mass., couple who recently
remodeled their kitchen,
opted to raise their central
island to 38 inches, 2 inches
over standard. (Thicker countertops are one way to man-
philes tend toward induction cooktops, which use magnetic flux for
rapid, precise heat and stay cool to
the touch.
Some men incorporate a staggering amount of entertainment and
data-access into their schemes.
A guy planning a kitchen wants a
50-inch television and surround
sound, said Bob Schwartz of interior design firm St. Charles of New
York, who often recommends the
Sonos wireless system for kitchen
use. Mr. Savage reported specifying
an iPad holder for a current project.
Men prefer finding recipes online to
using cookbooks, he said.
Mr. Schwartz shared his theory
on men and the tricked-out kitchen:
Women have been cooking a long
time and tend to take the kitchen
for granted, he said. Guys, on the
other hand, view the kitchen as a
new adventure. They ask for things
women would never think of: Salamanders [broiler units ideal for
searing steaks], deep fryers and
other professional equipment. And
two sinks are almost mandatory.
The two-sink requirement,
while indicative of mens agendas,
reflects a broader trend in kitchen
dynamics. Whether its male-female, male-male or female-female,
couples seem to be cooking together, said Mr. Zierman, of
Poggenpohl. Even the classic sinkfridge-stove triangle is waning,
he said. Its more cooking zones,
maybe two sinks or two stoves
multiple stations that accommodate
more than one person working.
Ergonomic issues in the kitchen,
like all matters matrimonial, call for
compromise. My husband and I
made our central island 38 inches
tall and the perimeter counters
height 36 inches. But even accommodating guy chefs sometimes insist on a macho indulgence. For my
husband, it was the roaring BlueStar gas range. For Wellesley, Mass.,
residents Elijah White and his wife,
who recently remodeled with Boston designer Melissa Hammond, it
was a Sub-Zero undercounter refrigerator. Its officially called a
beverage center, Mr. White said.
I call it a beer fridge.
age this.) Perimeter counters

remained the standard 36
inches high.
Ample entertainment.
A wireless sound system and
smart TV can be controlled
with a smartphone. New York
designer Bob Schwartz prizes
the Sonos system for its
compactness and crystalline
sound. I tuck it on a high
shelf in the pantry, he said.
Super-tough surfaces.
For counters, Ms. Huh recommended low-maintenance
quartz and other engineered
stone products, which are
resistant to stains and
scratches, in uniform colorsnot a lot of speckled
stone. Caesarstone and
Silestone are the big names
in this category.
Power to spare. Ranges,
exhaust systems and dish-
washers should be heavyduty. With a powerful stove,

choose a hood designed for
high BTUs, advised Ms. Huh.
(It will also do a better job
Hoovering all the smoke you
create as you learn to train
your dragon.)
Vent hood clearance.
To avoid headbanging when
tasting the pistou, hang the
hood high, but not so high
its ineffective; follow manufacturers guidelines.
Scope for performance.
Outfit the island with seats
and space for socializing.
Avid home cook Howard
Kurtzman, from L.A., who
worked with Kitchens on
Montana, made sure his 6by-5-foot center island was
wide enough that guests
can share the space with me
but not get in the way.
The bulked-up handles on Iittalas

cookware are easy to grab. In
addition, aluminum is sandwiched
between stainless steel all the way
up the sides, so heat conducts
evenly throughout the vessel.
Casserole with Lid, Sauteuse and
Frying Pan, from $210 each,
finnstyle.com
Built-in coffee makers top this

years wish lists, but designers say
the units are hard to clean and
maintain. For a simpler approach,
add boiling water and a fine grind
to this press, then lower the levers
to extract a cup. Satisfying on
many levels. ROK Manual Espresso
Maker, $199, trnk-nyc.com
Swanky cocktail bars
favor the small cubes
made by Scotsmans
ice machines for their
chewability (theyre
actually compacted
ice flakes). This
residential unit, which stands about
33 inches tall, will churn out approximately 80 pounds of ice a
day. Ive seen a lot of men now
getting excited about ice, said
Mr. Gunter. Scotsman SCN60 Nugget Ice Maker, call 800-726-8762
for pricing and retailers.
Large platters and big, roughhewn cutting boards are very

popular with our male clientele,
said Peter Sallick, CEO of Danbury,
Conn., retailer Waterworks. This
waxed black-walnut, end-grain
slab (about 2 by 9 by 16 inches)
doubles as richly woody wall dcor.
End-Grain Butcher Block, $300,
jacob-may.com
When youve
amassed a collection of covetable
vintages, why hide
them in a cellar?
This glass-front
fridge shows it off,
with two zones that
keep reds and
whites at proper
temperatures. Refrigerated drawers
below hold cheeses
or clandestine bottles of Bud Light.
30-Inch Integrated Wine Storage
Unit, $7,995, Sub-Zero and Wolf,
800-222-7820
GAGGENAU (BOULUD); GREG PREMRU (RED KITCHEN); F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (KNIFE, COOKWARE, CUTTING BOARD)
Continued from page W1

sign process, theres often an emphasis on work flow or machinelike efficiency, said architect James
Ramsey of New Yorks RAAD Studio.
Female clients, he found, lean toward a nostalgic, raised-panel look.
I hadnt expected it, and I dont
want to come across as typifying
men and women, he added.
In a new survey of industry pros
conducted by the NKBA, clean-lined
styling was named the top 2016
kitchen trend. Whats in: Flat-front
cabinetry, counters with mitered
rather than rounded edges, highcontrast palettes and large, simple
pulls. Whats (relatively) out: the
crown molding, corbels, soft hues,
ornate hardware and tiling of
Tuscan, French provincial and other
traditional styles. Kitchens are
more tailored, more masculine,
more streamlined, noted Ms. Huh,
and that reflects the male drive
and participation in kitchen design.
Brook Pyhtila, a scientific curator, is currently remodeling her
Wayland, Mass., kitchen with her
husband, head of analytics for a
health-services company. She said
she cares more about aesthetics
than her husband does, but only
slightly more. John had to see the
counter slab in person, and went
to the lighting store, she said.
Theyve settled on weathered soapstone countertops and handmade
lighting from Vermont firm Hubbardton Forge, including pendants
shaped like Erlenmeyer flasks
OFF DUTY
F. MARTIN RAMIN/THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS; GETTY IMAGES (PRINT)
Emerald and
Diamond Necklace,
$1,220,000,
Black, Starr & Frost,
949-673-1771
Rocks of Ages
Over 200 years old, jeweler Black, Starr & Frost is ready to become a household name again
BY NANDINI DSOUZA
ONLY VIA A BLACK velvet jewelry tray could
Mary Todd Lincoln and Marilyn Monroe find
a common thread. Mrs. Lincoln once racked
up a $64,000 bill for jewels from American
jeweler Black, Starr & Frost. Many decades
later, the actress name-checked the same
company while singing Diamonds Are a Girls
Best Friend in the 1953 film Gentlemen Prefer Blondes. Her character, Lorelei, was said
to be inspired by one of the houses clients,
Ziegfeld Follies star Peggy Hopkins Joyce.
Though you may not recognize the name
Black, Starr & Frost, the jeweler has an undeniably rich and colorful past. Its one that the
current owner and chairman Alfredo J. Molina, who bought the brand in 2006, wants to
tap as he works toward his ambitious goal of
restoring it to its glory days. Were Americas first jeweler, Mr. Molina saidand repeated during the course of an interview. Of
possessing a Black, Starr & Frost gem, he
added, Its owning a piece of history.
Thats not hyperbole. The company was
founded in 1810 and has operated continuously sincealbeit with several name
changes along the way. Before the Great Depression, the Black, Starr & Frost store at
the corner of Fifth Avenue and 48th Street
in Manhattan was the place to buy jewelry,
table clocks and even class rings.
The period of the 20s and 30sthe
height of art decois probably the most
sought-after [period for the brand] in our
current market, said Carol Elkins, a senior
vice president of jewelry at Sothebys. In the
past few years, Sothebys has sold Black,
Starr & Frost pieces in the collections of

Mrs. Paul Bunny Mellon and Brooke Astor.
It was collected by some of the great people in New York society, she added.
That does raise the question of why Black,
Starr & Frost isn't an American household
name in the vein of Tiffany & Co. Ms. Elkins
theorized that the company fell a bit short by
not driving innovation: I wouldnt say they
were imitators, but they were doing things
that were popular at the time.
Black, Starr & Frosts strength was the caliber of its gems. Its really collectible, said
Elizabeth Doyle, co-owner of Manhattan vintage-and-estate jewelry shop Doyle & Doyle.
Its beautiful and has high-quality stones.
That quality is something that current
owner Mr. Molina, an 11th-generation jeweler and certified gemologist, wants to
maintain in everything from his $7,500 diamond tennis bracelets to a $1.2 million emerald-and-diamond necklace (pictured
above). Hes been collecting gems for new
pieces for a decade and has partnered with
mines to source rough stones. The new
wares, many inspired by old designs that
Mr. Molina has been buying at auction and

from other secondary sources, can be found
at the companys two shopsin Newport
Beach, Calif. and Phoenix.
Whether Mr. Molina will fully restore the
brands luster is yet to be seen. But jewelry
brands, perhaps more so than fashion
houses, have a solid track record of a second chance. (See sidebar The Encore Club
for more jewelry revivals.) I believe in history and heritage, said Mr. Molina of jeweler comebacks. These old brands were
about integrity, truth and trust.
THE ENCORE CLUB // FIVE MORE JEWELRY BRANDS THAT HAVE BEEN SUCCESSFULLY RESUSCITATED
SIDNEY GARBER
Though never dormant, the
brand, launched in 1946,
has returned to the spotlight in recent years
through the efforts of the
founders daughter Brooke
Garber Neidich. Georgica
Pond Ring, $17,850, Sidney
Garber, 212-274-1111
VERDURA
In 1985, ex-Sothebys jewelry head Ward Landrigan
bought the brand started
by Italian duke Fulco di Verdura in 1939, and has since
built up a new set of dedicated clients.
Lily Bracelet, $83,500, Verdura, 212-758-3388
MARINA B.
Bulgari heirand former
CEOMarina Bulgari made
jewelry under this mark
from 1978 to 96. It remained defunct until 2014,
when cousin Giorgio Bulgari
took the design reins.
Troc Earrings, $16,000, Marina B. 212-644-1155
DAVID WEBB
The favored jeweler of Liz
Taylor and Jackie O. died in
1975, but the company,
bought by Mark Emanuel
and Robert Sadian in 2010,
lives on.
Elizabeth Taylor Chimera
Bracelet, $83,000, David
Webb, 844-811-9322
BELPERRON
Defunct for 41 years, the
very collectible Belperron
was relaunched recently by
Nico Landrigan, (Wards
son) who opened a salon,
selling both old and new
pieces. Suzanne Belperron
Cluster of Grapes Brooch,
$115,000, fd-gallery.com
WHERE TO WEAR IT
BRIGHT IDEAS
Designers sent some rather challenging looks down the spring 2016 runways. Here, an attempt to come up with real-life opportunities to show them off
For the art-lover

hopping from Friezes to
Basels all year long,
this walking Ellsworth
Kelly of an ensemble
by Marni might just
work for post-fair
cocktail parties and
dinners.
Then again: Its hard
to imagine a more
appropriate look for a
bathroom-tile
convention.
A particularly stylish
and playful mom might
find this airplanepatterned Chanel
ensemble apropo for
the playground. It has a
childlike buoyancy that
would fit right in with
the kids screams of joy.
Then again: It is
equally suitable for
hosting a special 30th
anniversary screening
of Top Gun.
Top, $2,680, and Skirt, $2,680,

