For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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Euro 2016: The
Competition Is On
SPORTS | A14
DJIA 17985.19 g 0.11%
What’s
News
Business & Finance
A French court convicted
Uber and two executives
of running an illegal taxi
service with UberPop and
fined them $1.1 million. A1
 Soros has returned to
trading, buying gold and
gold-mining shares, in a bid
to profit from what he sees
as coming economic woes. A1
 Gold futures and gold-
related securities have
surged as expectations of a
Fed rate increase abate. B5
 Foreign investors are
selling Japanese stocks at
the fastest pace in years,
citing disappointment with
Abe’s economic program. B5
 A VW employee is sus-
pected of encouraging the
destruction of files related
to the emissions scandal. B1
 VW and auto workers
have failed to reach an ac-
cord over a U.S. plant. B2
 Three top U.K. investors
played down the potential
impact of an exit from the
EU, calling China and U.S.
elections bigger concerns. B5
 China appears to be giv-
ing Disney unusual leeway to
inconspicuously police its
new Shanghai theme park. B1
 Amazon launched its gro-
cery-delivery service in Lon-
don, the program’s first ex-
pansion outside the U.S. B1
 Oman sold $2.5 billion of
bonds, joining other Gulf
states in tapping debt mar-
kets to shore up budgets. B5
World-Wide
 Israel revoked Palestin-
ians’ travel permits and said
it would send more troops
to the West Bank after gun-
men killed four Israelis. A1
 Two Baghdad bombings
claimed by Islamic State
killed at least 24 people as
Iraqi forces battle to retake
militant strongholds. A3
 The U.S. is revamping the
way it fights Islamic State
and other terror threats,
deepening its reliance on
special operations. A4
 A Belgian court approved
the transfer to France of a
suspect in the Brussels and
Paris terror attacks. A3
 U.K. lawmakers ex-
tended the deadline to vote
in the “Brexit” referendum,
angering those who want
Britain to leave the EU. A5
 Italian authorities were
checking the identity of an
alleged people-smuggler,
amid charges they had
seized the wrong man. A5
 Sanders vowed to com-
pete in the Washington, D.C.,
primary but said he would
help Clinton to defeat Trump
after talks with Obama. A7
 Clinton said she will focus
on Trump’s business record
and economic plan, calling
his ideas “incoherent.” A7
 A specialized ship is set
to arrive to aid EgyptAir in-
vestigators trying to retrieve
the plane’s black boxes. A4
CONTENTS
Books..................... A9-11
Business & Tech. B1-4
Crossword.............. A14
Heard on Street... B8
Mansion............ W9-13
Markets Digest..... B6
€3.20; CHF5.50; £2.00;
U.S. Military (Eur.) $2.20
s Copyright 2016 Dow Jones &
Company. All Rights Reserved
FRIDAY - SUNDAY, JUNE 10 - 12, 2016 ~ VOL. XXXIV NO. 91
S&P 500 2115.48 g 0.17% NIKKEI 16668.41 g 0.97%
Islamic State Bombings Strike a Weary Iraq
AHMAD AL-RUBAYE/AGENCE FRANCE-PRESSE/GETTY IMAGES
AFTERMATH: Two bombings killed at least 24 people in Baghdad on Thursday. Islamic State, which has
stepped up attacks there, asserted responsibility. Above, an Iraqi fireman at one of the sites hit. A2, A3
ZIKA SWAMPS EMBATTLED PUERTO RICO
A quarter of the U.S. territory’s population could be infected by year’s end, giving health authorities a rare chance to study the virus
BY BETSY MCKAY
SAN JUAN, Puerto Rico—The Zika
virus is creeping north toward the
continental U.S., and Alberto de la
Vega has started to detect its signs.
In ultrasounds he gives pregnant
women who are infected with the vi-
rus in this American territory, he
has seen a 22-week-old fetus with
serious brain damage and two oth-
ers with stunted growth. He is brac-
ing for more.
“If you ask me in a month,” says
Dr. de la Vega, an obstetrician-gyne-
Israel Blocks
Palestinian
Travel
After Attack
BY RORY JONES
TEL AVIV—Israel revoked
83,000 travel permits allowing
Palestinians to enter the coun-
try and said it would send two
more army battalions to the
occupied West Bank a day af-
ter a Palestinian shooting
spree killed four Israelis.
No group claimed responsi-
bility for the attack by two
gunmen Wednesday evening at
a popular Tel Aviv food mar-
ket. Relatives said the two
Money & Inv..... B5-8 men were cousins and identi-
Off Duty.............. W1-8
Opinion.............. A12-13
fied them as Mohammad
Sports....................... A14 Makhamreh, a construction
U.S. News.................. A7 worker, and Khalid Makham-
Weather................... A14 reh, a student at the Univer-
World News........ A2-5
sity of Jordan in Amman.
The shooting reflected the
despair young Palestinians feel
over the lack of concrete steps
toward establishing a Palestin-
ian state, relatives of the men
said.
“I’m against killing of inno-
cents,” said Khalid Makh-
rameh’s father, Mohammed.
“The occupation is to blame.
Please see ISRAEL page A4
A Guide to Making
The Perfect
Summer Sundae
OFF DUTY | W1
WSJ.com EUROPE EDITION
STOXX 600 341.25 g 0.96% OIL 50.56 g 1.31% GOLD 1270.20 À 0.83% EURO 1.1319 g 0.67% DLR ¥106.55 g 0.41%
French Court
Fines Uber,
Executives
PARIS—A French court Paris convicted Uber and two
added a criminal conviction of its executives of violating
to Uber Technologies Inc.’s transportation and privacy
growing list of world-wide laws, a big legal setback in
what was once its largest Eu-
By Sam Schechner, ropean market.
Douglas MacMillan After a trial in Paris earlier
and Nick Kostov this year, the court found
Uber and two French execu-
regulatory setbacks, which tives, Pierre-Dimitri Gore-
has dragged on growth at the Coty and Thibaud Simphal,
car-hailing company but guilty of complicity in run-
hasn’t yet impeded its fund- ning an illegal taxi service
raising. and other violations related
On Thursday, a court in Please see UBER page A2
A Bearish Soros
Is Trading Again
BY GREGORY ZUCKERMAN lion for Mr. Soros and his fam-
ily, sold stocks and bought
After a long hiatus, George gold and shares of gold min-
Soros has returned to trading, ers, anticipating weakness in
lured by opportunities to various markets. Investors of-
profit from what he sees as ten view gold as a haven dur-
coming economic troubles. ing times of turmoil.
Worried about the outlook The moves are a significant
for the global economy and shift for Mr. Soros, who earned
concerned that large market fame with a bet against the
shifts may be at hand, the bil- British pound in 1992, a trade
lionaire hedge-fund founder that led to $1 billion of profits.
and philanthropist recently di- In recent years, the 85-year-
rected a series of big, bearish old billionaire has focused on
investments, according to peo- public policy and philanthropy.
ple close to the matter. He is also a large contributor
Soros Fund Management to the super PAC backing pre-
LLC, which manages $30 bil- Please see SOROS page A2
cologist and chief of a high-risk- across the Americas.
pregnancy unit at the capital’s Uni- Obama Endorses The island has advantages over
versity Hospital, “we may have 10 Latin American and Caribbean nations
times the detection rate.”
Clinton for President that lack its modern medical system.
Zika has blanketed three-quarters Bernie Sanders vowed to compete in It has strong public-health surveil-
of this lush island over the past six the final Democratic primary but said lance and anticipated Zika’s arrival,
months, say health authorities, who he would work with Hillary Clinton to unlike Brazil, where the virus spread
expect it to keep spreading now that defeat Donald Trump. A7 unnoticed for months.
it is prime mosquito season. More “This is the best shot we have at
than 1,350 people have tested posi- understanding the natural spectrum of
tive for Zika since the beginning of ties say. the disease,” says Johnny Rullán, for-
the epidemic here, including 168 Puerto Rico’s battle with Zika is mer secretary of health and former
pregnant women. One patient died. giving local and U.S. health authori- state epidemiologist for the territory.
Thousands more are likely infected ties a rare chance to better under- Puerto Rico has been hit harder
without symptoms, health authori- stand the disease as it spreads Please see ZIKA page A6
In Corporate ‘Step Challenges’ Inside
It May Help to Have a Hamster
i i i
Step-trackers let co-workers compete,
but some boost totals; electric saw, fan
BY RACHEL BACHMAN ing power tools, pets and
household appliances to fool
Dan Adams, a sales execu- digital fitness trackers and
tive from Ogden, Utah, en- boost their step totals without
VANESSA BERBERIAN FOR THE WALL STREET JOURNAL
tered a friendly contest with lifting a foot.
two co-workers to see who During a step challenge at
could take the most steps in a an electronics-manufacturing
week. With five hours to go, firm in Texas, suspiciously
he was trailing. high activity on one em-
So Mr. Adams taped his Fit- ployee’s fitness tracker
bit activity tracker to the prompted a call from Sonic
blade of an elec- Boom Wellness,
tric saw and left the Carlsbad, Ca-
it vibrating on a lif.-based company
work bench. running the chal-
When he returned lenge. After a brief
early the next interrogation, the
morning, the man came clean:
saw’s vibrations He had clipped his MANSION | W9
had registered tracker to a ham-
57,000 steps. ster wheel. Own a Piece of a Country Manor
Mr. Adams, a self-described “This hamster was just
gadget junkie, swore it was a racking up all kinds of activity
As grand English estates are subdivided into apartments, buyers are
one-time move. “This is the for the guy,” says Danna Korn,
finding more affordable, low-maintenance retreats.
only time that I’ve ever me- Sonic Boom CEO.
chanically enhanced my steps She recalls another step OPINION | A13
on Fitbit,” he said. challenge, at a construction
Workplace “step chal-
lenges” are big with compa-
company in California, when
an executive was ringing up
Beware the Allure of the Strongman
nies aiming to encourage em- hour upon hour of physical ac-
ployee fitness. In pursuit of tivity, even overnight. When China’s example has led some to believe that authoritarians are
victory, some workers are us- Please see STEPS page A6 better for economic growth.
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 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

WORLD NEWS

Can Victory on ISIS Last Without Sunni Help? the Kurdish-dominated and
U.S.-backed Syrian Demo-
cratic Forces, or SDF, have
pushed toward Islamic
State’s capital Raqqa and
advanced on the strategic
city of Manbij west of the
Euphrates.
MIDDLE EAST CROSSROADS In much of the Arab me-
YAROSLAV TROFIMOV dia, however, these ad-
vances, and in particular the
Fallujah offensive, are por-
Two years after Islamic trayed as not just a cam-
State launched its blitzkrieg paign against Islamic State,
on Iraq, exploiting Sunni but as an outright war on all
Arab grievances there and in Sunni Arabs.
neighboring Syria, the mili- “While you may have
tant group is steadily losing some Sunni Arabs in all
ground in both countries. these coalitions, it doesn’t
But, instead of local Sun- make them any less sectar-
nis reclaiming their lands, ian,” says Emile Hokayem, a
forces dominated by other senior fellow at the Interna-
communities—Iraq’s Shiite tional Institute for Strategic

RODI SAID/REUTERS
militias, Syrian and Iraqi Studies in Bahrain. “SDF, for
Kurds, and the Alawite-run example, is a force in which
Syrian re- Arabs can be cannon fodder.
gime—are But the Arab element of
inflicting SDF doesn’t have any name
these de- A Manbij military council fighter stood at a lookout point with smoke rising from the city of Manbij, Aleppo province, on Wednesday. recognition, local support
feats. or legitimacy.”
On the dominated government of pected Islamic State mem- against Islamic State have able, agrees Ala Talabani, an

A
only occa- Nouri al-Maliki in Baghdad bers banned from returning. collapsed because Washing- Iraqi Kurdish lawmaker. nd without such legiti-
sion where Sunni Arab rebels turned to sectarian repression. As more towns become liber- ton wouldn’t let them fight “Sunni people should play macy among the local
attempted a major offensive ated in Iraq and Syria, how- their often more-dangerous the No. 1 role in liberating population, victories

against Islamic State in re-
cent months, in Syria’s
northern Aleppo countryside
along Turkey’s border, it
ended in a rout and a further
loss of territory—partially
‘W
e could be look- ever, exercising that kind of enemy, the Syrian regime. In their areas, just as we Kurds against Islamic State are
ing at a ‘Ground- control will be harder. Iraq, the Shiite-dominated have done in our areas,” Ms. likely to be short-lived, ar-
hog Day’ sce- A backlash in those areas government has stalled plans Talabani says. That, she gues former Iraqi Prime Min-
nario,” warns Brian Katulis, against victorious Shiites or to create a National Guard- adds, isn’t happening be- ister Ayad Allawi, who heads
senior fellow at the Center Kurds would allow Islamic type force in Sunni areas. cause, in a region increas- a major parliament bloc op-
for American Progress, a State to keep recruiting new ingly polarized along sectar- posed to sectarian policies.

reversed this week—to the
self-proclaimed caliphate.
All of this raises a ques-
tion: How meaningful are the
recent victories if the root
cause behind the emergence
of Islamic State remains, and
as more Sunni towns such as
Fallujah become devastated
by the fighting?
Fallujah seemed largely
pacified following the cam-
paign against al Qaeda in Iraq
a decade ago—only to suc-
cumb to Sunni Islamist ex-
tremists again as the Shiite-
‘T
Washington think tank close fighters and bombers for a he Shiites are sup- ian lines, Baghdad fears In an interview, Mr. Al-
to the Democrats. “The cam- renewed insurgency, warns ported by Iran, the arming Sunni tribes. “It’s a lawi lists conflicts where
paign seems to be going well Robert Ford, a scholar at the Kurds are supported matter of trust.” battlefield successes proved
militarily, but it may have Middle East Institute who by the coalition, but nobody It’s also because, even ephemeral or even backfired
extreme costs in the long served as U.S. ambassador in wants to support the Sun- with little Sunni help, Is- in the absence of a political
run. The biggest risk is the Syria and deputy envoy in nis,” complains Atheel al-Nu- lamic State’s caliphate is solution: the Israeli-Franco-
re-emergence of radicalism Iraq. “If that happens, the jaifi, a prominent Sunni Arab shrinking daily. In recent British invasion of Egypt in
in a few short months, or fight against Islamic State politician from Mosul, who months, Syrian troops, with 1956, the French colonial
year or two.” doesn’t end, it just morphs served as governor there un- Russian help, retook the his- wars in Algeria, the U.S. in-
So far, the few areas re- into a different kind of bat- til Islamic State seized the toric city of Palmyra. In Iraq, volvement in Vietnam.
populated by Sunni Arabs, tle—and the terrorist threat Iraqi metropolis in June security forces and Shiite “All these wars were won
such as the city of Tikrit, to the West doesn’t go 2014 and who is trying to militias have seized a string militarily but lost politi-
have remained largely peace- away,” he says. raise a Sunni force to help of towns in Anbar province cally,” he says. “Here too, if
ful—in part because they are In Sunni-majority Syria, retake his hometown. and are now closing in on Is- the political and economic
still garrisoned by Shiite mi- costly U.S. projects to train Sunni participation in the lamic State in Fallujah. environment doesn’t change,
litias, with relatives of sus- and equip Sunni units campaign remains indispens- And in northern Syria, there will be no victory.”

UBER ernments world-wide over

Continued from Page One
to the company’s UberPop
service. The service, similar
to UberX in the U.S., used
drivers without professional
licenses. That service has
been closed in France and
several other countries after
French police jailed the two
executives overnight last
how—and whether—to regu-
late the digital economy. It
represents one of Uber’s
Uber is appealing that deci-
sion in a case that could
eventually end up in court.
In response to these chal-
highest profile legal defeats lenges, Uber has deployed an
in a market it at one time be- army of lawyers and lobbyists
lieved was so promising that and organized groups of its
it chose Paris for its first customers to pressure local
overseas expansion. lawmakers into passing pro-
An Uber spokesman said Uber ordinances in over 70
the company “is disap- jurisdictions in the U.S.—in-
pointed” by the verdict and cluding cities and states—as
will appeal. well as parts of Mexico, Can-
Law-enforcement officials ada, Australia, India and the
PHILIPPE WOJAZER/REUTERS

year. The court refrained, in France and other countries Philippines.

however, from ordering
prison time for Messrs. Gore-
Coty and Simphal.
The company and its exec-
utives were also asked to pay
fines, including damages and
court fees, totaling €964,000
($1.1 million) and ordered to
post a statement describing
the conviction to its website.
The court sentence was well
below what the court could
have issued.
Uber, which has raised a
total of more than $13.5 bil-
lion in debt and equity, has
money to pay the fines. Still,
the verdict is a blow for the
San Francisco company in the
broader legal war between
Silicon Valley firms and gov-
say that Uber has tried to Uber also has made peace
sidestep the rules meant to in another place where it had
ease traffic and protect riders faced criminal charges: South
in a race to gain market Korea. The country, which
share. Uber says it is bringing had indicted Uber Chief Exec-
innovation to the taxi sector, utive Travis Kalanick and his
where regulations are pro- Uber executives Thibaud Simphal, center, and Pierre-Dimitri Gore-Coty, right, in September. Korean partners for violating
tecting incumbent companies public-transport law, passed a
that haven’t kept pace with background-check regulations UberPop service. The company also faces revised set of regulations af-
technology. that included expensive and The UberPop pullback has continuing battles over ter Uber agreed to register
Opposition and closer reg- time-consuming fingerprint slowed Uber’s growth in Eu- whether its drivers should be existing taxi drivers to oper-
ulatory oversight have forced scans. UberPop has come un- rope, some people close to categorized as employees ate their own vehicles with
Uber into some rare retreats, der regulatory attention in Uber have said. rather than independent con- its mobile app.
after a period during which Europe. In addition to France, In France, Uber had about tractors—something that Uber has also begun to use
the company publicly chal- the company has had to close 500,000 regular UberPop rid- would upend its business its valuable equity to form
lenged regulators in many the service in Belgium, Ger- ers before it closed the ser- model. In France, meanwhile, strategic alliances with pow-
markets. The company last many, the Netherlands, Spain, vice, nearly half its total of an agency charged with con- erful nation-states. The com-
month halted ride-hailing and Sweden under pressure 1.2 million in France. Uber ducting payroll taxes in the pany last month took a $3.5
services in Austin, Texas, for from regulators and courts. continues to operate its more Paris region recently asserted billion investment from Saudi
instance, where residents On Thursday, a German expensive services using li- that the company’s drivers Arabia’s sovereign-wealth
voted against overturning court upheld its ban on the censed drivers in the country. are in fact employees, but fund.

SOROS distressed debt, arbitrage and

Continued from Page One
sumptive Democratic nominee
Hillary Clinton and has do-
nated to other groups support-
ing Democrats.
Mr. Soros has always
closely monitored his firm’s in-
vestments. In the past, some
senior executives bristled at
how he sometimes inserted
himself into the firm’s opera-
tions, usually after the fund
suffered losses, according to
people familiar with the mat-
ter. But in recent years, he
hasn’t done much investing of
his own. That changed earlier
this year when Mr. Soros be-
gan spending more time in the
office directing trades. He has
other types of trading, rather
than macro investing, Mr. So-
ros’s specialty. That is why Mr.
The fallout from any un-
winding of Chinese invest-
ments likely will have global
implications, Mr. Soros said in
Soros felt comfortable step- an email.
ping back in, the people said. “China continues to suffer
Mr. Soros’s recent hands-on from capital flight and has
approach reflects a gloomier been depleting its foreign cur-
outlook than many others on rency reserves while other
Wall Street. His worldview Asian countries have been ac-
darkened over the past six cumulating foreign currency,”
months as economic and polit- Mr. Soros said. “China is facing
ical issues in China, Europe internal conflict within its po-
litical leadership, and over the
coming year this will compli-
cate its ability to deal with fi-
nancial issues.”
Mr. Soros worries that new
troubles will arise in China
partly because he said the na-
tion doesn’t seem willing to
embrace a transparent politi-
cal system that he contends is
necessary to enact lasting eco-
JASON ALDEN/BLOOMBERG NEWS
challenges in Greece and a po-
tential exit by the United King-
dom from the EU.
“If Britain leaves, it could
unleash a general exodus, and
the disintegration of the Euro-
pean Union will become practi-
cally unavoidable,” he said.
Still, Mr. Soros said recent
strength in the British pound
is a sign that a vote to exit the
EU is less likely. “I’m confident
that as we get closer to the Br-
exit vote, the ‘remain’ camp is
getting stronger,” Mr. Soros
said. “Markets are not always
right, but in this case I agree
with them.”
Other big investors also
have become concerned about
markets. Last month, billion-
aire trader Stanley Drucken-
miller warned that “the bull
market is exhausting itself”
that has increased 28% so far
in the second quarter, through
Wednesday.
Meanwhile, front-month
the decisions.
The last time Mr. Soros be-
came closely involved in his
firm’s trading: 2007, when he
Comex gold futures have became worried about housing
climbed 20% this year through and placed bearish wagers
Thursday. over two years that netted
But Mr. Soros also adopted more than $1 billion of gains.
bearish derivative positions
that serve as wagers against THE WALL STREET JOURNAL.
U.S. stocks. It isn’t clear when Europe Edition ISSN 0921-99
those positions were placed The News Building, 1 London Bridge Street,
London, SE1 9GF
and at what levels during the
first quarter, but the S&P 500 Thorold Barker, Editor, Europe
Bruce Orwall, Senior Editor, Europe
index, through Wednesday, had Cicely K. Dyson, News Editor, Europe
climbed 3% since the begin- Margaret de Streel, International Editions Editor
Darren Everson, Deputy International Editor
ning of the second period, sug-
gesting Mr. Soros could be fac- Joseph C. Sternberg, Editorial Page Editor
ing losses on some moves. Anna Foot, Advertising Sales
Overall, the Soros fund is up Jacky Lo, Circulation Sales
Andrew Robinson, Communications
a bit this year, in line with Stuart Wood, Operations
most macro hedge funds, ac- Jonathan Wright, Commercial Partnerships
cording to people close to the Katie Vanneck-Smith,
matter. The investments by the

Global Managing Director & Publisher

also been in more frequent nomic overhauls. Beijing has and hedge-fund manager Leon firm were previously disclosed
Advertising through Dow Jones Advertising
contact with the executives, embarked on overhauls in the Cooperman said “the bubble is in filings, but it wasn’t clear Sales: Hong Kong: 852-2831 2504; Singapore:
the people said. past year but has backtracked in fixed income,” though he how involved Mr. Soros was in 65-6415 4300; Tokyo: 81-3 6269-2701;
Frankfurt: 49 69 29725390; London: 44 207
In some ways, Mr. Soros is on some efforts. was sanguine on stocks. 842 9600; Paris: 33 1 40 17 17 01;
stepping into a void at his Some investors are begin- Mr. Soros’s bearish invest- New York: 1-212-659-2176
firm. Last year, Scott Bessent,
who served as Soros’s top in-
ning to anticipate rising infla-
tion amid recent wage gains in
ments have had mixed success.
His firm bought more than 19
CORRECTIONS  Printers: France: POP La Courneuve; Germany:
Dogan Media Group/Hürriyet A.S. Branch; Italy:

