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THE BENEFITS OF
THE WALK-AND-TALK
DJIA 18325.07 À 1.32%
What’s
News
Business & Finance
T he selloff in govern-
ment bonds continued
to ripple through markets as
investors lowered expecta-
tions of future stimulus. A1
 Canadian fertilizer firms
Agrium and Potash agreed
to merge, creating a crop-
nutrient giant valued at
about $27 billion. B1
 A Fed governor urged
“prudence” in raising rates,
saying labor-market im-
provement hasn’t had the
desired effect on inflation. A7
 The Bank of England
listed the securities it can
buy in its corporate-bond-
buying program, including
many non-U.K. firms. B5
 Linde ended merger talks
with U.S. industrial-gas rival
Praxair because the German
firm feared losing key func-
tions in the combination. B1
 OPEC said oil output by
rivals is stronger than ex-
pected, resulting in a big-
ger petroleum glut than
previously forecast. B8
 The ECB published pro-
posals aimed at forcing eu-
rozone banks to tackle over
$1 trillion of bad debt. B5
 Some property funds in
Britain are reopening after
suspending trade in the
wake of the Brexit vote. B5
 Aberdeen was told to
bolster its capital buffer,
signaling greater scrutiny of
fund-management firms. B5
World-Wide
 Clinton will release addi-
tional medical records this
week after her campaign dis-
closed she had pneumonia
and after a video showed her
stumbling at an event. A1
 A cease-fire brokered by
the U.S. and Russia took ef-
fect in Syria, just hours after
Assad vowed to take back all
rebel-controlled territory. A3
 Cameron said he would
leave Parliament, ending
the former British prime
minister’s 15-year career
as a lawmaker. A5
 Two militants dressed
as doctors raided a hospi-
tal in Afghanistan, killing
at least one patient before
they were shot dead. A3
 The Philippine president
called for U.S. military ad-
visers to leave, saying
their presence makes them
a target for extremists. A4
 Japan’s defense minister
urged closer military cooper-
ation with Washington fol-
lowing accelerated missile
testing by North Korea. A4
 Suu Kyi will visit Obama
on Wednesday, affirming the
ex-dissident’s role as Myan-
mar’s de facto leader. A4
 South Sudan’s leaders
have moved millions of dol-
lars outside the country while
waging war, an NGO said. A3
 Austria will delay its pres-
idential vote due to a flaw in
some mail-in ballots. A5
CONTENTS
Arts & Ent............... A9
Business & Fin.. B1-4
Capital Journal...... A2
Crossword.............. A12
Finance & Mkts B5-8
Heard on Street.... B8
€3.20; CHF5.50; £2.00;
U.S. Military (Eur.) $2.20
s Copyright 2016 Dow Jones &
Company. All Rights Reserved
PERSONAL JOURNAL | A8
TUESDAY, SEPTEMBER 13, 2016 ~ VOL. XXXIV NO. 158
NASDAQ 5211.89 À 1.68% NIKKEI 16672.92 g 1.73%
Cease-Fire Takes Hold in War-Weary Syria
SAMEER AL-DOUMY/AGENCE FRANCE-PRESSE/GETTY IMAGES
QUIET MOMENT: A man and his son visited a cemetery in the Damascus suburb of Douma on
Monday. A U.S.-Russia brokered cease-fire took effect, with early reports of reduced violence. A3
China Rethinks Alliance
With a Reeling Venezuela
BY KEJAL VYAS
CARACAS—China spent
much of the past decade build-
ing a strategic alliance with
Venezuela, a country that sits
atop the world’s largest oil re-
serves and was led by a social-
ist president, the late Hugo
Chávez, who admired Mao Ze-
dong and wanted to counter
U.S. influence in Latin America.
These days, confronted with
a pile of unpaid bills and in-
creasing security headaches for
As a Team-Building Vehicle,
This Bus Is a Real Sleeper
i i
Executives hit the road in bunk beds, with
awkward moments; ‘Pass back to back’
BY RACHEL FEINTZEIG
UNIONDALE, N.Y.—A good
night’s sleep is something
John Pergolizzi promises oth-
ers as a vice president at mat-
tress retailer Sleepy’s. So he
wondered one evening this
summer just how he found
himself wedged into a 20-
inch-tall bunk
space on a bus
parked outside a
Marriott here on
Long Island.
Thoughts of a
Markets Digest..... B6
hotel room steps
away taunted
Opinion.............. A10-11
Personal Journal.. A8
him. “Is there a
king in there or a
Sports........................ A12
U.S. News.................. A7 queen?” he re-
Weather................... A12 called fantasiz-
World News........ A2-5
ing, speaking the next morn-
ing on the coach as it
lumbered toward New Jersey.
Executive travel often
means premium-class flying
and plush accommodations.
The executives of Mattress
Firm Holding Corp. and
Sleepy’s took a cozier business
trip together this summer, af-
ter Mattress Firm bought
Sleepy’s, spending nights
STOXX 600 342.23 g 0.95%
its citizens and companies in
Venezuela, China appears to be
recalculating its alliance with
the nation where it has made
about $60 billion in loans.
As a result, Venezuela might
not get meaningful fresh loans
or investment from China, rais-
ing the possibility of deeper cut-
backs and shortages in the oil-
rich nation or a default on more
than $110 billion in government
and state-oil-company bonds.
China’s envoy in Caracas
conveyed concerns over secu-
i
crammed onto a 45-foot bus
that sleeps 12.
The bunk-bed business bus
let them travel to nearly 20
stores, where they aimed to
rally employees and build ca-
maraderie among the com-
bined leadership teams. Bunk-
ing in a 450-square-foot space
alongside fellow executives
between stops,
though, created
awkwardness.
“You don’t
want to look
silly getting in,”
said Joi Falana,
Mattress Firm’s
development di-
rector for merg-
ers and acquisi-
tions, speaking
of her struggle to enter her
bottom berth. She finally
dived in stomach-down, then
rolled over. She had to text a
colleague for help getting out
of the sleeping area.
Cory Ludens, Mattress
Firm’s Vice President of Cul-
ture and Events, said he
learned to “spider monkey”
into a high bunk, crawling up
Please see BUS page A6
BRENT 48.32 À 0.65%
rity and Venezuela’s debt re-
payment during emergency
meetings held from April to
June with dozens of represen-
tatives from Chinese state com-
panies, according to four offi-
cials from Chinese companies.
“The consensus was that no
new money was going to be in-
vested,” said one of the officials.
“There was a clear message
Please see CHINA page A2
 Offshore yuan trade suggests
Beijing intervention................ B7
HEPATITIS C MEDICINES
FUEL U.S. PRISON CRISIS
Many inmates have the disease but only the sickest qualify for costly drugs
BY PETER LOFTUS AND GARY FIELDS
GRATERFORD, Pa.—David Maldonado, an
inmate at a Pennsylvania state prison, is one
of thousands of convicted criminals with
hepatitis C, an infectious disease that is one
of the country’s biggest killers. Powerful
new drugs on the market could help Mr.
Maldonado and cut the chances of it spread-
ing outside prison walls.
The medicines, however, are so expensive,
FEAR FOR THE
‘SAFEST’
INVESTMENTS
JAMES MACKINTOSH
MARKETS | B1
WSJ.com EUROPE EDITION
GOLD 1321.00 g 0.68% EURO 1.1230 g 0.04%
Policy Fears
Bring Higher
Bond Yields
BY CHRISTOPHER WHITTALL markets remained rattled.
AND MIKE BIRD The yield on the 10-year
German government bond
Bond markets are on the touched a high of 0.057% in
move again. the morning, according to
The selloff in government Tradeweb, and finished at
bonds that started last week 0.037%, its highest close since
continued to ripple through fi- late June when the U.K.’s vote
nancial markets on Monday as to leave the European Union
investors dialed back their ex- triggered a rush to safety. In
pectations of future central- Japan, yields on the 10-year
bank stimulus. government bond hovered just
Investors are now asking below zero, up from a low of
whether markets are on the minus-0.29% in late July. The
verge of another so-called yield on the 10-year U.S. Trea-
bond-market tantrum, in sury note was nearly un-
which yields rise sharply as changed at 1.671% late Mon-
prices fall. So far, most con- day, but that was up from
clude that markets are not. 1.614% late Thursday.
Many investors believe that European and Asian stock
central banks will continue to Please see BONDS page A2
provide aggressive stimulus
because economic growth and  Fed officials: No urgency on
inflation remain low. rates................................................ A7
But they predict volatility  U.S. stocks rebound after
ahead, and on Monday some rout................................................... B1
Clinton to Release
Health Records
BY LAURA MECKLER
WHITE PLAINS, N.Y.—Dem-  Capital Journal: Clinton’s
ocratic presidential nominee biggest dilemma ............... A2
Hillary Clinton will release ad-  Opinion: Are the candidates
ditional medical records this fit to serve?............. A10, A11
week, a spokesman said Mon-
day, a day after her campaign
disclosed she had pneumonia Fallon said the campaign
and after a health-related wanted the information about
stumble leaving a 9/11 cere- Mrs. Clinton’s diagnosis to
mony put her well-being into come from her doctor, which
the spotlight. he said wasn’t possible until
Press secretary Brian Fallon she examined the candidate
also said the campaign made again later in the day.
mistakes handling the situa- Last year, Mrs. Clinton re-
tion on Sunday, specifically by leased a summary of her
not responding to questions health, including the results of
for 90 minutes about Mrs. some medical testing. Until
Clinton’s exit from the memo- now, her campaign said that
rial event in Manhattan. was sufficient and pointed out
Even then, a spokesman at- her release was more detailed
tributed her departure to feel- than that of opponent Donald
ing overheated, when she also Trump, who has tried to raise
had pneumonia—a fact the questions about her health.
campaign didn’t disclose until But after Sunday’s events, she
late in the afternoon. Mr. Please see CLINTON page A7
and the problem so widespread, that to
treat all sufferers would blow up most
prison budgets. List prices for the newer
drugs range from $54,000 to $94,000 a per-
son for a typical 12-week course.
Pennsylvania’s corrections department has
given the drugs to inmates at high risk of de-
veloping liver problems and with low blood-
Please see PRISONS page A6
 Hepatitis drug inventor wins Lasker award.... B4
One
More
Goodbye
EXIT: Former U.K.
Prime Minister
David Cameron said
he is standing down
as a member of
Parliament, saying
he didn’t want to be
STEFAN WERMUTH/REUTERS
a distraction for
Theresa May’s new
administration. At
left, Mr. Cameron
with his wife,
Samantha, at No. 10
in July. A5
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A2 | Tuesday, September 13, 2016
Clinton‘s Dilemma: How to Confront Trump
CAPITAL JOURNAL
GERALD F. SEIB
H
illary Clinton’s health
issue is her most cur-
rent problem, but not
her biggest one.
The larger issue, revealed
by the difficulties she’s en-
countered in the last couple
of weeks, is the same one
more than a dozen Republi-
can presiden-
tial contend-
ers grappled
with, largely
unsuccess-
fully, during
the primary
season: How do you run
against a candidate as uncon-
ventional, harsh and relent-
less as Donald Trump?
Sen. Marco Rubio and for-
mer Florida Gov. Jeb Bush
can sympathize, for they dis-
covered the difficult strategic
choice Mr. Trump presents.
An opponent can try to ig-
nore his jabs and pursue his
or her own agenda instead,
only to discover that Mr.
Trump has used his tactics to
define the race and soak up
much of the oxygen in the
room by grabbing attention
for himself.
Or the foe can engage in a
BONDS
Continued from Page One
markets were also unsettled
Monday, but U.S. shares re-
bounded from Friday’s selloff.
The Stoxx Europe 600 index de-
clined 1%, while Hong Kong’s
Hang Seng Index skidded 3.4%
and Japan’s Nikkei Stock Aver-
age fell 1.7%.
In the U.S., the Dow Jones
Industrial Average jumped
239.62 points, or 1.3%, to
18325.07. Stocks got a lift from
comments by Federal Reserve
Governor Lael Brainard that in-
dicated she is in no hurry to see
rates raised at next week’s pol-
icy meeting.
The increase in government-
bond yields reverses only a por-
tion of the tremendous drop re-
corded in recent years as
central banks kept interest
rates at record lows, or knocked
them into negative territory,
and some launched huge bond-
buying programs. At the start
of 2016, yields in the U.S., the
U.K., Germany and Japan were
all higher than they are today.
The recent selloff started on
Thursday after European Cen-
tral Bank President Mario
CHINA
Continued from Page One
from up top: Let them fall,” said
the official. He said Chinese
companies were moving em-
ployees to Colombia and Pan-
ama for personal-safety reasons
and because many Chinese-led
projects have ground to a halt.
Since February, at least
three Venezuelan opposition
lawmakers as well as econo-
mists and oil-industry consul-
tants have gone to Beijing at
the invitation of China’s Com-
munist Party to discuss a tran-
sitional government and recov-
ery plan to turn around the
world’s worst-performing
economy, according to several
Chinese and Venezuelan peo-
ple familiar with the talks. The
International Monetary Fund
estimates Venezuela’s economy
declined by nearly 6% last year
and will contract 10% this year.
MIGUEL GUTIERREZ FOR THE WALL STREET JOURNAL
China appears to be recalculating its alliance with Venezuela. A Chinese market in Caracas, above.
kind of punch-counter-punch
exchange of insults, only to
learn how hard it is to beat
Donald Trump at his own
game.
Mr. Trump’s primary ri-
vals never quite figured out
how to navigate between
those two paths—and now
Mrs. Clinton is struggling
with the same problem.
“The primary should have
been a case study in the les-
son that you can never, ever
let Trump control the tone
and tempo of the race,” says
Kevin Madden, who was a top
strategist on Mitt Romney’s
2012 GOP presidential cam-
paign. “If you do, he will put
you in a reactive, defensive
crouch and you will end up
running at his pace instead of
your own.”
At the same time, Mr.
Madden adds, “you can never
assume your opponent will
implode on their own or the
media scrutiny will be enough
to showcase the contrasts be-
tween you and your oppo-
nent. You have to go at your
opponent decisively and re-
lentlessly, disassembling the
argument for their candi-
dacy.”
Mrs. Clinton’s current
problems illustrate how tough
it is to get the mix right.
It’s possible, perhaps even
likely, that the Clinton camp
decided to hide the fact that
she was diagnosed with pneu-
monia last week because dis-
closing that would have
played directly into the narra-
Draghi declined to commit to
extending the bank’s €80 billion
($89.9 billion) in monthly asset
purchases, which are currently
slated to end in March 2017.
Investors are also concerned
that the Bank of Japan is near-
ing the limit of its bond-buying
program and may reduce its
purchases of the country’s long-
dated government debt.
That has upended a convic-
tion that has shaped financial
markets over the last two years:
that central banks would keep
on easing monetary policy.
“Nobody has been buying on
[economic] fundamentals, but
on [market] technicals,” said
Mark Dowding, co-head of in-
vestment-grade at BlueBay As-
set Management. “And the
dominant technical has been
central banks being massive
buyers of assets.”
Investors are looking at past
“tantrums” for clues to how
this selloff may play out.
In spring 2015, sovereign
bonds around the world also
fell sharply and Germany was
again the focus. Then, the yield
on the 10-year German bund
rose from just above zero in
late April to just below 1% in
early June as prices plunged.
That selloff wasn’t driven by
China is still owed about $20
billion of the $60 billion it has
lent, these people said, and is
concerned about corruption and
misappropriation of its develop-
ment funds. It also wants guar-
antees that its investments in
Venezuela will be respected by
the opposition amid a fast-dete-
riorating situation involving
food riots and rampant crime.
China’s Foreign Ministry de-
nied in a written statement that
it has been rethinking its rela-
tionship with Venezuela. It said
the Chinese government has re-
peatedly reminded its citizens
and companies in the country
to raise their safety awareness.
The loans Chinese financial in-
stitutions have provided, it
said, were commercially driven
and have “brought about prac-
tical benefits for both sides.”
Venezuela’s foreign minis-
try didn’t respond to requests
to comment. Venezuelan Presi-
dent Nicolás Maduro recently
told a visiting Chinese busi-
WORLD NEWS
Republican presidential candidate Donald Trump speaking in Pensacola, Fla., on Friday
tive Mr. Trump and his al-
lies—principally former New
York Mayor Rudy Giuliani—
were crafting of a Democratic
nominee with mysterious, se-
rious health issues.
If so, Mr. Trump laid a
trap—and Mrs. Clinton
walked into it.
Likewise, Mrs. Clinton’s
second new problem may
have been another case of
walking into a Trump trap.
She asserted at a fundraiser a
few days ago that “to be
grossly generalistic, you could
put half of Trump’s support-
ers into what I call the basket
of deplorables. The racist,
sexist, homophobic, xeno-
phobic, Islamophobic—you
any particular market event or
signs of a meaningful economic
reversal. Yields soon began to
fall again.
While the increase in yields
this time around has, so far,
been smaller, investors do ex-
pect it to continue. Francesco
Garzarelli, co-head of global
macro and markets research at
Goldman Sachs, predicts the 10-
year Treasury yield will rise to
2% by year-end. BlueBay’s Mr.
Dowding said 10-year German
yields could rise another 0.2 to
0.3 percentage point.
“In relation to expectations
for the economy, these bond
yields are very low. They got
ridiculously low in the after-
math of Brexit,” Mr. Garzarelli
said. “We’ve now passed the
most extreme valuation levels,
but we’re still at levels that
look quite dire relative to the
macro outlook.”
But many investors don’t ex-
pect the sort of big move in
yields that happened in the
spring last year. That is because
the factors that have encour-
aged central banks to act—slow
growth and low inflation—ha-
ven't gone away, particularly in
the eurozone and Japan. Cen-
tral-bank bond buying is aimed
at boosting growth and infla-
ness delegation: “We value
very much this extraordinary
relationship with the People’s
Republic of China.”
Security risks are growing for
Chinese expatriates, a long-es-
tablished merchant class here.
They have become targets for
kidnappers and extortion rings,
prompting many to leave the
country.
Venezuela has the world’s
second-highest murder rate af-
ter Honduras, according to the
independent Venezuela Vio-
lence Observatory. Many re-
cently arrived Chinese state
workers rarely venture out
from where they live and work.
“At all levels in China, there’s
a huge worry about what is
happening in Venezuela and an
understanding that a change in
government is needed,” said
one person familiar with the
discussions in Beijing.
How China plays its Venezu-
ela hand could have ramifica-
tions across Latin America and
name it.”
Mrs. Clinton backtracked
later, repeating that she had
been “grossly generalistic”
about Trump supporters and
saying “that’s never a good
idea.”
The bad idea may have
been being lured into trying
to play the attack game in
Trump style. This time,
though, the target wasn’t Mr.
Trump himself but rather
many of the voters backing
him, which is a crucial differ-
ence.
Clinton supporters are
doubtless galled that Mr.
Trump has attacked so many
people over the last year—
Hispanic immigrants, Mus-
Moving Higher
Bond yields are on the rise as investors question whether the stock
of global negative-yielding debt has grown too much.
Global stock of
negative-yielding debt
$50.0 trillion
40.0
Positive-yielding
30.0
20.0
Negative-yielding
10.0
0.0
2013 ’14 ’15 ’16
Source: Bank of America Merrill Lynch (negative yields);
Thomson Reuters (bonds, as of 9:30 a.m. ET)
tion by driving down bond
yields and pushing investors
into riskier assets, and prod-
ding banks into lending more.
“Yes, the [central bank] pol-
icy maker world may be evolv-
ing, but broadly speaking we’re
still dealing with the same un-
derlying fundamentals and
that’s not likely to change,” said
Africa, where resources-rich
countries turned to Chinese fi-
nancing during the commodi-
ties boom, said Diego Moya-
Ocampos, analyst with the risk
consultancy IHS.
Bilateral talks in Caracas in
August produced a commit-
ment from China for only a
few thousand vans and trucks
to help ease shortages, the
Venezuelan government an-
nounced, but no big loans.
During the meetings in China,
Venezuela’s opposition offered
assurances that Beijing’s loans
would be recognized, hoping to
keep the door open to more
credit if a new government
comes to power, said the people
familiar with the talks. “We
can’t afford to lose the privi-
leged relationship we’ve devel-
oped with China,” one said.
The Chinese government and
Venezuela’s opposition both
want to make future deals more
transparent and subject to ap-
proval from Venezuela’s presi-
CORRECTIONS  AMPLIFICATIONS
ValueAct Capital Manage-
ment LP has held board seats
at both Microsoft Corp. and
Adobe Systems Inc. Mason
Morfit, president of ValueAct,
served as a director at Micro-
soft. A Finance & Markets arti-
cle Monday about ValueAct
buying a stake in Seagate
Technology PLC incorrectly
said Mr. Morfit was also a di-
rector of Adobe.
Brian Bolke is the presi-
dent and co-founder of Dallas
Readers can alert The Wall Street Journal to any errors in news articles by
emailing wsjcontact@wsj.com.
lims, Sen. John McCain—and
himself has been “grossly
generalistic” along the way,
yet has prospered anyway,
while Mrs. Clinton is being
pummeled for this comment.
That misses the point.
Such a style is what people
have come to expect, and in
some cases admire, about Mr.
Trump. It’s not what they ex-
pect of Hillary Clinton, nor
does it play to the former
secretary of state’s strengths.
This is what both Messrs.
Bush and Rubio learned the
hard way during the primary
season. When they decided to
engage in a knife fight with
Mr. Trump, they got sliced up
pretty badly.
10-year government-
bond yields
0.2%
0.1
Germany
0.0
–0.1
Japan
–0.2
–0.3
June July Aug.
THE WALL STREET JOURNAL.
Charlie Diebel, head of interest
rates at Aviva Investors.
Last year’s tantrum came
amid some higher-than-ex-
pected inflation data in Europe
and at a time when investors
were more confident that the
ECB’s quantitative-easing pro-
gram would work. That meant
that investors thought the
dent as well as the opposition-
controlled National Assembly—a
bid to ensure their survival
should the opposition take over.
Relations blossomed under
former President Chávez. Cheap
Chinese mobile phones, motor-
cycles and home-building mate-
rials helped Venezuela’s govern-
ment win support among the
poor. Venezuela welcomed thou-
sands of Chinese technicians to
work on infrastructure ventures,
largely paid for with shipments
to China of 600,000 barrels of
oil a day. China was a crucial
lender of last resort as investors
in debt markets charge Venezu-
ela some of the highest borrow-
ing rates in the world.
Then security emerged as a
concern. Warnings distributed
by the Chinese embassy here to
Chinese nationals, reviewed by
The Wall Street Journal, refer to
attacks against foreigners.
“As Asian people, to the
greatest extent possible, you
should avoid traveling by your-
boutique Forty Five Ten. An
Off Duty article in the Friday-
Sunday edition about new
fashion trends inspired by the
1980s incorrectly said he also
is CEO.
The name of Marisa Di
Nardo, a Cantor Fitzgerald
broker killed in the U.S. terror-
ist attacks of Sept. 11, 2001,
was misspelled as Marissa Di-
nardo in a News article about
her firm in the Sept. 14-15,
2001, edition.
THE WALL STREET JOURNAL.
EVAN VUCCI/ASSOCIATED PRESS
Sept.
In this case, the “deplor-
ables” comment also cut
against what had emerged as
the uber theme of the Clinton
campaign, which is that
Americans are “Stronger To-
gether.” In a recent “Meet the
Press” interview, Mrs. Clinton
cited that slogan as the big
idea animating her candidacy.
The deplorables comment
went in the opposite direc-
tion, and just when the Clin-
ton camp was trying to pivot
to stress her agenda more.
T
here is no easy way to
handle the challenge
Mrs. Clinton confronts.
Republicans learned early this
year that ignoring Mr. Trump
and his jabs doesn’t work
very well.
“You can’t ignore Trump,”
says Alex Conant, a top ad-
viser to Sen. Rubio’s presi-
dential campaign. “He is too
good of a showman and his
message is too salient.” But
campaigning in Trump style
also undercuts the key differ-
ence Mrs. Clinton is trying to
draw between his approach
and hers.
Her advantages lie in her
more detailed grasp of policy
issues and her government
experience. His advantages lie
in his advocacy for a new at-
titude in Washington and dis-
missal of the establishment.
Perhaps Mrs. Clinton would
be better off staying in her
lane, and allowing other Dem-
ocrats to engage Mr. Trump
in his.
ECB’s bond-buying was transi-
tory, said Jack Kelly, an invest-
ment director at Standard Life
Investments. “Skepticism over
the effectiveness of QE is more
entrenched this year and wage
inflation is simply not coming
through,” he said.
The depth of the current
move in bond markets will de-
pend on central banks.
Investors are particularly
concerned over the Bank of
Japan’s Sept. 21 meeting, when
officials will reveal their assess-
ment of the central bank’s cur-
rent policies. Analysts are
watching to see whether the
bank will defend or backtrack
on its policy of negative inter-
est rates, which was announced
in January and has helped keep
yields low.
The U.S. Federal Reserve is
meeting on the same day.
Themos Fiotakis, co-head of
fixed-income strategy at UBS,
believes that yields will rise “a
little further” but predicts that
the current era of low yields
will continue.
Markets, though, “can still
move violently,” Mr. Fiotakis
added. “Any hint that the ECB
may not be quite as dovish as
the market thinks is enough to
cause a selloff.”
selves,” read one advisory from
the local office of China’s state-
owned Sinohydro Corp.
Kidnappings increased 60%
in 2015, the notice said. An em-
bassy email from March recom-
mended buying guard dogs and
installing GPS systems in cars to
make abductees easier to locate.
The Federation of Chinese
Associations here, which keeps
a registry of 23 social clubs
across Venezuela, estimates
that more than 30,000 Chinese
have left the country since 2014.
More than 100,000 remain.
—Brian Spegele
contributed to this article.
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THE WALL STREET JOURNAL.
Syrian Leader Vows Fight Despite Truce
U.S. Secretary of
State wary of Assad’s
intentions, says role of
Russia is critical
BY MARIA ABI-HABIB
AND NOAM RAYDAN
BEIRUT—A tenuous calm
set in across Syria on Monday
night as a U.S.-Russia brokered
cease-fire took effect, just
hours after President Bashar
al-Assad vowed to take back all
opposition-controlled territory.
“The Syrian state is deter-
mined to retake every area
from the terrorists, and restore
security and safety,” Mr. Assad
said, according to the state run
Syrian Arab News Agency. The
regime refers to all its oppo-
nents as terrorists.
The Syrian leader spoke as
he walked through Daraya, a
Damascus suburb that surren-
dered last month and returned
to government control after a
nearly four-year siege. Its
10,000 residents—many mal-
nourished—were all forced to
evacuate as part of the truce.
Meanwhile, U.S. Secretary
of State John Kerry said Mon-
day it was too early to say if
the cease-fire would hold but
that there were early reports
of reduced violence in major
conflict areas.
“It is far too early to draw
any definitive conclusions,”
Mr. Kerry told reporters in
Remains Returned of Americans Fighting Against ISIS
BY BEN KESLING
SULAYMANIYAH, Iraq—The
bodies of three Americans who
died fighting Islamic State as
volunteers for a Syrian Kurd-
ish militia have begun a return
home after a weekslong strug-
gle by their families and the
U.S. government to repatriate
their remains.
The remains of Levi Jona-
than Shirley, William Savage
and Jordan MacTaggart had
been held for weeks in Syrian
Kurdistan after they died
fighting against Islamic State
forces. Later, they were driven
across the region—in ambu-
REUTERS
lances displaying their so-
called martyr photos—before
crossing into Iraqi Kurdistan,
where the paperwork needed
for the flights to the U.S. was
secured, according to repre-
sentatives of the semiautono-
mous Kurdish Syrian region of
Rojava.
On Monday, the bodies of
two of the men left the inter-
national airport here in Iraqi
Kurdistan bound for Chicago’s
O’Hare International Airport,
Syrian Kurdish officials said.
The other body had been flown
out on Sunday.
The long and logistically
complex journey from the Syr-
ian battlefield back to the U.S.
revealed a simple truth: It is
much easier for Americans to
get to Kurdistan to fight Is-
Report Blasts South Sudan Leaders Attack Sparks Firefight
BY MATINA STEVIS
JUBA, South Sudan—South
Sudan’s leaders have trans-
ferred millions of dollars of ill-
gotten wealth outside the
country while waging a civil
war that has left nearly half of
the country’s people homeless
or in urgent need of humani-
tarian aid, a nongovernmental
group said Monday.
President Salva Kiir and
some his top associates, along
with Riek Machar, the former
South Sudanese President Salva Kiir with U.N. and U.S. officials in the capital of Juba this month.
Syrian President Bashar al-Assad, center, walking with officials on Monday in Daraya, a formerly rebel-controlled suburb of Damascus.
Washington.
Mr. Kerry said if Mr. Assad
uses the days of calm to strike
opposition groups, “then we
don’t have seven days of calm,
folks.”
He added: “Russia here
plays the critical role.” Mr.
Kerry and Russian Foreign
Minister Sergei Lavrov on Sat-
urday announced the agree-
ment, which was set to begin
on Monday at sundown.
Images of a confident Mr.
U.S. volunteer fighters Levi Jonathan Shirley, left, and Jordan MacTaggart were killed in combat alongside Kurdish forces in Syria.
lamic State than it is for their
remains to come home.
“I didn’t think he was going
to get out,” Reginald Savage of
Raleigh, N.C., said of the re-
mains of his son William, who
died in early August. “I was
planning on him being buried
in Syria.”
About a year and a half ago,
the younger Mr. Savage joined
dozens of other Americans
with an idealistic desire to
fight Islamic State as unpaid
volunteers with the Kurdish
forces in northern Syria. The
Kurds won’t release official
tallies, but the open-source in-
vestigative group Bellingcat
vice president, have invested
millions of dollars in real es-
tate in Kenya, Uganda and
Australia, according to a re-
port by the Sentry, which in-
vestigates corruption and or-
ganized crime in Africa,
following a two-year probe.
The watchdog group was
founded by Hollywood actor
George Clooney and John
Prendergast, a former official
in the Clinton administration.
According to the report,
these powerful political figures
WORLD NEWS
Assad strolling through the of the deal.
ghost town just hours ahead of Messrs. Kerry and Lavrov
the cease-fire left Syrian oppo- released few details of the
sition groups fuming over the agreement, which outlines a
deal, saying it lacked enforce- truce for seven days to facili-
ment measures to guarantee tate the delivery of humanitar-
the government abides by the ian assistance. It is supposed
truce or drop its “starve or to be a first step toward a
submit” tactics. broader deal to end the more
By the time the cease-fire than five-year war.
went into effect Monday eve- Russia is a key supporter of
ning, the majority of Syria’s the regime and has been help-
rebel groups hadn’t said ing for nearly a year to crush
whether they will follow terms its opponents with airstrikes
estimated last year that more ley of Arvada, Colo., was killed
than 100 Americans had gone in July, likely from a land mine,
to fight with Kurds in Syria. his mother said.
The three men were part of Family members said State
an operation that began in May, Department officials first sug-
when the Kurdish militia known gested the remains be taken
as the YPG, along with their U.S. through Turkey, considering
special-forces advisers, pushed that logistically simpler than
westward across the Euphrates going through Iraqi Kurdistan.
River into what is referred to as But that route presented a
the Manbij pocket. formidable diplomatic obsta-
Like Mr. Savage, Mr. Mac- cle: Istanbul considers the Syr-
Taggart of Castle Rock, Colo., ian Kurdish YPG militias to be
was killed in early August. Both terrorists, indistinguishable
likely died by gunfire, according from the Kurdistan Workers’
to Gharib Hassou, a representa- Party, or PKK, who attack
tive of YPG-affiliated Demo- Turkish targets. Like Turkey,
cratic Union Party. the U.S. government desig-
The third volunteer, Mr. Shir- nates PKK as a terrorist outfit,
and their immediate relatives
have large ownership interests
tocratic networks and, ulti-
mately, the international facili-
in local oil, construction, secu- tators whose services the
rity and gambling businesses— networks utilize and on which
in violation of South Sudanese they rely,” it says.
law barring officeholders from A spokesman for Mr. Kiir
engaging in commercial activ- didn’t immediately reply to
ity. calls and messages seeking
“The leaders of South Su- comment. A spokesman for
dan’s warring parties manipu- Mr. Machar said he would
late and exploit ethnic divi- study the report and respond
sions in order to drum up to it later. Messrs. Clooney
support for a conflict that and Prendergast said they
serves the interests only of the would meet with U.S. Presi-
top leaders of these two klep- dent Barack Obama, Secretary
of State John Kerry and Trea-
sury Secretary Jacob Lew to
present the investigation and
lobby for the use of antiterror-
ism and anti-money-launder-
ing rules to seize the South
Sudanese leaders’ assets.
Foreign donors sponsored
South Sudan’s independence
declaration in 2011 and have
supplied billions of dollars in
aid since the two political ri-
vals pitted their tribes and
armies against each other
nearly three years ago.
JUSTIN LYNCH/ASSOCIATED PRESS
The conflict has cost thou-
sands of lives since. About 1.6
million of South Sudan’s 12
million people have been
forced to flee their homes, and
some 5.2 million are in desper-
ate need of humanitarian as-
sistance, including food, ac-
cording to the United Nations.
Tuesday, September 13, 2016 | A3
the deal before they endorsed
it, even after the cease-fire
took effect.
Syria’s armed and political
opposition have criticized pre-
vious truces, claiming they fa-
vor the regime by allowing it
to continue laying siege to op-
position-controlled communi-
ties across Syria to force their
surrender. A similar cease-fire
deal crumbled this year after
violations by both sides.
Iran and the Lebanese Shi-
ite movement Hezbollah, two
of Mr. Assad’s close allies, de-
clared support for the accord
over the weekend.
Aid organizations said
Monday they were eager to
see the agreement imple-
mented by all sides so they
SANA/ASSOCIATED PRESS
can deliver much-needed hu-
manitarian supplies, particu-
larly in opposition-held dis-
tricts of Aleppo city, where
300,000 civilians live and a
government siege was reim-
posed last week.
Opponents of Mr. Assad
even as it sits in negotiations criticized his government for
with the U.S. over a possible agreeing to the deal only after
political solution. The U.S. it succeeded in reimposing the
backs some moderate rebel siege over opposition-held dis-
groups fighting the regime in tricts of Aleppo, once the
Syria and heads an interna- country’s largest city and eco-
tional coalition battling Is- nomic powerhouse.
lamic State in Syria and Iraq. Fighting intensified be-
Syria’s mainstream political tween rebels and government
opposition, the High Negotia- forces there and elsewhere
tions Committee, and several across the country since the
rebel factions continued to call cease-fire was announced.
for “guarantees” to ensure —Felicia Schwartz
government implementation of contributed to this article.
searching how to get to Kurdis-
tan, his mother said. He got his
first combat experience in his
first trip to Syria, his mother
said, and when got back to the
U.S. he wanted only to return.
“This time he would have
had no illusions about war as
romance,” Ms. Shirley said.
“He made it very clear that he
ROBERT MACTAGGART/ASSOCIATED PRESS
was there for the atrocities
that had been done there and
to the United States.”
Mr. Savage lied to his re-
cruiters, telling them he had
combat experience to ensure he
was accepted, his father said.
“When he got there, one of the
guys that trained him said Wil-
liam was the greenest recruit
they’d ever had,” his father said.
Mr. MacTaggart was eager
to join the cause too, after a
but Washington considers it dangerous brush with drugs,
separate from the YPG. his parents said.
The U.S. officially attempts “When he recovered from
to steer its citizens clear of that he had an epiphany,” his
such forays into Syria. “Private mother said. “He was high-
U.S. citizens are strongly dis- minded,” she added and he
couraged from traveling to went off to Syria knowing that
Syria to take part in the con- he had to do something to put
flict,” State Department spokes- his ideals into practice.
man John Kirby said. There was a wait of more
In practice, however, it does than a week as a final docu-
little to stop such volunteers, ment was obtained authorizing
say family members. The State their final flights out. Fearing
Department declined to com- even more delays from Turkish
ment. objections to the men’s links to
Mr. Shirley had wanted to be Kurdish militias, Mr. Hassou
a U.S. Marine. Less than a week said, those flights were booked
after he was told his eyesight on flights with no layovers in
disqualified him, he started re- Istanbul.
In Kandahar Hospital
BY EHSANULLAH AMIRI firm their deaths. No group
AND JESSICA DONATI immediately claimed responsi-
bility for the attack.
KABUL—Two militants The ICRC employs some 50
dressed as doctors raided a Afghan and international staff-
hospital in Kandahar sup- ers at the Mirwais Hospital in
ported by the International Kandahar. No ICRC staff mem-
Committee of the Red Cross bers were present during
on Monday, killing at least one Monday’s raid due to this
emergency-room patient in an week’s Muslim religious holi-
hourlong firefight, Afghan of- day Eid al-Adha, said ICRC
ficials said. spokeswoman Jessica Barry.
The men, armed with pistols The attack was the latest in
and suicide vests, wounded a string of incidents that have
two other people before being struck aid workers in Afghani-
shot dead by Afghan security stan, despite pleas by humani-
forces, the officials said. The tarian agencies to respect
firefight took place in patient their neutrality. Hospitals in
wards, they said. Afghanistan have repeatedly
The first militant was been attacked or caught in the
quickly shot by an intelligence crossfire in recent years.
agent, while the second es- The Kandahar militants
caped further into the hospital were likely targeting Kanda-
before being killed by security har’s deputy governor, who
forces about an hour later, a had been scheduled to visit
spokesman for the Kandahar the hospital for the holiday
governor said. Families outside Monday but canceled his ap-
protested to be allowed into pearance after being warned
the compound to rescue of an impending attack, an Af-
trapped relatives as the gunfire ghan official said.
rang out across Afghanistan’s “The deputy governor with
second-largest city. a convoy of several provincial
An Afghan intelligence offi- officials were on their way to
cer and a policeman were also the hospital when we got re-
killed in the attack, a foreign ports of a security incident,”
official in the country said. Af- said the governor’s spokes-
ghan authorities didn’t con- man, Samim Khapalwak.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A4 | Tuesday, September 13, 2016 HK JP KO ML SI IN UK FR MN PR THE WALL STREET JOURNAL.