Saks Fifth Avenue, 212-7534000, Turtleneck, $770,
Totokaelo, 206-623-3582
Top, $2,100, Pants, $3,850, and

Pullover, $3,450, Chanel, 800550-0005
This open-knit,
macaron-hued gown
and cape from Gucci
could be an intriguingly
chic choice for a
summer party on a
terrace in Southampton
or Sorrento, especially if
its a nippy night.
Then again: It would
also work nicely at a
backyard potluck for
crochet enthusiasts in
Saskatchewan, but only
if its a nippy night.
Cape, $2,290, and Dress,
$3,690, gucci.com
OFF DUTY
FROM TOP: SOPHIE CARR; W15; HENRY WISMAYER; MAP BY JASON LEE
ONE FIN DAY Sperm

whales are one of several
varieties seen off Mirissa,
in southern Sri Lanka.
Chasing the Blues

A lazy beach getaway in Sri Lanka becomes an impromptu safari when the prospect of spotting a blue whale arises
BY HENRY WISMAYER
T WAS SIX A.M. when the

procession of headlights
began to pierce the predawn
darkness at the dockyard.
Bleary-eyed tourists from all
along Sri Lankas south coast were
arriving at the harbor in Mirissa for
a chance to spot a blue whale,
thought to be the largest animal
ever to have inhabited the earth.
My motives for heading to
Mirissa were different. I was just
doing what many first-time visitors to Sri Lankas southern coast
do almost instinctively: looking for
a quiet beach on which to achieve
no goals whatsoever. Mirissa
appeared a likely spot to find one.
Ever since the Tamil Tigers
30-year insurgency was crushed in
2009, tourism along Sri Lankas
south coast has been on the rise.
For now, though, Mirissa has escaped the large-scale development
that is walling off its neighboring
towns behind rows of resorts.
Three-and-a-half hours from Sri
Lankas capital, Colombo, by train,
Mirissa still exudes a laid-back
vibe that draws backpackers and
other independent travelers happy
to avoid the package-tour crowds.
Soon after Id arrived and
checked into an inexpensive guesthouse, I slipped easily into a slothful rhythm. I spent my first two
days at the beacha two minute
walk awayreading and jumping
the waves along the ocher arc
fringed with gangly coconut palms.
But I found Mirissa most beguiling at dusk, when the fairylights coiled around tree-trunks
at restaurants projected constellations onto plastic tables, and

staffers at the reggae bars lit bonfires on the sand. Beachside restaurants loaded small boats with
seafoodsnapper, king prawn,
dory, tunaand placed them on
the sand so diners could take
their pick from the days catch
and have it taken straight to the
kitchens for grilling.
You neednt spend much time
in Mirissa to see that the ocean
there is superabundant. Immediately to the east, off Dondra Head,
where a chalk-white lighthouse
marks Sri Lankas southernmost
cape, nutrient-rich waters draw
krill, the tiny crustaceans that are
the main food source for blue
whales. The krill also attract
schools of smaller fish, which in
turn lure bigger predators: Sperm
whales, pilot whales and dolphins
make regular appearances. But
the blue whale, I discovered, is
without question the headliner of
the aquatic spectacular that takes
place just offshore. (Blue whales
can also be spotted in California,
the Sea of Cortez off Mexico, and
Canadas St. Lawrence River.)
The gravitational pull they
exert on visitors to southern
Sri Lanka is not without problems: Locals complained to me
that new tour operators, unregulated and, in too many cases, uncompliant with the rules for safe
whale-watching, are springing up
all the time. And I had my own
misgivings about harassing an
endangered creature that seems
to do its best to avoid humans.
But as someone who spent his
childhood enraptured by museum
RAW DEAL Choosing an entre on the beach at Mirissa.
THOU SWELL Surfers love to hole up at the 10-room W 15, on Weligama Bay next to Mirissa.
skeletons of dinosaurs, mastodons
and giant sloths, I was unable to resist the idea of seeing a big blue
measuring up to a hundred feet
long and weighing up to 200 tons,
with an aorta big enough to swim
through. To me, the blue whale had
an almost mythical quality by virtue of its elusiveness and its incomparable size. I decided I couldnt
leave without seeing one.
Which is why, on my third
morning in Mirissa, I found myself
down at the dockyard sipping coffee and thumbing through an encyclopedia of Sri Lankas marine
wildlife, while my fellow day-trippers congregated outside in the
orange glow of sunrise.
Id picked up the bookand the
coffeefrom the office of Mirissa
Water Sports, the company which
pioneered whale-watching tours
here 10 years ago, and has since
acquired a reputation for causing
minimal stress to the endangered
whales. The auguries for the day
ahead were good. On the wall
outside the office, a signboard
declared that between two and 10
blue whales had been spotted on
each of the last 10 days.
Outside, the pier was abuzz. The
smell of fish combined with the
tang of the ocean was wafting over
from the dock where fishermen
were haggling over the nights haul,
displayed on the concrete in a glis-
tening patchwork of flank and fin.

As excited whale-watchers
queued up to board the boats, I
was surprised to read that, until
relatively recently, few people even
knew the whales were here. Only
after a World Wildlife Fund-sponsored research vessel named the
Tulip spent two years cataloging
the countrys megafauna in the
early 80s did news of Sri Lankas
whales take a more concrete form
than fishermen anecdotes.
Soon we were motoring out into
the bay. Our fiberglass boat was
around 40 feet long, with rows of
seats on the lower deck and
a viewing platform above, where
a crew of three spotters stood
sentinel beneath a plastic awning.
The ocean swelled as we nosed
toward Dondra Head. For the rest
of the morning the boat pitched in
the chop, crashing resolutely over
bow-waves sent our way by the
hulking container ships on the horizon, slicing through one of the
busiest shipping lanes in the world.
I was worried that the rough
seas would spoil the odds of a
sighting, but one of the spotters reassured me. Dont worry, he said,
you dont need calm seas to spot
a blue whale. When they surface to
exhale, they send waterspouts
shooting up to 30 feet into the air.
After a quiet first hour, the
ocean came to life. At one point
THE LOWDOWN // WHALE WATCHING ON SRI LANKAS SOUTHERN COAST

Getting There: Etihad and Qatar
Airways offer one-stop flights from
New Yorks JFK to the Sri Lankan
capital, Colombo, from which frequent
bus and train service to Mirissa is
available.
Whale Watching There: Blue whales
are most commonly found in the seas
around Mirissa from December to
April. Among the most reputable
agencies offering whale-watching
tours are Mirissa Water Sports
(mirissawatersports.lk) and Raja and
the Whales (rajaandthewhales.com).
Trips leave from the Mirissa dockyard

at around 6:30 a.m., and cost between $40 and $60 per person.
Staying There: Accommodation in
Mirissa itself is mostly low-key and
inexpensive. The Spice House (from
about $60 a night; thespicehousemirissa.com) and Peacock Villa (from
about $40 a night; peacockvilla.lk)
are among the pick of the beachside
guesthouses. If youre after something more upmarket, a better bet is
neighboring Weligama Bay, where
the recently opened boutique hotel
W 15 (from about $140 a night;

w15.lk) has been earning glowing reviews. For the regions most luxurious option, head to Cape Weligama
(from about $570 a night;
capeweligama.com).
Eating There: At night, Mirissas
beach becomes heaven for seafood
lovers. Among the best dining options
is Zephyr (220/0 Galle Road,
94-414-545-044), located near the
lifeguard tower in the middle of the
bay, where meals cost between $7
and $20.
INDIA
BAY OF
BENGAL
INDIAN
OCEAN
COLOMBO
SRI
LANKA
GALLE
MIRISSA
50 KM
50 MI
we had spinner dolphins leaping in

arcs at our bow, a group of obsidian-black pilot whales cutting
across our path and dozens of flying fish erupting from the water
like explosions of quicksilver. Too
much centrifugal force up here,
harrumphed one British man to no
one in particular, both hands
clasped on his telephoto lens.
A group of Dutch girls, their hangovers suddenly forgotten, let out
a collective squeal of delight.
An enormous hump
that could only be a
blue whale appeared.
Our boat chugged
deferentially forward.
Then I heard a cry from the
bow that recalled the whalers of
old: Whale! One oclock! Far! For
a while, no one saw what the eagle-eyed spotter had spied. Then
a sudden vaporous cloud erupted
from the water, plum ahead; two
minutes later an enormous hump
that could only be a blue whale
appeared. We chugged deferentially forward.
The first thing that grabs you
when you approach a blue whale is
its vivid color. The blue tinge to its
skin appears just beneath the surface of the water as a dazzling ultramarine. All that could be seen
of our whale, when we neared him,
was the blowhole and the comparatively puny dorsal. But the shimmering blue shadow gradually revealed its true footprintat least
twice as long as our boat.
For a while it lingered 100 feet
off our starboard side, its huge
body rising and falling as it filled
its 5,000-liter lungs. Then it arched,
a whole island on the move, until
its vast flukes broke clear of the
water, dripping a curtain of pearls.
Then, with the merest ripple, it was
gone, down back into the blue.
OFF DUTY
Tokyos Tasty
Underside
JEREMIE SOUTEYRAT FOR THE WALL STREET JOURNAL
For the best introduction to the citys cuisine,

head to a depachika. These subterranean food
halls offer endless eatsand free samples galore
SNACKING SPREE //
4 DEPACHIKAS TO VISIT
IN TOKYO
Daimaru
This is the place to load up on gorgeously packaged rice-cake sets,

Hokkaido seaweed and boxes of
gyokuro (Japans prized green tea).
Located inside Tokyo Stationfrom
which the high-speed Shinkansen
bullet trains departDaimaru is
where Tokyoites stop to load up on
gifts, as well as boxed meals for the
ride. The fish at popular sushi shop
Tsukiji Suzutomi comes straight
from wholesalers at the famed
Tsukiji fish market. And a counter
from the tonkatsu restaurant
Maisen offers the greatest porkcutlet sandwich known to man.
(Its all about the squishy white
bread, really.) daimaru.co.jp/tokyo
Isetan
BY MATT RODBARD
okyos depachika
are the silk lining of
Japans intricately
woven food culture
extravagantly high-end
food halls located on subterranean
levels of department stores, selling
everything from hulking slabs of
otoro (the most coveted cut of tuna
belly) to immaculate white strawberries called hatsukoi no kaori
(scent of first love). The going
price for 15 of the latter? 10,800.
That would be close to $100, even
with todays strong U.S. dollar.
For a foreign visitor, as I was recently, the depachikas maze of food
counters and restaurant pop-ups
is a living, steaming (also bubbling
and sizzling) encyclopedia of Japanese food. Plus, the Japanese are
generous with the free samples.
The opportunity to absorb an extraordinary amount of information,
and calories, is remarkable, said
Matt Goulding, author of Rice,
Noodle, Fish, a deep dive into
Japans shokunin (craftsman) culture as it pertains to food. If you
have one hour and want to learn,
head to the basement.
Depachika is a mashup of depato (department store) and chika
(basement). In Tokyo many department stores are built near or atop
busy subway stations because train
companies, beginning in the 1920s,
saw the opportunity to turn straphangers into shoppers. To this day
some department stores and rail-
way companies are owned by the

same parent company.
In the case of Mitsukoshi, Japans
first modern depato, the store came
first; Mitsukoshimae, the name of
the adjacent subway station, means
in front of Mitsukoshi. By 1932,
when that station opened, wellstocked and seasonally oriented
basement food stores were becoming the norm, often located literally
steps from a train exit. In Japanese
economics, it is called the fountain
effect, said Momoko Nakamura,
a food-business consultant who
helped launch Iron Chef in America. If the basement is doing well,
people will take the elevator up to
the higher floors and shop more.
Ms. Nakamura agreed to guide
me through several of the citys
depachika, a tour that took us from
the old-world Ueno district to the
packed streets of Ginza to the gateway to the suburbs at Ikebukuro.
Japans population is largely middle
class; socioeconomic differences between halls were subtle. Were not
talking Barneys versus Walmart,
Ms. Nakamura said. The depachika
is meant to appeal to all Tokyoites
and a culture obsessed with quality,
freshness and packaging design.
The date of our tour fell, coincidentally, on Japans National
Department Store Day, a busy Sunday in the midst of year-end holiday-shopping fever. Japan has the
worlds third-largest economy and
a deeply rooted culture of omiyage
CARNIVORES DELIGHT Meat for sale at Mitsukoshi.
TRY GOODS Clockwise from top left: A warm welcome at Tokyos