vestor and has a background
in macro investing, or antici-
pating macroeconomic moves
around the globe, left the firm
to start his own hedge fund.
Soros has invested $2 billion
with Mr. Bessent’s firm, Key
Square Group.
Later in 2015, Mr. Soros
tapped Ted Burdick as his
chief investment officer. Mr.
Burdick has a background in
the U.S., but Mr. Soros said he
Mr. Soros in London last year. is more concerned that contin-
ued weakness in China will ex-
and elsewhere have become ert deflationary pressure—a
more intractable, in his view. damaging spiral of falling
While the U.S. stock market wages and prices—on the U.S.
has inched back toward record and global economies.
levels after troubles early this Mr. Soros also argues that
year and Chinese markets have there remains a good chance
stabilized, Mr. Soros remains the European Union will col-
skeptical of the Chinese econ- lapse under the weight of the
omy, which is slowing. migration crisis, continuing
million shares of Barrick Gold
Corp. in the first quarter, ac-
cording to securities filings,
making it the firm’s largest
stockholding at the end of the
quarter. That position has
gained more than $90 million
since the end of the first quar-
ter. Soros Fund Management
also bought a million shares of
miner Silver Wheaton Corp. in
the first quarter, a position
AMPLIFICATIONS
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©2015 Dow Jones & Company. All rights reserved.
given incorrectly as Sygenta Editeur responsable: Thorold Barker M-17936-
AG in a Business & Tech arti- 2003. Registered address: Avenue de Cortenbergh
60/4F, 1040 Brussels, Belgium
cle on Thursday about Chinese
investors seeking to acquire NEED ASSISTANCE WITH
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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.
Islamic State Steps Up Baghdad Bombings
Two attacks in capital
kill at least 24 people
as pressure grows on
militants’ strongholds
Facing airstrikes and
ground offensives aimed at its
strongholds in Syria and Iraq,
Islamic State hit out again
with attacks in crowded areas
of Baghdad on Thursday, kill-
ing at least 24 people in two
separate bombings.
By Ghassan Adnan
in Baghdad
and Asa Fitch in Dubai
A car loaded with explo-
sives blew up near a cinema in
a busy New Baghdad neigh-
borhood of the Iraqi capital,
leaving at least 14 people dead
and setting nearby shops
ablaze, Iraq’s Interior Ministry
said, adding that most of the
casualties were women and
children.
In another attack, the en-
trance of the Al Taji military
camp in northern Baghdad
was targeted with a suicide
bombing that killed 10 people,
including four soldiers, it said.
In statements distributed
via social media, Islamic State
asserted responsibility for
both bombings, saying it had
Belgium Approves Transfer of Terror Suspect to France
BY VALENTINA POP
BRUSSELS—A Belgian court
on Thursday approved a
French request for the transfer
of Mohamed Abrini, who is
suspected of playing a role in
both the Brussels and Paris
terror attacks.
The court also extended Mr.
Abrini’s detention by one
month. Belgian prosecutors
didn’t give any details on
when the transfer will take
place.
A lawyer for Mr. Abrini
Firefighters battled a blaze in Baghdad on Thursday after a car bomb killed at least 14 people, most of them women and children.
targeted Shiite Muslim fight-
ers. Iraqi authorities didn’t re-
spond to the claim.
With Iraqi government
forces retaking the cities of
Ramadi and Hit in nearby An-
couldn’t be immediately
reached for comment.
Belgian officials have said
Mr. Abrini abandoned his sui-
cide mission at Brussels air-
port on March 22, after two
other Islamic State fighters,
Najim Laachraoui and Ibrahim
Bakraoui, blew up their explo-
sives there, killing 16 people
and injuring more than 100.
Mr. Abrini was also wanted
in connection with the attacks
in Paris on Nov. 13. Investiga-
tors believe both attacks were
carried out by members of the
WORLD NEWS
bar province in the past seven
months, the Sunni Muslim
radical group has stepped up
its attacks in Baghdad, killing
nearly 200 people in and near
the city in just a week in May.
same Islamic State cell.
Two nights before the Paris
attacks, Mr. Abrini was seen in
a car at a gas station in France
with Salah Abdeslam, the only
surviving suspect in those at-
tacks. That car was later used
in the killings in the French
capital.
Investigators say Mr. Abde-
slam aborted his suicide mis-
sion and fled to Brussels,
where he was captured after a
four-month manhunt. Mr. Ab-
deslam was transferred to
France in April.
Regional pressure on Is-
lamic State is mounting, with
three of Islamic State’s bas-
tions currently under heavy
military pressure—Fallujah in
Anbar and Manbij and Raqqa
The Belgian court also ap-
proved the transfer of another
suspect, Mohamed Bakkali,
who is suspected of having of-
fered logistical help to Mr. Ab-
deslam. Mr. Bakkali’s lawyer
couldn’t be reached for com-
ment but had previously said
he wouldn’t challenge the re-
quest.
Three other suspects who
admitted to having driven Mr.
Abdeslam out of Paris and
within Brussels had their
transfers to France approved
last week.
Friday - Sunday, June 10 - 12, 2016 | A3
its of Fallujah for the first
time since the operation to re-
take the city began May 22.
By recapturing the city, lo-
cated 40 miles west of the
capital, the government hopes
to tighten its grip on eastern
Anbar, a predominantly Sunni
Muslim region of the country.
The large number of Shiite
militiamen fighting alongside
Iraqi government forces in Fal-
lujah has raised fears of sec-
tarian violence and human-
rights abuses by both sides.
Islamic State and other Sunni
radical groups sees Shiites as
polytheists and apostates.
Human Rights Watch said
Thursday that it had received
credible allegations of execu-
tions, beatings and mutilation
of corpses by government
forces during the first two
HADI MIZBAN/ASSOCIATED PRESS
weeks of fighting on Fallujah’s
outskirts.
“The Iraqi government
needs to control and hold ac-
countable its own forces if it
hopes to claim the moral up-
per hand in its fight against
[Islamic State],” Joe Stork,
the rights group’s deputy
Middle East director, said in
in neighboring Syria. a statement.
On Wednesday, Iraqi forces, Iraqi Prime Minister Haider
reinforced with airstrikes by al-Abadi has ordered an inves-
the U.S.-led international co- tigation into the reported
alition fighting Islamic State, abuses, and a number of the
penetrated inside the city lim- accused have been arrested.
OLIVIER MATTHYS/ASSOCIATED PRESS
Police guarded the federal court building in Brussels on Thursday.
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 | Friday - Sunday, June 10 - 12, 2016
Ship to Aid EgyptAir Hunt U.S. Shifts Command
Structure on Terror
Specialized vessel to
help in search for
downed plane’s black
boxes in Mediterranean
BY ROBERT WALL
LONDON — International
efforts to recover the black
boxes of EgyptAir Flight 804
are set to gain pace with the
arrival of a specialized ship
capable of retrieving the re-
corders deep from the Medi-
terranean, the head of the
French air-accident office
said on Thursday.
The Egyptian-led team
probing the May 19 crash of
the Airbus Group SE A320
plane bound for Cairo from
Paris detected a signal from
the aircraft’s black boxes
more than a week ago, help-
ing them identify the likely
location of the devices. In-
vestigators have been wait-
ing for additional equipment
to arrive to help determine
exactly where they are lo-
cated.
The cockpit voice and
flight-data recorder typically
provide the best clue to why
an aircraft crashed.
The ship, provided by
ISRAEL
Continued from Page One
The Palestinian Authority is to
blame. The youth have no
leadership.”
The two men, wearing suits
and ties, were shown in closed-
circuit television footage
standing up from their table at
a restaurant in Tel Aviv’s Sa-
rona Market and opening fire
on customers. One was ar-
rested and the other was
rushed to the hospital after be-
ing shot and subdued by po-
lice.
Police identified the four
dead Israelis as Ido Ben Arieh,
42, Ilana Nave, 39, Michal
Fiegeh, 58, and Mila Mishev,
32.
Israel’s Prime Minister Ben-
jamin Netanyahu visited the
scene of the shooting on
Thursday evening and said an-
other assailant had also been
arrested for collaborating with
the shooters, without provid-
ing more detail.
“This nation is strong,
they will not defeat us,” he
said. “I see life returning to a
normal routine around us,
which is good.”
The assault poses the first
serious test for Avigdor Lieber-
man, Israel’s newly appointed
hard-line defense minister.
Mr. Lieberman agreed last
week to the issuance of the
travel permits as a goodwill
gesture to Palestinians in the
West Bank and Gaza during the
World
Watch
EUROPEAN CENTRAL BANK
Draghi Urges Nations
To Boost Growth
European Central Bank Presi-
dent Mario Draghi urged Euro-
pean governments to play their
part in boosting growth and in-
flation in the region, warning that
a lack of economic overhauls is
making the ECB’s job harder.
“If other policies are not
aligned with monetary policy, infla-
tion risks returning to our objec-
tive at a slower pace,” Mr. Draghi
told policy makers in Brussels.
The ECB has unleashed a
sweeping range of stimulus mea-
sures in recent years, but inflation
remains far short of the central
bank’s target of just below 2%,
coming in at minus 0.1% in May.
Mr. Draghi warned that re-
peated attempts to make Europe
the world’s most competitive
and dynamic knowledge-based
economy “have produced only
meager results,” and called for a
range of economic overhauls
aimed at reducing barriers to
trade and boosting employment.
—Tom Fairless
RUSSIA
Air Force Grounds
Jet-Fighter Fleet
The air force grounded its en-
tire fleet of Sukhoi-27 jet fight-
ers following a fatal crash near
Moscow that the defense minis-
try said could be the result of a
A French soldier searches for debris from EgyptAir Flight 804.
Deep Ocean Search Ltd., is
equipped with a scanning
sensor that could allow in-
vestigators to pinpoint the
exact location of the main
body of the plane and is also
carrying equipment to even-
tually recover the black
boxes.
Flight 804 went down
The government will send more troops to the occupied West Bank. A Palestinian family spoke with Israeli soldiers on Thursday.
Muslim holy month of Rama-
dan, to allow them to visit rela-
tives in East Jerusalem and
other areas, as well as abroad.
The defense minister—
whose predecessor Moshe
Ya’alon was credited by other
Israel government officials
with helping damp a nine-
month wave of Palestinian vio-
lence against Israelis—visited
the site of the shooting Thurs-
day and promised a tough re-
sponse.
“I’m not going to speak and
elaborate on the steps we in-
tend to take, but I’m sure I’m
technical failure, Russian news
agencies reported.
The Russian air force ordered
the fleet grounded until the rea-
sons for the crash that killed one
pilot have been determined, Inter-
fax reported.
The pilot, who was part of
the Russian Knights team that
performed aerobatics exercises,
didn’t eject because he had
made a decision to steer away
from a populated area, the de-
fense ministry said.
The plane wasn’t carrying
weapons or ammunition and
there was no destruction on the
ground, the ministry said.
—Olga Razumovskaya
JAPAN
Tokyo Protests China
Warship Movements
Japan protested to China af-
ter spotting a Chinese warship
for the first time near disputed
islands in the East China Sea.
Japanese officials said a Chi-
nese navy frigate was seen off
the coast of the Japanese-con-
trolled Senkaku Islands, also
claimed by China and called the
Diaoyu Islands. The ship didn’t
violate Japan’s territorial waters,
and it has since left the area.
While Chinese coast-guard ves-
sels routinely patrol the area, it
was the first time a Chinese war-
ship was spotted, officials said.
Chief Cabinet Secretary
Yoshihide Suga criticized Beijing
for escalating regional tension.
—Associated Press
INDONESIA
Three Men Arrested
In Terror Probe
Police said they arrested
three men on suspicion of ter-
HK JP KO ML SI
WORLD NEWS
with 66 passengers and crew
on board. Accident investiga-
tors believe the airliner’s
main wreckage is some
10,000 feet below the sea’s
surface.
French investigators, who
have extensive experience in
accident probes, are also in
talks with their Egyptian
not going to settle for just talk-
ing,” he said.
The Israeli military, which
oversees the country’s activi-
ties in the West Bank, said it
was rescinding Israeli work
permits for 204 relatives of the
gunmen. The military also de-
clared Yatta, their village near
the West Bank city of Hebron,
a closed military zone.
The two additional battal-
ions being dispatched to the
West Bank amount to hundreds
of soldiers. In addition, Israeli
police said they would deploy
thousands of officers to the
rorism, and seized guns and
bombs that may have been ear-
marked for suicide attacks coin-
ciding with the Muslim holy
month of Ramadan.
The men are suspected of
having connections with mili-
tants believed to be backed by
Islamic State, which was behind
a bomb-and-gun attack in Ja-
karta in January that left eight
people dead, including the four
PARIS IN THE SPRINGTIME: A strike by trash collectors left piles of garbage in the French capital.
IN UK FR MN PR
counterparts who are leading
the probe about what would
be required to read the stor-
age devices once they are re-
covered. The decision on
whether the data extraction
will take place in Egypt, at
the headquarters of the
French air-accident investi-
gation office, the BEA, out-
ALEXANDRE GROYER/AGENCE FRANCE-PRESSE/GETTY IMAGES
side Paris, or elsewhere will
be made by the Egyptians,
said BEA Director-General
Rémi Jouty.
Black boxes are equipped
with underwater locator bea-
cons that have to last at
least 30 days to help search
teams find them. A French
navy ship with two BEA in-
vestigators on board on June
1 said it heard a signal using
hydrophones that can be sub-
merged to a depth of 3,280
feet and can detect a signal
up to 2½ miles away, accord-
ing to Alseamar, the hydro-
phones’ French manufac-
turer.
Accident investigators
have said the evidence col-
lected so far, including a
small number of automated
fault alerts, debris and body
parts, haven’t been sufficient
to determine the cause of the
crash. Egyptian officials ha-
ven’t ruled out any scenario.
streets of Jerusalem on Friday,
the first Friday of Ramadan,
when Palestinians from East
Jerusalem are expected to visit
the Al Aqsa mosque, one of the
holiest shrines in Islam.
Sami Abu Zohri, a spokes-
man for the Islamist movement
Hamas, which rules the Gaza
Strip, called the attack a “nor-
mal response” to the Israeli oc-
cupation.
Without explicitly referring
to the shootings, the office of
Palestinian Authority President
Mahmoud Abbas issued a
statement condemning attacks
attackers, police said Thursday.
The arrests took place
Wednesday in the country’s sec-
ond-largest city, Surabaya. A
nearby city, Gresik, was home to
some of the militants in a net-
work that police were breaking
up at the end of last year but
were unable to dismantle before
the Jakarta attack.
Police told a news conference
that two of the suspects ar-
THE WALL STREET JOURNAL.
BY GORDON LUBOLD killed Osama bin Laden, secre-
tive training missions inside
WASHINGTON—The Penta- Syria, and raids around the Mid-
gon is about to restructure the dle East. Unlike the geographic
way it fights Islamic State and commands, Socom functions in
other terror threats, deepening regions around the world, mak-
its reliance on the U.S. Special ing it a natural choice to coordi-
Operations Command, whose nate a global fight.
forces have carried out some of The plan, which has been in
the most prominent U.S. mili- development for several months
tary missions in recent years, and is awaiting an expected ap-
defense officials said. proval by Defense Secretary Ash
The move is designed to Carter, is known as the Cam-
modernize the U.S. fighting ef- paign Plan for Countering
fort and to better coordinate Trans-Regional Terrorist Organ-
limited resources, including izations.
drones, intelligence, troops and Among the U.S. military’s
funding, the defense officials geographical commands are U.S.
said. Central Command, which over-
The new approach reflects a sees the Middle East; Africa
recognition that the long-term Command; Northern Command;
challenge posed by Islamic State Southern Command; European
and other networks are global Command; and Pacific Com-
and not well-suited to the geo- mand.
graphical boundaries defined by They are largely designed
the Pentagon and its regional around problems that existed in
combatant commands, defense the last century. Defense offi-
officials said. cials said those boundaries are
“There was this recognition still largely relevant but that the
that we have this integrated growth of nonstate actors like al
network and we can’t deal with Qaeda, Boko Haram and Islamic
it in geographic stovepipes,” State exposes gaps. For exam-
said a senior defense official. ple, Turkey is inside the area
The Tampa-based Special Op- overseen by the U.S. European
erations Command—or Socom— Command; Syria, on its border,
has been behind the raid that sits inside Central Command.
said Thursday, referring to Is-
rael’s missile defense system,
which has proved an effective
deterrent to rocket fire from
Gaza.
Mr. Netanyahu met Mr. Lie-
berman and other members of
this security cabinet Thursday
afternoon, according to a
statement from the Israeli
leader’s office. The officials
were briefed on the day’s in-
telligence activities, the state-
ABED AL HASHLAMOUN/EUROPEAN PRESSPHOTO AGENCY
ment said.
As Israeli authorities investi-
gated how the two gunmen en-
tered Israel from the West
Bank, and where and how they
obtained their weapons, a court
issued a gag order on the coun-
try’s media barring it from dis-
closing details of the shooting.
Israeli security officials
have said that firearms are
widely available in the West
Bank. Israeli gun laws allow li-
censed owners to carry their
weapons.
In its statement, Mr. Netan-
on civilians “regardless of its yahu’s office said openings in
sources and justifications.” The the security fence that divides
authority governs the West Israel and the West Bank
Bank. would be closed.
A monthslong surge of vio- Some 34 Israeli civilians and
lence between Palestinians and soldiers have been killed and
Israelis had ebbed in recent 412 injured in more than 300
weeks and with it, a sense of Palestinian attacks since Sep-
calm had begun to return to Is- tember, Israeli officials say.
rael. But Wednesday’s attack in Palestinian officials say
a city that has been spared more than 200 Palestinians—
most of the recent bloodshed mostly alleged attackers—have
once again put the country on been killed by Israeli security
edge. forces during the period.
“We have no Iron Dome —Nuha Musleh
against terror attacks like in the West Bank
these,” President Reuven Rivlin contributed to this article.
rested this week were radical- eased in May for the first time
ized in prison, which has been a
concern of antiterror officials in
in seven months as food prices
fell, giving policy makers more
recent months and led to moves
to isolate suspected organizers.
room to ease monetary policy.
The consumer-price index
—Anita Rachman rose 2% in May from a year ear-
lier, compared with a 2.3% in-
CHINA crease in April, the National Bu-
reau of Statistics said Thursday.
Consumer Inflation The rise in the key inflation
Eased in May gauge undershot a median 2.2%
Consumer inflation in China gain economists had expected.
“This gives China a lot more
space to keep policy settings
pretty loose,” said Angus Nichol-
son of IG Markets.
But he said that Beijing is
walking a fine line as consumer
inflation decelerates, pushing the
index further from the govern-
ment’s target ceiling of 3% infla-
tion for 2016.
—Mark Magnier
SOUTH KOREA
Base Rate Trimmed
To Record Low 1.25%
The central bank took mar-
kets by surprise by cutting its
main policy rate to a record low,
in a move to support the econ-
omy as diminished expectations
of a U.S. rate increase over the
summer gave the bank room to
ease.
The Bank of Korea lowered
its base rate Thursday by a
quarter of a percentage point to
1.25%, in response to pressure to
spur growth. It was the first
rate cut in a year.
The bank’s unanimous deci-
sion was made “pre-emptively”
MAXPPP VIA ZUMA PRESS
to better cope with risks to
growth toward the second half
of the year, Bank of Korea Gov.
Lee Ju-yeol said, citing sluggish
exports, weak domestic demand
and corporate restructuring.
—Kwanwoo Jun
 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.
Rush of Voters Gets More Time to Register
Deadline extended to
sign up for referendum;
Leave camp threatens
challenge
BY NICHOLAS WINNING
LONDON—U.K. lawmakers
approved emergency legisla-
tion allowing more people to
register to vote in the referen-
dum on Britain’s continued
membership of the European
Union, prompting anger
among some “leave” cam-
paigners who said it would fa-
vor those lobbying to remain.
A last-minute rush by those
wishing to register to vote
ahead of the initial deadline of
midnight Tuesday caused the
government’s website to crash,
leaving some unable to access
the system.
Prime Minister David Cam-
eron, who is leading the push
to persuade voters to stay in
the EU, said he wanted those
people to have the opportunity
to take part in the June 23
plebiscite.
The government subse-
quently introduced legislation
to extend the deadline to mid-
night on Thursday, which was
passed by lawmakers in parlia-
ment earlier in the day.
The government said a re-
cord 525,000 people registered
to vote Tuesday, a significant
number of them under the age
of 34, an age group that polls
show favor staying in the EU.
Politicians from across the
political spectrum had called
for an extension, and the Elec-
toral Commission—the coun-
Migrant-Smuggling
Probe Grows Murkier
BY MANUELA MESCO
MILAN—Italian police said
on Thursday that authorities
were checking the identity of
an Eritrean extradited from Su-
dan to Italy this week on peo-
ple-smuggling charges, amid
questions as to whether they
had the wrong man in custody.
Prosecutors in Palermo, It-
aly, said on Wednesday that
Medhanie Yedhego Mered, an
Eritrean national suspected of
heading a people-smuggling
ring stretching from Africa to
Libya and Europe, had been
extradited to Italy after being
arrested in Khartoum, Sudan,
on May 24.
But later in the day, doubts
emerged about the identity of
the person arrested after a
number of people identifying
themselves as friends and fam-
ily of the person who appeared
in news images in Italian police
custody, along with a person
involved in the investigation,
said he wasn’t the right man.
They identified the man under
arrest as Medhanie Tesfamar-
iam Berhe, an Eritrean refugee.
A spokeswoman for the
Italian police said police were
conducting fresh checks on the
man in custody, but declined
to provide any further details.
On Wednesday, prosecutor
Maurizio Scalia, who followed
the case, expressed confidence
about the intelligence-gather-
EUROPEAN PRESSPHOTO AGENCY
Italy says it is holding Medhanie Yedhego Mered, left, but friends and
family of Medhanie Tesfamariam Berhe say he is the one in custody.
EU Delays Waiving Visas
For Eastern Neighbors
BY VALENTINA POP
AND LAURENCE NORMAN
BRUSSELS—Hopes in Geor-
gia, Ukraine and Kosovo that
the European Union would ap-
prove visa-free access for their
citizens by the summer have
faded amid a raft of new con-
cerns from the bloc’s biggest
member states.
The issues raised in recent
days range from German con-
cerns about organized crime
by Georgian gangs to worries
WORLD NEWS
A video image shows British Prime Minister David Cameron taking questions about the EU referendum in Parliament this week.
try’s elections watchdog—also referendum or, at a bare mini-
urged the government to ex- mum, to load the dice,”
tend the deadline. Opening the parliamentary
Leave.EU, a group cam- debate on extending the dead-
paigning for Britain’s exit, or line, Oliver Letwin, Minister
‘Brexit,’ said that it was un- for Government Policy, said he
constitutional for the govern- was confident the legislation
ment to alter election law dur- to shift the deadline was le-
ing an election period and that gally watertight.
it was looking into how it Vote Leave, the official
might challenge the decision. group campaigning for with-
Arron Banks, co-founder of drawal, said it welcomed the
Leave.EU, said the move was a 48-hour registration exten-
desperate attempt to register sion. Michael Gove, a promi-
as many potential “remain” nent member of Vote Leave
voters as possible to “rig the and senior member of Mr.
‘Brexit’ Could Pare U.K.’s Say on Trade
Many of those people
who intend to vote to leave
ing that lead to the arrest. the European Union in this
The U.K.’s National Crime month’s U.K. referendum say
Agency, which supported the they want to claw back con-
Italians in the investigation, on trol over British affairs from
Thursday said it was confident Brussels. The irony is that a
in its intelligence-gathering. decision to exit the EU
“This was a complex, multi- would put the U.K.’s fate as a
partner operation,” an NCA trading nation into the
spokesman said. “It is too soon hands of dozens of foreign
to speculate about claims” governments.
over the mistaken identity of As Britain debates what
the person arrested. type of trading relationships
If the wrong man has been it would have with the rest
seized, it would be a major of the world
embarrassment to Europe’s after an exit,
push to crack down on people here’s the
smuggling as a way to stem thing: Other
the flow of migrants. countries get a
The incident also comes at big say too,
a delicate time, given a plan BRUSSELS and it is hard
by the European Union to of- BEAT to say in ad-
fer aid to African nations as STEPHEN vance what
part of a broader effort to gain FIDLER their motiva-
their support in stemming the tions would be.
flows of migrants. Under the “The major
proposals, Sudan stands to re- problem of ‘Brexit’ is the il-
ceive millions in assistance. lusion of control,” said Otilia
The hunt for Mr. Mered has Dhand, Brussels-based ana-
been long-running, as Euro- lyst for the Teneo Intelli-
pean investigators—particu- gence consulting firm.
larly in Italy—gathered evi- In negotiations over trade
dence of his alleged people- between the U.K. and the
smuggling business. rest of the EU, each country
Mr. Mered organized the has a veto, and outcomes are
passage of a number of ships therefore not in the hands of
that sank, including one in the U.K. or even of Germany.
April 2015 that left about 800 Many campaigners for
dead, said the Sahan Founda- exit say other EU govern-
tion, working on behalf of the ments would be “shooting
Intergovernmental Authority themselves in the foot” by
on Development, a regional obstructing open trade, post-
body in East Africa. exit, with the U.K. They say
German car manufacturers,
among others, would surely
want tariff-free access to the
British market.
Yet not every economy in
the EU is an export behe-
moth like Germany, and gov-
ernments would have other
issues to consider. Politicians
and officials in Brussels, for
SEGHEN TESFAMARIAM
example, worry that deliver-
ing a deal that looks too
sweet for the U.K. could
tempt other countries down
the same path, risking a
larger-scale disintegration of
the EU. That prospect, in
their view, could spell much
Berlusconi to Undergo Heart Surgery
BY MANUELA MESCO
in France that the visa deals
could create new security risks MILAN—Former Italian Pre-
amid heightened terror fears. mier Silvio Berlusconi will un-
EU officials now say that dergo surgery to replace a de-
September appears to be the fective aortic valve that is
earliest date that EU govern- potentially life-threatening,
ments and the European Par- his doctor said Thursday.
liament could sign off on the Over the weekend, the
agreements. The deal would three-time premier suffered
let millions of citizens from what his doctor called a “car-
these countries travel without diac deficiency.” He was hos-
a visa for up to three months pitalized late Sunday in Milan
to and within the border-free after returning from Rome,
Schengen zone, which covers where the 79-year-old voted in
most EU nations. the city’s local elections.
Cameron’s Conservative Party,
said it was particularly im-
portant given how few young
people normally vote.
Mr. Cameron’s campaign re-
ceived a boost after a Conser-
vative lawmaker who had sup-
ported the leave camp
switched sides. Sarah Wollas-
ton, who heads a parliamen-
tary committee on health pol-
icy, said she now believed
leaving the EU would be nega-
tive for the economy and
therefore for the National
Health Service.
A man sartorially expressed his commitment to his homeland this week on a London street.
more damage to the Euro-
pean economy than if the
British exit on tough terms.
I
n a bid to minimize eco-
nomic disruption, some
pro-exit British politi-
cians have revived the idea
of a Norway-style arrange-
ment. The idea would be for
the U.K. to slot into the Eu-
ropean Economic Area,
which includes the 28 EU
members along with Norway,
Iceland and Liechtenstein.
That would in effect keep
the U.K. in the single mar-
ket—with the drawback that
it would have to pay a mem-
bership fee perhaps greater
than now, as well as accept
free movement of people and
a swath of EU regulations
over which it would no lon-
ger have any say.
Apart from this arrange-
ment being unacceptable for
many who will have voted to
leave the EU, there is an-
other issue: Thirty other
governments would have to
agree to it, each one wield-
ing a veto right.
Some of them might balk,
particularly if the EEA be-
He has since remained hos-
pitalized in San Raffaele Hos-
pital, undergoing exams that
lasted until Wednesday. Those
tests found that he suffered
from a defective valve that, if
untreated, could have proved
fatal.
“He risked dying,” said Al-
berto Zangrillo, the personal
doctor of the media mogul and
longtime leader of Italy’s con-
servative wing.
Mr. Berlusconi will undergo
open heart surgery next week
to replace his aortic valve with
Friday - Sunday, June 10 - 12, 2016 | A5
ing because it doesn’t take
into account the government’s
rebate on its contribution to
the EU budget.
Tony Blair and John Major,
former prime ministers from
opposing political parties,
warned Thursday that leaving
the EU would jeopardize the
unity of the U.K. by reopening
the question of Scotland’s in-
dependence and threatening
stability in Northern Ireland.
Theresa Villiers, the minis-
ter responsible for Northern
Ireland and a pro-Brexit cam-
paigner, said support for the
peace process in Northern Ire-
land was “rock solid” and
wouldn’t be affected by the
referendum result.
AGENCE FRANCE-PRESSE/GETTY IMAGES
Opinion polls suggest the
referendum is too close to call.
Some recent polls put the
“Leave” camp ahead, while
others show “Remain” with a
narrow lead.
Robert Hayward, an elec-
tions analyst and Conservative
politician who correctly fore-
cast a Conservative victory in
last year’s national election
despite most pollsters sug-
Ms. Wollaston said she had gesting otherwise, said he ex-
spoken to the prime minister pected the nation to vote to
and “came away from that exit the EU.
conversation convinced, per- Mr. Hayward, who says he
sonally, that he did think the personally backs Britain’s con-
economic consequences would tinued EU membership, said
be as bad.” In an earlier state- his conclusion was based on
ment, she also called Vote conversations with people
Leave’s claim that the U.K. from all demographic groups
sends £350 million ($509 mil- to see where views differed
lion) to the EU every week a from what polls suggested
“financial lie.” those people should vote.
Vote Leave has defended its “Overwhelmingly those people
claim amid criticism from the that deviate from the expected
U.K.’s official statistics agency demographic are deviating to-
and others that it is mislead- wards leave,” he said.
CHRIS RATCLIFFE/BLOOMBERG NEWS
comes, as some Leave sup- the U.K.,” WTO Director-Gen-
porters have suggested, just eral Roberto Azevêdo said
a staging post to Britain this week. “Therefore impor-
eventually pulling out of the tant elements would need to
single market entirely. be negotiated.”
A post-exit U.K. could Indeed, the U.K. would
also decide it wouldn’t need have to secure an agreement
a special deal with the EU— with the 161 other members
now responsible for about on a proposed schedule cov-
47% of the country’s trade in ering an extensive list of is-
goods—or indeed with the sues from tariffs and quotas,
58 other economies with agricultural subsidies, trade
which the EU has negotiated in services, movement of
trade agreements, responsi- people and public services.
ble for a further 13%. That has never been easy
Instead, it would just rely in an environment where
on its membership of the most governments are, in
World Trade Organization, the words of one senior offi-
which governs world-wide cial familiar with trade nego-
trading rules among its 162 tiations, “driven by politics
members. That would mean and mercantilism.”
higher average tariffs on Nobody knows in advance
British exports, but trade what the timeline would be,
wouldn’t grind to a halt. but experience suggests an
agreement could take years.
B
ut the U.K. can’t just Also unknown: what would
step into a deal with happen if the U.K. left the
the WTO, because its EU without securing an ac-
trade arrangements with cord at the WTO.
most countries, including the “If you need to complete
U.S. and China, have been a deal quickly when the
negotiated via the EU. other side can wait, you are
“Key aspects of the EU’s negotiating from a very
terms of trade could not weak position,” Mr. Azevêdo
simply be cut and pasted for said.
a new one, Dr. Zangrillo said. in recent years, dogged by ju-
The four-hour operation at dicial problems and sharp crit-
San Raffaele presents some icisms of his record as prime
risks, and the former premier minister.
is expected to face a month- Health problems will likely
long rehabilitation following complicate his efforts to hold
the surgery. together his party, Forza Ita-
After that, Mr. Berlusconi’s lia, which has suffered deep
“vitality will improve,” Dr. divisions as Mr. Berlusconi’s
Zangrillo said, adding that the popularity has plunged over
billionaire is in good spirits. the past few years.
Mr. Berlusconi stormed into Mr. Berlusconi is the con-
politics in the 1990s and domi- trolling shareholder of media
nated Italy’s political scene for company Mediaset and the
about two decades. But he has owner of soccer club A.C. Mi-
largely been on the sidelines lan.
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 | Friday - Sunday, June 10 - 12, 2016
ZIKA
Continued from Page One
than any mainland U.S. state is
likely to be, U.S. health authori-
ties say. The Aedes aegypti
mosquito that spreads Zika
teems here, flourishing in the
steamy climate and dense
neighborhoods. It invades the
many homes lacking screens
and air conditioning. It incu-
bates in unsealed septic tanks,
old tires and other places
where stagnant water stands.
The island’s protracted eco-
nomic crisis has strained the
health-care system and efforts
to kill off mosquitoes. Puerto
Rico is defaulting on payments
it owes on $70 billion of debt,
and U.S. Congress is consider-
ing forming a federal over-
sight board to supervise its fi-
nances.
The Centers for Disease
Control and Prevention esti-
mates 25% of Puerto Rico’s 3.5
million population will be in-
fected with Zika by the end of
2016, says Tyler Sharp, epide-
miologist in the CDC’s dengue
branch, based in San Juan,
which researches dengue and
other viruses that are trans-
mitted by the same mosqui-
toes as Zika.
About 40 million people a
year travel between the U.S.
and areas where Zika is circu-
lating, according to the CDC.
Puerto Rico is a popular desti-
nation, with regular daily
flights to and from multiple
cities on the U.S. mainland.
Cruise ships make regular
stops.
The spread of Zika by mos-
quitoes hasn’t been detected
on the U.S. mainland yet. Pub-
lic-health officials say they ex-
pect that to happen this sum-
Path of the
Zika Virus
Countries and
territories that have
had evidence of Zika
virus transmission
Habitats of the primary mosquito to transmit the Zika virus
Areas that are
Highly suitable
Moderately suitable
Unsuitable
Aedes aegypti
Primary carrier
of the virus
Sources: Centers for Disease Control and Prevention; Kraemer MUG et al., eLife Sciences,
University of Oxford; photos by Marvin Recinos/Agence France-Presse/Getty Images (aegypti)
STEPS
Continued from Page One
questioned, the man—an engi-
neer—proudly admitted he
had attached his fitness
tracker to a ceiling fan, Ms.
Korn says.
Activity challenges are pop-
ular with companies for their
relatively low cost and high
worker-participation levels.
On the other hand, they tend
to favor marathon runners,
people who are already fit and
short people, who take more
steps. And then there’s the
combustible human combina-
tion of competition and devi-
ousness.
Atlanta-based Delta Air
Lines has offered several step
challenges for its 80,000 em-
ployees world-wide, allowing
participants to use a digital
step tracker or enter steps
manually into an app.
Near the end of a challenge
last year, an employee rock-
eted up the leaderboard over-
night, Delta spokeswoman Ra-
chel Solomon says. The
employee had logged by hand,
all at once, the equivalent of
31 miles of steps a day for 42
consecutive days. The com-
pany “thought that seemed
unlikely,” and began requiring
employees to log their steps at
least once a week, Ms. Solo-
mon says.
mer, though, particularly in
the South where Aedes mos-
quitoes are most common. All
it will take, they say, is for
someone who got infected
elsewhere to get bitten by
mosquitoes once they return
home. Those mosquitoes may
then spread the virus to oth-
ers.
Public-health officials say
they don’t believe U.S. out-
breaks would be large, because
most people are protected
from mosquitoes in their
homes with window screens.
But it is a matter of how
quickly doctors or mosquito-
control officials detect the cir-
culating virus.
In Puerto Rico, mosquito-
control programs have been
cut back in the budget crisis,
rendering spraying campaigns
spotty, although it isn’t clear
how much the budget cuts af-
fected the offending mos-
quito’s spread. The insecticide
used most widely didn’t work
against the mosquito, and one
that replaced it works only in
some places, says Steve
Waterman, chief of the CDC’s
dengue branch. Puerto Rico’s
health department didn’t re-
spond to requests to comment.
The Obama administration
has asked Congress for emer-
gency funds to combat Zika,
including in Puerto Rico. Con-
gress is deliberating over the
amount to allot. Meanwhile,
the federal government has
sent some aid and redirected
dollars from other needs.
Puerto Rico’s emergency
management agency has led
cleanup campaigns around the
island, says its chief, Angel
Crespo, collecting 1.2 million
discarded tires, dropping lar-
vicide into abandoned pools,
educating residents and train-
ing local brigades in fumiga-
Puerto Rico
THE WALL STREET JOURNAL.
Mr. Adams posted a You-
Tube video titled “The secret
to winning Fitbit challenges,”
which has attracted more than
15,000 views. He says he
’fessed up to his competi-
tors—and still finished sec-
ond.
Fitbit wouldn’t discuss ma-
nipulation of fitness trackers.
A spokesman said the com-
pany’s products “help moti-
vate millions of users to
achieve their goals and to
change their daily behavior.”
“It is a game of cat and
mouse,” says Mike Tinney,
CEO of Atlanta-based Fitness
Interactive Experience, which
Dan Adams, left, tied his Fitbit to a power saw. Stridekick, which operates wellness programs, tested trackers on its employees’ dogs.
FROM PAGE ONE
Carmen Zorrilla, an obstetrician-gynecologist for women with high-risk pregnancies, discussed Zika prevention at a prenatal-care
session in Puerto Rico, where authorities are running campaigns urging people to protect themselves from virus-carrying mosquitoes.
tion. For now, Mr. Crespo says,
“we’re moving forward with
our own resources.”
Protecting mothers
The island’s housing de-
partment is installing screens
in doors and windows of pub-
lic-housing apartments occu-
pied by pregnant women,
spending about $500,000 out
of funds for regular capital im-
provements. “For us this is a
priority,” says Housing Secre-
tary Alberto Lastra Power.
Ganasha Reynoso, seven
months pregnant with her sec-
ond child, a boy, was relieved
when workers installed screens
in three doors and 10 windows
of her two-bedroom apartment
two months ago in San Juan’s
Residencial Ernesto Ramos An-
tonini housing project.
“I’m worried because I know
about the microcephaly risk,”
says Ms. Reynoso, 20, referring
to a condition caused by Zika in
which babies have undersized
skulls that can signal brain dam-
age. She added that she is also
using mosquito repellent. She
tested negative for Zika and
prays she doesn’t get infected
before delivery. She may have to
move to a larger apartment af-
ter the birth. She says she
would miss the screens but un-
derstands it is “a privilege for
pregnant women.”
Federal and Puerto Rico sci-
entists are using the spread of
Zika on the island to study birth
defects related to the virus, its
link to Guillain-Barré syndrome
and other neurological compli-
cations, and how long the virus
persists in semen and other
bodily fluids. The virus is trans-
mitted primarily by mosquitoes
but also through sexual contact.
They are hoping to answer
questions about the risk that an
infected pregnant woman will
have a child with birth defects.
Experts plan to track babies for
three years after birth to Zika-
infected mothers to see if they
develop problems not evident in
utero or at birth. They also hope
to figure out what percentage of
people infected with Zika de-
velop no symptoms.
“We’re going to be generat-
ing some good information,”
uses games to encourage ac-
tivity in corporate challenges.
“If there are loopholes, players
find them and exploit them.”
One of the company’s chal-
lenges awards bonuses for
bursts of exercise beyond
walking. When one such con-
test took place at a prominent
accounting firm, “they were
very, very vigilant with each
other,” Mr. Tinney recalls.
An employee logged seven
hours of downhill skiing into
his account, spurring vigorous
debate in the game’s online
chat room about how much
time the man spent actually
skiing, as opposed to sitting
says Dr. Waterman, “that will be
useful for public health and clin-
ical medicine by the end of the
year or early next year.”
Gloria Rodríguez Vega, chief
of the critical-care department
at the HIMA San Pablo hospital
in Caguas, hopes a new system
to track Guillain-Barré syn-
drome, or GBS, will shed light
on debilitating neurological
complications Zika may cause.
Testing positive
Dr. Rodríguez Vega has pro-
vided intensive care to three
Zika-positive GBS patients this
year. She normally sees four to
five patients a year with GBS, a
neurological condition that can
cause temporary paralysis,
among other symptoms. She
also treated a Zika-positive pa-
tient who had encephalitis, an-
other condition scientists sus-
pect may have a link to the
virus. That patient tested posi-
tive for Zika, while other causes
were ruled out. “When it takes
months to recuperate,” she says,
“that will affect society.”
Island health authorities have
targeted Zika-prevention mes-
sages to women, offering educa-
tion in hospitals and clinics.
They hand out prevention kits
assembled by the CDC and CDC
Foundation, a nonprofit organi-
zation, with repellent, mosquito
nets, brochures and a condom
to remind couples of the possi-
bility of sexual transmission.
In a group session for preg-
nant women and partners at
University Hospital, Carmen
on a chairlift or standing in
line. The employee succumbed
to co-worker pressure and re-
duced his skiing time to four
hours, Mr. Tinney says.
At the University of Michi-
gan, various departments
compete in challenges to log
the most minutes of physical
activity, wellness coordinator
Colleen Greene says. The low
stakes in a challenge last fall—
bragging rights—didn’t keep
one employee from ratting out
a competitor he suspected of
attaching his fitness tracker to
his dog.
“I think it was more of a
personal grudge,” Ms. Greene
THE WALL STREET JOURNAL.
JOSÉ JIMÉNEZ-TIRADO FOR THE WALL STREET JOURNAL (PHOTOS)
Zorrilla, an obstetrician-gyne- for inserting IUDs are low, and
cologist for high-risk pregnan- patients must navigate bureau-
cies, calmly describes the risks cratic steps to get them.
of Zika, where the virus had Pregnant women are typi-
come from and how to prevent cally tested for Zika at a mini-
infection. mum in their first and second
Liliana Sanchez, 39, is 20 trimesters, with or without
weeks pregnant and says she is symptoms, and get ultrasounds
afraid but not panicked. “Most to monitor their babies—steps
important is to use repellent,” that protect their health and al-
she says, adding she wants to low public-health officials to
keep other family members gather data that may provide
from infection. clues about the disease.
“I like your attitude,” Dr. Zor- Of more than 50 Zika-in-
rilla tells her, “because it’s pre- fected pregnant patients seen
vention without fear.” by University Hospital’s Dr. de la
Dr. Zorrilla helped develop Vega, three had fetuses with ab-
the strategy for preventing HIV normalities, he says. The 22-
transmission from mothers to week-old fetus, whose mother
their children and led its imple- had initially tested negative for
mentation in Puerto Rico. Zika Zika, had the same symptoms
is another disease for which Brazilian doctors have found:
women need special support, microcephaly, calcifications in
she says. the brain—an indication of in-
Others are trying to improve flammation—and poor growth
access to contraception. About of some brain structures.
two-thirds of pregnancies in The other two showed
Puerto Rico are unintended, and stunted growth. “This worries
teenage birthrates are high. us a lot,” he says. There are
Nabal Bracero, a reproduc- other cases of concern in which
tive endocrinologist who heads the head may be in the lower
the Puerto Rico section of the ranges of growth, he says, “but
American Congress of Obste- it is still too early to tell.”
tricians and Gynecologists and He expects to see many more
a reproductive-health non- abnormalities because there are
profit, is leading an effort to now women who became preg-
train physicians around the is- nant when Zika was already cir-
land to insert IUDs. culating. Doctors believe birth-
Studies have shown long- defect risks are highest early in
acting forms of contraception pregnancy.
are highly effective at prevent- “We live on a tropical island.
ing pregnancy. Dr. Bracero We’re accustomed to hearing
hopes the Zika crisis will force that a hurricane is forming in
change in two obstacles to get- Africa and it’s coming this way,”
ting them: Insurance reim- Dr. de la Vega says. “It’s that
bursement rates to physicians kind of stressful situation.”
says. She said the accused co-
worker hadn’t registered an
unusual amount of activity.
The tracker-on-your-dog
step goals rather than award-
ing prizes to top steppers.
Stridekick generally lets cli-
ents police their own employ-
technique is common enough ees. False accusations of cor-
that Chicago-based Stridekick, ner-cutting can be “a really
which operates wellness pro- touchy thing,” Mr. Knierim
grams at about 200 compa- says.
nies, tested trackers on its Companies that operate
own employees’ pooches. step challenges say cheating is
The findings: “Dogs typi- rare but memorable. About
cally do between 13,000 and seven years ago, a CFO at a
30,000 steps in a day,” co- small company boosted his
founder Anthony Knierim step total by attaching his
says. tracker to his foot and tapping
To discourage cheating, it throughout meetings, recalls
Stridekick encourages clients Chris Boyce, CEO of Virgin
to hold drawings for prizes in- Pulse, which runs workplace
cluding everyone who reaches wellness programs.
A co-worker surreptitiously
captured an image of the toe-
tapping and emailed it compa-
nywide with a message asking
people to guess who was do-
ing it.
“Everybody knew, and ev-
erybody responded,” Mr.
Boyce says. The executive
stopped tapping.
BEN SANT/BTS PHOTOGRAPHY (LEFT); STRIDEKICK
Henry Albrecht, CEO of
Bellevue, Wash.-based Lime-
ade, a wellness technology
company, says it’s better to let
employees self-report rather
than use trackers, even if
someone occasionally cheats
to win a T-shirt.
“We encourage employers
to lighten up a little bit,” he
says. “If you don’t trust people
to exercise with each other,
how do you trust people to do
real, important work?”
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 Swipes at Trump Over Economy
Democratic candidate
pledges to contrast
policies, offer tax-cut
plan for middle class
BY LAURA MECKLER
WASHINGTON—With the
Democratic primary behind
her, Hillary Clinton said she
plans to put Republican Donald
Trump’s business record and
economic agenda at the center
of her campaign, calling his
ideas “deeply misguided” and
“dangerously incoherent.”
In an interview Wednesday,
Mrs. Clinton said she would de-
liver an economic speech soon
contrasting Mr. Trump’s record
and policies with her own.
“While he may have some
catchy sound bites, his state-
ments on the economy are
dangerously incoherent,” she
said in the interview. “They
are deeply misguided, and they
reflect an individual who is
temperamentally unfit to man-
age the American economy.”
Mr. Trump is hardly shrink-
ing from the fight. He prom-
ised Tuesday night to deliver a
speech as early as Monday lay-
ing out the case for how Mrs.
Clinton and her husband, former
President Bill Clinton, have per-
fected what he called the “poli-
tics of personal enrichment.”
With the general election in
effect now under way, the ex-
changes left no doubt that the
next five months will be par-
ticularly bitter and divisive.
Mrs. Clinton promised in
the interview to put forth a
middle-class tax-cut plan,
which she said would be a crit-
ical part of the case she makes
to voters. She wouldn’t say
U.S.
Watch
GUN CONTROL
Court Rules Against
Concealed Firearms
Americans have no guaran-
teed right to carry concealed
guns in public, a federal appeals
court in California ruled on
Thursday, in a significant blow
to gun-rights activists and gun
owners in a large swath of the
western U.S.
The San Francisco-based
Ninth U.S. Circuit Court of Ap-
peals, in an 7-4 ruling, upheld a
California law requiring residents
to show “good cause” for carry-
ing a concealed handgun.
Under California law, personal
safety alone doesn't qualify as
good cause, which is defined by
county sheriffs. The plaintiffs,
seeking licenses to carry con-
cealed weapons, said the policies
in San Diego and Yolo counties
violated their Second Amend-
ment rights.
The Ninth Circuit encom-
passes Alaska, Arizona, Califor-
nia, Hawaii, Idaho, Montana, Ne-
vada, Oregon and Washington.
The ruling aligns the court with
three other regional appeals
courts but puts it in conflict
with the Chicago-based Seventh
Circuit.
—Joe Palazzolo
FINANCES
Americans’ Wealth
Reaches a Record
The wealth of Americans
reached a record $88.1 trillion in
the first quarter, with rising
home values offsetting stock-
market wobbles.
The boost to wealth was
driven by a $498 billion increase
in residential-real-estate values,
while the overall value of equi-
ties declined by $160 billion, ac-
cording to a Federal Reserve re-
port released Thursday.
The report underscores a
change since the housing bubble
and stock-market crash of the
last decade. U.S. households and
nonprofit organizations lost
more than $12 trillion during the
housing and financial busts, and
net worth fell to $55 trillion.
The report, known as the
“Flow of Funds,” tracks the ag-
gregate balance sheet of U.S.
households to show how the
components of wealth shift over
time. It provides no breakdown
of the distribution of these as-
sets among households or dif-
ferent demographic groups. The
figures aren’t adjusted for infla-
tion.
—Josh Zumbrun
In an interview with The Wall Street Journal, Hillary Clinton said a Donald Trump presidency could lead to a global economic crisis.
whether she supports biparti-
san efforts to overhaul the cor-
porate tax code by lowering
rates and eliminating some tax
breaks, but she promised more
details in the weeks ahead.
The interview came a day
after the former first lady, sen-
ator and secretary of state
made history as the first
woman to claim the presiden-
tial nomination of a major po-
litical party.
Mrs. Clinton said she was
also working to unify Demo-
crats. She spoke to rival Bernie
Obama, Sanders Meet Amid Calls for Unity
BY CAROL E. LEE
AND PETER NICHOLAS
WA S H I N G T O N — B e r n i e
Sanders on Thursday vowed to
compete in the final Demo-
cratic presidential primary in
Washington, D.C., but gave no
indication he would try to pry
the nomination away from Hil-
lary Clinton and said he would
work with her to defeat Don-
ald Trump.
Mr. Sanders spoke briefly
following a private meeting
with President Barack Obama.
Democratic leaders have urged
him to end his campaign and
help unify the party for the
general-election showdown
with Mr. Trump, the presump-
tive Republican nominee.
While Mr. Sanders didn’t say
he planned to drop out, he also
didn’t speak of Mrs. Clinton as
a competitor, emphasizing that
he planned to meet with her
“in the near future to see how
we can work together to defeat
Donald Trump and to create a
government which represents
all of us and not just the 1%.”
White House press secre-
tary Josh Earnest said Mr.
Obama congratulated and
complimented Mr. Sanders on
his campaign. He said it was
“a friendly conversation that
was focused on the future.”
Shortly after the meeting,
the Clinton campaign an-
Economists Lower Estimates for Job Growth
BY JOSH ZUMBRUN
The job gains of recent
years, when the economy rou-
tinely added more than two
million positions annually,
may be a thing of the past.
Forecasters have sharply
lowered their expectations for
job growth in the coming year
after employers added just
38,000 jobs in May, according
to The Wall Street Journal’s
latest survey of academic, busi-
ness and financial economists.
They now expect the econ-
omy will add about 155,000
jobs a month over the next
year, a pace of about 1.9 mil-
lion annually. That is the third
consecutive month of lowered
expectations for the jobs out-
look. Their estimates fell from
about 180,000 in May, 185,000
in April and 190,000 in March.
If their forecast proves cor-
rect, it would be the worst
year for job growth since 2010.
“The economy right now is
navigating this period where
there’s going to be lower
growth overall and lower
U.S. NEWS
Sanders, a Vermont senator, on
Tuesday and said she would
continue making the case to his
supporters that there is more
that unites than divides them.
While Mr. Sanders lost the
contest, he succeeded in help-
ing to push Mrs. Clinton to the
left on some issues, including
her stance on possible changes
to the Social Security program,
though she was also responding
to a changing Democratic Party.
During the long primary
campaign, Mr. Sanders repeat-
edly hit Mrs. Clinton for her
nounced in a tweet that Mr.
Obama formally endorsed Mrs.
Clinton for president. The
tweet included a video of Mr.
Obama speaking to the camera
and praising Mrs. Clinton’s
credentials. “Look, I know how
hard this job can be,” Mr.
Obama said. “That’s why I
know Hillary will be so good
at it. In fact, I don’t think
there’s ever been someone so
qualified to hold this office.”
Mr. Obama and Mrs. Clinton
are scheduled to make a joint
campaign appearance in Green
Bay, Wis., on June 15.
Mr. Sanders also used his
five-minute address to de-
nounce Mr. Trump, a function
that the Clinton campaign
would like to see him fulfill in
the coming months.
“Donald Trump would be a
disaster as president of the
U.S.,” said Mr. Sanders, stand-
ing outside the White House,
with his wife, Jane, behind him.
“It is unbelievable to me…that
the Republican Party would
have a candidate for president
who in the year 2016 makes
bigotry and discrimination the
cornerstone of his campaign.”
Mr. Sanders suggested he
will be a presence at the Demo-
cratic convention in Philadel-
phia, but he described his goal
as pressing the issues that have
been at the center of his cam-
paign, including income inequal-
profit margins,” said Brian
Bethune, an economist at
Tufts University.
The economy has posted
steady job growth for most of
the past six years, even though
overall economic output as
measured by gross domestic
product was growing more
slowly than expected. Both
Economists generally think the U.S. will be able to avoid a
recession. Above, a job fair in Kentucky last month.
Friday - Sunday, June 10 - 12, 2016 | A7
foreign policy, on economic is-
sues, Mr. Trump opens the
general election with the edge,
Wall Street Journal/NBC News
polling found last month.
Asked about four economic
issues, voters rated Mr. Trump
as better equipped to handle
Wall Street, trade and the
economy overall. Mrs. Clinton
drew the stronger marks only
on which candidate could best
look out for the middle class.
Mrs. Clinton regularly says
President Barack Obama
doesn’t get the credit he de-
serves for rescuing the econ-
omy from the brink of col-
lapse. But economic headwinds
remain. Mr. Trump has aimed
his campaign squarely at vot-
ers who feel deep anxiety.
“We are going to have fantas-
tic trade deals,” he said Tues-
day. “We’re going to start mak-
ing money and bringing in jobs.”
JULIO CORTEZ/ASSOCIATED PRESS
Over the course of the pri-
mary, Mrs. Clinton announced
53 different policy proposals
totaling 201 pages, an aide said.
She would use the tax code to
deter short-term investing, en-
courage companies to share
profits with their workers and
ease burdens on the middle
class through targeted credits.
ties to Wall Street, including partners and his suggestion, Mrs. Clinton acknowledged
donations from employees of later rescinded, that the U.S. that her approach might re-
big banks and paid speeches. might seek to renegotiate the quire deeper explanation. But
Asked if she would consider national debt. “It’s not hard to she suggested the fact that she
including people who have see how a Trump presidency garnered more primary votes
worked on Wall Street in her could actually lead to a serious than either Mr. Trump or Mr.
economic team, she said the global economic crisis,” she said. Sanders means Americans may
question was premature but that A Trump spokeswoman said be drawn to her approach.
she was “not ruling in, not rul- Mr. Trump, in his speech next “I think it’s clear we’ve got a
ing out” such an appointment. week, would respond to “the lot of work to do, we’re going to
Her economic address will many inaccurate statements” have a lot of explaining to do,”
come later this month, an aide made by Mrs. Clinton. she said. “But it’s important
said, but the candidate offered a Polling suggests the Demo- that voters know that, No. 1, I
preview Wednesday, pointing to crat has a tough task on the am listening, and I’m also learn-
Mr. Trump’s plan for large tax economy. While she is seen by ing about what will work…to
cuts, threats made to trading voters as better able to handle make the economy stronger.”
One person he didn’t thank
was Democratic National Com-
mittee Chairwoman Debbie
Wasserman Schultz, whom his
campaign has criticized for
decisions and statements it
says favored the Clinton cam-
paign.
White House officials had
earlier said Mr. Obama would
use the Oval Office meeting
with Mr. Sanders to stress the
importance of uniting the
party to work toward defeat-
ing Mr. Trump in November.
Mr. Obama said Wednesday
PABLO MARTINEZ MONSIVAIS/ASSOCIATED PRESS
in an interview on NBC’s To-
night Show that the tougher-
than-expected primary race
was “a healthy thing” for the
party and made Mrs. Clinton a
better candidate.
“I thought that Bernie
Sanders brought enormous en-
ergy and new ideas,” he said,
adding that he hopes “over the
next couple of weeks we’re
able to pull things together.”
Democratic presidential candidate Bernie Sanders, left, with Mr. Sanders requested the
President Barack Obama at the White House on Thursday. meeting after Tuesday’s pri-
mary results firmly positioned
ity. He was silent on whether his Before those elections, he Mrs. Clinton as the presump-
purpose would be to come away said the convention would be tive Democratic nominee.
with the nomination. “contested,” laying out plans Mr. Sanders also planned to
The more conciliatory tone to try to flip pro-Clinton su- meet with Vice President Joe
from Mr. Sanders is a shift perdelegates in hopes of cap- Biden on Thursday, a person fa-
from the combative messages turing the nomination. miliar with the plans said. Mr.
he put forward before Tues- Mr. Sanders went out of his Biden was to host his former
day, when he lost California, way to praise Mr. Obama for Senate colleague at the vice-
New Jersey and two other his impartiality during the presidential residence in Wash-
states to Mrs. Clinton. Democratic primary. ington, D.C., the person said.
measures are expected to be Fed will wait until July and tinue to hurt U.S. exporters and
slower in the year ahead. 30% until September. manufacturers, as well as U.S.
That deterioration in the la- In addition to the weaker la- oil companies. Already, the
bor market is likely to keep bor market, many economists manufacturing industry has lost
the Federal Reserve on hold are worried about what could 39,000 jobs in the past year,
when officials gather next happen if the United Kingdom while the mining and logging
week. Many economists earlier votes to leave the European industry—a group that includes
had expected the central bank Union on June 23. Such a deci- oil producers—has lost 129,000.
to raise interest rates in June, sion, known as Brexit, from Brit- A big risk for the U.S. is
but now about 52% believe the ish voters could cause an unrav- that there is “no offsetting
eling of trade arrangements and factor to the energy and man-
jolt financial markets. ufacturing slowdown,” said
“It is prudent, given the Nathaniel Karp, chief U.S.
May jobs report and the pend- economist for the bank BBVA.
ing Brexit vote, to wait and The U.S. energy boom, in par-
see before raising rates,” said ticular, had been a bright spot
KPMG chief economist Con- until oil prices plunged and re-
stance Hunter. mained low in 2014 and 2015.
The Wall Street Journal sur- In a gauge of the panel’s
veyed 66 economists from June pessimism, about 76% of re-
3 through June 7, though not spondents said that if their
LUKE SHARRETT/BLOOMBERG NEWS
every economist answered ev- forecasts are wrong, it will
ery question. The forecasters likely be because the economy
generally see an economy in does worse. Only 16% think the
peril, surrounded by risks from economy is more likely to do
around the world. In addition to better than their forecasts.
the potential fallout from Brit- Economists generally think
ain leaving the EU, many see the U.S. will be able to avoid
the possibility that a slowdown tilting into a recession. They
in China could batter the U.S. see, on average, a 21% chance
A strong U.S. dollar and of being in a recession within
lower energy prices could con- the next 12 months.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A8 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
‘What we are building now is the nervous system of mankind, which will link together the whole human race.’ —Arthur C. Clarke
The Fall and Rise of Iridium
Eccentric Orbits
By John Bloom
Grove, e-book, £6.64
BY JON GERTNER
UNLESS YOU HAPPEN to be a
sailor, scientist or survivalist, there’s
probably only a middling chance that
the name Iridium rings a bell. But a
decade and a half ago it was front-
page news—an ill-fated satellite-
phone company whose failure repre-
sented one of the largest bank-
ruptcies in American history.
Launched in 1998, the Iridium
system was ballyhooed as a techno-
logical marvel: Dozens of inter-
linked satellites, launched into a
low-earth elliptical orbit, would of-
fer coverage anywhere on the globe
to anyone who owned a satellite-
compatible handset.
At a time when cellphone usage
stood at only 300 million (the num-
ber is 7 billion today), Iridium prom-
ised to revolutionize mobile commu-
nications forever. It was among the
most expensive startups ever, cost-
ing more than $5 billion to develop
and deploy. As one of the early engi-
neers on the project pointed out,
Iridium signaled the first time since
God’s acts of original creation that
anyone had put a new constellation
in the sky.
Iridium’s innovative logic had a
powerful resonance. As John Bloom
JONATHAN CARLSON
explains in “Eccentric Orbits,” his en-
gaging and ambitious retelling of the
Iridium saga, this was arguably “the
first one-world company, offering a
one-world service, that was truly
blind to nationalities.”
Mr. Bloom’s book sets out to tell
the story of Iridium’s rise and fall.
Along the way, it attempts to un-
ravel the complicated question of
how risky new technologies can fail
in the near term but succeed in the
long run.
The business was hatched in the
early 1990s by Motorola, then one of
the world’s premier electronics com-
panies, and was guided by a fairly
simple idea: Why not avoid the mas-
sive costs of cell-tower construction
and cables and simply put cell tow-
ers in the sky?
The rationale was that a network
of satellites could provide a cheaper
infrastructure than a sprawling,
land-based system. This may be
arguable, but just as alluring was the
notion that a space-based system
could allow for calls from any-
where—the middle of the Atlantic,
the tip of the Antarctic Peninsula,
the remote reaches of the most hos-
tile and depopulated deserts. The
network could even, in theory, pro-
vide pilots and air passengers with
excellent coverage.
If properly deployed, it was
thought, Iridium might also finally
address one of the most vexing prob-
lems of the early mobile era: the Ba-
bel of competing analog and digital
cellular technologies that made life
especially challenging for global
travelers. Iridium—one world, one
phone—would solve that problem.
Through the Looking-Glass
Magic and Loss
By Virginia Heffernan
Simon & Schuster, 263 pages, £18.01
BY LAURA VANDERKAM
IN THE DECADES since Al Gore in-
vented it, the internet has insinuated
itself into all aspects of life. Any
group of people waiting for an eleva-
tor can be observed staring at small
hand-held devices that transport
them elsewhere. But where? And
why is that universe so fascinating
that we often ignore those around us
in order to slip away into it?
The internet has been around long
enough that we should be able to
have some philosophical perspective
on it, argues Virginia Heffernan in
“Magic and Loss: The Internet as
Art.” “It’s time to understand it—and
not as a curiosity or an entry in the
annals of technology or business but
as an integral part of our humanity,
as the latest and most powerful ex-
tension and expression of the project
of being human.”
In “Magic and Loss”—just as on
the internet—one is constantly stum-
bling across unexpected delights. Our
attention spans aren’t chopped up,
The original Iridium system, de-
signed mainly by engineers in Motor-
ola’s Chandler Labs in Arizona, used
a network of 77 satellites moving
around the earth at an altitude of
about 485 miles, following a north-
south, transpolar trajectory. Some of
the insights into how these birds
could autonomously communicate
with one another were derived from
the Pentagon’s ambitious “Star Wars”
Strategic Defense Initiative program.
As for the name Iridium? That
was chosen in honor of the element
with 77 electrons orbiting its nu-
cleus. When the system was scaled
back slightly, just prior to launch, to
66 satellites, the name stuck. Dyspro-
sium, which has 66 electrons, just
didn’t have the same ring.
It may be difficult, nearly 20 years
after the fact, to understand the
breathless press coverage that at-
tended the ramp-up of the Iridium de-
ployment. At the time, there was a
sense that the sat-phone business
would prove both technologically rev-
olutionary and immensely profitable.
Most countries in the developed
world joined the Iridium business—
in some cases by marketing service
plans and in others by investing in
the company or constructing “gate-
way” centers to manage calls and
satellites. According to Mr. Bloom,
a study conducted before the Irid-
ium launch predicted that the
phones would be adopted univer-
Ms. Heffernan writes, they are “juli-
enned.” The vocabulary of the inter-
net, she notes, is full of “kindergar-
ten staples,” such as “apple, share,
and friend.” E-books allow you to es-
cape from “the indifferent clerks at
the major bookstores and the embit-
tered clerks at the indie ones.” The
author, a cultural critic for the New
York Times Magazine and elsewhere,
The vocabulary of the
internet is filled with
kindergarten words like
‘apple,’ ‘share,’ ‘friend.’
sees life on the internet as including
“moments of magic and an inevitable
experience of profound loss.”
Plenty has been written in both
GETTY IMAGES
these veins. The internet is a gee-
whiz wonder that will change every-
thing (that’s the magic part) or a
force destroying and dumbing down
culture (the loss). Ms. Heffernan
tries to avoid both extremes, mostly
by choosing off-beat examples.
Forget the practical services
(summon a pizza or a driver by tap-
ping a screen) that change day-to-
BOOKS
sally by the upscale traveler. What’s
more, Iridium looked to have huge
potential in the Third World, where
the cost of cell towers would other-
wise be prohibitive.
But if you looked a bit closer, you
could see that the assumptions sup-
porting the Iridium business were
quite shaky. We tend to forget that
one of the big innovations of the
early cellphone era was not the tech-
nology itself but the pricing plans—
in essence, the marketing. These
made expensive phones affordable to
almost anyone and helped the net-
works expand quickly.
Not only were Iridium handsets
extremely costly, at around $3,000,
but the pricing plans often left users
with bills well in excess of $3 per
minute. Even worse, Mr. Bloom ex-
plains, Iridium couldn’t really reduce
its prices, because Motorola had
structured the business so as to en-
sure that large, mandatory payments
(“$140 million per quarter in perpe-
tuity for operations and mainte-
nance”) would go directly from Irid-
ium to Motorola.
In Mr. Bloom’s words, the situa-
tion was akin to “the parent that eats
its child.” And it meant that Iridium
was in financial straits before it even
connected its first caller.
Ed Staiano, Iridium’s hard-driving
chief executive, who Mr. Bloom indel-
ibly describes lifting weights on his
Gulfstream jet as he negotiates agree-
day life. She praises YouTube for “in-
cubating novel forms of creative
expression and cultivating new audi-
ences” with wildly popular genres
such as the “haul” video, in which a
shopper shows off her treasures. The
“fail” video—think footage of a per-
son running into a wall—is likewise
a universal human language. We are
drawn to “all manner of human en-
deavor gone wrong,” Ms. Heffernan
Friday - Sunday, June 10 - 12, 2016 | A9
ments with service providers around
the globe, soon begins to realize that
Iridium will need a million customers
in the first year just to break even. It
turns out that the company can’t
even come close. On launch day, Irid-
ium executives monitor the network’s
dashboard and suffer a shock: No-
body is using the system, except for a
few test callers.
A month after launch, the
ballyhooed company had
made more money selling
mugs and T-shirts than
handsets and service.
A month later, the company has
made more money from selling mugs,
keychains and T-shirts than handsets
and service. A few months after that,
the Iridium tally stands at 3,637 pay-
ing customers. Bankruptcy looms on
the near horizon. So much for the
grand constellations of man.
It’s worth noting that Mr. Bloom
spends only about a third of the book
on the failure of Iridium’s launch.
The bulk of the story actually sur-
rounds the scrappy efforts of Dan
Colussy—a retired airline executive—
to save the company’s technology
from total destruction.
writes. No broadcast producer would
have invented these, and yet millions
of people watch them.
The author is at her best pointing
out the natural but silly inclination
of elites to denigrate much internet
fare. She raises the intriguing notion,
realized after her MacBook died but
her data survived in “the Cloud,”
that thanks to the internet “con-
sciousness had survived bodily
death”—the stuff of religion.
Indeed, she claims that, with the
failure of her device but the preser-
vation of its data, she had discovered
“the instant when pixels and bytes
quicken into divinity.” Today, “our
lives are both here—in our physical
beating hearts; our thick-skinned,
small-boned feet; our despised fat;
our buzzing brains—and elsewhere,
in a fathomless realm channeled
through our phones and laptops that
we can but dimly intuit.”
These musings, and a chapter that
recounts her intertwined spiritual
and technological journey, lend con-
text to her Yahoo News post that
went viral in 2013 because of its
headline: “Why I Am Creationist.”
“Where physicists typically see a
void (before the Big Bang and as the
spark that turns matter to mind), I
habitually see God.” She is an ex-
By 2000, Motorola was poised to
“de-orbit” the bankrupt Iridium sys-
tem to save money; at that point, the
company’s engineers were putting the
finishing touches on “suicide soft-
ware” that could bring the satellites
down from their lofty perches so that
they would burn up upon re-entry.
As the clock ticks, Mr. Colussy, the
hero in Mr. Bloom’s telling, cobbles
together an unlikely team of inves-
tors and a few hundred million dol-
lars. With the support of a group of
government technocrats and Penta-
gon officials—all of whom have be-
come convinced that the Iridium sys-
tem is potentially useful for the
miliary and too valuable to destroy—
he eventually succeeds in doing what
Motorola could not: creating a satel-
lite phone system with both a func-
tioning technology and a viable busi-
ness strategy.
What Mr. Colussy can see is that
the Iridium system will never work
for the mass market, especially after
the world’s cellular providers de-
velop international standards to al-
low callers to use their phones for
global travel. Iridium, as Mr. Col-
ussy perceives it, is for soldiers,
deep-sea fishermen, first responders
and field scientists.
With Iridium freed by the bank-
ruptcy process from its burdensome
capital costs—not to mention its
onerous debts to Motorola—Mr. Col-
ussy begins to demonstrate over the
ensuing decade that the company
didn’t get the technology wrong. It
got the market wrong.
“Eccentric Orbits” is maximalist
nonfiction, 500 pages of deep report-
ing put forward with epic intentions.
In many respects, this is the great
strength of the book—a panoramic
narrative, laced with fine filigree de-
tails, that makes for a story that
soars and jumps and dives and di-
gresses, often quite pleasurably. By
the end, we come to understand
more than just a new phone technol-
ogy; we grasp the tenebrous relation-
ships between obscure players in the
aerospace industry, the U.S. military
and Beltway politicians.
The book’s details can be posi-
tively exhausting, too. Mr. Bloom
gives us too many characters, too
much minutiae and often a numbing,
real-time recitation of details. In
some places the book’s excesses will
make it too technologically involved
for the business reader but too fi-
nancially daunting for the tech
reader. I have nothing against con-
vertible debt; it’s just hard to trans-
form it into dramatic action.
But no reader should be dissuaded
from pushing through to the end. As
imperfect as “Eccentric Orbits” may
be, this big, gutsy, exciting book
takes an obscure chapter from recent
technological history, explores its
implications from all directions, and
asks us not only to enjoy the messy
drama of how a new idea becomes a
dazzling reality but to understand
why innovators make very human
mistakes along the way.
Mr. Gertner is the author of “The
Idea Factory: Bell Labs and the
Great Age of American Innovation.”
plorer, given to wonder and uncer-
tainty about the cosmos and trying
to figure it out as she goes.
Sometimes all these explorations
can be a bit much. In the space of
three short paragraphs toward the
start, she namechecks David Hock-
ney, Harold Bloom, J.R.R. Tolkien
and Vladimir Nabokov while describ-
ing a YouTube video of guitarist
Funtwo playing an arrangement of
Pachelbel’s Canon. She is profoundly
taken with the idea that, though
tweets may be short, so are the great
Confucianisms, or Pascal’s pensées.
She keeps coming back to this in-
sight, in case we missed it.
Nonetheless, “Magic and Loss” is
an illuminating guide to the internet.
Even if you don’t agree with Ms. Hef-
fernan that “the Internet is the great
masterpiece of human civilization,”
rivaling the pyramids, agriculture or
monotheism, it is impossible to come
away from this book without sharing
some of her awe for this brave new
world “populated by our online ava-
tars and increasingly recruited to
stand in for reality itself.”
Ms. Vanderkam is the author, most
recently, of “I Know How She Does
It: How Successful Women Make
the Most of Their Time.”
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 | Friday - Sunday, June 10 - 12, 2016
The Greatest Runner of All Time
Today We Die a Little!
By Richard Askwith
Yellow Jersey, 457 pages, £16.99
Endurance
By Rick Broadbent
Wisden, 314 pages, £16.99
BY MICHAEL SHERMER
IN THE ANNALS of running, almost
everyone knows the significance of
1954, for that is the year the great
British miler Roger Bannister broke
the four-minute mile and became a
symbol for conquering psychologi-
cal barriers to human achievement.
Few people know that, in the same
year, a Czechoslovakian long-dis-
tance runner named Emil Zátopek
became the first to break the 29-
minute barrier for 10,000 meters, an
arguably tougher accomplishment
given how much longer the agony
must be endured.
Zátopek was known as
the ‘Czech Locomotive’
because of his conspicuous
wheezing and groaning.
The 1954 record was one of many
marks to fall to Zátopek. At 6 feet,
159 pounds, this scrappy and sinewy
athlete was known as the “Czech Lo-
comotive” because of his conspicuous
wheezing and groaning and the con-
torted facial expressions that accom-
panied his efforts. “It isn’t gymnas-
tics or figure skating, you know,” he
once growled. Contrasting himself to
milers, he opined: “If you want to
run, run a mile; if you want to experi-
ence a different life, run a marathon.”
Zátopek’s deeds at the 1948 Olym-
pic Games in London netted him gold
in the 10,000 meters and silver in the
5,000 meters. Four years later, at the
Helsinki Games, he took gold in the
5,000 meters, the 10,000 meters and,
stunningly, the marathon—his first,
which he entered on something of a
whim. All three runs were Olympic
records, and the trifecta has never
been matched (and probably never
will be). Zátopek went on to set
FICTION CHRONICLE: SAM SACKS
IN A CLEVER promo-
tional maneuver, Yaa
Gyasi’s “Homego-
ing” (Viking, 305
pages, £16.99) is be-
ing published in
America to coincide with the 40th an-
niversary of Alex Haley’s “Roots” and
the reboot of the iconic American tele-
vision miniseries. The Ghanaian-born
American novelist’s far-ranging debut
is another ancestor’s tale that begins
in West Africa in the 18th century and
continues to the near present. But
here the family tree is forked at the
trunk by the axe blow of the slave
trade: “Homegoing” imagines the par-
allel lineages of two half-sisters, one
in Ghana, the other in the U.S.
The gripping opening chapters
dramatize the fateful trajectories. Ef-
fia, the child of a Fante tribal leader
and an Asante servant, is married off
to the British governor of the Cape
Coast slave castle, a common prac-
tice that solidified the Fante’s privi-
leged status with the colonizers. Esi
is an Asante villager taken captive by
Fante warriors and sold to the sla-
vers. While Effia lives in comfort in
the castle, Esi is chained in the dun-
geon below her, then shipped across
the Atlantic.
In brisk, alternating chapters Ms.
Gyasi follows the fortunes of their
descendants. Esi’s branch closely
overlaps with Mr. Haley’s story, mov-
ing from antebellum plantations to
Reconstruction to the Harlem Re-
naissance and beyond.
The world of Effia’s bloodline is
less familiar—its backdrop includes
the series of Anglo-Asante wars of
the 19th century, the tumultuous
spread of Christianity and Ghanaian
independence in 1957. But the miser-
ies of slavery still cast the greatest
shadow over events, and the African
characters seem cursed by the an-
cient collusion with the British.
Decades after, Effia’s great-great-
granddaughter Akua is part a mob
that burns to death a white traveler
who is mistaken for a missionary.
“Evil begets evil,” she later thinks.
THE WALL STREET JOURNAL.
BOOKS
‘I’m not talented enough to run and smile at the same time.’ —Emil Zátopek
world records for 20,000 meters, pened to him after the Prague
25,000 meters, 30,000 meters, 6 Spring of 1968, when he did publicly
miles, 10 miles and 15 miles. He held back the party’s more democratic
the men’s one-hour world record for wing. After the movement was
years and was the first to break the crushed by Soviet tanks, party hard-
20,000-meter mark in that time. liners accused Zátopek of possessing
For these accomplishments on the an anti-Soviet attitude, stripped him
track—all told, he won five Olympic of his army rank, and shipped him
medals and set 18 world records— off to work as a trash collector, well
and many more off the field in train- digger and uranium miner. Later it
ing (he was the founder of the mod- came to light that the State Security
ern interval training method), police (the StB) had files on both
Zátopek was one of the first 12 ath- Zátopek and his wife, tracking their
letes inducted into the International movements, especially during over-
Association of Athletics Federations seas meets. Despite being a lifelong
Hall of Fame in 2012. In 2013, Run- Communist (“He just wanted a Com-
ner’s World magazine christened munism that would work,” says Mr.
him “the greatest runner of all Broadbent), he became persona non
time.” When you reflect on whom he grata. Rumors that Zátopek was an
beat out—Jesse Owens, Steve Pre- StB informant have never been veri-
fontaine, Alberto Salazar, Sebastian fied, says Mr. Askwith, although dis-
Coe, Carl Lewis, Edwin Moses, Usain turbingly it appears that one in four
Bolt—it is surprising that so few Czechs were.
people outside the sport know him. It wasn’t until 1990, when de-
Zátopek competed in the era just mocracy triumphed under Václav
before television turned athletes into Havel during the Velvet Revolution,
celebrities. Yet it would hardly be that Emil Zátopek was able to put
surprising if movie treatments—ei- his broken life back together. But he
ther dramatic or documentary—were had no further political role to play.
to appear in the wake of two Zátopek, says Mr. Broadbent, “was
thoughtfully written biographies. not a political animal. He had a ba-
Fleshing out the full life of this re- sic sense of right and wrong and
markable man are British journalists lived by that. Sometimes, in such an
Richard Askwith, in his aptly titled aggressively black and white world,
“Today We Die a Little!,” and Rick that made him malleable.” And as
THE LIFE PICTURE COLLECTION
Broadbent, in “Endurance.” Both do Mr. Askwith notes, “Defiance looks
their subject justice through exten- YOU CAN WIN THEM ALL good on paper. In real life, it comes
sive archival research and personal Zátopek in the marathon at the at a price that many cannot bring
interviews with people who knew 1952 Olympics. It was his first, themselves to pay.” As Dana herself
Zátopek, including his wife and fel- and he won the gold medal. once said: “What good is it if some-
low Olympian Dana Zátopková. one says five or ten years after you
Mr. Askwith quotes a 1964 de- are dead that you are a hero?
scription of what he calls Zátopek’s Maybe don’t be such a big hero.
“special spirit”: He was, his sources through their subject’s mercurial life which he replied: “That’s right. A Maybe be alive, instead.” Fortu-
write, “not mad . . . just utterly ab- in Czechoslovakia, where he was born wife must think of her husband, af- nately Zátopek lived long enough to
sorbed, with every fibre of his explo- into poverty in 1922 and landed his ter all.” He later apologized, but the receive his country’s highest
sive body, in what he is doing, and first job at the Bata athletic-shoe fac- point is that we must be careful not honor—the Order of the White
damn what the rest of the world tory at age 14, leading to his first to judge people of another era by Lion—and in 2000, at age 78, he
thinks. It makes him the most re- race at age 18. He finished second, our own values. died a national hero.
freshing, and the most exhausting, Mr. Broadbent narrates, “with an ugly This is especially true when the Today, at the Stadium of Youth in
person to be with.” Mr. Broadbent rolling gait and flailing arms, tongue era is Cold War Czechoslovakia. Zá- Zlin, a life-size bronze statue of Zá-
puts Zátopek’s accomplishments into lolling, face contorted.” Yet it was topek’s athletic accomplishments topek inspires young athletes, and
perspective by noting that sprinters clear that Zátopek had talent, and the unfolded during much political tur- the grainy videos you can watch on-
can be beaten by a dog or squirrel longer the race, the better he did. moil. Even prominent athletes had line help his inimitable grit live on
(lions are twice as fast), but over Though married to a woman ev- to dissemble, equivocate and ma- for future generations, meaning that
long distances humans can outrun ery bit his athletic equal (Dana won neuver around the political mine- he will never again be the greatest
all mammals, even horses, meaning two Olympic medals in the javelin), field of the 1950s. Sometimes Záto- runner you’ve never heard of.
that “endurance runners are true Zátopek was very much a man of his pek stood up to the regime in
masters of the universe” and that time. When she noticed that her defense of fellow athletes under Mr. Shermer is the publisher of
“Emil Zátopek is probably the great- event was scheduled during one of suspicion, sometimes he didn’t. Skeptic magazine and a monthly
est of these masters.” his, she lovingly told him, “I can’t This selective reticence was not columnist for Scientific American.
Both biographers take readers concentrate if you are racing,” to unreasonable in light of what hap- His latest book is “The Moral Arc.”
Evil Begets Evil
“It grows. It transmutes, so that comers” traces their bumpy acclima-
sometimes you cannot see that the tion while providing forceful
evil in the world began as the evil in glimpses of a region bracing for the
your own home.” Axis invasion due in Book Two.
There is a lot to synthesize, and Kovačič (1928-2004) is widely con-
Ms. Gyasi doesn’t always make it sidered Slovenia’s greatest 20th-cen-
work. The biggest obstacle in a gene- tury writer, and this work achieves
alogical novel is the need to con- the panoramic effects of H.G. Adler’s
stantly explain how the families per- Shoah trilogy by way of Joycean
petuates their lines, and the result is stream of consciousness. Its arrival
that the stories in “Homegoing” re- in English is most welcome.
petitively focus on the hows and Max Porter’s “Grief Is the Thing
whys of marriage and childbirth. You With Feathers” (Faber & Faber,
start to feel that the only point to 114 pages, £10) is like a book of
these characters’ lives is their ability hours for the bereaved—a pocket
to procreate. volume of loosely connected lyric
Yet it’s refreshing to read a novel passages on loss, madness, mourn-
ing and regeneration.
It’s divided into three speaking
While Effia lives in parts: the joint voice of a pair of
brothers whose mother has died in
comfort in Cape Coast an unexplained accident; their bereft
Castle, Esi is chained in father, a literary scholar struggling to
finish a study of Ted Hughes’s poetic
the dungeon below her. sequence “Crow” (itself written after
his wife Sylvia Plath’s suicide); and
an imaginary incarnation of grief, a
with a sense of historical imminence. crow who flies into their house and
Contemporary American fiction fre- takes up residence with them.
quently seems to exist in blank isola- As each has their say, Mr. Porter
tion from world events. Not so gives expression to grief in all its
“Homegoing,” where wars and laws emotional manifestations. The boys
directly shape the characters’ desti- are pure raucous rebellion, fighting
nies, often across generations. As Ef- and making mischief, while their
fia’s son Quey says of the British dad is dazed and rueful: “Many peo-
GETTY IMAGES
withdrawal from slave trading, “‘You ple said, ‘You need time,’ when what
cannot stick a knife in a goat and we really needed was washing pow-
then say, Now I will remove my knife der, nit shampoo, football stickers,
slowly, so let things be easy and CAPTIVE A view from the Cape Coast slave castle in Ghana. batteries, bows, arrows, bows, ar-
clean, let there be no mess. There rows.” Crow is chaos and macabre
will always be blood.” Blood is what Switzerland, where they own a fur- thing as though I were in a the- laughter, the gibbering of an un-
links Ms. Gyasi’s characters, and it’s rier’s shop but don’t possess citi- ater . . . Before a storm the sky would hinged mind. “Blackberry, redcur-
the price exacted from them by the zenship. They’re forced to live with get dark. The rain splashed as rant, loganberry, sloe. Damson,
violent cycles of history. distant relatives on a farm in the though a whole sea hung in the plum-pear, crab-apple, bruises.
Hitler’s aggressions are the cata- Slovene territory of Yugoslavia, in air . . . The Krka flowed like a road- Clots, phlegm, tumours and quince.”
lyst for Slovenian writer Lojze one fell swoop trading the modern way from hell . . . the water rose to He is also a freighted literary sym-
Kovačič’s “Newcomers,” a sprawl- comforts of Basel for beds stuffed the machine with the bucket . . . a bol, and while appreciating this book
ing, autobiographical novel he pub- with corn husks and meals eaten whole wagon, a haystack, half a hay- doesn’t require knowledge of
lished in three parts in the with wooden spoons. rack, a small forest.” Hughes’s poems or the trickster
mid-1980s. “Book One” (Archipel- We follow the pastoral transfor- The greatest bewilderments of myths on which they drew, they cer-
ago, 356 pages, £12.99) has now mation through the halting, easily di- Bubi’s ellipsis-filled narration are tainly help. The constant literary al-
appeared in English in a vigorous verted interior monologue of the due to language. The Kovačič family lusions make “Grief Is the Thing
translation by Michael Biggins, and family’s 10-year-old son Bubi, who speaks no Slovenian when they ar- With Feathers” unpredictably play-
begins in 1938, when the Kovačič sees it as a thrilling—if frightening— rive, and their German dialogue is ful, filling it with sarcasm, absurdity
family is abruptly expelled from adventure: “I could examine every- translated only in footnotes. “New- and black-winged humor.
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.
‘Three be the things I shall never attain: / Envy, content, and sufficient champagne.’ —Dorothy Parker
Champagne, Uncorked
By Alan Tardi
PublicAffairs, 264 pages, £17.99
BY MOIRA HODGSON
THE MOST EXPENSIVE Champagne
glasses in the world cost $400,000 a
pair. Designed by an Australian jew-
eler, John Calleija, they are made of
crystal and have a deep, broad bowl
studded with tiny pink and white di-
amonds. They wouldn’t pass muster
with Alan Tardi. He’d find them the
wrong shape. If a glass is wide at the
top, he asserts in “Champagne, Un-
corked: The House of Krug and the
Timeless Allure of the World’s Most
Celebrated Drink,” the aroma of the
wine becomes less focused, and its
bubbles evaporate more quickly,
which isn’t good: “Bubbles give
Champagne its crackle and pop, its
foamy finesse, its distinctive, bril-
GETTY IMAGES
liant, effervescent personality.”
Mr. Tardi contends that the ubiq-
uitous flute is not the right shape ei-
ther. It’s too narrow to aerate Cham-
pagne properly. The glass he
recommends, I’m pleased to report,
is one that most of us already own: a
tulip-shaped white wine glass.
A longtime professional chef, Mr.
Tardi has worked in some of New
York’s finest restaurants (and had a
terrific one of his own, the Italian-in-
spired Follonico, which he closed in
2002). When he first tasted Krug
Champagne 25 years ago, he was
standing in a restaurant kitchen. He
can’t remember which kitchen, but
he remembers the wine as vividly as
if he had drunk it a moment ago.
“When someone passed me a glass, I
saw a delicate double helix of bub-
bles slowly circling its way to the
surface, and a sniff inside revealed a
tightly knit collection of aromas that
was subtle yet pungent: crunchy
pear, creamy caramel, fragrant
lemon, buttery brioche, dried spice,
and chalky phosphate.”
It was Krug Grande Cuvée, the
house’s core offering, blended each
year from a variety of vintages to
maintain its unvarying quality. Krug,
Mr. Tardi writes, “is the smallest of
the so-called grandes marques, a
group of mostly large, well-estab-
When Fossil-Finding Was a Contact Sport
House of Lost Worlds
By Richard Conniff
Yale, 331 pages, £24.11
BY JENNIE ERIN SMITH
TUCKED AWAY in New Haven,
Conn., is a smallish museum that in
its 19th century heyday amassed a
paleontological collection to shame
those of the great European muse-
ums. To celebrate its 150th year, the
Yale Peabody Museum of Natural
History tapped Richard Conniff, a
writer with a gift for teasing out the
bizarre human dramas endemic to
natural history, to create a sort of
institutional narrative. Mr. Conniff, a
Yale man as it happens, seems to
have approached the commission
with an anti-hagiographical bent.
While “House of Lost Worlds” chron-
icles the Peabody’s achievements
and luminaries quite thoroughly, it
also takes a hard-nosed look at its
debacles, starting with the excesses
of its monomaniacal founder.
A budding mineralogist from Lock-
port, N.Y., Othniel Charles Marsh en-
tered Yale in 1856, just as the univer-
sity was starting to take science
seriously. Before, it had mostly fo-
cused on churning out Congregation-
alist ministers. Bankrolled by his
wealthy uncle George Peabody, a
merchant banker in London, “O.C.”
Marsh filled his student rooms with
so many rocks that the floors sagged
ominously, a prelude to his later
achievements. A growing cadre of ge-
ologists at Yale, led by Benjamin Silli-
man Jr. and James Dwight Dana, han-
kered for a museum, which Marsh
persuaded Peabody to endow.
Still a graduate student when the
papers were signed in 1866, Marsh
landed himself on the Yale faculty
soon after. What put the Peabody
museum on the map was Marsh’s
turn from minerals to the burgeon-
ing science of fossil remains and his
wholehearted embrace of Darwinism.
But much of Marsh’s output was
fueled by a pathological rivalry with
the Philadelphia paleontologist Ed-
ward Drinker Cope.
Friday - Sunday, June 10 - 12, 2016 | A11
BOOKS
A Taste of Heaven
year at Krug, he gives us a colorful
history of Champagne. On the advice
of his doctor, Louis XIV drank noth-
ing but Champagne—until another
physician insisted that the wine was
unstable and recommended Bur-
gundy instead. Madame de Pompa-
dour favored Moët & Chandon, and
so did Napoleon. After the emperor’s
ignominious retreat from Moscow,
the clever widow Clicquot found a
new market in Russia. Her Cham-
pagne was the only one Czar Nicho-
las I would drink.
Champagne has encountered
many hazards over the years. The
phylloxera epidemic of the mid-19th
century decimated more than half
the vineyards. There were riots in
1911 when the local growers thought
that the Champagne houses were
bringing in outside grapes. World
War I was fought across the re-
gion—1914 was an excellent vintage,
ironically. During World War II,
Göring assigned German agents (the
French called them weinführers) to
the occupied region and ordered
500,000 bottles of Champagne a
week to be labeled “Produced for
lished Champagne brands, and is for the 2013 season, and in his book multiple contracts with each farmer. the Wehrmacht.” When word got
quirkily unique and quintessentially he takes the reader through the Mr. Tardi goes to the vineyards, out that the Comte de Vogüé, head
classic at the same time.” There are whole process, from picking and where he meets the farmers, exam- of Moët, had been unmasked as a
times when this knowledgeable and pressing the grapes—the ven- ines their vines and tries the grapes, Resistance leader and condemned
meticulously researched book gets dange—through the storing, tasting comparing their different levels of to death, the Champenois called a
precariously close to sounding like and blending of the wine to its bot- acidity and fruitiness. general strike until his sentence
an advertorial. But he is, of course, tling and aging. The first serious tasting Mr. Tardi was commuted.
correct when he notes that Krug Though legally seven grapes may attends is a surprise. “I’m a pretty Champagne has always been the
“holds a special place in the hearts be used in the making of Champagne, quick taster but the speed of this one ultimate luxury drink, whether for
and palates of wine aficionados and just three of them are widely used: took my breath away: look, twirl, members of Hitler’s army, Winston
Champagne geeks; the name is whis- Churchill (not Krug but Pol Roger),
pered with reverence.” Russian oligarchs, hip-hop stars,
“Champagne, Uncorked” began to fashion designers or brides. Evelyn
take form in 2012 when Mr. Tardi After visiting the winery and tasting a 1961 Krug Waugh, no stranger to Champagne,
was invited to visit the company in that he found ‘bright and fresh as a spring blossom wrote an article for Vogue in 1965
Reims and take part in a tour and a where he described the ideal cir-
blending seminar. (The firm is today after a shower,’ Alan Tardi became obsessed. cumstances in which to enjoy it:
owned by LVMH, the French luxury- “For two intimates, lovers or com-
goods conglomerate, although the rades, to spend a quiet evening with
family of Joseph Krug, who started chardonnay, pinot meunier and pinot smell, taste, spit, comments, next.” a magnum, drinking no aperitif be-
it in 1843, still maintains an active noir. Like most houses in Cham- Subtle nuances had to be discerned fore, nothing but a glass of Cognac
role.) After tasting a 1961 Krug that pagne, Krug obtains most of its in the blink of an eye. Tasting Cham- after—that is the ideal . . . . The
he found “bright and fresh as a grapes from outside suppliers. The pagne is very different from tasting worst time is that dictated by con-
spring blossom after a shower,” Mr. company’s cellar master Eric Lebel other wine, Mr. Lebel explains: “The vention, in a crowd, in the early af-
Tardi became obsessed. says that the specific plot that the wines are never perceived as com- ternoon, at a wedding reception.”
For a start, he wondered, how grapes come from makes a large dif- plete in and of themselves but rather Alan Tardi would surely raise a
could such an old wine seem so ference. “The most important thing as components or ingredients that glass of Krug in agreement.
young? And how were different is the character, the expression of will at some point be used, along
grape varieties, even different vin- the terroir, and what it can contrib- with many others, to create a greater Ms. Hodgson is the author of “It
tages, blended into a seamless ute to our mix.” In order to get the whole (the assemblage).” Seemed Like a Good Idea at the Time:
whole year after year? He returned grapes they want, Krug draws up As Mr. Tardi takes us through a My Adventures in Life and Food.”
Photographs of Marsh, even al- diminished scientific influence by
lowing for the awkwardness of pho- radiating Darwinist zeal. Mere
tography in his era, show a thick- months after the Scopes trial had
necked man with a strangely put the chill on evolutionary theory
disaffected gaze, as though he was in textbooks, the Peabody doubled
unable to muster eye contact. He down with exhibits illustrating the
never married, had few personal at- close connections between primates
tachments and, were he alive today, and humans. “Thousands upon
“he would no doubt be tagged with thousands of innocent young school
that overworked diagnosis ‘some- children are to be inveigled,” wrote
where on the autism spectrum,’ ” Mr. horrified editorialists at the New
Conniff writes. Marsh’s battles with York Telegram-Mail.
Cope began over extinct marine rep- The Peabody went on to suffer
tiles whose fossils both men were more decades of cramped space and
discovering in New Jersey marl pits. underfunding, thanks to a university
(Mr. Conniff reports that, remark- that had been “stingy . . . even mean-
ably, his own great-great-grandfa- spirited” toward it for much of its
ther, an immigrant laborer, died in a existence. Some of the museum’s
collapse at one of these pits.) wounds were self-inflicted, Mr. Con-
DEINONYCHUS A cast niff finds. Talented women and Jew-
from ‘Exploration and ish scientists were snubbed in the
The discovery of a toothed Discovery’ (Yale, 126 1950s and ’60s, and molecular biolo-
pages, $27.50), a treasury gists did their best to purge tradi-
bird made news in the of images from the Yale tional naturalists.
1870s. A century later, so Peabody Museum. Even during those dark years, the
Peabody’s scientists continued to log
did feathered dinosaurs. discoveries, notably in archaeology
and ecology, but when the museum
began making headlines again it was
YALE PEABODY MUSEUM OF NATURAL HISTORY
The Cope-Marsh “bone wars” with dinosaurs. In the early 1970s,
spilled into the American West, fer- paleontologist John Ostrom began
tile ground for fossil discoveries in laying out the anatomical evidence
the 1870s, with some bone deposits for a dinosaur-bird connection—the
covering miles. Unearthing dino- now widely accepted idea that birds
saurs and ancient mammals in Kan- evolved from small theropod dino-
sas, Colorado, the Dakotas and Wyo- saurs like Velociraptor. Dinosaurs
ming, Marsh and Cope enlisted spies, were not, as it turned out, the slug-
shot off hastily written species de- gish and stupid creatures envisioned
scriptions by telegraph just to one- by Marsh; nor were they strictly
up each other, and engaged a host of speaking extinct.
well-armed freelance field collectors What followed was a “full-on
to do their bidding, which included nonsense-science the government tory in New York, under Henry Fair- dinomania” in American popular cul-
vandalizing each other’s sites. should never be funding. field Osborn, came to dominate in ture, Mr. Conniff writes, culminating
In 1872 Marsh cajoled one of The enmity between Cope and paleontology. In 1905, the year Os- in the “Jurassic Park” book-and-movie
Cope’s collectors into diverting to Marsh “took over a portion of each born unveiled with great fanfare a franchise of the 1990s. Shortly after
Yale a sensational fossil out of Kan- man’s mind and began to fester,” Mr. skeleton of Brontosaurus—a species Ostrom’s death in 2005, another group
sas, a toothed bird. The new fossil Conniff writes. They traded barbs Marsh had described—Yale began at Yale began investigating the pig-
“does much to break down the old and accusations in the popular planning the demolition of the Pea- ments in fossils—starting with speci-
distinction between Birds and Rep- press. Marsh’s antics embarrassed body to make way for dormitories. mens acquired by Marsh. Five years
tiles,” Marsh declared. Indeed it rep- Yale, and even though the Peabody The Peabody was razed in 1917, later, they published the first-ever
resented the type of transitional Museum’s stamp on paleontology and for nearly a decade the collec- representation of the true colors of a
form that Charles Darwin had pre- was huge as a result of his labors, tion was homeless; specimens were feathered dinosaur: a gaudy creature,
dicted must exist but the evidence Yale did not see fit to sustain its improperly stored, and some deteri- it turned out, with a spiky red crest
for which was still in short supply. momentum. Marsh died still begging orated. Paleontologists left for and black-and-white striped wings.
Darwin was delighted. Twenty years the university to finish the museum greener pastures. When the new
later, an Alabama congressman building, only one wing of which museum reopened on its current Ms. Smith is the author of “Stolen
would seize on Marsh’s “birds with was ever constructed. Soon the site in 1925, not much bigger than it World: A Tale of Reptiles, Smug-
teeth” as an example of the kind of American Museum of Natural His- was before, it compensated for its glers, and Skulduggery.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
A12 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