WORLD NEWS

Duterte Says
U.S. Advisers
Should Leave
Philippine president have peace,” Mr. Duterte said
during a swearing-in cere-
suggests presence of mony for public officials. “We
American military might as well give it up.”
He warned that the contin-
invites extremism ued presence of U.S. personnel
in the Philippines risks inflam-

TED ALJIBE/AGENCE FRANCE-PRESSE/GETTY IMAGES

BY CRIS LARANO ing an already volatile cam-
paign to track down members
MANILA—Philippine Presi- of Abu Sayyaf, whom security
dent Rodrigo Duterte called experts estimate to number
for the U.S. to withdraw its re- around 300 fighters.
maining military advisers, Abu Sayyaf will kill Ameri-
warning that their presence in cans, Mr. Duterte said. “They
a southern island makes them will try to kidnap them for
a valuable target for the ex- ransom,” he said.
tremist Abu Sayyaf militant The comments sparked crit-
group. icism from other Philippine
The remarks on Monday by politicians. Sen. Antonio Tril-
Mr. Duterte, known for his lanes IV, a former navy officer,
blunt speech, are likely to fur- said Mr. Duterte was letting President Rodrigo Duterte cited accounts of American troops killing Muslims when the U.S. was the Philippines’ colonial master.
ther complicate his already emotion cloud his judgment.
prickly relationship with the “The anti-U.S. bias of Presi- tioned in the southern Philip- mayor of Davao City. also adamant in holding Amer- Ernesto Abella, subsequently
U.S. The Obama administration dent Duterte should not be the pines since 2002, training and At its peak, the U.S.-Philip- ica to account for what he issued a statement saying that
last week canceled a meeting basis of the recrafting of our advising Filipino troops in pine operation involved more sees as its past excesses. the Philippine president’s re-
with Mr. Duterte at a regional security policies,” Mr. Tril- their campaign against Abu than 1,000 Americans before On Monday, before calling marks were aimed at empha-
summit after he referred to lanes said in a statement. “The Sayyaf, an affiliate of al Qaeda officially ending in 2015. A few for the remaining U.S. forces sizing how the country is now
President Barack Obama as a U.S. special operations forces that has earned a grisly repu- advisers and technical-support to leave, he displayed pictures attempting to craft an inde-
“son of a whore” and railed have been instrumental in the tation for kidnapping and be- teams remain. from the early 20th century pendent foreign policy. Mr.
against the colonial history of development and increased ef- heading Westerners. More re- Mr. Duterte’s remarks raise showing American soldiers Abella also said Mr. Duterte
the Philippines. The slur fectiveness of our [Armed cently the group has declared further questions about the standing over a mass grave of wants the U.S. to atone for
against Mr. Obama was lobbed Forces of the Philippines].” allegiance to Islamic State. relations between the U.S. and Muslims in the southern Phil- what he perceives as the injus-
in the broader context of Mr. The U.S. Embassy in Manila Abu Sayyaf said its supporters the Philippines, traditionally ippines during the U.S.’s long tices inflicted on Muslim Fili-
Duterte’s approach to human couldn’t be reached to com- were responsible for a bomb- one of America’s strongest al- campaign to pacify the region pinos in the southern Philip-
rights in his war on drugs. ment. Philippine military offi- ing in Davao City this month lies in the Asia-Pacific region. after the Spanish-American pines, which Mr. Duterte has
“For as long as we stay cials also couldn’t be reached. that killed 14 people. Mr. Du- He has said close ties with the War. singled out as one of the roots
with America, we will never U.S. forces have been sta- terte previously served as U.S. are important, but he is Mr. Duterte’s spokesman, of the insurgency there.

Nuclear Test Raises Stakes for Japan Suu Kyi Visit Tests
North Korea’s recent nu-
clear detonation and acceler-
ated missile testing raise the
impetus for closer military co-
Obama’s Asia Pivot
operation between Tokyo and BY JAMES HOOKWAY after Ms. Suu Kyi’s National
League for Democracy won
By Alastair Gale Aung San Suu Kyi will visit elections in November. It in-
in Seoul and President Barack Obama at the troduced general licenses that
Chieko Tsuneoka White House on Wednesday, a make it easier for American
in Tokyo move that will affirm the for- companies or individuals to do
mer dissident’s role as Myan- business in Myanmar. It also
Washington, as Japan’s new mar’s de facto leader and re- removed seven state-owned
defense minister prepares for new the question of whether enterprises and three state-
her first official visit to the Washington is ready to drop owned banks from a blacklist
U.S. this week. sanctions on the country. of companies prohibited from
Tomomi Inada is expected Her arrival in the U.S. will doing business with the U.S.,
FRANCK ROBICHON/EUROPEAN PRESSPHOTO AGENCY

to meet with U.S. Secretary of also cast a spotlight on Mr. while adding an additional six.
Defense Ash Carter on Thurs- Obama’s efforts to cement his It is unclear whether the
day, U.S. officials said. Ms. In- administration’s pivot to Asia U.S.—or Myanmar, for that
ada became defense minister in his final months in office. matter—would like the sanc-
last month. Both sides have been pre- tions relaxed further. “It’s
North Korea’s nuclear pro- paring the ground for the visit. something that we continue to
gram poses a “serious and im- Ms. Suu Kyi last month visited look at, because the purpose of
minent threat,” she told mili- China, Myanmar’s most impor- the sanctions regime was to
tary officers in Tokyo on tant trade partner, where she support a democratic transi-
Monday, warning also of rising worked to restore relations af- tion, and some of the sanc-
tensions with China over dis- ter a fraught few years during tions even were tied to the
puted islands in the East which Myanmar tilted more treatment of Ms. Suu Kyi spe-
China Sea. To cope with secu- toward the West after its mili- cifically,” deputy national-se-
rity challenges, Japan needs to Japanese Prime Minister Shinzo Abe reviewed an honor guard in Tokyo on Monday. tary began political reforms. curity adviser Ben Rhodes told
reinforce its alliance with the Ms. Suu Kyi has moved to reporters last week.
U.S. and build cooperation built missile-defense system in U.S. has about 54,000 military tackle ethnic tensions that ac- Some of Ms. Suu Kyi’s ad-
with other countries such as South Korea, warned that personnel based in Japan, companied this liberalization. visers suggest that sanctions
the Philippines and Australia, “unilateral action” would ag- many of them on the southern This month she met with for- shouldn’t be fully lifted: They
she said. gravate tension. On Monday, island of Okinawa. mer United Nations Secretary- need them to exert pressure on
North Korea fired three she said both the cause of the On Monday, South Korea’s General Kofi Annan, who she Myanmar’s military, which still
missiles last week that landed nuclear problem and the solu- Defense Ministry said North invited to lead a commission controls the important defense
about 150 miles off the west tion lies with “the U.S., not Korea appears capable of con- investigating violence. and interior ministries and ef-
coast of Okushiri Island, close China.” ducting another nuclear test The U.S. eased some of its fectively shares power with
to Hokkaido, the northernmost Against that backdrop, at any time. Pyongyang has sanctions on Myanmar in May Ms. Suu Kyi’s administration.
of Japan’s four main islands. China and Russia on Monday expanded its nuclear-test site
KIM KYUNG-HOON/REUTERS

In August, a North Korean kicked off eight days of long- in recent months with new
missile landed around the planned joint military exer- tunneling for underground
same distance from the main cises, highlighting an increas- detonations of nuclear bombs.
ROSLAN RAHMAN/AGENCE FRANCE-PRESSE/GETTY IMAGES

island of Honshu. ingly close relationship North Korean dictator Kim

The missiles, followed by between two powers with sig- Jong Un has ordered further
the nuclear explosion last nificant differences with the missile and nuclear testing
week, have intensified recrimi- U.S. For the first time, they this year as Pyongyang pur-
nations and diplomacy from held the exercises in the South Japan’s Tomomi Inada. sues a range of nuclear-tipped
Beijing to Tokyo to Washing- China Sea, another source of missiles to threaten the U.S.
ton to New York, where the building U.S.-Chinese tension. day. and its allies.
United Nations is considering China’s navy said the exercises Following its nuclear test U.S.-Japanese defense coop-
steps to penalize Pyongyang. would involve drills to practice last week, North Korea said eration has increased under
Mr. Carter last week said defending and seizing islands, that it can now easily put a Prime Minister Shinzo Abe. A
China, North Korea’s chief eco- a move likely to unsettle nuclear device on a missile, 2015 agreement boosted coor-
nomic and diplomatic partner, neighbors with overlapping escalating concerns. North Ko- dination in many areas, in-
bore “great responsibility” for territorial claims in the sea. rea often threatens Japan, the cluding maritime security and
Pyongyang’s nuclear stance. China’s air force also said it U.S. and South Korea with at- missile defense.
A Chinese foreign ministry sent jet fighters, bombers and tack, citing the need to pre- —Te-Ping Chen
spokeswoman, referring to the other aircraft on a drill over emptively counter an invasion and Jeremy Page in Beijing Aung San Suu Kyi at a summit in Vientiane, Laos, this month.
planned deployment of a U.S.- the Western Pacific on Mon- by the U.S. and its allies. The contributed to this article. She will visit Barack Obama at the White House on Wednesday.

Indonesia’s Busiest Day for Butchers

BY ANITA RACHMAN early. People converged at high as $1,300 a head. In pre- stand the journey.
mosques or open fields to pray vious years, though, prices Technology plays a role,
JAKARTA — Indonesians before slaughtering cows, have risen more; in 2014, they too. Online markets have
slaughtered over 600,000 ani- sheep, goats and buffalo. In surged 35%. helped match buyers and sell-
mals on Monday, nearly one- some areas, alleys ran red with Boethdy Angkasa, the agri- ers more efficiently, helping to
DEDI SINUHAJI/EUROPEAN PRESSPHOTO AGENCY

tenth of the livestock normally blood before devotees distrib- culture ministry’s coordinator keep a lid on price increases.
butchered in a year, as they uted packages of meat to for the sacrifices, said the cost “Beef is still considered
marked Eid al-Adha, one of the neighbors or to the poor. of transporting animals across quite a luxury here,” Mr. Ang-
holiest celebrations in the Is- The Ministry of Agriculture the archipelago to the big cit- kasa said. “The government
lamic calendar. deployed 1,600 people across ies has long been one of the wants to push down prices so
In a modest success for the the greater Jakarta area, which biggest contributors to the an- it’s more accessible.”
country’s bureaucrats, the in- has a population of some 30 nual uptick in prices. Indonesia’s softening econ-
crease in prices due to soaring million, to help oversee the rit- In recent years, the ministry omy also may have contributed
demand for livestock wasn’t as uals at over 9,000 sites. has sent advisers to help farm- to this year’s relatively modest
great as in previous years. The cost of the two most ers boost production, provid- price rises. Lower prices for
Preparations for the festi- popular offerings, cattle and ing them with guidelines on commodities such as palm oil,
val, which marks the prophet goats, rose as much as 30% in how to better care for live- coal and natural gas mean that
An Indonesian mosque official distributed fresh meat to people Abraham’s willingness to sacri- the run-up to the holiday, with stock and breed more robust household spending isn’t
during Eid al-Adha celebrations in Medan, Sumatra, on Monday. fice his son to God, began some cattle reaching prices as animals that can better with- growing as rapidly as before.
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Cameron to Exit
U.K. Parliament
BY JASON DOUGLAS
AND JENNY GROSS
LONDON—Former British
Prime Minister David Cameron
said he is standing down as a
member of Parliament, ending
a 15-year career as a law-
maker.
Mr. Cameron said in a
statement that he didn’t want
his presence in Parliament to
be a distraction for the U.K.’s
new administration, led by
Prime Minister Theresa May.
JUSTIN TALLIS/AGENCE FRANCE-PRESSE/GETTY IMAGES
Ex-U.K. leader David Cameron.
“In my view, the circum-
stances of my resignation as
prime minister and the reali-
ties of modern politics make it
very difficult to continue on
the backbenches without the
risk of becoming a diversion
to the important decisions
that lie ahead for my succes-
sor in Downing Street and the
government,” he said.
Mr. Cameron was prime
minister from 2010 until late
June, when he resigned from
the post after losing a referen-
dum on Britain’s continued
Glue Snafu Delays Presidential Vote in Austria Official
BY ANTON TROIANOVSKI
Three weeks before a
scheduled presidential election
that could install postwar Aus-
tria’s first right-wing populist
head of state, the top elections
official said the vote needed to
be postponed.
The reason: Defective glue
has been causing some mail-in
ballot envelopes to open, ren-
dering the vote inside invalid.
“I must acknowledge that a
ballot-card production error is
the reason why we cannot
guarantee an election that is
irreproachably in conformity
with the law,” Interior Minis-
ter Wolfgang Sobotka said in
Vienna on Monday. “We can-
not estimate today how many
and which of these ballot
cards could still open.”
Mr. Sobotka said he would
submit a bill to parliament on
Tuesday to postpone the vote
until Dec. 4.
It was the latest embarrass-
ment for the Alpine country’s
government, which has been
struggling to execute a closely
watched election.
The runoff vote for the
mainly ceremonial post of
president had been scheduled
for Oct. 2, pitting center-left
candidate Alexander Van der
World
Watch
FRANCE
Hollande Moves
To Safeguard Factory
French President François
Hollande ordered his govern-
KASHMIR PROTEST: A man at a protest in Srinagar on Monday in the Indian-controlled portion of
Kashmir, an area racked by protests for two months following the killing of a top rebel leader.
membership of the European
Union. The 49-year-old had led
the campaign to keep the U.K.
in the bloc, but Britons sided
with those advocating Britain’s
exit, by 52% to 48%.
Mr. Cameron said his resig-
nation would take effect im-
mediately. He is the member
of Parliament for Witney, in
Oxfordshire, England, a seat
long held by the ruling Con-
servative Party. His resigna-
tion will trigger a special elec-
tion to succeed him.
In an interview Monday
with broadcaster ITV News, he
said he believed Mrs. May was
“off to a cracking start” as
leader and denied his decision
reflected policy differences
with his successor. He said
that although voters made a
decision in June’s EU referen-
dum that he disagreed with,
he hoped the government
would make a success of exit-
ing from the bloc.
Mr. Cameron added that he
hoped to remain in public ser-
vice in Britain, although he
didn’t have any firm plans.
Mrs. May said she was
proud to serve in Mr. Cam-
eron’s government, adding
that “under his leadership we
achieved great things.” In par-
ticular, she praised him for
stabilizing the economy in the
aftermath of the global finan-
cial crisis and his efforts at so-
cial reform.
See the story develop.
Download on the App Store
Austrian Interior Minister Wolfgang Sobotka announcing on Monday a two-month postponement.
Bellen against Norbert Hofer
of the anti-immigrant Freedom
Party. Mr. Hofer, propelled by
a popular backlash against the
centrist government’s han-
dling of the refugee crisis, has
been running about even with
Mr. Van der Bellen in the polls.
Mr. Van der Bellen beat Mr.
Hofer by just over 30,000
ment to prop up Alstom’s Bel-
fort factory after the high-speed
train maker said it plans to
close production at the emblem-
atic site because of weak de-
mand.
The sprawling Belfort indus-
trial site near the German and
Swiss borders has regularly
been threatened by closure,
making it a political battle-
ground for leaders hoping to
show they have a solution to
France’s industrial decline.
“The president gave us one
Tuesday, September 13, 2016 | A5
WORLD NEWS
EU Grills British Nominee
U.K. candidate for the
European Commission
is questioned over
commitment to bloc
BY VALENTINA POP
STRASBOURG—European
Union lawmakers on Monday
quizzed Britain’s candidate for
the European Commission
about his commitment to im-
plementing the bloc’s security
plans, as the U.K. is preparing
PATRICK SEEGER/EUROPEAN PRESSPHOTO AGENCY
to leave the EU.
Sir Julian King, a British ca-
reer civil servant currently
serving as ambassador to
France, was nominated earlier
this summer to replace Jona-
than Hill, who resigned after
Britons voted in favor of leav-
ing the EU. As long as the U.K.
is still a member of the bloc, it
is entitled to a commissioner
in the bloc’s influential execu-
tive arm, where each EU coun-
try has a representative. Sir Julian King promised in his role as commissioner to serve ‘only the European general interest.’
Addressing the polyglot
civil liberties committee partly EU will conflict, which master rorists’ funding to better ex- “London will still be two
in French, Sir Julian admitted will you serve?” change of information on ter- hours by train from Paris and
that his nomination could Sir Julian promised to take ror suspects across Europe. two hours by train from Brus-
raise questions, given the Br- the EU oath “very seriously” During the first half of the sels…terrorists don’t make a
exit vote, which the U.K. gov- and “neither seek nor accept three-hour hearing, Sir Julian difference if we are [an] EU
ernment vowed to respect. instructions from any govern- deflected questions from the member or not,” he said.
“I will fulfill my tasks to the ment” once appointed. euroskeptic UK Independence Monday’s hearing will be
best of my ability, serving the In his introductory state- Party about how long he en- followed by a vote in the full
European general interest and ment, Sir Julian said that dur- visages to be in the job, given house on Thursday. While the
only the European general in- ing the referendum campaign, that Brexit is likely to happen European Parliament has only
terest,” Sir Julian said in he “strongly advocated” the during his term. a consultative role in Sir Ju-
French. position of the British govern- He said he couldn’t predict lian’s appointment, a negative
Under EU rules, commis- ment—which was in favor of how long his term would last, vote would make it harder for
sioners are obliged to sever Britain’s remaining in the EU. given that EU-U.K. negotia- commission chief Jean-Claude
links with their national gov- “Personally, I have always tions on the terms of Brexit Juncker and EU governments
ernments, but in practice, they been proud to be British and haven’t even started. Those to approve his appointment.
often try to influence policies proud to be European and see negotiations, once triggered, EU officials however don’t
the way their countries ask no contradiction between the must be concluded within two expect any hurdles in Sir Ju-
them to. Gerard Batten, a two,” Sir Julian said. years. lian’s appointment. “I’d be sur-
member of the UK Indepen- He listed eight measures he Sir Julian stressed the im- prised if there will be any
dence Party, asked him “if the will prioritize, ranging from portance of this post also for drama,” one official said ahead
interests of the U.K. and the new legislation on cutting ter- the security of the U.K. of the hearing.
“One could take this glue fi-
asco as a symbol of what Aus-
At BOE
tria needs now: to stick to-
gether,” Mr. Van der Bellen
said later Monday.
To Quit for
The government’s acknowl-
edgment of problems with
mail-in ballots could, however,
New Post
energize supporters of Mr. BY PAUL HANNON
Hofer and his Freedom Party’s
antiestablishment campaign. One of the Bank of Eng-
“This government is not land’s four deputy governors
even able to conduct a lawful, is to leave more than two
CHRISTIAN BRUNA/EUROPEAN PRESSPHOTO AGENCY
timely, and proper election,” years before the end of her
Freedom Party Chairman term to become director of the
Heinz-Christian Strache said London School of Economics.
on his Facebook page. “Austria The U.K.’s central bank an-
is being embarrassed by this nounced Monday the surprise
government.” departure of Minouche Shafik,
Mr. Sobotka addressed the who will leave her position as
news media Monday alongside deputy governor for markets
Franz Lang, director of the and banking in February 2017
Federal Criminal Agency, Aus- before joining the LSE next
tria’s version of the FBI. The September.
agency has found no signs of Ms. Shafik was recruited by
foul play but continues to in- the central bank in 2014, hav-
vestigate, Mr. Lang said. ing been a deputy managing
A company that printed the director at the International
votes in a runoff election on the prospect of yet another ballots for previous elections Monetary Fund. Her term was
May 22. In July, the Constitu- bungled election. in Austria produced the defec- due to end in July 2019.
tional Court ordered a rerun “If a well-developed and tive envelopes, Mr. Sobotka Upon joining the Bank of
because of improprieties in modern democracy such as the said. Another company, Öster- England, her main task was to
how some mail-in ballots were one in Austria isn’t able to reichische Staatsdruckerei, lead the Fair and Effective
processed. But in recent days, guarantee regular elections, will now print new ballots Markets Review, which had
reports emerged in Austrian then it is anything but funny,” with a simpler envelope de- been a response to a series of
media that some mail-in ballot journalist Michael Völker sign that was used until 2008, high-profile scandals in Lon-
envelopes for the rescheduled wrote in Der Standard news- pending parliamentary ap- don’s financial district, includ-
vote were defective, raising paper on Sunday. proval of the new law. ing the fixing of interest-rate
benchmarks and similar ma-
nipulation of foreign-exchange
single goal: maintaining train ac- By reviving the French gov- Beit Saadan included first re- rates.
tivities at the Belfort site,”
French Economy and Finance
ernment’s interventionism, Mr.
Hollande is launching a last-gasp
sponders and children. The
strikes took place on Saturday,
Minouche Shafik is
Minister Michel Sapin said Mon-
day after attending a meeting
effort to outflank his rivals in
the presidential 2017 election by
on the eve of the Muslim holi-
day of Eid al-Adha. leaving the bank
with the president. A spokes- positioning himself as a leading McGoldrick said he is “deeply
woman declined to comment on guardian of French industry. disturbed by the unrelenting at-
to head the London
Mr. Hollande’s decision. However, the government will tacks on civilians and on civilian School of Economics
“We will work with elected have to tread carefully, in help- infrastructure,” and urges rival
officials, unions, Alstom man- ing Alstom as the European parties to resume a cease-fire
agement and those who are in Commission prohibits direct or declared by the U.N. in April. Ms. Shafik also served as a
position to make orders that indirect state aid to private Yemen’s state-controlled member of the central bank’s
would keep the level of activ- companies. news agency SABA, which is Monetary Policy Committee,
ity at Alstom’s train plant in Many of Mr. Hollande’s po- controlled by Houthi rebels, has which sets interest rates. She
Belfort.” tential rivals in the 2017 have reported that 100 people were was a centrist member of that
built reputations as protectors killed or wounded in the air- group, supporting Gov. Mark
of Alstom and the Belfort site, strikes. Witnesses said an initial Carney as the central bank
which became a home for airstrike killed 13 people, but edged toward its first increase
French train makers fleeing the then a number of rescuers were in its benchmark interest rate
Alsace-Lorraine territory when it killed in subsequent airstrikes. since the financial crisis, until
was annexed by Germany in The U.N. statement said it it abruptly reversed course
1871. based its findings on its own following Britain’s June refer-
— Inti Landauro sources and media reports. The endum to leave the European
and William Horobin Associated Press was unable to Union.
independently verify the death Ms. Shafik backed an Au-
YEMEN toll. The Saudi-led coalition made gust cut in the interest rate, as
no statement regarding the air- well as the expansion of a pro-
Strikes on Water Well strikes, but its spokesman, Brig. gram under which the central
Reportedly Kill 30 Gen. Ahmed al-Asiri, has said bank buys government bonds,
Saudi-led airstrikes on a wa- before that relief and rights and the launch of a new pro-
ter well in northern Yemen re- groups are biased and give mis- gram under which it will buy
portedly killed 30 people and leading reports. corporate bonds.
DANISH ISMAIL/REUTERS
wounded 17, a U.N. official said Yemen’s conflict pits the in- “While it was impossible to
Monday, making it one of the ternationally recognized govern- resist the opportunity to lead
deadliest attacks since peace ment, which is allied with a a world class university like
talks collapsed a month ago. Saudi-led military coalition, the LSE, I leave the bank with
The U.N. Humanitarian Coor- against Shiite Houthi rebels and a deep appreciation for its
dinator for Yemen, Jamie McGol- forces loyal to a former presi- work and much admiration of
drick, said in a statement that dent. its staff,” she said in a state-
the casualties in the village of —Associated Press ment.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A6 | Tuesday, September 13, 2016
PRISONS
Continued from Page One
platelet levels. Mr. Maldonado
isn’t among them, because his
disease isn’t advanced enough
to meet the department’s crite-
ria, and he has sued seeking
treatment.
In a March court filing, the
department said treating the
state’s estimated 7,000 in-
fected inmates would cost
about $600 million, which
“would effectively cripple the
Department from a budgetary
standpoint” and squeeze other
medical care and security
needs. A spokeswoman de-
clined to comment on Mr. Mal-
donado’s case.
The rationing, which has
been implemented at both the
state and federal level, is an
acute example of the dilemmas
caused by both high and fast-
rising drug prices. Lawmakers
and consumers have increas-
ingly pressured drugmakers
such as Valeant Pharmaceuti-
cals International Inc. and My-
lan NV over the prices they
charge, and both presidential
contenders have proposed
ways to cut them.
California’s Department of
Corrections and Rehabilitation
said costs for hepatitis C medi-
cation totaled $66 million in
the year ended June 30, com-
pared with $47 million the
year before. The increase
stemmed more from a jump in
cost per treatment than from
an increase in the number of
patients being treated.
In Alaska, about 1,800 of
the 4,624 inmates on any
given day have hepatitis C,
said Robert Lawrence, chief
medical officer for the Alaska
Department of Corrections.
Treating them all would cost
nearly three times Alaska’s
$40 million annual prison-sys-
tem health-care budget.
“If we can treat them they
won’t go back into the commu-
nity and spread it further,” he
said. “That’s the solution, but
here is the problem—the cost
of the drug.”
The hepatitis C virus, which
A Costly Cure
The per-patient price paid by
state corrections departments
for a 12-week course of Gilead
Sciences Inc.’s hepatitis C drug
Harvoni.
Georgia 91,014
Texas 88,000
Indiana 80,000
California* 70,000-80,000
Rhode Island 64,000
South Dakota 64,000
Alaska 63,000
Iowa* 63,000-73,000
Montana 62,847
Louisiana 60,000
Hawaii 60,000
Maryland 60,000-70,000
New Hampshire 57,645
North Carolina 57,645
Florida 56,550
Oregon 56,210
Oklahoma 56,202
Colorado 56,145
Pennsylvania 56,000
Idaho* 48,000
Virginia 47,250
North Dakota 46,021
*Costs include Harvoni and other newer
medications.
Source: state corrections departments
THE WALL STREET JOURNAL.
BUS
Continued from Page One
as a primate climbs a tree.
Dino Cifelli, a Sleepy’s re-
gional sales vice president,
hadn’t met some Mattress
Firm leaders before boarding.
After he got stuck in the bath-
room, “I said, ‘This would be a
great first impression.’ ”
The event-planning com-
pany that manages the firm’s
tours, Encore Live LLC of Fort
Worth, Texas, last year ar-
ranged bus expeditions for a
bank and a car maker, said its
chief executive, Walter Kinzie.
In recent months, a Florida
car dealership and an Ohio
firearms-distribution company
inquired about sleeper-bus
trips.
Pure Romance LLC liked its
sleepover trips so much it
switched to an extended lease
on a pink-accented bus its ex-
ecutives use for three tours a
year. The Cincinnati company,
whose wares include “what
you see in ‘Fifty Shades of
Grey,’ ” according to CEO
Chris Cicchinelli, uses the
coach to visit dozens of cities.
The trips are for marketing,
to connect with sales consul-
tants and to gather executives
without distraction. At first,
“they were like, ‘What are we
doing? This is going to be ter-
rible,’ ” Mr. Cicchinelli said,
A guard mans the gate to the main corridor of the Pennsylvania
State Correctional Institution at Graterford.
has infected between 2.7 mil-
lion and 3.9 million Americans,
kills more people in the U.S.
than HIV and dozens of other
infectious diseases combined,
according to the Centers for
Disease Control and Preven-
tion. Unlike many diseases,
hepatitis can take 20 to 30
years to advance to a life-
threatening stage, sickening
patients and risking transmis-
sion to others all the while.
Prisoners have a higher in-
fection rate because many have
a history of injection drug use,
a common route of the blood-
borne virus’s transmission. Re-
searchers at Emory University
estimate that at least 17% of
the nation’s 1.3 million state
prisoners have the disease,
compared with about 1% of the
general population.
The new treatments, includ-
ing Gilead Sciences Inc.’s
Sovaldi and Harvoni, AbbVie
Inc.’s Viekira Pak and Merck &
Co.’s Zepatier, began to reach
the market about three years
ago. They are shown to have
cure rates above 90% while re-
ducing side effects and cutting
treatment times to about three
months on average.
Older medicines have cure
rates of about 65% or less and
need to be taken for up to a
year. Some have been discon-
tinued by manufacturers.
When they are prescribed, it is
generally in combination with
the newer drugs.
Patients with private health
insurance and those relying on
state Medicaid programs have
also had difficulties getting the
newer drugs, although some of
those restrictions are being
eased. In August, Massachu-
setts made the drugs more
widely available after negotiat-
ing a lower price with Gilead.
State prisons say they are
modeling policies after the fed-
eral prison system, reserving
drugs for the sickest patients
while monitoring the health of
other infected inmates. Gabriel
Eber, senior staff counsel for
the American Civil Liberties
but the camaraderie brought
people around.
Also, his bus has a fully
stocked bar. “Are we going to
have some cocktails at 9
o’clock [p.m.] when we’re talk-
ing about business?” he said.
“Yeah, we’re going to have
some cocktails.”
Thanks to ideas from one
trip, his executives hatched
plans for a high-end line of vi-
brators. “I get their full undi-
vided attention for a week,”
Mr. Cicchinelli said. “It’s
priceless.”
One bus had just hauled a
reggae band, leaving a telltale
aroma. For two weeks, Mr.
Cicchinelli and his team pref-
aced client meetings with a
disclaimer that the marijuana
smell wasn’t theirs.
“Somebody who’s never
done it before thinks this is
like sleeping at the Ritz Carl-
ton, and it’s not at all,” said
Don Neuen, senior vice presi-
dent at Star Coaches Inc.,
which leases such buses.
“You’ve got a 500 horsepower
diesel engine underneath
you.”
Bearing, a New York char-
ter service, pitches shorter
runs to corporations as dis-
creet meeting venues. Its
black 45-foot buses have
tinted windows, conference
rooms and toilets stocked with
amenities including mouth-
wash and Dramamine. An in-
vestment bank hosted pre-
FROM PAGE ONE
Union national prison project,
said he can’t think of another
example of drugs used to treat
a large-scale epidemic being
rationed because of their cost.
Such withholding is at odds
with treatment guidelines from
medical societies, which rec-
ommend most people with per-
sistent hepatitis C be given
new drugs, regardless of the
stage of their disease.
“While we realize that cer-
tain patients with advanced
liver disease do need the treat-
ment more quickly, that does
not abrogate the responsibility
to treat patients at earlier
stages of disease,” said Dr. Ar-
thur Kim, an infectious-disease
specialist at Massachusetts
General Hospital in Boston who
helped draft the treatment
guidelines. “We would never
not treat diabetes until there
were later complications.”
The Wall Street Journal
surveyed all 50 state depart-
ments of corrections to deter-
mine how many affected in-
mates are receiving newer
hepatitis C drugs. The 34
states that had data reported a
total of roughly 101,000 in-
mates with the condition. Of
those, about 3.4% have been
treated for hepatitis C with
the new drugs. A few states
provided estimates of preva-
lence and treatment rates only.
The remaining states didn’t
have the data, or declined to
comment. Some didn’t respond
to phone calls or emails.
The majority of responding
states cited cost as a reason
for limiting treatment. Few
prisoners have private insur-
ance, and federal law generally
prohibits Medicaid from fund-
ing most types of inmate care
that doesn’t require hospital-
ization.
The nation’s 192 federal
prisons are also feeling the
squeeze, despite access to
mandatory drug discounts.
Federal Bureau of Prison
spending to treat hepatitis C
has tripled since 2013, even
though the number of treated
merger talks on one, said John
McDermott, Bearing’s founder
and a former fund manager.
“How do you get two CEOs
together, unnoticed?” he said.
“No one has any way of know-
ing who’s on board.”
CEO Ken Murphy of Mat-
tress Firm, which Steinhoff In-
ternational Holdings NV re-
cently agreed to acquire,
conceived bus trips as a way
to meet employees face to
face, embarking on the first
tour in 2013. The next year,
the tour became part of the
firm’s “Bed Talks,” motiva-
tional programming named af-
Jody Putnam, Mattress Firm’s talent and integration officer, snaps selfies aboard the bus in Greensboro, N.C.
Many Infected, Few Treated
Newer drugs for hepatitis C have high cure rates—and high price
tags to match. The cure/cost disconnect, doctors warn, is fueling
a public-health crisis, especially in prisons. A Wall Street Journal
survey of state corrections departments illustrates the problem.
Hepatitis C-infected prison populations by state
Inmates in Total prison population
treatment Number of estimated hepatitis C infections
Texas 412
17,000
California 751
17,000
49,300
Pennsylvania 50
7,000
New York 546*
5,940
32,832
Missouri 18
5,146
42,000
Michigan 127
4,655
21,000
Tennessee 8 got the virus from injection-
3,514
26,500
Indiana 442
3,400
16,785
Washington 100
2,937
27,074
Oklahoma 2 he kept tabs on the newer
2,433
patients has fallen by 42%, ac-
cording to a bipartisan report
from December issued by
members of the Senate Fi-
nance Committee.
Last year, the system
treated 222 inmates, the vast
majority with the new drugs,
out of an estimated infected
population of 9,200. A Bureau
of Prisons spokesman said the
number treated declined be-
cause the bureau reserved the
new drugs for its sickest in-
mates and delayed treatment
for others.
The bureau said it receives
an average discount of 38.4%
off the list prices for the new
hepatitis C drugs, using De-
partment of Veterans Affairs
contracts. State prison sys-
tems, which house the majority
of U.S. prisoners, aren’t enti-
tled to those discounts.
The Senate Finance Com-
mittee, as part of its investiga-
tion into the pricing of Sovaldi
and Harvoni, has charged that
Gilead, of Foster City, Calif.,
ter TED Talks.
There have been six expedi-
tions, typically about 6,000
miles across 15 states over
roughly 21 days. Most execu-
tives rotate on for about a
week, flying home; some ride
the duration.
The bus features leather
couches, televisions and a
kitchen with a drawer labeled
“wine.” In back, a lounge pro-
vides a place for conference
calls.
In the middle are sand-
wiched 12 bunks, three high.
The mattresses don't come
from the company’s stores be-
THE WALL STREET JOURNAL.
Gilead’s vice president of man-
aged markets.
Gilead dominates the mar-
ket for new hepatitis C drugs,
earning more than $19 billion
in annual revenue from such
sales last year. Its U.S. list
prices of more than $1,000 per
pill and higher for Sovaldi and
Harvoni have drawn criticism
from insurers as well as state
and federal officials.
“We have seen increased
concerns about the cost of re-
cent drug approvals that really
have forced states to reallocate
resources to cover those
drugs,” including Sovaldi, said
Pam Curtis, director of the
Center for Evidence-Based Pol-
icy at Oregon Health & Science
University, which helps state
RYAN COLLERD FOR THE WALL STREET JOURNAL
Medicaid programs decide
what drugs they will cover.
AbbVie and Merck, which
also sell expensive new treat-
ments for hepatitis C, say
they too are working with
prison systems to make their
drugs more available to in-
mates. They declined to dis-
close details about the terms
of their contracts with state
prisons. The list price for
AbbVie’s Viekira Pak is more
than $83,000 for a 12-week
course, while Merck’s Zepat-
ier is $54,600 for a 12-week
treatment.
According to court records,
when he was 17, Mr. Mal-
donado stabbed and killed a
19-year-old man near a Phila-
delphia swimming hole called
Devil’s Pool in August 1980.
147,000 “I can apologize a thousand
times, but still I can never
change what happened. I wish
128,864
I could,” Mr. Maldonado, now
53, said in an interview at
Graterford prison, which is
about 30 miles northwest of
54,000 Philadelphia. He was sentenced
to life without parole.
A prison doctor diagnosed
Mr. Maldonado with hepatitis
C in 1997, after he began to ex-
perience joint stiffness. Mr.
Maldonado said he probably
*Those approved for treatment
Notes: Some treatment and
inmate population numbers may drug use or the tattoos he re-
have changed slightly since states ceived in jail.
responded to WSJ survey; Overall
Prison health officials tried
prison population numbers are
latest available. to cure him with older drugs in
2001 and 2013, but the virus
Source: WSJ survey of state
corrections departments persisted. Mr. Maldonado said
conducted March through August
THE WALL STREET JOURNAL. drugs by subscribing to a hep-
atitis C newsletter. He began
made decisions knowing they asking the prison’s medical
would put the drugs out of staff for Gilead’s Harvoni soon
reach for many patients. after it came out in late 2014.
A Gilead slide deck for an In June 2015, with the help
internal presentation in Sep- of the Pennsylvania Institu-
tember 2014, released by the tional Law Project, which pro-
committee, showed plans to of- vides free legal services for
fer discounts of 10% to 20% for prisoners, he filed suit in fed-
Harvoni to prison health-care eral court seeking access to the
programs in just seven states, drugs for himself an other in-
including California and Texas, fected prisoners. The suit con-
because they had high infec- tends that denying access to
tion rates. The Senate report the latest treatments is a viola-
concluded Gilead “saw dimin- tion of the Eighth Amendment,
ishing benefits in smaller which prohibits cruel and un-
prison systems.” usual punishment of prisoners.
Michele Rest, a spokes- Similar lawsuits are pending in
woman for Gilead, said the Minnesota, Tennessee and
company offers discounts to Massachusetts.
large and small prison systems, “Our punishment is being
sometimes directly, or through removed from society, not be-
pharmacy-benefit managers or ing denied medical care,” said
multistate purchasing groups. Mr. Maldonado.
Gilead said prisons can partner This past April, Mr. Mal-
with hospitals for certain dis- donado’s lawyer received an
counts, which would put the email from the corrections
price on a par with rates for department’s attorney saying
state Medicaid programs. he didn’t meet the criteria for
“This isn’t a system we’ve the new drugs. The case is
ignored,” said Coy Stout, pending.
cause the berths are too small,
said Mr. Ludens. As for com-
fort, “your expectations are
pretty low.”
structing passengers in the
cramped corridor to brush by
others with backs touching in-
stead of fronts. They snack on
Managers on one trip board and stop at restaurants
awoke at 2 a.m. when some- such as Cracker Barrel.
one screamed and opened the The bus is kept cool to mit-
curtain to another’s berth; he igate odors, but things get
hadn’t warned of suffering “funky” when air-conditioning
from night terrors, Mr. Ludens goes out, said Sunni Goodman,
said. To help sleep, an execu- vice president of communica-
tive once played a recording tions. Mr. Ludens describes
of a children’s book, “The that smell as “a little bit of
Rabbit Who Wants to Fall feet.”
Asleep.” Mattress Firm books two
Posted rules of the road in- hotel rooms nightly for show-
clude “Don’t drink the water” ering. Under no circum-
and “Pass back to back,” in- stances, said Mr. Murphy, may
riders sleep there.
Sleepy’s Mr. Pergolizzi, a
bus-trip rookie, said he began
asking “qualifying questions
to see if everyone was com-
mitted” to bedding down
aboard. His colleagues, he
said, “grabbed the tar and
feathers.”
After the bus left Long Is-
land, some executives turned
to laptops. Others shared a
box of jelly beans, some bear-
ing flavors such as “dead
fish.” DJ Khaled’s “All I Do Is
Win” played.
Rolling into New Jersey,
they discussed a quick Man-
hattan foray. Mr. Ludens sug-
gested Central Park or a
Broadway show.
DAN MILLICAN
His colleagues had another
idea: They went on a bus tour.
—Lauren Weber
contributed to this article.
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THE WALL STREET JOURNAL. Tuesday, September 13, 2016 | A7