Mitsukoshi department store; sweets at Daimaru department store next
to Tokyo station; fruits for sale at Daimaru.
(gifting). That day the shoppers
had turned out en masse, and they
appeared to be hungry.
Arigatou gozaimasu! In the depachika at Mistukoshi, the more formal version of thank you rang out
repeatedly over what seemed like
a perpetual loop of George Michael
and Mariah Carey Christmas tunes.
The scene was similar to the cosmetics floor at any Western depart-
The opportunity to
absorb an extraordinary
amount of information,
and calories,
is remarkable.
ment store: dozens of glass-plated
counters with an intensely friendly
clerk behind each one. One perfectly coiffed shop girl lured me toward a case packed with exquisite
fried things: tonkatsu (breaded pork
cutlet), kaki furai (golden oysters),
potato croquettes and shrimp tempura the size of a babys forearm.
I resisted the impulse to buy everything in sight, despite the extra incentive of seeing each piece individually wrapped in a paper sleeve,
creased perfectly, taped on the
seam and affixed with a bow.
Just before 11 a.m., the depachika was already heaving with
shoppers. Sensing I was being distracted by every shark-fin gyoza,
hunk of marbled Matsusaka beef
and $19 celery stalk we passed,
Ms. Nakamura insisted I begin by
getting the lay of the land, which
turned out to be similar at each
of the depachika we visited. The
offerings in the massive halls
sometimes as many as 30,000
productsreflected a balance between ancient customs and modern
trends. The pastries and sweets,
for example, were divided into
strictly Japanese wagashidesserts made with mochi (chewy rice
cake), fruit and azuki bean paste
and Western hybrids such as
green-tea Swiss rolls and choux
la crme filled with yogurt.
There was always a French-style

bakery, or four, including global
chains like Maison Kayser.
Fresh produce, sometimes grown
hundreds of miles away and trucked
in, was sealed in plastic bags and
sold by the piece. At Mitsukoshi,
some muskmelons, priced as high
as $150 each, were kept under
glass, like designer hand bags.
There was a section dedicated to
alcohol, with domestic wines and
Japanese whisky allotted their own
sections along with European bottles. And lots of real estate was
dedicated to prepared foods, like
onigiri (rice balls), elaborate bento
boxes with expensive unagi (eel)
and astronomically expensive ikura
(salmon roe), as well as stalls dedicated to Chinese and Korean food.
Here and elsewhere, an entire
grocery storeselling more workaday household items, meat and
fishwas sectioned off or located
in a sub-basement. Always an entire
section was devoted to gifts: pricey
tea sets, spices, jams, honey.
Depachika are typically open
between 10 a.m. and 8 p.m. At the
end of the day, vendors offer deep
discounts to turn over product.
Shrewd shoppers plan their buying
around these flash sales. Temporary stalls, booked by Tokyo restaurants and artisans traveling
from as far as Fukuoka and Hokkaido, pop up for a week or two at
a time. The competition for these
spots is so fierce that vendors with
slow sales have been kicked out
and swiftly replaced before their
tenure was up.
At Mitsukoshi, I met a woman
named Nobuko Tsujiishi who was
selling mitarashi dangosweet
balls of pressed rice lacquered with
an umami-rich glaze of sugar and
light soy sauce, served on a stick.
Ms. Tsujiishi lives in Kyoto and
runs a small restaurant called Kotoka. Shes been selling in weeklong
runs at Mitsukoshi for many years,
and at the nearby Isetan depachika
for over 30. I see the same customers all the time, year after
year, she said through a translator.
And many of them bring me gifts.
In Japan, it seems gifts are even
bestowed on those selling them.
Located a short distance from

Shinjuku Station, Isetan is big and
crowded and rewards the courageous with the archetypal depachika
experience. Wagashi are traditional,
very pretty Japanese confections
often served with tea, and Toraya,
which has a counter here, has been
mastering the craft since the 16th
century. French macaron king
Pierre Herm and chocolate don
Jean-Paul Hvin have spots as
well. And Isetan is hands down
the place to buy boozea bottle of
rare Nikka whisky or aged sake to
bring back for your pet sitter, perhaps? If youre lucky, they will be
pouring samples. isetan.mistore.jp
Isetan department store.
Tobu
A trip out to Ikebukuro offers two

of the largest (and competing)
depachika: Seibu and Tobu. Tobu
is the better option, and one of
Japans largest food halls, with two
massive levels (one dedicated to
gifts, one dedicated to fresh foods)
and a spacious area featuring
weekly rotating pop-up vendors,
where a point and eat ethic can
lead to a highly enjoyable lunch of
grilled silver fish or Okinawan taco
rice. And make a point of strolling
through the fish section of the grocery store. Its wildthe mongers
working magic with their Japanese
steel blades while busy shoppers
stock up on plastic trays of mackerel and tuna. tobu-dept.jp
Mitsukoshi
Tokyos original depachika in Ginza

was recently given an extensive
renovation and is a great place to
show up early. At exactly 10 a.m.
the doors are flung open, and
as you enter, a row of the stores
staff welcomes you with a line
of graceful bows. Step inside and
youll find a wonderful selection of
both Western and Japanese baked
goods and sweets, with counters
from Franois Pralus and Johan
Paris. Also make sure to look for
the pristine fruits and vegetables
including that $150 melonto
Instagram. mitsukoshi.mistore.jp
OFF DUTY
Prepare for
Dram-ageddon
BY NOAH ROTHBAUM
HERES A CHILLING scenario
for a Scotch aficionado:
You head to your local liquor
store, anticipating the
purchase of your favorite
12-year-old whisky, only to
discover its nowhere to be
found. You search high and
low, eventually settling for
a similar but slightly different (aka suspect) bottle.
This scene will soon play
out in shops across the
country. As a result of high
worldwide demand and a
finite supply of single-malt
Scotchthe production of
a single distillery, which can
be blended only with water,
not other whiskiessome
drinkers preferred spirits
are disappearing.
Lately, brands have been
replacing the familiar 10-,
12- and 18-year-old range
with whiskies that have no
stated ages. Though aged
as all Scotch must be,
by law, for at least three
yearsthese ageless whiskies are younger than the
whiskies theyre replacing
and can be released without
hitting a specified maturity.
It was really only in
the 1960s that single malts
started to be sold in the U.S.
and in the 1990s that they
began to be marketed as superior to blended whiskies
(and priced accordingly),
with age cited as a key indicator of quality. Perhaps this
strategy was too successful.

Now, with hundreds of
Scotches available, selecting
a bottle without a number to
latch onto can be destabilizing. While age is no guarantee of qualitymany experts
believe excessive time in the
barrel leads to too much
tannic wood flavorin the
absence of that reference
point, brands must bank on
consumers being educated
enough to know what they
like and select accordingly.
I think you could argue
from one perspective that
consumers of single malts
have become a bit more sophisticated than they were
and dont necessarily need
to be given just numbers as
a means of differentiating
Many of the
outstanding 10-, 12and 15-year-old
whiskeys may go the
way of the dodo.
between different types and
qualities of product, said
Dr. Nick Morgan, head of
whisky outreach for Diageo.
The company owns 28 Scotch
distilleries, including Talisker, Oban and Lagavulin,
and is currently aging 8 million casks in its warehouses.
The move away from age
statements allows a brand
much greater flexibility and

the ability to increase supply without waiting years
for stocks to age. Age statements give you no flexibility
whatsoever, said Mr. Morgan. They also tie your
hands behind your back in
terms of innovation. And
innovation has always been
the lifeblood of the Scotch
whisky category.
Take, for instance, Laphroaig 18-Year-Old. A few
months ago the brand
announced that whats currently housed in its distributor warehouses and available in stores will be it for
the foreseeable future.
A number of different limited-edition whiskies will
take its place. Even more
unsettling, the brand says it
will no longer produce the
standard range of whiskies
and will, with the exception
of the best-selling 10-YearOld, make different spirits
available at different times
depending upon supply.
In 2012 (you might want
to sit down for this one),
the Macallan replaced its
10-, 12- and 15-year-olds in
many markets around the
world with a series of ageless malts. While the brand
maintains it has no plans
to do the same in the U.S.,
it may have little choice if
demand continues to rise.
Its little wonder that the
Scotch whisky industry as
a whole cant keep up with
demand for single malt. Ac-
BROCK DAVIS; F. MARTIN RAMIN/THE WALL STREET JOURNAL (BOTTLES)
Soaring demand for single-malt Scotch is

sucking distilleries dry. Heres a list of whiskies
to stock up on before they disappear
cording to the Distilled Spirits Council of the United

States, sales of single malt
in the U.S. rose by an astonishing 149% from 2002 to
2014. And the U.S. spends
more on single malts than
any other country. After decades of losing market share
to vodka, wine and beer,
brown spirits have been rediscovered by Americans,
and producers have flooded
the market with a dizzying
array of themcashing in
on a growing fascination
with traditionally made and
artisanal products.
Back in the late 1990s,

however, when todays
18-year-old whiskies were
distilled and set aside in
barrels to age, forecasts for
the volume of single malt
that drinkers would demand
in 2015 and beyond were
relatively modest. Many
popular single malts are
no longer sold to blenders
or independent bottlers.
Some brands have gone so
far as to buy back singlemalt stocks from blenders.
A number of distilleries are
running around the clock;
others have expanded their
facilities. But the effect of

these moves wont be felt
for years.
In the meantime, many
outstanding 10-, 12- and 15year-olds may go the way
of the dodo. While Diageos
Dr. Morgan assures me that
whiskies without age statements are not, by definition,
of any lower quality than
their quantified counterparts, lovers of aged Scotch
will, at the very least, need
time to adjustand whisky
to drink while they do.
Below, a few endangered
drams worth stocking up on.
OVER A BARREL // SINGLE MALTS IN SHORT SUPPLY

Here are a few estimable bottlings likely to
disappear from store
shelves soon. Get them
while you can.
1. Laphroaig 18-YearOld ($110): If you like

this smooth, peaty malt
from the island of Islay,
stock up now. Beam
Suntory has announced
that whatever is on store
shelves is it for now. No
doubt this will become
a real collectors item.
2. GlenDronach
Revival 15-Year-Old
($110): GlenDronach
dates back to 1826,
was mothballed in
1996 and then reopened six years
laterhardly unusual,
as the Scotch industry
suffered a massive
slowdown in sales at
the end of the 20th
century, when drinkers
favored vodka, beer
and wine. As a result,
the stocks of both
GlenDronachs 15-yearold whiskies are quite

limited.
3. GlenDronach 24Year-Old Grandeur
($700): This GlenDronach bottling is still
available but will likely
run dry this year. This
whiskys supplies are
so limited that it may
be replaced with a
small run of a completely different whisky
aged 25 years.
4. Scapa 16-Year-Old
($75): Previously,
Scapa, way up at the
top of Scotland, made
its 16-year-old single
malt its signature.
That changed when the
distillery recently introduced the no-age-statement Skiren ($80), now
its global priority. Lay in
a bottle of the 16-yearold while you still can.
5. GlenDronach 15Year-Old Tawny Port
HOW TO
Finish ($90): See number 2 above.