OPINION
REVIEW & OUTLOOK Bernie Should Hold Out
There is a reason why the taboo on the word “socialism.” Ber-
The Clinton Restoration Hillary Clinton’s mile-
stone as America’s first
nie, said Mr. Nader, “has brought the
word into the mainstream and made class

T
hat was an impressive performance by a debate, Bernie Sanders won it. female presidential distinctions central to his campaign.”
Hillary Clinton Tuesday, announcing her Mrs. Clinton made the decision to accommo- nominee is having trou- But not even Sen. Sanders uses the S-
ble reaching elevation. word much, preferring the euphemisms
presumptive presidential nomination as date, rather than rebut, his socialist policy di-
The reason is that her of “income inequality” and “social jus-
a historic first for womankind rection. She didn’t challenge WONDER
victory is not the most tice,” which are gentler on American
and something new and won- Democrats are offering his premises so much as meet LAND
significant event of the ears. Mrs. Clinton will use most of the
derful for American democ- By Daniel
racy. Watching her arms out-
the ethics of the 1990s him halfway. Thus she favors
higher taxes on capital while Henninger
Democratic primaries. Sanders vocabulary.
The real claim to That said, many activists on the left
stretched like Moses, you without the policies. her husband cut them. She Democratic Party his- believe, rightly, that they haven’t gained
could almost forget that she frowns on charter schools tory belongs to Bernie Sanders. Sen. permanent control of the party. They
first came to national promi- while her husband and even Sanders has recentered the Democrats, have its heart and soul, but the Sanders
nence 25 years ago and is the very soul of the Mr. Obama favor them. She wants to expand once and for all, as a party of the political revolution doesn’t yet command the
Washington status quo. Medicare and Social Security while her husband left. He has reimagined the Democrats— power stations. Effective party power
The Republican tumult this year has masked wanted to reform them before impeachment almost with the force of his personality— remains with what Sen. Sanders repeat-
as a party of the state, of government edly calls the “establishment.”
that Mrs. Clinton represents the triumph of the made it impossible.
and of redistribution. Period. But Bernie has something close to
Democratic establishment. The party’s interest She favors debt-free college while Bernie Barack Obama himself became a veto power. Sen. Sanders has discon-
groups coalesced around her, and her most wants it all “free” on the taxpayer dime. Like Bernista in his June 1 speech in Elkhart, nected Mrs. Clinton from most of the
prominent opponents declined to run, leaving Bernie, she wants to phase out all fossil fuels. Ind., when he essentially proposed party’s younger voters. They’re listening
only a 74-year-old socialist to contest the nomi- And like Bernie, but unlike her husband, she delinking Social Security’s benefits from to him, not her, and maybe not even to
nation. Democratic elites are getting what they now frowns on free trade. any known economic reality. Barack Obama anymore. Indeed, one
want: Another identity-politics candidacy Some wishful Republicans say this is merely The party of Franklin Roosevelt may ask whether the Democratic estab-
wrapped around a relentless will to power. campaign positioning, and that Mrs. Clinton through Lyndon Johnson and its alliance lishment abhorred by Sen. Sanders’s
i i i will move to the center and govern that way. with private-sector industrial unions base now includes Mr. Obama.
Yet this attempt to restore the Clinton dy- But more likely is that the Hillary of the prima- made Democrats aware that their for-
nasty is no mere replay of the 1990s. This time ries is closer to her genuine beliefs. Long before tunes ultimately were joined to the suc-
America is being offered the familiar Clinton her White House days she was widely known as
cess of the private sector. Sanders has reimagined
The Democrats are now the party of a major party. He deserves
ethics, but without Bill Clinton’s bow to center- a woman of the left. She tried to deliver Hillary- Bernie Sanders, the progressive icon
right policy. This time we are getting the grasp- Care in 1993, only to adopt her husband’s cen- Sen. Elizabeth Warren and—make no something very big.
ing and corner-cutting of the Clinton entourage trist stylings after the Republicans took Con- mistake—of Barack Obama, a man of
with economic policies somewhere to the left gress in 1994. Perhaps she would be more the left from day one. Rather than dis-
of President Obama’s. pragmatic in dealing with Congress than Mr. trust the private sector, they disdain All of which makes the scorpion
This carries no small political risk. Demo- Obama has been—a low bar—but only if forced and even loathe it. dance over “unifying the party” between
crats have had to accept the uncertainty of an by the political mood. In this milieu, Hillary was the odd Sen. Sanders and bloodless Democratic
FBI investigation into her private emails, about i i i woman out. If she’d had any credibility heavyweights a show not to be missed.
which she has lied repeatedly, and Bill Clinton’s The exception may be foreign policy, where as an authentic member of the party’s I am reminded of the Corleone family
new Sanders-Warren center, she would in “The Godfather—II” when Tom Hagen
fundraising from foreign donors with business her personal instincts have been hard to sepa-
have overwhelmed this obscure Vermont tells Frankie Pentangeli it’s time to go. I
before the State Department when she was Sec- rate from Mr. Obama’s broad strategic retreat. senator in the Iowa caucuses. Instead, see Harry Reid as making the Hagen
retary. Cheryl Mills, her close aide, said 38 She was along for the ride as Secretary of State liberals under 40, especially millennials, buyout offer to Bernie.
times under oath that she could not “recall” an- on the failed Russian “reset,” though she now don’t believe she is one of them. Tom Hagen: “When a plot against the
swers to email questions, much as Harold Ickes says Vladimir Putin can’t be trusted. She has The policies of John Kennedy and Bill emperor failed, the plotters were always
could remember little about his Teamsters me- embraced the Iran nuclear deal, which is consis- Clinton, now in disrepute, ensured that given a chance to let their families keep
diation in the 1990s. tent with her misguided faith in arms control annual economic growth remained at its their fortunes.”
All of this has produced unfavorable ratings with adversaries. postwar average of about 3%. Those Frankie Pentangeli: “Yeah, but only
second only to Donald Trump’s in modern presi- On the other hand, Mrs. Clinton seems to be- Democrats understood the private sec- the rich guys. The little guys got
dential polling, and even a sizable plurality of lieve that American leadership is essential to tor, even if they distrusted it. knocked off.”
Democrats think Mrs. Clinton can’t be trusted. resisting rogue and authoritarian regimes. She That understanding is gone, as But Bernie isn’t in Frankie Pentan-
proved by the seven-year Obama growth geli’s bathtub by himself. A whole gener-
Mr. Trump can get away with calling her was right to support the rebels in Syria, but she
rate between zero and little more than ation of young Democratic voters—who
“Crooked Hillary” because voters know the in- was overruled by Mr. Obama to catastrophic ef- 2%. If Hillary Clinton utters the phrase see Hillary and what she represents as
sult captures a fundamental truth. fect in the Middle East, Africa and increasingly “corporate-tax reform,” she will lose the the moribund empire and themselves as
Even her claim as a political pioneer is half Europe. We have some hope that she would election. The Sanders wing of the Obama the little guys—will be watching the deal
phony because she rose to power as a spouse. come around to support the Pacific trade deal. coalition will walk away from her. the party offers to make Bernie go.
Many other women—Margaret Thatcher, An- In this respect she offers a sober alternative to In the new Democratic Party, de- Bernie’s brigades should hold out for
gela Merkel—have succeeded on their own ac- Mr. Trump’s frequent rejection of alliances and fined by the substance of Sen. Sand- more than writing platform boilerplate.
count. A woman will become U.S. President, global engagement. ers’s campaign, the role of the private If Sen. Sanders forced Hillary to pick
sooner rather than later, which may be why All of this adds up more or less to a third sector is to transmit revenue to the Elizabeth Warren as her running mate,
younger women are less motivated by the “first Obama term, especially on the home front. She public purse. Private business has be- it would be the capstone to Bernie’s ca-
woman” narrative. The question they ask, more is offering more of what hasn’t worked on the come an exotic abstraction. reer. History would record him as
As the Obama presidency made clear, someone who decisively shifted the lo-
wisely than the Baby Boomers, is whether this economy, and a continuing drive left on the this new relationship is not based on the cus of a major American party, rather
woman should be President. identity politics of gender and race. The country tax code, which the new Democrats than just another eccentric candidate
What Mrs. Clinton has left behind from the wants change she isn’t promising, so she will think of as a kind of dumb sump pump. who briefly caught fire.
1990s is her husband’s New Democrat politics. have to run a campaign that seeks to disqualify The driver now is legal prosecution or Plus, we’d get the spectacle of Donald
The former first lady said on Tuesday that her Mr. Trump as too erratic, divisive and danger- the constant threat of it by government Trump battling two women, not least
party had benefitted from a “vigorous debate” ous. He may be the only Republican she could enforcement agencies—Justice, Labor, Sen. Warren, progressivism’s central
during this year’s primaries, but if there was beat, and vice versa. the NLRB, and the new Consumer Finan- processing unit.
cial Protection Bureau, whose originator We are all in a five-month skydive, so
was Elizabeth Warren. it might as well be fun. Even for Bernie
China’s ‘Unsafe Intercept’ Ralph Nader this week told the Wash-
ington Post that Sen. Sanders had broken
Sanders.
Write to henninger@wsj.com

C
hina’s military has an interesting way of The PLA’s provocations come as tensions are
greeting U.S. officials. In 2011 the People’s rising with the Philippines over a pending deci- LETTERS TO THE EDITOR
Liberation Army unveiled its first stealth sion by a U.N. tribunal over Beijing’s brazen ef-
fighter—a crude knock-off of
an F-22 called the J-20—during Beijing welcomes
forts to dominate the South
China Sea by building artificial
Sure Wall Street Adds Value, but for Whom?
a visit by then-Secretary of De- U.S. officials with a islands and taking control of Harvard Business School Dean Nitin that the growth in size and power of
fense Robert Gates. This week strategic shoals and reefs. On Nohria makes a reasonable point in the U.S. financial sector has coincided
a Chinese fighter made an “un- reckless military act. Wednesday the Chinese For- “Imagine an Economy Without Wall with a decline in many metrics of busi-
safe intercept” of a U.S. recon- eign Ministry blamed Manila Street” (op-ed, June 2). Raising equity ness health, from R&D spending as a
naissance plane while John for taking “a series of provoca- in the form of IPOs and secondary of- percentage of revenue to the number of
ferings for our nation’s corporations is new startups being created.
Kerry and Jack Lew were in Beijing for the U.S.- tive moves that infringed upon China’s legiti-
a valuable economic activity that fos- America’s financial system today
China Strategic and Economic Dialogue. Call it mate rights” and “turning its back on the bilat- ters economic growth. enriches mainly itself, creating only
the diplomacy of recklessness. eral consensus regarding managing differences.” But the proportion of Wall Street’s 4% of all jobs but taking 25% of corpo-
Tuesday’s midair intercept of the U.S. Air The words may be aimed at the Philippines, but activities that involves equity-capital rate profits. That’s a lot of economic
Force RC-135 over the East China Sea is the sec- the U.S. is bound to its ally’s defense through the formation is minuscule. According to oxygen sucked out by a single indus-
ond such incident in less than a month, after two 1951 Mutual Defense Treaty. Sifma, equity underwritings totaled try. It’s also worth noting that as fi-
Chinese jets came within 50 feet of a U.S. Navy In 2001 a hot-dogging Chinese fighter pilot $256 billion during 2015, while the vol- nance has gotten bigger over the past
EP-3 flying over the South China Sea. Far from caused an international incident when he ume of stock trading totaled $48.6 tril- 40 years, financial fees have roughly
apologizing for the incidents—or denying crashed his plane into a U.S. reconnaissance lion. So trading by speculators and in- doubled, another measure of the in-
them—the Chinese foreign ministry accused the plane. The U.S. should put China on notice that vestors represented 99.5% of this total dustry’s inefficiency.
activity on Wall Street. Business curricula teach financial
U.S. of provoking them by flying “in China’s rele- it will hold Beijing accountable for another such
What does all this trading activity engineering over the real kind. Many
vant airspace.” On both occasions the U.S. planes provocation, which could easily trigger a larger accomplish? It diverts to Wall Street a of the CEOs I interviewed for my book
were flying in international airspace. military showdown. portion of the stock-market returns felt that this focus on short-term bal-
created by American corporations. For ance-sheet manipulation before any-
investors as a group, the attempt to thing else—including workers, custom-
White House Rules beat the market through trading is in- ers or longer-term corporate

M
evitably a zero-sum game before costs, prosperity—was hindering their ability
embers of Congress are gradually around the country can vote accordingly. and a “loser’s game” after deducting to get the type of talent they need.
learning the cost of having ceded so The vote could also help the lawsuit the in- the high costs of all those transactions. Washington is the ultimate arbiter
much of their regulatory power to the dustry has filed in federal court in Texas claim- In economic terms, trading is a “rent- of what happens on Wall Street. It’s
executive branch. The latest ing that Labor acted without seeking” function which subtracts crucial that the next president pay at-
Obama vetoes the value from Wall Street’s customers. tention to the fact that the U.S. capi-
painful lesson came Wednes- proper Congressional author-
So I respectfully disagree with Dean tal-market system has become a head-
day when President Obama bipartisan repeal of his ity. The courts tend to defer Nohria’s statement that, “Wall Street wind to business. What we need isn’t a
vetoed a bipartisan effort to to the executive when stat- remains a fundamentally value-creat- financial system that’s bigger. What
kill the Labor Department’s costly fiduciary rule. utes are ambiguous, but in ing enterprise.” The fact is that, on we need is a financial system whose
new fiduciary rule that im- this case Labor decided to balance, Wall Street hasn’t created primary function is to support real
poses more burdens on finan- change long-understood lan- value in the past and won’t create Main Street business. Sadly in the U.S.,
cial advisers. guage out of the blue without any new congres- value in the future. and in a growing number of other
The House and Senate had used the Congres- sional direction. Now Congress has said it JOHN C. BOGLE countries, that’s not what we have.
sional Review Act that lets them repeal a new wants no such change. Valley Forge, Pa. RANA FOROOHAR
regulation within 60 days of being made final. Mr. Obama’s veto underscores the impor- Mr. Bogle is the founder of the Van- Brooklyn, N.Y.
The Review Act allows such repeal votes to pass tance of winning the Presidency in this new era guard Group.
Very few people other than perhaps
the Senate with a simple majority, dodging the of executive-branch ascendancy. The cliche
Mr. Nohria takes issue with the Elizabeth Warren or Bernie Sanders
60-vote filibuster rule, and in this case three used to be that a President’s authority on do- core premise of my new book, “Mak- advocate eliminating Wall Street. But
Democrats joined 53 Republicans. mestic issues is limited to the “power to per- ers and Takers: The Rise of Finance do we really need dark pools, deriva-
But the Constitution says every bill must be suade.” But the administrative state has grown and the Fall of American Business,” tives, excessively high-risk debt lever-
sent to the President for his signature before so large, often with Congress’s assent, that which is that as finance has nearly age and billionaire hedgefunders
it can become law, and Mr. Obama deep-sixed Presidents have taken advantage to change even quadrupled in size as a percentage of charging outrageous fees for the capi-
repeal with the stroke of his pen. The new rule, settled law on their own. Mr. Obama has esca- the U.S. economy over the past several talist financial system to function?
which requires every financial adviser to act as lated this practice to the edge of law-breaking decades, business has suffered and STEVE DOUD, CFA
a fiduciary, will now remake that industry the and beyond, but the courts take time to catch economic growth has slowed. While I Plano, Texas
way the Administration has so many others. up and the President is now packing the courts respect the dean, the statistics simply
don’t back him up.
One result is likely to be much less or no advice with liberals too. Letters intended for publication should
Since the financial sector began to be addressed to: The Editor, 1211 Avenue
for average investors who can’t afford a “per- The larger lesson is that Congress needs to ascend in the 1980s, the number of fi- of the Americas, New York, NY 10036,
sonal wealth” manager. start reclaiming its powers—in part by writing nancial crises (the biggest destroyer of or emailed to wsj.ltrs@wsj.com. Please
The repeal vote was still valuable in demon- bills with clearer, narrower language that limits prosperity after wars and natural disas- include your city and state. All letters
strating bipartisan opposition, as well as get- executive discretion. Hillary Clinton has been ters) has increased, and overall trend are subject to editing, and unpublished
ting Democrats on the record for the next elec- watching Mr. Obama, and she’s likely to be ev- growth has slowed. As I write in my letters can be neither acknowledged nor
returned.
tion. Tens of thousands of financial advisers ery bit as aggressive in rewriting the law. book, deep academic research shows
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.
Beware the Economic Allure of the Strongman
By Ruchir Sharma
I
n the aftermath of the 2008 fi-
nancial crisis, one of the big-
gest casualties has been
democracy. Every year over
the past decade, according to
the independent watchdog Freedom
House, the number of countries
experiencing a decline in political
rights has exceeded those that have
seen an increase. This retreat, re-
versing a period of progress that
began in the 1980s, continued this
year as autocratic leaders such as
Vladimir Putin of Russia and Recep
Tayyip Erdogan of Turkey further
curbed freedoms.
China’s example has
led some to believe that
authoritarians are better
for growth. The evidence
favors democracies.
The retreat of democracy is en-
tering a new phase, driven by vot-
ers embracing strongman rule. Par-
ties led by autocratic personalities
have won a string of election victo-
ries from Poland to the Philippines,
and nearly won in Austria last
month. In Germany, France and
Britain, support is rising for parties
that show a strongman’s impulse to
address economic distress by com-
mand: shut borders, deport foreign-
ers, stifle dissent. Now some people
fear that strongman rule could
loom for the leading democracy, as
a Putin fan who promises to “make
America great again” runs for the
White House.
Voters are losing faith in the
capacity of slow, deliberative de-
mocracy to solve their problems as
the global economy faces its weak-
est recovery in postwar history.
Amid mounting frustration, how-
ever, nothing has done more to le-
gitimize faith in autocrats than the
rise of China. In 2008 Beijing ag-
gressively borrowed and spent to
Expanding the U.S. Military’s Smart-Power Toolbox
By James Stavridis
And John R. Allen
L
ast year the United States
Africa Command, known as
Africom, spotted an opportu-
nity and took unusual action. It
asked the Pentagon for approval to
support a civilian government initia-
tive that it believed would help
counter the spread of violent ex-
tremist groups and keep American
soldiers safer.
Commanders saw a
promising way to combat
extremism—too bad
current law won’t allow it.
Africom had noticed that civilian
programs led by the U.S. Agency for
International Development in Aga-
dez, Niger, were clearly reducing
support for violent extremism
there. Specifically, a combination of
youth-development and conflict-
mitigation programs were helping
promote tolerance and reducing the
allure of extremist violence among
young people. So commanders
asked to invest up to $5 million of
the Pentagon’s $1.3 billion 2015
Counterterrorism Partnerships
Fund to scale up these USAID pro-
grams, which would cost a fraction
of military operations.
But when Pentagon lawyers re-
viewed Africom’s request, they
determined that current law pre-
vents the Defense Department from
sharing the Counterterrorism Part-
nerships Fund with USAID. The law-
yers effectively said that the mili-
tary didn’t have the authority to
deploy taxpayer dollars, already ap-
propriated by Congress, in ways it
assessed would reduce the risk to
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fight the global downturn, mobiliz-
ing resources as only a single-party
dictatorship can.
As China boomed in 2009-10, while
the West struggled, the world’s intel-
lectual elite began talking up the new
“Beijing consensus,” implying general
agreement that autocrats have an
economic advantage, particularly be-
cause they can command swift action
in hard times. Donald Trump
launched his campaign in part on the
premise that Washington needs a
tough guy to stand up to Beijing,
claiming that in business, “I beat
China all the time.”
Beware the economic allure of
strongman rule. I have spent 25
years developing a system for pre-
dicting the rise and fall of nations,
and I have studied whether autocra-
cies or democracies are better eco-
nomic managers. The winner: de-
mocracy. Of the 124 cases since 1980
when an economy grew faster than
5% for a full decade, 60 unfolded
under an authoritarian government,
while 64 unfolded under a demo-
cratic government. This suggests a
near-dead heat, with a slight edge
for democracy.
ISTOCK
Those results conceal the big flaw
of authoritarian regimes: their er-
ratic economic swings and long
slumps. Since 1950, 43 economies
posted an annual growth rate of 7%
or more for a full decade, and 35 of
them were under authoritarian gov-
ernment. Those cases include some
that kept growing steadily for several
decades (including China before this
decade), but also many that grew
rapidly one decade only to collapse
the next, as Venezuela did in the
1960s and Iraq in the 1980s.
Autocrats can orchestrate a
forced march to prosperity, but
these tend to end badly. Long
slumps are also much more common
in autocracies. Since 1950, 138 econ-
omies posted an average annual
GDP growth rate of less than 3% for
a decade, and 100 of those cases un-
folded under authoritarian regimes,
ranging from Ghana in the 1950s to
Nigeria in the 1990s. Russia is now
headed the same way.
U.S. troops and make America safer.
So instead of strategically invest-
ing in a smart-power program
showing promise toward reducing
violent extremism, Africom pur-
chased more military hardware for
its African partners.
This needs to change. Combatant
commanders need the requisite legal
authority to reasonably allocate
their resources so as to leverage the
full capabilities of military, diplo-
matic and development tools in line
with their mission.
To give combatant commanders
this authority, Sen. Tim Kaine (D.,
Va.) on Monday introduced an
amendment to the 2017 National De-
fense Authorization Act. The concise
amendment would create a pilot
program granting the Pentagon the
authority to share funds appropri-
ated for Pentagon security coopera-
tion activities with USAID. The
funds could then be invested in
community-led programming to re-
duce violent extremism.
This is an idea whose time has
come. The rise of these violent ex-
tremist groups is one of the great-
est security threats facing the U.S.
and the international community.
While it is essential to continue fo-
cused military campaigns against
these groups, their existence is a
symptom of a greater problem: vio-
lent radicalization of thousands
upon thousands of men and women
living with little or no hope under
corrupt regimes or in conflict-rid-
den states.
In the past year alone, terrorists
have hit Afghanistan, Belgium,
France, Iraq, Kenya, Nigeria and
Turkey with deadly results. Violent
extremist organizations like Is-
lamic State, al-Shabaab, Boko
Haram and the Taliban planned and
carried out those attacks. They
have also inspired attacks and at-
tempts in the U.S.
Robert Thomson
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OPINION
Russia emerged as a new democ-
racy after the fall of the Soviet
Union, and when Vladimir Putin was
first elected president in 2000, he
was a reformer, cleaning up a cor-
rupt and Byzantine tax system, sav-
ing windfall oil profits in a rainy-day
fund. That set the stage for a boom
as oil prices took off, and by 2010
Russia’s average income had more
than quintupled to $12,000.
But success made Mr. Putin com-
placent and more authoritarian. He
failed to diversify from oil and re-
placed reformers on his staff with
loyalists. As oil prices collapsed,
Russia’s average income fell by a
third, back to $8,000. This is an
odd moment for an American presi-
dential candidate to cite Mr. Putin
as an example of what tough guys
can get done.
Autocracy is a bad economic bet
While the U.S. and its allies have
made progress against Islamic State,
even if it were wiped out tomorrow
countless others share its radical
and fatalistic ideology and are pre-
pared to rise up and kill peaceful
people across the globe. Along with
numerous other current and former
military officials, we have said that
military force alone cannot defeat
these groups and eliminate the
threat of violent extremism.
That’s why the U.S. military
needs the flexibility to use every-
thing in the national-security tool-
box—including those tools that are
rightfully in the hands of other gov-
ernment agencies.
To be clear, the Kaine amendment
won’t take money away from mili-
tary readiness. It doesn’t force the
Pentagon to transfer funds. It
doesn’t tie the hands of combatant
commanders. On the contrary, the
Don’t Lift Russia’s Sanctions Yet
By Benjamin Haddad and
Hannah Thoburn
T
he 28 member states of the
European Council will con-
vene later this month to de-
bate whether to renew sanctions
against Russia for its military ag-
gression in eastern Ukraine and ille-
gal annexation of Crimea. The sanc-
tions package has been extended
every six months since it was first
adopted in July 2014. But some
countries are now pushing behind
the scenes for a gradual withdrawal
of sanctions.
That would be a mistake. It’s not
yet time to return to business as
usual with Moscow. Lifting sanctions
now would send a dangerous signal
of weakness and division in Europe.
The specific sanctions up for re-
newal target industries such as en-
ergy, defense and banking. They
were implemented following the
July 2014 downing of Malaysia Air-
lines Flight 17 by Russian-backed
rebels in eastern Ukraine. Removing
these sanctions has been made con-
ditional on Kremlin compliance with
the so-called Minsk II Agreement,
the February 2015 accord designed
to de-escalate the Ukraine-Russia
conflict. Kiev hasn’t always lived up
to its obligations, but Moscow’s vio-
lations have been extensive, system-
atic and brazen.
Ukraine’s eastern border is still un-
der the control of Russian-backed
fighters. Russian troops and merce-
naries still stalk Ukrainian territory,
and they continue to use heavy weap-
onry, all in violation of the accord.
Europeans shouldn’t be fooled by
symbolic gestures of goodwill such
as President Vladimir Putin’s deci-
sion to free jailed Ukrainian pilot
Nadiya Savchenko, however wel-
Friday - Sunday, June 10 - 12, 2016 | A13
because of its tendency to centralize
decision-making in a circle of friends
and family, and to tie economic pol-
icy to the whims of a strongman.
Since 1950, 36 countries have seen at
least nine individual years of growth
faster than 7% and nine individual
years of negative growth. And 27 of
these roller-coaster countries were
governed for most of the period by
an authoritarian government, includ-
ing Iran, Ethiopia, Iraq, Syria and Ni-
geria. Most of these countries are
poor, with average incomes below
$5,000, because the boom years were
wiped out by the busts.
By contrast, democracies suffered
very few extreme swings. Together,
Sweden, France, Belgium and Norway
have posted only one year of growth
faster than 7% since 1950. Yet all four
have seen average incomes rise five-
to sixfold, to more than $30,000, in
amendment grants commanders
freedom and flexibility to deploy
taxpayer dollars already appropri-
ated for combating violent extrem-
ism toward programs working to
tackle its root causes. Execution of
this authority would require concur-
rence from the chairman of the
Joint Chiefs of Staff and approval
from Congress.
Testifying before the Senate
Armed Services Committee on
March 8, Gen. David Rodriguez,
commander of Africom, argued that
development programs that comple-
ment security-force operations are
essential to countering violent ex-
tremism and radicalism. “If efforts
are to be successful,” he explained,
the Defense Department “must have
the flexibility to transfer funds
between agencies and collaborate on
holistic responses to counter cur-
rent and emerging threats.”
come. These moves are perfectly
timed to appeal to those in Europe
who long for restored relations with
Russia, but amount to paltry prog-
ress on the ground.
Sanctions haven’t been altogether
ineffective, either. Combined with
the drop in oil prices, sanctions
have taken a toll on the Russian
economy, leading in 2015 to an esti-
Measures targeting the
Kremlin’s finances can
reinforce efforts to
negotiate on Ukraine.
mated 3.8% contraction in gross do-
mestic product. Related effects,
such as reduced foreign investment
and Moscow’s retaliatory sanctions,
have sharpened the pain.
This economic situation is what
led Moscow to the negotiating table
at Minsk in the first place, largely
freezing the situation on the ground.
Removing the sanctions now, with-
out progress, only encourages the re-
newal of hostilities.
These sanctions have hurt Euro-
peans on a decreasingly smaller
scale than they do Russia. As the
European Commission had antici-
pated in late 2015, the effect on Eu-
ropean economies, less dependent
on Russia than Russia is on them,
“remains contained,” particularly as
European industries continue to
find new, alternative markets and
diversify their exports.
That doesn’t mean the impact is
nonexistent: The European Parliamen-
tary Research Service estimates that
reduction in trade has cost European
economies 0.3% of GDP in 2014 and
part because they rarely suffer years
of negative growth.
This is the stabilizing effect of de-
mocracy. Among the large economies
that have grown steadily enough to
have average incomes over $10,000,
every one is a democracy. China, with
an average income now approaching
$10,000, is trying to become a large,
rich autocracy, but it would be the
first. And today, the same autocratic
model that allowed China to orches-
trate three decades of rapid industrial
development also allowed it to sud-
denly start fueling economic growth
with debt, beginning in 2008. Those
mounting debts are weighing on
China’s growth, which peaked above
10% in 2010 and has since fallen to
less than 4% or 5%, according to
independent estimates. This record
should give pause to any nation look-
ing to a strongman as a quick cure for
economic problems.
The big difference between Don-
ald Trump and Vladimir Putin is that
Mr. Trump is rising in a well-estab-
lished democracy, with institutions
that are probably strong enough to
resist any leader’s whims. If a similar
figure were rising in a developing
country with weaker institutions,
financial markets would be in panic,
with money fleeing and the currency
in free fall.
Instead, the dollar and the U.S.
stock market have been broadly
stable even as Mr. Trump climbed in
the polls and became the putative
Republican nominee. Investors are
betting that an autocratic personal-
ity can’t do much harm in the U.S.,
or that Mr. Trump is not a true auto-
crat, more outrageous than danger-
ous. Whatever one thinks of Mr.
Trump, the message for any country
looking to a strongman is clear: In
the economic race, democracies ulti-
mately prevail.
Mr. Sharma, the head of emerging
markets and global macro at Mor-
gan Stanley Investment Manage-
ment, is the author of “The Rise and
Fall of Nations: Forces of Change in
the Post-Crisis World,” out this week
from Norton.
We couldn’t agree more. As for-
mer senior commanders who have
seen, designed and budgeted for the
fight against extremism, we urge
Congress to adopt this common
sense amendment when it takes up
debate on the National Defense
Authorization Act.
Our troops cannot win this battle
on their own—and we shouldn’t be
asking them to. Americans face
greater risks and a deadlier fight if
Congress does not adopt the Kaine
amendment.
Mr. Stavridis, a retired U.S. Navy
four-star admiral and former NATO
supreme allied commander, is the
dean of the Fletcher School of Law
and Diplomacy at Tufts University.
Mr. Allen is a retired U.S. Marine
Corps four-star general and former
commander of the International Secu-
rity Assistance Force in Afghanistan.
0.4% in 2015. But the economic aspect
cannot be the whole picture.
In Russia, business interests and
political motivations are often one
and the same. As Moscow tends to
leverage economic ties into political
influence, gradual divestment from
Russia increases Europeans’ ability
to conduct their foreign policy au-
tonomously. This should be wel-
comed. Further measures to roll back
the influence of dirty kleptocratic
money laundered in Europe, notably
through real-estate investments,
should accompany this.
Critics of the sanctions, such as
Greece’s Prime Minister Alexis Tsip-
ras, have argued that dialogue is
the path forward. Western leaders
should continue engaging Moscow.
But effective dialogue and a robust
stance on sanctions aren’t mutually
exclusive. They reinforce each
other. The current situation wasn’t
created by Europeans or Americans
but by Russia’s unilateral revision
of the post-Cold War security order
and invasion of a neighbor. This is
what soured the dialogue in the
first place.
The unanimous adoption of sanc-
tions two years ago was a rare mo-
ment of solidarity and unity on stra-
tegic issues in Europe, a fact too
little noticed at a time when Europe-
ans are prompt to bash themselves
and lament their own weaknesses.
Opponents and supporters of Mr. Pu-
tin’s policies sometimes tend to
overstate his strength and strategic
prowess. Russia has much more to
gain from lifting sanctions than Eu-
ropeans. Western strategy should re-
flect that reality.
Mr. Haddad and Ms. Thoburn are
research fellows at the Hudson Insti-
tute in Washington.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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A14 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