U.S. NEWS
Fed Officials: No Urgency on Rates Trump Heightens
Criticism of Bank
Three central-bank Republican presidential nomi-
nee Donald Trump ratcheted up
members see no need his criticism of the Federal Re-
for an increase at serve and Chairwoman Janet
Yellen on Monday, saying the
meeting next week central bank is keeping rates low
to help President Barack Obama.
BY HARRIET TORRY Mr. Trump, presumably speak-
ing of Ms. Yellen, said interest
Three Federal Reserve offi- rates have been kept low “be-
cials indicated Monday that cause she’s obviously political and
they are in no hurry to raise doing what Obama wants her to
short-term interest rates at do.” Mr. Trump, in an interview on
their policy meeting next week. CNBC, added, “What they are do-
Fed governor Lael Brainard ing is, I believe, it’s a false mar-
said in a speech that the central ket. Money is essentially free.”
bank’s recent caution on rates— Ms. Yellen, he said, “should
leaving them unchanged since be ashamed of herself.”
December—“has served us well His comments also marked
in recent months, helping to sup- the latest swing in Mr. Trump’s
port continued gains in employ- views on monetary policy and
ment and progress on inflation.” the central-bank chief, for whom
Federal Reserve Bank of At- he said he had “great respect”
lanta President Dennis Lockhart in an interview with The Wall
said in a speech that economic Street Journal four months ago.
conditions warrant a “serious Mostly Republicans have
discussion” at the Sept. 20-21 taken aim at the Fed over its
meeting about raising rates, but handling of the financial crisis
he doesn’t “feel that we are in- and its easy-money policies. But
DAVID PAUL MORRIS/BLOOMBERG NEWS

curring the costs of patience such harsh criticism of the Fed’s

that put a lot of urgency on the interest-rate decisions is unusual
question of raising rates.” He de- from the presidential nominee of
clined to say when he would like a major political party.
to see the central bank next act. A Fed spokesman declined to
His counterpart at the Min- comment. Central-bank officials
neapolis Fed, Neel Kashkari, have repeatedly said politics,
said during an interview on and the coming presidential elec-
CNBC that “there doesn’t ap- tion, in particular, won't factor
pear to be [a] huge urgency to into their decision about when
do anything, frankly.” Fed governor Lael Brainard said she is reluctant to raise rates until she sees stronger growth, business investment and progress on inflation. to next raise interest rates.
Theirs were the last sched- The Fed held its benchmark
uled public remarks by Fed offi- moved the band up by a quar- In contrast, Ms. Yellen said board just over two years ago cent jitters in global stock mar- short-term rate near zero for
cials before Tuesday, when they ter percentage point. in an Aug. 26 speech: “In light and has emerged as a voice fa- kets about the outlook for seven years until December
were entering a self-imposed, Ms. Brainard, speaking in of the continued solid perfor- voring a go-slow approach on global central banks’ policies. 2015, when it nudged it up a
weeklong blackout period in Chicago, presented several rea- mance of the labor market and raising interest rates, given Financial markets’ expectations quarter percentage point to a
which they engage in private sons for holding rates steady our outlook for economic activ- risks to economic growth from for a rate increase at the Fed’s range between 0.25% and 0.5%.
discussions about what they for a while longer, saying that ity and inflation, I believe the low inflation and volatility September meeting diminished Democrat Hillary Clinton
will do at their next meeting. a relatively strong labor mar- case for an increase in the fed- overseas. Inflation has under- after the Fed officials’ remarks hasn't weighed in on interest-
Their comments appeared ket isn’t boosting wages and eral-funds rate has strength- shot the Fed’s 2% annual tar- Monday. After they spoke, trad- rate policy, though her cam-
to contrast with those of Fed inflation as much as would ened in recent months.” get for more than four years. ers in futures markets saw a paign has called for changes in
Chairwoman Janet Yellen and have been expected in the past. During a question-and-an- The former Treasury offi- 15% likelihood of a rate increase Fed operations, including pro-
other officials who have sug- Persistently weak inflation swer session after her speech, cial, in her speech, also cited this month, according to data hibiting bankers from serving
gested in recent weeks that despite low unemployment has Ms. Brainard said she is reluc- Japan and the eurozone’s diffi- from CME Group, down from a on the boards of the Fed’s 12
they could consider a Fed rate reinforced her skepticism tant to raise rates until she culties in tackling weak growth 24% probability on Sunday. regional reserve banks.
increase this month. Together, about many economists’ belief sees stronger growth, business and inflation as reasons for Unlike Ms. Brainard, neither Mrs. Clinton chided her op-
they suggest a lack of consen- that a tightening labor market investment and progress on the U.S. to proceed cautiously Mr. Lockhart nor Mr. Kashkari ponent following similar com-
sus on whether to move at will push up wages and prices inflation. “It would be impor- in raising rates. Monetary pol- is currently a voting member ments last week, and said it
their next meeting. faster as firms compete for tant to see some of those indi- icy “should be oriented toward of the rate-setting Federal was inappropriate for candi-
The Fed has held its bench- workers. In the current envi- cators move in a more positive minimizing the risk of the U.S. Open Market Committee. dates and presidents to weigh
mark federal-funds rate in a ronment, “the case to tighten direction going into the third economy slipping into such a —Michael S. Derby, Shayndi in on Fed actions.
range between 0.25% and 0.5% policy pre-emptively is less and fourth quarters,” she said. situation,” she said. Raice and Mark Taylor —Kate Davidson
since December, when it compelling,” Ms. Brainard said. Ms. Brainard joined the Fed Her remarks came amid re- contributed to this article. and Mark Taylor
MONICA HERNDON/ASSOCIATED PRESS

Democratic candidate Hillary Clinton shown speaking at the University of South Florida this month.

CLINTON was full-steam ahead.” He said

aides had to persuade her to
cancel the California trip.
There were discussions
“Antibiotics can take care
of pneumonia,” he wrote on
Twitter. “What’s the cure for
an unhealthy penchant for pri-
Continued from Page One about deploying her husband, vacy that repeatedly creates
decided to release more infor- former President Bill Clinton, unnecessary problems?” The
mation, Mr. Fallon said. to attend Los Angeles fund- disclosure of Friday’s pneumo-
On Monday, Mr. Trump also raisers in her stead. She also nia diagnosis didn’t come until
said he would put out more had planned to appear on El- hours after a video emerged
medical information, though len DeGeneres’s talk show Sunday of Mrs. Clinton stum-
his timetable wasn’t clear. His while in California. bling as aides helped her into
campaign released a four- Mrs. Clinton, who main- her van.
paragraph doctor’s note claim- tained a grueling travel sched- Clinton Communications Di-
ing he would be “the healthi- ule as secretary of state and rector Jennifer Palmieri re-
est individual ever elected to now as a presidential candi- plied to Mr. Axelrod: “We
the presidency.” date, “continues to feel better could have done better yester-
Mrs. Clinton was spending but intends to remain at home day, but it is a fact that public
Monday at home resting, the today, following her doctor’s knows more about HRC than
campaign said, though she recommendation to rest,” any nominee in history.”
was expected to call in to a spokesman Nick Merrill said On Monday, Mr. Trump
fundraiser being held in San Monday. wished Mrs. Clinton a speedy
Francisco that she had recovery, but he again aired
planned to attend. She was questions about her health,
supposed to be in California
GOP nominee Donald citing a coughing episode dur-
for events on Monday and Trump also said he ing a rally earlier this month.
Tuesday and then in Nevada Mrs. Clinton attributed the
on Wednesday. It is possible
would release more cough to seasonal allergies. The best-equipped reader survives.
she will return to the trail on medical information. “I hope she gets well soon.
Wednesday, but it wasn’t clear I don’t know what’s going on. Explore now at wsj.com/brexit
whether she would travel out I’m like you, I just see what I
West. Some Democrats pointed to see,” Mr. Trump said on Fox
Mr. Fallon said Mrs. Clinton her resilience. “ ‘Powering News. “The coughing fit was a
hadn’t planned on changing through’ illness is what week ago, so I assume that
her schedule after her diagno- women do: Stoically, every. was pneumonia, also. I would
sis of pneumonia on Friday. single. day,” former Michigan think it would have been, so
That day, she attended a na- Gov. Jennifer Granholm wrote something is going on, but I
tional-security meeting, talked on Twitter. just hope she gets well and
to reporters and attended a But David Axelrod, a former gets back on the trail, and
fundraiser. She also partici- adviser to President Barack we’ll be seeing her at the de-
pated in meetings on Saturday Obama, said the way that she bate.”
and didn’t want to miss the handled the situation was a The candidates are sched-
9/11 event on Sunday, he said. problem and fed the perception uled to meet Sept. 26 in
“Her intention was to that the candidate isn’t always Hempstead, N.Y., for their first © 2016 Dow Jones & Co., Inc. All rights reserved. 3DJ3944

power through,” he said. “She straightforward with the public. debate.

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A8 | Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

PERSONAL JOURNAL.

The Office Walk-and-Talk Really Works

The health benefits are Carolina Department of Health and
Environmental Control in Colum-
real for people who bia, S.C. She was startled to learn
regularly take walking from an app months ago she was
getting only about one-third of her
meetings at work 10,000-steps-a-day goal.
Ms. Bracey started inviting col-
BY RACHEL BACHMAN leagues on 15-minute walking
meetings, a few a week. She came
They don’t require yoga pants to find that the mobile meetings
or a shower, but the research is are more relaxed than seated ones,
clear: Walking meetings count as and remove barriers between man-
exercise. agers and employees.
“If corporations were to adopt “Even just having a desk be-
this ubiquitously, you just start to tween two people, it almost states
think of those health benefits add- that you’re in this position and
ing up,” says James Levine, co-di- they’re in that position,” Ms.
rector of obesity solutions at the Bracey says. “When you’re side by
Mayo Clinic and Arizona State Uni- side, we’re there with our comfy
versity. “It’s an amazingly simple shoes on and we’re just two peo-
thing and it costs nothing.” ple out walking.”
Walking meetings are typically Walking meetings also spur
held with two or three people over more ideas, Ms. Bracey says. Re-
a set route and period—often 30 search backs her up. Creative out-
minutes. They can take place at a put increases by an average of 60%
nearby park or even in office hall- when people are walking, accord-
ways. Some people are using walk-
ing meetings to boost their daily
How to Walk and Talk ing to a 2014 Stanford University
of 176 college students and other
step counts. Others are spurred by  Limit meetings to two to three people adults. Study participants were
mounting research on the physical asked to think of alternate uses for
and mental benefits of being more  Keep meetings to 30 minutes a given object, for instance, while
mobile at work. they were seated or walking. When
One of the few studies on walk-  Aim to get 150 minutes of aerobic activity a week people were walking, they pro-
ing meetings, published this year, duced more responses that no one
FROM TOP: ISTOCK; KPMG UK

demonstrated their potential. The  Walking for 15 minutes burns an average of 56 calories else in the group had thought of
three-week study, co-written by Dr. than when they were sitting.
Alberto J. Caban-Martinez, a phy-  Sitting at a laptop for 15 minutes burns 20 calories Jeff Donnay, a managing direc-
sician and scientist at the Univer- tor at Salo, a Minneapolis-based
sity of Miami, showed a 10-minute  Standing at a desk for 15 minutes burns 22 calories staffing and consulting agency,
gain among the 17 participants in says he often walks while talking
weekly physical activity after they on the phone.
added walking meetings. “I’m on a wireless headset, so
The more participants engaged ducted while walking, experts say. 56 calories, compared with 20 cal- few sort of quizzical looks from I’m walking around the office right
in moderate physical activity at Although standing desks have ories for sitting at a laptop com- some people” when she suggested now,” he said in a recent phone
work, the less likely they were to received attention in recent years, puter and 22 for standing. Walking a few months ago that her office call.
miss work for health reasons, ac- standing burns scarcely more calo- participants moved at about 2.6 hold walking meetings. The head Mr. Donnay says a study of of-
cording to the study, published in ries than sitting, according to a miles an hour, says study co-au- of communications at business-ad- fice-based health care conducted
the journal Preventing Chronic study of 74 people by researchers thor Seth Creasy, now a postdoc- visory firm KPMG in London none- at Salo and co-written by the
Disease. Being sedentary for long at the University of Pittsburgh toral fellow at the University of theless paired off the 26 people in Mayo Clinic’s Dr. Levine, published
stretches is linked with obesity, published earlier this year in the Colorado, Denver. That’s a bit her department and sent them on in 2011, persuaded him and his col-
Type 2 diabetes and a range of Journal of Physical Activity and slower than the 3-miles-an-hour one 30-minute walking meeting a leagues to move more at work. Mr.
other conditions. Health. federal health guidelines say week. The pairings were randomly Donnay also holds about two 30-
Most Americans get less than The study found that walking counts as brisk walking. assigned and rotated weekly to in- minute walking meetings a month,
the recommended 150 minutes a for 15 minutes burns an average of Sorrelle Harper says she got “a clude everyone and to stimulate sometimes in a nearby park.
week of moderate-intensity aero- new conversations. In a previous job, Paul Nuki re-
bic activity, such as brisk walking. Each pair settles on a topic, called staging long, out-of-office
Previous studies have shown that which can range from career goals walking meetings that turned out
walking for as little as 15 minutes to client strategy, ahead of time. to be too ambitious for some of
a day can add up to three years of All the talks are confidential, his co-workers.
life expectancy. which has made them more candid “Three or four members of the
Walking meetings have been than typical meetings, Ms. Harper team would book a holiday for
outlined in a TED Talk and encour- says. Despite occasional rain and that day or phone in sick,” he re-
aged in a Funny or Die video with even snow flurries, employees calls. Mr. Nuki has since co-
the cast of “The West Wing,” have embraced the meetings, Ms. founded a London-based company,
whose characters were known for Harper says. People seem “much StepJockey, to combat sedentary
their frequent walk-and-talks. The more animated when they’re walk- behavior in large office buildings
2015 federal dietary guidelines ing side-by-side in the fresh air.” by promoting the use of stairs.
suggested people use walking Paula Bracey is a director of He says it’s also important to
meetings to increase physical ac- project management at the South make clear that walking meetings
tivity. are work, not meanderings or gos-
Meetings, phone calls and email sip sessions. “If bosses see you
have come to consume more than Walking in London wandering outside heading to a
90% of the working time of man- Becca Appleby and Nahidur cafe, the instinct is, ‘Why aren’t
agers and some other workers, Rahman hold a walking meeting they at their desks working?’ ” Mr.
such as consultants. Many of those near the London office of business- Nuki says. “So you need to let peo-
meetings and calls could be con- advisory firm KPMG. ple know.”

Boxing, Biking and Bikinis: The Three B’s of Fitness

BY JEN MURPHY

Bikinis and pasta might seem

like an odd pairing, but not to
Margot Micallef. The 57-year-old
eats a lot of pasta, as chief execu-
tive of Gabriella’s Kitchen, a forti-
fied pasta company based outside
Toronto. She also competes in bi-
kini fitness competitions.
After losing her sister and busi-
ness partner, Ga-
WHAT’S YOUR briella Micallef,
WORKOUT? to cancer in
2012, Ms. Mi-
callef turned to
exercise. “I was overwhelmed by
the loss, as well as the challenge of
running the company on my own,”
she says.
BRIAN BUCHSDRUECKER FOR THE WALL JOURNAL (2)

Ms. Micallef hired a personal

trainer, joined a boxing gym and
started biking with a friend. “Exer-
cise gave me mental clarity and fo-
cus,” she says.
Ms. Micallef divides her time
among Calgary, Vancouver and To-
ronto because she runs two busi-
nesses: Oliver Capital Partners, in Margot Micallef, above and left,
Calgary, Alberta, which invests in prepares for 100-mile bike rides and
private companies looking for ex- bikini fitness competitions by working
pansion capital or an outright sale; out with Louie Raposo, of Impact
and Gabriella’s Kitchen, which sells Boxing & Fitness in Calgary, Alberta.
high-protein, gluten-free products
under the label Skinnypasta. sick, she always would say, ‘Find ing back extensions using a TRX coach helped teach me to ride says.
Eventually, Ms. Micallef got so the time to take care of your Suspension Trainer. more efficiently and to focus.” Ms. Micallef bought a Special-
fit that her trainer, Yvan Courn- health, because you will always Depending on which competi- Ms. Micallef starts her day with ized Elite Ruby road bike for
oyer, suggested she sign up for a find the time to take care of your tion or bike ride she is training for, a cup of organic ginger-green tea. $3,500 (prices in Canadian dol-
bodybuilding competition. “I al- illness,’ ” Mrs. Micallef says. she cycles or boxes in the after- Her breakfast concoction is a com- lars); her Shimano Ultegra 6800
ways thought bodybuilding was for “That’s why I always find the noons or evenings at Impact Box- bination of goat-milk yogurt, ber- wheel set cost $750. She spent
Arnold Schwarzenegger types,” she time.” ing & Fitness in Calgary. “Boxing is ries, cucumbers, chia, hemp and $750 on an ultralight Scicon Aero-
says. Last year, in May, she com- Ms. Micallef’s workouts begin one of the scariest things,” Ms. Mi- flax seeds, shredded coconut, comfort bike bag so she can travel
peted in a regional fitness compe- at 6 a.m., Monday through Friday. callef says. spices like cinnamon, cayenne and with her bike. She likes Campag-
tition of the British Columbia Ama- She has personal trainers in Cal- Ms. Micallef does various drills turmeric, fish oil and a touch of nolo cycling apparel, Specialized
teur Bodybuilding Association and gary, Vancouver and Toronto and on different bags with a trainer. Or maple syrup. “It’s a challenge to Body Geometry gel gloves and her
placed second in the age 45-plus keeps an extra bike and workout she rides on Calgary’s bike paths, get all of my ingredients into my Specialized Sierra helmet. She
bikini category.She plans to com- gear at her 26-year-old son’s To- completing rides of two to three yogurt when I travel, but I try,” spent $350 on her Sidi Eagle 5 Fit
pete in the Popeye’s Fall Classic bi- ronto apartment. When she is in hours on weekends. After last she says. Lunch and dinner are Venice bike shoes. She boxes in
kini competition in November. New York City, which is about one year’s Branch Out Bike Tour, she protein- and vegetable-focused; Everlast Grid high top boxing
To balance her strength train- week a month, a trainer comes to hired a cycling coach for three pasta with capers, artichokes, spin- shoes and runs in Brooks Adrena-
ing, Ms. Micallef does long-dis- her hotel. days. “I felt really out of control on ach and kale is a go-to meal. She line GTS shoes.She buys Lolë leg-
tance cycling. For the past two Each day her workout will focus the downhills and was surprised snacks on raw vegetables or apples gings, Nike shorts and Gap Fit
years she has participated in the on a different muscle group: For that the hardest part for me throughout the day, and cuts out tops. Her custom-made competi-
Branch Out Bike Tour, a 100-kilo- legs and back, she might perform wasn’t the uphill, but being able to all sugar leading up to a body- tion bathing suit cost $250. She
meter ride in Panorama, British three sets each of step-ups, re- concentrate on the long flat building competition. “Luckily, I spends about $100 an hour on
Columbia. “When my sister got verse flyes, split squats, and stand- stretches of road,” she said. “My don’t have a sweet tooth,” she training.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Tuesday, September 13, 2016 | A9

ARTS & ENTERTAINMENT

Lightening Up a Too Dark Knight

BY BEN FRITZ

THEY’RE TWO OF THE MOST successful movies

of the year, grossing a combined $1.5 billion
at the global box office.
“Batman v Superman: Dawn of Justice”
and “Suicide Squad” are also two of the
year’s biggest disappointments, met with vi-
ciously negative reviews, bitter fans’ com-
plaints and large second-weekend sales
drops that indicate word-of-mouth was un-
kind, to say the least. The Wall Street Jour-
nal’s Joe Morgenstern wrote that “Suicide
Squad” represented “an all-out attack on the
whole idea of entertainment” due to its “ex-
ceptional cynicism and startling ineptitude.”
Warner Bros. is responding to this paradox
by charging full-speed ahead with plans for
its DC “cinematic universe”—while conceding
the movies to date have fallen creatively
short, a rare public admission in Hollywood.
The studio has reworked the 2017-slated
“Justice League” in hopes of making it less ZAP! Warner Bros.
grim and depressing than March’s “Batman v accentuates the positive

Superman.” And it has put fan-favorite comic
book and TV writer Geoff Johns in a senior
position overseeing the next wave of movies,
along with veteran production executive Jon
Berg.
One of the duo’s main goals, they said in
their first interview since taking the jobs this
past spring, is to make DC superheroes on the
big screen more inspiring.
“Mistakenly in the past I think the studio
has said, ‘Oh, DC films are gritty and dark
and that’s what makes them different.’ That
couldn’t be more wrong,” said Mr. Johns, who
has written comic books featuring most of
the company’s top superheroes. “It’s a hope-
ful and optimistic view of life. Even Batman
has a glimmer of that in him. If he didn’t
think he’d make tomorrow better, he’d stop.”
Many have complained that such a sense
of optimism was precisely what was missing
from director Zack Snyder’s “Batman v Su-
perman” and his 2013 Superman reboot “Man
of Steel.” Neither Ben Affleck’s Batman nor
Henry Cavill’s Superman crack a smile, and
both films feature so much death and de-
struction, including killings perpetrated by
the main characters, that bloggers labeled
them the “DC cinematic murderverse.”
The shuffle that made DC movies a full-
time job for Messrs. Berg and Johns came
soon after the public reaction to “Batman v
Superman.” Previously, no Warner executives
were devoted exclusively to the studio’s su-
perhero films. Mr. Berg worked on them
along with other productions, and Mr. Johns
was a consultant with no authority.
Their appointments indicate that after giv-
ing Mr. Snyder the type of long leash ac-
corded Christopher Nolan on the hit “Dark
Knight” Batman trilogy, Warner has con-
cluded it needs to oversee its DC movies
more closely. A spokeswoman for Mr. Snyder
said he was unavailable to comment.
There was precedent in comics for Mr.
Snyder’s interpretations, particularly Frank
Miller’s revered 1986 comic-book miniseries
“The Dark Knight Returns,” in which Batman
and Superman battle. And director David
Ayer’s “Suicide Squad,” though it had signifi-
cant reshoots and last-minute editing, was
never going to be a lighthearted romp, since
its source material is about villains coerced
into doing good.
While they knew the movies had flaws and
expected them to be controversial, Warner
executives were taken aback by the over-
whelmingly negative responses, people at the
studio said. They believed they had created
more grounded, character-based stories that,
like “The Dark Knight,” would favorably stand
out from chief rival Marvel Studios’ consis-
tently successful but fluffier fare such as
“Avengers” and “Guardians of the Galaxy.”
The negative reactions were troubling. De-
spite the box office, if people aren’t happy
and excited to see what’s next when they
come out of theaters, the long-term prospects
for DC films and consumer products are poor.
Warner plans to release at least two movies
based on DC characters every year for the
foreseeable future at a cost of several billion
dollars. CEO Kevin Tsujihara has said DC is
one of three pillars of his studio’s movie busi-
ness, along with Harry Potter and Lego.
Still, Warner executives have found rea-
WARNER BROS.
after bad reactions to
films like ‘Batman v
Superman.’
sons to take heart. The fact that this year’s par for the course. And it’s expected to have
movies were met with strident opinions—in- fewer of Mr. Snyder’s controversial flourishes,
stead of a shrug like the Twentieth Century like the dream sequences in “Batman v Super-
Fox 2015 superhero flop “Fantastic Four”—in- man,” in favor of focusing more tightly on the
dicates that fans care about the characters. plot, people close to the picture said.
Big opening weekends mean that the market- Plans to make “Justice League” a multi-
ing and concepts resonated—a particularly movie story were also abandoned. Instead, a
impressive feat for “Suicide Squad,” given the 2019 sequel will stand alone. “Justice League”
low profile of the comic book on which it’s will come out in November 2017, following
based. And even people who didn’t like the next June’s “Wonder Woman.” Mr. Johns did
movies latched onto characters who proved a rewrite of the script for the superheroine’s
popular, particularly Gal Gadot’s Wonder origin story, working with director Patty Jen-
Woman and Mr. Affleck’s Batman in “Batman kins, and is co-writing a solo Batman movie
v Superman” and Margot Robbie’s Harley with Mr. Affleck, who will also direct. It will
Quinn and Will Smith’s Deadshot in “Suicide feature Joe Mangianello, from “Magic Mike”
Squad.” and “True Blood,” as nemesis Deathstroke
“To have these characters be part of the and could come as early as 2018, though War-
fabric of pop culture is so rewarding, though ner hasn’t set a release date.
of course we’re disappointed the movies As he is writing screenplays and working
weren’t better reviewed,” said Mr. Berg. He with Mr. Berg to develop other coming DC
spoke from the London set of “Justice movies, including “Flash,” “Aquaman” and
League,” where Mr. Snyder is a few weeks “Cyborg,” Mr. Johns has pulled back from his
away from completing a five-month shoot. work on DC television shows and comic
“Justice League” was already intended to books. In May, however, he wrote a special
be less depressing than “Batman v Super- called “Rebirth” that gave DC’s comic-book
man,” but Messrs. Berg and Johns worked line a more hopeful tone and a renewed focus
with Mr. Snyder and screenwriter Chris Ter- on each superhero’s core qualities—following
rio to make changes after gauging fan reac- complaints that, like the recent movies, they
tions to the superhero fight. “We accelerated had gone astray from what fans loved about
the story to get to the hope and optimism a them. Early sales numbers have been strong,
little faster,” said Mr. Berg. and Mr. Johns said he is applying the lessons
“Justice League” will also directly address to his films. “We’re trying to take a really
Batman’s extreme actions in the last movie, hard look at everything to make sure we stay
such as torturing criminals and nearly killing true to the characters and tell stories that
the man of steel, rather than accept them as celebrate them,” he said.