6. Macallan 15-YearOld ($115): While Macallan refuses to comment
on its stocks of 15-YearOld (or any of its whiskies, for that matter),
I imagine its really quite
tight. I would hardly be
surprised if this whisky
was discontinued, given
that its already been
pulled from a number of
markets overseas. N.R.
STEPS
MAKE FRENCH TOAST

1.
Beat eggs,
vanilla and
cinnamon in
a shallow dish.
Stir in milk.
Full disclosure: Its not really French. But if you follow these steps, you can
transform the humblest ingredients into something magnifique
FIRST, THERE WAS my mothers
French toast, a comforting composition of Wonder Bread and maple
syrup. Later, diner French toastgloriously greasy and steadyingbecame
a college late-night favorite. When my
children were small I discovered that
French toast cut into tiny bites was
irresistible to the pickiest of little eaters. Made with healthy bread, it was
a breakfast I felt pretty good about:
whole grains, milk and eggs.
Im certainly not the first parent
to resort to the technique of dousing
bread slices in milk and eggs and
frying them to a golden-brown crisp;
French toast has given stale bread

a second life for centuries. Contrary to
popular belief, pain perdu (lost bread),
as its called in France, was not invented there. Historians have traced
the recipeor something very close to
itto ancient Rome and the early centuries of the last millennium.
The stale bread is not merely a matter of expediency. It soaks up more of
the egg mixture than fresh slices will,
without falling apart. But fresh bread
will certainly do the job. With so many
great loaves now widely available,
why not opt for something interesting?
A bakery pain de mie or even best-
quality packaged, pre-sliced white

bread works well. If you can obtain a
brioche, peasant or cinnamon bread, or
a whole grain loaf, so much the better.
You might drizzle (or drench)
yours with maple or berry syrup, or
honey, or top it with fresh fruit and
whipped cream. I favor a dusting of
powdered sugar and a squeeze of
lemon or orange. Follow the steps at
right, and youll produce a fluffy, tender, subtly spiced and sweet French
toast you may well prefer just as it is.
As my mother knew, even the sorriest
slice will emerge from the pan redeemed. Gail Monaghan
2.
Dip bread in
egg mixture,
turning to
coat both
sides evenly.
INGREDIENTS
1 teaspoon
ground
cinnamon
2 teaspoons
vanilla extract
2 eggs
1/
cup milk
Butter for pan
3.
Cook bread slices
on a lightly greased
griddle or large skillet over medium
heat until browned
on both sides.
LIBBY VANDERPLOEG
8 slices bread
OFF DUTY
The
Incredible
Shrinking
Hi-Fi
BY MICHAEL HSU
COMPACT, CONVENIENT
and, for the most part, prettier than the majority of
other audio gear, a lifestyle speaker is a neatniks
dream come true. These
self-contained, wireless
sound systemswhich are
usually compatible with Bluetooth, Airplay or other
streaming technologyobviate the need for a stack of
unsightly hi-fi equipment,
require only a single cable
(for power) and are intended to blend more harmoniously into
a living space.
The problem is, a single,
small speaker can pump out
only a limited range of frequencies. Bass is usually the
first thing to go. Vocals often sound constricted and
muffled. These systems may
play loud, but they usually
arent very satisfying to listen to at length.
Lately, though, a number

of serious audio companies
that previously catered to
audiophiles with money to
burn have entered this end
of the market. Their products can easily cost four
or five times more than
speakers aimed at the
masses. But do these highend minis really deliver
a higher-end sound?
The fact is, a single
speaker can only do so
much; itll never rival a traditional two-speaker system.
But if you simply must have
the most compact setup
available, these three pricey
offerings from esteemed audio companies deliver considerable punch per cubic
square inch. Heres a rundown of how they work,
and the technical know-how
they borrow from their
much, much more expensive
full-size counterparts.
FOR COMPACTNESS
FOR STEREO PAIRING
Naim Mu-so Qb
Company Pedigree:
Naim, the British audio
brand behind the Mu-so
Qb, isnt a household
name, but if you have a large collection of
MP3s and CDs, you owe it to yourself to
check out one of its digital-to-analog converters. These inscrutable black boxes
somehow extract more nuance and a striking sense of immediacy from the digital
music youve been listening to for years.
Trickle-Down Technology: To figure out
how to get a roughly 8.5-inch cube to fill
a room with sound, Naim drew on its experience designing audio systems for
Bentley Motors, according to Roy George,
the companys technical director. And although the Mu-so Qb doesnt sound as
full and rich as the other models shown
here, this diminutive speaker does a valiant job of pushing the laws of physics. It
sounds much bigger than it is, no matter
what volume you play it at.
Visual Appeal: High. The aluminum
chassis has a futuristic-looking, touch-sensitive shuttle dial inset into its top, while
the subtly illuminated acrylic base makes
the speaker appear to float (really, it does).
If the black-fabric grille is too staid for
your taste, spring for a replacement with
more zing in teal, orange or red.
Wireless intelligence: Airplay, Bluetooth
and UPnP. The app lets you play up to five
of these speakers in sync. $999, available
this spring, naimaudio.com
McIntosh RS100
FOR SPACIOUSNESS
Bowers & Wilkins

Zeppelin Wireless
Company Pedigree: Founded in the

1960s, the venerable British audio company Bowers & Wilkins is known for its
especially sonorous traditional speakers.
It now offers them in four lines, ranging
from the entry-level 600 series to the
flagship Nautilus (which max out at
$60,000 a pair).
Trickle-Down Technology: The Zeppelin Wirelesss unusual, oblong shape isnt
just a gimmick; it allows the tweeters to
be set in a semi-spherical enclosure instead of a big boxy one. This design,
which is based on one the brand uses for
its high-end speakers, is said to improve
clarity by reducing sound-wave reflections.
The approach works. The Zeppelin Wireless sounds especially open and full, no
matter where in the room we placed it or
where we stood in relation to it. And its a
huge improvement over the first-gen Zeppelin that the company released over a decade ago.
Visual Appeal: A 26-inch-long, jet-black
ovoid probably wont endear itself to your
interior decorator, but its squat enough to
sit discreetly on a credenza or bookshelf.
Wireless intelligence: Bluetooth and
Airplay. $700, bowers-wilkins.com
Company Pedigree: The

hand-built audio components
coming out of McIntoshs
Binghamton, N.Y., factory are
the stuff of legend. The Grateful Dead famously used McIntosh amps to
power its Wall of Sound. And most aspiring
audiophiles have, at some point, coveted McIntoshs unabashedly massive gear.
Trickle-Down Technology: Some of the rivers on the RS100 are similar to those found in
the companys entry-level XR50 bookshelf
speaker. But probably the main reason the
RS100 sounds as spacious, well-rounded and
natural as it does is that it was personally
tuned by McIntosh acoustic engineer Carl Van
Gelder, who has tuned just about every McIntosh loudspeaker released over the past three
decades. You can consider the RS100 a building-block for a whole-house system: Up to 16
RS100s can connect to the same Wi-Fi network, and two can be coupled to create stereo
pairs (for a total of 8 rooms of stereo sound).
Visual Appeal: A lacquered black cabinet is
par for the course with audio components,
but pretty much the only thing youll notice
when the speaker is playing is the mesmerizing dance of the glowing blue metera
McIntosh signature.
Wireless intelligence: Rather than relying on
Bluetooth or Airplay, the RS100 uses an upand-coming streaming technology known as
Play-Fi, which has apps for iOS, Android and
Windows and can handle hi-res audio streams.
$1,000, available in March, mcintoshlabs.com
THE STORY IS
JUST THE START
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ILLUSTRATION BY PHILIP WRIGGLESWORTH, MARKO METZINGER FOR THE WALL STREET JOURNAL, STYLING BY ANNE CARDENAS (SPEAKERS)
The most respected names in

audio are making petite,
all-in-one wireless speakers that just
might blow you away
OFF DUTY
RUMBLE SEAT: DAN NEIL
YOU PROBABLY HAVE a driveway

to shovel so Ill get right to the
point: The 2016 Mazda CX-3 is my
new favorite among the slew of
minicrossovers with available allwheel drive. That includes Chevy
Trax, Nissan Juke, Mini Clubman,
Jeep Renegade, Honda HR-V, Buick
Encore, Fiat 500X. Now take your
baby aspirin, grab your shovel and
get out there.
A few of these cars Ive yet to
drive, actually, but I think the CX-3
wins regardless, since its design
best shakes off the oppression of
The Small. The other cars designs
revel too much in their own daintiness. The term Mini says it all,
doesnt it? Ditto the pocket-size
poetry of Trax and Juke.
And, look, I apologize for the
micro-aggression of my heteronormative Boomerism, but, you know,
Im a dude. Driving some of these
cars makes me feel like Im wearing a pretty bow in my hair.
Compared with the baby-faced
Fiat 500X, the CX-3 looks like it
should be arguing before the Supreme Court. With a larger vehicles rakishness writ smallparticularly the generous axle-to-dash
distancethe CX-3 projects a light,
lambent sophistication, fine line,
quiet smarts and a refreshing absence of cute.
Radical, its not. Its a steelbodied, five-seat hatchback with
front or all-wheel drive, leveraged
on the Mazda2 platform, sharing
some ortho with the Mazda3 and
AWD bits with the compact crossover CX-5. Nothing unusual about
that. Its got MacPherson strut
front whatever and torsion-beam
rear. When it comes to this end of
the market, all manufacturers are
pursuing the same ends with the
same means. It turns out to be
a swimsuit competition.
The CX-3s charms lie mostly
in its segment-climbing detail and
execution. A generous, polished
metal bezel surrounds CX-3s upright grille and flows into the
MAZDA
Mazda CX-3: Finally, a Seductive Minicrossover
CUTE, ITS NOT The Mazda CX-3 avoids the design pitfalls of its category, with a rakishness and sophistication more typical of larger vehicles.
heavy-lidded LED headlamps.
Mazda watchers know the company wandered in the grille design
wilderness for ages; the new escutcheon, with seven horizontal
chrome pinstripes and the floating
Mazda crest, finally coheres.
You may notice this car seems
to have been working its abs.
Metallic spars catch light at the
rocker panels and pinch the composition at the waist. The CX-3s
2016 MAZDA CX-3 GRAND TOURING AWD

Base price: $26,240
Price, as tested: $29,690
Powertrain: Naturally aspirated direct-injection 2.0-liter in-line fourcylinder with variable valve timing;
six-speed automatic transmission;
front-wheel drive/on-demand AWD/
full-time all-wheel drive.
Horsepower/torque: 146 hp at
6,000 rpm/146 pound-feet at

2,800 rpm
Length/weight: 168.3 inches/2,952
pounds
Wheelbase: 101.2 inches
0-60 mph: 8.6 seconds
EPA fuel economy: 27/32/29 mpg,
city/highway/combined
Cargo capacity: 12 cubic feet
lower edges and wheel arches are

otherwise dipped in black composite and that, combined with the
fast roof line and 18-inch wheels,
gives the CX-3 a little more stance
and swagger, a little more than
your expected helping of huevos.
The nose-to-tail form language,
in broad strokes, is what Mazda
calls Kodo, or Soul of Motion,
which is a bit of an eye-roller, but
still, its not just about creased
sheet metal.
Delivering the hydraulic flow of
Kodo required massaging some
hard engineering points in the
structure, stealing a few centimeters here and there to lengthen the
hood, lower the scuttle and deepen
the windshield rake. Those are bigkid styling cues.
Speaking of kids, CX-3 buyers
better not have them, or at least
not infants or toddlers. With all
the ski-slope drama of the curved
roof and squinting greenhouse,
there is little space for a stroller in
the back (the rear seatbacks do
fold down). Trying to get kids into
car seats in the CX-3s rear cabin
would be grounds for charges.
Mazda has a lot of branded intellectual property, come to think
of it. Another bit of fairy dust it
sprinkles over the engineering is
what it calls Skyactiv (here forward imagine engineers shouting
it in unison during morning exercisesSky-ACTIV!). The term is
to convey an ethos of holistic efficiency in the service of clean skies.
For instance, the CX-3s Skyactiv
unit-body is made light with significant percentage of high-strength
steel (63%, where the industry
average currently hovers around