SPORTS

How Germany Engineered a Soccer Machine

During his decadelong high-energy approach to hunt
the ball in packs and force
tenure, Joachim Löw turnovers high up the field.
has created Europe’s This summer, influenced in
part by the tactical innova-
most consistent team tions of Pep Guardiola at Bay-
ern Munich, the Germans are
BY JOSHUA ROBINSON expected to evolve again, play-
ing almost without a desig-
Paris nated center forward.
When the European Cham- Of course, Löw’s success is
pionship kicks off here on Fri- partly down to timing. His
day, it will bring together 24 tenure has coincided with the
teams for the first time. There emergence of the most ex-
will be traditional powers such pertly crafted generation of
as Spain and France and Euro players ever to roll off the
first-timers, such as Iceland German production line.
and Albania. The story of German soc-
Over 30 days and an un- cer’s grass-roots revamp has
precedented 51 matches, this followed the team through ev-

ROBERT MICHAEL/AGENCE FRANCE-PRESSE/GETTY IMAGES

expanded crowd of teams from ery major tournament since
the world’s deepest soccer re- Löw arrived. Spurred into ac-
gion will square off in what tion by the twin fiascos of the
may be the most unpredictable 1998 World Cup and Euro
tournament in the interna- 2000—Germany was elimi-
tional game. nated in the quarterfinals and
But despite the wealth of group stage, respectively—the
talent on show and the tour- country’s soccer federation re-
nament’s newfangled format, examined every aspect of how
one thing about Euro 2016 is children are taught the game.
all but guaranteed to stay the It invested heavily in youth
same. You can grab your coaching and beefed up the
bracket and push Germany competitive, national leagues
straight into the final four. for younger age groups. It’s
Write it in ink. safe to say the plan worked. In
For the past decade, Die Under head coach Joachim Löw, Germany has advanced to the semifinals of every major tournament since the 2006 World Cup. 2014, Germany ended a 24-
Mannschaft has been the sur- year drought by lifting the
est thing in international soc- standing customs on its head. World Cup. Germany is consid- agers are judged almost through a revolving door, most World Cup in Brazil.
cer. This team has made the Instead of cycling through ered one of the favorites at exclusively by their perfor- countries are forced to stick Since then, the rest of Eu-
semifinals of every major managers every two or four this tournament, along with mances at major tournaments. with the same core of key rope has been plotting to take
tournament since the 2006 years, like most national the host nation France. Every two years, they go on players, and the style of play down the Germans. But not
World Cup, finishing as run- teams, Germany has left its “I would say that most of trial for their jobs. Most of the reflects their strengths. everyone seems prepared.
ner-up at Euro 2008 and win- head coach, Joachim Löw, in my time as national team time, they lose. For Germany, Löw has Spain is in a period of tran-
ning its fourth World Cup in place for a decade. coach is already behind me,” The 24 managers who will achieved the opposite. Under sition. Italy, short on attacking
Brazil in 2014. No one in Rarely seen on the sideline Löw said in a recent interview begin Euro 2016 on Friday his leadership, a nation once talent, looks unlikely to repeat
France this month will have a without a crisp white shirt— with the German newspaper have been in place for an aver- known for its old-fashioned its run to the final from four
bigger target on their back. collar open, cuffs turned up— Bild. “Eventually, I think, age of three years and seven defensive discipline now plays years ago. England has the op-
“We can’t complain even if Löw first served as an assis- maybe the team, the organiza- months. A quarter of them are some of the most modern, at- posite problem: a wealth of at-
our opponents play defensive tant under Jurgen Klinsmann tion or I will need a new goal.” lame ducks, due to retire or tacking soccer on the planet. tacking talent, but a defense
with all 11 players,” said mid- from 2004 through the 2006 There aren’t many goals in take club jobs after the Euro. “We have our structure, but without much mettle.
fielder Sami Khedira. World Cup. After Germany fin- soccer loftier than those Löw Not Löw. His contract runs in the last 10 years the game Only France, among Eu-
Germany’s remarkable con- ished third at that tourna- has already achieved with Ger- through the 2018 World Cup, changed,” Germany and Bay- rope’s traditional powers, is
sistency owes something to ment, Löw took over as man- many. His winning percentage which would be his fifth major ern Munich goalkeeper Manuel expected to carry the fight to
the size of its population and ager. Now, 10 years on, he will makes him the country’s most tournament in charge. Neuer said. “We don’t play like the Germans. “For all of us, it’s
the strength of its domestic try to repeat the feat of successful manager of all time. Because coaching stints are 10 years ago.” clear that it’s the most impor-
league. But it has also been France in 2000 and Spain in In international soccer, a ten- short, national styles in soccer At the 2014 World Cup, Die tant competition of our ca-
built, in part, by turning one 2012 by winning the Euro im- ure like Löw’s is almost un- tend to stay broadly the same. Mannschaft led the way with reers,” said France goalkeeper
of international soccer’s long- mediately after lifting the heard of. National team man- While managers enter and exit so-called gegenpressing, a Hugo Lloris.

Breaking Down the Euro 2016 Groups

BY JOSHUA ROBINSON match? Well, kind of. Their
real rivalry is on the rugby
Group A field. That said, it’s finally an
France has one of the most opportunity to watch Gareth
exciting strike forces at the Bale on the biggest interna-
tournament. Juventus’s Paul tional stage. Russia is missing
Pogba runs the show from star Alan Dzagoev, while Slo-
Group D
The ignominy of Spain’s
early exit from the World Cup
in Brazil makes it easy to for-
get one gigantic fact ahead of
the Euros: La Roja is a two-
time defending champion. The
You’ve got a wilting super-
power with Italy, a trendy
tournament pick in Belgium,
the scrappy bunch from Ire-
land and the Democratic Re-
public of Zlatan Ibrahmiovic,
also known as Sweden.
JOHN THYS/AGENCE FRANCE-PRESSE/GETTY IMAGES

midfield with Atlético Ma- vakia can be dangerous, hav- team might be in transition Group F
drid’s Antoine Griezmann ing beaten Spain in qualifying. but can’t be wholly dismissed. Portugal, led by Cristiano
ahead of him and any combi- Group C The rest of this group is full of Ronaldo, is the headliner in
nation of Arsenal’s Olivier Gir- Germany, the defending sneaky talent. The Czech Re- this group but Austria quietly
oud, Manchester United’s An- world champion, enters every public brings its usual array of went undefeated in qualifying.
thony Martial, West Ham’s tournament these days among skillful dribblers. Croatia is Hungary brings some soccer
Dimitri Payet, and Bayern Mu- the automatic favorites. Re- built around its tandem of star lore to the tournament. The
nich’s Kingsley Coman. Les turning 14 of the 23 who lifted midfielders, Barcelona’s Ivan Magic Magyars, as they were
Bleus are expected to sail the World Cup in Brazil, it Rakitic and Real Madrid’s Luka known, revolutionized the
through a group that also in- seems every bit as strong as it Modric. And Turkey has only game in the 1950s. Iceland,
cludes Switzerland, Romania was two years ago. Poland, lost one game since November with a population of 320,000,
and Albania. Ukraine and Northern Ire- 2014. is playing in its first major
Group B land will battle for the second Group E tournament and is Euro 2016’s
Is England-Wales a grudge spot. This year’s Group of Death. feel-good story. Paul Pogba leads France’s attack from the midfield.

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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Dot follower PUZZLE
-10
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56
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17 18 59
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61
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10 19 20 21 22
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15
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Dublin Berlin 23 24 25 26 27 62 Maker of the first 27 Christian of
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25 28 29 30 31 32
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30
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Prague 35
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Paris i h
Munich 36 37 38
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Geneva Cold wrote 1953’s 34 Provoke
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47 48 49 50
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Madrid
d id number 28 39 World Series
Lisbon 57 58 59 60
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61 62 3 Exhort 42 Show extreme
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63 64
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Flurries 5 Envelope letters 44 Took to work, say
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b
Ice THE POLLS WERE WRONG | By Matt Gaffney 6 Japanese zither 45 Relax,
7 Obliterate metaphorically
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Hi Lo W
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46 Madagascar’s
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rejection
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Anchorage 17 10 pc 15 9 r Istanbul 23 16 s 25 19 s Portland, Ore. 18 11 sh 18 9 sh Across 21 “On the other
contest answer 12 Told 55 Prison, in
Athens 26 19 t 28 18 s Jakarta 31 24 t 32 24 t Rio de Janeiro 22 18 c 21 16 sh 1 Redford film hand...”
39 Caravan stop 13 Melodramatic Colonial times
Atlanta 34 22 s 35 23 s Johannesburg 20 7 s 18 3 s Riyadh 44 30 s 44 30 s
with the line 22 ___ Avivians
Baghdad 41 24 s 39 23 s Kansas City 33 23 s 34 23 s Rome 25 16 t 25 18 pc 40 “Othello” fellow goodbye 58 Go quickly, to
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41 Upward slope 14 Armenia’s capital Shakespeare
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bad...” 42 Lab order? 21 Boxers 59 Assn. created at
Beijing 34 19 t 32 19 pc London 21 14 pc 19 13 sh San Francisco 20 12 pc 24 12 pc thinks” alternative Bretton Woods
Berlin 20 9 pc 20 10 pc Los Angeles 25 15 pc 23 16 pc San Juan 32 25 pc 31 25 pc 9 Another name 25 To be, in Haiti 43 Matched socks,
Bogota 19 8 r 19 8 r Madrid 29 15 pc 30 14 pc Santiago 18 5 s 20 7 s say 24 Attacks 60 Dwight Gooden
for the VW Golf 27 Bernie Sanders’s
Boise 28 11 pc 22 10 pc Manila 33 26 t 34 26 t Santo Domingo 32 23 pc 32 23 pc persistently nickname
Boston 20 12 pc 23 17 s Melbourne 15 8 sh 11 7 sh Sao Paulo 18 6 pc 14 5 pc 15 Greenskeeper’s son 47 Bridal gown
Brussels 21 13 pc 19 13 t Mexico City 24 14 t 23 14 t Seattle 18 10 sh 17 11 sh devices 28 My friend at the designer Di Santo Previous Puzzle’s Solution
Buenos Aires 11 0 s 12 1 s Miami 31 25 t 31 25 pc Seoul 29 20 pc 28 20 pc 16 Spot for a Louvre 48 Vet’s trouble U S P S T E S T B U R B S
Cairo 32 22 s 35 24 s Milan 27 18 pc 22 15 t Shanghai 28 23 pc 28 22 c 31 Secreted 50 Hugs and kisses N A S H Y E OW O P E R A
Calgary 22 10 t 19 9 pc Minneapolis 34 22 t 35 20 s Singapore 31 26 t 30 26 t
nursery rhyme S L O E P L Y I N G S L OW
Caracas 32 25 pc 32 25 pc Monterrey 33 22 t 31 22 pc Stockholm 14 5 sh 14 4 pc trio 32 Fusses 51 Photo ___ T E R R I E S T I S I T T
Charlotte 32 20 s 34 23 pc Montreal 20 12 pc 23 14 pc Sydney 20 10 s 18 11 s 17 Yacht club 33 Put back in the 52 Pumpkin, peach O S I R I S F C C
P R A I S E S S H E L L
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Chicago 33 22 t 34 20 t Moscow 17 9 pc 15 9 sh Taipei 31 26 t 31 28 t events kiln or pecan S E S T I E A L A
Dallas 34 24 pc 33 25 s Mumbai 34 29 pc 33 29 t Tehran 36 24 pc 36 22 pc P I N K S P R I N T E R S
Email your answer—in the subject line—to crosswordcontest@wsj.com
s

Denver 34 18 t 34 17 pc Nashville 35 20 s 36 20 s Tel Aviv 27 20 s 27 21 s S O S I R A B I T

P U T T E R S T R I P E
Detroit 26 19 s 34 19 t New Delhi 41 29 pc 41 30 pc Tokyo 28 20 pc 28 19 pc by 11:59 p.m. Eastern Time Sunday, June 12. A solver selected at random A C H E A H S T E E T H E
Dubai 39 30 s 41 30 s New Orleans 32 25 t 32 25 t Toronto 22 15 s 27 15 t will win a WSJ mug. Last week’s winner: Joseph Zargari, New Rochelle, M A E P O E S I X I R O N
Dublin 18 12 sh 19 11 c New York City 25 16 s 24 19 t Vancouver 19 12 c 19 12 sh P R I C E SW I N E S A N E
Edinburgh 13 10 sh 14 11 sh Omaha 35 24 s 37 24 s Washington, D.C. 27 19 s 32 23 t
NY. Complete contest rules at WSJ.com/Puzzles. (No purchase necessary. L E D O N A D O S E G E R
Frankfurt 23 14 pc 21 13 sh Orlando 32 23 t 32 23 pc Zurich 23 13 pc 18 13 t Void where prohibited. U.S. residents 18 and over only.) E D I T S R O B T R E D S
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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BUSINESS & TECH.
BAE Looks Beyond Typhoon
Focus will be on F-35 fighter program and drones BUSINESS | B4
© 2016 Dow Jones & Company. All Rights Reserved.
ADIDAS
Adidas will use robots to make shoes at a factory in Germany.
Higher Asian Costs
Fuel West’s Robots
The opening of Adidas
AG’s first factory in Germany
in more than 30 years is one
of the most visible examples
of global brands bringing
By Kathy Chu
in Hong Kong and
Ellen Emmerentze Jervell
in Ansbach, Germany
manufacturing home because
of rising labor costs in Asia.
Adidas’s 50,000 square-
foot factory, in the Bavarian
town of Ansbach, will rely on
robots and customized auto-
mation to produce 500,000
pairs of athletic shoes a
year—well below 1% of Adi-
das’s total annual production
of 300 million pairs—when
full production starts in 2017.
Adidas says manufacturing
in Germany will help improve
the quality of its shoes, cut
the time it takes to bring
products to market and slash
warehouse costs.
Manufacturers view
automation as a way
to maintain strict
quality standards.
“People want flexibility
and speed,” said Gerd Manz,
Adidas’s vice president of
technology innovation, add-
ing that similar facilities are
planned around the world, in-
cluding in the U.S. next year.
The way brands currently
manufacture “stands in the
way of that,” he said.
The move to manufacture
closer to customers is becom-
ing more popular with com-
panies facing rising labor and
transportation costs—coupled
with worker shortages—in
much of the developing
world. In addition, consumers
want new styles of shoes and
unique electronics and they
want them quickly—forcing
global brands to rethink how
they make their goods.
Nike Inc. said it has begun
working with contract manu-
facturer Flex on technology
that will allow it to make
shoes closer to its major mar-
kets. Apple Inc. has expanded
production of its Mac com-
Amazon Expands Grocery Deliveries
BY SAABIRA CHAUDHURI
LONDON—Amazon.com
Inc. has extended full-scale
grocery-delivery service out-
side the U.S. for the first time,
launching its AmazonFresh
service Thursday for custom-
ers across much of London.
Members of Amazon’s
Prime loyalty program in cen-
tral and east London “can now
order their full weekly grocery
shop from a range of over
130,000 competitively priced
products,” Amazon said.
Available items include food
from markets, vegetables,
meat, seafood, baked goods,
dairy and other perishables.
Customers also can order non-
food items such as baby,
health and beauty products
and pet supplies.
“We are launching with a
puters in the U.S. And the
world’s third-largest contract
manufacturer, St. Petersburg,
Fla.-based Jabil Circuit Inc.,
says it is turning to automa-
tion to prepare for a future
where factories are smaller
and closer to customers.
“What factories are doing
right now is mass produc-
tion,” said KC Ong, senior
vice president of operations
at Jabil, a circuit board and
electrical-parts maker for
companies including Apple
and Electrolux SA. “In the fu-
ture, it will be customization
at satellite factories. We are
standardizing in our factories
so if we have to set up in a
lot of different locations, then
we can do it.”
The centerpiece of Jabil’s
vision for the future: a boxy
white platform, up to a meter
wide, with robotic arms that
can be transported from one
factory to another. The plat-
form can be reprogrammed
easily to perform different
tasks related to assembly of
printed circuit boards.
Analysts with expertise in
manufacturing say automa-
tion is crucial to moving op-
erations closer to home be-
cause machines can replace
increasingly expensive human
labor on some of the most
manual and repetitive tasks.
Manufacturers also view au-
tomation as a way to main-
tain strict quality standards
and boost workplace safety
by having robots do the most
dangerous jobs.
Adidas said inventory, lo-
gistics and supply-chain costs
will decrease in the new fac-
tory. Retail and sportswear
companies typically have to
order large quantities of
product from manufacturers
based on sales projections. If
these projections aren’t met,
the products sit in ware-
houses and in some cases are
eventually marked down at
the cash register.
Between 2014 and 2018, in-
dustrial robot sales will
nearly double to 400,000
units, according to the Inter-
national Federation of Robot-
ics, driven by labor shortages
and rising costs in the devel-
oping world.
Please see ADIDAS page B2
Amazon has been moving toward grocery delivery in London.
comprehensive offer in a lim-
ited area and will take our time
to hone and improve our ser-
vice based on our learnings
and feedback from our custom-
THE WALL STREET JOURNAL.
Probe of VW Legal Advice
BY WILLIAM BOSTON vestigation by U.S. authorities.
A Volkswagen official said
BERLIN—German prosecu- the person under investigation
tors say they are investigat- is a member of the auto
ing a member of Volkswagen maker’s legal team and has
AG’s legal team who is sus- been suspended pending com-
pected of encouraging other pletion of the investigation.
employees to destroy or re- Klaus Ziehe, the prosecutor
move documents during the in Braunschweig who is lead-
weeks before U.S. authorities ing several investigations of
disclosed that the German Volkswagen employees in con-
auto maker had rigged diesel nection with the emissions
engines to cheat on emissions scandal, said the employee
tests. “made suggestions to other
If true, the allegation would employees in a roundabout
suggest that senior Volks- way that they should delete or
wagen officials were aware as
early as August that the Envi-
ronmental Protection Agency
was preparing an official com-
at least remove files linked to
the diesel issue.”
Volkswagen employees
transferred much of the data
plaint that would spark an in- to thumb drives, most of
Outsize crowds are flocking to a tourist zone surrounding the Shanghai Disneyland theme park, which opens officially on June 16.
In China, Disney Security Is Quiet
Shanghai theme park on crowd control get applied
in a park that 330 million can
to keep the company’s reach in less than three hours.
guards behind scenes; Disneyland won’t officially
open until June 16 but outsize
‘protecting the magic’ crowds are already flocking by
cars and subway to new res-
BY JAMES T. AREDDY taurants and a lakeside prome-
nade in a tourist zone sur-
SHANGHAI—Chinese law rounding the theme park that
enforcement often relies on in- offers a free taste of the expe-
your-face muscle-flexing, but rience—90,000 on one day re-
Shanghai appears to be giving cently.
unusual leeway to Walt Dis- Shanghai events have
ney Co. to police its new drawn some of the largest
theme park there nearly as in- crowds in the world, and de-
conspicuously as in other spite massive numbers of offi-
Magic Kingdoms. cers and widespread electronic
Shanghai Disneyland Resort surveillance local authorities
promises to offer a study in have a mixed response record.
the cultural blend of U.S.- In 2010, Shanghai took a
branded entertainment and page from the heavily policed
Chinese sensibilities—Disney’s Beijing Olympics two years
dog Pluto outfitted as a char- earlier and stationed a battal-
acter in the Chinese zodiac, ion of officers, paramilitary
for instance. But a key ques- and army at the city’s giant
tion as Disney tweaks its World’s Fair expo, which drew
magic for the Middle Kingdom nearly half a million visitors
is how divergent philosophies daily for six months with min-
Amazon’s move intensifies
competition in the U.K.’s cut-
throat market for online gro-
cery delivery, widely hailed as
the world’s most advanced.
Amazon has been making
JASON HENRY FOR THE WALL STREET JOURNAL
incremental steps to push into
grocery delivery here. In Feb-
ruary, it struck a deal with the
U.K.’s fourth-largest grocery
chain by market share, Wm
Morrison Supermarkets PLC,
to make hundreds of Morri-
sons products available to cus-
tomers of its Prime and Pantry
services.
Thursday’s move increases
the pressure on the U.K.’s large
mainstream grocers, all of
which offer online delivery.
ers,” said Ajay Kavan, vice Tesco PLC, J Sainsbury
president of AmazonFresh. “We PLC, Wal-Mart Stores Inc.-
will be very methodical and owned Asda and Morrisons
considered in how we roll this have struggled in recent years
service out further in the U.K.” Please see AMAZON page B3
INSIDE:
MONEY &
INVESTING
Bankers Vie
For Aramco IPO
FINANCE | B5
Friday - Sunday, June 10 - 12, 2016 | B1
In a separate case in
March, a former Volkswagen
employee filed a lawsuit in
Michigan alleging that his co-
BRENNAN LINSLEY/ASSOCIATED PRESS
workers continued to delete
files at a Volkswagen data cen-
ter in Auburn Hills, Mich.,
even after September, when
the company issued a “litiga-
tion hold” requiring employees
to preserve all files as poten-
tial evidence in the investiga-
tion.
The whistleblower, Daniel
Worker counsel raises alarm. Donovan, alleges that he was
fired because his superiors be-
which were later recovered.
“We don’t think a lot of
data were lost that could sig-
nificantly impede or delay the
lieved he was going to report
the company to authorities,
according to a court filing seen
by The Wall Street Journal.
investigation,” Mr. Ziehe said. Please see PROBE page B2
WANG GANG/IMAGINECHINA/ASSOCIATED PRESS
imal incidents. But a year and crowds from getting unwieldy.
a half ago, three dozen people A Disney spokesman said
died in a New Year’s Eve stam- the resort’s management com-
pede after police failed to di- pany is responsible for secu-
vert an estimated 200,000 rity inside the park. Shang-
revelers from crushing into hai’s government echoed that,
the city’s No. 1 tourist spot, adding that security would be
the historic riverfront Bund. supervised by a “comprehen-
The Burbank, Calif.-based sive law enforcement team.”
company’s agreement gives it The area’s top policeman, Li
broad scope to manage risks Guirong, sidestepped a ques-
in Shanghai much like it does tion about jurisdiction at a re-
at Walt Disney World Resort cent news conference, saying
in Florida and its parks in only, “The standard for our
other countries. Disney won’t public-security management is
say much about the arrange- very high.”
ments but its plans indicate In Shanghai, some of Dis-
that uniformed police gener- ney’s “security cast mem-
ally won’t be seen inside the bers”—as the company refers
park gates. to guards—wear yellow ties,
With three parks outside white police style hats and
the U.S. in Hong Kong, Paris cartoonish badges emblazoned
and Tokyo, Disney faces local- with a castle logo. “Protecting
ized risks from earthquakes to the magic is the main goal,”
terrorism. Violent crime re- according to the job descrip-
mains rare in China, and the tion for security cast members
primary concern for Shanghai on one Disney website in the
Disneyland—reflected in the U.S., which shows guards
park’s design—is preventing Please see DISNEY page B2
Airbus Expects Gains
In Used-Plane Market
BY ROBERT WALL cannot afford such a big and
expensive aircraft. They will
LONDON—The looming mar- have a possibility to have it at
ket for inexpensive, second- least at half price,” Mr. Brégier
hand Airbus Group SE A380 said at the Aviation Club in
superjumbos could attract new London.
airline customers for a plane None of the early operators
that has struggled to win or- have said when they would
ders, the boss of the European start phasing out their early
plane maker said Thursday. planes. Emirates Airline Presi-
Airbus Chief Executive Fab- dent Tim Clark last week said
rice Brégier said he expects the the first of its A380 planes is
used A380 market to start due to be phased out around
emerging around 2020 when 2021, though it might opt to
some of the first superjumbos retain the plane. Emirates Air-
to enter airline service are line started operating A380s in
phased out by their operators. 2008 and had a fleet of 79 as
Singapore Airlines was the of the end of May.
first airline to fly the A380 Mr. Brégier said buyers of
commercially in 2007. used superjumbos “will make
“[The secondhand market] I tons of money because it will
believe it will be a good oppor- be by far the most competitive
tunity for airlines that just Please see AIRBUS 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 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

INDEX TO BUSINESSES BUSINESS NEWS

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

A
Adidas ......................... B1
Airbus Group.........A4,B1
Alamos Gold................B7
Aldi..............................B3
Alibaba Group.............B8
Amazon.com ............... B1
Apple...........................B3
Archer Daniels
Midland.....................B4
Audi.............................B2
B Lockheed Martin.........B4
BAE..............................B4
Barrick Gold...........A2,B5
Boston Consulting
Group.........................B8
Bunge .......................... B4
C Neste Oyj....................B7
Citigroup......................B8
D O
Deutsche Bank............B8
Deutsche Lufthansa...B3
Direxion Daily Gold
Miners Index Bull 3x
Shares.......................B5
E which controls half the seats
H
HSBC ........................... B8
I
Sky Network
Television..................B3
Soros Fund
Management ............ A1
VW, Union Fail to Reach Accord
IG Metall.....................B2 S&P/ASX 200 Germany’s powerful
IKEA.............................B4 Benchmark Index......B7
IG Metall trade union
J SPDR Gold Trust.........B5
J.P. Morgan Chase......B8
SR Global Japan ......... B7 has joined fight over
Stoxx Europe 600 Index
J Sainsbury.................B1
EUR ........................... B7 U.S. assembly plant
L Syngenta.....................A2
Lidl...............................B3 T-U BY WILLIAM BOSTON
Templeton Global
M Advisors....................B7 BERLIN—Volkswagen AG
McKinsey.....................B8 Tesco............................B1 and the United Auto Workers
Monsanto....................B4 Total ............................ B7 union remain at loggerheads
N T. Rowe Price Group...B5 over representation of mainte-
Uber Technologies......A1 nance workers at the car
Newmont Mining........B7 V maker’s U.S. assembly plant.
VanEck.........................B7 A high-level meeting was
held in Stuttgart, Germany,
Vivendi ........................ B3
Ocado Group................B3 last month to resolve the is-
Vodafone Group..........B3
Oechsler ...................... B2 sue, but failed to do so.
Vodafone New Zealand
R .....................................B3 The conflict risks escalat-
ing, because Germany’s pow-
Remy Cointreau..........B3 Volkswagen.................B2
Respsol........................B7 W erful IG Metall trade union,

JOE DODD/ASSOCIATED PRESS

EgyptAir......................A4
Emirates Airline ......... B1
F-G
Freeport-McMoRan.....B7
Golden Star
Resources..................B7
Restoration Hardware B8
Royal Institute of
Chartered Surveyors B7
S Resort ....................... B1
Samsung Electronics..B3
Saudi Aramco..............B5
Silver Wheaton...........A2
Wal-Mart Stores.........B1
Walt Disney................B1
Walt Disney World
White & Case..............B8
Wm. Morrison
Supermarkets...........B1
on Volkswagen’s supervisory
board, has joined the battle on
the side of the UAW.
IG Metall is echoing UAW
demands that Volkswagen
open collective bargaining
talks with Local 42, a branch

INDEX TO PEOPLE of UAW formed to represent

workers at Volkswagen’s Chat-
tanooga, Tenn., plant on be-
The dispute comes at an inopportune time for VW, which plans to make a new SUV in Tennessee.

A Gilford, Sam................B8
Agnefjäll, Peter...........B4
B
Balls, Andrew ............. B5
Benjamin, Yannick.....W7
Bessent, Scott............A2
Blessing, Karlheinz.....B2
Boersma, Norman.......B7
Brégier, Fabrice...........B1
Brodin, Jesper.............B4
Burdick, Ted................A2
Burstow, Clive ............ B7
C Soros, George........A1,B5
Casteel, Gary .............. B2
Combes, Gaël..............B7
Cooperman, Leon........A2
F W
Foster, Joe .................. B7
G Lee, Homin..................B5
Gavin, John.................B8
Gore-Coty, Pierre-
Dimitri.......................A1
Grzinic, James ............ B3
Gundlach, Jeffrey ....... B5
H broiled in negotiations with
Hann, Brian.................B3
Hofmann, Jörg............B2
Hunter, Constance......A7
I
Ikuss, Scott.................B7
J Tension between the Ger-
Jacobsen, Brian...........B7
K
Karp, Nathaniel .......... A7
Kavan, Ajay.................B1
Kydd, Alex...................B7
L-M
Leighton, Fred ........... W3
McCarthy, David ......... B3 half of the maintenance work-
McQueen, Alexander.W3 ers.
Middleton, Kate.........W3 The labor dispute comes at
O an inopportune time for
Ong, KC ....................... B1 Volkswagen, which is em-
P
U.S. authorities over a settle-
Paris, Chaumet..........W3
ment in its emissions-cheating
Paulson, John..............B7
scandal, and is readying pro-
R duction later this year of a
Reyes, Rick de los......B5 new midsize sport-utility vehi-
S
cle at the Chattanooga plant.
man car maker and its U.S.
T workers flared in December,
Turnill, Richard ........... B5 when a smaller unit of
Turzyn, Heidi ............. W7 skilled workers at the Chat-
tanooga plant voted in favor
of representation by UAW
Wadhwani, Sushil.......B5
Local 42. The vote came two
Y years after plant assem-
Yadav, Anita................B5 bly staff voted down a pro-
posal to unionize.
Volkswagen has refused to
talks with the unit, despite a
ruling by the National Labor
Relations Board in April,
which said the refusal violated
U.S. labor law.
UAW Secretary-Treasurer
Gary Casteel and Karlheinz
Blessing, Volkswagen’s man-
agement board member in
charge of human resources,
met on May 11 in a Stuttgart
airport conference room to re-
solve the conflict.
A spokesman for Mr. Bless-
ing declined to comment on
the details of the meeting, but
said it “lasted for an hour as
planned and it was agreed to
continue the dialogue.” How-
ever, no date was set for an-
other meeting.
The spokesman also said
that Volkswagen “respects the
rights of its employees to de-
cide for themselves about
added that the car maker
didn’t want to divide the
workforce into separate bar-
gaining units. “The NLRB did
not vote unanimously and
that’s why we want the
NLRB’s decision to be re-
viewed.”
Mr. Casteel said Mr. Bless-
ing “offered no indication that
he was seeking a solution, but
just kept saying ‘I have no
mandate’. Now, we’re consid-
ering legal action.
“They committed to recog-
nizing us and now they’re
thumbing their noses at the
NLRB.”
The UAW is turning to IG
Metall, Germany’s biggest in-
dustrial trade union, to put
pressure on Volkswagen exec-
utives. IG Metall represents
nearly 300,000 workers at
Volkswagen and its Porsche
many, and has considerable in-
fluence on the company’s su-
pervisory board.
“It is not acceptable that
companies abide by the law in
Germany but disregard it in
other countries,” Jörg Hof-
mann, president of IG Metall,
said last week in connection
with the Chattanooga workers.
“Workers’ rights should be re-
spected world-wide—particu-
larly by companies headquar-
tered in Germany.”
Mr. Hofmann, an economist
and vice chairman of Volks-
wagen’s board of directors,
made the comment after a
meeting of IndustriALL, an in-
ternational organization of in-
dustrial trade unions, which
issued a statement on May 30
demanding that Volkswagen
begin negotiations with the
UAW on behalf of the mainte-

DISNEY back outside the Paris park.

China’s unapologetic polic-
ing isn’t Disney’s style. It fa-
open collective bargaining union representation,” but and Audi subsidiaries in Ger- nance workers.

Continued from the prior page

dressed casually in lei-
surewear such as straw hats
mously strives for subtle secu-
rity such as hidden cameras
that won’t distract from the
fun. Where Shanghai has X-ray
PROBE U.S. authorities disclosed in
September that Volkswagen
had manipulated software in
some of its diesel vehicles to
they are investigating around
17 people in connection with
the emissions scandal. No
charges have been filed
AIRBUS
and golf shirts. machines in every one of its Continued from the prior page produce lower levels of toxic against anyone yet. Continued from the prior page
A black Shanghai police subway stations, Disney theme The company has declined to nitrogen-oxide emissions dur- Olaf Lies, the economics [aircraft].”
surveillance van regularly parks only added them in the comment on Mr. Donovan’s al- minister in Lower Saxony Willie Walsh, chief executive
parked near Shanghai Disney- past year or so. legations. state, a major Volkswagen of British Airways parent Inter-
land’s front gate is a reminder In Shanghai, crowd control A Volkswagen spokesman
Employee may have shareholder, said the com- national Consolidated Airlines
that ultimately Chinese law starts with regulating expecta- has said that Mr. Donovan was encouraged others to pany’s supervisory board had Group SA, has said the com-
enforcement hasn’t been out- tions. Ticketing is handled let go for other reasons, but also discussed the allegations pany might buy some used
ranked by Disney security. In through online reservations declined to elaborate because
tamper with files, that employees removed or de- A380s. British Airways as of
all, the purpose-built tourist for specific days. Controls of privacy laws. prosecutors say. stroyed evidence. “We are tak- last month already operated 11
zone including Shanghai Dis- weren’t so tight in 2005. At It isn’t clear if there is any ing these allegations very seri- of the dozen A380s it had or-
neyland covers an area about Hong Kong Disneyland, a sold- link between the case under ously,” he told the state’s dered. Mr. Walsh said he is in-
twice the size of New York’s out day around China’s Na- investigation by Braunschweig ing laboratory tests than un- legislature on Thursday. terested in a few more, but
Central Park. Near the theme tional Day holiday prompted prosecutors and Mr. Donovan’s der real driving conditions. The diesel-testing scandal only at lower cost.
park, local authorities operate chaos, with angry visitors who allegations in the U.S. Prosecutors in Braunsch- has battered Volkswagen’s Airbus is betting that by ex-
a new multibay firehouse and couldn’t get in lifting their The investigation of the weig, the district with jurisdic-
namesake brand, which has posing the double-decker to
a large police compound. Para- children over the fence into German manager was reported tion over Wolfsburg, where lost market share in major re- new customers and routes will
military police may appear in the park. earlier by German media. Volkswagen is based, have saidgions of the world. eventually help spur interest in
the area, though so far uni- Many will travel to Shang- an aircraft that can seat more
formed officers have been hai Disneyland by a subway than 600 passengers and costs
seen mostly on traffic duty line designed to shuttle 20,000 Hard-Wired Labor $432.6 million each at list
and sniffer-dog patrols. per hour. Electronic road signs price, even though buyers typi-
As wages rise in China and other parts of Asia, manufacturers are increasingly turning to
Wang Hongwei, a professor and social-media messages are cally get discounts.
robots and automation.
of national security at Bei- intended to alert visitors to Securing new orders has
jing’s Renmin University, says congestion. In the park itself, a Average monthly income for Estimated global shipments of industrial robots been a struggle for Airbus, Mr.
there is likely to be strong co- design with Chinese crowds in migrant workers in China Brégier said, adding that “the
ordination. He called the park mind provides for extra-wide challenge is to promote the air-
“an important target for the sidewalks, metal-barricade 3,000 yuan 300,000 units craft more aggressively.”
government to keep an eye on channels, shaded seating and Other countries All Nippon Airways late last
from a public security per- overflow zones. year agreed to buy three of the
spective.” One area Disney doesn’t di- planes and Iran Air in January
2,500 250,000
Disney spent years working rectly control: the subway sta- said it planned to take 12,
Europe
to make Chinese authorities tion near the front gate, where though the deal still needs to
comfortable about its apoliti- on a recent day visitors Germany be completed. Other airlines,
cal entertainment and security queued at a narrow entrance 2,000 200,000 such as Air Austral, Kingfisher
competence. It toured Chinese waiting to pass bags into X-ray Airlines and Hong Kong Air-
police officials through each of machines. Asia and Australia ways, ordered the plane and
its five parks—which draw The new park’s architecture 1,500 150,000 then reversed course.
over 120 million annually—to is its own security measure. The A380 has proved popu-
demonstrate how it manages Instead of entering along an lar with passengers, though
attendance. American-style “Main Street” airline buyers have shied away
Martin Lewison, a theme- as in other Disneylands, 1,000 100,000 because of concern whether
park expert at Farmingdale Shanghai visitors will get they can sell enough seats on
State College in New York, channeled from “Mickey Ave- the large plane. Mr. Brégier
predicts crowd management nue” into a jumbo-size oval China said Airbus will try to reach
500 50,000
will feature “measures that with a garden maze designed out more directly to passen-
the Chinese middle class will to slow the scramble toward Americas
gers with plans to launch a
find appropriate” because se- the biggest castle Disney has website that will allow them to
0 0 North America
curity around Disneylands built anywhere. see on what routes the double-
usually has local characteris- —Yang Jie in Beijing 2013 ’14 ’15 ’16 2013 ’14 ’15 decker operates and directly
tics, such as police on horse- contributed to this article. Forecasts book tickets.
Sources: International Federation of Robotics; CEIC (migrant wages) 3,000 yuan = $457 THE WALL STREET JOURNAL. Airbus for years lost money
on delivering A380s and last