ART
DOCUMENTARIES

The Origins of Beatlemania

BY JOHN JURGENSEN

THE LEGACY OF THE BEATLES is

usually explained through their record-
ings. A new documentary film explores
the other side of their career, as per-
formers. On the road and in concert,
the four bandmates bonded, defined
their moptop image and accelerated
their creativity in the studio—until
Beatlemania forced them to retreat
from the stage.
FROM TOP: APPLE CORPS LTD.; JEFF LIPSKY

At the center of “The Beatles: Eight

Days a Week—The Touring Years” is
the band’s meteoric run between their
Ed Sullivan appearance in 1964 and
their final public concert 50 years ago,
at San Francisco’s Candlestick Park on
Aug. 29, 1966. Before that, however,
came years of groundwork, including
hundreds of pre-fame performances
before the band released its first sin-
gle, “Love Me Do.”
“A lot of people thought we were an
overnight sensation. We weren’t. Peo-
ple didn’t realize we had all this devel-
opment,” 74-year-old Paul McCartney
says in the film.
For director Ron How-
ard, the band’s journey
formed the basis of
“an adventure
story.” As they
went from sharing
cramped quarters
in the seedy part
of Hamburg to
hiding in a bath-
room to escape the
crush of fans and
media in New York,
their tale turned into
“an ensemble survival
story,” says Mr. Howard, the
ELEVATING THE EVERYDAY David Shrigley’s ’Memorial’ in New York.
A Monumental
Grocery List
commissioned by an anonymous
BY ANNA RUSSELL
group, which rise like oversize grave-
COME TOGETHER Director Ron Howard, below, stitched together fan footage. stones in a rural part of the state.
BRITISH ARTIST David Shrigley’s The 19-foot-tall monument includes a
submit their personal recordings and They played their guitars through low- monumental public sculpture, “Memo- set of 10 guidelines to life inscribed in
footage. There are some 2,000 audio, wattage amplifiers, and the sound rial,” unveiled last week in the south- eight languages. Mr. Shrigley says of
visual and photographic clips was delivered through stadiums by east corner of New York’s Central “Memorial,” “I liked the idea that a
in the film from more tinny public address systems used by Park, is a 17-foot-tall grocery list ren- shopping list and a memorial serve
than 100 sources, in- sports announcers. The Beatles had dered in solid granite. On the docket the same purpose. They are both an
cluding fans, collec- three roadies and almost zero stage are everyday items such as milk, eggs aid to memory.” One of them, he
tors and archive spectacle, aside from their matching and sausages. “Rice wine vinegar added, is meant for something
houses. They in- suits. didn’t make the cut,” he said. grander. “But for most of us, what
cluded a jackpot The band made the decision to quit Later this month, in London’s Tra- are the noble deeds of our lives?”
revealed by a touring while sliding around the back falgar Square, Mr. Shrigley will mount Mr. Shrigley’s offbeat aesthetic will
woman who used of a cargo truck that was carting them an equally incongruous project: a 10- appear elsewhere this fall too. For a
a Super 8 camera away from the stage at Candlestick foot tall “thumbs-up” sign cast in festival in Toulouse, France, this
to shoot much of Park. Three months later they started dark bronze, titled “Really Good.” month, he has designed wonky but
the band’s final work on “Sgt. Pepper’s Lonely Hearts For an artist primarily known for still functional guitars with one string
concert from a good Club Band,” and released five more al- darkly comic drawings of stick fig- and maracas in the shape of giant
seat in Candlestick bums before breaking up in 1970. As ures in absurdist situations, it’s a fists. At his show at the Rose Art
Park. After she devel- Mr. Lennon says in the film, “We really high-stakes introduction to a Museum at Brandeis University in
oped it and watched it expressed ourselves through the re- broader public. The 47-year-old Mr. Waltham, Mass., which opened Sun-
once or twice, it sat under her cords, because we could no longer do it Shrigley was born in Macclesfield, day, Mr. Shrigley invites visitors to
DAVID SHRIGLEY/ANTON KERN GALLERY/PUBLIC ART FUND, NY

filmmaker behind movies such as
“Apollo 13” and the “The Da Vinci
Code“ trilogy (including October’s “In-
ferno”).
“Eight Days a Week” is his second
feature-length documentary. His first,
“Made In America,” was about Jay Z
and the launch of the rapper’s music
festival of the same name. “Eight Days
a Week” is set for release this week in
theaters, where showings will include a
half-hour of restored footage from the
Beatles’ 1965 concert at New York’s
Shea Stadium.
In 2014, the filmmakers put out a
request online, asking Beatles fans to
bed for five decades.
Editors painstakingly stitched this
source material together, synchroniz-
ing bootleg audio recordings with
footage shot by fans. The din from
screaming fans that made it difficult
for the Beatles to hear themselves on
stage also stymied the filmmakers.
Music producer Giles Martin (son of
the Beatles’ producer George Martin)
worked to filter out the screams so
the music could be heard in the audio
mix.
The film is also a snapshot of a
band that grew faster than the con-
cert technology available to them.
outside.” England, and trained at the Glasgow make “life drawings” from a 9-foot,
Mr. Howard, who was experiencing School of Art. He lived in Glasgow badly proportioned sculpture of a
a different kind of fame then as a star for years afterward, gaining a repu- woman. “The better you are at draw-
on “The Andy Griffith Show,” recalls tation for deadpan doodles, often ing, the less your drawing is going to
wearing a Beatles wig on his 10th underscored with wry text. (One look like reality,” he said.
birthday in 1964. (His parents couldn’t drawing depicts a cat and mouse For “Really Good,” Mr. Shrigley
find the Beatles boots he had re- shaking paws. “I won’t kill you,” says wrote his proposal to create it using
quested.) After interviewing the two the cat. “Thanks,” says the mouse.) the voice of an arrogant politician. He
surviving band members for the docu- Mr. Shrigley’s art often straddles this argued that the thumbs-up sign
mentary, the director compared their line, somewhere between sincerity would work as a self-fulfilling proph-
accounts to those of the astronauts he and irony, profundity and nonsense. ecy, making London and the world a
talked to when making “Apollo 13.” The artist toys with this line in better place. “Obviously it’s nonsense
“They achieved something momen- “Memorial” as well. He modeled the to suggest that,” he said. “But I’ve
tous in the human experience,” he said, piece after the towering Georgia suddenly, in a funny sort of way,
“but they don’t really know how to ex- Guidestones (1980), mysteriously come to believe it might be true.”
plain it.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A10 | Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK New Elections Revive
Clinton and the ‘Deplorables’ Old German Ghosts
I
n one of Saturday Night Live’s more memo- will be different. They won’t wake up and see En route to running Merkel had lived in a frame of refer-
rable political skits, Jon Lovitz playing Mi- their jobs disappear, lose a kid to heroin, feel ahead of Angela ence quite free from the rumble of out-
Merkel’s Christian Dem- side events. A paradigmatic instant:
chael Dukakis in 1988 exclaims after an- like they’re in a dead-end. Those are people we
ocrats in her home-state the chancellor’s remark on her website
other silly statement by Dana have to understand and empa- elections earlier this just after a Malaysia Airlines jetliner
Carvey as George H.W. Bush Her comments about thize with as well.” month—and exposing was shot down in July 2014 over terri-
that “I can’t believe I’m losing So she thinks half of Mr. the deep instability of tory held by pro-Russian rebels in
to this guy!” More than a few
Trump voters—her Trump’s voters are loath- EYE ON
German politics before Ukraine, saying that “The events show
Democrats are beginning to fellow Americans—show some bigots and the other EUROPE
nationwide elections how fortunate we are to live in peace
By John
wonder if Hillary Clinton could half are losers and dupes who next year—the hard- and freedom in Germany.”
soon be saying that about Don-
why she could lose. deserve Democratic pity. It’s
Vinocur
right Alternative for A year later, Mrs. Merkel opened Ger-
ald Trump, of all people. no accident that Mrs. Clinton Germany (AfD) party many’s frontiers to an unrestricted flow
That’s the essence of a Fri- said this at a fundraiser head- gave a notable miss to waving official of largely Muslim refugees from Syria
day story in the Washington Post headlined lined by Barbra Streisand, the friendliest of German flags at its rallies. and other Middle East war zones. More
Instead, reporters for the Frankfurter than a million have arrived since.
“Democrats wonder and worry: Why isn’t Clin- crowds, because this really is what today’s
Allgemeine Zeitung noted that AfD sup- Support for the government’s self-
ton far ahead of Trump?” The reporters quote elite progressives believe about America’s porters unfurled flaglike banners with a congratulatory “Welcome Culture”
former Senate Majority Leader Tom Daschle as great unwashed. horizontal black-and-yellow cross wilted in face of the self-protective
saying that given “all the things that Trump has Mr. Trump has certainly made appalling com- against a red background. The newspa- reflexes of citizens to close off the
done, the numbers should be far more explicitly ments, but Republicans and media conservatives per described the gesture as “part of never officially capped influx—and
in her favor, but they’re not.” have criticized him for it. They denounced his their attempt to style themselves as re- with the deadly arrival this summer of
The tone is Lovitz-like disbelief, which praise of Vladimir Putin. They assailed his at- sistance fighters in a non-free state” or, Islamist terrorism.
helps to explain why the polls are tightening. tacks on Judge Gonzalo Curiel and his insensi- as Alexander Gauland, an AfD leader,
Democrats have convinced themselves that tivity to the Khan family. Some have said they called it, a Germany run by “Chancellor-
Mr. Trump is such a threat to the republic that can’t support the GOP nominee. Dictator” Merkel. An isolationist breed of
they can’t recognize that Mrs. Clinton is The demonstration associated the AfD
But where are the Democrats raising doubts nationalism is on the rise
with a flag created in 1944 in honor of
equally as unacceptable to most of the coun- about Mrs. Clinton’s behavior? Mrs. Clinton re-
try. In a year when most Americans want neged on her confirmation promise to the Sen-
the failed attempt, led by Claus von despite—or because of—
Stauffenberg, to kill Adolf Hitler.
change in Washington, Democrats don’t want ate not to mix her State Department duties with Stauffenberg was undoubtedly a brave Merkel’s moral ambitions.
to admit that they’ve nominated the epitome the Clinton Foundation by doing favors for do- man, but one who historians, according
of the self-dealing status quo that disdains nors. She maintained a private email server to to the newspaper, say had no time for
their fellow Americans. hide her official emails and lied about it to the the ideas of the Enlightenment. Left and right parties at the edges of
Consider the reaction over the weekend to public. Yet no prominent Democrat we know Today, the flag routine speaks for a extremism began to find a common voice
Mrs. Clinton’s comments Friday night that has denounced this deception, and former current of deeply antidemocratic reflexes in anti-Western blame and German vic-
“just to be grossly generalistic, you could put House Speaker Nancy Pelosi says there’s “too within the illiberal German new right. timization, classic elements of the past
half of Trump’s supporters into what I call the much ado” about it. The AfD’s election score of 21% gave half-century’s nationalist calls for Ger-
it second place behind the Social Dem- man “emancipation” from the U.S. and
‘basket of deplorables.’ Right? The racist, sex- The great liberal media watchdogs aren’t
ocrats in the state of Mecklenburg- German “equidistance” between Russia
ist, homophobic, xenophobic, Islamophobic— challenging Mrs. Clinton either. They’re beating West Pomerania. It became the ninth of and America.
you name it.” up NBC’s Matt Lauer because he spent too much Germany’s 16 state Parliaments where Soon, AfD and the hard-left Linke
The remarks echo Mitt Romney’s comment time asking Mrs. Clinton about the emails dur- AfD has representation, and created party, heir to East Germany’s Commu-
in 2012 about the 47% on the government dole. ing last week’s military forum. This is best un- the very strong probability that it will nists, sounded alike in their denunciation
The media played up the Romney comments as derstood as a collective warning to the modera- win Bundestag seats in the general of the Germans’ so-called subordination
emblematic of an out-of-touch rich guy, and tors of the coming debates not to jeopardize election, threatening Mrs. Merkel’s to the Europe Union, and in urging the
they probably contributed to his defeat. Mrs. their standing in polite progressive company by chance for a fourth term. lifting of EU sanctions against Russia for
Clinton’s comments were arguably worse, at- doing the same. A few near certainties: For the first its annexation of Crimea and aggression
tributing hateful motives to tens of millions of i i i time since the end of World War II, a in eastern Ukraine.
Americans, but the media reaction has treated As Mrs. Clinton’s support has eroded in the party sharply to the right of the Chris- A recent poll—revealing a German
tian Democrats and their Bavarian al- populist kinship with Donald Trump—
it like a mere foot fault. polls, Democrats are figuring out that they may
lies, the CSU, is receiving broad public reported that among the two parties’
Mrs. Clinton apologized, sort of, on Saturday have nominated the only candidate who could acceptance. The AfD will seize much of supporters, 30% on each side were
by saying in a statement that, “Last night I was lose to Donald Trump. But then they didn’t give the public mood rejecting the chancel- more confident in Vladimir Putin than
‘grossly generalistic,’ and that’s never a good themselves many good choices. Their Congres- lor’s open-door refugee policy and ex- in Mrs. Merkel. The Social Democrat
idea. I regret saying ‘half’—that was wrong.” sional leaders are old, and their bench in the ploit it ruthlessly. leadership in the chancellor’s home
But she went on to say she was otherwise right states is thin after their election wipeouts of The party can find more success in state claimed, meanwhile, that “the
because some of Mr. Trump’s supporters are the 2010 and 2014. Mrs. Clinton’s bid to be the first anti-Americanism, an aggressive pro- West” was “engaged in a spiral of esca-
likes of David Duke. woman President fit the party’s priority for Russian stance, and challenging the Fed- lation” against Russia.
Yet the rest of what she said was almost as identity politics, and the Clinton machine would eral Republic’s years of Western align- In the process, Mrs. Merkel, who has
insulting. She said Mr. Trump’s other support- do what it takes to win. ment by cozying up to neutralism and an fallen to sixth place in popularity polls of
ers are “people who feel that the government Mrs. Clinton is still leading, and Mr. Trump exit from NATO. attitudes toward nationally prominent
“German nationalism is coming politicians, has come up short in fighting
has let them down, the economy has let them is always a driverless-car accident waiting to back,” Joschka Fischer, the former for- rising nationalism, failing to defend the
down, nobody cares about them, nobody wor- happen. But it’s also obvious that a majority of eign minister, told me. “And that’s West publicly to the Germans with any-
ries about what happens to their lives and their Americans do not want to vote for an extension something special. American weakness thing resembling intense heat or ur-
futures, and they’re just desperate for change. of the Clinton dynasty. They aren’t “deplor- and rejection of a leadership role is an gency, and refusing to confront Islamic
It doesn’t really even matter where it comes ables.” They’ve seen Mrs. Clinton in public life element in the process.” State militarily (unlike the Danes or
from. They don’t buy everything he says, but for 25 years and they know what they’ll be get- German nationalism, obviously, no Dutch) by withholding German aircraft
he seems to hold out some hope that their lives ting if she wins. longer means a German will to conquer from attacking positions in Syria.
the world. Rather, it has become a In the end, her politician’s caution has
unique area of German retreat. contributed to legitimizing some of the
Honesty and Presidential Health The movement accelerated with the
implosion of Mrs. Merkel’s notion that
country’s dangerous instincts.
Germany’s Federal President, Joachim

H
she ingeniously created a cushioned mid- Gauck, has spoken in the context of the
illary Clinton left a 9/11 memorial ser- don’t tell our doctors about pizza on the campaign dle ground for the country away from German refugee crisis of a Germany of
vice after feeling overheated on Sunday, bus, either.) Mrs. Clinton is in “excellent physical her allies’ world of dread—terrorism, Is- Light and a Germany of Darkness.
her campaign first dismissed it as noth- condition,” the note concludes, and Dr. Bardack lamic State, Russia, Syria. There’s no argument now about which
ing, but then her physician re- reiterated that judgment as re- Briefly, the Germans under Mrs. one is on the move.
leased a statement saying Mrs. Trump and Clinton cently as last month.
Clinton was diagnosed with
pneumonia on Friday.
should both be held Mr. Trump in December re-
leased a four-paragraph letter
LETTERS TO THE EDITOR
The event understandably to the John McCain from Harold Bornstein, a New
raises new questions about
medical standard. York gastroenterologist who The U.S. Is Committed to the Test-Ban Treaty
the Democrat’s health. Yet asserted that the GOP nominee
We were disappointed to read Sen- binding resolution that reinforces the
neither presidential nominee would “be the healthiest indi-
ate Republicans’ letter to President international norm against nuclear
has released a thorough med- vidual ever elected to the pres- Obama regarding his intention to testing and the value of the monitor-
ical history, while both are among the oldest idency.” Cardiovascular status? “Excellent.” Lab pursue a United Nations Security ing system established to detect and
and least trusted by Americans in modern results? “Astonishingly excellent.” Council resolution on the Compre- confirm nuclear explosions anywhere
times. The candidates could help voters with If this sounds glib, perhaps that’s because hensive Nuclear Test Ban Treaty on the planet. The vital importance of
an independent and bipartisan review of their Dr. Bornstein has since told NBC that he wrote (“GOP Decries Nuclear-Test Ban,” U.S. this system was once again under-
health records. the letter in minutes while a black car idled out- News, Sept. 9). While the U.S. isn’t scored last week after it verified North
For weeks Donald Trump has suggested Mrs. side. Mr. Trump has disclosed no other health yet a party to the CTBT, we are a sig- Korea’s fifth nuclear test.
Clinton is not physically fit for office, tweeting information, aside from the occasional photo natory and, since 1992, our own na- American leadership on nuclear
that his opponent lacks “drive” and “stamina” of him working through a bucket of Kentucky tional policy prevents the testing of security is needed now more than
nuclear weapons in line with the ever, so it’s hard to believe our col-
and in a separate subtlety asking “#WheresHil- Fried Chicken.
treaty’s main goal. leagues would want to follow
lary? Sleeping!!!!!” The Clinton campaign dis- Mrs. Clinton and Mr. Trump should be held Setting aside the important but through on their political, short-
missed these swipes as “idiotic,” to quote vice- to the same standard as Sen. McCain, who in broader debate about constitutional sighted threat to defund this system.
presidential candidate Tim Kaine in an interview 2008 invited medical experts and journalists prerogatives of the executive and leg- And if they agree with our own pol-
with ABC News. Mrs. Clinton’s traveling press to scour more than 1,000 pages of records, islative branches raised by our col- icy on testing, then isn’t our national
secretary told an NBC reporter who published many from the Mayo Clinic, where he was leagues, this letter can be read only as security enhanced by reaffirming and
a story on the subject to “get a life.” treated for melanoma. Reviewers could not re- a partisan attack on the president promoting a similar practice in more
The public has an interest in the health of move the documents from a private room, but based on speculation completely at corners of the world?
potential Presidents, and the issue is hardly the campaign sent out a detailed description odds with the administration’s stated SEN. BENJAMIN L. CARDIN (D., MD.)
new: In 1995 a Time magazine feature asked of the Senator’s history from more than one goal. According to Secretary of State SEN. EDWARD J. MARKEY (D., MASS.)
about then-72-year-old Republican front run- specialist who treated him. Nothing turned up, John Kerry, the U.S. is seeking a non- Washington
ner and eventual nominee Bob Dole: “Is he too and questions faded.
old to be president?” In early 2008 the press Marc Siegel, an NYU professor of medicine, BDS Movement Is Part of a Face It, Much Terror Money
rolled out a cascade of stories that Arizona Re- was among those who reviewed Mr. McCain’s re-
publican Sen. John McCain, who was 71 at the cords and describes the episode nearby. He sug- Long, Honorable Continuum Comes From Saudi Arabia
time, might be too damaged to be President af- gests that the Trump and Clinton campaigns al- Contrary to Cynthia Ozick’s asser- Regarding John R. Bolton and Mi-
ter years of torture during the Vietnam War low similar access. tions in “Names Like ‘America First’ chael B. Mukasey’s “The Folly of Fight-
and bouts of cancer. The irony is that the reporters who chased Have Histories” (op-ed, Sept. 1), the ing Terrorism by Lawsuit” (op-ed, Sept.
Mrs. Clinton, 68, is the oldest nominee in her Sen. McCain are now dismissing any questions Boycott, Divest, Sanction movement 7): The withholding of the 28 pages of
party’s history. Mr. Trump, 70, would be the old- of candidate health as a conspiracy against is a nonviolent international move- the 9/11 report is only the tip of the ice-
est president ever sworn into office if he wins. Mrs. Clinton, as if her campaign has never ment that targets the Israeli govern- berg regarding the Saudi role in 9/11.
Both have reached an age when medical risks fibbed about private email, the Clinton Founda- ment and supporters of Israel’s sys- President George W. Bush famously
tematic abuses of Palestinian rights, said: “Those who harbor terrorism are
multiply, though plenty of younger presidents tion or sundry other topics. This pattern of dis-
not Jews. BDS follows the time- as guilty as the terrorists.” Any factual
have suffered health trouble: John F. Kennedy honesty is one reason health rumors persist. honored tradition of employing boy- analysis of the funding of terrorism
in his early 40s had Addison’s disease, which he By the way, Mrs. Clinton told the FBI recently cotts for social justice and human leads to one of two places—Iran and
hid from the public. that she didn’t remember certain briefings be- rights, like boycotts for civil rights, Saudi Arabia. Forget about how the
The candidates have released perfunctory cause she was recovering from her 2012 con- workers’ rights and LGBTQ rights in Clinton Foundation raises funds for
statements, but it isn’t much. Mrs. Clinton’s phy- cussion. So add that to the list of reasons her the U.S. and the boycott of apartheid charity and start worrying about who
sician, Lisa Bardack, last year put out a two-page neurological records are relevant. South Africa. is funding terrorism.
summary of the Democrat’s health: blood clots Mr. Trump has said he’s willing to release his Despite attacks like Ms. Ozick’s, TOM SCOTT
in 1998 and 2009; a fractured elbow in 2009; and full history if Mrs. Clinton does, and that he may public opinion in the U.S. and world- Morgan Hill, Calif.
a concussion in 2012 that resulted in a blood clot even disclose his first. If he’s so sure he’s struck wide is shifting. We are confident
that ultimately freedom, justice and
in her head and temporary double vision. She a winning issue, then he should. No one expects Letters intended for publication should
equality for Palestinians will prevail. be addressed to: The Editor, 1211 Avenue
was treated with blood thinners and, according a President to be an Olympic athlete. But the The BDS movement that we support of the Americas, New York, NY 10036,
to the letter, the clot dissolved. Mrs. Clinton’s public is entitled to a review of the evidence, and will help to ensure that. or emailed to wsj.ltrs@wsj.com. Please
cancer evaluations are “all negative.” the brouhaha over coughing and other tedium ALLISON BROWN AND PATRICK CONNORS include your city and state. All letters
The former first lady has seasonal pollen aller- is the latest symptom of a broader malady: That The New York Campaign for the are subject to editing, and unpublished
gies, occasionally drinks alcohol and “eats a diet voters are wondering if either candidate is level- Boycott of Israel letters can be neither acknowledged nor
returned.
rich in lean protein, vegetables and fruits.” (We ing with them. Adalah, N.Y.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
Clinton and Trump: Healthy Enough to Serve?
By Marc Siegel
W
hen Hillary Clinton
left a 9/11 memorial
service on Sunday—
reportedly feeling
overheated, stum-
bling, seeming to be about to
faint—the question once again came
up about the health of America’s
presidential candidates and the
public’s right to know.
Medical advances of the 20th and
the early-21st century have helped
most people to live longer, healthier
lives, and U.S. presidents are no
exception. But older people often
have multiple medical problems,
and when they run for public office,
the question comes up as to
whether these problems could inter-
fere with performance.
Candidates over the age
of 70 or with a medical
history should release their
health records for private
viewing by a few reporters.
In 2016 the U.S. has two older
candidates, Donald Trump, 70, and
Hillary Clinton, 68. An argument
can be made that Mr. Trump should
release his full health records on
the basis of his age. His sparse but
glowing physician’s letter, from Dr.
Harold Bornstein of Lenox Hill Hos-
pital in New York City, asserts in
classic Trump hyperbole that if
elected, Mr. Trump would be “the
healthiest individual ever elected to
the presidency.” Mr. Trump report-
edly has low blood pressure
(110/65), takes a daily aspirin, and
is on Lipitor to lower his cholesterol
while admitting to a diet containing
considerable amounts of fast food.
By Lawrence Kudlow
And Brian Domitrovic
S
ince 2000, U.S. economic out-
put has inched along at a rate
of 1.8% a year, an astound-
ingly low number almost half of
the long-term average of over 3%.
This is not the way America is sup-
posed to be. The United States has
regularly achieved more than 3%
economic growth as a matter of
course, as it has led the global in-
dustrial and technological revolu-
tions with millions of new jobs, en-
trepreneurial wonders and mass
prosperity in tow.
The two greatest political figures
in America since World War II
staked their presidencies on eco-
nomic growth: John F. Kennedy in
the 1960s and Ronald Reagan in the
1980s. Kennedy was the pioneer.
When Reagan rallied to the cause of
growth 20 years later, he did so ex-
plicitly following Kennedy’s “a rising
tide lifts all boats” model.
Americans often think that the
1950s were a decade of economic
growth. True, there were gains for
people lucky enough to work for the
How Xi Jinping Undermines China’s Reforms
By Joshua Eisenman
‘W
e shall proceed with re-
form and opening up
without hesitation,”
China’s President Xi Jinping told his
country’s top leaders in August 2014
during a symposium marking the
100th anniversary of the birth of
former leader Deng Xiaoping. At the
time, this pledge appeared sincere.
Since taking office in March 2013,
Mr. Xi had consistently advocated a
reform agenda intended to continue
the economic restructuring and na-
tional revitalization that Deng had
started in 1978. Now, two years later,
and despite his consolidation of
power, Mr. Xi’s reforms are mired in
a morass of bureaucratic hurdles
and official foot dragging.
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In contrast, Hillary Clinton’s doc-
tor, Lisa Bardack of Mount Kisco,
N.Y., has released a much more
extensive letter to cover, among
other things, Mrs. Clinton’s 2012 fall,
concussion and incidentally discov-
ered blood clot on the outside of her
brain (transverse venous sinus
thrombosis) that (coupled with a his-
tory of a previous blood clot in her
leg) will require lifetime anticoagula-
tion for which she currently takes
the blood thinner Coumadin.
Dr. Bardack’s letter includes a de-
scription of Mrs. Clinton’s recovery
from concussion, the blood clot, a
follow-up MRI and subsequent neu-
rological testing a year later that is
reported as being normal. She
writes that Mrs. Clinton is in excel-
lent physical condition and fit to
serve as president.
What are missing are the re-
cords. Is Sunday’s episode insignifi-
cant or part of an underlying prob-
lem? Her doctor reported later
Sunday that she was found to have
pneumonia Friday, is on antibiotics,
was dehydrated and overheated but
is now better. Anything more spe-
cific is bound by HIPAA, unless the
candidate authorizes a private re-
lease to a small group as John Mc-
Cain did when he was running for
president in 2008.
Without the actual facts, specula-
tion runs rampant, even among phy-
sicians. It isn’t acceptable for a doc-
tor to put forth diagnostic
impressions on a patient he hasn’t
examined or whose records he
hasn’t reviewed. I am concerned
about the speculative response to
Mrs. Clinton’s recurrent cough, es-
pecially when you consider that up
to 90% of cases of chronic cough
are due to either postnasal drip,
asthma or acid reflux. All are com-
mon problems that are treatable
and in no way an obstacle to being
president.
Return to JFK’s ‘Rising Tide’ Model
big firms. But there were three re-
cessions during Dwight Eisenhower’s
presidency (1953-61), including one
from 1957-58 that saw a similarly
severe two-quarter drop in GDP as
during the Great Recession of
2008-09. Structural unemployment
(the number out of work at the eco-
nomic peak) rose remorselessly in
the 1950s, as did youth and African-
American unemployment.
By the end of 1960, the average
rate of growth during the Eisen-
hower presidency was just 2.5%.
Kennedy won the presidency that
year after a campaign in which he
specifically pledged 5% growth to
the nation. As president, he kept
the number “118,573” tucked in his
suit pocket, to remind him of the
cat’s whisker margin of his popu-
lar-vote victory and the need to
keep his campaign promise.
When the Democrat Kennedy
took office in January 1961, he
put three Republicans in cabinet-
level positions, including C. Doug-
las Dillon as secretary of the
Treasury. The 35th president was
part of a high-level tradition in
American politics of inclusiveness
The problem is that Mr. Xi’s
agenda is self-contradictory. It at
once calls for deepening reforms and
the rule of law while demanding
strict conformity with party ortho-
doxy. This recipe, which can be
called reform without opening up,
has failed to produce results.
True, China’s anticorruption cam-
paign has taken down hundreds of
thousands of officials within the
Communist Party. But it has yet to
be institutionalized, sending a pow-
erful signal to elites that it remains
politically motivated, a cudgel
wielded against the president’s ri-
vals. Many of those who might be
affected, therefore, are simply wait-
ing for the heat to die down or are
actively working to thwart official
investigations of their malfeasance.
Robert Thomson
Chief Executive Officer, News Corp
William Lewis
Chief Executive Officer and Publisher
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OPINION
Hillary Clinton leaves the National 9/11 Memorial in New York, Sept. 11.
In 1980 the media expressed
concern that Ronald Reagan was
too old at 69 to be president. There
was no mention of specific health
issues, and Reagan proved to be
healthy throughout his eight years,
with the exception of a near-fatal
gunshot wound that couldn’t have
been anticipated. Alzheimer’s dis-
ease as far as we know developed
after he left office.
Previous presidents, from Wil-
liam Henry Harrison (who died of
pneumonia after only a month in of-
fice), to Woodrow Wilson (who suf-
fered a stroke during his last term
that wasn’t revealed), to FDR (the
severity of his illness wasn’t pub-
licly known), to JFK (Addison’s dis-
ease), to Nixon (who took multiple
medications including the anticon-
vulsant Dilantin) had undisclosed
health problems.
More recently, public concerns
have been raised about the health
of candidates running for presi-
and the desire to win debates on
the merits.
Spurred on by his campaign
theme to “get this country moving
again” and to deliver on his 5%
growth goal, Kennedy put together
a coalition of growth-oriented offi-
cials and officeholders—Dillon and
his tax assistant at Treasury, Har-
Kennedy and Reagan both
spurred growth through
bipartisan tax cuts. That’s
what the U.S. needs now.
vard law professor Stanley Surrey;
Wilbur Mills, the Democratic chair-
man of the House Ways and Means
committee; and the nation’s top
business leader, U.S. Chamber of
Commerce President H. Ladd Plum-
ley, and top labor chief, George
Meany of the AFL-CIO. By 1963,
each member of this diverse group
had joined Kennedy in calling for
significant across-the-board cuts in
income-tax rates, in the context of
Meanwhile, the once-enthusiastic
Chinese public has been shocked by
the extent of official graft, and for
good reason. In 2013, an estimated
180,000 officials were disciplined for
corruption. In 2014, the estimate
was 232,000. Last year, the figure
topped 300,000.
Economic reforms have also
stalled. Despite strong high-level
support at the outset, the initial ex-
citement over the Shanghai Free
Trade Zone has faded, shrugged off
as anachronistic by many foreign
firms seeking access to the entire
Chinese market. Similarly, Beijing’s
measures to liberalize currency
trading and capital markets have
been reversed.
When markets crashed last sum-
mer, authorities intervened by pur-
chasing equities, pressuring traders
not to sell, increasing lending and
infrastructure-investment spending,
tightening regulations on capital
outflows and depreciating the Chi-
nese currency. Although this tem-
porarily halted the market’s de-
cline, it also chilled investment and
exacerbated capital outflows. To
pump up the market, China is now
moving about 2 trillion yuan ($299
billion) of its people’s pensions
from low-risk, low-yield govern-
ment bonds into riskier securities,
including equities.
The results are hardly reassuring.
Between March and June, China’s
currency fell 3% against the dollar,
its largest quarterly fall on record.
By July, China’s foreign-exchange
holdings were down to about $3.21
trillion, off by about 20% from their
June 2014 peak of $4 trillion. They
remained steady in August.
Reforms have been stillborn be-
cause China’s “opening up,” initi-
Tuesday, September 13, 2016 | A11
REUTERS
dent. In 1996, Sen. Bob Dole at 73
became the oldest candidate to run
for president, and he felt com-
pelled to release his full health re-
cords under pressure from Presi-
dent Bill Clinton’s campaign. Sen.
John Kerry allowed the media a
brief look at his military medical
records in 2004, and George W.
Bush released approximately 400
pages of health records in 2000
and again in 2004.
But the first time a real stan-
dard was superimposed was in
2008, when I joined a group of
more than 20 journalists in Phoe-
nix for a private three-hour session
at a local hotel to review more
than 1,100 pages of Sen. McCain’s
medical records. The focus was on
the senator’s age (71) and his his-
tory of melanoma, as he’d had four.
Our endeavor was a witch hunt of
sorts, though we all concluded
from the records that the mela-
noma hadn’t spread or recurred
a dollar guaranteed against gold, as
the policy mix necessary to sustain
5% growth.
JFK created the model—king
dollar and tax cuts—assembled the
coalition, and kept his eye on the
economic objective. The opponents
who remained were liberal Keynes-
ian economists in the White House,
beneficiaries of tax loopholes that
derived their value from high rates,
and deficit-hawk Republicans in
Congress. The Kennedy coalition
prevailed, and by the time the
president’s policy became law in
February 1964, the nation had be-
gun a nearly nine-year run of 5%
annual growth. This feat remains
one of the greatest success stories
in the modern history of American
public policy.
Running for president at the
end of the stagflationary 1970s,
the Republican Reagan, like the
Democrat JFK two decades earlier,
understood the importance of re-
storing economic growth. In 1980,
Reagan adopted Rep. Jack Kemp’s
“duplication” (as Kemp called it)
of the Kennedy tax cut. The mas-
terful communicator then per-
ated by Deng in 1978 and reaf-
firmed by Premier Zhu Rongji in the
1990s, is under threat. Restrictions
on information flows on the inter-
net and social media, known offi-
cially as “internet sovereignty” or
“governance of cyberspace with
Chinese socialist characteristics,”
The president’s policies
are a contradiction of
liberalization and
retrenched Party orthodoxy.
have become more pervasive, more
difficult to surmount and more ef-
fective at silencing dissent. This
trend will continue under the new
cybersecurity law slated for ap-
proval later this year.
Moreover, an already-approved
nongovernmental-organization law,
which will take effect in January,
has put a chill on Chinese coopera-
tion with foreign organizations and
stigmatized that cooperation by
placing it under the purview of the
security services. At a time when
international coordination among
NGOs and transnational networks
has reached its apex, it has never
been more difficult for foreign
NGOs to work with their Chinese
counterparts.
Other elements of this tightening
include a new counterterrorism law
that requires foreign-technology
firms to hand over sensitive data to
Beijing. Visa restrictions have be-
come more onerous on foreigners.
And there has been an increase in
anti-Western, anti-liberal and anti-
Japanese attacks in the official
and Mr. McCain was fit to serve.
Requests for then-Sen. Obama to
release his records for a similar
viewing got no traction, only a
short letter that revealed him to be
a former smoker with low
cholesterol and blood pressure
who jogged frequently.
In retrospect, his youth and
vigor were probably enough, and
2008 set the new standard that
unless you were elderly or had a
significant medical history, sum-
mary letters from a candidate’s pri-
mary-care physician were neces-
sary and sufficient.
Flash forward to 2012. Mr. Obama
was again pronounced fit, having
reportedly not smoked while in the
White House and working out
several times a week. Challenger
Mitt Romney, then 65, released a
letter that revealed his active health
problems to be only benign prostatic
hypertrophy, low heart rate and high
cholesterol (on Lipitor). The new
standard had been met.
I was never completely comfort-
able with the way Sen. McCain was
treated in 2008, though at least by
the time the records were released in
May the obsessive media focus
wasn’t on questions of PTSD from the
Vietnam War, only on his melanoma
history. A new standard was set then,
and it should be followed now.
I call it the McCain Protocol: If
you are 70 or over (Mr. Trump) or
have a health history (Mrs. Clinton),
records should be made available by
the candidate for a private viewing
of select journalists or perhaps an
independent board of physicians.
This transparency may be excessive,
but consistency would demand that
it be part of the vetting process for
our highest public office.
Dr. Siegel is an internist in New
York City and medical correspon-
dent for Fox News.
suaded so many Democrats and
liberal Republicans that both the
1981 and 1986 tax cuts had big
congressional majorities. The 1986
act passed the Senate 97-3 and
took the top income-tax rate down
to 28%, one of the lowest levels
ever. Along came another two-de-
cade period of growth mainly be-
tween 4% and 5%.
The JFK-Reagan policy nexus
shows that we have the model to
return to growth. It works. There
is no reason the model cannot be
used again now. The greatest Dem-
ocrat and the greatest Republican
of the past 50 years both rose
above partisan politics and in a
civil and optimistic manner con-
vinced the nation that the king-
dollar, tax-rate-cut policy mix will
work—and it did. Whoever be-
comes America’s next president
should follow in their pro-growth,
bipartisan footsteps.
Messrs. Kudlow and Domitrovic
are the authors of “JFK and the
Reagan Revolution: A Secret His-
tory of American Prosperity” (Port-
folio, 2016).
press. The word “sensitive” is now
regularly used at academic confer-
ences to preclude discussion of in-
convenient topics. Chinese women
are being warned not to date for-
eigners, for fear they are spies hunt-
ing for state secrets.
Another important reason for the
lack of progress is the autocratic
methods and Maoist tactics used to
advance reform. Mr. Xi has called
on “every branch and every mem-
ber” of the Communist Party to en-
force a yearlong political campaign
to study his speeches, ensure “strict
party management at the grass-
roots level,” “consolidate Party
members’ Marxist positions and en-
sure that the entire Party maintains
a high degree of ideological and po-
litical consistency.” But this isn’t
Mao’s China, and many local cadres
either ignore the slogans or deride
them in private.
As enthusiasm fades and obstacles
arise, the momentum of Mr. Xi’s cam-
paign-driven reform strategy has
proved short-lived. Today, many Chi-
nese still believe that China’s rise can
only continue through “opening” and
effective reforms. But the country’s
current strategy runs counter to this
approach and harkens back to an ear-
lier era of politically driven policy. As
such, it is likely to continue provok-
ing resentment and opposition, from
party members and domestic inter-
ests as well as foreign businesses and
NGOs that feel unreasonably con-
strained in an increasingly hostile,
nationalistic China.
Mr. Eisenman is an assistant pro-
fessor at the LBJ School of Public
Affairs at the University of Texas at
Austin and a senior fellow at the
American Foreign Policy Council.
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A12 | Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