50%). The AWD version tips the
scales at a bantam-esque 2,952
pounds, says Mazda. Meanwhile,
the company expects full marks
from the relevant crash-testing authorities. And if not, there will be
a lot of trouble for somebody back
in Hiroshima.
The other cars designs

revel too much in
their own daintiness.
The term Mini says
it all, doesnt it?
The CX-3s direct-injection 2.0liter four does a little Skyactiv
dance too, able to switch between
Otto combustion cycle (during periods of high engine demand) to
a leaner, less powerful Atkinson
cycle during periods of lower demand. This isnt a feature that is in
any way gratifying, away from the
gas pump. Our fully loaded CX-3
Grand Touring AWD rates at 27/32
mpg, city/highway, or weighted average of 29 mpg combined.
In faith, the CX-3 isnt the most
rabbit-y and urgent-feeling of the
micro-utes. For the sake of efficiency, Mazda held the engine to
a modest 146 hp and 146 pound-feet
of torque. Especially at interstate
speeds the CX-3 can have moments
of furious futility under throttle.
But what power there is in the
CX-3, I must say, is nicely focused
and easily exploited. The electri-
cally assisted steering is wakeful

and tender, and the CX-3 feels eager to get up on its toes and dance
around. In midspeed cornering, the
CX-3 lays out effortlessly. Sure, its
heavier in the nose, but not noseheavy. It is easily be provoked into
tire-sliding understeer but it just
as happily drives through it. These
are fun cars to drive.
The architecture of the AWD
system is straightforward: a front
power takeoff connected via prop
shaft to a small rear mechanical
differential between the rear
wheels. Heres where it gets tricky:
The Mazda AWD system engages
automatically and distributes
torque based on 27 parameters,
from climate to whether the windshield wipers and fog lights are on.
Mazda calls the system predictive,
but it isnt, exactly. I prefer the
word prophylactic.
AWD or no, there isnt a whole
lot of ground clearance, so on
snowy secondary roads the little
bugger might fetch up on ruts.
Low, lovely, and luxurious: Our
tester, as per media fleet practice,
was a fully optioned Grand Touring
AWD edition, with standard Bluetooth, heated leather front seats,
18-inch alloys, moonroof, smart
LED headlamps, navi and Bose
sound system.
The car also showcased
Mazdas drivers assistance package, including smart braking,
adaptive cruise control and automatic headlamps ($1,920). That
brought the total for our precocious mini-ute to a fair sounding
$29,690. Proof that small things
come in good packages.
MY TECH ESSENTIALS
The host of CNBCs Jay Lenos Garage

on 3-D printing, hand-winding watches
and TiVoing The Tonight Show
There are no longer

any junk yards to
find parts for cars
that are 100 years
oldtheyve all become recycling centersso a tool that
has become invaluable is the 3-D
printer. I have two of
thema Fortus 250mc and 400mc. With
3-D printing, you can copy and make almost
any automotive part you need. Ive got
a bunch of steam cars from the turn of
the century. We can make our own pistons
and connecting rods using the printers.
Theres nothing I enjoy more

than hand-winding a watch
before I go to bed. I love the
feel of the crown wheel.
I love the way that it ticks
along. I have a nice JaegerLeCoultre.
Before I go to
bed, I turn that
crown wheel,
and each click
is definitive.
Theres a great
satisfaction in
winding that
watch.
Some of my motorcycles are 100

years old, and they dont have speedometers on them. So I have a speedometer app called MotoSpeed on my
Apple Watch that I can look at while
Im driving down the road and go, Oh, Im doing
60. I shouldnt be doing 60 on this thing.
I use my iPad to take pictures while disassembling

vehiclesa picture every time I take something off.
Theres nothing worse than fixing something and
having a bunch of parts left over and going, Uh oh,
where do these go?
Ill watch some of the

late-night shows, like
Jimmys (Fallon) monologue. But I TiVo it so I can
speed through the commercials.
Thirty-second commercials are so
good now, they feel like 2-minute
commercials. When you have five in
a row, its like, Geez, how long is
this? Edited from an interview
by Chris Kornelis
GETTY IMAGES (FALLON); ALAMY (FORD)
JAY LENO
I have 117 motorcycles and about 140 cars. My first car was
a 1934 Ford pickup truck. Id like to track it down. I know
its somewhere in New England. The last vehicle that
I acquired was a 1918 Pierce Arrow Model 66. Im always
amazed when I meet young people who couldnt care less
about having a drivers license. To me, deduct the first 16
years, they dont even count. You have to understand,
the car, for my generation, was the iPhone of the day.
HOMES
MARKETS
PEOPLE
MANSION
UPKEEP
VALUES
NEIGHBORHOODS
REDOS
Ralph Monroe on annexation by Miami
SALES
FIXTURES
BROKERS
ALEXIA FODERE FOR THE WALL STREET JOURNAL
Coconut Grove was swallowed,

willy-nilly, like a trout by a bass.
IN LIVING COLOR Sandy Dufay with dogs Chacha and Bentley at her 1928 waterfront villa, which is on the market for $3.795 million. Ms. Dufay, who is renovating a newer home a few blocks away, is
hoping the buyer will keep her home intact; many vintage homes on valuable waterfront lots are dwindling as developers tear them down to build larger spreads to maximize the return.
COCONUT GROVE GETS GLAM

The groovy Miami enclave is now commanding some of the highest prices in the city,
and billionaires have moved in. Will the village be able to hang onto its hippie roots?
BY STEFANOS CHEN
PEACOCKS AMBLE down the side streets. The
vegetation has an overgrown, junglelike quality.
Hippies once camped out here in vacant lots and
public parks. And Coconut GroveMiamis groovy,
Birkenstock-loving villageis now commanding
some of the highest prices in the city, competing
with slicker neighbors like Miami Beach.
With tight inventory and a spate of ambitious
condo projects, the Grove has attracted a number of high profile residents in recent years, in-
cluding actor Christian Slater, megadeveloper

Jorge Prez, Miami Heat coach Erik Spoelstra
and health-care tycoon Mike Fernandez, according to public records and real-estate agents.
Prices for some units in Park Groves underconstruction towers are expected to top $1,900
a square foota city of Miami record. Coconut
Groves priciest home, a historic estate listed for
$47.5 million, is likely to be torn down as the
value really lies in its 6.9 acres, agents say.
It could be a challenge for the subtropical enclave, known for its wild flora, to keep its hippie
roots intact. Sandy Dufay, a retired health-care
company founder, is selling her 1928 waterfront

villa for $3.795 million, as shes conducting the
renovation of a newer home a few blocks away.
Listing agent Mercedes Hernandez with Avatar Real Estate Services says homes on valuable
waterfront lots, like Ms. Dufays, are dwindling
because developers are tearing them down to
build larger modern spreads that maximize their
return. Down the block, a home on a similar lot
was demolished to create a 9,800-square-foot
spec house listed for almost $8 millionmore
than double the price of Ms. Dufays home.
Please turn to page W14
VACATION-HOME DEALS FOR THE INTREPID
HOUSE
OF THE DAY
wsj.com/houseoftheday
There are bargains to be had on luxury houses in Thailand, Bali and Malaysiabut also some risks.
FAMILY RETREAT Swiss financial adviser Martin Lack, above, with his wife, Lindsay, and daughters, Olivia and Bailey, bought this
two-story Bali home last January.
SAVILLS
United Kingdom
A Windsor home,
lovingly restored
CORCORAN GROUP
HOUSE HUNTERS dreaming

of a villa on the white-sand
beaches of Thailand or Bali
can find significant bargains,
thanks to wild currency dips
in Southeast Asia over the
past year. But investing in
these properties can mean
stomaching some risks.
In Thailand, property is
now 10% to 15% less expensive than it was at the beginning of 2015, partly due to
the depreciation of the Thai
baht, according to real-estate
agency Engel & Vlkers
Phuket. Since May 2014, the
Thai baht has tumbled 10.5%
against the U.S. dollar.
Some luxury buyers are
taking notice. Barry King,
managing director at Prime
Real Estate Phuket, says that
thanks to price declines on inland villas, he sold about 20%
more properties priced at $3
million or more in the past
year, though he didnt disclose
the number of homes sold.
But many potential buyers
are taking a wait-and-see approach. Andrew Hunter, managing director at Hunter Sothebys International Realty in
Phuket, says inquiries about
properties priced above $2
Please turn to page W13
United States
A Brooklyn loft, listed
for $4.25 million
IMAGE FACTORY
MARIO JUANITO REYNALDI FOR THE WALL STREET JOURNAL (3)
BY ANJIE ZHENG
Australia
A farmhouse on the
Mornington Peninsula
MANSION
INSIDE STORY
A Maestros Private Symphony Space
In Helsinki, a conductor and his partner choose an unusual home in a courtyard; playing piano at 1 a.m.
BY J.S. MARCUS
HELSINKI HAVEN 1. Finnish conductor Hannu Lintu in his late-19th-century home, with Shurik, a Russian rescue dog.
2. The conductors piano and scores are in the second-floor study. 3. The living room features lively colors and an exposed-brick ceiling. 4. The sauna. 5. The kitchen. 6. The 2,150-square-foot home is in the hipster enclave of Punavuori.
KRISTA KELTANEN FOR THE WALL STREET JOURNAL (6)
THE ONCE BARE-BONES structure, hidden in a courtyard behind

an upscale apartment building in
Helsinki, Finland, was likely used
in the past to shelter horses and
store coal.
But Finnish conductor Hannu
Lintu and his partner, businessschool professor Pekka Mattila,
saw the spot as a luxury refuge.
They paid 1.2 million, or about
$1.3 million, for the space.
Early last year, the couple gave
up their high-end rental in the
Kaivopuisto neighborhood, which
hosts many embassies, to buy the
cavernous carriage house in the
hipster enclave of Punavuori, behind the tree-lined, tram-traveled
Bulevardi.
They were able to negotiate on
the sales price somewhat because
this is weird, says Mr. Lintu, referring to the placement of the
structure. The sellers were a family in western Finland who had
been using it as a pied--terre and
makeshift office.
In this city, says Mr. Lintu, if
you pay 1.5 million or 2 million,
you want a sea view.
The couple does without such
views, and a limited amount of
natural light on the ground floor,
but feel rewarded by the quietness
and privacy that only an entire
house can offer.
The three-story, 2,150-squarefoot structure, dating back to the
late 19th century, would have been
used to service the lavish apartments in frontlikely providing
residents with stables, coal and a
staffed kitchen.
The previous owners had a
three-bedroom configuration. The
couple knocked down a bedroom
wall to create a big second-floor
study, and converted a smaller
bedroom into a walk-in closet.
Now the home is a spacious onebedroom, with two full bathrooms,
two powder rooms and a sauna.
The soaring ground-floor ceilings provide ample space for the
couples extensive library, and the
study allows room for the babygrand piano and many musical
scores belonging to Mr. Lintu, the
47-year-old chief conductor of Helsinkis Finnish Radio Symphony
Orchestra. Prof. Mattila, 37, is on
the marketing faculty of greater
Helsinkis Aalto University.
Cities such as New York and
London have often preserved their
old carriage houses as exclusive
residences. But in pragmatic Helsinki such structures were typically treated as obsolete after
World War II and so were torn
down before they could be transformed into modern homes.