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BUSINESS OPPORTUNITY FINANCIAL SERVICES Continued from the prior page duce lower-cost goods closer The facility could also cut “we are still struggling to be
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For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL.
Samsung
Gets Boost
In Apple
Patent Case
BY JONATHAN CHENG
SEOUL—The U.S. Justice
Department filed an amicus
curiae brief urging the Su-
preme Court to overturn a
federal appeals court ruling
that awarded about half a bil-
lion dollars in damages to Ap-
ple Inc. for design patent in-
fringements by South Korean
smartphone rival Samsung
Electronics Co.
While the Justice Depart-
ment’s filing didn’t formally
take a side in the Apple-Sam-
sung dispute, its call for a new
trial was quickly welcomed by
Samsung as a victory in its
long-running patent dispute
with the Cupertino, Calif.,
company.
“We welcome the over-
whelming support for over-
turning the ruling in favor of
Apple, including from leading
patent experts, numerous con-
cerned companies and the U.S.
government,” said a Samsung
spokeswoman on Thurs-
day. She added that the cur-
rent appeals court judgment
would lead to “diminished in-
novation” and “negatively im-
pact the economy and con-
sumers.”
Samsung’s petition
involves ‘design
patents’ for the look
and feel of a product.
An Apple spokeswoman de-
clined to comment on the Jus-
tice Department’s brief but re-
iterated the company’s
previous comment regarding
its legal fight with Samsung,
saying the company values
“originality and innovation.”
Samsung last December
asked the Supreme Court to
hear an appeal of its long-run-
ning feud with Apple, hoping
to upend part of a 2012 jury
verdict that found the com-
pany liable for infringing pat-
ents on Apple’s iPhone.
Samsung was initially or-
dered to pay $930 million to
Apple for a variety of infringe-
ments. A federal appeals court
in Washington, D.C., last year
threw out part of the verdict,
reducing Samsung’s penalty to
$548 million. In December,
Samsung agreed to pay that
amount, though it reserved
the right to seek reimburse-
ment if it succeeded with the
Supreme Court.
Samsung’s petition to the
Supreme Court that same
month revolves around “de-
sign patents” that cover the
look and feel of a product. At
trial, Apple convinced the jury
that basic design elements of
certain Samsung smartphones,
including the Galaxy S II—es-
sentially a rectangle with
rounded corners and a touch-
screen grid made up of
smaller icons—borrowed too
closely from Apple’s iPhone
design.
In its petition to the na-
tion’s top court, Samsung ar-
gues that, even if it did in-
fringe design patents held by
Apple, damages should be
awarded on a proportional
basis to the value of the de-
signs being infringed—not on
the value of the entire prod-
uct.
In the original trial, U.S.
District Judge Lucy Koh in-
structed the jury to come up
with an award for what it
deemed to be Samsung’s profit
from its design patent in-
fringement.
Samsung alleges that
Judge Koh’s instructions es-
sentially told the jury to
award damages equal to the
value of the entire smart-
phones being sold, rather
than allowing the jury to de-
cide whether the value of the
infringement only corre-
sponded to a certain portion
of the phone’s value.
“Under that rule, a jury that
awards infringer’s profits must
award the entire profits on a
car…that contains an infring-
ing cupholder,” wrote Sam-
sung’s lawyer in the brief.
The Justice Department, in
calling for a new trial, gives
Samsung a strong upper hand
in making its case, said Florian
Mueller, a German consultant
who publishes a blog about
patent disputes.
Vodafone Steps Into Pay Television
Vodafone Group PLC plans
to add pay television to its New
Zealand operations through a
3.44 billion New Zealand dollar
(US$2.41 billion) merger of its
local unit with Sky Network
Television, as the world’s big
telecommunications companies
continue to pivot toward TV
and online video.
By Rebecca Thurlow
in Sydney and
Kate Geenty
in Wellington, New Zealand
Sky said Thursday it will is-
sue new shares to Vodafone at
NZ$5.40 a share—a 21% pre-
mium to its last closing price
before trading was halted
Wednesday—and pay NZ$1.25
billion in cash, giving Voda-
fone a 51% stake in the com-
bined entity. Russell Stanners,
currently chief executive of
Vodafone New Zealand Ltd.,
will head the new business.
The move follows a trend
by telecom companies to do
deals that will help them bun-
dle media content into their
offerings to differentiate
themselves from competitors
and reduce customer churn.
Last year AT&T Inc. ac-
quired U.S. satellite-television
company DirecTV for US$49
billion and Verizon Communi-
cations Inc. acquired AOL Inc.
for US$4.4 billion, gaining
technology that plays videos
and serves up ads.
While U.K.-based Vodafone,
the world’s second-largest mo-
bile carrier, behind China Mo-
bile Ltd., once focused on sell-
ing only mobile-phone
subscriptions, it has been in-
vesting heavily in recent years
in adding fixed lines for cable
TV and broadband, enabling it
to sell combination packages
with both wireless and fixed-
line services.
Last year, Vodafone an-
nounced plans to launch tele-
France Rejects Vivendi Deal With Qatari Firm
BY NICK KOSTOV
The French antitrust watch-
dog has rejected an alliance
between Vivendi SA’s pay-TV
group Canal Plus and Qatar-
controlled beIN Sports, deal-
ing a blow to the French me-
dia company.
The deal, which had been
under discussion for months,
involved Canal Plus paying
€1.5 billion ($1.7 billion) to
distribute channels from the
Qatari group exclusively for
Business
Watch
DEUTSCHE LUFTHANSA
CFO Set to Step
Down From Airline
Deutsche Lufthansa AG on
Thursday said Chief Financial Offi-
cer Simone Menne would step
down, a surprise announcement
in the midst of a far-reaching ef-
fort to put the German flag car-
rier on a sound financial footing.
Ms. Menne will leave the air-
line on Aug. 31 to pursue other
career options, Lufhansa said in a
statement, without providing de-
tails. A decision on her successor
will be made shortly, the airline
added.
Ms. Menne has been a right-
hand aide to Lufthansa Chief Ex-
ecutive Carsten Spohr in his ef-
forts to turn around the airline.
She became CFO in July 2012
when she also took a seat on the
airline’s executive board, making
her one of the airline industry’s
most influential female execu-
tives.
“The supervisory board regrets
Ms. Menne’s decision but has, af-
ter careful consideration, acceded
to her request to be prematurely
released from her contractual ob-
ligations,” the company said.
—William Wilkes|
and Robert Wall
RÉMY COINTREAU
Cognac Sales
Help Lift Profit
Rémy Cointreau SA’s fiscal-
year net profit jumped more
than 10%, led by strong demand
for the French liquor group’s co-
gnac and other dark spirits in
the U.S., and rebounding demand
in China and the rest of Asia.
TECHNOLOGY
U.K.-based Vodafone, the world’s second-largest mobile carrier, has been investing in adding fixed lines for cable TV and broadband.
vision services in the U.K. to
boost revenue amid greater
competition from incumbent
competitors who had been
strengthened by a round of in-
dustry consolidation.
For Sky, the deal with Voda-
fone comes as it struggles to
battle competition from on-de-
mand and streaming content
providers such as Netflix Inc.
“It’s a real survival strat-
egy,” said Morningstar analyst
Brian Hann. “By going down
this route they have basically
admitted that as a stand-alone
pay-TV single product com-
pany, we simply can’t com-
pete.”
Sky is the leading pay-TV
operator in New Zealand, with
more than 830,000 subscribers
serving almost half of all New
Zealand households.
five years, people familiar
with the matter said.
“This project to ally, of
which we don’t know every-
thing, contained a risk of col-
lusion in sports rights, as the
two actors would have held
80% of sports right, and the
football league was worried,”
antitrust chief Bruno
Lasserre said.
“An agreement couldn’t be
found for concessions that
would have limited competi-
tion risks. We preferred to say
Rémy Cointreau reported strong demand in the U.S. and Asia.
The owner of Rémy Martin
cognac and Cointreau liqueur
said on Thursday that net profit
rose to €102.4 million ($125.9
million) in the year to end-March
from €92.6 million the previous
year.
Revenue rose 8.9% to €1.05
billion, partly helped by favorable
exchange rates. On a comparable
basis, revenue rose 0.3%. Rémy
Cointreau increased its dividend
by 4.6% to €1.60 a share.
After two years of decline,
sales of Rémy Martin, which ac-
counts for around half of com-
pany revenue, recovered across
regions with strong growth in
the 1738 Accord Royal and Club
brands in the U.S. and Asia, the
company said.
—William Horobin
LENOVO
New Phone Based on
Google Technology
Lenovo Group Ltd. unveiled
the first smartphone based on
Google’s Project Tango, a tech-
nology designed to measure and
map surrounding objects and
spaces.
Friday - Sunday, June 10 - 12, 2016 | B3
However, profit fell last fi- Golden State Warriors, in Oak-
nancial year as it ramped up land, Calif., on May 30 via the
investment in content deals to Sky Go app were disappointed.
try to compete with rivals. The Live streaming on the app
company also surprised the stopped working around tip-
market in May by forecasting off and was down for most of
that subscribers will be down the playoff game—one of the
in the second half of this fiscal biggest of the year for New
year because many customers Zealand basketball fans.
who signed up for last year’s Analysts said Vodafone can
Rugby World Cup decided not provide Sky with much-needed
to renew their contracts. technology investment and ex-
Its efforts to move into new pertise to ensure its content is
areas such as on-demand TV available at all times, across
and over-mobile streaming multiple devices. Vodafone is
have lagged behind competi- the biggest provider of mobile-
tors and been marred with phone services in New Zealand
technological glitches. with more than 2.35 million
Basketball fans hoping to connections and is the No. 2
watch New Zealander Steven fixed-line competitor with
Adams and his Oklahoma City more than 500,000 broadband
Thunder team play the Na- and home-phone connections.
tional Basketball Association’s Already, it provides Sky TV
reigning champions, the packages to customers via a
no,” he added. BeIN Sports entered the
Thursday’s verdict is a set- French market in 2012, spend-
back for Vivendi, which has ing millions of euros scooping
described the deal as an es- up live sports rights including
sential part of its strategy to the UEFA Champions League
stem losses at its French pay- and French Ligue 1 soccer
TV channels, which have been games and quickly becoming a
losing money for the last four formidable competitor to Ca-
years. nal Plus.
In a statement, Canal Plus Although the beIN Sports
said it “acknowledged” the de- channel now counts more than
cision and would work on “al- 2.5 million subscribers in
ternative solutions” to stop France, turning a profit has
the losses at its French chan- proved more difficult. Analysts
nels. at Natixis estimate the channel
Thursday the acquisition of U.K.
food-distribution company
Brakes Group by U.S.-based
Sysco Corp.
The European Commission,
the EU’s executive arm, said
the takeover wouldn’t adversely
affect competition in Europe.
“Consumers, hospitals,
schools and other food-service
customers must be able to rely
on competition to deliver af-
fordable prices and good ser-
vice. Our investigation has con-
firmed that this would be the
REGIS DUVIGNAU/REUTERS
case also after the merger,”
said Margrethe Vestager, the
bloc’s competition commis-
sioner
Sysco agreed in February to
acquire Brakes Group for $800
million, expanding the U.S. com-
pany’s overseas presence. The
acquisition also entails the as-
The Chinese company also sumption of $2.3 billion in debt.
announced an initiative to deliver —Viktoria Dendrinou
a new line of modular smart-
phones, stemming from its 2014 AIRASIA
purchase of Motorola Mobility.
Lenovo unveiled new Moto Z
Capacity Growth
handsets that will feature inter- To Restart Next Year
changeable snap-on modules, Malaysia’s AirAsia Bhd. is
starting with an extra speaker, a looking to restart its capacity
projector for presentations and growth next year as the bud-
an expanded internal battery. get airline sees strong growth
Lenovo said it hoped to spur potential for air-travel demand
other companies to offer many in Asia, Chief Executive Tony
new “Moto Mods,” as the com- Fernandes said.
pany calls them. Mr. Fernandes said in an in-
Alphabet Inc.’s Google dis- terview Thursday that the
closed the Tango effort in early company was “super bullish”
2014, and its relationship with on growth in the region.
Lenovo was disclosed in January. “We’ve conservatively cut ca-
The technology uses arrays of pacity for a few years. Next
cameras, sensors and software year we’ll restart growth.”
to create three-dimensional AirAsia, founded and run by
models of indoor spaces and Mr. Fernandes and Kamarudin
track the user’s motions through Meranun, is Asia’s biggest bud-
them. get airline by passenger num-
—Don Clark bers.
“I would say on average Air-
SYSCO Asia is short of about 100 air-
craft,” Mr. Fernandes said.
Brakes Group Deal “And we are beginning to
Is Cleared by the EU look at the A321, it is an inter-
The European Union’s anti- esting aircraft.”
trust watchdog approved —Yantoultra Ngui
@wsjd | wsjd.com
PRASHANTH VISHWANATHAN/BLOOMBERG NEWS
wholesale relationship be-
tween the two companies.
The combined group will be
one of the largest companies
listed on the NZX Main Board,
and will have a revenue of
NZ$2.914 billion in the year
ending in June 2017, Sky said.
Still, some analysts are
questioning how long Voda-
fone will remain in the market.
“New Zealand is a very mar-
ginal, mature market for Voda-
fone to parent, so questions
can always be asked” about
what Vodafone is doing in New
Zealand,” said Morningstar’s
Mr. Hann. “That’s now in a
ready-made exit vehicle and
later on down the track they
can sell it more easily.”
Sky shareholders will vote
on the deal in a meeting
scheduled for early July.
is losing between €250 million
and €300 million a year, partly
because it charges subscribers
€13 a month for expensively
acquired sports content.
For Vivendi, a lot is at stake
in returning Canal Plus to fi-
nancial health. The pay-TV
group is currently Vivendi’s
largest business, accounting
for more than half of its sales,
and is a key cornerstone of the
group’s plans to build a media
empire focused on southern
Europe.
AMAZON
Continued from page B1
against discount grocers Aldi
and Lidl, which have gained
market share with low prices
and increasingly high-quality
produce.
In response, the big chains
have slashed prices and re-
vamped their operations,
while pouring money into bol-
stering their online delivery
businesses.
“Whilst not a ‘killer blow,’
it should be viewed as the
start of a journey that could
have impacts across the sec-
tor,” HSBC analyst David
McCarthy said of Amazon’s
Thursday announcement.
Jefferies analyst James Gr-
zinic said Ocado Group PLC—
which describes itself as the
world’s largest online-only
grocer—is the most vulnerable
to losing market share to Am-
azon. Morrisons is in the best
position due to its deal with
the Seattle-based retail giant,
he said.
A spokeswoman for Ocado
declined to comment.
Amazon will charge Prime
customers—who already pay
£79 ($114.55) a year for the ser-
vice—£6.99 a month for unlim-
ited delivery of orders above
£40 in one hour delivery slots
from 7 a.m. to 11 p.m.
The retailer is offering
same-day delivery after 5 p.m.
for customers who place orders
by 1 p.m.
HSBC’s Mr. McCarthy noted
that the delivery fee, while
competitive, isn’t market lead-
ing. Given the inertia that
takes hold after customers
sign up for a delivery service,
he said, Amazon likely is look-
ing to expand the overall U.K.
online delivery market rather
than just win over existing
shoppers.
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 | Friday - Sunday, June 10 - 12, 2016
BAE Looks Beyond the Typhoon
Military plane maker
says it will focus on
the F-35 fighter
program and drones
BY ROBERT WALL
SAMLESBURY, U.K.—After
more than a decade in which
building Eurofighter Typhoon
jet fighters has been the back-
bone of BAE Systems PLC’s
combat aircraft production,
the defense company is shift-
ing its focus to the new F-35
Joint Strike Fighter and what
may come next.
BAE Systems expects sales
from the Lockheed Martin
Corp.-led F-35 program to jump
in coming years as its work on
the program surpasses produc-
tion of the Typhoon combat jet,
said Chris Boardman, manag-
ing director of the British arms
maker’s military air and infor-
mation systems unit.
With its role on the F-35
limited to being a key supplier,
the British weapons maker
also is trying to retain its abil-
ity to lead future combat air-
craft developments to remain a
top-tier military plane maker.
BAE is working with other
U.K. and French firms to de-
velop a stealthy combat drone
that could surveil and strike
ground targets. A small group
of engineers also is exploring
what a future air-superiority
combat plane might look like,
IKEA Pursues Cramped, Connected Buyers
BY SAABIRA CHAUDHURI
ÄLMHULT, Sweden—IKEA
on Wednesday showed off pro-
totypes for new products from
electronic lighting controls to
space-saving furniture, as the
retailer looks to cater to a
world that is fast becoming
more cramped and connected.
The world’s largest furni-
ture retailer has so far been
slow to integrate technology
into its products, but it has re-
125,000
Minutes a year
STUDYING FOR YOUR
UNDERGRADUATE DEGREE
4,400
Minutes a month
ATTENDING ENTREPRENEUR
F-35B Lightning II Joint Strike Fighters during a 2013 training exercise over eastern California.
Mr. Boardman said, though
fielding such a system may
take another two decades.
The Franco-British combat
drone program, through which
both countries hope to keep
up with more advanced U.S.
developments, received a
boost in March when U.K.
Prime Minister David Cameron
and French President François
Hollande pledged €2 billion
($2.3 billion) to develop a
drone to fly around 2025 and
potentially enter production a
few years later. “It is the most
advanced program of its kind,”
cently shown signs that it
wants to expand beyond its
bread-and-butter offerings of
couches and tables.
Last year, IKEA began sell-
ing lamps that double as
charging stations for mobile
phones. In April, it launched a
virtual-reality app that lets us-
ers wearing a headset explore
one of three kitchen settings
and change the color of cabi-
nets and drawers.
At a media event Wednes-
14,800
Minutes a month
MENTORING START-UPS
EVENTS
BUSINESS NEWS
Martin Rowe-Willcocks, head
of for future programs at the
BAE Systems unit, told report-
ers.
BAE Systems is building on
experience gained using a
smaller combat drone test air-
craft, the Taranis, which first
flew in Australia in 2013. It
may take to the skies again to
validate technologies for the
Anglo-French program, which
also involves companies such
as France’s Dassault Aviation
SA, and engine makers Rolls-
Royce Holdings PLC and Sa-
fran SA.
day, IKEA displayed proto-
types of new products that
will hit stores next year. One
of these is a dial that lets
bulbs embedded with micro-
chips be dimmed or made
brighter and their tone
changed from warm to cold.
Chief Executive Peter Ag-
nefjäll said the company
might further refine the con-
cept so the same functions
could be controlled with a
smartphone app.
850
Minutes a week
PRESENTING AT
CONFERENCES
THE WALL STREET JOURNAL.
£4 billion ($5.8 billion) in sales
last year.
Making F-35 parts gives
BAE Systems about 10% of
value on each of the planes
that currently cost around
$110 million or more depend-
ing on the version. The com-
pany also is involved in pro-
viding some of the
sophisticated electronics, add-
ing another 3% to 5% of sales.
LCPL. RAQUEL BARRAZA/PLANET PIX/ZUMA PRESS
RBC Capital analyst Robert
Stallard said Thursday that
“the F-35 should be a major
driver of revenue and earnings
growth for Lockheed Martin,
the prime contractor, and key
suppliers such as BAE Systems
and Northrop Grumman dur-
ing the rest of this decade and
beyond.” BAE Systems should
see its £600 million annual
F-35 sales grow to £1.5 billion
over the next five years.
How large annual F-35 sales
will be for BAE depends on the
The nearer-term focus for share of the lucrative spares
BAE Systems, though, is on and maintenance work for the
boosting output on parts it plane the company can win, Mr.
makes for the F-35 fighter. The Boardman said. It is a business
British company built nearly where the partners in building
50 rear-fuselage sections last the jet can compete fiercely.
year and expects to produce BAE Systems has secured
about 160 when output peaks an agreement to provide heavy
after 2020. U.S. and interna- maintenance of the jet in Aus-
tional buyers could purchase tralia and is working with
more than 3,000 of the jets. Northrop Grumman in Europe
Mr. Boardman said sales to secure component repair
from designing, building and contracts.
other F-35 activities should “The big unknown from our
reach about 25% of the mili- perspective will be how much
tary aircraft unit’s revenue of the support market we get,”
around that time. The unit had Mr. Boardman said.
IKEA also is in the early target of increasing revenue to
stages of working on technol- €50 billion ($57 billion) by fis-
ogy to turn any surface into an cal 2020 from €31.9 billion in
induction stovetop, possibly fiscal 2015, ended in August,
by embedding chips in frying despite currency volatility that
pans that allow them to heat has recently pressured results.
up internally while staying While many retailers world-
cool externally, said Jesper wide have been affected by the
Brodin, IKEA’s head of range slowdown in China, Mr. Ag-
and supply. The company nefjäll said IKEA has been rel-
launches roughly 2,000 new atively insulated from it as the
products every year. company benefits from “a
Separately, Mr. Agnefjäll growing middle class with an
said IKEA is on track to hit its appetite for better homes.”
38,000
Minutes a year
LEARNING TO CODE
5
Minutes a day
READING WHAT’S NEWS
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Why not invest a little to stay there?
The What’s News app gives you the
essential information to drive your
ambition. From markets and finance to
politics and opinion, What’s News keeps
you in control in just a few minutes a day.
NOW ON ANDROID
© 2016 Dow Jones & Co., Inc. All rights reserved. 6DJ3754
EU Faces
Criticism
Over GMO
Soybeans
BY JACOB BUNGE
A trans-Atlantic dispute
about new genetically modi-
fied soybean varieties is esca-
lating, as agriculture groups in
the U.S. and Europe lambasted
the European Commission for
not yet approving new seeds.
Trade groups representing
grain traders and soybean
farmers in separate letters
this week said European
Union officials have dithered
for months longer than usual
about the final approval of
the seeds and not explained
the delays, ratcheting up
risks to international trade
and livestock operations.
Tension is growing in the
agricultural sector over the
approval process for the bio-
tech soybeans, including a va-
riety that Monsanto Co. sold
to U.S. farmers for the first
time this year.
The lack of approval from
the EU to import the new soy-
beans has prompted some grain
firms such as Archer Daniels
Midland Co. and Bunge Ltd. to
tell farmers that the companies
won't buy the crops once they
are harvested. U.S. grain groups
have pressed Monsanto to out-
line plans that would ensure
the soybeans don’t wind up in
ships bound for the EU.
European agriculture
groups said that the Euro-
pean Commission is months
overdue in granting final im-
port approval since an EU
committee in January voted
in favor of authorizing three
new genetically modified
soybean varieties, and the
European Food Safety Au-
thority deemed the products
safe last year.
A European Commission
spokeswoman said that the EU
takes “a precautionary ap-
proach” to regulating biotech
crop imports that is based on
science.
 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
MARKETS DIGEST B6 | THURSDAY’S MARKETS B7 | FINANCE WATCH B8

British Housing Prices Reading the Tea Leaves

Are Expected to Fall On China Crude Imports

REUTERS
PROPERTY | B7 HEARD ON THE STREET | B8
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, June 10 - 12, 2016 | B5
As of 4 p.m. ET EUR/GBP 0.7830 g 0.33% YEN/DLR ¥106.55 g 0.41% GOLD 1270.20 À 0.83% OIL 50.56 g 1.31% 3-MONTH LIBOR 0.65605% 10-YR TREAS À 8/32 yield 1.678%

Tokyo Stocks Hit as Foreign Buyers Flee

Disillusionment over year since at least 2003, the
data showed.
‘Abenomics’ is cited Uncertainty about global
as the pace of stock growth, particularly fears
early this year of a sharp
selling quickens slowdown in China, drove part
of the selling. And there are
BY KOSAKU NARIOKA some investors who still see
plenty of opportunity in select
TOKYO—Foreign investors Japanese stocks.
are selling Japanese stocks at Many foreign investors,
the fastest pace in years, as however, point to a growing
high hopes for “Abenomics” disappointment with Abe-
turn to disenchantment. nomics, Prime Minister
Through the end of May, Shinzo Abe’s economic pro-
foreigners had sold a net ¥4.5 gram, which hasn’t delivered
trillion ($42 billion) of Japa- sustained growth. Some
nese equities this year, accord- question whether Japanese
ing to Tokyo Stock Exchange policy makers are committed
data provided by Quick. That to achieving their stated
was the biggest exodus during goals, including the Bank of
the first five months of any Japan’s 2% inflation target
and structural reforms.
Homin Lee, regional econ-
omist for Asia at private
bank Lombard Odier, said un-
certainty over the central
bank’s determination to reach
2% inflation had led his team
to cut its allocation to Japa-
nese stocks in recent months.
He pointed to the BOJ’s deci-
sion not to take additional
action at its policy meeting
in April, despite sagging in-
flation expectations.
“If you’re serious about the
[inflation] target, then there
was no excuse for Bank of
Japan not to ease at the end
of April,” said Mr. Lee, whose
team manages about $8 billion
in assets.
Mr. Abe took office in late
2012, vowing to achieve sus-
tainable, robust growth with
extraordinary monetary eas-
ing, fiscal stimulus and struc-
tural reforms. But the Japa-
nese economy has never taken
off, and has swung between
contractions and modest
growth in recent quarters.
The impact of the BOJ’s
monetary policies appears to
be fading, while its inflation
target remains elusive. A
weaker yen had been a key
driver of rising corporate
profits in recent years. How-
ever, the Japanese currency
has strengthened this year and
earnings are sagging.
The flight from Japanese
equities by foreign investors
has helped push the bench-
mark Nikkei Stock Average
down 12% this year, leaving it Coming and Going
20% below its recent peak in Foreign investors have been
June 2015. fleeing Japanese stocks in recent
Abenomics-fueled expecta- months, after piling in during the
tions had sparked a rally early days of ‘Abenomics.’
that sent the index to an 83%
gain over the 3½ years from ¥15 trillion
January 2013.
Net buying
Foreign investors, which 10
account for about one-third
of Japanese equities hold- 5
ings, sold a net ¥7.6 trillion
of Japanese equities over the
12 months through May. 0
They were net buyers of Net selling
¥20.3 trillion during the pre- –5
vious 2½ years. 2012 ’13 ’14 ’15 ’16
Even investors who are still Note: 2016 data through May;
buying Japanese stocks note ¥1 trillion = $9.35 billion
that the “easy gains” enjoyed Source: Tokyo Stock Exchange via Quick
Please see JAPAN page B7 THE WALL STREET JOURNAL.

Top U.K.
Investors
Play Down
EU Exit
BY JOSIE COX
IAN TIMBERLAKE/AGENCE FRANCE-PRESSE/GETTY IMAGES

Three top U.K. investors

warned that global markets
have bigger worries over the
coming months than the result
of Britain’s referendum on Eu-
ropean Union membership.
Speaking at a WSJ City
panel discussion Thursday, An-
drew Balls, chief investment
officer of global fixed income
at Pacific Investment Manage-
ment Co., Richard Turnill,
chief investment strategist at
BlackRock Inc., and Sushil
A base for energy production in the Shaybah field, in Saudi Arabia’s Empty Quarter desert. The kingdom’s oil reserves are estimated at 261 billion barrels. Wadhwani, chief executive of
Wadhwani Asset Management

Aramco’s IPO Treasure: $1 Billion in Fees

BY MAUREEN FARRELL Co., as it is formally known,
AND NICOLAS PARASIE could be worth $2 trillion to
$3 trillion—roughly equal at
Some deals only happen its midpoint to the total mar-
once in a blue moon. Others ket value of every other pub-
only come around once in a licly traded oil and gas com-
pany in the world, according
generation.
But the one Wall Street to S&P Global Market Intelli-
bankers are eyeing in the des- gence.
erts of Saudi Arabia is going The prospect of a deal that
to need a new set of superla- could generate $1 billion in
tives. fees has senior bankers at the
That would be the planned world’s largest financial insti-
initial public offering of state- tutions scrambling to
owned oil giant Saudi Aramco’s headquarters in the
Aramco, by virtually any mea- coastal city of Dhahran. Some
sure one of the largest enter- have spent hours waiting to
prises on earth. The kingdom sit down with Chief Executive
has said that Saudi Arabian Oil Amin Nasser or Chairman
Khalid al-Falih, only to be told
they would be meeting more
junior Aramco officials in-
stead, according to people fa-
miliar with the process.
One who did win a recent
meeting with Mr. Nasser in
one of the company’s off-
white, stucco buildings said
the CEO spent the hour extol-
ling the promise of Saudi Ara-
bia’s economic transformation.
Mr. Nasser made it clear that
to win a role on the IPO, banks
should consider financing big
infrastructure projects aimed
at moving the economy be-
yond its dependence on oil,
Please see IPO page B8
LLP, agreed that while the ref-
erendum has the potential to
jolt markets domestically, the
international impact is likely
to be muted in the long run,
How Big Is Aramco? whatever the outcome.
Saudi Arabian Oil Co.'s estimated value, compared with a few Mr. Balls said: “I think we’re
of the world's largest companies by market capitalization exaggerating. Who cares if the
U.K. leaves the EU from a
global markets perspective?
Aramco* $2 trillion $3 trillion
There are much bigger fish to
fry.”
Apple $542 billion All three agreed that ster-
ling and domestically focused
Alphabet $505 billion stocks, especially small and
midsize companies, would
Microsoft $409 billion likely suffer in the aftermath
of a vote to leave. They also
Exxon Mobil $376 billion
said peripheral European mar-
kets could suffer a degree of
contagion as investors may
*Estimated range Note: Market capitalization as of Wednesday
Sources: the company (Aramco); wonder who could be next to
WSJ Market Data Group (market capitalization) THE WALL STREET JOURNAL. Please see INVEST page B7

Big Bet of 2016: Join Soros in Gold Oman Joins Oil Rivals
BY STEPHANIE YANG week low after soft U.S. jobs
data and comments from Fed
Billionaire investor George
Soros, who has recently re-
firms has more than doubled
this year, including a 4% gain
Selling Debt Abroad
There is a new gold rush Chairwoman Janet Yellen turned to trading amid what Wednesday, reversing several BY CAROLYN CUI $15 billion in global debt. That
on. made clear that no increase is he sees as coming economic years’ declines. The SPDR would be one of the largest
Abating expectations for imminent, extending a com- troubles, in May disclosed a 19 Gold Trust ETF, which gives The Oman government sold sales ever by a developing
Federal Reserve rate increases modity-sector rebound whose million-share stake in the investors a low-cost way to $2.5 billion of bonds Wednes- country.
have fueled a fresh boom in size and longevity have sur- world’s largest gold producer, track gold futures, has posted day, becoming the latest Gulf Oman is the largest Middle
everything that glitters, from prised many investors. Barrick Gold Corp. DoubleLine five straight weeks of investor state to tap the debt markets East oil producer outside of
gold futures to the shares of “It’s been an unbelievably Capital’s Jeffrey Gundlach has inflows up to the week ended in a move to shore up its bud- the Organization of the Petro-
gold-mining firms to ex- quick change from despair to called for gold to reach $1,400 June 1, according to Morning- get during a period of low oil leum Exporting Countries.
change-traded funds that give euphoria since the beginning an ounce. On Thursday in New star. The Direxion Daily Gold prices. With oil and gas contributing
traders a way to bet on gold’s of the year,” for gold miners, York, gold for August delivery Miners Index Bull 3x Shares, The bond deal represented about 85% to its government
daily rise and fall. said Rick de los Reyes, who rose about 0.8% to settle at a leveraged gold ETF, took in the Gulf state’s first issuance revenues, Oman was hit hard
Front-month Comex gold helps manage $1.4 billion in $1,272.70 a troy ounce. $240 million in the week in the international debt mar- by the plunge in the price of
futures have been among the metals and mining at T. Rowe The NYSE Arca Gold Bugs ended May 25, its highest ket in nearly two decades. The oil since mid-2014.
best-performing major asset Price Group Inc. Index of 15 major gold-mining Please see GOLD page B7 government placed five-year Even after the government
classes in financial markets notes at a coupon rate of took steps to cut expenditures
this year, up 20% through 3.625%, and 10-year ones at and remove fuel subsidies,
Thursday. But those gains 4.75%, according to a person Oman faces a 17% budget defi-
have been dwarfed by the familiar with the deal. cit for this year. The govern-
surge in many gold-related se- Yields on both tranches ment tapped its foreign re-
curities, the latest sign of the came in lower than initial indi- serves, which stood at $17.5
topsy-turvy trading across cations to investors, reflecting billion last year, according to
markets in 2016 that for now strong demand from both re- the International Monetary
has transformed some of the gional and international buy- Fund, and borrowed from local
least-beloved investments on ers. Total demand was around and foreign banks before turn-
Wall Street into top perform- $7 billion, this person said. ing to the debt markets.
ers. Middle Eastern govern- “It’s a good deal, but the
DADO GALDIERI/BLOOMBERG NEWS

The gains reflect a vast ments are on a record pace for pricing is not cheap,” said
shift in investor expectations debt issuance in 2016. Abu Anita Yadav, head of fixed-in-
over the past six months. Dhabi and Qatar tapped the come research at Emirates
Many analysts and portfolio markets earlier this year, rais- NBD, a Dubai-based bank, re-
managers entered 2016 ex- ing $5 billion and $9 billion, ferring to the Oman bonds.
pecting the U.S. dollar to re- respectively, while Kuwait is For example, she said, the
sume its rise as the Fed car- expected to issue $5 billion of yield on Oman’s 10-year note
ried out a series of interest- debt in the weeks ahead. is higher than on debt sold by
rate increases. Instead, the Saudi Arabia, meanwhile, Indonesia, a country with a
dollar this week hit a five- Gold-miner stocks have surged this year, propelled by a 20% jump in gold’s price. Here, a Peru mine. has indicated plans to sell lower credit rating.
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 | Friday - Sunday, June 10 - 12, 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
16668.41 t 162.51, or 0.97% Year-to-date t 12.43% 341.25 t 3.31, or 0.96% Year-to-date t 6.71% 2115.48 t 3.64, or 0.17% Trailing P/E ratio * 24.22 21.23
High, low, open and close for each 52-wk high/low20868.03 14952.61 High, low, open and close for each 52-wk high/low 406.80 303.58 High, low, open and close for each P/E estimate * 17.81 17.89
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 2.18 2.00
All-time high: 2130.82, 05/21/15

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

18000 350 2120

65-day moving average

17500 345 2090

17000 340 2060

16500 335 2030

Session high
DOWN UP 16000 330 2000
t

Session open Close

65-day moving average
Close Open 15500 325 65-day moving average 1970
t

Bars measure the point change from session's open Session low
15000 320 1940
Mar. Apr. May June Mar. Apr. May June Mar. Apr. May June