SPORTS

Heard On Tennis’s Master of the Upset

The Field In winning his third major
title, Stan Wawrinka
proved once again that he
is the man of big matches
BY TOM PERROTTA

New York
Stan Wawrinka looks more like a
lumberjack than a tennis player.
Thick shoulders, burly chest, scruffy

ALEX GOODLETT/GETTY IMAGES; MICHAEL REAVES/GETTY IMAGES

beard and mustache. He is strong
but unpredictable. He likes to point
to his head during matches, because
he knows that if he keeps his mind
clear and his one-handed backhand
flowing, he can beat anyone.
Kerber, Not Williams, Wawrinka’s latest triumph, a four-
set victory over Novak Djokovic on
Now Tops the Rankings Sunday for the U.S. Open title, was
U.S. Open champion Angelique proof. Although men’s tennis has
Kerber officially became the oldest long been ruled by the sport’s “Big
woman to debut at No. 1 in the Four”—Djokovic, Roger Federer,
WTA rankings, ending Serena Wil- Andy Murray and Rafael Nadal—it’s
liams’ record-tying run of 186 con- time to start reassessing that exclu-
secutive weeks in the top spot. sive club’s membership.
Monday’s rankings are the first Wawrinka now has three major ti-
since February 2013 without Wil- tles, matching Murray. Wawrinka re-
liams at No. 1. mains ranked No. 3 in the world, still Stan Wawrinka played another magical major final on Sunday when he defeated Novak Djokovic to win the U.S. Open.
The 28-year-old Kerber’s rise behind Djokovic and Murray but
from No. 2 was assured when Wil- ahead of No. 4 Nadal and Federer, In his career, Wawrinka is 0-15 made him jealous. At the Olympic Games in Rio,
liams lost in the semifinals at who has slipped to seventh amid in- against No. 1-ranked players in best- Most pros with a one-handed Djokovic lost his first match, to
Flushing Meadows. jury. Nadal, 30, hasn’t won a major of-three-set matches, and 0-4 at backhand are vulnerable to high- eventual silver-medalist Juan Martín
Kerber (above) went on to beat the past two years, and Federer, 35, Grand Slams before the final. But in bouncing topspin. Wawrinka throt- del Potro. He played little before the
Karolina Pliskova in Saturday’s final hasn’t since 2012. major finals, he is now 3-0 against tles those balls. His down-the-line U.S. Open, and not much more once
for her second Grand Slam title of But the new U.S. Open champion, top-seeded opponents, with a victory blasts practically leave trails of he got here, either, because his op-
the season. She defeated Williams at 31, is going strong. against Nadal and two against Djok- smoke. ponents kept getting hurt. One of
at the Australian Open in January, Wawrinka is a late bloomer. He ovic. His 2015 French Open final vic- “No one else can get that kind of them withdrew before their match
then was the runner-up to the didn’t win his first major title until tory against Djokovic, in four sets, pace on the one-hander,” said James began and two others retired during
American at Wimbledon in July. the 2014 Australian Open, when he was one of the best matches played Blake, the former pro. “It’s a lot of play.
—Associated Press was 28. Djokovic, 29, is a steady by anyone in this historic era of the upper body strength.” Djokovic said the rest had helped
champion, always in finals, always Big Four. “Novak, he’s a beast mentally,” and that he was at his peak headed
Fowler, Holmes, Kuchar eating the right foods and drinking “He plays best in the big Wawrinka said. “It’s always the big- into the final. Peak Djokovic is
Make U.S. Ryder Team the right drinks. Wawrinka is as un- matches,” Djokovic said. “He was gest challenge to play against him.” nearly invincible—really, there’s only
U.S. Ryder Cup captain Davis predictable and messy as an after- more courageous.” Wawrinka’s backhand started to one man these days who stands a
Love III chose Rickie Fowler, J.B. midnight subway in Manhattan. He On Sunday, Wawrinka dropped the click in the second set. As he hit good chance. Blake explained why
Holmes and Matt Kuchar for three tosses rackets, towels, finger tape, first set to Djokovic. He did the same harder and deeper, Djokovic slid Wawrinka is that man.
of his four picks for the upcoming wristbands and sweaty shirts all against Djokovic in the 2014 Austra- along the baseline like a man on a “He has the ability to hit someone
showdown with Europe at Ha- around his on-court chair, like a col- lian Open quarterfinals and in the Slip N Slide to keep the ball in play. off the court, and he can have that
zeltine. lege kid in his dorm room. Wawrinka 2015 French Open final, then came By the time the fourth set rolled clear in his mind,” Blake said. “Peo-
Those three join Dustin Johnson, almost lost in the third round here, back to win each time. Wawrinka’s around, Wawrinka had more energy. ple play their best when they have a
Jordan Spieth, Phil Mickelson, Pat- when he faced a match point against coach, Magnus Norman, has learned Djokovic looked like he’d run up the clear plan and they’re not second-
rick Reed, Jimmy Walker, Brooks Britain’s Daniel Evans. that there’s no need to worry. steps of the Empire State Building. guessing.”
Koepka, Brandt Snedeker and Zach The beauty of Wawrinka doesn’t “I know that he’s always going to Djokovic won the first two major Wawrinka now has a 5-19 record
Johnson, who qualified in the final come early in tournaments. He needs come back,” Norman said. “He has titles of the season in Melbourne against Djokovic in his career. He’ll
standings for the Americans. time to settle in, to believe in his more than one life in five sets.” and Paris, but then he went into hid- never pull even, but he won’t mind.
Love will announce his final pick strokes, to gather speed. Once he After his slow start, Wawrinka ing this summer. He lost early at When it counts, there’s no man in
GETTY IMAGES

on Sept. 25. The Ryder Cup begins makes it to the end, he’s a different punished Djokovic with strong Wimbledon, to American Sam Quer- tennis better than Stan.
on Sept. 30. Once dominated in the man—Wawrinka has won his last 11 serves, deep forehands and the one- rey. He said he had some personal “He’s a man for the big tourna-
biennial matchup, Europe has won tournament finals. The longer and handed backhand that Pete Sampras, problems to work out, without giv- ments,” Norman said. “He’s a man of
the last three and 8 of 10. —AP later the match, the better he plays. winner of 14 major titles, once said ing details. Then he had a sore wrist. the big matches.”

Weather The WSJ Daily Crossword | Edited by Mike Shenk

Shown are today’s noon positions of weather systems and precipitation. Temperature bands are highs for the day.
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Denver 20 9 c 24 10 pc Nashville 33 21 s 33 21 pc Tel Aviv 30 23 s 30 24 s water product 64 Clear out V A S E A T O M O I N K
Tokyo 29 22 sh 29 24 sh I L E S L O MO B I L
Detroit 27 19 pc 23 12 pc New Delhi 35 24 s 35 26 pc 27 Petty officer on a 44 “M*A*S*H” 65 “Someone Like E L E P H A N T S A T A L E
Dubai 40 32 s 40 31 s New Orleans 32 26 t 32 25 t Toronto 28 18 s 23 10 r S T I R S O H O I G O T
Dublin 16 12 r 19 13 r New York City 28 20 s 31 18 pc Vancouver 21 9 s 20 12 s merchant ship vehicle You” singer E T H N I C T A X I C A B S
Edinburgh 22 14 pc 19 12 pc Omaha 19 11 c 22 15 pc Washington, D.C. 30 22 pc 34 22 pc A A R O N S A M E N M A O
Solve this puzzle online and discuss it at WSJ.com/Puzzles.
s

Frankfurt 32 17 s 31 18 s Orlando 30 23 t 31 23 t Zurich 28 12 t 28 12 s T R U N K S L E N S E R N

©2016 Dow Jones & Co. Inc. All rights reserved. 6DJ3504

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NFL GAME IS A TEST FOR TWITTER TECHNOLOGY | B3

Euro vs. Dollar

1.16
BUSINESS & FINANCE
1.1230 t 0.04% FTSE 100
7000
6700.90 t 1.12% Gold
1400
1321.00 t 0.68% WTI crude
50
46.29 s 0.89% German Bund
0.10
yield 0.038% 10-Year Treasury
2.25
yield 1.671%

1.13 6500 1350 45 0.00 1.50

1.10 6000 1300 40 -0.10 0.75

1.07 5500 1250 35 -0.20 0.00

J J A J J A J J A J J A J J A J J A
As of 4 p.m. ET Sources: Tullett Prebon; SIX Financial

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Tuesday, September 13, 2016 | B1

Burdens Mount for Pension Plans Canadian

Low yields on
government debt
leave some firms with
funding shortfalls
BY GEORGI KANTCHEV
Low-yielding government
debt is pushing investors to
look beyond profits and losses
to another part of the corpo-
rate balance sheet: pensions.
On Monday, shares in Asso-
ciated British Foods PLC shed
more than 10%, even though
the company reported bumper
profits. AB Foods, which had a
market capitalization of £25
billion ($33.1 billion) before
the tumble, said its pension
plan will end the year with a
£200 million deficit that it
blamed on a fall in yields from
British government debt.
Pension deficits are rising
across Europe as the income
the plans make on government
bonds shrinks. Pension funds
typically stock up on govern- fund given a poorer outlook
ment bonds because they are
considered a safe investment.
Yields on that debt have
for returns.
In August this year, the
U.K’s 6,000 defined-benefit
been falling as extensive cen-
tral-bank buying pushes them
down. It is a particularly big
pension plans had a deficit of
£710 billion, according to PwC,
a £190 billion increase over
issue in the U.K. because a the previous year.
large chunk of British pensions “When we look at company
are paid under defined-benefit results we increasingly look at
plans, where the pension pro- those pension deficits,” said
vider promises to pay a cer- Danny Cox, a financial planner
tain amount each year when at financial services firm Har-
the employee retires. As gilt greaves Lansdown. “The re-
yields fall, companies have to cent cases of Tata Steel and
set aside more money to meet BHS and now AB Foods show
future payments. how they’ve become a key fea-
A large pension deficit ture of company results.”
helped push British retailer Aging populations
BHS Group into administration are compounding the prob-
earlier this year. A near £485 lem as people draw on pen-
million pension deficit at the sions for longer. A fifth of the
U.K. operations of Tata Steel European Union’s population
has been an obstacle to selling will be 65 and over by 2020,
the steelmaker’s British busi- according to EU estimates.
ness. On Friday, HC Slingsby Pensions across Europe are
PLC, which sells industrial and under pressure. Workers re-
commercial equipment, said it tiring in the European Union
may have to increase the between 2017 and 2057 need
funds it pays into its pension to save an extra €2 trillion
Fertilizer
yields fell further after the
Indigestion
Associated British Foods shares
in London
British voted to leave the Eu-
ropean Union. That happened
as investors looked for haven
Companies
£35
assets and the Bank of Eng-
land launched a raft of stimu-
lus measures aimed at protect-
To Merge
ing the U.K. economy. BY JACQUIE MCNISH
While gilt yields have risen AND JUDY MCKINNON
30 in recent trading days, they
are still below where they TORONTO—Canadian fer-
were before the Brexit vote. tilizer giants Agrium Inc. and
Yields on 10-year gilts rose Potash Corp. of Saskatchewan
to as high as 0.9% on Monday, Inc. confirmed plans to
25 but they still are down from merge on Monday, in a deal
the 1.3% level they were trad- that would create a crop-nu-
Monday ing at before the referendum. trient giant valued at about
28.15 “Companies are feeling the $27 billion.
t10.8% pain as the market expects Joining forces with Agrium
20 that long-term interest rates offers Saskatchewan-based
J F M A M J J A S will remain lower for longer,” Potash, the world’s largest fer-
Source: Factset said Raj Mody, PwC’s global tilizer producer by capacity,
THE WALL STREET JOURNAL. head of pensions. “That should protection against volatile fer-
be a big reality check for com- tilizer prices, through Agrium’s
($2.25 trillion) a year to close panies, which shouldn’t as- steadier retail network. That
the pension gap, according to sume these problems will be system also would lower Pot-
insurer Aviva. solved by the market.” ash’s distribution costs, while
In the U.K., the fall in in- expanding fertilizer sales.
come from government debt  BOE may buy bonds of non- Agrium’s retail arm, North
was made worse when gilt British companies.................... B5 America’s biggest for fertilizer,
seeds and equipment, gener-
ates the bulk of the Calgary-

A Fear E-Commerce Upends Rural Retail

based company’s sales. For
Agrium, the deal would bolster
its volume of potash and other

For ‘Safe’
fertilizer ingredients.
BY LAURA STEVENS Potash prices have been un-
der pressure since 2013, when

Assets
Investors who spent the
summer floating serenely on
mirror-calm markets have
been frantically bailing out
the boat in the past two
days. Whether the storm
MANGUM, Okla.—Vince Russian producer Uralkali JSC
Bledsoe, a United Parcel Ser- pulled out of its sales partner-
vice Inc. delivery man in this ship with Belarusian Potash Co.
remote tiny town, remembers Slowing demand from emerging
the exact moment he knew markets amid a flood of supply
that e-commerce had changed has prompted merger discus-
the way rural America shops. sions in the fertilizer sector.
He was taping up a package Agrium CEO Chuck Magro
a few months ago destined for said in an interview that he
one of the town’s 3,000 resi- first explored merger discus-
LAURA STEVENS/THE WALL STREET JOURNAL

that hit U.S. stocks on Fri-
day and spread globally on
Monday is the start of some-
thing much worse or merely
a squall de-
pends a lot
on what ex-
plains it: the
Federal Re-
serve, global
central
STREETWISE banks or the
JAMES unwinding
MACKINTOSH of excessive
compla-
cency. Un-
fortunately for shareholders,
the signs point to the latter.
The Fed story is a favor-
ite of Wall Street. When the
markets are driven by cen-
tral banks, it is tempting to
explain price moves by refer-
ence to the most powerful of
them, and on Friday some-
thing changed. Speeches
from Fed policy makers
raised expectations of a rate
increase at this month’s
meeting, and the probability
priced into federal-funds fu-
tures rose to 24% from 18%,
according to CME Group Inc.
Bond yields rose, and shares
fell, although by late Monday
afternoon they had re-
bounded somewhat, with the
S&P 500 up 1.5%.
But this is only part of
the story, at best. Investors
Please see STREET page B2
dents and noticed it contained sions with Potash’s CEO Jochen
a bottle of bleach. “It wasn’t Tilk last year as they sought
lavender [scented] or any- opportunities to lower costs.
thing,” he recalls. “It was just Mr. Magro said Potash is
a bottle of plain Clorox.” the “right partner” because of
Until five years ago, Mr. the potential for significant
Bledsoe was the bearer of spe- cost reductions. “We’re going
cial orders, tractor parts and to be much more able to man-
business deliveries to this area. age the storms in the commod-
Now, he delivers dog food, fruit ity market,” he said
snacks and Kleenex, among Agrium also held prelimi-
other things. His business has Vince Bledsoe makes a delivery in Mangum, Okla. He estimates 100 miles Kansas City nary talks with Minnesota nu-
increased 30% during the past his business has increased 30% during the past couple of years. trient producer Mosaic Co. in
couple of years, he estimates. early 2016, but the discussions
“It is getting out of hand,” he companies. firm support manager, recently KANSAS were unsuccessful, according
said. “They can find anything According to Kantar Retail, bought her two teenage to people familiar with the
online. Literally anything.” about 73% of rural consum- daughters designer Miss Me matter. Spokespeople for both
E-commerce hasn’t just ers—defined as those who jeans for half price on Ma- OKLAHOMA Tulsa companies declined to com-
reached rural America, it is drive at least 10 miles for ev- cys.com. Her family now has ment on those talks.
Oklahoma City
transforming it by giving eryday shopping—are now access to things “I didn’t ever 40 The merger between Potash
small-town residents an op- buying online versus 68% two think we would have,” said the Mangum and Agrium would be the lat-
35
portunity to buy staples online years ago. Last year, 30% were Mangum resident. est in a series of global farm-
at a cheaper price than at the members of Amazon Prime, up Residents here are even ing-sector deals. Those include
local supermarket. from 22% in 2014. starting to buy groceries on- TEXAS the pending merger of Dow
It also provides remote ar- Flowers Unlimited and Brat- line because frequently it is Dallas Chemical Co. and DuPont, and
eas with big-city conveniences ton Drug are about all that is cheaper than at the town’s China National Chemical
and the latest products. Con- left of a red-brick town square United Supermarkets. A can of Corp.’s planned takeover of
temporary fashion, such as that just a couple of decades Bush’s Best Bold and Spicy THE WALL STREET JOURNAL. Swiss pesticide and seed com-
Victoria Secret bathing suits or ago buzzed with three florists, Baked Beans cost $2.07 on pany Syngenta AG.
Tory Burch ballet flats—items restaurants and a furniture Walmart.com recently, 22% ton mails up to 100 packages a U.S. lawmakers said last
that can’t be found at Dollar store. A Wal-Mart built in 1982 less than at the United in week from her clothing store month that they plan to hold a
General—are easily shipped. in Altus, Okla., about 20 miles Mangum, where it is more ex- Trailer Trash. hearing to examine this wave of
Consumers increasingly are away, brought residents pensive to transport goods. While e-commerce is great mergers, saying the deals po-
shopping online instead of choice, convenience and low E-commerce has provided for rural America, it is expen- tentially could reduce competi-
driving, often long distances, prices. Now, online shopping is new opportunities for area sive for retailers and delivery tion and lead to higher prices.
to stores. Online shopping also creating another retail revolu- residents to earn money. In companies. Potash shareholders would
brings with it deals and new tion here that doesn’t require Willow, Okla., Anneliese Rog- The longest mail route in own about 52% of the new com-
entrepreneurial opportunities. a half-hour drive to Wal-Mart ers, a mother of three, raised the country—a 187.6-mile daily pany and Agrium shareholders
These consumers, however, are or roughly 2½-hour drive to $1,500 in one sitting by selling loop for carrier Jim Ed Bull— would own about 48%. The two
the most expensive to serve Oklahoma City. items from her closet on Face- runs from Mangum. The longer have a current combined mar-
for both retailers and delivery April Geralds, a security- book. Nearby, Kassandra Bru- Please see MANGUM page B4 Please see DEAL page B2

Industrial-Gas Giants U.S. Stocks Rebound as Rate Worries Ease

Call Off Merger Talks
BY EYK HENNING
FRANKFURT—Industrial-
gas giant Linde AG ended
BY AARON KURILOFF
AND RIVA GOLD
Monday had its biggest point
and percentage gains since
tatives on the company’s su- July 8.
pervisory board decided to U.S. stocks climbed Monday, Investors weighed com-
end talks because discussions rebounding in the wake of Fri- ments from various Federal
over “governance aspects did day’s rout that ended two Reserve officials ahead of the
MARCIO JOSE SANCHEZ/ASSOCIATED PRESS

merger talks with U.S. rival
Praxair Inc. because the Ger-
man company feared losing
key functions, said people fa-
miliar with the talks, in a com-
bination that would have
formed the industry’s largest
player, valued at about $60
billion.
Both companies—each
worth around $30 billion—
said on Monday in separate
statements that they termi-
nated talks that were dis-
closed almost four weeks ago.
Linde said its chief execu-
tive and shareholder represen-
not result in a mutual under- months of summer calm.
standing.” Linde said the stra- The Dow
tegic rationale of a tie-up in MONDAY’S Jones Indus-
principle remained. MARKETS trial Average
It is rare for companies to rose 239.62
call off merger talks over such points, or 1.3%,
differences in corporate cul- to 18325.07, and the S&P 500
ture, according to analysts and gained 1.5%, after their biggest
management experts. Typi- declines since the U.K. voted
cally companies realize funda- to leave the European Union.
mental differences only after The Nasdaq Composite gained
the deal closes. 1.7%.
“When a merger happens, In Europe, the Stoxx Europe
the corporate cultures rarely 600 shed 1% to 342.23.
merge,” said Andre Spicer, an The recovery in U.S. mar-
organizational behavior pro- kets came after the Dow in-
Please see MERGER page B2 dustrials and the S&P 500
Elon Musk’s Tesla rose on tweaks to driver-assistance features.
closed at their lowest levels
since July 7 on Friday, down
roughly 3% from their records,
amid investor concerns that
central bank’s self-imposed
blackout period, which begins
Tuesday, ahead of their next
policy meeting Sept. 20-21.
While statements last week
raised concerns that the Fed
could tighten policy faster
than expected, some of those
worries abated Monday.
“You saw today they started
walking back the rate hike a
little bit, and that allowed the
market to recover from Fri-
central banks around the day’s steep drop,” said Bruce
world were running out of Bittles, chief investment strat-
willingness or ability to prop egist at Robert W. Baird.
up markets. The S&P 500 on Please see MARKETS page B2
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B2 | Tuesday, September 13, 2016
INDEX TO BUSINESSES
These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.
Aberdeen Asset
A
Management.............B5
ABN Amro Group........B7
Amgen.........................B5
Apple......................B3,B5
Associated British
Foods.........................B2
AstraZeneca................B5
Aviva Investors...........B5
B G
Bank of England.........B5
Belarusian Potash ...... B1
BlackRock....................B5
BMW ........................... B8
BP................................B5
Bridgewater
Associates................B7
Brother Industries......B3
C K
Canada Life.................B5
Canon...........................B3
Carlyle Group..............B7
China National
Chemical...................B1
Christie's.....................B8
Claren Road Asset
Management.............B7
CME Group.............B1,B2
Columbia Threadneedle
Investments..............B5
Credit Suisse Group ... B8
D N
Daimler .................. B5,B8
DONG Energy..............B5
INDEX TO PEOPLE
A Gupta, Bejoy Das........B5
Ando, Fuminori...........B3
B Hindman, Leslie..........B8
Bason, John ................ B2
C Jenkins, Mark ............. B7
Cook, Tim....................B3
D L
Daly, Kevin..................B5
Derella, Matt .............. B3
Donnery, Sharon.........B5
Dorsey, Jack................B3
E-G
Erickson, Brad.............B3
Gownder, J.P...............B3
MARKETS
Continued from the prior page
Fed Governor Lael Brainard
pushed in a speech Monday
for “prudence in the removal
of policy accommodation,” ar-
guing that improvement in the
labor market hasn’t had the
desired effect on inflation. Ms.
Brainard joined the Fed board
just over two years ago, and
has emerged as a voice favor-
ing a go-slow approach on
raising interest rates.
Those remarks came after
Federal Reserve Bank of Bos-
ton President Eric Rosengren
on Friday heightened expecta-
tions for an interest-rate rise
later this year. Federal Reserve
Bank of Atlanta President Den-
The Stoxx Europe
600 fell 1%. Losses
were bigger in Asian
trading.
nis Lockhart, a centrist seen
as aligned with Fed Chair-
woman Janet Yellen, said
Monday that economic condi-
tions warrant debate about
raising rates at the central
bank’s meeting next week,
adding officials don’t face an
urgent need to act.
Several traders and ana-
lysts said Fed officials hadn’t
significantly altered rate-in-
crease expectations, and cen-
tral-bank concerns provided
an excuse for some investors
to move from positions ac-
quired as major U.S. indexes
climbed to record highs this
summer.
Stocks that pay high divi-
dends and are sensitive to in-
ADVERTISEMENT
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of solar panels for sale. Includes two
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Interested parties can email at
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à As with all investments,
appropriate advice should
be obtained prior to
entering into any
binding contract. à
THE WALL STREET JOURNAL.
BUSINESS NEWS
Dow Chemical.............B1
E
Electricite de France...B5
Emerging Sovereign
Group.........................B7
Nike.............................B3
O
Össur...........................B3
P
Phillips.........................B8
Primark Margins Squeezed
BY TAPAN PANCHAL “There has been some slip-
F Praxair.........................B1
page in phasing and delay in
Facebook......................B3 R
Fine Art Group............B8 LONDON—The British handling over the stores” to
Ricoh............................B3
Franklin Templeton.....B5 Rio Tinto ..................... B5 pound’s post-Brexit tumble Primark, Mr. Bason said. The
S benefited the Primark discount company is poised to open all
GlaxoSmithKline.........B5 Samsung Electronics..B3 fashion chain recent results, of the U.S. stores as soon as it
Goldman Sachs Group B5 Schaeffler....................B8 but the disadvantages result- can, he added.
ALESSIA PIERDOMENICO/BLOOMBERG NEWS
H-I Seiko Epson ................ B3 ing from the currency’s fall Kate Ormrod, an analyst at
Henkel ......................... B8 SHC Design.................B3
Sinohydro....................A2
also have grown. retail research agency Verdict
IHS...............................A2
Sleepy's.......................A1 Associated British Foods Retail, said a “more aggres-
J Snapchat ..................... B3 PLC, the food and ingredients sive” expansion plan would be
Julius Baer..................B8 Sotheby's....................B8 company that owns Primark, required to fully seize Pri-
Standard Life
Investments..............B5 said on Monday that the mark’s U.S. potential and drive
Konica Minolta............B3
Syngenta.....................B1 weaker pound after the U.K.’s the volume required for suc-
L
T June 23 vote to leave the Eu- cess.
Leslie Hindman
Auctioneers...............B8 Tesla Motors...............B8 ropean Union would bolster its “A Primark that trades well
Linde............................B1 Twitter ........................ B3 results for fiscal 2016, ending in the U.S. will have vast
Los Angeles Modern U
Saturday. But it warned that growth potential, but if the
Auctions....................B8 UBS..............................B8 the currency move would hurt The Primark fashion chain has been affected by the weak pound. brand fails to gain traction in
M United Parcel Service.B1
profit margins in fiscal 2017, the notoriously competitive
Mattress Firm V
Holding.....................A1
because it has many expenses and he expects several other and much of Europe, is ex- U.S. apparel sector, then a lot
ValueAct Capital
M&G Investments ...... B5 Management ............ A2 in dollars and earns much of U.K. companies to report pen- panding gradually in the U.S. It of hopes will have been
Volkswagen.................B8 its revenue in pounds and eu- sion deficits due to falling opened its first store there a dashed,” said George Salmon,
NH Investment & X ros, and would turn its modest bond yields. year ago, in the former Boston an equity analyst at Har-
Securities..................B3 Xerox ........................... B3 pension surplus into a £200 The company vowed to location of the original Filene’s greaves Lansdown.
million ($265.4 million) deficit. maintain Primark’s rock-bot- Basement discount store, and AB Foods said Primark’s op-
AB Foods shares plunged in
London trading on Monday,
down 10.8% to £28.15.
tom prices despite the squeeze
in margins and said the brand
has been well received in the
since has opened four more
elsewhere in the U.S. North-
east.
erating profit margin for fiscal
2016 would be close to the
11.7% it achieved in the first
N The London-based company world’s largest clothing mar- The chain now plans to ex- half. It said it expects Pri-
H Nouri, Amy..................B3 blamed the pension deficit on ket, the U.S. pand selling space at the mark’s same-store sales to fall
O a marked decline in U.K. long- “All of our U.S. stores are 77,000-square-foot Boston by 2%, citing adverse weather
J Ormrod, Kate..............B2 term bond yields following the growing in sales,” Mr. Bason store by 20%, and it aims to conditions.
S EU referendum. The company said, adding that the stores have five more U.S. stores in The company said the weak
uses bond yields to value its are meeting sales expectations operation by fiscal 2018. That pound would help its sugar
Jordison, Don..............B5 Salmon, George .......... B2
Shafik, Minouche........A5
pension obligations. set by the company. He de- is a slower pace than it unit’s profit margins in the
AB Foods Finance Director clined to provide specific sales planned a year ago, when it coming fiscal year, as well as
Lee Jae-yong...............B3 T
John Bason said the company’s figures for the U.S. stores. forecast nine U.S. stores by the delivering a benefit on its
Lee Sei-cheol .............. B3 Tilk, Jochen.................B1
pension plan is well funded Primark, popular in the U.K. end of calendar 2016. profit earned outside the U.K.
Lores, Enrique.............B3 Tokushima, Yutaka.....B3
M W
MERGER
Mark Carney................B5 Williams, Jeff.............B3
Masuda, Tsuneo..........B3 Z
Morfit, Mason ............ A2 Zalm, Gerrit ................ B7
Continued from the prior page
terest-rate changes were
among the biggest gainers
Monday, after leading Friday’s
fessor at Cass Business School
in London. “What happens is
that one culture dominates
declines. Shares of telecommu- which eventually kills off the
nications companies in the other, or firms can continue
S&P 500 rose 2.1% by late af- with separate cultures for
ternoon. Utility stocks climbed years.”
1.8%. Merger talks between Linde
Fed funds futures, used by and Praxair had propelled the
DAVID STOBBE/REUTERS
investors to bet on central shares of both companies be-
bank policy, Monday suggested cause the move would have re-
a roughly 15% chance of a rate sulted in considerable syner-
rise in September, down from gies and a more balanced
24% on Friday, according to business profile. Linde shares
CME Group. fell nearly 6% on Monday.
The yield on the benchmark A Potash Corp. supervisor examines potash inside a storage facility in Saskatchewan, Canada. Praxair shares rose nearly 1%
10-year U.S. Treasury note was in New York trading.
flat at 1.671%. Ten-year Japa-
nese government-bond yields
settled at 0.031%, according to
Tradeweb, having spent most
DEAL top seed and pesticide develop-
ers pursue their own tie-ups.
Already grappling with a
three-year slide in major crop
which undercut demand from
one of the world’s big consum-
ers of the fertilizer. More re-
cently, prices also were hurt by
People familiar with the
matter said Linde’s leaders felt
uncomfortable with a merger
because Linde and its Munich
of the year in negative terri- Continued from the prior page prices, some farmers are con- delays in the signing of supply headquarters would have lost
tory. Yields rise as prices fall. ket capitalization of about $27 cerned that mergers between contracts with China and In- too many key functions.
In corporate news, Tesla billion. The merged company some of the world’s largest dia, two of the other largest In a letter to Linde employ-
Motors was up 2% after news would have annual revenue of farm-supply companies will con- fertilizer markets. ees seen by The Wall Street
that the electric-car maker nearly $21 billion. solidate pricing power among Both companies say, Journal, CEO Wolfgang
will tweak its suite of driver- The Potash-Agrium tie-up is fewer players and lead to higher though, there are signs point- Büchele said concerns about
assistance features to improve expected to face scrutiny from costs at a time when farmers are ing to increased-volume sales the balance of power between
safety. antitrust regulators in the U.S. scrimping to eke out profits. of potash through the rest of the two companies overrode
Wal-Mart Stores rose 2.3%, and Canada, among others, Fertilizer accounts for the year. Outside of North the desire for a merger.
and Procter & Gamble gained concerning the combined com- about one-fifth of corn farm- America, Potash and Agrium “The price of giving up
2.3%. panies’ North American share ers’ total costs, and about 7% sell the crop nutrient through one’s independent and unique
Many investors also remain of global potash production ca- for soybeans, according to the Canpotex, a Saskatchewan- position must be weighed
disappointed by the European pacity, analysts say. The two U.S. Agriculture Department. based exporter that also in- against the benefits of such a
Central Bank’s decision Thurs- together would control 23% of The companies estimated cludes rival Mosaic Co. move,” he wrote.
day not to ease policy further global production capacity, but the deal would generate up to Under the agreement, Pot- “One focus for us was our
at its most recent meeting. 60% or more of North Ameri- $500 million in annual operat- ash shareholders would receive traditional location in Munich,
German 10-year bond yields can capacity, ahead of Mosaic ing synergies, and the company 0.4 common share of the new which for us would have been
climbed to 0.037%, according and Intrepid Potash, National would employ about 20,000. company for each common of central importance in the
to Tradeweb. Bank said in a note ahead of Agrium has more than 1,200 share they own and Agrium merged company,” he said.
In Asia, Hong Kong’s Hang Monday’s announcement. retail outlets, mostly located in shareholders would receive Mr. Büchele on Sunday
Seng Index fell 3.4% in its Mr. Magro, who is to be- Canada and North America, 2.23 common shares of the new called Praxair CEO and Chair-
worst day since February. come CEO of the new company, and sells a little more than 10% company for each common man Steve Angel to inform
Markets in Shanghai, Japan said he is “highly confident” of the nitrogen, phosphate and share of Agrium they own. him of the termination of the
and Australia all closed with the proposed merger won’t potash it manufactures to in- On Monday afternoon, talks that had lasted for about
losses of around 2%. trigger antitrust issues. He said dustrial customers. The rest Agrium shares were down two months, according to one
The dollar fell 1% against the potash market has become goes to retail customers. 2.5%, trading in New York at of these people.
the yen to ¥101.683, while the very competitive with the Potash’s Mr. Tilk will be ex- $92.80, and Potash shares The merger was expected to
euro gained 0.1% against the emergence of new producers, ecutive chairman of the com- were down 1.2%, at $16.76. result bring more than $1 bil-
dollar at $1.1245, according to and there is very little overlap bined company, which will be The companies, which first lion in annual synergies, one
FactSet. in the companies’ nitrogen and based in Saskatoon, Potash’s announced they were in pre- of the people said. Linde’s su-
—Corrie Driebusch phosphate operations. current headquarters. How- liminary discussions late last pervisory board chairman
contributed to this article. The deal likely would sow fur- ever, it will maintain corporate month, said they expect the Wolfgang Reitzle was expected
ther unease among North Amer- offices in Calgary. deal to close in mid-2017. to become chairman.
ican farmers wary of reduced Potash sales have been hurt —Jacob Bunge —Nina Trentmann
competition and higher prices as by Brazil’s slumping currency, contributed to this article contributed to this article.
ANNOUNCEMENTS
STREET day’s meeting of the Euro-
pean Central Bank disap-
pointed economists’ hopes of
a revamped or extended
ations of supposedly safe
stocks soared.
No longer. Friday’s 2.5%
drop in U.S. shares was the
less attractive.
That isn’t to say it was
great to be betting on eco-
nomic growth. Every sector
Continued from the prior page bond-buying program, Euro- worst since June, but it fell, but those hit hardest
concerned about a Fed policy pean yields started to rise. wasn’t a classic case of a were those most closely tied
mistake would expect rates The German 10-year yield flight to safety. Quite the op- to lower bond yields.
to rise in the short run, but turned positive on Friday for posite. There had been warning
fall in the longer run—say, the first time since July, just The worst-performing signs. Cyclical shares have
from five-year paper on- minutes before the U.S. stock stocks were those least sen- been outperforming for a
ward—because the economy market opened, according to sitive to the economy, pre- couple of months even as
would suffer. Thomson Reuters data. That cisely the shares investors bonds refused to register
On Friday, the rising prob- could have triggered the had bought as alternatives to any hope for the U.S. econ-
ability of a rate in- broader bond selloff, in bonds because they pay out omy, while Japanese bond
crease pushed up the rate- which 10-year yields rose steady dividends. If bonds yields have been rising since
sensitive two-year Treasury more than two-year, and 30- suffer (yields rise), those early July.
yield. But even year yields even more. stocks look less attractive. But the new wave of
when Thursday’s (bigger) While both the Fed and Just how much less attrac- money fleeing plunging bond
TRAVEL rise is added, it was still global central banks are easy tive was shown by the yields in the U.K. after the
only the biggest two-day rise to blame, the buildup of worst-performing sector on Brexit vote helped offset any
Save Up To 60% since (gasp!) two weeks be- complacency is at least as Friday: Utilities fell 3.8%, a effects from Japan or the
fore. The two-year closed on big a danger. This year, in- sign of how little safety stock market.
First & Business
INTERNATIONAL Friday yielding slightly less vestors bought wholesale overpriced shares offer, no Ultimately, the Fed, global
Major Airlines, Corporate Travel than it started the week. The into the idea of secular stag- matter how solid their cash central banks and investor
Never Fly Coach Again! dollar had a similarly lack- nation, figuring rates would flow. Telecoms, another sec- sentiment are intertwined,
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Europe and Japan fleeing stocks in particular per- rising bond yields made divi- posedly safe stocks can fall a
negative rates. After Thurs- formed fabulously, and valu- dend income look relatively lot more.
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THE WALL STREET JOURNAL. Tuesday, September 13, 2016 | B3