In the couples previous apartment in a 19th-century building
shared with the Turkish Embassy,
Mr. Lintu had to forgo late-night
music making in deference to Finlands residential rule that restricts apartment noise after 10
p.m.
Now, he says, referring to his
1 or 2 a.m. bedtimes, I can play
the piano whenever I want. He
adds: I hadnt realized how much
I missed that.
The two men have busy schedules and travel extensivelyMr.
Lintus recent engagements have
included appearances with the
Cleveland Orchestra, the Baltimore
Symphony Orchestra and Tokyos
New Japan Philharmonic. Arranging a moving date took some precise planning. After choosing a
January day last year, and setting
aside two weeks, the couple had to
postpone the move until March. A
leaky radiator had caused some
ground-floor water damage.
They condensed the unpacking
and arranging to a matter of days,
then took a few more months to
settle in. A decade-old renovation
by the previous owners, who were
seldom there, meant that little
work needed to be done by the
new owners. By July, says Mr.
Lintu, it felt like home.
He says plans for entertaining
prodded the couple to get things
done. It helps to invite people
right after a move, he adds.
The hardest part of the move,
he says, was dealing with all the
books and musical scores. Mr.
Lintu insisted on packing his fragile scores himself. The couple was
able to take along the living
rooms massive bookshelves, but
they bought a new Italian sofa for
the second-floor studynow Mr.
Lintus go-to spot.
Unlike many other Finnish
homeowners, who are drawn to
the cool white look of Nordic minimalism, the couple prefer something livelier.
I have never been a huge
friend of the simple Scandinavian
style, Mr. Lintu says. I have seen
beautiful places like that, but I
need to have colors. The interior
features bold rugs bought in Marrakesh and color-rich art.
Right now, the couple is content
with two floors, but they have
their eye on the unused attic. The
third floor is interesting, Mr.
Lintu says, but we havent decided what do to with it.
One day, we may want to build
an entirely new study there, he
adds. Or we may just put in a
cross-trainer.
RELATIVE VALUES | SARAH TILTON
LOOK AT THE SUNNY SIDE

ONE SOTHEBYS INTERNATIONAL REALTY (3)
L-R: DAVID MOORE (3); PARTNERS TRUST (3)
Three homes in balmy locales where the notion of snow boots and tire chains elicits chuckles
$53 million
Miami Beach, Fla.

Four bedrooms, five full baths, two half-baths
This beachfront, ninth-floor penthouse measures 6,807 square
feet and has balconies on the east and west sides. On the 10th
floor is a private pool and roof deck with a bar, lounge, barbecue
area and garden. The unit has ocean and city views, and is being
sold fully furnished.
Agent: Jorge Uribe of One Sothebys International Realty
$7.89 million
$18.95 million
Honolulu
Four bedrooms, six full baths, two half-baths
Malibu, Calif.
Five bedrooms, six full baths, two half-baths
This 9,123-square-foot home has ocean and Diamond Head views.

The house includes two master suites, a billiards room with a bar
and a yoga room. The spa room has a steam shower and a dry
sauna. The outdoor space has a pool, lounge and putting green.
Agents: Kai McDurmin and Douglas Shanefield of Coldwell Banker
Pacific Properties
This roughly 8,000-square-foot home sits on more than 4.2

acres in a gated community. A 2,500-square-foot master suite
opens onto a 1,500-square-foot terrace. The home also has a theater with a a wet bar. The pool looks out at the ocean.
Agents: Katie Bentzen and Sarah Kosasky of Partners Trust;
Rommy Shy of Royalty Realty
Exceptional New York Homes
MANSION 25-FOOT WIDE
$35M
57 E 64th St. Limestone mansion 25-wide, by CPH Gilbert grand

rooms, abundant light, high ceilings, elevator on 7 levels, sculptural
staircases with leaded glass skylights, best deal. WEB# 3465797
Branko Vujanic (m) 917.406.5588
MINT UPPER EAST SIDE MANSION
$29.5M
STYLISH FOUR-BEDROOM CONDO
$5.4M
E 70s/2nd. 10ceilings, 3.5 baths, top-of-the-line chefs eat-in kitchen.

Sun ooded, and in excellent condition. Unobstructed views. Full
service luxury building with top amenities. WEB# 3509968
Sharon E. Baum 212.836.1036
3
3-4 BEDROOM CONDO
W 53rd St. Located in the heart of midtown, on the 23rd oor of the
renowned Museum Tower, enjoy spectacular city views from this south
and east facing corner apartment. WEB# 3588437
Sara Gelbard 212.242.9941, Paul Kolbusz 212.500.7026
LEGENDARY PRASADA
Central Park West. Breathtaking cityscape and Central Park views

from this stunning triple-mint 3-4 bedroom condo on Central Park
West. This apt has it all and is truly one of a kind. WEB# 3532232
Meghan Kelly Gefaell 212.937.7012
Central Park West. Coveted address on Central Park West. Five

to six bedrooms, 4 baths plus plenty of living space. Double living
room, paneled dining room both with decorative replace. Views,
location and white-glove service. WEB# 3504065
Rose Ann Nielsen 212.875.2974
1
CLASSIC PREWAR ELEGANCE
$12.75M
5th Ave. Grand 3,400 square feet+/-, prewar 3 bedroom/4 bath coop with 66 linear feet directly on CP, living room with wood burning
replace, formal DR, library, eat-in kitchen, staff room, thru-wall air
conditioning. Pets OK, fully staffed building. WEB# 3533794
John Gasdaska 212.821.9138, Jonathan Conlon 212.508.7162
ULTRA CHIC PLAZA LIVING
$10.9M
1 Central Park South. Triple mint 2 bedroom/2.5 bath at the highly

sought after Plaza Residences. High ceiling with sun-ooded
eastern views over Fifth Avenue and top-of-the-line chefs kitchen.
Elegant and private master suite. WEB# 3414445
Leighton Candler 212.937.6677
3-4 BEDROOM WITH VIEWS
BEST PRICED UES 3 BR/3 BATH CONDO
$4.795M
$4.495M
E 66th St. Sunny high oor, triple mint, three bedroom/three bath,
2,285 square feet condo the Manhattan House, two balconies, east,
west, north exposure, ample closet space. WEB# 3493704
Marie-Claire Gladstone (m) 917.664.8157
TRIPLE-MINT TOWNHOUSE
$4.25M
240 W 121st St. Renovated to perfection. This townhouse features

4 bedrooms, 3.5 baths plus an ofce, terrace, 6 replaces, central
heat/air and a fantastic garden. This is truly a unique home located
on Harlems best block. WEB# 3531097
Fabienne Lecole (m) 917.405.6336
LUXURIOUS THREE BEDROOM CONDO
$3.45M
E 76th St. Sun ooded 3 bedroom/3 bath on high oor, open city
views south, east and north, huge Master bedroom with ensuite bath,
W/D. Full service white-glove condo with gym. WEB# 3610806
Michael Spodek 212.323.3232
GRACIOUS PARK AVENUE CLASSIC SIX
PENTHOUSE WITH VIEWS
$2,219,500
South East Ave. Incredible triple mint penthouse home that just
underwent an extensive renovation done to perfection. This 2 BR,
2.5 bath condo features spectacular views of the New York City
Harbor and the Statue of Liberty. WEB# 3531101
$4.99M
E 60s off Madison Ave. Sun-ooded, newly renovated mansion

encompassing over 9,600 square feet with four outdoor spaces,
grand proportions & top-of-the-line nishes including Christopher
Peacock kitchen and Clive Christian cabinetry. WEB# 3481008
$11.5M
STUNNING
$2.175M
E 75th St. Beautifully designed home featuring an entrance gallery,

grand living room, corner master bedroom, stunning library/dining
room, powder room, sunny kitchen with washer/dryer. Full service
white-glove prewar, gym, storage. WEB# 3441918
Abby Levine 212.836.1011
PENTHOUSE DUPLEX MINT
$2.15M
E 86th St. Mint condition three bedrooms, three baths, dining room,
windowed kitchen, thru wall air conditioning, large picture windows,
great views, two spacious terraces. WEB# 3479642
Edith Salton 212.360.6765, Kerry Martin Verille 212.360.2299
TWO BEDROOM/TWO BATH
$1.895M
E 70th St. Pied--terre perfect and sunny south facing home with
tree-lined townhouse views. Located across from the Frick and a
half block to Central Park, it doesnt get better than this. Pied-terres welcome. No nancing. WEB# 3604079
Linda Feder 212.605.9292
8
LUXURY AT THE VENETO
$1.395M
E 53rd St. Glamorous, sun lled 1 bedroom, 1.5 bath residence with
oor-to-ceiling UV protected windows, high-end kitchen, powder
room, washer/dryer, and mahogany oors. Full service with gym,
lounge with garden, valet parking. WEB# 3532511
Michael Spodek 212.323.3232
$3.375M
Park/70th. Sun ooded home in excellent condition. Living room,

dining room, 2 bedrooms, 3.5 baths, windowed eat-in kitchen with
top appliances, staff room, washer/dryer. Full service postwar coop with gym, pet-friendly. WEB# 3514359
Sharon E. Baum 212.836.1036
SUNNY PREWAR EIGHT-ROOM ESTATE
CHARMING UPPER EAST SIDE TOWNHOUSE
$9.9M
E 80th and Madison Ave. Sun ooded 5-story townhouse. Perfect

proportions, lovely entertaining spaces with renovated kitchen.
5 bedrooms plus private master oor with library and renovated
bath. Separate grand oor apartment. WEB# 3483006
EXQUISITELY RENOVATED
$7.999M
West Village. Downtown luxury living at Morton Square with four

bedrooms and four full baths. Excellent light & generous proportions in
an enviable location with exceptional amenities. WEB# 3436038
Dennis Margulies 212.444.7881
PREMIER PARK AVENUE
$6.75M
Park Ave. 4 bedrooms plus 2 staff rooms/4 baths. Incredible layout

with direct Park Avenue views, white glove co-op. 4 exposures, high
ceilings, central air, washer/dryer, grand rooms, oversized windows,
original prewar details. WEB# 3512198
Elizabeth Sahlman/Liora Yalof 212.323.3241
2
$3.295M
E 63rd St. Beautiful classic eight-room home in a top prewar cooperative

building just steps off Park Avenue with high ceilings and hardwood
oors. South-facing and bright. 3-4 bedrooms. WEB#3532085
Meghan Kelly Gefaell 212.937.7012
SUPERB 3 BR/3.5 BTH AT HUYS SPONSOR UNIT
$6.35M
Park Ave. Designed by Piet Boon, this 3 BR/3.5 bth home offers dramatic
11.5 ceilings with south and west exposure, loggia and W/D. Full service
building with rooftop, gym, rec room, media room. WEB# 3534026
Maria Pashby (m) 917.520.0592, 404 PAS Sales Gallery 212.725.0404
MINT 1-5 BRS AT THE CHATSWORTH
BEST CONDO ON UPPER WEST
$2.89M
LOFTY, LIGHT AND LOVELY
$1.025M
W 76th St & Broadway. Impeccable 14th oor 2 bedrooms, 2 baths,