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 2370.71 –20.54 –0.86 2033.03 • 2605.96 1.5 Country/ Spread Over Treasurys, in basis points Yield
MSCI EAFE 1672.87 –24.24 –1.43 1471.88 • 1956.39 –2.5 Coupon Maturity, in years Yield Latest Previous Month Ago Year ago Previous Month ago Year ago
MSCI EM USD 836.30 –6.08 –0.72 691.21 • 1044.05 5.3 3.250 Australia 2 1.609 83.4 84.2 87.7 129.7 1.621 1.583 2.018
4.250 10 2.099 42.2 46.4 58.6 53.6 2.166 2.331 2.976
Americas DJ Americas 510.19 –1.38 –0.27 433.38 • 522.25 4.7
3.500 Belgium 2 -126.7 -128.1 -121.4 -80.8 -0.502 -0.508 -0.088
-0.492
Brazil Sao Paulo Bovespa 51271.23 –358.07 –0.69 37046.07 • 54977.70 18.3
0.800 10 0.288 -139.0 -139.3 -134.6 -115.0 0.310 0.399 1.291
Canada S&P/TSX Comp 14241.01 –72.09 –0.50 11531.22 • 14995.33 9.5
1.000 France 2 -0.442 -121.7 -120.8 -115.2 -82.6 -0.429 -0.446 -0.105
Mexico IPC All-Share 45670.46 –593.38 –1.28 39256.58 • 46545.32 6.3
0.500 10 0.391 -128.6 -127.9 -124.9 -115.9 0.423 0.496 1.281
Chile Santiago IPSA 3112.57 –15.13 –0.48 2730.24 • 3243.62 5.7
0.000 Germany 2 -0.534 -130.9 -131.2 -119.8 -86.6 -0.533 -0.492 -0.145
U.S. DJIA 17985.19 –19.86 –0.11 15370.33 • 18188.81 3.2
0.500 10 0.038 -163.9 -164.4 -161.8 -148.5 0.058 0.127 0.955
Nasdaq Composite 4958.62 –16.03 –0.32 4209.76 • 5231.94 –1.0
4.500 Italy 2 -0.033 -80.8 -82.1 -75.3 -53.2 -0.042 -0.047 0.189
S&P 500 2115.48 –3.64 –0.17 1810.10 • 2132.82 3.5
2.000 10 1.305 -37.3 -38.4 -27.4 -15.2 1.319 1.471 2.289
CBOE Volatility 14.58 0.50 3.55 10.88 • 53.29 –19.9
0.100 Japan 2 -0.246 -102.1 -101.9 -95.0 -72.2 -0.240 -0.244 -0.001
EMEA Stoxx Europe 600 341.25 –3.31 –0.96 303.58 • 406.80 –6.7 0.100 10 -0.126 -180.3 -181.3 -184.9 -198.7 -0.110 -0.105 0.454
Stoxx Europe 50 2851.78 –28.03 –0.97 2556.96 • 3541.18 –8.0 0.500 Netherlands 2 -0.520 -129.5 -129.7 -120.9 -83.6 -0.518 -0.503 -0.116
Austria ATX 2235.05 –10.14 –0.45 1929.73 • 2567.85 –6.8 0.250 10 0.131 -154.6 -154.3 -151.6 -128.4 0.159 0.229 1.157
Belgium Bel-20 3518.79 –24.71 –0.70 3117.61 • 3867.21 –4.9 4.350 Portugal 2 0.218 -55.7 -56.1 -41.5 -58.1 0.218 0.291 0.140
France CAC 40 4405.61 –43.12 –0.97 3892.46 • 5217.80 –5.0 2.875 10 3.053 137.5 136.5 134.9 53.7 3.067 3.094 2.977
Germany DAX 10088.87 –128.16 –1.25 8699.29 • 11802.37 –6.1 4.500 Spain 2 -0.088 -86.3 -87.8 -78.6 -60.7 -0.099 -0.080 0.114
Greece ATG 645.69 –6.69 –1.03 420.82 • 826.53 2.3 1.950 10 1.413 -26.4 -26.0 -17.6 -16.4 1.442 1.569 2.276
Hungary BUX 26975.91 –420.98 –1.54 20452.90 • 27422.93 12.8 4.250 Sweden 2 -0.526 -130.1 -128.5 -114.6 -91.6 -0.506 -0.440 -0.195
Israel Tel Aviv 1430.44 –9.07 –0.63 1383.34 • 1728.89 –6.4 1.000 10 0.522 -115.6 -114.0 -100.0 -140.5 0.562 0.744 1.035
Italy FTSE MIB 17763.88 –145.82 –0.81 15773.00 • 24157.39 –17.1 1.250 U.K. 2 0.382 -39.3 -39.5 -29.2 -0.3 0.384 0.414 0.718
Netherlands AEX 446.10 –4.05 –0.90 378.53 • 506.05 1.0 2.000 10 1.245 -43.2 -44.8 -32.8 -33.1 1.254 1.417 2.109
Poland WIG 45940.12 –611.42 –1.31 41747.01 • 54565.77 –1.1 0.875 U.S. 2 0.775 ... ... ... ... 0.779 0.706 0.721
Russia RTS Index 950.86 –14.50 –1.50 607.14 • 989.87 25.6 1.625 10 1.677 ... ... ... ... 1.702 1.745 2.440
Spain IBEX 35 8769.50 –61.90 –0.70 7746.30 • 11612.60 –8.1
Sweden SX All Share 481.30 –4.86 –1.00 432.78 • 543.12 –4.7 Commodities Prices of futures contracts with the most open interest 3:30 p.m. New York time
Switzerland Swiss Market 8076.35 –67.41 –0.83 7425.05 • 9537.90 –8.4 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 53353.87 –606.31 –1.12 45975.78 • 54760.91 5.2 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 6/8/2016
Turkey BIST 100 77711.73 –1120.92 –1.42 68230.47 • 86931.34 8.3
One-Day Change Year Year
U.K. FTSE 100 6231.89 –69.63 –1.10 5499.51 • 6873.43 –0.2 Commodity Exchange Last price Net Percentage high low
427.25 -4.00 -0.93% 439.25 351.25
Asia-Pacific DJ Asia-Pacific TSM 1389.38 –10.69 –0.76 1188.42 • 1561.66 –0.03 Corn (cents/bu.) CBOT
Soybeans (cents/bu.) 1152.50 2.25 0.20% 1,159.25 868.00
Australia S&P/ASX 200 5361.90 –8.10 –0.15 4765.30 • 5706.70 1.2
Wheat (cents/bu.)
CBOT
CBOT 511.00 -8.50 -1.64 524.00 449.50
China Shanghai Composite 2927.16 … Closed 2655.66 • 5166.35 –17.3
Live cattle (cents/lb.) CME 118.650 -0.075 -0.06 125.350 110.925
Hong Kong Hang Seng 21297.88 … Closed 18319.58 • 27404.97 –2.8
Cocoa ($/ton) ICE-US 3,096 4 0.13 3,241 2,745
India S&P BSE Sensex 26763.46 –257.20 –0.95 22951.83 • 28504.93 2.5
Coffee (cents/lb.) ICE-US 136.65 -5.00 -3.53 146.85 117.15
Japan Nikkei Stock Avg 16668.41 –162.51 –0.97 14952.61 • 20868.03 –12.4
Sugar (cents/lb.) ICE-US 19.75 0.09 0.46 19.94 12.92
Singapore Straits Times 2843.80 –18.58 –0.65 2532.70 • 3373.48 –1.4
Cotton (cents/lb.) ICE-US 65.40 -0.56 -0.85 66.45 54.19
South Korea Kospi 2024.17 –2.91 –0.14 1829.81 • 2107.33 3.2 Robusta coffee ($/ton) ICE-EU 1686.00 -11.00 -0.65 1,718.00 1,372.00
Taiwan Weighted 8715.48 … Closed 7410.34 • 9476.34 4.5
Copper ($/lb.) COMEX 2.0370 -0.0245 -1.19 2.3290 1.9580
Source: SIX Financial Information;WSJ Market Data Group Gold ($/troy oz.) COMEX 1272.70 10.40 0.82 1,308.00 1,065.70
Silver ($/troy oz.) COMEX 17.310 0.325 1.91 18.060 13.810
Currencies London close on June 9 Aluminum ($/mt)* LME 1,607.00 55.50 3.58 1,675.00 1,451.50
Tin ($/mt)* LME 17,100.00 150.00 0.88 17,500.00 13,225.00
Yen, euro vs. dollar; dollar vs. major U.S. trading partners US$vs,
Thu YTDchg Copper ($/mt)* LME 4,605.00 10.00 0.22 5,070.50 4,320.50
Country/currency in US$ per US$ (%) Lead ($/mt)* LME 1,739.00 5.00 0.29 1,888.00 1,598.00
15%
Europe Zinc ($/mt)* LME 2,054.50 28.50 1.41 2,054.50 1,467.00
10 Bulgaria lev 0.5790 1.7271 –4.1 Nickel ($/mt)* LME 8,880.00 260.00 3.02 9,575.00 7,750.00
WSJ Dollar index s Yen Croatia kuna 0.1502 6.657 –5.0 Rubber (Y.01/ton) 150.10 -0.70 -0.46 165.00 149.20
s
5 TCE
Euro zone euro 1.1319 0.8835 –4.0
Czech Rep. koruna-b 0.0419 23.878 –4.1 Palm oil (MYR/mt) MDEX 2564.00 -2.00 -0.08 2,707.00 2,374.00
0
Denmark krone 0.1522 6.5692 –4.4 Crude oil ($/bbl.) NYMEX 50.56 -0.67 -1.31 51.67 31.61
–5 s Euro Hungary forint 0.003637 274.94 –5.3 NY Harbor ULSD ($/gal.) NYMEX 1.5522 -0.0183 -1.17 1.5848 0.9406
Iceland krona 0.008159 122.56 –5.9 RBOB gasoline ($/gal.) NYMEX 1.6183 -0.0015 -0.09 1.6707 1.1485
–10 Norway krone 0.1226 8.1593 –7.7
0.2609 3.8324 –2.3
Natural gas ($/mmBtu) NYMEX 2.600 0.132 5.35 2.6350 1.9390
2015 2016 Poland zloty
Russia ruble-d 0.01559 64.160 –10.8 Brent crude ($/bbl.) ICE-EU 51.95 -0.56 -1.07 52.86 30.70
US$vs, US$vs,
YTDchg YTDchg Sweden krona 0.1223 8.1790 –3.2 Gas oil ($/ton) ICE-EU 461.00 -3.50 -0.75 470.50 278.50
Thu Thu
Country/currency in US$ per US$ (%) Country/currency in US$ per US$ (%) Switzerland franc 1.0369 0.9644 –3.8
Turkey lira 0.3452 2.8970 –0.7 Sources: SIX Financial Information; WSJ Market Data Group
Americas Hong Kong dollar 0.1288 7.7624 0.1
Ukraine hryvnia 0.0402 24.8870 3.7
Argentina peso-a 0.0723 13.8360 6.9
India rupee
Indonesia rupiah
0.0150
0.0000753
66.6885 0.7
13274 –4.1
U.K. pound 1.4454 0.6919 2.0 Cross rates London close on Jun 9
Brazil real 0.2948 3.3923 –14.4 Middle East/Africa
Japan yen 0.009386 106.55 –11.4
Canada dollar 0.7849 1.2741 –7.9 USD GBP CHF JPY HKD EUR CDN AUD
Kazakhstan tenge 0.003028 330.20 –2.5 Bahrain dinar 2.6516 0.3771 0.01
Chile peso 0.001475 677.90 –4.3 Australia 1.3464 1.9467 1.3965 0.0126 0.1735 1.5242 1.0571 ...
Macau pataca 0.1251 7.9951 –0.1 Egypt pound-a 0.1126 8.8794 13.4
Colombia peso 0.0003400 2940.94 –7.4 Canada 1.2741 1.8415 1.3210 0.0120 0.1641 1.4418 ... 0.9460
Malaysia ringgit-c 0.2468 4.0516 –5.8 Israel shekel 0.2604 3.8406 –1.3
Ecuador US dollar-f 1 1 unch
New Zealand dollar 0.7128 1.4029 –4.1 Kuwait dinar 3.3202 0.3012 –0.8 Euro 0.8835 1.2771 0.9160 0.0083 0.1138 ... 0.6935 0.6561
Mexico peso-a 0.0547 18.2948 6.4
Pakistan rupee 0.0096 104.375 –0.5 Oman sul rial 2.5987 0.3848 –0.04 Hong Kong 7.7624 11.2197 8.0489 0.0729 ... 8.7850 6.0927 5.7635
Peru sol 0.3033 3.2975 –3.4
Philippines peso 0.0217 46.008 –1.8 Qatar rial 0.2747 3.640 –0.1 Japan 106.5470 154.0100 110.4900 ... 13.7260 120.5900 83.6338 79.1300
Uruguay peso-e 0.0326 30.690 2.6
Singapore dollar 0.7390 1.3532 –4.6 Saudi Arabia riyal 0.2666 3.7506 –0.1 0.9644 1.3940 ... 0.0091 0.1242 1.0917 0.7570 0.7162
Venezuela bolivar 0.100150 9.99 58.4 Switzerland
South Korea won 0.0008622 1159.87 –1.4 South Africa rand 0.0673 14.8485 –4.1
U.K. 0.6919 ... 0.7174 0.0065 0.0891 0.7830 0.5430 0.5137
Asia-Pacific Sri Lanka rupee 0.0068695 145.57 0.9 Close Net Chg % Chg YTD % Chg
0.7427 1.3464 –1.9 Taiwan dollar 0.03100 32.262 –2.0 U.S. ... 1.4454 1.0369 0.0094 0.1288 1.1319 0.7849 0.7427
Australia dollar WSJ Dollar Index 85.96 0.28 0.33 –4.67
China yuan 0.1525 6.5569 1.0 Thailand baht 0.02844 35.160 –2.4 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 0.44705% 0.18550% ¥ TakedaPharm 4502 4569.00 -1.00 -24.67 £ RioTinto RIO 1967.50 -3.55 -0.61 Last: 132.13 t 0.74, or 0.55% YTD t 3.0%
Three month 0.65605 0.28585 Asia Titans HK$ TencentHoldings 0700 175.90 -0.40 15.19 CHF RocheHldgctf ROG 256.50 -0.39 -7.20
150
Six month 0.94390 0.44480 HK$ AIAGroup 1299 46.50 -0.21 -0.21 ¥ TokioMarineHldg 8766 3591.00 -1.94 -23.79 £ RoyDtchShell A RDSA 1784.50 -0.86 16.94 High 50–day
One year 1.27425 0.78795 ¥ AstellasPharma 4503 1562.00 0.35 -9.79 ¥ ToyotaMtr 7203 5603.00 -1.37 -25.17 € SAP SAP 71.33 -0.52 -2.79 Close 140
moving average
Euro Libor AU$ AustNZBk ANZ 24.50 -0.93 -12.28 AU$ Wesfarmers WES 41.07 ... -1.30 € Sanofi SAN 72.35 -0.41 -7.95 Low t 130
One month -0.35714% -0.06857% AU$ BHP BHP 19.61 0.36 9.80 AU$ WestpacBanking WBC 30.33 -0.88 -9.62 € SchneiderElectric SU 56.11 -1.09 6.75
Three month -0.28114 -0.01429 HK$ BankofChina 3988 3.31 0.91 -4.34 AU$ Woolworths WOW 21.73 0.51 -11.31 € Siemens SIE 95.62 -0.72 6.39 120
Six month -0.16743 0.05571 HK$ CKHutchison 0001 92.50 -0.22 -11.40 € Telefonica TEF 9.02 -1.06 -11.90 110
One year -0.02614 0.17357 HK$ CNOOC 0883 9.75 1.88 20.82 Stoxx 50 € Total FP 42.84 -1.21 5.92
100
Euribor ¥ Canon 7751 3115.00 -0.42 -15.24 CHF ABB ABBN 20.37 -1.36 13.42 CHF UBSGroup UBSG 14.23 -2.06 -27.10
One month -0.35100% -0.06200% ¥ CentralJapanRwy 9022 19300 -0.36 -10.65 € AXA CS 21.20 -1.65 -15.95 € Unilever UNA 40.56 -0.33 1.13 11 18 25 1 8 15 22 29 6 13 20 27 3
Three month -0.26200 -0.01400 HK$ ChinaConstructnBk 0939 5.21 -0.38 -1.88 € AirLiquide AI 94.11 -0.72 -9.20 £ Unilever ULVR 3212.00 -0.65 9.76 Apr. May June
Six month -0.15900 0.04900 HK$ ChinaLifeInsurance 2628 17.28 -0.23 -31.16 € Allianz ALV 139.85 -2.17 -14.49 £ VodafoneGroup VOD 219.65 -1.50 -0.61
One year -0.01800 0.16100 HK$ ChinaMobile 0941 90.35 -0.82 3.26 € Anheuser Busch ABI 114.25 -0.61 -0.13 CHF ZurichInsurance ZURN 227.50 -1.60 -11.96
Yen Libor AU$ CmwlthBkAust CBA 76.30 -0.90 -10.79 £ AstraZeneca AZN 3953.00 -1.97 -14.37
DJIA Stoxx 50
One month -0.08914% 0.06000% ¥ EastJapanRailway 9020 9850.00 -1.79 -13.97 € BASF BAS 69.55 -0.95 -1.65
16810 -1.09 -20.26 65.69 -0.86 -5.55 Last: 2851.78 t 28.03, or 0.97% YTD t 8.0%
Three month -0.03500 0.09714 ¥ Fanuc 6954 € BNP Paribas BNP 45.88 -1.14 -12.17 $ AmericanExpress AXP
Six month -0.01057 0.13500 ¥ Hitachi 6501 491.20 -1.48 -28.97 £ BT Group BT.A 425.25 0.75 -9.85 $ Apple AAPL 99.65 0.72 -5.33 3000
One year 0.08329 0.25257 TW$ Hon Hai Precisn 2317 81.30 0.25 0.62 € BancoBilVizAr BBVA 5.57 -0.98 -16.49 $ Boeing BA 133.09 0.07 -7.95
¥ HondaMotor 7267 2893.00 -1.73 -26.01 € BancoSantander SAN 4.07 -0.47 -10.79 $ Caterpillar CAT 77.16 -1.22 13.54 2925
Offer Bid
KRW HyundaiMtr 005380 139000 -0.36 -6.71 £ Barclays BARC 176.05 -1.12 -19.58 $ Chevron CVX 102.82 -0.26 14.30 2850
Eurodollars
HK$ Ind&Comml 1398 4.28 0.47 -8.55 € Bayer BAYN 90.23 -1.54 -22.08 $ CiscoSystems CSCO 29.14 ... 7.31
One month 0.5000% 0.4000%
45.78
2775
Three month 0.6500 0.5500
¥ JapanTobacco 2914 4480.00 0.45 0.20 £ BP BP. 374.15 -0.64 5.69 $ CocaCola KO 0.50 6.56
¥ KDDI 9433 3108.00 -0.80 -1.46 £ BritishAmTob BATS 4272.50 -0.09 13.30 $ Disney DIS 97.86 -0.18 -6.87 2700
Six month 1.0000 0.9000
¥ Mitsubishi 8058 1944.00 -0.61 -4.14 CHF FinRichemont CFR 60.65 -1.54 -15.88 $ DuPont DD 67.90 -0.69 1.95 2625
One year 1.3000 1.2000
¥ MitsuUFJFin 8306 526.20 -3.29 -30.50 CHF CreditSuisse CSGN 12.55 -2.71 -41.56 $ ExxonMobil XOM 90.67 -0.13 16.32
Latest 52 wks ago
1297.00 -0.73 -10.27 $ GenElec GE 30.25 -0.20 -2.89 11 18 24 1 8 15 22 29 6 13 20 27 3
¥ Mitsui 8031 € Daimler DAI 58.78 -1.39 -24.23
Apr. May June
Prime rates ¥ Mizuho Fin 8411 165.10 -2.13 -32.20 € Deutsche Bank DBK 14.73 -1.77 -34.61 $ GoldmanSachs GS 153.24 -0.91 -14.98
U.S. 3.50% 3.25% ¥ NTTDoCoMo 9437 2799.00 -1.27 12.68 € DeutscheTelekom DTE 14.95 -3.55 -9.53 $ HomeDepot HD 129.31 -0.22 -2.22
Canada 2.70 2.85 AU$ NatAustBnk NAB 26.41 -0.23 -12.55 £ Diageo DGE 1849.00 -1.26 -0.40 $ Intel INTC 31.94 0.16 -7.29
Japan
Hong Kong
1.475
5.00
1.475
5.00
¥ NipponStl&SmtmoMtl 5401 2107.50
4752.00
0.81
-1.04
-12.77
-1.74
€ ENI ENI 14.06 -0.50 1.88 $
$
IBM
JPMorganChase
IBM
JPM
153.43
64.76
-0.37 11.49
-0.75 -1.92
Dow Jones Industrial Average P/E: 19
¥ NipponTeleg 9432 £ GlaxoSmithKline GSK 1440.50 -0.66 4.92
Policy rates ¥ NissanMotor 7201 1051.00 -2.50 -17.86 £ HSBC Hldgs HSBA 443.55 -0.71 -17.28 $ JohnsJohns JNJ 117.01 1.04 13.91 Last: 17985.19 t 19.86, or 0.11% YTD s 3.2%
ECB 0.00% 0.05% ¥ NomuraHldgs 8604 439.00 -1.88 -35.36 € INGGroep INGA 10.73 -1.15 -13.78 $ McDonalds MCD 122.80 0.57 3.94
$ Merck MRK 57.18 -0.76 8.25 18500
Britain 0.50 0.50 ¥ Panasonic 6752 961.40 -2.90 -22.50 £ ImperialBrands IMB 3728.50 -1.38 3.96
Switzerland 0.50 0.50 HK$ PetroChina 0857 5.72 2.33 12.38 € IntesaSanpaolo ISP 2.20 -0.90 -28.89
$ Microsoft MSFT 51.62 -0.81 -6.96 18000
Australia 1.75 2.00 HK$ PingAnInsofChina 2318 35.60 0.14 -17.02 € LVMHMoetHennessy MC 145.75 -1.22 0.59
$ NikeClB NKE 54.94 1.52 -12.10
17500
U.S. discount 1.00 0.75 $ RelianceIndsGDR RIGD 29.00 0.69 -5.23 £ LloydsBankingGroup LLOY 69.11 -1.07 -5.42
$ Pfizer PFE 35.31 0.17 9.39
Fed-funds target 0.25 0.00 45.44 0.60 1.63 $ Procter&Gamble PG 83.20 0.67 4.77 17000
AU$ RioTinto RIO € LOreal OR 166.85 -1.04 7.44
Call money 2.25 2.00 KRW SamsungElectronics 005930 1430000 1.71 13.49 £ NationalGrid NG. 983.90 0.05 4.95
$ 3M MMM 170.15 -0.74 12.95 16500
4685.00 -1.51 -15.59 $ TravelersCos TRV 114.21 -0.01 1.20
Overnight repurchase rates ¥ Seven&I Hldgs 3382 CHF Nestle NESN 73.00 -0.54 -2.08 16000
6104.00 -0.75 -0.57 $ UnitedTech UTX 102.30 0.23 6.48
U.S. 0.46% 0.19% ¥ SoftBankGroup 9984 CHF Novartis NOVN 77.80 -0.51 -10.37
3319.00 -2.81 -27.94 $ UnitedHealthGroup UNH 140.68 0.20 19.59 11 18 24 1 8 15 22 29 6 13 20 27 3
Euro zone n.a. n.a. ¥ Sumitomo Mitsui 8316 DKK NovoNordiskB NOVO-B 374.70 0.64 -6.30
94.05 -0.95 0.32 $ VISAClA V 81.27 -0.47 4.80 Apr. May June
HK$ SunHngKaiPrp 0016 £ Prudential PRU 1289.50 -2.01 -15.77
Sources: WSJ Market Data Group, SIX 165.50 2.16 15.73
$ Verizon VZ 51.95 0.83 12.40 Note: Price-to-earnings ratios are for trailing 12 months
TW$ TaiwanSemiMfg 2330 £ ReckittBenckiser RB. 6863.00 -1.28 9.27
Financial Information, Tullett $ WalMart WMT 71.09 -0.27 15.97 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.
U.S. and European Stocks Decline GOLD
Treasury yields fall to
their lowest levels
since February;
oil prices weaken
BY AARON KURILOFF
AND RIVA GOLD
U.S. stocks pulled back and
government-bond yields tum-
bled Thursday as investors re-
treated from risk just as major
indexes were
THURSDAY’S approaching
MARKETS new highs.
European
stocks also
fell, marking a second straight
decline as a pullback in crude-
oil futures off multimonth
highs weighed on energy
shares.
The S&P 500 slipped from
near its record close after
three days of gains and U.S.
government-bond yields fell to
their lowest level since Febru-
ary as record-low yields in Eu-
rope and weaker oil and stock
prices stoked demand for
Treasurys.
Some analysts said the
moves reflected investors’ lack
of confidence in the global
economic outlook and appre-
hension about the future
course of central-bank stimu-
lus efforts. Uncertainty over
the outcome of a late June ref-
erendum on whether the U.K.
will remain in the European
Union also bolstered demand
for haven debt, because an
exit could rattle global mar-
kets.
The yield on the benchmark
10-year Treasury note declined
to 1.678%, approaching the
2016 settle low of 1.642%
U.K. Poll Foresees Decline in House Prices
BY ART PATNAUDE
LONDON—U.K. house prices
are predicted to fall this sum-
mer for the first time in four
years. Property brokers blame
uncertainty over the referen-
dum on Britain’s membership
of the European Union.
The Royal Institute of Char-
tered Surveyors said Thursday
that more of its membersthink
house prices will fall in the
next three months than think
they will rise. This was the
first time since 2012 that the
balance of a monthly RICS sur-
vey tipped toward falling
prices.
Uncertainty surrounding
the June 23 vote was “by far
the most prevalent sugges-
tion” among reasons property
brokers cited, said RICS, which
trains and accredits real-estate
surveyors.
Demand for U.K. housing
also dropped sharply in May,
with 33% more members re-
porting declines in buyer in-
quiries than said queries rose.
“What we are looking at is
a short-term drop caused by
the uncertainty resulting from
the forthcoming EU referen-
dum, coupled by a slowdown
following the rush to get into
the market ahead of the tax
change on the purchase of in-
vestment properties,” said Si-
JAPAN
Continued from page B5
during the early days of Abe-
nomics are a thing of the past.
Gaël Combes, a fundamen-
tal risk analyst at Unigestion
SA, a Geneva-based asset man-
ager with $15 billion under
management, offered a more
upbeat assessment of the
prime minister’s economic
program. He said real eco-
nomic growth of 1% to 2% an-
nually and inflation of 1%, ex-
cluding food and energy, are
sustainable and acceptable
targets for Japan, given its ag-
ing and shrinking population.
Japan’s inflation rate, exclud-
ing food and energy, was 0.7%
in April.
Unigestion has wagered
that some Japanese food mak-
ers would benefit as global
consumers seek healthier,
higher-quality choices, he said.
Mr. Abe has stressed the
need to improve corporate
governance, and the country
introduced a governance code
last year. Many companies
have responded by increasing
shareholder returns.
Alex Kydd, London-based
co-manager of the $100 mil-
lion SR Global Japan fund,
said his fund has been buying
Total’s shares fell 1.2% as oil-and-gas companies in Europe were among the big losers.
reached Feb. 11. The yield was
1.706% Wednesday.
Government-bond yields in
Germany, the U.K. and Swit-
zerland have hit record lows
this week. The 10-year German
bund on Thursday touched a
new record-low yield of
0.025%, surpassing its all-time
low reached earlier this week,
according to data from
Tradeweb, while the 10-year
U.K. gilt hit a fresh low of
1.220%. Yields fall as prices
rise.
“The hunt for yield has be-
Doubts over the EU membership vote is hurting demand for homes in the U.K., brokers say.
mon Rubinsohn, chief econo-
mist at RICS, which surveyed
326 property brokers.
Polls show the British pub-
lic is split on whether to leave
the EU. Uncertainty ahead of
the vote has stalled commer-
cial real-estate sales, caused
volatile trade in sterling and
hampered corporate deal-mak-
ing.
Proponents of quitting the
shares in companies that re-
turn more than 100% of their
earnings to shareholders.
“Some management is
changing quicker than others,”
Mr. Kydd said.
Norman Boersma, president
of Templeton Global Advisors
Ltd., who manages a $30 bil-
lion global equities portfolio,
said the problem with Japa-
nese companies from an inves-
tor’s perspective was their low
return on equity.
Japanese companies gener-
ate about nine cents in profit
for each dollar of shareholder
equity, compared with about
17 cents for those in the U.S.
and 11 cents for European
companies, according to No-
mura Securities.
Mr. Boersma said he
blamed the poor returns
partly on years of ultralow in-
terest rates. Because financing
has been so cheap, companies
invested in less-profitable
projects and their balance
sheets became inefficient, he
said.
Excess capacity in some in-
dustries also keeps returns
low, he said.
Amid the global market
rout earlier this year, Mr.
Boersma said he was buying
European bank stocks. “We
just find fewer companies to
buy in Japan.”
MONEY & INVESTING
come increasingly difficult for
investors,” said Mike van
Dulken, head of research at
Accendo Markets. “Some in-
vestors are so concerned that
they are prepared to take the
hit—a potential guaranteed
loss rather than sitting on
huge volatility.”
The Dow Jones Industrial
Average fell 19.86 points, or
0.1%, to 17985.19. The S&P 500
lost 0.2%, and the Nasdaq
Composite declined 0.3%.
Financial shares in the S&P
500 fell 0.8% by late after-
bloc argue that the economy
will flourish outside the EU
and any market jitters will
soon pass.
The other major factor
weakening the housing market
in May was a change to a
transaction tax called stamp
duty that landlords pay when
buying homes, RICS said.
This raised the cost of pur-
chasing rental homes by 3% on
INVEST
Continued from page B5
demand a referendum. But
other events, including au-
tumn’s U.S. election, are likely
to have a greater bearing on
global markets over the longer
term, they concurred. Large
companies will be more influ-
enced by the price of oil, for
example, than by the U.K.’s fu-
ture with the EU, Mr. Balls
said.
BlackRock’s Mr. Turnill said
that as well as U.S. politics, he
deems China to be a bigger po-
tential risk to global markets
than a potential British exit
from the EU, called Brexit. “A
much bigger risk for markets
would be big devaluation of
the Chinese currency,” he said.
And Mr. Wadhwani, a for-
mer member of the Bank of
England’s Monetary Policy
Committee, said the sheer un-
certainty created by the race
for the White House would
have a major impact on the
economy “and on board rooms
around the world.”
“I think the markets are in-
sufficiently focused on [Don-
ald] Trump,” he said, adding
that ahead of the vote, hiring
and investment are likely to
slow or stall, which would
noon, and the KBW Nasdaq
Bank Index of large U.S. com-
mercial lenders lost 1.3%.
Last week’s dismal jobs re-
port made investors anticipate
a slower pace of U.S. interest-
rate increases, weighing on fi-
nancial companies, said Brian
Jacobsen, chief portfolio strat-
egist at Wells Fargo Funds
Management. Rising rates
tend to be good for banks be-
cause they increase the gap
between what banks charge on
loans and what they pay for
deposits, a spread known as
April 1, causing a rush to buy
before the change came into
effect.
The U.K. housing market
cooled in April for the first
time in more than a year.
RICS said the long-term
outlook for house prices re-
mains positive because of a
shortage of homes being built.
“There is not, at this point,
a sense that a fundamental
present an “obvious” risk to
the economy, not just in the
U.S. “I must confess that I’m
puzzled that the markets
aren’t paying more attention
to Trump,” he said. “Some-
times markets ignore the obvi-
ous thing.”
U.S. political uncertainty is
also likely to have a bearing on
the path of Federal Reserve
monetary policy for the re-
mainder of this year, the inves-
tors agreed.
Mr. Balls said that—espe-
cially in relation to the domes-
tic U.S. economy—there is a
“reasonable case” for the Fed
to raise rates again this year,
but that the poor performance
in some economies elsewhere
could keep monetary policy of-
ficials in check.
He acknowledged that the
most recent, and disappoint-
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Friday - Sunday, June 10 - 12, 2016 | B7
the net interest margin.
Oil prices fell as the dollar
strengthened, dragging down
shares of materials and energy
companies in the S&P 500 that
had helped spur recent gains.
U.S. crude fell 1.3% to settle at
$50.56 a barrel.
The Stoxx Europe 600 lost
1% to 341.25. Among oil pro-
ducers, Neste declined 1.3%,
France’s Total gave up 1.2%
and Spain’s Respsol fell 2.2%.
Meanwhile, ECB President
Mario Draghi warned in a
speech in Brussels on Thurs-
day that a lack of economic re-
forms is making the central
bank’s job harder.
Shares in Japan ended 1%
lower, while Australia’s S&P/
ASX 200 lost 0.2%. Markets in
Shanghai, Taiwan and Hong
Kong were closed for a holi-
MICHEL EULER/ASSOCIATED PRESS
day.
Data on Thursday showed
consumer inflation in China
eased in May for the first time
in eight months, missing econ-
omists’ expectations, while
Japanese core machinery or-
ders, a leading indicator of
business sentiment, fell
sharply in April.
The number of Americans
filing new applications for job-
less benefits declined last
week, data showed, a sign that
layoffs are remaining in check.
In currencies, the euro fell
0.6% to $1.1323, while the dol-
lar rose 0.1% against the yen
to ¥107.083. The WSJ Dollar
Index, which measures the
dollar against a basket of 16
currencies, rose 0.4%.
Gold for June delivery rose
0.8% to $1,270.20 an ounce.
—Min Zeng
and Jasmine Horsey
contributed to this article.
shift is taking place in the
market,” Mr. Rubinsohn said.
U.K. house prices have
soared in recent years. The av-
erage price in March was
£292,000 ($423,500), up from
a financial-crisis low of
£187,000 in March 2009, ac-
cording to Office for National
Statistics data.
London has been the center
of the housing boom. The av-
erage house price here hit
£552,000 in March, ONS data
show.
In central London, where
LUKE MACGREGOR/BLOOMBERG NEWS
the market is heavily influ-
enced by wealthy international
investors, house prices have
been falling. The RICS survey
showed 35% more property
brokers reported lower prices
over the past month than said
prices increased.
“The outlook is particularly
weak in London,” RICS said,
noting 43% more brokers ex-
pect prices to fall further in
the near future than foresee a
rebound.
Any short-term dip in
prices won’t necessarily make
buying homes more afford-
able, an issue that has become
front-and-center in U.K. poli-
tics.
“It is unlikely that we are
seeing the emergence of a
more affordable market,” Mr.
Rubinsohn said.
ing, U.S. payrolls figures
knocked expectations of an im-
minent rate rise, but said if the
next employment figures don’t
undershoot expectations and
Britons reject Brexit later this
month, the central bank “will
probably go again in July.”
After that, he said, the fore-
cast becomes more opaque as
a result of the U.S. election.
Mr. Wadhwani said the Fed
is “paranoid about being be-
hind the curve” but Novem-
ber’s election has the potential
to trigger a “significant
growth scare,” which could de-
rail any plans for tighter mon-
etary policy in the U.S.
—This story first appeared
on WSJ City: Fast, fact-
packed updates on financial
news affecting London and
beyond. Made for mobile.
Download for iPhone.
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Continued from page B5
weekly inflow in 2016, and is
up 340% this year through
Wednesday.
Mining firms such as New-
mont Mining Corp. and Free-
port-McMoRan Inc., which
only months ago were hitting
new lows, have surged. New-
mont is the best-performing
stock in the S&P 500, having
risen 98% this year as of
Thursday morning. Freeport is
fifth-best, up 62%.
Because gold yields noth-
ing, it becomes less attractive
compared with yield-bearing
assets when borrowing costs
rise. Gold-mining stocks often
follow gold’s price movements
but with wider swings, be-
cause a rise in gold prices
adds to profitability while
costs are more stable.
“A more positive outlook
gives us more conviction to
buy,” said Joe Foster, a fund
manager at VanEck Associates
Corp. Mr. Foster started posi-
tioning for a gold rally in June
2015, trading in other gold
holdings in favor of gold-min-
ing stocks.
Bets on a higher gold price
by hedge funds and other in-
stitutional investors have de-
clined in recent weeks but still
outnumber bearish bets by
155,776, according to data
from the Commodity Futures
Trading Commission. In May,
net bullish bets on gold hit
their highest level since 2011.
Billionaire investor
George Soros in May
disclosed a big stake
in Barrick Gold.
Not everyone has been
jumping into gold. Hedge-fund
manager John Paulson, who
has been publicly bullish on
gold, cut his positions at the
end of last year, just before
the precious metal’s rally took
off.
After years of cutting costs
and reducing their debt when
gold prices were low, mining
companies look primed to ben-
efit from the metal’s recent
rise. But even some investors
who are bullish on gold see
reason to be cautious when
betting on mining stocks.
While May’s U.S. jobs report
was weak and employment
gains have been softening this
year, many analysts believe
the economic recovery re-
mains on track, likely threat-
ening the rally at some point.
“I think the market is un-
derpricing the risk of future
rate hikes,” said Scott Ikuss, a
portfolio manager for precious
metals at Deutsche Asset Man-
agement.
Clive Burstow, who man-
ages the Global Mining Fund
at Barings Asset Management,
increased positions in gold eq-
uities in the first quarter. As
gold’s gains have continued
throughout the year, Mr. Bur-
stow said investors have taken
on more risk, adding smaller-
cap companies to their portfo-
lios along with bigger firms.
Small-cap gold companies
such as Golden Star Re-
sources Ltd., up 279% this
year as of Thursday morning,
and Alamos Gold Inc., up
115%, have been beneficiaries
of the move. But some ana-
lysts warn that these firms
may be hit harder, should gold
prices start falling, than more-
established competitors such
as Newmont.
“It’s a bit of a crowded
trade,” Mr. Burstow said.
Picking the right stocks in
the sector can be tricky, given
disparities across the industry
in debt levels and manage-
ment quality. The run-up in
gold prices this year may also
lead some gold miners to start
spending again, negating the
benefit of years of cutting
costs, said T. Rowe Price’s Mr.
de los Reyes.
“Gold miners have a ten-
dency to spend as much as the
price of gold allows them to
spend,“ he said. “Don’t be sur-
prised if their behavior starts
to change pretty soon. It is not
a disciplined industry.”
NAV —%RETURN—
GF AT LB DATE CR NAV YTD 12-MO 2-YR
OT OT MUS 06/03 USD 278289.19 -0.6 -16.0 -9.2
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
B8 | Friday - Sunday, June 10 - 12, 2016
Email: heard@wsj.com
Quick Fix Is
Off Table at
Restoration
Restoration Hardware
Holdings remains a long way
from livable. Investors could
have seen it coming.
The high-end home-fur-
nishings retailer reported a
loss of 33 cents a share
late Wednesday for the fiscal
first quarter ended in April.
Analysts had expected it to
report a per-share profit of
two cents. Restoration Hard-
ware also lowered guidance
for its full-year adjusted
earnings to a range of $1.60
to $1.80 a share from a pre-
vious forecast of roughly
even with last year’s $2.72.
Shares were down
20% Thursday afternoon.
The company said costs
associated with the delay of
its RH Modern furniture line
contributed to the shortfall.
The effects of those supply-
chain woes have been known
for months and had already
pushed its shares down by
55% since the beginning of
the year. But the market may
have underestimated the im-
pact of a major shift.
In March, the company
announced it was replacing
its seasonal sale events with
the RH Grey Card, a $100-a-
year membership program
that gives cardholders a 25%
discount on regular-priced
merchandise. The rapid
switch resulted in what Res-
toration Hardware called a
“longer selling cycle.”
Restoration Hardware also
pared the number of prod-
ucts it sells during the quar-
ter. That may help it in the
long run. Still, the pain looks
likely to linger. The company
noted it was highly promo-
tional in the fourth quarter
of last year, setting up this
year’s upcoming fourth quar-
ter as a particularly sharp
year-over-year contrast.
Restoring this stock to its
once-lofty perch will take a
while. —Miriam Gottfried
U.S. Consumer Watchdog Blocks the Door
BY YUKA HAYASHI
For years, Wall Street firms
have used the federal open-re-
cords system to seek informa-
tion relevant to investment
decisions. Now, the relatively
young Consumer Financial
Protection Bureau also is field-
ing requests from analysts,
who aren’t happy with the
agency’s response.
The CFPB, which was cre-
ated after the financial crisis
and began operation in 2011, is
the latest federal agency to re-
ject requests using a “Glomar
response,” named after the
Glomar Explorer, a Cold War-
era ship used by intelligence
officials to retrieve sunken So-
viet submarines.
Often, when agencies turn
down a Freedom of Informa-
tion Act request, they cite one
of nine exemptions, including
one saying the information
could “reasonably be expected
to interfere with enforcement
activities.”
With a Glomar response, in
contrast, an agency says it can
IPO
Continued from page B5
this person said.
Before leaving the com-
pound, which is patrolled by
police officers carrying M-16s,
the banker said he was photo-
graphed extensively by
Aramco’s public-relations
team.
Saudi Aramco declined to
comment for this article.
The payoff for enduring
such scrutiny is expected to be
rich. The kingdom has indi-
cated it could float as much as
5% of Aramco, which would
mean proceeds of as much as
$150 billion, and list it on mul-
tiple international exchanges.
At that level, the IPO would
blow past Alibaba Group
Holding Ltd.’s $25 billion of-
fering in 2014 as the biggest in
history.
“This will give the winning
banks tremendous credibility
in the energy markets for all
kinds of transactions,” said
HEARD ON THE STREET
Don’t Write Off Inflation Misses
It isn’t news that global
inflation is low. And yet just
how low is apparently still a
surprise to forecasters—at
least to judge by Citigroup’s
Inflation Surprise indexes,
which track the performance
of actual inflation against
forecasts.
Only three times since the
start of 2015 have the in-
dexes for the U.S., U.K., euro-
zone and Japan entered pos-
itive territory, which implies
inflation was higher than ex-
pected. Those occasions
were in June and July 2015
for Japan and in April 2016
for the U.K. Otherwise, the
indexes have shown inflation
consistently undershooting
expectations—even at ex-
tremely low levels.
Citigroup’s indexes don’t
just look at headline con-
sumer-price inflation. They
also look at wages and pro-
ducer-price inflation, where
data and forecasts are avail-
able. That explains why the
U.S. index, for instance, re-
China ‘Teapots’ Not Enough for Oil
China’s rising crude-oil
imports may be only a tem-
pest in a teapot.
China’s so-called teapot
refineries—smaller, private
facilities that operate outside
the state-owned petroleum
industrial complex—have
taken center stage of late.
Their emergence has made it
even trickier to peer through
China’s already muddy oil-
demand picture.
On the surface, it seems
Chinese demand should take
some credit for driving crude
prices higher. Trade data this
week showed that in May,
the world’s No. 2 economy
imported 39% more crude by
volume than a year before.
Part of this is because May
last year was a weak month.
A bigger factor were the
teapot refineries, which are
in possession of new govern-
“neither confirm nor deny”
the existence of the requested
record, a step that lawyers
and academics said is sup-
posed to be reserved for cases
in which officials determine
that even acknowledging a
document in its files could
compromise national security
or damage someone’s privacy.
The CFPB’s use of Glomar
has sparked a dispute with a
financial-newsletter publisher
who combs through regulatory
records to identify companies
that may face investigation for
potential misconduct, seeking
scoops for his business.
John Gavin, the Minneapo-
lis-based publisher of Probes
Reporter, sends thousands of
FOIA requests every year to
the Securities and Exchange
Commission and fought the
regulator in court over
its Glomar responses in the
middle part of the last decade.
Since the court case ended in
2007, Mr. Gavin said the SEC
has stopped denying his re-
quests for information using
Glomar responses.
David Wessels, director of ex-
ecutive education at the Whar-
ton School of the University of
Pennsylvania and a former
McKinsey & Co. consultant.
Underwriters typically earn
fees of about 2% on deals over
$10 billion, according to mar-
ket-data provider Dealogic.
Fees on privatizations tend to
be lower, and Aramco is ex-
pected to drive a tough bar-
gain. But even if the fee pool
comes in under 1%, as one per-
son close to the deal said it
might, it could still be as high
as $1 billion.
So far, only a small group of
bankers, consultants and law-
yers have done any direct
work on the IPO or the gov-
ernment’s National Transfor-
mation Program, a related
plan to more than triple its
non-oil revenue by 2020, peo-
ple familiar with the matter
said.
Among them are J.P. Mor-
gan Chase & Co., whose rela-
tionship with the kingdom
dates back eight decades; for-
mer Citigroup Inc. banker Mi-
FINANCIAL ANALYSIS & COMMENTARY
Underwhelming
Citigroup’s Inflation Surprise indexes, which track the performance of
actual inflation against forecasts
U.S. U.K. Japan
10
0 a previous expectation of a
–10
–20
–30
–40
–50
2015
Source: FactSet
mains negative, despite fore-
casters having a better han-
dle on headline CPI recently;
wages have been the disap-
pointment there. They also
are calculated on a rolling
basis, which means past
forecast errors have some
weight.
Granted, economic fore-
casts often are unreliable.
ment quotas to import crude.
Between January and April,
teapots accounted for 15% of
China’s crude-import volume,
Citigroup says.
Many teapot units went
offline in May, but because
these refineries typically run
at 50% utilization—compared
with 70% to 80% for estab-
lished refiners—a teapot
company could shut down
one unit and ramp up utiliza-
tion at a second to compen-
sate, according to Energy As-
pects, a London-based
consultancy. This suggests
that China’s appetite for im-
porting crude will stay
strong regardless of refinery
maintenance schedules. That
should please crude sellers.
The bigger question is
what China does with all this
crude once it is refined. Ana-
lysts can impute China’s final
MONEY & INVESTING
The CIA rejected requests in 1976 seeking documents about the
agency’s ties with Howard Hughes and the Glomar Explorer ship.
Mr. Gavin is taking that
same battle to the CFPB now.
“The CFPB is supposed to
be a consumers’ advocate,” he
said. “To have 10…requests in
and not have one page of re-
cord is really unsettling.”
Sam Gilford, a CFPB spokes-
man, said: “Disclosing whether
the bureau possesses records
about a pending or potential
investigation would effectively
disclose whether it has in fact
chael Klein, who is viewed by
the kingdom as an indepen-
dent voice able to help navi-
gate the process; consultants
at McKinsey and Boston Con-
sulting Group; and lawyers
from White & Case LLP.
There are plenty of risks for
those chasing a piece of the
bonanza. There is no guaran-
tee there will be sufficient de-
mand from investors to soak
up all the shares—especially if
The kingdom has
said Saudi Aramco
could be worth $2
trillion to $3 trillion.
the country’s famously secre-
tive officials don’t provide suf-
ficient disclosure. Aramco
could ultimately scale back its
ambitions to a relatively mod-
est listing on the Saudi ex-
change, one person said.
Either way, shareholders
are unlikely to directly own
the kingdom’s oil reserves, es-
THE WALL STREET JOURNAL.
flation should pick up later
this year as the effects of
falling oil prices fade.
There have been false
dawns before. The oil price
Eurozone
plunge at the end of 2015
and start of 2016 pushed out
rebound.
Even the European Cen-
tral Bank last week appeared
to err on the side of caution.
It kept its forecasts for 2017
and 2018 inflation un-
changed at 1.3% and 1.6%, re-
spectively, even though pol-
icy changes and oil prices
’16 still were expected to lift in-
THE WALL STREET JOURNAL. flation.
Investors might be right
But, arguably, they should be to be cautious because infla-
just as likely to miss the out- tion forecasters appear to
come from both directions. have been crying wolf.
The consistently negative They need to be careful,
readings on the Citigroup in- however, because they could
dexes implies that forecast- suddenly find higher infla-
ers have been persistently tion at their door later this
overoptimistic on inflation. year. That would be a sur-
And that may help to explain prise markets wouldn’t take
why markets are refusing to in stride.
price in predictions that in- —Richard Barley
Under the Hood
China's trade balance in refined-oil products, in thousands of tons.
oil demand by adding to- A positive figure implies net exports.
gether refinery output, net
trade in products and 2,000
changes in inventories.
This always has been an
imprecise exercise, thanks to 1,000
the country’s opaque inven-
tory figures. Some analysts 0
now reckon the data don’t
capture new teapot activity.
Yet that doesn’t mean oil –1,000
bulls can rejoice. Even if de-
mand today is higher than
–2,000
previously assumed, there is
a strong indication that sup- 2012 ’13
ply of refined products is Source: CEIC
even higher and isn’t fully
getting absorbed at home. As ago of guzzling crude, and
evidence, China has exported re-exporting refined prod-
more products than it im- ucts, chiefly diesel. Thanks to
ported every single month. the teapots’ increased capac-
In May, net exports were al- ity, China also has begun ex-
most seven times what they porting more gasoline. In the
were a year ago. first four months of the year,
China’s state refineries China’s average daily gaso-
started this trend two years line exports were one-third
aire Howard Hughes to de-
velop the Glomar Explorer.
The CFPB handles far fewer
FOIA requests than other reg-
VINCE MAGGIORA/SAN FRANCISCO CHRONICLE/AP
ulators with similar tasks, 318
cases last fiscal year, com-
pared with 16,898 for the SEC,
1,531 for the Federal Trade
Commission and 778 for the
Federal Reserve System, ac-
cording to the FOIA website.
The CFPB and other agen-
cies wouldn’t provide any in-
formation on how often they
use Glomar responses.
Mr. Gavin has his own en-
try, by name, in last year’s an-
nual FOIA report from the
SEC, which said he personally
investigated the institution,” filed 2,624 requests with the
which could hamper a probe. agency, or 15.5% of the total
“This response,” he said, “is that year.
used across the federal gov- In October, Mr. Gavin re-
ernment in appropriate cir- quested correspondence he
cumstances and has been re- thought might disclose an in-
peatedly affirmed by courts.” vestigation of a company in
The Glomar response was the timeshare business.
first used by the Central Intel- The CFPB gave a Glomar re-
ligence Agency in 1976 to re- sponse. Mr. Gavin’s similar re-
buff journalists seeking docu- quests about five other time-
ments pertaining to the share companies in March also
agency’s project with billion- drew a Glomar response.
timated at 261 billion barrels.
Rather, the publicly traded ve-
hicle is expected to have long-
term rights to extract them,
haps choose an underwriting
team this summer. The com-
pany could work with more
than a dozen banks but just
similar to other state-owned six or fewer lead underwriters,
oil companies. a person familiar with the
The Saudi government is matter said.
pursuing the IPO as part of a J.P. Morgan is widely ex-
broad plan to decrease it de- pected to claim the lead un-
pendence on the oil industry derwriting role, people famil-
and to raise funds to diversify iar with the matter said. It has
its economy. been the main lender or part
The kingdom is also prepar- of a team of banks on almost
ing its first of what is ex- all of Aramco’s loans, accord-
pected to be a series of inter- ing to Dealogic. It is known in-
national bond sales, which side Saudi Arabia as “the king-
could take place as soon as dom’s bank,” and in recent
July and raise as much as $15 months it played a lead role in
billion, according to people fa- assembling a $10 billion loan
miliar with the deal. The lead to the Saudi government.
underwriters are likely to gain Citigroup, Deutsche Bank
an edge in the IPO sweep- AG and HSBC Holdings PLC
stakes, they said. were part of a large consor-
Saudi officials have told tium in the $10 billion revolv-
banks that haven’t already lent ing credit facility Aramco se-
money in the kingdom that cured in March 2015.
they should consider doing so, Potentially giving HSBC an-
the people said. other leg up, the bank’s CEO
Bankers expect Aramco to for the Middle East, Moham-
deliver a more detailed under- mad Al Tuwaijri, was recently
standing of what assets will be named the Saudi deputy min-
included in the IPO and per- ister of economy.
WSJ.com/Heard
OVERHEARD
Big banks are no longer so
big.
Despite the wave of merg-
ers during the financial crisis,
the biggest banks in the U.S.,
U.K. and eurozone now ac-
count for a smaller portion of
total bank assets than they
did before it.
However, the eurozone’s
top five banks have seen
their share drop far less than
in other markets.
In the U.S., the share of
total bank assets held by the
top five has gone from 71% in
2007 to 57% at the end of
2015. But in the eurozone,
the top five has lost a much
smaller portion, going from
34% to 30%.
The 19-member eurozone
is a bigger banking market
than the U.S., with almost
twice the assets in dollar
terms. Still, the smaller
change in share shows how
slow the currency bloc’s big-
gest lenders have been to re-
structure and shrink.
’14 ’15 ’16
THE WALL STREET JOURNAL.
higher than in all of 2015, ac-
cording to Energy Aspects.
That will pressure gasoline
prices across Asia.
Just because the teapots
are active doesn’t mean that
China is the factor that will
keep oil prices aloft.
—Abheek Bhattacharya
Finance
Watch
DONG ENERGY
Danish IPO Gains
As Trading Starts
Danish utility Dong Energy,
one of Europe’s biggest initial
public offerings this year, rose
nearly 12% before slipping back
in its first day of trading.
The IPO price of 235 Danish
kroner a share valued the com-
pany at 98.2 billion Danish kro-
ner ($15 billion). After hitting
262.80 kroner, up 12%, the stock
fell back to close at 258 kroner.
Dong said 36,000 retail inves-
tors had purchased shares. The
Danish government has a stake
of 50.4%, while Goldman Sachs
Group Inc.-controlled New En-
ergy Investment S.à.r.l holds a
13.4% stake and SEAS-NVE
A.m.b.A. has a 9.6% stake, the
company said.
Dong Energy has shifted
from being one of Europe’s most
coal-exposed utilities to become
its leading developer of offshore
wind power. Dong also has
stakes in oil and gas assets.
—Kjetil Malkenes Hovland
GLENCORE
Fund Buys Part
Of Agriculture Arm
Glencore PLC said Thursday
it has agreed to sell a stake in
its agricultural business to a
large Canadian pension fund for
$624.9 million, part of a plan by
the commodities giant to reduce
its heavy debt load.
The deal to sell a 9.99% stake
to British Columbia Investment
Management Corp. follows
Glencore’s April agreement to
sell 40% of the agricultural busi-
ness to the Canada Pension Plan
Investment Board for $2.5 billion
in cash. The deals let Glencore
retain a controlling 50.01% stake.
Glencore said it would use
the proceeds to help repay its
net debt, which stood at $26 bil-
lion at the end of 2015. The ag-
ricultural unit will assume about
$3.6 billion of debt, most of
which currently sits on Glen-
core’s balance sheet, the com-
pany said. —Scott Patterson
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

MANSION
INSIDE:
A New Land Rush
In Texas Hill Country
The water’s
Betrothed extra-fine at
sommeliers this deluxe
on ideal surf school in
wedding wines Costa Rica
W7
W6

EATING | DRINKING | STYLE | FASHION | DESIGN | DECORATING | ADVENTURE | TRAVEL | GEAR | GADGETS
© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, June 10 - 12, 2016 | W1

Sundae Best You can find icy marvels

at new-school soda
fountains across the country,
but why not try a premium
“A cherry is pile-on at home? Here’s
like an exclamation a DIY guide to attaining the
mark for the
top of a sundae.” height of cool this summer
—Michael Turback,
author of “A Month
of Sundaes”

“You want good

ice cream. You don’t
want something icy,
and you don’t want
“Texture, texture,
something gummy.”
texture! You want
something crunchy, and —Sally Mengel,
maybe something Loblolly Creamery,
chewy. If it’s all whipped Little Rock, Ark.
cream and crème
anglaise and caramel,
it’s not as exciting.”
—Tracy Obolsky, Cookshop,
New York
“If you’re using
just a straight vanilla ice
cream, then your fudge
really matters. If you’re
using chocolate chocolate
chunk, fudge can be too
competitive.”
—Peter Freeman, Brooklyn
Farmacy, Brooklyn

“If you have the

option to have a
clear glass, that’s the
best. Because then you
can see every layer, “Layering is key.
and how the layers are Otherwise
melding together.” you’d be calling it
—Judy Herrell, Herrell’s Ice a milkshake. ”
Cream, Northampton, —Lior Lev Sercarz,
Mass. La Boîte, New York
VICTOR PRADO FOR THE WALL STREET JOURNAL, FOOD STYLING BY HEATHER MELDROM, PROP STYLING BY NIDIA CUEVA

bartenders soda jerks. Yet one popcorn: popcorn-infused ice creations have nothing to do with strawberries, pineapple and nuts,
BY MATTHEW KRONSBERG
can’t help but walk out thinking cream, popcorn financiers, pink the sundaes of yore, take a look then surround it with candy

T
HERE MAY BE no
perch in New York
City better for an ice
cream sundae than
one of the stools at
the marble counter of Brooklyn
Farmacy & Soda Fountain. The
1920s apothecary-turned-21st-
century-soda-fountain triggers
powerful nostalgia for the prohi-
bition-era “golden” age of the
sundae, when countless bars be-
came soda fountains, and many
there’s no time better than right
now to be an eater or, better yet,
a maker of ice cream sundaes.
The hallmarks of that earlier
era—well deployed exotic top-
pings and syrups (house-made,
of course), a fetish for glassware
and a bartender’s eye for bal-
ance—are evident at many of the
better ice cream shops and sun-
dae-slinging restaurants across
the country. At Cookshop in New
York, pastry chef Tracy Obolsky
recently offered up a study in
pepper whipped cream, salted
butterscotch and, yes, popcorn.
At Loblolly Ice Cream Bar & Soda
Fountain in Little Rock, Ark., the
rolling roster of sundaes includes
a beer-themed one, concocted
from ice cream, chocolate and
caramel sauces, all made with
Flyway Brewing’s Shadow Hands
Stout, and topped with candied
pecans, whipped cream and a
house-made cherry.
Before you go harrumphing
and insisting that such modern
at Michael Turback’s book “Ice
Cream Sundae: 100 Greatest
Fountain Formulas.” There, on
page 78, is a popcorn sundae
straight from an edition of the
Bulletin of Pharmacy, dated 1916.
Or consider a recipe, from an is-
sue of the Dispenser’s Formulary
published the year before, for the
Monorail, in which sundae mak-
ers are told to mold their ice
cream into the form of a monorail
car “with a seating capacity of
eight,” and top it with chopped
teddy bears. Had there been
Instagram-by-telegram back in
the summer before our boys went
“over there,” this would have
been all anyone talked about.
Having said all that, what
makes now the best time ever
for a sundae? Not only has the
definition of “sundae” expanded
exponentially in recent years,
but you can now mail-order
everything you’ll need to make
an Instagram-by-telegram-worthy
creation at home.

TURN TO W2 FOR RECIPES, PRO TIPS AND MAIL-ORDER GOODIES

For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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W2 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

OFF DUTY

SUNDAE FUNDAMENTALS
The Sauce 1
2
1 Black Pepper Rich Simple Syrup, Blank
Slate Kitchen: With just enough bite to catch
1 in the back of throat, this peppery palm-
sugar-based syrup is bit of a revelation when
drizzled over berry flavored or even vanilla ice
cream. $13 for an 8-ounce bottle, blank-
2 slatekitchen.com

2 Caramel, Fat Toad Farm: Handmade in

copper kettles, this goats’ milk caramel is rich 4 3
and earthy. $29 for 2 8-ounce jars and a sun-
dae-friendly squeeze bottle, fattoadfarm.com

3 Patrón XO Cafe Incendio, Tequila Patrón:

Take a cue from soon-to-open Prohibition
Creamery in Austin and hit the sauce with this
tequila, chocolate and árbol chili liqueur over
ice cream. $34 for 750 ml, patrontequila.com
4 Original Hot Fudge, Herrell’s: When it
comes into contact with ice cream, this classic
4 of the form thickens, becoming almost chewy,
adding textural contrast, just as a hot fudge
should. $8 for a 10-ounce jar, herrells.com
3 Cancale N.11 Caramel Popcorn, La Boîte:
Chocolate Peanut Butter Sauce
The Toppings
1 Dark- and White-Chocolate Vermicelli,
Callebaut: Made with nothing but pure high-
quality chocolate, these two toppings bring in-
tense bursts of flavor that will forever ruin you
for regular sprinkles. $8 per 8-ounce bag,
olivenation.com
2 Apollonia N.29 Chocolate Popcorn and
What do you get when a spice blender who

The Ice Cream

1 Church Elderberry, Izzy’s
Ice Cream: Is there a better
endorsement for an ice cream
shop than seeing people lined
up there in winter? In Minne-
apolis? Yes, Izzy’s is that good.
A combination of raspberries,
blackberries, blueberries and
strawberries gives this popular
ice cream plenty of flavor, but
a finishing dash of elderberry
extract is the coup de grace.
$7.50 per pint,
izzysicecream.com
2 Salted Peanut Butter,
Nancy’s Fancy Gelato: Nancy
Sweet and salty, creamy and
crunchy—just what you’d want
from Nancy Silverton, who won
James Beard awards both as a
chef and a pastry chef. $13 per
pint, nancyfancy.com
3 Wildberry Lavender, Jeni’s
Splendid Ice Cream: The
wildberries here are tart black-
currants, blended with sweet
cream, floral lavender and or-
ange oil for an intensely sum-
mery (and colorful) scoop. $12
per pint, jenis.com
4 Vanilla, Ample Hills
Creamery: Sure, intensely fla-
vored, baroque creations like “It
Came From Gowanus” get all
the attention at this premium
parlor, but those only work be-
cause of the quality ice cream
underpinning it all, as this va-
nilla demonstrates. $9 per pint,
amplehills.com
Ken Forkish opened Trifecta in Portland, Ore.,“to
satisfy my inner 12-year-old.” At that age, he’d
top ice cream with a blend of Hershey’s syrup
and chunky peanut butter. Your inner (or actual)
12-year-old will appreciate this upgrade.
In a small pot over medium-high heat, bring
1½ cups water, 1/4 cup light corn syrup and
1/
2 cup plus 1 tablespoon sugar to a boil.
Simmer until sugar dissolves. // Make choco-
late syrup: Sift 1/2 cup cocoa powder into a
medium bowl, then slowly whisk in enough
sugar syrup to form a smooth paste. Whisk in
remaining sugar syrup. // Melt 6 ounces
chopped bittersweet chocolate in a double
boiler or a heatproof bowl set over a pot of
simmering water. When chocolate is melted,
whisk in chocolate syrup, then 1/2 teaspoon
salt and 1/3 cup natural peanut butter. Sauce
should be thick but pourable. If too thin, add
1/
3 cup peanut butter. Serve warm. —Adapted
works with some of America’s top chefs
teams up with Wisconsin popcorn power-
house? A snack that’s as sophisticated as it is
addictive. $9 per 7.5-8-ounce bag,
shop.laboiteny.com
3 Salted Spanish Peanuts, Picosos’: Per-
fectly small, snappy Spanish peanuts have
earned this tiny Texas roaster a worldwide fol-
lowing, thanks largely to service members who
spent time based in and around San Antonio.
$3 per 12-ounce can, picososnuts.com
4 Almond Toffee Crumbs, Enstrom: Smile
slyly and tell people you’ve got a bag of the
good stuff from Colorado before breaking out
a pouch of buttery, crunchy almond toffee
crumbs from this fourth-generation confec-
tioner. $6 per 1-pound bag, enstrom.com

from Ken Forkish of Trifecta, Portland, Ore.