TECHNOLOGY @wsjd | wsjd.com

HP Bolsters Twitter Faces Vital Ad Test

Printer Assets BY YOREE KOH

Thursday night’s matchup

BY DON CLARK business, said acquiring
AND EUN-YOUNG JEONG printer-engine technology
would bolster its profit mar-
HP Inc. agreed to buy Sam- gins and help it shape the evo-
sung Electronics Co.’s printer lution of its laser printers.
business for $1.05 billion, a “You have control over the
cratic and Republican National
Conventions, shows from
Bloomberg News and sports
between the New York Jets events like Wimbledon.
and Buffalo Bills has more at The NFL game Thursday
stake than two old foes’ brag- marks Twitter’s first time sell-
ging rights. The football game ing ads for live sports video.
is a crucial test for Twitter Ad packages for all 10
Inc., which is streaming the games range from $1 million

TOM SZCZERBOWSKI/GETTY IMAGES

deal designed to bolster the core technology,” he said. broadcast as part of an urgent to $8 million, according to a
Silicon Valley company’s offer- “That is very, very important.” revival effort by Chief Execu- company presentation re-
ings in the market for high- Canon is HP’s main supplier tive Jack Dorsey to regain sup- viewed by The Wall Street
volume devices that handle of printing engines in its exist- port from advertisers. Journal. At $5 million—the
printing and copying for office ing product line, a relationship Twitter will show the live same price as a 30-second ad
work groups. Mr. Lores said he expected to CBS feed on its mobile app during the Super Bowl—an ad-
The transaction, which is continue. HP’s new A3 laser and website, along with run- vertiser gets two commercials
subject to regulatory approval, printers rely on Samsung’s ning commentary of tweets a game as well as sponsorship
is expected to close within 12 print engine. and commercials from brands around dozens of video clips
months, the companies said on Beyond helping HP enter such as Budweiser and Bank of Thursday’s game is the first in a deal that Twitter won in April. of coverage a week.
Monday. Samsung also agreed the market for A3 machines, America. It is the first of 10 The NFL deal allots Twitter
to buy between $100 million he said, the deal would likely such Thursday night National straight period of declining lege students into a media about 15 in-game local ad
and $300 million in HP shares help winnow the number of Football League games in a growth. Investors, growing im- powerhouse, while Snapchat spots a game, as well as ads
through open-market pur- suppliers in the market. $10 million deal Twitter won patient with years of muddled Inc. has transformed its disap- shown ahead of NFL highlights
chases after the business sale “We see HP as a consolida- in April. strategies, have sent shares pearing messaging app into a and sponsored broadcasts on
is completed. tor in the market,” Mr. Lores Mr. Dorsey, a Twitter co- down about 31% since last Oc- flourishing content business. Periscope, Twitter’s live-
Several hours after disclos- said. “We want to drive this founder who returned as CEO tober when Twitter announced Those companies are also streaming app. Advertisers in-
ing the deal, HP unveiled 16 consolidation and make it hap- last year, has made video cen- Mr. Dorsey as the permanent pushing into digital video, but cluding Verizon Communica-
new multifunction printers pen.” tral to his turnaround effort. CEO. The shrinking ad gains, Mr. Dorsey is betting there are tions Inc., Sony Corp. and
targeted at so-called A3 larger The deal includes about The social media company flatlining user growth and a enough dollars to go around as Nestlé SA have signed on.
printer-copier combinations 6,500 Samsung printing-re- is hoping to attract advertis- lackluster stock has sparked consumers increasingly cut One advantage for advertis-
that are the stronghold of such lated patents, which Mr. Lores ers’ bigger video ad budgets speculation that Twitter is a the cable-TV cord. ers with Twitter over televi-
companies as Xerox Corp., said would also help HP ex- by becoming a prime destina- takeover target. The web video advertising sion is the ability to target
Canon Inc., Ricoh Co. and pand its business. Around tion to watch live events. A Twitter spokesman de- market is expected to climb specific users, says Matt Der-
Konica Minolta Inc. 6,000 Samsung employees will But it is a tough sell that clined to comment. 28% to $9.8 billion in 2016, ac- ella, Twitter’s vice president
HP, created as part of the join HP, including about 1,500 will require time and strong Executives have long ar- cording to eMarketer. of global sales in charge of
breakup of Hewlett-Packard engineers, he said. execution—two things Twitter gued that Twitter’s real-time Twitter spent the summer selling the NFL ad packages.
Co. last fall, sells personal Samsung has been slimming is short on these days. nature sets it apart from ri- signing streaming deals with Ford Motor Co., which has
computers but gets most of its down its business portfolio un- With cooling advertising vals, but it struggled to evolve sports leagues including Major purchased a Twitter-NFL ad
profit from supplying ink and der vice chairman and heir ap- demand, Twitter reported a from its roots as a 140-charac- League Baseball, the National package, could show a com-
toner for its printers. It is the parent, Lee Jae-yong, said Lee 20% gain in revenue in the ter messaging service. Basketball Association and the mercial featuring the Escape
market leader in the desktop Sei-cheol, an analyst at NH In- second quarter, its smallest Facebook Inc. has matured National Hockey League. SUV to one viewer while pitch-
printer business. vestment & Securities Co., revenue gain and eighth- from a social network for col- It has streamed the Demo- ing its Fusion to someone else.
That business hasn’t been adding that the deal can be
growing lately, in part because seen as a bid to strengthen the

Apple Watch Shifts Focus to Sports

PC users print fewer pages South Korean company’s bet-
these days. HP last month re- ter-performing areas.
ported that revenue from ink The world’s top maker of
and toner supplies declined smartphones, memory chips
18% in the third fiscal quarter and refrigerators, Samsung BY ROBERT MCMILLAN version, called Series 2, to be vice that does fitness and A significant part of the Ap-
from the year-earlier period, ranks fifth in the world-wide AND SARA GERMANO water resistant to a depth of health quite well,” said J.P. ple Watch’s sporty push comes
while printer hardware unit market for printers and copi- 50 meters, thanks to a custom- Gownder, an analyst with For- via the Nike deal.
sales fell 10%. ers by shipments with a 4% When Apple Inc. Chief Ex- designed speaker system that rester Research Inc. A new version of the watch,
HP Chief Executive Dion market share, behind global ecutive Tim Cook introduced flushes out water after a Apple still considers the the Apple Watch Nike+, comes
Weisler has vowed to spur rev- majors HP, Canon, Seiko Ep- the Apple Watch two years swim. watch a multipurpose digital equipped with the latest Nike+
enue growth by expanding in son Corp. and Brother Indus- ago, he touted its many fea- Apple also touted a part- accessory. Pacific Crest Securi- running app and Nike-inspired
A3 printing markets, a busi- tries Ltd. Samsung’s ship- tures, including email, a calen- nership with Nike Inc. to mar- ties analyst Brad Erickson watch faces and bands.
ness HP estimates has $55 bil- ments declined by 8.9% in the dar, the weather and phone ket sports-themed watches agrees. “If you’re Apple, your Despite the prominent Nike
lion in annual revenue and second quarter compared with calls. along with GPS capability that branding on the watch, it isn’t
which it has tried to crack be- a year earlier, according to re- Mr. Cook also described the helps the device track hikes, clear if it will help the world’s
fore with little success. Sam- search firm IDC. watch’s health features. But runs and bicycle rides.
A significant part of largest sportswear maker gain
sung already has a business Samsung doesn’t break out when Apple unveiled an up- Analysts estimate that Ap- the Apple Watch’s share in the competitive fit-
selling A3 machines, which HP sales figures for its printer dated model last week, the fo- ple sold about 12 million ness-tracker app marketplace.
will acquire in the deal. business, which falls under the cus was clearly on sports and watches in the year following
sporty push comes Nike has focused on devel-
HP also acquires through consumer-electronics division fitness. its April 2015 launch, but the via the Nike deal. oping software since abandon-
the deal the ability to make that also includes television “We think Apple Watch is product hasn’t proved to be a ing production of its own
the crucial mechanisms inside sets and home appliances such the ultimate device for a breakout hit like the iPhone; wearable fitness devices, in-
laser printers, known as print- as refrigerators and washing healthy life,” said Jeff Wil- Apple has sold more than one broader purpose is to use your cluding its short-lived Fuel-
ing engines. Samsung devel- machines. Last year, consumer liams, Apple’s chief operating billion iPhones over the past devices and your ecosystem to Band, in 2014.
oped the printing engines used electronics contributed just officer. nine years. One rumored fea- provide more utility to your The latest edition of its
in its own laser printers, while 4.7% of the company’s operat- The evolving presentations ture Apple didn’t add to the user base and enrich that ex- Nike+ app, released this sum-
HP has used external suppliers ing profit, while the higher- underscore a shift in Apple’s watch: a cellular connection, perience,” he said. mer, combines elements of fit-
for these components. profile smartphone and chip marketing focus for the watch, so the watch can handle calls Still, Mr. Erickson said the ness tips and motivation with
Enrique Lores, president of divisions generated 38.4% and from a stylish jack-of-all- independent of an iPhone. new Apple Watch could cut a customized marketplace,
HP’s imaging and printing 48.4%, respectively. trades fashion accessory to a “They’re still missing out into sales of fitness-focused aimed at increasing direct
personal trainer. on a central purpose, but devices from companies such sales of the company’s apparel
Apple designed the new they’re inching toward a de- as Garmin Ltd. and Fitbit Inc. and shoes.

Samsung Names Startup Prints Out Low-Cost Prosthetics

Lee to Its Board BY MEGUMI FUJIKAWA

BY EUN-YOUNG JEONG Fuminori Ando thought he

would never be able to wear
SEOUL—Samsung Electron- traditional Japanese summer
ics Co. nominated Lee Jae-yong, sandals. The design of his arti-
the son of its longtime chair- ficial leg didn’t allow it.
man, to its board of directors as Then the 41-year-old, who
shares in the technology titan lost his right leg below the
suffered their steepest one-day knee soon after he was born,
decline since 2008 in the wake heard about SHC Design Inc., a
SEONGJOON CHO/BLOOMBERG NEWS

of a global phone recall. startup that is using three-di-

MIHO INADA/THE WALL STREET JOURNAL

The latest step in the eleva- mensional printing to produce

tion of Mr. Lee, the South custom-made polymer limbs.
Korean company’s vice chair- Mr. Ando, who has a day
man and heir apparent, comes job at an internet company,
more than two years after his started working part time for
father, Chairman Lee Kun-hee, SHC Design helping with pat-
was hospitalized following a ents, and the company crafted
heart attack. He remains inca- him a free prosthetic leg de-
pacitated. Samsung’s Lee Jae-yong signed to accommodate the
Samsung on Monday said sandal. The artificial limb in-
the announcement wasn’t re- been under pressure to act cludes a specially curved heel, SHC Design’s Yutaka Tokushima, left, with Fuminori Ando, who got a 3-D-printed leg from the firm.
lated to the crisis that has en- more decisively in response to as well as a space for the san-
gulfed the company since it increasing reports of phones dal’s strap between the big devices. Developed by rubber for trials in the Philippines of All Nippon Airways Co. is
initiated a voluntary recall of catching fire because of faulty and second toes. maker JSR Corp., which has the 3-D limb printer. also on board in a research ca-
its latest smartphone, the Gal- lithium-ion batteries. On Fri- “It would have cost me a lot teamed up with SHC Design on More than 100,000 Filipinos pacity as it explores ways to
axy Note 7, earlier this month day, the U.S. Consumer Prod- if I made something like this this project, the polymer is fed whose disabilities prevent give passengers with pros-
because of a risk that the bat- uct Safety Commission and in a regular way,” said Mr. into a printer specially de- them from working could get thetic limbs easier passage
tery might catch fire. Samsung advised users of the Ando, wearing a pair of san- signed to output soft materials jobs if supplied with an artifi- through airport security,
Investors dumped Samsung Galaxy Note 7 smartphone to dals color-coordinated with stably. Guided by a template cial limb, the agency said. where the standard models set
shares again Monday, knock- turn off the device and not use his Japanese-style summer that SHC Design’s software “I wanted to provide my off alarms. Larger prosthetics
ing a further $15.9 billion off it. Several airlines have asked outfit. creates from a scan of the cus- product to those really in companies are also looking at
the company’s market value passengers not to use the Typically handmade from tomer’s healthier leg and the need,” said SHC Design Chief 3-D printing. Ottobock, a pros-
after wiping out more than phone while flying or stow multiple materials, a pros- desired footwear, the printer Executive Tsuneo Masuda, thetics maker based in Ger-
$10 billion Friday. them in checked luggage. thetic limb costs an average of sprays out a prosthetic leg. who started the company after many, distributes 3-D-printed
Samsung shares Monday The statement disclosing Mr. $4,200 in Japan, according to Insurance generally pays working at a medical-equip- leg covers made by San Fran-
finished down 7% at 1.465 mil- Lee’s nomination also came on health-ministry data. SHC De- for a prosthetic limb for ev- ment maker for 26 years. cisco-based UNYQ Design Inc.
lion won ($1,321) in Seoul, the the day Samsung said it agreed sign Chief Operating Officer eryday use, but the high cost SHC Design, which has re- that allow users to conceal the
largest fall since October to sell its printing business unit Yutaka Tokushima said he ex- of standard artificial legs ceived some subsidies from mechanical parts.
2008. Analysts said Samsung’s to HP Inc., a deal viewed by ana- pects his company’s printer makes it expensive for wearers the Japanese government, Prosthetics maker Össur hf.
steep decline was compounded lysts as driven by the third-gen- will be able to produce a pros- to get additional ones special- plans to begin selling its sys- in Reykjavik, Iceland, uses 3-D
by global market concern over eration heir’s desire to slim thetic leg for about $100. ized for activities such as tem—the 3-D printer and soft- printing to make prototypes
a possible U.S. interest-rate in- down the company’s business The 3-D printing wave swimming or skiing, or for ware—as soon as next April in and some parts for its micro-
crease this year as well as de- portfolio and strengthen its bet- erupted a few years ago with particular shoes. the Philippines and Japan, said processor-controlled knee, ac-
clines in U.S. stocks last week. ter-performing areas. visions of industrial parts and In a poor country like the operating chief Mr. Tokush- cording to research-and-devel-
South Korea’s main Kospi His nomination will be put even whole minicars being Philippines, SHC Design’s tech- ima. It will cost about $2,000, opment director Magnús
share index dropped 2.3%, its to a shareholder vote on Oct. churned out inexpensively. nology could fill a more funda- he said. A scanner is also re- Oddsson.
biggest one-day fall since Jan- 27, the company said. The ad- Much of the hype has yet to mental need. Nearly 350,000 quired and must be purchased “With further development
uary. “It’s one thing piling on dition of Mr. Lee to the be borne out, but SHC Design’s people there need prosthetic from another provider. of the technology, this method
after another,” said Lee Sei- company’s board will allow technology suggests the prom- legs, and more than 90% can’t The company believes it will be used more,” he added.
cheol, an analyst at NK Invest- him to increase his involve- ise of 3-D printing when com- get one because of the cost would be the first to offer a Tom Fise, executive direc-
ment & Securities. ment in business decisions bined with other advances. and lack of specialists to treat self-contained 3-D printing tor of the American Orthotic &
Since the company an- such as investments and In the case of prostheses, them, according to Japan In- system for prosthetic limbs, Prosthetic Association, said he
nounced the voluntary recall merger-and-acquisition deals, the other advance was an elas- ternational Cooperation according to Mr. Tokushima, isn’t aware of any other fully
of more than 2.5 million a person familiar with the tic polymer that is soft to the Agency, an aid arm of the gov- and it plans to seek patents printed legs as close to market
smartphones on Sept. 2, it has matter said. touch and suitable for medical ernment that provided funding for the printer and software. as SHC Design’s.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B4 | Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

BUSINESS NEWS

Hollande Moves on Alstom Joint Venture Set

BY INTI LANDAURO
AND WILLIAM HOROBIN To Fight Diabetes
PARIS—French President BY DENISE ROLAND more common form of the dis-
François Hollande has ordered AND INTI LANDAURO ease. This affects about 90% of
his government to prop up Al- all diabetes patients and oc-
stom’s Belfort factory after the Sanofi SA has teamed up curs when the body produces
high-speed train maker said it with Verily Life Sciences LLC, insulin but is unable to use it
plans to shutter production at a unit of Google parent Alpha- effectively.
the emblematic site because of bet, to develop high-tech tools In the early stages it can be
weak demand. for managing diabetes. managed by switching to a
The sprawling Belfort in- The French pharmaceutical healthier diet and increasing
dustrial site near the German company on Monday said the exercise, but as it progresses
and Swiss borders has been new business, called Onduo, treatment becomes more com-
regularly threatened by clo- would combine its expertise in plex and expensive, ultimately
sure, making it a battleground diabetes medicine with Ver- involving carefully-managed
for politicians hoping to show ily’s knowledge of miniatur- insulin injections.
SIMON DAWSON/BLOOMBERG NEWS

they have a solution to ized electronics, analytics and Paris-based Sanofi is one of
France’s industrial decline. software development. The the world’s biggest makers of
Mr. Hollande said Alstom companies didn’t disclose fi- diabetes drugs, though that
now needs contracts in France nancial details of the deal. part of the business is under
and pressured the company to The agreement is the latest pressure from increasingly
concentrate on its home mar- sign of convergence between cost-conscious health systems.
ket after the government Silicon Valley and the pharma- The company expects revenue
helped it make sales abroad. ceutical industry as technol- from diabetes drugs to decline
“What I’ve done for Alstom ogy companies aim to tap during the coming years as
abroad, Alstom should also do Alstom intends to stop producing trains at Belfort by 2018. Above, the plant seen in 2014. ever-higher demand for health competition between insulin
for France, but we have to care products from aging pop- makers intensifies.
provide orders,” Mr. Hollande hibits direct or indirect state Montebourg’s replacement level of orders for locomotives ulations, while drugmakers Mr. Oelrich said one attrac-
said. An Alstom spokeswoman aid to private companies. who resigned last month to for freight and high-speed seek alternatives to the tion of the Verily collaboration
declined to comment on Mr. Many of Mr. Hollande’s po- prepare his own run for presi- trains made in Belfort doesn’t lengthy and risk-laden process for Sanofi is that it could yield
Hollande’s remarks. tential rivals in the 2017 elec- dent—last year visited Belfort justify keeping the factory of developing new medicines a new product much faster
By reviving the French gov- tion have built reputations as to pledge the government was open. Two months ago, the to treat disease. than traditional drug develop-
ernment’s interventionism, Mr. protectors of Alstom and the striving to save jobs there. French state-owned train op- Sanofi and Google already ment. He expects Onduo to
Hollande is launching an effort Belfort site, which became a And former President Nico- erator SNCF picked an Alstom have spent a year exploring launch its first product within
to outflank his rivals in the home for French train makers las Sarkozy, a conservative rival, Germany-based Vossloh, the potential of high-tech de- two to three years, instead of
presidential 2017 election by fleeing the Alsace-Lorraine who is also in the running in for a €140 million ($157 mil- vices to improve diabetes care the roughly 10 years it takes
positioning himself as a lead- territory when it was annexed 2017, was finance minister lion) order for 44 freight loco- by, for example, using micro- to develop a new medicine.
ing guardian of French indus- by Germany in 1871. when the state bailed out Al- motives starting in 2018. chips to continuously monitor The two companies ap-
try. Economy and Finance Mr. Hollande’s potential ri- stom in 2004. “When I heard Alstom was counting on blood-sugar levels in patients. pointed Joshua Riff, formerly
Minister Michel Sapin said the vals for the 2017 elections in- Alstom’s Belfort factory would that order to keep the activity Monday’s deal is the result of a senior executive at United-
French president had told him clude former economy minis- close, it made me feel sick, at Belfort going, the spokes- that work, according to a com- Health Group’s Optum, as the
to work with unions, elected ter Arnaud Montebourg, a left- sick for the workers I’ve seen woman for the company said. pany spokeswoman. chief executive of Onduo,
officials and Alstom to encour- wing Socialist who led a high- so many times at Alstom and The train maker has People with diabetes must which will be based in Cam-
age demand for trains. profile battle in 2014 against who we saved,” Mr. Sarkozy pledged to find jobs for all its monitor their food intake and bridge, Mass.
“The president gave us one General Electric’s ultimately said last week. 470 employees at Belfort. exercise levels, as well as stick Diabetes, a fast-growing
single goal: maintaining train successful bid for Alstom’s Alstom intends to stop pro- A group of 80 workers will to an often complex treatment disease expected to affect 592
activities at the Belfort site,” power turbine activities. The ducing trains at Belfort by remain in Belfort to service regimen to manage the dis- million people world-wide by
Mr. Sapin said. However, the French government still holds 2018 and transfer the activi- French trains, and the others ease. Stefan Oelrich, head of 2035, is a hot area for phar-
government will have to tread 20% of voting rights in Alstom ties to another site located in will be offered work at one of diabetes at Sanofi, said Onduo maceutical and tech tie-ups.
carefully in helping Alstom as as part of the takeover deal. Reichshoffen, 200 kilometers the company’s 11 other sites in would work to bring these as- Last year Novo Nordisk A/S
the European Commission pro- Emmanuel Macron—Mr. north. Alstom said the current France. pects of diabetes treatment to- and IBM’s Watson Health
gether in a single product. started working together on a
Sanofi said the collabora- “virtual doctor” that could

Hanjin Restarts Freight Deliveries

tion initially would focus on dispense treatment advice
Type 2 diabetes, the much such as insulin dosage.

BY KWANWOO JUN

SEOUL—A Hanjin Shipping

Co. vessel was set to finish un-
sea, and pressure is mounting
on South Korea and the U.S. to
break the logjam. Several Han-
jin ships have been seized by
loading freight in California on
Monday, clearing the way for
more of its ships to dock, as
creditors or turned away from
ports, with terminals refusing
to unload cargo for fear they
the ailing South Korean com- won’t get paid.
pany works with ports to get Court papers show a total of
its supply chain moving again. 13 ships either owned or leased
The Hanjin Greece docked by Hanjin are set to make their
at Long Beach, Calif., on Satur- next port of call in the U.S.
day and began unloading The cargo operator got
cargo Sunday after days of be- some respite over the weekend
ing stranded off the coast. A after Korean Air Lines Co., its
Hanjin Shipping spokeswoman largest shareholder and Han-
in Seoul said at least three jin Group’s flagship company,
more cargo ships—the Hanjin agreed to lend it 60 billion
Gdynia, the Hanjin Jungil and won ($54 million), using Han-
the Hanjin Montevideo—were jin Shipping’s Long Beach
expected to follow suit. port-terminal assets as collat-
The financial woes of one of eral. The airline’s agreement is
the world’s largest shipping part of Hanjin Group’s earlier
lines have left as much as $14 pledge to provide 100 billion
billion of cargo stranded at won to help resolve the cargo
crisis. Hanjin Group Chairman
Cho Yang-ho has promised to
make the remaining 40 billion
won available by Tuesday, ac-
Sunday and promised to use
government funds to help de-
liver cargo to its final destina-
tion on time.
Scientists Honored
cording to Korean Air.
One of Hanjin’s lawyers on
Friday said in a U.S. federal
Mr. Joo also said the gov-
ernment was working with
Hanjin’s smaller South Korean
For Hep C Research
court that the company has rival, Hyundai Merchant Ma-
both the funding and the legal rine Co., and other companies BY PETER LOFTUS change the future for” people
permission necessary to unload to deploy extra vessels to deal with hepatitis C, Dr. Sofia said
four ships bound for U.S. ports. with stranded cargo. Three scientists whose in an interview. Up to 3.9 mil-
Hanjin also has asked a Hanjin filed for the equiva- work helped transform hepati- lion Americans have chronic
South Korean court for autho- lent of chapter 11 in South Ko- tis C treatment, including the hepatitis C infection, which
rization to use a further $3.5 rea last month and days later lead inventor of a multibillion- can damage the liver and be
million to have goods that al- sought chapter 15 bankruptcy dollar drug from Gilead Sci- life-threatening if not treated.
ready have been unloaded and protection in the U.S. ences Inc., are among the win- Dr. Sofia, who trained as a
are sitting at U.S. ports deliv- Chapter 15 gives a foreign ners of the 2016 Lasker chemist, led the effort to cre-
ered to their owners, a process company the benefits of U.S. Awards, one of the highest ate sofosbuvir while working
that its lawyer said could be bankruptcy law, including pro- honors in medical research. at a small biotech company,
jump-started as soon as tections that prevent creditors The Albert and Mary Lasker Pharmasset Inc., which Gilead
Wednesday. from seizing assets. But the Foundation, a New York-based acquired in 2012 for about $11
South Korean Minister of U.S. court’s power is limited foundation that supports med- billion. He left Gilead later in
Trade, Industry and Energy Joo and much of the aftermath of ical research, has given the 2012 to cofound his own com-
Hyung-hwan met with local ex- the bankruptcy will have to be awards annually for 71 years. pany, now known as Arbutus
porters and smaller shippers worked out in South Korea. Some 87 past winners have Biopharma, where he serves as
also won Nobel Prizes, accord- chief scientific officer. Arbutus
ing to the foundation. is developing new treatments

MANGUM lege and gets strong foot traf-

fic, said a Wal-Mart Stores
spokesman, though
LAURA STEVENS/THE WALL STREET JOURNAL
he
One of the three winners of
this year’s Lasker-Debakey Clini-
cal Medical Research Award, an-
for the hepatitis B virus.
Dr. Sofia said he recognizes
the high cost of the Gilead