1,321 SF (123m2) in the premier Laureate Condominium, sunny
south east exposure and 10-foot ceilings. WEB# 3465673
Alexander Pisa 212.572.3178
W 42nd St. Sprawling live work one bedroom loft in the full service
Armory offers comfort, luxury and lenient sublet policy, too.
Maintenance 62% deductible. WEB# 3492105
Jodie Garay 212.941.2622
FULL PARK VIEWS
LOFT LIKE A ONE BEDROOM
$2.795M
Fifth Ave. Incredible Park views from every window in this triple
mint split 2 bedroom/2 bath Robert Stern Condominium with open
chefs kitchen. The building is full service, with roof top spectacular
pool, all amenities. Very unique. WEB# 3506734
6
1025 FIFTH AVENUE 3EN
$2.4M
$950K
LIC/27-28 Thomson Ave. 1920 building with full amenities. This

loft has a separate sleeping area. Great lights and very good
closet space. Washer/dryer in apartment. Swimming pool, 24 hour
doorman. Not to be missed. WEB# 3528094
Hanifa Scully 212.875.2859
SUN FLOODED LARGE ONE BEDROOM
$845K
UES. In top notch condition this sophisticated, smartly laid out

2 bedroom, 2 bath has excellent proportions and a wonderful
expanse of living space. A terric offering that makes it leisurely to
experience a ne standard of full service living. WEB# 3505877
Stefania Cardinali (m) 516.443.0171
Harlem/117 W 123rd St. Very large one bedroom, sun-lled condo

featuring a private terrace, oversized living room, high ceilings,
huge thermal windows and abundant closets. WEB# 3490780
SKY HIGH TRUMP PLACE PENTHOUSE
LIC/27-28 Thomson Ave. Rarely available and will t perfectly a

music studio or a Photographer. The space has no window. Located
in 1920 building with 24 hour doorman and great location for
subways. Flexible showing. WEB# 3531839
Hanifa Scully 212.875.2859
$2.395M
Riverside Boulevard. Top oor corner penthouse with stunning

skyline and river views. Great investment or home. Extra-large
2 bedroom/2 bath with 11 ceilings, oor-to-ceiling windows, chefs
kitchen, spa-like baths, hardwood oors. WEB# 3496624
Ellen Raines Martin (m) 917.734.7525, Flora Resnick 212.937.6718
$5.7M
ARTIST STUDIO
SPECTACULAR VIEW ONE BEDROOM
$350K
$4,000/MO.
UWS. New development - magnicent homes at 344 W 72 St with

RSD Park at your front door. Designed by Pembrooke and Ives. Coffered
ceilings, herringbone oors, W/D and custom cabinetry. Low monthly
fees. F/S bldg with superb amenities. *CD# 13-0004 WEB# 3402954
Maria Pashby (m) 917.520.0592, Joanna Pashby (m) 917.623.9123
Park Ave. Sun-ooded, renovated, hi-oor corner 2 bedroom/2 bath

home at iconic Ritz Tower. White glove building with hotel services,
tness center and party room. WEB# 3511503
Maria Pashby 917.520.0592, Joanna Pashby 212.893.1442
Murray Hill/E 38th St. Spectacular south panoramic view, one

bedroom/one bath condo with balcony, lots of closets, new stainless
steel appliances, washer/dryer, white oak parquet oors, pool and
gym. Pets OK. WEB# 3529775
Branko Vujanic (m) 917.406.5588
FOLLOW THE CORCORAN GROUP
HI-FLOOR SUN-FLOODED 2 BR AT RITZ TOWER $2.25M
A name doesnt define a company. The people do.

Be part of a company that believes people are greater than numbers.
CO R CO R AN. CO M/BEGR EA TER
Real estate agents afliated with The Corcoran Group are independent contractor sales associates and are not employees of The Corcoran Group. Equal Housing Opportunity. The Corcoran Group is a licensed real estate broker located at 660 Madison Ave, NY, NY 10065. All listing phone numbers indicate
listing agent direct line unless otherwise noted. All information furnished regarding property for sale or rent or regarding nancing is from sources deemed reliable, but Corcoran makes no warranty or representation as to the accuracy thereof. All property information is presented subject to errors, omissions,
price changes, changed property conditions, and withdrawal of the property from the market, without notice. All dimensions provided are approximate. To obtain exact dimensions, Corcoran advises you to hire a qualied architect or engineer.
MANSION
HOUSE CALL | UTE LEMPER
A German Performers Cold War Childhood

The actress, singer and composer looks back at a divided family and her passion for the unusual
In the 1960s, when I

grew up in Mnster,
Germany, the city was
still recovering from
World War II and coping with the Cold War.
Everyone was expected to conform to a rigid standard of normalcy, but I resisted. I had feelings,
dreams and passions, making it hard
to fit in. I escaped through music.
My family lived in a nine-family
apartment building on the outskirts
of Mnster. It was a drab, low-income complex built in the 1950s,
and we lived in a small apartment
on the second floor. I shared a room
with my older brother, Martin.
My parents didnt own a car
until 1975. The city had a bicycle
culture, and my father, Josef,
biked to his banking job and my
mother, Elfriede, rode her bike to
the market.
The entire old city of Mnster
had been leveled in the last
months of the war. Five years
later, it was rebuilt to match its
original gothic beauty, but there
were plenty of anonymous modern
buildings that went up as well.
The 1960s and 70s were frightening years. The Cold War was on
and the East German border was
sealed with metal fences and
minefields, and guarded by Soviet
and East German troops. My
mother had aunts and cousins
trapped on the other side.
Each year, my mother would
send care packages of food and
sweets to her family. In 1975, when
I was 12, we drove to see them.
Our first stop was Helmstedt,
where the 110-mile highway to
IN TUNE Ute Lemper in her Manhattan apartment, left, and in Mnster, Germany, around 1969, above.
FROM LEFT: CHRIS SORENSEN FOR THE WALL STREET JOURNAL; UTE LEMPER
Berlin began. The highway didnt

have exits and the scenery along
the way was lifeless.
In West Berlin, we crossed over
to East Berlin, where we were reminded that we had to be out before 8 p.m. On the other side, I
was shocked. There was no color,
no ads and no supermarkets. The
buildings were still damaged from
the war with no restoration or
care. Toilets were outside apartments and shared with neighbors.
Everyone stood in long lines in
front of the egg shop, the milk
shop or the butcher shop.
Still, there was plenty of fun and
laughter that day, followed by a
tearful goodbye. As we left East
Berlin that evening, we had to get
out of our car while guards unscrewed all seats and trunk panels
searching for people or items we
might be smuggling out. My father
was quite angry.
From an early age, music consumed me. Though my father was
a banker, he had the soul of a musician. He could play the piano,
guitar, violin and other instruments. My mother, who had a soprano opera voice, liked more conventional classical music. She
enjoyed singing operetta as my dad
accompanied her on piano. My
brother and I rolled our eyes and
listened to Pink Floyd.
I started taking ballet classes
when I was 6, and modern dance
and tap followed. When I was 13, I
sang with jazz groups, moving on

to rock bands when I was 16. I was
listening to pop music and R&B,
including Earth, Wind & Fire, Stevie Wonder and Joni Mitchell, but
the greats were Ella Fitzgerald and
Sarah Vaughan.
The music didnt have any of
our rigid German identity, and I
didnt understand half the words.
But I was completely inspired.
I left Mnster at 18 to study
drama in Vienna. I didnt have
much money, and my flat was
without heat. Id sleep in my coat
wearing gloves and a hat.
My first big break came in 1982,
when I won a part in the first international production of Cats.
I first came to New York in 1987.
I was invited to sing Kurt Weill at

Merkin Concert Hall. New York
took my breath away, and I came
back annually to perform.
Today, I live in a 10-story apartment building on New Yorks Upper West Side. I moved there in
1998 when I was on Broadway in
Chicago. I turned two apartments into a four-bedroom duplex,
so there would be plenty of space
for my four childrentwo with my
husband Todd Turkisher.
Years ago, I bought a one-bedroom on the top floor that allows
me to work undisturbed on my
composing. Its a haven, with a
roof terrace with hundreds of
plants. Its my little Tuscany.
As told to Marc Myers
Singer-actress Ute Lemper, 52, star
of the Broadway revival of Chicago, is best known for her interpretations of Kurt Weills work.
Her new album, with Paulo Coelho,
is 9 Secrets (Steinway & Sons).
ADVERTISEMENT
Distinctive Properties & Estates

UNITED STATES

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MANSION
SOUTHEAST ASIA VACATION-HOME DEALS
TROPICAL PARADISE A bungalow on Martin Lacks Bali property, above left;

the pool and garden, above; a Bali landscape, below.
Currency Crunch
How three Southeast Asian currencies
have performed against the U.S. dollar
since the start of 2015.
5%
0
MARIO JUANITO REYNALDI FOR THE WALL STREET JOURNAL (3)

million have risen in the past year
but actual sales have been soft.
Fears about political and economic instability are likely scaring
off buyers, agents say. Since the
May 2014 coup that removed democratically elected Prime Minister
Yingluck Shinawatra, Thailand has
been under military rule. The regime has tried to woo foreign investment, but the economy remains shaky.
Agents and analysts say the military junta hasnt created significant upheaval in the daily life of
Thailand, particularly on the island
of Phuket. The tourism sector has
benefited from the relative political calm since the military took
over, said Krystal Tan, Asia Economist at research firm Capital Economics. Tourist visits rose 19% in
2015 compared with the year earlier, despite a mid-August bombing
in Bangkok.
The number of wealthy Chinese
buyers in Southeast Asia, already
on the rise, could also pick up as
the weakened yuan and volatility in
the Chinese markets add pressure
on wealthy Chinese to get money
out of the country, analysts say.
Last January, Dominic Powers,
who is based in Hong Kong as the
managing director of marketing
firm Epsilon, bought a 6,000square-foot house north of Laguna,
Phuket. Mr. Powers, age 43, wanted
a place that he and his wife could
retire to and that his three daughters could call home.
He decided to fix the price in
Hong Kong dollars, because he
was not sure in January which
way the Thai baht would go. He
estimates that had he set the price
in baht, he would have saved the
equivalent of about 700,000 Hong
Kong dollars when he finally closed
on the house in September, due to
the bahts plunge in the intervening months. Mr. Powers said he
wasnt concerned about losing out
due to currency fluctuations, since
he was focused on finding a new
home for his family.
The Indonesian island of Bali, an-
5
10
15
Thai baht
Indonesian rupiah
Malaysian ringgit
20
25
2015
16
Source: Tullett Prebon
other popular vacation-home destination, saw an 11.3% drop in the Indonesian rupiah against the U.S.
dollar in the past year. A slowing Indonesian economy has also dragged
down the property market in the
commodity-rich nation. Dominique
Gallmann, CEO of Bali-based real-estate broker Exotiq Properties, says
the average sales price for the
agency has dropped to less than
$500,000 from $750,000 in 2014.
Luxury prices in South Bali dropped
an average of 15% to 25% by the end
of 2015, with the segment above $1
million suffering more than lower-
priced properties, he added.