Sea Island Benne Ice Cream
Benne—another name for sesame—adds a distinct
nuttiness to this ice cream. “You can even use
black sesame seeds, which will yield an eerie gray
ice cream that’s just delicious,” said chef Paul
Fehribach.
Heat oven to 350 degrees. Toast 1/2 cup Sea
extract and 1 teaspoon kosher salt in a 2-
quart non-reactive saucepan and whisk to
combine. Slowly bring to a low boil over medium
heat, stirring regularly. Add 1 tablespoon hot milk
mixture to yolks and whisk to incorporate. Whisk
in 2 more tablespoons hot milk mixture, then
add remainder in a thin stream, whisking
Shortcake Crumble
This crumble from Brooklyn Farmacy started
1 out as a scone they were developing for brunch.
Toasty, craggy edges add texture to sundaes
without adding too much sweetness.
Heat oven to 400 degrees. Combine 2 cups all-
2 purpose flour, 1 tablespoon baking powder,
1/
2 teaspoon baking soda and /2 teaspoon sea
1

Island benne seeds (available from
ansonmills.com) or sesame seeds on a cookie
sheet, 12 minutes. Let cool. // Add 6 egg yolks
to a mixing bowl and whisk until smooth. Place
1/
2 cup granulated sugar, /2 cup clover or other
1
brightly flavored honey, 2 cups heavy cream,
2 cups skim milk, 2 teaspoons pure vanilla
1 2
4 stem-on Oregon-grown beau-
constantly. Let cool, whisking periodically, 30 salt in a large bowl and stir with a fork. Cut 6
minutes. // Strain custard through a fine-mesh tablespoons cold unsalted butter, chopped
sieve. Stir in toasted benne seeds. Cover tightly into 1/2 -inch cubes, into dry ingredients with a
and refrigerate at least 6 hours. Freeze in an ice pastry cutter or two knives until mixture
cream maker according to manufacturer’s 4 resembles texture of coarsely ground cornmeal
instructions. —Adapted from “The Big Jones 3 with some peas in it. (Work quickly so butter
Cookbook” by Paul Fehribach doesn’t melt. It’s okay if there are small lumps
of butter in mixture after mixing. This can also
be done by pulsing in a food processor.) // In a
separate small bowl, briefly whisk 1 large egg.
Add 1/2 cup buttermilk and whisk to combine.
The Cherry on Top Add 2 tablespoons firmly packed light
brown sugar, rubbing between your fingers to
1 Brandied Balaton Cherries, Luxardo cherries, these are the colors. $8 for a 14-ounce jar, squash any lumps. Add 1 teaspoon pure
American Spoon: You’ll be ones you want when you’re tillenfarms.com vanilla extract and whisk again. Make a
dipping into the jar as much for looking for Italian authenticity depression in center of dry ingredients and
the thick, slightly Christmas-y with a broader appeal. $8 for 4 The Original Maraschino empty wet ingredients into it. Mix gently with a
syrup as you will for these an 8.1-ounce jar, eataly.com Cherries, Luxardo: Small and fork until just combined. (Don’t overdo this or
plump Michigan grown cherries. purple, verging on black, these your crumble will be tough.) // Turn dough out
$13 for a 13.5-ounce jar, 3 Merry Maraschino Cher- are the genuine article. They onto a rimmed baking sheet lined with
spoon.com ries, Tillen Farms: These make a sundae a grown-up af- parchment paper. Spread dough out with your
fair; when the ice cream social’s fingers, separating and breaking up larger
2 Amarena Cherries, Fabri: ties have the look and taste of over, drop one in your Manhat- clumps so they’re no bigger than 2 inches in
VICTOR PRADO FOR THE WALL STREET JOURNAL, FOOD STYLING BY HEATHER MELDROM, PROP STYLING BY NIDIA CUEVA (4); F. MARTIN RAMIN/THE WALL STREET JOURNAL (ACCOUTREMENTS)

3 A little sweeter, a little bigger
Loblolly Cherry
Loblolly Creamery of Little Rock Ark., not only
makes ice cream from scratch but maraschino
cherries, too. With the aid of a pitter, so can you.
Stem and pit 1 pound tart cherries, such as
Bing. (In a pinch use frozen pitted tart cherries.)
// Combine 3/4 cup granulated sugar, 1/4 cup
classic maraschino cherries, but tan. $19 for a 14-ounce jar, lux-
and a bit less brooding than without any artificial flavors or ardo.it
water and 1/2 teaspoon cherry extract Place pitted cherries in a 1-quart lidded air-
(optional) in a saucepan over medium heat. tight container. Pour maraschino syrup over
Cook, stirring occasionally, until mixture cherries, cover and refrigerate at least 5 days
comes to a boil. Remove from heat and let before serving. Cherries will keep in air-tight
cool to room temperature, about 40 minutes. container in refrigerator up to 3 weeks.
// Add 1 cup maraschino liqueur, preferably —Adapted from Sally Mengel of Loblolly
Luxardo, to the syrup and stir to combine. // Creamery, Little Rock, Ark.
diameter. There will be gaps in the dough
through which you can see the metal of the
pan. // Bake crumble until golden brown, 12-15
minutes. Cool completely in pan on a wire rack.
Once cool, use your fingers to break up crumble
into bite-size pieces (1 inch or smaller). Store in
a covered plastic container at room temperature
up to 1 day or frozen up to 3 months. If frozen,
allow to thaw in refrigerator overnight and toast
lightly before using. —Adapted from “The Soda
Fountain” by Gia Giasullo and Peter Freeman

Putting “The idea of any good sundae is that you can get every part of it in every bite,” said Tin Roof, Raised Purple Eminence Toffee Break
Peter Freeman of Brooklyn Farmacy. To that end, Tracy Obolsky of Manhattan’s (pictured on cover) Wildberry Lavender Ice Sea Island Benne Ice Cream
It All Cookshop suggested you “start with a little sauce drizzled down the insides of the Vanilla Ice Cream + Cream + Black Pepper Rich + Almond Toffee Crumbs +
Together glass,” then add a little whipped cream and topping to the bottom before your ice
cream goes in. And, Ms. Obolsky warned, don’t jam your ice cream down; stack
Shortcake Crumble +
Spanish Peanuts + Hot
Simple Syrup + Dark-
Chocolate Vermicelli +
Caramel + Whipped Cream +
Loblolly Cherry
Pro Tips on Sundae scoops loosely to leave room for sauces and toppings. Finally, crucially, from Nick Fudge + Caramel Popcorn + Whipped Cream + Luxardo
Construction Morgenstern of Manhattan’s Morgenstern’s Finest Ice Cream: “If you’re going to put Caramel + Whipped Cream* Cherry *Find the Perfect Whipped
+ 3 Cool Recipes a cherry on your ice cream, don’t buy a garbage cherry. Buy a good cherry.” + Maraschino Cherry Cream recipe at wsj.com/food.


Banana Split Bowl, Pottery
Barn Kids: Bright yellow,
virtually unbreakable and big
enough to hold a proper three-
scoop split. $8 each,
potterybarnkids.com 
Long Melamine

The Accoutrements
Spoons in Just Be
Awesome Colors,
Rice: If you’re going to
 make your sundae in a
Circee Tall Ice Cream Cups, tall glass, you’ll need a
La Rochère: A modern, shell-  long spoon to get to
inspired twist on a traditional Cherry Pitter, Prepworks by Progressive: Pity the bottom of things.
ice cream glass from La the fools who stone their cherries one by one. This These are stylish and
Rochère, makers of glassware gadget does a half-dozen at a time, leaving more durable enough for any
in France since 1475. $89 for time for the important stuff. Like eating ice cream. yard party. $9 for 6,
6, larochere-na.com $19.99, amazon.com ricebyrice.com
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. Friday - Sunday, June 10 - 12, 2016 | W3

OFF DUTY


Tiara, $515,
miumiu.com

on her monumental updo, and Princess

Diana in her family’s heirloom, the Spencer
tiara. Tiaras “are the nighttime equivalent
LOVE STORY of an Ascot hat,” the late Deborah Caven-
dish, the Duchess of Devonshire, once said.

Heads,YouWin
“A casket of delight with which to decorate
a female form.”
Their history is long and rich. “Tiara” is
Persian for the king’s headdress, and ancient
Greeks and Romans wore leafy gold garlands
atop their heads. During the 18th-century
A longtime envier of $210,000 sparkling tiaras neoclassical era, bejeweled tiaras became
fashionable and remained so among aristo-
learns that you no longer have to be crats and the nouveau riche until World War
II. They were only worn by brides or mar-
Lady Mary Crawley to come out on top  ried women, and, as Anna Robbins, the cos-
Floral Tiara, $210, tume designer for “Downton Abbey,” ex-
twigsandhoney.com plained, strictly for white-tie occasions such
as balls or state banquets. When white tie
went out of fashion, so did tiaras.
one on “Downton Abbey” to wed the doomed ger the sole province of royalty. TV aristo- Happily they are back and weighed down
BY DANA THOMAS
Matthew (a circa-1800 diamond garland, bor- crats, random models and Keith Urban’s with far less protocol. You can buy a new
rowed from the London vintage jeweler Bent- brilliant wife can also sport a sparkling dia- one with a stretchy band to secure it in

M
Y TIARA MOMENT started
out simply enough—with
the impulse to celebrate my
50th birthday with a 1960s-
themed bash. My husband
and I hired a swinging jazz combo and urged
invitees to dress in Rat-Pack chic. And I made
ley & Skinner). In “Game of Thrones” this sea- dem. London’s Dover Street Market now place, or pick up a vintage version at an
son, Margaery Tyrell was soulful in a metal offers Bentley & Skinner’s Victorian and antiques shop such as Alfies Antique Market
one reciting scripture to the High Sparrow. Edwardian tiaras for mere mortals. “We are on Church Street in London, where Ms.
I’ve since learned that designer Hedi Sli- traditional and Dover Street is hip,” said Robbins found the seed-pearl version Lady
mane put tiaras—reminiscent of Courtney Bentley & Skinner’s sales director Omar Edith wore; it cost less than £500 ($725).
Love’s Hole days—on his models for the Vaja. “But there is no reason trad and hip Lady Mary’s Georgian one, worth £145,000
Saint Laurent Spring-Summer 2016 show, shouldn’t marry.” I’m all with that. (about $210,000)—are we surprised?—is

CHANTEL TATTOLI (WRITER); F. MARTIN RAMIN/THE WALL STREET JOURNAL (TIARAS)

an appointment with my and that Miu Miu, Louis Growing up, I had my share of princess still for sale at Bentley & Skinner’s Picca-
hairdresser David Mallett Vuitton, Gucci and Dolce aspirations, harboring rhinestone tiaras in dilly shop. If that’s too steep for you, it can
in Paris, where I live, to & Gabbana had followed my dress-up box and, well into my adult- be rented for 1% of the price for 24 hours.
acquire a big updo. My suit. At spring’s Metropol- hood, swooning over women who wore real “When you walk into a room in the tiara,
plan: to top it off with itan Museum of Art’s Cos- ones. I idolized Audrey Hepburn in “Break- wow—it’s great,” promised Mr. Vaja. Having
a tiara left over from tume Institute gala, Nicole fast at Tiffany’s,” a sparkling tiara perched tried it on, I can assure you, it is.
my daughter’s childhood Kidman topped her ethe-
dress-up days. After all, real Alexander McQueen
it was my party. Why not gown with a tiara crafted GUCCI MIU MIU SAINT
princess it up a bit? from a 19th-century dia- LAURENT
Little did I realize mond necklace from New
I was participating in a York jeweler Fred Leigh-
legitimate fashion trend. ton. (It’s still for sale,
I knew Kate Middleton BLING IT ON The author and her if anyone’s interested).
had spiked interest in husband, Hervé d’Halluin, celebrate. On July 4, Assouline will
tiaras when she wore publish a book by Chau-
one—the Queen Mother’s 1936 Cartier dia- met Paris called “The Art of the Tiara.” Ap-
mond halo scroll diadem, as it turns out—for parently, by indulging in my birthday adorn-
her 2011 marriage to Prince William. I re- ment, I was also participating in an “art.”
membered that Lady Mary Crawley had worn The message is clear: Tiaras are no lon-

FAST FIVE

HAUTE KARATE
M ANUFACTURE DE H AU TE H OR LOGER IE
Who said denim can’t be dressy? These
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MM6 Maison
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 ragged-hem
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Kimono Jacket,
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Tokyo Jacket, $165,
louponline.com

Ganni Jacket, $300, www.parmigiani.ch
otteny.com
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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W4 | Friday - Sunday, June 10 - 12, 2016
Who Says No One
Walks in L.A.?
The Arts District in downtown Los Angeles is chockablock
with some of the best new dining, shopping and art-viewing
in the city—and you can take it all in on foot
BY MARGOT DOUGHERTY
A
RTISTS IN NEED of
big spaces and cheap
rents have a knack for
colonizing neighbor-
hoods the rest of us
would run from. Soon enough, the
artists’ collective cool rubs off on
the place and developers arrive.
The painters and sculptors may
get priced out, but galleries pop
up in their honor. The Arts Dis-
trict, aka the AD, a 50ish-block
trapezoid in downtown Los Ange-
les, has followed this time-honored
trajectory with aplomb.
After a slow percolation—a
foodie restaurant here, a pricey
mixed-use complex there—the
zone came to a boil thanks largely
to the nearby opening of the Broad
Museum last September, which
cemented downtown as the new
center of the exploding L.A. art
scene. In March came the opening
of the Hauser Wirth & Schimmel
gallery, furthering the cause. Now
the district is a full-blown destina-
tion with a vibrant mix of art and
grit, top-tier food and drink and
boutiques-cum-galleries selling ev-
erything from cashmere knickers
to leather settees.
Here are a handful of recom-
mended spots; you’ll find loads
more as you amble along—yes,
walkable L.A. Keep your head up.
Brick grandes dames and larger-
than-life murals rise high above
the pavement.
ART
1 A+D Museum
Dedicated to progressive architec-
ture and design, A+D showcases
a spectrum of disciplines. The cur-
rent exhibit, “Come In! DTLA” ex-
hibits the work of L.A. photogra-
phers, sculptors, graphic and
industrial designers, as well as
a shoemaker’s improbable but in-
spired takes on footwear. Through
June 23. As of Now, a California-
modern-boho home shop, is adja-
cent. 900 E. 4th St., aplusd.org
A+D Museum
2 Hauser Wirth & Schimmel
A new outpost from the blue-chip
gallery, the 116,000 square-foot
HW&S occupies the turn-of-the-
century Globe Mills complex and
was the tipping point in the AD’s
renaissance. Along with the soaring
main gallery, the premises include
three more exhibition spaces, two
book shops and a large courtyard.
A restaurant, Manuela, debuts
this fall. The inaugural show, ab-
stract sculpture by women, features
works by Louise Bourgeois and
Louise Nevelson. Through Septem-
ber 4. 901 E. 3rd St., hauserwirth-
schimmel.com
10
4 else was serving beef-heart tartare)
3 Jason Vass
Gallerist Jason Vass grew up in
the New York art world. His fa-
ther, Gene Vass, was an abstract
expressionist and his mother,
Joan Vass, designed knitwear
worn by Jackie Onassis. Mr. Vass
had galleries in Soho, Santa Mon-
ica and Santa Fe before opening
in the AD with a roster of estab-
lished and emerging sculptors,
painters and photographers, in-
cluding Douglas Tausik, Mark
Dutcher, Luke Austin and Nancy
Evans, whose show opens June
18. 1452 E. 6th St., jasonvass.com
4 Royale Projects
An alley of looming murals leads
to the crisply white entry of this
contemporary-art gallery. The cur-
rent show, “LA Today,” curated
by 80-year-old Carl Schlosberg,
a founder of MOCA Los Angeles
and the Skirball Center, features
mixed media pieces by Ed Moses,
circle paintings by Gary Lang and
glowing light panels by Phillip K.
Smith III. Through June 26. 432
S. Alameda St. (entry on Seaton),
royaleprojects.com
Hauser Wirth &
Schimmel.
OFF DUTY
8 yoga!) make it a brew
2 6
7 angelcitybrewery.com
9 5
12
14
1 restaurant’s 2013 opening (nobody
16
15
3
13
COMMERCE
5 Alchemy Works
Why waste travel time when you
can snag a vintage Porsche, Warby
Parker frames, a diminutive potted
cactus and a Clare V. wallet with
just a few standing pivots in this
new-breed boutique? Co-owner
Raan Parton also owns men’s
clothing and accessories store
Apolis, a few doors down, with
his brother, Shea Parton, where
their global advocacy and environ-
mental concerns are woven into
the casual-cool aesthetic. 826 E.
3rd St., alchemyworks.us
6 Hammer and Spear
When interior designers Scott
Jarrell and Kristan Cunningham
moved to the AD four years ago,
they lived in a building with no
heat. “But we had 3,500 square
feet,” said Ms. Cunningham.
“We could skateboard down the
middle of the street,” said Mr.
Jarrell. Now, not so much, but
the influx of residents spurred the
opening of their handsome vin-
tage and contemporary home-
goods store. “From candles and
pantry items to sofas and bed-
ding,” said Ms. Cunningham, “we
have everything you need to live
in the neighborhood.” Or any-
where else. 255 S. Santa Fe Ave.,
hammerandspear.com
7 Hennessey + Ingalls
The offerings at L.A.’s venerable
art and architecture bookstore
span the visual arts—landscaping,
photography, graphic design, inte-
riors, architecture. A few months
ago it moved from L.A.’s Westside
THE WALL STREET JOURNAL.
A food truck in the Hauser
Wirth & Schimmel complex
11
Espadrilles at
Alchemy
Works
to One Santa Fe, a spanking new
complex with tony apartments,
cafes and shops. 300 S. Santa Fe
Ave., hennesseyingalls.com
8 House of Woo
Staci Woo and husband Mike Badt
moved their wholesale clothing
design studio to this warehouse in
2007. “We always knew the front
would be good for retail,” Ms.
Woo said, “but the neighborhood
wasn’t ready.” A few years ago,
it was, and Woo Souvenir Shop
(now House of Woo) opened, with
an evolving mix, from cashmere
undies and floaty dresses to baby
clothes and vintage finds (need a
Cameroonian feather headdress?).
209 S. Garey St., Ilovewoo.com
9 Poketo
You might not think this disparate
collection—from a pup tent, san-
dal-grazing shifts and striped
ankle socks to design books and
cute little pens—falls neatly into
a single aesthetic. Yet, in Poketo,
an early pioneer in the hood,
they’re all a cohesive expression
of happy, poppy, sometimes nerdy
cool. 820 E. 3rd St., poketo.com
REFUELING SPOTS
10 Angel City Brewery
The first in downtown’s hopping
brewery scene, Angel City is in
a factory that once made steel
cables—for the Brooklyn Bridge
among others; a chute for spools
remains. The true-to-its-roots in-
terior and house-made
suds—from lagers to
a Srirachelada with seri-
ous heat—merge the
old AD with the new.
Craft flights, Ping-Pong,
food trucks pulled up
to the patio and com-
munity events (beer and
hall for everyone. 216 S. Alameda,
11 Bestia
Chef Ori Menashe and pastry chef
Genevieve Gergis’s rustic Italian fare
has been a foodie draw since this
and lured beach- and hill-dwelling
Angelenos armed with Waze apps
into urban territory. Ms. Gergis also
had a hand in the whimsical indus-
trial-butcher décor: Why shouldn’t
a meat hook be a chandelier?
2121 E. 7th Place, bestiala.com
12 Blacktop Coffee
This tiny affair offers a succinct
menu of brews served in artisanal-
style cups. Hang out on a tree-
stump seat outside and watch the
comings and goings at HW&S
across the way. If the Salt & Straw
ice cream truck is parked outside,
indulge in a DIY affogato moment.
826 E. 3rd St., blacktop.la
13 E.R.B. (Everson Royce Bar)
Co-owned by Silverlake Wine’s
Randy Clement and chef Matt Mo-
lina (ex of Mozza),
this place takes
its small-bites and
drink seriously.
Exposed brick,
tufted banquettes
and a marble bar
mark the inside,
while twinkle
lights accent the
patio. 1936 E. 7th St., erbla.com
14 Fritzi
Chef Neal Fraser’s comfort food
is the ticket here: hearty salads,
burgers, soft pretzels, waffle fries
and a sous-vide carrot served
in bun like a hot dog and topped
with charred Brussels sprouts.
814 Traction Ave., fritzidtla.com
15 Officine Brera
Wide plank floors, soaring ceilings
with skylights and a long gleaming
stretch of bar are the design hall-
marks of this newcomer. The menu
is inspired by the rustic meat-
centric food of Italy’s Po Valley.
1331 E. 6th St., officinebrera.com
16 Zinc Cafe and Bar Mateo
On a recent visit, a labradoodle
snoozed in a courtyard shaded
with olive trees, and a kitten poked
its head from a fashionable tote.
Their bipeds dined on avocado
toast with poached eggs and qui-
noa capellini. Inside are more ta-
bles and a shop selling perfect lit-
tle everythings—olive-wood cheese
spreaders to Ottolenghi cookbooks.
Bar Mateo, a warm nook in the
LIZ KUBALL FOR THE WALL STREET JOURNAL; ILLUSTRATION BY KERRY HYNDMAN
rear of the courtyard, serves
Bloody Marys made with roasted
garlic. 580 Mateo St., zinccafe.com
The courtyard
at Zinc Cafe
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THE WALL STREET JOURNAL. Friday - Sunday, June 10 - 12, 2016 | W5
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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W6 | Friday - Sunday, June 10 - 12, 2016
BY CHARLES BETHEA
P
REPARING FOR
my first surfing
trip was a chal-
lenge, given that
I live in Atlanta,
five hours by car from half-
decent surf. Between visits
to the pool, I made a rookie
mistake—watching surf clips
on YouTube. What I saw was
gruesome: men swallowed
alive, along with their surf-
boards, by frothing tsunamis
with names like “Jaws.” So
when I finally found myself
looking up at the sneering lip
of an incoming wave while
learning to surf at Costa
Rica’s Surf Simply school
and resort, my first thought
wasn't: “Righteous!”
It was day three, and
I did what I’d been taught:
rolled off my board, holding
on to its edges, and dropped
down into the depths just be-
OPEN WIDE One of the six bungalows at Surf Simply resort.
THE LOWDOWN // CATCHING A BREAK IN COSTA RICA
Getting There: Fly to Liberia,
in northern Costa Rica, where
a driver from Surf Simply—or
the resort of your choice—will
shuttle you 2½ hours south
to Nosara. You can also fly to
San Jose, but the drive to the
resort is twice as long.
Staying There: The all-inclu-
sive Surf Simply resort caters
to beginners and advanced
surfers. It has six air-condi-
tioned bungalows, a pool, and
some of the finest dining in the
area. Between surf sessions,
Boarding School
At a swell surf resort on Costa Rica’s Pacific coast, a landlubber
learns to negotiate the waves—and speak passable ‘dude’
fore a wave crashed on me.
I emerged and hastily paddled
beyond the breakers, away
from shore, where Rob, my
younger brother, waited with
the knowing smile of a more
capable surfer.
There comes a time when
a younger sibling, who has
long followed, must lead.
As I noted with ambivalence,
you’ll be able to ride horses or
bikes, go zip-lining or kayaking,
take yoga classes or get a mas-
sage. Use of all sports equip-
ment and one massage are in-
cluded in the rate (From $3,380
a week, per person, for a shared
bungalow, surfsimply.com).
Eating There: Aside from
the terrific food at Surf Simply,
which is only for guests, out-
standing restaurants in Nosara
include La Luna, a beachfront
bistro serving ceviche and
wood-fired pizzas (Playa
OFF DUTY
this was one such moment.
Shortly after I reached him,
Rob, not one to pass up
a thrill, took off into an on-
coming swell. I watched him
nimbly pop up onto his surf-
board and disappear with a
barbaric yawp over the crest.
Should I follow? That’s what
competitive brothers do. So
I did, then got pummeled, by
Pelada, 506-2682-0122) and
Burgers and Beer, which does
the name proud (Guiones
Nosara, 506-2682-5558).
NICARAGUA
At la n t ic
O cean
Liberia
COSTA RICA
Nosara San Jose
PANAMA
100 miles
Pacific
100 km O cean
THE WALL STREET JOURNAL.
what was later described as
a mere 6-footer. I’d gotten
what I’d asked for: a vacation
that would leave a mark.
Slapped fully awake now,
I surveyed the scene. Along
with six instructors, a dozen
of us—mostly novice surfers
in our 30s and 40s, arrayed
in rash guards and SPF 80—
had a wide, soft-sand beach
and its sinuous, blue-green
waves all to ourselves. It was
the most beautiful place I’d
ever experienced humiliation.
Rob, a junior-high-school
English teacher, had recently
moved to southern California
and purchased a surfboard
that he spoke of with great
tenderness. He’d used it a few
times, with mixed results.
Meanwhile, I’d recently read
“Barbarian Days,” William
Finnegan’s propulsive and
deeply felt account of a life
spent surfing. I couldn’t get
certain lines out of my head:
“I did not consider, even
passingly, that I had a choice
when it came to surfing. My
enchantment would take me
where it would.” Enchant-
ment sounded nice.
And Costa Rica’s west
coast is an ideal place to seek
it. Its waters are bathtub
warm, nearing 84 degrees in
June. Flights from the U.S.
are cheap. And the waves at
Playa Guiones, in Nosara,
arrive like clockwork, attract-
ing both beginners and the
more advanced.
Among the dozen other
surf pupils were Anna, a ro-
mance novelist and Ultimate
Fighting enthusiast from
New York; Chris, an ophthal-
mologist and Deadhead from
North Carolina; Martha, a cof-
fee farmer and biotech con-
sultant from Hawaii; Joonas,
a tattooed watchmaker from
Finland; and Andy, a quiet,
hard-charging fisherman from
the Isle of Wight. As we all
got acquainted during our
first day’s goal-setting ses-
sion, around a big wooden ta-
ble at Surf Simply’s elegantly
rustic headquarters, it was
evident that this was an ac-
complished group who, like
Rob, enjoyed throwing back
THE WALL STREET JOURNAL.
a few cervezas.
The next day, our instruc-
tors broke us up into twos
and threes, based on skill.
I was paired up with Mau-
reen, a 50ish public-relations
expert from Aspen. Our coach
was Harry Knight: a debonair
32-year-old surfer from Eng-
land—a bit like a bobsledder
from Jamaica—who dissected
the surprisingly complex
physics of waves and surfing
(the most efficient way to
paddle, we learned, is with
12½ degrees separating each
finger) during our optional
daily “theory” sessions.
It’s the prettiest place
I’ve ever experienced
humiliation.
During our weeklong stay,
mornings began with an out-
door breakfast—coffee, fruit,
bacon, eggs and sautéed plan-
tains—which we ate while
the Howler monkeys cleared
their throats in the Guana-
caste trees. Surf flicks played
on a TV nearby, serving as
both inspiration and warning.
We surfed from 8 a.m. to
10 a.m., and again from 1 p.m.
to 3 p.m. In between, we were
free to surf more, attend
theory classes, zip-line, kayak,
nap (me), drink beer in the
pool (Rob) or ride bikes into
town. Some 5,000 people live
in Nosara, where mostly un-
paved roads meander past
a smoothie cart, a skate park,
open-air boutiques, a farmers
market and more surf and
yoga resorts than I could
count. You’ll see other tour-
ists, but not enough to make
you queasy.
Surf Simply was created
six years ago, because “the
state of surf instruction
sucks,” according to co-
founder Rupert Hill, who
owns the company with Dan-
iela Acosta and Harry. The
philosophy they call “radical”
uses elite surf-training tech-
niques—video analysis, ad-
vanced board positioning—to
TO SURF WITH LOVE
Clockwise from left: Low
tide on Playa Guiones;
surfers and yogis flock
to the resort town of
Nosara; learning the
basics at Surf Simply.
teach nonelite surfers.
After our second morning’s
session, Harry joined us to re-
view the footage a staffer had
shot of our efforts, and dead-
panned that it wouldn’t easily
be mistaken for a pro-spon-
sorship video clip. I’d fallen
hard midway through some
basic exercises—learning to
pop up onto the board in the
broken waves close to shore—
and smashed my shin. A pur-
plish lump had begun to form.
By day four, it was time
to try catching a big, unbro-
ken wave, which William
Finnegan did before he was
10. Eyeing my brother riding
a wave, I summoned my
modest grit and paddled out.
I “took a set on the head”—
surfer-speak for getting
thrashed. But Harry had
taught me that the longest
I would be underwater when
this happened was three sec-
onds, no matter how long
it felt. So I tried again and
again until I finally caught
a wave. I had to feel the rush
and surge beneath my feet.
Before our last surf ses-
sion, I went to the lounging
area by the pool to crack
open a coconut. In walked
Rob. “You ready to rip a
few?” he asked. “You know it,
brah,” I replied. The surfer in
me had finally emerged, from
CLOCKWISE FROM TOP LEFT: PERNILLE LOOF; ALAMY, SURF SIMPLY (2)
central casting. A few hours
later, I climbed out of the
ocean and gathered around
a cooler of cold Costa Rican
beer with the other students.
The sun was setting in
a bruise-colored sky, the air
was warm. I pressed an icy
bottle of Imperial against my
left triceps muscle, whacked
by the board earlier in the
session. But I’d caught my fi-
nal wave and, with it, a pow-
erful feeling of freedom.
“I think,” I told Rob, “this is
what it means to be ‘stoked.’ ”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Friday - Sunday, June 10 - 12, 2016 | W7

OFF DUTY
ON WINE: LETTIE TEAGUE

Betrothed Sommeliers On Wedding Wines

WHEN HEIDI TURZYN and Yannick cha Blanca ($9) from Spain, the last
Benjamin were married on May 22, BOTTLE BOND Sommeliers white of my selection, was a good
they brought not only joy to their Heidi Turzyn and Yannick deal for couples seeking a clean,
family and friends but good wine as simple white. “It’s like a complex

well. That second fact is particu-
larly notable since most wine
served at weddings isn’t worth
toasting. Of course, Ms. Turzyn and
Mr. Benjamin had a decided advan-
tage when it came to selecting the
best bottles: She is the wine direc-
tor of New York’s Gotham Bar and
Grill; he is the head sommelier at
the city’s University Club.
I told the happy couple I’d de-
cided to explore the topic of wed-
ding wines, and they graciously
agreed to meet me just five days
before their nuptials. Although they
had chosen their wines long ago,
they were game to sample the can-
didates I brought along to Gotham
Bar and Grill for a tasting. Who
better than two almost-marrieds to
help determine what constitutes
a good wedding wine? And it’s the
beginning of the high wedding sea-
son, after all, when just-marrieds
everywhere will be celebrating with
carefully selected menus, music
and bottles of…Brazilian Merlot?
My first question was why so
many couples choose bad wines. Mr.
Benjamin thought they didn’t know
any better or had received bad ad-
vice. I thought it was more about
saving money. I’ve been to count-
less weddings where couples have
clearly spent freely on food, music
and flowers but economized on
wine. Did they think their guests
would be so blinded with joy they’d
overlook the Two-Buck Chuck?
The only thing worse than serv-
ing inferior wine at a wedding is
serving two tiers: good bottles to
a select group of friends and plonk
to the masses. Richard Nixon was
infamous for serving first-growth
Bordeaux Château Margaux to the
guests he thought mattered and
rotgut to everyone else.
Friends had actually asked if Mr.
Benjamin and Ms. Turzyn were go-
ing to use a two-tier system. They
had discussed it, he confessed, “but
we’re going to drink what everyone
is going to drink.” In the case of the
toast, guests will be served from
the same bottle of Champagne: a
9-liter bottle of Pol Roger Brut non-
vintage, a present from a friend.
(A 750 ml. bottle costs about $45.)
Benjamin suss out
toastworthy wines at New
York’s Gotham Bar and Grill.
The couple brought a half-bottle
of the Pol Roger to the tasting,
along with their other wedding
wines, all in regular bottles rather
than the magnums they would
serve at the wedding. Most profes-
sionals prefer magnums since wine
ages more slowly and gracefully in
the larger, 1.5 liter size. Big bottles
are also more festive and fun.
A red with a lot of
tannins stains teeth—bad
for wedding photos.
Having too much wine is always
better than having too little, said
Ms. Turzyn, who calculated each
guest would drink four 5-ounce
glasses. She and Mr. Benjamin both
hate to see waiters pour too much
wine, filling glasses to the brim.
“Yannick calls that the ‘American
pour,’ ” Ms. Turzyn said, laughing.
For my contribution, I chose
wines with wide appeal and a rea-
sonable price: $20 or less, with one
exception. Broad appeal is particu-
larly important when it comes to
celebrations. A good wedding wine
cannot be too extreme. For exam-
ple, Mr. Benjamin said he wouldn’t
serve a Chardonnay that was too
oaky or buttery, or a wine with too
much acidity.
That’s why the pleasant and re-
freshing Bohigas Brut Cava Reserva
was one of my sparkling-wine
choices. Easy to drink, it was more
interesting than Prosecco and a
worthy alternative to Champagne—
and a bargain at $14 a bottle.
“I would have thought this wine
cost $20 to $25,” Mr. Benjamin said.
My other options were the
Nicolas Feuillatte Brut Réserve Non
Vintage Champagne ($31) and Do-
maine Mittnacht Frères Extra Brut
($18), a Crémant from Alsace. The
Nicolas Feuillatte is one of the best
buys in Champagne, but Mr. Benja-
min worried it was too readily
found, which could detract from
the uniqueness of the event. The
Crémant was elegant and refined,
though its more pronounced acidity
meant “you might want to have this
with food,” Mr. Benjamin said.
MIMI RITZEN CRAWFORD FOR THE WALL STREET JOURNAL; F, MARTIN RAMIN/THE WALL STREET JOURNAL (BOTTLES)
Pinot Grigio,” said Mr. Benjamin,
who meant that as a compliment.
For red wine, the couple chose
a rich and rather concentrated
Oregon Pinot Noir that Ms. Turzyn
had helped winemaker Louis-Michel
Liger-Belair produce: the 2014
12 East 12 Pinot Noir, named after
Gotham Bar and Grill’s address
(around $40 a bottle). “Pinot Noir is
one of the most versatile wines with
food,” noted Mr. Benjamin.
They were able to get a good
deal on the 12 East 12, but finding
a good Pinot for less than $20 can
be quite hard, so I brought three
reds that were equally food-friendly
but better-priced: a bright and
lively 2014 Elio Altare Dolcetto
d’Alba from Piedmont, Italy ($17);
a plush 2013 Duorum from Portugal
($14); and a Beaujolais from the
aptly named Saint-Amour, the 2014
Domaine des Billards ($18).
Light- or medium-bodied reds
are best at weddings, said Ms.
Turzyn. “You don’t want a wine
with a lot of tannin.” They’re less
The couple’s white wines in- versatile but, more problematically,
cluded a Riesling from the Finger they stain your teeth, she explained.
Lakes in New York, because they “That’s bad for wedding photos.”
love the region and its winemakers, She and Mr. Benjamin both liked
and a Chablis. The 2014 Hermann the Dolcetto and Duorum—the lat-
J. Wiemer Dry Riesling ($16) would ter would be good for guests who
please guests who like their wine wanted a “bigger red,” he noted—
on the fruity side, while the 2014 but the Domaine des Billards was
Patrick Piuze Chablis Terroir de the big hit. Mr. Benjamin liked the
Chablis ($25) was well-balanced label, Ms. Turzyk liked that it
and wonderfully minerally. “Chablis wouldn’t stain her teeth, and we all
is my favorite wine in the world,” loved the gorgeous nose and lively,
Mr. Benjamin said. juicy fruit. “We might have a use
It’s mine, too. But I thought the for this wine,” Mr. Benjamin said.
Patrick Piuze might be a bit pricey But they had already chosen
for some brides and grooms, so we their wines, hadn’t they? The cou-
opened the Chardonnays I’d ple had but were planning a party
brought. The 2012 Foxglove ($17), later in the summer for friends
from Edna Valley, Calif., was well- who’d missed the wedding. They
balanced and, we agreed, not exces- would serve their wedding wines
sively oaky. “I could drink this with again, and perhaps the Beaujolais
the meal,” said Ms. Turzyn. The as well. “Maybe we can get it in
2014 Domaine des Vieilles Pierres a magnum,” Mr. Benjamin said.
Jean Jacques Litaud Mâcon- That’s the mark of a good wed-
Bussières ($20), a simple white ding wine, I thought: A wine you
Burgundy, was a bit too simple. Plus not only enjoy on the big day but
its label, plain white with black also many months later—and hope-
type, looked, well, cheap. “It looks fully for the rest of a long and
like a wedding wine,” said Ms. happily married life.
Turzyn—an insult of the worst kind.
The 2014 Herencia Altés Garna- Email Lettie at wine@wsj.com.

OENOFILE // WINES WITH WHICH TO CELEBRATE A MORE PERFECT UNION

Bohigas Brut Domaine Mittnacht 2014 Herencia Altés 2014 Elio Altare Dolc- 2014 Domaine des
Reserva Cava $14 Frères Crémant Garnacha Blanca $9 etto d’Alba $17 Billards Saint-Amour
A good wedding wine d’Alsace Extra Brut $18 The Terra Alta region of A top Barolo producer in Beaujolais $18
has wide appeal. This This crisp, elegant and Catalonia, Spain, is home Italy’s Piedmont region, A wine with “love” in its
zesty but soft and just very dry Champagne- to some notable old vine- Elio Altare also turns out name is an obvious choice
slightly off-dry Span- method (no added sugar) yards and a wide range of terrific bargain wines. The for a wedding celebration
ish cava, marked by sparkling wine from a fam- grapes. This is a lively, name Dolcetto means “lit- (Saint-Amour is actually
a bright green-apple ily-run Alsace domain is clean, unoaked white with tle sweet one” and while a subregion in Beaujolais),
note, certainly meets a near-ringer for Cham- a bright citrus note that this wine, marked by notes but it’s also a compulsively
that criteria. It’s also pagne—lovely, sophisticated will pair well with a wide of red fruit and spice, is drinkable wine marked by
a very good deal. and good with food. range of dishes. quite dry, it’s a sweet deal. lots of crunchy red berry fruit.

SLOW FOOD FAST: SATISFYING AND SEASONAL FOOD IN ABOUT 30 MINUTES

LINDA XIAO FOR THE WALL STREET JOURNAL, FOOD STYLING BY HEATHER MELDROM, PROP STYLING BY STEPHANIE HANES, ILLUSTRATION BY MICHAEL HOEWELER

Cheese-Stuffed Chicken Katsu

BORN IN Kyoto, raised in California, Sylvan directly to you, took a lot of finagling.”
Mishima Brackett cut his teeth at Chez Pa- With so many skewered poultry parts
nisse in Berkeley. Overseeing special din- passing over that grill nightly, Mr. Brackett
ners and events there, he gained a nuanced was left with a surplus of chicken breasts.
appreciation of the many details that add Hence this breaded cutlet, or katsu, with
up to gracious hospitality. When he opened a melted-cheese center. A cabbage slaw
Rintaro two years ago in San Francisco, and some lightly dressed cherry tomatoes
“just figuring out how customers could sit make it an easy, irresistible meal. “After
in front of the yakitori grill, to enjoy the in- I tried this,” Mr. Brackett said, “I ate it for
timacy that comes from a chef handing food seven nights straight.” —Kitty Greenwald
The Chef:
Sylvan Mishima TOTAL TIME: 30 minutes SERVES: 4
Brackett
6 cups canola oil 4 skinless chicken breasts 3 eggs, beaten
His Restaurant: 11/2 tablespoons mayonnaise (about 1 1/2 pounds) 2 cups panko
Rintaro in 1/
2 tablespoon water
1/
4 pound semi-firm cow’s
1/
2 head green cabbage,

San Francisco 1 lemon, halved, plus 1/2 milk cheese, such as cored and sliced very thin
lemon cut into wedges fontina, in 8 equal slices 11/4 cups halved cherry
What He Is Salt 1/
2 cup all-purpose flour tomatoes
Known For:
Matching Japanese 1. Pour oil into a deep pan and set over me- then panko. Pack panko onto chicken,
traditions and dium heat. Secure a deep-fry thermometer to pressing firmly.
techniques with pan’s side and heat oil to 320-330 degrees. 4. In two batches to avoid overcrowding, fry
Bay Area bounty. 2. Meanwhile, make dressing: In a small bowl, chicken until exterior is golden brown, interior
Crave-inducing whisk together mayonnaise, water and juice of is just cooked through and cheese has melted,
dishes ordered 1/
2 lemon. Season with salt. 5-6 minutes per side, maintaining an oil tem-
by the round. 3. Use a mallet or rolling pin to pound chicken perature of 320-330 degrees and cleaning oil
to a uniform 1 inch thick. With a knife, cut slots as needed. Transfer chicken to a paper-towel-
into sides of chicken breasts, and tuck 2 lined plate and season with salt.
cheese pieces inside each breast. Set out flour, 5. In a large bowl, toss cabbage with dressing.
eggs and panko in separate shallow bowls. In another bowl, gently toss tomatoes with salt
Season flour generously with salt. Working and a squeeze of lemon juice. Slice cutlets
with one chicken breast at a time, dip into across the grain into 1/4 -inch strips. Serve with WELL BREAD Be sure to press the coating of panko securely onto the
flour, shake off excess and dredge in eggs, cabbage, tomatoes and lemon wedges. chicken. After a dip in hot oil, that breading will pack a serious crunch.
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
W8 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

OFF DUTY

ANDREA MANZATI
Tech Wisdom From a Tech-Averse Dad
A gadget-loving son realizes that there’s sage insight to be gleaned from his father’s largely gadget-free lifestyle

These are crucial to install. lives. Gotta go, love you!” the air. I’ve since learned the ben-
BY JOSHUA FRUHLINGER
But when a newly released It was a key lesson for If the alternative is efit of not knowing every-
operating system touts cool me. If you’ve got something voice mail, electronic com- thing all the time. Life is

T
HERE CAME a moment in the early ’80s when bells and whistles rather important to discuss, munication that leaves zestier when it involves a
my dad realized I was a lot more interested than security patches, you pick up the darn phone. the modern-day equivalent little mystery and dad deliv-
in computers than trying out for the high-school don’t necessarily have to It’s amazing how much of a paper trail can get ers his own punchlines.
baseball team. Rather than fight it, he bought make the switch. Dad knows can be efficiently conveyed superior results.
me an Apple II. Over the next few years, I be- these updates often make over a call. Feeling bored? Resist
came the massive nerd I was always meant to be: I wrote you wish you could travel Googling the answer to the temptation to check
software, built my own computers and ultimately made back in time to the days But if you’re trying to everything ruins the fun. Facebook.
a career of writing about it all. when things just worked. reach a company’s cus- Sounds like bad advice be- Sounds like bad advice be-
In the 30 years since then, I’ve become my dad’s own per- tomer-service depart- cause: Ubiquitous access to cause: Facebook, Instagram,
sonal-technology consultant. During our regular phone calls, Texting is overrated. ment, don’t call. Use the the internet is one of hu- Twitter are extraordinarily
the conversation breaks down along these lines: 33% life up- Place a phone call in- internet. manity’s greatest achieve- convenient ways to connect
dates, 33% gripes about the Yankees and 34% his questions stead. Sounds like bad advice ments. With a smartphone with friends, family and
about technology. Sounds like bad advice be- because: When we think of in your pocket, answers to loved ones.
Even though I’m the one with the technical know-how cause: Waiting for someone customer service, we think life’s deepest—and most The hidden wisdom: Dad is
in the relationship, I’ve come to realize that my dad is still to pick up the phone, then of talking to a human being. trivial—questions are just no social-media-phobe. He
a huge source of wisdom about technology—much of it actually conversing, is a waste The conventional wisdom a few taps away. enjoys catching up on his
counterintuitive. Here are a few of those pearls. of time. Texting? So much goes: “Get a living entity The hidden wisdom: My grandchildren’s latest ac-
more efficient and faster! on the phone and he’ll actu- dad often texts the setups complishments over Face-
If you want to enjoy your And if we’d really needed to The hidden wisdom: Dad ally be able to do something for jokes to me. (In his book. He leaves snarky com-
vacation, leave your reach him, we could have texts, just like everyone else. for you.” book, texting is OK for ments on my pretentious
smartphone at home called his hotel. He texts that he’s on the way. The hidden wisdom: A few knock-knock humor but not Instagram photos. It’s all in
Sounds like bad advice He texts when he’s going to months ago, Dad grew weary more serious matters.) To good fun.
because: Aren’t smartphones Wait before upgrading to be late (all the time). But of the annoying ad that be honest, his jokes are But Dad used to do what
essential vacation tools? a completely revamped I once asked him for pressing his favorite radio station was rarely all that funny, but so many of us do: When
They provide access to maps, operating system real-estate advice in a text playing dozens of times I love them because they mired in boredom, he’d pop
travel guides, restaurant rec- Sounds like bad advice be- message, figuring he’d write a day. (He spends untold come from him. open the Facebook app and
ommendations, your favorite cause: Overhauled operating back when he had a moment. hours in his car for work.) When he first started, before he knew it, he’d be
books, music and more. Plus, systems promise to deliver He didn’t respond. I texted When he called the station I would use Google to find deep into an agitating politi-
they let loved ones reach better features, improved in- again. Still no response. to complain, he was directed the punchlines and text cal argument. He discovered
us in an emergency. terfaces and, most impor- Before long, I got worried. to leave a message on a cus- them back to him. Then it that social media sometimes
The hidden wisdom: When tant, security fixes. “You OK?” I texted. tomer-complaint line. He ex- dawned on me: Googling left him feeling anxious, espe-
my dad and his wife visited The hidden wisdom: A couple “Call me,” he replied. pressed his dissatisfaction was spoiling the fun. cially when he’d turn to it ha-
Costa Rica earlier this year, of weeks ago, Dad’s computer Concerned, I called him with considerate succinctness It’s like when you’re out bitually throughout the day.
they agreed not to bring their updated itself to an “im- right away. Without pream- but received no response. with friends and someone Now he devotes a few
smartphones; instead, they proved” version of its operat- ble, he launched into an So later he wrote the inevitably asks who played minutes every night to
consulted printed guidebooks ing system. But what he no- exhaustive answer to my radio station a thoughtful that other cop—not Erik browsing Facebook, much
(gasp!), asked locals for ad- ticed afterward weren’t the real-estate query. email. After a week, the sta- Estrada but the other one— the way he sets aside time
vice, and didn’t check their new capabilities or the prom- I let him finish and asked, tion management replied, on “CHiPs.” Everybody racks for phone calls and family
mail or social networks once. ised speed upgrades. All he “So, you’re OK, right?” explaining that Dad wasn’t their brains. The name is on dinners. This allows him
They said it was the best va- saw was that the icons had “Yeah, of course,” he said. the only one who had com- the tip of someone’s tongue. to focus on catching up with
cation they’d ever had. been moved around. “But if you have a real ques- plained about the ad and But nobody knows. Then people he loves. The rest
Vacations, Dad reminded To be sure, many auto- tion, pick up the phone. That that they’d be making some someone Googles the an- of the time? He’s living his
me, are a time to discon- matic software updates con- call took us three minutes. changes soon. Sure enough, swer. (Larry Wilcox, if you own life.
nect, recharge and reboot. tain important security fixes. Now we can get on with our the ad was soon taken off must know.) Game’s over. Sage advice, Dad.