Continued from page B1 wouldn’t provide numbers. nounced Tuesday, is Michael J. drugs—at least $1,000 a pill be-
the drive and the fewer the On a recent weekday, 80 Sofia, 58 years old, the lead in- fore discounts—have been con-
packages per stop—known as miles away in Lawton, Okla., ventor of the drug sofosbuvir, troversial. He said Gilead made
delivery density—the lower Central Mall’s food court is which was partly named after a “business decision” about
the profit for the U.S. Postal busy, but shoppers are scarce. him. In studies, the drug has pricing after he left the com-
Service, UPS and FedEx. A handful of vacant storefronts shortened treatment duration, pany. He doesn’t receive any
UPS says one mile a day promise that shops are “com- and led to higher cure rates and royalties from sales of the
across its U.S. delivery fleet ing soon,” and a J.C. Penney is less severe side effects than drugs, he said. Dr. Sofia received
costs up to $50 million a year. “closed for renovations.” older treatments for hepatitis C cash for his Pharmasset stock
UPS’s Mr. Bledsoe drives 56 Greg Maloney, retail CEO at virus infection. options in the Gilead acquisi-
miles nearly every day to deliver Jones Lang LaSalle, which Sofosbuvir is the active in- tion.
medicine to one customer—a Downtown Mangum, Okla., once was a bustling hub for retailers. manages Central Mall, says re- gredient in the brand-name When Dr. Sofia joined Phar-
veterinarian—on his route. tailers are opening fewer and drug Sovaldi, introduced in masset in 2005 after a stint at
To offset the cost, UPS and $11.44—already more than the Mangum. smaller stores in rural areas in the U.S. by Gilead Sciences in Bristol-Myers Squibb Co., the
FedEx charge an extra $4 per approximately $11 price of the About a dozen consumers in an effort to find the right bal- 2013, and one of two drugs in standard treatments for hepa-
package for remote residential item itself, according to an Mangum said they shop online ance with online shopping. Gilead’s combination pill Har- titis C had limitations, includ-
deliveries. The prevalence of analysis by Spend Manage- to reduce the need for trips to E-commerce has changed life voni, which came out in 2014. ing a cure rate of about 40%
free shipping to consumers ment Experts. Shipping the the Wal-Mart in Altus. Angela for Flowers Unlimited, the last Partly due to high price tags and difficult side effects.
and the need to price items pods to Mangum costs $15.65. Monroe, a dental assistant and remaining Mangum florist and that have drawn criticism, the Dr. Sofia’s co-winners of the
the same online and in stores, It is a double-whammy for mother of two, now goes once gift shop on the town’s square. drugs had about $19 billion in Lasker-Debakey Clinical Medi-
typically leaves retailers bear- retailers, which also are losing a week instead of two or three While it has lost much of its combined sales last year, mak- cal Research Award are Ralf
ing this additional cost. in-store customers to e-com- times, and does the rest of her bridal and baby registry busi- ing them among the most lu- F.W. Bartenschlager, 58, head
For retailers, that adds to merce. Wal-Mart built its busi- shopping online. Customers ness to online retailers, it has crative new drug launches in of the department of molecu-
already steep costs. Shipping a ness by combining muscular also tend to spend more when one big advantage: There is still the industry’s history. lar virology at the University
container of Tide Pods laundry buying power and a vast trans- they shop in stores. a need for last-minute gifts, “It’s pretty astounding to of Heidelberg in Germany; and
detergent from Atlanta to ur- portation network to provide a The Wal-Mart store in Altus says owner Darla Heatly. “They see how this drug has been Charles M. Rice, 64, professor
ban Oklahoma City is esti- wide variety of items and low is near an Air Force base and can’t do e-commerce if they able to transform people’s in virology at the Rockefeller
mated to cost a retailer prices to small towns like Western Oklahoma State Col- don’t plan ahead,” she adds. lives and certainly really University in New York.

dia’s salt-to-software Tata SASOL out certain exceptional and one-

Business Group, posted an increase in net
loss of 31.83 billion rupees ($476
Watch million) for the three months
ended June 30, compared with a
loss of 3.17 billion rupees a year
earlier. The company’s net loss
from discontinued operations
due to its divestment of parts of
TATA STEEL its U.K. steel business stood at
33.55 billion rupees compared
Slow U.K. Demand
Oil Company Looks off items, fell 17% to 41.40 rand,
in line with expectations.
To Preserve Cash
South African petrochemical
The company reduced its divi-
dend by more than a fifth to
and energy producer Sasol Ltd. 9.10 rand a share. Sasol, one of
reported a steep drop in net South Africa’s biggest industrial
profit and vowed to cut costs enterprises, said it now expects
further in the face of a sus- sustainable cash cost savings of
tained slump in oil prices. 2.5 billion rand through 2019, a
Sasol said on Monday that billion rand more than it had
JASPER JUINEN/BLOOMBERG NEWS

with 3.39 billion rupees a year
Worsens Net Loss earlier. Revenue fell 5% to 263.32
Tata Steel Ltd., one of the billion rupees, reflecting sluggish
world’s biggest steelmakers, sur- demand amid rising imports and
prised analysts Monday by post- a supply glut in world markets.
ing a 10-fold increase in net loss But a drop in steel demand
for the fiscal first quarter as a and high costs had made the
slowdown in demand and losses unit a drag on the company’s
at its U.K. business hurt mar- overall performance.
gins. The company, part of In- —Vibhuti Agarwal
net profit fell 55% to 13.22 billion previously targeted. Manage-
South African rand ($914.4 mil- ment would continue to focus
lion) in the year to end-Septem- on preserving cash to better re-
ber from 29.72 billion rand in the spond to the prospect that oil
previous fiscal year despite cost prices would remain “lower for
reductions and an increase in oil much longer,” the company said.
output. Revenue fell 6.6% to Sasol also explores for oil and
172.9 billion rand. Headline earn- gas in southern and central Af-
ings a share, the company’s pre- rica, Australia and Canada.
ferred profit measure that strips —Matina Stevis Tata Steel posted a loss of $475.7 million in the June quarter.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
ECB Aims
To Tackle
Bad Debt
At Banks
BY TOM FAIRLESS
AND TODD BUELL
FRANKFURT—The European
Central Bank published new
proposals on Monday aimed at
forcing eurozone banks to face
up to a mountain of bad debt, a
€900 billion ($1.01 trillion)
problem that policy makers
worry is curbing new lending
and hindering the region’s eco-
nomic recovery.
The proposals are part of a
broader effort by the ECB, the
eurozone’s top banking supervi-
sor, to restore confidence in
Europe’s battered lenders,
which are contending with ul-
tralow interest rates and slug-
gish economic growth.
They call on banks to estab-
lish separate units to manage
bad debt, disclose more infor-
mation to supervisors, and set
clear one-year and three-year
targets for winding up problem
loans.
“Banks can and, in many
cases should, be doing more to
reduce the level of” bad loans,
said Sharon Donnery, Ireland’s
deputy central-bank governor,
who heads an ECB task force on
nonperforming loans.
Around 7% of the
loans of the biggest
eurozone banks have
turned sour.
ECB officials have expressed
concerns that bad loans are
weighing on bank stocks and
preventing lenders from pass-
ing on ultralow interest rates to
consumers and businesses. Eu-
ropean bank stocks have fallen
more than 20% this year.
In a call with journalists on
Monday, Ms. Donnery said as-
set quality was “a serious chal-
lenge for many European
banks,” which could constrain
credit growth and economic ac-
tivity and lead to higher fund-
ing costs.
Around 7% of the loans of
the biggest eurozone banks
have turned sour, according to
ECB data, but the problem is
most acute in southern Europe,
where about 47% of loans in
Greece and 45% in Cyprus are
nonperforming. That compares
with 2% in Germany. The ECB
defines nonperforming loans as
those that are more than 90
days past-due, and for which
the debtor is deemed unlikely
to repay in full.
In Italy, where about 12% of
loans are nonperforming, offi-
cials have said that the govern-
ment hopes to inject as much
as €40 billion in capital into do-
mestic banks, though such a
move would likely face opposi-
tion in Brussels and Berlin.
Under the ECB’s guidelines,
banks will be required develop
clear strategies to accelerate
loan disposals, including quan-
titative targets and greater in-
vestment in information tech-
nology and staff.
While the proposals aren’t
binding, banks will have to ex-
plain failures to comply, and
could face sanctions.
Property Funds Back After Brexit Closure Bolster Capital Buffer,
BY ART PATNAUDE
Some U.K. real-estate funds
have started thawing out after
the post-Brexit freeze.
Asset manager Columbia
Threadneedle Investments
said Monday that its U.K.
property fund would reopen
later this month. The London-
based firm had shut down
trading in early July when
investors were rushing to pull
their money out after Britain
voted to leave the European
Union.
Earlier this month, asset-
management firm Canada Life
lifted the suspension of
redemptions on its U.K. real-
estate fund. And U.K. fund
manager Aberdeen Asset
Management PLC reopened its
property fund in mid-July,
having taken a slightly different
approach after Brexit,
suspending its fund for a short
time and charging a steep fee if
an investor insisted on pulling
money out.
Some of the biggest U.K.
FINANCE & MARKETS
Investors Flee Indebted Mongolia
Once a market darling,
the high-yielding,
commodity-rich nation
turns into a pariah
BY CAROLYN CUI
AND JULIE WERNAU
There is nary a corner on
Earth where investors won’t
journey to find extra yield. But
the trip to Mongolia is proving
treacherous.
Money managers piled into
assets from the world’s most
sparsely populated country in
past years on the prospects of
vast untapped mines rich with
copper and gold. Mongolian
debt got an additional boost
this year, soaring 6% in July,
as raw-material prices picked
up and investors sought alter-
natives to low and even nega-
tive bond yields in developed
countries.
But in August, Mongolia’s
finance minister stunned
global investors by saying that
its government debt would
reach 78% of gross domestic
product, far above the coun-
try’s 55% target. The revela-
tion triggered a selloff in Mon-
golia’s markets, with the
country’s dollar-denominated
debt tumbling 7.7% last month
and the nation’s currency fall-
ing the most among all its de-
veloping-economy peers, be-
fore rebounding slightly this
month.
“Until recently, Mongolia
was a darling of the markets
and they couldn’t do anything
wrong,” said Bejoy Das Gupta,
chief economist for Asia Pa-
cific at the Institute of Inter-
national Finance. “But when
the hard landing happens,
markets adjust very quickly.”
Mongolia is among a hand-
ful of countries with once-
bright futures that took on
massive debt loads during a
period of investor enthusiasm
for frontier markets. In 2011,
the nation was the world’s
fastest-growing economy, ex-
panding at a 17% rate as prices
of copper, gold and iron ore
soared.
Foreign lenders handed
over billions of dollars to the
government, its banks and
mining companies to help ex-
BOE May Buy Bonds of Non-British Firms
BY JASON DOUGLAS
AND JON SINDREU
LONDON—U.S. tech giant
Apple Inc. and German auto
maker Daimler AG are among
a host of non-British compa-
nies whose debt is eligible for
the Bank of England’s corpo-
rate-bond-buying program, the
central bank said Monday.
The BOE published a list of
around 300 securities it can
buy in a £10 billion ($13.3 bil-
lion) program scheduled to be-
gin Sept. 27 and run for 18
months. The list is made up of
bonds issued by more than 100
companies, many of which
have significant U.K. opera-
tions but have headquarters
overseas.
Other non-British names on
the BOE’s shopping list include
U.S. biotechnology firm Amgen
Inc., French utility Électricité
property funds remain shut,
including those at Standard
Life Investments Ltd., Aviva
Investors and M&G
Investments. In August, Aviva
told investors it wouldn’t
reopen its fund for at least six
months.
But the reopening of even a
few funds signals that
investors’ concerns about the
London’s property market has fared better than some had expected.
Tuesday, September 13, 2016 | B5
WU HONG/EUROPEAN PRESSPHOTO AGENCY
Houses in Ulan Bator, Mongolia. In August, the government said it may soon stop paying civil servants and the military due to debt.
tract wealth from under- 2017, part of $2 billion in ma-
ground. Among the bonds’ turing public- and private-sec- Digging Out
holders are BlackRock Inc., tor debt in 2017, according to A looming debt pile in Mongolia is spooking even the most
Franklin Templeton, Gold- the International Monetary yield-hungry investors.
man Sachs Group Inc. and Fund. External debt as a Emerging markets’ bond
UBS Global Asset Manage- Investors are pinning hopes percentage of GDP performance in August
ment, according to the latest on a vast gold and copper 200% Forecast TOP FIVE
holder data from Thomson mine that is expected to lead
Reuters. Mongolia’s debt levels to huge economic growth. In
Zambia 12.0%
swelled 264% in the five years December 2015, the govern- Iraq 8.1
ended 2015, the largest in- ment approved a $4.4 billion 150 Cameron 5.9
crease in the world during financing deal for Rio Tinto Ghana 5.6
that period, according to PLC’s second phase of the Oyu
Mozambique 5.2
Moody’s Investors Service. Tolgoi copper and gold mine, 100
But the commodities bust believed to be the world’s BOTTOM FIVE
that began in 2011 crimped the largest underdeveloped re- 0.1% Philippines
country’s growth. Now, the serve of copper, concluding a 50
prospect of higher U.S. inter- four-year-long negotiation. –0.1 Honduras
est rates, which could make But delays in the projects have –0.4 Chile
bonds in developing econo- been costly: During the wait, –0.8 South Africa
mies less attractive, could copper prices more than 0
2004 ’06 ’08 ’10 ’12 ’14 ’16 –7.7 Mongolia
worsen a troubled situation. halved.
As of the first quarter, As the country’s current fi- Sources: Moody’s (debt); J.P. Morgan (bonds) THE WALL STREET JOURNAL.
Mongolia’s total debt owed to nancial woes deepened, the
foreign creditors stood at government resorted to emer- flows. up investor confidence that it
$22.6 billion, compared with a gency measures. Moody’s also lowered Mon- will be able to pay its debt,
still tiny $11.8 billion economy. In August, the government golia’s sovereign credit rating, said Kevin Daly, a portfolio
Meanwhile, a $580 million said it may soon stop paying sending it further into junk manager at Aberdeen Asset
Mongolian bond taken on to its civil servants and the mili- status. Standard & Poor’s Management, with $9 billion
help finance a still-unfinished tary, and raised interest rates made a similar move. in emerging-market debt un-
project to connect 21 prov- by 4.5 percentage points, to If Mongolia turns to the der management, including
inces with roads comes due in 15%, to combat capital out- IMF for help, that could prop Mongolian bonds.
de France SA, and Danish en- and “enhance their growth po- loans for banks to cushion the
ergy firm Dong Energy AS. tential through effective cor- economy from a possible slow-
The inclusion of non-British porate governance,” among down.
names underscores the un- other criteria. The BOJ still Officials fret that uncer-
usual measures some central doesn’t directly invest in these tainty over the U.K.’s future
banks are taking to stimulate corporations. Rather, it buys economic ties to its largest
sluggish economies. The U.K. shares in exchange-traded trading partner may weigh on
long has been a magnet for funds that track stock indexes spending and investment, al-
STEPHANE MAHE/REUTERS
foreign investment, and the that officials deem eligible. though a recent run of data
BOE said the principle crite- The European Central Bank, suggest the economy has
rion for inclusion is that the which also is engaged in cor- weathered the initial surprise
issuer makes “a material con- porate-bond purchases, buys of the result reasonably well.
tribution to the U.K. economy.” euro-denominated bonds of Most BOE officials have
The issuer’s debt also must be nonbank corporations estab- high hopes for the corporate-
investment grade and denomi- lished in the euro area. bond plan, even though it is a
nated in sterling. Bonds of France’s EDF qualify. The BOE’s corporate-bond- relatively small slice of their
Plenty of British firms make buying program is part of a planned purchases overall.
the cut, including newspaper Zeneca PLC also are included. multipronged stimulus effort BOE Gov. Mark Carney, in tes-
publisher Daily Mail & General Financial firms are excluded. announced last month in the timony to lawmakers last
Trust PLC, whose flagship title In setting its eligibility cri- wake of the U.K.’s decision to Wednesday, said the plan al-
the Daily Mail supported the teria, the BOE has taken a page leave the EU. The central bank ready had led to an uptick in
U.K.’s exit from the European from the Bank of Japan’s play- also revived a crisis-era gov- corporate-bond issuance. The
Union in a referendum in June. book. Japanese officials’ pur- ernment-bond-buying pro- theory is that the policy low-
Bonds from oil company BP chases aim to support firms gram, cut its benchmark inter- ers borrowing costs for com-
PLC and drug makers Glaxo- that are “proactively investing est rate to a new low of 0.25% panies and should spur invest-
SmithKline PLC and Astra- in physical and human capital” and lined up cheap four-year ment.
impact on U.K. property market
have eased since the
been as big as they were in
previous market downturns.
FCA Tells Aberdeen
referendum in late June. In Shares have rebounded. BY MIKE FOSTER we would be surprised if Aber-
addition to funds suspending The stability has been AND LAURENCE FLETCHER deen is alone in being required
trade, shares of listed landlords reason enough for some asset to hold more capital,” analysts
sank, deals collapsed, and managers to resume business. The U.K.’s financial watch- at Credit Suisse said.
completed sales were done at a “Any effects of the Brexit dog has told Aberdeen Asset Aberdeen said it volun-
discount. vote on the overall U.K. Management to increase the teered to set aside £100 million
So far, the market has held up economy, negative or capital buffer it holds by £140 prior to the FCA request, tak-
better than some had expected. otherwise, will take many million ($186 million), signal- ing its previous reserve to
The discounts on sales haven’t months if not years to ing greater scrutiny of the £435 million. Analysts don’t
transpire, and sometime after fund-management sector. believe the higher requirement
that for the property market,” Aberdeen, which manages a will impair prospects for divi-
Don Jordison, managing little more than £300 billion in dends paid by the asset-man-
director of property at assets, said its total regulatory agement firm.
Columbia Threadneedle capital requirement will now The action came about fol-
Investments, said in a be around £475 million. Its lowing a periodic review of Ab-
statement. shares, which are down 37% erdeen’s finances by the FCA.
Aberdeen reopened after since April 2015, fell 1.7% to It is expected to publish an in-
setting up new procedures for 320.10 pence. terim review of the asset-man-
pricing redeemed units. If The fund-management sec- agement sector in November.
investors wanted to take money tor has been under heightened The agency didn’t respond
JONATHAN BRADY/ZUMA PRESS
out, they needed to pay a 17% scrutiny since the U.K.’s vote to to requests for comment.
fee. During that period, the exit the European Union in Andrew Bailey became chief
firm sold properties, often at June, and the action by the Fi- executive of the FCA in July af-
steep discounts, to fund nancial Conduct Authority has ter a stint in charge of the
redemptions. raised concerns that other Bank of England’s Pruden-
The exit fee at Aberdeen has fund-management firms will tial Regulation Authority,
since been reduced to 5%. have to follow suit. where he expressed concern
—Elizabeth Pfeuti “The FCA’s gaze has fixed over risks to funds in the event
contributed to this article. upon asset managers, and so of a bond-market rout.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B6 | Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

MARKETS DIGEST
Nikkei 225 Index STOXX 600 Index S&P 500 Index Data as of 4 p.m. New York time
Last Year ago
16672.92 t 292.84, or 1.73% Year-to-date t 12.40% 342.23 t 3.29, or 0.95% Year-to-date t 6.45% 2159.04 s 31.23, or 1.47% Trailing P/E ratio * 24.86 20.77
High, low, open and close for each 52-wk high/low20012.40 14952.02 High, low, open and close for each 52-wk high/low 385.43 303.58 High, low, open and close for each P/E estimate * 18.52 16.42
trading day of the past three months. All-time high 38915.87 12/29/89 trading day of the past three months. All-time high 414.06 4/15/15 trading day of the past three months. Dividend yield 2.12 2.20
All-time high: 2190.15, 08/15/16

* P/E data based on as-reported earnings from Birinyi Associates Inc.

17500 360 2200

65-day moving average 17000 65-day moving average 350 2160

16500 340 2120

16000 330 2080

Session high
DOWN UP 65-day moving average
15500 320 2040
t

Session open Close

Close Open
t

15000 310 2000

Session low
Bars measure the point change from session's open
14500 300 1960
June July Aug. Sept. June July Aug. Sept. June July Aug. Sept.

International Stock Indexes Data as of 4 p.m. New York time Global government bonds
Latest 52-Week Range YTD Latest, month-ago and year-ago yields and spreads over or under U.S. Treasurys on benchmark two-year
Region/Country Index Close NetChg % chg Low Close High % chg and 10-year government bonds around the world. Data as of 3 p.m. ET
World The Global Dow 2444.54 1.84 0.08 2033.03 • 2489.23 4.6 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1691.97 –15.30 –0.90 1471.88 • 1956.39 –1.4 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 892.72 –16.60 –1.83 691.21 • 1044.05 12.4 3.250 Australia 2 1.600 82.2 77.4 76.9 119.8 1.560 1.467 1.907
4.250 10 2.056 38.7 29.9 40.7 55.4 1.973 1.919 2.745
Americas DJ Americas 521.50 6.94 1.35 433.38 • 529.32 7.0
1.250 Belgium 2 -132.5 -134.8 -130.4 -91.8 -0.562 -0.606 -0.209
-0.547
Brazil Sao Paulo Bovespa 58556.62 556.89 0.96 37046.07 • 60310.50 35.1
1.000 10 0.270 -139.8 -142.9 -139.5 -120.7 0.245 0.117 0.984
Canada S&P/TSX Comp 14607.88 67.88 0.47 11531.22 • 14855.69 12.3
1.000 France 2 -0.568 -134.6 -136.3 -127.3 -86.4 -0.577 -0.575 -0.154
Mexico IPC All-Share 46742.52 283.35 0.61 39924.09 • 48956.06 8.8
0.500 10 0.271 -139.8 -143.1 -139.6 -120.1 0.243 0.116 0.990
Chile Santiago IPSA 3168.67 –19.37 –0.61 2730.24 • 3259.22 7.6
0.000 Germany 2 -0.624 -140.2 -141.5 -132.3 -95.6 -0.629 -0.625 -0.246
U.S. DJIA 18325.07 239.62 1.32 15450.56 • 18668.44 5.2
0.000 10 0.038 -163.0 -166.1 -161.7 -153.5 0.013 -0.106 0.656
Nasdaq Composite 5211.89 85.98 1.68 4209.76 • 5287.61 4.1
0.250 Italy 2 -0.053 -83.1 -85.6 -78.3 -59.0 -0.070 -0.086 0.119
S&P 500 2159.04 31.23 1.47 1810.10 • 2193.81 5.6
1.600 10 1.276 -39.2 -42.4 -46.2 -35.7 1.251 1.050 1.835
CBOE Volatility 15.14 –2.36 –13.49 11.02 • 32.09 –16.9
0.100 Japan 2 -0.249 -102.7 -99.7 -89.5 -69.6 -0.211 -0.197 0.013
EMEA Stoxx Europe 600 342.23 –3.29 –0.95 303.58 • 385.43 –6.4 0.100 10 -0.013 -168.1 -169.8 -161.9 -184.3 -0.024 -0.107 0.349
Stoxx Europe 50 2852.97 –23.78 –0.83 2556.96 • 3305.96 –8.0 4.000 Netherlands 2 -0.586 -136.4 -138.0 -129.7 -94.3 -0.593 -0.599 -0.234
Austria ATX 2375.75 –18.78 –0.78 1929.73 • 2515.09 –0.9 0.500 10 0.145 -152.3 -155.3 -151.4 -135.0 0.121 -0.002 0.841
Belgium Bel-20 3546.86 –35.42 –0.99 3117.61 • 3773.73 –4.1 4.450 Portugal 2 0.468 -31.0 -29.9 -34.4 -39.5 0.488 0.354 0.315
France CAC 40 4439.80 –51.60 –1.15 3892.46 • 5011.65 –4.3 2.875 10 3.183 151.5 147.8 118.0 41.5 3.152 2.692 2.606
Germany DAX 10431.77 –141.67 –1.34 8699.29 • 11430.87 –2.9 0.250 Spain 2 -0.097 -87.5 -91.5 -86.3 -60.0 -0.129 -0.165 0.109
Greece ATG 557.25 –9.55 –1.68 420.82 • 731.18 –11.7 1.950 10 1.085 -58.3 -59.0 -58.1 -9.2 1.084 0.931 2.099
Hungary BUX 28167.57 –278.26 –0.98 20452.90 • 28709.80 17.8 4.250 Sweden 2 -0.593 -137.1 -138.2 -134.2 -118.7 -0.596 -0.644 -0.478
Israel Tel Aviv 1437.24 4.21 0.29 1378.80 • 1607.43 –6.0 1.000 10 0.304 -136.4 -139.4 -147.6 -154.6 0.281 0.036 0.645
Italy FTSE MIB 16840.28 –316.20 –1.84 15017.42 • 22874.96 –21.4 1.250 U.K. 2 0.165 -61.4 -60.8 -55.3 -10.8 0.178 0.144 0.601
Netherlands AEX 447.60 –5.28 –1.17 378.53 • 474.87 1.3 2.000 10 0.774 -89.4 -90.7 -99.1 -47.2 0.768 0.521 1.720
Poland WIG 46756.18 –569.96 –1.20 41747.01 • 51909.32 0.6 0.750 U.S. 2 0.778 ... ... ... ... 0.786 0.698 0.709
Russia RTS Index 983.78 –4.09 –0.41 607.14 • 1017.32 30.0 1.500 10 1.668 ... ... ... ... 1.674 1.512 2.191
Spain IBEX 35 8866.60 –158.90 –1.76 7579.80 • 10631.60 –7.1
Sweden SX All Share 508.25 –3.75 –0.73 432.78 • 530.82 0.6 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 8206.20 –57.93 –0.70 7425.05 • 9080.56 –6.9 EXCHANGE LEGEND: CBOT: Chicago Board of Trade; CME: Chicago Mercantile Exchange; ICE-US: ICE Futures U.S.; MDEX: Bursa Malaysia
South Africa Johannesburg All Share 52802.00 –545.30 –1.02 45975.78 • 54760.91 4.2 Derivatives Berhad; TCE: Tokyo Commodity Exchange; COMEX: Commodity Exchange; LME: London Metal Exchange;
NYMEX: New York Mercantile Exchange; ICE-EU: ICE Futures Europe. *Data as of 9/9/2016
Turkey BIST 100 77053.54 … Closed 68230.47 • 86931.34 7.4
One-Day Change Year Year
U.K. FTSE 100 6700.90 –76.05 –1.12 5499.51 • 6955.34 7.3 Commodity Exchange Last price Net Percentage high low
340.25 -0.75 -0.22% 449.00 314.75
Asia-Pacific DJ Asia-Pacific TSM 1452.96 –24.53 –1.66 1188.42 • 1499.93 4.5 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 966.00 -14.25 -1.45 1,186.25 868.00
Australia S&P/ASX 200 5219.60 –119.60 –2.24 4765.30 • 5587.40 –1.4
Wheat (cents/bu.)
CBOT
CBOT 409.50 6.00 1.49% 551.50 386.75
China Shanghai Composite 3021.98 –56.88 –1.85 2655.66 • 3651.77 –14.6
Live cattle (cents/lb.) CME 105.775 1.375 1.32 125.475 99.375
Hong Kong Hang Seng 23290.60 –809.10 –3.36 18319.58 • 24099.70 6.3
Cocoa ($/ton) ICE-US 2,783 21 0.76 3,216 2,728
India S&P BSE Sensex 28353.54 –443.71 –1.54 22951.83 • 29045.28 8.6
Coffee (cents/lb.) ICE-US 150.75 -0.40 -0.26 157.65 119.40
Japan Nikkei Stock Avg 16672.92 –292.84 –1.73 14952.02 • 20012.40 –12.4
Sugar (cents/lb.) ICE-US 20.82 0.13 0.63 21.37 13.48
Singapore Straits Times 2873.33 … Closed 2532.70 • 3083.07 –0.3
Cotton (cents/lb.) ICE-US 66.87 -2.21 -3.20 77.98 54.19
South Korea Kospi 1991.48 –46.39 –2.28 1835.28 • 2066.53 1.5 Robusta coffee ($/ton) ICE-EU 1926.00 17.00 0.89 1,932.00 1,423.00
Taiwan Weighted 8947.06 –106.63 –1.18 7664.01 • 9262.89 7.3
Copper ($/lb.) COMEX 2.1065 0.0140 0.67 2.3290 1.9710
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1331.70 -2.80 -0.21 1,384.40 1,066.00
Silver ($/troy oz.) COMEX 19.210 -0.158 -0.82 21.250 13.865
Currencies London close on Sept. 12 Aluminum ($/mt)* LME 1,586.50 1.00 0.06 1,700.50 1,451.50
Tin ($/mt)* LME 19,500.00 -25.00 -0.13 19,625.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Mon YTDchg Copper ($/mt)* LME 4,643.00 7.00 0.15 5,070.50 4,320.50
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 1,906.00 6.00 0.32 1,967.00 1,598.00
20%
Yen Europe Zinc ($/mt)* LME 2,298.00 -9.00 -0.39 2,364.00 1,467.00
s
Bulgaria lev 0.5739 1.7424 –3.2 Nickel ($/mt)* LME 10,375.00 35.00 0.34 10,950.00 7,750.00
10
Croatia kuna 0.1500 6.667 –4.9 Rubber (Y.01/ton) TCE 153.90 0.90 0.59 159.60 149.50
Euro zone euro 1.1230 0.8905 –3.3
0 Palm oil (MYR/mt) MDEX 2639.00 -1.00 -0.04 2,669.00 2,171.00
Czech Rep. koruna-b 0.0416 24.064 –3.3
s Denmark krone 0.1509 6.6287 –3.5 Crude oil ($/bbl.) NYMEX 46.65 0.19 0.41 53.39 34.10
–10 s WSJ Dollar index 0.003629 275.57 –5.1
Hungary forint NY Harbor ULSD ($/gal.) NYMEX 1.4590 0.0083 0.57 1.6112 1.0272
Euro Iceland krona 0.008734 114.50 –12.0
–20 RBOB gasoline ($/gal.) NYMEX 1.3838 0.0227 1.67 1.5121 0.9930
Norway krone 0.1214 8.2378 –6.8
0.2576 3.8814 –1.1
Natural gas ($/mmBtu) NYMEX 2.971 0.081 2.80 3.1480 2.1680
2015 2016 Poland zloty
Russia ruble-d 0.01546 64.698 –10.0 Brent crude ($/bbl.) ICE-EU 48.67 0.20 0.41 54.12 33.05
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1176 8.5015 0.7 Gas oil ($/ton) ICE-EU 423.00 -4.50 -1.05 477.50 298.00
Mon Mon
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0270 0.9737 –2.8
Turkey lira 0.3357 2.9792 2.1 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1289 7.7582 0.1
Ukraine hryvnia 0.0376 26.6175 10.9
Argentina peso-a 0.0666 15.0160 16.0
India rupee
Indonesia rupiah
0.0150
0.0000757
66.7968 0.9
13205 –4.6
U.K. pound 1.3314 0.7511 10.7 Cross rates London close on Sep 12
Brazil real 0.3046 3.2828 –17.1 Middle East/Africa
Japan yen 0.009808 101.95 –15.2
Canada dollar 0.7645 1.3081 –5.5 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.002960 337.82 –0.3 Bahrain dinar 2.6528 0.3770 –0.04
Chile peso 0.001490 671.10 –5.3 Australia 1.3291 1.7698 1.3654 0.0130 0.1713 1.4928 1.0161 ...
Macau pataca 0.1252 7.9882 –0.2 Egypt pound-a 0.1126 8.8805 13.4
Colombia peso 0.0003384 2955.25 –6.9 Canada 1.3081 1.7415 1.3435 0.0128 0.1686 1.4689 ... 0.9841
Malaysia ringgit-c 0.2433 4.1102 –4.5 Israel shekel 0.2648 3.7768 –3.0
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7317 1.3667 –6.6 Kuwait dinar 3.3165 0.3015 –0.6 Euro 0.8905 1.1857 0.9145 0.0087 0.1148 ... 0.6807 0.6699
Mexico peso-a 0.0524 19.0784 10.9
Pakistan rupee 0.0096 104.310 –0.6 Oman sul rial 2.5970 0.3851 0.03 Hong Kong 7.7582 10.3284 7.9677 0.0761 ... 8.7120 5.9311 5.8372
Peru sol 0.2946 3.3950 –0.6
Philippines peso 0.0210 47.512 1.4 Qatar rial 0.2746 3.641 –0.03 Japan 101.9530 135.7500 104.7300 ... 13.1420 114.4900 77.9500 76.7000
Uruguay peso-e 0.0343 29.120 –2.6
Singapore dollar 0.7356 1.3594 –4.2 Saudi Arabia riyal 0.2666 3.7509 –0.1 0.9737 1.2962 ... 0.0095 0.1255 1.0935 0.7443 0.7324
Venezuela bolivar 0.100100 9.99 58.4 Switzerland
South Korea won 0.0008984 1113.03 –5.4 South Africa rand 0.0695 14.3964 –7.0
U.K. 0.7511 ... 0.7715 0.0074 0.0968 0.8436 0.5742 0.5652
Asia-Pacific Sri Lanka rupee 0.0068871 145.20 0.7 Close Net Chg % Chg YTD % Chg
0.7524 1.3291 –3.1 Taiwan dollar 0.03154 31.703 –3.7 U.S. ... 1.3314 1.0270 0.0098 0.1289 1.1230 0.7645 0.7524
Australia dollar WSJ Dollar Index 86.42 –0.09 –0.11 –4.16
China yuan 0.1497 6.6806 2.9 Thailand baht 0.02866 34.890 –3.2 Sources: Tullett Prebon, WSJ Market Data Group Source: Tullett Prebon