Martin Lack bought a classic
two-story Balinese house of teak
wood on 1,400 square meters of
land last January, at what he said
was likely the peak of the market.
The Swiss financial adviser said he
and his American wife moved to
Bali full time two years ago, partly
because property in Hong Kong is
so outrageously expensive.
Mr. Lack, a former UBS banker,
pleaded guilty in 2014 to federal
charges of helping Americans evade
U.S. taxes by setting up Swiss bank
accounts. He was sentenced to five
years of probation by the Florida

Southern District Court.
After 30 years in banking, I just
opened a language school in Bali.
New life, new business, but the
same family and thats the most
important, Mr. Lack said of his life
in Bali. The Lacks bought the
house, the familys third in Bali,
because they needed a bigger
house. Mr. Lack said he didnt prioritize the currency exchange in
his decision to buy.
Mr. Lack said if he ever decided
to sell his house, it would be more
difficult because Balis economy has
been dragged down by the overall

Indonesian economy. The market is
quite lackluster. Buyers are probably
not as eager as before, he said.
Authorities have stepped up security on the island after recent attacks in Jakarta, which were linked
to Islamic State. Bali, which is majority Hindu rather than Muslim, is
over 700 miles away from the Indonesian capital. Earlier bombings in
2002 and 2005 on the island led to
steep drops in tourist arrivals.
No currency in the region performed as poorly as the Malaysian
ringgit in 2015, which fell over
22.7% against the U.S. dollar. For
foreign buyers, that has created
some opportunities in the luxury
housing market.
PropGoLuxury, an online luxury
real-estate platform, says there has
been a 45% spike in inquiries into
luxury Kuala Lumpur properties
this year, with the majority coming
from Singapore.
So far, however, agencies say
they havent seen a spike in purchases by foreign buyers. The government, to curb speculation,
raised the minimum amount for
foreign purchases of property to
MYR1 million ($237,316) in March
and banks tightened lending restrictions, making it more difficult
for buyers to obtain loans.
Foreigners may also be spooked
by the political climate, says Singapore-based property consultant
Khalil Adis. Malaysias anticorruption agency said Wednesday it
wants to review a decision by the
countrys top prosecutor clearing
Prime Minister Najib Razak of
wrongdoing regarding nearly $700
million transferred into the Prime
Ministers private bank account. Mr.
Najib has denied any wrongdoing.
Brokers say the slowdown in
sales presents a good buying opportunity, especially as new developments are going up. The number of
high-end condominiums priced
above 1,200 ringgit a square foot
will increase to 5,192 units in
Greater Kuala Lumpur at the end of
this year, estimates Savills Research,
compared with 2,216 units in 2014.
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Premier Sothebys International Realty

Michelle Thomas
Douglas Elliman
John Sandberg / Ann Nortmann
phone: 239.860.7176
phone: 305.586.7200 / 786.385.6977
email: michelle.thomas@sothebysrealty.com
To Advertise Call: +852-2831-2552
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cjangle@anglerealestate.com
MANSION
MIAMIS COCONUT GROVE GETS GLITZY

5 miles
MEET
THE
NEIGHBORS
5 km
Miami
Intl airport
M IAM I
Coconut Grove
South Beach
Atl an tic
O cean
CHRISTIAN
SLATER
Actor
JORGE PREZ
Developer, Related
Group
ERIK
SPOELSTRA
Miami Heat coach
VILLAGE SCENES The village of Coconut Grove contains about 20,000 people and predates the founding of Miami. An organic farmers
market, top; the barge and a statue at the Vizcaya Museum & Gardens, above left and right; the marina, middle right.
BLOOM IMAGES (RENDERING)
MIKE
FERNANDEZ
Founder, MBF
Healthcare
EMERSON
FITTIPALDI
Retired race
car driver
GOING UP A rendering of the Park Grove, a three-tower complex designed by Rem Koolhaas and his firm OMA. The first two towers
are mostly sold; the final, most expensive tower will have units ranging from a $4 million three-bedroom to an $8 million five-bedroom.
BERNARDO
FORT-BRESCIA
Architect
and co-founder,
Arquitectonica
ALEXIA FODERE FOR THE WALL STREET JOURNAL (9)

Theres hardly a street that
hasnt had something knocked
down for redevelopment, says
Ms. Dufay, who hopes her future
buyer will keep her home intact.
Located south of the downtown area, the 5.6-square-mile
village of about 20,000 people
predates the founding of Miami,
which annexed the area in 1925.
Unlike nearby Miami Beach, Coconut Grove has no sandy
beaches or direct oceanfront. In
the 1950s and 60s, beatniks and
hippies were nonetheless drawn
to the areas walkable core and
eclectic housing, and it has retained a bohemian spirit since,
according to Paul George, a professor at Miami Dade College.
Winding side streets and lush
vegetation recall an older Grove,
established by English and Bahamian settlers, where Mediterranean villas meet colorful timberframe conch houses. On some
blocks, you might spot a muster of
peacocks dawdling in the road.
Its different than the rest of
the cityit isnt manicured like
other neighborhoods, said Bernardo Fort-Brescia, the co-founder
of design firm Arquitectonica and
a longtime resident. He lives with
his family in a modern waterfront
home in a junglelike private community thick with trees.
Mr. Prez, the billionaire developer and founder of Related
Group, lives down the road in a
10,000-square-foot Venetian-style
palazzo. Nearby, according to records, is Jonathan Lewis, an investor and son of the late Progressive
Insurance chairman, Peter Lewis
as well as Carlos Migoya, the CEO
of Jackson Health System (and occasional tennis partner to Mr.
Prez, the developer says).
The spirit persists in the zoning
code, which forbids adjacent homes
to be exactly alike and mandates
that removal of historic trees, like
the villages prized banyans and
oaks, must be cleared by the city,
says Luciana Gonzalez, assistant director of planning and zoning.
When high-end retail and residential development picked up in
nearby Miami Beach and surrounding areas in the late 1990s, the
Grove was largely left out, said Peter Zalewski, founder of condo-data
company Cranespotters. The only
people you were left with were the
hippies, says Mr. Zalewski, who
adds that top-flight buyers looked
to beachfront communities.
That began to change in 2013
when sales started at the Grove at
Grand Bay, two towers designed by
Bjarke Ingels, who is now designing
New Yorks Two World Trade Center. Prices ranged from about $3
million to $9 million, with a roughly
14,000-square-foot penthouse asking $28 million. It was the first new
high-end condo project to hit the
Grove since about 2006 and all 98
units have sold, according to David
Martin, the president of the developer, Terra Group. The towers will
be finished in roughly eight months.
Now Terra Group, along with
Related Group, is building Park
Grove, the nearby three-tower
complex designed by architect
Rem Koolhaas and his firm OMA.
The first two towers will be completed around winter 2017, but 95%
of the units, priced from $600,000
to $5 million, have sold, said Pietro Belmonte of Douglas Elliman.
The final and most expensive
tower, slated for completion in
2018, will have 54 units ranging
from a $4 million three-bedroom
to an $8 million apartment with
five bedrooms, 6 baths and a
wraparound balcony. That translates to more than $1,900 a square
foot for some units. Relateds Mr.
Prez says he will personally curate a multimillion-dollar collection of contemporary art pieces
and installations for Park Grove,
including sculptures from Jaume
Plensa and Richard Serra.
Buyers include Mr. Fernandez,
founder of MBF Healthcare Partners, and Brazilian race car driver
Emerson Fittipaldi. Mr. Fittipaldi,
68, says he is moving his family,
HEADSHOTS FROM TOP: WIREIMAGE/GETTY IMAGES; ALEXIA FODERE FOR THE WALL STREET JOURNAL; ASSOCIATED PRESS; GETTY IMAGES (2); PATRICK MCMULLAN (3)
Biscayne
B ay
From actors
to athletes to
big CEOs, here
are some notable
residents of
Coconut Grove
TEAR DOWN? Sandy Dufays waterfront home, which is for salea home on a similar lot down the block was demolished to create a
large spec house. Clockwise from top left: the family room, living room, make-up room, pool, faux-painted ceilings and walls.
along with a collection of Grand
Prix race cars, from nearby Key Biscayne. He says he bought a 3,000square-foot unit for $4.5 million at
the new tower for the same reason
many locals will: top-rated schools
like Ransom Everglades, where tuition costs $34,550 a year.
Mr. Fernandez, 63, says he
bought a two-story, 5,000-squarefoot apartment with a private
pool, as well as a two-bedroom
unit for his daughter, for a total of
roughly $10 million. If I was 17, I
would probably go to South

Beach, he says. But Coconut
Grove has a maturity to it that is
[both] calm and exciting. He
plans to move from his current
residence in nearby Coral Gables.
The housing market has risen
rapidly in the past few years, says
Michael Light of Miami Luxury
Homes. For publicly listed condos
and homes, the median sales price
in the Grove was $675,000 in 2015,
up 17.5% from 2014. Last year, NBA
star LeBron James sold his roughly
12,000-square-foot home in the

Grove for $13.4 million, according to
public recordsone of the most expensive home sales in the village.
Nelson Gonzalez of EWM Realtors
is listing La Brisa, the 6.9-acre estate
with a circa 1920 mansion and over
200 feet of bay frontage. The only
interest so far has come from developers looking to bulldoze and subdivide the land, Mr. Gonzalez says.
Sometimes they go down so
fast, I forget what was there said
historian Arva Moore Parks about
CARLOS
MIGOYA
CEO, Jackson
Health System
JONATHAN
LEWIS
Investor
the surge of demolitions. She recently campaigned to prevent a

developer from leveling a historic
Mediterranean home. According to
the zoning department, there were
about 45 requests for residential
demolition in 2014, and most were
approved. In 2015, there were 70.
Mr. Fort-Brescia has a few
words of advice for newcomers
looking to change the village. You
cant let success take it over, because before you know it, were
just like everybody else.

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Deals for the Brave

FRIDAY - SUNDAY, JANUARY 29 - 31, 2016 ~ VOL. XL NO. 106

S&P 500 1879.51 g 0.18%

NIKKEI 17041.45 g 0.71%

STOXX 600 334.89 g 1.57%

OIL 33.02 2.23% GOLD 1115.70 g 0.01% EURO 1.0953 0.53%

Japans Economy Minister Resigns Over Political-Funds Scandal

Business & Finance

Chinese stocks have been

Money & Inv..... B5-8

China: RMB28.00; Hong Kong: HK$23.00;

s Copyright 2016 Dow Jones &

reas presidential office said

The e-commerce giant also

Japan hopes to join stealth

Heard on the Street: Alibaba

Seoul Warms to U.S. Shield

South Korea is leaning toward introducing an advanced

cently spoken with top South Terminal High Altitude Area

Poll Shows Trump Leading Africas Fight Against Boko Haram

states, said Lee M. Miringoff,

State Hillary Clinton and Sen.

At This Tennis Tourney, the Racket Is in the Cafe

(US$42), players and coaches stocked with sandwiches,

YAROSLAV TROFIMOV/THE WALL STREET JOURNAL

Oil prices rose on comments from Russias energy

DLR 118.73 0.04%

Alibaba Group Holding Ltd.

FRANCK ROBICHON/EUROPEAN PRESSPHOTO AGENCY

Samsungs profit declined 40% in a difficult

WAR-TORN: Boko Haram, Islamic States deadliest affiliate, is reacting

Health Agency Says

THE WALL STREET JOURNAL.

A2 | Friday - Sunday, January 29 - 31, 2016

Losing Land, Boko Haram Sends In Bombs

THE WALL STREET JOURNAL.

Paul Beckett, Asia Editor

victed from much of

communitys growing anxiety,

thorities welcomed WHOs announcement, saying Brazil and

rose 25%, boosted by improvements in its ability to increase

is fueled by consumption and

Printers: Hong Kong: Euron Limited, 2/F., Block 1,

NEED ASSISTANCE WITH

in some ways, more difficult

Zika is spread primarily by Aedes aegypti mosquitoes, above.

roma Bakary, who hails from

ver, rash, joint pain and conjunctivitis, or redness in the

gains, 17 times more than initially ordered by a judge. A

YAROSLAV TROFIMOV/THE WALL STREET JOURNAL

ing roadside bombs from U.S.

FELIPE DANA/ASSOCIATED PRESS

MIDDLE EAST CROSSROADS

we will have another suicide

Sources: company llings (revenue); WSJ Market Data Group (shares)

THE WALL STREET JOURNAL.

nior research analyst with

THE WALL STREET JOURNAL.

Friday - Sunday, January 29 - 31, 2016 | A3

Japan Unveils Stealth Fighter Prototype

NAGOYA, JapanJapan unveiled its first radar-evading

TOMOHIRO OHSUMI/BLOOMBERG NEWS