FRESH PICK

SURE HANDS
A Bergdorf Goodman pop-up shop takes the guesswork out of
buying an authentic vintage watch
THOUGH TODAY’S VINTAGE watch market
is as much about clicks as ticks, online pur-
chases can be risky. With its slender profile
and deco details, that 1968 Rolex you found
on eBay is seemingly a steal for well under
$2,000, but how can you be certain the
watch is the real deal?
Your instinct to hesitate before clicking
“buy” might well save you from a scam.
“There are a tremendous number of fakes and
counterfeit pieces and parts that go into some
of these timepieces,” said Rob Ronen, the co-
founder of Material Good, a New York-based
boutique specializing in rarefied watches. “A
lot of times the external cases are legitimate,
but the internal parts are not.”
The wary need not despair: This month,
Manhattan retailer Bergdorf Goodman has
partnered with Material Good to offer a
collection of 35 authenticated timepieces
from the 1960s, ’70s and ’80s that have
been inspected by Material Good from the
case to the tiniest cog to ensure their legit-
imacy, inside and out. Prices range from
1975 Rolex
1965 Rolex
Cellini, $8,850
Oyster Perpetual

Datejust,
$8,750
$3,550 for a 1962 Rolex Oysterdate Manual 
Wind in black gilt to $22,500 for a 1981
Rolex with a rare lapis lazuli dial.
The pop-up watch shop, located on the
main floor of Goodman’s Men’s Store, across
from the flagship Bergdorf Goodman store on
Fifth Avenue, was conceived to deliver not
only authenticity but originality: “Each piece
has a noteworthy aspect,” said Bruce Pask, the
men’s fashion director at Bergdorf Goodman.
Take the 1965 Rolex Oyster Perpetual
Datejust (near right). With its gold case, wide
leather strap and signature “bubble” date
display (which magnifies the number), this
classic timepiece is the equivalent of an As-
ton Martin: sleek yet inarguably masculine.
Those who like a dose of color might gravi- 
tate toward a 1980s Piaget’s square dress 1980s Piaget Dress
watch with a green and white nephrite gem- Watch with
stone face (right, center). Nephrite Dial,
No seconds, though. Once any single $6,550
watch is sold, it’s gone. All available at
Goodman’s Men’s Store, 745 Fifth Avenue,
212-339-3261 —Jacob Gallagher
 For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.

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

‘If a man’s from Texas, he’ll tell you.

If he’s not, why embarrass him
by asking?’ —John Gunther

HOMES | MARKETS | PEOPLE | UPKEEP | VALUES | NEIGHBORHOODS | REDOS | SALES | FIXTURES | BROKERS

© 2016 Dow Jones & Company. All Rights Reserved. THE WALL STREET JOURNAL. Friday - Sunday, June 10 - 12, 2016 | W9

2 3 4

LAND RUSH
5

IN THE HILL
COUNTRY
The latest Texas settlers are
buying hundreds of acres
and building modern ranches
with traditional metal roofs
and white limestone walls;
culture with a cowboy vibe.

1 6

AMY MIKLER FOR THE WALL STREET JOURNAL (6)

RURAL RETREATS 1.-2. The master bedroom and dining room of Bill and Mary Anne Waldrip’s home in Fredricksburg. 3. A stretch of highway southeast of Kerrville. 4. A living room in the guest quar-
ters of a home in Vanderpool owned by John and Amy Miller. 5. The kitchen in Scott and Diane Clark’s home near Uvalde. 6. The living room of a home in Dripping Springs owned by Pat and Cindy Fox.

BY ALINA DIZIK
DALLAS RESIDENTS Pat and Cindy Fox wanted a
rural retreat with easy urban access. They chose to
build in Dripping Springs, a small Texas town that
calls itself “the Wedding Capital of Texas.” Here
they paid $1 million for 100 acres of land and built
a $3 million, modern country home on it.
“You can hear the wind and the birds, and see
the stars, but in 30 minutes you can have dinner”
in Austin, said Mr. Fox, a 58-year-old a real-estate
investor who commutes from Dallas and plans to
retire on the property.
The Foxes, who built their home in 2010, are
among the Texas Hill Country’s latest wave of set-
tlers, affluent buyers from large metro areas seek-
ing getaways in the countryside. Located in central
Texas near Austin and San Antonio, the Hill Coun-
try covers about 17 counties across 11 million acres
of terrain noted for gnarly live oaks, spring-fed
streams and rocky hills.
The area’s first nonnative settlers were Spanish
missionaries and mountaineers, followed by Ger-
man immigrants as well as pioneers from states
like Tennessee and Arkansas. Agriculture was the
main industry at first, but soon lone trading posts
expanded into small towns that attracted even
more pioneer families to the area.
Today’s settlers are reshaping the landscape in
their own way, building modern getaways with lit-
tle interest in herding cattle or growing crops.
These newcomers are attracted to the remote, ru-
ral lifestyle within distance of cosmopolitan cities.
Retirees from across the U.S. often relocate here
for an active lifestyle and low cost of living rela-
tive to many other states. And while there’s still a
strong cowboy vibe, there are plenty of cultural of-
Please turn to page W13

HOUSE
LORD OF THE MANOR? WELL, OF THE FLAT OF THE DAY
wsj.com/houseoftheday
As England’s grand country-home estates are subdivided into apartments, buyers seek out luxury on a small scale.

BY CHARLIE WELLS

THE GRAND COUNTRY es-

tate of Albury Park, about an
hour’s drive southwest of cen-
SAVILLS

tral London, is home to a

30,000-square-foot mansion
with 63 chimneys and 5 acres United Kingdom
of formal gardens. Over cen- A torpedo test center
turies, it has been owned by a turned family home
series of dukes and earls. To-
VANESSA BERBERIAN FOR THE WALL STREET JOURNAL (3)

day, for about $1.3 million, a

buyer can own a piece of the
home—but should take care
not to disturb the neighbors
in the property’s other 11
apartments.
Albury Park is one of a
JUAN VIDAL

number of large country

homes in the U.K. that have
been split into luxury flats in
recent years. Once the do- United States
main of the landed gentry, A Pennsylvania farm
these estates, now divided, with lavender gardens
tend to attract international
buyers seeking stylish sea-
ALBURY sonal, low-maintenance re-
PARK treats in the countryside, as
The country es- well as locals looking for lux-
tate, above, has ury on a manageable scale.
been divided “When houses get to
into 12 apart- 50,000 or 60,000 square feet,
IMAGE FACTORY

ments. One they’re just too big for Brit-

features a for- ish people. The value actually
mer ballroom, decreases,” said Robin Pater-
right; residents son, joint chairman of So-
share spaces theby’s International Realty Australia
like a reception in the U.K. Homes above the A home in a converted
area, far right. Please turn to page W12 Melbourne church
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
W10 | Friday - Sunday, June 10 - 12, 2016
In Basque Country, a Family Tames Tradition
A Spanish couple builds a four-bedroom villa in a green suburb of Bilbao that is contemporary,
yet displays elements of their heritage; an exterior of limestone and slate
BY J.S. MARCUS
LUIS ZISKAR and Amaia
Goñi decided they were go-
ing to buck tradition when
they built their first home, a
mansion in Spain’s Basque
Country.
The region, among the
country’s wealthiest, has a
rich tradition in villas, but
those are often rustic in
style, with the pitched roofs
and visible stones reminis-
cent of Basque farmhouses.
Instead, the couple’s home
would be a contemporary
geometric showpiece, ren-
dered in limestone and slate.
Mr. Ziskar, a 42-year-old
industrial designer, and Ms.
Goñi, 44, who helps run her
family’s local chain of car
dealerships, traded in an
apartment in Getxo, Bil-
bao’s seaside suburb famed
for its 19th and early 20th
century mansions, for a cul-
de-sac in Laukariz-Mungia,
a newer suburb in the
green hills above Bilbao.
The city is the largest in
the Basque region, with a
metropolitan population of
about one million.
The new home situates
the couple and their three
young children near Ms.
Goñi’s parents and offers
easy access to the Laukariz
Country Club, where Mr.
Ziskar, an avid golfer, can
enjoy one of northern
Spain’s top courses.
In 2010, they bought a
roughly half-acre lot for
$227,300 and hired Foraster
Architects, a Bilbao studio
known for upscale residen-
tial projects. They spent
about $1.28 million building
and furnishing the 7,100
square-foot, two-story home,
which has four bedrooms,
five full bathrooms and one
half-bath, and servants’
quarters. They moved into
the completed house
mid-2012.
Ms. Goñi was the guiding
spirit behind the project,
coming up with the home’s
signature feature: a long,
swirling, concrete staircase
that was poured on site.
“I have wanted something
like that for years,” she says,
citing interior-design maga-
zines, movies and television
shows as her inspiration.
She sent a collection of
images to the architects,
who turned her daydream
into a reality for a cost of
about $11,000.
The family came up with
other creative designs for
practical needs. As a way to
enjoy alone time while keep-
ing an eye on their chil-
dren—10-year-old twin girls
and an 8-year-old boy—the
couple have double living
rooms separated by a glass-
door atrium. On one side,
the parents hang out or
watch TV, but they can see
to the other side where
there is a playroom-like
lounge for the kids.
“It’s logical,” says Ms.
Goñi.
On the ground floor, Ms.
Goñi wanted to have an
open plan between the liv-
ing and dining areas, but
also to partially conceal the
kitchen. She did that with
the help of an enormous
room divider in the form of
a glass cabinet. “The cabi-
net lets light pass through,”
she says, but still preserves
a more formal atmosphere
elsewhere.
The couple spent $35,000
on a kitchen from Gunni &
Trentino, Spain’s upmarket
home-furnishings company.
Off the kitchen, they put in a
250-square-foot laundry
room that doubles as a pan-
try. The children each have
en-suite bedrooms, a luxury
in Spain.
The home has a 1,500-
square-foot finished base-
ment that the parents say
could later be turned into a
THE WALL STREET JOURNAL.
MANSION
BALANCE SHEET
SALVA LÓPEZ FOR THE WALL STREET JOURNAL (8)
MODERN AGE place for teenagers to enter-
The home of tain friends or a separate
Luis Ziskar and COSTS apartment for an adult child.
Amaia Goñi has For now, Mr. Ziskar uses
a signature Stone facade part of it as his home gym.
poured-con- and interior The couple cultivates
crete staircase, their Basque identity. They
above. Mr. $90,000 send their children to an
Ziskar in his ikastola, a school where
Gunni & Tren- Staircase Basque is the predominant
tino kitchen, language of instruction, and
and the dining $11,000 Mr. Ziskar is a champion of
room with pelota vasca, a Basque
room divider, Kitchen game he plays with a heavy
far right. Cus- wooden racket. So when it
tom, lacquered $35,000 comes to their first free-
MDF walls hide standing home, why not
storage, right. Heating/ stick with tradition?
ventilation “I have enough of that al-
ready,” says Ms. Goñi, laugh-
$52,300 ing. “I didn’t want anymore.”
The couple’s architect,
Landscaping José Ramón Foraster, has a
more contemplative answer.
$155,000 In spite of its frank, neo-
modernist geometry, the
Bathrooms home does have a certain
Basque quality, he says, due
$109,000 to the limestone and slate
exteriors. The materials
Furniture/room come from northern Spain,
divider and cost $64,000.
Mr. Foraster and his wife
$5,000 and collaborator, Cristina
Ybarra, also brought the
Architect’s fee limestone indoors, to the
floors, at a cost of $26,000.
$68,000 Mr. Foraster, a 48-year-old
Bilbao native, says stone is
Lot important in Basque culture,
and is used for everything
$227,300 from traditional sports, such
as competitive stone lifting,
Construction to art, such as the work of
and other costs artists like Eduardo Chillida,
who used heavy stones in his
$755,400 sculptures.
“And stone is cheaper
TOTAL over time,” he says, invoking
the rural Basque virtue of
$1,508,000 frugality, “because you don’t
have to take care of it.”
Mr. Ziskar still seems a
little in awe of his house,
The home’s
which Ms. Goñi furnished in
signature
large part before it was fin-
feature:
ished, seeking pieces online
a long,
and at the furniture fair in
swirling,
Valencia, a Spanish design
concrete
hub.
staircase that
“My part was choosing
was poured
SPANISH EYES The kitchen and patio, top. Large windows let light into the living room, above left. A view of the the TV and the sound sys-
on site.
staircase, above right. The home, below, with an exterior of limestone and slate, a nod to Basque stone design. tem,” he says.
The couple has a vaca-
tion home in Tenerife, on
Spain’s Canary Island chain,
and they imported a time-
saving device from there to
their primary residence: ar-
tificial turf.
Northern Spain can be as
rainy as the British Isles, and
the landscape is strikingly
green, compared with the
reds and browns in the rest
of Spain. The home lawn
seems to gild the lily, with
its neon-green glow.
“It’s so easy to take care
of,” says Ms. Goñi, speaking
behind her desk at her fam-
ily’s BMW dealership. “And
that’s fabulous.”
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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THE WALL STREET JOURNAL. Friday - Sunday, June 10 - 12, 2016 | W11

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by Intracoastal Waterway with beautiful views, post & beam barn, 2BR granite counter tops, Pella windows, vaulted ceilings, California closets, 5 beds/4.5 baths, wine cellar & full basement/gym. Over 3,483 sf detached
guesthouse, cupola, stone fireplace & patios, 4-car gar & across causeway bathrooms draped in marble, immaculate kitchen, and a lovely pool and residence has a 1 bed, 1 bath guest home + subterranean rec hall; custom
has own private island w/dock, boatlift & room for large main residence. tennis court. Stunning, located in Bayberry community of New Rochelle, just wine cellar, game room, library, gym & executive bath. 2 outdoor kitchens, pool
30 min to NYC. & spa + full basketball court. 0.5 mi to beach. Nationally recognized schools.
$3,550,000 $1.8million http://bit.ly/1WPHJnV $22,500,000 www.caskeyandcaskey.com
Diane Lewis
Highgate Properties Domenick J. Canale Caskey & Caskey at Shorewood Realtors
phone: 203.970.7870 dlewis.highgate@gmail.com phone: 347.221.2974 email: dcanale@kw.com phone: 310.374.1800 email: dave@caskeyandcaskey.com

NEWPORT, RHODE ISLAND
“The Wyndham Estate” at 100+ feet above sea level, offers unparalleled
views of Newport’s stunning coastline, The Atlantic, and points as far as
Martha’s Vineyard. Set on 3.67 private acres. The main house has undergone
substantial renovations including an 1,800 sf luxurious master suite. This
stunning property offers a unique blend of Old World charm with today’s
modern amenities.
$6,900,000 GustaveWhite.com
Gustave White Sotheby’s International Realty
phone: 401.849.3000
RIDGWAY/ TELLURIDE, COLORADO FRENCH QUARTER NEW ORLEANS, LOUISIANA
PRICE REDUCED - MOUNTAIN ESTATE. 13,067 SF estate features 4 BR, Own a one-of-a-kind, historic gem located in the heart of the French
8 BA with remarkable craftsmanship throughout. Enjoy 28 private acres of Quarter! Stunning renovation of a 2 story home 2bd/2ba.1452 sq.ft. Quiet
breathtaking mountain views of the San Juan and Cimarron mountain ranges. street half block from Bourbon St.; Private balcony and terrace, hardwood
A 2 BR, 3 BA caretakers home with luxury toy garage rounds out this unique floors, quartz countertops, Carrera marble floors, Grohe Swarovski fixtures.
property. Estate is offered at 50% of the cost to build. Gorgeous master ste, exposed orig. brick, French doors to backyard pool!
$6,950,000 telluridearearealestate.com/listing/cms/rr-ranch/ $875,000 www.829Ursulines.com
TELLURIDE PROPERTIES French Quarter Realty
Steve Cieciuch (Chet-chu) Eric Wilkinson
phone: 970.708.2338 email: stevec@tellurideproperties.com phone: 504.782.6883 eric@fqr.com

LAGUNA BEACH, CALIFORNIA ST. MICHAELS, MARYLAND NEWPORT, RHODE ISLAND

Architecturally significant oceanfront estate on one acre of prime
oceanfront land, located in Irvine Cove, a private beach community. The
Warner Group architects have created one of the finest oceanfront homes in
California, worthy of the property’s history and setting. Pool, spa and event
lawn command spectacular Pacific Ocean views. A triumph of design and
construction.
$59,900,000.00 2585RivieraDriveIrvineCove.com
Beverly Manor is one of the finest 19th-century waterfront estates on
Maryland’s Eastern Shore. The fully remodeled main house sits on a 10-acre
peninsula with deep water and 1,200 feet of shoreline. It’s an enchanting
historic compound surrounded by southwest river vistas, sweeping lawns
and mature trees, with access to D.C., New York and Philadelphia.
$6,900,000 www.historicbeverly.com
Oceanfront - Iconic “Seafair” reigns over its gated oceanfront peninsula
setting. A long estate drive leads to the one of a kind residence featuring
gracious interiors, state of the art amenities, 8 en suite bedrooms, an ocean
facing pool, expansive terraces and balconies, a carriage/pool house, tennis
court and garages for the car collector. Development possibilities.
$19,000,000 LilaDelman.com http://liladel.re/_seafair

Coldwell Banker Previews International Benson & Mangold Real Estate

Rod Daley Ray Stevens Lila Delman Real Estate International
phone: 949.395.1091 rod@roddaley.com phone: 410.310.6060 ore@goeaston.net phone: 401.284.4820 Email: Details@LilaDelman.com

To Advertise Call: +44 (0) 207-572-2124

For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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W12 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

MANSION

Cher’s Onetime L.A. Home Asks $85 Million

A Los Angeles estate that
counts Hollywood stars Cher
and Eddie Murphy among its
previous owners is going on the
market for $85 million.
The gated estate in the Bev-
erly Hills Post Office area mea-
sures about 16 acres, according
to listing agent Aaron Kirman of
MATT MOMBERGER
John Aaroe Group. an equestrian barn, two riding tate developer Raul Walters and as a number of hiking and rid- man said, so a new owner
The roughly 20,000-square- rings, a swimming pool and a his wife, Vicki, bought the ing trails, Mr. Kirman said. would need to build out the
foot main home on the property tennis court. property from another owner in While living in the guest- kitchens, bathrooms and fin-
is partially renovated, Mr. Kir- According to public records, the 1990s. house, they started an exten- ishes.
man said, and a new owner the house was owned in the After the couple bought the sive renovation of the main Ms. Walters is selling because
would need to complete it be- 1980s by Cher, who sold it in property, they acquired several house but hadn’t completed the she has moved out and now has
fore moving in. The grounds 1988 to Mr. Murphy. surrounding parcels and built project when Mr. Walters died another property in the area, Mr.
also include a four-bedroom The comedian sold the es- the guesthouse, tennis court in 2009. Ms. Walters opted not Kirman said. She couldn’t be
Moroccan-theme guesthouse, tate in 1995. The late real-es- and equestrian facilities, as well to finish construction, Mr. Kir- reached for comment.

LORD OF THE MANOR? WELL, THE FLAT

buy. Because many of these build-
ings are historically listed, renova-
tions need to fall in line with the
rules of English conservation au-
thorities, as well as the terms of
the purchase agreement, says Ste-
phen Christie-Miller, head of Savills
office in Henley-on-Thames.
Most agents say the large,
sturdy nature of these homes, as
well as the fact that many are only
seasonally occupied, reduces the
Continued from page W9 APLEY PARK feeling that residents are living on
20,000-square-foot mark can be a Tim and Claire top of each other in the country.
hard sell in Britain, he said. Wentworth, above, The conversion of Albury Park
For buyers, these apartments own a unit that in- was designed with a view toward
represent a more affordable way to cludes the former international buyers who might
buy into a very expensive market. library, left, of the only want to live in the property
Property prices in London’s prime Apley Park man- for a few months out of the year,
country-house sector have been on sion, far left. They said Cheryl Prime of Sotheby’s U.K.
the rise for 13 consecutive quarters, have listed the six- country-property division. When
according to a 2016 report by real- bedroom apart- they’re not there, she said, they
estate agency Knight Frank. Al- ment, one of 17 at benefit from year-round caretakers,
though still down from their 2007 Apley Park, for who mind the gardens and other
highs, prices for prime country about $1.4 million. common spaces. Many units also
houses were up 2.4% in the 12 have private roof terraces, she said.
months ending in March 2016. Tim Wentworth, a retired
Richard Thoburn, 58 years old, banker who spent many years in
owns one of 11 apartments in Wy- London, says he doesn’t mind hav-
fold Court Mansion near Henley- ing close neighbors. He was excited
on-Thames in the English country- to be living at Apley Park, in a
side. The country home was built Gothic mansion 7 miles from
over a century ago for a wealthy where he grew up in Shropshire, a
cotton magnate, and redeveloped county some three hours north-
in the late 1990s into nearly a west of London near the Welsh
dozen luxury properties. Mr. Tho- border. Mr. Wentworth paid $1.2
burn, who owns a financial public- million dollars for his home in late
relations and advertising agency, 2004 and moved in in 2006 after
paid about $1.4 million for the doing substantial renovation work.
property when he bought it in His six-bedroom apartment, set
2006. His primary residence in the over three south-facing floors, is
U.K. is a rental in central London, one of 17 units on the property and
close to his office. located in the main building, called
“I once convinced a friend visit- Library House. The apartment in-
ing that I owned the whole place cludes the house’s former library,
VANESSA BERBERIAN FOR THE WALL STREET JOURNAL (7)

when we arrived outside in my as well as a dining room fashioned

car,” said Mr. Thoburn, who has out of a former chapel; the estate is
now listed his 3,300-square-foot still owned by trustees of the fifth
slice of the mansion with Savills Lord Hamilton of Dalzell.
for $2.7 million. “It was pretty ob- WYFOLD COURT Mr. Wentworth, now 69 years
vious once we got upstairs and Richard Thoburn, old, says he is looking to move into
there was another door to unlock above left, is list- a home without so many stairs. He
that that wasn’t the case.” Now, he ing his apartment has listed his home with Savills for
says, he travels abroad so much in the mansion for $1.4 million, but says it’s hard to
that he wants to downsize. $2.7 million. His envision life outside of an estate
Agents say there is typically no living room, above; home.
application process for buying an the grounds, right; “I’m finding it very difficult to
apartment in one of these proper- a communal corri- contemplate anything less than 20-
ties; anyone with the money can dor, left. foot ceilings,” he said.
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
To reprint or license content, please contact our reprints and licensing department at +1 800-843-0008 or www.djreprints.com
THE WALL STREET JOURNAL.
LAND RUSH IN THE TEXAS HILL COUNTRY
Continued from page W9
ferings and some creative fare
for foodies.
In the past three to four
years, “we’re seeing an in-
crease in absentee landown-
ers,” said Katherine Romans,
interim president of the Hill
Country Alliance, a local eco-
nomic and tourism organiza-
tion. Many of them are buying
vast swaths of land and leav-
ing much of it undeveloped as
conservation easements. The
purchases ensure the area’s
rugged rural feel, while enti-
tling the landowners to prop-
erty-tax breaks.
With few luxury homes for
sale, buyers typically look to
add on to existing property or
build new ranches, says Tim
Riley, a land broker in Austin
who covers Central Texas. Dry
land lists for as low as $4,000
per acre, he said. Properties
with running water, such as a
lake or swimmable creek, can
cost as much as $50,000 per
acre, he added. Homesites
within an hour or two of Aus-
OKLA.
150 miles
TEXAS
150 km
Hill Country
Austin
San Antonio
MEXICO
kitchen and living area have
sliding panel walls that open
up to the outdoors. “You are
hearing nature even though
you are in the house,” said Ms.
Miller, a 48-year-old stay-at-
home mom. Mr. Miller, 57, is a
geophysicist.
The master wing is con-
nected via a glass hallway,
while additional bedrooms are
in a separate structure. Their
twin daughters must walk out-
side to get from their rooms to
the main house, something
that was difficult when they
were younger, but is fine now
that they’re 17. “Long term, we
knew it was good design,” said
MANSION
NEAR UVALDE Scott and Diane Clark built a modern ranch that sits on 500 acres. They kept the hunting lodge that was already on
the property. Above, the home’s backyard pool area. Clockwise from top left, a reading nook off the living room, a display of old family
furniture and artwork, and the master bedroom. The Clarks’ new home is LEED certified, meaning it meets green-building standards.
ers purchase land during years
when nearby rivers and
streams are dry, he added.
Dallas In the past five years,
LA. homeowners have embraced
architecture that combines
Houston modern elements—walls of
glass, industrial railings and
Gulf of
Mexico angled rooflines—with local
materials, such as weathered
wood, metal roofs and Austin
White limestone, says Alex
Landry, an Austin real-estate
agent who owns a second
home in Spicewood near the
Pedernales River. “That ‘Hill
Country modern’ aesthetic has
gone gangbusters,” says Ms.
Landry.
Scott and Diane Clark
owned a hunting lodge on 500
acres near the Hill Country
town of Uvalde, where the ex-
tended family would gather
for long vacations and Thanks-
giving. In 2012, the Clarks
built a modern ranch on the
property, purchased in 1980
for “hundreds of dollars per
acre,” said Mr. Clark, 60 years
old and a retired financial ex-
Friday - Sunday, June 10 - 12, 2016 | W13
DRIPPING SPRINGS Pat and
Cindy Fox built a $3 million
home on 100 acres. Left, Ms.
Fox with their dog Shadow.
Above, a guest room sitting
area. Below, a breezeway con-
nects a barn to the home.
AMY MIKLER FOR THE WALL STREET JOURNAL (10)
VANDERPOOL John and Amy
Miller built a $3 million home,
above, on their 2,700-acre
property. Far left, one of the
bedrooms in the 3,000-square-
foot home. Left, antlers dis-
played in a breezeway that con-
nects two wings of the home.
Frame. Hallways between the founder who commutes kitchen and bar area for enter-
three reconstructed cabins weekly from San Antonio. taining. The couple plans to
connect to an open kitchen, a The Waldrips’ home, mod- pass down the property to
living area and a master wing eled after cabins built by Fred- their three adult children. “If
with a lofted guest room. ericksburg’s early German set- you use it, it’s really money
There’s a separate guest bed- tlers, includes an outdoor well spent,” he said.
room over the garage. Ms.
Frame is selling because she
now finds it too difficult to ADVERTISEMENT
maintain the 3,000-square-
foot home.
Some developers offer a
Distinctive Properties
low-maintenance approach to
Hill Country living. Last year,
Craig Martin, a partner at Dal-
UNITED STATES
las-based developer Terra
Verde Group, purchased Boot
Ranch in Fredericksburg. The
2,050-acre property includes a
golf course that was partially
developed in 2006 but fell into
foreclosure. The developer
hopes to sell 360 properties
over the next seven years. So
far, 85 lots have been sold,
with 25 homes completed and
16 under construction. Homes
cost between $1 million and
$10 million. In addition to golf,
Boot Ranch homeowners have
an on-site restaurant and a fit-        
   
tin or San Antonio also have Ms. Miller of the home de- ecutive from New York. The ness area with a spa, which
  
           
premium prices. signed by Lake Flato archi- Clarks’ new home is LEED cer- are included in the price of the
Land values around towns tects. tified, meaning it meets green- property ownership. Nonresi-  

like Dripping Springs and
Boerne, as well as smaller
communities around Lake Tra-
vis have grown by 2% to 3% in
the past few years, he esti-
mates. Clients are typically
looking to build 100-plus acre
“recreational ranches” mainly
for hunting, fishing and horse-
back riding, with plans to
hand down the properties to
children or grandchildren, he
says. In Fredericksburg, a
town settled by German immi-
grants in the mid-1800s, prop-
erties spent 122 days on the
market in March, down from
194 days two years ago, ac-
cording to the Texas Associa-
tion of Realtors.
 
Those who buy land to
build on can expect to spend
$100,000 to $150,000 in im-
provements to prepare a sep-
tic system, roads, water wells
and electrical hookups for the
home, says Paul Sumrall, a
custom home builder based in
Johnson City, Texas. Construc-
tion is another hurdle, because
getting to more remote prop-
erties can be difficult. “You’re
paying a premium to build out
there,” said Mr. Sumrall, who
estimates construction costs
at $150 to $450 per square
foot in the Hill Country.
This spring, some Hill
Country areas have had re-
cord-setting floods, cutting off
building standards. Features
include an outdoor pool area
and large, energy-efficient
windows that capture Hill
Country views. Mr. Clark de-
clined to give construction
costs for the Lake Flato-de-
signed home, but the archi-
tects said comparable projects
start at $1.8 million. The cou-
ple kept the original cabin.
“It’s a time capsule,” he said.
Modern design hasn’t com-
pletely crowded out country
charm. Gloria Frame is listing
her Hill Country home in
Spicewood for $1.8 million.
Ms. Frame, an 84-year-old in-
terior designer, built the home
in 1999 using 100-year-old logs
dent memberships start at 
$100,000 and have sold out.
The property managers main-
       
tain the grounds and facilities,
one less burden for home-     ! "   
owners. ## $     %
San Antonio residents, Bill       
and Mary Anne Waldrip, who   # & '
moved into Boot Ranch’s
“Overlook Cabin” style home
last May, said the process was
simple. Rather than hiring an
architect, they modified a de-
sign suggested by the devel-
oper to build the 3,800-
square-foot home. The family
declined to give costs, but
similar homes in the develop-
ment sell for $2 million.    
In addition to the main

After a yearlong search, accessibility to roads. Rural ar- from three disassembled cab- home, the family built two 



 



Amy and John Miller built a
3,000-square-foot ranch-style
home on 2,700 acres that
overlooks a spring-fed creek in
Vanderpool. The couple paid
$9 million for the land in 2008
and $3 million to build the
home in 2012. The home’s
eas tend to have poor flood-
mapping records, so builders
increasingly rely on engineers
to predict flood-stage water
levels, Mr. Sumrall said. The
area is also having more fre-
quent droughts, which may
lower property values if buy-
ins in Tennessee and Kentucky.
She paid $150,000 for 5 acres
near a horse farm and another
$800,000 on the house, de-
signed by Austin-based Chas
Architects.
“The old wood has a
warmth and dignity,” said Ms.
guest cabins on their 1.4-acre
property for visiting grand-
children and business associ-
ates. They also have access to
10 guest lodges built by the
developers for homeowners’
use, says Mr. Waldrip, a 61-
year-old private-equity firm
For personal non-commercial use only. Do not edit or alter. Reproductions not permitted.
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W14 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.

PA R A DI SE I SL A N D, BA HA M AS PA R A DI SE I SL A N D, BA HA M AS G L E N E L L E N , C A L I F OR N IA
Ocean Club Estates. Casa DeLeon. Opulent 5 BR, 6.5 bath estate with Crestron home Ocean Club Residences & Marina, 3 BR, 3.5 bath furnished waterfront condo in Ocean Club Sonoma County Wine Country Estate. Approximately 23 acres, sophisticated villa, large
automation touch pads. 120’ of beachfront, and floor to ceiling windows looking out Estates. Private community with golf, tennis, beach, marina & concierge services. Residents terrace, breathtaking views. Stone wine building, guest house, pool. Solar power. Premium
to the infinity pool and ocean beyond. WEB: SN3NDG. $11,995,000 US. have access to all of the amenities at the Atlantis Resort. WEB: GBGQKP. $2,495,000 US. Zinfandel and Syrah vines. Close to towns. WEB: 0243739. $9,950,000. Tina Shone.
Monty.Roberts@SIR.com Nick.Damianos@SIR.com
Damianos Sotheb’s International Realt Damianos Sotheb’s International Realt Sotheb’s International Realt Wine Countr Brokerage
+1 242.424.4944 | SIRbahamas.com +1 242.376.1841 | SIRbahamas.com +1 707.933.1515 | sothebshomes.com

I N DIA N W E L L S , C A L I F OR N IA L O S A LTO S H I L L S , C A L I F OR N IA R A NC HO S A N TA F E , C A L I F OR N IA
Premier estate in The Vintage Club, one of the most exclusive country clubs in Southern CA. Private, resort-like estate in one of Silicon Valley’s exclusive residential communities. The This 4 acre sunny Mediterranean-style estate in a prestigious gated enclave of multi-million
7 BR, 14 baths, single level with 20 garage spaces on three and a half lots. An open design 20,000 sf home on 8+ acres is designed for entertaining on a corporate or personal level. dollar homes is all on one level and boasts its own pool, lit tennis court, detached guest
with specialty rooms and guest cabanas overlooking a private lagoon. Indoor pool, vineyard. Easy access to airports make the home a perfect house, lush landscaping, 5+ BR and gourmet chef’s island kitchen.
$11,900,000. Scott@ScottAurich.com West Coast hub. $88,000,000. Michael Dreyfus. $5,495,000. Randy and Jo-an Upjohn.
Pacific Sotheb’s International Realt Drefus Sotheb’s International Realt Pacific Sotheb’s International Realt
+1 619.987.9797 | pacificsothebsrealt.com +1 650.485.3476 | drefussir.com +1 858.354.1736 | pacificsothebsrealt.com

S A N DI E G O, C A L I F OR N IA S A N DI E G O, C A L I F OR N IA S ONOM A , C A L I F OR N IA
Brand new oceanfront home completed June 2016. Sweeping whitewater views from A rare opportunity. 2 units in beautiful Del Mar, CA. This 4 BR home with oversized Approximately 140 acre ranch, 11,800 sf home with 6 BR, lake, beach, softball diamond,
Dana Point to La Jolla. This gated Venetian villa overlooking the Pacific Ocean is truly one patios is ideal for outdoor entertainment. Let sandy beaches, warm waters and the gentle tennis court, gardens, pool and manager’s building. Approx 15 mins to Sonoma Plaza,
of the rarest trophy properties on the coast. $11,995,000. tides of the Pacific Ocean become your personal playground! $11,500,000. 60 mins to San Francisco. WEB: 0243305. Price upon request. Donald Van de Mark.
Eric Iantorno and Clinton Selfridge. Eric Iantorno.
Pacific Sotheb’s International Realt Pacific Sotheb’s International Realt Sotheb’s International Realt Wine Countr Brokerage
+1 858.240.8010 | pacificsothebsrealt.com +1 858.256.7005 | pacificsothebsrealt.com +1 707.337.2227 | SonomaRanchEstate.com

ST. H E L E NA , C A L I F OR N IA W E ST HOL Ly WO OD, C A L I F OR N IA W I N D S OR , C A L I F OR N IA

This 7 BR, 9 full and 3 half bath estate occupies a 21+ acre hilltop with unsurpassed views
of the wine-producing region of the Napa Valley. Pool, spa and quintessential resort living.
$25,000,000. Bill Bullock and Lydia Sarkissian. b.bullock@deckerbullocksir.com
Decker Bullock Sotheb’s International Realt
+1 415.517.7720 | 101RutherfordHill.com
A rare opportunity to own an architecturally significant Gerard Colcord home, or build a
dream home on a key, 14,500+ sf lot in the coveted Sunset Strip/Bird Streets Gateway.
3 BR, 3 baths, “B & B” style guest house. WEB: 0355638. $4,495,000. Michael Hiatt.
Sotheb’s International Realt Brentwood Brokerage
+1 310.481.4342 | sothebshomes.com
World class Sonoma County estate. Approximately 20 acres, knoll top residence, guest
house, Pinot Noir vineyard. Open interiors, outdoor kitchen/living area, pool, views.
State-of-the-art amenities, wine cellar. Near airports. WEB: 0243839. $8,695,000.
Tina Shone.
Sotheb’s International Realt Wine Countr Brokerage
+1 707.933.1515 | sothebhomes.com

G R E E N W IC H , C ON N E C T IC U T M A DI S ON , C ON N E C T IC U T NEW CANAAN, C ONNECTICU T

This Mid-Country manor blends the timeless architecture and exquisite craftsmanship of
a bygone era. Easily livable with 7 BR and 9.1 baths spanning approximately 14,532 sf.
4 acres, tennis court, cottage and new 60’ pool. $11,995,000. Joseph Barbieri.
Sotheb’s International Realt Greenwich Brokerage
+1 203.618.3112 | sothebshomes.com/Greenwich
Fantastic direct waterfront opportunity. On one of Madison’s most beautiful stretches of
sandy beach, over .5 acre with nearly 3,000 sf main house and 3 car carriage house with
guest quarters and in-ground pool. Quiet private lane, no flood insurance required.
$2,495,000. Margaret Muir. mmuir@williampitt.com
William Pitt Sotheb’s International Realt
+1 203.738.0202 | williampitt.com
Beautiful new energy efficient home by Fletcher Development. Cutting edge yet timeless
design with 3 finished floors, kitchen with 2-story reclaimed oak beamed ceiling, 2 flat acres,
6 BR, generator. Pool and pool house sites. $4,595,000. Martha Perry.
William Pitt Sotheb’s International Realt
+1 203.912.9091 | 114SkviewLane.com

N E W C A NA A N , C ON N E C T IC U T N E W C A NA A N , C ON N E C T IC U T N E W C A NA A N , C ON N E C T IC U T
Exquisite 6 BR stone & shingle 9,213 sf Colonial built in 2000 on 2.6 landscaped acres Stunning 6,743 sf, 6 BR, 6 bath 2005 Colonial beautifully sited on two acres within walking In-town gem with 5,814 sf, built in 2007 with 6-7 BR, open floor plan and a warm
abutting a 21 acre land trust. Designed by famed architect Brooks & Folotico. Chef’s kitchen, distance to the town village center and Metro North train. Gracious rooms, incredible welcoming kitchen/family room/eating area with access to a stunning stone terrace with
mahogany library, rear gallery hall, theater room, game room and infinity edge pool. updated master BR suite, open floor plan and high ceilings. Transitional styling at its best. fire pit overlooking a special large lot. Exquisite millwork & custom features. Walk to
WEB: 99060165. $4,495,000. Rachel Walsh. $2,950,000. Rachel Walsh. schools, town. WEB: 99130402. $2,575,000. Rachel Walsh.
William Pitt Sotheb’s International Realt William Pitt Sotheb’s International Realt William Pitt Sotheb’s International Realt
+1 203.912.5908 | williampitt.com +1 203.912.5908 | 20Silvermine.com +1 203.912.5908 | williampitt.com
© MMXVI Sotheby’s International Realty Affiliates LLC. a Realogy Company. All Rights Reserved. Vetheuil, used with permission. Sotheby’s International Realty® is a registered trademark
licensed to Sotheby’s International Realty Affiliates LLC. An Equal Opportunity Company. Equal Housing Opportunity. Each Office is Independently Owned and Operated.
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. Friday - Sunday, June 10 - 12, 2016 | W15

NA P L E S / M A RC O I SL A N D, F L OR I DA BA R HA R B OR , M A I N E C A P E C OD, M AS S AC H U SE T T S
Imagine enjoying spectacular sunsets every day from the comfort of your own luxury “Seaduced”, a one-of-a-kind statement home perched on the cliffs overlooking the Quanset Harbor Club, Orleans. Graceful and unique. 4 BR, 3 full, 2 half baths. 1st floor
Gulf-front home. Private location in gated community with kayaking, tennis, golf, Atlantic Ocean and Acadia National Park. Unparalleled views of the Atlantic Ocean, open living/dining space in turret + master suite. Impressive central core brick fireplace.
fitness, dining, many activities. $5,350,000. Michelle Thomas. rugged shoreline, islands, lighthouse and Champlain Mountain. $5,300,000. Kim Swan. Beautiful association beach, dock and mooring field. Patios, gardens, privacy, walk to beach.
michelle.thomas@sothebysrealty.com 3,000+sf. $1,399,000. Hardman/Liberles.
Premier Sotheby’s International Realty The Swan Agency Sotheby’s International Realty oldCape Sotheby’s International Realty
+1 239.860.7176 | premiersothebysrealty.com +1 207.288.5818 | swanagency.com +1 508.237.3996 | oldcape.com

C A P E C OD, M AS S AC H U SE T T S B I T T E R RO OT VA L L E Y, M ON TA NA G A R N ET MOU N TA I N R A NG E , M ON TA NA
Brewster waterfront sanctuary. 5 BR, 4.5 bath Cape on 1.5 acre lot with amazing water Stunning retreat nestled along the West Fork of the Bitterroot River on 16.75 private acres. Over 8,500 sf in the main lodge, over 5,000 sf of outdoor living including fireplaces, a bar,
views. Open layout, large garage, guest studio. Professional landscaping, patio and dock. Features include biblical period stone floors, hand-forged chandeliers, Chicago style bar, water fountains and a 6,000 sf shop. Guest house, 2 chalets, hunting cabins and an indoor/
On Walkers Pond with hiking trails nearby. $1,090,000. Dee Higgins. dee@oldcape.com 3,000 bottle wine cellar and indoor firing range. $4,200,000. Dawn Maddux. outdoor shooting range on up to 8,200 acres. $8,550,000 - $15,900,000. Dawn Maddux.

oldCape Sotheby’s International Realty Glacier Sotheby’s International Realty Glacier Sotheby’s International Realty
+1 508.221.8599 | oldcape.com +1 406.550.4131 | glaciersir.com +1 406.550.4131 | glaciersir.com

H E L E NA , M ON TA NA N E W YOR K , N E W YOR K N E W YOR K , N E W YOR K

Private, gated sporting ranch on Canyon Ferry Lake. Luxurious 17,533 sf home on
640 acres. Elaborate wine cellar, tasting room, theatre, outdoor entertaining area, gym
and caretaker’s quarters. $26,000,000. Laura Sacchi. laura@bigskysir.com
and Tory Cyr. tory@bigskysir.com
Big Sky Sotheby’s International Realty
+1 406.995.2211 | bigskysir.com
Originally built in 1940 by famed architect Sylvan Bien, 737 Park Avenue, has been
transformed in to a luxury prewar condo with 1-5 BR residences. WEB: 00110452.
$3,550,000 - $25,000,000. Juliette R. Janssens, Allison B. Koffman and Jacqueline Rohrbach.
Sotheby’s International Realty East Side Manhattan Brokerage
+1 212.606.7670/ 212.606.7688/ 212.606.7646 | sothebyshomes.com/nyc
116 East 70th Street. Impeccably renovated 20’ wide townhouse with a wonderful
garden ideally situated on a coveted tree lined block off Park Avenue.
WEB: 00110777. $22,000,000. Serena Boardman.
Sotheby’s International Realty East Side Manhattan Brokerage
+1 212.606.7611 | sothebyshomes.com/nyc

N E W YOR K , N E W YOR K N E W YOR K , N E W YOR K N E W YOR K , N E W YOR K

This penthouse duplex at the Ritz Carlton offers incredible water views, wraparound terrace, Masterpiece home designed by the legendary Robert A.M. Stern. 1,653± sf, 2 BR, 2.5 baths. Space and light abound in this sophisticated 2 BR, 2.5 bath penthouse. With east and west
and access to all of the 5-star hotel’s services and amenities: room service, housekeeping, Apartment affords fabulous vistas of Central Park, the Hudson River and the northern exposures, soaring 12’± ceilings and floor-to-ceiling windows, it is ideally located at the
valet parking, spa and fitness center. WEB: 0138343. $14,495,000. Jeremy Stein. skyline. WEB: 00110711. $9,995,000. E. Sample, B. Powers and K. Jamison. crossroads of Soho, West Village and Tribeca. WEB: 0138442. $3,500,000. Lisa Verdi.

Sotheby’s International Realty Downtown Manhattan Brokerage Sotheby’s International Realty East Side Manhattan Brokerage Sotheby’s International Realty Downtown Manhattan Brokerage
+1 212.431.2427 | sothebyshomes.com/nyc +1 212.606.7685/ 212.606.7653/ 212.606.7650 | sothebyshomes.com/nyc +1 212.431.2423 | sothebyshomes.com/nyc

S C A R SDA L E , N E W YOR K C HA R L E STOW N , R HODE I SL A N D NA R R AG A N SE T T, R H ODE I SL A N D

Stunning new “Green” construction in Scarsdale Estate Area. 9,022 sf, 7 BR, 6.2 bath
Georgian Colonial on .97 acre. Advanced, non-toxic building materials and superior
air/water purification systems for the healthiest living. Fabulous amenities. 30 minutes to
New York City. WEB: 4602893. $6,950,000. dawn.knief@juliabfee.com
Julia B. Fee Sotheby’s International Realty
+1 914.393.1159 | juliabfee.com
Capture oceanside opulence with this classic New England shingle style beach home just
steps from sandy beach and sparkling shore in sought-after Quonnie. The 3 BR, 3 bath
dwelling is sited waterfront with airy open floor plan to maximize the panoramic ocean
views. $3,150,000.
Mott & Chace Sotheby’s International Realty
+1 401.364.6700 | mottandchace.com
Peaceful beachfront living privately nestled above the sand dunes. Offers unobstructed
ocean views to Block Island, brilliant sunsets from the west facing Oceanside deck, and a
private pathway to the beach. Interior features sun-drenched living spaces with stylish
finishes. $4,950,000.
Mott & Chace Sotheby’s International Realty
+1 401.314.3000 | mottandchace.com

SE A B RO OK I SL A N D, S OU T H C A ROL I NA JAC K S ON HOL E , W YOM I NG JAC K S ON HOL E , W YOM I NG

“Private Peninsular Estate.” Unparalleled ocean, marsh and golf panoramas are enjoyed In tax friendly Wyoming, near Grand Teton and Yellowstone NP, the Bar BC Ranch offers With Snake River frontage and two streams, this property is one of the most pristine
from every room in this magnificent custom home. An exclusive 1.5 acre peninsula Snake River blue-ribbon fly-fishing and Teton views. Bar BC East offers Gros Ventre and wildlife-rich in the area. Just ten minutes from the Jackson Hole Town Square and
offers you a private island lifestyle with easy access to luxurious amenities. $6,500,000. riverfront. Parcels from 35 acres. Prices from $8,000,000. TomEvansRE@JHSIR.com its amenities as well as world-class recreation. Price upon request.
H. Middleton Rutledge. Brandon and Dave Spackman. Spackmans@JHSIR.com
Daniel Ravenel Sotheby’s International Realty Jackson Hole Sotheby’s International Realty Jackson Hole Sotheby’s International Realty
+1 843.723.7150 | DanielRavenelSIR.com +1 307.739.8149 | JHSIR.com +1 307.739.8156 | JHSIR.com
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W16 | Friday - Sunday, June 10 - 12, 2016 THE WALL STREET JOURNAL.