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

Latest 52 wks ago % YTD% % YTD% % YTD%
Libor Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Cur Stock Sym Last Chg Chg Asia Titans 50
One month 0.52772% 0.20900% ¥ TakedaPharm 4502 4668.00 -0.89 -23.03 CHF RocheHldgctf ROG 239.00 -0.42 -13.53 Last: 140.38 t 3.50, or 2.43% YTD s 3.0%
Three month 0.85578 0.33550 Asia Titans HK$ TencentHoldings 0700 207.00 -3.18 35.56 £ RoyDtchShell A RDSA 1857.00 -1.22 21.69
145
Six month 1.25528 0.54175 HK$ AIAGroup 1299 50.10 -2.34 7.51 ¥ TokioMarineHldg 8766 3944.00 -2.35 -16.30 € SAP SAP 78.38 -0.60 6.81 High
One year 1.56644 0.85455 ¥ AstellasPharma 4503 1569.00 -0.57 -9.38 ¥ ToyotaMtr 7203 6093.00 -1.26 -18.63 € Sanofi SAN 69.95 -0.57 -11.01 140
Close
Euro Libor AU$ AustNZBk ANZ 26.19 -2.13 -6.23 AU$ Wesfarmers WES 42.50 -0.35 2.14 € SchneiderElectric SU 59.50 0.17 13.20 Low 135
One month -0.37286% -0.11357% AU$ BHP BHP 19.94 -4.04 11.65 AU$ WestpacBanking WBC 29.03 -1.73 -13.50 € Siemens SIE 103.80 -0.95 15.49 t
Three month -0.32014 -0.03786 HK$ BankofChina 3988 3.56 -4.30 2.89 AU$ Woolworths WOW 22.32 -2.32 -8.90 € Telefonica TEF 9.50 -2.34 -7.18 130
Six month -0.20614 0.03057 HK$ CKHutchison 0001 99.50 -2.74 -4.69 € Total FP 43.44 -0.96 7.37 50–day 125
One year -0.07686 0.14386 HK$ CNOOC 0883 9.43 -2.68 16.85 Stoxx 50 CHF UBSGroup UBSG 14.13 -2.35 -27.61
moving average
120
Euribor ¥ Canon 7751 2901.50 -3.44 -21.05 CHF ABB ABBN 21.61 -1.19 20.32 € Unilever UNA 40.76 -0.67 1.62
One month -0.37100% -0.10400% ¥ CentralJapanRwy 9022 17125 -0.35 -20.72 € ASMLHolding ASML 90.94 -1.24 10.16 £ Unilever ULVR 3505.00 -0.71 19.77 17 24 1 8 15 22 29 5 12 19 26 2 9
Three month -0.30300 -0.03800 HK$ ChinaConstructnBk 0939 5.77 -5.41 8.66 € AXA CS 19.27 -2.82 -23.64 € Vinci DG 66.98 -0.45 13.26 July Aug. Sept.
Six month -0.19800 0.03700 HK$ ChinaLifeInsurance 2628 20.20 -5.61 -19.52 € AirLiquide AI 94.65 -1.01 -8.68 £ VodafoneGroup VOD 222.40 0.50 0.63
One year -0.05700 0.15700 HK$ ChinaMobile 0941 94.50 -3.57 8.00 € Allianz ALV 134.90 -1.21 -17.52 CHF ZurichInsurance ZURN 256.40 -0.62 -0.77
Yen Libor AU$ CmwlthBkAust CBA 70.22 -0.92 -17.90 € Anheuser Busch ABI 110.35 -0.63 -3.54
DJIA Stoxx 50
One month -0.07371% 0.04943% ¥ EastJapanRailway 9020 8958.00 -1.14 -21.76 £ AstraZeneca AZN 4858.00 0.81 5.23
16735 -2.99 -20.61 65.90 1.20 -5.25 Last: 2852.97 t 23.78, or 0.83% YTD t 8.0%
Three month -0.03536 0.08357 ¥ Fanuc 6954 € BASF BAS 71.42 -1.60 0.99 $ AmericanExpress AXP
Six month -0.00479 0.12586 ¥ Hitachi 6501 477.80 -2.47 -30.90 € BNP Paribas BNP 46.88 -2.20 -10.25 $ Apple AAPL 105.44 2.24 0.17 2925
One year 0.08914 0.23543 TW$ Hon Hai Precisn 2317 77.50 -0.64 91.83 £ BT Group BT.A 385.00 -1.29 -18.38 $ Boeing BA 130.07 1.20 -10.04
¥ HondaMotor 7267 3090.00 -1.47 -20.97 € BancoBilVizAr BBVA 5.56 -2.44 -16.73 $ Caterpillar CAT 81.91 1.39 20.53 2850
Offer Bid
KRW HyundaiMtr 005380 138500 -0.72 -7.05 € BancoSantander SAN 4.09 -2.62 -10.25 $ Chevron CVX 102.24 0.96 13.65 2775
Eurodollars
HK$ Ind&Comml 1398 4.83 -4.55 3.21 £ Barclays BARC 170.05 -2.69 -22.32 $ CiscoSystems CSCO 31.44 1.91 15.78
One month 0.6000% 0.5000%
43.19
2700
Three month 0.9500 0.8500
¥ JapanTobacco 2914 3950.00 -0.40 -11.65 € Bayer BAYN 93.55 -1.55 -19.21 $ CocaCola KO 2.18 0.54
¥ KDDI 9433 3074.00 -0.74 -2.54 £ BP BP. 428.70 -0.80 21.10 $ Disney DIS 93.62 1.30 -10.91 2625
Six month 1.3500 1.2500
¥ Mitsubishi 8058 2176.00 -1.81 7.30 £ BritishAmTob BATS 4698.00 0.05 24.58 $ DuPont DD 68.20 -0.34 2.40 2550
One year 1.6500 1.5500
¥ MitsubishiUFJFin 8306 532.30 -2.54 -29.69 CHF FinRichemont CFR 58.90 -0.42 -18.31 $ ExxonMobil XOM 87.29 0.52 11.98
Latest 52 wks ago
1369.00 -1.83 -5.29 $ GenElec GE 30.49 1.26 -2.12 17 24 1 8 15 22 29 5 12 19 26 2 9
¥ Mitsui 8031 € Daimler DAI 62.40 -1.67 -19.57
July Aug. Sept.
Prime rates ¥ Mizuho Fin 8411 178.00 -1.17 -26.90 € DeutscheTelekom DTE 14.55 -1.56 -11.95 $ GoldmanSachs GS 171.00 1.44 -5.12
U.S. 3.50% 3.25% ¥ NTTDoCoMo 9437 2577.50 -0.90 3.76 £ Diageo DGE 2065.50 -0.70 11.26 $ HomeDepot HD 128.58 0.66 -2.78
Canada 2.70 2.70 AU$ NatAustBnk NAB 26.60 -2.56 -11.92 € ENI ENI 13.56 -1.53 -1.74 $ Intel INTC 36.08 1.81 4.73
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥ NipponStl&SmtmoMtl 5401 2057.50
4591.00
-3.79
-0.82
-14.84
-5.07
£ GlaxoSmithKline GSK 1592.00 -0.47 15.95 $
$
IBM
JPMorganChase
IBM
JPM
158.26
67.06
1.65 15.00
0.62 1.56
Dow Jones Industrial Average P/E: 20
¥ NipponTeleg 9432 £ HSBC Hldgs HSBA 565.60 -2.15 5.48
Policy rates ¥ NissanMotor 7201 1031.50 -1.67 -19.38 € INGGroep INGA 11.10 -1.99 9.36 $ JohnsJohns JNJ 119.16 0.79 16.00 Last: 18325.07 s 239.62, or 1.32% YTD s 5.2%
ECB 0.00% 0.05% ¥ NomuraHldgs 8604 481.80 -0.99 -29.05 £ ImperialBrands IMB 3907.50 -0.45 8.95 $ McDonalds MCD 115.95 1.20 -1.85
Britain 0.25 0.50 1030.50 -1.58 -16.93 $ Merck MRK 63.19 1.12 19.63 19000
¥ Panasonic 6752 € IntesaSanpaolo ISP 2.12 -2.03 -31.28
Switzerland 0.50 0.50 HK$ PetroChina 0857 5.11 -2.11 0.39 € LVMHMoetHennessy MC 152.00 -0.13 4.90
$ Microsoft MSFT 57.05 1.49 2.83
$ NikeClB NKE 56.02 1.25 -10.37 18500
Australia 1.50 2.00 HK$ PingAnInsofChina 2318 41.55 -3.48 -3.15 £ LloydsBankingGroup LLOY 56.97 -3.95 -22.03
U.S. discount 1.00 0.75 $ RelianceIndsGDR RIGD 31.75 1.76 3.76 € LOreal OR 167.25 0.06 7.69
$ Pfizer PFE 34.65 1.61 7.34 18000
Fed-funds target 0.25 0.00 AU$ RioTinto RIO 47.41 -2.45 6.04 £ NationalGrid NG. 1042.00 -1.19 11.15
$ Procter&Gamble PG 88.23 2.31 11.11
Call money 2.25 2.00 1465000 -6.98 16.27 $ 3M MMM 178.13 1.42 18.25 17500
KRW SamsungElectronics 005930 CHF Nestle NESN 77.75 -0.70 4.29
4416.00 -0.99 -20.43 $ TravelersCos TRV 115.50 0.92 2.33
Overnight repurchase rates ¥ Seven&I Hldgs 3382 CHF Novartis NOVN 77.25 -0.19 -11.00 17000
6691.00 -3.01 8.99 $ UnitedTech UTX 104.02 1.31 8.28
U.S. 0.54% 0.18% ¥ SoftBankGroup 9984 DKK NovoNordiskB NOVO-B 298.30 0.74 -25.41
3520.00 -2.00 -23.58 $ UnitedHealthGroup UNH 135.51 1.41 15.19 17 24 1 8 15 22 29 5 12 19 26 2 9
Euro zone n.a. n.a. ¥ Sumitomo Mitsui 8316 £ Prudential PRU 1368.00 -2.29 -10.65
116.70 -3.47 24.48 $ VISAClA V 82.97 2.02 6.99 July Aug. Sept.
HK$ SunHngKaiPrp 0016 £ ReckittBenckiser RB. 7201.00 0.28 14.65
Sources: WSJ Market Data Group, SIX 175.00 -1.69 22.38
$ Verizon VZ 52.60 1.51 13.80 Note: Price-to-earnings ratios are for trailing 12 months
TW$ TaiwanSemiMfg 2330 £ RioTinto RIO 2294.50 -2.36 15.91
Financial Information, Tullett $ WalMart WMT 71.94 2.33 17.36 Sources: WSJ Market Data Group; Birinyi Associates
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Hong Kong’s Yuan Trading Heats Up
Intervention by Beijing
suspected as the cost
for banks to borrow
climbs above 5.5%
The most vibrant market for
yuan trading outside mainland
China has turned into a key
battleground for Beijing to de-
fend the Chinese currency.
By Saumya
Vaishampayan
in Hong Kong and
Lingling Wei in Beijing
Suspected intervention by
Chinese banks in what is known
as the offshore market in Hong
Kong has led to a surge in the
cost for banks in the territory
to borrow yuan from one an-
other. Investors and analysts
believe the intervention—which
they say likely has come at the
behest of China’s central
bank—is aimed at thwarting
bets against the Chinese cur-
rency, also known as the ren-
minbi.
On Monday, the overnight
interbank yuan borrowing rate
in Hong Kong reached 5.5155%,
its highest since Feb. 19. The
rate breached 5% on Thursday,
ending a nearly two-month
stretch of relative calm, and
has since remained at levels
that traders characterized as
elevated.
Suspected heavy yuan buy-
ing by Chinese banks has
helped squeeze a market that
China had tried to foster just a
few years ago as it looked to
promote the yuan as a major
international trading currency.
It comes on top of other recent
measures from Beijing intended
to support the currency, such
as tightening restrictions on
money flowing out of the main-
land.
“It’s pretty obvious that ren-
minbi internationalization has
taken a back seat” to defending
the currency, an executive at
one of China’s top four state
banks operating in Hong Kong
said.
Carlyle Taps Pension Executive
BY MATT JARZEMSKY
Carlyle Group LP hired a
senior executive from Canada’s
biggest pension fund to over-
see debt investing, part of the
asset manager’s effort to re-
group from setbacks in its
credit and hedge-fund busi-
ness.
Washington, D.C.-based Car-
lyle tapped Mark Jenkins, most
recently head of global private
investments at Canada Pen-
sion Plan Investment Board,
for the newly created position,
according to a statement.
The hire follows a series of
setbacks in Carlyle’s global
market strategies arm, which
encompasses much of the
firm’s investing outside of pri-
vate equity and real estate.
KEITH BEDFORD/REUTERS
Like its peers, the firm has ex-
panded beyond its roots in cor-
porate buyouts over the years,
seeking to diversify, boost as-
sets and appeal to sharehold-
ers following its 2012 initial
public offering.
Global market strategies has
been a sore spot for Carlyle,
largely because of struggles at
its hedge funds Claren Road
Asset Management, Vermil-
lion Asset Management LLC
and Emerging Sovereign
Group LLC. In May, Mitch
Petrick stepped down from a
role running the $34.7 billion
business. Carlyle tasked long-
time private-equity executive
Kewsong Lee to rebuild it and
has said it is reviewing options
to improve the unit’s perfor-
mance.
Overall, global market strat-
egies’ funds have fallen in four
straight quarters, including a
Finance
Watch
DEUTSCHE BANK
Asset Management
Is Still ‘Essential’
Deutsche Bank AG’s asset-
management business “is and
will remain an essential part” of
the company’s business model,
Chief Executive John Cryan told
staff in a letter the bank pub-
lished Monday on its website.
“The stated views and analy-
ses are not true,” the People’s
Bank of China said when asked
for comment. It didn’t elabo-
rate. President Xi Jinping said
last week that yuan liberaliza-
tion would be carried out in an
orderly way and China would
continue to encourage the
yuan’s use abroad.
Yuan-related trading has
been falling in Hong Kong since
Beijing first put a squeeze on
the market earlier this year, ac-
cording to the latest data. De-
posits denominated in the Chi-
nese currency have dropped to
667.1 billion yuan ($99.73 bil-
lion) in July from a peak of just
over one trillion yuan in De-
cember 2014, according to the
Hong Kong Monetary Author-
ity. Yuan-bond issuance has
dropped to $6.3 billion this
year from $16.2 billion a year
earlier, according to Dealogic.
The declining interest in us-
ing the yuan for trading and
capital-raising has come as Bei-
jing’s priorities have shifted,
with the Chinese economy los-
ing steam after years of breath-
taking growth—and steady
yuan appreciation.
Beijing first allowed the
yuan to be bought and sold
outside the mainland in 2010,
in Hong Kong, still the world’s
major center for offshore trad-
ing in the currency.
Now, a more urgent task for
China is to prevent the cur-
rency from falling too much
and potentially further eroding
investors’ confidence in the
economy.
Since early this year, China’s
central bank has been trying to
let some air out of the yuan
while trying to make sure that
the descent doesn’t become so
fast as to trigger excessive cap-
ital outflows. That strategy of-
ten risks getting derailed by in-
vestors who use the offshore
market in Hong Kong, where
the currency can be traded
freely, to wager against the
yuan. (In the mainland, the
yuan is allowed to swing only
2% above or below the level set
by the central bank each day.)
Carlyle’s global market strategies arm has been a sore spot amid struggles at its hedge funds.
12% decline in the first three
months of the year.
Mr. Jenkins is focused on
the unit’s credit investing,
which includes energy lending,
providing capital to midsize
companies and bets on dis-
tressed debt.
Credit is an “established,
profitable business” for Car-
lyle, Mr. Lee said in an inter-
view. “Mark’s hiring makes a
strategic statement that we are
committed to investing in and
growing the credit platform.”
Carlyle has been active in
collateralized loan obligations,
distressed investing and other
The Wall Street Journal re-
ported last month that the bank
has analyzed selling all or part
of its asset-management busi-
ness but that executives have
wanted to keep the bulk of the
business.
Mr. Cryan said in his note
that he wanted to dispel any ru-
mors about asset management’s
role. —Jenny Strasburg
HSBC
A High-Ranking
Banker Is Leaving
A top HSBC Holdings PLC
banker, Spencer Lake, is leaving
the bank after being sidelined
in a management shuffle earlier
FINANCE & MARKETS
Investors and analysts believe the intervention is aimed at thwarting bets against the yuan. A currency-exchange booth in Hong Kong
The more that bearish bets
pile up on the yuan offshore,
the more difficult it is for the
central bank to control its de-
scent. These bets typically are
enacted by traders who borrow
the yuan overnight, and ex-
change it for dollars, exchang-
ing the money back the follow-
ing day after the yuan has
dropped—a practice known as
short selling. A rise in over-
night borrowing costs makes
this a less-profitable trade.
Following a surprise weak-
ening of the yuan’s official rate
by the central bank in early
January, investors piled on bets
against the currency in Hong
Kong’s market, causing a wid-
ening divergence between the
yuan traded there and its main-
land peer. Chinese authorities
areas of credit over the years.
It may seek to build on its na-
scent debt business in Europe
or providing bonds and loans
to small companies or those
with atypical capital needs.
During his eight years at
CPPIB, he built the pension
fund’s direct-lending business
and oversaw its $12 billion ac-
quisition of General Electric
Co.’s private-equity lending
business, Antares Capital. Be-
fore that, Mr. Jenkins co-led
Barclays PLC’s leveraged-fi-
nance business in New York
and worked in Goldman Sachs
Group Inc.’s finance and fixed-
this year.
Mr. Lake, a group general
manager, ran HSBC’s global
capital financing business until
February, when HSBC merged
the function into its global
banking unit. Mr. Lake became
vice chairman of global banking
and markets with a set of stra-
tegic projects and a greatly re-
duced role in day-to-day opera-
tions. Mr. Lake didn’t respond
to a request for comment.
—Margot Patrick
E*TRADE
General Counsel
Will Succeed CEO
E*Trade Financial Corp. said
at the time responded by dras-
tically tightening yuan liquidity
in Hong Kong, by ordering local
branches of Chinese state-
owned banks to buy up the cur-
rency, sending the overnight
yuan-borrowing cost to a re-
cord 66.8%.
Then, as now, downward
pressure on the yuan—and up-
ward pressure on the dollar—
was exacerbated by expecta-
tions the Federal Reserve soon
might raise interest rates in the
U.S.
This time around, many in-
vestors saw similar tactics from
Beijing as bearish yuan wagers
in Hong Kong rose ahead of a
Group of 20 economic summit
in China last week.
—Carol Chan contributed
to this article.
income departments.
CPPIB, like other Canadian
pensions, takes stakes in funds
managed by Carlyle and other
firms but also directly invests
in companies and other assets.
In recent years, the pension
has invested in department-
store chain Neiman Marcus
Group, retailer 99 Cents Only
Stores and health-care infor-
mation technology company
IMS Health Inc.
CPPIB promoted managing
director Shane Feeney to
global head of private invest-
ments, succeeding Mr. Jenkins,
according to a statement.
it is shaking up its executive
ranks and will replace its chief
executive with its general coun-
sel as growth in its core broker-
age business has come under
pressure.
General Counsel Karl Roess-
ner is succeeding Paul Idzik as
chief executive. Chairman Rod-
ger Lawson will take on a daily
operational role in the company,
becoming executive chairman.
The company also said it
had completed its $725 million
deal for Aperture New Holdings
Inc., the parent of online broker
OptionsHouse LLC. Aperture’s
CEO, Michael Curcio, is becom-
ing E*Trade’s chief brokerage
officer. —Austen Hufford
Tuesday, September 13, 2016 | B7
PHILIPPE LOPEZ/AGENCE FRANCE-PRESSE/GETTY IMAGES
Hibor Highs
The cost of borrowing yuan overnight in Hong Kong has surged in
recent days, while yuan bank deposits in the city have been falling,
tightening liquidity.
Three-month yuan Monthly total customer
Hibor rate yuan deposits
6% Sept. 12: 5.52% 1.2 trillion yuan
5 1.0
4 0.8
3 0.6
2 0.4
1 0.2
895 million
0 0.0
J J A S 2004 ’06 ’08 ’10 ’12 ’14 ’16
Note: 1 trillion yuan = $149.7 billion
Sources: Thomson Reuters (HIBOR rate); Hong Kong Monetary Authority (deposits)
THE WALL STREET JOURNAL.
Bridgewater Raises
Cash for Key Fund
BY MATT WIRZ better this year, returning
13% through the end of Au-
Bridgewater Associates gust. This marks a reversal
LP, the world’s largest hedge- from 2015, when Pure Alpha
fund manager, is raising new gained about 5%, while All
money for its flagship Pure Weather lost 7%.
Alpha fund for the first time Investors had been lining
since 2009, a person familiar up to allocate new capital to
with the matter said. Bridgewater for years when
The move follows an un- the firm last year launched a
characteristically poor perfor- new fund called Optimal Port-
mance this year for the $70 folio, which blends the All
billion fund, prompting the Weather and Pure Alpha
firm to open Pure Alpha up to strategies. The firm took in
investors to bring it back to about $11 billion last year.
its optimal size, the person
said.
Pure Alpha uses a macro
Pure Alpha, the
investment strategy to bet on firm’s flagship fund,
and against world markets.
The fund, which hasn’t had a
lost about 9%
losing performance in the through August.
past 15 years, lost about 9%
through August. It has re-
turned an average 12% annu- Bridgewater continued to
ally since 1991. take investments for Optimal
News of Pure Alpha’s re- Portfolio at the start of 2016
opening was reported earlier and reopened Pure Alpha
by the Financial Times. about five months ago, the
Bridgewater’s slightly person familiar with the mat-
smaller All Weather fund, ter said. Investors have put
which employs a risk-parity about $11.5 billion of new
strategy based on passive au- money into Bridgewater since
tomated programs, did far January, the person added.
ABN Amro Considers
A Round of Job Cuts
BY MAARTEN VAN TARTWIJK nance, human-resources and
communication departments.
AMSTERDAM—ABN Amro The plans will be completed in
Group NV could eliminate the coming months.
more than 1,000 jobs as the The restructuring comes as
Dutch bank ramps up a re- European banks grapple with
structuring plan designed to
reduce costs.
record-low interest rates,
stricter regulations and a shift
ABN Amro said Monday in
a letter to its works council
to digital banking services.
Analysts have said the current
that it is considering scrap- environment could force lend-
ping 975 to 1,375 jobs in the ers to further slash costs.
next couple of years, a move ABN Amro said market con-
that would reduce annual ditions are pressuring its
costs by €195 million ($219.1 business model and profit
million) to €225 million. The margins, and that it needs to
bank, which is controlled by free up money to invest in
the Dutch government, em- growth areas such as digital
ploys around 22,000 people services.
worldwide. “We need to tackle the
The bank had already bank’s bureaucracy, eliminate
hinted at job losses when it duplication of work, make
presented its second-quarter sure that our managers ‘walk
results in August. The job cuts the talk,’” said Chief Executive
could affect the bank’s fi- Gerrit Zalm.
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B8 | Tuesday, September 13, 2016 THE WALL STREET JOURNAL.

Email: heard@wsj.com
HEARD ON THE STREET FINANCIAL ANALYSIS & COMMENTARY WSJ.com/Heard

Rivals Are Rich Pickings

Total assets of the rich in Asia-Pacific
Bond Markets Get
Closing in $20 trillion
A Bizarre Reversal
On BMW 16

12
The bond market has gregate in Europe is actu-
BMW used to be well been turned on its head by ally sharply lower this year,
ahead of its peers in the race central banks—and the mar- even as borrowing condi-

BLOOMBERG PHOTOS
to become Europe’s Tesla 8 ket’s tantrum shows it. tions have improved: Year-
Motors. But with sales of its Last week brought a to-date high-yield sales are
first electric car weak and 4 string of events that could running at €39 billion, down
competition ramping up, be read as clear signals of some 40% from the same
BMW is considering an over- overheating in credit mar- period of 2015, according to
haul of its electric-vehicle 0 kets. There was the bizarre J.P. Morgan. The feeding
strategy. 2009 ’10 ’11 ’12 ’13 ’14 ’15 A Credit Suisse branch sight of French drugmaker frenzy seen in high-yield
That could be costly for Source: Capgemini THE WALL STREET JOURNAL. in Tokyo Sanofi and German con- markets before the global fi-
investors. In March, the com- sumer-goods company Hen- nancial crisis is absent.

Pain for Swiss Lenders

pany proudly unveiled plans kel issuing debt at negative High-yield spreads are far
to launch the next all-electric yields. And in the European from record territory.
car within its “i” series by high-yield market, bearings The real risk lies in in-
2021. Now, German media re- maker Schaeffler and pack- vestment decisions being
ports say management is In polite circles they call recent results. curred in 2015, according to aging group Ardagh sold made on the basis of ul-
considering the more radical it “regularization.” More Within Europe, the total Citigroup. Julius Baer said it large payment-in-kind notes tralow and negative govern-
option of releasing electric bluntly, it is coming clean. amounts “regularized” be- expects emerging-market on which interest can be ment-bond yields. If they
versions of existing flagship Wealthy people in Europe tween 2011 and the end of regularization outflows to paid in additional debt un- were to rise further, then
models. have been admitting for last year were huge, at more drag on growth for two to der certain circumstances, the ripple effects could be
Sales of BMW’s all-electric years to having money they than 40 billion Swiss francs three more years. usually a sign of a frothy large. There is some cushion
i3 model, which was released should have declared to tax ($41 billion) for Credit Su- The big question is market. for riskier assets in their
in 2013, have been disap- authorities. For Swiss banks, isse and an additional 30 bil- whether the trend will Yet it was a selloff in relatively higher yields, but
pointing, particularly com- that has been money out the lion francs for UBS. spread to Asia, where the “risk-free” government- not enough to compensate
pared with those of Tesla. door as clients moved it A study by Deutsche Bank best growth potential re- bond markets that caused for a sharp rise in underly-
Preorders of Tesla’s Model 3, home or withdrew funds to and Oliver Wyman estimated sides. India and Indonesia turmoil as inaction by the ing rates. Still, it is the
which won’t be delivered un- pay taxes. that these outflows cut pre- have declared tax amnesties, European Central Bank and foundation that markets are
til late next year, stood at But the trend is spreading tax earnings by between 400 but the effects so far aren’t the looming U.S. Federal built on that looks most
373,000 in May. BMW has to emerging markets. And million and 500 million noticeable. Reserve meeting led inves- wobbly.
sold about 50,000 i3s. starting next year, a global Swiss francs over the period The types of clients Swiss tors to fret about the end of The odd outcome is that
Tesla isn’t the only chal- automatic exchange of infor- for each of the banks. Across banks attract in Asia—the ul- easy money. Traditional sig- at least initially, the pain in
lenge: BMW’s German rivals mation program will be ad- Swiss banking, the study es- trarich—may present less of nals of risk aren’t as reli- bond markets is felt most
also have turned up their opted by about 50 countries. timates that regularization a tax risk, because they ha- able as they might be in quickly and acutely in risk-
electric-vehicle rhetoric over Under the program, coun- and more focus on the super ven’t avoided taxes in the markets that have been so free assets.
the summer. tries will share with one an- wealthy, who get lower fees same small, systematic way distorted by central-bank Central banks have cre-
In June, Volkswagen said other details of financial as- on their big accounts, have over decades that European policies. ated a world where govern-
it would aim to sell two mil- sets owned by nonresidents, cut margins by about 30% clients did. Take the developments in ment and corporate borrow-
lion to three million e-cars by lifting the lid on more hid- since 2010. For the super-rich of a junk bonds: Ultralow yields ers have never had it so
2025—accounting for up to den funds. The peak of European out- country such as China, the and issuance of PIK notes good. But investors have
one-quarter of all sales. For the Swiss private flows was in 2012 and they cash they have salted away might usually suggest a never had it so confusing.
Daimler plans to unveil an banks, this will tamp down have declined steadily since, across Asia may be more at market that is too bullish —Richard Barley
electric concept car at next growth, but also is likely to but outflows from emerging risk if they fall out of favor for its own good. Demand
month’s Paris Auto Show. depress profitability because markets have picked up. politically, or if other poli- was so strong for Schaef-
Leaks suggest this will be ac- these cross-border assets Credit Suisse has forecast cies change. fler’s sale that it was able to Low Point
companied by plans to re- have historically produced a that 5 billion more Swiss By the end of 2018, when sell €3.6 billion ($4 billion) Yield on euro-denominated
lease at least six electric cars. higher gross margin. francs will go this year, information exchange has of debt in euros and dollars, high-yield bonds
Competition to reinvent Customers in Latin Amer- mostly from emerging-mar- been in place for a while, the versus an originally planned
the car is getting increas- ica already have begun tak- ket clients. impact on Asia will be €2.5 billion. In the process 7%
ingly fierce. With huge in- ing back funds from the in- This rate is less than half clearer. it refinanced debt that car- 6
vestments needed—Tesla is dustry due to tax-amnesty what it was in the heaviest For those banks with ried rates ranging from 5
raising billions to produce programs in Argentina, Bra- years, but still will be a drag slowing or struggling invest- 5.75% to 6.875% with notes
4
the Model 3—the increas- zil, Chile and Mexico. Russia on growth for the whole in- ment-banking businesses, paying from 2.75% to 4.75%.
ingly competitive environ- and South Africa, too, are dustry. the last thing they need is But the high-yield market 3
ment poses a risk to incum- causing outflows. Swiss banks as a group more difficulty making doesn’t feel frothy on its 2016
bent car makers’ margins. Credit Suisse, UBS and expect tax-related outflows money in their most promis- own, and issuers are far Source: Bank of America Merrill Lynch index
Their shares are cheap for a Julius Baer all noted some in 2016 and 2017 to continue ing wealth markets. from fully exploiting these via FactSet
reason. —Stephen Wilmot effects of this trend in their at a rate similar to what oc- —Paul J. Davies conditions. Issuance in ag- THE WALL STREET JOURNAL.

FINANCE & MARKETS

Art Sellers Are Finding Non-OPEC Output a Wrinkle

BY BENOIT FAUCON

Auctioneers Want to Deal

capping OPEC production, the OPEC said American pro-
official said. duction is set to decline at a
LONDON—OPEC said Mon- Oil prices fell in London af- slower rate than previously ex-
day that crude-oil output from ter the report was released pected after the U.S. oil indus-
BY DANIEL GRANT rival producers is turning out Monday morning, as traders try added 77 drilling rigs in
to be stronger than expected determined there was now less the past two months. The U.S.
This fall isn’t shaping up to and will result in a bigger glut hope of a deal next month. is still set to pump about
be the best of times for art auc- of petroleum than previously Brent, the global crude that 340,000 barrels a day less this
tion houses. Which means it believed this year and next. sets benchmark prices for in- year at 13.63 million barrels,
may be a very good time for The findings present a di- ternationally traded oil, later but that is 66,000 barrels a
people looking to sell their lemma for the Organization of rebounded to settle up 0.65% day more than previously ex-
works of art. the Petroleum Exporting to $48.32 a barrel. U.S. crude pected, OPEC said. Those fig-
Weakness in the British Countries before the 14-nation futures gained 41 cents, or ures include about 9 million
SIMON DAWSON/BLOOMBERG NEWS

pound, the euro and petroleum oil cartel meets in Algeria from 0.9%, to $46.29 a barrel. barrels a day of crude produc-
prices are all expected to take Sept. 26 to 28 to talk about Overall, OPEC production tion, along with output of
their toll on bids in the Novem- ways to limit output and bring declined only slightly in Au- lighter types of petroleum
ber sales of impressionist, mod- the crude market back into bal- gust to 33.2 million barrels a such as condensates.
ern and contemporary art in ance. OPEC members are strug- day. But with a few exceptions, There were other signs in
New York City. The U.S. elec- gling with oil prices that have such as economically de- Monday’s report that the
tions in November, too, are fallen more than 50% in the pressed Venezuela, OPEC world’s glut of crude oil and its
causing some to worry that the past two years because global members have been pumping products won’t go away soon.
market that month could be supply is outstripping demand. at full tilt in the past two Production in OPEC mem-
weak. Auction houses Christie’s, Phillips and Sotheby’s could see a drop In its closely watched years despite the fact all that ber Saudi Arabia, the world’s
Philip Hoffman, founder and in works offered for sale in November, says Philip Hoffman. monthly report on market con- output has kept prices at his- largest oil exporter, increased
chief executive officer of the ditions, OPEC said non-OPEC toric lows. OPEC members had again to a new record of more
London-based Fine Art Group, Here’s a look at some of the money from both buyers and members such as the U.S., hoped that a period of low than 10.6 million barrels a day
a private-equity firm specializ- incentives that upscale auction sellers, and consignors of de- Russia and Norway will pro- prices would chase out pro- in August, OPEC said, citing
ing in artworks, fears as much houses are often willing to offer sirable items may seek a re- duce about 190,000 barrels a ducers who have high costs in sources like traders, shippers
as a 30% drop in works offered when their cupboards start to duction or even elimination of day more than expected in the U.S. and elsewhere, caus- and consultancies. Saudi Ara-
for sale in November at the look a little less well-stocked: the commission, which is 2016, a sign that production ing supply to naturally fall as bia told OPEC that its produc-
Christie’s, Phillips and So- sometimes as high as 30%. outside the cartel has re- investment across the world tion went down slightly in Au-
theby’s auction houses in New GUARANTEES: An auction “When you know there is com- mained resilient despite low declined. Monday’s report gust, but either way, the
York. house will sometimes commit petition with other auction prices. showed the obstacles to that kingdom is producing at his-
But what sellers sitting on to paying the individual who is houses, the first place you By 2017, the cartel’s data strategy. torically high levels.
the fence need to know is, the selling, known as the consignor, cave is with commissions,” suggests, oil supplies will out-
art auction houses have lots of an agreed-upon amount—re- says Leslie Hindman, owner of strip demand by an average of
incentives that can sweeten the gardless of whether the art- Chicago-based Leslie Hind- about 760,000 barrels a day, Bucking Up
terms for collectors who are work actually sells. In effect, man Auctioneers. over three times higher than OPEC now believes its rivals will produce more oil than expected.
willing to sell valuable pieces in the auctioneer is buying the OPEC predictions made just
uncertain times. consignment, guaranteeing the FEES: Auction houses regu- last month. Those dynamics Change in non-OPEC supply expectations between
seller, say, $4 million for the larly charge an array of fees for suggest that OPEC members August and September
painting that has been valued services including photography, may not want to institute a so-
Auction houses have at $4 million. If the auction transportation, storage, insur- called freeze on their output,
Europe 90,000 barrels a day
many incentives that house doesn’t sell the picture, ance and marketing. All of which would limit their ability Former Soviet Union 60,000
or sells it for less than $4 mil- these fees may be waived if the to compete with rising produc-
can sweeten the lion, the company eats the loss. auction wants the consignment tion from outside the cartel. U.S. 50,000
terms for sellers. enough. “I am very concerned,” said Latin America –20,000
PERFORMANCE BONUS: an OPEC official involved in
Consignors can ask—but only ADD-ONS: Consignors can the negotiations. If non-OPEC Total non-OPEC supply 190,000
To test the waters, experts ahead of time—for a cut of ask for good positioning in the members are producing more,
advise contacting more than what the auction house charges sale catalog—even for place- “it won’t be easy” to agree on Source: OPEC THE WALL STREET JOURNAL.
one auction house to learn the buyer as a premium. The ment on the cover. A separate
what they’re willing to offer. premium may be 25%, 20% or catalog, or a catalog-within-a-
The more valuable and rare the
object, the more sellers can
12% of the final sale price at
both Christie’s and Sotheby’s.
catalog can be a possibility if
the seller has a number of
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For information about listing your funds,
actual negotiations with auc- AUCTIONEER’S COMMIS- herst, Mass. He can be reached U.S. Securities and Exchange Commission and aren’t available for sale to United
States citizens and/or residents except as noted. Prices are in local currencies.
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